VBTX - Earnings call 4 2023 | Veritex Holdings, Inc.

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Operator

Good morning, and welcome to the Veritex Holdings Fourth Quarter 2023 Earnings Conference Call and Webcast. [Operator Instructions] Please note, this event will be recorded.

I will now turn the conference over to Will Holford with Veritex.

Will Holford

Good morning. Thank you for joining Veritex' Fourth Quarter 2023 Earnings Call.

be based call of on or please statements include future begin, events. are that our we aware will this forward-looking results Before current expectations

uncertainties known are materially differ statements. unknown to statements these cause both Forward-looking risks results subject from and that to could actual and

and Our are call with them. revise Statements and the on this as information SEC. date and the together this call, other or forward-looking do to not today's filings subsequent annual statements and update be in statements should cautionary considered most we with our XX-K assume report of earnings of any contained obligation made Form or release recent

the veritexbank.com. today's will which the found can Investor to of be in with Relations website our slides We section refer at during presentation, along release investor press

will speakers conclusion call the our Riebe. Terry Earley; CEO, are Officer, session. our our and of At for prepared the CFO, Chairman Clay for Our Credit we lines Chief out open and a the Q&A Malcolm Holland; today remarks,

the now will to Malcolm. call I over turn

Malcolm Holland

fourth Good Will. our recap both as results annual as Today, well we'll you, morning, our everyone. XXXX Thank quarter results.

will see, and to clear to book strengthen we our add add a things balance commitment to value sheet with that the shareholders. our continue tangible to will you value As long-term

pre-provision quarter, reported pretax average $X.XX return operating operating -- in we the share on X.XX%. For of earnings or of million per $XX.X assets X.X%

assets $XXX.X X.XX%. operating reported operating of we million $X.XX average XXXX, earnings pretax year with of the pre-provision per or For return on share a

much place shareholders. for power sheet able nice a hoped we to and to earnings still for our our the from stronger had make a an were Although balance not reposition to our perspective, year use we return earnings

the to meet Our continued CETX over ending being up goal our greater at also year-end XX.XX%, over XXXX. XX%, bps than allowed XXX year of profitability us

loan by place growth continued that third fruition. XXXX, nonrelational our and by decline. during the the seeing strategy or to a the or was This cry a some Again, of X.X% and XXXX accomplished slow lift just move able quarter payoffs focused loan general into the which people some went during and XX-plus for year XX.X% expected a were this $X.X to borrowers, outcomes grow strategy far to in we're a heavy out volatile able of is from loan Certainly, $XXX the million, to now billion. times. market down testament percent. resolve deposits our We're we -- of challenging a coming growth focused year to Concurrently, to

Looking forward full to new costs for while will that deposits XXXX, our at adding represent funding related relationships and priorities mid-single in the will grow improving single-digit digits. believe we clients can remain loans grow We the a high XXXX. and pace, same: its

remains our we As priority. top a every quarter, mentioned, credit

Our credit industry guarantee. loan noted that that and $XX were in The be or a be for to used of a firm million, that will million a on should government It those losses net million. from C&I assets million center loans -- $XX.X increase million loans of data XX.XX%. a holdback has category. And $X $XX totaling government specific those future we in have $X.X reminder, as NPAs total million several $XX of one of increased $XX comprised million million guaranteed $X.X plastics of to loan

had category. also C&I the of upgrade NPA out large We one

Terry I'll of net this color will to greater but the year while XX% remained was call over some up We did or now quarter over and well $X.X provide for criticized $X.XX, the XX Terry. have quarter-over-quarter XQ charge-offs as ACL as shortly. on XX.X% through million flat year-over-year. the loans stable Our turn XX/XX/XX, bps.

