Veritex Holdings, Inc.

Good morning and welcome to the Veritex holding fourth quarter and full year 2024 earnings conference call and webcast. All participants will be in a listen-only mode. Please note this event will be recorded. I will now turn the conference over to Will Alford with Veritex.

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

Thank you, Will. Good morning, everyone. Today we'll review our fourth quarter and full year 2024 results. For the fourth quarter, we reported net operating profit of $29.8 million, or 54 cents per share. Pre-tax, pre-provision earnings were 41 million, or 1.28%. Then decreased during the quarter, but we anticipate to increase it from here, which Terry will cover in detail later in the call. For the full year 2024, we made operating earnings of $119.4 million, or $2.17 per share, which was flat over 2023. As I've stated many times during 2024, we communicated our earnings would take a hit to transform our balance sheet. We feel very good about where our balance sheet currently stands and earnings will begin to increase from their current levels. We are laser-focused and committed to return on average asset levels in excess of 1% in 2025 and beyond. Although the vast majority of the balance sheet work is completed, there are still opportunities for us to be more efficient with our liabilities through repricing and positioning of our funding. You saw some of this in the fourth quarter as our balance sheet decreased approximately $300 million, running off some high-priced funding. We also saw a small decrease in our funded loans for the fourth quarter and year over year. We expect 2025 to be a positive loan growth year between low to mid single digits due to very high forecasted payoffs. The discipline loan focus and new client acquisition has my undivided attention as well as our bankers. When I say discipline, I'm speaking about our ability to continue to be deposit first focused with well-priced relationships that produce available funding and spreads that are creative and profitable. I'm now going to turn the call over to Curtis Anderson, our Chief Credit Officer, to give you an update on our credit picture. I want to add that Curtis and all his dedicated teams have done an incredible job in 2024 transforming our credit process, our credit priorities, and our credit surveillance. As a result of their work, criticized loans have declined 20% over the last 12 months, and including two large payoffs in the first two weeks of January, that percentage decline goes to 28%. The numbers speak for themselves, but the team's focus and execution has been, quite frankly, remarkable. More to do, but I'm super proud of the progress.