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 33% below its fair value

Earnings are forecast to grow 17.45% per year

Earnings grew by 118.2% over the past year

Risk Analysis

Shareholders have been substantially diluted in the past year

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Flawless balance sheet and fair value.


Similar Companies

Prosperity Bancshares

NYSE:PB

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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.6%

VBTX

-1.0%

US Banks

-0.09%

US Market


1 Year Return

22.7%

VBTX

14.7%

US Banks

23.9%

US Market

Return vs Industry: VBTX exceeded the US Banks industry which returned 17% over the past year.

Return vs Market: VBTX underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

VBTXIndustryMarket
7 Day1.6%-1.0%-0.09%
30 Day-0.4%-3.0%3.1%
90 Day16.7%4.5%10.4%
1 Year25.1%22.7%18.0%14.7%26.6%23.9%
3 Year8.8%6.7%28.6%19.4%50.9%41.2%
5 Year124.2%119.8%86.7%65.8%78.1%58.5%

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?

30.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VBTX ($28.33) is trading below our estimate of fair value ($42.27)

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


Price To Earnings Ratio

PE vs Industry: VBTX is poor value based on its PE Ratio (18.4x) compared to the Banks industry average (12.8x).

PE vs Market: VBTX is good value based on its PE Ratio (18.4x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: VBTX is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: VBTX is overvalued based on its PB Ratio (1.2x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Veritex Holdings forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

17.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VBTX's forecast earnings growth (17.5% per year) is above the savings rate (1.7%).

Earnings vs Market: VBTX's earnings (17.5% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: VBTX's revenue (3.3% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: VBTX's revenue (3.3% 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 (10.2%).


Next Steps

Past Performance

How has Veritex Holdings performed over the past 5 years?

48.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VBTX has a large one-off loss of $39.2M impacting its September 30 2019 financial results.

Growing Profit Margin: VBTX's current net profit margins (28.5%) are lower than last year (28.7%).


Past Earnings Growth Analysis

Earnings Trend: VBTX's earnings have grown significantly by 48.7% per year over the past 5 years.

Accelerating Growth: VBTX's earnings growth over the past year (118.2%) exceeds its 5-year average (48.7% per year).

Earnings vs Industry: VBTX earnings growth over the past year (118.2%) exceeded the Banks industry 27.1%.


Return on Equity

High ROE: VBTX's Return on Equity (5.9%) is considered low.


Return on Assets


Return on Capital Employed


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 sufficient 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 (0.21%)


Next Steps

Dividend

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

1.73%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: VBTX's dividend (1.76%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: VBTX's dividend (1.76%) is low compared to the top 25% of dividend payers in the US market (3.66%).


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 low payout ratio (24.3%), 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 (25.5% payout ratio).


Next Steps

Management

What is the CEO of Veritex Holdings's salary, the management and board of directors tenure and is there insider trading?

10.0yrs

Average management tenure


CEO

Charles Holland (59yo)

11yrs

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 ($USD1.02M) is below average for companies of similar size in the US market ($USD3.86M).

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


Management Age and Tenure

10.0yrs

Average Tenure

58yo

Average Age

Experienced Management: VBTX's management team is seasoned and experienced (10 years average tenure).


Board Age and Tenure

2.7yrs

Average Tenure

59yo

Average Age

Experienced Board: VBTX's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: VBTX insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$374,78912 Nov 19
Blake Bozman
EntityIndividual
Shares15,000
Max PriceUS$24.99
SellUS$46,62301 Aug 19
Angela Harper
EntityIndividual
Role
Senior Key Executive
Executive Vice President
Shares1,800
Max PriceUS$25.90
BuyUS$484,29813 May 19
Patrick Bolin
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares18,771
Max PriceUS$25.82
BuyUS$266,78426 Apr 19
Patrick Bolin
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$26.68
BuyUS$176,01325 Apr 19
Terry Earley
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares6,800
Max PriceUS$25.88
BuyUS$25,82425 Apr 19
Gordon Huddleston
EntityIndividual
Shares1,000
Max PriceUS$25.82
BuyUS$15,65701 Apr 19
John Sughrue
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares601
Max PriceUS$26.06
BuyUS$650,00015 Mar 19
Mark Griege
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares25,000
Max PriceUS$26.00
BuyUS$38,74004 Feb 19
Ned Fleming
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,500
Max PriceUS$25.83
BuyUS$26,03604 Feb 19
Gordon Huddleston
EntityIndividual
Shares1,000
Max PriceUS$26.04

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 93.9%.


Management Team

  • Terry Earley (60yo)

    Executive VP & CFO

    • Tenure: 1yrs
  • Charles Holland (59yo)

    Chairman

    • Tenure: 11yrs
    • Compensation: US$1.02m
  • LaVonda Renfro (58yo)

    Executive Vice President

    • Tenure: 10yrs
    • Compensation: US$373.25k
  • Angela Harper (50yo)

    Executive Vice President

    • Tenure: 11yrs
  • Clay Riebe (58yo)

    Executive Vice President

    • Compensation: US$493.00k
  • Michael Bryan (62yo)

    Executive Vice President

    • Tenure: 3yrs
  • Jack Dunn

    President of Veritex Mortgage

    • Jeff Kesler (41yo)

      Executive Vice President

      • Compensation: US$550.24k
    • Susan Caudle

      Executive Assistant & Shareholder Relations


      Board Members

      • Ned Fleming (59yo)

        Independent Director

        • Tenure: 2.7yrs
        • Compensation: US$87.20k
      • Manny Mehos (65yo)

        Independent Director

        • Tenure: 1yrs
      • Greg Morrison (59yo)

        Independent Director

        • Tenure: 2.7yrs
        • Compensation: US$83.45k
      • Steve Lerner (65yo)

        Independent Director

        • Tenure: 1yrs
      • Pat Bolin (68yo)

        Independent Director

        • Tenure: 8.8yrs
        • Compensation: US$83.45k
      • Charles Holland (59yo)

        Chairman

        • Tenure: 11yrs
        • Compensation: US$1.02m
      • Don Ellis (56yo)

        Independent Director

        • Tenure: 1yrs
      • John Sughrue (58yo)

        Independent Director

        • Tenure: 11yrs
        • Compensation: US$82.20k
      • Mark Griege (60yo)

        Independent Director

        • Tenure: 11yrs
        • Compensation: US$84.70k

      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$1.501b
      • Shares outstanding: 51.90m
      • 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

      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 Analysis2020/01/24 01:10
      End of Day Share Price2020/01/23 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      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.