DALLAS, Jan. 26, 2021 (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 2020. Net income for the quarter ended December 31, 2020 totaled $22.8 million, or $0.46 diluted earnings per share ("EPS"), compared to $22.9 million, or $0.46 diluted EPS, for the quarter ended September 30, 2020 and $29.1 million, or $0.56 diluted EPS, for the quarter ended December 31, 2019. Operating earnings for the quarter ended December 31, 2020 totaled $29.7 million, or $0.60 diluted operating EPS1, compared to $22.9 million, or $0.46 diluted operating EPS1, for the quarter ended September 30, 2020 and $30.3 million, or $0.58 diluted operating EPS1, for the quarter ended December 31, 2019.
“2020 certainly proved to be a very challenging year given the economic disruption from the pandemic. Yet through it all, the team executed well and delivered strong results,” said C Malcolm Holland, III, the Company’s Chairman and Chief Executive Officer. The 4th quarter reflects continued loan growth, strong deposit results, higher capital levels and continued strong pre-tax, pre-provision operating earnings. Our business momentum and loan pipelines are the strongest we have seen since 2019. This momentum is supported by the recovering economy, the strength of the Texas economy and our significant investment during 2020 in new team members to support our continued success.”
Fourth Quarter and 2020 Highlights:
- Net income of $22.8 million, or $0.46 diluted EPS, compared to $22.9 million, or $0.46 diluted EPS, for the quarter ended September 30, 2020 and $29.1 million, or $0.56 diluted EPS, for the quarter ended December 31, 2019. Net income of $73.9 million, or $1.48 diluted EPS, for the year ended December 31, 2020 compared to $90.7 million, or $1.68 diluted EPS, for the year ended December 31, 2019;
- Pre-tax, pre-provision operating earnings1 totaled $38.4 million, compared to $39.3 million for the quarter ended September 30, 2020 and $42.1 million for the quarter ended December 31, 2019;
- Total loans held for investment, excluding Paycheck Protection Program ("PPP") loans, grew $91.3 million, from the third quarter of 2020, or 5.8% annualized. Total loans held for investment, excluding PPP loans, grew $504.3 million, or 8.5%, year over year;
- Total deposits grew $290.3 million for the fourth quarter of 2020, or 18.7% annualized, with the average cost of total deposits decreasing to 0.38% for the three months ended December 31, 2020 from 0.46% for the three months ended September 30, 2020. Total deposits grew $618.5 million, or 10.5%, year over year;
- Return on average tangible common equity1 of 12.84% and operating return on average tangible common equity1 of 16.44% for the three months ended December 31, 2020;
- Repurchased 347,428 shares of outstanding common stock under the stock buyback program during the three months ended December 31, 2020 at an average price of $22.90. Since inception, the Company has repurchased 11.1% of issued common stock under the stock buyback program;
- Declared quarterly cash dividend of $0.17 payable on February 18, 2021.
| Financial Highlights | QTD | YTD | |||||||||||||
| Q4 2020 | Q3 2020 | Q4 2020 | Q4 2019 | ||||||||||||
| (Dollars in thousands) (unaudited) | |||||||||||||||
| GAAP | |||||||||||||||
| Net income | $ | 22,801 | $ | 22,920 | $ | 73,883 | $ | 90,739 | |||||||
| Diluted EPS | 0.46 | 0.46 | 1.48 | 1.68 | |||||||||||
| Book value per common share | 24.39 | 23.87 | 24.39 | 23.32 | |||||||||||
| Return on average assets2 | 1.04 | % | 1.06 | % | 0.87 | % | 1.14 | % | |||||||
| Efficiency ratio | 62.52 | 48.12 | 50.90 | 56.41 | |||||||||||
| Return on average tangible common equity | 12.84 | 13.27 | 12.84 | 13.27 | |||||||||||
| Non-GAAP1 | |||||||||||||||
| Operating earnings | $ | 29,730 | $ | 22,928 | $ | 77,980 | $ | 123,836 | |||||||
| Diluted operating EPS | 0.60 | 0.46 | 1.56 | 2.29 | |||||||||||
| Tangible book value per common share | 15.70 | 15.19 | 15.70 | 14.73 | |||||||||||
| Pre-tax, pre-provision operating earnings | 38,407 | 39,265 | 162,447 | 178,186 | |||||||||||
| Pre-tax, pre-provision operating return on average assets2 | 1.75 | % | 1.82 | % | 1.91 | % | 2.24 | % | |||||||
| Operating return on average assets2 | 1.35 | 1.06 | 0.91 | 1.56 | |||||||||||
| Operating efficiency ratio | 49.49 | 48.11 | 47.69 | 43.80 | |||||||||||
| Operating return on average tangible common equity | 16.44 | 13.27 | 11.72 | 17.39 | |||||||||||
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.
Result of Operations for the Three Months Ended December 31, 2020
Net Interest Income
For the three months ended December 31, 2020, net interest income before provision for loan losses was $66.8 million and net interest margin was 3.29% compared to $65.9 million and 3.32%, respectively, for the three months ended September 30, 2020. The $896 thousand increase in net interest income was primarily due to a $951 thousand increase in interest income on loans driven by an increase in average balances. Net interest margin decreased 3 basis points from the three months ended September 30, 2020, primarily due to a 1 basis point decrease in yields earned on loan balances. As a result, the average cost of interest-bearing deposits decreased to 0.55% for the three months ended December 31, 2020 from 0.67% for the three months ended September 30, 2020.
Net interest income before provision for loan losses decreased by $3.1 million from $69.9 million to $66.8 million and net interest margin decreased 52 basis points from 3.81% to 3.29% for the three months ended December 31, 2020 as compared to the same period in 2019. The decrease in net interest income before provision for loan losses was primarily due to a $15.5 million decrease in interest income on loans, excluding MW and PPP, partially offset by a $6.1 million and $5.5 million decrease in interest expenses on transaction and savings deposits and certificates and other time deposits, respectively, during the three months ended December 31, 2020 compared to the three months ended December 31, 2019. Net interest margin decreased 52 basis points compared to the three months ended December 31, 2019 primarily due to a decrease in yields earned on loan balances, partially offset by decreases in the average rate paid on interest-bearing demand and savings deposits and certificates and other time deposits for the three months ended December 31, 2020. As a result, the average cost of interest-bearing deposits decreased to 0.55% for the three months ended December 31, 2020 from 1.59% for the three months ended December 31, 2019.
Noninterest Income
Noninterest income for the three months ended December 31, 2020 was $9.0 million, a decrease of $783 thousand, or 8.0% compared to the three months ended September 30, 2020. The decrease in noninterest income is primarily due to a $1.8 million decrease in government guaranteed loan income, net, and a $1.1 million decrease in loan fees. This is partially offset by a $841 thousand increase in service fees and a $830 thousand net increase in derivative income.
Compared to the three months ended December 31, 2019, noninterest income for the three months ended December 31, 2020 grew $1.9 million or 26.4%. The increase was primarily due to a $1.1 million increase in derivative income and a $771 thousand increase in gain on sale of other real estate owned.
Noninterest Expense
Noninterest expense was $47.4 million for the three months ended December 31, 2020, compared to $36.4 million and $36.3 million for the three months ended September 30, 2020 and December 31, 2019, respectively. The increase was primarily driven by a $9.7 million increase in debt extinguishment costs on Federal Home Loan Bank ("FHLB") advances that were pre-paid in the fourth quarter of 2020 with no corresponding FHLB advance prepayments during the three months ended September 30, 2020 or December 31, 2019.
Financial Condition
Total loans were $6.8 billion at December 31, 2020, an increase of $51.4 million, or 3.04% annualized, compared to September 30, 2020 and an increase of $869.6 million, or 14.65%, compared to December 31, 2019. These increases were the result of the continued execution and success of our loan growth strategy.
