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Results of Operations for the Three Months Ended December 31, 2024

Net Interest Income

For the three months ended December 31, 2024, net interest income before provision for credit losses was $96.1 million and net interest margin was 3.20%, compared to $100.1 million and 3.30%, respectively, for the three months ended September 30, 2024. The $3.9 million decrease, or 3.9%, in net interest income before provision for credit losses was primarily due to a $12.3 million decrease in interest income on loans primarily driven by a decrease in loan yields and average loan balances. This decrease was partially offset by a $1.1 million increase in interest income on debt securities, $6.0 million decrease in interest expense on certificates and other time deposits, $2.4 million decrease in interest expense on transaction and savings deposits during the three months ended December 31, 2024. Net interest margin decreased 10 bps from the three months ended September 30, 2024, primarily due to the decrease in loan yields during the three months ended December 31, 2024, partially offset by an increase in yields on debt securities.

Compared to the three months ended December 31, 2023, net interest income before provision for credit losses for the three months ended December 31, 2024 increased by $608 thousand, or 0.6%. The increase was primarily due to a $4.6 million increase in interest income on debt securities, a $3.7 million increase in interest income in deposits in financial institutions and fed funds sold, a $2.5 million decrease in interest expense on advances from FHLB and a $1.4 million decrease in transaction and savings deposits driven by an decrease in funding costs. The increase in net interest income was partially offset by a $10.4 million decrease in interest income on loans driven by a decrease in loan yields and average balances. Net interest margin decreased 11 bps to 3.20% for the three months ended December 31, 2024 from 3.31% for the three months ended December 31, 2023. The decrease was primarily due to the decrease in loan yields during the three months ended December 31, 2024.

Noninterest Income (Loss)

Noninterest income for the three months ended December 31, 2024 was $10.1 million, a decrease of $3.1 million, or 23.3%, compared to noninterest income of $13.1 million for the three months ended September 30, 2024. The decrease in noninterest income was primarily due to a $4.4 million loss on sales of debt securities as a result of a strategic restructuring in which we sold $188.9 million of lower-yielding AFS securities, at amortized cost, with a 3.89% average yield, and reinvested the proceeds in higher yielding AFS securities with a 5.67% average yield. The decrease was also the result of a decrease of $852 thousand of OREO income, higher amortization of our servicing assets of $829 thousand and a decrease of $681 thousands due to the change in the value of equity securities. The decrease was partially offset by an increase of $4.6 million increase in government guaranteed loan income.

Compared to the three months ended December 31, 2023, noninterest income for the three months ended December 31, 2024 increased $27.8 million, or 156.5%. The increase was primarily due to a $29.4 million loss on equity method investment income related to the write down of our equity method investment in Thrive during the three months ended December 31, 2023 with no corresponding loss recorded during the three months ended December 31, 2024. The Company has no remaining equity method investment in Thrive.

Noninterest Expense

Noninterest expense was $71.2 million for the three months ended December 31, 2024, compared to $70.1 million for the three months ended September 30, 2024, a increase of $1.1 million, or 1.6%. Changes within noninterest expenses items were nominal.

Noninterest expense was $71.2 million for the three months ended December 31, 2024, compared to $60.2 million for the three months ended December 31, 2023, an increase of $11.0 million, or 18.2%. The increase was primarily driven by a $6.8 million increase in salary and employee benefits, a $4.1 million increase in other expenses, a $1.2 million increase in data processing and software expenses, and a $951 thousand increase in marketing expenses. The increase was partially offset by a $2.1 million decrease in professional and regulatory fees.

Financial Condition

Total loans held for investment (“LHI”) was $8.90 billion at December 31, 2024, a decrease of $129.4 million, compared to September 30, 2024, and a decrease of $307.4 million, or 3.3%, compared to December 31, 2023.

Total deposits were $10.75 billion at December 31, 2024, an decrease of $283.4 million compared to September 30, 2024, and an increase of $414.4 million, or 4.0%, compared to December 31, 2023. The decrease from September 30, 2024 was primarily the result of a decrease of $667.1 million in certificates and other time deposits, a decrease of $452.4 million in noninterest-bearing deposits, and a decrease of $20.4 million in correspondent money market accounts. The decrease was partially offset by a increase of $856.4 million in interest-bearing transaction, money market, and savings deposits. The increase from December 31, 2023 was primarily the result of an increase in attractive deposits which consisted of $712.8 million in interest-bearing transaction, money market, and savings deposits. The increase was partially offset by a $232.9 million decrease in certificates and other time deposits, a $38.9 million decrease in correspondent money market accounts, and a $26.6 million decrease in non-interest bearing deposits.

