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Veritex Holdings, Inc. Reports Fourth Quarter and Full Year 2024 Results

1. VBTX's Q4 2024 net income reached $24.88 million. 2. Total deposits grew by 4% year-over-year, enhancing liquidity. 3. Nonperforming assets increased to 0.62%, indicating potential credit concerns. 4. Quarterly cash dividend of $0.20 was declared, showcasing shareholder returns. 5. Credit risk profile improved as criticized loans decreased by approximately $100 million.

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Why Bullish?

The solid profit and increased deposits may attract investors, similar to past growth phases.

How important is it?

The data reflects significant operational improvements, impacting investor sentiment strongly.

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Investor sentiment may improve quickly following this positive news, similar to other earnings reports.

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VBTXFDICNASDAQ
DALLAS, Jan. 28, 2025 (GLOBE NEWSWIRE) -- Veritex Holdings, Inc. (“Veritex”, the “Company”, “we” or “our”) (Nasdaq: VBTX), the holding company for Veritex Community Bank, today announced the results for the fourth quarter and full year of 2024. “We achieved significant milestones during 2024 as we improved our credit risk profile and strengthened and completed our balance sheet remake,” said C. Malcolm Holland, III, the Company’s Chairman and Chief Executive Officer. “My team and I are committed to continue to drive execution of our strategic plan in 2025. Now it’s back to what we do best; grow profitability.” 2024 Highlights: Operating EPS was $2.17 for 2024;Criticized loans decreased approximately $100 million during 2024;Commercial real estate concentrations decreased from 320.2% for the year ended 2023 to 298.9% for the year ended 2024;Nonperforming assets to total loans decreased 15 basis points to 0.62% from 2023;Loan to deposit ratio decreased to 89.3% as of December 31, 2024 compared to 93.6% as of December 31, 2023;Total deposits grew $414.4 million, or 4.0%, year-over-year;Common equity tier 1 capital increased 80 bps to 11.09% as of December 31, 2024 compared to 10.29% as of December 31, 2023;Tangible book value per common share increased 6.9%, or $1.40, during 2024 compared to 2023;Allowance for credit losses (“ACL”) to total loans increased to 1.18%, or 4 bps, from 1.14% as of December 31, 2023;Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on February 28, 2025;.andNamed one of the “Best Companies to Work For” by the 2024 Inaugural U.S. News & World Report which evaluates companies based on quality of pay, work/life balance, and opportunities for professional development and advancement.   Quarter to Date  Full YearFinancial Highlights Q4 2024 Q3 2024 Q4 2023   2024   2023   (Dollars in thousands, except per share data)(unaudited)GAAP     Net income $24,882  $31,001  $3,499   $107,241  $108,261 Diluted EPS  0.45   0.56   0.06    1.95   1.98 Book value per common share  29.37   29.53   28.18    29.37   28.18 Return on average assets1  0.78%  0.96%  0.11%   0.85%  0.88%Return on average equity1  6.17   7.79   0.92    6.85   7.21 Net interest margin  3.20   3.30   3.31    3.26   3.49 Efficiency ratio  67.04   61.94   77.49    62.62   55.82 Non-GAAP2           Operating earnings $29,769  $32,181  $31,625   $119,397  $142,114 Diluted operating EPS  0.54   0.59   0.58    2.17   2.60 Tangible book value per common share  21.61   21.72   20.21    21.61   20.21 Pre-tax, pre-provision operating earnings  40,945   44,555   47,688    173,576   222,211 Pre-tax, pre-provision operating return on average assets1  1.28%  1.38%  1.54%   1.37%  1.81%Pre-tax, pre-provision operating return on average loans1  1.72   1.83   1.97    1.81   2.32 Operating return on average assets1  0.93   1.00   1.02    0.95   1.16 Return on average tangible common equity1  9.04   11.33   2.00    10.10   10.91 Operating return on average tangible common equity1  10.69   11.74   12.37    11.17   14.09 Operating efficiency ratio  62.98   60.63   55.50    60.22   50.94  1 Annualized ratio.2 Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of these non-generally accepted accounting principles (“GAAP”) financial measures to their most directly comparable GAAP measures. Results of Operations for the Three Months Ended December 31, 2024 Net Interest Income For the three months ended December 31, 2024, net interest income before provision for credit losses was $96.1 million and net interest margin was 3.20%, compared to $100.1 million and 3.30%, respectively, for the three months ended September 30, 2024. The $3.9 million decrease, or 3.9%, in net interest income before provision for credit losses was primarily due to a $12.3 million decrease in interest income on loans primarily driven by a decrease in loan yields and average loan balances. This decrease was partially offset by a $1.1 million increase in interest income on debt securities, $6.0 million decrease in interest expense on certificates and other time deposits, $2.4 million decrease in interest expense on transaction and savings deposits during the three months ended December 31, 2024. Net interest margin decreased 10 bps from the three months ended September 30, 2024, primarily due to the decrease in loan yields during the three months ended December 31, 2024, partially offset by an increase in yields on debt securities. Compared to the three months ended December 31, 2023, net interest income before provision for credit losses for the three months ended December 31, 2024 increased by $608 thousand, or 0.6%. The increase was primarily due to a $4.6 million increase in interest income on debt securities, a $3.7 million increase in interest income in deposits in financial institutions and fed funds sold, a $2.5 million decrease in interest expense on advances from FHLB and a $1.4 million decrease in transaction and savings deposits driven by an decrease in funding costs. The increase in net interest income was partially offset by a $10.4 million decrease in interest income on loans driven by a decrease in loan yields and average balances. Net interest margin decreased 11 bps to 3.20% for the three months ended December 31, 2024 from 3.31% for the three months ended December 31, 2023. The decrease was primarily due to the decrease in loan yields during the three months ended December 31, 2024. Noninterest Income (Loss) Noninterest income