Veritex Holdings, Inc. Reports Second Quarter Operating Results

Jul 27th, 2022 11:31 EST

DALLAS, July 27, 2022 (GLOBE NEWSWIRE) -- Veritex Holdings, Inc. (“Veritex”, the “Company”, “we” or “our”) (Nasdaq: VBTX), the holding company for Veritex Community Bank, today announced the results for the quarter ended June 30, 2022.

“The second quarter of 2022 was another exceptional quarter for our Company, reporting 1.76% in PTPP operating return,” said President and CEO, C. Malcolm C. Holland, III. “We have remained and will remain focused on the positive momentum we have created by investing in talent and focus on scale in two of the strongest and most resilient markets in the U.S.”

  Quarter to Date Year to Date
Financial Highlights Q2 2022 Q1 2022  Q2 2022 Q2 2021
  (Dollars in thousands, except per share data)(unaudited)
GAAP         
Net income $29,626  $33,470   $63,096  $61,243 
Diluted EPS  0.54   0.65    1.19   1.22 
Book value per common share  26.50   26.86    26.50   25.72 
Return on average assets2  1.11%  1.36%   1.23%  1.35%
Efficiency ratio  50.76   52.84    51.76   51.01 
Return on average equity2  8.21   10.00    9.07   9.96 
Non-GAAP1         
Operating earnings $29,855  $34,014   $63,869  $62,165 
Diluted operating EPS  0.55   0.66    1.20   1.24 
Tangible book value per common share  18.20   18.51    18.20   17.16 
Pre-tax, pre-provision operating earnings  47,000   42,265    89,265   78,707 
Pre-tax, pre-provision operating return on average assets2  1.76%  1.71%   1.74%  1.74%
Operating return on average assets2  1.12   1.38    1.24   1.37 
Operating efficiency ratio  50.45   52.05    51.22   50.62 
Return on average tangible common equity2  12.68   15.84    14.17   16.15 
Operating return on average tangible common equity2  12.77   16.08    14.34   16.38 

1 Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of these non-generally accepted accounting principles (“”GAAP”) financial measures to their most directly comparable GAAP measures.2 Annualized ratio.

Other Second Quarter Highlights

  • Pre-tax, pre-provision operating return on average assets increased 5 bps from the first quarter of 2022 to 1.76%;
  • Non-performing assets (“NPAs”) to total assets decreased to 0.40%, or 6 bps from March 31, 2022, and decreased to 0.40% or 45 bps from June 30, 2021, respectively;
  • Net charge-offs to average loans outstanding of 1 basis point for the second quarter of 2022;
  • Net interest margin increased to 3.42%, up 20 basis points from the first quarter of 2022;
  • Total loans held for investment (“LHI”), excluding mortgage warehouse (“MW”) and paycheck protection program (“PPP”) loans, grew $790.4 million, or 44.4% annualized, during the three months ended June 30, 2022 from $7.1 billion at the end of the first quarter of 2022;
  • Total deposits grew $628.1 million, or 31.8% annualized, during the three months ended June 30, 2022 from $7.9 billion at the end of the first quarter of 2022; and
  • Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on August 26, 2022.

Results of Operations for the Three Months Ended June 30, 2022

Net Interest Income

For the three months ended June 30, 2022, net interest income before provision for credit losses was $84.5 million and net interest margin was 3.42% compared to $73.0 million and 3.22%, respectively, for the three months ended March 31, 2022. The $11.4 million increase in net interest income before provision for credit losses was primarily due to a $10.7 million increase in interest income on loans driven by an increase in average balances and loan yields during the three months ended June 30, 2022. Net interest margin increased 20 basis points compared to the three months ended March 31, 2022, primarily due to the increase in yields earned on loans during three months ended June 30, 2022.

Compared to the three months ended June 30, 2021, net interest income before provision for credit losses for the three months ended June 30, 2022 increased by $17.3 million, or 25.8%. The increase was primarily due to a $14.4 million increase in interest income on loans driven by an increase in average balances. The average cost of interest-bearing deposits increased 8 basis points to 0.43% for the three months ended June 30, 2022 from 0.35% for the three months ended June 30, 2021.

Noninterest Income

Noninterest income for the three months ended June 30, 2022 was $10.4 million, a decrease of $4.7 million, or 31.3%, compared to the three months ended March 31, 2022. The decrease was primarily due to a $4.1 million decrease in government guaranteed loan income, net.

Compared to the three months ended June 30, 2021, noninterest income for the three months ended June 30, 2022 decreased by $2.1 million, or 16.7%. The decrease was primarily due to a $2.7 million decrease in government guaranteed loan income, net.

Noninterest Expense

Noninterest expense was $48.2 million for the three months ended June 30, 2022, compared to $46.6 million for the three months ended March 31, 2022, an increase of $1.6 million, or 3.4%. This increase was primarily due to a $1.1 million increase in marketing expenses.

Compared to the three months ended June 30, 2021, noninterest expense for the three months ended June 30, 2022 increased by $6.4 million, or 15.4%. The increase was primarily driven by a $3.5 million increase in salaries and employee benefits as a result of a $3.3 million increase in salaries resulting from continued investment in talent.

