Veritex Holdings - 10-Q quarterly report FY2025 Q1

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


			FORM			10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-36682


			VERITEX HOLDINGS, INC.
			(Exact name of registrant as specified in its charter)


Texas		27-0973566
(State or other jurisdiction of		(I.R.S. employer
incorporation or organization)		identification no.)

8214 Westchester Drive, Suite 800
Dallas,	Texas	75225
(Address of principal executive offices)		(Zip code)


			(972)			349-6200
			(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01

VBTX

Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 6, 2025, there were 54,271,523 outstanding shares of the registrant’s common stock, par value $0.01 per share.

Glossary of Acronyms, Abbreviations, and Terms

The acronyms, abbreviations, and terms listed below are used in various sections of this Quarterly Report on Form 10-Q, including “Part I, Item 1. Financial Statements” and “Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations."

ACL

Allowance for Credit Loss

FRB

Federal Reserve Bank of Dallas

AFS

Available-For-Sale

Green

Green Bank

AOCI

Accumulated Other Comprehensive Income

GAAP

Generally Accepted Accounting Principles in the United States of America

APIC

Additional Paid-In Capital

HTM

Held-To-Maturity

ASC

Accounting Standards Codification

LHFS

Loans Held for Sale

ASU

Accounting Standard Update

LHI

Loans Held for Investment

BOLI

Bank-Owned Life Insurance

MBS

Mortgage-backed Securities

Board

Board of Directors of Veritex Holdings, Inc.

Mortgage Warehouse

bps

Basis Points

NOOCRE

Non-owner Occupied CRE

CBLR

Community Bank Leverage Ratio

OBS

Off-Balance Sheet

CECL

Current Expected Credit Losses

OOCRE

Owner Occupied CRE

CET1

Common Equity Tier 1

OREO

Other Real Estate Owned

CMO

Collateralized Mortgage Obligation

PCA

Prompt Corrective Action

CODM

Chief Operating Decision Maker

PCD

Purchased Credit Deteriorated

CRA

Community Reinvestment Act

PSU

Performance-based Restricted stock units

CRE

Commercial Real Estate

RBC

Risk-Based Capital

DFW

Dallas-Fort Worth

RSU

Restricted stock units

EPS

Earnings Per Share

RWA

Risk-Weighted Assets

Exchange Act

Securities Exchange Act of 1934, as amended

SBA

U. S. Small Business Administration

FDIC

Federal Deposit Insurance Corporation

SEC

Securities and Exchange Commission

Federal Reserve

The Federal Reserve System

TDB

Texas Department of Banking

FHLB

Federal Home Loan Bank

USDA

United States Department of Agriculture

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

as of March 31, 2025 and December 31, 2024

(Dollars in thousands, except par value and share information)


	March 31,		December 31,
	2025		2024
	(Unaudited)
ASSETS
Cash and due from banks	$	81,088	$	52,486
Interest bearing deposits in other banks	768,702		802,714
Total cash and cash equivalents	849,790		855,200
Debt securities AFS, at fair value	1,284,360		1,294,512
Debt securities HTM (fair value of $154,864 and $160,560, at March 31, 2025 and December 31, 2024, respectively)	178,797		184,026
Equity securities	20,461		22,053

Investment in unconsolidated subsidiaries	1,018		1,018
FHLB Stock and FRB Stock	47,973		46,567
Total investments	1,532,609		1,548,176
LHFS	69,236		89,309
LHI, MW	571,775		605,411
LHI, excluding MW	8,828,672		8,899,133
Less: ACL	(111,773)		(111,745)
Total LHI, net	9,288,674		9,392,799
BOLI	85,424		85,324
Premises and equipment, net	112,801		113,480
OREO	24,268		24,737
Intangible assets, net of accumulated amortization	27,974		28,664
Goodwill	404,452		404,452
Other assets	210,863		226,200
Total assets	$	12,606,091	$	12,768,341
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing deposits	$	2,318,645	$	2,191,457
Interest-bearing transaction and savings deposits	5,180,495		5,061,157
Certificates and other time deposits	2,679,221		2,958,861
Correspondent money market deposits	486,762		541,117
Total deposits	10,665,123		10,752,592
Accounts payable and other liabilities	151,579		183,944

Subordinated debentures and subordinated notes	155,909		230,736

Total liabilities	10,972,611		11,167,272

Stockholders’ equity:
Common stock, $0.01 par value:
Authorized shares - 75,000,000
Issued shares - 61,490,069 and 61,332,445 at March 31, 2025 and December 31, 2024, respectively	615		613

APIC	1,329,626		1,328,748
Retained earnings	526,044		507,903
AOCI	(42,170)		(65,076)
Treasury stock, 7,193,110 and 6,815,764 shares, at cost, at March 31, 2025 and December 31, 2024, respectively	(180,635)		(171,119)
Total stockholders’ equity	1,633,480		1,601,069
Total liabilities and stockholders’ equity	$	12,606,091	$	12,768,341

See accompanying Notes to Consolidated Financial Statements.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

For the Three Months Ended March 31, 2025 and 2024

(Dollars in thousands, except per share amounts)


	Three Months Ended March 31,
		2025		2024
INTEREST AND DIVIDEND INCOME
Interest and fees on loans		$	146,505	$	161,942
Debt securities		17,106		13,695
Deposits in financial institutions and federal funds sold		9,244		8,050
Equity securities and other investments		870		900
Total interest and dividend income		173,725		184,587
INTEREST EXPENSE
Transaction and savings deposits		45,165		46,784
Certificates and other time deposits		30,268		40,492
Advances from FHLB		27		1,391
Subordinated debentures and subordinated notes		2,824		3,114
Total interest expense		78,284		91,781
NET INTEREST INCOME		95,441		92,806
Provision for credit losses on loans		4,000		7,500
Provision (benefit) for credit losses on unfunded commitments		1,300		(1,541)
Net interest income after provision (benefit) for credit losses		90,141		86,847
NONINTEREST INCOME
Service charges and fees on deposit accounts		5,611		4,896
Loan fees		2,495		2,510
Loss on sales of debt securities		—		(6,304)
Government guaranteed loan income, net		3,301		2,614

Customer swap income		700		408
Other		2,182		2,538
Total noninterest income		14,289		6,662
NONINTEREST EXPENSE
Salaries and employee benefits		36,624		33,365
Occupancy and equipment		4,650		4,677
Professional and regulatory fees		4,931		6,053
Data processing and software expense		5,403		4,856
Marketing		2,032		1,546
Amortization of intangibles		2,438		2,438
Telephone and communications		330		261

Other		10,426		8,920
Total noninterest expense		66,834		62,116
Income before income tax expense		37,596		31,393
Provision for income taxes		8,526		7,237
NET INCOME		$	29,070	$	24,156
Basic EPS		$	0.53	$	0.44
Diluted EPS		$	0.53	$	0.44

See accompanying Notes to Consolidated Financial Statements.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

For the Three Months Ended March 31, 2025 and 2024

(Dollars in thousands)


	Three Months Ended March 31,
		2025		2024
NET INCOME		$	29,070	$	24,156
OTHER COMPREHENSIVE INCOME
Net unrealized gains (losses) on debt securities AFS:
Change in net unrealized gains (losses) on debt securities AFS during the period, net		22,491		(10,421)
Change in unamortized gains from transfer of debt securities from AFS to HTM		(212)		2,925
Reclassification adjustment for net losses included in net income		—		6,304
Net unrealized gains (losses) on debt securities AFS		22,279		(1,192)

Unrealized gains (losses) on derivative financial instruments:
Net unrealized gains (losses) arising during the period		6,180		(9,331)
Reclassification adjustment for amortization in net income		536		836
Net unrealized gains (losses) on derivative instruments		6,716		(8,495)

Other comprehensive income (loss), before tax		28,995		(9,687)
Income tax expense (benefit)		6,089		(1,993)
Other comprehensive income (loss), net of tax		22,906		(7,694)
COMPREHENSIVE INCOME		$	51,976	$	16,462

See accompanying Notes to Consolidated Financial Statements.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the Three Months Ended March 31, 2025 and 2024

(Dollars in thousands, except share data)



Three Months Ended March 31, 2025
	Common Stock			Treasury Stock			APIC		Retained Earnings		AOCI		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2024	54,516,681	$	613	6,815,764	$	(171,119)	$	1,328,748	$	507,903	$	(65,076)	$	1,601,069
RSUs vested, net of 70,644 shares withheld to cover taxes	157,053	2		—	—		(1,871)		—		—		(1,869)
Exercise of employee stock options	571	—		—	—		12		—		—		12
Stock buyback	(377,346)	—		377,346	(9,516)		—		—		—		(9,516)
Stock based compensation	—	—		—	—		2,737		—		—		2,737

Net income	—	—		—	—		—		29,070		—		29,070
Dividends paid	—	—		—	—		—		(10,929)		—		(10,929)
Other comprehensive income	—	—		—	—		—		—		22,906		22,906
Balance at March 31, 2025	54,296,959	$	615	7,193,110	$	(180,635)	$	1,329,626	$	526,044	$	(42,170)	$	1,633,480


Three Months Ended March 31, 2024
	Common Stock			Treasury Stock			APIC		Retained Earnings		AOCI
	Shares	Amount		Shares	Amount								Total
Balance at December 31, 2023	54,338,368	$	610	6,638,094	$	(167,582)	$	1,317,516	$	444,242	$	(63,463)		$	1,531,323
RSUs vested, net of 69,034 shares withheld to cover taxes	157,593	1		—	—		(1,261)		—		—			(1,260)




Stock based compensation	—	—		—	—		2,889		—		—			2,889

Net income	—	—		—	—		—		24,156		—			24,156
Dividends paid	—	—		—	—		—		(10,899)		—			(10,899)

Other comprehensive loss	—	—		—	—		—		—		(7,694)			(7,694)
Balance at March 31, 2024	54,495,961	$	611	6,638,094	$	(167,582)	$	1,319,144	$	457,499	$	(71,157)		$	1,538,515

See accompanying Notes to Consolidated Financial Statements.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

For the Three Months Ended March 31, 2025 and 2024

(Dollars in thousands)


	For the Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net income	$	29,070	$	24,156
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed assets and intangibles	4,689		5,127
Net accretion of time deposit premium, debt discount and debt issuance costs	(909)		(843)
Provision for credit losses on loans and unfunded commitments	5,300		5,959
Accretion of loan discount	(572)		(422)
Stock-based compensation expense	2,737		2,889

Excess tax expense from stock compensation	202		384
Net (accretion) amortization of (discounts) premiums on debt securities	(89)		1,191
Unrealized (gain) loss on equity securities recognized in earnings	(168)		105
Change in cash surrender value and mortality rates of BOLI	(100)		(526)
Loss on sales of AFS debt securities	—		6,304
Change in fair value of government guaranteed loans using fair value option	2,920		49
Gain on sales of mortgage LHFS	(40)		(10)
Gain on sales of government guaranteed loans	(6,220)		(3,211)


Servicing asset recoveries	(140)		(222)
Originations of LHFS	(23,170)		(7,842)
Proceeds from sales of LHFS	44,526		24,148






Net change in other assets	22,913		4,845
Net change in accounts payable and other liabilities	(37,372)		(17,812)
Net cash provided by operating activities	43,577		44,269
Cash flows from investing activities:


Purchases of AFS debt securities	(264,798)		(229,936)
Proceeds from sales of AFS debt securities	—		113,794
Proceeds from maturities, calls and pay downs of AFS debt securities	297,653		18,201

Maturity, calls and paydowns of HTM debt securities	4,894		1,366
Net change in other investments	354		(655)


Net change in loans	74,763		(153,534)
Proceeds from sale of government guaranteed loans	22,299		14,409
Net additions to premises and equipment	(522)		(768)

Proceeds from sales of OREO and repossessed assets	59		—
Net cash provided by (used in) investing activities	134,702		(237,123)
Cash flows from financing activities:
Net (decrease) increase in deposits	(86,387)		316,719




Payments to tax authorities for stock-based compensation	(1,869)		(1,260)
Proceeds from exercise of employee stock options	12		—

Purchase of treasury stock	(9,516)		—
Redemption of subordinated notes	(75,000)		—
Dividends paid	(10,929)		(10,899)

Net cash (used in) provided by financing activities	(183,689)		304,560
Net change in cash and cash equivalents	(5,410)		111,706
Cash and cash equivalents at beginning of period	855,200		629,063
Cash and cash equivalents at end of period	$	849,790	$	740,769

See accompanying Notes to Consolidated Financial Statements.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except for per share amounts)

1. Operations and Summary of Significant Accounting Policies

Organization and Nature of Business

In this report, the words “Veritex,” “the Company,” “we,” “us,” and “our” refer to the combined entities of Veritex Holdings, Inc. and its subsidiaries, including Veritex Community Bank. The word “Holdco” refers to Veritex Holdings, Inc. The word “Bank” refers to Veritex Community Bank.

Veritex is a Texas state banking organization, with corporate offices in Dallas, Texas, and currently operates 19 branches located in the DFW metroplex and 12 branches in the Houston metropolitan area. The Bank provides a full range of banking services, including commercial and retail lending and the acceptance of checking and savings deposits, to individual and corporate customers. The TDB and the Board of Governors of the Federal Reserve are the primary regulators of the Company and the Bank, and both regulatory agencies perform periodic examinations to ensure regulatory compliance.

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Veritex Holdings, Inc. and its subsidiaries, including the Bank.

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP, but do not include all of the information and footnotes required for complete financial statements. Intercompany transactions and balances are eliminated in consolidation. In management’s opinion, these unaudited consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated balance sheets at March 31, 2025 and December 31, 2024, consolidated statements of income, consolidated statements of comprehensive income (loss) and consolidated changes in stockholders’ equity for the three months ended March 31, 2025 and 2024 and consolidated statements of cash flows for the three months ended March 31, 2025 and 2024.

Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown herein are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Quarterly Reports on Form 10-Q adopted by the SEC. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 3, 2025.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reclassifications

Certain prior period financial statement and disclosure amounts have been reclassified to conform to current period presentation. The reclassifications have no effect on net income or stockholders’equity as previously reported.

EPS

EPS is based upon the weighted average shares outstanding. The table below sets forth the reconciliation between weighted average shares used for calculating basic and diluted EPS for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024
Numerator:
Net income	$	29,070	$	24,156
Denominator:
Weighted average shares outstanding for basic EPS	54,486		54,444
Dilutive effect of employee stock-based awards	637		398
Adjusted weighted average shares outstanding	55,123		54,842
EPS:
Basic	$	0.53	$	0.44
Diluted	$	0.53	$	0.44
Antidilutive shares	299		1,127

For the three months ended March 31, 2025, there were 299 antidilutive shares excluded from the diluted EPS weighted average shares outstanding, all relating to stock options.

For the three months ended March 31, 2024, there were 1,127 antidilutive shares excluded from the diluted EPS weighted average shares outstanding, 514 related to RSUs and 613 related to stock options.

Segment Reporting

The Company has one reportable segment. All of the Company’s activities are interrelated, and each activity is dependent and assessed based on how each activity of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with deposits and borrowings while managing interest rate and credit risk. Accordingly, all significant operating decisions are based upon analysis of the Bank as one segment or unit. The Company’s CODM, the Chief Executive Officer, uses the consolidated results to make operating and strategic decisions.

The Company has determined that all of its banking divisions and subsidiaries meet the aggregation criteria of ASC 280, Segment Reporting, as its current operating model is structured whereby banking divisions and subsidiaries serve a similar base of primarily commercial clients utilizing a company-wide offering of similar products and services managed through similar processes and platforms that are collectively reviewed by the CODM.

The CODM regularly assesses performance of the aggregated single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as is net income reported in the Company’s consolidated statements of income and other comprehensive income. The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company’s consolidated statements of income and other comprehensive income.

Recent Accounting Pronouncements

ASU 2025-01, Income Statement Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. ASU 2025-01 clarifies the effective date of Accounting Standards Update 2024-03 Income Statement Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to stipulate that ASU 2024-03 is effective for public business entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 will be effective for the Company beginning January 1, 2027 for the Company’s annual financial statements on Form 10-K and January 1, 2028 for the Company’s quarterly financial statements on Form 10-Q and is not expected to have a significant impact on the Company’s financial statements.

2. Supplemental Statement of Cash Flows

Other supplemental cash flow information is presented below:


	Three Months Ended March 31,
	2025		2024
	(in thousands)

Cash paid for interest	$	91,937	$	98,354
Cash paid for income taxes	70		—

3. Share Transactions

Stock Buyback Program

On March 26, 2024, the Board authorized a stock buyback program (the "Stock Buyback Program") pursuant to which the Company could, from time to time, purchase up to $50,000 of its outstanding common stock in the aggregate. On March 25, 2025, the Board authorized the extension of the Stock Buyback Program through March 31, 2026. The Stock Buyback Program may be suspended, terminated, amended or modified by the Board at any time without prior notice at the Board’s discretion. The shares may be repurchased in the open market or in privately negotiated transactions from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations of the SEC. The Stock Buyback Program does not obligate the Company to purchase any shares and the program may be terminated or amended by the Board at any time prior to its expiration.