for the three months ended December 31, 2024 was $10.1 million, a decrease of $3.1 million, or 23.3%, compared to noninterest income of $13.1 million for the three months ended September 30, 2024. The decrease in noninterest income was primarily due to a $4.4 million loss on sales of debt securities as a result of a strategic restructuring in which we sold $188.9 million of lower-yielding AFS securities, at amortized cost, with a 3.89% average yield, and reinvested the proceeds in higher yielding AFS securities with a 5.67% average yield. The decrease was also the result of a decrease of $852 thousand of OREO income, higher amortization of our servicing assets of $829 thousand and a decrease of $681 thousands due to the change in the value of equity securities. The decrease was partially offset by an increase of $4.6 million increase in government guaranteed loan income. Compared to the three months ended December 31, 2023, noninterest income for the three months ended December 31, 2024 increased $27.8 million, or 156.5%. The increase was primarily due to a $29.4 million loss on equity method investment income related to the write down of our equity method investment in Thrive during the three months ended December 31, 2023 with no corresponding loss recorded during the three months ended December 31, 2024. The Company has no remaining equity method investment in Thrive. Noninterest Expense Noninterest expense was $71.2 million for the three months ended December 31, 2024, compared to $70.1 million for the three months ended September 30, 2024, a increase of $1.1 million, or 1.6%. Changes within noninterest expenses items were nominal. Noninterest expense was $71.2 million for the three months ended December 31, 2024, compared to $60.2 million for the three months ended December 31, 2023, an increase of $11.0 million, or 18.2%. The increase was primarily driven by a $6.8 million increase in salary and employee benefits, a $4.1 million increase in other expenses, a $1.2 million increase in data processing and software expenses, and a $951 thousand increase in marketing expenses. The increase was partially offset by a $2.1 million decrease in professional and regulatory fees. Financial Condition Total loans held for investment (“LHI”) was $8.90 billion at December 31, 2024, a decrease of $129.4 million, compared to September 30, 2024, and a decrease of $307.4 million, or 3.3%, compared to December 31, 2023. Total deposits were $10.75 billion at December 31, 2024, an decrease of $283.4 million compared to September 30, 2024, and an increase of $414.4 million, or 4.0%, compared to December 31, 2023. The decrease from September 30, 2024 was primarily the result of a decrease of $667.1 million in certificates and other time deposits, a decrease of $452.4 million in noninterest-bearing deposits, and a decrease of $20.4 million in correspondent money market accounts. The decrease was partially offset by a increase of $856.4 million in interest-bearing transaction, money market, and savings deposits. The increase from December 31, 2023 was primarily the result of an increase in attractive deposits which consisted of $712.8 million in interest-bearing transaction, money market, and savings deposits. The increase was partially offset by a $232.9 million decrease in certificates and other time deposits, a $38.9 million decrease in correspondent money market accounts, and a $26.6 million decrease in non-interest bearing deposits. Credit Quality Nonperforming assets (“NPAs”) increased to $79.2 million, or 0.62% of total assets, at December 31, 2024, compared to $67.3 million, or 0.52% of total assets, at September 30, 2024. Net charge-offs compared to average loans outstanding were 21 bps for the year ended December 31, 2024, compared to 25 bps for year ended December 31, 2023. ACL as a percentage of LHI was 1.18%, 1.21%, and 1.14% at December 31, 2024, September 30, 2024, and December 31, 2023, respectively. The Company recorded a provision for credit losses of $2.3 million for the three months ended December 31, 2024, compared to a provision for credit losses of $4.0 million and $9.5 million for the three months ended September 30, 2024 and December 31, 2023, respectively. The recorded provision for credit losses reported for the three months ended December 31, 2024, compared to the three months ended December 31, 2023 was primarily attributable to a decrease in the overall loans held for investment balances and changes in general reserves as a result of changes in economic factors. The Company recorded a benefit for unfunded commitments of $401 thousand and $1.5 million during the three months ended December 31, 2024, and December 31, 2023, respectively. There was no provision for unfunded commitments recorded during the three months ended in September 30, 2024. The decrease in the recorded benefit for unfunded commitments during the three months ended December 31, 2024, compared to the three months ended September 30, 2024, was primarily attributable to changes in the economic factors applied to unfunded commitment balances. Dividend Information On January 28, 2025, Veritex's Board of Directors declared a quarterly cash dividend of $0.20 per share on its outstanding shares of common stock. The dividend will be paid on February 28, 2025 to stockholders of record as of the close of business on February 14, 2025. Non-GAAP Financial Measures Veritex’s management uses certain non-GAAP (U.S. generally accepted accounting principles) financial measures to evaluate its operating performance and provide information that is important to investors. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, Veritex’s reported results prepared in accordance with GAAP. Specifically, Veritex reviews and reports tangible book value per common share, operating earnings, tangible common equity to tangible assets, return on average tangible common equity, pre-tax, pre-provision operating earnings, pre-tax, pre-provision operating return on average assets, pre-tax, pre-provision operating return on average loans, diluted operating earnings per share, operating return on average assets, operating return on average tangible common equity and operating efficiency ratio. Veritex has included in this earnings release information related to these non-GAAP financial measures for the applicable periods presented. Please refer to “Reconciliation of Non-GAAP Financial Measures” after the financial highlights at the end of this earnings release for a reconciliation of these non-GAAP financial measures. Conference Call The Company will host an investor conference call to review the results on Wednesday, January 29, 2025 at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/8uwctr48 and will receive a unique PIN, which can be used when dialing in for the call. Participants may also register via teleconference at:https://register.vevent.com/register/BIf4f4afb9195448ba90575ac59fb337bc. