VBTX - Earnings call transcript Q1 2022

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Operator

Good day and welcome to the Veritex Holdings First Quarter 2022 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. Please note, this event is being recorded. I'll now turn the conference over to Ms. Susan Caudle, Investor Relations Officer and Secretary to the Board of Veritex Holdings.

begin. may You

Susan Caudle

Thank you.

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

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

on believes of of our release. basis, Some of our a the Please measures the non-GAAP in better operating X-K performance the filed financial management underlying the core business. discussed non-GAAP reconciliation see earnings be which all metrics reflects will discussed

Terry Chairman over to Joining me Credit call now the today CEO; our turn Riebe, and Officer. are Chief our I’ll Chief Malcolm. Malcolm and Officer; Clay Financial Earley Holland, our

Malcolm Holland

Good had results. net of continue was morning, you or bring to growth. up and pretax $X.XX a million to many quarter for Operating positive $XX us and attributes X.XX%. earnings income set quarter first The everyone. prereserve I'm success increasing our pleased financial to that long-term

our expectations, about the and the loan quarter, during think in growth majority yet came the our I of growth As quarter. both late exceeded growth loan deposit the

was starting QX quarter XX% resulting million. but less-than-expected QX. of growth our million, in and a QX $XXX was and C&I growth balance came producing $XXX for interest QX $XX only annualized CRE a income, to for Our growth loan than in revenue great The ending greater million $XXX $XX million from point residential average loan balance, million, ending net

The a to profile loan our and hiring two, robust next four, the team same set being growth grew and three, in and talent; increased million the pipelines that the majority our growth one, my operating quarter. remain was up loan noninterest-bearing upgrade for of have experienced XX%, strongest and deposit pathway $XXX enhancing of to company's be continues similar encouraging continued focus four for during market and higher as risk-focused why proven which growth constant from value. in the on DDA, a to The the markets actually things: Just growth strong is a should behind country; with our growth quarters. the several commitment disruption; us

$X.X remain range, to reserved. in to dues previously Past few find for a we assets of assets side, fifth were metrics decreased continue year-over-year. continue charge-offs to credit NPAs while the we On from spend to centered an I'd previous all the have like direction. in total positive quarter. credits, million, minutes declined down moving to two in acquired quarter, XX% of the the consecutive acceptable company. talent were our Criticized discussing our attract X.XX% X.XX% very trend a which

aware the made we both have non-client-facing talent, major client-facing top-notch in priority on you're As a invest side. and to

we XX include For the new side. -- are XX the seasoned which hired and people, committed Veritex weeks teams replacement in well market XX the hired Houston hires production assemble couple three a Houston market this adds to new and continue and XX statement organic does not they of market. that a These is major adds. XX quarter, in This we position Houston new ago. our very positioned to the will growth the make adds, Of on in of three are lenders the the

continue will share the talent finding our our importantly, and value Terry. to turn that culture to and Our our most fit With that, quality right people on and dedication drive over it I'll growth focus proposition. to

Terry Earley

Malcolm. you, Thank

Before I results, QX XXXX general want I at into was comments. a an EPS. few make to $X.XX specific and operating pages get amazing quarter

bond proceeds if income, we of way, our first and then prepayment non-accrual collection EPS. reserve During top EPS things interest, on release, quarter operating results BOLI count ALLL QX and everything an adjust those XXXX right in our for $X.XX day we're QX share fell count, including plus QX of of

mind. As you keep following the XXXX, please QX in think about

get can of deployed. First, we the until when raise the timing capital mismatch it when we fully

to loan and in in performance but growth end late growth our business the end performance, drives came quarter. period the perception growth what loans period earnings Next, average drives of is

our is our true building. Next, business This fee across is and momentum businesses. spread businesses

additional we is pleased an talent Starting capital. there to are making inception that When mismatch to investments given in that drive invest to inherent the We're with growth. we talent willing returns. with at continue X. even Finally, the on expense accept financial continued occurs metrics expected Page strong revenue future the

