NasdaqGM:VBTX

Stock Analysis Report

Executive Summary

Veritex Holdings, Inc. operates as the holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals.

Rewards

Trading at 63.1% below its fair value

Earnings are forecast to grow 8.57% per year

Earnings grew by 130.6% over the past year

Risk Analysis

Shareholders have been substantially diluted in the past year

Unstable dividend track record

Highly volatile share price over past 3 months

Large one-off items impacting financial results



Snowflake Analysis

Very undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Veritex Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VBTX's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-12.6%

VBTX

-7.1%

US Banks

-2.0%

US Market


1 Year Return

-51.2%

VBTX

-32.9%

US Banks

-15.1%

US Market

Return vs Industry: VBTX underperformed the US Banks industry which returned -32.9% over the past year.

Return vs Market: VBTX underperformed the US Market which returned -15.1% over the past year.


Shareholder returns

VBTXIndustryMarket
7 Day-12.6%-7.1%-2.0%
30 Day-47.1%-30.6%-19.7%
90 Day-57.7%-42.5%-23.2%
1 Year-50.2%-51.2%-30.9%-32.9%-13.4%-15.1%
3 Year-52.8%-54.0%-21.7%-27.5%10.9%3.7%
5 Year-9.7%-12.0%3.5%-8.4%28.4%14.4%

Price Volatility Vs. Market

How volatile is Veritex Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Veritex Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VBTX ($12.41) is trading below our estimate of fair value ($33.66)

Significantly Below Fair Value: VBTX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: VBTX is good value based on its PE Ratio (7.3x) compared to the Banks industry average (8.6x).

PE vs Market: VBTX is good value based on its PE Ratio (7.3x) compared to the US market (12.4x).


Price to Earnings Growth Ratio

PEG Ratio: VBTX is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: VBTX is good value based on its PB Ratio (0.5x) compared to the US Banks industry average (0.8x).


Next Steps

Future Growth

How is Veritex Holdings forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

8.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VBTX's forecast earnings growth (8.6% per year) is above the savings rate (1.7%).

Earnings vs Market: VBTX's earnings (8.6% per year) are forecast to grow slower than the US market (13.4% per year).

High Growth Earnings: VBTX's earnings are forecast to grow, but not significantly.

Revenue vs Market: VBTX's revenue (0.7% per year) is forecast to grow slower than the US market (7.1% per year).

High Growth Revenue: VBTX's revenue (0.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VBTX's Return on Equity is forecast to be low in 3 years time (9.1%).


Next Steps

Past Performance

How has Veritex Holdings performed over the past 5 years?

51.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VBTX has a large one-off loss of $39.0M impacting its December 31 2019 financial results.

Growing Profit Margin: VBTX's current net profit margins (30.9%) are lower than last year (32.9%).


Past Earnings Growth Analysis

Earnings Trend: VBTX's earnings have grown significantly by 51.8% per year over the past 5 years.

Accelerating Growth: VBTX's earnings growth over the past year (130.6%) exceeds its 5-year average (51.8% per year).

Earnings vs Industry: VBTX earnings growth over the past year (130.6%) exceeded the Banks industry 10.9%.


Return on Equity

High ROE: VBTX's Return on Equity (7.6%) is considered low.


Next Steps

Financial Health

How is Veritex Holdings's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: VBTX has a low level of unsold assets or inventory.

Debt Coverage by Assets: VBTX's debt is not covered by short term assets (assets are 0.3x debt).


Financial Institutions Analysis

Asset Level: VBTX's level of assets compared to its equity is low.

Allowance for Bad Loans: VBTX has a low allowance for bad loans.

Low Risk Liabilities: VBTX's liabilities are made up of primarily low risk sources of funding.

Loan Level: VBTX has an acceptable proportion of non-loan assets held.

Low Risk Deposits: VBTX's loans are broadly funded by customer deposits.

Level of Bad Loans: VBTX has an appropriate level of bad loans (0.56%)


Next Steps

Dividend

What is Veritex Holdings's current dividend yield, its reliability and sustainability?

5.48%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: VBTX's dividend (5.48%) is higher than the bottom 25% of dividend payers in the US market (2.05%).