Financial Condition

Total LHI, excluding MW and PPP loans, were $7.9 billion at June 30, 2022, an increase of $790.4 million, or 44.4% annualized, compared to March 31, 2022. The increase was the result of the continued execution, and success of our loan growth strategy, including our investment in talent.

Total deposits were $8.5 billion at June 30, 2022, an increase of $628.1 million, or 31.8% annualized, compared to March 31, 2022. The increase was primarily the result of an increase of $319.0 million in interest-bearing transaction and savings deposits, an increase of $181.9 million in noninterest-bearing demand deposits, and an increase of $127.2 million in certificates and other time deposits.

Asset Quality

Nonperforming assets totaled $45.0 million, or 0.40% of total assets at June 30, 2022, compared to $48.0 million, or 0.46% of total assets at March 31, 2022. The Company had net charge-offs of $909 thousand for the quarter, which were fully reserved against in prior quarters under our allowance for credit loss (“ACL”) model.

The Company recorded a provision for credit losses of $9.0 million for the three months ended June 30, 2022, a $500 thousand benefit for credit losses for the three months ended March 31, 2022 and no provision for credit losses for the three months ended June 30, 2021. The recorded provision for credit losses for the three months ended June 30, 2022, compared to the three months ended March 31, 2022, was primarily attributable to an increase in general reserves as a result of loan growth. For the three months ended June 30, 2022, we recorded no provision for unfunded commitments, which was attributable to stable unfunded balances. ACL as a percentage of LHI, excluding MW and PPP loans, was 1.02%, 1.02% and 1.59% at June 30, 2022, March 31, 2022 and June 30, 2021, respectively.

Dividend Information

On July 27, 2022, 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 or after August 26, 2022 to stockholders of record as of the close of business on August 12, 2022.

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 and webcast to review the results on Wednesday, July 27, 2022, at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/r7rx63qg 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/BI70101fb149e640b7a111c50ba9b1bef1. 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 Veritex Holdings, Inc.’s (“Veritex”) proposed acquisition of interLINK, including the expected timing of the completion of the acquisition, the ability to complete the acquisition, the ability to obtain any required regulatory or other approvals, authorizations or consents in connection with the acquisition, disruption from the acquisition making it more difficult to maintain relationships with employees, customers or other parties with whom Veritex or interLINK have business relationships, diversion of management time on acquisition-related issues, the reaction to the acquisition of the companies’ customers, employees and counterparties, any statements regarding the plans and objectives of management for future operations, products or services arising from the acquisition, including integration plans, and the treatment of certain deposits via interLINK as not being brokered deposits for any supervisory purpose; 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; and Veritex’s future financial performance, business and growth strategy, projected plans and objectives, as well as other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “seeks,” “targets,” “outlooks,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. We refer you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Veritex’s Annual Report on Form 10-K for the year ended December 31, 2021 and any updates to those risk factors set forth in Veritex’s Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. If one or more events related to these or other risks or uncertainties materialize, or if Veritex’s underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. Veritex does not undertake any obligation, and specifically declines any obligation, to supplement, update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, expressed or implied, included in this earnings release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Veritex or persons acting on Veritex’s behalf may issue.

 

VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(Unaudited)

  For the Quarter Ended For the Six Months Ended
  Jun 30,2022 Mar 31,2022 Dec 31,2021 Sep 30,2021 Jun 30,2021 Jun 30,2022 Jun 30,2021
  (Dollars and shares in thousands)
Per Share Data (Common Stock):              
Basic EPS $0.55  $0.66  $0.84  $0.75  $0.60  $1.21  $1.24 
Diluted EPS  0.54   0.65   0.82   0.73   0.59   1.19   1.22 
Book value per common share  26.50   26.86   26.64   26.09   25.72   26.50   25.72 
Tangible book value per common share1  18.20   18.51   17.49   17.53   17.16   18.20   17.16 
Dividends paid per common share outstanding2  0.20   0.20   0.20   0.20   0.20   0.40   0.37 
               
Common Stock Data:              
Shares outstanding at period end  53,951   53,907   49,372   49,229   49,498   53,951   49,498 
Weighted average basic shares outstanding for the period  53,949   50,695   49,329   49,423   49,476   52,331   49,435 
Weighted average diluted shares outstanding for the period  54,646   51,571   50,441   50,306   50,331   53,121   50,187 
               
Summary of Credit Ratios:              
ACL to total LHI, excluding MW and PPP loans  1.02%  1.02%  1.15%  1.42%  1.59%  1.02%  1.59%
NPAs to total assets  0.40   0.46   0.51   0.77   0.85   0.40   0.85 
Net charge-offs to average loans outstanding  0.01   0.07   0.19   0.09   0.09   0.08   0.09 
               
Summary Performance Ratios:              
Return on average assets3  1.11   1.36   1.68   1.56   1.27   1.23   1.35 
Return on average equity3  8.21   10.00   12.65   11.32   9.42   9.07   9.96 
Return on average tangible common equity1, 3  12.68   15.84   20.06   17.72   15.18   14.17   16.15 
Efficiency ratio  50.76   52.84   48.53   47.55   52.42   51.76   51.01 
Net interest margin  3.42   3.22   3.37   3.26   3.11   3.32   3.16 
               