Total deposits were $6.5 billion at December 31, 2020, an increase of $290.3 million, or 18.7% annualized, compared to September 30, 2020 and an increase of $618.5 million, or 10.49%, compared to December 31, 2019. The increase from September 30, 2020 was primarily the result of an increase of $176.4 million in non-interest bearing demand deposits and an increase of $136.5 million in interest-bearing transaction and savings deposits accounts. The increase from December 31, 2019 was primarily the result of an increase of $540.6 million in non-interest bearing demand deposits and an increase of $303.5 million in interest-bearing transaction and savings deposits accounts, partially offset by a decrease of $225.6 million in certificates and other time deposits.
Asset Quality
Nonperforming assets totaled $87.6 million, or 0.99% of total assets, at December 31, 2020, compared to $96.4 million, or 1.11% of total assets, at September 30, 2020. The Company had net charge-offs of $16.5 million for the quarter, which is primarily the result of one lending relationship.
The Company recorded no provision for credit losses for the three months ended December 31, 2020, compared to $8.7 million and $3.5 million for the three months ended September 30, 2020 and December 31, 2019, respectively. The decrease in the recorded provision for credit losses for the three months ended December 31, 2020, compared to the three months ended September 30, 2020, was primarily attributable to improvement in the Texas economic forecasts used in the Current Expected Credit Losses (“CECL”) model in the fourth quarter of 2020 to reflect the expected impact of the COVID-19 pandemic as of December 31, 2020, as compared to our Texas economic forecasts and expected impact of the COVID-19 pandemic as of September 30, 2020. In the fourth quarter of 2020, we recorded a $902 thousand provision for unfunded commitments which was attributable to higher unfunded balances compared to a $1.4 million provision for unfunded commitments recorded for the three months ended September 30, 2020. Allowance for credit losses ("ACL") as a percentage of loans held for investment ("LHI"), excluding mortgage warehouse and PPP loans, was 1.80%, 2.10% and 0.50% at December 31, 2020, September 30, 2020 and December 31, 2019, respectively.
Income Tax
Income tax expense for the three months ended December 31, 2020 totaled $4.7 million, a decrease of $1.5 million, or 24.1%, compared to the three months ended September 30, 2020. The Company’s effective tax rate was approximately 17.1% and 21.3% for the three months ended December 31, 2020 and the three months ended September 30, 2020, respectively. The change in the effective tax rate from the three months ended September 30, 2020 was primarily due to the reversal of acquired deferred tax liabilities resulting in a tax benefit of $1.2 million offset by tax expense of $550 thousand for setting up an uncertain tax position liability for state nexus tax exposure for the three months ended December 31, 2020.
Dividend Information
On January 26, 2021, Veritex's Board of Directors declared a quarterly cash dividend of $0.17 per share on its outstanding shares of common stock. The dividend will be paid on or after February 18, 2021 to stockholders of record as of the close of business on February 4, 2021.
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 27, 2021 at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/pkxdjtjuzz and will receive a unique PIN number, which can be used when dialing in for the call. This will allow attendees to enter the call immediately. Alternatively, participants may call toll-free at (877) 703-9880.
The call and corresponding presentation slides will be webcast live on the home page of the Company's website, www.veritexbank.com. An audio replay will be available one hour after the conclusion of the call at (855) 859-2056, Conference #4893521. This replay, as well as the webcast, will be available until February 3, 2021.
About Veritex Holdings, Inc.
Headquartered in Dallas, Texas, Veritex is a bank holding company that conducts banking activities through its wholly-owned subsidiary, Veritex Community Bank, with locations throughout the Dallas-Fort Worth metroplex and in the Houston metropolitan area. Veritex Community Bank is a Texas state chartered bank regulated by the Texas Department of Banking and the Board of Governors of the Federal Reserve System. For more information, visit www.veritexbank.com.
Forward-Looking Statements
This earnings release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to the expected payment date of Veritex’s quarterly cash dividend, the impact of certain changes in Veritex’s accounting policies, standards and interpretations, the effects of the COVID-19 pandemic and actions taken in response thereto, Veritex’s future financial performance, business and growth strategy, projected plans and objectives, as well as other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. 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, 2019 and any updates to those risk factors set forth in Veritex’s Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. If one or more events related to these or other risks or uncertainties materialize, or if Veritex’s underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. Veritex does not undertake any obligation, and specifically declines any obligation, to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, expressed or implied, included in this earnings release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Veritex or persons acting on Veritex’s behalf may issue.
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
| For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Dec 31, 2020 | Dec 31, 2019 | |||||||||||||||||||||
| (Dollars and shares in thousands) | |||||||||||||||||||||||||||
| Per Share Data (Common Stock): | |||||||||||||||||||||||||||
| Basic EPS | $ | 0.46 | $ | 0.46 | $ | 0.48 | $ | 0.08 | $ | 0.56 | $ | 1.48 | $ | 1.71 | |||||||||||||
| Diluted EPS | 0.46 | 0.46 | 0.48 | 0.08 | 0.56 | 1.48 | 1.68 | ||||||||||||||||||||
| Book value per common share | 24.39 | 23.87 | 23.45 | 23.19 | 23.32 | 24.39 | 23.32 | ||||||||||||||||||||
| Tangible book value per common share1 | 15.70 | 15.19 | 14.71 | 14.39 | 14.73 | 15.70 | 14.73 | ||||||||||||||||||||
| Common Stock Data: | |||||||||||||||||||||||||||
| Shares outstanding at period end | 49,340 | 49,650 | 49,633 | 49,557 | 51,064 | 49,340 | 51,064 | ||||||||||||||||||||
| Weighted average basic shares outstanding for the period | 49,571 | 49.647 | 49.597 | 50.725 | 51,472 | 49,884 | 53,154 | ||||||||||||||||||||
| Weighted average diluted shares outstanding for the period | 49,837 | 49,775 | 49,727 | 51,056 | 52,263 | 50,036 | 53,978 | ||||||||||||||||||||
| Summary of Credit Ratios: | |||||||||||||||||||||||||||
| ACL to total LHI, excluding mortgage warehouse and PPP loans | 1.80 | % | 2.10 | % | 2.01 | % | 1.73 | % | 0.50 | % | 1.80 | % | 0.50 | % | |||||||||||||
| Nonperforming assets to total assets | 0.99 | 1.11 | 0.62 | 0.60 | 0.50 | 0.99 | 0.50 | ||||||||||||||||||||
| Net charge-offs to average loans outstanding | 0.28 | 0.04 | 0.03 | — | — | 0.36 | 0.19 | ||||||||||||||||||||
| Summary Performance Ratios: | |||||||||||||||||||||||||||
| Return on average assets2 | 1.04 | % | 1.06 | % | 1.11 | % | 0.20 | % | 1.43 | % | 0.87 | % | 1.14 | % | |||||||||||||
| Return on average equity2 | 7.58 | 7.74 | 8.36 | 1.41 | 9.63 | 6.34 | 7.57 | ||||||||||||||||||||
| Return on average tangible common equity1, 2 | 12.84 | 13.27 | 14.49 | 3.27 | 16.22 | 11.16 | 13.02 | ||||||||||||||||||||
| Efficiency ratio | 62.52 | 48.12 | 46.02 | 47.61 | 47.12 | 50.90 | 56.41 | ||||||||||||||||||||
| Selected Performance Metrics - Operating: | |||||||||||||||||||||||||||
| Diluted operating EPS1 | $ | 0.60 | $ | 0.46 | $ | 0.43 | $ | 0.08 | $ | 0.58 | $ | 1.56 | $ | 2.29 | |||||||||||||
| Pre-tax, pre-provision operating return on average assets1, 2 | 1.75 | % | 1.82 | % | 2.11 | % | 1.94 | % | 2.07 | % | 1.91 | % | 2.24 | % | |||||||||||||
| Operating return on average assets1, 2 | 1.35 | 1.06 | 0.98 | 0.20 | 1.49 | 0.91 | 1.56 | ||||||||||||||||||||
| Operating return on average tangible common equity1, 2 | 16.44 | 13.27 | 12.90 | 3.27 | 16.87 | 11.72 | 17.39 | ||||||||||||||||||||
| Operating efficiency ratio1 | 49.49 | 48.11 | 45.74 | 47.61 | 45.67 | 47.69 | 43.80 | ||||||||||||||||||||
| Veritex Holdings, Inc. Capital Ratios: | |||||||||||||||||||||||||||
| Tier 1 capital to average assets (leverage) | 9.43 | 9.54 | 9.16 | 9.49 | 10.17 | 9.43 | 10.17 | ||||||||||||||||||||
| Common equity tier 1 capital | 9.30 | 9.67 | 9.66 | 9.53 | 10.60 | 9.30 | 10.60 | ||||||||||||||||||||
| Tier 1 capital to risk-weighted assets | 9.66 | 10.05 | 10.05 | 9.92 | 11.02 | 9.66 | 11.02 | ||||||||||||||||||||
| Total capital to risk-weighted assets | 13.56 | 12.70 | 12.71 | 12.48 | 13.10 | 13.56 | 13.10 | ||||||||||||||||||||
| Tangible common equity to tangible assets1 | 9.23 | 9.12 | 8.96 | 8.81 | 10.01 | 9.23 | 10.01 | ||||||||||||||||||||
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.
