10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             .

Commission File Number: 001-36682

VERITEX HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Texas		27-0973566
(State or other jurisdiction of		(I.R.S. employer
incorporation or organization)		identification no.)
8214 Westchester Drive, Suite 800
Dallas,	Texas	75225
(Address of principal executive offices)		(Zip code)

(972)	349-6200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01	VBTX	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 9, 2023, there were 54,247,973 outstanding shares of the registrant’s common stock, par value $0.01 per share.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

		Page
PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements – Unaudited	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Income	6
	Consolidated Statements of Comprehensive Income	8
	Consolidated Statements of Changes in Stockholders’ Equity	9
	Consolidated Statements of Cash Flows	11
	Notes to Consolidated Financial Statements	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	79
Item 4.	Controls and Procedures	81
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	82
Item 1A.	Risk Factors	82
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	82
Item 6.	Exhibits	82
SIGNATURES		84

2

PART I. FINANCIAL INFORMATION 

Item 1. Financial Statements

3

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

as of March 31, 2023 and December 31, 2022

(Dollars in thousands, except par value and share information) 

	March 31,		December 31,
	2023		2022
	(Unaudited)
ASSETS
Cash and due from banks	$	57,628	$	60,551
Interest bearing deposits in other banks	750,767		375,526
Total cash and cash equivalents	808,395		436,077
Debt securities available-for-sale (“AFS”), at fair value	966,123		1,096,292
Debt securities held-to-maturity (“HTM”) (fair value of $161,778 and $158,781, at March 31, 2023 and December 31, 2022, respectively)	184,836		186,168
Equity securities	20,522		19,864
Investment in unconsolidated subsidiaries	1,018		1,018
Federal Home Loan Bank of Dallas (“FHLB”) Stock and Federal Reserve Bank (“FRB”) Stock	116,081		101,568
Total investments	1,288,580		1,404,910
Loans held for sale (“LHFS”)	42,816		20,641
Loans held for investment (“LHI”), mortgage warehouse (“MW”)	437,501		446,227
LHI, excluding MW	9,237,159		9,036,424
Less: Allowance for credit losses (“ACL”)	(98,694)		(91,052)
Total LHI, net	9,575,966		9,391,599
Bank-owned life insurance (“BOLI”)	84,962		84,496
Premises and equipment, net	107,540		108,824
Intangible assets, net of accumulated amortization	51,086		53,213
Goodwill	404,452		404,452
Other assets	245,690		250,149
Total assets	$	12,609,487	$	12,154,361
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing deposits	$	2,212,389	$	2,640,617
Interest-bearing transaction and savings deposits	3,492,011		3,738,535
Certificates and other time deposits	2,896,870		2,086,642
Correspondent money market deposits	433,468		657,440
Total deposits	9,034,738		9,123,234
Accounts payable and other liabilities	171,985		177,579
Advances from FHLB	1,680,000		1,175,000
Subordinated debentures and subordinated notes	229,027		228,775
Total liabilities	11,115,750		10,704,588
Stockholders’ equity:
Common stock, $0.01 par value:
Authorized shares - 75,000,000
Issued shares - 60,867,127 and 60,668,049 at March 31, 2023 and December 31, 2022, respectively	609		607
Additional paid-in capital (“APIC”)	1,308,345		1,306,852
Retained earnings	406,873		379,299
Accumulated other comprehensive (loss) income (“AOCI”)	(54,508)		(69,403)
Treasury stock, 6,638,094 and 6,638,094 shares at cost at March 31, 2023 and December 31, 2022, respectively	(167,582)		(167,582)
Total stockholders’ equity	1,493,737		1,449,773
Total liabilities and stockholders’ equity	$	12,609,487	$	12,154,361

See accompanying Notes to Consolidated Financial Statements.

4

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

For the Three Months Ended March 31, 2023 and 2022

(Dollars in thousands, except per share amounts)

	Three Months Ended March 31,
	2023		2022
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	151,707	$	71,443
Debt securities	10,988		7,762
Deposits in financial institutions and Fed Funds sold	5,534		262
Equity securities and other investments	1,408		910
Total interest and dividend income	169,637		80,377
INTEREST EXPENSE
Transaction and savings deposits	29,857		1,751
Certificates and other time deposits	20,967		1,380
Advances from FHLB	12,358		1,547
Subordinated debentures and subordinated notes	3,066		2,659
Total interest expense	66,248		7,337
NET INTEREST INCOME	103,389		73,040
Provision (benefit) for credit losses	9,385		(500)
Provision for credit losses on unfunded commitments	1,497		493
Net interest income after provision (benefit) for credit losses	92,507		73,047
NONINTEREST INCOME
Service charges and fees on deposit accounts	5,017		4,710
Loan fees	2,064		2,794
Loss on sales of debt securities	(5,321)		—
Gain on sale of mortgage LHFS	6		307
Government guaranteed loan income, net	9,688		4,891
Equity method investment (loss) income	(1,521)		367
Customer swap income	217		946
Other	3,381		1,082
Total noninterest income	13,531		15,097
NONINTEREST EXPENSE
Salaries and employee benefits	31,865		27,513
Occupancy and equipment	4,973		4,517
Professional and regulatory fees	4,389		3,158
Data processing and software expense	4,720		2,921
Marketing	1,779		1,187
Amortization of intangibles	2,495		2,495
Telephone and communications	478		385
Merger and acquisition (“M&A”) expense	—		700
Other	5,916		3,696
Total noninterest expense	56,615		46,572
Income before income tax expense	49,423		41,572
Income tax expense	11,012		8,102
NET INCOME	$	38,411	$	33,470
Basic earnings per share (“EPS”)	$	0.71	$	0.66
Diluted EPS	$	0.70	$	0.65

See accompanying Notes to Consolidated Financial Statements.

5

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

For the Three Months Ended March 31, 2023 and 2022

(Dollars in thousands)

	Three Months Ended March 31,
	2023		2022
NET INCOME	$	38,411	$	33,470
OTHER COMPREHENSIVE INCOME
Net unrealized gains (losses) on debt securities AFS:
Change in net unrealized gain (loss) on debt securities AFS during the period, net	2,547		(49,076)
Amortization from transfer of debt securities from AFS to HTM	3,622		4,255
Reclassification adjustment for net losses included in net income	5,321		—
Net unrealized gain (loss) on debt securities AFS	11,490		(44,821)
Net unrealized gain (loss) on derivative instruments designated as cash flow hedges	7,078		(13,381)
Other comprehensive gain (loss), before tax	18,568		(58,202)
Income tax benefit (expense)	3,673		(13,114)
Other comprehensive gain (loss), net of tax	14,895		(45,088)
COMPREHENSIVE INCOME (LOSS)	$	53,306	$	(11,618)

See accompanying Notes to Consolidated Financial Statements.

6

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) 

For the Three Months Ended March 31, 2023 and 2022

(In thousands, except for shares)

Three Months Ended March 31, 2023
	Common Stock			Treasury Stock			APIC		Retained Earnings		AOCI		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2022	54,029,955	$	607	6,638,094	$	(167,582)	$	1,306,852	$	379,299	$	(69,403)	$	1,449,773
Restricted stock units (“RSU”) vested, net of 71,465 shares withheld to cover taxes	161,081	2		—	—		(1,928)		—		—		(1,926)
Exercise of employee stock options, net of 121 and 9,729 shares withheld to cover taxes and exercise, respectively	37,997	—		—	—		534		—		—		534
Stock based compensation		—		—	—		2,887		—				2,887
Net income	—	—		—	—		—		38,411		—		38,411
Dividends paid	—	—		—	—		—		(10,837)		—		(10,837)
Other comprehensive income	—	—		—	—		—		—		14,895		14,895
Balance at March 31, 2023	54,229,033	$	609	6,638,094	$	(167,582)	$	1,308,345	$	406,873	$	(54,508)	$	1,493,737

Three Months Ended March 31, 2022
	Common Stock			Treasury Stock			APIC		Retained Earnings		AOCI
	Shares	Amount		Shares	Amount								Total
Balance at December 31, 2021	49,372,329	$	560	6,638,094	$	(167,582)	$	1,142,758	$	275,273	$	64,070	$	1,315,079
RSUs vested, net of 67,965 shares withheld to cover taxes	187,801	2		—	—		(2,839)		—		—		(2,837)
Exercise of employee stock options, net of 5,738 and 28,064 shares withheld to cover taxes and exercise, respectively	34,320	—		—	—		98		—		—		98
Common stock follow on offering	4,314,474	43					153,826						153,869
Stock based compensation	—	—		—	—		3,318		—		—		3,318
Net income	—	—		—	—		—		33,470		—		33,470
Dividends paid	—	—		—	—		—		(9,913)		—		(9,913)
Other comprehensive loss	—	—		—	—		—		—		(45,088)		(45,088)
Balance at March 31, 2022	53,908,924	$	605	6,638,094	$	(167,582)	$	1,297,161	$	298,830	$	18,982	$	1,447,996

See accompanying Notes to Consolidated Financial Statements.

7

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

For the Three Months Ended March 31, 2023 and 2022

(Dollars in thousands)

	For the Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net income	$	38,411	$	33,470
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed assets and intangibles	4,764		4,378
Net amortization (accretion) of time deposit premium, debt discount and debt issuance costs	240		(16)
Provision (benefit) for credit losses and unfunded commitments	10,882		(7)
Accretion of loan discount	(1,014)		(1,598)
Stock-based compensation expense	2,887		3,318
Excess tax expense (benefit) from stock compensation	112		(992)
Net amortization of premiums on debt securities	885		811
Unrealized (gain) loss on equity securities recognized in earnings	(126)		513
Change in cash surrender value and mortality rates of BOLI	(466)		(447)
Loss on sales of debt securities	5,321		—
Change in fair value of government guaranteed loans using fair value option	(2,239)		(379)
Gain on sales of mortgage LHFS	(6)		(307)
Gain on sales of government guaranteed loans	(7,449)		(4,161)
Net impairment of servicing asset	(424)		280
Originations of LHFS	(25,136)		(12,613)
Proceeds from sales of LHFS	5,520		21,293
Equity method investment loss (income)	1,521		(367)
Decrease (increase) in other assets	(3,119)		(9,687)
(Decrease) increase in accounts payable and other liabilities	3,975		34,729
Net cash provided by operating activities	34,539		68,218
Cash flows from investing activities:
Purchases of AFS debt securities	(149,982)		(266,490)
Proceeds from sales of AFS debt securities	109,793		—
Proceeds from maturities, calls and pay downs of AFS debt securities	175,289		33,880
Purchases of HTM debt securities	—		(5,068)
Maturity, calls and paydowns of HTM debt securities	800		25
Purchases of other investments	(15,045)		(91)
Proceeds from sales of equity securities	—		1,470
Net loans originated	(134,513)		(332,290)
Proceeds from sale of government guaranteed loans	(52,868)		4,910
Net additions (disposals) to premises and equipment	18		(1,130)
Net cash used in investing activities	(66,508)		(564,784)
Cash flows from financing activities:
Net (decrease) increase in deposits	(88,484)		525,987
Net increase in advances from FHLB	505,000		224
Net change in securities sold under agreement to repurchase	—		927
Net proceeds on sale of common stock in public offering	—		153,869
Payments to tax authorities for stock-based compensation	(1,926)		(2,837)
Proceeds from exercise of employee stock options	534		98
Dividends paid	(10,837)		(9,913)
Net cash provided by financing activities	404,287		668,355
Net increase in cash and cash equivalents	372,318		171,789
Cash and cash equivalents at beginning of period	436,077		379,784
Cash and cash equivalents at end of period	$	808,395	$	551,573

See accompanying Notes to Consolidated Financial Statements.

8

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands, except for per share amounts) 

1. Summary of Significant Accounting Policies

Nature of Organization

In this report, the words “Veritex,” “the Company,” “we,” “us,” and “our” refer to the combined entities of Veritex Holdings, Inc. and its subsidiaries, including Veritex Community Bank. The word “Holdco” refers to Veritex Holdings, Inc. The word “the Bank” refers to Veritex Community Bank.