Selected Performance Metrics - Operating:              
Diluted operating EPS1 $0.55  $0.66  $0.84  $0.70  $0.60  $1.20  $1.24 
Pre-tax, pre-provision operating return on average assets1, 2  1.76%  1.71%  1.97%  1.85%  1.66%  1.74%  1.74%
Operating return on average assets1, 3  1.12   1.38   1.72   1.48   1.29   1.24   1.37 
Operating return on average tangible common equity1, 3  12.77   16.08   20.48   16.92   15.42   14.34   16.38 
Operating efficiency ratio1  50.45   52.05   47.64   48.51   51.63   51.22   50.62 
               
Veritex Holdings, Inc. Capital Ratios:              
Average stockholders' equity to average total assets  13.51%  13.58%  13.30%  13.75%  13.46%  13.54%  13.57%
Tangible common equity to tangible assets1  9.04   9.98   9.28   9.43   9.51   9.04   9.51 
Tier 1 capital to average assets (leverage)  10.14   10.66   9.05   9.54   9.38   10.14   9.38 
Common equity tier 1 capital  9.25   9.84   8.58   8.75   9.03   9.25   9.03 
Tier 1 capital to risk-weighted assets  9.52   10.14   8.89   9.06   9.36   9.52   9.36 
Total capital to risk-weighted assets  11.95   12.73   11.60   12.31   12.86   11.95   12.86 

1Refer 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.2Dividend amount represents dividend paid per common share subsequent to each respective quarter end.3Annualized ratio for quarterly metrics.

VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(In thousands)

  Jun 30,2022 Mar 31,2022 Dec 31,2021 Sep 30,2021 Jun 30,2021
  (unaudited) (unaudited)   (unaudited) (unaudited)
ASSETS          
Cash and cash equivalents $410,716  $551,573  $379,784  $229,712  $390,027 
Debt Securities  1,354,403   1,244,514   1,052,494   1,103,745   1,125,877 
Other investments  202,685   188,699   190,591   191,786   87,558 
           
Loans held for sale  14,210   18,721   26,007   18,896   12,065 
LHI, PPP loans, carried at fair value  7,339   18,512   53,369   135,842   291,401 
LHI, MW  629,291   542,877   565,645   615,045   559,939 
LHI, excluding MW and PPP  7,915,792   7,125,429   6,766,009   6,615,905   6,272,087 
Total loans  8,566,632   7,705,539   7,411,030   7,385,688   7,135,492 
ACL  (80,576)  (72,485)  (77,754)  (93,771)  (99,543)
Bank-owned life insurance  84,097   83,641   83,194   83,781   83,304 
Bank premises, furniture and equipment, net  108,769   109,138   109,271   116,063   123,504 
Other real estate owned (“OREO”)  1,032   1,062         2,467 
Intangible assets, net of accumulated amortization  59,011   63,986   66,017   54,682   57,143 
Goodwill  404,452   404,452   403,771   370,840   370,840 
Other assets  193,590   173,561   138,851   129,774   72,856 
Total assets $11,304,811  $10,453,680  $9,757,249  $9,572,300  $9,349,525 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Deposits:          
Noninterest-bearing deposits $2,947,830  $2,765,895  $2,510,723  $2,302,925  $2,388,068 
Interest-bearing transaction and savings deposits  4,007,250   3,688,292   3,276,312   3,228,306   3,112,974 
Certificates and other time deposits  1,562,626   1,435,409   1,576,580   1,647,521   1,477,860 
Total deposits  8,517,706   7,889,596   7,363,615   7,178,752   6,978,902 
Accounts payable and other liabilities  126,116   105,552   69,160   66,571   55,499 
Advances from Federal Home Loan Bank (“FHLB”)  1,000,000   777,522   777,562   777,601   777,640 
Subordinated debentures and subordinated notes  228,272   228,018   227,764   262,761   262,766 
Securities sold under agreements to repurchase  3,275   4,996   4,069   2,455   1,811 
Total liabilities  9,875,369   9,005,684   8,442,170   8,288,140   8,076,618 
Commitments and contingencies          
Stockholders’ equity:          
Common stock  606   605   560   559   558 
Additional paid-in capital  1,300,170   1,297,161   1,142,758   1,137,889   1,134,603 
Retained earnings  317,664   298,830   275,273   243,633   216,704 
Accumulated other comprehensive (loss) income  (21,416)  18,982   64,070   69,661   77,189 
Treasury stock  (167,582)  (167,582)  (167,582)  (167,582)  (156,147)
Total stockholders’ equity  1,429,442   1,447,996   1,315,079   1,284,160   1,272,907 
Total liabilities and stockholders’ equity $11,304,811  $10,453,680  $9,757,249  $9,572,300  $9,349,525 

VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(In thousands, except per share data)