2Annualized ratio for quarterly metrics.
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(in thousands)
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and cash equivalents | $ | 230,825 | $ | 128,767 | $ | 160,306 | $ | 430,842 | $ | 251,550 | |||||||||
| Debt securities | 1,055,201 | 1,091,440 | 1,112,061 | 1,117,804 | 997,330 | ||||||||||||||
| Other investments | 87,192 | 98,023 | 104,213 | 112,775 | 84,063 | ||||||||||||||
| Loans held for sale | 21,414 | 13,928 | 28,041 | 15,048 | 14,080 | ||||||||||||||
| PPP loans, at fair value | 358,042 | 405,465 | 398,949 | — | — | ||||||||||||||
| Loans held for investment, mortgage warehouse ("MW") | 577,594 | 544,845 | 441,992 | 371,161 | 183,628 | ||||||||||||||
| Loans held for investment, excluding MW and PPP | 5,847,862 | 5,789,293 | 5,726,873 | 5,853,735 | 5,737,577 | ||||||||||||||
| Total loans | 6,804,912 | 6,753,531 | 6,595,855 | 6,239,944 | 5,935,285 | ||||||||||||||
| Allowance for credit losses | (105,084 | ) | (121,591 | ) | (115,365 | ) | (100,983 | ) | (29,834 | ) | |||||||||
| Bank-owned life insurance | 82,855 | 82,366 | 81,876 | 81,395 | 80,915 | ||||||||||||||
| Bank premises, furniture and equipment, net | 115,063 | 115,794 | 115,560 | 116,056 | 118,536 | ||||||||||||||
| Other real estate owned | 2,337 | 5,796 | 7,716 | 7,720 | 5,995 | ||||||||||||||
| Intangible assets, net | 61,733 | 64,716 | 66,705 | 69,444 | 72,263 | ||||||||||||||
| Goodwill | 370,840 | 370,840 | 370,840 | 370,840 | 370,840 | ||||||||||||||
| Other assets | 114,997 | 112,693 | 88,091 | 85,787 | 67,994 | ||||||||||||||
| Total assets | $ | 8,820,871 | $ | 8,702,375 | $ | 8,587,858 | $ | 8,531,624 | $ | 7,954,937 | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing deposits | $ | 2,097,099 | $ | 1,920,715 | $ | 1,907,697 | $ | 1,549,260 | $ | 1,556,500 | |||||||||
| Interest-bearing transaction and savings deposits | 2,958,456 | 2,821,945 | 2,714,149 | 2,536,865 | 2,654,972 | ||||||||||||||
| Certificates and other time deposits | 1,457,291 | 1,479,896 | 1,503,701 | 1,713,820 | 1,682,878 | ||||||||||||||
| Total deposits | 6,512,846 | 6,222,556 | 6,125,547 | 5,799,945 | 5,894,350 | ||||||||||||||
| Accounts payable and other liabilities | 59,263 | 66,096 | 64,625 | 56,339 | 37,427 | ||||||||||||||
| Accrued interest payable | 2,665 | 3,444 | 4,088 | 5,407 | 6,569 | ||||||||||||||
| Advances from Federal Home Loan Bank | 777,718 | 1,082,756 | 1,087,794 | 1,377,832 | 677,870 | ||||||||||||||
| Subordinated debentures and subordinated notes | 262,778 | 140,158 | 140,283 | 140,406 | 145,571 | ||||||||||||||
| Securities sold under agreements to repurchase | 2,225 | 2,028 | 1,772 | 2,426 | 2,353 | ||||||||||||||
| Total liabilities | 7,617,495 | 7,517,038 | 7,424,109 | 7,382,355 | 6,764,140 | ||||||||||||||
| Commitments and contingencies | |||||||||||||||||||
| Stockholders’ equity: | |||||||||||||||||||
| Common stock | 555 | 555 | 555 | 554 | 549 | ||||||||||||||
| Additional paid-in capital | 1,126,437 | 1,124,148 | 1,122,063 | 1,119,757 | 1,117,879 | ||||||||||||||
| Retained earnings | 172,232 | 157,639 | 143,277 | 127,812 | 147,911 | ||||||||||||||
| Accumulated other comprehensive income | 56,225 | 47,155 | 42,014 | 45,306 | 19,061 | ||||||||||||||
| Treasury stock | (152,073 | ) | (144,160 | ) | (144,160 | ) | (144,160 | ) | (94,603 | ) | |||||||||
| Total stockholders’ equity | 1,203,376 | 1,185,337 | 1,163,749 | 1,149,269 | 1,190,797 | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | 8,820,871 | $ | 8,702,375 | $ | 8,587,858 | $ | 8,531,624 | $ | 7,954,937 | |||||||||
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(in thousands, except per share data)
| For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Dec 31, 2020 | Dec 31, 2019 | |||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||
| Loans, including fees | $ | 69,597 | $ | 68,685 | $ | 70,440 | $ | 77,861 | $ | 82,469 | $ | 286,583 | $ | 340,813 | |||||||||||||
| Investment securities | 7,652 | 7,852 | 7,825 | 7,397 | 7,168 | 30,726 | 29,484 | ||||||||||||||||||||
| Deposits in financial institutions and Fed Funds sold | 99 | 65 | 186 | 871 | 1,285 | 1,221 | 5,540 | ||||||||||||||||||||
| Other investments | 752 | 827 | 891 | 850 | 820 | 3,320 | 2,949 | ||||||||||||||||||||
| Total interest income | 78,100 | 77,429 | 79,342 | 86,979 | 91,742 | 321,850 | 378,786 | ||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||
| Transaction and savings deposits | 2,105 | 2,105 | 2,471 | 6,552 | 8,203 | 13,233 | 40,355 | ||||||||||||||||||||
| Certificates and other time deposits | 3,919 | 5,004 | 6,515 | 8,240 | 9,455 | 23,678 | 38,675 | ||||||||||||||||||||
| Advances from FHLB | 2,222 | 2,707 | 2,801 | 2,879 | 2,661 | 10,609 | 9,984 | ||||||||||||||||||||
| Subordinated debentures and subordinated notes | 3,088 | 1,743 | 1,798 | 1,903 | 1,559 | 8,532 | 4,675 | ||||||||||||||||||||
| Total interest expense | 11,334 | 11,559 | 13,585 | 19,574 | 21,878 | 56,052 | 93,689 | ||||||||||||||||||||
| Net interest income | 66,766 | 65,870 | 65,757 | 67,405 | 69,864 | 265,798 | 285,097 | ||||||||||||||||||||
| Provision for credit losses | — | 8,692 | 16,172 | 31,776 | 3,493 | 56,640 | 21,514 | ||||||||||||||||||||
| Provision for unfunded commitments | 902 | 1,447 | 2,799 | 3,881 | — | 9,029 | — | ||||||||||||||||||||
| Net interest income after provisions | 65,864 | 55,731 | 46,786 | 31,748 | 66,371 | 200,129 | 263,583 | ||||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||||
| Service charges and fees on deposit accounts | 3,971 | 3,130 | 2,960 | 3,642 | 3,728 | 13,703 | 14,334 | ||||||||||||||||||||
| Loan fees | 684 | 1,787 | 1,240 | 845 | 1,921 | 4,556 | 7,782 | ||||||||||||||||||||
| (Loss) gain on sales of investment securities | (256 | ) | (8 | ) | 2,879 | — | (438 | ) | 2,615 | (1,852 | ) | ||||||||||||||||
| Gain on sales of mortgage loans held for sale | 317 | 472 | 308 | 142 | 81 | 1,239 | 475 | ||||||||||||||||||||