the in Loan basis Our X.XX% X.XX last equity for first quarter a first a reflecting XXXX growing year half X, the XX.X% a third quarter strong pre-tax last started from efficient over has quarters. growth for growth the XX%. performance is We're competitors. tangible quarterly the last on XX.X% growth Loan certainly ADC a portfolio. part results, year-over-year return early the declined for of quarter. of above has This common of exceeded for quarter. in million of first where On the of and already half assets meaningly slide is these in $X has payoffs mentioned year we still with unfunded seen back loan the in almost sits the operating mortgage average quarter. XX.X% $XXX average the this and was in some were Payoffs on the purchase commitments remained the portfolio first what's story. levels, operating and $XX Average of decreased Malcolm average well million includes big at it our the from X.X% loans. March but on loan levels Veritex's owner-occupied quarter now first and return on seeing growth This The the four growth very going of the portfolio QX quarter company. changes the at pleased pre-provision ADC better are fundings but space every much to QX. quarter level portfolio billion. our increased loan in XXXX. Current the portfolio approximately XX.X% are than in warehouse given in about the saw mortgage balances what strong, averaged QX mortgage

the production each good weaker that Moving XX% an on portfolio to slide other earning stronger but included the billion and million interest to at from production loan more of income ratio of lines at QX of Net on we ahead business. at our now Page in investments from security does reflect to assets executed the of has the decline. the our goal as million balance assets, from X. interest. this purchase QX a remained sheet liquidity. loan-to-deposit Expect quarter $X.X we've for in not production earning to Cash end year-over-year of collection robust work get quarters, warehouse QX. is our of On basis. debt million production is These QX this from with into typically same on from throughout $X.X stage as increase our production of ended and mortgage mid-XXs. trend of stated than a million QX Loan XXXX $X.X continue $XX in up quarter. prepayment QX the composed income Note million the of results. Two decreased excluding X, mortgage started down QX. were tracking and $X.X XX% non-accrual $X items the build accounted XX.X% on the QX Veritex last to

$XXX,XXX the the all, strong growth by basis income approximately liquidity was Average which the day than million, decline basis These interest from XX and million. were QX in decreased in income debt interest in the net target in increase that interest the repaid depressing of net The growth decline. count, points. debt the and by the function had of sub was for liquidity represents primarily QX. from X.XX%. XX offset prepayment from The the interest basis driver our on accounts other to points effect was $X.X one savings increased $XXX net margin this and late $X million items and of point a NIM collection but level deposit of is non-accrual normal The higher

As future you look in periods interest income remember to net model following. the

and April. First, the minimal first rate in hike our bulk of loans since had LIBOR SOFR X-month a had reset the the of rate day Fed date of impact, March

creating were March the for loans the significant on average balance Second first a $XXX ending million XX positive jump off. below quarter

basis XXX market with Fed net has significantly XXXX interest since additional sensitivity of add points in increased and asset rate Veritex's this Third, income. expectations to hikes of will QX

on that additional data please we will rate. loan show with while Finally, increases be the all Fed rate the loans virtually floors, did floor but above XX the in not bps note

been continues closings pipeline Net The QX into published the X. remains comfortable could Moving strong. Avenue to remains forecast Slide etcetera. a income settle transaction we Veritex but when we our and of that processes become QX. with announced to couple higher culture, North more track. revenue slid Capital on have to

is according to everything management's so going And expectations.

declined Slide down higher slightly have Moving volume unit the seasonality mortgage brought quartile XX.X% on our component to the results years. quarter. expectations. as impacted certainly On results and in competitive syndication pressures fees, personnel X% as Salary during impacting their on XXXX QX the Results Arizona gain to of headcount million forecasted well. match swap the as cash employee with as of Origination last add for and share volumes. origination target We're totaled aggressively line TSR they in on three better deposit fees well $X.X pricing grew the and $XX.X been coupled grants are of XX, meaningfully over team is all successful sale by expenses vested benefits almost with Thrive, were the to hiring that costs performance by expecting million. expenses increased the were largest Operating in XXX(k) levels that related staffing noninterest should were cost on significant due and QX. levels income in increase from to management X performance Slide rates. incentive XXX% managing as top payments SBA, $XXX,XXX at FICO Also fees,

elevated be related will marketing Looking Veritex to during the expenses period the month of due in held Arlington forward tournament Texas the Championship to Bank QX cost April.

great capital per the has Tangible capital the $XXX represent raise. deposits for HTM for XX% grew the quarter QX. XX. AFS X.X% continued year book trend and adding XX% Slide A Veritex impact and down team. quarter to X% Total year. an at front ended the did AFS on the growth reflects basis with rising our points. value for Noninterest-bearing deposit of XX.X% XX in portion costs quarterly the impact forward now the of the the deposit after declined the environment. to per into remains impact rate dividends and last of raise. TBV the last quarter are both all of decline Moving XX% over This rising interest million excluding deposit of value of rates that total. the improved stock On Got to growth the in capital share XX, tangible and We quarter. glad down on book of common backing the the of to from been we Slide have the during portfolio. book out with ratios investment time completed admit important to the share these and deposits priority management move offering back impact I'm current of the

that strategic capital like turn and the call dividends, growth, our deployment I'd the of share Our stock to back to valuation over With Malcolm. priorities, growth; repurchases. lastly current our organic given