Shares repurchased through the periods indicated are as follows:


	Three Months Ended March 31,
	2025		2024
Numbers of shares repurchased	377,346		—
Weighted average price per share	$	25.22	$	—

4. Securities

Equity Securities With a Readily Determinable Fair Value

The Company held equity securities with a fair value of $9,949 and $9,781 at March 31, 2025 and December 31, 2024, respectively. The Company did not realize a loss on equity securities with a readily determinable fair value during the three months ended March 31, 2025 or 2024. The gross unrealized gain (loss) recognized on equity securities with readily determinable fair values recorded in other noninterest income in the Company’s consolidated statements of income is as follows:


	Three Months Ended March 31,
	2025		2024
Unrealized gain (loss) recognized on equity securities with a readily determinable fair value	$	168	$	(105)

Equity Securities Without a Readily Determinable Fair Value

The Company held equity securities without a readily determinable fair value and measured at aggregate cost of $10,512 and $12,272 as of March 31, 2025 and December 31, 2024, respectively.

Debt Securities

Debt securities have been classified in the consolidated balance sheets according to management’s intent. The amortized cost, related gross unrealized gains and losses, ACL and the fair value of AFS and HTM debt securities are as follows:


	March 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
AFS

Corporate bonds	$	282,068	$	1,872	$	12,683	$	—	$	271,257
Municipal securities	28,121		—		4,268		—		23,853
MBS	252,334		3,916		12,069		—		244,181
CMO	587,585		3,696		30,452		—		560,829
Asset-backed securities	104,116		1,135		2,164		—		103,087
Collateralized loan obligations	81,802		11		660		—		81,153
	$	1,336,026	$	10,630	$	62,296	$	—	$	1,284,360

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
HTM
MBS	$	30,713	$	—	$	6,043	$	—	$	24,670
CMO	32,575		—		4,014		—		28,561
Municipal securities	115,509		—		13,876		—		101,633
	$	178,797	$	—	$	23,933	$	—	$	154,864


	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
AFS

Corporate bonds	$	271,889	$	1,815	$	17,184	$	—	$	256,520
Municipal securities	28,142		—		3,797		—		24,345
MBS	258,896		2,256		14,822		—		246,330
CMO	600,709		1,734		41,841		—		560,602
Asset-backed securities	110,148		563		2,745		—		107,966
Collateralized loan obligations	98,885		106		242		—		98,749
	$	1,368,669	$	6,474	$	80,631	$	—	$	1,294,512

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
HTM
MBS	$	31,439	$	—	$	6,625	$	—	$	24,814
CMO	32,892		—		4,920		—		27,972
Municipal securities	119,695		—		11,921		—		107,774
	$	184,026	$	—	$	23,466	$	—	$	160,560

MBS are commercial MBS, secured by commercial properties, and residential MBS, generally secured by single-family residential properties. All MBS included in the table above were issued by U.S. government agencies or corporations.

In 2022, the Company elected to transfer 25 AFS debt securities with an aggregate fair value of $117,001 to a classification of HTM debt securities. The transfer from AFS to HTM was recorded at the fair value of the AFS debt securities at the time of transfer. The net unrealized holding gain retained in AOCI for securities transferred from AFS to HTM was $2,269 and $2,437 at March 31, 2025 and December 31, 2024, respectively. The Company did not transfer any debt securities from AFS to HTM during the three months ended March 31, 2025.

The following tables disclose the Company’s debt securities in an unrealized loss position, aggregated by investment category and length of time that individual debt securities have been in a continuous loss position:


	March 31, 2025
	Less Than 12 Months				12 Months or More				Totals
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AFS

Corporate bonds	$	48,223	$	1,498	$	162,474	$	11,185	$	210,697	$	12,683
Municipal securities	14,837		1,268		9,016		3,000		23,853		4,268
MBS	8,589		149		73,932		11,920		82,521		12,069
CMO	87,725		710		249,394		29,742		337,119		30,452
Asset-backed securities	14,301		30		45,422		2,134		59,723		2,164
Collateralized loan obligations	63,061		520		9,052		140		72,113		660
	$	236,736	$	4,175	$	549,290	$	58,121	$	786,026	$	62,296

HTM
MBS	$	—	$	—	$	24,670	$	6,043	$	24,670	$	6,043
CMO	—		—		28,561		4,014		28,561		4,014
Municipal securities	77,649		9,426		21,826		4,450		99,475		13,876
	$	77,649	$	9,426	$	75,057	$	14,507	$	152,706	$	23,933


	December 31, 2024
	Less Than 12 Months				12 Months or More				Totals
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AFS

Corporate bonds	$	38,914	$	2,329	$	174,876	$	14,855	$	213,790	$	17,184
Municipal securities	15,519		594		8,826		3,203		24,345		3,797
MBS	71,889		694		74,131		14,128		146,020		14,822
CMO	168,016		3,383		247,079		38,458		415,095		41,841
Asset-backed securities	71,538		635		13,034		2,110		84,572		2,745
Collateralized loan obligations	40,406		242		—		—		40,406		242
	$	406,282	$	7,877	$	517,946	$	72,754	$	924,228	$	80,631

HTM
MBS	$	—	$	—	$	24,814	$	6,625	$	24,814	$	6,625
CMO	—		—		27,972		4,920		27,972		4,920
Municipal securities	83,738		8,198		22,679		3,723		106,417		11,921
	$	83,738	$	8,198	$	75,465	$	15,268	$	159,203	$	23,466

The number of AFS debt securities in an unrealized loss position totaled 128 and 137 at March 31, 2025 and December 31, 2024, respectively. Management does not have the intent to sell any of these debt securities and believes that it is more likely than not that the Company will not have to sell any such debt securities before a recovery of cost. The fair value is expected to recover as the debt securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of March 31, 2025, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions, and therefore no ACL has been recognized.

The amortized costs and estimated fair values of AFS and HTM debt securities, by contractual maturity, as of the dates indicated, are shown in the table below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. MBS, CMOs, asset-backed securities, and collateralized loan obligations typically are issued with stated principal amounts, and the securities are backed by pools of mortgage loans and other loans that have varying maturities. The terms of MBS, CMOs, asset-backed securities, and collateralized loan obligations thus approximates the terms of the underlying mortgages and loans and can vary significantly due to prepayments. Therefore, these securities are not included in the maturity categories below.


	March 31, 2025
	AFS				HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	—	$	—
Due from one year to five years	79,619		79,865		2,443		2,405
Due from five years to ten years	161,760		152,512		17,861		17,251
Due after ten years	68,810		62,733		95,205		81,977
	310,189		295,110		115,509		101,633
MBS and CMO	839,919		805,010		63,288		53,231
Asset-backed securities	104,116		103,087		—		—
Collateralized loan obligations	81,802		81,153		—		—
	$	1,336,026	$	1,284,360	$	178,797	$	154,864


	December 31, 2024
	AFS				HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	3,919	$	3,919
Due from one year to five years	69,451		68,737		890		857
Due from five years to ten years	176,147		163,478		19,464		18,857
Due after ten years	54,433		48,650		95,422		84,141
	300,031		280,865		119,695		107,774
MBS and CMO	859,605		806,932		64,331		52,786
Asset-backed securities	110,148		107,966		—		—
Collateralized loan obligations	98,885		98,749		—		—
	$	1,368,669	$	1,294,512	$	184,026	$	160,560

Proceeds from sales of debt securities AFS and gross gains and losses for the three months ended March 31, 2025 and 2024 were as follows:


	Three Months ended March 31,
	2025		2024
Proceeds from sales	$	—	$	113,794
Gross realized gains	—		—
Gross realized losses	—		6,304

As of March 31, 2025 and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders' equity.

5. LHI and ACL

LHI in the accompanying consolidated balance sheets are summarized as follows:


	March 31, 2025		December 31, 2024
LHI, carried at amortized cost:
Real estate:
Construction and land	$	1,214,260	$	1,303,711
Farmland	31,339		31,690
1 - 4 family residential	1,021,293		957,341
Multi-family residential	782,412		750,218
OOCRE	795,808		780,003
NOOCRE	2,266,526		2,382,499
Commercial	2,717,037		2,693,538
MW	571,775		605,411
Consumer	8,597		9,115
	$	9,409,047	$	9,513,526

Deferred loan fees, net	(8,600)		(8,982)
ACL	(111,773)		(111,745)
Total LHI, net	$	9,288,674	$	9,392,799

Included in the total LHI, net, as of March 31, 2025 and December 31, 2024 was an accretable discount related to purchased performing and PCD loans acquired in the approximate amounts of $3,133 and $3,870, respectively. The discount is being accreted into income on a level-yield basis over the life of the loans. In addition, included in the net loan portfolio as of March 31, 2025 and December 31, 2024 is a discount on retained loans from sale of originated SBA and USDA loans of $9,307 and $7,851, respectively.

ACL

The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The activity in the ACL related to LHI is as follows:


	Three Months Ended March 31, 2025
	Construction and land		Farmland		Residential		Multifamily		OOCRE		NOOCRE		Commercial		MW		Consumer		Total
Balance at beginning of the period	$	15,457	$	97	$	15,639	$	4,849	$	17,546	$	39,968	$	17,654	$	321	$	214	$	111,745
Credit loss expense (benefit) non-PCD loans	3,962		3		1,167		105		256		(1,387)		(32)		50		(101)		4,023
Credit loss (benefit) expense PCD loans	—		—		(4)		—		(11)		—		(8)		—		—		(23)
Charge-offs	—		—		—		—		—		(3,090)		(918)		—		(212)		(4,220)
Recoveries	—		—		21		—		—		—		32		—		195		248
Ending Balance	$	19,419	$	100	$	16,823	$	4,954	$	17,791	$	35,491	$	16,728	$	371	$	96	$	111,773


	Three Months Ended March 31, 2024
	Construction and land		Farmland		Residential		Multifamily		OOCRE		NOOCRE		Commercial		MW		Consumer		Total
Balance at beginning of the period	$	21,032	$	101	$	9,539	$	4,882	$	10,252	$	27,729	$	35,886	$	260	$	135	$	109,816
Credit loss (benefit) expense non-PCD loans	(1,251)		6		1,978		1,457		47		11,653		(2,136)		144		42		11,940
Credit loss (benefit) expense PCD loans	—		—		(2)		—		(377)		(3,952)		(109)		—		—		(4,440)
Charge-offs	—		—		—		—		(120)		(4,293)		(946)		—		(71)		(5,430)
Recoveries	—		—		1		—		—		—		96		—		49		146
Ending Balance	$	19,781	$	107	$	11,516	$	6,339	$	9,802	$	31,137	$	32,791	$	404	$	155	$	112,032

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:


	March 31, 2025				December 31, 2024
	Real Property		ACL Allocation		Real Property		ACL Allocation





OOCRE	$	—	$	—	$	1,925	$	84
NOOCRE	5,659		565		—		—
Commercial	1,976		655		2,873		532


Total	$	7,635	$	1,220	$	4,798	$	616

Nonaccrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due in accordance with the terms of the loan agreement. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When the accrual of interest is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Nonaccrual loans aggregated by class of loans, as of March 31, 2025 and December 31, 2024, were as follows:


	March 31, 2025				December 31, 2024
	Nonaccrual		Nonaccrual With No ACL			Nonaccrual		Nonaccrual With No ACL

Construction and land	$	6,373	$	6,373		$	6,373	$	6,373

1 - 4 family residential	1,393		1,393			1,562		1,562

OOCRE	8,853		6,928			8,887		6,962
NOOCRE	29,607		23,949			10,967		5,309
Commercial	23,110		8,458			24,680		8,935

Consumer	48		48			52		52
Total	$	69,384	$	47,149		$	52,521	$	29,193

During the three months ended March 31, 2025 and 2024, interest income not recognized on non-accrual loans was $985 and $781, respectively.

An age analysis of past due loans, aggregated by class of loans and including past due nonaccrual loans, as of March 31, 2025 and December 31, 2024, is as follows:


	March 31, 2025
	30 to 59 Days		60 to 89 Days		90 Days or Greater		Total Past Due		Total Current		Total Loans		Total 90 Days Past Due and Still Accruing
Real estate:
Construction and land	$	—	$	—	$	6,373	$	6,373	$	1,207,887	$	1,214,260	$	—
Farmland	—		—		—		—		31,339		31,339		—
1 - 4 family residential	3,596		1,329		3,855		8,780		1,012,513		1,021,293		3,198
Multi-family residential	556		—		—		556		781,856		782,412		—
OOCRE	58		—		7,846		7,904		787,904		795,808		26
NOOCRE	—		1,607		18,085		19,692		2,246,834		2,266,526		—
Commercial	467		12,762		6,331		19,560		2,697,477		2,717,037		25
MW	—		—		—		—		571,775		571,775		—
Consumer	38		41		34		113		8,484		8,597		—
Total	$	4,715	$	15,739	$	42,524	$	62,978	$	9,346,069	$	9,409,047	$	3,249


	December 31, 2024
	30 to 59 Days		60 to 89 Days		90 Days or Greater		Total Past Due		Total Current		Total Loans		Total 90 Days Past Due and Still Accruing
Real estate:
Construction and land	$	—	$	—	$	6,373	$	6,373	$	1,297,338	$	1,303,711	$	—
Farmland	—		—		—		—		31,690		31,690		—
1 - 4 family residential	991		1,036		2,832		4,859		952,482		957,341		1,865
Multi-family residential	—		—		—		—		750,218		750,218		—
OOCRE	9,571		874		8,887		19,332		760,671		780,003		—
NOOCRE	14,329		1,615		9,024		24,968		2,357,531		2,382,499		—
Commercial	785		1,976		5,595		8,356		2,685,182		2,693,538		49
MW	—		—		—		—		605,411		605,411		—
Consumer	55		6		36		97		9,018		9,115		—
Total	$	25,731	$	5,507	$	32,747	$	63,985	$	9,449,541	$	9,513,526	$	1,914

Loans 90 days past due and still accruing interest are considered well-secured and in the process of collection as of the reporting date with plans in place for the borrowers to bring the notes fully current. The Company believes that it will collect all principal and interest due on each of the loans 90 days past due and still accruing.

Modifications to Borrowers Experiencing Financial Difficulty

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty by providing certain concessions, such as principal forgiveness, term extension, payment deferral, interest rate reduction, or a combination of such concessions. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ACL (due to the measurement methodologies used to estimate the allowance), a change to the ACL is generally not recorded upon modification.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted during the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31, 2025
						Financial Impact
	Payment Deferral		Combination of payment deferral, interest rate reduction and/or term extension		% of Loan Class	Interest Rate Reduction (in months)	Term Extension (in Months)	Payment Deferrals (in months)

OOCRE	$	2,317	$	—	0.3%	—	—	> 3 months
NOOCRE	—		20,035		0.9%	> 3 months	—	> 3 months
Commercial	548		4,631		0.2%	—	>3 months	> 3 months
Total	$	2,865	$	24,666


	Three Months Ended March 31, 2024
							Financial Impact
	Interest Rate Reduction		Payment Deferral		Combination of payment deferral, interest rate reduction and/or term extension	% of Loan Class	Interest Rate Reduction (in months)	Term Extension (in Months)	Payment Deferrals (in months)
Construction and land	$	—	2,000		—	0.1%	—	—	> 3 months

NOOCRE	28,441		—		45,762	3.1%	> 3 months	—	> 3 months
Commercial	—		—		6,336	0.2%	—	> 3 months	> 3 months
Total	$	28,441	$	2,000	52,098

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months:


March 31, 2025
	Payment Status
	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due

OOCRE	2,317		—		—		—
NOOCRE	$	50,664	$	—	$	—	$	1,400
Commercial	21,255		—		12,675		—
Total	$	74,236	$	—	$	12,675	$	1,400


March 31, 2024
	Payment Status
	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due
Construction and land	$	—	$	2,000	$	—	$	—

NOOCRE	84,190		9,343		—		—
Commercial	27,764		—		—		2,108
Total	$	111,954	$	11,343	$	—	$	2,108

The Company has not committed to lend additional material amounts to customers with outstanding loans classified as Troubled Loan Modifications as of March 31, 2025 or December 31, 2024.

