Veritex (VBTX) - 2025 Q2 - Quarterly Results

Report Overview & Key Highlights Q2 2025 Operating Highlights Veritex Holdings, Inc. reported strong Q2 2025 operating results with increased net income and EPS, robust credit quality, strong capital, a $0.22 dividend, and announced a merger with Huntington Bancshares - Veritex Holdings, Inc. reported Q2 2025 operating results and declared a quarterly cash dividend of $0.22 per share[1][2] Q2 2025 Financial Highlights (GAAP & Non-GAAP) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------------------- | :------ | :------ | :------ | | GAAP | | | | | Net income (in thousands) | $30,906 | $29,070 | $27,202 | | Diluted EPS | 0.56 | 0.53 | 0.50 | | Book value per common share | 30.39 | 30.08 | 28.49 | | Return on average assets | 1.00 % | 0.94 % | 0.87 % | | Return on average equity | 7.56 % | 7.27 % | 7.10 % | | Net interest margin | 3.33 % | 3.31 % | 3.29 % | | Efficiency ratio | 61.15 % | 60.91 % | 59.11 % | | Non-GAAP | | | | | Operating earnings (in thousands) | $30,906 | $29,707 | $28,310 | | Diluted operating EPS | 0.56 | 0.54 | 0.52 | | Tangible book value per common share | 22.68 | 22.33 | 20.62 | - Credit quality remained strong with a nonperforming assets (NPAs) to total assets ratio of 0.60% and annualized net charge-offs of 0.05% for the quarter[4] - Allowance for Credit Losses (ACL) to total loans held-for-investment (excluding mortgage warehouse) remained relatively unchanged at 1.28%[4] - Capital remains strong with a common equity Tier 1 capital ratio of 11.05% as of June 30, 2025[4] - Book value per share increased $0.31 to $30.39 and tangible book value per share increased $0.35 to $22.68[4] - Veritex repurchased 286,291 shares of Company stock for $7.1 million during the second quarter[4] - On July 14, 2025, Veritex announced entry into a definitive agreement to merge with Huntington Bancshares Incorporated, expected to close in the fourth quarter of 2025[4] Financial Performance Analysis Results of Operations for the Three Months Ended June 30, 2025 For the three months ended June 30, 2025, Veritex Holdings, Inc. reported a slight increase in net interest income and margin, a decrease in noninterest income QoQ but an increase YoY, and a modest rise in noninterest expense Net Interest Income Net interest income increased by $0.9 million (0.9%) QoQ to $96.3 million, driven by loan interest income and lower funding costs, with net interest margin rising to 3.33% Net Interest Income & Margin Trends | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | Q2 2024 | Change (YoY) | | :------------------------------------ | :------ | :------ | :----------- | :------ | :----------- | | Net interest income (in millions) | $96.3 | $95.4 | +$0.9 (+0.9%) | $96.2 | Unchanged | | Net interest margin (NIM) | 3.33% | 3.31% | +2 bps | 3.29% | +4 bps | - QoQ increase in net interest income was primarily due to a $2.8 million increase in interest income on loans and decreases in interest expense on certificates and other time deposits ($1.7 million) and subordinated debentures ($768 thousand), partially offset by a $2.9 million increase in interest expense on transaction and savings deposits[5] - YoY increase in NIM was primarily due to decreased funding costs on deposits, advances, and subordinated debt resulting from interest rate cuts, partially offset by the related declines in rates earned on interest-earnings assets, primarily loans[6] Noninterest Income Noninterest income decreased by $0.8 million (5.5%) QoQ to $13.5 million, primarily due to lower government guaranteed loan income, but increased by $2.9 million YoY Noninterest Income Trends | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | Q2 2024 | Change (YoY) | | :-------------------- | :------ | :------ | :----------- | :------ | :----------- | | Noninterest income (in millions) | $13.5 | $14.3 | -$0.8 (-5.5%) | $10.6 | +$2.9 (+27.6%) | - QoQ decrease was primarily due to a $1.6 million decrease in government guaranteed loan income, partially