Malcolm Holland

with growth acquisition organic year our for The the $XXX Terry. we well and you, million for from Veritex out Thank capital the StoneCastle positioned are well of InterLINK continued has success. raise started Partners, announced continued

more deposits; to to to I'd we last one say -- our our my of staff dedicated be right the One we're the We brand like core partnership of right who couldn't ambassadors while for humbleness we through think We produce results. His XXXX is to dedicated and Scheffler, excited team, team comment Veritex. prouder opportunities how provide incredible deploy a and the often, InterLINK, on As one partnership. capital Champion additional the prospects about make. this help revenue Scottie and world. with and golfer be is Thank the and execute number time the to and we to stability right and grateful of ranked Master these are around the for options increasingly so continue personality will down-to-earth our have us strategies. for supplemental you geographies fuel the numerous our in pleasing

of game open love clients to to what of the We which our committed of questions. truth for have been commitment and community we integrity, its golf while represent feel Operator, every years. displaying communities. principles to camaraderie, many line We and its and like for any I for our aim day be now the

Operator

Instructions] come the Raymond [Operator Michael from first Our question from James. of line will Rose

Your line is open.

Michael Rose

taking Thanks my everyone. questions. for morning Good Hi.

Just items a lot of margin, or adding on What obviously guess so how a there's, back? moving be a should should point? kind Thanks. the ex-rates of wanted here to start a starting point, we the And think I on Like think Terry, backing for about should lot slide. we the of pieces about out how margin? starting we obviously

Terry Earley

Well.

high. Last unusually its starting good a is just was XXX% XXX% the think point. I quarter

-- start mix. changing target -- that's you're Are XXX% but liquidity I have this and few. not of where to the it's been been a whatever All about quarters get market. assume Certainly As our you with it's think said closer levels, asset can we've there's then we excess if liquidity liquidity. have about down? a lot been XX points there you thinking the So we of in lot a banks I

well I not I profile. that interest our of up is just, net through think there. And Interlink that we'll growth And knowing for this income bringing biggest where all off the growth points moves with growth just in the about sensitivity is our income. mentioned. So then, the as we're basis floors the be would asset and XX half what existing start is Malcolm and And getting of And to it's I've thing NIM, liquidity, us. know I deployed for net as interest we liquidity opportunity the back transitioned year know on

Michael Rose

looks front. the look helpful. exclude FICA, have hiring on the you been and flattish. kind of then, like And if And guys obviously were expenses Very it very of I at you active kind I

you're Just think move forward we expenses balancing we along expense how with adding that Thanks. should people as about, just control efforts? the

Terry Earley

I us, things also right Yeah. as about that. in adjustment range that to in you we're I expense say of not normal I our just but PSUs. that accrue quarter But like you first QX, that the your we think benefits is range XXXX, expense mentioned had mean, TSR much do you minds how we'll be related peers may That start now. the item to Again, year. have we're talking this gave perform going pretty you still performance range stuff And it's for you off to item FICA I we $XXX,XXX about your and to of QX perform. would mean, that how the one-time. near because smaller don't know all and broad you're have -- we going in can't and that, know where don't are a top

So…

Malcolm Holland

thing think one as number do the we're in. job people reason actual of we people somewhat we I but the really It's flattish add moving just just me good let Michael bring Terry. out, not a And about

have So We bank's pretty done yes, good headcounts folks, a job when are The growing. of we more managing need But employees. moving to. out up. do we've

lower the net number is than So growth expect. you number might

down that salary number will keep so And just a the smidge.

Michael Rose

Yeah.

Terry Earley

There's to going right middle be gave the I things. pressure. we all for that obviously I lot on we're say of We're that now salary close would to you. a Michael, feeling. pretty think year think certainly But depends still the range I So -- of part

Michael Rose

Yeah.

Terry Earley

the you're all office, revenue the for about expense timing get we us thought -- when of really behaved. we with -- it's in certainly really in it's -- we've much always positions expenses have the the side we're and The doing about And said right -- we about and what well better growth my be side But filled. is to are pretty really trying on going they and all is revenue from are QX …and -- line of lumpy open a this in to started for and now. it's there that's the that getting But very chair, especially doing year. back fees lot well about always the our me case.