| Government guaranteed loan income, net | 448 | 2,257 | 11,006 | 439 | 560 | 14,150 | 4,709 | ||||||||||||||||||||
| Rental income | 579 | 502 | 547 | 551 | 371 | 2,179 | 2,172 | ||||||||||||||||||||
| Other | 3,269 | 1,655 | 2,350 | 1,628 | 909 | 8,902 | 2,460 | ||||||||||||||||||||
| Total noninterest income | 9,012 | 9,795 | 21,290 | 7,247 | 7,132 | 47,344 | 30,080 | ||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||
| Salaries and employee benefits | 20,011 | 20,553 | 20,019 | 18,870 | 18,917 | 79,453 | 72,791 | ||||||||||||||||||||
| Occupancy and equipment | 4,116 | 3,980 | 3,994 | 4,273 | 4,198 | 16,363 | 16,385 | ||||||||||||||||||||
| Professional and regulatory fees | 3,578 | 3,159 | 2,796 | 2,196 | 2,615 | 11,729 | 10,201 | ||||||||||||||||||||
| Data processing and software expense | 2,238 | 2,452 | 2,434 | 2,089 | 1,880 | 9,213 | 8,365 | ||||||||||||||||||||
| Marketing | 945 | 1,062 | 561 | 1,083 | 971 | 3,651 | 3,259 | ||||||||||||||||||||
| Amortization of intangibles | 2,558 | 2,840 | 2,696 | 2,696 | 2,696 | 10,790 | 10,887 | ||||||||||||||||||||
| Telephone and communications | 340 | 345 | 308 | 319 | 466 | 1,312 | 1,847 | ||||||||||||||||||||
| Merger and acquisition expense | — | — | — | — | 918 | — | 38,960 | ||||||||||||||||||||
| COVID expenses | — | 132 | 1,245 | — | — | 1,377 | — | ||||||||||||||||||||
| Debt extinguishment costs | 9,746 | — | 1,561 | — | — | 11,307 | — | ||||||||||||||||||||
| Other | 3,841 | 1,885 | 4,447 | 4,019 | 3,623 | 14,192 | 13,712 | ||||||||||||||||||||
| Total noninterest expense | 47,373 | 36,408 | 40,061 | 35,545 | 36,284 | 159,387 | 177,803 | ||||||||||||||||||||
| Income before income tax expense | 27,503 | 29,118 | 28,015 | 3,450 | 37,219 | 88,086 | 115,860 | ||||||||||||||||||||
| Income tax (benefit) expense | 4,702 | 6,198 | 3,987 | (684 | ) | 8,168 | 14,203 | 25,121 | |||||||||||||||||||
| Net income | $ | 22,801 | $ | 22,920 | $ | 24,028 | $ | 4,134 | $ | 29,051 | $ | 73,883 | $ | 90,739 | |||||||||||||
| Basic EPS | $ | 0.46 | $ | 0.46 | $ | 0.48 | $ | 0.08 | $ | 0.56 | $ | 1.48 | $ | 1.71 | |||||||||||||
| Diluted EPS | $ | 0.46 | $ | 0.46 | $ | 0.48 | $ | 0.08 | $ | 0.56 | $ | 1.48 | $ | 1.68 | |||||||||||||
| Weighted average basic shares outstanding | 49,571 | 49,647 | 49,597 | 50,725 | 51,472 | 49,884 | 53,154 | ||||||||||||||||||||
| Weighted average diluted shares outstanding | 49,837 | 49,775 | 49,727 | 51,056 | 52,263 | 50,036 | 53,978 | ||||||||||||||||||||
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
| For the Quarter Ended | ||||||||||||||||||||||||||||||||
| December 31, 2020 | September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||
| 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 | $ | 5,798,692 | $ | 65,259 | 4.48 | % | $ | 5,753,859 | $ | 64,958 | 4.49 | % | $ | 5,692,773 | $ | 80,779 | 5.63 | % | ||||||||||||||
| Loans held for investment, mortgage warehouse | 446,027 | 3,355 | 2.99 | 358,248 | 2,705 | 3.00 | 191,132 | 1,690 | 3.51 | |||||||||||||||||||||||
| PPP loans | 390,509 | 983 | 1.00 | 407,112 | 1,022 | 1.00 | — | — | — | |||||||||||||||||||||||
| Debt securities | 1,076,031 | 7,652 | 2.83 | 1,101,469 | 7,852 | 2.84 | 1,004,342 | 7,168 | 2.83 | |||||||||||||||||||||||
| Interest-earning deposits in other banks | 258,687 | 99 | 0.15 | 175,201 | 65 | 0.15 | 312,530 | 1,285 | 1.63 | |||||||||||||||||||||||
| Equity securities and other investments | 95,706 | 752 | 3.13 | 103,948 | 827 | 3.17 | 71,791 | 820 | 4.53 | |||||||||||||||||||||||
| Total interest-earning assets | 8,065,652 | 78,100 | 3.85 | 7,899,837 | 77,429 | 3.90 | 7,272,568 | 91,742 | 5.00 | |||||||||||||||||||||||
| Allowance for loan losses | (121,162 | ) | (116,859 | ) | (27,564 | ) | ||||||||||||||||||||||||||
| Noninterest-earning assets | 805,651 | 802,948 | 798,501 | |||||||||||||||||||||||||||||
| Total assets | $ | 8,750,141 | $ | 8,585,926 | $ | 8,043,505 | ||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||
| Interest-bearing demand and savings deposits | $ | 2,862,084 | 2,105 | 0.29 | % | $ | 2,735,170 | $ | 2,105 | 0.31 | % | $ | 2,621,163 | 8,203 | 1.24 | % | ||||||||||||||||
| Certificates and other time deposits | 1,467,250 | 3,919 | 1.06 | 1,459,046 | 5,004 | 1.36 | 1,789,544 | 9,455 | 2.10 | |||||||||||||||||||||||
| Advances from FHLB | 885,014 | 2,222 | 1.00 | 1,067,771 | 2,707 | 1.01 | 726,352 | 2,661 | 1.45 | |||||||||||||||||||||||
| Subordinated debentures and subordinated notes | 259,581 | 3,088 | 4.73 | 142,432 | 1,743 | 4.87 | 118,193 | 1,559 | 5.23 | |||||||||||||||||||||||
| Total interest-bearing liabilities | 5,473,929 | 11,334 | 0.82 | 5,404,419 | 11,559 | 0.85 | 5,255,252 | 21,878 | 1.65 | |||||||||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 2,011,995 | 1,937,921 | 1,540,406 | |||||||||||||||||||||||||||||
| Other liabilities | 67,943 | 65,704 | 50,656 | |||||||||||||||||||||||||||||
| Total liabilities | 7,553,867 | 7,408,044 | 6,846,314 | |||||||||||||||||||||||||||||
| Stockholders’ equity | 1,196,274 | 1,177,882 | 1,197,191 | |||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 8,750,141 | $ | 8,585,926 | $ | 8,043,505 | ||||||||||||||||||||||||||
| Net interest rate spread2 | 3.03 | % | 3.05 | % | 3.35 | % | ||||||||||||||||||||||||||
| Net interest income and margin3 | $ | 66,766 | 3.29 | % | $ | 65,870 | 3.32 | % | $ | 69,864 | 3.81 | % | ||||||||||||||||||||
1 Includes average outstanding balances of loans held for sale of $11,938, $15,404 and $8,525 for the three months ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively, and average balances of loans held for investment, excluding mortgage warehouse 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
(Unaudited)
| For the Year Ended December 31, | |||||||||||||||||||||
| 2020 | 2019 | ||||||||||||||||||||
| 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 | $ | 5,770,228 | $ | 273,999 | 4.97 | % | $ | 5,722,039 | $ | 334,025 | 5.93 | % | |||||||||