High Dividend: VBTX's dividend (5.48%) is low compared to the top 25% of dividend payers in the US market (5.71%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether VBTX's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if VBTX's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29.3%), VBTX's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: VBTX's dividends in 3 years are forecast to be well covered by earnings (33.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

10.3yrs

Average management tenure


CEO

Charles Holland (59yo)

11.25s

Tenure

US$1,023,102

Compensation

Mr. Charles Malcolm Holland, III, has been the Chairman, President and Chief Executive Officer at Veritex Holdings, Inc. since 2009. Mr. Holland has been the Chairman of the Board, Chief Executive Officer  ...


CEO Compensation Analysis

Compensation vs Market: Charles's total compensation ($USD1.02M) is below average for companies of similar size in the US market ($USD3.31M).

Compensation vs Earnings: Charles's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Charles Holland
Chairman11.25yrsUS$1.02m0.37% $2.3m
LaVonda Renfro
Executive Vice President10.25yrsUS$373.25k0.051% $322.4k
Jeffrey Kesler
Executive Vice Presidentno dataUS$550.24k0.12% $744.2k
Michael Riebe
Executive Vice Presidentno dataUS$493.00k0.042% $261.6k
Terry Earley
Executive VP & CFO1.25yrsno data0.092% $578.5k
Susan Caudle
Executive Assistant & Shareholder Relationsno datano datano data
Angela Harper
Executive Vice President11.25yrsno data0.070% $436.3k
Michael Bryan
Executive Vice President3.25yrsno data0.028% $174.2k
Jack Dunn
President of Veritex Mortgageno datano datano data

10.3yrs

Average Tenure

58yo

Average Age

Experienced Management: VBTX's management team is seasoned and experienced (10.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Charles Holland
Chairman11.25yrsUS$1.02m0.37% $2.3m
Ned Fleming
Independent Director2.92yrsUS$87.20k0.019% $117.7k
Manuel Mehos
Independent Director1.25yrsno data1.02% $6.4m
Gregory Morrison
Independent Director2.92yrsUS$83.45k0.020% $124.1k
Steven Lerner
Independent Director1.25yrsno data0.051% $319.2k
Patrick Bolin
Independent Director9.08yrsUS$83.45k0.31% $2.0m
William Ellis
Independent Director1.25yrsno data0.94% $5.9m
John Sughrue
Independent Director11.25yrsUS$82.20k0.11% $658.6k
Mark Griege
Independent Director11.25yrsUS$84.70k0.21% $1.3m

2.9yrs

Average Tenure

59yo

Average Age

Experienced Board: VBTX's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: VBTX insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 119.9%.


Top Shareholders

Company Information

Veritex Holdings, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Veritex Holdings, Inc.
  • Ticker: VBTX
  • Exchange: NasdaqGM
  • Founded: 2009
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$626.669m
  • Shares outstanding: 50.50m
  • Website: https://www.veritexbank.com

Number of Employees


Location

  • Veritex Holdings, Inc.
  • 8214 Westchester Drive
  • Suite 800
  • Dallas
  • Texas
  • 75225
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VBTXNasdaqGM (Nasdaq Global Market)YesCommon StockUSUSDOct 2014
47YDB (Deutsche Boerse AG)YesCommon StockDEEUROct 2014

Biography

Veritex Holdings, Inc. operates as the holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals. The company’s deposit products include checking, demand, savings, money market, and time deposit accounts, as well as commercial deposit and financial institution money market accounts. Its loan portfolio consists of commercial real estate and general commercial loans, residential real estate loans, construction and land loans, farmland loans, and consumer loans. The company also provides a range of online banking solutions, such as access to account balances, online transfers, online bill payment and electronic delivery of customer statements, and ATMs, as well as banking through telephone, mail, and personal appointment. In addition, it offers debit cards, night depository services, direct deposits, cashier's checks, and letters of credit; treasury management services, including balance reporting, transfers between accounts, wire transfer initiation, automated clearinghouse origination, and stop payments; and cash management deposit products consisting of lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts. As of December 31, 2018, the company had 20 branches and 1 mortgage office located in the Dallas-Fort Worth metroplex, as well as 1 branch in the Houston metropolitan area. Veritex Holdings, Inc. was founded in 2009 and is headquartered in Dallas, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/04 04:26
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.