Credit Quality

Nonperforming assets (“NPAs”) increased to $79.2 million, or 0.62% of total assets, at December 31, 2024, compared to $67.3 million, or 0.52% of total assets, at September 30, 2024. Net charge-offs compared to average loans outstanding were 21 bps for the year ended December 31, 2024, compared to 25 bps for year ended December 31, 2023.

ACL as a percentage of LHI was 1.18%, 1.21%, and 1.14% at December 31, 2024, September 30, 2024, and December 31, 2023, respectively. The Company recorded a provision for credit losses of $2.3 million for the three months ended December 31, 2024, compared to a provision for credit losses of $4.0 million and $9.5 million for the three months ended September 30, 2024 and December 31, 2023, respectively. The recorded provision for credit losses reported for the three months ended December 31, 2024, compared to the three months ended December 31, 2023 was primarily attributable to a decrease in the overall loans held for investment balances and changes in general reserves as a result of changes in economic factors. The Company recorded a benefit for unfunded commitments of $401 thousand and $1.5 million during the three months ended December 31, 2024, and December 31, 2023, respectively. There was no provision for unfunded commitments recorded during the three months ended in September 30, 2024. The decrease in the recorded benefit for unfunded commitments during the three months ended December 31, 2024, compared to the three months ended September 30, 2024, was primarily attributable to changes in the economic factors applied to unfunded commitment balances.

Dividend Information

On January 28, 2025, 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 28, 2025 to stockholders of record as of the close of business on February 14, 2025.

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, pre-tax, pre-provision operating return on average loans, 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 29, 2025 at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/8uwctr48 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/BIf4f4afb9195448ba90575ac59fb337bc. 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’s quarterly cash dividend; the impact of certain changes in Veritex’s accounting policies, standards and interpretations; a continuation of recent turmoil in the banking industry, responsive measures to mitigate and manage it and related supervisory and regulatory actions and costs 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, 2023 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)

¹ Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” after the financial highlights for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.
² Dividend amount represents dividend paid per common share subsequent to each respective quarter end.
³ Annualized ratio for quarterly metrics.

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

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

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

¹ Includes average outstanding balances of LHFS of $46.4 million, $54.3 million and $31.2 million for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively, and average balances of LHI, excluding MW.
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)

¹Includes average outstanding balances of LHFS of $53.3 million and $25.7 million for the twelve months ended December 31, 2024 and 2023, respectively, and average balances of LHI, excluding MW.
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

¹ Includes average outstanding balances of LHFS of $46.4 million, $54.3 million, $58.5 million, $53.9 million and $31.2 million for the three months ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively, and average balances of LHI, excluding MW.
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

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

LHI and Deposit Portfolio Composition

¹ Total LHI does not include deferred costs of $9.0 million, $8.2 million, $7.8 million, $6.9 million and $8.8 million at December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively.

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

Asset Quality

¹ Nonaccrual PCD loans consist of PCD loans that transitioned upon adoption of ASC 326 Financial Instruments - Credit Losses and were accounted for on a pooled basis that have subsequently been placed on nonaccrual status.
² Accruing loans greater than 90 days past due exclude PCD loans greater than 90 days past due that are accounted for on a pooled basis.
³Annualized ratio for quarterly metrics.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
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 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:

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
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:

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
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:

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
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 Assets, Pre-tax, Pre-Provision Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Loans, 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 equity method investment write-down, plus FDIC special assessment, plus severance payments, plus loss on sale of debt securities AFS, net, less tax impact of adjustments, plus nonrecurring tax adjustments. 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 benefit (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 noninterest expense plus adjustments to operating noninterest expense divided by noninterest income plus adjustments to operating noninterest 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:

¹ Severance payments relate to restructurings made during the periods disclosed.

¹ Annualized ratio for quarterly metrics.

CONTACT: Media and Investor Relations: investorrelations@veritexbank.com