VBTX - Earnings call transcript Q3 2019

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Operator

Good day, and welcome to the Veritex Holdings Third Quarter 2019 Earnings Conference Call and Webcast. [Operator Instructions]

I would now like to turn the conference over to Ms. Susan Caudle, Investor Relations Officer and Secretary to the Board of Veritex Holdings.

Susan Caudle

Thank you.

I include to forward-looking started, this you get may presentation statements. we would remind like that Before Those statements are could cause subject to risks and results and anticipated to differ. actual uncertainties that any no to undertakes company The publicly revise forward-looking obligation statement. this webcast, refer our our harbor to logged Slide on including please statement, presentation, time, beginning if Slide X. At are safe into you our

today's available For call comments harbor statement safe note that those the All that to of you subject veritexbank.com. presentation are joining on are safe us made website, by during phone, please statement. our and harbor

non the In addition, Management X-K files metrics some underlying the of on be GAAP a release. reflects earnings discussed see better GAAP of core our measures financial with in Please discuss performance of reconciliation business. will our basis operating the non the believes all

today me Financial Chief Credit and Joining and Chairman Malcolm our Earley, Officer. are CEO; our our Terry Clay Chief Malcolm. Riebe, Officer; Holland,

Malcolm Holland

morning, for was Good quarter everyone. third Susan. you, Veritex. Thank Overall, quarter nice another

quarter, we after accounting For Bank. is $XX.X a charge-off with previously announced we gas $X.XX a $X.X acquired This produced of or loan of the Sovereign oil share. for and per operating income million million

rates. months the Like income. soften team incredible slower to on increasing everyone continue challenged rate remain to of managing noninterest our and on We be of declining to our focused the job else, in six environment the have over addition growth with last Terry we anticipated. expense an than management declining his done sheet this and balance blow

have Pretax average average operating Keeping in assets or on long is like is Diluted year-to-date of mention nine-month return X.X%. I Veritex been assets metrics. preprovision our XX.X%. operating company. how to Operating $X.XX EPS a few X.XX%. on this one is up make return is would and Green of mind, or

perspective, were involved ratio million environment warehouse equity consolidating achieved in all XX.X%. we efficiency increased declining and new into strong our loans in growth the rate a mortgage operating common while return tangible $XX Veritex. and is warehouse transforming XX.X%, on nonmortgage decreased metrics while is million. and book a our Operating These were integrating, From $XX

decrease The quarter-over-quarter be primary million in attributed loans drivers. three to $XX can

accelerate. relationships smaller and a were a rate paydowns commerce-driven to payoffs relocate of had the a moving We to these few majority a banks company fixed continue loans our to in long-term where sale of provider. or First, payoffs

The from silver problem $XX is payoff the lining in identified over Green we number of the resolved assets payoff previously that legacy our portfolio. million

from XX% same Second, XXXX. new down production period in loan the is

markets state state with continued becoming and are vibrant relocations our strong Uber in as its Dallas and booming, economy lows later family clients appear remain the cycle. is that an new fewer though overall historical as in opportunities in campus conservative and we Even unemployment, employee corporate line move X,XXX more here like and and

We pipeline; that period be continue mid-single-digit will probably delivery to the especially side, a are optimistic wouldn't however, we do Houston. anticipate in growth. a And have credit an we active quarter there the transition bit in third, that produce fourth

Heine cultures key place seats lending production in staff we and of our as to together. two our Under right bringing Kesler leadership add Dallas we in hires. in build are We Jon the and the momentum some beginning Jeff see Houston, new

from had we On good $X.X million the a aside charge-off, mentioned credit previously front, the credit-wise. quarter

we X.XX% loan X.XX% quarter, during Total million asset from NPAs strong assets the have problem looks reduction problem fourth and the in million $XX like decreased during another to in quarter. the number total quarter, assets. in it $XX resolved We

