DALLAS, Jan. 24, 2023 (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 2022.

"Today we reported strong 2022 performance metrics with $216 million in pre-tax pre-provision earnings, or 1.97% on average assets, 1.35% operating return on average assets, 16% return on average tangible common equity and an efficiency ratio below 50% for the 5th consecutive year," said C. Malcolm Holland, III, Veritex President and Chief Executive Officer. "We generated 34% growth in loans, 24% growth in deposits, completed an oversubscribed common stock offering and expanded relationships and new customers. Looking towards 2023, we remain focused on credit discipline, lending in portfolios that align with our core deposit priorities and delivering strong financial results."

Financial HighlightsFourth Quarter
2022		 Third Quarter
2022		 Fourth Quarter
2021		  Full Year
2022		 Full Year
2021
 (Dollars in thousands, except per share data)
(unaudited)
GAAP          
Net income$39,897  $43,322  $41,506   $146,315  $139,584 
Diluted EPS 0.73   0.79   0.82    2.71   2.77 
Book value per common share 26.83   26.15   26.64    26.83   26.64 
Return on average assets2 1.35%  1.50%  1.68%   1.33%  1.49%
Efficiency ratio 47.63   44.71   48.53    48.64   49.45 
Return on average equity2 11.03   11.82   12.65    10.28   11.01 
Non-GAAP1          
Operating earnings$40,395  $43,625  $42,410   $147,889  $139,647 
Diluted operating EPS 0.74   0.80   0.84    2.74   2.77 
Tangible book value per common share 18.64   17.91   17.49    18.64   17.49 
Pre-tax, pre-provision operating earnings 63,694   63,454   48,640    216,413   171,205 
Pre-tax, pre-provision operating return on average assets2 2.15%  2.20%  1.97%   1.97%  1.83%
Operating return on average assets2 1.36   1.51   1.72    1.35   1.49 
Operating efficiency ratio 47.11   44.37   47.64    48.21   49.27 
Return on average tangible common equity2 16.75   17.82   20.06    15.78   17.57 
Operating return on average tangible common equity2 16.95   17.94   20.48    15.94   17.58 

1 Refer 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.
2 Annualized ratio.

Other Fourth Quarter and 2022 Highlights:

Results of Operations for the Three Months Ended December 31, 2022

Net Interest Income

For the three months ended December 31, 2022, net interest income before provision for credit losses was $106.1 million and net interest margin was 3.87%, compared to $101.0 million and 3.77%, respectively, for the three months ended September 30, 2022. The $5.1 million increase in net interest income before provision for credit losses was primarily due to a $27.6 million increase in interest income on loans driven by an increase in average balances and loan yields, offset by a $23.9 million increase in total interest expense on interest bearing liabilities driven by an increase in average balances and rates during three months ended December 31, 2022. Net interest margin increased 10 bps from the three months ended September 30, 2022, primarily due to the increase in yields earned on loans during the three months ended December 31, 2022, partially offset by an increase in funding costs.

Compared to the three months ended December 31, 2021, net interest income before provision for credit losses for the three months ended December 31, 2022 increased by $29.4 million, or 38.3%. The increase was primarily due to a $62.7 million increase in interest income on loans driven by an increase in average balances and loan yields, offset by a $22.4 million increase in interest expenses on interest-bearing demand and savings deposits and $6.9 million increase in certificates and other time deposits. Net interest margin increased 50 bps to 3.87% for the three months ended December 31, 2022 from 3.37% for the three months ended December 31, 2021. The increase was primarily due to an increase in average balances and loan yields during the three months ended December 31, 2022, partially offset by an increase in funding costs.

Noninterest Income

Noninterest income for the three months ended December 31, 2022 was $14.3 million, an increase of $1.3 million, or 10.0%, compared to the three months ended September 30, 2022. The increase in noninterest income was primarily due to a $7.0 million increase in gain on sale of USDA loans through our wholly owned subsidiary, North Avenue Capital, LLC ("NAC"). This increase was partially offset by an increase of $4.4 million in equity method investment losses and a $1.1 million decrease in customer swap income.