| Loans held for investment, mortgage warehouse | 318,657 | 9,672 | 3.04 | 162,325 | 6,788 | 4.28 | |||||||||||||||
| PPP loans | 290,851 | 2,912 | 1.00 | — | — | — | |||||||||||||||
| Debt securities | 1,083,633 | 30,726 | 2.84 | 977,621 | 29,484 | 3.02 | |||||||||||||||
| Interest-earning deposits in other banks | 276,970 | 1,221 | 0.44 | 259,866 | 5,540 | 2.13 | |||||||||||||||
| Equity securities and other investments | 100,556 | 3,320 | 3.30 | 60,308 | 2,949 | 4.89 | |||||||||||||||
| Total interest-earning assets | 7,840,895 | 321,850 | 4.10 | 7,182,159 | 378,786 | 5.27 | |||||||||||||||
| Allowance for loan losses | (98,527 | ) | (23,533 | ) | |||||||||||||||||
| Noninterest-earning assets | 782,907 | 799,257 | |||||||||||||||||||
| Total assets | $ | 8,525,275 | $ | 7,957,883 | |||||||||||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| Interest-bearing demand and savings deposits | $ | 2,726,462 | 13,233 | 0.49 | $ | 2,648,113 | 40,355 | 1.52 | |||||||||||||
| Certificates and other time deposits | 1,550,995 | 23,678 | 1.53 | 1,997,090 | 38,675 | 1.94 | |||||||||||||||
| Advances from FHLB | 1,024,142 | 10,609 | 1.04 | 502,681 | 9,984 | 1.99 | |||||||||||||||
| Subordinated debentures and subordinated notes | 172,594 | 8,532 | 4.94 | 86,110 | 4,675 | 5.43 | |||||||||||||||
| Total interest-bearing liabilities | 5,474,193 | 56,052 | 1.02 | 5,233,994 | 93,689 | 1.79 | |||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||
| Noninterest-bearing deposits | 1,825,806 | 1,480,207 | |||||||||||||||||||
| Other liabilities | 60,303 | 44,809 | |||||||||||||||||||
| Total liabilities | 7,360,302 | 6,759,010 | |||||||||||||||||||
| Stockholders’ equity | 1,164,973 | 1,198,873 | |||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 8,525,275 | $ | 7,957,883 | |||||||||||||||||
| Net interest rate spread2 | 3.08 | % | 3.48 | % | |||||||||||||||||
| Net interest income and margin3 | $ | 265,798 | 3.39 | % | $ | 285,097 | 3.97 | % | |||||||||||||
1Includes average outstanding balances of loans held for sale of $15,315 and $8,762 for the twelve months ended December 31, 2020 and 2019, respectively, and average balances of loans held for investment, excluding mortgage warehouse 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
(Unaudited)
Yield Trend
| For the Quarter Ended | ||||||||||||||
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||||||||||
| Average yield on interest-earning assets: | ||||||||||||||
| Total loans1 | 4.48 | % | 4.49 | % | 4.68 | % | 5.32 | % | 5.63 | % | ||||
| Loans held for investment, mortgage warehouse | 2.99 | 3.00 | 3.01 | 3.28 | 3.51 | |||||||||
| PPP loans | 1.00 | 1.00 | 1.00 | — | — | |||||||||
| Debt securities | 2.83 | 2.84 | 2.82 | 2.86 | 2.83 | |||||||||
| Interest-bearing deposits in other banks | 0.15 | 0.15 | 0.20 | 1.14 | 1.63 | |||||||||
| Equity securities and other investments | 3.13 | 3.17 | 3.24 | 3.72 | 4.53 | |||||||||
| Total interest-earning assets | 3.85 | % | 3.90 | % | 3.99 | % | 4.74 | % | 5.00 | % | ||||
| Average rate on interest-bearing liabilities: | ||||||||||||||
| Interest-bearing demand and savings deposits | 0.29 | % | 0.31 | % | 0.37 | % | 1.00 | % | 1.24 | % | ||||
| Certificates and other time deposits | 1.06 | 1.36 | 1.61 | 2.01 | 2.10 | |||||||||
| Advances from FHLB | 1.00 | 1.01 | 0.93 | 1.23 | 1.45 | |||||||||
| Subordinated debentures and subordinated notes | 4.73 | 4.87 | 5.07 | 5.27 | 5.23 | |||||||||
| Total interest-bearing liabilities | 0.82 | % | 0.85 | % | 0.97 | % | 1.47 | % | 1.65 | % | ||||
| Net interest rate spread2 | 3.03 | % | 3.05 | % | 3.02 | % | 3.27 | % | 3.35 | % | ||||
| Net interest margin3 | 3.29 | % | 3.32 | % | 3.31 | % | 3.67 | % | 3.81 | % | ||||
1 Includes average outstanding balances of loans held for sale of $11,938, $15,404, $22,958, $10,995 and $8,525 for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, respectively, and average balances of loans held for investment, excluding mortgage warehouse 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, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||||||||||
| Average cost of interest-bearing deposits | 0.55 | % | 0.67 | % | 0.84 | % | 1.39 | % | 1.59 | % | ||||
| Average costs of total deposits, including noninterest-bearing | 0.38 | 0.46 | 0.59 | 1.02 | 1.18 | |||||||||
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
LHI and Deposit Portfolio Composition
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||
| LHI1 | ||||||||||||||||||||||||||||||||||
| Commercial | $ | 1,559,546 | 26.7 | % | $ | 1,623,249 | 28.0 | % | $ | 1,555,300 | 27.2 | % | $ | 1,777,603 | 30.4 | % | $ | 1,712,838 | 29.9 | % | ||||||||||||||
| Real Estate: | ||||||||||||||||||||||||||||||||||
| Owner occupied commercial | 717,472 | 12.3 | 734,939 | 12.7 | 769,952 | 13.4 | 723,839 | 12.4 | 706,782 | 12.3 | ||||||||||||||||||||||||
| Non-owner occupied commercial | 1,904,132 | 32.5 | 1,817,013 | 31.4 | 1,847,480 | 32.3 | 1,828,386 | 31.2 | 1,784,201 | 31.1 | ||||||||||||||||||||||||
| Construction and land | 693,030 | 11.8 | 623,496 | 10.8 | 599,510 | 10.5 | 566,470 | 9.7 | 629,374 | 11.0 | ||||||||||||||||||||||||
| Farmland | 13,844 | 0.2 | 14,413 | 0.2 | 14,723 | 0.3 | 14,930 | 0.3 | 16,939 | 0.3 | ||||||||||||||||||||||||
| 1-4 family residential | 524,344 | 9.0 | 548,953 | 9.5 | 528,688 | 9.2 | 536,892 | 9.2 | 549,811 | 9.6 | ||||||||||||||||||||||||
| Multi-family residential | 424,962 | 7.3 | 412,412 | 7.1 | 394,829 | 6.8 | 388,374 | 6.7 | 320,041 | 5.6 | ||||||||||||||||||||||||
| Consumer | 13,000 | 0.2 | 14,127 | 0.2 | 14,932 | 0.3 | 15,771 | 0.3 | 17,457 | 0.3 | ||||||||||||||||||||||||
| Total LHI | $ | 5,850,330 | 100 | % | $ | 5,788,602 | 100 | % | $ | 5,725,414 | 100 | % | $ | 5,852,265 | 100 | % | $ | 5,737,443 | 100 | % | ||||||||||||||
| Mortgage warehouse | 577,594 | 544,845 | 441,992 | 371,161 | 183,628 | |||||||||||||||||||||||||||||
| PPP loans | 358,042 | 405,465 | 398,949 | — | — | |||||||||||||||||||||||||||||