Credit Quality Indicators

From a credit risk standpoint, the Company classifies its loans in one of the following categories: (i) pass, (ii) special mention, (iii) substandard or (iv) doubtful. Loans classified as loss are charged-off. Loans not rated special mention, substandard, doubtful or loss are classified as pass loans.

The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on criticized credits monthly. Ratings are adjusted to reflect the degree of risk and loss that is felt to be inherent in each credit as of each monthly reporting period. All classified credits are evaluated for impairment. If impairment is determined to exist, a specific reserve is established. The Company’s methodology is structured so that specific reserves are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss).

Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness, however, such concerns are generally not so pronounced that the Company expects to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits with a lower rating.

Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral. A protracted workout on these credits is a distinct possibility. PCA is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed.

Credits rated doubtful are those in which full collection of principal appears highly questionable, and in which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt. Based upon available information, positive action by the Company is required to avert or minimize loss. Credits rated doubtful are generally also placed on non-accrual.

Credits classified as PCD are those that, at acquisition date, have experienced a more-than-insignificant deterioration in credit quality since origination. All loans considered to be purchased-credit impaired loans prior to January 1, 2020 were converted to PCD loans upon adoption of ASC 326. The Company elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. Loans are only removed from the existing pools if they are foreclosed, written off, paid off, or sold.

The Company considers the guidance in ASC 310-20 when determining whether a modification, extension or renewal of a loan constitutes a current period origination. Generally, current period renewals of credit are re-underwritten at the point of renewal and considered current period originations for purposes of the table below. Based on the most recent analysis performed, the risk category of loans by class of loans based on year or origination as of March 31, 2025 and December 31, 2024 is as follows:


	Term Loans Amortized Cost Basis by Origination Year1
	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2025
Construction and land:
Pass	$	23,689	$	178,437	$	22,713	$	656,320	$	36,033	$	4,075	$	230,630	$	—	$	1,151,897
Special mention	—		—		—		28,948		—		—		—		—		28,948
Substandard	—		—		25,961		6,342		1,081		31		—		—		33,415

Total construction and land	$	23,689	$	178,437	$	48,674	$	691,610	$	37,114	$	4,106	$	230,630	$	—	$	1,214,260
Construction and land gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Farmland:
Pass	$	—	$	2,430	$	2,463	$	2,290	$	—	$	21,713	$	2,443	$	—	$	31,339



Total farmland	$	—	$	2,430	$	2,463	$	2,290	$	—	$	21,713	$	2,443	$	—	$	31,339
Farmland gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


1 - 4 family residential:
Pass	$	31,748	$	130,406	$	91,936	$	238,391	$	293,550	$	189,515	$	39,045	$	567	$	1,015,158
Special mention	—		—		2,667		139		—		68		—		—		2,874
Substandard	—		—		—		—		820		923		492		—		2,235
PCD	—		—		—		—		—		1,026		—		—		1,026
Total 1 - 4 family residential	$	31,748	$	130,406	$	94,603	$	238,530	$	294,370	$	191,532	$	39,537	$	567	$	1,021,293
1-4 family residential gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-family residential:
Pass	$	6,903	$	49,786	$	9,213	$	203,472	$	360,247	$	152,235	$	—	$	—	$	781,856


Special mention	—		—		—		556		—		—		—		—		556


Total multi-family residential	$	6,903	$	49,786	$	9,213	$	204,028	$	360,247	$	152,235	$	—	$	—	$	782,412
Multi-family residential gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

OOCRE:
Pass	$	25,288	$	100,706	$	102,898	$	160,429	$	94,886	$	249,964	$	5,947	$	—	$	740,118
Special mention	—		—		506		6,611		3,128		3,713		—		—		13,958
Substandard	—		—		5,299		8,478		6,532		12,346		—		—		32,655
PCD	—		—		—		—		—		9,077		—		—		9,077
Total OOCRE	$	25,288	$	100,706	$	108,703	$	175,518	$	104,546	$	275,100	$	5,947	$	—	$	795,808
OOCRE gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

NOOCRE:
Pass	$	35,655	$	237,675	$	56,989	$	611,296	$	488,667	$	680,866	$	37,103	$	410	$	2,148,661
Special mention	—		—		—		26,442		24,107		15,860		—		—		66,409
Substandard	—		—		—		6,086		3,690		41,332		—		—		51,108
PCD	—		—		—		—		—		348		—		—		348
Total NOOCRE	$	35,655	$	237,675	$	56,989	$	643,824	$	516,464	$	738,406	$	37,103	$	410	$	2,266,526
NOOCRE gross charge-offs	$	—	$	—	$	—	$	1,000	$	—	$	2,090	$	—	$	—	$	3,090

Commercial:
Pass	$	43,572	$	149,192	$	243,701	$	264,122	$	48,858	$	81,910	$	1,727,472	$	1,667	$	2,560,494
Special mention	—		8,333		178		9,774		281		203		30,139		—		48,908
Substandard	—		1,017		4,300		24,823		—		12,343		64,872		—		107,355
PCD	—		—		—		—		—		280		—		—		280
Total commercial	$	43,572	$	158,542	$	248,179	$	298,719	$	49,139	$	94,736	$	1,822,483	$	1,667	$	2,717,037
Commercial gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	918	$	—	$	—	$	918

MW:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	571,775	$	—	$	571,775



Total MW	$	—	$	—	$	—	$	—	$	—	$	—	$	571,775	$	—	$	571,775
MW gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer:
Pass	$	685	$	1,282	$	1,878	$	532	$	184	$	1,511	$	2,398	$	—	$	8,470
Special mention	—		—		—		—		—		71		—		—		71
Substandard	—		—		—		—		—		50		—		—		50
PCD	—		—		—		—		—		6		—		—		6
Total consumer	$	685	$	1,282	$	1,878	$	532	$	184	$	1,638	$	2,398	$	—	$	8,597
Consumer gross charge-offs	$	—	$	—	$	6	$	—	$	—	$	206	$	—	$	—	$	212

Total Pass	$	167,540	$	849,914	$	531,791	$	2,136,852	$	1,322,425	$	1,381,789	$	2,616,813	$	2,644	$	9,009,768
Total Special Mention	—		8,333		3,351		72,470		27,516		19,915		30,139		—		161,724
Total Substandard	—		1,017		35,560		45,729		12,123		67,025		65,364		—		226,818
Total PCD	—		—		—		—		—		10,737		—		—		10,737
Total	$	167,540	$	859,264	$	570,702	$	2,255,051	$	1,362,064	$	1,479,466	$	2,712,316	$	2,644	$	9,409,047
Current period gross charge-offs	$	—	$	—	$	6	$	1,000	$	—	$	3,214	$	—	$	—	$	4,220

1 Term loans amortized cost basis by origination year excludes $8,600 of deferred loan fees, net.


	Term Loans Amortized Cost Basis by Origination Year1
	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
December 31, 2024
Construction and land:
Pass	$	144,236	$	48,138	$	732,933	$	103,292	$	756	$	4,709	$	211,546	$	465	$	1,246,075
Special mention	—		—		24,869		—		—		—		—		—		24,869
Substandard	—		25,298		6,342		1,096		31		—		—		—		32,767

Total construction and land	$	144,236	$	73,436	$	764,144	$	104,388	$	787	$	4,709	$	211,546	$	465	$	1,303,711
Construction and land gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Farmland:
Pass	$	2,447	$	2,479	$	2,317	$	—	$	17,452	$	4,441	$	2,554	$	—	$	31,690



Total farmland	$	2,447	$	2,479	$	2,317	$	—	$	17,452	$	4,441	$	2,554	$	—	$	31,690
Farmland gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

1 - 4 family residential:
Pass	$	91,388	$	83,605	$	198,960	$	343,223	$	81,486	$	114,086	$	33,732	$	4,589	$	951,069
Special mention	—		2,701		—		—		—		65		—		—		2,766
Substandard	—		—		133		831		50		932		516		—		2,462
PCD	—		—		—		—		—		1,044		—		—		1,044
Total 1 - 4 family residential	$	91,388	$	86,306	$	199,093	$	344,054	$	81,536	$	116,127	$	34,248	$	4,589	$	957,341
1-4 Family gross charge-offs	$	—	$	—	$	31	$	—	$	—	$	—	$	—	$	—	$	31

Multi-family residential:
Pass	$	48,713	$	11,645	$	136,014	$	366,468	$	169,627	$	17,180	$	—	$	13	$	749,660

Substandard	—		—		558		—		—		—		—		—		558

Total multi-family residential	$	48,713	$	11,645	$	136,572	$	366,468	$	169,627	$	17,180	$	—	$	13	$	750,218
Multifamily gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	198	$	—	$	—	$	198

OOCRE:
Pass	$	100,969	$	106,561	$	168,061	$	96,427	$	73,502	$	173,131	$	5,554	$	11,681	$	735,886
Special mention	—		461		4,313		967		953		6,173		—		—		12,867
Substandard	—		5,338		—		6,567		4,839		5,140		—		—		21,884
PCD	—		—		—		—		—		9,366		—		—		9,366
Total OOCRE	$	100,969	$	112,360	$	172,374	$	103,961	$	79,294	$	193,810	$	5,554	$	11,681	$	780,003
OOCRE gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	120	$	—	$	—	$	120

NOOCRE:
Pass	$	238,165	$	59,546	$	615,542	$	517,432	$	181,026	$	536,196	$	54,323	$	9,620	$	2,211,850
Special mention	—		12,330		8,569		24,523		11,397		20,607		—		—		77,426
Substandard	—		—		55,714		3,715		303		33,139		—		—		92,871
PCD	—		—		—		—		—		352		—		—		352
Total NOOCRE	$	238,165	$	71,876	$	679,825	$	545,670	$	192,726	$	590,294	$	54,323	$	9,620	$	2,382,499
NOOCRE gross charge-offs	$	—	$	—	$	3,790	$	—	$	1,323	$	6,262	$	—	$	—	$	11,375

Commercial:
Pass	$	533,306	$	259,973	$	282,571	$	56,431	$	11,124	$	58,869	$	1,389,257	$	3,155	$	2,594,686
Special mention	7,894		184		—		316		56		159		26,586		176		35,371
Substandard	1,087		4,285		25,025		—		469		13,068		19,244		—		63,178
PCD	—		—		—		—		—		303		—		—		303


Total commercial	$	542,287	$	264,442	$	307,596	$	56,747	$	11,649	$	72,399	$	1,435,087	$	3,331	$	2,693,538
Commercial gross charge-offs	$	—	$	217	$	4,943	$	2,285	$	—	$	5,947	$	—	$	—	$	13,392

MW:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	605,411	$	—	$	605,411



Total MW	$	—	$	—	$	—	$	—	$	—	$	—	$	605,411	$	—	$	605,411
MW gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer:
Pass	$	2,365	$	2,058	$	613	$	202	$	368	$	1,300	$	2,069	$	—	$	8,975
Special mention	—		—		—		—		—		74		—		—		74
Substandard	—		—		—		—		3		55		—		—		58
PCD	—		—		—		—		—		8		—		—		8
Total consumer	$	2,365	$	2,058	$	613	$	202	$	371	$	1,437	$	2,069	$	—	$	9,115
Consumer gross charge-offs	$	420	$	—	$	—	$	—	$	—	$	155	$	—	$	—	$	575

Total Pass	$	1,161,589	$	574,005	$	2,137,011	$	1,483,475	$	535,341	$	909,912	$	2,304,446	$	29,523	$	9,135,302
Total Special Mention	7,894		15,676		37,751		25,806		12,406		27,078		26,586		176		153,373
Total Substandard	1,087		34,921		87,772		12,209		5,695		52,334		19,760		—		213,778
Total PCD	—		—		—		—		—		11,073		—		—		11,073
Total	$	1,170,570	$	624,602	$	2,262,534	$	1,521,490	$	553,442	$	1,000,397	$	2,350,792	$	29,699	$	9,513,526
Current year gross charge-offs	$	420	$	217	$	8,764	$	2,285	$	1,323	$	12,682	$	—	$	—	$	25,691

1 Term loans amortized cost basis by origination year excludes $8,982 of deferred loan fees, net.

Servicing Assets

The Company was servicing loans of approximately $549,493 and $586,583 as of March 31, 2025 and 2024, respectively. A summary of the changes in the related servicing assets are as follows:


	Three Months Ended March 31,
		2025		2024
Balance at beginning of period		$	9,921	$	13,258

Increase from loan sales		2,658		635
Servicing asset recoveries		140		222
Amortization charged as a reduction to income		(1,051)		(1,493)
Balance at end of period		$	11,668	$	12,622

Fair value of servicing assets is estimated by discounting estimated future cash flows from the servicing assets using discount rates that approximate current market rates over the expected lives of the loans being serviced. A valuation allowance is recorded when the fair value is below the carrying amount of the asset. As of March 31, 2025 and 2024 there was a valuation allowance of $1,064 and $1,310, respectively.

The following table reflects principal sold and related gain for SBA and USDA LHI. The gain on sale of these loans is recorded in government guaranteed loan income, net, in the Company’s consolidated statements of income.


	Three Months Ended March 31,
		2025		2024
SBA LHI principal sold		$	10,377	$	13,233
Gain on sale of SBA LHI		857		1,176
USDA LHI principal sold		9,864		—
Gain on sale of USDA LHI		1,200		—

LHFS

The following table reflects LHFS as of March 31, 2025 and December 31, 2024.


	March 31, 2025		December 31, 2024
SBA/USDA construction and land	$	18,788	$	21,629
1 - 4 family residential	1,268		905
SBA/USDA OOCRE	33,352		36,437
SBA NOOCRE	—		5,028

SBA/USDA commercial	15,828		25,310
Total LHFS	$	69,236	$	89,309

6. Subordinated Debentures and Subordinated Notes

Subordinated debentures and subordinated notes as of March 31, 2025 and December 31, 2024 were as follows:


	March 31, 2025		December 31, 2024



Subordinated notes, net of debt issuance costs	$	124,725	$	199,607



Subordinated debentures, net of discount	31,184		31,129

Total subordinated notes and debentures	$	155,909	$	230,736

In first quarter 2025, the Company redeemed $75,000 of its 4.75% fixed-to-floating subordinated notes, including accrued interest of $1,526. The notes were redeemable in whole or in part on any interest payment date that occurred after November 15, 2024, subject to the Federal Reserve Bank’s approval in compliance with applicable statutes and regulations.

7. Fair Value

The following table summarizes assets measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:


	March 31, 2025
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
AFS debt securities	$	—	$	1,284,360	$	—	$	1,284,360
Equity securities with a readily determinable fair value	9,949		—		—		9,949
LHFS(1)	—		67,968		—		67,968
Interest rate swap designated as hedging instruments	—		8,272		—		8,272
Correspondent interest rate swaps not designated as hedging instruments	—		18,096		—		18,096
Customer interest rate swaps not designated as hedging instruments	—		3,688		—		3,688


Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	35,426	$	—	$	35,426
Correspondent interest rate swaps not designated as hedging instruments	—		3,965		—		3,965
Customer interest rate swaps not designated as hedging instruments	—		17,516		—		17,516

1Represents LHFS elected to be carried at fair value upon origination or acquisition.


	December 31, 2024
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
AFS debt securities	$	—	$	1,294,512	$	—	$	1,294,512
Equity securities with a readily determinable fair value	9,781		—		—		9,781

LHFS(1)	—		88,405		—		88,405
Interest rate swaps designated as hedging instruments	—		7,786		—		7,786
Correspondent interest rate swaps not designated as hedging instruments	—		25,328		—		25,328
Customer interest rate swaps not designated as hedging instruments	—		1,514		—		1,514

Financial Liabilities:
Interest rate swaps designated as hedging instruments	$	—	$	41,893	$	—	$	41,893
Correspondent interest rate swaps not designated as hedging instruments	—		1,651		—		1,651
Customer interest rate swaps not designated as hedging instruments	—		24,817		—		24,817

(1) Represents LHFS elected to be carried at fair value upon origination or acquisition.

There were no transfers between Level 2 and Level 3 during the three months ended March 31, 2025 and the year ended December 31, 2024.

The following table summarizes assets measured at fair value on a non-recurring basis as of March 31, 2025 and December 31, 2024, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:


	Fair Value Measurements Using
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
As of March 31, 2025
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	6,415	$	6,415
Servicing assets with a valuation allowance	—		—		3,831		3,831
OREO	—		—		24,268		24,268
As of December 31, 2024
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	4,182	$	4,182
Servicing assets with a valuation allowance	—		—		3,356		3,356
OREO	—		—		24,737		24,737

At March 31, 2025, collateral dependent loans with an allowance had a recorded investment of $7,635, with $1,220 specific ACL allocated. At December 31, 2024, collateral dependent loans with an allowance had a carrying value of $4,798, with $616 of specific ACL allocated.