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time. A replay will be available within approximately two hours after the completion of the call, and made accessible for one week. You may access the replay via webcast through the investor relations section of Veritex’s website. About Veritex Holdings, Inc. Headquartered in Dallas, Texas, Veritex is a bank holding company that conducts banking activities through its wholly-owned subsidiary, Veritex Community Bank, with locations throughout the Dallas-Fort Worth metroplex and in the Houston metropolitan area. Veritex Community Bank is a Texas state chartered bank regulated by the Texas Department of Banking and the Board of Governors of the Federal Reserve System. For more information, visit www.veritexbank.com. Forward-Looking Statements This earnings release includes “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors, which change over time and are beyond our control, that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to the expected payment of Veritex’s quarterly cash dividend; the impact of certain changes in Veritex’s accounting policies, standards and interpretations; a continuation of recent turmoil in the banking industry, responsive measures to mitigate and manage it and related supervisory and regulatory actions and costs and Veritex’s future financial performance, business and growth strategy, projected plans and objectives, as well as other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “seeks,” “targets,” “outlooks,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. We refer you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Veritex’s Annual Report on Form 10-K for the year ended December 31, 2023 and any updates to those risk factors set forth in Veritex’s Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. If one or more events related to these or other risks or uncertainties materialize, or if Veritex’s underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. Veritex does not undertake any obligation, and specifically declines any obligation, to supplement, update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, expressed or implied, included in this earnings release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Veritex or persons acting on Veritex’s behalf may issue. VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(Unaudited)   For the Quarter Ended For the Year Ended  Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023  (Dollars and shares in thousands, except per-share data)Per Share Data (Common Stock):              Basic EPS $0.46  $0.57  $0.50  $0.44  $0.06  $1.97  $2.00 Diluted EPS  0.45   0.56   0.50   0.44   0.06   1.95   1.98 Book value per common share  29.37   29.53   28.49   28.23   28.18   29.37   28.18 Tangible book value per common share1  21.61   21.72   20.62   20.33   20.21   21.61   20.21 Dividends paid per common share outstanding2  0.20   0.20   0.20   0.20   0.20   0.80   0.80                Common Stock Data:              Shares outstanding at period end  54,517   54,446   54,350   54,496   54,338   54,517   54,338 Weighted average basic shares outstanding for the period  54,489   54,409   54,457   54,444   54,327   54,450   54,256 Weighted average diluted shares outstanding for the period  55,237   54,932   54,823   54,842   54,691   54,958   54,596                Summary of Credit Ratios:              ACL to total LHI  1.18%  1.21%  1.16%  1.15%  1.14%  1.18%  1.14%NPAs to total assets  0.62   0.52   0.65   0.82   0.77   0.62   0.77 NPAs to total loans and OREO  0.83   0.70   0.85   1.06   1.00   0.83   1.00 Net charge-offs to average loans outstanding3  0.32   0.01   0.28   0.22   0.40   0.21   0.25                Summary Performance Ratios:              Return on average assets3  0.78%  0.96%  0.87%  0.79%  0.11%  0.85%  0.88%Return on average equity3  6.17   7.79   7.10   6.33   0.92   6.85   7.21 Return on average tangible common equity1, 3  9.04   11.33   10.54   9.52   2.00   10.10   10.91 Efficiency ratio  67.04   61.94   59.11   62.45   77.49   62.62   55.82 Net interest margin  3.20   3.30   3.29   3.24   3.31   3.26   3.49                Selected Performance Metrics - Operating:              Diluted operating EPS1 $0.54  $0.59  $0.52  $0.53  $0.58  $2.17  $2.60 Pre-tax, pre-provision operating return on average assets1, 3  1.28%  1.38%  1.42%  1.42%  1.54%  1.37%  1.81%Pre-tax, pre-provision operating return on average loans1, 3  1.72   1.83   1.83   1.84   1.97   1.81   2.32 Operating return on average assets1,3  0.93   1.00   0.91   0.95   1.02   0.95   1.16 Operating return on average tangible common equity1,3  10.69   11.74   10.94   11.34   12.37   11.17   14.09 Operating efficiency ratio1  62.98   60.63   58.41   58.73   55.50   60.22   50.94 Risk weighted assets $11,247,813  $11,290,800  $11,450,997  $11,407,446  $11,387,825  $11,247,813  $11,387,825                Veritex Holdings, Inc. Capital Ratios:              Average stockholders' equity to average total assets  12.58%  12.31%  12.26%  12.43%  12.27%  12.40%  12.22%Tangible common equity to tangible assets1  9.54   9.37   9.14   9.02   9.18   9.54   9.18 Tier 1 capital to average assets (leverage)  10.32   10.06   10.06   10.12   10.03   10.32   10.03 Common equity tier 1 capital  11.09   10.86   10.49   10.37   10.29   11.09   10.29 Tier 1 capital to risk-weighted assets  11.36   11.13   10.75   10.63   10.56   11.36   10.56 Total capital to risk-weighted assets  13.96   13.91   13.45   13.33   13.18   13.96   13.18  1 Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” after the financial highlights for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.2 Dividend amount represents dividend paid per common share subsequent to each respective quarter end.3 Annualized ratio for quarterly metrics. VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(In thousands)   Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023  (unaudited) (unaudited) (unaudited) (unaudited)  