Terry Earley

for thankful it the year Malcolm. in progress done. for drilling sheet. good the progress, results is I the little quarter. made want ended job We've covered not primarily spend now and to into our the time you, but XX/XX/XX, Thank I'm for strengthening not fourth balance the

I and think just an and on businesses quarterly. them seasonal think we important some annual basis because are about of this our not is

on Starting X. Page

growth reliance Our XX/XX/XX. to strong commercial deposit deposit concentrations. we and reduce progress to growth at allowed significantly on stronger, XX/XX/XX Capital XXX.X% also XX% reducing real reduce our growth ratio estate and our almost to from low loan-to-deposit XX.X% allowed wholesale loan Veritex at at is year-end. its The us made funding to

XX.X% Pretax XXXX. This over were share for dividends. $X.XX up earnings when that slightly value you X, it. Page to is we for the sheet $XX from that come to the share operating have knew Veritex the going a our gone power million strengthening to earnings $XXX per Tangible On or year we balance the back at pre-provision add absorb is up in has first increased book tangible Thankfully, time value. $XX.XX, year, book cost. per the

points CETX, basis grown XX.XX%. goal quarter of we've there We continued to we a strengthen XXX mentioned, about to had Malcolm capital. as and XX%. Finally, a got We early

Veritex the progress improving quarter. funding its fourth X. in and continued Slide to Moving liquidity its profile over

allowed we deposits X.X%, expensive FHLB $XXX invest deposit us and to $XXX the investment by During million The grew deposits. into with growth combined no or broker with in loan advances pay portfolio. quarter, little the change million growth down

balance its of shifted away We shifted focus the said small and side our loan late focus business. started sheet and ADC loan right third We Veritex XXXX. of the growth. from CRE As the production before, C&I we in to slowing have quarter to

campaign weighting. and marketing give a deposits changed We higher multi-wave deposit launched direct at the in program banker our products XXXX marketing February. incentive reallocated spend to of beginning We to a

the showing on than by digital meaningful is new deposit started net making our growth. are these evident which that in second XXX% bank, Additionally, All in fact was efforts XXXX. the a account is impact XXXX quarter growth higher in we promise

be a deposits. quite as we're This Noninterest-bearing is reversed to XXXX, strong, escrow the was going $XXX the to ratio desire mortgage the XX% quarter seasonal to pressure it and by deposits That continue pricing on declined said, Deposit not during being as below QX. our due outflows loan-to-deposit early but with quarters to end the intense deposit NIM. move in competition to continues few of ago. million our before beta our feel in

the is X. XXXX. loan you In XX% away thinking loan Slide from to progress. On that shift noticed about This ADC XXXX portfolio, production CRE declined and from showing

the the CRE is below from levels As $XXX million ADC during were over for stated declined The heading ADC ADC guidelines. regulatory concentration XXX% and to down and Payoffs XXXX. in year year. $X.X move Unfunded the declined CRE down the our and the at level in remained and XXX% in of these XXX% sit commitments XXXX to to goal earlier, XXX%. to from continue portfolios million billion into level $XXX moved strong slightly now

forward compared Looking as to into by we XX% XXXX, forecast fundings to XXXX. ADC decline

estate provides commercial the ADC asset real including detail the by Slide on class, out X is and what portfolios state. of

you loan asked loan of mortgage businesses comprised Moving and about our X. portfolio. as out-of-state our see, can to and national our Slide frequently XX% portfolio total We loans of

SNCs, and have XX% up loans Our book. $X.X under are and where out-of-state are followed portfolio we developers. of Texas makes of C&I. rest billion the total X syndicated state The was XX% out the loans portfolio Almost just

in these interest change higher to offset lower the $XX interest deposit on NIM decrease The XX related QX. On portfolio. Slide investment to yields margin drivers The $X.X net million by loan was The were Net same X. yields biggest from primarily points by to and costs decreased QX income of just the million decreased higher drivers. over basis X.XX%.

contraction. to As a portfolio the excess and the continue XXXX. XX%. achieve points is work in to investment This loan-to-deposit to we of securities between ratio additional below stated during investment will This us earlier, invest require $XXX pressure million funding basis XX debt X NIM will as to to drive million in into going $XXX feel NIM

for the point NIM XX basis basis will rate. Funds X contract Additionally, points the Fed in approximately reduction every

