Veritex Holdings, Inc.

Good day and welcome to the Veritex Holdings Second Quarter 2021 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. Please note this event is being recorded. I'll now turn the conference over to Ms. Susan Cottle, Investor Relations Officer and Secretary to the Board of Veritex Holdings.

Thank you. Before we get started, I would like to remind you that this presentation may include forward-looking statements, and those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ. The company undertakes no obligation to publicly revise any forward-looking statement. At this time, if you're logged into our webcast, please refer to our slide presentation, including our safe harbor statement, beginning on slide two. For those of you joining us by phone, please note that the safe harbor statement and presentation are available on our website, veritexbank.com. All comments made during today's call are subject to that safe harbor statement. Some of the financial metrics discussed will be on a non-GAAP basis, which our management believes better reflects the underlying core operating performance of the business. Please see the reconciliation of all discussed non-GAAP measures in our filed 8K earnings release. Joining me today are Malcolm Holland, our Chairman and CEO, Terry Early, our Chief Financial Officer, and Clay Reby, our Chief Credit Officer. I will now turn the call over to Malcolm.

Good morning, everyone. My team and I are excited to discuss our second quarter earnings. We're back to business as usual. It feels like momentum is continuing to pick up. For the quarter, we announced operating earnings of $0.60 a share, or $30 million, while producing a pre-tax, pre-provision return of 1.66%. We also announced a dividend increase from $0.17 per share to $0.20 per share, an 18% increase. We have been communicating for several quarters the people investments we've been making over the last year. I think we're beginning to see some of the early results of those investments. For the quarter, we grew loans excluding PPP and mortgage warehouse 21 percent annualized, while for the year, we are at 14.5 percent annualized growth. We expect that for the year, we will remain in the 14 percent range due to our level of unfunded commitments early signs of increased CNI usage, and our pipeline strength. Our mid-July pipeline is up over 50% from the same date in mid-April, and it is at its highest funding forecast in the company's history. On page 7, bottom right, we're showing you that our lenders are incredibly productive with 26% of our top producers generating $47 million in average production for the quarter. It should also be noted that the new loan production for the quarter is made up of 545 loans with an average commitment of just under $2.5 million, proving out that all areas of the bank are participating in our growth initiative. Additionally, we provided a quick snapshot of our construction loans that will give you some indication of the underwriting and ultimate approval metrics of new credits that were booked during the quarter. Deposits continue their positive trend upward, growing 4.3% annualized length quarter, but more impressive is the growth in the non-interest bearing category. We now sit at non-interest-bearing deposits greater than 34% of total deposits. With this growth and deposit pricing focus, we continue to drive our deposit costs down from 31 bps to 23 bps quarter over quarter. Our asset quality continues with all trends in a positive direction. NPAs reduced for the third straight quarter to 0.86% of total assets. Past dues declined to their lowest point over the last five quarters. Our ACL decreased to 1.59, excluding mortgage warehouse and PPP, with no credit loss provision and net charge-offs of $5.4 million for the quarter. Terry and Clay will provide further details momentarily.