At March 31, 2025, servicing assets of $4,895 had a valuation allowance totaling $1,064. At December 31, 2024, servicing assets of $4,560 had a valuation allowance totaling $1,204.

OREO primarily consists of two properties recorded with a fair value of approximately $24,268 in total at March 31, 2025. There were four OREO properties recorded with a fair value of approximately $24,737 in total as of December 31, 2024.

There were no liabilities measured at fair value on a non-recurring basis as of March 31, 2025 or December 31, 2024.

Fair Value of Financial Instruments

The Company’s methods of determining fair value of financial instruments in this Note are consistent with its methodologies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Please refer to Note 16 in the Company’s Annual Report on Form 10-K for information on these methods.

The estimated fair values and carrying values of all financial instruments not measured at fair value on a recurring basis under current authoritative guidance as of March 31, 2025 and December 31, 2024 were as follows:


			Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
March 31, 2025
Financial assets:
Cash and cash equivalents	$	849,790	$	—	$	849,790	$	—
HTM debt securities	178,797		—		154,864		—
LHFS(1)	1,268		—		1,268		—
LHI(2)	9,392,812		—		—		9,223,104
Accrued interest receivable	44,762		—		44,762		—
BOLI	85,424		—		85,424		—
Servicing asset	7,837		—		7,837		—
Equity securities without a readily determinable fair value	10,512		N/A		N/A		N/A
FHLB and FRB stock	47,973		N/A		N/A		N/A
Financial liabilities:
Noninterest-bearing deposits	$	2,318,645	$	—	$	2,318,645	$	—
Interest-bearing deposits	8,346,478		—		8,154,514		—

Accrued interest payable	27,090		—		27,090		—
Subordinated debentures and subordinated notes	155,909		—		155,014		—
December 31, 2024
Financial assets:
Cash and cash equivalents	$	855,200	$	—	$	855,200	$	—
HTM debt securities	184,026		—		160,560		—

LHFS(1)	904		—		904		—

LHI(2)	9,499,746		—		—		9,409,813
Accrued interest receivable	46,328		—		46,328		—
BOLI	85,324		—		85,324		—
Servicing asset	6,565		—		6,565		—
Equity securities without a readily determinable fair value	12,272		N/A		N/A		N/A
FHLB and FRB stock	46,567		N/A		N/A		N/A
Financial liabilities:
Noninterest-bearing deposits	$	2,191,457	$	—	$	2,191,457	$	—
Interest-bearing deposits	8,561,135		—		8,349,988		—

Accrued interest payable	38,568		—		38,568		—
Subordinated debentures and subordinated notes	230,736		—		230,736		—

(1) LHFS primarily represent mortgage LHFS that are carried at lower of cost or market.

(2) LHI includes MW and is carried at amortized cost.

8. Derivative Financial Instruments

The Company primarily uses derivatives to manage exposure to market risk, including interest rate risk and credit risk and to assist customers with their risk management objectives. Management will designate certain derivatives as hedging instruments in a qualifying hedge accounting relationship. The Company’s remaining derivatives consist of derivatives held for customer accommodation or other purposes.

Cash Flow Hedges

We enter into cash flow hedge relationships to mitigate exposure to the variability of future cash flows or other forecasted transactions. The Company uses interest rate swaps, floors, caps and collars to manage overall cash flow changes related to interest rate risk exposure on benchmark interest rate loans. To qualify for hedge accounting, a formal assessment is prepared to determine whether the hedging relationship, both at inception and on an ongoing basis, is expected to be highly effective in achieving offsetting cash flows attributable to the hedged risk during the term of the cash flow hedge. At inception a statistical regression analysis is prepared to determine hedge effectiveness. At each reporting period thereafter, a statistical regression or qualitative analysis is performed. If it is determined that hedge effectiveness has not been or will not continue to be highly effective, then hedge accounting ceases and any gain or loss in AOCI is recognized in earnings immediately. The cash flow hedges are recorded at fair value in other assets and other liabilities on the consolidated balance sheets with changes in fair value recorded in AOCI, net of tax. Amounts recorded to AOCI are reclassified into earnings in the same period in which the hedged asset or liability affects earnings and are presented in the same income statement line item as the earnings effect of the hedged asset or liability.

Interest Rate Swap, Floor, Cap and Collar Agreements Not Designated as Hedging Derivatives

In order to accommodate the borrowing needs of certain commercial customers, the Company has entered into interest rate swap or cap agreements with those customers. These interest rate derivative contracts effectively allow the Company’s customers to convert a variable rate loan into a fixed rate loan. In order to offset the exposure and manage interest rate risk, at the time an agreement was entered into with a customer, the Company entered into an interest rate swap or cap with a correspondent bank counterparty with offsetting terms. These derivative instruments are not designated as accounting hedges and changes in the net fair value are recognized in noninterest income or expense. Because the Company acts as an intermediary for its customers, changes in the fair value of the underlying derivative contracts substantially offset each other and do not have a material impact on the Company’s results of operations. The fair value amounts are included in other assets and other liabilities.

The fair value of derivative positions outstanding is included in other assets and accounts payable and other liabilities on the accompanying consolidated balance sheets and in the net change in each of these financial statement line items in the accompanying consolidated statements of cash flows. For derivatives not designated as hedging instruments, swap fee income and gains and losses due to changes in fair value are included in other noninterest income and the operating section of the consolidated statement of cash flows. For derivatives designated as hedging instruments, the entire change in the fair value related to the derivative instrument is recognized as a component of other comprehensive income and subsequently reclassified into interest income or interest expense when the forecasted transaction affects income.

The notional amounts and estimated fair values as of March 31, 2025 and December 31, 2024 are as shown in the table below.


	March 31, 2025						December 31, 2024
			Estimated Fair Value						Estimated Fair Value
	Notional Amount		Asset Derivative		Liability Derivative		Notional Amount		Asset Derivative		Liability Derivative
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on money market deposit account payments	$	—	$	—	$	—	$	250,000	$	2,361	$	—
Interest rate swaps on variable rate funding sources	275,000		129		2,423		275,000		201		1,821
Interest rate swaps on customer loan interest payments	375,000		—		32,676		375,000		—		39,517
Interest rate collars on customer loan interest payments	700,000		6,509		327		700,000		3,780		555
Interest rate floor on customer loan interest payments	200,000		1,634		—		200,000		1,444		—
Total derivatives designated as hedging instruments	$	1,550,000	$	8,272	$	35,426	$	1,800,000	$	7,786	$	41,893

Derivatives not designated as hedging instruments:
Financial institution counterparty:
Interest rate swaps	$	852,742	$	18,096	$	3,965	$	857,625	$	25,328	$	1,651
Interest rate caps and collars	5,500		—		—		4,000		—		—
Commercial customer counterparty:
Interest rate swaps	852,742		3,688		17,516		857,625		1,514		24,817
Interest rate caps and collars	5,500		—		—		4,000		—		—
Total derivatives not designated as hedging instruments	$	1,716,484	$	21,784	$	21,481	$	1,723,250	$	26,842	$	26,468
Offsetting derivative assets/liabilities	—		(23,519)		(23,519)		—		(28,239)		(28,239)
Total derivatives	$	3,266,484	$	6,537	$	33,388	$	3,523,250	$	6,389	$	40,122

Pre-tax (loss) gain included in the consolidated statements of income and related to derivative instruments for the three months ended March 31, 2025 and 2024 were as follows.


	For the Three Months Ended March 31, 2025						For the Three Months Ended March 31, 2024
	(Loss) gain recognized in other comprehensive income on derivative		Gain (loss) reclassified from AOCI into income		Location of (loss) gain reclassified from AOCI into income		Gain (loss) recognized in other comprehensive income on derivative		Gain (loss) reclassified from AOCI into income		Location of (loss) gain reclassified from AOCI into income
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on borrowing advances	$	(1,082)	$	1,082	Interest Expense		$	(1,094)	$	1,094	Interest Expense
Interest rate swap on money market deposit account payments	(3,035)		2,402		Interest Expense		1,849		3,439		Interest Expense
Interest rate swaps, collars and floors on customer loan interest payments	10,833		(4,020)		Interest Income		(9,250)		(5,369)		Interest Income
Total	$	6,716	$	(536)			$	(8,495)	$	(836)

					Net gain recognized in other noninterest income						Net gain recognized in other noninterest income
Derivatives not designated as hedging instruments:
Interest rate swaps, caps and collars					$	700					$	449

9. OBS Loan Commitments

The Company is party to financial instruments with OBS risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, MW commitments and standby and commercial letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets.

The Company’s exposure to credit loss in the event of nonperformance by the other party to a financial instrument for commitments to extend credit, MW commitments and standby and commercial letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

The following table sets forth the approximate amounts of these financial instruments as of March 31, 2025 and December 31, 2024:


	March 31,		December 31,
	2025		2024
Commitments to extend credit	$	3,482,436	$	3,115,682
MW commitments	671,225		562,589
Standby and commercial letters of credit	112,074		111,930
Total	$	4,265,735	$	3,790,201

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Management evaluates each customer’s creditworthiness on a case-by-case basis and substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of future loan funding. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the borrower.

MW commitments are unconditionally cancellable and represent the unused capacity on MW facilities the Company has approved. The Company reserves the right to refuse to buy any mortgage loans offered for sale by a customer, for any reason, at the Company’s sole and absolute discretion.

Standby and commercial letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby and commercial letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company’s policy for obtaining collateral and the nature of such collateral is substantially the same as that involved in making commitments to extend credit.

The table below presents the activity in the allowance for unfunded commitment credit losses related to those financial instruments discussed above. This ACL on unfunded commitments is recorded in accounts payable and other liabilities on the consolidated balance sheets:


	Three Months Ended March 31,
		2025		2024
Beginning balance for ACL on unfunded commitments		$	6,103	$	8,045
Provision (benefit) for credit losses on unfunded commitments		1,300		(1,541)
Ending balance of ACL on unfunded commitments		$	7,403	$	6,504

10. Stock-Based Awards

Grants of RSUs and PSUs

During the three months ending March 31, 2025, the Company granted non-performance-based RSUs and PSUs under the 2022 Amended and Restated Omnibus Incentive Plan (the “2022 Equity Plan”). The majority of the RSUs granted to employees during the three months ending March 31, 2025 have an annual graded vesting over a three year period from the grant date.

The PSUs granted in February 2025 are subject to service, performance and market conditions. The performance and market condition determine the number of awards to vest. The service period is from February 1, 2025 to January 31, 2028, the performance conditions performance period is from January 1, 2025 to December 31, 2027 and the market condition performance period is from February 1, 2025 to January 31, 2028. A Monte Carlo simulation was used to estimate the fair value of PSUs on the grant date.

Stock Compensation Expense

Stock compensation expense for RSUs and PSUs granted under the 2022 Equity Plan and the Veritex (Green) 2014 Plan were as follows for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024
2022 Equity Plan	$	2,561	$	2,459
Veritex (Green) 2014 Plan	176		430

2022 Equity Plan

A summary of the status of the Company’s stock options under the 2022 Equity Plan as of March 31, 2025 and 2024, and changes during the three months then ended, is as follows:


	2022 Equity Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2024	602,573	$	24.40





Outstanding at March 31, 2024	602,573	$	24.40	4.59 years
Options exercisable at March 31, 2024	602,573	$	24.40	4.59 years

Outstanding at January 1, 2025	492,847	$	24.72





Outstanding at March 31, 2025	492,847	$	24.72	3.57 years	$	912
Options exercisable at March 31, 2025	492,847	$	24.72	3.57 years	$	912

There was no unrecognized compensation expense related to options awarded under the 2022 Equity Plan as of March 31, 2025.

A summary of the status of the Company’s RSUs under the 2022 Equity Plan as of March 31, 2025 and 2024, and changes during the three months then ended, is as follows:


	2022 Equity Plan
	Non-performance-Based RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2024	948,513	$	27.52
Granted	190,018	21.94

Vested into shares	(159,113)	29.87
Forfeited	(4,700)	30.73
Outstanding at March 31, 2024	974,718	$	26.03

Outstanding at January 1, 2025	826,837	$	25.79
Granted	149,496	26.21

Vested into shares	(155,014)	25.63

Outstanding at March 31, 2025	821,319	$	24.37

A summary of the status of the Company’s PSUs under the 2022 Equity Plan as of March 31, 2025 and 2024, and changes during the three months then ended, is as follows:


	2022 Equity Plan
	Performance-Based
	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2024	129,786	$	30.28
Granted	113,144	18.84

Vested into shares	(56,729)	25.94

Outstanding at March 31, 2024	186,201	$	25.01

Outstanding at January 1, 2025	163,545	$	24.62
Granted	71,726	25.73
Performance condition adjustment	(1,945)
Vested into shares	(28,996)	38.68

Outstanding at March 31, 2025	204,330	$	22.86

As of March 31, 2025, there was $14,618 of total unrecognized compensation expense related to RSUs and PSUs awarded under the 2022 Equity Plan, respectively. The unrecognized compensation expense at March 31, 2025 is expected to be recognized over the remaining weighted average requisite service period of 2.34 years.

A summary of the fair value of the Company’s RSUs and PSUs vested under the 2022 Equity Plan during the three months ended March 31, 2025 and 2024 is presented below:


	Three Months Ended March 31,
	2025		2024

RSUs vested	$	4,819	$	3,057
PSUs vested	1,122		1,133

Veritex (Green) 2014 Plan

A summary of the status of the Company’s stock options under the Veritex (Green) 2014 Plan as of March 31, 2025 and 2024, and changes during the three months then ended, is as follows:


	Veritex (Green) 2014 Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2024	124,499	$	22.00





Outstanding at March 31, 2024	124,499	$	22.00	3.46 years
Options exercisable at March 31, 2024	124,499	$	22.00	3.46 years

Outstanding at January 1, 2025	94,669	$	20.56




Exercised	(571)	21.38
Outstanding at March 31, 2025	94,098	$	20.77	3.11 years	$	524
Options exercisable at March 31, 2025	94,098	$	20.77	3.11 years	$	524

As of March 31, 2025, there was no unrecognized compensation expense related to options awarded under the Veritex (Green) 2014 Plan.

A summary of the status of the Company’s RSUs under the Veritex (Green) 2014 Plan as of March 31, 2025 and 2024 and changes during the three months then ended, is as follows:


	Veritex (Green) 2014 Plan
	Non-performance-Based
	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2024	64,719	$	18.26

Vested into shares	(3,308)	32.20

Outstanding at March 31, 2024	61,411	$	17.51

Outstanding at January 1, 2025	59,565	$	17.51



Outstanding at March 31, 2025	59,565	$	17.51

A summary of the status of the Company’s PSUs under the Veritex (Green) 2014 Plan as of March 31, 2025 and 2024 and changes during the three months then ended, is as follows:


	Veritex (Green) 2014 Plan
	Performance-Based
	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2024	10,642	$	31.93
Granted	1,246	18.84

Vested into shares	(7,477)	25.94

Outstanding at March 31, 2024	4,411	$	40.38

Outstanding at January 1, 2025	4,411	$	40.38

Performance condition adjustment	(316)
Vested into shares	(4,095)	40.38

Outstanding at March 31, 2025	—	$	—

As of March 31, 2025, there was no unrecognized compensation related to PSUs awarded under the Veritex (Green) 2014 Plan.

A summary of the fair value of the Company’s stock options exercised, RSUs and PSUs vested under the Veritex (Green) 2014 Plan during the three months ended March 31, 2025 and 2024 presented below:


	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2025		2024
Non-performance-based stock options exercised	$	4	$	—
RSUs vested	111		326
PSUs vested	165		149

Green 2010 Plan

In addition to the Veritex (Green) 2014 Plan discussed earlier in this Note, the Company assumed the Green Bancorp Inc. 2010 Stock Option Plan (“Green 2010 Plan”).

A summary of the status of the Company’s stock options under the Green 2010 Plan as of March 31, 2025 and 2024, and changes during the three months then ended, is as follows:


	Green 2010 Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2024	10,784	$	12.65





Outstanding at March 31, 2024	10,784	$	12.65	3.82 years

Outstanding at January 1, 2025	10,784	$	12.65





Outstanding at March 31, 2025	10,784	$	12.65	2.82 years	$	133

11. Income Taxes

Income tax expense for the three months ended March 31, 2025 and 2024 was as follows:


	Three Months Ended March 31,
		2025			2024
Income tax expense for the period		$	8,526		$	7,237
Effective tax rate		22.7		%	23.1		%

The effective income tax rates for the comparable periods differed from the U.S. statutory federal income tax rates of 21% primarily due to the effects of tax-exempt income from certain investment securities and bank owned life insurance policies, as well as nondeductible compensation, state income taxes and changes in valuation allowances recorded.