ASSETS          Cash and due from banks $52,486  $54,165  $53,462  $41,884  $58,914 Interest bearing deposits in other banks  802,714   1,046,625   598,375   698,885   570,149 Cash and cash equivalents $855,200  $1,100,790  $651,837  $740,769  $629,063 Debt securities, net  1,478,538   1,423,610   1,349,354   1,344,930   1,257,042 Other investments  69,638   71,257   75,885   76,788   76,238 Loans held for sale ("LHFS")  89,309   48,496   57,046   64,762   79,072 LHI, mortgage warehouse ("MW")  605,411   630,650   568,047   449,531   377,796 LHI, excluding MW  8,899,133   9,028,575   9,209,094   9,249,551   9,206,544 Total loans  9,593,853   9,707,721   9,834,187   9,763,844   9,663,412 ACL  (111,745)  (117,162)  (113,431)  (112,032)  (109,816)Bank-owned life insurance  85,324   84,776   84,233   85,359   84,833 Bank premises, furniture and equipment, net  113,480   114,202   105,222   105,299   105,727 Other real estate owned ("OREO")  24,737   9,034   24,256   18,445   — Intangible assets, net of accumulated amortization  28,664   32,825   35,817   38,679   41,753 Goodwill  404,452   404,452   404,452   404,452   404,452 Other assets  226,200   211,471   232,518   241,863   241,633 Total assets $12,768,341  $13,042,976  $12,684,330  $12,708,396  $12,394,337 LIABILITIES AND STOCKHOLDERS’ EQUITY          Deposits:          Noninterest-bearing deposits $2,191,457  $2,643,894  $2,416,727  $2,349,211  $2,218,036 Interest-bearing transaction and savings deposits  5,061,157   4,204,708   3,979,454   4,220,114   4,348,385 Certificates and other time deposits  2,958,861   3,625,920   3,744,596   3,486,805   3,191,737 Correspondent money market deposits  541,117   561,489   584,067   597,690   580,037 Total deposits  10,752,592   11,036,011   10,724,844   10,653,820   10,338,195 Accounts payable and other liabilities  183,944   168,415   180,585   186,027   195,036 Advances from FHLB  —   —   —   100,000   100,000 Subordinated debentures and subordinated notes  230,736   230,536   230,285   230,034   229,783 Total liabilities  11,167,272   11,434,962   11,135,714   11,169,881   10,863,014 Commitments and contingencies          Stockholders’ equity:          Common stock  613   613   612   611   610 Additional paid-in capital  1,328,748   1,324,929   1,321,995   1,319,144   1,317,516 Retained earnings  507,903   493,921   473,801   457,499   444,242 Accumulated other comprehensive loss  (65,076)  (40,330)  (76,713)  (71,157)  (63,463)Treasury stock  (171,119)  (171,119)  (171,079)  (167,582)  (167,582)Total stockholders’ equity  1,601,069   1,608,014   1,548,616   1,538,515   1,531,323 Total liabilities and stockholders’ equity $12,768,341  $13,042,976  $12,684,330  $12,708,396  $12,394,337  VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(in thousands, except per share data)   For the Quarter Ended For the Year Ended  Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023  (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)  Interest income:              Loans, including fees $154,998  $167,261 $166,979 $161,942  $165,443  $651,180  $648,245 Debt securities  16,893   15,830  15,408  13,695   12,282   61,826   44,364 Deposits in financial institutions and Fed Funds sold  11,888   12,571  7,722  8,050   8,162   40,231   28,331 Equity securities and other investments  940   1,001  1,138  900   1,717   3,979   5,934 Total interest income  184,719   196,663  191,247  184,587   187,604   757,216   726,874 Interest expense:              Transaction and savings deposits  44,841   47,208  45,619  46,784   46,225   184,452   148,975 Certificates and other time deposits  40,279   46,230  44,811  40,492   40,165   171,812   125,409 Advances from FHLB  130   47  1,468  1,391   2,581   3,036   41,024 Subordinated debentures and subordinated notes  3,328   3,116  3,113  3,114   3,100   12,671   12,352 Total interest expense  88,578   96,601  95,011  91,781   92,071   371,971   327,760 Net interest income  96,141   100,062  96,236  92,806   95,533   385,245   399,114 Provision for credit losses  2,300   4,000  8,250  7,500   9,500   22,050   42,512 (Benefit) provision for unfunded commitments  (401)  —  —  (1,541)  (1,500)  (1,942)  (2,041)Net interest income after provisions  94,242   96,062  87,986  86,847   87,533   365,137   358,643 Noninterest income:              Service charges and fees on deposit accounts  5,612   5,442  4,974  4,896   4,800   20,924   20,248 Loan fees  2,265   3,278  2,207  2,510   1,200   10,260   6,348 Loss on sales of debt securities  (4,397)  —  —  (6,304)  —   (10,701)  (5,321)Government guaranteed loan income, net  5,368   780  1,320  2,614   4,378   10,082   19,982 Equity method investment (loss) income  —   —  —  —   (29,417)  —   (30,589)Customer swap income  509   271  326  449   258   1,555   1,633 Other income  699   3,335  1,751  2,497   989   8,282   6,804 Total noninterest income (loss)  10,056   13,106  10,578  6,662   (17,792)  40,402   19,105 Noninterest expense:              Salaries and employee benefits  37,446   37,370  32,790  33,365   30,606   140,971   122,070 Occupancy and equipment  4,633   4,789  4,585  4,677   4,670   18,684   19,351 Professional and regulatory fees  5,564   4,903  5,617  6,053   7,626   22,137   26,166 Data processing and software expense  5,741   5,268  5,097  4,856   4,569   20,962   18,539 Marketing  2,896   2,781  1,976  1,546   1,945   9,199   8,704 Amortization of intangibles  2,437   2,438  2,438  2,438   2,438   9,751   9,838 Telephone and communications  323   335  365  261   356   1,284   1,551 Other  12,154   12,216  10,273  8,920   8,028   43,563   27,245 Total noninterest expense  71,194   70,100  63,141  62,116   60,238   266,551   233,464 Income before income tax expense  33,104   39,068  35,423  31,393   9,503   138,988   144,284 Income tax expense  8,222   8,067  8,221  7,237   6,004   31,747   36,023 Net income $24,882  $31,001 $27,202 $24,156  $3,499  $107,241  $108,261                Basic EPS $0.46  $0.57 $0.50 $0.44  $0.06  $1.97  $2.00 Diluted EPS $0.45  $0.56 $0.50 $0.44  $0.06  $1.95  $1.98 Weighted average basic shares outstanding  54,489   54,409  54,457  54,444   54,327   54,450   54,256 Weighted average diluted shares outstanding  55,237   54,932  54,823  54,842   54,691   54,958   54,596  VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(Unaudited)   For the Quarter Ended  December 31, 2024 September 30, 2024 December 31, 2023  AverageOutstandingBalance