Compared to the three months ended December 31, 2021, noninterest income for the three months ended December 31, 2022 decreased $1.8 million, or 11.3%. The decrease was primarily due to a $6.7 million decrease in equity method investment income and $1.7 million decrease in gain on sale of SBA loans. The decrease was partially offset by a $5.7 million increase in gain on sale of USDA loans through NAC and a $1.5 million increase in customer swap income.

Noninterest Expense

Noninterest expense was $57.4 million for the three months ended December 31, 2022, compared to $51.0 million for the three months ended September 30, 2022, an increase of $6.4 million, or 12.5%. The increase was primarily driven by a $4.0 million increase in salaries and employee benefits from continued investment in talent, a $688 thousand increase in data processing and software expenses, a $683 thousand increase in professional and regulatory fees and a $501 thousand increase in occupancy and equipment.

Noninterest expense was $57.4 million for the three months ended December 31, 2022, compared to $45.1 million for the three months ended December 31, 2021, an increase of $12.3 million, or 27.2%. The increase was primarily driven by a $8.3 million increase in salary and employee benefits, from continued investment in talent. Additionally, the increase was driven by data processing and software expense of $1.6 million, professional and regulatory fees of $1.4 million, and occupancy and equipment of $718 thousand.

Financial Condition

Total LHI, excluding MW and PPP, were $9.0 billion at December 31, 2022, an increase of $524.0 million, or 24.4% annualized, compared to September 30, 2022, and an increase of $2.3 billion, or 33.5%, compared to December 31, 2021. These increases were the result of the continued execution and success of our loan growth strategy, including our investment in talent during 2022.

Total deposits were $9.1 billion at December 31, 2022, an increase of $374.8 million, or 17.0% annualized, compared to September 30, 2022, and an increase of $1.8 billion, or 23.9%, compared to December 31, 2021. The increase from September 30, 2022 was primarily the result of increase of $419.3 million in certificates and other time deposits and an increase of $126.3 million in interest-bearing transaction, money market and savings deposits accounts. The increase was partially offset by a decrease of $170.8 million of noninterest bearing deposits. The increase from December 31, 2021 was primarily the result of increases of $1.1 billion and $510.1 million in interest-bearing transaction, money market, and savings and certificates and other time deposits, respectively.

Asset Quality

NPAs increased to $43.7 million, or 0.36% of total assets, at December 31, 2022, compared to $30.6 million, or 0.26% of total assets, at September 30, 2022. The increase is primarily the result of a $13.2 million pool of PCD loans placed on non-accrual status during the three months ended December 31, 2022. Excluding the nonaccrual PCD loans, NPAs decreased to $30.5 million, or 0.25% of total assets. The Company had net charge-offs of $5.8 million for the fourth quarter of 2022. Net charge-offs compared to average loans outstanding were 17 bps for the year ended December 31, 2022, compared to 38 bps for year ended December 31, 2021.

The Company recorded a provision for credit losses of $11.8 million for the three months ended December 31, 2022, compared to a provision for credit losses of $6.7 million and a benefit for credit losses of $3.3 million for the three months ended September 30, 2022 and December 31, 2021, respectively. The provision for credit losses reported for the three months ended December 31, 2022, compared to the three months ended September 30, 2022 and December 31, 2021, respectively, was primarily attributable to an increase in general reserves as a result of changes in economic factors and loan growth. During the three months ended December 31, 2022, the Company recorded a $523 thousand benefit for unfunded commitments, which was primarily driven by decreases in unfunded balances.

Allowance for credit losses ("ACL") as a percentage of LHI, excluding MW and PPP loans, was 1.01%, 1.00% and 1.15% at December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

Dividend Information

On January 24, 2023, Veritex's Board of Directors declared a quarterly cash dividend of $0.20 per share on its outstanding shares of common stock. The dividend will be paid on February 24, 2023 to stockholders of record as of the close of business on February 10, 2023.

