About Veritex Holdings

Veritex Holdings, Inc. operates as the bank holding company for Veritex Community Bank that provides commercial and retail lending and checking and savings deposit products, 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. The company's business is conducted through one segment, community banking, which generates the majority of its 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. The company's primary customers are small and medium-sized businesses, generally with annual revenues of under $30 million, and professionals. These businesses and professionals highly value the local decision-making and relationship-driven, quality service the company provides and its deep, long-term understanding of Texas community banking. Strategy The key elements of the company's strategy are to continued organic growth; pursue strategic acquisitions; and strengthen its community ties. Banking Services The company focuses on delivering a wide variety of relationship-driven commercial banking products and services tailored to meet the needs of small to medium-sized businesses and professionals. A general discussion of the range of commercial banking products and other services the company offers follows. Lending Activities: The company's loan portfolio primarily consists of CRE and general commercial loans, MW loans, residential real estate loans, construction and land loans, farmland loans and consumer loans. The company's underwriting philosophy seeks to balance its desire to make sound, high quality loans while recognizing that lending money involves a degree of business risk. Managing credit risk is a company-wide process. The company's strategy for credit risk management includes well-defined, centralized credit policies, uniform underwriting criteria by loan type and ongoing risk monitoring and review processes for all types of credit exposures. The company's processes emphasize early-stage review of loans, regular credit evaluations and management reviews of loans, which supplement the ongoing and proactive credit monitoring and loan servicing provided by its loan officers and lending support staff. The company's Executive Loan Committee and Credit Portfolio Management Committee provide company-wide credit oversight and periodically review all credit risk portfolios via internal loan reviews throughout the year to ensure that the risk identification processes are functioning properly and that its credit standards are followed. In addition, a third-party loan review is performed at least annually to identify problem assets and confirm the company's internal risk rating of loans. The company attempts to identify potential problem loans early in an effort to aggressively seek resolution of these situations before the loans become a loss, record any necessary charge-offs promptly and maintain adequate ACL levels for probable credit losses inherent in the loan portfolio. Deposits: Deposits are the company's principal source of funds for its interest-earning assets. A critical component of the company's success is the importance it places on its deposit services. The company's services include typical deposit functions of commercial banks, safe deposit facilities and commercial and personal banking services, in addition to its loan offerings. The company offers a variety of deposit products and services consistent with the goal of attracting a wide variety of customers, including high net worth individuals and small to medium-sized businesses. The company offers demand, savings, money market and time deposit accounts. The company actively pursues business checking accounts by offering competitive rates, telephone banking, online banking and other convenient services to its customers. The company also pursues commercial deposit and financial institution money market accounts that will benefit from the utilization of its treasury management services. Other Products and Services: The company offers banking products and services that are attractively priced and it easily understood by customers, with a focus on convenience and accessibility. The company offers an interest rate swap program, as well as a full suite of online banking solutions, including access to account balances, online transfers, online bill payment and electronic delivery of customer statements, as well as ATMs, and mobile and digital banking, mail and personal appointment. The company also offers debit cards, night depository, direct deposit, cashier's checks and letters of credit. The company offers a full array of commercial treasury management services designed to be competitive with banks of all sizes. Treasury management services include balance reporting (including current day and previous day activity), transfers between accounts, wire transfer initiation, automated clearinghouse origination and stop payments. Cash management deposit products and services consist of lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts and sweep accounts, including loan sweep. The company remains focused on its organic loan growth and deposit repricing strategy to expand net interest margin. In addition, the company focuses on limiting its interest rate exposure and expanding noninterest income though increased income from its derivative program and non-bank subsidiaries. The company's interest rate swap program has been developed as an accommodation to its customers who desire a fixed rate on loans over a certain size threshold with a defined repayment schedule. In such cases, the company enters into a derivative contract with its borrower using a standard International Swaps and Derivative Association agreement and confirmation, while simultaneously entering into a mirror derivative contract with a correspondent bank counterparty. The two derivatives are carried at market value with changes in value offsetting. 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. Investment Portfolio As of December 31, 2023, the company's investment portfolio included corporate bonds; municipal securities; mortgage-backed securities; collateralized mortgage obligations; asset-backed securities; and collateralized loan obligations. Market Area The company's current primary market includes the broader Dallas-Fort Worth metroplex and the Houston metropolitan area. As it continues to grow, the company may expand to other metropolitan banking markets in Texas. Regulation and Supervision The bank is a Texas-chartered banking association, the deposits of which are insured by the Deposit Insurance Fund (DIF) of the Federal Deposit Insurance Corporation (FDIC) up to applicable legal limits. The bank is a member of the Federal Reserve; therefore, the bank is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the Texas Department of Banking (TDB) and the Federal Reserve. The bank is subject to the FDIC's Prompt Corrective Action (PCA) regime. As a bank holding company, the company is subject to ongoing supervision, regulation, examination and enforcement by the Federal Reserve. As a bank holding company of a Texas state-chartered bank, the company is also subject to supervision, regulation, examination and enforcement by the TDB. The bank's deposits are insured by the DIF to the maximum extent permitted by the FDIC. The bank's privacy practices and the effectiveness of its systems to protect consumer privacy are one of the subjects covered in periodic compliance examinations conducted by the TDB and the Federal Reserve. The bank received an overall Community Reinvestment Act (CRA) rating of 'Satisfactory' as a large bank on its rating of recent the CRA examination as of April 2022. As insurer of the bank's deposits, the FDIC is authorized to conduct examinations of, and to require reporting by, the bank, and has back-up enforcement authority of the bank as well. The Bank Secrecy Act (BSA), the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or the USA PATRIOT Act of 2001, and regulations and policies implementing these statutes require the bank to maintain a risk-based Anti-Money Laundering (AML) program reasonably designed to prevent and detect money laundering and terrorist financing and to comply with the recordkeeping and reporting requirements of the BSA, including the requirement to report suspicious activities. History Veritex Holdings, Inc. was founded in 2009. The company was incorporated in 2009 as a Texas corporation.