offset by an $850 thousand increase in customer swap income[7] - YoY increase was primarily due to a $1.2 million increase in customer swap income, $728 thousand increase in service charges and fees on deposit accounts, $528 thousand increase in loan fees, and $368 thousand increase in government guaranteed loan income[8] Noninterest Expense Noninterest expense slightly increased by $0.3 million (0.5%) QoQ to $67.2 million, driven by various increases partially offset by lower salaries and benefits Noninterest Expense Trends | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | Q2 2024 | Change (YoY) | | :-------------------- | :------ | :------ | :----------- | :------ | :----------- | | Noninterest expense (in millions) | $67.2 | $66.8 | +$0.3 (+0.5%) | $63.1 | +$4.0 (+6.4%) | - QoQ increase was primarily due to increases in other noninterest expense ($920 thousand), professional and regulatory fees ($627 thousand), and marketing expenses ($580 thousand), largely offset by a $1.7 million decrease in salaries and employee benefits[9] - YoY increase was primarily due to a $2.2 million increase in salaries and employee benefits and a $1.1 million increase in other noninterest expense[10] Income Tax Income tax expense remained consistent at $8.5 million QoQ, with the effective tax rate decreasing to 21.6% from 22.7% Income Tax Trends | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | Q2 2024 | Change (YoY) | | :-------------------- | :------ | :------ | :----------- | :------ | :----------- | | Income tax expense (in millions) | $8.5 | $8.5 | Consistent | $8.2 | +$0.3 (+3.6%) | | Effective tax rate | 21.6% | 22.7% | -1.1 pp | 23.2% | -1.6 pp | Financial Condition Total loans held for investment (excluding MW) decreased by $44.7 million to $8.78 billion, and total deposits decreased by $247.2 million to $10.42 billion Key Financial Condition Metrics | Metric | Jun 30, 2025 | Mar 31, 2025 | Change (QoQ) | | :------------------------------------ | :----------- | :----------- | :----------- | | Total LHI (excluding MW) (in billions) | $8.78 | $8.83 | -$0.045 (-0.5%) | | Total deposits (in billions) | $10.42 | $10.66 | -$0.247 (-2.3%) | - The decrease in total deposits was primarily the result of decreases of $185.4 million in noninterest-bearing deposits and $171.4 million in interest-bearing transaction and savings deposits, partially offset by an increase of $113.5 million in certificates and other time deposits[14] Credit Quality Credit quality remained strong, with NPAs decreasing to $75.2 million (0.60% of total assets) and annualized net charge-offs improving to 0.05% Credit Quality Metrics | Metric | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | | NPAs (in millions) | $75.2 | $96.9 | $83.0 | | NPAs to total assets | 0.60% | 0.77% | 0.65% | | Annualized net charge-offs to average loans outstanding | 0.05% | 0.17% | 0.28% | | ACL to LHI (excluding MW) | 1.28% | 1.27% | 1.23% | | Provision for credit losses on loans (in millions) | $1.8 | $4.0 | $8.3 | - The provision for credit losses for the three months ended June 30, 2025, was primarily attributable to changes in economic factors for the period[16] Dividend Information Veritex's Board of Directors declared a quarterly cash dividend of $0.22 per share on its outstanding common stock, payable on August 21, 2025, to shareholders of record as of August 7, 2025 - Quarterly cash dividend declared: $0.22 per share of common stock[17] - The dividend will be paid on or after August 21, 2025, to stockholders of record as of the close of business on August 7, 2025[17] Non-GAAP Financial Measures Reconciliation Non-GAAP Financial Measures_Overview Management uses non-GAAP measures like tangible book value and operating earnings to evaluate performance, providing supplemental information reconciled to GAAP results - Non-GAAP financial measures are used by management to evaluate operating performance and provide supplemental information to investors, not as an alternative to GAAP results[18][45] - Key