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 25, 2023 at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/767zfwtq 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/BI7ccf0c5ef7d84e35916df74d12b9e4ad. 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 Year Ended
 Dec 31,
2022		 Sep 30,
2022		 Jun 30,
2022		 Mar 31,
2022		 Dec 31,
2021		 Dec 31,
2022		 Dec 31,
2021
 (Dollars and shares in thousands, except per-share data)
Per Share Data (Common Stock):             
Basic EPS$0.74  $0.80  $0.55  $0.66  $0.84  $2.75  $2.83 
Diluted EPS 0.73   0.79   0.54   0.65   0.82   2.71   2.77 
Book value per common share 26.83   26.15   26.50   26.86   26.64   26.83   26.64 
Tangible book value per common share1 18.64   17.91   18.20   18.51   17.49   18.64   17.49 
Dividends paid per common share outstanding2 0.20   0.20   0.20   0.20   0.20   0.80   0.77 
              
Common Stock Data:             
Shares outstanding at period end 54,030   53,988   53,951   53,907   49,372   54,030   49,372 
Weighted average basic shares outstanding for the period 54,011   53,979   53,949   50,695   49,329   53,170   49,405 
Weighted average diluted shares outstanding for the period 54,780   54,633   54,646   51,571   50,441   53,952   50,352 
              
Summary of Credit Ratios:             
ACL to total LHI, excluding MW and PPP loans 1.01%  1.00%  1.02%  1.02%  1.15%  1.01%  1.15%
NPAs to total assets 0.36   0.26   0.40   0.46   0.51   0.36   0.51 
NPAs, excluding nonaccrual PCD loans, to total assets3 0.25   0.26   0.40   0.46   0.51   0.25   0.51 
Net charge-offs to average loans outstanding, excluding MW and PPP loans4 0.28   0.12   0.04   0.28   0.75   0.17   0.38 
              
Summary Performance Ratios:             
Return on average assets4 1.35%  1.50%  1.11%  1.36%  1.68%  1.33%  1.49%
Return on average equity4 11.03   11.82   8.21   10.00   12.65   10.28   11.01 
Return on average tangible common equity1, 4 16.75   17.82   12.68   15.84   20.06   15.78   17.57 
Efficiency ratio 47.63   44.71   50.76   52.84   48.53   48.64   49.45 
Net interest margin 3.87   3.77   3.42   3.22   3.37   3.59   3.24 
              
Selected Performance Metrics - Operating:             
Diluted operating EPS1$0.74  $0.80  $0.55  $0.66  $0.84  $2.74  $2.77 
Pre-tax, pre-provision operating return on average assets1, 2 2.15%  2.20%  1.76%  1.71%  1.97%  1.97%  1.83%
Operating return on average assets1,4 1.36   1.51   1.12   1.38   1.72   1.35   1.49 
Operating return on average tangible common equity1,3 16.95   17.94   12.77   16.08   20.48   15.94   17.58 
Operating efficiency ratio1 47.11   44.37   50.45   52.05   47.64   48.21   49.27 
              
Veritex Holdings, Inc. Capital Ratios:             
Average stockholders' equity to average total assets 12.20%  12.69%  13.51%  13.58%  13.30%  12.96%  13.54%
Tangible common equity to tangible assets1 8.60   8.58   9.04   9.98   9.28   8.60   9.28 
Tier 1 capital to average assets (leverage) 9.82   9.79   10.14   10.66   9.05   9.82   9.05 
Common equity tier 1 capital 9.09   9.09   9.25   9.84   8.58   9.09   8.58 
Tier 1 capital to risk-weighted assets 9.34   9.35   9.52   10.14   8.89   9.34   8.89 
Total capital to risk-weighted assets 11.63   11.68   11.95   12.73   11.60   11.63   11.60 

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.
3 Nonaccrual PCD loans consist of PCD loans that transitioned upon adoption of ASC 326 and were accounted for on a pooled basis that have subsequently been placed on nonaccrual status.
4Annualized ratio for quarterly metrics.