InterestEarned/InterestPaid AverageYield/Rate AverageOutstandingBalance InterestEarned/InterestPaid AverageYield/Rate AverageOutstandingBalance InterestEarned/InterestPaid AverageYield/Rate  (Dollars in thousands)Assets                  Interest-earning assets:                  Loans1 $8,957,193  $147,782 6.56% $9,184,182  $159,163 6.89% $9,280,439  $161,021 6.88%LHI, MW  492,372   7,216 5.83   477,592   8,098 6.75   301,345   4,422 5.82 Debt securities  1,458,057   16,893 4.61   1,384,835   15,830 4.55   1,188,776   12,282 4.10 Interest-earning deposits in other banks  971,451   11,888 4.87   924,685   12,571 5.41   587,929   8,162 5.51 Equity securities and other investments  72,223   940 5.18   75,884   1,001 5.25   82,271   1,717 8.28 Total interest-earning assets  11,951,296   184,719 6.15   12,047,178   196,663 6.49   11,440,760   187,604 6.51 ACL  (117,293)      (115,510)      (111,937)    Noninterest-earning assets  916,969       930,250       977,811     Total assets $12,750,972      $12,861,918      $12,306,634                        Liabilities and Stockholders’ Equity                  Interest-bearing liabilities:                  Interest-bearing demand and savings deposits $5,001,159   44,841 3.57% $4,700,196  $47,208 4.00% $4,547,911   46,225 4.03%Certificates and other time deposits  3,319,628   40,279 4.83   3,678,718   46,230 5.00   3,285,164   40,165 4.85 Advances from FHLB and Other  10,598   130 4.88   3,261   47 5.73   182,935   2,581 5.60 Subordinated debentures and subordinated notes  230,633   3,328 5.74   230,393   3,116 5.38   229,648   3,100 5.36 Total interest-bearing liabilities  8,562,018   88,578 4.12   8,612,568   96,601 4.46   8,245,658   92,071 4.43                    Noninterest-bearing liabilities:                  Noninterest-bearing deposits  2,400,809       2,486,676       2,322,555     Other liabilities  183,810       179,273       228,135     Total liabilities  11,146,637       11,278,517       10,796,348     Stockholders’ equity  1,604,335       1,583,401       1,510,286     Total liabilities and stockholders’ equity $12,750,972      $12,861,918      $12,306,634                        Net interest rate spread2     2.03%     2.03%     2.08%Net interest income and margin3   $96,141 3.20%   $100,062 3.30%   $95,533 3.31% 1 Includes average outstanding balances of LHFS of $46.4 million, $54.3 million and $31.2 million for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively, and average balances of LHI, excluding MW.2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.3 Net interest margin is equal to net interest income divided by average interest-earning assets. VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(Unaudited)   For the Year Ended December 31,   2024   2023   AverageOutstandingBalance InterestEarned/InterestPaid AverageYield/Rate AverageOutstandingBalance InterestEarned/InterestPaid AverageYield/Rate  (Dollars in thousands)Assets            Interest-earning assets:            Loans1 $9,191,753  $624,853 6.80% $9,244,070  $628,122 6.79%LHI, MW  417,985   26,327 6.30   347,596   20,123 5.79 Debt securities  1,372,812   61,826 4.50   1,173,880   44,364 3.78 Interest-earning deposits in other banks  762,569   40,231 5.28   542,959   28,331 5.22 Equity securities and other investments  75,825   3,979 5.25   120,135   5,934 4.94 Total interest-earning assets  11,820,944   757,216 6.41   11,428,640   726,874 6.36 ACL  (115,259)      (103,179)    Noninterest-earning assets  927,178       957,286     Total assets $12,632,863      $12,282,747                  Liabilities and Stockholders’ Equity            Interest-bearing liabilities:            Interest-bearing demand and savings deposits $4,728,453   184,452 3.90  $4,197,517   148,975 3.55 Certificates and other time deposits  3,468,448   171,812 4.95   2,977,178   125,409 4.21 Advances from FHLB and Other  55,109   3,036 5.51   873,617   41,024 4.70 Subordinated debentures and subordinated notes  230,264   12,671 5.50   229,268   12,352 5.39 Total interest-bearing liabilities  8,482,274   371,971 4.39   8,277,580   327,760 3.96              Noninterest-bearing liabilities:            Noninterest-bearing deposits  2,397,681       2,309,983     Other liabilities  186,951       193,659     Total liabilities  11,066,906       10,781,222     Stockholders’ equity  1,565,957       1,501,525     Total liabilities and stockholders’ equity $12,632,863      $12,282,747                  Net interest rate spread2     2.02%     2.40%Net interest income and margin3   $385,245 3.26%   $399,114 3.49% 1Includes average outstanding balances of LHFS of $53.3 million and $25.7 million for the twelve months ended December 31, 2024 and 2023, respectively, and average balances of LHI, excluding MW.2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.3 Net interest margin is equal to net interest income divided by average interest-earning assets. VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(Unaudited) Yield Trend   For the Quarter Ended  Dec 31,2024 Sep 30,2024 Jun 30,2024 Mar 31,2024 Dec 31,2023Average yield on interest-earning assets:          Loans1 6.56% 6.89% 6.90% 6.83% 6.88%LHI, MW 5.83  6.75  6.36  6.27  5.82 Total loans 6.53  6.89  6.88  6.81  6.85 Debt securities 4.61  4.55  4.58  4.25  4.10 Interest-bearing deposits in other banks 4.87  5.41  5.54  5.54  5.51 Equity securities and other investments 5.18  5.25  5.80  4.75  8.28 Total interest-earning assets 6.15% 6.49% 6.54% 6.44% 6.51%           Average rate on interest-bearing liabilities:          Interest-bearing demand and savings deposits 3.57% 4.00% 4.01% 4.06% 4.03%Certificates and other time deposits 4.83  5.00  5.02  4.96  4.85 Advances from FHLB 4.88  5.73  5.54  5.54  5.60 Subordinated debentures and subordinated notes 5.74  5.38  5.44  5.45  5.36 Total interest-bearing liabilities 4.12% 4.46% 4.50% 4.47% 4.43%           Net interest rate spread2 2.03% 2.03% 2.04% 1.97% 2.08%Net interest margin3 3.20% 3.30% 3.29% 3.24% 3.31% 1 Includes average outstanding balances of LHFS of $46.4 million, $54.3 million, $58.5 million, $53.9 million and $31.2 million for the three months ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively, and average balances of LHI, excluding MW. 2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities. 