12. Legal Contingencies

Litigation

The Company may from time to time be involved in legal actions arising from normal business activities. In the opinion of management, there are no claims for which it is reasonably possible that an adverse outcome would have a material effect on the Company's financial position, liquidity or results of operations. The Company is not aware of any material unasserted claims.

13. Capital Requirements and Restrictions on Retained Earnings

Under applicable U.S. banking laws, there are legal restrictions limiting the amount of dividends the Company can declare. Approval of the regulatory authorities is required if, among other things, the effect of the dividends declared would cause regulatory capital of the Company to fall below specified minimum levels.

The Company on a consolidated basis and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements triggers certain mandatory actions and may lead to additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for PCA, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain OBS items as calculated under regulatory accounting practices. The Bank’s capital amounts and PCA classification are also subject to qualitative judgments by the regulators about components of capital, risk weightings of assets, and other factors. In addition, an institution may be downgraded to, or deemed to be in, a capital category that is lower than indicated by its capital ratios, if it is determined to be in an unsafe or unsound condition or if it receives an unsatisfactory examination rating with respect to certain matters.

As a result of our no longer using the CBLR framework, we are subject to various quantitative measures established by regulation to ensure capital adequacy. These generally applicable capital requirements require a banking organization that does not operate under the CBLR framework to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier 1 capital, and CET1 capital to RWA, and of Tier 1 capital to average assets. The capital rules implementing Basel III also include a “capital conservation buffer” of 2.5% on top of each of the minimum RBC ratios, and a banking organization with any RBC ratio that meets or exceeds the minimum requirement but does not meet the capital conservation buffer will face constraints on dividends, equity repurchases and discretionary bonus payments based on the amount of the shortfall. Additionally, to be categorized as “well capitalized,” a bank that does not operate under the CBLR framework is required to maintain minimum total risk-based CET1, Tier 1, and total capital ratios and Tier 1 leverage ratios as set forth in the table below.

In the first quarter of 2020, U.S. federal regulatory authorities issued an interim final rule that provides banking organizations that adopt CECL during the 2020 calendar year with the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided during the initial two-year delay (i.e., a five-year transition in total). In connection with our adoption of CECL on January 1, 2020, the Company elected to utilize the five-year CECL transition. As a result, the effects of CECL on the Company’s and the Bank’s regulatory capital was delayed through the year 2021, with the effects phased-in over a three-year period from January 1, 2022 through December 31, 2024.

As of March 31, 2025 and December 31, 2024, the Company’s and the Bank’s capital ratios exceeded those levels necessary to be categorized as “well capitalized”. There are no conditions or events since March 31, 2025 that management believes have changed the Company’s category.

A comparison of the Company’s and Bank’s actual capital amounts and ratios to required capital amounts and ratios as of March 31, 2025 and December 31, 2024 is presented in the following table:


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under PCA Provisions
	Amount		Ratio		Amount		Ratio			Amount		Ratio
As of March 31, 2025
Total capital (to RWA)
Company	$	1,523,437	13.46	%	$	905,458	8.0	%		$	1,131,822	10.0	%
Bank	1,450,709		12.87		901,867		8.0			1,127,334		10.0
Tier 1 capital (to RWA)
Company	1,279,536		11.31		679,093		6.0			679,093		6.0
Bank	1,331,533		11.81		676,400		6.0			901,867		8.0
CET1 (to RWA)
Company	1,249,370		11.04		509,320		4.5			n/a		n/a
Bank	1,331,533		11.81		507,300		4.5			732,767		6.5
Tier 1 capital (to average assets)
Company	1,279,536		10.55		485,359		4.0			n/a		n/a
Bank	1,331,533		11.02		483,468		4.0			604,336		5.0
As of December 31, 2024
Total capital (to RWA)
Company	$	1,571,001	13.96	%	$	900,287	8.0	%		$	1,125,135	10.0	%
Bank	1,510,901		13.49		896,012		8.0			1,120,016		10.0
Tier 1 capital (to RWA)
Company	1,277,955		11.36		674,976		6.0			675,081		6.0
Bank	1,402,462		12.52		672,106		6.0			896,142		8.0
CET1 (to RWA)
Company	1,247,844		11.09		506,339		4.5			n/a		n/a
Bank	1,402,462		12.52		504,080		4.5			728,115		6.5
Tier 1 capital (to average assets)
Company	1,277,955		10.32		495,331		4.0			n/a		n/a
Bank	1,402,462		11.37		493,390		4.0			616,738		5.0

Dividend Restrictions

Dividends paid by the Bank are subject to certain restrictions imposed by regulatory agencies. Capital requirements further limit the amount of dividends that may be paid by the Bank. Dividends of $97,000 and $27,500 were paid by the Bank to the Holdco during the three months ending March 31, 2025 and 2024, respectively. The increase in dividends paid by the Bank to the Holdco during the three months ended March 31, 2025 was primarily due to the redemption of $75,000 in subordinated notes as further discussed in Note 6. Subordinated Debentures and Subordinated Notes.

Dividends of $10,929, or $0.20 per outstanding share, on the applicable record dates, and $10,899, or $0.20 per outstanding share, on the applicable record dates, were paid by the Company during the three months ended March 31, 2025 and 2024, respectively.

The Bank is subject to limitations on dividend payouts if, among other things, it does not have a capital conservation buffer of 2.5% or more. The Bank had a capital conservation buffer of 4.87% as of March 31, 2025.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes thereto appearing in Item 1 of Part I of this Quarterly Report on Form 10-Q (this “Report”) as well as with our consolidated financial statements and notes thereto appearing in our Annual Report on Form 10-K for the year ended December 31, 2024. Except where the content otherwise requires or when otherwise indicated, the terms “Veritex,” the “Company,” “we,” “us,” “our,” and “our business” refer to the combined entities of Veritex Holdings, Inc. and its subsidiaries, including Veritex Community Bank.

This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that we believe are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Special Cautionary Notice Regarding Forward-Looking Statements,” may cause actual results to differ materially from the projected results discussed in the forward-looking statements appearing in this discussion and analysis. We assume no obligation to update any of these forward-looking statements. For additional information concerning forward-looking statements, please read “Special Cautionary Notice Regarding Forward-Looking Statements” below.

Overview

We are a Texas state banking organization with corporate offices in Dallas, Texas. Through our wholly owned subsidiary, Veritex Community Bank, a Texas state-chartered bank, we provide relationship-driven commercial banking products and services tailored to meet the needs of small to medium-sized businesses and professionals. Beginning at our operational inception in 2010, we initially targeted customers and focused our acquisitions primarily in the Dallas metropolitan area, which we consider to be Dallas and the adjacent communities in North Dallas. Our current primary markets include the broader DFW metroplex and the Houston metropolitan area. As we continue to grow, we may expand to other metropolitan banking markets in Texas.

Our business is conducted through one reportable segment, community banking, which generates the majority of our revenues from interest income on loans, customer service and loan fees, gains on sale of government guaranteed loans and mortgage loans and interest income from securities. We incur interest expense on deposits and other borrowed funds and noninterest expense, such as salaries, employee benefits and occupancy expenses. We analyze our ability to maximize income generated from interest earning assets and expense of our liabilities through net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest income is the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings, which are used to fund those assets.

Changes in the market interest rates and interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, and interest-bearing and noninterest-bearing liabilities, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. Fluctuations in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international conditions and conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions in Texas and, specifically, in the DFW metroplex and Houston metropolitan area, as well as developments affecting the real estate, technology, financial services, insurance, transportation, manufacturing and energy sectors within our target markets and throughout the state of Texas.

The Company is providing a comparison of the quarter ended March 31, 2025 against the preceding sequential quarter, which it believes provides more relevant information for investors and stakeholders to understand and analyze the business. The Company continues to present the required comparison of current year-to-date results with the same period of the prior year.

Results of Operations for the Three Months Ended March 31, 2025 and December 31, 2024

The following table sets forth information regarding our consolidated results of operations for the three month periods ending March 31, 2025 and December 31, 2024, respectively (in thousands except per share information):


	Three Months Ended				Change
	March 31, 2025		December 31, 2024		Increase (decrease)
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	146,505		$	154,998	$	(8,493)
Debt securities	17,106		16,893		213
Deposits in financial institutions and federal funds sold	9,244		11,888		(2,644)
Equity securities and other investments	870		940		(70)
Total interest and dividend income	173,725		184,719		(10,994)
INTEREST EXPENSE
Transaction and savings deposits	45,165		44,841		324
Certificates and other time deposits	30,268		40,279		(10,011)
Advances from FHLB	27		130		(103)
Subordinated debentures and subordinated notes	2,824		3,328		(504)
Total interest expense	78,284		88,578		(10,294)
NET INTEREST INCOME	95,441		96,141		(700)
Provision for credit losses on loans	4,000		2,300		1,700
Provision (benefit) for credit losses on unfunded commitments	1,300		(401)		1,701
Net interest income after provision (benefit) for credit losses	90,141		94,242		(4,101)
NONINTEREST INCOME
Service charges and fees on deposit accounts	5,611		5,612		(1)
Loan fees	2,495		2,265		230
Loss on sales of debt securities	—		(4,397)		4,397
Government guaranteed loan income, net	3,301		5,368		(2,067)

Customer swap income	700		509		191
Other	2,182		699		1,483
Total noninterest income	14,289		10,056		4,233
NONINTEREST EXPENSE
Salaries and employee benefits	36,624		37,446		(822)
Occupancy and equipment	4,650		4,633		17
Professional and regulatory fees	4,931		5,564		(633)
Data processing and software expense	5,403		5,741		(338)
Marketing	2,032		2,896		(864)
Amortization of intangibles	2,438		2,437		1
Telephone and communications	330		323		7

Other	10,426		12,154		(1,728)
Total noninterest expense	66,834		71,194		(4,360)
Income before income tax expense	37,596		33,104		4,492
Provision for income taxes	8,526		8,222		304
NET INCOME	29,070		$	24,882	$	4,188
Basic EPS	$	0.53	$	0.46	$	0.07
Diluted EPS	$	0.53	$	0.45	$	0.08

General

Net income for the three months ended March 31, 2025 was $29.1 million, an increase of $4.2 million, or 16.8%, from net income of $24.9 million for the three months ended December 31, 2024.

Basic EPS for the three months ended March 31, 2025 was $0.53, an increase of $0.07 per share from $0.46 for the three months ended December 31, 2024. Diluted EPS for the three months ended March 31, 2025 was $0.53, an increase of $0.08 from $0.45 for the three months ended December 31, 2024.

Net Interest Income

For the three months ended March 31, 2025, net interest income totaled $95.4 million and net interest margin and net interest spread were 3.31% and 2.24%, respectively. For the three months ended December 31, 2024, net interest income totaled $96.1 million and net interest margin and net interest spread were 3.20% and 2.03%, respectively. The decrease in net interest income was due to a decrease in interest income of $11.0 million, primarily due a $8.5 million decrease on loan interest income, due to both lower average loan balances and lower rates earned. The decrease was partially offset by a $10.3 million decrease in interest expense on interest-bearing liabilities primarily due to the $10.0 million decrease in interest expense on certificates and other time deposits during the three months ended March 31, 2025 compared to the three months ended December 31, 2024. Net interest margin increased 11 bps to 3.31% from 3.20% for the three months ended March 31, 2025, compared to the three months ended December 31, 2024, primarily due to a 33 bps decline on funding costs rates on interest-bearing deposits and borrowings from 4.12% for the three months ended December 31, 2024 to 3.79% for the three months ended March 31, 2025. This change was partially offset to a lesser extent by a 12 bps decline in yields on interest earning assets for the period, mostly driven by a 16 bps decline on LHI for the three months ended March 31, 2025 compared to the three months ended December 31, 2024.

The following table presents, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rates earned on interest-earning assets, the average rates paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the three months ended March 31, 2025 and three months ended December 31, 2024, interest income not recognized on nonaccrual loans was $985 thousand and $410 thousand, respectively. Any nonaccrual loans have been included in the table as loans carrying a zero yield.


	For the Three Months Ended
	March 31, 2025						December 31, 2024
			Interest						Interest
	Average		Earned/		Average		Average		Earned/		Average
	Outstanding		Interest		Yield/		Outstanding		Interest		Yield/
	Balance		Paid		Rate		Balance		Paid		Rate
	(Dollars in thousands)
Assets
Interest-earning assets:
Loans(1)	$	8,886,905	$	140,329	6.40	%	$	8,957,193	$	147,782	6.56	%
LHI, MW	426,724		6,176		5.87		492,372		7,216		5.83
Debt Securities	1,467,220		17,106		4.73		1,458,057		16,893		4.61
Interest-earning deposits in other banks	827,751		9,244		4.53		971,451		11,888		4.87
Equity securities and other investments	70,696		870		4.99		72,223		940		5.18
Total interest-earning assets	11,679,296		173,725		6.03		11,951,296		184,719		6.15
ACL	(111,563)						(117,293)
Noninterest-earning assets	938,401						916,969
Total assets	$	12,506,134					$	12,750,972

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	5,449,091	$	45,165	3.36	%	$	5,001,159	$	44,841	3.57	%
Certificates and other time deposits	2,726,309		30,268		4.50		3,319,628		40,279		4.83
Advances from FHLB and other	2,333		27		4.69		10,598		130		4.88
Subordinated debentures and subordinated debt	191,638		2,824		5.98		230,633		3,328		5.74
Total interest-bearing liabilities	8,369,371		78,284		3.79		8,562,018		88,578		4.12

Noninterest-bearing liabilities:
Noninterest-bearing deposits	2,345,586						2,400,809
Other liabilities	170,389						183,810
Total liabilities	10,885,346						11,146,637
Stockholders’ equity	1,620,788						1,604,335
Total liabilities and stockholders’ equity	$	12,506,134					$	12,750,972

Net interest rate spread(2)					2.24	%					2.03	%
Net interest income			$	95,441					$	96,141
Net interest margin(3)					3.31	%					3.20	%

(1) Includes average outstanding balances of LHFS of $66.3 million and $46.4 million for the three months ended March 31, 2025 and three months ended December 31, 2024, respectively, and average balances of LHI, excluding MW loans.

(2) Net interest rate spread is equal to 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.

The following table presents the changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and interest rates. For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.


	For the Three Months Ended
	March 31, 2025 vs. December 31, 2024
	Increase (Decrease)
	Due to Change in
	Volume		Rate		Total
	(In thousands)
Interest-earning assets:
Loans	$	(1,150)	$	(6,303)	$	(7,453)
LHI, MW	(954)		(86)		(1,040)
Debt Securities	105		108		213
Equity securities and other investments	(1,744)		(900)		(2,644)
Interest-bearing deposits in other banks	(20)		(50)		(70)
Total decrease in interest income	(3,763)		(7,231)		(10,994)
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	3,983		(3,659)		324
Certificates and other time deposits	(7,139)		(2,872)		(10,011)
Advances from FHLB and other	(101)		(2)		(103)
Subordinated debentures and subordinated notes	(558)		54		(504)
Total decrease in interest expense	(3,815)		(6,479)		(10,294)
Increase (decrease) in net interest income	$	52	$	(752)	$	(700)

Provision for Credit Losses

Our provision for credit losses is a charge to income in order to bring our ACL to a level deemed appropriate by management. We recorded a provision for credit losses on loans of $4.0 million for the three months ended March 31, 2025, compared to a $2.3 million provision for credit loss expense for the three months ended December 31, 2024. The change was primarily attributable to an increase in general reserves as a result of changes in economic factors. We recorded $1.3 million provision for credit loss expense for unfunded commitments, for the three months ended March 31, 2025 compared to a credit loss benefit of $401 thousand for the three months ended December 31, 2024, as the balance of unfunded commitments increased quarter over quarter.

Noninterest Income

Our primary sources of recurring noninterest income are service charges and fees on deposit accounts, loan fees, loss on sales of debt securities, government guaranteed loan income, net, customer swap income, and other income. Noninterest income does not include loan origination fees, which are generally recognized over the life of the related loan as an adjustment to yield using the interest method.

The following table presents, for the periods indicated, the major categories of noninterest income:


	For the Three Months Ended
	March 31,		December 31,		Increase (Decrease)
(In thousands)	2025		2024		$ change		% change
Noninterest income:
Service charges and fees on deposit accounts	$	5,611	$	5,612	$	(1)	—%
Loan fees	2,495		2,265		230		10.2
Loss on sales of debt securities	—		(4,397)		4,397		(100.0)
Government guaranteed loan income, net	3,301		5,368		(2,067)		(38.5)

Customer swap income	700		509		191		37.5
Other income	2,182		699		1,483		212.2
Total noninterest income	$	14,289	$	10,056	$	4,233	42.1%

Noninterest income for the three months ended March 31, 2025 increased $4.2 million, or 42.1%, to $14.3 million compared to noninterest income of $10.1 million for the three months ended December 31, 2024. The primary drivers of the increase were as follows:

Loss on sale of debt securities. The increase during the three months ended March 31, 2025 compared to the three months ended December 31, 2024, was due to a $4.4 million loss on sales of debt securities recognized during the three months ended December 31, 2024 with no corresponding loss recorded in the three months ended March 31, 2025.