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

 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021
 (unaudited) (unaudited) (unaudited) (unaudited)  
ASSETS         
Cash and cash equivalents$436,077  $433,897  $410,716  $551,573  $379,784 
Debt securities 1,282,460   1,303,004   1,354,403   1,244,514   1,052,494 
Other investments 122,450   115,551   202,685   188,699   190,591 
          
Loans held for sale 20,641   17,644   14,210   18,721   26,007 
LHI PPP loans, carried at fair value 1,995   2,821   7,339   18,512   53,369 
LHI, MW 446,227   523,805   629,291   542,877   565,645 
LHI, excluding MW and PPP 9,034,429   8,510,433   7,915,792   7,125,429   6,766,009 
Total loans 9,503,292   9,054,703   8,566,632   7,705,539   7,411,030 
ACL (91,052)  (85,037)  (80,576)  (72,485)  (77,754)
Bank-owned life insurance 84,496   84,030   84,097   83,641   83,194 
Bank premises, furniture and equipment, net 108,824   108,720   108,769   109,138   109,271 
Other real estate owned ("OREO") —   —   1,032   1,062   — 
Intangible assets, net of accumulated amortization 53,213   56,238   59,011   63,986   66,017 
Goodwill 404,452   404,452   404,452   404,452   403,771 
Other assets 250,149   238,896   193,590   173,561   138,851 
Total assets$12,154,361  $11,714,454  $11,304,811  $10,453,680  $9,757,249 
LIABILITIES AND STOCKHOLDERS’ EQUITY         
Deposits:         
Noninterest-bearing deposits$2,640,617  $2,811,412  $2,947,830  $2,765,895  $2,510,723 
Interest-bearing transaction and savings deposits 4,395,975   4,269,668   4,007,250   3,688,292   3,276,312 
Certificates and other time deposits 2,086,642   1,667,364   1,562,626   1,435,409   1,576,580 
Total deposits 9,123,234   8,748,444   8,517,706   7,889,596   7,363,615 
Accounts payable and other liabilities 177,579   173,198   126,116   105,552   69,160 
Advances from Federal Home Loan Bank ("FHLB") 1,175,000   1,150,000   1,000,000   777,522   777,562 
Subordinated debentures and subordinated notes 228,775   228,524   228,272   228,018   227,764 
Securities sold under agreements to repurchase —   2,389   3,275   4,996   4,069 
Total liabilities 10,704,588   10,302,555   9,875,369   9,005,684   8,442,170 
Commitments and contingencies         
Stockholders’ equity:         
Common stock 607   606   606   605   560 
Additional paid-in capital 1,306,852   1,303,171   1,300,170   1,297,161   1,142,758 
Retained earnings 379,299   350,195   317,664   298,830   275,273 
Accumulated other comprehensive (loss) income (69,403)  (74,491)  (21,416)  18,982   64,070 
Treasury stock (167,582)  (167,582)  (167,582)  (167,582)  (167,582)
Total stockholders’ equity 1,449,773   1,411,899   1,429,442   1,447,996   1,315,079 
Total liabilities and stockholders’ equity$12,154,361  $11,714,454  $11,304,811  $10,453,680  $9,757,249 