3 Net interest margin is equal to net interest income divided by average interest-earning assets. Supplemental Yield Trend   For the Quarter Ended For the Year Ended  Dec 31,2024 Sep 30,2024 Jun 30,2024 Mar 31,2024 Dec 31,2023 Dec 31,2024 Dec 31,2023Average cost of interest-bearing deposits 4.07% 4.44% 4.46% 4.43% 4.38% 4.35% 3.82%Average costs of total deposits, including noninterest-bearing 3.16  3.42  3.46  3.42  3.37  3.36  2.89  VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(Unaudited) LHI and Deposit Portfolio Composition   Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023  (In thousands, except percentages)LHI1                    Commercial and Industrial ("C&I") $2,693,538  30.2% $2,728,544  30.2% $2,798,260  30.4% $2,785,987  30.1% $2,752,063  29.9%Real Estate:                    Owner occupied commercial ("OOCRE")  780,003  8.8   807,223  8.9   806,285  8.7   788,376  8.5   794,088  8.6 Non-owner occupied commercial ("NOOCRE")  2,382,499  26.7   2,338,094  25.9   2,369,848  25.7   2,352,993  25.5   2,350,725  25.5 Construction and land  1,303,711  14.7   1,436,540  15.8   1,536,580  16.7   1,568,257  16.9   1,734,254  18.8 Farmland  31,690  0.4   32,254  0.4   30,512  0.3   30,979  0.3   31,114  0.3 1-4 family residential  957,341  10.7   944,755  10.5   917,402  10.0   969,401  10.5   937,119  10.2 Multi-family residential  750,218  8.4   738,090  8.2   748,740  8.1   751,607  8.1   605,817  6.6 Consumer  9,115  0.1   11,292  0.1   9,245  0.1   8,882  0.1   10,149  0.1 Total LHI1 $8,908,115  100% $9,036,792  100% $9,216,872  100% $9,256,482  100% $9,215,329  100%                     MW  605,411     630,650     568,047     449,531     377,796                        Total LHI1 $9,513,526    $9,667,442    $9,784,919    $9,706,013    $9,593,125                        Total LHFS  89,309     48,496     57,046     64,762     79,072                        Total loans $9,602,835    $9,715,938    $9,841,965    $9,770,775    $9,672,197                        Deposits                    Noninterest-bearing $2,191,457  20.4% $2,643,894  24.0% $2,416,727  22.5% $2,349,211  22.1% $2,218,036  21.5%Interest-bearing transaction  839,005  7.8   421,059  3.8   523,272  4.9   724,171  6.8   927,193  8.9 Money market  3,772,964  35.1   3,462,709  31.4   3,268,286  30.5   3,326,742  31.2   3,284,324  31.8 Savings  449,188  4.2   320,940  2.9   187,896  1.8   169,201  1.6   136,868  1.3 Certificates and other time deposits  2,958,861  27.5   3,625,920  32.8   3,744,596  34.9   3,486,805  32.7   3,191,737  30.9 Correspondent money market account  541,117  5.0   561,489  5.1   584,067  5.4   597,690  5.6   580,037  5.6 Total deposits $10,752,592  100% $11,036,011  100% $10,724,844  100% $10,653,820  100% $10,338,195  100%                     Total loans to total deposits ratio  89.3%    88.0%    91.8%    91.7%    93.6%                       Total loans to Deposit Ratio, excluding MW loans and LHFS  82.8%    81.9%    85.9%    86.9%    89.1%   1 Total LHI does not include deferred costs of $9.0 million, $8.2 million, $7.8 million, $6.9 million and $8.8 million at December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively. VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(Unaudited) Asset Quality  For the Quarter Ended For the Year Ended Dec 31,2024 Sep 30,2024 Jun 30,2024 Mar 31,2024 Dec 31,2023 Dec 31,2024 Dec 31,2023 (In thousands, except percentages)NPAs:             Nonaccrual loans$52,521  $55,335  $58,537  $75,721  $79,133  $52,521  $79,133 Nonaccrual PCD loans1 —   70   73   9,419   13,715   —   13,715 Accruing loans 90 or more days past due2 1,914   2,860   143   220   2,975   1,914   2,975 Total nonperforming loans held for investment ("NPLs") 54,435   58,265   58,753   85,360   95,823   54,435   95,823 Other real estate owned ("OREO") 24,737   9,034   24,256   18,445   —   24,737   — Total NPAs$79,172  $67,299  $83,009  $103,805  $95,823  $79,172  $95,823               Charge-offs:             1-4 family residential$—  $—  $(31) $—  $(21) $(31) $(21)Multifamily —   —   (198)  —   (192)  (198)  (192)OOCRE —   —   —   (120)  (364)  (120)  (855)NOOCRE (5,113)  —   (1,969)  (4,293)  (5,434)  (11,375)  (13,649)C&I (4,586)  (2,259)  (5,601)  (946)  (3,893)  (13,392)  (10,413)Consumer (420)  (54)  (30)  (71)  (33)  (575)  (236)Total charge-offs$(10,119) $(2,313) $(7,829) $(5,430) $(9,937) $(25,691) $(25,366)              Recoveries:             1-4 family residential$2  $3  $—  $1  $1  $6  $3 OOCRE —   —   120   —   —   120   — NOOCRE 1,323   —   —   —   —   1,323   350 C&I 1,047   1,962   361   96   387   3,466   1,165 MW   46   —   —   —   46   — Consumer 30   33   497   49   34   609   100 Total recoveries$2,402  $2,044  $978  $146  $422  $5,570  $1,618               Net charge-offs$(7,717) $(269) $(6,851) $(5,284) $(9,515) $(20,121) $(23,748)              Provision for credit losses$2,300  $4,000  $8,250  $7,500  $9,500  $22,050  $42,512               ACL$111,745  $117,162  $113,431  $112,032  $109,816  $111,745  $109,816               Asset Quality Ratios:             NPAs to total assets 0.62%  0.52%  0.65%  0.82%  0.77%  0.62%  0.77%NPAs, excluding nonaccrual PCD loans, to total assets 0.62   0.52   0.65   0.74   0.66   0.62   0.66 NPAs to total loans and OREO 0.83   0.70   0.85   1.06   1.00   0.83   1.00 NPLs to total LHI 0.57   0.60   0.60   0.88   1.00   0.57   1.00 NPLs, excluding nonaccrual PCD loans, to total LHI 0.57   0.60   0.60   0.78   0.86   0.57   0.86 ACL to total LHI 1.18   1.21   1.16   1.15   1.14   1.18   1.14 ACL to total loans, excluding MW and LHFS 1.25   1.30   1.23   1.21   1.19   1.25   1.19 Net charge-offs to average loans outstanding3 0.32   0.01   0.28   0.22   0.40   0.21   0.25  1 Nonaccrual PCD loans consist of PCD loans that transitioned upon adoption of ASC 326 Financial Instruments - Credit Losses and were accounted for on a pooled basis that have subsequently been placed on nonaccrual status.2 Accruing loans greater than 90 days past due exclude PCD loans greater than 90 days past due that are accounted for on a pooled basis.3Annualized ratio for quarterly metrics. VERITEX HOLDINGS, INC. AND SUBSIDIARIESReconciliation of Non-GAAP Financial Measures(Unaudited) We identify certain financial measures discussed in this earnings release as being “non-GAAP financial measures.” In accordance with SEC rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP, in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios calculated using exclusively either one or both of (i) financial measures calculated in accordance with GAAP and (ii) operating measures or other measures that are not