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    Mark Shutley • Keefe, Bruyette & Woods

    Mark Shutley's questions to Veritex Holdings Inc (VBTX) leadership

    Mark Shutley's questions to Veritex Holdings Inc (VBTX) leadership • Q4 2024

    Question

    Mark Shutley inquired about the dynamics causing the decline in noninterest-bearing deposits during the quarter and asked for an outlook on the government-guaranteed loan business for 2025.

    Answer

    Executive Will Holford explained the decline in noninterest-bearing deposits was due to seasonal fluctuations in mortgage escrow accounts and an intentional exit from an expensive ECR deposit relationship. He projected the noninterest-bearing mix would normalize to a 21% to 23% range. Regarding the government-guaranteed business, CFO Terry Earley stated they are 'pretty bullish,' citing a strong start to 2025, stable premiums, and the strongest pipelines they have ever had, particularly in the SBA space.

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    Mark Shutley's questions to Veritex Holdings Inc (VBTX) leadership • Q2 2024

    Question

    Mark Shutley followed up on margin guidance by asking about the outlook for loan yields before any rate cuts and questioned if the current quarterly expense level is a sustainable run rate for the rest of 2024.

    Answer

    CFO Terry Earley explained that with 75% of the loan portfolio tied to variable rates, yields will decline with Fed cuts, making the ability to lower deposit costs crucial. He affirmed that the current expense level is a 'good run rate,' but noted that investments in business banking and potential incentive payouts from the government-guaranteed business could affect the total. He emphasized the bank's challenges are revenue-related, not expense-related.

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