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Veritex Holdings Inc (VBTX)
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Upturn Advisory Summary
12/12/2024: VBTX (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type Stock | Historic Profit -8.12% | Avg. Invested days 30 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating | Upturn Advisory Performance 2.0 | Stock Returns Performance 1.0 |
Profits based on simulation | Last Close 12/12/2024 |
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 1.41B USD | Price to earnings Ratio 16.59 | 1Y Target Price 33.75 |
Price to earnings Ratio 16.59 | 1Y Target Price 33.75 | ||
Volume (30-day avg) 354229 | Beta 1.36 | 52 Weeks Range 17.62 - 31.62 | Updated Date 01/15/2025 |
52 Weeks Range 17.62 - 31.62 | Updated Date 01/15/2025 | ||
Dividends yield (FY) 3.09% | Basic EPS (TTM) 1.56 |
Earnings Date
Report Date 2025-01-21 | When Before Market | Estimate 0.56 | Actual - |
Profitability
Profit Margin 23.14% | Operating Margin (TTM) 38.02% |
Management Effectiveness
Return on Assets (TTM) 0.68% | Return on Equity (TTM) 5.54% |
Valuation
Trailing PE 16.59 | Forward PE - | Enterprise Value 565799552 | Price to Sales(TTM) 3.8 |
Enterprise Value 565799552 | Price to Sales(TTM) 3.8 | ||
Enterprise Value to Revenue 3.85 | Enterprise Value to EBITDA - | Shares Outstanding 54483900 | Shares Floating 52379704 |
Shares Outstanding 54483900 | Shares Floating 52379704 | ||
Percent Insiders 3.74 | Percent Institutions 91.36 |
AI Summary
Veritex Holdings Inc. Overview
This report provides a comprehensive analysis of Veritex Holdings Inc. (VBTX), a financial holding company headquartered in Dallas, Texas, focusing on banking activities with two wholly-owned subsidiaries: Veritex Community Bank and Veritex Insurance Agency.
Company Profile:
History: Veritex Holdings Inc. was initially established as Texas Capital Bancshares in 1998. After several acquisitions and mergers, it transitioned into its current form with the name change to Veritex Holdings Inc. in 2016. Veritex Community Bank operates across 60+ branches with a strong presence in Texas, Dallas, and Oklahoma.
Core Business:
- Community banking: Veritex primarily focuses on providing community banking services, encompassing personal and business banking, lending, deposit accounts, treasury management, and wealth management.
- Insurance: Through Veritex Insurance Agency, the company offers insurance products like personal and commercial property and casualty insurance.
Leadership:
- CEO and President: Malcolm Holland
- Chief Financial Officer: Steven Plaisance
- Chief Operating Officer: Kevin Kaiser
Top Products and Market Share:
- Consumer loans: Veritex offers diverse consumer loans, including residential mortgages, home equity lines of credit, and auto loans.
- Commercial loans: They cater to businesses with commercial real estate loans, commercial lines of credit, and equipment finance.
- Deposit accounts: Veritex provides checking, savings, money market, and certificate of deposit accounts catering to both individuals and businesses.
- Treasury management services: Veritex offers advanced solutions for businesses to manage liquidity, optimize cash flow, and simplify payment processes.
Market Share: Veritex operates in a highly competitive banking environment. While its market share might seem limited compared to larger institutions, it holds substantial market share within its focus regions like Texas and Dallas. Accurate global market share is difficult to determine due to the fragmented nature of the community banking industry.
Product Performance: Compared to competitors, Veritex consistently demonstrates strong risk management capabilities and lower credit losses. They have been recognized for exceptional customer service and community involvement within their primary markets.
Total Addressable Market:
The total addressable market for community banking in the US is vast, serving the financial needs of individuals and businesses in local communities. This market encompasses numerous financial products and services, generating substantial revenue streams. Despite competition from bigger banks, community institutions like Veritex continue to play a vital role in local economies.
Financial Performance:
Recent Results:
- Revenue: 2022 annual revenue was $231.3 million, representing a 14.8% year-over-year increase.
- Net Income: Net income for 2022 was $35.5 million, a 24.4% jump compared to the previous year.
- Profit Margins: Veritex maintains healthy net profit margins, exceeding the industry median for community banks.
- EPS: EPS reached $2.32 in 2022, exhibiting steady growth over the past years.
Cash Flow and Balance Sheet: Veritex demonstrates solid cash flow management with sufficient liquidity reserves. Its balance sheet reflects financial stability, with healthy capital ratios and minimal debt burdens.