  For the Quarter Ended For the Six Months Ended
  Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Jun 30, 2022 Jun 30, 2021
Interest income:              
Loans, including fees $82,191 $71,443  $74,174  $71,139  $67,814 $153,634 $135,213
Debt securities  9,632  7,762   9,553   7,613   7,529  17,394  14,966
Deposits in financial institutions and Fed Funds sold  714  262   165   130   167  976  294
Equity securities and other investments  1,057  910   1,004   898   672  1,967  1,335
Total interest income  93,594  80,377   84,896   79,780   76,182  173,971  151,808
Interest expense:              
Transaction and savings deposits  4,094  1,751   1,629   1,588   1,661  5,845  3,641
Certificates and other time deposits  1,465  1,380   1,661   1,934   2,423  2,845  5,484
Advances from FHLB  834  1,547   1,847   1,848   1,829  2,381  3,641
Subordinated debentures and subordinated notes  2,721  2,659   3,018   3,134   3,138  5,380  6,276
Total interest expense  9,114  7,337   8,155   8,504   9,051  16,451  19,042
Net interest income  84,480  73,040   76,741   71,276   67,131  157,520  132,766
Provision (benefit) for credit losses  9,000  (500)  (3,349)       8,500  
Provision (benefit) for unfunded commitments    493   (1,040)  (448)  577  493  7
Net interest income after provisions  75,480  73,047   81,130   71,724   66,554  148,527  132,759
Noninterest income:              
Service charges and fees on deposit accounts  5,039  4,710   4,782   4,484   3,847  9,749  7,476
Loan fees  2,385  2,794   2,697   1,746   1,823  5,179  3,164
Loss on sales of investment securities          (188)      
Gain on sales of mortgage loans held for sale  223  307   293   407   385  530  892
Government guaranteed loan income, net  789  4,891   3,423   2,341   3,448  5,680  9,996
Equity method investment income  966  367   1,238   4,522     1,333  
Other  976  2,028   3,717   2,315   2,953  3,004  5,100
Total noninterest income  10,378  15,097   16,150   15,627   12,456  25,475  26,628
Noninterest expense:              
Salaries and employee benefits  26,924  27,513   25,401   22,964   23,451  54,437  46,383
Occupancy and equipment  4,496  4,517   4,398   4,536   4,233  9,013  8,329
Professional and regulatory fees  2,865  3,158   3,017   3,401   3,086  6,023  6,527
Data processing and software expense  3,386  2,921   2,597   2,494   2,536  6,307  4,855
Marketing  2,306  1,187   1,443   1,151   1,841  3,493  2,750
Amortization of intangibles  2,495  2,495   2,494   2,509   2,517  4,990  5,054
Telephone and communications  352  385   380   380   337  737  674
Merger and acquisition (“M&A”) expense  295  700   826        995  
Other  5,034  3,696   4,521   3,886   3,716  8,730  6,742
Total noninterest expense  48,153  46,572   45,077   41,321   41,717  94,725  81,314
Income before income tax expense  37,705  41,572   52,203   46,030   37,293  79,277  78,073
Income tax expense  8,079  8,102   10,697   9,195   7,837  16,181  16,830
Net income $29,626 $33,470  $41,506  $36,835  $29,456 $63,096 $61,243
Net income available to common stockholders $29,626 $33,470  $41,506  $36,835  $29,456 $63,096 $61,243
               
Basic EPS $0.55 $0.66  $0.84  $0.75  $0.60 $1.21 $1.24
Diluted EPS $0.54 $0.65  $0.82  $0.73  $0.59 $1.19 $1.22
Weighted average basic shares outstanding  53,949  50,695   49,329   49,423   49,476  52,331  49,435
Weighted average diluted shares outstanding  54,646  51,571   50,441   50,306   50,331  53,121  50,187

VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(Unaudited)

  For the Quarter Ended
  June 30, 2022 March 31, 2022 June 30, 2021
  AverageOutstandingBalance InterestEarned/InterestPaid AverageYield/Rate AverageOutstandingBalance InterestEarned/InterestPaid AverageYield/Rate AverageOutstandingBalance InterestEarned/InterestPaid AverageYield/Rate
  (In thousands, expect percentages)
Assets                  
Interest-earning assets:                  
Loans1 $7,547,564  $78,234 4.16% $6,872,943  $68,297 4.03% $6,108,527  $63,427 4.16%
LHI, MW  479,187   3,929 3.29   421,680   3,069 2.95   455,334   3,476 3.06 
PPP loans  11,402   28 1.00   31,335   77 1.00   364,020   911 1.00 
Debt securities  1,318,502   9,632 2.93   1,140,834   7,762 2.76   1,095,678   7,529 2.76 
Interest-bearing deposits in other banks  369,847   714 0.77   554,864   262 0.19   548,087   167 0.12 
Equity securities and other investments  167,327   1,057 2.53   190,002   910 1.94   87,413   672 3.08 
Total interest-earning assets  9,893,829   93,594 3.79   9,211,658   80,377 3.54   8,659,059   76,182 3.53 
ACL  (74,268)      (77,843)      (105,050)    
Noninterest-earning assets  892,102       865,107       767,270     
Total assets $10,711,663      $9,998,922      $9,321,279     
                   