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

 For the Quarter Ended For the Year Ended
 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Dec 31, 2022 Dec 31, 2021
Interest income:             
Loans, including fees$136,846  $109,199  $82,191  $71,443  $74,174  $399,679  $280,526 
Debt securities 10,880   10,462   9,632   7,762   9,553   38,736   32,132 
Deposits in financial institutions and Fed Funds sold 3,401   1,898   714   262   165   6,275   589 
Equity securities and other investments 1,087   1,666   1,057   910   1,004   4,720   3,237 
Total interest income 152,214   123,225   93,594   80,377   84,896   449,410   316,484 
Interest expense:             
Transaction and savings deposits 24,043   12,897   4,094   1,751   1,629   42,785   6,858 
Certificates and other time deposits 8,543   3,919   1,465   1,380   1,661   15,307   9,079 
Advances from FHLB 10,577   2,543   834   1,547   1,847   15,501   7,336 
Subordinated debentures and subordinated notes 2,954   2,826   2,721   2,659   3,018   11,160   12,428 
Total interest expense 46,117   22,185   9,114   7,337   8,155   84,753   35,701 
Net interest income 106,097   101,040   84,480   73,040   76,741   364,657   280,783 
Provision (benefit) for credit losses 11,800   6,650   9,000   (500)  (3,349)  26,950   (3,349)
(Benefit) provision for unfunded commitments (523)  850   —   493   (1,040)  820   (1,481)
Net interest income after provisions 94,820   93,540   75,480   73,047   81,130   336,887   285,613 
Noninterest income:             
Service charges and fees on deposit accounts 5,173   5,217   5,039   4,710   4,782   20,139   16,742 
Loan fees 2,477   2,786   2,385   2,794   2,697   10,442   7,607 
Loss on sales of investment securities —   —   —   —   —   —   (188)
Gain on sales of mortgage loans held for sale 4   16   223   307   293   550   1,592 
Government guaranteed loan income, net 7,808   572   789   4,891   3,423   14,060   15,760 
Equity method investment (loss) income (5,416)  (1,058)  966   367   1,238   (5,141)  5,760 
Customer swap income 2,273   3,358   1,321   946   796   7,898   2,491 
Other income (loss) 2,007   2,130   (345)  1,082   2,921   4,874   8,641 
Total noninterest income 14,326   13,021   10,378   15,097   16,150   52,822   58,405 
Noninterest expense:             
Salaries and employee benefits 33,690   29,714   26,924   27,513   25,401   117,841   94,748 
Occupancy and equipment 5,116   4,615   4,496   4,517   4,398   18,744   17,263 
Professional and regulatory fees 4,401   3,718   2,865   3,158   3,017   14,142   12,945 
Data processing and software expense 4,197   3,509   3,386   2,921   2,597   14,013   9,946 
Marketing 1,841   1,845   2,306   1,187   1,443   7,179   5,344 
Amortization of intangibles 2,495   2,494   2,495   2,495   2,494   9,979   10,057 
Telephone and communications 358   389   352   385   380   1,484   1,434 
Merger and acquisition ("M&A") expense —   384   295   700   826   1,379   826 
Other 5,261   4,323   5,034   3,696   4,521   18,314   15,149 
Total noninterest expense 57,359   50,991   48,153   46,572   45,077   203,075   167,712 
Income before income tax expense 51,787   55,570   37,705   41,572   52,203   186,634   176,306 
Income tax expense 11,890   12,248   8,079   8,102   10,697   40,319   36,722 
Net income$39,897  $43,322  $29,626  $33,470  $41,506  $146,315  $139,584 
              
Basic EPS$0.74  $0.80  $0.55  $0.66  $0.84  $2.75  $2.83 
Diluted EPS$0.73  $0.79  $0.54  $0.65  $0.82  $2.71  $2.77 
Weighted average basic shares outstanding 54,011   53,979   53,949   50,695   49,329   53,170   49,405 
Weighted average diluted shares outstanding 54,780   54,633   54,646   51,571   50,441   53,952   50,352 

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

 For the Quarter Ended
 December 31, 2022 September 30, 2022 December 31, 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
 (Dollars in thousands)
Assets                 
Interest-earning assets:                 
Loans1$8,741,023  $131,817 5.98% $8,277,762  $104,543 5.01% $6,777,397  $70,334 4.12%
LHI, MW 383,080   5,024 5.20   448,556   4,649 4.11   483,850   3,629 2.98 
PPP loans 2,357   6 1.00   2,775   7 1.00   83,553   211 1.00 
Debt securities 1,286,342   10,880 3.36   1,362,365   10,462 3.05   1,092,089   9,553 3.47 
Interest-earning deposits in other banks 353,737   3,401 3.81   346,296   1,898 2.17   417,266   165 0.16 
Equity securities and other investments 119,054   1,087 3.62   203,528   1,666 3.25   191,031   1,004 2.09 
Total interest-earning assets 10,885,593   152,215 5.55   10,641,282   123,225 4.59   9,045,186   84,896 3.72 
ACL (85,275)      (81,888)      (95,218)    
Noninterest-earning assets 960,726       901,463       838,703     
Total assets$11,761,044      $11,460,857      $9,788,671     
                  