Veritex is a Texas state banking organization, with corporate offices in Dallas, Texas, and currently operates 18 branches located in the Dallas-Fort Worth metroplex and 10 branches in the Houston metropolitan area. The Bank provides a full range of banking services, including commercial and retail lending and the acceptance of checking and savings deposits, to individual and corporate customers. The Texas Department of Banking and the Board of Governors of the Federal Reserve System (the “Federal Reserve”) are the primary regulators of the Company and the Bank, and both regulatory agencies perform periodic examinations to ensure regulatory compliance.

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Veritex Holdings, Inc. and its subsidiaries, including Veritex Community Bank.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), but do not include all of the information and footnotes required for complete financial statements. Intercompany transactions and balances are eliminated in consolidation. In management’s opinion, these unaudited consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated balance sheets at March 31, 2023 and December 31, 2022, consolidated statements of income, consolidated changes in stockholders’ equity and consolidated statements of comprehensive income for the three months ended March 31, 2023 and 2022 and consolidated statements of cash flows for the three months ended March 31, 2023 and 2022.

Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown herein are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Quarterly Reports on Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 28, 2023.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

9

Reclassifications

Certain items in the Company’s prior year financial statements were reclassified to conform to the current presentation. PPP loans of $1,995 were reported separately as LHI PPP loans, carried at fair value, as of December 31, 2022 and have been reclassed to LHI, excluding MW loans.

EPS is based upon the weighted average shares outstanding. The table below sets forth the reconciliation between weighted average shares used for calculating basic and diluted EPS for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
Numerator:
Net income	$	38,411	$	33,470
Denominator:
Weighted average shares outstanding for basic EPS	54,149		50,695
Dilutive effect of employee stock-based awards	457		876
Adjusted weighted average shares outstanding	54,606		51,571
EPS:
Basic	$	0.71	$	0.66
Diluted	$	0.70	$	0.65

For the three months ended March 31, 2023, there were 834 antidilutive shares excluded from the diluted EPS weighted average shares outstanding, 440 relating to RSUs and 214 relating to stock options.

For the three months ended March 31, 2022, there were 80 antidilutive shares excluded from the diluted EPS weighted average shares outstanding related to RSUs and none related to stock options.

Recent Accounting Pronouncements

ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326)” (“ASU 2022-02”) eliminates the guidance on troubled debt restructurings and requires entities to evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. ASU 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination for loans and leases. ASU 2022-02 is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The adoption of ASU 2022-02 did not have a significant impact on our financial statements. See Note 4 - LHI and ACL for new financial statement disclosures applicable under this standard.

ASU No. 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” ASU 2023-02 is intended to improve the accounting and disclosures for investments in tax credit structures. ASU 2023-02 allows entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. Previously, this method was only available for qualifying tax equity investments in low-income housing tax credit structures. ASU 2023-02 will be effective for us on January 1, 2024, though early adoption is permitted, and its adoption is not expected to have a significant effect on our financial statements.

10

2. Supplemental Statement of Cash Flows

Other supplemental cash flow information is presented below:

	Three Months Ended March 31,
	2023		2022
	(in thousands)
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	54,189	$	5,368
Cash paid for income taxes	—		—
Supplemental Disclosures of Non-Cash Flow Information:
Transfer of AFS debt securities to HTM debt securities	—		117,001
Net foreclosure of OREO and repossessed assets	—		1,062

3. Securities

Equity Securities With a Readily Determinable Fair Value

The Company held equity securities with a fair value of $9,918 and $9,792 at March 31, 2023 and December 31, 2022, respectively. The Company did not realize a loss on equity securities with a readily determinable fair value during the three months ended March 31, 2023 or 2022, respectively. The gross unrealized gain (loss) recognized on equity securities with readily determinable fair values recorded in other noninterest income in the Company’s consolidated statements of income were as follows:

	Three Months Ended March 31,
	2023		2022
Unrealized gain (loss) recognized on equity securities with a readily determinable fair value	$	126	$	(513)

Equity Securities Without a Readily Determinable Fair Value

The Company held equity securities without a readily determinable fair values and measured at cost of $10,604 and $10,072 as of March 31, 2023 and December 31, 2022, respectively.

Securities purchased under agreements to resell

As of March 31, 2023, we held no securities purchased under agreements to resell and we recognized no interest income during the three months ended March 31, 2023. As of March 31, 2022, we held securities purchased under agreements to resell of $100.8 million and we recognized interest income of $270 thousand during the three months ended March 31, 2022. Securities purchased under agreements to resell typically mature 30 days from the settlement date, qualify as a secured borrowing and are measured at amortized cost.

Debt Securities

Debt securities have been classified in the consolidated balance sheets according to management’s intent. The amortized cost, related gross unrealized gains and losses, ACL and the fair value of AFS and HTM debt securities are as follows:

11

	March 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
AFS
Corporate bonds	$	244,190	$	1,218	$	23,900	$	885	$	220,623
Municipal securities	46,910		57		3,345		—		43,622
Mortgage-backed securities	130,343		24		14,703		—		115,664
Collateralized mortgage obligations	524,593		—		41,940		—		482,653
Asset-backed securities	38,966		622		2,075		—		37,513
Collateralized loan obligations	69,750		—		3,702		—		66,048
	$	1,054,752	$	1,921	$	89,665	$	885	$	966,123
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
HTM
Mortgage-backed securities	$	35,999	$	—	$	6,302	$	—	$	29,697
Collateralized mortgage obligations	35,616		—		4,748		—		30,868
Municipal securities	113,221		98		12,106		—		101,213
	$	184,836	$	98	$	23,156	$	—	$	161,778

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
AFS
Corporate bonds	$	268,179	$	1,445	$	17,379	$	—	$	252,245
Municipal securities	49,886		3		4,198		—		45,691
Mortgage-backed securities	156,408		23		17,420		—		139,011
Collateralized mortgage obligations	609,456		—		55,850		—		553,606
Asset-backed securities	42,015		289		2,613		—		39,691
Collateralized loan obligations	69,750		—		3,702		—		66,048
	$	1,195,694	$	1,760	$	101,162	$	—	$	1,096,292
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
HTM
Mortgage-backed securities	$	36,342	$	—	$	6,753	$	—	$	29,589
Collateralized mortgage obligations	36,169		—		5,884		—		30,285
Municipal securities	113,657		6		14,756		—		98,907
	$	186,168	$	6	$	27,393	$	—	$	158,781

The Company elected to transfer 25 AFS debt securities with an aggregate fair value of $117,001 to a classification of HTM debt securities on January 1, 2022. In accordance with FASB ASC 320-10-35-10, the transfer from AFS to HTM must be recorded at the fair value of the AFS debt securities at the time of transfer. The net unrealized holding gain of $4,387, net of tax, at the date of transfer was retained in AOCI, with the associated pre-tax amount retained in the carrying value of the HTM debt securities. Such amounts will be amortized to comprehensive income over the remaining life of the securities.

12

The following tables disclose the Company’s AFS debt securities in an unrealized loss position for which an ACL has not been recorded, aggregated by investment category and length of time that individual debt securities have been in a continuous loss position:

	March 31, 2023
	Less Than 12 Months				12 Months or More				Totals
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AFS
Corporate bonds	$	—	$	—	$	15,710	$	311	$	15,710	$	311
Municipal securities	27,477		306		11,317		3,039		38,794		3,345
Mortgage-backed securities	3,410		67		111,436		14,636		114,846		14,703
Collateralized mortgage obligations	131,159		3,404		351,494		38,536		482,653		41,940
Asset-backed securities	3,224		150		16,978		1,925		20,202		2,075
Collateralized loan obligations	—		—		66,048		3,702		66,048		3,702
	$	165,270	$	3,927	$	572,983	$	62,149	$	738,253	$	66,076
HTM
Mortgage-backed securities	$	—	$	—	$	29,697	$	6,302	$	29,697	$	6,302
Collateralized mortgage obligations	3,829		220		27,039		4,528		30,868		4,748
Municipal securities	12,170		94		76,434		12,012		88,604		12,106
	$	15,999	$	314	$	133,170	$	22,842	$	149,169	$	23,156

	December 31, 2022
	Less Than 12 Months				12 Months or More				Totals
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AFS
Corporate bonds	$	197,946	$	15,697	$	15,568	$	1,682	$	213,514	$	17,379
Municipal securities	33,919		848		8,813		3,350		42,732		4,198
Mortgage-backed securities	115,467		11,104		22,780		6,317		138,247		17,421
Collateralized mortgage obligations	482,358		42,553		71,198		13,296		553,556		55,849
Asset-backed securities	15,195		991		11,207		1,621		26,402		2,612
Collateralized loan obligations	23,673		1,328		42,375		2,375		66,048		3,703
	$	868,558	$	72,521	$	171,941	$	28,641	$	1,040,499	$	101,162
HTM
Mortgage-backed securities	$	804	$	85	$	28,784	$	6,668	$	29,588	$	6,753
Collateralized mortgage obligations	25,285		4,676		4,999		1,208		30,284		5,884
Municipal securities	85,671		11,411		9,161		3,345		94,832		14,756
	$	111,760	$	16,172	$	42,944	$	11,221	$	154,704	$	27,393

Management evaluates AFS debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

The number of AFS debt securities in an unrealized loss position totaled 114 and 175 at March 31, 2023 and December 31, 2022, respectively. Management does not have the intent to sell any of these debt securities and believes that it is more likely than not that the Company will not have to sell any such debt securities before a recovery of cost. The fair value is

13

expected to recover as the debt securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of March 31, 2023, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions, and therefore no losses have been recognized in the Company’s consolidated statements of income.

    The amortized costs and estimated fair values of AFS debt securities, by contractual maturity, as of the dates indicated, are shown in the table below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities, collateralized mortgage obligations, asset-backed securities, and collateralized loan obligations typically are issued with stated principal amounts, and the securities are backed by pools of mortgage loans and other loans that have varying maturities. The terms of mortgage-backed securities, collateralized mortgage obligations, asset-backed securities, and collateralized loan obligations thus approximates the terms of the underlying mortgages and loans and can vary significantly due to prepayments. Therefore, these securities are not included in the maturity categories below.

	March 31, 2023
	AFS				HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due from one year to five years	$	29,466	$	30,422	$	456	$	445
Due from five years to ten years	205,272		182,451		13,221		12,946
Due after ten years	56,362		51,372		99,544		87,822
	291,100		264,245		113,221		101,213
Mortgage-backed securities and collateralized mortgage obligations	654,936		598,317		71,615		60,565
Asset-backed securities	38,966		37,513		—		—
Collateralized loan obligations	69,750		66,048		—		—
	$	1,054,752	$	966,123	$	184,836	$	161,778

	December 31, 2022
	AFS				HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due from one year to five years	$	53,692	$	54,179	$	—	$	—
Due from five years to ten years	205,911		190,406		8,275		8,129
Due after ten years	58,462		53,351		105,382		90,778
	318,065		297,936		113,657		98,907
Mortgage-backed securities and collateralized mortgage obligations	765,864		692,617		72,511		59,874
Asset-backed securities	42,015		39,691		—		—
Collateralized loan obligations	69,750		66,048		—		—
	$	1,195,694	$	1,096,292	$	186,168	$	158,781

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Proceeds from sales of debt securities AFS and gross gains and losses for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
	2023		2022
Proceeds from sales	$	109,793	$	—
Gross realized losses	5,321		—

As of March 31, 2023 and December 31, 2022, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders' equity. There was a blanket floating lien on all debt securities held by the Company to secure FHLB advances as of March 31, 2023 and December 31, 2022.

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4. LHI and ACL

LHI in the accompanying consolidated balance sheets are summarized as follows:

	March 31, 2023		December 31, 2022
LHI, carried at amortized cost:
Real estate:
Construction and land	$	1,831,349	$	1,787,400
Farmland	51,680		43,500
1 - 4 family residential	896,252		894,456
Multi-family residential	432,209		322,679
Owner occupied commercial real estate (“OOCRE”)	631,563		715,829
Non-owner occupied commercial real estate (“NOOCRE”)	2,505,344		2,341,379
Commercial	2,895,957		2,942,348
MW	437,501		446,227
Consumer	8,316		7,806
	9,690,171		9,501,624
Deferred loan fees, net	(15,511)		(18,973)
ACL	(98,694)		(91,052)
LHI carried at amortized cost, net	9,575,966		9,391,599
Total LHI, net	$	9,575,966	$	9,391,599

Included in the total LHI, net, as of March 31, 2023 and December 31, 2022 was an accretable discount related to purchased performing and purchased credit deteriorated (“PCD”) loans acquired in the approximate amounts of $7,476 and $8,260, respectively. The discount is being accreted into income on a level-yield basis over the life of the loans. In addition, included in the net loan portfolio as of March 31, 2023 and December 31, 2022 is a discount on retained loans from sale of originated U.S. Small Business Administration (“SBA”) and U.S. Department of Agriculture (“USDA”) loans of $6,554 and $5,238, respectively. During the year ended December 31, 2022, the Company purchased $223,924 in pooled residential real estate loans at a net discount. The remaining net purchase discount of $3,909 is included in the total LHI, net, and will be amortized on a straight line basis over five years.