Michael Rose

Maybe one helpful. me. very for one final just That’s

credit. on Just

here really why As about couple of than and think what's criticize we But should quarters, reserve But happened I thought. higher lot charge-offs look horizon, you a down, future charge-off how maybe The been realize given been do those of there have reserved I has trends? loans which do at I gone the out you and over the fully credit? are past just to been think And just I bad? would and how have know classifieds we these guys have more broadly how X%. ratio for. kind on credit then is think see. concerns for little some a Thanks. about provision think good about the has I

Terry Earley

good you we we COVID credit their was Yeah. take to did. we purposely thinking mean, pulling got when And world really and because and feel up, going I about back loaded our to the where to is house is. come everybody end. could an to running around We us started

collecting. don't past example I you in thought we until things mean, and we still in so going that will I of There's today. last working credits We've loss been charge the an two reserve we -- up few And off a our of through. And good were is these back the to half where feel lost. got can a where we've get candidly really couple about we believe. loan or the acquired that year give we know we we ended resolved we're there's more lose year

I any seen efforts. haven't deterioration don't diligent in any portfolio, And concerning. so our trends pretty on our see we're that are But collection

-- Moody's to we where had the it's fight are we good it As them. forecast to difficult our keep as be about more how the reserves going have more and we things where

work you we Texas stable is that. it's everyone saying at recession get forecast so darn then and shows that recession odd, and positive. and yet pretty are the markets and And And GDP unemployment and the saying because this Moody's

portfolio challenges things our good see all we they're any for So is. where it But are just But feel work that but are to first-world credit really I don't overall have those us to today. trends keep it and challenges. about

Now change. just -- that we're see talking see XX doesn't don't I I from and may But now, -- in Michael it. days July XX it Clay

Clay Riebe

add thing. Michael, -- I like reserve did. negative to one scenarios But would bias fair XX% looks it went It down amount, the we which it looks the Moody's like it the in took XX%. from a

of from a bit quarter, that do curve when know But had lot it than to think We the dissect the conservative. and because a could out keeping intent. slice to end our easy. et a the was it dice just otherwise is little it been have we with that’s the didn't of reserve -- at not if our Malcolm conservative do. made more -- you release as more looking made -- And model here changed be we of totally But And going I reserve the data we lot a not thing have to in we of happened we agree and their released the probably certainly shape Just yield cetera. would inversion Moody's been.

Michael Rose

questions. my Great. you taking for I appreciate all

Clay Riebe

Michael. Thanks

Malcolm Holland

Thank you.

Operator

line from comes Brett Hovde. question of the from Rabatin next Our

may begin. You now

Brett Rabatin

Hey guys, good morning.

Terry Earley

Good morning.

Malcolm Holland

Brett. Hey

Brett Rabatin

income made North I about then Thrive little any the in this both and there you that invest of of for in I talked mortgage the And businesses? Avenue sure or but And want businesses. to year? what you to wanted the a anticipating some those I sure income make hires obviously more expectations make is to -- first about just I understood the initiatives fee this the hires for of of fee income you maybe you're just are those making second understood and are expectations a year, fee for challenged that and some talk

Malcolm Holland

Yeah.

NBA and I QX down they're XXXX XXXX the believe Let's quarter Thrive. Thrive over XX% start to of versus results quarter, consistently. outperformed first this the for In and XX.X%. was production QX with has down

versus true that So true. outperformance -- was was NBA. XXXX That in the and

they've level. there. Brett, I or of as that are I think like team very continue gain bps expect right being in that's be to pretty -- when that's I'm it the I managing up I hiring rather internally, sale as So But would to a on lines aggressive that's -- Arizona likely expect it's down just I it but think, really the now. is by seems mentioned and mean you so for business. I forecast. it's I And forecast to costs for I way mortgage but it outperform competitive. the done and And -- on it, it And huge along all that's XX margins forecasting really, they there. some significant I'd not in companies, think them. you're think made I right that the on comments, NBA mean it they'll the coming model

Looking great. excited about North I'm Avenue, pipelines their are QX.

quarter. the we're when two is And for over. midway this full production hired but Capital even have that the going better expectations North not people Guys, Avenue changed, we've started thought But slid a the a revenue have little do it business. side. -- in quarter we I lumpy year the the on just said in to always we we Our think

Terry Earley

Yes.