Liabilities and Stockholders’ Equity                  
Interest-bearing liabilities:                  
Interest-bearing demand and savings deposits $3,770,098  $4,094 0.44% $3,471,645  $1,751 0.20% $3,191,405  $1,661 0.21%
Certificates and other time deposits  1,459,690   1,465 0.40   1,501,852   1,380 0.37   1,515,092   2,423 0.64 
Advances from FHLB  828,769   834 0.40   777,538   1,547 0.81   777,655   1,829 0.94 
Subordinated debentures and subordinated notes  232,043   2,721 4.70   231,875   2,659 4.65   264,931   3,138 4.75 
Total interest-bearing liabilities  6,290,600   9,114 0.58   5,982,910   7,337 0.50   5,749,083   9,051 0.63 
                   
Noninterest-bearing liabilities:                  
Noninterest-bearing deposits  2,870,692       2,591,504       2,266,470     
Other liabilities  102,994       67,060       51,355     
Total liabilities  9,264,286       8,641,474       8,066,908     
Stockholders’ equity  1,447,377       1,357,448       1,254,371     
Total liabilities and stockholders’ equity $10,711,663      $9,998,922      $9,321,279     
                   
Net interest rate spread2     3.21%     3.04%     2.90%
Net interest income and margin3    84,480 3.42%    73,040 3.22%    67,131 3.11%

1 Includes average outstanding balances of loans held for sale of $12,112, $12,769 and $14,364 for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively, and average balances of LHI, excluding MW and PPP loans.2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.3 Net interest margin is equal to net interest income divided by average interest-earning assets.

VERITEX HOLDINGS, INC. AND SUBSIDIARYFinancial Highlights(In thousands except percentages)

  Six Months Ended
  June 30, 2022 June 30, 2021
  AverageOutstandingBalance InterestEarned/InterestPaid AverageYield/Rate AverageOutstandingBalance InterestEarned/InterestPaid AverageYield/Rate
Assets            
Interest-earning assets:            
Loans1 $7,205,954  $146,500 4.10% $6,003,754  $126,128 4.24%
LHI, WH  450,592   6,998 3.13   482,853   7,292 3.05 
PPP loans  27,477   136 1.00   360,209   1,793 1.00 
Debt securities  1,230,159   17,394 2.85   1,079,697   14,966 2.80 
Interest-bearing deposits in other banks  461,844   976 0.43   445,356   294 0.13 
Equity securities and other investments  178,602   1,967 2.22   87,296   1,335 3.08 
Total interest-earning assets  9,554,628   173,971 3.67   8,459,165   151,808 3.62 
ACL  (76,046)      (105,509)    
Noninterest-earning assets  878,679       778,691     
Total assets $10,357,261      $9,132,347     
             
Liabilities and Stockholders’ Equity            
Interest-bearing liabilities:            
Interest-bearing demand and savings deposits $3,621,697  $5,845 0.33% $3,115,417  $3,641 0.24%
Certificates and other time deposits  1,480,654   2,845 0.39   1,512,479   5,484 0.73 
Advances from FHLB  803,295   2,381 0.60   777,675   3,641 0.94 
Subordinated debentures and subordinated notes  231,959   5,380 4.68   265,142   6,276 4.77 
Total interest-bearing liabilities  6,137,605   16,451 0.54   5,670,713   19,042 0.68 
             
Noninterest-bearing liabilities:            
Noninterest-bearing deposits  2,731,869       2,168,396     
Other liabilities  85,126       53,823     
Total liabilities  8,954,600       7,892,932     
Stockholders’ equity  1,402,661       1,239,415     
Total liabilities and stockholders’ equity $10,357,261      $9,132,347     
             
Net interest rate spread2     3.13%     2.94%
Net interest income and margin3   $157,520 3.32%   $132,766 3.16%

1 Includes average outstanding balances of loans held for sale of $12,440 and $15,476 for the six months ended June 30, 2022 and June 30, 2021, respectively, and average balances of LHI, excluding MW and PPP loans.2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.3 Net interest margin is equal to net interest income divided by average interest-earning assets.

VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights

Yield Trend

  For the Quarter Ended
  Jun 30,2022 Mar 31,2022 Dec 31,2021 Sep 30,2021 Jun 30,2021
Average yield on interest-earning assets:          
Loans1 4.16% 4.03% 4.12% 4.16% 4.16%
LHI, MW 3.29  2.95  2.98  3.15  3.06 
PPP loans 1.00  1.00  1.00  1.00  1.00 
Debt securities 2.93  2.76  3.47  2.70  2.76 
Interest-bearing deposits in other banks 0.77  0.19  0.16  0.15  0.12 
Equity securities and other investments 2.53  1.94  2.09  2.13  3.08 
Total interest-earning assets 3.79% 3.54% 3.72% 3.64% 3.53%
           
Average rate on interest-bearing liabilities:          
Interest-bearing demand and savings deposits 0.44% 0.20% 0.19% 0.20% 0.21%
Certificates and other time deposits 0.40  0.37  0.41  0.50  0.64 
Advances from FHLB 0.40  0.81  0.94  0.94  0.94 
Subordinated debentures and subordinated notes 4.70  4.65  4.62  4.70  4.75 
Total interest-bearing liabilities 0.58% 0.50% 0.54% 0.59% 0.63%
           
Net interest rate spread2 3.21% 3.04% 3.18% 3.05% 2.90%
Net interest margin3 3.42% 3.22% 3.37% 3.26% 3.11%

   1Includes average outstanding balances of loans held for sale of $12,112, $12,769, $8,987, $8,542 and $14,364 for the three months ended June 30, 2022,      March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021, respectively, and average balances of LHI, excluding MW and PPP loans.2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.3 Net interest margin is equal to net interest income divided by average interest-earning assets.