| Total LHI1 | $ | 6,785,966 | $ | 6,738,912 | $ | 6,566,355 | $ | 6,223,426 | $ | 5,921,071 | ||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||||||||
| Noninterest-bearing | $ | 2,097,099 | 32.2 | % | $ | 1,920,715 | 30.9 | % | $ | 1,907,697 | 31.1 | % | $ | 1,549,260 | 26.7 | % | $ | 1,556,500 | 26.4 | % | ||||||||||||||
| Interest-bearing transaction | 453,110 | 7.0 | 450,739 | 7.2 | 343,640 | 5.6 | 306,641 | 5.3 | 388,877 | 6.6 | ||||||||||||||||||||||||
| Money market | 2,398,526 | 36.8 | 2,267,191 | 36.4 | 2,272,520 | 37.1 | 2,143,874 | 37.0 | 2,180,017 | 37.0 | ||||||||||||||||||||||||
| Savings | 106,820 | 1.6 | 104,015 | 1.7 | 97,989 | 1.6 | 86,350 | 1.5 | 86,078 | 1.5 | ||||||||||||||||||||||||
| Certificates and other time deposits | 1,457,291 | 22.4 | 1,479,896 | 23.7 | 1,503,701 | 24.5 | 1,713,820 | 29.6 | 1,682,878 | 28.6 | ||||||||||||||||||||||||
| Total deposits | $ | 6,512,846 | 100 | % | $ | 6,222,556 | 100 | % | $ | 6,125,547 | 100 | % | $ | 5,799,945 | 100 | % | $ | 5,894,350 | 100 | % | ||||||||||||||
| Loan to Deposit Ratio | 104.2 | % | 108.3 | % | 107.2 | % | 107.3 | % | 100.5 | % | ||||||||||||||||||||||||
| Loan to Deposit Ratio, excluding mortgage warehouse and PPP loans | 89.8 | % | 93.0 | % | 93.5 | % | 100.9 | % | 97.3 | % | ||||||||||||||||||||||||
1 Total LHI does not include deferred fees of $2.5 million and $691 thousand at December 31, 2020 and September 30, 2020, respectively, deferred costs of $1.5 million, $1.5 million and $134 thousand at June 30, 2020, March 31, 2020 and December 31, 2019, respectively.
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
Asset Quality
| For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Dec 31, 2020 | Dec 31, 2019 | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||
| Nonperforming Assets ("NPAs"): | |||||||||||||||||||||||||||
| Nonaccrual loans | $ | 81,096 | $ | 88,877 | $ | 43,594 | $ | 38,836 | $ | 29,799 | $ | 81,096 | $ | 29,799 | |||||||||||||
| Accruing loans 90 or more days past due1 | 4,204 | 1,689 | 2,021 | 4,764 | 3,660 | 4,204 | 3,660 | ||||||||||||||||||||
| Total nonperforming loans held for investment ("NPLs") | 85,300 | 90,566 | 45,615 | 43,600 | 33,459 | 85,300 | 33,459 | ||||||||||||||||||||
| Other real estate owned | 2,337 | 5,796 | 7,716 | 7,720 | 5,995 | 2,337 | 5,995 | ||||||||||||||||||||
| Total NPAs | $ | 87,637 | $ | 96,362 | $ | 53,331 | $ | 51,320 | $ | 39,454 | $ | 87,637 | $ | 39,454 | |||||||||||||
| Charge-offs: | |||||||||||||||||||||||||||
| Residential | $ | (18 | ) | $ | — | $ | — | $ | — | $ | — | $ | (18 | ) | $ | (157 | ) | ||||||||||
| Owner occupied commercial real estate | — | (2,421 | ) | — | — | — | (2,421 | ) | — | ||||||||||||||||||
| Nonowner occupied commercial real estate | (2,865 | ) | — | — | — | — | (2,865 | ) | — | ||||||||||||||||||
| Commercial | (13,699 | ) | (68 | ) | (1,740 | ) | — | — | (15,507 | ) | (10,898 | ) | |||||||||||||||
| Consumer | (26 | ) | (11 | ) | (57 | ) | (68 | ) | (48 | ) | (162 | ) | (265 | ) | |||||||||||||
| Total charge-offs | (16,608 | ) | (2,500 | ) | (1,797 | ) | (68 | ) | (48 | ) | (20,973 | ) | (11,320 | ) | |||||||||||||
| Recoveries: | |||||||||||||||||||||||||||
| Residential | 49 | 7 | — | 1 | 5 | 57 | 67 | ||||||||||||||||||||
| Commercial | 52 | 14 | 7 | 29 | 135 | 102 | 226 | ||||||||||||||||||||
| Consumer | — | 13 | — | 274 | 6 | 287 | 92 | ||||||||||||||||||||
| Total recoveries | 101 | 34 | 7 | 304 | 146 | 446 | 385 | ||||||||||||||||||||
| Net charge-offs | $ | (16,507 | ) | $ | (2,466 | ) | $ | (1,790 | ) | $ | 236 | $ | 98 | $ | (20,527 | ) | $ | (10,935 | ) | ||||||||
| CECL transition adjustment | $ | — | $ | — | $ | — | $ | 39,137 | $ | — | $ | 39,137 | $ | — | |||||||||||||
| Allowance for credit losses ("ACL") at end of period | $ | 105,084 | $ | 121,591 | $ | 115,365 | $ | 100,983 | $ | 29,834 | $ | 105,084 | $ | 29,834 | |||||||||||||
| Asset Quality Ratios: | |||||||||||||||||||||||||||
| NPAs to total assets | 0.99 | % | 1.11 | % | 0.62 | % | 0.60 | % | 0.50 | % | 0.99 | % | 0.50 | % | |||||||||||||
| NPLs to total LHI, excluding mortgage warehouse and PPP loans | 1.46 | 1.56 | 0.80 | 0.75 | 0.57 | 1.46 | 0.57 | ||||||||||||||||||||
| ACL to total LHI, excluding mortgage warehouse and PPP loans | 1.80 | 2.10 | 2.01 | 1.73 | 0.50 | 1.80 | 0.50 | ||||||||||||||||||||
| Net charge-offs to average loans outstanding | 0.28 | 0.04 | 0.03 | — | — | 0.36 | 0.19 | ||||||||||||||||||||
1 Accruing loans greater than 90 days past due exclude purchase credit deteriorated loans greater than 90 days past due that are accounted for on a pooled basis.
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
We identify certain financial measures discussed in this earnings release as being “non-GAAP financial measures.” In accordance with SEC rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles as in effect from time to time in the United States (“GAAP”), in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios calculated using exclusively either one or both of (i) financial measures calculated in accordance with GAAP and (ii) operating measures or other measures that are not non-GAAP financial measures.
The non-GAAP financial measures that we present in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we present in this earnings release may differ from that of other companies reporting measures with similar names. You should understand how such other financial institutions calculate their financial measures that appear to be similar or have similar names to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures.
Tangible Book Value Per Common Share. Tangible book value per common share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by number of common shares outstanding. For tangible book value per common share, the most directly comparable financial measure calculated in accordance with GAAP is book value per common share.
We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.