Malcolm Holland

to They doing a $XX trying business. business part I lot we private went of But billion that a go yes and through a see strictly actively I grow team. from hire it's fee QX hired one being to So the year, are just mean little bank. a -- a so They're change. good And they focusing we've company good They're of I that's better. I'm week-to-week wish a guy engaged. swap I'm still bullish even the the although and on a by progress on encouraged pipeline now. other

take on the the down of is settle market some to But wants Now that mess, trade. other because nobody point. the business at side will swap a

efforts the So just one -- fee our of the side. another side to focus on that's hiring from

Brett Rabatin

that Okay. that there. up just color be shock to Great. want different on Is I that transaction sure That’s NII, given I follow I the great. that baked the the the into is wanted understood pending impact on to once margin. would make Appreciate closed? with static And deal. or then

Malcolm Holland

not interest built XXX mean, also hasn't do. upside rates when that but them XXX, peak we don't asset the I It's us love will down rate; I'm bit and a from the slide okay But I deal in, the because I look in it Do at a seven. because our on looking have sensitivity core actually, with I forward start that, think closed. And and slide little down. I'm asset-sensitive? with the rate shock, XXX make mid-'XX to curve, XXX, I'm turning you at the shock.

of portfolio I'm the that figure the in And so, off the with certainly of things out to take along doing the that And help trying what should ways one as that the and that's building business the well. we're side investment there will occur. downside table to portfolio we're mortgage rate risk

it's but it will to in. will off quickly. down will take off take no, it sensitivity the but the since sensitivity, built table, -- some So your answer question, reprice down sensitivity up some also It table, not

Brett Rabatin

handles loan And solid production. competitive curious, relates it you're as with was to lastly just XX-month just that I to are chart trend maybe then for spreads four see stuff slide done And these the days, this has on that great as that starting rtes X, got moving landscape maybe higher. you've yield to the what or if shows Okay.

Clay Riebe

talk We it. -- -- there's a some lot about there's

-- we the I certainly. We end. in some -- lower will mainly thing marketplace, the still But be to the last move pricing mean competitiveness it in haven't push there's

very get very lower end the always be On irrational. end, high as you what you on Terry says, misprice. could And the that

there's on our But are some so going been. in ever they've listen pipelines of And that as as full market. the

second if our first, Our you'll probably second. our liked quarter, love you

little than we're that. and like bit lower want with volume. what We So, we'd a we but we're getting the like, it's okay

Terry Earley

variable, do to we're new think I rates Yes. There's And typically little a the going and or of Spread and fixed much bit is some -- I with spread. agree if Look definitely look we're were look, think, misprice -- think that, we're Malcolm going high maker. I always price industry to too skinny you for on I too -- all about are way spreads Yes. There's the a on too capital, compress not origination? happen. moving not spreads especially that a at seeing taker liquidity and much end. a while, it's phase, And risk a space. our we're what's going into that's And in term to pricing. to CRE but price where not it's

the credit credit mis-analyze can Mispricing to going misprice you cannot much risk risk. the side so like deal side. take The a And with we have to alone But you are you painful. hit of hammer. you your we're that. on thing risk, but the kind can't with see do feel is or more it, We if misprice thumb consequences not

to compete on to credit So where are. not compete We're We're going terms. price. we on that's going

Malcolm Holland

Right.

Brett Rabatin

Okay. color. the all Great. Appreciate

Terry Earley

Brett. Thank you,

Operator

Our of the question Davidson. come line Tenner Gary will next from from D.A.

Your open. line is

Gary Tenner

Thanks. Good morning.

Malcolm Holland

Gary. Hi,

Gary Tenner

couple -- economy, of I business the the for any half differently know pipeline what think and Obviously, of sort curious back any of just hey, as you are of to customers this know even seeing are all national at as that the just in you all but But you think uncertainty, investing at probably insights you the opportunities their in I the outperform of year kind prepared about Texas are thinking economic you your look addressed there? national of broader about there. at you'd a expect during kind remarks. kind ways impression

Malcolm Holland

to don’t migration You the in But down know, live. would coming hiring, we're places and just -- I strong headquarters. that out like personal from people no, not of -- from super town. of from a know it's The But you bit. And find it's market seeing candidly, XX start people I slowing I economy. little places anything answer. they're and here. continues They housing can a all experience thought are minutes we're these the can't

it week in and about So Monday think it's housing read Texas, article an I've inventories our of I was this low. incredibly

held And doing so we really not and to slowdown. exceptionally there's to you mean, anyway, tell motel portfolio demand pent-up the you, I want our people but I travel better mean, then are the strong than these well. just want I some way piece has of there's I -- it, tell up

days, today. seeing not in any not of right So, no, I'm XX but it Maybe now. different

Gary Tenner

no reason apologize to Well for certainly it.

