Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Veritex Holdings, Inc. | a8kpiperjaffrayfinancialin.htm |
V E R I T E X
Piper Jaffray
Financial Institutions Conference
May 15-17, 2017
2
Safe Harbor Statement
ABOUT VERITEX HOLDINGS, INC.
Headquartered in Dallas, Texas, Veritex Holdings, Inc. (“VBTX”, “Veritex” or the “Company”) is a bank holding company that conducts banking
activities through its wholly-owned subsidiary, Veritex Community Bank, with locations throughout the Dallas metropolitan area. Veritex
Community Bank is a Texas state chartered bank regulated by the Texas Department of Banking and the Board of Governors of the Federal
Reserve System. For more information, visit www.veritexbank.com.
NO OFFER OR SOLICITATION
This communication does not constitute an offer to sell, a solicitation of an offer to sell, the solicitation or an offer to buy any securities or a
solicitation of any vote or approval. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by
means of a prospectus meeting the requirement of Section 10 of the Securities Act of 1933, as amended.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
In connection with the proposed merger of Veritex and Sovereign Bancshares, Inc. (“Sovereign”), Veritex filed on January 20, 2017 with the
Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 that includes a joint proxy statement of Veritex and
Sovereign and a prospectus of Veritex, and will file other relevant documents concerning the proposed transaction. WE URGE INVESTORS
AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THOSE DOCUMENTS, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND
ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT VERITEX, SOVEREIGN AND THE PROPOSED MERGER. The joint proxy statement/prospectus has
or will be sent to the shareholders of each institution seeking the required shareholder approvals. Investors and security holders may obtain
free copies of the registration statement on Form S-4 and the related joint proxy statement/prospectus, as well as other documents filed with
the SEC by Veritex through the web site maintained by the SEC at www.sec.gov. Documents filed with the SEC by Veritex will also be available
free of charge by directing a written request to Veritex Holdings, Inc., 8214 Westchester Drive, Suite 400, Dallas, Texas 75225 Attn: Investor
Relations. Veritex’s telephone number is (972) 349-6200.
NON-GAAP FINANCIAL MEASURES
Veritex reports its results in accordance with United States generally accepted accounting principles (“GAAP”). However, management
believes that certain non-GAAP performance measures used in managing the business may provide meaningful information about underlying
trends in its business. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Veritex’s reported results
prepared in accordance with GAAP.
PARTICIPANTS IN THE TRANSACTION
Veritex, Sovereign and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of
proxies from the respective shareholders of Veritex and Sovereign in connection with the proposed transaction. Certain information regarding
the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, are included in the
joint proxy statement/prospectus regarding the proposed transaction. Additional information about Veritex and its directors and officers may
be found in the definitive proxy statement of Veritex relating to its 2017 Annual Meeting of Stockholders filed with the SEC on April 10, 2017.
The definitive proxy statement can be obtained free of charge from the sources described above.
3
Forward Looking Statements
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release may contain certain forward-looking
statements within the meaning of the securities laws that are based on various facts and derived utilizing important assumptions, current
expectations, estimates and projections about Veritex and its subsidiaries. Forward-looking statements include information regarding
Veritex’s future financial performance, business and growth strategy, projected plans and objectives, and related transactions, integration of
the acquired businesses, ability to recognize anticipated operational efficiencies, and other projections based on macroeconomic and industry
trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material.
Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,”
“estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally
forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors
that could affect Veritex’s future results and cause actual results to differ materially from those expressed in the forward-looking statements
include, but are not limited to whether Veritex can: successfully implement its growth strategy, including identifying acquisition targets and
consummating suitable acquisitions; continue to sustain internal growth rate; provide competitive products and services that appeal to its
customers and target market; continue to have access to debt and equity capital markets; and achieve its performance goals. For discussion of
these and other risks that may cause actual results to differ from expectations, please refer to “Special Cautionary Notice Regarding Forward-
Looking Statements” and “Item 1A. Risk Factors” in Veritex’s Annual Report on Form 10-K filed with the SEC on March 10, 2017 and any
updates to those risk factors set forth in Veritex’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more
events related to these or other risks or uncertainties materialize, or if Veritex’s underlying assumptions prove to be incorrect, actual results
may differ materially from what Veritex anticipates. Accordingly, you should not place undue reliance on any such forward-looking
statements. Any forward-looking statement speaks only as of the date on which it is made, and Veritex does not undertake any obligation to
publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New
risks and uncertainties arise from time to time, and it is not possible for us to predict those events or how they may affect us. In addition,
Veritex cannot assess the impact of each factor on Veritex’s business or the extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or
implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement
should also be considered in connection with any subsequent written or oral forward-looking statements that Veritex or persons acting on
Veritex’s behalf may issue. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts
and may not reflect actual results.