Government guaranteed loan income, net. Government guaranteed loan income, net, includes income related to the sales of SBA and USDA loans. The decrease in government guaranteed loan income, net, of $2.1 million, or 38.5%, during the three months ended March 31, 2025 was primarily due to downward valuation adjustments totaling $7.4 million on the Company’s HFS government guaranteed loan portfolios offset to a lesser extent by a $5.3 million increase on gain on sales of government guaranteed loans during the period.

Other. Other includes other noninterest income from various fees, servicing income, equity security income, BOLI income and other miscellaneous fees. Other noninterest income increased $1.5 million, or 212.2%, as compared to the three months ended December 31, 2024. The increase was primarily driven by an increase in loan servicing income of $1.2 million and a $468 thousand gain on sale of an equity security, offset by a $456 thousand decrease in BOLI income due to charges incurred relating to a Section 1035 exchange of BOLI policies during the quarter. The remaining changes were nominal amongst individual other noninterest income accounts.

Noninterest Expense

Noninterest expense is composed of all employee expenses and costs associated with operating our facilities, acquiring and retaining customer relationships and providing bank services. The major component of noninterest expense is salaries and employee benefits. Noninterest expense also includes operational expenses, such as occupancy and equipment expenses, professional fees and regulatory fees, data processing and software expenses, marketing expenses, amortization of intangibles, telephone and communications expenses and other expenses.

The following table presents, for the periods indicated, the major categories of noninterest expense:


	For the Three Months Ended
	March 31,		December 31,		Increase (Decrease)
(In thousands)	2025		2024		$ change		% change
Noninterest expense:
Salaries and employee benefits	$	36,624	$	37,446	$	(822)	(2.2)%
Occupancy and equipment	4,650		4,633		17		0.4%
Professional and regulatory fees	4,931		5,564		(633)		(11.4)%
Data processing and software expense	5,403		5,741		(338)		(5.9)%
Marketing	2,032		2,896		(864)		(29.8)%
Amortization of intangibles	2,438		2,437		1		—%
Telephone and communications	330		323		7		2.2%

Other	10,426		12,154		(1,728)		(14.2)%
Total noninterest expense	$	66,834	$	71,194	$	(4,360)	(6.1)%

Noninterest expense for the three months ended March 31, 2025 decreased $4.4 million, or 6.1%, to $66.8 million compared to noninterest expense of $71.2 million for the three months ended December 31, 2024. The most significant components of the decrease were as follows:

Salaries and employee benefits. Salaries and employee benefits include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. These expenses are impacted by the amount of direct loan origination costs, which are required to be deferred in accordance with ASC 310-20. Salaries and employee benefits were $36.6 million for the three months ended March 31, 2025, a decrease of $822 thousand, or 2.2%, compared to the three months ended December 31, 2024. The decrease was primarily attributable to decreases of $973 thousand in severance costs, $768 thousand in bonus and incentive accruals and $655 thousand in stock grant expense, offset by a $1.5 million increase in payroll taxes, which are historically higher in the first quarter. The remaining changes were nominal amongst individual other salaries and employee benefits expense accounts.

Professional and regulatory fees. This category includes legal, professional, audit, regulatory, and FDIC assessment fees. Professional and regulatory fees decreased $633 thousand, or 11.4%, compared to the three months ended December 31, 2024. The decrease is primarily due to a decrease in FDIC assessment fees of $744 thousand for the three months ended March 31, 2025.

Marketing. This category of expenses includes expenses related to advertising, promotions, donations and business development. Marketing expenses decreased $864 thousand, or 29.8% during the three months ended March 31, 2025, primarily due to a decrease of $1.1 million in advertising and promotion expenses offset by an increase of $515 thousand in sports marketing.

Other noninterest expense. This category includes loan operations and collections, supplies and printing, automatic teller and online expenses and other miscellaneous expenses. Other noninterest expense decreased $1.7 million, or 14.2%, for the three months ended March 31, 2025 compared to the three months ended December 31, 2024. This decrease was primarily due to a decrease of $2.0 million in earned credit rebates paid during the quarter. The remaining changes were nominal amongst individual other noninterest expense accounts.

Income Tax Expense

Income tax expense is a function of our pre-tax income, tax-exempt income and other nondeductible expenses. Deferred tax assets and liabilities reflect current statutory income tax rates in effect for the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

For the three months ended March 31, 2025, income tax expense totaled $8.5 million, an increase of $304 thousand, compared to an income tax expense of $8.2 million for the three months ended December 31, 2024. For the three months ended March 31, 2025, we had an effective tax rate of 22.7% compared to an effective tax rate of 24.8% for the three months ended December 31, 2024. The Company had a net discrete tax expense of $202 thousand associated with the recognition of an excess tax expense realized on share-based payment awards during the three months ended March 31, 2025, offset by a $98 thousand change in valuation allowance during the period. Excluding these discrete tax items, the Company had an effective tax rate of 22.4% for the three months ended March 31, 2025.

Results of Operations for the Three Months Ended March 31, 2025 and March 31, 2024

General

Net income for the three months ended March 31, 2025 was $29.1 million, an increase of $4.9 million, or 20.3%, from net income of $24.2 million for the three months ended March 31, 2024.

Basic EPS for the three months ended March 31, 2025 was $0.53, an increase of $0.09 per share from $0.44 for the three months ended March 31, 2024. Diluted EPS for the three months ended March 31, 2025 was $0.53, an increase of $0.09 per share from $0.44 for the three months ended March 31, 2024.

Net Interest Income

For the three months ended March 31, 2025, net interest income before provisions for credit losses totaled $95.4 million and net interest margin and net interest spread were 3.31% and 2.24%, respectively. For the three months ended March 31, 2024, net interest income before provision for credit losses totaled $92.8 million and net interest margin and net interest spread were 3.24% and 1.97%, respectively. Net interest margin increased 7 bps from the three months ended March 31, 2024, primarily due to a decrease in the average rate paid on interest-bearing liabilities from 4.47% for the three months ended March 31, 2024 to 3.79% for the three months ended March 31, 2025, offset partially by a corresponding decrease in yield earned on interest-earning assets from 6.44% for the three months ended March 31, 2024 to 6.03% for the three months ended March 31, 2025. The increase in net interest income of $2.6 million was primarily attributable to decreases in funding costs, including $10.2 million in interest expense on certificates and other time deposits, $1.6 million in interest expense on transaction accounts and $1.4 million in interest expense on FHLB advances, in addition to a decrease in interest expense on subordinated debt due to the redemption of $75.0 million in subordinated notes occurring mid-quarter, along with increases in interest income on debt securities of $3.4 million and interest income on interest-bearing deposits in other banks of $1.2 million. Those changes were partially offset by a decrease in interest income on loans of $15.4 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The $11.8 million decrease in interest expense on deposit accounts was due to rate declines over the year. As a result, the average cost of interest-bearing deposits decreased 69 bps to 3.74% for the three months ended March 31, 2025 from 4.43% for the three months ended March 31, 2024. The average costs of total deposits, including noninterest-bearing deposits, for the three months ended March 31, 2025 decreased 51 bps to 2.91% compared to 3.42% for the three months ended March 31, 2024.

The following table presents, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest–bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as non-accrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the three months ended March 31, 2025 and March 31, 2024, interest income not recognized on non-accrual loans was $985 thousand and $781 thousand, respectively. Any non-accrual loans have been included in the table as loans carrying a zero yield.


	For the Three Months Ended March 31,
	2025						2024
			Interest						Interest
	Average		Earned/		Average		Average		Earned/		Average
	Outstanding		Interest		Yield/		Outstanding		Interest		Yield/
	Balance		Paid		Rate		Balance		Paid		Rate
	(Dollars in thousands)
Assets
Interest-earning assets:
Loans(1)	$	8,886,905	$	140,329	6.40	%	$	9,283,815	$	157,585	6.83	%
LHI, MW	426,724		6,176		5.87		279,557		4,357		6.27
Debt securities	1,467,220		17,106		4.73		1,294,994		13,695		4.25
Interest-bearing deposits in other banks	827,751		9,244		4.53		584,593		8,050		5.54
Equity securities and other investments	70,696		870		4.99		76,269		900		4.75
Total interest-earning assets	11,679,296		173,725		6.03		11,519,228		184,587		6.44
ACL	(111,563)						(112,229)
Noninterest-earning assets	938,401						929,043
Total assets	$	12,506,134					$	12,336,042

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	5,449,091	$	45,165	3.36	%	$	4,639,445	$	46,784	4.06	%
Certificates and other time deposits	2,726,309		30,268		4.50		3,283,735		40,492		4.96
Advances from FHLB	2,333		27		4.69		100,989		1,391		5.54
Subordinated debentures and subordinated notes	191,638		2,824		5.98		229,881		3,114		5.45
Total interest-bearing liabilities	8,369,371		78,284		3.79		8,254,050		91,781		4.47

Noninterest-bearing liabilities:
Noninterest-bearing deposits	2,345,586						2,355,315
Other liabilities	170,389						192,809
Total liabilities	10,885,346						10,802,174
Stockholders’ equity	1,620,788						1,533,868
Total liabilities and stockholders’ equity	$	12,506,134					$	12,336,042

Net interest rate spread(2)					2.24	%					1.97	%
Net interest income			$	95,441					$	92,806
Net interest margin(3)					3.31	%					3.24	%

(1) Includes average outstanding balances of LHFS of $66.3 million and $53.9 million for the three months ended March 31, 2025 and March 31, 2024, respectively, and average balances of LHI, excluding MW.

(2) Net interest rate spread is equal to 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.


	For the Three Months Ended
	March 31, 2025 vs March 31, 2024
	Increase (Decrease)
	Due to Change in
	Volume		Rate		Total
	(In thousands)
Interest-earning assets:
Loans	$	(6,681)	$	(10,575)	$	(17,256)
LHI, MW	2,275		(456)		1,819
Debt securities	1,806		1,605		3,411
Interest-bearing deposits in other banks	3,321		(2,127)		1,194
Equity securities and other investments	(65)		35		(30)
Total increase (decrease) in interest income	656		(11,518)		(10,862)
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	8,097		(9,716)		(1,619)
Certificates and other time deposits	(6,817)		(3,407)		(10,224)
Advances from FHLB and other	(1,348)		(16)		(1,364)
Subordinated debentures and subordinated notes	(514)		224		(290)
Total decrease in interest expense	(582)		(12,915)		(13,497)
Increase in net interest income	$	1,238	$	1,397	$	2,635

Provision for Credit Losses

Our provision for credit losses is a charge to income in order to bring our ACL to a level deemed appropriate by management. For a description of the factors taken into account by management in determining the ACL see “Financial Condition—ACL on LHI”. The provision for credit loan losses on loans was $4.0 million for the three months ended March 31, 2025, compared to a $7.5 million provision for credit loan losses for the three months ended March 31, 2024, a decrease of $3.5 million. The decrease in the recorded provision for credit losses on loans for the three months ended March 31, 2025 was primarily attributable to changes in economic factors, qualitative factors and specific reserves on loans that do not share similar risk characteristics. For the three months ended March 31, 2025, we also recorded a $1.3 million provision for credit losses for unfunded commitments compared to a $1.5 million benefit for unfunded commitments for three months ended March 31, 2024.

Noninterest Income

The following table presents, for the periods indicated, the major categories of noninterest income:


	Three Months Ended
	March 31,				Increase (Decrease)
(In thousands)	2025		2024		$ change		% change
Noninterest income:
Service charges and fees on deposit accounts	$	5,611	$	4,896	$	715	14.6%
Loan fees	2,495		2,510		(15)		(0.6)
Loss on sales of debt securities	—		(6,304)		6,304		(100.0)
Government guaranteed loan income, net	3,301		2,614		687		26.3

Customer swap income	700		408		292		71.6
Other income	2,182		2,538		(356)		(14.0)
Total noninterest income	$	14,289	$	6,662	$	7,627	114.5%

Noninterest income for the three months ended March 31, 2025 increased $7.6 million, or 114.5%, to $14.3 million compared to noninterest income of $6.7 million for the three months ended March 31, 2024. The primary drivers of the increase were as follows:

Service charges and fees on deposit accounts. The $715 thousand, or 14.6%, increase in service charges and fees on deposit accounts is primarily due to higher account analysis charges for the three months ended March 31, 2025 compared to the same period in the prior year.

Loss on sales of debt securities. The increase during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was due to a $6.3 million loss on sales of debt securities recognized during the three months ended March 31, 2024 with no corresponding loss recorded in the three months ended March 31, 2025.

Government guaranteed loan income, net. Government guaranteed loan income, net, includes income related to the sales of SBA and USDA loans. The increase in government guaranteed loan income, net, of $687 thousand, or 26.3%, during the three months ended March 31, 2025 was primarily due to a $3.0 million increase on gain on sales of government guaranteed loans offset by net downward valuation adjustments totaling $2.3 million on the HFS government guaranteed loan portfolios compared to the three months ended March 31, 2024.

Noninterest Expense

The following table presents, for the periods indicated, the major categories of noninterest expense:


	Three Months Ended
	March 31,				Increase (Decrease)
(In thousands)	2025		2024		$ change		% change
Noninterest expense
Salaries and employee benefits	$	36,624	$	33,365	$	3,259	9.8%
Occupancy and equipment	4,650		4,677		(27)		(0.6)
Professional and regulatory fees	4,931		6,053		(1,122)		(18.5)
Data processing and software expense	5,403		4,856		547		11.3
Marketing	2,032		1,546		486		31.4
Amortization of intangibles	2,438		2,438		—		—
Telephone and communications	330		261		69		26.4

Other	10,426		8,920		1,506		16.9
Total noninterest expense	$	66,834	$	62,116	$	4,718	7.6%

Noninterest expense for the three months ended March 31, 2025 increased $4.7 million, or 7.6%, to $66.8 million compared to noninterest expense of $62.1 million for the three months ended March 31, 2024. The most significant components of the increase were as follows:

Salaries and employee benefits. Salaries and employee benefits include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. These expenses are impacted by the amount of direct loan origination costs, which are required to be deferred in accordance with ASC 310-20. Salaries and employee benefits increased $3.3 million, or 9.8%, during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was primarily attributable to a $1.4 million increase in salaries expense and a $2.7 million increase in incentive accruals, offset by an increase of $1.4 million in contra origination costs.

Professional and regulatory fees. This category includes legal, professional, audit, regulatory, and FDIC assessment fees. Professional and regulatory fees decreased $1.1 million, or 18.5%, compared to the three months ended March 31, 2024. The decrease is primarily due to a decrease in FDIC assessment fees of $947 thousand for the year over year period.

Data processing and software expense. This category of expenses includes expense related to data processing and software expenses. Data processing and software costs increased $547 thousand, or 11.3%, compared to the three months ended March 31, 2024. The increase is primarily due to increases of $295 thousand in data processing expenses and $252 thousand in software expense.

Other noninterest expense. This category includes loan operations and collections, supplies and printing, automatic teller and online expenses and other miscellaneous expenses. Other noninterest expense increased $1.5 million, or 16.9%. This increase was primarily due to an increase of $752 thousand in OREO expenses during the three months ended March 31, 2025 as compared to the same period in 2024. The remaining changes were nominal amongst individual other noninterest expense accounts.

Income Tax Expense

Income tax expense is a function of our pre-tax income, tax-exempt income and other nondeductible expenses. Deferred tax assets and liabilities reflect current statutory income tax rates in effect for the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or statutory tax rates are enacted, deferred tax assets and liabilities are adjusted through the provision of income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

For the three months ended March 31, 2025, income tax expense totaled $8.5 million, an increase of $1.3 million, or 17.8% , compared to an income tax expense of $7.2 million for the three months ended March 31, 2024. For the three months ended March 31, 2025, we had an effective tax rate of 22.7%. The Company had a net discrete tax expense of $202 thousand associated with the recognition of an excess tax expense realized on share-based payment awards during the three months ended March 31, 2025, offset by a $98 thousand change in valuation allowance during the period. Excluding these discrete tax items, the Company had an effective tax rate of 22.4% for the three months ended March 31, 2025.

For the three months ended March 31, 2024, we had an effective tax rate of 23.1% which includes a discrete tax expense of $384 thousand associated with the recognition of excess tax expense realized on share-based payment awards. Excluding this discrete tax item, the Company had an effective tax rate of 21.8%.