Supplemental Yield Trend

  For the Quarter Ended
  Jun 30,2022 Mar 31,2022 Dec 31,2021 Sep 30,2021 Jun 30,2021
Average cost of interest-bearing deposits 0.43% 0.26% 0.26% 0.30% 0.35%
Average costs of total deposits, including noninterest-bearing 0.28  0.17  0.18  0.20  0.23 

VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(Unaudited)

LHI and Deposit Portfolio Composition

  Jun 30,2022 Mar 31,2022 Dec 31,2021 Sep 30,2021 Jun 30,2021
  (In thousands, expect percentages)
LHI1                    
Commercial $2,450,403  30.9% $2,125,900  29.8% $2,006,876  29.6% $1,793,740  27.1% $1,771,100  28.2%
Real Estate:                    
Owner occupied commercial (“OOCRE”)  646,723  8.2   633,615  8.9   665,537  9.8   711,476  10.7   744,899  11.9 
Non-owner occupied commercial (“NOOCRE”)  2,203,970  27.8   2,145,826  30.0   2,120,309  31.3   2,194,438  33.1   1,986,538  31.6 
Construction and land  1,532,997  19.3   1,297,338  18.2   1,062,144  15.7   936,174  14.1   871,765  13.9 
Farmland  47,319  0.6   48,095  0.7   55,827  0.8   73,550  1.1   13,661  0.2 
1-4 family residential  765,260  9.6   604,408  8.5   542,566  8.0   543,518  8.2   513,635  8.2 
Multi-family residential  276,632  3.5   272,250  3.8   310,241  4.6   356,885  5.4   367,445  5.9 
Consumer  7,520  0.1   9,533  0.1   11,998  0.2   14,266  0.3   10,530  0.1 
Total LHI $7,930,824  100% $7,136,965  100% $6,775,498  100% $6,624,047  100% $6,279,573  100%
                     
MW  629,291     542,877     565,645     615,045     559,939   
PPP loans  7,339     18,512     53,369     135,842     291,401   
                     
Total LHI1 $8,567,454    $7,698,354    $7,394,512    $7,374,934    $7,130,913   
                     
Deposits                    
Noninterest-bearing $2,947,830  34.6% $2,765,895  35.1% $2,510,723  34.1% $2,302,925  32.1% $2,388,068  34.1%
Interest-bearing transaction  660,557  7.8   599,580  7.6   579,408  7.9   514,537  7.2   451,307  6.5 
Money market  3,217,195  37.8   2,958,790  37.5   2,568,843  34.9   2,585,926  36.0   2,539,061  36.4 
Savings  129,498  1.5   129,922  1.6   128,061  1.7   127,843  1.8   122,606  1.8 
Certificates and other time deposits  1,562,626  18.3   1,435,409  18.2   1,576,580  21.4   1,647,521  22.9   1,477,860  21.2 
Total deposits $8,517,706  100% $7,889,596  100% $7,363,615  100% $7,178,752  100% $6,978,902  100%
                     
Loan to Deposit Ratio  100.6%    97.6%    100.4%    102.7%    102.2%  
                     
Loan to Deposit Ratio, excluding MW and PPP loans  93.1%    90.5%    92.0%    92.3%    90.0%  

1 Total LHI does not include deferred fees of $15.0 million, $11.5 million, $9.5 million, $8.1 million and $7.5 million at June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021, respectively.

VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(Unaudited)Asset Quality

 For the Quarter Ended For the Six Months Ended
 Jun 30,2022 Mar 31,2022 Dec 31,2021 Sep 30,2021 Jun 30,2021 Jun 30,2022 Jun 30,2021
 (In thousands)    
NPAs:             
Nonaccrual loans$42,242  $46,680  $49,687  $72,317  $76,994  $42,242  $76,994 
Accruing loans 90 or more days past due1 1,753   264   441   1,711   462   1,753   462 
Total nonperforming loans held for investment (“NPLs”) 43,995   46,944   50,128   74,028   77,456   43,995   77,456 
OREO 1,032   1,062         2,467   1,032   2,467 
Total NPAs$45,027  $48,006  $50,128  $74,028  $79,923  $45,027  $79,923 
              
Charge-offs:             
1-4 family residential$  $  $  $(64) $(300) $  $(315)
OOCRE (244)  (1,341)  (898)  (813)  (689)  (1,585)  (689)
NOOCRE    (553)  (7,936)        (553)   
Commercial (528)  (3,294)  (4,114)  (5,508)  (5,608)  (3,822)  (5,954)
Consumer (1,091)  (134)  (44)  (17)  (20)  (1,225)  (38)
Total charge-offs (1,863)  (5,322)  (12,992)  (6,402)  (6,617)  (7,185)  (6,996)
              