On Loan up are relatively deposit Slide slight decline. basis cost and increased flat, XX. points. yields Investment yields are

capital first has only on portfolio and X minimal available million steady and on QX. has and a it's assets, Slide a takeaways the portfolio. remained shows metrics the currently hedge delivered mark-to-market around in on at spread sale. XX. investment of the over This equity XX% basis are of capital has purchase and held excluded. half $XXX years, is certain the securities did XXX in Overall, X XX% our of ratio portfolio We our the years. points tangible These next efficient duration impact securities were for the of Key X.X

with noninterest On Slide on biggest their over The drivers XXXX. to increased sale fees, quarter-over-quarter, was by lower Operating increased insurance, expenses FDIC legal are increase government limited being businesses, the billion XX. of production, slightly flat almost professional XXXX loan marketing deferral gain drivers XX% $XX Operating offset and variable in Significant associated almost which loan were XX. increased over and million. but This cost. higher were year-over-year. guaranteed million by Slide $XX compensation. On noninterest revenue $XX cost income from lower largely

expanded capital been assets. XX.X% been per shareholders. the is basis it that in for points risk-weighted tangible have during public when ratios During XXXX, worth ratios million at expansion CETX of and a compounded include noting Veritex It's a you decline to capital value approximately since XXXX, the rate by in that to in significant book $XXX share points $XXX A quarter XX dividends million. went year. has paid XXX total the grew the contributor the

the to of XX. to on we've the additions XXXX, grown XXXX points Slide it allowance XX%. X.XX%. to was million a These by the of building XX ACL. basis increased beginning Finally, about or year Since $XX

part up uncertainty downside ACL. to more in the to the all faced the I'd weighting decided Texas sizable the and over make to call to Two like the that, in the turn continue model. a factors to Clay comments Given credit. on we U.S. for With allocate scenarios of economy,

Michael Riebe

morning, good and everyone. Terry, you, Thank

a has quarter challenges. been improvements credit of and This mixed bag

$X.X over in On side, was off post by improvement does or bank's office that loan million reduction a XX% paid quarter substandard $XX exposure the an not office the end. XX last include days. That million the

X% Secondly, XXXX amount problem the $XX Classified fourth credits. to diligent assets our classified team quarter. resolve of million their efforts assets by for were the lowest or were to reduced our at due in

XX-day past in NPAs million in by the past XX- that's loan was the and as due renewal multifamily and due category, year-end. matured On in were an million process at Malcolm, to elevated to challenge ongoing are and $X.X in a discussed dues dues. primarily Past previously $XX discussions charge-offs increase elevated side

million year-end now during relationship a the of year-end at were estate amount Two other were charge-off office the is XX quarter. was $X.X a data which and the due of $XX the totaling real at payoff. quarter days million property past current. out weighting past NPA million for was center Commercial moved spread that in $X.X was largest the X loans due and are borrowers, Charge-offs to across on

charge-off largest XXXX second few $X.X bankruptcy are Atlanta of moved The exit QX. amounted that NPA million and to was various property $X.X filed practice smaller that in a was in million $X.X taken taken million the a in charge-off to types. loan on was A that charge-offs spread to medical there other amount was for office the across

building years. in year-over-year net look charge-offs back by office X turn of final acquired a year. the the charge-offs X-year charge-off. A on increase all back driven to charge-offs previous up makes over Malcolm comments. with The I'll is credit provided for XX% context it as of that, for the is Charge-offs And for Atlanta

Malcolm Holland

Clay. Thank you,

we somewhat we committed challenging persistence can and sheet engaged XXXX, in. of while our questions. about patient take a a highest is ourselves balance fully We're moves the perform it level team to believe find appropriate unwavering to our regardless think that at on standpoint. be with at Operator, that, we time the make purpose rate the stronger being will times. we right from Despite now the building As growth we

Operator

[Operator will our Matthew be call coming first Olney. Instructions] and from

Matt Olney

capital. just I start on want to off

I capital You guys your set met goals XXXX and XXXX? if wondering any was goals, for you had

Terry Earley

question. great. Good That's

little probably We targets. bit. a any continue build will have explicit to don't capital We

capital to to leverage see that as We an -- able to get think slower our 'XX to efficient anything, capital and build you'll back I like the see growth dividends, has pay in be 'XX. but in mid-single will than as in digits way, and continue it probably much we'd certainly

Matt Olney

then from color the And appreciate more I one Okay. me. there.