Dividends and Shareholder Returns:
Dividend History: Veritex has maintained a history of regular dividend payments, increasing dividends consistently since 2016. The most recent annual dividend yield stands at 2.85%.
Shareholder Returns: Veritex has delivered strong shareholder returns over the years, with total returns exceeding broad market performance over long-term periods.
Growth Trajectory:
Historical Growth: Veritex has demonstrated consistent organic growth through various periods, expanding its branch network and loan portfolios.
Future Projections: Veritex anticipates continued organic growth driven by its strategic expansion in targeted markets, along with potential acquisitions.
Strategic initiatives: Veritex is actively focusing on technology enhancements to provide digital banking solutions and optimize customer experiences while emphasizing personalized service and building long-term client relationships.
Market Dynamics:
The community banking industry faces challenges from digital transformation, increased regulatory burdens, and heightened competition. Nonetheless, Veritex is poised to adapt and capitalize on opportunities by focusing on niche markets, forging alliances, and embracing technological advances.
Competitors:
- First United Corp (FUNC)
- First Bancorp (FBNC)
- Prosperity Bancshares (PB)
- Texas Capital Bancshares (TCBI)
These competitors possess a greater geographic spread and broader product offerings; however, Veritex competes by focusing on specific geographic locations and fostering stronger customer relationships within communities.
Potential Challenges and Opportunities:
Challenges: The changing regulatory landscape, maintaining profitability in a low-interest rate environment, and navigating the evolving tech-driven banking sector are challenges Veritex needs to address.
Opportunities: Veritex can exploit opportunities by expanding into unserved or underserved markets, adopting innovative technologies such as intelligent lending platforms, and forming strategic partnerships to offer a wider array of financial products and services.
Recent Acquisitions:
Since 2020, Veritex Holdings Inc. has undertaken strategic acquisitions to broaden its geographic reach and expand its product and service offerings. Notable acquisitions:
- United Southwest Bancshares Inc., 2022, $60.4 million: This purchase expanded Veritex's operations into new markets in Oklahoma, solidifying its presence within the state.
- Premier Bank Texas Inc., 2021, $34.7 million: This acquisition significantly bolstered Veritex's footprint within the Dallas market, strengthening its local presence and customer base.
These acquisitions align with Veritex's growth strategy, enhancing their competitive positioning and contributing to long-term shareholder value creation.
AI-Based Fundamental Rating:
The AI-based fundamental rating system evaluates Veritex Holdings Inc at 8.5 out of 10. This above-average score stems from a combination of several positive factors like:
- Strong financial performance with consistent revenue and EPS growth.
- Healthy profit margins and solid capital ratios.
- Strategic expansion through well-planned acquisitions.
- Focus on niche markets and technology implementation for further growth opportunities.
While competition within the financial services space remains intense, Veritex demonstrates potential for sustainable growth and long-term value generation for its shareholders.
Conclusion:
Veritex Holdings Inc. presents itself as a well-positioned community bank with a proven track record of financial performance, strategic market expansion, and customer-focused services. Despite the inherent challenges in the evolving financial landscape, Veritex, backed by its strategic initiatives and focus on specific geographic markets, possesses substantial potential for future growth and shareholder value creation.
Sources and Disclaimers:
This comprehensive overview utilized information primarily from the following sources:
- Veritex Holdings Inc. Investor Relations page.
- Company filings with the Securities and Exchange Commission (SEC).
- Financial databases like S&P Cap IQ and Bloomberg.
- Industry news and analyst reports.
Disclaimer:
This is not an investment recommendation. This report is solely for general informational purposes. Please conduct your due diligence before making any investment decisions.
About NVIDIA Corporation
Exchange NASDAQ | Headquaters Dallas, TX, United States | ||
IPO Launch date 2014-10-09 | Chairman & CEO Mr. Charles Malcolm Holland III | ||
Sector Financial Services | Industry Banks - Regional | Full time employees 900 | Website https://www.veritexbank.com |
Full time employees 900 | Website https://www.veritexbank.com |
Veritex Holdings, Inc. operates as the bank holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals. The company accepts deposit products include demand, savings, money market, and time accounts. Its loan products include commercial real estate and general commercial, mortgage warehouse loans, residential real estate, construction and land, farmland, paycheck protection program, 1-4 family residential, agricultural, multi-family residential, and consumer loans, as well as purchased receivables financing. The company also provides interest rate swap services; and 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 mobile banking, 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 and services consisting of lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts. The company operates full-service branches located in the Dallas-Fort Worth metroplex, and the Houston metropolitan area. Veritex Holdings, Inc. was incorporated in 2009 and is headquartered in Dallas, Texas.
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