Yahoo Finance Veritex Holdings Inc (VBTX) Q1 2024 Earnings Call Transcript Highlights: Key Financial Metrics ...
Earnings: $29.1 million
Earnings Per Share (EPS): $0.53
Pre-tax Pre-provision Return: 1.42% or $43.7 million
Loan Growth: Up $114.7 million or around 1%
Deposit Growth: Up $316 million or 12% annualized
Non-Performing Assets (NPAs): Increased from 0.77% to 0.82% of total assets
Loan Loss Reserve: Grew to 1.15%
Tangible Book Value Per Share: Increased to $20.33, up 9.1% year-over-year
Loan to Deposit Ratio: Reduced from 107.7% to 91.7%
Net Interest Income: Decreased by $2.7 million to almost $93 million
Net Interest Margin (NIM): Decreased by 7 basis points to 3.24%
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the changes in classified assets, specifically the movement in Substandard and Special Mention categories this quarter? A: C. Malcolm Holland, CEO of Veritex Holdings, explained that the changes included both payoffs and new entries into these categories. He highlighted that there were several payoffs in the Substandard category, totaling about $23 million, and some upgrades out of Substandard. Holland emphasized that there is no specific trend or systemic issue within any asset category causing these movements.
Q: How do you balance achieving your CRE concentration levels with the new stock buyback program? A: Terry Earley, CFO, noted that it's a balancing act. Given the current uncertain rate environment, the company plans to be conservative with the buyback program, focusing on maintaining a strong capital position while gradually reducing CRE concentrations.
Q: What are your expectations for CD rollovers and the impact on funding costs? A: Terry Earley mentioned that there has been a recent uptick in wholesale borrowing costs, which could lead to a slight increase in new CD rates. However, the bank has managed to maintain a high retention rate for CDs, which has helped stabilize deposit costs.
Q: Can you provide insights into the USDA business performance and expectations for government guaranteed loans? A: Terry Earley indicated a reduction in the forecast for government guaranteed loans by 15-20% due to challenges in getting USDA loans approved. He remains optimistic about the SBA business but cautious about the USDA segment.
Q: What trends are you seeing in loan growth, and are there any particular sectors or geographic areas driving this growth? A: C. Malcolm Holland noted that loan growth is primarily coming from within their markets, with strong pipelines, especially in the commercial C&I space. He stressed that while real estate deals are returning, the bank is cautious and aims to maintain reduced CRE concentrations.
Q: How do you foresee the net interest margin (NIM) and net interest income (NII) trending, given the current economic environment? A: Terry Earley expressed that the NIM has largely troughed and should remain stable. He highlighted three key factors that could impact NIM: wholesale funding costs, interest reversals on credit, and deposit mix. The recent securities portfolio restructuring is expected to help offset some pressures on NIM.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