. XXXX. out throughout laid of us internally XX Can idea the you're guys cuts? You give an what for cuts you impacts of bps the modeling

Terry Earley

X, the Yes. -- If did. I had a I market says crystal does? look, mean, to comment I'm I the -- says that's Fed reason ball I X. Who way a structured not the

we as rates modeling just what as our with part are as so think, a proven to I volatile is prudent have making to X guys, statement you -- If think. -- not on be,

job from insulate can rate balance all the we and sheet do. as hedge movements our best is that's to we and as to can Our try best risk can we

Operator

And our KBW. from be question Brady Gailey will next of coming

Brady Gailey

Brady. It's

the I some than faster the in So deposits growing additional put seeing understand pressure. NIM it you're the bond. commentary about loans mean, I and

So you be do that downside dynamic. at XQ? When to increasing? you I look think to stable in relative NII that do NII understand Or you see expect could to dollars, dollars

Terry Earley

focus well. loan just of I think it the because and some start the I that. and XQ, should maybe year to growth a relative front think lot our with back relatively I'll in deposit as the we be in is growth to should on costs think And half leave to -- of positive it going help build stable I momentum half

Brady Gailey

how about seems Okay. last year. And years, expense double-digit this pace at few the you a less Expenses you it than could growing are are that it but in expenses? 'XX? for then thinking been thinking growth about How be have like

Malcolm Holland

made the pretty driver efficient to Dom the people, and company is opportunities certainly on continue certain to has area. require had good to We've bank small today continue and we expense to some business that That's a going folks we business, biggest Brady. see banking areas. expenses a our grow a group. continue discussion of and to That's pretty issue focus for The company our around a in is obviously, Yes. run at lot do. the of any goal,

So it is somewhat our to hold flat. goal

of were marketing driving back at insurance, some deposits. our FDIC Some I of of out year, last had dollars benefits some stuff we control. is you the mean, look in these you had that costs,

Unknown Executive

cost down production loan Lower XX%. deferrals because was our

Malcolm Holland

Yes, XX definitely lower. of rule our FASB was deal

some hold pretty feel growth. to there's some pretty if looking them expenses. flat our can. still going be goal -- we forward, to But certainly there's going So we about But good is to be

Terry Earley

think say, it's my with X-year probably into least we're expenses XXXX paying fair going I at to company. attention more and history to the

Malcolm Holland

And my XX.

Brady Gailey

Got more this consider amount me, this mean, year accumulate pretty to it. profitability mean, from I able feels Xx a [ that the stock earnings, the buybacks? capital I tangible. And color. share is decent good of just capital you'll at It to it. Got year. the your ] still you Is X,X seriously . lastly good. question. That's is back like then be

Malcolm Holland

and if Listen, something some at. powder, certainly be stock look had have some we meeting is see yesterday, place we 'XX time but protect topic have a to And we of some try it's ourselves Board there in something may where discussion. to dry a to love a king, and in in it at point was I the to dips. and put were Capital situation

something have surprised didn't like have place in we So wouldn't conversations we today, don't expenses, the it, in shortly. your answer to be is, place I but question we've that about any had very

Operator

will from Hovde Brett question coming next Group. Rabatin, be Our

Brett Rabatin

The perspective? you the that back a about to purely thinking Why margin the the just securities at guys the from portfolio. can grow just outlook? decision securities and Or the book to increase Is decision don't this start talk sheet point? balance you liquidity about on

Terry Earley

It's the really sheet. a just of on balance assets. it's It's building earning -- remixing liquidity

by in funding investment we've using for the in spreads what in through I swap lock been rates curve the versus think X the has spreads to quarter years. lock the good good fourth done relative to

NIM on to factor, have help for we're additional I we're as to important pressure want hedge mitigate down. it way down there's think the we which and be is, so going not going the protection to rate it -- to forward, to going much going an

to is that to shift a do help have as on do and gotten of So tweaking the it that's with kind to for moved, as -- to going it's the of Fed's provide rates got we've as going investing little clear look 'XX forward we them what bit rest the protection. We're rates.

Malcolm Holland

Brett, balance going put overall deposit down And balance an you decided your somewhere. liquidity And our and go got get months, that you to the if strategy. sheet and is sheet to below were XX back order would to on we XX% say, in just change it this loan about we I ratio,

bigger And a book. got be so to securities there's

a Terry months it's that XX sheet. it's started we remix, part all ago of as So remake but strategy said, balance this the to .