ACL

The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The activity in the ACL related to LHI is as follows:

	Three Months Ended March 31, 2023
	Construction and Land		Farmland		Residential		Multifamily		OOCRE		NOOCRE		Commercial		Consumer		Total
Balance at beginning of the period	$	13,120	$	127	$	9,533	$	2,607	$	8,707	$	26,704	$	30,142	$	112	$	91,052
Credit loss (benefit) expense non-PCD loans	4,240		41		12		877		238		(499)		2,995		363		8,267
Credit (benefit) loss expense PCD loans	(46)		—		(5)		—		(16)		33		267		—		233
Charge-offs	—		—		—		—		(116)		—		(1,051)		(62)		(1,229)
Recoveries	—		—		1		—		—		—		364		6		371
Ending Balance	$	17,314	$	168	$	9,541	$	3,484	$	8,813	$	26,238	$	32,717	$	419	$	98,694

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	Three Months Ended March 31, 2022
	Construction and Land		Farmland		Residential		Multifamily		OOCRE		NOOCRE		Commercial		Consumer		Total
Balance at beginning of the period	$	7,293	$	187	$	5,982	$	2,664	$	9,215	$	30,548	$	21,632	$	233	$	77,754
Credit (benefit) loss expense non-PCD loans	1,595		(29)		224		(537)		813		(4,114)		4,044		622		2,618
Credit (benefit) loss expense PCD loans	(5)		—		(72)		—		(1,264)		673		(2,442)		(8)		(3,118)
Charge-offs	—		—		—		—		(1,341)		(553)		(3,294)		(134)		(5,322)
Recoveries	—		—		—		—		—		400		144		9		553
Ending Balance	$	8,883	$	158	$	6,134	$	2,127	$	7,423	$	26,954	$	20,084	$	722	$	72,485

The majority of the Company's loan portfolio consists of loans to businesses and individuals in the Dallas-Fort Worth metroplex and the Houston metropolitan area. This geographic concentration subjects the loan portfolio to the general economic conditions within these areas. The risks created by this concentration have been considered by management in the determination of the adequacy of the ACL. Management believes the ACL was adequate to cover estimated losses on loans as of March 31, 2023 and 2022.

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:

	March 31, 2023					December 31, 2022
		Real Property(1)		ACL Allocation			Real Property(1)		ACL Allocation
Construction and land		$	1,583	$	—		$	—	$	—
OOCRE		1,181		—			1,193		129
NOOCRE		20,696		1,939			20,896		2,138
Commercial		1,231		477			1,240		396
Consumer		12		—			15		—
Total		$	24,703	$	2,416		$	23,344	$	2,663

(1) Loans reported exclude PCD loans that transitioned upon adoption of ASC 326 and accounted for on a pooled basis.

Nonaccrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due in accordance with the terms of the loan agreement. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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Nonaccrual loans aggregated by class of loans, as of March 31, 2023 and December 31, 2022, were as follows:

	March 31, 2023				December 31, 2022
	Nonaccrual		Nonaccrual With No ACL		Nonaccrual		Nonaccrual With No ACL
Real estate:
Construction and land	$	1,583	$	1,583	$	—	$	—
1 - 4 family residential	818		818		862		$	862
OOCRE	9,322		9,322		9,737		8,545
NOOCRE	20,783		12,784		21,377		13,178
Commercial	11,659		2,633		11,397		2,521
Consumer	71		71		169		169
Total	$	44,236	$	27,211	$	43,542	$	25,275

    There were $8,141 and $8,545 of PCD loans that are not accounted for on a pooled basis included in nonaccrual loans at March 31, 2023 and December 31, 2022, respectively.

    During the three months ended March 31, 2023 and 2022, interest income not recognized on nonaccrual loans was $772 and $889, respectively.

An age analysis of past due loans, aggregated by class of loans and including past due nonaccrual loans, as of March 31, 2023 and December 31, 2022, is as follows:

	March 31, 2023
	30 to 59 Days		60 to 89 Days		90 Days or Greater		Total Past Due (1)		Total Current		PCD		Total Loans		Total 90 Days Past Due and Still Accruing(2)
Real estate:
Construction and land	$	619	$	—	$	1,583	$	2,202	$	1,829,147	$	—	$	1,831,349	$	—
Farmland	—		—		—		—		51,680		—		51,680		—
1 - 4 family residential	5,331		442		296		6,069		888,989		1,194		896,252		296
Multi-family residential	—		—		—		—		432,209		—		432,209		—
OOCRE	2,833		1,405		1,181		5,419		606,957		19,187		631,563		—
NOOCRE	—		—		20,696		20,696		2,471,438		13,210		2,505,344		—
Commercial	1,152		3,219		2,785		7,156		2,885,081		3,720		2,895,957		—
MW	208		—		—		208		437,293		—		437,501		—
Consumer	113		10		—		123		8,175		18		8,316		—
Total	$	10,256	$	5,076	$	26,541	$	41,873	$	9,610,969	$	37,329	$	9,690,171	$	296

(1) Total past due loans includes $17 of PCD loans as of March 31, 2023.

(2) Loans 90 days past due and still accruing excludes $1,449 of PCD loans as of March 31, 2023.

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	December 31, 2022
	30 to 59 Days		60 to 89 Days		90 Days or Greater		Total Past Due(1)		Total Current		PCD		Total Loans		Total 90 Days Past Due and Still Accruing(2)
Real estate:
Construction and land	$	1,121	$	2,111	$	—	$	3,232	$	1,782,624	$	1,544	$	1,787,400	$	—
Farmland	—		—		—		—		43,500		—		43,500		—
1 - 4 family residential	4,319		129		499		4,947		888,329		1,180		894,456		123
Multi-family residential	1,000		—		—		1,000		321,679		—		322,679		—
OOCRE	3,342		1,186		1,193		5,721		690,291		19,817		715,829		—
NOOCRE	5,156		—		20,896		26,052		2,302,579		12,748		2,341,379		—
Commercial	3,088		2,188		1,675		6,951		2,931,696		3,701		2,942,348		—
MW	—		—		—		—		446,227		—		446,227		—
Consumer	352		—		45		397		7,386		23		7,806		2
Total	$	18,378	$	5,614	$	24,308	$	48,300	$	9,414,311	$	39,013	$	9,501,624	$	125

(1) Total past due loans includes $13,178 of PCD loans as of December 31, 2022.

(2) Loans 90 days past due and still accruing excludes $2,004 of PCD loans and $669 of PPP loans as of December 31, 2022.

There were $296 loans past due 90 days and still accruing as of March 31, 2023. Loans past due 90 days and still accruing were $125 as of December 31, 2022. These loans are also considered well-secured, and are in the process of collection with plans in place for the borrowers to bring the notes fully current or to subsequently be renewed. The Company believes that it will collect all principal and interest due on each of the loans past due 90 days and still accruing.

Modifications to Borrowers Experiencing Financial Difficulty

The Company adopted Accounting Standards Update (“ASU”) 2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measure of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty.

An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted during the three months ended March 31, 2023:

Loan Modifications Made to Borrowers Experiencing Financial Difficulty
	Interest Rate Reduction
	Amortized Cost Basis		% of Loan Class		Financial Impact
1-4 Family Residential Rentals1	$	42,647	4.8	%	Reduced weighted-average contractual interest rate from floating 7.5% to fixed 6.0%
Total	$	42,647

1 1-4 Family Residential Rentals is included in the 1-4 family residential loan portfolio and is reported as such in accordance with Federal Financial Institutions Examination Counsel guidelines.

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No modifications to borrowers in financial difficulty had a payment default during the period and were modified in the 12 months before default to borrowers experiencing financial difficulty:

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months:

Payment Status
	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due
1-4 Family Residential Rentals	$	42,647	$	—	$	—	$	—
Total	$	42,647	$	—	$	—	$	—

The Company has not committed to lend additional amounts to customers with outstanding loans classified as TLMs as of March 31, 2023 or December 31, 2022.

Credit Quality Indicators

    From a credit risk standpoint, the Company classifies its loans in one of the following categories: (i) pass, (ii) special mention, (iii) substandard or (iv) doubtful. Loans classified as loss are charged-off. Loans not rated special mention, substandard, doubtful or loss are classified as pass loans.

    The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on criticized credits monthly. Ratings are adjusted to reflect the degree of risk and loss that is felt to be inherent in each credit as of each monthly reporting period. All classified credits are evaluated for impairment. If impairment is determined to exist, a specific reserve is established. The Company’s methodology is structured so that specific reserves are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss).

    Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness, however, such concerns are generally not so pronounced that the Company expects to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits with a lower rating.

    Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed.

    Credits rated doubtful are those in which full collection of principal appears highly questionable, and in which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt. Based upon available information, positive action by the Company is required to avert or minimize loss. Credits rated doubtful are generally also placed on non-accrual.

    Credits classified as PCD are those that, at acquisition date, have experienced a more-than-insignificant deterioration in credit quality since origination. All loans considered to be purchased-credit impaired loans prior to January 1, 2020 were converted to PCD loans upon adoption of ASC 326. The Company elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. Loans are only removed from the existing pools if they are foreclosed, written off, paid off, or sold.

The Company considers the guidance in ASC 310-20 when determining whether a modification, extension or renewal of a loan constitutes a current period origination. Generally, current period renewals of credit are re-underwritten at the point of renewal and considered current period originations for purposes of the table below. Based on the most recent analysis performed, the risk category of loans by class of loans based on year or origination is as follows:

20

	Term Loans Amortized Cost Basis by Origination Year1
	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2023
Construction and land:
Pass	$	2,440	$	503,556	$	731,203	$	243,188	$	43,087	$	17,882	$	200,052	$	—	$	1,741,408
Special mention	—		1,470		25,948		11,487		20,641		290		—		—		59,836
Substandard	—		—		4,583		25,522		—		—		—		—		30,105
Total construction and land	$	2,440	$	505,026	$	761,734	$	280,197	$	63,728	$	18,172	$	200,052	$	—	$	1,831,349
Construction and land gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Farmland:
Pass	$	2,044	$	2,514	$	22,640	$	18,397	$	19	$	5,034	$	1,032	$	—	$	51,680
Total farmland	$	2,044	$	2,514	$	22,640	$	18,397	$	19	$	5,034	$	1,032	$	—	$	51,680
Farmland gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1 - 4 family residential:
Pass	$	13,449	$	139,484	$	183,529	$	86,358	$	41,883	$	294,800	$	115,517	$	17,766	$	892,786
Special mention	—		—		—		—		—		691		—		—		691
Substandard	—		—		—		—		—		1,382		199		—		1,581
PCD	—		—		—		—		—		1,194		—		—		1,194
Total 1 - 4 family residential	$	13,449	$	139,484	$	183,529	$	86,358	$	41,883	$	298,067	$	115,716	$	17,766	$	896,252
1-4 family residential gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multi-family residential:
Pass	$	5,190	$	73,744	$	121,248	$	136,876	$	8,306	$	35,226	$	35,911	$	—	$	416,501
Special mention	—		—		—		—		1,945		13,763		—		—		15,708
Total multi-family residential	$	5,190	$	73,744	$	121,248	$	136,876	$	10,251	$	48,989	$	35,911	$	—	$	432,209
Multi-family residential gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
OOCRE:
Pass	$	5,931	$	126,121	$	105,907	$	89,064	$	42,865	$	209,887	$	3,352	$	—	$	583,127
Special mention	—		—		2,298		—		1,943		4,738		—		—		8,979
Substandard	—		—		—		1,442		—		18,828		—		—		20,270
PCD	—		—		—		—		—		19,187		—		—		19,187
Total OOCRE	$	5,931	$	126,121	$	108,205	$	90,506	$	44,808	$	252,640	$	3,352	$	—	$	631,563
OOCRE gross charge-offs	$	—	$	—	$	—	$	5	$	5	$	106	$	—	$	—	$	116
NOOCRE:
Pass	$	47,684	$	761,518	$	568,395	$	263,632	$	152,268	$	487,869	$	16,523	$	595	$	2,298,484
Special mention	—		—		—		22,849		18,536		38,563		—		—		79,948
Substandard	—		—		2,783		—		2,232		108,687		—		—		113,702
PCD	—		—		—		—		—		13,210		—		—		13,210
Total NOOCRE	$	47,684	$	761,518	$	571,178	$	286,481	$	173,036	$	648,329	$	16,523	$	595	$	2,505,344
NOOCRE gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