non-GAAP measures include tangible book value per common share, operating earnings, tangible common equity to tangible assets, return on average tangible common equity, pre-tax, pre-provision operating earnings, diluted operating earnings per share, and operating efficiency ratio[18] Tangible Book Value Per Common Share Tangible book value per common share, a non-GAAP measure excluding intangibles, increased to $22.68 at June 30, 2025, from $22.33 QoQ - Tangible book value per common share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions, as it excludes goodwill and core deposit intangibles[47][48] Tangible Book Value Per Common Share Reconciliation | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Total stockholders' equity (in thousands) | $1,649,219 | $1,633,480 | $1,601,069 | $1,608,014 | $1,548,616 | | Goodwill (in thousands) | (404,452) | (404,452) | (404,452) | (404,452) | (404,452) | | Core deposit intangibles (in thousands) | (13,868) | (16,306) | (18,744) | (21,182) | (23,619) | | Tangible common equity (in thousands) | $1,230,899 | $1,212,722 | $1,177,873 | $1,182,380 | $1,120,545 | | Common shares outstanding (in thousands) | 54,265 | 54,297 | 54,517 | 54,446 | 54,350 | | Book value per common share | $30.39 | $30.08 | $29.37 | $29.53 | $28.49 | | Tangible book value per common share | $22.68 | $22.33 | $21.61 | $21.72 | $20.62 | Tangible Common Equity to Tangible Assets This non-GAAP ratio, excluding intangibles from equity and assets, increased to 10.16% at June 30, 2025, from 9.95% QoQ - Tangible common equity to tangible assets is a non-GAAP measure that excludes goodwill and core deposit intangibles from both total stockholders' equity and total assets, providing a clearer view of capital strength and relative changes in common equity and total assets[51][52] Tangible Common Equity to Tangible Assets Reconciliation | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Tangible common equity (in thousands) | $1,230,899 | $1,212,722 | $1,177,873 | $1,182,380 | $1,120,545 | | Total assets (in thousands) | $12,527,868 | $12,606,091 | $12,768,341 | $13,042,976 | $12,684,330 | | Goodwill (in thousands) | (404,452) | (404,452) | (404,452) | (404,452) | (404,452) | | Core deposit intangibles (in thousands) | (13,868) | (16,306) | (18,744) | (21,182) | (23,619) | | Tangible Assets (in thousands) | $12,109,548 | $12,185,333 | $12,345,145 | $12,617,342 | $12,256,259 | | Tangible Common Equity to Tangible Assets | 10.16% | 9.95% | 9.54% | 9.37% | 9.14% | Return on Average Tangible Common Equity This non-GAAP measure, adjusting net income for intangible amortization, increased to 10.79% in Q2 2025 from 10.49% QoQ - Return on average tangible common equity is a non-GAAP measure used by financial analysts and investment bankers to evaluate financial institutions, focusing on the return on common equity exclusive of the impact of core deposit intangibles[56][57] Return on Average Tangible Common Equity Reconciliation | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------------ | :------ | :------ | :------ | | Net income (in thousands) | $30,906 | $29,070 | $27,202 | | Net income available for common stockholders adjusted for amortization of core deposit intangibles (in thousands) | $32,832 | $30,996 | $29,128 | | Average tangible common equity (in thousands) | $1,220,499 | $1,198,432 | $1,111,939 | | Return on Average Tangible Common Equity (Annualized) | 10.79% | 10.49% | 10.54% | Operating Earnings and Related Metrics Operating earnings and related non-GAAP metrics provide insight into ongoing performance, with Q2 2025 operating earnings at $30.9 million and diluted operating EPS at $0.56 - Operating earnings, pre-tax, pre-provision operating earnings, and related performance metrics are non-GAAP measures used by management and investors to understand the ongoing operating performance of the Company and provide meaningful comparisons to its peers[60][61] Operating Earnings and Related Metrics Reconciliation | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------------ | :------ | :------ | :------ | | Net income (in thousands) | $30,906 | $29,070 | $27,202 | | Operating earnings (in thousands) | $30,906 | $29,707 | $28,310 | | Diluted EPS | $0.56 | $0.53 | $0.50 | | Diluted operating EPS | $0.56 | $0.54 | $0.52 | | Pre-tax, pre-provision operating earnings (in thousands) | $42,672 | $43,413 | $44,420 | | Pre-tax, pre-provision operating return on average assets | 1.38% | 1.41% | 1.42% | | Operating return on average assets | 1.00% | 0.96% | 0.91% | | Operating return on average tangible common equity | 10.79% | 10.70% | 10.94% | | Operating efficiency ratio | 61.15% | 60.62% | 58.41% | Company Information & Disclosures About Veritex Holdings, Inc. Veritex Holdings, Inc. is a Dallas, Texas-based bank holding company operating through its wholly-owned subsidiary, Veritex Community Bank, serving the Dallas-Fort Worth and Houston metropolitan areas - Veritex Holdings, Inc. is a bank holding company headquartered in Dallas, Texas[19] - It conducts banking activities through its wholly owned subsidiary, Veritex Community Bank, with locations throughout the Dallas-Fort Worth metroplex and in the Houston metropolitan area[19] - 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[19] CAUTION REGARDING FORWARD-LOOKING STATEMENTS This section cautions that forward-looking statements, especially regarding the Huntington merger, are subject to risks and uncertainties that could cause actual results to differ materially - This communication may contain certain forward-looking statements, including plans, expectations, goals, projections, and statements about the benefits and timing of the proposed transaction with Huntington Bancshares Incorporated[20] - Such statements are subject to numerous assumptions, risks, estimates, uncertainties, and other important factors that could cause actual results to differ materially, including changes in economic conditions, regulatory policies, market volatility, cybersecurity risks, and the ability to complete the transaction and integration successfully[20][21][22] - Readers are cautioned that forward-looking statements are not guarantees of future performance and involve known and unknown risks[21][23] - Neither Veritex nor Huntington assumes any obligation to update these statements to reflect actual results, new information, or future events[21][23] Supplemental Financial Data Key Per Share, Credit, Performance, and Capital Ratios This section provides a detailed overview of per share data, credit ratios, performance ratios, and capital ratios for Veritex Holdings, Inc. across multiple quarters Per Share Data (Common Stock) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Basic EPS | $0.57 | $0.53 | $0.46 | $0.57 | $0.50 | | Diluted EPS | $0.56 | $0.53 | $0.45 | $0.56 | $0.50 | | Book value per common share | $30.39 | $30.08 | $29.37 | $29.53 | $28.49 | | Tangible book value per common share | $22.68 | $22.33 | $21.61 | $21.72 | $20.62 | | Dividends paid per common share outstanding | $0.22 | $0.22 | $0.20 | $0.20 | $0.20 | Summary of Credit Ratios | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | ACL to total LHI | 1.19% | 1.19% | 1.18% | 1.21% | 1.16% | | NPAs to total assets | 0.60% | 0.77% | 0.62% | 0.52% | 0.65% | | Net charge-offs to average loans outstanding | 0.05% | 0.17% | 0.32% | 0.01% | 0.28% | Summary Performance Ratios | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Return on average assets | 1.00% | 0.94% | 0.78% | 0.96% | 0.87% | | Return on average equity | 7.56% | 7.27% | 6.17% | 7.79% | 7.10% | | Net interest margin | 3.33% | 3.31% | 3.20% | 3.30% | 3.29% | | Efficiency ratio | 61.15% | 60.91% | 67.04% | 61.94% | 59.11% | Veritex Holdings, Inc. Capital Ratios | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Tangible common equity to tangible assets | 10.16% | 9.95% | 9.54% | 9.37% | 9.14% | | Common equity tier 1 capital | 11.05% | 11.04% | 11.09% | 10.86% | 10.49% | | Total capital to risk-weighted