Green, credit continue confidence we and we in of see in assets We original have pool our to progress problem shrinking from marks. the still acquired

is now less any marks. of net Our than energy book million $XX

over now I the to Terry. turn call will

Terry Earley

you provide would year-to-date financial like I minutes XXXX career. best a for to Thank on The financial in the basis. everybody. third have my results Veritex' Malcolm. Good the on and details you, year-to-date quarter take few XXXX with are morning, more to results I a seen

results the from Green, declining through converting acquired integrating problem working significant These a growth assets headwinds from portfolios, been and loan rates difficult while more have accomplished environment. and

clearly to over Note and pass his bottom table the scale mentioned the merger at importance page and few them the and mentioning Skipping the of by show X. of will which a Malcolm this without year-to-date operating of in between These not page half shows XXXX again. this impact Slide Green. the remarks, of results. results the I Veritex

XXXX, Operating into and return almost points diluted now in has of XX.X%. about million tangible on per almost at income $XX translating grown fully common share an XXX basis earnings stands increase net equity improved from XX%. Operating over has

Finally, efficiency of ratio XX.X%, over X% XXXX. is from the operating improvement an at

Slide Skipping to X.

of the bottom have on is the since per of Green XXXX. Bank less XXXX, in the end This Focusing merger. at value in third down the as right-hand of book from end tangible merger tangible dilution a than X% value we graph, Starting share $XX.XX is the $X.XX with the quarter. book

QX the in results. disclosed was This

merger approximately than modeled. per in occurring tangible year. initiated value minutely we of from our We back this is originally absorbed dilution dividends also From book share $X.XX the the perspective, the have buyback faster dilution from the earn stock the

XX The basis in QX. points X. interest net decreased Slide to GAAP On margin X.X%

points excludes bottom that NIM items which GAAP X adjusted adjusted X.XX%. both impacted accounting the to NIM. shows the in of NIM, right all basis the the and declined the table purchase The Slide impacts, the While

adjusted XX Focusing given NIM, of XX% our floating. on loan portfolio following offset control This reduced points. by impacted interest largely rates was the the the earning is on short-term adjusted basis yield the and have assets NIM

liabilities, higher X-basis NIM much on we lower moving funding point expansion from rates expensive away was This where by a less offset shift interest-bearing cost executed to funding sources partially a deposit sources. wholesale from

asset planned mix managements of Its to Lower the further basis rates. falling earning what NIM the accounts were to to we intend loan quarter, interest the three the neutral part volumes more and to adjusted shift the continue to position this to of negative transition a other risk for balance sheet So compression. do in reduce able and we points do.

income On Slide quarter million fees the operating Veritex in fees. positively from for of stronger X, and QX. $X.X $X.X loan impacted million, deposit reported The were by up results fee

flat revenue improvement with but was we remain SBA for Our our pipeline QX. basically in looking QX, strong and are

CRE quarter of customer that customer on are only revenue. negatively weak where interest $XXX,XXX by Also, we QX follows $XXX,XXX $XX,XXX levels in fee rate the where a writedown transactions. Also swap the impacted were quarter the best revenue business year, remember the second income had XX fee with investment. This of

the on operate efficiently benefits Overall and variable expenses below lower merger the FDIC continues assessment and branch-light due to realizing the from of were a scale XX, to target compensation On expenses. insurance credit the company Slide the Green model. business our

forward, $XX Looking to million expect $XX I that million expenses operating stay in range. will the

linked from quarter. XX, on X% annualized the note a the production loans second total to Please On declined that Dallas-Fort Slide third increased the quarter from basis. market significantly Worth

the portfolio. $XX In mentioned, bank Malcolm able addition improvement PCI million to achieve that the nonperforming in assets acquired a in our to the reduction also is

relief at portfolio, lower. at XXX.X% short-term quarter. of the of the shown floor Please table on additional Slide if to the right the XX. loan the embedded rates end should detail The provide quadrant our in bottom is top continue ratio see left, stood On and at page. the Loan-to-deposit

If the XX.X%. total, moves down the you out balances back loan from warehouse then mortgage ratio the to

liquidity think if because and liquidity warehouse is converted of mortgage cash Loans the be to needed. warehouse important loans characteristics is quickly more We on this metric can our of our loans. turn

and As we discussed we last aggressively higher out index deposit to Home our deposits structured borrowings. quarter's Banks' rates and Loan been have money from cost shifting market call, into market Federal of reducing

even a basis, declined bottom deposit about from shows rates, analysis that can show. the But basis than quarterly greater we the on QX feel the to in quarterly five accounting, excluding graph of progress The the QX. points page left purchase is

we graph borrowings. bank Home a in Therefore, the in of Federal Loan deposits right the bottom Bank showing interest added cost monthly

can 'til see, we basis you September, to points. deposit interest-bearing costs June by were from XX able As lower