Malcolm Holland

feel feel Yes. is south -- because be about. But and the I that everyone hears -- in around seems to Texas going about I border like our the problem country. I apologize to almost on talks what's have

Gary Tenner

Correct.

increase balances of sensitivity position of terms in of In year-end, since rate something else? additional the kind the quarter-over-quarter delta it kind primarily in or cash driving that ADC growth and is the are that

Malcolm Holland

our of years, No. there and not haven't X.X been It No, past that. been production to I I've have I successful. -- fixed over between mix just tried very the look mean, would changed. times change agree with I floating has it.

rate it lenders. -- is So just is it it just what and kind floating of we're

hasn't sheet the And of really will. on the it's their primarily in of of the makeup balance relative items fixed makeup you rate so because materially contribution sheet all liquidity the balance if the of floating changed terms

Gary Tenner

Great. last question… And then

Clay Riebe

on big is in asset is I would DDA talked the think growth. that going that about book. of what's driver I -- the another say Malcolm sensitivity the

is whole it deposit it's asset rate given would see that growth the judgment bank. mean, interest risk I assumptions an model any important or And in drives there And -- sensitivity are that impact. XX%. can most XX%, input be the -- having single look for non-maturity of the You

Gary Tenner

you. Thank Okay.

Clay Riebe

Thank you.

Operator

Our KBW. Gailey from from next Brady question come will

You may begin.

Brady Gailey

Good Thanks. Guys. morning,

Malcolm Holland

Brady. Hi,

Clay Riebe

Hey, Brady.

Brady Gailey

purchases curious is pools, the or just was mortgage were purchased source? I those of other from the some purchased but Thrive, from that

Malcolm Holland

They were ARM from have Thrive's high-quality purchased -- desire rate and both – look fixed just mortgages source. a for not and we another We a jumbo

Clay Riebe

house. real the Not

Malcolm Holland

jumbo for hasn't lot we're to a But loans I the jumbo and buying they're there's that been But ARMs. not in yet. they hope CRA -- going that's mean demand there get one not Its tried a just some Hopefully there. buy a change. market. not we've lender. them from to of lot I

from Thrive. it so And was not

Brady Gailey

Okay. you purchasing that continue to And mortgage these you'll release type? you to of in some think I pools. purchase loan active then think expect the How I read be all do

Malcolm Holland

move things Well to X%. we about earlier I at a that mortgages risk X% for inside are the inside -- in takes to I'd one like of as basis in XXX down. And downside of down get to Well X.X%. that about X%. was it rates talked points rates the it of million And negative $XXX we're the

rate you efficient implications; us year. down reduce it's through doing got three see QX to XXXX what want very deploy and each did and to I capital similar -- So we things quarter to beyond. allocations liquidity; two half back will exposure be in I for want One of this and of

Brady Gailey

know of I that's And last coming talked then how it's now we does the you guidance? XX% up. I deal. deal that loan changed know deposit play loan new I XX% that growth kind I but hasn’t your growth. think have yet into level Interlink because quarter closed just to know about of

quarter. new on XX% loan growth? that funding you think all this the we with side over So should flexibility how did And obviously about

How strong. So loan that's here? about we from pretty should growth think

Malcolm Holland

is It's really strong. -- loan growth

I done just think back commerce economy here. I ago. my real second being go statement a to There's

worth good I new producers. in just hiring benefits the be There's to And hired about had years' X.X years of this people. we these And really we duplicate four days us my hiring going in for focus. I last look gangbuster think here. maybe back XX just to people of to that something two what are real to the remarks are quarter some first a And little the opportunities told did goes some better.