21

Commercial:
Pass	$	101,857	$	388,951	$	123,908	$	69,297	$	84,702	$	66,526	$	1,968,105	$	572	$	2,803,918
Special mention	—		—		1,113		—		71		5,467		14,070		—		20,721
Substandard	—		17,894		3,292		5,121		3,982		16,125		21,110		74		67,598
PCD	—		—		—		—		—		3,720		—		—		3,720
Total commercial	$	101,857	$	406,845	$	128,313	$	74,418	$	88,755	$	91,838	$	2,003,285	$	646	$	2,895,957
Commercial gross charge-offs	$	—	$	—	$	—	$	48	$	479	$	524	$	—	$	—	$	1,051
MW:
Pass	$	1,868	$	55,891	$	252	$	288	$	741	$	174	$	359,206	$	—	$	418,420
Special mention	—		—		—		—		—		—		18,873		—		18,873
Substandard	—		—		—		—		—		208		—		—		208
Total MW	$	1,868	$	55,891	$	252	$	288	$	741	$	382	$	378,079	$	—	$	437,501
Mortgage warehouse gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer:
Pass	$	1,388	$	1,437	$	412	$	804	$	168	$	2,240	$	1,709	$	—	$	8,158
Special mention	—		—		—		—		—		57		—		—		57
Substandard	—		—		—		—		16		67		—		—		83
PCD	—		—		—		—		—		18		—		—		18
Total consumer	$	1,388	$	1,437	$	412	$	804	$	184	$	2,382	$	1,709	$	—	$	8,316
Consumer gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	62	$	—	$	—	$	62
Total Pass	$	181,851	$	2,053,216	$	1,857,494	$	907,904	$	374,039	$	1,119,638	$	2,701,407	$	18,933	$	9,214,482
Total Special Mention	—		1,470		29,359		34,336		43,136		63,569		32,943		—		204,813
Total Substandard	—		17,894		10,658		32,085		6,230		145,297		21,309		74		233,547
Total PCD	—		—		—		—		—		37,329		—		—		37,329
Total	$	181,851	$	2,072,580	$	1,897,511	$	974,325	$	423,405	$	1,365,833	$	2,755,659	$	19,007	$	9,690,171
Total gross charge-offs	$	—	$	—	$	—	$	53	$	484	$	692	$	—	$	—	$	1,229

1 Term loans amortized cost basis by origination year excludes $15,511 of deferred loan fees, net.

	Term Loans Amortized Cost Basis by Origination Year1
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31,
Construction and land:
Pass	$	347,855	$	709,208	$	378,229	$	69,241	$	30,673	$	14,025	$	215,263	$	140	$	1,764,634
Special mention	—		18,662		2,560		—		—		—		—		—		21,222
PCD	—		—		—		—		—		1,544		—		—		1,544
Total construction and land	$	347,855	$	727,870	$	380,789	$	69,241	$	30,673	$	15,569	$	215,263	$	140	$	1,787,400
Farmland:
Pass	$	2,546	$	16,242	$	18,530	$	21	$	—	$	5,069	$	1,092	$	—	$	43,500
Total farmland	$	2,546	$	16,242	$	18,530	$	21	$	—	$	5,069	$	1,092	$	—	$	43,500

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1 - 4 family residential:
Pass	$	135,006	$	188,635	$	87,861	$	43,293	$	41,960	$	257,768	$	86,900	$	726	$	842,149
Special mention	—		—		—		—		—		278		26,068		—		26,346
Substandard	—		184		—		—				1,028		23,569		—		24,781
PCD	—		—		—		—		—		1,180		—		—		1,180
Total 1 - 4 family residential	$	135,006	$	188,819	$	87,861	$	43,293	$	41,960	$	260,254	$	136,537	$	726	$	894,456
Multi-family residential:
Pass	$	72,044	$	80,793	$	110,426	$	8,402	$	32,822	$	2,494	$	—	$	—	$	306,981
Total multi-family residential	$	72,044	$	80,793	$	110,426	$	10,356	$	46,566	$	2,494	$	—	$	—	$	322,679
OOCRE:
Pass	$	191,044	$	106,698	$	84,230	$	43,965	$	49,461	$	167,968	$	5,225	$	—	$	648,591
Special mention	—		2,321		1,409		1,964		—		3,447		—		45		9,186
Substandard	—		—		—		—		23,231		15,004		—		—		38,235
PCD	—		—		—		—		—		19,817		—		—		19,817
Total OOCRE	$	191,044	$	109,019	$	85,639	$	45,929	$	72,692	$	206,236	$	5,225	$	45	$	715,829
NOOCRE:
Pass	$	752,476	$	531,735	$	215,076	$	149,246	$	196,424	$	305,434	$	16,642	$	465	$	2,167,498
Special mention	—		—		22,774		19,464		12,274		51,451		—		—		105,963
Substandard	—		—		—		1,310		7,659		46,201		—		—		55,170
PCD	—		—		—		—		12,697		51		—		—		12,748
Total NOOCRE	$	752,476	$	531,735	$	237,850	$	170,020	$	229,054	$	403,137	$	16,642	$	465	$	2,341,379
Commercial:
Pass	$	473,084	$	132,396	$	90,543	$	83,996	$	40,030	$	31,269	$	1,906,074	$	553	$	2,757,945
Special mention	—		666		—		4,543		7,385		270		114,447		—		127,311
Substandard	17,894		4,058		5,189		4,195		10,954		4,732		6,292		77		53,391
PCD	—		—		—		—		273		3,428		—		—		3,701
Total commercial	$	490,978	$	137,120	$	95,732	$	92,734	$	58,642	$	39,699	$	2,026,813	$	630	$	2,942,348
MW:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	444,393	$	—	$	444,393
Substandard	—		—		—		—		46		162		—		—		208
Total MW	$	—	$	—	$	—	$	—	$	46	$	162	$	446,019	$	—	$	446,227
Consumer:
Pass	$	1,965	$	452	$	872	$	216	$	135	$	2,298	$	1,618	$	—	$	7,556
Special mention	—		—		—		—		—		58		—		—		58
Substandard	—		—		—		—		—		169		—		—		169
PCD	—		—		—		—		—		23		—		—		23
Total consumer	$	1,965	$	452	$	872	$	216	$	135	$	2,548	$	1,618	$	—	$	7,806
Total Pass	$	1,976,020	$	1,766,159	$	985,767	$	398,380	$	391,505	$	786,325	$	2,677,207	$	1,884	$	8,983,247
Total Special Mention	—		21,649		26,743		25,971		19,659		55,504		142,141		45		291,712
Total Substandard	17,894		4,242		5,189		7,459		55,634		67,296		29,861		77		187,652
Total PCD	—		—		—		—		12,970		26,043		—		—		39,013
Total	$	1,993,914	$	1,792,050	$	1,017,699	$	431,810	$	479,768	$	935,168	$	2,849,209	$	2,006	$	9,501,624

1 Term loans amortized cost basis by origination year excludes $18,973 of deferred loan fees, net.

23

Servicing Assets

The Company was servicing loans of approximately $571,611 and $518,612 as of March 31, 2023 and 2022, respectively. A summary of the changes in the related servicing assets are as follows:

	Three Months Ended March 31,
	2023		2022
Balance at beginning of period	$	14,880	$	17,705
Increase from loan sales	959		1,491
Servicing asset impairment, net of recoveries	424		(280)
Amortization charged as a reduction to income	(1,015)		(748)
Balance at end of period	$	15,248	$	18,168

Fair value of servicing assets is estimated by discounting estimated future cash flows from the servicing assets using discount rates that approximate current market rates over the expected lives of the loans being serviced. A valuation allowance is recorded when the fair value is below the carrying amount of the asset. As of March 31, 2023 and 2022 there was a valuation allowance of $2,027 and $908, respectively.

The Company may also receive a portion of subsequent interest collections on loans sold that exceed the contractual servicing fees. In that case, the Company records an interest-only strip based on its relative fair market value and the other components of the loans. There was no interest-only strip receivable recorded at March 31, 2023 and December 31, 2022.

The following table reflects principal sold and related gain for SBA and USDA LHI. The gain on sale of these loans is recorded in government guaranteed loan income, net in the Company’s consolidated statements of income.

	Three Months Ended March 31,
	2023		2022
SBA LHI principal sold	$	6,340	$	4,376
Gain on sale of SBA LHI	148		533
USDA LHI principal sold	44,002		20,000
Gain on sale of USDA LHI	6,984		3,628

5. Fair Value

The following table summarizes assets measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

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	March 31, 2023
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
AFS debt securities	$	—	$	966,123	$	—	$	966,123
Equity securities with a readily determinable fair value	9,918		—		—		9,918
LHFS(1)	—		41,747		—		41,747
Interest rate swap designated as hedging instruments	—		28,246		—		28,246
Correspondent interest rate swaps not designated as hedging instruments	—		29,358		—		29,358
Customer interest rate swaps not designated as hedging instruments	—		1,912		—		1,912
Correspondent interest rate caps and collars not designated as hedging instruments	—		1,351		—		1,351
Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	44,880	$	—	$	44,880
Correspondent interest rate swaps not designated as hedging instruments	—		2,454		—		2,454
Customer interest rate swaps not designated as hedging instruments	—		28,282		—		28,282
Customer interest rate caps and collars not designated as hedging instruments	—		1,351		—		1,351

1) Represents LHFS elected to be carried at fair value.

	December 31, 2022
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
AFS debt securities	$	—	$	1,096,292	$	—	$	1,096,292
Equity securities with a readily determinable fair value	9,792		—		—		9,792
PPP loans	—		—		1,995		1,995
LHFS(1)	—		19,775		—		19,775
Interest rate swap designated as hedging instruments	—		26,523		—		26,523
Correspondent interest rate swaps not designated as hedging instruments	—		38,839		—		38,839
Customer interest rate swaps not designated as hedging instruments	—		1,004		—		1,004
Correspondent interest rate caps and collars not designated as hedging instruments	—		1,494		—		1,494
Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	54,171	$	—	$	54,171
Correspondent interest rate swaps not designated as hedging instruments	—		1,126		—		1,126
Customer interest rate swaps not designated as hedging instruments	—		38,188		—		38,188
Customer interest rate caps and collars not designated as hedging instruments	—		1,494		—		1,494

(1) Represents LHFS elected to be carried at fair value upon origination or acquisition..

There were no transfers between Level 2 and Level 3 during the three months ended March 31, 2023 and December 31, 2022.

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The following table summarizes assets measured at fair value on a non-recurring basis as of March 31, 2023 and December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	Fair Value Measurements Using
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
As of March 31, 2023
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	6,814	$	6,814
Servicing assets with a valuation allowance	—		—		8,895		8,895
As of December 31, 2022
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	7,969	$	7,969
Servicing assets with a valuation allowance	—		—		10,984		10,984

At March 31, 2023, collateral dependent loans with an allowance had a recorded investment of $9,230, with $2,416 specific allowance for credit loss allocated. At December 31, 2022, collateral dependent loans with an allowance had a carrying value of $10,632, with $2,663 of specific allowance for credit loss allocated.

At March 31, 2023, servicing assets of $10,922 had a valuation allowance totaling $2,027. At December 31, 2022, servicing assets of $13,435 had a valuation allowance totaling $2,451.

There were no liabilities measured at fair value on a non-recurring basis as of March 31, 2023 or December 31, 2022.

Fair Value of Financial Instruments

    The Company’s methods of determining fair value of financial instruments in this Note are consistent with its methodologies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Please refer to Note 17 in the Company’s Annual Report on Form 10-K for information on these methods.