May of able Additionally, borrowings FHLB to from September we by lower cost basis XX were to points. the

It's floating portfolio. pressure executed downward rate has funding reduction loan-to-deposit pressure loan put the in instrumental the mitigating NIM on ratio. been our The from rate shift upward in

deposits of XX% stands at now total Finally, deposits. noninterest-bearing

XX. to Moving Slide

XX of resolution because mentioned, migration progress from good our Malcolm made total elevated of originated introducing and loan renewals. the with Sovereign energy we of points scheduled assets. was to acquired basis to acquired NPAs loans As of normal loan provision QX along during loans Bancshares The

much How our CECL. will Now increase? allowance concerning

range of believe percentage to XX loans implementation stages and amount will to we Preliminarily, getting basis up they each X.XX%, total validated. independently for use loan points determine that the in follow loss are model, could be the the allowance of the a CECL quarter When allowance we from as X.XX% currently currently.

the meaningful a without an reserves, of amount which credit transfer upon includes to purchase adoption into impaired allowance amount capital. This impact will

As of this approximately $XX amount million. September XX, is

Finally, on company XX, capital very at Slide strong. holding bank remain the ratios

equity in buyback announced stock Back with and to September, common Veritex increase tangible increased actions. million. assets to to Our capital slightly XX.XX% our tangible a even an $XXX

this the we almost returned $XX shares through million quarter, the repurchase returned million buyback million basis, year. year-to-date to X.X shareholders we the During in dividend, dividends. $XX.X $X.X over through and million of we and common million a million On $XX X.X from the shares shareholders which initiated of to common

which $X.XXX, paid did Additionally, November. we its dividend in of quarterly declare Veritex regular

Veritex process Finally, the has working announced the ratings have rating shortly. with growth to expect through been and

we of attractiveness are considering the subject in issuance market, the future. Given the an

my ago. company a year it's opinion was closing, than that better significantly is it In a Veritex today

supported basis on culture, financial earnings this to and job value. to keep to on shares story potential our our a by Our results and positioning to power, markets, strong to analysts investors. deliver strategy telling significant It's and is consistent execute and growth market

would the to I turn back like that, Malcolm. With call over to

Malcolm Holland

conversions. third very Thanks, Sovereign our growth. We a little Terry. all all, loan Bank charge-off acquired despite we are pleased with completed slower-than-expected in and results All the quarter

and we We integrated of work Green are have progress extremely the nine team's months. fully proud my in made hard Bank with and

part inception acquisition company. seven our ago, be of will always years With since our nine M&A a

great accomplished capital. a our have increase maximize to scale focus to and efficiency. team's three have can items: percentage our main continue asset our efficiently to risk, market a manage My achieved to credit and is share meaningful where deposit and We profitability we manage deal on

M&A. on currently We focusing are not

be we are that the we successful arguably these the reside accomplishing down the opportunities consider nation. road. goals, The in in may present would we themselves to best if in open But new are markets

We earnings continues our have be to a team, quarter-after-quarter. top-class executive validated and power institution

position exhibit a and strong out closing are sturdy Our fourth to year and transformational strong and this sheet forward with balance we looking capital company, quarter.

open would At line any to happy for this the time, we be operator, questions.

Operator

question Jaffray. first Our Instructions] [Operator Rabatin Brett Piper with comes from

is line Your open. now

Brett Rabatin

Hey guys, morning. good

Malcolm Holland

Good morning Brett.

Terry Earley

Hey Brett.

