In This Article:
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Net Operating Profit: $29 million or $0.54 per share.
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Pretax Pre-Provision Earnings: $43.4 million or 1.41%.
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Loan Decrease: $125 million or 5% annualized.
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Gross Loan Production: $750 million in Q1, with $237 million funded.
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Nonperforming Assets: Increased from $79 million to $97 million.
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Net Charge-offs: $4 million for the quarter.
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Tangible Book Value Per Share: $22.33, up from $21.61 at year-end.
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Quarterly Dividend Increase: 10% to $0.22 per share.
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Share Repurchase: 377,000 shares repurchased, with $37 million remaining on authorization.
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Allowance for Credit Losses: 119 basis points, rising to 127 basis points excluding mortgage warehouse.
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Loan-to-Deposit Ratio: Reduced from 104% to 89% over two-plus years.
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Net Interest Margin (NIM): Increased 11 basis points to 3.31% in Q1.
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Operating Noninterest Income: Increased 2.4% to $14.8 million.
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Operating Efficiency Ratio: Declined 2.5% to 60.4%.
Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Veritex Holdings Inc (NASDAQ:VBTX) reported a net operating profit of $29 million or $0.54 per share for the first quarter.
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The company achieved a pretax pre-provision earnings of $43.4 million, indicating strong operational performance.
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Deposit growth was solid, with a focus on bringing in lower-priced relationship dollars and reducing reliance on higher-priced non-relationship dollars.
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Credit quality showed positive trends, with a net decrease in past dues and criticized loans, and charge-offs below forecast.
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The tangible book value per share increased to $22.33, marking a 13.8% year-over-year increase, including dividends paid.
Negative Points
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Loan growth was challenged, with a decrease in loans of $125 million or 5% annualized for the quarter.
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Nonaccrual loans increased by $17 million, primarily due to targeted actions on select retail and office exposures.
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Total loans declined 1.3% during Q1 and 3% on a year-over-year basis, with higher-than-normal payoffs impacting growth.
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The company's reliance on wholesale funding, although reduced, still stands at 13.7%, indicating a need for further reduction.
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Operating expenses are expected to increase slightly due to investments in new hires, despite efforts to manage costs.
Q & A Highlights
Q: Can you provide insights into the core deposit growth and the repricing of CDs in the upcoming quarters? A: Terry Earley, CFO, explained that the deposit growth is partly due to seasonality and new customer acquisition. The DDA growth includes mortgage escrows, which typically see outflows in Q4. For CDs, the current repricing is in the 4.15% to 4.25% range, offering opportunities to offset the impact of hedge roll-offs.