Liabilities and Stockholders’ Equity                 
Interest-bearing liabilities:                 
Interest-bearing demand and savings deposits$4,321,936   24,043 2.21% $4,164,164  $12,897 1.23% $3,357,958   1,629 0.19%
Certificates and other time deposits 1,785,152   8,543 1.90   1,656,347   3,919 0.94   1,615,066   1,661 0.41 
Advances from FHLB 1,073,049   10,577 3.91   904,065   2,543 1.12   777,577   1,847 0.94 
Subordinated debentures and subordinated notes 229,037   2,954 5.12   231,012   2,826 4.85   259,191   3,018 4.62 
Total interest-bearing liabilities 7,409,174   46,117 2.47   6,955,588   22,185 1.27   6,009,792   8,155 0.54 
                  
Noninterest-bearing liabilities:                 
Noninterest-bearing deposits 2,737,468       2,925,462       2,413,443     
Other liabilities 179,584       125,991       63,760     
Total liabilities 10,326,226       10,007,041       8,486,995     
Stockholders’ equity 1,434,818       1,453,816       1,301,676     
Total liabilities and stockholders’ equity$11,761,044      $11,460,857      $9,788,671     
                  
Net interest rate spread2    3.08%     3.32%     3.18%
Net interest income and margin3  $106,098 3.87%   $101,040 3.77%   $76,741 3.37%

1 Includes average outstanding balances of loans held for sale of $15,296, $14,023 and $8,987 for the three months ended December 31, 2022, September 30, 2022 and December 31, 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
(Unaudited)

 For the Year Ended December 31,
 2022
 2021
 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$7,865,432  $382,883 4.87% $6,285,510  $263,583 4.19%
LHI, MW 433,062   16,671 3.85   468,001   14,219 3.04 
PPP loans 12,517   125 1.00   272,770   2,724 1.00 
Debt securities 1,277,643   38,736 3.03   1,092,967   32,132 2.94 
Interest-earning deposits in other banks 405,471   6,275 1.55   410,785   589 0.14 
Equity securities and other investments 169,875   4,720 2.78   133,594   3,237 2.42 
Total interest-earning assets 10,164,000   449,410 4.42   8,663,627   316,484 3.65 
ACL (79,845)      (101,383)    
Noninterest-earning assets 905,103       799,334     
Total assets$10,989,258      $9,361,578     
            
Liabilities and Stockholders’ Equity           
Interest-bearing liabilities:           
Interest-bearing demand and savings deposits$3,934,926   42,785 1.09  $3,198,225   6,858 0.21 
Certificates and other time deposits 1,601,687   15,307 0.96   1,540,188   9,079 0.59 
Advances from FHLB 896,687   15,501 1.73   777,635   7,336 0.94 
Subordinated debentures and subordinated notes 230,984   11,160 4.83   263,535   12,428 4.72 
Total interest-bearing liabilities 6,664,284   84,753 1.27   5,779,583   35,701 0.62 
            
Noninterest-bearing liabilities:           
Noninterest-bearing deposits 2,782,077       2,256,546     
Other liabilities 119,237       57,457     
Total liabilities 9,565,598       8,093,586     
Stockholders’ equity 1,423,660       1,267,992     
Total liabilities and stockholders’ equity$10,989,258      $9,361,578     
            
Net interest rate spread2    3.15%     3.03%
Net interest income and margin3  $364,657 3.59%   $280,783 3.24%

1Includes average outstanding balances of loans held for sale of $13,558 and $12,093 for the twelve months ended December 31, 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
(Unaudited)

