Veritex Holdings, Inc.

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

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 are 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.

Thank you, and good morning, everyone. I'm excited to announce our fourth quarter and full year 2021 earnings highlights. The fourth quarter was a very strong quarter that produced operating income of 84 cents per share, our strongest quarter in the company's history. That was up from 70 cents per share in the third quarter, or a 20% increase, while producing a pre-tax, pre-provision operating return of just shy of 2%. The quarter did have a reserve release of approximately $4.4 million, or seven cents. Terry will give you the financial details on our quarter in a moment. Both growth and credit quality continue to trend in a very positive direction. Loan growth, excluding mortgage warehouse and PVP, was $150 million for the quarter and $918 million for the year, or 9 percent and 16 percent, respectively. This growth is despite elevated loan payoff levels in Q4 of 646 million, exceeding the payoffs in the first two quarters of the year. I could not be prouder of our frontline lenders to deliver continued loan growth results like they have in 2021. Our focus on hiring and adding to our team during the pandemic, in addition to the continued market disruption, shows me that we made the correct call to invest in people during the pandemic. It should also be noted that the support teams have been incredibly consistent and efficient in this high volume credit delivery process, and we would not be where we are without them. As we look into 2022, we have strong conviction that we can continue to produce mid-teens annual loan growth. Much like our loan growth, deposit increases look much the same way. For the year, total deposits grew $851 million, or 13%. It should be noted that a majority of that growth, 49%, was in the non-interest-bearing category, which now represents 34% of total deposits. From a credit standpoint, positive credit metrics remain the trend. The most notable move was NPAs reducing by $24 million, bringing NPAs to total assets down from 0.51% to 5.51 from 0.77. It should also be mentioned that the year-over-year reduction in NPAs was over 50%. Charge-offs were just shy of $13 million as several loans reached final conclusion. All charge-offs were previously identified and provided for in previous periods. As mentioned, we reported our first credit loss reserve release of $4.4 million, which brought down our ACL to 1.15%. Our credit leaders and their respective teams had an outstanding year, assisting our growth initiatives while at the same time measurably improving our credit metrics in all categories. The fourth quarter also brought to us several new production officers, mainly in the community bank space. Additionally, we are still active in hiring new and experienced talent in the risk and operational areas. Growth is great on the front line, but you must keep up in the non-client facing areas to deliver credit in a sound and efficient manner. I'd also like to point out that we closed our North Avenue capital transaction in November and are very impressed with the pipeline that Ben and Joseph have created going into 2022, but more importantly, impressed by the overall business and its culture fit with Veritex. With that, I'll turn it over to Terry.