The estimated fair values and carrying values of all financial instruments not measured at fair value on a recurring basis under current authoritative guidance as of March 31, 2023 and December 31, 2022 were as follows:

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			Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
March 31, 2023
Financial assets:
Cash and cash equivalents	$	808,395	$	—	$	808,395	$	—
HTM debt securities	184,836		—		161,778		—
LHFS(1)	1,069		—		—		1,069
LHI(2)	9,575,966		—		—		9,321,175
Accrued interest receivable	42,242		—		42,242		—
BOLI	84,962		—		84,962		—
Servicing asset	6,353		—		6,353		—
Equity securities without a readily determinable fair value	10,604		N/A		N/A		N/A
FHLB and FRB stock	116,081		N/A		N/A		N/A
Financial liabilities:
Deposits	$	9,034,738	$	—	$	8,296,710	$	—
Advances from FHLB	1,680,000		—		1,681,089		—
Accrued interest payable	18,651		—		18,651		—
Subordinated debentures and subordinated notes	229,027		—		229,027		—
December 31, 2022
Financial assets:
Cash and cash equivalents	$	436,077	$	—	$	436,077	$	—
HTM debt securities	186,168		—		158,781		—
Securities purchased under agreements to resell	—		—		—		—
LHFS1)	866		—		866		—
LHI(2)	9,399,614		—		—		9,163,616
Accrued interest receivable	44,035		—		44,035		—
BOLI	84,496		—		84,496		—
Servicing asset	3,896		—		3,896		—
Equity securities without a readily determinable fair value	10,072		N/A		N/A		N/A
FHLB and FRB stock	101,568		N/A		N/A		N/A
Financial liabilities:
Deposits	$	9,123,234	$	—	$	8,341,419	$	—
Advances from FHLB	1,175,000		—		1,156,852		—
Accrued interest payable	8,795		—		8,795		—
Subordinated debentures and subordinated notes	228,775		—		228,775		—
Securities sold under agreement to repurchase	—		—		—		—

(1) LHFS represent mortgage LHFS that are carried at lower of cost or market.

(2) LHI includes MW and is carried at amortized cost.

6. Derivative Financial Instruments

The Company primarily uses derivatives to manage exposure to market risk, including interest rate risk and credit risk and to assist customers with their risk management objectives. Management will designate certain derivatives as hedging instruments in a qualifying hedge accounting relationship. The Company’s remaining derivatives consist of derivatives held for customer accommodation or other purposes.

The fair value of derivative positions outstanding is included in other assets and accounts payable and other liabilities on the accompanying consolidated balance sheets and in the net change in each of these financial statement line items in the

27

accompanying consolidated statements of cash flows. For derivatives not designated as hedging instruments, swap fee income and gains and losses due to changes in fair value are included in other noninterest income and the operating section of the consolidated statement of cash flows. For derivatives designated as hedging instruments, the entire change in the fair value related to the derivative instrument is recognized as a component of other comprehensive income and subsequently reclassified into interest income or interest expense when the forecasted transaction affects income. The notional amounts and estimated fair values as of March 31, 2023 and December 31, 2022 are as shown in the table below.

	March 31, 2023						December 31, 2022
			Estimated Fair Value						Estimated Fair Value
	Notional Amount		Asset Derivative		Liability Derivative		Notional Amount		Asset Derivative		Liability Derivative
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on money market deposit account payments	$	250,000	$	17,257	$	—	$	250,000	$	21,234	$	—
Interest rate swaps on customer loan interest payments	375,000		—		41,126		375,000		—		49,211
Interest rate collars on customer loan interest payments	450,000		3,445		3,754		450,000		3,267		4,960
Interest rate floor on customer loan interest payments	200,000		7,544		—		100,000		2,022		—
Total derivatives designated as hedging instruments	$	1,275,000	$	28,246	$	44,880	$	1,175,000	$	26,523	$	54,171
Derivatives not designated as hedging instruments:
Financial institution counterparty:
Interest rate swaps	$	805,488	$	29,358	$	2,454	$	805,311	$	38,839	$	1,126
Interest rate caps and corridors	123,870		1,351		—		68,370		1,494		—
Commercial customer counterparty:
Interest rate swaps	805,488		1,912		28,282		805,311		1,004		38,188
Interest rate caps and corridors	123,870		—		1,351		68,370		—		1,494
Total derivatives not designated as hedging instruments	$	1,858,716	$	32,621	$	32,087	$	1,747,362	$	41,337	$	40,808
Offsetting derivative assets/liabilities			(25,703)		(25,703)				(30,982)		(30,982)
Total derivatives	$	3,133,716	$	35,164	$	51,264	$	2,922,362	$	36,878	$	63,997

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Pre-tax (loss) gain included in the consolidated statements of income and related to derivative instruments for the three months ended March 31, 2023 and 2022 were as follows.

	For the Three Months Ended March 31, 2023						For the Three Months Ended March 31, 2022
	(Loss) gain recognized in other comprehensive income on derivative		Gain (loss) reclassified from accumulated other comprehensive income into income		Location of (loss) gain reclassified from accumulated other comprehensive income into income		Gain (loss) recognized in other comprehensive income on derivative		(Loss) gain reclassified from accumulated other comprehensive income into income		Location of (loss) gain reclassified from accumulated other comprehensive income into income
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on borrowing advances	$	(1,082)	$	1,082	Interest Expense		$	(264)	$	264	Interest Expense
Interest rate swap on money market deposit account payments	(3,977)		2,568		Interest Expense		9,389		(171)		Interest Expense
Derivatives on customer loan interest payments	12,136		(3,807)		Interest Income		(22,506)		1,078		Interest Income
Total	$	7,077	$	(157)			$	(13,381)	$	1,171
					Net gain recognized in other noninterest income						Net gain recognized in other noninterest income
Derivatives not designated as hedging instruments:
Interest rate swaps, caps, floors and collars					$	212					$	719

Cash Flow Hedges

We enter into cash flow hedge relationships to mitigate exposure to the variability of future cash flows or other forecasted transactions. The Company uses interest rate swaps, floors, caps and collars to manage overall cash flow changes related to interest rate risk exposure on benchmark interest rate loans. To qualify for hedge accounting, a formal assessment is prepared to determine whether the hedging relationship, both at inception and on an ongoing basis, is expected to be highly effective in achieving offsetting cash flows attributable to the hedged risk during the term of the cash flow hedge. At inception a statistical regression analysis is prepared to determine hedge effectiveness. At each reporting period thereafter, a statistical regression or qualitative analysis is performed. If it is determined that hedge effectiveness has not been or will not continue to be highly effective, then hedge accounting ceases and any gain or loss in AOCI is recognized in earnings immediately. The cash flow hedges are recorded at fair value in other assets and other liabilities on the consolidated balance sheets with changes in fair value recorded in AOCI, net of tax. Amounts recorded to AOCI are reclassified into earnings in the same period in which the hedged asset or liability affects earnings and are presented in the same income statement line item as the earnings effect of the hedged asset or liability.    

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Interest Rate Swap, Floor, Cap and Collar Agreements Not Designated as Hedging Derivatives

    In order to accommodate the borrowing needs of certain commercial customers, the Company has entered into interest rate swap or cap agreements with those customers. These interest rate derivative contracts effectively allow the Company’s customers to convert a variable rate loan into a fixed rate loan. In order to offset the exposure and manage interest rate risk, at the time an agreement was entered into with a customer, the Company entered into an interest rate swap or cap with a correspondent bank counterparty with offsetting terms. These derivative instruments are not designated as accounting hedges and changes in the net fair value are recognized in noninterest income or expense. Because the Company acts as an intermediary for its customers, changes in the fair value of the underlying derivative contracts substantially offset each other and do not have a material impact on the Company’s results of operations. The fair value amounts are included in other assets and other liabilities.

The following is a summary of the interest rate swaps, caps and collars outstanding as of March 31, 2023 and December 31, 2022.

	March 31, 2023
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
Non-hedging derivative instruments:
Customer interest rate derivative:
Interest rate swaps - receive fixed/pay floating	$	805,488	2.41% - 8.47%	LIBOR 1 month + 3.0% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 4.8 years	$	(27,071)
Interest rate caps and corridors	$	123,870	3.50% - 5.90%	SOFR CME 1 month + 0.0%	Wtd. Avg. 1.6 years	$	(1,351)
Correspondent interest rate derivative:
Interest rate swaps - pay fixed/receive floating	$	805,488	2.41% - 8.47%	LIBOR 1 month + 3.0% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 4.8 years	$	26,904
Interest rate caps and corridors	$	123,870	3.50% - 5.90%	SOFR CME 1 month + 0.0%	Wtd. Avg. 1.6 years	$	1,351
	December 31, 2022
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
Non-hedging derivative instruments:
Customer interest rate derivative:
Interest rate swaps - receive fixed/pay floating	$	805,311	2.41% - 8.47%	LIBOR 1 month + 2.8% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 5.1 years	$	(37,183)
Interest rate caps and corridors	$	68,370	3.50%	LIBOR 1 month + 0.0%	Wtd. Avg. 1.8 years	$	(1,494)
Correspondent interest rate derivative:
Interest rate swaps - pay fixed/receive floating	$	805,311	2.41% - 8.47%	LIBOR 1 month + 2.8% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 5.1 years	$	37,713
Interest rate caps and corridors	$	68,370	3.50%	LIBOR 1 month + 0.0%	Wtd. Avg. 1.8 years	$	1,494

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7. Off-Balance Sheet Loan Commitments

The Company is party to financial instruments with off-balance sheet (“OBS”) risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, MW commitments and standby and commercial letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets.

The Company’s exposure to credit loss in the event of nonperformance by the other party to a financial instrument for commitments to extend credit, MW commitments and standby and commercial letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

The following table sets forth the approximate amounts of these financial instruments as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
Commitments to extend credit	$	4,138,471	$	4,511,671
MW commitments	985,207		1,088,558
Standby and commercial letters of credit	105,950		98,179
Total	$	5,229,628	$	5,698,408

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Management evaluates each customer’s creditworthiness on a case-by-case basis and substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of future loan funding. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the borrower.

MW commitments are unconditionally cancellable and represent the unused capacity on MW facilities the Company has approved. The Company reserves the right to refuse to buy any mortgage loans offered for sale by a customer, for any reason, at the Company’s sole and absolute discretion.

Standby and commercial letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby and commercial letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company’s policy for obtaining collateral and the nature of such collateral is substantially the same as that involved in making commitments to extend credit.

The table below presents the activity in the allowance for unfunded commitment credit losses related to those financial instruments discussed above. This ACL on unfunded commitments is recorded in accounts payable and other liabilities on the consolidated balance sheets:

	Three Months Ended March 31,
	2023		2022
Beginning balance for ACL on unfunded commitments	$	10,086	$	9,266
Provision for credit losses on unfunded commitments	1,497		493
Ending balance of ACL on unfunded commitments	$	11,583	$	9,759

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8. Stock-Based Awards

2010 Stock Option and Equity Incentive Plan (“2010 Incentive Plan”)

    The Company recognized no stock compensation expense related to the 2010 Incentive Plan for the three months ended March 31, 2023 and 2022.

A summary of option activity under the 2010 Incentive Plan for the three months ended March 31, 2023 and 2022, and changes during the periods then ended, is presented below:

	2010 Incentive Plan
	Non-Performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	1,000	$	10.43
Outstanding and exercisable at March 31, 2022	1,000	$	10.43	1.07
Outstanding at January 1, 2023	1,000	$	10.43	1.07	$	147
Exercised	(1,000)	10.43
Outstanding and exercisable at March 31, 2023	—	$	—	—	$	—

As of March 31, 2023, December 31, 2022 and March 31, 2022 there was no unrecognized stock compensation expense related to non-performance based stock options.

A summary of the fair value of the Company’s stock options exercised under the 2010 Incentive Plan for the three months ended March 31, 2023 and 2022 is presented below:

	Fair Value of Options Exercised as of March 31,
	2023		2022
Nonperformance-based stock options exercised	$	16	$	—

2022 Equity Plan and Green Acquired Omnibus Plans

Grants of Restricted Stock Units

    During the three months ending March 31, 2023, the Company granted non-performance-based RSUs and performance-based restricted stock units (“PSUs”) under the 2022 Amended and Restated Omnibus Incentive Plan (the “2022 Equity Plan”) and the Veritex (Green) 2014 Omnibus Equity Incentive Plan (the “Veritex (Green) 2014 Plan”). The majority of the RSUs granted to employees during the three months ending March 31, 2023 have an annual graded vesting over a three year period from the grant date.