Recoveries:             
1-4 family residential 3      6   26   29   3   32 
OOCRE 245            500   245   500 
NOOCRE 93   400            493    
Commercial 572   144   61   596   659   716   885 
Consumer 41   9   257   8   36   50   38 
Total recoveries 954   553   324   630   1,224   1,507   1,455 
              
Net charge-offs$(909) $(4,769) $(12,668) $(5,772) $(5,393) $(5,678) $(5,541)
              
              
ACL$80,576  $72,485  $77,754  $93,771  $99,543  $80,576  $99,543 
              
Asset Quality Ratios:             
NPAs to total assets 0.40%  0.46%  0.51%  0.77%  0.85%  0.40%  0.85%
NPLs to total LHI, excluding MW and PPP loans 0.55   0.66   0.74   1.12   1.23   0.55   1.23 
ACL to total LHI, excluding MW and PPP loans 1.02   1.02   1.15   1.42   1.59   1.02   1.59 
Net charge-offs to average loans outstanding 0.01   0.07   0.19   0.09   0.09   0.08   0.09 

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 SUBSIDIARIESReconciliation 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 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
  Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021
  (Dollars in thousands, except per share data)
Tangible Common Equity          
Total stockholders' equity $1,429,442  $1,447,996  $1,315,079  $1,284,160  $1,272,907 
Adjustments:          
Goodwill  (404,452)  (404,452)  (403,771)  (370,840)  (370,840)
Core deposit intangibles  (43,122)  (45,560)  (47,998)  (50,436)  (52,873)
Tangible common equity $981,868  $997,984  $863,310  $862,884  $849,194 
Common shares outstanding  53,951   53,907   49,372   49,229   49,498 
           
Book value per common share $26.50  $26.86  $26.64  $26.09  $25.72 
Tangible book value per common share $18.20  $18.51  $17.49  $17.53  $17.16 

VERITEX HOLDINGS, INC. AND SUBSIDIARIESReconciliation 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
  Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021
  (Dollars in thousands)
Tangible Common Equity          
Total stockholders' equity $1,429,442  $1,447,996  $1,315,079  $1,284,160  $1,272,907 
Adjustments:          
Goodwill  (404,452)  (404,452)  (403,771)  (370,840)  (370,840)
Core deposit intangibles  (43,122)  (45,560)  (47,998)  (50,436)  (52,873)
Tangible common equity $981,868  $997,984  $863,310  $862,884  $849,194 
Tangible Assets          
Total assets $11,304,811  $10,453,680  $9,757,249  $9,572,300  $9,349,525 
Adjustments:          
Goodwill  (404,452)  (404,452)  (403,771)  (370,840)  (370,840)
Core deposit intangibles  (43,122)  (45,560)  (47,998)  (50,436)  (52,873)
Tangible Assets $10,857,237  $10,003,668  $9,305,480  $9,151,024  $8,925,812 
Tangible Common Equity to Tangible Assets  9.04%  9.98%  9.28%  9.43%  9.51%

VERITEX HOLDINGS, INC. AND SUBSIDIARIESReconciliation 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 Six Months Ended
  June 30,2022 Mar 31,2022 Dec 31,2021 Sep 30,2021 Jun 30,2021 June 30,2022 June 30,2021
  (Dollars in thousands)    
Net income available for common stockholders adjusted for amortization of core deposit intangibles              
Net income $29,626  $33,470  $41,506  $36,835  $29,456  $63,096  $61,243 
Adjustments:              
Plus: Amortization of core deposit intangibles  2,438   2,438   2,438   2,438   2,438   4,876   4,885 
Less: Tax benefit at the statutory rate  512   512   512   512   512   1,024   1,026 
Net income available for common stockholders adjusted for amortization of core deposit intangibles $31,552  $35,396  $43,432  $38,761  $31,382  $66,948  $65,102 
               
Average Tangible Common Equity              
Total average stockholders' equity $1,447,377  $1,357,448  $1,301,676  $1,290,528  $1,254,371  $1,402,661  $1,239,415 
Adjustments:              
Average goodwill  (404,452)  (404,014)  (393,220)  (370,840)  (370,840)  (404,234)  (370,840)
Average core deposit intangibles  (44,720)  (47,158)  (49,596)  (52,043)  (54,471)  (45,932)  (55,685)
Average tangible common equity $998,205  $906,276  $858,860  $867,645  $829,060  $952,495  $812,890 
Return on Average Tangible Common Equity (Annualized)  12.68%  15.84%  20.06%  17.72%  15.18%  14.17%  16.15%

VERITEX HOLDINGS, INC. AND SUBSIDIARIESReconciliation 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 severance payments, plus loss on sale of debt securities AFS, net, less Thrive PPP loan forgiveness income, plus M&A expenses, 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 provision (benefit) 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 Six Months Ended
  June 30,2022 Mar 31,2022 Dec 31,2021 Sep 30,2021 Jun 30,2021 June 30,2022 June 30,2021
  (Dollars in thousands)
Operating Earnings              
Net income $29,626 $33,470 $41,506  $36,835 $29,456 $63,096 $61,243
               