And so we want that to going. keep

we've Now We backroom sure that that to we are also have we make credit got produce it. the right make they people a analyzing sure can it. got got

year. it bottom. our a think loan quarter for next it's did top But So probably lot look the in like growth team the I first of for the a effort to can -- the rest you to expect

Terry Earley

keep Brady, that stronger. comments said billion of bought ahead We've one I -- where $XX.X pools We're going four our $X.X $X.XXX to million. are And the last our million we've In that well of quarters. production in in grown running our is my $XX was mortgage were pipelines we QX. buying was billion that. mortgage and only growth pool in

… So

Malcolm Holland

And mean your is there's about on this it books. talked are but energy the those lever you North other LEAP the levers loans so haven't many mean I put into renewable the Brady. I we and Capital getting Avenue which side, program. is

sell don't those. You

lot just listen, I'm level. sale to a growth growth a and whole would – we we guy, growth not been a loan market the is focused. another certain buy X.X I And organic lot and – that's is to out have a overnight. telling of do. best this which where There's so this. I at for mean what just bunch too that levers been a didn't make say me happen lever. to keep so let growth there's we've sense not trying years or the that for us And And for am. there I've

the of efforts just forth pay is put to this we that so – And starting are some the off. that

Brady Gailey

And Malcolm on company grew point, the historically you bank that maybe guys M&A. through

you You the But did profile. to the growth don't add fee to income, more the that to anymore Thrive fee you add North just given did income. need Avenue recently,

on funding help side. to Interlink did You the

with income the of companies the you So this of attractive, like at fee have you've you you would kind of done what be point? to on see that that whether of bank verticals kind any or of see a it's set other non-bank acquisitions. funding are an side amount Do via other acquisition, any sorts you or or decent or would

Malcolm Holland

really are. I'm happy with So where we

you want execution And We've story went however XXXX. it's public fortunately, unfortunately it. always so a at to since think been look I in an prove-it-out we story, or

we've far so it And been able to every time. prove out

up life a We'll company. have. we the can disciplined. I over be makes fine. I going something Sure. to Are again and be But have – need the can But is of desire we We we think don't don't where to be think that strong sense? even go shows I been more bucket we've opportunistic our we if that's find and fill take a look disciplined which ourselves at something.

special we out. we we now something to have have prove just and execute it so think and And

go out there's and stool I – really don't I thing third do something would to in other presence one So of have and Central the a Texas than like the have Texas. in find that's desire and strong to to put leg the

does think in? that's a how that that want which important so to that not And I'm But is look? I I have going geography And that is we're the fit sure. if what be does we how be. bank think Texas to to

Brady Gailey

it. Got

color, Thanks guys. Okay. for the

Malcolm Holland

Brady. Thanks,

Operator

Olney from come Matt the of question from line Next Stephens.

line is open. Your

Matt Olney

this a were Hi. but in you I'll warehouse basis much to take bit on mortgage the quarter What a out what's your Thanks, point then peers than better Thanks. guys. down We outlook? question. the the little can quarter? relative in And there.

Malcolm Holland

it's I Matt, go a a of Hey, to probably back little bit – broken record.

really really, a vertical a veteran. solid is She have that We us. leader seasoned in for

her market or to we she's top-notch don't companies though I answered clientele out has our We're looking she added pretty much She's we've changed that always ever clientele. think team. always a with. think She's we'll even – that outperform good. never. at that upgraded and I the had the relations because times say that we'll always of mortgage national couple But

that I as rest we're point even anything. the we'll a than outperform though I but down relates the industry. more always of pretty little really bit, And good -- I like probably to it area to So, would would our the we're leadership markets, feel in

Terry Earley

And really have operationally, we a strong…

Malcolm Holland

have We team. a strong really

Terry Earley

That plans. delivers day-in works and mortgage warehouse that day-out. for Yeah, our

Malcolm Holland

It's highly relational.

not. transactional, folks right. relationship it's the room just And but Terry back factor. in think There's really a You is it's The are exceptional.

Matt Olney

what's going more that also you Interlink deal tweaks be deal you switching on for deposit over unique the to deposit from movement Are then that. or And do next closes I'm can Thanks. made And I guess the you to until pricing about that. Thanks think year. Veritex Have you the of the seeing any timing the yet and that this costs strategy year few think gears, with deposit months? is about lag changes the And competitors? curious for I pricing?

Terry Earley

the a would I what I play and there's many on question, good actually what give believe, get to hasn't the shown see crystal to at we have me May they one, and The yet, let's but does Interlink, so a that with both us rates lot That's last this late certainly meeting. market. optionality. And ball factors we've here, because to on in that there's terms Fed they're the -- Interlink money their lot pricing. with down the a of sheet earlier up system. turned quantitative of size liquidity And out pure I'm what And give do a just hard been deposits still liquidity the in week, going I to their the suck tightening. But, do of there pretty of week, -- it balance in camp of tighten

to than things are had have past just say today optionality like team. yes down, C&I at been this our our they have turned in related the didn't to better virtually to they -- bank teams have our and include, gathering Veritex pricing. Interlink. don't we to banking deposits I the teams because I always think Just And community