Yield Trend

 For the Quarter Ended
 Dec 31, 
2022		 Sep 30, 
2022		 Jun 30, 
2022		 Mar 31, 
2022		 Dec 31, 
2021
Average yield on interest-earning assets:         
Loans15.98% 5.01% 4.16% 4.03% 4.12%
LHI, MW5.20  4.11  3.29  2.95  2.98 
PPP loans1.00  1.00  1.00  1.00  1.00 
Debt securities3.36  3.05  2.93  2.76  3.47 
Interest-bearing deposits in other banks3.81  2.17  0.77  0.19  0.16 
Equity securities and other investments3.62  3.25  2.53  1.94  2.09 
Total interest-earning assets5.55% 4.59% 3.79% 3.54% 3.72%
          
Average rate on interest-bearing liabilities:         
Interest-bearing demand and savings deposits2.21% 1.23% 0.44% 0.20% 0.19%
Certificates and other time deposits1.90  0.94  0.40  0.37  0.41 
Advances from FHLB3.91  1.12  0.40  0.81  0.94 
Subordinated debentures and subordinated notes5.12  4.85  4.70  4.65  4.62 
Total interest-bearing liabilities2.47% 1.27% 0.58% 0.50% 0.54%
          
Net interest rate spread23.08% 3.32% 3.21% 3.04% 3.18%
Net interest margin33.87% 3.77% 3.42% 3.22% 3.37%

1 Includes average outstanding balances of loans held for sale of $15,296, $14,023, $12,112, $12,769 and $8,987 for the three months ended December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 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.

Supplemental Yield Trend

 For the Quarter Ended
 Dec 31,
2022		 Sep 30,
2022		 Jun 30,
2022		 Mar 31,
2022		 Dec 31,
2021
Average cost of interest-bearing deposits2.12% 1.15% 0.43% 0.26% 0.26%
Average costs of total deposits, including noninterest-bearing1.46  0.76  0.28  0.17  0.18 

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

LHI and Deposit Portfolio Composition

 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021
 (In thousands, except percentages)
LHI1                   
Commercial$2,940,353  32.4% $2,740,948  32.1% $2,450,403  30.9% $2,125,900  29.8% $2,006,876  29.6%
Real Estate:                   
Owner occupied commercial ("OOCRE") 715,829  7.9   677,705  7.9   646,723  8.2   633,615  8.9   665,537  9.8 
Non-owner occupied commercial ("NOOCRE") 2,341,379  25.9   2,273,305  26.7   2,203,970  27.8   2,145,826  30.0   2,120,309  31.3 
Construction and land 1,787,400  19.7   1,673,997  19.6   1,532,997  19.3   1,297,338  18.2   1,062,144  15.7 
Farmland 43,500  0.5   43,569  0.5   47,319  0.6   48,095  0.7   55,827  0.8 
1-4 family residential 894,456  9.9   858,693  10.1   765,260  9.6   604,408  8.5   542,566  8.0 
Multi-family residential 322,679  3.6   252,244  3.0   276,632  3.5   272,250  3.8   310,241  4.6 
Consumer 7,806  0.1   7,465  0.1   7,520  0.1   9,533  0.1   11,998  0.2 
Total LHI$9,053,402  100% $8,527,926  100% $7,930,824  100% $7,136,965  100% $6,775,498  100%
                    
MW 446,227     523,805     629,291     542,877     565,645   
PPP loans 1,995     2,821     7,339     18,512     53,369   
                    
Total LHI1$9,501,624    $9,054,552    $8,567,454    $7,698,354    $7,394,512   
                    
Deposits                   
Noninterest-bearing$2,640,617  28.9% $2,811,412  32.1% $2,947,830  34.6% $2,765,895  35.1% $2,510,723  34.1%
Interest-bearing transaction 622,814  6.8   603,729  6.9   660,557  7.8   599,580  7.6   579,408  7.9 
Money market 3,654,868  40.1   3,533,532  40.4   3,217,195  37.8   2,958,790  37.5   2,568,843  34.9 
Savings 118,293  1.3   132,407  1.5   129,498  1.5   129,922  1.6   128,061  1.7 
Certificates and other time deposits 2,086,642  22.9   1,667,364  19.1   1,562,626  18.3   1,435,409  18.2   1,576,580  21.4 
Total deposits$9,123,234  100% $8,748,444