Brett Rabatin

just just the give the pressure able balance to to additional funds. changes - now from cost you Can can to post you'd then of would It here margin Terry, about XQ, wanted some us I the degree. make just you I Can to are the monthly on you color? mitigate first talk give kind ask, you seem color be on appreciate some kind us to going your of from of other margin pressure? what and sheet insulate outlook like

Terry Earley

and it's - each and rates with that how deposit goes you to I beta good your think Brett, up. move I the market on think money makes, with are especially the question, able from a reduce Fed Well,

the the rest certainly see to increase we in to the of will September that through year. continue Ours increase, and we as the did go July

going even doing that to market compression. NIM you - we help you on to feel think some does, still side, the going deposit book still we the the I I you general, do on Fed In to you there. floors, money what The are depending can though, are if are are continue can they and everything everything think

are I aggressive. compression. going still been pretty I feel some think But you we think have to

compression So view get, you each is are that going the my about move plus X with bps or minus, to to general of NIM. core

guess, say I answer it. that can to is I way the best So

are to continue to to we aggressive. going I think be have

mix, funding We are look in have opportunistic. the to - to to going are be terms to going we continue to to have of

the use of were that basis, intentional. sources. quarter-over-quarter we lot I out negative done move have deposits was we our on A deposits down was this side the try what this Can where know to of in wholesale borrowing the we purposely call And but this index the talked a high-priced of on and We some at about other beginning replicate quarter? market spread QX.

can we wholesale graph you I No, move QX. think as to points can't. you tough. But going head you lower mean on this it's than another are probably be see I XXX here borrowing into our four it off But basis what rates months? in down

get the is points that, move are on NIM do, each one personal if the with move. the going move, but somewhere all need Fed they you that I anyway, NIM they think think don't My lose I So - what basis to to in I they with compression four, think every of six so. five, net-net view do more to need

Brett Rabatin

And then ask away obviously was is into getting a rates origination wanted versus be left prepayment about any then than to might is that Do and the expected you anyway. susceptible about payoffs thing to helpful. have maybe know I existing were just I that talk little Yes. what taken visibility the more I you kind of portfolio? can other or

Malcolm Holland

Yes.

and officers in their goes I for can quarter, say, will the down we it the and borrowers payoffs. vision front stuff a got better. books have you of bit can't. it, you The little We that plan our mean payoffs. $XX in a last managing some on of of million into to day of I being lot XXth,

were quarter positive seeing be if balances. we before, you loan to would close a So day the

So we didn't some of about know those.

were some refinances, of them I them were of are payoffs, that them of resolution the problem some So couple spoke asset about.

I majority think assets the fact, date. resolved were of on In problem that a

do answer is yes. have We the So visibility.

We an we fourth what active better We at get We see every we at better it get quarter. every month, have and in quarter. like the pipeline. it

rollover. stuff some have We

you once job have look on the yes, then lenders doing we a have rate $XX you and the in as while visibility And So of side, but good some our didn't every expect up get we a We payoffs. holding million. do offering line. pretty are damn seen

think it's I So --.

Terry Earley

New contractual origination about bps are so portfolio less rates, rates XX okay. than or

it's not… So

Malcolm Holland

And people street. because to we Yes. work job. where move lower getting are rate going across the is any quit back they that to money to they work it borrowers, pretty deals moving good make can't Terry not benefit did a environment around there are rate. much mid-fours, in at And lower probably

we level think see.. we some but the get to going of these I So things will to same, are keeping back

Brett Rabatin

color. Okay. all Thanks, appreciate I the

Operator

our O'Neill. And question Thank Brad next Sandler from you. comes with Milsaps

Your line open. is now

Brad Milsaps

morning. I I good regarding Hey, Guys but a catch just couple of minutes part Terry, CECL. did joined late, the

quarter million I my on or discount back $XX moving the accounting you'd to XX. interest June guess, about would correct? books be about what purchase discount the at impact Is net So recognize you in over the less so around saw that You $XX have million right, could of come got If maybe are this million the from, through you numbers bucket that income? reserve. $XX

Terry Earley

correct. is That

Brad Milsaps

of on side carry then And at the into of kind - XXXX? the CD things, out of the those end do did those deposit year the Okay. on of some or run marks through

Terry Earley

internal think forecasting, about that mean I internal own XXXX. but some forward, my sure that don't is No. I is not in enough. There carries I'm fraction in level there even

Brad Milsaps

Got it.

did I this, some what kind taking doing been Can you of you of guys some job of kind quarter in what thinking XX your might outlook next over sort of to months able then six, the you in given markets? do your and just new a talk advantage Malcolm, great And you addressed I of apologize know hires. all about but for be you Okay. if maybe have disruption the are