Terry Earley

risk. And it going only we makes rates exacerbate it just the rate because Fed our overnight think that sense down leave at that's don't to in short to

Brett Rabatin

Okay. around a And relative guidance continue to increase? commentary the initiatives for I initiatives update on to to then got place. in Can you you've maybe the few the deposit betas know, us betas. given give an deposit the Malcolm, quite

Malcolm Holland

mean, initiatives I or prior and is than got I Again, different doing. the different it levers the it pulling. X X that no mean, was we've we're we're quarter continue. what this quarter

this is think, we've Some that are reduce to wholesale can you. have of see start our because had we bank, the more year bonuses done time funding dependence, And to the a a you will. I where have movement. a actually little now -- stay year. actually right bit I expensive pretty out of trying pick couple what some seeing if every decent than sees well. good deposit quite we're others. But But of the We're away or taxes, and shrinkage

In you betas, terms of Terry, might...

Terry Earley

the during Well, and last about I competitive balance and call, on so off. general, QX. the seen already we've I and would betas just I QX talked think, say saw mean, it that driven that's pricing quarter, the in volumes. We more the we bringing been deposit it's this, call, to in

few had by ago declined. that. Not and days cost Our as but X a a encouraged total I'm deposit bps, of lot,

X production are right now Now around rates on for new margin, deposits. our the

And tell client traction. base day. deposit remake can our it's you I rebuild, say, balance to starting It we're and the -- takes all move. getting time that all XXX% in every to from it. it's about to new we're pricing that's accounts, as acquisition what of So And move mean, new to just bring

Brett Rabatin

how one. I helpful. and Avenue That's in last If speaking? year Malcolm, do fee Okay. generally maybe one about could sneak income North feel you this

Malcolm Holland

did momentum. had about a got would from whether constraints they or 'XX. and time in -- redundant they're government last it we funding a I stuff million more production or actually candidly about not. some in time $XXX the was do Candidly, I 'XX. expect from in to They've it we Avenue revenue they that expect bit revenue of a funding I huge -- some maybe fees time a again this are North about that time the good were a standpoint, huge. that standpoint, But No, Their as I because in think really year little And helpful We've $XX have bank, talked advantage we're I approximately. space. But listen, from a engaged. pipelines is million was think revenue they're -- them these can interim mean,

about on do loans some have one business books the they -- thing there's the miss think spread still I And is that income. that people and they're

covering it. And fee company, is income so upside income to spread is the of expenses the of the the kind

out it, and with and and he running phenomenal a a as what year hit I the on he's lot did able least business, to job, of So the guy it we would run expect what some in 'XX, at And say done been but already. to expect fee remade into new that more do we've last SBA a ground it to SBA hired business, we've has unfair they -- be just 'XX. we

fee outperform would say, businesses million. So will I the $XX

Terry Earley

in mean, has our XX% production that they is on been but I really SBA but you're production think encouraged. QX XX% as the said not contributor, agree really and Malcolm is indicative the on the of QX big I I of momentum broad. SBA everything did with to USDA, And seeing. outlook the a

Operator

will from Piper be Sandler. Stephen coming And of our Scouten question next

Stephen Scouten

you nice to quarter-over-quarter, big spread with I that Slide a loan in start list was to wanted looks like and see. It which new deposit jump the XX. production pretty

you like what perspective? is loan for and new I'm wondering to the that new perspective from could from of core actually kind of the So basis lead apart expansion that kind rate debt that XXX NIM cuts deposit noted? a securities and that potential And a points, some

Terry Earley

Well, but loan loan towards question new new isn't the is production. the is new enough good, production The with of The problem is, production. spread there it it. deposit

is And production loan about been the Xs. in New new X%. has production deposit

Stephen Scouten

growth. That a just much makes But deposit Yes. higher pace sense. of

Malcolm Holland

side, able possibly, budgeting mid-single at to may volume are if be to find going digits But production. you're that even not loan the the we for it, It but something helpful. to we're on is going be Stephen,

Michael Riebe

Exactly.