The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:
| As of | |||||||||||||||||||
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | |||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| Tangible Common Equity | |||||||||||||||||||
| Total stockholders' equity | $ | 1,203,376 | $ | 1,185,337 | $ | 1,163,749 | $ | 1,149,269 | $ | 1,190,797 | |||||||||
| Adjustments: | |||||||||||||||||||
| Goodwill | (370,840 | ) | (370,840 | ) | (370,840 | ) | (370,840 | ) | (370,840 | ) | |||||||||
| Core deposit intangibles | (57,758 | ) | (60,209 | ) | (62,661 | ) | (65,112 | ) | (67,563 | ) | |||||||||
| Tangible common equity | $ | 774,778 | $ | 754,288 | $ | 730,248 | $ | 713,317 | $ | 752,394 | |||||||||
| Common shares outstanding | 49,340 | 49,650 | 49,633 | 49,557 | 51,064 | ||||||||||||||
| Book value per common share | $ | 24.39 | $ | 23.87 | $ | 23.45 | $ | 23.19 | $ | 23.32 | |||||||||
| Tangible book value per common share | $ | 15.70 | $ | 15.19 | $ | 14.71 | $ | 14.39 | $ | 14.73 | |||||||||
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity, less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For tangible common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total stockholders’ equity to total assets.
We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, in each case, exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing both total stockholders’ equity and assets while not increasing our tangible common equity or tangible assets.
The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:
| As of | |||||||||||||||||||
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Tangible Common Equity | |||||||||||||||||||
| Total stockholders' equity | $ | 1,203,376 | $ | 1,185,337 | $ | 1,163,749 | $ | 1,149,269 | $ | 1,190,797 | |||||||||
| Adjustments: | |||||||||||||||||||
| Goodwill | (370,840 | ) | (370,840 | ) | (370,840 | ) | (370,840 | ) | (370,840 | ) | |||||||||
| Core deposit intangibles | (57,758 | ) | (60,209 | ) | (62,661 | ) | (65,112 | ) | (67,563 | ) | |||||||||
| Tangible common equity | $ | 774,778 | $ | 754,288 | $ | 730,248 | $ | 713,317 | $ | 752,394 | |||||||||
| Tangible Assets | |||||||||||||||||||
| Total assets | $ | 8,820,871 | $ | 8,702,375 | $ | 8,587,858 | $ | 8,531,624 | $ | 7,954,937 | |||||||||
| Adjustments: | |||||||||||||||||||
| Goodwill | (370,840 | ) | (370,840 | ) | (370,840 | ) | (370,840 | ) | (370,840 | ) | |||||||||
| Core deposit intangibles | (57,758 | ) | (60,209 | ) | (62,661 | ) | (65,112 | ) | (67,563 | ) | |||||||||
| Tangible Assets | $ | 8,392,273 | $ | 8,271,326 | $ | 8,154,357 | $ | 8,095,672 | $ | 7,516,534 | |||||||||
| Tangible Common Equity to Tangible Assets | 9.23 | % | 9.12 | % | 8.96 | % | 8.81 | % | 10.01 | % | |||||||||
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Return on Average Tangible Common Equity. Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) net income available for common stockholders adjusted for amortization of core deposit intangibles (which we refer to as “return”) as net income, plus amortization of core deposit intangibles, less tax benefit at the statutory rate; (b) average tangible common equity as total average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.
We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of core deposit intangibles. Goodwill and core deposit intangibles have the effect of increasing total stockholders’ equity while not increasing our tangible common equity. This measure is particularly relevant to acquisitive institutions that may have higher balances in goodwill and core deposit intangibles than non-acquisitive institutions.
The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income available for common stockholders adjusted for amortization of core deposit intangibles, net of taxes to net income and presents our return on average tangible common equity:
| For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Dec 31, 2020 | Dec 31, 2019 | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||
| Net income available for common stockholders adjusted for amortization of core deposit intangibles | |||||||||||||||||||||||||||
| Net income | $ | 22,801 | $ | 22,920 | $ | 24,028 | $ | 4,134 | $ | 29,051 | $ | 73,883 | $ | 90,739 | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||||
| Plus: Amortization of core deposit intangibles | 2,451 | 2,451 | 2,451 | 2,451 | 2,451 | 9,804 | 9,830 | ||||||||||||||||||||
| Less: Tax benefit at the statutory rate | 515 | 515 | 515 | 515 | 515 | 2,060 | 2,065 | ||||||||||||||||||||
| Net income available for common stockholders adjusted for amortization of core deposit intangibles | $ | 24,737 | $ | 24,856 | $ | 25,964 | $ | 6,070 | $ | 30,987 | $ | 81,627 | $ | 98,504 | |||||||||||||
| Average Tangible Common Equity | |||||||||||||||||||||||||||
| Total average stockholders' equity | $ | 1,196,274 | $ | 1,177,882 | $ | 1,155,798 | $ | 1,183,116 | $ | 1,197,191 | $ | 1,164,973 | $ | 1,198,873 | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||||
| Average goodwill | (370,840 | ) | (370,840 | ) | (370,840 | ) | (370,840 | ) | (370,463 | ) | (370,840 | ) | (369,441 | ) | |||||||||||||
| Average core deposit intangibles | (59,010 | ) | (61,666 | ) | (64,151 | ) | (66,439 | ) | (68,913 | ) | (62,803 | ) | (72,692 | ) | |||||||||||||
| Average tangible common equity | $ | 766,424 | $ | 745,376 | $ | 720,807 | $ | 745,837 | $ | 757,815 | $ | 731,330 | $ | 756,740 | |||||||||||||
| Return on Average Tangible Common Equity (Annualized) | 12.84 | % | 13.27 | % | 14.49 | % | 3.27 | % | 16.22 | % | 11.16 | % | 13.02 | % | |||||||||||||
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Assets, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings, pre-tax, pre-provision operating earnings and the performance metrics calculated using these metrics, listed below, are non-GAAP measures used by management to evaluate the Company’s financial performance. We calculate (a) operating earnings as net income plus loss (gain) on sale of securities, net, plus loss on sale of disposed branch assets, plus debt extinguishment costs, plus merger and acquisition expenses, less tax impact of adjustments, plus other merger and acquisition tax items, plus re-measurement of deferred tax assets as a result of the reduction in the corporate income tax rate under the Tax Cuts and Jobs Act. We calculate (b) diluted operating earnings per share as operating earnings as described in clause (a) divided by weighted average diluted shares outstanding. We calculate (c) pre-tax, pre-provision operating earnings as operating earnings as described in clause (a) plus provision for income taxes, plus provision for credit losses and unfunded commitments. We calculate (d) pre-tax, pre-provision operating return on average assets as pre-tax, pre-provision operating earnings as described in clause (a) divided by total average assets. We calculate (e) operating return on average assets as operating earnings as described in clause (a) divided by total average assets. We calculate (f) operating return on average tangible common equity as operating earnings as described in clause (a), adjusted for the amortization of intangibles and tax benefit at the statutory rate, divided by total average tangible common equity (average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization). We calculate (g) operating efficiency ratio as non interest expense plus adjustments to operating non interest expense divided by non interest income plus adjustments to operating non interest income, plus net interest income.
We believe that these measures and the operating metrics calculated utilizing these measures are important to management and many investors in the marketplace who are interested in understanding the ongoing operating performance of the Company and provide meaningful comparisons to its peers.