Malcolm Holland

some and I new in hires, Yes. to both we Well, look Houston. mean Worth continue for Dallas-Fort

announce we pretty the super, week excited are large will hire in We a next super here about. that

done Fort Worth. good pretty taking hasn't a it are Okay. been Has yet. hire yet? That We in

that but a we we Houston. couple Houston, more than in a working there are is one. on then is finalized there that So haven't couple And

fairly think the to So they on since things. you it's types closer all be come to as always and folks with up these active, hire the going season but issues year-end, I when their of bonuses get can and that get we

you them. inbound about will actually opportunities. it's to I'm I inquiring not to land going we us exactly sure tell active. We very are calls when have

you aren't couple have always ones want, those but really are Sometimes a strong. the that we ones

it's your manager an six going to question, adding our for to months us be active in relationship answer team. think through I So

Brad Milsaps

to guess of that terms sort able added to you name this the you bench do their loans of on next, If being strength six think you you've in capacity would it, had what over be year, bring to months? XX the

Malcolm Holland

I mean I end cycle, certainly net-net. There Brad, Yes. growth there. next we I'm high opportunities are the confident can to you is double-digit loan run year. strong here single-digit big have next to be to growth for the really think to do feel of us think not got you've some to XXXX. in way about a read we not do I question, that to year do what I that are and going that. do going deliver so out looking is number careful, you

would probably I is that that how So one. answer

Brad Milsaps

it. Great, you thank Appreciate guys.

Okay.

Operator

Thank our you. next Stephens. Olney with Matt comes And from question

Your now open. line is

Matt Olney

guys. deeper dig Hey, loan bit on morning, Good little I commentary. to your want a thanks. growth

from like we Your about the year. is quarter than is it and expectation in quarter? originations that swing, That DNI that us will assuming the the in this in understand, higher really digit, or quarter. in quarter third Help be more the we the slow mid-single saw third fourth what what saw improving paydown third what next we from sounds growth saw

Malcolm Holland

diverse. our is - bit still our both especially good I XX the that like had pipelines the area. might heavier I concentrated strong. not I minutes hire in within our side. are I mean the to little and come and really what it's a It's that quarter really you specific in Houston if are C&I through paydown paydown, not I knowing all-in-one coming, see heavy The new one color - this some question the see. announce fourth quarter market. area. And a up, mean is in was but going originations we I side paydown It's We but for it's working pipelines space. third of ago, give they

some there really bringing so And discipline on. are is we that nice

I at look as So the little an quarter a aberration. third of bit

the my have a think company putting we And done this have a see we too for those nine get piece could I changing, it but always do back of levels. we optimistic been are XX% on in together and been coming to we comments, like think have M&A, growth, to, I and will used won't together, as we putting years had those direction. were Listen, that digits, credit I we not said profile. that yes, where focused see but in not growth probably I growth like headed I to do, continue we we growth we companies two but already double have back, in

Terry Earley

I if I'm banks, to starting with to it deal. the just to portfolio through have what this the work and up one didn't on following that quarters remark revert only quarter say. lot exception, going - I curious. this I'm do would one you think the And always then will, I three close They Houston. normalize. I going to to Malcolm this, in we see norm. seen be the are And didn't if if prepay not NIM, of speeds especially this first a with have start follow accelerate loan a of the acquired

Matt Olney

allowing gears. deposit you XXX%? loan the And then the to ratio I loan switching but you room the and Terry, would above lean I deposit drift how have on let be Okay. drifting more do the more side, willing guess on ratio higher appreciate this? FHLB, on And much liability

Terry Earley

the go want loan-to-deposit don't because going XXX%, think warehouse, a do XXX%. of to that see we that XXX%, with warehouse I ratio, with mortgage excluding lot to I okay liquidity. above I'm the have No. mortgage off-balance-sheet

very a liquid got portfolio. have We investment

lot We a from of excess have can a perspective. lot a quickly got of collateral. liquidity raise We money

week. our discussion this last had we So with Board

be to because just letting up NIM. opportunistic are help the are to to think FHLB the comfortable move just continue trying it's We support we

that I affords quarter. QX, same will but pretty have do opportunistic think to magnitude are the able that do think by in to this the encouraged we we So because - I don't us. continue pricing we what can play we it been to it heavily do there

Matt Olney

Thank Got you it. guys.