assets | 13.46% | 13.46% | 13.96% | 13.91% | 13.45% | Consolidated Balance Sheets The consolidated balance sheet shows total assets decreased to $12.53 billion at June 30, 2025, from $12.61 billion at March 31, 2025, with total deposits also declining to $10.42 billion Key Balance Sheet Items (in thousands) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Total assets | $12,527,868 | $12,606,091 | $12,768,341 | $13,042,976 | $12,684,330 | | Total loans | $9,522,520 | $9,469,683 | $9,593,853 | $9,707,721 | $9,834,187 | | Total deposits | $10,417,920 | $10,665,123 | $10,752,592 | $11,036,011 | $10,724,844 | | Total liabilities | $10,878,649 | $10,972,611 | $11,167,272 | $11,434,962 | $11,135,714 | | Total stockholders' equity | $1,649,219 | $1,633,480 | $1,601,069 | $1,608,014 | $1,548,616 | Consolidated Statements of Income The consolidated statement of income for Q2 2025 shows total interest income of $175.1 million and total interest expense of $78.8 million, resulting in net income of $30.9 million Key Income Statement Items (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD Jun 30, 2025 | YTD Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :--------------- | :--------------- | | Total interest income | $175,123 | $173,725 | $191,247 | $348,848 | $375,834 | | Total interest expense | $78,788 | $78,284 | $95,011 | $157,072 | $186,792 | | Net interest income | $96,335 | $95,441 | $96,236 | $191,776 | $189,042 | | Provision for credit losses | $1,750 | $4,000 | $8,250 | $5,750 | $15,750 | | Total noninterest income | $13,499 | $14,289 | $10,578 | $27,788 | $17,240 | | Total noninterest expense | $67,162 | $66,834 | $63,141 | $133,996 | $125,257 | | Income before income tax expense | $39,422 | $37,596 | $35,423 | $77,018 | $66,816 | | Income tax expense | $8,516 | $8,526 | $8,221 | $17,042 | $15,458 | | Net income | $30,906 | $29,070 | $27,202 | $59,976 | $51,358 | | Diluted EPS | $0.56 | $0.53 | $0.50 | $1.09 | $0.94 | Average Balances and Yield/Rate Analysis This section details average balances, interest earned/paid, and yields/rates for interest-earning assets and liabilities, with Q2 2025 average asset yield at 6.05% Q2 2025 Average Balances and Yield/Rate Analysis (in thousands) | Metric | Average Outstanding Balance | Interest Earned/Paid | Yield/Rate | | :------------------------------------ | :-------------------------- | :------------------- | :--------- | | Interest-earning assets: | | | | | Loans | $8,875,970 | $141,688 | 6.40% | | LHI, MW | $523,203 | $7,666 | 5.88% | | Debt securities | $1,440,369 | $16,883 | 4.70% | | Total interest-earning assets | $11,618,254 | $175,123 | 6.05% | | Interest-bearing liabilities: | | | | | Interest-bearing demand and savings deposits | $5,502,672 | $48,080 | 3.50% | | Certificates and other time deposits | $2,742,655 | $28,539 | 4.17% | | Total interest-bearing liabilities | $8,411,125 | $78,788 | 3.76% | | Net interest rate spread | | | 2.29% | | Net interest margin | | $96,335 | 3.33% | YTD June 30, 2025 Average Balances and Yield/Rate Analysis (in thousands) | Metric | Average Outstanding Balance | Interest Earned/Paid | Yield/Rate | | :------------------------------------ | :-------------------------- | :------------------- | :--------- | | Interest-earning assets: | | | | | Loans | $8,881,407 | $282,017 | 6.40% | | LHI, MW | $475,230 | $13,842 | 5.87% | | Debt securities | $1,453,721 | $33,989 | 4.71% | | Total interest-earning assets | $11,648,607 | $348,848 | 6.04% | | Interest-bearing liabilities: | | | | | Interest-bearing demand and savings deposits | $5,476,030 | $93,245 | 3.43% | | Certificates and other time deposits | $2,734,527 | $58,807 | 4.34% | | Total interest-bearing liabilities | $8,390,364 | $157,072 | 3.78% | | Net interest rate spread | | | 2.26% | | Net interest income and margin | | $191,776 | 3.32% | Yield Trend Analysis This section presents historical trends of average yields and rates, showing a slight increase in net interest margin to 3.33% and a decrease in average