non-GAAP financial measures. The non-GAAP financial measures that we present in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we present in this earnings release may differ from that of other companies reporting measures with similar names. You should understand how such other financial institutions calculate their financial measures that appear to be similar or have similar names to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures. Tangible Book Value Per Common Share. Tangible book value per common share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by number of common shares outstanding. For tangible book value per common share, the most directly comparable financial measure calculated in accordance with GAAP is book value per common share. We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value. The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:   As of  Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023  (Dollars in thousands, except per share data)Tangible Common Equity          Total stockholders' equity $1,601,069  $1,608,014  $1,548,616  $1,538,515  $1,531,323 Adjustments:          Goodwill  (404,452)  (404,452)  (404,452)  (404,452)  (404,452)Core deposit intangibles  (18,744)  (21,182)  (23,619)  (26,057)  (28,495)Tangible common equity $1,177,873  $1,182,380  $1,120,545  $1,108,006  $1,098,376 Common shares outstanding  54,517   54,446   54,350   54,496   54,338            Book value per common share $29.37  $29.53  $28.49  $28.23  $28.18 Tangible book value per common share $21.61  $21.72  $20.62  $20.33  $20.21  VERITEX HOLDINGS, INC. AND SUBSIDIARIESReconciliation of Non-GAAP Financial Measures(Unaudited) Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity, less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For tangible common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total stockholders’ equity to total assets. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, in each case, exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing both total stockholders’ equity and assets while not increasing our tangible common equity or tangible assets. The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:   As of  Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023  (Dollars in thousands)Tangible Common Equity          Total stockholders' equity $1,601,069  $1,608,014  $1,548,616  $1,538,515  $1,531,323 Adjustments:          Goodwill  (404,452)  (404,452)  (404,452)  (404,452)  (404,452)Core deposit intangibles  (18,744)  (21,182)  (23,619)  (26,057)  (28,495)Tangible common equity $1,177,873  $1,182,380  $1,120,545  $1,108,006  $1,098,376 Tangible Assets          Total assets $12,768,341  $13,042,976  $12,684,330  $12,708,396  $12,394,337 Adjustments:          Goodwill  (404,452)  (404,452)  (404,452)  (404,452)  (404,452)Core deposit intangibles  (18,744)  (21,182)  (23,619)  (26,057)  (28,495)Tangible Assets $12,345,145  $12,617,342  $12,256,259  $12,277,887  $11,961,390 Tangible Common Equity to Tangible Assets  9.54%  9.37%  9.14%  9.02%  9.18% VERITEX HOLDINGS, INC. AND SUBSIDIARIESReconciliation of Non-GAAP Financial Measures(Unaudited) Return on Average Tangible Common Equity. Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) net income available for common stockholders adjusted for amortization of core deposit intangibles (which we refer to as “return”) as net income, plus amortization of core deposit intangibles, less tax benefit at the statutory rate; (b) average tangible common equity as total average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity. We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of core deposit intangibles. Goodwill and core deposit intangibles have the effect of increasing total stockholders’ equity while not increasing our tangible common equity. This measure is particularly relevant to acquisitive institutions that may have higher balances in goodwill and core deposit intangibles than non-acquisitive institutions. The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income available for common stockholders adjusted for amortization of core deposit intangibles, net of taxes to net income and presents our return on average tangible common equity:   For the Quarter Ended For the Year Ended  Dec 31,2024 Sep 30,2024 Jun 30,2024 Mar 31,2024 Dec 31,2023 Dec 31,2024 Dec 31,2023  (Dollars in thousands)Net income available for common stockholders adjusted for amortization of core deposit intangibles              Net income $24,882  $31,001  $27,202  $24,156  $3,499  $107,241  $108,261 Adjustments:              Plus: Amortization of core deposit intangibles  2,437   2,438   2,438   2,438   2,438   9,751   9,752 Less: Tax benefit at the statutory rate  512   512   512   512   512   2,048   2,048 Net income available for common stockholders adjusted for amortization of core deposit intangibles $26,807  $32,927  $29,128  $26,082  $5,425  $114,944  $115,965                Average Tangible Common Equity              Total average stockholders' equity $1,604,335  $1,583,401  $1,541,609  $1,533,868  $1,510,286  $1,565,957  $1,501,525 Adjustments:              Average goodwill  (404,452)  (404,452)  (404,452)  (404,452)  (404,452)  (404,452)  (404,452)Average core deposit intangibles  (20,342)  (22,789)  (25,218)  (27,656)  (30,093)  (23,988)  (33,718)Average tangible common equity $1,179,541  $1,156,160  $1,111,939  $1,101,760  $1,075,741  $1,137,517  $1,063,355 Return on Average Tangible Common Equity (Annualized)  9.04%  11.33%  10.54%  9.52%  2.00%  10.10%  10.91% VERITEX HOLDINGS, INC. AND SUBSIDIARIESReconciliation of Non-GAAP Financial Measures(Unaudited) Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Assets, Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Loans, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings, pre-tax, pre-provision operating earnings and the performance metrics calculated using these metrics, listed below, are non-GAAP measures used by management to evaluate the Company’s financial performance. We calculate (a) operating earnings as net income plus equity method investment write-down, plus FDIC special assessment, plus severance payments, plus loss on sale of debt securities AFS, net, less tax impact of adjustments, plus nonrecurring tax adjustments. We calculate (b) diluted operating earnings per share as operating earnings as described in clause (a) divided by weighted average diluted shares outstanding. We