Terry Earley

Thank you.

Operator

from Thank our question Raymond Mannix with Daniel you. And next James. comes

now is open. Your line

Daniel Mannix

Thanks, Good guys. morning.

to wanted Just with start buybacks.

utilized this to is too at about what you XX% really left, pretty the If get So have you look are through under active plan. don't to current be soon. I

us you Just a looking at the how commentary the that on buyback? a on potential replacement sub-debt your offering, that of size thinking with give juxtaposed about are can and authorization you

Malcolm Holland

want one? to that answer you Terry,

Terry Earley

Yes.

bit think those about look mean today. And a more on those rates Let sub-debt, are call me comment look, this you the those and when just and little at where I rates spreads that your to and Tier stack capital impact your financial right the the do. cost your lowering you optimizing and capital capital, about corporate of raw increasing is of X thing level,

is into thinking. that And our so playing

get never once to fast. company. have Secondly, you your we through access ability the And pretty ratings is market been the process, a

that will We been Veritex. acquired have as have certainly there in couple now. a years of sub-debt callable not be some We

in the I look first thinking. it into we the somewhere capital stack, if we trying round is were reality our We is to more day. to million buyback. we million get of But and to leverage of $XX want is be with double $XX could to optimized what are three - very million, issuance and its that the $XX probably way are conservative find forward

Daniel Mannix

to fee Got income. it. just Thank to you. That I over want switch great color. is

that Malcolm, it's the mentioned, of focuses looking forward. You one

work we loan as going guys And revenue. you were touch if then, good on higher items in could about that tied specifically, forward? the a Thinking looks much that SBA of there see paydown to just how such swaps So level loan it is there fees couple and line of the the were like fees. quarter

good bit run a quarter? this of there? into Has fourth the back more be a a moved that expecting over are you rate quarter. bounce think Should XQ we I expect

Malcolm Holland

Yes.

there that a but, yes, address is slower over bit So loan a into SBA rolls fees. I quarter quite than We QX. anticipated had will

couple could opportunities fourth a SBA the of a have in that the side have really quarter nice quarter. in We

We to has very SBA certain are are not been XXX% going happen, but those active.

focused is fee we want borrowers side Our on. lock have is fee swap Dallas-Fort Worth What to seen rates can certainly you go expect really which and The grew. one extremely have we in. it's that business, the as business down active on that

The whole have folks hugely a legacy material. loan are Veritex and of is, into That prepayment again, it's The very kind income, now that, fees. show of very, by lot not to starting that bought active. fee pipeline product. they so It's not driven

Terry Earley

It's the certainly an it SBA income, you was more a in guaranteed you seeing would've declined through. the that GAAP prepaid where that servicing on growing flat as are little But on the It which NIM, used that quarter expected. basis. come There line we linked fees. wouldn't is are a have the of off have fees. piece, seeing is where that you revenue some are additional bit accretion you NIM There seeing is on prepay but sold is portfolio the

Malcolm Holland

have that treasury area is - business. where other Green The is specialty we really nice

We are in grow some time right business spending some lines. in can that we figuring of how out now other

we are I QX time spending noninterest because time bearing, actually is that income our spend that, a fee some nice shortcomings, mean, But Recognizing noninterest there. a area. to I is are And we for of so think outlook one the little it's good. there quite so going

Daniel Mannix

All right, really for Thanks me. helpful.

Malcolm Holland

Daniel. Okay, thanks,

Operator

Gailey Brady from KBW. comes question next our And with you. Thank

now line Your open. is

Brady Gailey

morning, guys. good Hey,

maybe So with expenses. can start we

down and $XX quarterly line has guidance. million That run quarter. coming rate a cost little million expenses, been to fourth up in our with the the flat in going to is You've and be harvested saves, bit $XX the

growth think you at growth you do that normalizes in see kind and expense base? the could a mid-single-digit of As you expense look XXXX, rate