The following tables reconcile, as of the dates set forth below, operating net income and pre-tax, pre-provision operating earnings and related metrics:
| For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Dec 31, 2020 | Dec 31, 2019 | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||
| Operating Earnings | |||||||||||||||||||||||||||
| Net income | $ | 22,801 | $ | 22,920 | $ | 24,028 | $ | 4,134 | $ | 29,051 | $ | 73,883 | $ | 90,739 | |||||||||||||
| Plus: Loss (gain) on sale of securities available for sale, net | 256 | 8 | (2,879 | ) | — | 438 | (2,615 | ) | 1,852 | ||||||||||||||||||
| Plus: Loss on sale of disposed branch assets1 | — | — | — | — | — | — | 359 | ||||||||||||||||||||
| Plus: Debt extinguishment costs2 | 9,746 | — | 1,561 | — | — | 11,307 | — | ||||||||||||||||||||
| Plus: Merger and acquisition expenses | — | — | — | — | 918 | — | 38,601 | ||||||||||||||||||||
| Operating pre-tax income | 32,803 | 22,928 | 22,710 | 4,134 | 30,407 | 82,575 | 131,551 | ||||||||||||||||||||
| Less: Tax impact of adjustments | 2,100 | — | (277 | ) | — | (23 | ) | 1,823 | 8,262 | ||||||||||||||||||
| Plus: Other M&A tax items3 | — | — | — | — | 829 | — | 1,512 | ||||||||||||||||||||
| Plus: Nonrecurring tax adjustments4 | (973 | ) | — | (1,799 | ) | — | (965 | ) | (2,772 | ) | (965 | ) | |||||||||||||||
| Operating earnings | $ | 29,730 | $ | 22,928 | $ | 21,188 | $ | 4,134 | $ | 30,294 | $ | 77,980 | $ | 123,836 | |||||||||||||
| Weighted average diluted shares outstanding | 49,837 | 49,775 | 49,727 | 51,056 | 52,263 | 50,036 | 53,978 | ||||||||||||||||||||
| Diluted EPS | $ | 0.46 | $ | 0.46 | $ | 0.48 | $ | 0.08 | $ | 0.56 | $ | 1.49 | $ | 1.68 | |||||||||||||
| Diluted operating EPS | $ | 0.60 | $ | 0.46 | $ | 0.43 | $ | 0.08 | $ | 0.58 | $ | 1.56 | $ | 2.29 | |||||||||||||
1 Loss on sale of disposed branch assets for the year ended December 31, 2019 is included in merger and acquisition expense in the condensed consolidated statements of income.
2 Debt extinguishment costs relate to prepayment penalties paid in connection with the early payoff of FHLB structured advances.
3 Other M&A tax items of $829 thousand recorded during the three months ended December 31, 2019 relate to permanent tax expense recognized by the Company as a result of deduction limitations on compensation paid to covered employees in excess of the 162(m) limitation directly due to change-in-control payments made to covered employees in connection with the Green acquisition.
4 A nonrecurring tax adjustment of $973 thousand recorded in the fourth quarter of 2020 was primarily due the reversal of acquired deferred tax liabilities resulting in a tax benefit of $1.2 million offset by tax expense of $281 thousand for the setup of an uncertain tax position liability relating to state tax exposure for tax years prior to the year ending December 31, 2020. A nonrecurring tax adjustment of $1,799 was recorded in the second quarter of 2020 as a result of the Company amending a prior year Green tax return to carry back a net operating loss ("NOL") incurred by Green on January 1, 2019. The Company was allowed to carry back this NOL as result of a provision in the CARES Act which permits NOLs generated in tax years 2018, 2019 or 2020 to be carried back five years. A nonrecurring tax adjustment of $965 thousand was recorded during the fourth quarter of 2019 primarily due to the Company recording a net tax benefit of $1.6 million as a result of the Company settling an audit with the IRS. The Company released an uncertain tax position reserve that was assumed in the Green acquisition resulting in a $2.2 million tax benefit, offset by tax expense totaling $598 thousand that were recorded due to the Tax Cuts and Jobs Act rate change on deferred tax assets resulting from the IRS audit settlement. The net IRS settlement was offset by various non-recurring tax expenses totaling $0.6 million.
| For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||
| Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Dec 31, 2020 | Dec 31, 2019 | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||
| Pre-Tax, Pre-Provision Operating Earnings | |||||||||||||||||||||||||||
| Net Income | $ | 22,801 | $ | 22,920 | $ | 24,028 | $ | 4,134 | $ | 29,051 | $ | 73,883 | $ | 90,739 | |||||||||||||
| Plus: Provision for income taxes | 4,702 | 6,198 | 3,987 | (684 | ) | 8,168 | 14,203 | 25,121 | |||||||||||||||||||
| Pus: Provision for credit losses and unfunded commitments | 902 | 10,139 | 18,971 | 35,657 | 3,493 | 65,669 | 21,514 | ||||||||||||||||||||
| Plus: Loss (gain) on sale of securities, net | 256 | 8 | (2,879 | ) | — | 438 | (2,615 | ) | 1,852 | ||||||||||||||||||
| Plus: Loss on sale of disposed branch assets1 | — | — | — | — | — | — | 359 | ||||||||||||||||||||
| Plus: Debt extinguishment costs | 9,746 | — | 1,561 | — | — | 11,307 | — | ||||||||||||||||||||
| Plus: Merger and acquisition expenses | — | — | — | — | 918 | — | 38,601 | ||||||||||||||||||||
| Net pre-tax, pre-provision operating earnings | $ | 38,407 | $ | 39,265 | $ | 45,668 | $ | 39,107 | $ | 42,068 | $ | 162,447 | $ | 178,186 | |||||||||||||
| Total average assets | $ | 8,750,141 | $ | 8,585,926 | $ | 8,689,774 | $ | 8,125,782 | $ | 8,043,505 | $ | 8,525,275 | $ | 7,957,883 | |||||||||||||
| Pre-tax, pre-provision operating return on average assets2 | 1.75 | % | 1.82 | % | 2.11 | % | 1.94 | % | 2.07 | % | 1.91 | % | 2.24 | % | |||||||||||||
| Average Total Assets | $ | 8,750,141 | $ | 8,585,926 | $ | 8,689,744 | $ | 8,125,782 | $ | 8,043,505 | $ | 8,525,275 | $ | 7,957,883 | |||||||||||||
| Return on average assets2 | 1.04 | % | 1.06 | % | 1.11 | % | 0.20 | % | 1.43 | % | 0.87 | % | 1.14 | % | |||||||||||||
| Operating return on average assets2 | 1.35 | 1.06 | 0.98 | 0.20 | 1.49 | 0.91 | 1.56 | ||||||||||||||||||||
| Operating earnings adjusted for amortization of core deposit intangibles | |||||||||||||||||||||||||||
| Operating earnings | $ | 29,730 | $ | 22,928 | $ | 21,188 | $ | 4,134 | $ | 30,294 | $ | 77,980 | $ | 123,836 | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||||
| Plus: Amortization of core deposit intangibles | 2,451 | 2,451 | 2,451 | 2,451 | 2,451 | 9,804 | 9,830 | ||||||||||||||||||||
| Less: Tax benefit at the statutory rate | 515 | 515 | 515 | 515 | 515 | 2,060 | 2,065 | ||||||||||||||||||||
| Operating earnings adjusted for amortization of core deposit intangibles | $ | 31,666 | $ | 24,864 | $ | 23,124 | $ | 6,070 | $ | 32,230 | $ | 85,724 | $ | 131,601 | |||||||||||||
| Average Tangible Common Equity | |||||||||||||||||||||||||||
| Total average stockholders' equity | $ | 1,196,274 | $ | 1,177,882 | $ | 1,155,798 | $ | 1,183,116 | $ | 1,197,191 | $ | 1,164,973 | $ | 1,198,873 | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||||
| Average goodwill | (370,840 | ) | (370,840 | ) | (370,840 | ) | (370,840 | ) | (370,463 | ) | (370,840 | ) | (369,441 | ) | |||||||||||||
| Average core deposit intangibles | (59,010 | ) | (61,666 | ) | (64,151 | ) | (66,439 | ) | (68,913 | ) | (62,803 | ) | (72,692 | ) | |||||||||||||
| Average tangible common equity | $ | 766,424 | $ | 745,376 | $ | 720,807 | $ | 745,837 | $ | 757,815 | $ | 731,330 | $ | 756,740 | |||||||||||||
| Operating return on average tangible common equity2 | 16.44 | % | 13.27 | % | 12.90 | % | 3.27 | % | 16.87 | % | 11.72 | % | 17.39 | % | |||||||||||||
| Efficiency ratio | 62.52 | % | 48.12 | % | 46.02 | % | 47.61 | % | 47.12 | % | 50.90 | % | 56.41 | % | |||||||||||||
| Operating efficiency ratio | 49.49 | % | 48.11 | % | 45.74 | % | 47.61 | % | 45.67 | % | 47.69 | % | 43.80 | % | |||||||||||||
1 Loss on sale of disposed branch assets for the year ended December 31, 2019 is included in merger and acquisition expense in the condensed consolidated statements of income.
2 Annualized ratio for quarterly metrics.