    The PSUs granted in February 2023 are subject to a service, performance and market conditions. The performance and market condition determine the number of awards to vest. The service period is from February 1, 2023 to January 31, 2026, the performance conditions performance period is from January 1, 2023 to December 31, 2025 and the market condition performance period is from February 1, 2023 to January 31, 2026. A Monte Carlo simulation was used to estimate the fair value of PSUs on the grant date.

Stock Compensation Expense

Stock compensation expense for options, RSUs and PSUs granted under the 2022 Equity Plan and the Veritex (Green) 2014 Plan were as follows:

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	Three Months Ended March 31,
	2023		2022
2022 Equity Plan	$	2,465	$	2,904
Veritex (Green) 2014 Plan	422		414

2022 Equity Plan

A summary of the status of the Company’s stock options under the 2022 Equity Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	2022 Equity Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	710,043	$	24.38
Exercised	(38,128)	23.34
Outstanding at March 31, 2022	671,915	$	24.44	6.65
Options exercisable at March 31, 2022	518,237	$	24.45	6.35
Outstanding at January 1, 2023	657,494	$	24.47
Forfeited	(1,666)	17.38
Cancelled	(3,804)	29.13
Exercised	(3,951)	21.38
Outstanding at March 31, 2023	648,073	$	24.48	5.24	$	123
Options exercisable at March 31, 2023	610,073	$	24.74	5.13	$	114

As of March 31, 2023, December 31, 2022 and March 31, 2022, there was $122, $172 and $626 of total unrecognized compensation expense related to options awarded under the 2022 Equity Plan, respectively. The unrecognized compensation expense at March 31, 2023 is expected to be recognized over the remaining weighted average requisite service period of 0.01 years.

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A summary of the status of the Company’s RSUs under the 2022 Equity Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	2022 Equity Plan
	Non-performance-Based
	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	598,051	$	23.39
Granted	169,355	40.77
Vested into shares	(96,141)	24.69
Forfeited	(2,350)	26.12
Outstanding at March 31, 2022	668,915	$	27.59
Outstanding at January 1, 2023	955,104	$	28.38
Granted	224,165	27.90
Vested into shares	(162,952)	30.23
Forfeited	(16,394)	31.77
Outstanding at March 31, 2023	999,923	$	27.87

A summary of the status of the Company’s PSUs under the 2022 Equity Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	2022 Equity Plan
	Performance-Based
	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	156,471	$	24.17
Granted	39,429	40.38
Outstanding at March 31, 2022	132,564	$	30.15
Outstanding at January 1, 2023	126,707	$	31.19
Granted	53,310	27.55
Vested into shares	(41,781)	26.42
Outstanding at March 31, 2023	129,768	$	30.28

As of March 31, 2023, December 31, 2022 and March 31, 2022, there was $15,278, $17,160 and $16,882 of total unrecognized compensation related to RSUs and PSUs awarded under the 2022 Equity Plan, respectively. The unrecognized compensation expense at March 31, 2023 is expected to be recognized over the remaining weighted average requisite service period of 1.68 years.

    A summary of the fair value of the Company’s stock options exercised, RSUs and PSUs vested under the 2022 Equity Plan during the three months ended March 31, 2023 and 2022 is presented below:

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	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2023	2022
Non-performance-based stock options exercised	31	1,562
RSUs vested	3,044	2,524
PSUs vested	1,070	2,270

Veritex (Green) 2014 Plan

A summary of the status of the Company’s stock options under the Veritex (Green) 2014 Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	Veritex (Green) 2014 Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	217,804	$	19.62
Exercised	(28,622)	21.34
Outstanding at March 31, 2022	189,182	$	19.37	5.57
Options exercisable at March 31, 2022	180,830	$	18.81	5.45
Outstanding at January 1, 2023	155,212	$	19.83
Cancelled	(505)	21.38
Exercised	(13,266)	21.38
Outstanding at March 31, 2023	141,441	$	21.86	4.87	$	287
Options exercisable at March 31, 2023	141,441	$	21.86	4.87	$	287
Weighted average fair value of options granted during the period		$	—

As of March 31, 2023 and December 31, 2022 there was no unrecognized compensation expense related to options awarded under the Veritex (Green) 2014 Plan. As of March 31, 2022 there was $75 of total unrecognized compensation expense related to options awarded under the Veritex (Green) 2014 Plan, respectively.

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A summary of the status of the Company’s RSUs under the Veritex (Green) 2014 Plan as of March 31, 2023 and 2022 and changes during the three months then ended, is as follows:

	Veritex (Green) 2014 Plan
	Non-performance-Based
	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	122,784	$	21.13
Granted	4,231	40.38
Vested into shares	(32,931)	21.80
Forfeited	(2,558)	29.13
Outstanding at March 31, 2022	91,526	$	21.55
Outstanding at January 1, 2023	86,233	$	21.09
Vested into shares	(19,282)	29.66
Forfeited	(2,232)	29.13
Outstanding at March 31, 2023	64,719	$	18.26

A summary of the status of the Company’s PSUs under the Veritex (Green) 2014 Plan as of March 31, 2023 and 2022 and changes during the three months then ended, is as follows:

	Veritex (Green) 2014 Plan
	Performance-Based
	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	35,899	$	22.26
Granted	4,411	40.38
Incremental PSUs granted upon performance condition met	10,566	$	19.69
Vested into shares	(31,703)	$	19.69
Outstanding at March 31, 2022	19,173	$	29.26
Outstanding at January 1, 2023	19,173	$	30.74
Vested into shares	(8,531)	25.94
Outstanding at March 31, 2023	10,642	$	31.93

As of March 31, 2023, December 31, 2022 and March 31, 2022, there was $3,260, $3,825, and $1,399, respectively, of total unrecognized compensation related to outstanding RSUs and PSUs awarded under the Veritex (Green) 2014 Plan to be recognized over a remaining weighted average requisite service period of 2.20 years.

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    A summary of the fair value of the Company’s stock options exercised and RSUs vested under the Veritex (Green) 2014 Plan during the three months ended March 31, 2023 and 2022 presented below:

	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2023		2022
Non-performance-based stock options exercised	$	18	$	1,143
RSUs vested	1,990		718
PSU vested	227		624

Green 2010 Plan

In addition to the Veritex (Green) 2014 Plan discussed earlier in this Note, the Company assumed the Green Bancorp Inc. 2010 Stock Option Plan (“Green 2010 Plan”).

A summary of the status of the Company’s stock options under the Green 2010 Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	Green 2010 Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	66,143	$	12.56
Exercised	(1,372)	13.07
Outstanding at March 31, 2022	64,771	$	12.55	1.95 years
Outstanding at January 1, 2023	43,162	$	13.11
Exercised	(29,630)	13.22
Outstanding at March 31, 2023	13,532	$	12.86	3.94 years	$	73

A summary of the fair value of the Company’s stock options exercised under the Green 2010 Plan during the three months ended March 31, 2023 and 2022 presented below:

	Fair Value of Options Exercised as of March 31,
	2023	2022
Nonperformance-based stock options exercised	365	56

9. Income Taxes

    Income tax expense for the three months ended March 31, 2023 and 2022 was as follows:

	Three Months Ended March 31,
	2023			2022
Income tax expense for the period	$	11,012		$	8,102
Effective tax rate	22.3		%	19.5		%

For the three months ended March 31, 2023, the Company had an effective tax rate of 22.3%. The Company had a net discrete tax expense of $112 thousand associated with the recognition of an excess tax expense realized on share-based payment awards during the three months ended March 31, 2023. Excluding this discrete tax item, the Company had an effective tax rate of 22.1% for the three months ended March 31, 2023.

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For the three months ended March 31, 2022, the Company had an effective tax rate of 19.5%. The Company had a net discrete tax benefit of $992 associated with the recognition of an excess tax benefit realized on share-based payment awards during the three months ended March 31, 2022 . Excluding this discrete tax item, the Company had an effective tax rate of 21.9% for the three months ended March 31, 2022.

10. Legal Contingencies

Litigation

The Company may from time to time be involved in legal actions arising from normal business activities. In the opinion of management, there are no claims for which it is reasonably possible that an adverse outcome would have a material effect on the Company's financial position, liquidity or results of operations. The Company is not aware of any material unasserted claims.

11. Capital Requirements and Restrictions on Retained Earnings

Under applicable U.S. banking laws, there are legal restrictions limiting the amount of dividends the Company can declare. Approval of the regulatory authorities is required if, among other things, the effect of the dividends declared would cause regulatory capital of the Company to fall below specified minimum levels.

The Company on a consolidated basis and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements triggers certain mandatory actions and may lead to additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action (“PCA”), the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and PCA classification are also subject to qualitative judgments by the regulators about components of capital, risk weightings of assets, and other factors. In addition, an institution may be downgraded to, or deemed to be in, a capital category that is lower than indicated by its capital ratios, if it is determined to be in an unsafe or unsound condition or if it receives an unsatisfactory examination rating with respect to certain matters.

As a result of our no longer using the CBLR framework, we are subject to various quantitative measures established by regulation to ensure capital adequacy. These generally applicable capital requirements require a banking organization that does not operate under the CBLR framework to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. The capital rules implementing Basel III also include a “capital conservation buffer” of 2.5% on top of each of the minimum risk-based capital ratios, and a banking organization with any risk-based capital ratio that meets or exceeds the minimum requirement but does not meet the capital conservation buffer will face constraints on dividends, equity repurchases and discretionary bonus payments based on the amount of the shortfall. Additionally, to be categorized as “well capitalized,” a bank that does not operate under the CBLR framework is required to maintain minimum total risk-based common equity Tier 1, Tier 1, and total capital ratios and Tier 1 leverage ratios as set forth in the table below.

As of March 31, 2023 and December 31, 2022, the Company’s and the Bank’s capital ratios exceeded those levels necessary to be categorized as “well capitalized”. There are no conditions or events since March 31, 2023 that management believes have changed the Company’s category.

In the first quarter of 2020, U.S. federal regulatory authorities issued an interim final rule that provides banking organizations that adopt CECL during the 2020 calendar year with the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided during the initial two-year delay (i.e., a five-year transition in total). In connection with our adoption of CECL on January 1, 2020, the Company elected to utilize the five-year CECL transition. As a result, the effects of CECL on the Company’s and the Bank’s regulatory capital was delayed through the year 2021, with the effects phased-in over a three-year period from January 1, 2022 through December 31, 2024.

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A comparison of the Company’s and Bank’s actual capital amounts and ratios to required capital amounts and ratios is presented in the following table:

	Actual				For Capital  Adequacy Purposes				To Be Well Capitalized Under PCA Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of March 31, 2023
Total capital (to risk-weighted assets “RWA”)
Company	$	1,437,576	11.99	%	$	959,183	8.0	%	n/a		n/a
Bank	1,424,435		11.89		958,409		8.0		$	1,198,011	10.0	%
Tier 1 capital (to RWA)
Company	1,146,356		9.56		719,470		6.0		n/a		n/a
Bank	1,331,501		11.12		718,436		6.0		957,914		8.0
Common equity tier 1 (to RWA)
Company	1,116,632		9.32		539,146		4.5		n/a		n/a
Bank	1,331,501		11.12		538,827		4.5		778,305		6.5
Tier 1 capital (to average assets)
Company	1,146,356		9.67		474,191		4.0		n/a		n/a
Bank	1,331,501		11.24		473,844		4.0		592,305		5.0
As of December 31, 2022
Total capital (to RWA)
Company	$	1,395,904	11.63	%	$	960,209	8.0	%	n/a		n/a
Bank	1,368,082		11.41		959,216		8.0		$	1,199,020	10.0	%
Tier 1 capital (to RWA)
Company	1,121,021		9.34		720,142		6.0		n/a		n/a
Bank	1,291,288		10.77		719,381		6.0		959,174		8.0
Common equity tier 1 (to RWA)
Company	1,091,353		9.09		540,274		4.5		n/a		n/a
Bank	1,291,288		10.77		539,535		4.5		779,329		6.5
Tier 1 capital (to average assets)
Company	1,121,021		9.82		456,628		4.0		n/a		n/a
Bank	1,291,288		11.32		456,286		4.0		570,357		5.0

Dividend Restrictions

Dividends paid by the Bank are subject to certain restrictions imposed by regulatory agencies. Capital requirements further limit the amount of dividends that may be paid by the Bank. No dividends were paid by the Bank to the Holdco during the three months ended March 31, 2023 and March 31, 2022.