total deposit cost Average Yield on Interest-Earning Assets Trend | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Loans | 6.40% | 6.40% | 6.56% | 6.89% | 6.90% | | Total interest-earning assets | 6.05% | 6.03% | 6.15% | 6.49% | 6.54% | Average Rate on Interest-Bearing Liabilities Trend | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Interest-bearing demand and savings deposits | 3.50% | 3.36% | 3.57% | 4.00% | 4.01% | | Certificates and other time deposits | 4.17% | 4.50% | 4.83% | 5.00% | 5.02% | | Total interest-bearing liabilities | 3.76% | 3.79% | 4.12% | 4.46% | 4.50% | Supplemental Yield Trend | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Average cost of interest-bearing deposits | 3.73% | 3.74% | 4.07% | 4.44% | 4.46% | | Average costs of total deposits, including noninterest-bearing | 2.93% | 2.91% | 3.16% | 3.42% | 3.46% | Loan and Deposit Portfolio Composition This section details loan and deposit portfolio composition, with C&I loans at 30.6% of LHI and noninterest-bearing deposits at 20.5% of total deposits Loans Held for Investment (LHI) Composition (in thousands) | Loan Type | Jun 30, 2025 | % of Total | Mar 31, 2025 | % of Total | Jun 30, 2024 | % of Total | | :------------------------------------ | :----------- | :--------- | :----------- | :--------- | :----------- | :--------- | | Commercial and Industrial ("C&I") | $2,692,209 | 30.6% | $2,717,037 | 30.7% | $2,798,260 | 30.4% | | Non-owner occupied commercial ("NOOCRE") | $2,311,466 | 26.3% | $2,266,526 | 25.6% | $2,369,848 | 25.7% | | Construction and land | $1,142,457 | 13.0% | $1,214,260 | 13.7% | $1,536,580 | 16.7% | | 1-4 family residential | $1,086,342 | 12.3% | $1,021,293 | 11.6% | $917,402 | 10.0% | | Total LHI (excluding MW) | $8,792,686 | 100% | $8,837,272 | 100% | $9,216,872 | 100% | | MW | $669,052 | | $571,775 | | $568,047 | | | Total LHI | $9,461,738 | | $9,409,047 | | $9,784,919 | | Deposit Portfolio Composition (in thousands) | Deposit Type | Jun 30, 2025 | % of Total | Mar 31, 2025 | % of Total | Jun 30, 2024 | % of Total | | :------------------------------------ | :----------- | :--------- | :----------- | :--------- | :----------- | :--------- | | Noninterest-bearing deposits | $2,133,294 | 20.5% | $2,318,645 | 21.7% | $2,416,727 | 22.5% | | Interest-bearing transaction | $603,861 | 5.8% | $863,462 | 8.1% | $523,272 | 4.9% | | Money market | $3,856,812 | 37.0% | $3,730,446 | 35.0% | $3,268,286 | 30.5% | | Certificates and other time deposits | $2,792,750 | 26.8% | $2,679,221 | 25.1% | $3,744,596 | 34.9% | | Total deposits | $10,417,920 | 100% | $10,665,123 | 100% | $10,724,844 | 100% | Asset Quality Details This section details asset quality metrics, showing NPAs decreased to $75.2 million and net charge-offs significantly improved to -$1.26 million in Q2 2025 Nonperforming Assets (NPAs) (in thousands) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Nonaccrual loans | $61,142 | $69,188 | $52,521 | $55,335 | $58,537 | | Total nonperforming loans held for investment ("NPLs") | $65,979 | $72,633 | $54,435 | $58,265 | $58,753 | | Other real estate owned ("OREO") | $9,218 | $24,268 | $24,737 | $9,034 | $24,256 | | Total NPAs | $75,197 | $96,901 | $79,172 | $67,299 | $83,009 | Net Charge-offs and Recoveries (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD Jun 30, 2025 | YTD Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :--------------- | :--------------- | | Total charge-offs | $(1,841) | $(4,220) | $(7,829) | $(6,061) | $(13,259) | | Total recoveries | $580 | $248 | $978 | $828 | $1,124 | | Net charge-offs | $(1,261) | $(3,972) | $(6,851) | $(5,233) | $(12,135) | | Provision for credit losses | $1,750 | $4,000 | $8,250 | $5,750 | $15,750 | Asset Quality Ratios | Metric | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | | NPAs to total assets | 0.60% | 0.77% | 0.65% | | NPLs to total LHI | 0.70% | 0.77% | 0.60% | | ACL to total LHI | 1.19% | 1.19% | 1.16% | | Net charge-offs to average loans outstanding | 0.05% | 0.17% | 0.28% |