Terry Earley

deposits, we're billion. that's means grow mid-single if going mean, million. X% that deposits since That's use let's digits, I we loans we just about $X to digits. grow Yes. $XXX mid-single If need to grow

not So dilutive, XXXX, But to that going where to it's really million flat other 'XX, good a is help have and going the be it's going cost The it's be invest to $XXX and NIM going spread. much. so million, to you going 'XX. can but $XXX of into for funding about

Malcolm Holland

Yes, you the $X.XX loan, was where I going you or now that in you're need that $X that. once of so, make XXX in to to make that double want you need a delta deposits. kind footing you on do of if only solid is that's point up Today,

do the assuming in you loans, 'XX, $X.X yes. deposits So running, in the $X hit and billion ground should billion we

Terry Earley

sheet the growth because And 'XX once where not going balance need want to optimizing to we 'XX we're year to -- be it get about the think correct. get excess I balance where we is the going also a we pricing going sheet want is be to it, deposit

Stephen Scouten

makes Yes. That all sense.

the is to you number I that it that you're maybe your trying a edges? can around you point in can basis basis you mentioned, you cut? move I XX X do every mean, rate just to work not, think number sensitivity future? for you half? mean, kind in what Or of the hedging mean, do overall down bring points down? And Okay. is I more cut that know think I

Terry Earley

number is, we we way pandemic. with the that No, we work the aggressively think could I during on of a combination expectations things. how price exceeded down One down and

And lot never hedging so loans been rate down it fixed did The then I big rate right risk more rate but -- now do I it. on it's well. problem what look, lender. rather with to the that, curve, that. in the making not and there, going with greater way with fixed a got And discussion space I hedging would we as derivative today, just the there's in and a and just would certainly we're have rate coupled loans shape appetite more securities. -- cash to has it a there's fixed lot more replicate before we Veritex think of much and forward for discussions on do hedge the expensive so space, the with I rather a

Stephen Scouten

Yes, makes sense.

next past maybe end. 'XX, that I from one as Okay. related then conversations. to back credit about think elevation sounds year, of itself the spike credit, large largely last we I a what's since of kind dues reasonable this for of you of it mean, But saw in just like office quarter kind charge-offs mean, to -- the know? from degree thing pace earlier the I resolved in moving is a me And the to

Michael Riebe

downside $XX than our budgeting We're for Sure, that. potential charge-offs sure. here looking sitting we're budgeting think question. forward I not more But I million than for today. that. for today Yes, identify in couldn't if into Thanks I'm XXXX, the

Malcolm Holland

in Yes. bps And the got it I answer yes, said last think deals. historical think all you number. has years. million the a We average choose, current mean, have already like bps X but of I'm start. our XX -- slide I we we'll is to there, and do plus asked, on XX Clay, place X to we did better, the you've question you sounds been If over great $XX-something it a sitting that

Terry Earley

is for Stephen, XX would to to bps, charge-off I to rather I with be rather I year We'd outperform want consensus the the guys that. think anybody XX, number just you. see I'd got -- on the say, drop -- honest you estimate,

Stephen Scouten

mean, with a No, understood. obviously, I standpoint, the need a provision build. there for guess, migrations, wasn't And even I of from some provision

So you to not large-scale if you need build makes the that, as correct? see any it's degradation that see

Terry Earley

not would the we're amount expect I Correct. that it year, grew this close anywhere what to so.

Operator

question will come And Hasan of next Ahmad from Davidson. our D.A.

Ahmad Hasan

on Gary Tenner. Hassan for is This Ahmad

color So missed $X.X and but firstly, credit any might went the million I generated interest that on this, have in reversal? nonaccrual

Terry Earley

We didn't I think. interest I think I range. it's reversals, $XXX,XXX, have or bps think $X.X was somewhere million bps, in it X and X that in And about $XXX,XXX don't

was agree -- with that in that I rest So part. The that the move the the NIM. nonaccruals affected

Ahmad Hasan

right. And like reliance funding, the is you year-end. the looking XX% ratio wholesale over XXXX would All and at this to through target Where tick a be?