Dividends of $10,837, or $0.20, and $9,913, or $0.20, per outstanding share of the Company’s common stock were paid by the Company during the three months ended March 31, 2023 and 2022, respectively.

The Bank is subject to limitations on dividend payouts if, among other things, it does not have a capital conservation buffer of 2.5% or more. The Bank had a capital conservation buffer of 3.89% as of March 31, 2023.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes thereto appearing in Item 1 of Part I of this Quarterly Report on Form 10-Q (this “Report”) as well as with our consolidated financial statements and notes thereto appearing in our Annual Report on Form 10-K for the year ended December 31, 2022. Except where the content otherwise requires or when otherwise indicated, the terms “Veritex,” the “Company,” “we,” “us,” “our,” and “our business” refer to the combined entities of Veritex Holdings, Inc. and its subsidiaries, including Veritex Community Bank.

This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that we believe are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Special Cautionary Notice Regarding Forward-Looking Statements,” may cause actual results to differ materially from the projected results discussed in the forward-looking statements appearing in this discussion and analysis. We assume no obligation to update any of these forward-looking statements. For additional information concerning forward-looking statements, please read “Special Cautionary Notice Regarding Forward-Looking Statements” below.

Overview

    We are a Texas state banking organization with corporate offices in Dallas, Texas. Through our wholly owned subsidiary, Veritex Community Bank, a Texas state-chartered bank, we provide relationship-driven commercial banking products and services tailored to meet the needs of small to medium-sized businesses and professionals. Beginning at our operational inception in 2010, we initially targeted customers and focused our acquisitions primarily in the Dallas metropolitan area, which we consider to be Dallas and the adjacent communities in North Dallas. Our current primary markets now includes the broader Dallas-Fort Worth metroplex and the Houston metropolitan area. As we continue to grow, we may expand to other metropolitan banking markets in Texas.

    Our business is conducted through one reportable segment, community banking, which generates the majority of our revenues from interest income on loans, customer service and loan fees, gains on sale of government guaranteed loans and mortgage loans and interest income from securities. We incur interest expense on deposits and other borrowed funds and noninterest expense, such as salaries, employee benefits and occupancy expenses. We analyze our ability to maximize income generated from interest earning assets and expense of our liabilities through net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest income is the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings, which are used to fund those assets.

    Changes in the market interest rates and interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, and interest-bearing and noninterest-bearing liabilities, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. Fluctuations in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international conditions and conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions in Texas and, specifically, in the Dallas-Fort Worth metroplex and Houston metropolitan area, as well as developments affecting the real estate, technology, financial services, insurance, transportation, manufacturing and energy sectors within our target markets and throughout the state of Texas.

Recent Industry Developments

During the first quarter of 2023, the banking industry experienced significant volatility with multiple high-profile bank failures and industry wide concerns related to liquidity, deposit outflows, unrealized securities losses and eroding consumer confidence in the banking system. Despite these negative industry developments, the Company’s liquidity position and balance sheet remains robust. The Company’s total deposits decreased by 1% as compared to December 31, 2022, to $9.0 billion at March 31, 2023 as we experienced minimal deposit outflow in the first quarter. There Federal Reserve also established a Bank Term Funding Program to offer loans of up to one year to eligible depository institutions pledging qualifying assets as collateral. The Company signed up for the program however has not utilized the program to date. The Company also took a number of preemptive actions, which included pro-active outreach to clients and actions to maximize its funding sources in response to these recent developments. Furthermore, the Company remains well capitalized with CET1 at 9.32% as of March 31, 2023.

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In accordance with Item 303(c) of Regulation S-K, the Company is providing a comparison of the quarter ended March 31, 2023 against the preceding sequential quarter. The Company believes providing a sequential discussion of its results of operations provides more relevant information for investors and stakeholders to understand and analyze the business.

Results of Operations for the Three Months Ended March 31, 2023 and December 31, 2022

General

    Net income for the three months ended March 31, 2023 was $38.4 million, a decrease of $1.5 million, or 3.7%, from net income of $39.9 million for the three months ended December 31, 2022.

    Basic EPS for the three months ended March 31, 2023 was $0.71, a decrease of $0.03 from $0.74 for the three months ended December 31, 2022. Diluted EPS for the three months ended March 31, 2023 was $0.70, a decrease of $0.03 from $0.73 for the three months ended December 31, 2022.

Net Interest Income

For the three months ended March 31, 2023, net interest income before provisions for credit losses totaled $103.4 million and net interest margin and net interest spread were 3.69% and 2.74%, respectively. For the three months ended December 31, 2022, net interest income totaled $106.1 million and net interest margin and net interest spread were 3.87% and 3.08%, respectively. The decrease in net interest income of $2.7 million was primarily due to an increase of $12.4 million in interest expense on certificates and other time deposits, a $5.8 million increase in interest expense on transaction and savings deposits and a $1.8 million increase in interest expense on advances from FHLB. The decrease was partially offset by interest income on loans which increased $14.9 million and a $2.1 million increase in interest income on deposits in financial institutions and Fed Funds sold during the three months ended March 31, 2023, compared to the three months ended December 31, 2022. The $18.2 million increase in interest expense on deposit accounts was due to an increase in average funding costs of total deposits and borrowings. The increase in interest income on loans was due to an increase in loan yields and higher average balances. Net interest margin decreased 18 basis points from the three months ended December 31, 2022 primarily due to an increase in the average rate paid on interest-bearing liabilities, slightly offset by an increase in the average rate paid on interest-bearing liabilities during the three months ended March 31, 2023. As a result, the average cost of interest-bearing deposits increased 94 basis points to 3.06% for the three months ended March 31, 2023 from 2.12% for the three months ended December 31, 2022. The average costs of total deposits, including noninterest-bearing deposits, for the three months ended March 31, 2023 is 2.24%.

For the three months ended March 31, 2023, interest expense totaled $66.2 million and the average rate paid on interest-bearing liabilities was 3.32%. For the three months ended December 31, 2022, interest expense totaled $46.1 million and the average rate paid on interest-bearing liabilities was 2.47%. The increase of $20.1 million in interest expense was primarily due to an increase in funding costs attributable to a $12.4 million increase in the average rate paid on certificates and other time deposits, a $5.8 million increase in interest paid interest-bearing demand and savings deposits and a $1.8 million increase in the average rate paid on advances from FHLB.

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    The following table presents, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest–bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as non-accrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the three months ended March 31, 2023 and December 31, 2022, interest income not recognized on non-accrual loans was $772 thousand and $4.7 million, respectively. Any non-accrual loans have been included in the table as loans carrying a zero yield.

	For the Three Months Ended March 31,						For the Three Months Ended December 31,
	2023						2022
			Interest						Interest
	Average		Earned/		Average		Average		Earned/		Average
	Outstanding		Interest		Yield/		Outstanding		Interest		Yield/
	Balance		Paid		Rate		Balance		Paid		Rate
	(Dollars in thousands)
Assets
Interest-earning assets:
Loans(1)	$	9,141,137	$	146,801	6.51	%	$	8,743,380	$	131,823	5.98	%
LHI, MW	360,172		4,906		5.52		383,080		5,024		5.20
Debt securities	1,252,457		10,988		3.56		1,286,342		10,880		3.36
Interest-bearing deposits in other banks	478,345		5,534		4.69		353,737		3,401		3.81
Equity securities and other investments	124,985		1,408		4.57		119,054		1,087		3.62
Total interest-earning assets	11,357,096		169,637		6.06		10,885,593		152,215		5.55
ACL	(92,664)						(85,275)
Noninterest-earning assets	949,881						960,726
Total assets	$	12,214,313					$	11,761,044
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	4,150,995	$	29,857	2.92	%	$	4,321,936	$	24,043	2.21	%
Certificates and other time deposits	2,588,728		20,967		3.28		1,785,152		8,543		1.90
Advances from FHLB	1,122,683		12,358		4.46		1,073,049		10,577		3.91
Subordinated debentures and subordinated notes	231,251		3,066		5.38		229,037		2,954		5.12
Total interest-bearing liabilities	8,093,657		66,248		3.32		7,409,174		46,117		2.47
Noninterest-bearing liabilities:
Noninterest-bearing deposits	2,470,700						2,737,468
Other liabilities	173,380						179,584
Total liabilities	10,737,737						10,326,226
Stockholders’ equity	1,476,576						1,434,818
Total liabilities and stockholders’ equity	$	12,214,313					$	11,761,044
Net interest rate spread(2)					2.74	%					3.08	%
Net interest income			$	103,389					$	106,098
Net interest margin(3)					3.69	%					3.87	%

________________________________

(1) Includes average outstanding balances of LHFS of $19,679 and $15,296 for the three months ended March 31, 2023 and December 31, 2022, respectively, and average balances of LHI, excluding MW.

(2) Net interest rate spread is equal to the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

(3) Net interest margin is equal to net interest income divided by average interest-earning assets.

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The following table presents the changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and interest rates. For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.

	For the Three Months Ended
	March 31, 2023 vs. December 31, 2022
	Increase (Decrease)
	Due to Change in
	Volume		Rate		Total
	(In thousands)
Interest-earning assets:
Loans	$	3,943	$	11,035	$	14,978
LHI, MW	(167)		49		(118)
Debt securities	(8)		116		108
Interest-bearing deposits in other banks	206		1,927		2,133
Equity securities and other investments	53		268		321
Total increase in interest income	4,027		13,395		17,422
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	(84)		5,898		5,814
Certificates and other time deposits	733		11,691		12,424
Advances from FHLB	99		1,682		1,781
Subordinated debentures and subordinated notes	25		87		112
Total increase in interest expense	773		19,358		20,131
Increase in net interest income	$	3,254	$	(5,963)	$	(2,709)

Provision for Credit Losses

Our provision for credit losses is a charge to income in order to bring our ACL to a level deemed appropriate by management. For a description of the factors taken into account by management in determining the ACL see “—Financial Condition—Allowance for Credit Losses on Loans Held for Investment.” The provision for credit loan losses was $8.5 million for the three months ended March 31, 2023, compared to $11.8 million provision for the three months ended December 31, 2022, a decrease of $3.3 million. The decrease in the recorded provision for credit losses for the three months ended March 31, 2023 was primarily attributable to changes in the Texas economic forecast and a decrease in loan growth. For the three months ended March 31, 2023, we also recorded a $1.5 million provision for unfunded commitments, which was attributable to changes in Texas economic factors, offset by lower unfunded balances compared to a $523 thousand benefit for unfunded commitments for three months ended December 31, 2022.

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Noninterest Income

The following table presents, for the periods indicated, the major categories of noninterest income:

	For the
	Three Months Ended
	March 31,		December 31,		Increase
	2023		2022		(Decrease)
	(In thousands)
Noninterest income:
Service charges and fees on deposit accounts	$	5,017	$	5,173	$	(156)
Loan fees	2,064		2,477		(413)
Loss on sales of debt securities	(5,321)		—		(5,321)
Gain on sales of mortgage loans	6		4		2
Government guaranteed loan income, net	9,688		7,808		1,880
Equity method investment loss	(1,521)		(5,416)		3,895
Customer swap income	217		2,273		(2,056)
Other	3,381		2,007		1,374
Total noninterest income	$	13,531	$	14,326	$	(795)

Noninterest income for the three months ended March 31, 2023 decreased $795 thousand, or 5.5%, to $13.5 million compared to noninterest income of $14.3 million for the three months ended December 31, 2022. The primary drivers of the decrease were as follows:

Loss on sales of debt securities. The loss on sale of debt securities during the three months ended March 31, 2023, compared to the three months ended December 31, 2022, was primarily due to a $5.3 million loss on sales of investment securities due to the Company selling $116.2 million of investment securities in early March 2023.

Government guaranteed loan income, net. Government guaranteed loan income, net, includes income related to the sales of SBA and USDA loans. The increase in government guaranteed loan income, net, of $1.9 million during the three months ended March 31, 2023 was primarily due to a $1.9 million increase in the valuation of USDA loans HFS compared to the three months ended December 31, 2022.