4
Headquartered in Dallas, Texas
Established in 2010
Twelve locations within one of the fastest
growing metropolitan areas in the U.S.
Strong core deposit mix and commercial
lending focus
Significant organic growth profile
complemented by disciplined M&A
Franchise FootprintOverview
Veritex – “Truth in Texas Banking”
Financial Highlights
Source: SNL Financial and Company documents; financial data as of 03/31/17.
Note: ROAA LTM is calculated by dividing net income for the 12 months beginning April 1, 2016 through March 31, 2017 by average assets for this same period.
VBTX (11)
(Dollars in Millions, Except Per Share)
Total Assets $ 1,522
Net Income $ 3,098
Earnings Per Share $ 0.20
ROAA (LTM) 0.99%
NPAs/ Assets 0.19% VBTX (12)
5
First Quarter 2017 Highlights
Acquisitionsa
Strategic
Investments
Successful
Organic
Growth
Merger with Sovereign Bancorp on track for a second quarter closing
Expansion into Fort Worth, Austin, and Houston markets
Positive EPS and TBVPS accretion anticipated with realization of expense
savings and inclusive of all estimated one-time deal related charges
Addition of new lending teams expanded the scope and sophistication of the
C&I and CRE lending functions
Opened new branch in the attractive Turtle Creek area of Dallas, adding to our
network of relationship-driven banking center targeting private client and
small to medium-sized businesses.
1 Q 2017
Ending Balances
1 Q 2017
Annualized Growth
Assets $1.5 billion 32%
Loans $1.0 billion 12%
Deposits $1.2 billion 36%
6
Combined Texas Footprint
Announced Acquisition of Sovereign Bancshares
VBTX (11)
Sovereign (10)
D/FW Metroplex
VBTX (11)
Sovereign (7)
Source: SNL Financial and Company documents as of 12/31/16.
Note: Market share rank based on FDIC data as of 6/30/16. Combined figures for Veritex and Sovereign as of 12/31/16.
Combined Franchise
Offices: 21
Assets: $2.5 Billion
Loans: $1.9 Billion
Deposits: $2.0 Billion
Compelling transaction between two
established Dallas-based banks
Increases deposit market share rank to #17 in
D/FW metroplex
Addition of two Sovereign insiders to VBTX
board of directors
Financially attractive with double-digit EPS
accretion and limited TBVPS dilution
VBTX (12)
Sovereign (9)
VBTX (12)
Sovereign (6)
Successful Organic Growth and M&A Strategy
Source: SNL Financial and Company documents
Note: Combined Pending financials represent combined assets for Veritex and Sovereign as of 12/31/2016 7
$524,127
$664,971
$802,286
$1,408,350
$1,522,015
$2,485,535
$181,800
$220,100
$121,417
0.03%
0.31%
0.58%
0.73%
0.98%
1.06%
2010 2011 2012 2013 2014 2015 2016 2017 1Q Combined 2016
Total Assets at Year End Assets Acquired During the Year ROAA
$197,949
$437,820
$1,039,551
(Dollars in Thousands)
Pending
Grew $114
million or 32%
in 1Q 2017Completed $40
million Initial
Public Offering
and grew $137
million organically
Founded
Veritex
Holdings &
acquired $182
million asset
Professional
Bank
Acquired
$166
million
asset
Fidelity
Bank and
$54 million
asset Bank
of Las
Colinas
Grew $86
million
organically
exceeding
$500 million in
assets
Grew $141
million
organically
Acquired $121
million
asset IBT
Bancorp, Inc.
exceeded $1
billion in assets
Grew $369
million or
35% in 2016
Diversified and Growing Loan Portfolio
Source: Company documents; information as of and for the year ended unless otherwise noted.