Terry Earley

the to would on it's happy growth I side, but to going and the growth in XX% that If so somewhere Yes. expect Probably first It's already XX% between down deposit XX%, like core in as XX%. far -- done. this it somewhere low because I'm for deposit to XX% year. end meaningfully in range. be the quarter. outperformed we've It's as lower, We've been XX%, somewhere

Ahmad Hasan

but XX%. particularly XXXX, the All over given know about bit ETX thinking talked next I that outlook for thinking this, How risk-weighted the a lastly, growth you about assets right. year? about growing And are is loan over you

Malcolm Holland

on risk-weighted we're in going the that mean, measured to asset side. more I growth be

to many keep mentioned have goal calls is and got our number bit we've unfunded our I over we that's think the now inside little always and what what you. As our that But ago a number you that [indiscernible] capital on that should expect.

I don't that growth. So see

Terry Earley

assets. been risk-weighted net-net, the some instead add of will stay get and XXX, a probably estate unfunded, it's ADC I we think they're our 'XX. shrinking, the see so as And 'XX inside. in in unfunded not definitely do ratios and you real will -- ADC a it's I than -- say, to going some think But XXX of That to I'd to production going commercial but to grow higher lot. and still as below little,

of investment have But going growing we're going help the but more CETX look one And CETX unfunded utilize things the stay growth, XXXX. keep -- to investments And did seen to much for to so capital-efficient in to that's nothing loan be I we've the if that's think and increase, in it as like from portfolio. to in that's the we some we're deploy going past. as ratio or going going the

Ahmad Hasan

quick that. a And follow-up on

the the construction book $X Within commitments billion, year-over-year should in segment a in balances larger and 'XX? versus loan we $XX that decline the unfunded under in million expect decline

Malcolm Holland

No.

be little to a but nothing meaningful. We growth, expect maybe flat, it

Operator

will And for of coming the James. day our be Michael Rose final question Raymond from

Michael Rose

of have and I follow-ups. in X I'm you but the sorry Just to we loan-to-deposit assume understand sorry could cost -- down. missed some I higher for missed noninterest-bearing terminal I'm sense the quick are What this, some ratio expectations categories, going but where the I should bring what is for a be desire to your that certainly out if what for or this, if and could expectations mix? Terry, expect I growth do drop -- be? beta

Terry Earley

from expect I to here. be flat Yes, would it pretty

fourth the see of outflows quarter come have always would already. in are business, to seasonality, first our And But if hitting we're There's outflows means I again be flat. that small it flat. execute in some that the their commercial in quarter. quarter pretty I community in those expect I would our to going 'XX. said, to bankers, our like There's well, fourth targets, the be that, C&I we guys back Now expect it

now. best our that's guess Michael, So right

Michael Rose

what's outlook to That's XX% at I outside for the there? update that sort credit NPAs this think, And Any credits X then, comprise, of And bank? of helpful. CRE Okay. going quality. office those the loans know potentially back moving the your point. just there's I

Malcolm Holland

note actually them, just it. we one Just one, out had late. It's and working It about right? on of that one fell sale

So we in do to wrote -- a note have was it sale the to that down going be. that. where participant in partner We

work the them. -- really just gone But our sale asset to were So we be we this sort. quarter close is note that, will with of obviously out [fill] that But probably end. some through through to at anticipation either have a

Michael Rose

curve delta since X, forward if if for Just trying at talked I look touched that linear. Terry, would we we me. kind kind get it's you we rate call. earlier -- from delta sense have know any cuts; this the this then the what a sensitivity don't and X. of was And from could point? not Okay. do us What I look on of for you terms the kind assume do, a, finally being Great. in what of cuts, like, in about But at curve being then, how b, if at to forward be maybe the of just get

Terry Earley

NIM. Yes, if $X.XX for It's point may. million I basis every in about

flat, so cuts, and it it's to to -- if reduction, I thinking were to anybody going to year it's pretty not rates to if is NIM stay flat, And if NII I'm don't we're think meaningful don't -- end -- EPS. flat. X But you -- stays I basis yes, the math of kind there. And XX in it's it's XX there's your and get points so

to So that's answer it, Mike. know I the best way

Michael Rose

I helpful, No, appreciate my you that's guys questions. very taking Terry.

Terry Earley

Michael. Thanks,

Operator

Thank concludes conference you all today's This time your call. for today.

disconnect. may You all

Veritex (VBTX) 24 Jan 242023 Q4 Earnings call transcript