Financial Condition

Our total assets decreased $162.3 million, or 1.3%, from $12.77 billion as of December 31, 2024 to $12.61 billion as of March 31, 2025. The slight decrease was primarily due to declines in the Company’s LHFS and LHI portfolios due to net payoffs during the period.

Loan Portfolio

Our primary source of income is interest on loans to individuals, professionals, small to medium-sized businesses and commercial companies primarily located in the DFW metroplex and Houston metropolitan area. Our loan portfolio consists primarily of commercial loans and real estate loans secured by CRE properties located in our primary market areas. Our loan portfolio represents the highest yielding component of our interest-earning asset base.

As of March 31, 2025, total LHI, excluding ACL, was $9.41 billion, a decrease of $104.5 million, or 1.1%, compared to $9.51 billion as of December 31, 2024. In addition to these amounts, $69.2 million and $89.3 million in loans were classified as LHFS as of March 31, 2025 and December 31, 2024, respectively.

Total LHI as a percentage of deposits were 88.2% and 88.5% as of March 31, 2025 and December 31, 2024, respectively. Total LHI, excluding MW loans, as a percentage of deposits were 82.9% and 82.8% as of March 31, 2025 and December 31, 2024, respectively. Total LHI as a percentage of assets were 74.6% and 74.5% as of March 31, 2025 and December 31, 2024, respectively.

The following table summarizes our loan portfolio by type of loan as of the dates indicated:


	As of March 31,				As of December 31,
	2025				2024				Increase (Decrease)
	Amount		% of Total		Amount		% of Total		Amount		% Change Quarter over Quarter
	(Dollars in thousands)
Commercial	$	2,717,037	28.9	%	$	2,693,538	28.3	%	$	23,499	0.9	%
MW	571,775		6.1		605,411		6.4		(33,636)		(5.6)
Real estate:
OOCRE	795,808		8.5		780,003		8.2		15,805		2.0
NOOCRE	2,266,526		24.1		2,382,499		25.0		(115,973)		(4.9)
Construction and land	1,214,260		12.9		1,303,711		13.7		(89,451)		(6.9)
Farmland	31,339		0.3		31,690		0.3		(351)		(1.1)
1-4 family residential	1,021,293		10.8		957,341		10.1		63,952		6.7
Multifamily	782,412		8.3		750,218		7.9		32,194		4.3
Consumer	8,597		0.1		9,115		0.1		(518)		(5.7)
Total LHI, carried at amortized cost(1)	$	9,409,047	100.0	%	$	9,513,526	100.0	%	$	(104,479)	(1.1)	%

Total LHFS	$	69,236			$	89,309

(1) Total LHI, carried at amortized cost, excludes $8.6 million and $9.0 million of deferred loan fees, net, as of March 31, 2025 and December 31, 2024, respectively.

CRE Portfolio Composition

The majority of our CRE loan portfolio consists of multifamily residential, NOOCRE and construction and land loans. The table below details the composition of the multifamily residential, NOOCRE and construction and land loan portfolios by borrower type and geographic location.


	As of March 31,
	2025
Property Type	DFW		Houston		Secondary Texas(1)		Out of State		Total		% of Total Loans

Industrial	$	388,028	$	230,890	$	162,065	$	277,886	$	1,058,869	11.3	%
Multifamily	394,474		323,444		180,914		166,396		1,065,228		11.3
Office	316,335		119,899		12,695		30,819		479,748		5.1
Retail	192,942		161,647		106,217		109,433		570,239		6.1
Hotel	185,027		22,429		111,883		121,487		440,826		4.7
SFR	250,816		35,793		64,035		11,642		362,286		3.9
Other	95,439		61,491		76,662		52,410		286,002		3.0
Total CRE	$	1,823,061	$	955,593	$	714,471	$	770,073	$	4,263,198	45.3	%


	As of December 31,
	2024
Property Type	DFW		Houston		Secondary Texas(1)		Out of State		Total		% of Total Loans

Industrial	$	406,146	$	250,586	$	156,214	$	281,866	$	1,094,812	11.5	%
Multifamily	425,774		351,177		213,560		153,644		1,144,155		12.0
Office	318,638		116,090		32,737		32,632		500,097		5.3
Retail	173,747		172,690		110,141		157,681		614,259		6.5
Hotel	192,940		22,603		113,923		127,358		456,824		4.8
SFR	236,027		32,193		62,622		11,832		342,674		3.6
Other	91,500		61,942		75,142		55,023		283,607		3.0
Total CRE	$	1,844,772	$	1,007,281	$	764,339	$	820,036	$	4,436,428	46.6	%

(1)Includes loans made to markets in the state of Texas outside of DFW and Houston.

Out of State Concentration

The majority of the Company's loan portfolio consists of loans to businesses and individuals in the DFW metroplex and the Houston metropolitan area. The following table provides details on our out of state portfolio concentration:


	As of March 31,				As of December 31,
	2025				2024
Out of State Loan Portfolio	Amount		Percent of Total Loans		Amount		Percent of Total Loans
(Dollars in thousands)
CRE	$	770,073	8.2	%	$	820,036	8.6	%
Lender Finance	510,540		5.4		473,007		5.0
Commercial	420,898		4.5		408,914		4.3
MW	306,406		3.3		335,815		3.5
Mortgage Servicing Rights	278,028		3.0		311,119		3.3
1-4 Family Residential	285,220		3.0		246,547		2.6
USDA and SBA	162,166		1.7		183,672		1.9
Other	3,199		—		14,244		0.1
Total Out of State Loans	$	2,736,530	29.1	%	$	2,793,354	29.4	%

Nonperforming Assets

The following table presents information regarding nonperforming assets by category as of the dates indicated:


	As of March 31,			As of December 31,
	2025			2024
	(Dollars in thousands)
Nonperforming loans
Construction and land	$	6,373		$	6,373
1-4 family residential	1,393			1,562

OOCRE	8,853			8,887
NOOCRE	29,607			10,967


Commercial	23,110			24,680

Consumer	48			52
Accruing loans 90 or more days past due	3,249			1,914
Total nonperforming loans	72,633			54,435
OREO	24,268			24,737
Total nonperforming assets	$	96,901		$	79,172

Nonperforming assets to total assets	0.77		%	0.62		%
Nonperforming assets to total LHI and OREO	1.03		%	0.83		%
Nonperforming loans to total LHI	0.77		%	0.57		%

Potential Problem Loans

The following tables summarize our internal ratings of our loans as of the dates indicated.


	March 31, 2025
	Pass		Special Mention		Substandard		PCD1		Total
	(Dollars in thousands)
Real estate:
Construction and land	$	1,151,897	$	28,948	$	33,415	$	—	$	1,214,260
Farmland	31,339		—		—		—		31,339
1 - 4 family residential	1,015,158		2,874		2,235		1,026		1,021,293
Multi-family residential	781,856		556		—		—		782,412
OOCRE	740,118		13,958		32,655		9,077		795,808
NOOCRE	2,148,661		66,409		51,108		348		2,266,526
Commercial	2,560,494		48,908		107,355		280		2,717,037
MW	571,775		—		—		—		571,775
Consumer	8,470		71		50		6		8,597
Total	$	9,009,768	$	161,724	$	226,818	$	10,737	$	9,409,047


	December 31, 2024
	Pass		Special Mention		Substandard		PCD		Total
	(Dollars in thousands)
Real estate:
Construction and land	$	1,246,075	$	24,869	$	32,767	$	—	$	1,303,711
Farmland	31,690		—		—		—		31,690
1 - 4 family residential	951,069		2,766		2,462		1,044		957,341
Multi-family residential	749,660		—		558		—		750,218
OOCRE	735,886		12,867		21,884		9,366		780,003
NOOCRE	2,211,850		77,426		92,871		352		2,382,499
Commercial	2,594,686		35,371		63,178		303		2,693,538
MW	605,411		—		—		—		605,411
Consumer	8,975		74		58		8		9,115
Total	$	9,135,302	$	153,373	$	213,778	$	11,073	$	9,513,526

ACL on LHI

We maintain an ACL that represents management’s best estimate of the credit losses and risks inherent in the loan portfolio. In determining the ACL, we estimate losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably determined. The balance of the ACL is based on internally assigned risk classifications of loans, historical loan loss rates, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions on certain historical loan loss rates.

The following table presents, as of and for the periods indicated, an analysis of the ACL and other related data:


	March 31, 2025						December 31, 2024
	Allocated Allowance		% of Loan Portfolio		ACL to Loans			Allocated Allowance		% of Loan Portfolio		ACL to Loans

Construction and land	$	19,419	12.9	%	1.60	%		$	15,457	13.7	%	1.19	%
Farmland	100		0.3		0.32			97		0.3		0.31
1 - 4 family residential	16,823		10.8		1.65			15,639		10.1		1.63
Multi-family residential	4,954		8.3		0.63			4,849		7.9		0.65
OOCRE	17,791		8.5		2.24			17,546		8.2		2.25
NOOCRE	35,491		24.1		1.57			39,968		25.0		1.68
Commercial	16,728		28.9		0.62			17,654		28.3		0.66
MW	371		6.1		0.06			321		6.4		0.05
Consumer	96		0.1		1.12			214		0.1		2.35
Total	$	111,773	100.0	%	1.19	%		$	111,745	100.0	%	1.18	%

The ACL increased $28 thousand to $111.8 million as of March 31, 2025 from $111.7 million at December 31, 2024.


(Dollars in thousands)	Net (Charge-offs) Recoveries		Average Loans		Annualized Net (Charge-off) Recoveries to Average Loans
Three Months Ended March 31, 2025
Construction and land	$	—	$	1,383,980	—	%
Farmland	—		30,914		—
1 - 4 family residential	21		968,194		0.01
Multi-family residential	—		724,573		—
OOCRE	—		786,374		—
NOOCRE	(3,090)		2,241,014		(0.56)
Commercial	(886)		2,743,535		(0.13)
MW	—		426,724		—
Consumer	(17)		8,321		(0.83)
Total	$	(3,972)	$	9,313,629	(0.17)	%

Three Months Ended March 31, 2024
Construction and land	$	—	$	1,714,865	—	%
Farmland	—		31,673		—
1 - 4 family residential	1		947,718		—
Multi-family residential	—		715,215		—
OOCRE	(120)		777,606		(0.06)
NOOCRE	(4,293)		2,298,375		(0.75)
Commercial	(850)		2,789,218		(0.12)
MW	—		279,557		—
Consumer	(22)		9,145		(0.97)
Total	$	(5,284)	$	9,563,372	(0.22)	%

Net charge-offs decreased $1.3 million, or 5 bps, to average loans annualized. Although we believe that we have established our ACL in accordance with GAAP and that the ACL was adequate to provide for known and inherent losses in the portfolio at all times shown above, future provisions will be subject to ongoing evaluations of the risks in our loan portfolio. If we experience economic declines or if asset quality deteriorates, material additional provisions could be required.

OBS Credit exposure

The ACL on OBS credit exposures totaled $7.4 million and $6.1 million at March 31, 2025 and December 31, 2024, respectively. The level of the ACL on OBS credit exposures depends upon the volume of outstanding commitments, underlying risk grades, the expected utilization of available funds and forecasted economic conditions impacting our loan portfolio.

Equity Securities

As of March 31, 2025, we held equity securities with a readily determinable fair value of $9.9 million compared to $9.8 million as of December 31, 2024. These equity securities primarily represent investments in a publicly traded CRA fund and are subject to market pricing volatility, with changes in fair value recorded in earnings.

The Company held equity securities without a readily determinable fair values and measured at cost of $10.5 million at March 31, 2025 compared to $12.3 million at December 31, 2024. The decrease from December 31, 2024 is primarily due to the sale of an equity security totaling approximately $2.5 million, which resulted in a gain on sale of $468 thousand. The Company measures equity securities that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

FHLB Stock and FRB Stock

As of March 31, 2025, we held FHLB stock and FRB stock of $48.0 million compared to $46.6 million as of December 31, 2024. The Bank is a member of its regional FRB and of the FHLB system. FHLB members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. Both FRB and FHLB stock are carried at cost, restricted for sale, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

Debt Securities

We use our debt securities portfolio to provide a source of liquidity, provide an appropriate return on funds invested, manage interest rate risk, meet collateral requirements and meet regulatory capital requirements. As of March 31, 2025, the carrying amount of debt securities totaled $1.46 billion, a decrease of $15.4 million, or 1.0%, compared to $1.48 billion as of December 31, 2024. Debt securities represented 11.6% of total assets as of March 31, 2025 and December 31, 2024.

All of our MBS and CMOs are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored entities. We do not hold any Fannie Mae or Freddie Mac preferred stock, corporate equity, collateralized debt obligations, structured investment vehicles, private label CMOs, subprime, Alt-A, or second lien elements in our investment portfolio. As of March 31, 2025, our investment portfolio did not contain any securities that are directly backed by subprime or Alt-A mortgages.

Management evaluates AFS debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. The Company has 128 AFS debt securities that were in an unrealized loss position totaling $62.3 million as of March 31, 2025. The Company evaluated all debt securities and no ACL on debt securities was recognized in the Company’s consolidated balance sheets as of March 31, 2025. The Company recorded no ACL for its held to maturity debt securities as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025 and December 31, 2024, we did not own securities of any one issuer other than U.S. government agency securities for which aggregate cost exceeded 10.0% of our stockholders’ equity as of such respective dates

Deposits

Total deposits as of March 31, 2025 were $10.67 billion, a decrease of $87.5 million, or 0.8%, compared to $10.75 billion as of December 31, 2024. The decrease from December 31, 2024 was primarily the result of decreases of $279.6 million in certificates and other time deposits and $54.4 million in correspondent money market deposits, partially offset by increases of $127.2 million in noninterest-bearing deposits and $119.3 million in interest-bearing transaction and savings accounts.


	March 31, 2025
	Ending Balance		% of Total		Average Outstanding Balance
Noninterest-bearing	$	2,318,645	21.7	%	$	2,345,586
Interest-bearing transaction	863,462		8.1		807,804
Money market	3,730,446		35.0		3,646,604
Savings	586,587		5.4		522,615
Certificates and other time deposits > $250k	954,702		9.0		1,001,812
Certificates and other time deposits < $250k	1,724,519		16.2		1,724,497
Correspondent money market accounts	486,762		4.6		472,068
Total deposits	$	10,665,123	100.0	%	$	10,520,986



	December 31, 2024
	Ending Balance		% of Total		Average Outstanding Balance
Noninterest-bearing	$	2,191,457	20.4	%	$	2,400,809
Interest-bearing transaction	839,005		7.8		544,313
Money market	3,772,964		35.1		3,503,252
Savings	449,188		4.2		362,293
Certificates and other time deposits > $250k	1,056,639		9.8		1,103,026
Certificates and other time deposits < $250k	1,902,222		17.7		2,216,602
Correspondent money market accounts	541,117		5.0		591,301
Total deposits	$	10,752,592	100.0	%	$	10,721,596

Borrowings

We utilize short- and long-term borrowings to supplement deposits to fund our lending and investment activities. We had no short-term borrowings as March 31, 2025 or December 31, 2024.

Junior subordinated debentures and subordinated notes

Subordinated debentures and subordinated notes as of March 31, 2025 and December 31, 2024 were as follows:


	March 31, 2025		December 31, 2024



Subordinated notes, net of debt issuance costs	$	124,725	$	199,607



Subordinated debentures, net of discount	31,184		31,129

Total subordinated notes and debentures	$	155,909	$	230,736

Total subordinated notes and subordinated debentures decreased $74.8 million, or 32.4%, due to the redemption of $75.0 million of the Company’s 4.75% fixed-to-floating subordinated notes during the three months ended March 31, 2025.

Refer to Note 13 “Subordinated Debentures and Subordinated Notes” in our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the details of our junior subordinated debentures and subordinated notes.

Liquidity and Capital Resources

Liquidity

Liquidity management involves our ability to raise funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events. For the three months ended March 31, 2025 and the year ended December 31, 2024, our liquidity needs were primarily met by core deposits, wholesale borrowings and security and loan amortization and maturities. Use of brokered deposits, purchased funds from correspondent banks and overnight advances from the FHLB and the FRB are available and have been utilized to take advantage of the cost of these funding sources.

FHLB

The FHLB allows us to borrow on a blanket floating lien status collateralized by certain securities and loans. As of March 31, 2025 and December 31, 2024, total available borrowing capacity of $2.48 billion and $2.36 billion, respectively, was available under this arrangement with no outstanding balance as of March 31, 2025 and December 31, 2024. The FHLB has also issued standby letters of credit to the Company for $932.3 million and $1.06 billion as of March 31, 2025 and December 31, 2024, respectively.