8
(Dollars in Millions)
34%
37%
11%
14%
4%
Percentage by Loan Type
Commercial Real Estate Commercial & Industrial
1-4 Family Mortgages Construction & Land
Other
$298
$398
$495
$603
$821
$992
$1,021
2011 2012 2013 2014 2015 2016 2017 Q1
Loan Growth
YTD 2017 Yield on loans 4.78%
Includes held for sale loans
Strong Credit Culture
Source: SNL Financial and Company documents; information as of and for the year ended unless otherwise noted.
9
0.05%
0.21%
0.02% 0.04% 0.01% 0.03%
0.06%
0.31%
0.24%
0.18%
0.10%
0.14%
0.23%
0.14%
0.67%
0.48%
0.31%
0.23%
0.17%
0.18%
0.11%
2011 2012 2013 2014 2015 2016 2017 Q1
Net Charge-offs to
Average Loans
Veritex
Texas Commerical Bank
US Commerical Bank
0.05%
0.33% 0.23%
0.07% 0.08% 0.18% 0.19%
1.54% 1.54%
1.33%
0.96% 0.92% 1.15% 1.13%
3.16%
2.82%
2.33%
1.90%
1.63%
1.49% 1.48%
2011 2012 2013 2014 2015 2016 2017 Q1
Veritex
Texas Commerical Bank
US Commerical Bank
Non Performing
Loans to Total Loans
Core Funded Deposit Base
Source: Company documents; information as of and for the year ended unless otherwise noted.
10
(Dollars in Millions)
28%
6%
54%
12%
Percentage by Deposit Type
Noninterest Demand Interest-bearing Demand
Savings and Money Market Time and Wholesale
YTD 2017 Cost of Deposits 0.54%
YTD 2017 Cost of Interest-bearing Deposits 0.78%
$365
$448
$574
$639
$868
$1,120
$1,222
2011 2012 2013 2014 2015 2016 2017 Q1
Deposit Growth
Veritex Plan for 2017
11
Focus on seamless integration of the Sovereign acquisition
Maintain strong underwriting standards and excellent credit quality
Continue strong pace of organic growth in loans and EPS
Add experienced bankers to enhance our growth profile
Seek accretive acquisitions that strengthen our presence in new and
existing markets
We are committed to the significant ongoing expansion of Veritex and
expect the robust pace of our growth and momentum to continue
Experienced Leadership
12
Executive Management
C. Malcolm Holland, III
Chairman of the Board,
Chief Executive Officer
35 years of banking experience in Texas
Former CEO of Texas region for Colonial Bank, which grew from $625 million to
$1.6 billion
Former President of First Mercantile Bank
William C. Murphy
Vice Chairman
45 years of banking experience
Former Chairman or CEO of several Dallas community banks
Has led 25 financial institution transactions
Noreen E. Skelly
Chief Financial Officer
30 years of banking experience
Former CFO of Highlands Bancshares, Inc.
Former SVP and Retail line of business chief finance officer for Comerica and
LaSalle Banks
Jeff Kesler
Chief Lending Officer
16 years of banking experience
Former president of Dallas and Austin markets for Colonial Bank
Clay Riebe
Chief Credit Officer
30 years of banking experience
Former Chief Lending Officer of American Momentum Bank
Former market president of Citibank’s Bryan/College Station markets
LaVonda Renfro
Chief Retail Officer
32 years of banking experience
Former Retail Executive of Colonial Bank/BB&T
Former Senior Vice President, District Manager for Bank of America’s Austin
and San Antonio markets
Angela Harper
Chief Risk Officer
25 years of banking experience
Former Senior Vice President, Credit Administration Officer and Risk
Management Officer for the Texas Region of Colonial Bank
13