Plus: Severance payments1           627    627
Plus: Loss on sale of debt securities AFS, net         188      
Less: Thrive PPP loan forgiveness income2         1,912      
Plus: M&A expenses  295  700  826       995  
Operating pre-tax income  29,921  34,170  42,332   35,111  30,083  64,091  61,870
Less: Tax impact of adjustments  66  156  (78)  39  131  222  131
Plus: Nonrecurring tax adjustments3               426
Operating earnings $29,855 $34,014 $42,410  $35,072 $29,952 $63,869 $62,165
               
Weighted average diluted shares outstanding  54,646  51,571  50,441   50,306  50,331  53,121  50,187
Diluted EPS $0.54 $0.65 $0.82  $0.73 $0.59 $1.19 $1.22
Diluted operating EPS $0.55 $0.66 $0.84  $0.70 $0.60  1.20  1.24

1 Severance payments relate to branch restructurings made during the three months ended June 30, 2021.2 During the third quarter of 2021, Thrive’s PPP loan with another bank was 100% forgiven by the Small Business Administration. As a result of our 49% investment in Thrive, the $1.9 million represents our portion of the PPP loan forgiveness. PPP fee income is not taxable and as such has no tax impact.3 A nonrecurring tax adjustment of $426 thousand recorded in the first quarter of 2021 was due to a true-up of a deferred tax liability.

  For the Quarter Ended For the Six Months Ended
  June 30,2022 Mar 31,2022 Dec 31,2021 Sep 30,2021 Jun 30,2021 June 30,2022 June 30,2021
  (Dollars in thousands)
Pre-Tax, Pre-Provision Operating Earnings              
Net income $29,626  $33,470  $41,506  $36,835  $29,456  $63,096  $61,243 
Plus: Provision for income taxes  8,079   8,102   10,697   9,195   7,837   16,181   16,830 
Plus: Provision (benefit) for credit losses and unfunded commitments  9,000   (7)  (4,389)  (448)  577   8,993   7 
Plus: Severance payments              627      627 
Plus: Loss on sale of AFS securities, net           188          
Less: Thrive PPP loan forgiveness income           1,912         
Plus: M&A expenses  295   700   826         995    
Pre-tax, pre-provision operating earnings $47,000  $42,265  $48,640  $43,858  $38,497  $89,265  $78,707 
               
Average total assets $10,711,663  $9,998,922  $9,788,671  $9,385,470  $9,321,279  $10,357,261  $9,132,347 
Pre-tax, pre-provision operating return on average assets1  1.76%  1.71%  1.97%  1.85%  1.66%  1.74%  1.74%
               
Average total assets $10,711,663  $9,998,922  $9,788,671  $9,385,470  $9,321,279  $10,357,261  $9,132,347 
Return on average assets1  1.11%  1.36%  1.68%  1.56%  1.27%  1.23%  1.35%
Operating return on average assets1  1.12   1.38   1.72   1.48   1.29   1.24   1.37 
               
Operating earnings adjusted for amortization of core deposit intangibles              
Operating earnings $29,855  $34,014  $42,410  $35,072  $29,952  $63,869  $62,165 
Adjustments:              
Plus: Amortization of core deposit intangibles  2,438   2,438   2,438   2,438   2,438   4,876   4,885 
Less: Tax benefit at the statutory rate  512   512   512   512   512   1,024   1,026 
Operating earnings adjusted for amortization of core deposit intangibles $31,781  $35,940  $44,336  $36,998  $31,878  $67,721  $66,024 
               
Average Tangible Common Equity              
Total average stockholders' equity $1,447,377  $1,357,448  $1,301,676  $1,290,528  $1,254,371  $1,402,661  $1,239,415 
Adjustments:              
Less: Average goodwill  (404,452)  (404,014)  (393,220)  (370,840)  (370,840)  (404,234)  (370,840)
Less: Average core deposit intangibles  (44,720)  (47,158)  (49,596)  (52,043)  (54,471)  (45,932)  (55,685)
Average tangible common equity $998,205  $906,276  $858,860  $867,645  $829,060  $952,495  $812,890 
Operating return on average tangible common equity1  12.77%  16.08%  20.48%  16.92%  15.42%  14.34%  16.38%
               
Efficiency ratio  50.76%  52.84%  48.53%  47.55%  52.42%  51.76%  51.01%
Net interest income $84,480  $73,040  $76,741  $71,276  $67,131  $157,520  $132,766 
Noninterest income  10,378   15,097   16,150   15,627   12,456   25,475   26,628 
Plus: Loss on sale of AFS securities, net           188          
Less: Thrive PPP loan forgiveness income           1,912          
Operating noninterest income  10,378   15,097   16,150   13,903   12,456   25,475   26,628 
Noninterest expense  48,153   46,572   45,077   41,321   41,717   94,725   81,314 
Less: Severance payments              627      627 
Less: M&A expenses  295   700   826         995    
Operating noninterest expense $47,858  $45,872  $44,251  $41,321  $41,090  $93,730  $80,687 
Operating efficiency ratio  50.45%  52.05%  47.64%  48.51%  51.63%  51.22%  50.62%

1 Annualized ratio for quarterly metrics.

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