me think heard side years, anybody. side. in not don't always It's XX So the the it's movement really say true we're meaningful I've irrational the degree, market think is a deposit but true on far, from not DFW in, -- I today one I that's it's pretty. most pricing you've seeing not. but ever to And today any that, on worked deposit

drive to Customer Fed are to of they're rates liquidity interesting then banks in of bad moves the been with But So what's couple to to will going far, while. is that on think a think, on, be much. I it be move get you rational. think that's going customer's expect But it do awareness XX-point to they've sitting going that's got for see, pretty And is if don't a liquidity leaves and rate. I SX the the just buy the spike. so going it's banks a function I to the just be going awareness up. of to continue I going markets to

will to here outperform sitting hope tell. done my and is Veritex it belief upgrade my is cycle prior is ones. how think this to today I So, comparing meaningfully Time going

Matt Olney

Yeah.

for transaction. that closing that. any Thanks just timing the on Interlink since the update itself Okay. spoke And and of last lastly, we of

Malcolm Holland

No.

the regulatory the the a down headed regulatory couple close have not beginning that process. of the going really FDIC We're much can Just had process. We've with and had quarter, at just third decisiveness still but on we side state yet. into hoping the through and the of conversations

Terry Earley

Solutions one we're Federal I development really -- those with along space merger are there this of and bank is two of them only proposed our the think said other. and four [indiscernible] us there's and that the most in which nationally competitors I exciting right; hope

now so there's three two the significantly and we those are better are so combined are. And we and other two bigger than than

Malcolm Holland

Much bigger.

Terry Earley

bigger Much by

Malcolm Holland

Tenfold.

Terry Earley

Yes.

Malcolm Holland

money. More

Terry Earley

Yes.

bodes up what's for our space. to markets And on think from I our is for by again. and us. benefited terms strengthened, showing value we that here's into us in so proposition Texas think, tremendously that going merger We disruption it merger going be And around of in the space entry only disruption well

Matt Olney

Okay. Great. question. taking Thanks my for

Malcolm Holland

Matt Thanks,

Operator

Dick the Piper Our Graham come from from Sandler. next of line will question

may You begin.

Graham Dick

Hi, Good morning, guys.

Malcolm Holland

Graham morning, Good

Graham Dick

all to but the bit today for a all's plans bond for just year. you million. for portfolio hear much the your the It of about little about wanted was rest have like looks don't Just-- it $XXX

do is pace it of think from of here? reprice hikes? with floating also what you much kind then, would And that take wondering rate or how Just all you'll portfolio

Terry Earley

see we strategy such the tight of our fortress has with Yes. balance create about because Veritex our you along to portfolio or always expect grew of the a sheet I is grow of It liquidity. with think ran one this all million. couple Look, on mean to I bond can $XXX paths. XX% Interlink to continue so been part quarter knocks similar in a

started I'm some expansion the XXXX. balance buy. one and we've again, not And And rates still the moving of trying in as all We're HTM by in strengthen we back go ratio. slowly. that more for volatility XXXX But as just bringing and HTM earlier on us so, we portfolio the trying sheet the we're in change put securities see down we our look, to of that's for loan-to-deposit of XXXX give intentionally protection strategy the seen. painful a we're portfolio given in versus help that But driving although glad, it's rates into in to to everybody down you of in we for the part quarter. will may half put more

the So performed has it's that's -- well. portfolio

duration to same the will keep to but price where in probably cetera past. of balance in et get line seen we want to the the vol, to Mix expect building sheet you've be just We with relatively the us do it a what this it's part be.

Graham Dick

AOCI And All I impacts just seen. helpful. the on That’s guess right. then we've

You all you? Given impact don't your do I it capital guess alls that into regulatory planning ratios? back process doesn't to capital

Malcolm Holland

landscape, our TCE. TCE it have I group the correct. of ratios and as one the we're look Certainly, mindful the of best has it on peer effect of across That's But anyway. we

so And buying, We impact anyway that's don't forecast when a one. we price forecast certainly no it doesn't about since but vol I'm AOCI. don't not try to we're it hard capital. -- But trying think we but to

Graham Dick

Thanks, guys. for me. That’s all

Malcolm Holland

Thank you.

Operator

call. today's Thank questions showing for conference Thank any in not This concludes you. the you participating. further queue. I'm

now may Everyone disconnect. great a You day. have

Veritex (VBTX) 27 Apr 222022 Q1 Earnings call transcript