Terry Earley

this are is to but using jump think expense not year-over-year Brady, a XXXX, do more Terry. I I rate. run off see normal from going into rate the growth as of you standpoint Yes. we QX

to Now on and we on side. the growth to very operating the revenue be operating sure leverage got drive positive from leverage be focused

been about is talking hires, last a assets lot there new in I But you production we much space that, we been think especially sweat orange And able offset in over have - the special six think but I out. to have credit don't months. the squeeze and not

So start expenses are grow. see start to we going to to

that benefit You with. et cost thing, deal going have got the you cetera, healthcare, to are whole to

some So XXXX, are I you see out growth. to have start going look expense yes, as a to to think I

not good that it that with what to only talking into but we have drive about, And management efficiency to the harvest we what need down management, cost and this growth. them need and growth, risk of trying we been think is invested I cycle. - these especially this saves is risk ratio back Because get really at stage

Brady Gailey

of to to that from we Or stable be you All here? you you are then right. And I see do Do growth. fall they'll - deposits for back finally was forward? think continue think me it. Got some is deposit that purpose. looking just guess that the on you strategic more and did it

Terry Earley

on looking DDA I more you think I mean the the I'm are stable. is the When outside, at guys side. it stable thing from key was

at we good from good in give rate this overpriced pushback money those, Our where market were and negative surprisingly. didn't a cuts those with of negative. a lot there spread or CDs all the were that that same customers, is core spread were relationship But overpriced

these We don't think letting in have customers without are relationships. those just go those because price-sensitive been okay we

worked have so think as think through we we of out, stable Fed's kind to out, what rational what should we lot wanted lot a of order you be And rates. pricing the I work of have a - out worked because I

Brady Gailey

for thanks guys, the Okay, color.

Operator

Thank you. [Operator Instructions] Our next question Davidson. comes with from Gary D.A. Tenner

is line Your open. now

Gary Tenner

the if there? do to said, wonder in you What $XX on happen a needs mid-single-digit are about slowdown for quarter Even fourth want the the so payout, at get the I the looking the of growth just quarter I last kind million. you quarter payoff morning. of day Good guys. that growth. of number, get the commentary linked quarter. should outlook that annualized of for be X% for adjust Thanks in that kind with to But the of if you growth. a just about kind

Malcolm Holland

you $XXX X%, talking Yes. X%, net I - million we warehouse. are of do mean loans, a made around these growth about rate since if mortgage

will it's warehouse. just So make I of do when I mortgage net that say, probably clear,

I that underwritten. So These being identified. loans loans sheet. aren't aren't have we that mean in These that are are term

we These about. are that loans know

have net that of there, number We in some got is payoffs that.

that I that our from tell our achievable. today, number all and vantage is think as a point So can you extremely we view is

Terry Earley

is is in Gary, our confidence attention keep have moves granular moving enormous loan got every what tracking. - it tracking in that on We are through sure improving, make we our million to an $X.X very we are track our that are pipeline. we every stage the saying, as the garner they And and they and of amount Malcolm through in over eyes year. they

Gary Tenner

great. quarters the now. quarter first a think just the that the color in That the much the little just you combined. there. Okay. you third of a is I the had is on obviously, And year And two bit very then active right lower buyback, the as quarter, third than in Appreciate stock at price in did

XXXX? about the pace buyback So quarter how do fourth of we think into early

Terry Earley

the it's price. a think the of strength function stock of I

we set buyback are maximum limit up move the into for our the buying willing up yet, that price higher our We to everyday. the have weaker

kind and buying as weak third So the what somewhere will stays with much. price if is quarter, price the just you see current, us averaged the in the of

up, down. to slow If then will you bit. not going the see strengthens are We a price slow it little that

price-driven. have to just authorization the it but and ability active, be as the got So will be we

Malcolm Holland

still to I levels, there this best our at say, active, at higher. be the We think these levels pretty are capital reinvest And us even for will and and some is way to is we room still these active.

for mean I it's So us. a positive

we is something We in with capital, do no and there make ourselves. to this than have better investment can

Gary Tenner

Great. Thank you.

Terry Earley

Thanks

Operator

Thank are And Thank this there in today's you. concludes Ladies no questions for queue this at the further and conference call. time. participating. gentleman you

may disconnect. You now

Veritex (VBTX) 22 Oct 192019 Q3 Earnings call transcript