FRB

The FRB has an available borrower in custody arrangement, which allows us to borrow on a collateralized basis. Certain loans and securities are pledged under this arrangement. We maintain this borrowing arrangement to meet liquidity needs pursuant to our contingency funding plan. The following table outlines the FRB availability:


	Three Months Ended
	March 31,		December 31,
	2025		2024
FRB loans pledged as collateral at period end	$	2,359,928	$	2,165,451
FRB securities pledged as collateral at period end	728,243		745,648

Total FRB availability	$	3,088,171	$	2,911,099

In addition, we maintained five lines of credit with commercial banks that provide for extensions of credit with an availability to borrow up to an aggregate of $150.0 million as of March 31, 2025 and December 31, 2024. There were no advances under these lines of credit outstanding as of March 31, 2025 and December 31, 2024.

The following table illustrates, during the periods presented, the mix of our funding sources and the average assets in which those funds are invested as a percentage of our average total assets for the period indicated. Average assets totaled $12.51 billion for the three months ended March 31, 2025 and $12.63 billion for the year ended December 31, 2024.


	For the		For the
	Three Months Ended		Year Ended
	March 31, 2025		December 31, 2024
Sources of Funds:
Deposits:
Noninterest-bearing	18.8	%	19.0	%
Interest-bearing	43.5		37.4
Certificates and other time deposits	21.8		27.5
Advances from FHLB	—		0.4
Other borrowings	1.5		1.8
Other liabilities	1.4		1.5
Stockholders’ equity	13.0		12.4
Total	100.0	%	100.0	%
Uses of Funds:
Loans	73.6	%	75.2	%
Debt Securities	11.7		10.9
Interest-bearing deposits in other banks	6.6		0.6
Other noninterest-earning assets	8.1		13.3
Total	100.0	%	100.0	%
Average noninterest-bearing deposits to average deposits	22.3	%	22.6	%

Average loans, excluding MW, to average deposits	84.5	%	86.8	%

Our primary source of funds is deposits and our primary use of funds is loans. We do not expect a change in the primary source or use of our funds in the foreseeable future and believe that funds provided by such means will be sufficient to satisfy our anticipated cash requirements for the next twelve months and foreseeable future. Our average LHI decreased 3.1% for the three months ended March 31, 2025, compared to the year ended December 31, 2024.

As of March 31, 2025, we had $3.48 billion in outstanding commitments to extend credit, $671.2 million in unconditionally cancellable MW commitments and $112.1 million in commitments associated with outstanding standby and commercial letters of credit. As of December 31, 2024, we had $3.12 billion in outstanding commitments to extend credit, $562.6 million in MW commitments and $111.9 million in commitments associated with outstanding standby and commercial

letters of credit. Since commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements.

As of March 31, 2025, we had cash and cash equivalents of $849.8 million compared to $855.2 million as of December 31, 2024.

Current Ratings from Rating Agency

The ability of the Company to raise unsecured funding at competitive rates is impacted by rating agencies' views of the credit quality, liquidity, capital, earnings and other relevant factors related to the Company. During 2025, the ratings were reaffirmed by Kroll Bond Rating Agency and assigned the following ratings to long-term senior unsecured obligations of the Company, as well as long-term deposits at the Bank. A security rating is not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating.


	Long-Term Deposit and Senior Unsecured Debt Rating	Subordinated Debt Rating	Short-Term Deposit and Debt Rating1
Kroll Bond Rating Agency	BBB+	BBB	K2

1 For the subsidiary, Veritex Community Bank.

Share Repurchases

On March 28, 2024, the Board authorized a stock buyback program (the "Stock Buyback Program") pursuant to which the Company could, from time to time, purchase up to $50,000 of its outstanding common stock in the aggregate. On March 25, 2025, the Board authorized the extension of the Stock Buyback Program through March 31, 2026. The Stock Buyback Program may be suspended, terminated, amended or modified by the Board at any time without prior notice at the Board’s discretion. The shares may be repurchased in the open market or in privately negotiated transactions from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations of the SEC. The Stock Buyback Program does not obligate the Company to purchase any share and the program may be terminated or amended by the Board at any time prior to its expiration.

Shares repurchased through the periods indicated are as follows:


	Three Months Ended March 31,
	2025		2024
Numbers of shares repurchased	377,346		—
Weighted average price per share	$	25.22	$	—

Capital Resources

Total stockholders’ equity increased to $1.63 billion as of March 31, 2025 compared to $1.60 billion as of December 31, 2024, an increase of $32.4 million, or 2.0%. The increase from December 31, 2024 to March 31, 2025 was primarily the result of $29.1 million of net income recognized, $22.9 million increase in AOCI and $2.7 million in stock-based compensation. This increase was partially offset by $10.9 million in dividends paid, $9.5 million in stock buybacks and $1.9 million of RSUs vesting during the three months ended March 31, 2025.

Capital management consists of providing equity to support our current and future operations. Our regulators view capital levels as important indicators of an institution’s financial soundness. As a general matter, FDIC-insured depository institutions and their holding companies are required to maintain minimum capital relative to the amount and types of assets they hold. We are subject to regulatory capital requirements at the bank holding company and bank levels. See Note 13 – “Capital Requirements and Restrictions on Retained Earnings” in the notes to our consolidated financial statements for additional discussion regarding the regulatory capital requirements applicable to us and the Bank. As of March 31, 2025 and December 31, 2024, we and the Bank were in compliance with all applicable regulatory capital requirements, and the Bank was classified as “well capitalized” for purposes of the PCA regulations. As we employ our capital and continue to grow our operations, our regulatory capital levels may decrease depending on our level of earnings. However, we expect to monitor and control our growth in order to remain in compliance with all regulatory capital standards applicable to us.

Contractual Obligations

In the ordinary course of the Company’s operations, we have entered into contractual obligations and have made other commitments to make future payments. Other than normal changes in the ordinary course of business and changes discussed within “Financial Condition—Borrowings,” there have been no significant changes in the types of contractual obligations or amounts due as of March 31, 2025 since December 31, 2024 as reported in our Annual Report on Form 10-K for the year ended December 31, 2024.

Critical Accounting Policies

Our accounting policies are fundamental to understanding our management’s discussion and analysis of our results of operations and financial condition. We have identified certain significant accounting policies which involve a higher degree of judgment and complexity in making certain estimates and assumptions that affect amounts reported in our consolidated financial statements. The current significant accounting policies which we believe to be the most critical in preparing our consolidated financial statements relate to ACL and goodwill. Since December 31, 2024, there have been no changes in critical accounting policies as described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our Form 10-K for the year ended December 31, 2024.

Cautionary Notice Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 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 date of our quarterly cash dividend, impact of certain changes in our accounting policies, standards and interpretations, any turmoil in the banking industry, responsive measures to mitigate and manage it and related supervisory and regulatory actions and costs and our 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,” “seeks,” “projects,” “estimates,” “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. You should understand that the following important factors could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements:

•risks related to the concentration of our business in Texas, and specifically within the DFW metroplex and the Houston metropolitan area, including risks associated with any downturn in the real estate sector and risks associated with a decline in the values of single family homes in the DFW metroplex and the Houston metropolitan area;

•uncertain market conditions and economic trends nationally, regionally and particularly in the DFW metroplex and Texas;

•the effects of regional or national civil unrest;

•the effects of war or other conflicts, including, but not limited to, the current conflicts between Russia and Ukraine and Israel and Hamas, acts of terrorism, cyber attacks or other catastrophic events, including natural disasters such as storms, droughts, fires, tornadoes, hurricanes and flooding, that may affect general economic conditions;

•changes in market interest rates that affect the pricing of our loans and deposits and our net interest income;

•risks related to our strategic focus on lending to small to medium-sized businesses;

•the sufficiency of the assumptions and estimates we make in establishing reserves for potential loan losses;

•our ability to implement our growth strategy, including identifying and consummating suitable acquisitions;

•our ability to recruit and retain successful bankers that meet our expectations in terms of customer relationships and profitability;

•changes in our accounting policies, standards and interpretations;

•our ability to retain executive officers and key employees and their customer and community relationships;

•risks associated with our CRE and construction loan portfolios, including the risks inherent in the valuation of the collateral securing such loans;

•risks associated with our commercial loan portfolio, including the risk of deterioration in value of the general business assets that generally secure such loans;

•our level of nonperforming assets and the costs associated with resolving problem loans, if any, and complying with government-imposed foreclosure moratoriums;

•potential changes in the prices, values and sales volumes of commercial and residential real estate securing our real estate loans;

•risks related to the significant amount of credit that we have extended to a limited number of borrowers and in a limited geographic area;

•changes in the financial performance and/or condition of our borrowers;

•our ability to maintain adequate liquidity and to raise necessary capital to fund our acquisition strategy and operations or to meet increased minimum regulatory capital levels;

•potential fluctuations in the market value and liquidity of our debt securities;

•the effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services;

•our ability to maintain an effective system of disclosure controls and procedures and internal control over financial reporting;

•risks associated with fraudulent and negligent acts by our customers, employees or vendors;

•our ability to keep pace with technological change or difficulties when implementing new technologies;

•risks associated with difficulties and/or terminations with third-party service providers and the services they provide;

•risks associated with unauthorized access, cyber-crime and other threats to data security;

•potential impairment on the goodwill we have recorded or may record in connection with business acquisitions;

•our ability to comply with various governmental and regulatory requirements applicable to financial institutions;

•the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators, and economic stimulus programs;

•changes in consumer spending, borrowing and saving habits;

•the potential impact of climate change;

•the impact of pandemics, epidemics or any other health-related crisis;

•the effects of and changes in governmental monetary and fiscal policies and laws, including the policies of the Federal Reserve;

•our ability to comply with supervisory actions by federal and state banking agencies;

•changes in the scope and cost of FDIC, insurance and other coverage; and

•systemic risks associated with the soundness of other financial institutions.

Other factors not identified above, including those described under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2024, may also cause actual results to differ materially from those described in our forward-looking

statements. Most of these factors are difficult to anticipate and are generally beyond our control. Any forward-looking statement speaks only as of the date on which it is made. You should consider these factors in connection with considering any forward-looking statements that may be made by us. We undertake no obligation, and specifically decline any obligation, to publicly release any supplement, update or revision to any forward-looking statements, to report events or to report the occurrence of unanticipated events, whether as a result of new information, future developments or otherwise, unless we are required to do so by law.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a financial institution, our primary component of market risk is interest rate volatility. Our asset, liability and funds management policy provides management with the guidelines for effective funds management, and we have established a measurement system for monitoring our net interest rate sensitivity position. We manage our sensitivity position within our established guidelines.

Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the market value of all interest-earning assets and interest-bearing liabilities, other than those which have a short term to maturity. Interest rate risk is the potential of economic losses due to future interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair market values. The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing income.

We manage our exposure to interest rates by structuring our balance sheet in the ordinary course of business. With exception of our cash flow hedges designated as a hedging instrument, we do not enter into instruments such as leveraged derivatives, interest rate swaps, financial options, financial future contracts or forward delivery contracts for the purpose of reducing interest rate risk. We enter into interest rate swaps, caps and collars as an accommodation to our customers in connection with our interest rate swap program. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets.

Our exposure to interest rate risk is managed by the Asset-Liability Committee of the Bank in accordance with policies approved by its board of directors. The committee formulates strategies based on appropriate levels of interest rate risk. In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors. The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings. Additionally, the committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer and commercial deposit activity. Management employs methodologies to manage interest rate risk, which include an analysis of relationships between interest-earning assets and interest-bearing liabilities, and an interest rate shock simulation model.

We use an interest rate risk simulation model and shock analysis to test the interest rate sensitivity of net interest income and the balance sheet, respectively. Contractual maturities and repricing opportunities of loans are incorporated in the model as are prepayment assumptions, maturity data and call options within the investment portfolio.

We utilize static balance sheet rate shocks to estimate the potential impact on net interest income of changes in interest

rates under various rate scenarios. This analysis estimates a percentage of change in the metric from the stable rate base scenario versus alternative scenarios of rising and falling market interest rates by instantaneously shocking a static balance sheet. Internal policy regarding internal rate risk simulations currently specifies that for instantaneous parallel shifts of the yield curve, estimated net income at risk for the subsequent one-year period should not decline by more than 5.0% for a 100 bps shift, 12.5% for a 200 bps shift, and 15.0% for a 300 bps shift.

The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of the dates indicated:


	As of March 31, 2025				As of December 31, 2024
	Percent Change		Percent Change		Percent Change		Percent Change
Change in Interest	in Net Interest		in Fair Value		in Net Interest		in Fair Value
Rates (BPS)	Income		of Equity		Income		of Equity
+ 300	8.11	%	(11.81)	%	7.60	%	(9.24)	%
+ 200	5.75		(7.18)		5.51		(5.14)
+ 100	3.34		(3.13)		3.17		(1.99)
Base	—		—		—		—
−100	(2.47)		0.55		(2.55)		0.43
−200	(4.81)		(2.40)		(10.01)		(6.48)

The results are primarily due to behavior of demand, money market and savings deposits during such rate fluctuations. We have found that, historically, interest rates on these deposits change more slowly than changes in the discount and Federal Funds Rates. This assumption is incorporated into the simulation model and is generally not fully reflected in a gap analysis. The assumptions incorporated into the model are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various strategies.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures — As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of its management, including its CEO and CFO, of the effectiveness of the design and operation of its disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply judgment in evaluating its controls and procedures. Based on this evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of the end of the period covered by this report.

There were no significant changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are from time to time subject to claims and litigation arising in the ordinary course of business. These claims and litigation may include, among other things, allegations of violation of banking and other applicable regulations, competition law, labor laws and consumer protection laws, as well as claims or litigation relating to intellectual property, securities, breach of contract and tort. We intend to defend ourselves vigorously against any pending or future claims and litigation.

At this time, in the opinion of management, the likelihood is remote that the impact of such proceedings, either individually or in the aggregate, would have a material adverse effect on our consolidated results of operations, financial condition or cash flows. However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which they are resolved. In addition, regardless of their merits or their ultimate outcomes, such matters are costly, divert management’s attention and may materially adversely affect our reputation, even if resolved in our favor.

Item 1A. Risk Factors

In evaluating an investment in our common stock, investors should consider carefully, among other things, the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, as well as the information contained in this Quarterly Report on Form 10-Q and our other reports and registration statements filed with the SEC.

There has been no material change in the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On March 26, 2024, the Board authorized a stock buyback program (the “Stock Buyback Program”) pursuant to which the Company is authorized to purchase up to $50.0 million shares of the Company’s outstanding common stock. On March 25, 2025, the Board authorized the extension of the Stock Buyback Program through March 31, 2026. The Stock Buyback Program may be suspended, terminated, amended or modified by the Board at any time without prior notice at the Board’s discretion. Repurchases under the Stock Buyback Program may be made, from time to time, in amounts and at prices the Company deems appropriate. The Stock Buyback Program does not obligate the Company to purchase any shares of its common stock. Repurchases by the Company under the Stock Buyback Program will be subject to general market and economic conditions, applicable legal and regulatory requirements and other considerations. During the three months ended March 31, 2025, the Company repurchased shares of its common stock in the following amounts:



Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the program (in thousands)

January 1 - January 31, 2025	—	—		—	$	46,463
February 1 - February 28, 2025	177,346	25.98		4,608	41,855
March 1 - March 31, 2025	200,000	24.54		4,908	36,947
	377,346	$	25.22	9,516	$	36,947

Item 6. Exhibits


Exhibit Number						Description of Exhibit
3.1						Restated Certificate of Formation (with Amendments) of Veritex Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (Registration No. 333-198484) filed September 22, 2014).
3.2						Third Amended and Restated Bylaws of Veritex Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed July 25, 2017).
31.1*						Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**						Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*						The following materials from Veritex Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL (Inline eXtensible Business Reporting Language): (i) Cover Page, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Income, (iv) Consolidated Statements of Comprehensive Income, (v) Consolidated Statements of Changes in Stockholders’ Equity, (vi) Consolidated Statements of Cash Flows, and (vii) Notes to Consolidated Financial Statements.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

______________________________

* Filed with this Quarterly Report on Form 10-Q

** Furnished with this Quarterly Report on Form 10-Q

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure, other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



						VERITEX HOLDINGS, INC.
						(Registrant)





Date: May 7, 2025						/s/ C. Malcolm Holland, III
						C. Malcolm Holland, III
						Chairman and Chief Executive Officer
						(Principal Executive Officer)




Date: May 7, 2025						/s/ Terry S. Earley
						Terry S. Earley
						Chief Financial Officer
						(Principal Financial and Accounting Officer)

Veritex Holdings - 10-Q quarterly report FY2025 Q1

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