calculate (c) pre-tax, pre-provision operating earnings as operating earnings as described in clause (a) plus provision for income taxes, plus benefit (provision) for credit losses and unfunded commitments. We calculate (d) pre-tax, pre-provision operating return on average assets as pre-tax, pre-provision operating earnings as described in clause (a) divided by total average assets. We calculate (e) operating return on average assets as operating earnings as described in clause (a) divided by total average assets. We calculate (f) operating return on average tangible common equity as operating earnings as described in clause (a), adjusted for the amortization of intangibles and tax benefit at the statutory rate, divided by total average tangible common equity (average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization). We calculate (g) operating efficiency ratio as noninterest expense plus adjustments to operating noninterest expense divided by noninterest income plus adjustments to operating noninterest income, plus net interest income We believe that these measures and the operating metrics calculated utilizing these measures are important to management and many investors in the marketplace who are interested in understanding the ongoing operating performance of the Company and provide meaningful comparisons to its peers. The following tables reconcile, as of the dates set forth below, operating net income and pre-tax, pre-provision operating earnings and related metrics:   For the Quarter Ended For the Year Ended  Dec 31,2024 Sep 30,2024 Jun 30,2024 Mar 31,2024 Dec 31,2023 Dec 31,2024 Dec 31,2023  (Dollars in thousands, except per share data)Operating Earnings              Net income $24,882 $31,001 $27,202 $24,156 $3,499 $107,241 $108,261Plus: Equity method investment write-down  —  —  —  —  29,417  —  29,417Plus: FDIC special assessment  —  —  134  —  768  134  768Plus: Severance payments1  1,545  1,487  613  —  —  3,645  1,950Plus: Loss on sale of debt securities AFS, net  4,397  —  —  6,304  —  10,701  5,321Operating pre-tax income  30,824  32,488  27,949  30,460  33,684  121,721  145,717Less: Tax impact of adjustments  1,248  307  166  1,323  2,059  3,044  3,603Plus: Nonrecurring tax adjustments  193  —  527  —  —  720  —Operating earnings $29,769 $32,181 $28,310 $29,137 $31,625 $119,397 $142,114               Weighted average diluted shares outstanding  55,237  54,932  54,823  54,842  54,691  54,958  54,596Diluted EPS $0.45 $0.56 $0.50 $0.44 $0.06 $1.95 $1.98Diluted operating EPS $0.54 $0.59 $0.52 $0.53 $0.58 $2.17 $2.60 1 Severance payments relate to restructurings made during the periods disclosed.   For the Quarter Ended For the Year Ended(Dollars in thousands) Dec 31,2024 Sep 30,2024 Jun 30,2024 Mar 31,2024 Dec 31,2023 Dec 31,2024 Dec 31,2023Pre-Tax, Pre-Provision Operating Earnings              Net Income $24,882  $31,001  $27,202  $24,156  $3,499  $107,241  $108,261 Plus: Provision for income taxes  8,222   8,067   8,221   7,237   6,004   31,747   36,023 Plus: Provision for credit losses and unfunded commitments  1,899   4,000   8,250   5,959   8,000   20,108   40,471 Plus: Severance payments  1,545   1,487   613   —   —   3,645   1,950 Plus: Loss on sale of AFS, net  4,397   —   —   6,304   —   10,701   5,321 Plus: Equity method investment write-down  —   —   —   —   29,417   —   29,417 Plus: FDIC special assessment  —   —   134   —   768   134   768 Net pre-tax, pre-provision operating earnings $40,945  $44,555  $44,420  $43,656  $47,688  $173,576  $222,211                Average total assets $12,750,972  $12,861,918  $12,578,706  $12,336,042  $12,306,634  $12,632,863  $12,282,747 Pre-tax, pre-provision operating return on average assets1  1.28%  1.38%  1.42%  1.42%  1.54%  1.37%  1.81%               Average loans $9,449,565  $9,661,774  $9,765,428  $9,563,372  $9,581,784  $9,609,738  $9,591,666 Pre-tax, pre-provision operating return on average loans1  1.72%  1.83%  1.83%  1.84%  1.97%  1.81%  2.32%               Average Total Assets $12,750,972  $12,861,918  $12,578,706  $12,336,042  $12,306,634  $12,632,863  $12,282,747 Return on average assets1  0.78%  0.96%  0.87%  0.79%  0.11%  0.85%  0.88%Operating return on average assets1  0.93   1.00   0.91   0.95   1.02   0.95   1.16                Operating earnings adjusted for amortization of core deposit intangibles              Operating earnings $29,769  $32,181  $28,310  $29,137  $31,625  $119,397  $142,114 Adjustments:              Plus: Amortization of core deposit intangibles  2,437   2,438   2,438   2,438   2,438   9,751   9,752 Less: Tax benefit at the statutory rate  512   512   512   512   512   2,048   2,048 Operating earnings adjusted for amortization of core deposit intangibles $31,694  $34,107  $30,236  $31,063  $33,551  $127,100  $149,818                Average Tangible Common Equity              Total average stockholders' equity $1,604,335  $1,583,401  $1,541,609  $1,533,868  $1,510,286  $1,565,957  $1,501,525 Adjustments:              Less: Average goodwill  (404,452)  (404,452)  (404,452)  (404,452)  (404,452)  (404,452)  (404,452)Less: Average core deposit intangibles  (20,342)  (22,789)  (25,218)  (27,656)  (30,093)  (23,988)  (33,718)Average tangible common equity $1,179,541  $1,156,160  $1,111,939  $1,101,760  $1,075,741  $1,137,517  $1,063,355 Operating return on average tangible common equity1  10.69%  11.74%  10.94%  11.34%  12.37%  11.17%  14.09%               Efficiency ratio  67.04%  61.94%  59.11%  62.45%  77.49%  62.62%  55.82%Operating efficiency ratio              Net interest income $96,141  $100,062  $96,236  $92,806  $95,533  $385,245  $399,114 Noninterest income (loss)  10,056   13,106   10,578   6,662   (17,792)  40,402   19,105 Plus: Loss on sale of AFS, net  4,397   —   —   6,304   —   10,701   5,321 Plus: Equity method investment write-down  —   —   —   —   29,417   —   29,417 Operating noninterest income  14,453   13,106   10,578   12,966   11,625   51,103   53,843 Noninterest expense  71,194   70,100   63,141   62,116   60,238   266,551   233,464 Less: FDIC special assessment  —   —   134   —   768   134   768 Less: Severance payments  1,545   1,487   613   —   —   3,645   1,950 Operating noninterest expense $69,649  $68,613  $62,394  $62,116  $59,470  $262,772  $230,746 Operating efficiency ratio  62.98%  60.63%  58.41%  58.73%  55.50%  60.22%  50.94% 1 Annualized ratio for quarterly metrics.

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