Equity method investment loss. Equity method investment loss is comprised of losses earned on equity method investments, specifically our 49% investment in Thrive. The loss from these investments was $1.5 million for the three months ended March 31, 2023, as compared to the three months ended December 31, 2022. The decrease in the loss recorded during the three months ended March 31, 2023 compared to three months ended December 31, 2022 is a result of Thrive's continued focus on expense reduction across the corporation and exiting long dated locks, which are no longer being entered into, and represented 50% of the loss reported for the three months ended March 31, 2023. Thrive reported a 7.3% increase in loan units originated during the three months ended March 31,2022 compared to three months ended December 31, 2022.

Customer swap income. The decrease in customer swap income of $2.1 million or 90.5%, during the three months ended March 31, 2023 was primarily due to the decrease in trade executions, compared to the three months ended December 31, 2022.

Other. Other includes other noninterest income from fees. Other noninterest income was $3.4 million for the three months ended March 31, 2023, an increase of $1.4 million, or 68.5% as compared to the three months ended December 31, 2022. The increase was primarily driven by an increase in BOLI income of $932 thousand and a $507 thousand increase in the credit valuation adjustment on the servicing asset.

44

Noninterest Expense

The following table presents, for the periods indicated, the major categories of noninterest expense:

	For the
	Three Months Ended
	March 31,		December 31,		Increase
	2023		2022		(Decrease)
	(In thousands)
Noninterest expense
Salaries and employee benefits	$	31,865	$	33,690	$	(1,825)
Occupancy and equipment	4,973		5,116		(143)
Professional and regulatory fees	4,389		4,401		(12)
Data processing and software expense	4,720		4,197		523
Marketing	1,779		1,841		(62)
Amortization of intangibles	2,495		2,495		—
Telephone and communications	478		358		120
Other	5,916		5,261		655
Total noninterest expense	$	56,615	$	57,359	$	(744)

Noninterest expense for the three months ended March 31, 2023 decreased $744 thousand, or 1.3%, to $56.6 million compared to noninterest expense of $57.4 million for the three months ended December 31, 2022. The most significant components of the decrease were as follows:

Salaries and employee benefits. Salaries and employee benefits include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. These expenses are impacted by the amount of direct loan origination costs, which are required to be deferred in accordance with ASC 310-20. Salaries and employee benefits were $31.9 million for the three months ended March 31, 2023, a decrease of $1.8 million, or 5.4%, compared to the three months ended December 31, 2022. The decrease was primarily attributable to a $1.2 million decrease in salaries expense.

Income Tax Expense

Income tax expense is a function of our pre-tax income, tax-exempt income and other nondeductible expenses. Deferred tax assets and liabilities reflect current statutory income tax rates in effect for the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or statutory tax rates are enacted, deferred tax assets and liabilities are adjusted through the provision of income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. As of March 31, 2023, we did not believe a valuation allowance was necessary.

For the three months ended March 31, 2023, income tax expense totaled $11.0 million, a decrease of $878 thousand, compared to an income tax expense of $11.9 million for the three months ended December 31, 2022. For the three months ended March 31, 2023, we had an effective tax rate of 22.3% which includes a discrete tax expense of $112 thousand associated with the recognition of an excess tax expense realized on share-based payment awards. Excluding this discrete tax item, the Company had an effective tax rate of 22.1%. For the three months ended December 31, 2022, the Company had an effective tax rate of 21.6%.

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Results of Operations for the Three Months Ended March 31, 2023 and 2022

General

    Net income for the three months ended March 31, 2023 was $38.4 million, an increase of $4.9 million, or 14.8%, from net income of $33.5 million for the three months ended March 31, 2022.

    Basic EPS was $0.71 and $0.66 for the three months ended March 31, 2023 and March 31, 2022, respectively. Diluted EPS for the three months ended March 31, 2023 was $0.70, an increase of $0.05 from $0.65 for the three months ended March 31, 2022.

Net Interest Income

For the three months ended March 31, 2023, net interest income totaled $103.4 million and net interest margin and net interest spread were 3.69% and 2.74%, respectively. For the three months ended March 31, 2022, net interest income totaled $73.0 million and net interest margin and net interest spread were 3.22% and 3.04%, respectively. The increase in net interest income was primarily due to an increase in interest income of $80.3 million on loans and an increase of $3.2 million on debt securities, offset by an increase in interest expense of $28.1 million in transaction and savings deposits, a $19.6 million increase in certificates and other time deposits, and a $10.8 million increase in advances from FHLB during the three months ended March 31, 2023, compared to the three months ended March 31, 2022. Net interest margin increased 47 bps to 3.69% from 3.22% for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, primarily due to an increase in average balances and yields on loans, partially offset by an increase in funding costs during the three months ended March 31, 2023. As a result, the average cost of interest-bearing deposits increased to 3.06% for the three months ended March 31, 2023 from 0.26% for the three months ended March 31, 2022.

For the three months ended March 31, 2023, interest expense totaled $66.2 million and the average rate paid on interest-bearing liabilities was 3.32%. For the three months ended March 31, 2022, interest expense totaled $7.3 million and the average rate paid on interest-bearing liabilities was 0.50%. The year-over-year increase was primarily due to increases in the average rates paid on interest-bearing demand and savings deposits, certificates and other time deposits driven by increases in Federal Funds Rate.

The following table presents, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rates earned on interest-earning assets, the average rates paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the three months ended March 31, 2023 and 2022, interest income not recognized on nonaccrual loans was $772 thousand and $889 thousand, respectively. Any nonaccrual loans have been included in the table as loans carrying a zero yield.

46

	For the Three Months Ended March 31,
	2023						2022
			Interest						Interest
	Average		Earned/		Average		Average		Earned/		Average
	Outstanding		Interest		Yield/		Outstanding		Interest		Yield/
	Balance		Paid		Rate		Balance		Paid		Rate
	(Dollars in thousands)
Assets
Interest-earning assets:
Loans(1)	$	9,141,137	$	146,801	6.51	%	$	6,904,278	$	68,374	4.02	%
LHI, MW	360,172		4,906		5.52		421,680		3,069		2.95
Debt Securities	1,252,457		10,988		3.56		1,140,834		7,762		2.76
Interest-earning deposits in other banks	478,345		5,534		4.69		554,864		262		0.19
Equity securities and other investments	124,985		1,408		4.57		190,002		910		1.94
Total interest-earning assets	11,357,096		169,637		6.06		9,211,658		80,377		3.54
ACL	(92,664)						(77,843)
Noninterest-earning assets	949,881						865,107
Total assets	$	12,214,313					$	9,998,922
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	4,150,995	$	29,857	2.92	%	$	3,471,645	$	1,751	0.20	%
Certificates and other time deposits	2,588,728		20,967		3.28		1,501,852		1,380		0.37
Advances from FHLB	1,122,683		12,358		4.46		777,538		1,547		0.81
Subordinated debentures and subordinated debt	231,251		3,066		5.38		231,875		2,659		4.65
Total interest-bearing liabilities	8,093,657		66,248		3.32		5,982,910		7,337		0.50
Noninterest-bearing liabilities:
Noninterest-bearing deposits	2,470,700						2,591,504
Other liabilities	173,380						67,060
Total liabilities	10,737,737						8,641,474
Stockholders’ equity	1,476,576						1,357,448
Total liabilities and stockholders’ equity	12,214,313						$	9,998,922
Net interest rate spread(2)					2.74	%					3.04	%
Net interest income			$	103,389					$	73,040
Net interest margin(3)					3.69	%					3.22	%

(1) Includes average outstanding balances of LHFS of $19,679 and $12,769 for the three months ended March 31, 2023 and March 31, 2022, respectively, and average balances of LHI, excluding MW loans.

(2) Net interest rate spread is equal to the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

(3) Net interest margin is equal to net interest income divided by average interest-earning assets.

47

The following table presents the changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and interest rates. For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.

	For the Three Months Ended March 31,
	2023 vs 2022
	Increase (Decrease)
	Due to Change in
	Volume		Rate		Total
	(In thousands)
Interest-earning assets:
Loans	$	22,152	$	56,275	$	78,427
LHI, MW	(447)		2,284		1,837
Debt Securities	760		2,466		3,226
Equity securities and other investments	(36)		5,308		5,272
Interest-bearing deposits in other banks	(311)		809		498
Total increase in interest income	22,118		67,142		89,260
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	343		27,763		28,106
Certificates and other time deposits	999		18,588		19,587
Advances from FHLB	687		10,124		10,811
Subordinated debentures and subordinated notes	(7)		414		407
Total increase in interest expense	2,022		56,889		58,911
Increase in net interest income	$	20,096	$	10,253	$	30,349

Provision for Credit Losses

Our provision for credit losses is a charge to income in order to bring our ACL to a level deemed appropriate by management. We recorded a provision for credit losses of $9.4 million for the three months ended March 31, 2023, compared to $500 thousand benefit for the same period in 2022. The increase was primarily attributable to an increase in general reserves as a result of changes in economic factors and loan growth, partially offset by charge-offs. For the three months ended March 31, 2023, we also recorded $1.5 million provision for unfunded commitments, which was attributable to changes in Texas economic forecasts, compared to a $493 thousand benefit for unfunded commitments for the three months ended March 31, 2022.

48

Noninterest Income

Our primary sources of recurring noninterest income are service charges and fees on deposit accounts, loan fees, loss on sales of debt securities, gain on the sale of mortgage loans, government guaranteed loan income, net, equity method investment (loss) income, customer swap income, and other income. Noninterest income does not include loan origination fees, which are generally recognized over the life of the related loan as an adjustment to yield using the interest method.

The following table presents, for the periods indicated, the major categories of noninterest income:

	Three Months Ended March 31,				Increase
	2023		2022		(Decrease)
	(In thousands)
Noninterest income:
Service charges and fees on deposit accounts	$	5,017	$	4,710	$	307
Loan fees	2,064		2,794		(730)
Loss on sales of debt securities	(5,321)		—		(5,321)
Gain on sales of mortgage LHFS	6		307		(301)
Government guaranteed loan income, net	9,688		4,891		4,797
Equity method investment (loss) income	(1,521)		367		(1,888)
Customer swap income	217		946		(729)
Other	3,381		1,082		2,299
Total noninterest income	$	13,531	$	15,097	$	(1,566)

Noninterest income for the three months ended March 31, 2023 decreased $1.6 million, or 10.4%, to $13.5 million compared to noninterest income of $15.1 million for the same period in 2022. The primary drivers of the decrease in noninterest income are equity method investment income and government guaranteed loan income, net; offset by increases in customer swap income, loan fees, other noninterest income, and service charges and fees on deposit accounts.

Loan fees. We earn certain fees in connection with funding and servicing loans. The decrease of $730 thousand, or 26.1%, in loan fees during the three months ended March 31, 2023, compared to the same period in 2022 is primarily attributable to a $412 thousand decrease in syndication and arrangement fees, and a $220 thousand decrease in prepayment fees.

Loss on sales of debt securities. The decrease in loss on sales of debt securities during the three months ended March 31, 2023, compared to the same period in 2022, was primarily due to a $5.3 million loss on sales of investment securities due to the Company selling $116.2 million of investment securities in early March 2023.

Government guaranteed loan income, net. Government guaranteed loan income, net, includes income related to the sales of government guaranteed loans. The increase in government guaranteed loan income, net, of $4.8 million, or 98.1%, for the three months ended March 31, 2023, compared to the same period in 2022, was primarily due to a $1.7 million increase in the fair value of government guaranteed loans, including held for sale loans, and an increase of $3.4 million on the gain on sale of SBA and U.S. Department of Agriculture (“USDA”) loans.

Equity method investment (loss) income. Equity method investment (loss) income is comprised of income recorded on equity method investments, specifically our investment in Thrive Mortgage, LLC (“Thrive”), of which the Bank holds a 49% equity method interest. During the three months ended March 31, 2023, the company recorded a loss from this investment of $1.9 million compared to income from this investment of $367 thousand during the three months ended March 31, 2022. The decrease was primarily due to the negative impact of rising interest rates on the fair value and volume of loans originated by Thrive.

Customer swap income. The decrease in customer swap income of $729 thousand, or 77.1%, during the three months ended March 31, 2023, compared to the same period in 2022, was primarily due to the decrease in trade executions.

Other. The increase in other noninterest income of $2.3 million, or 212.5%, during the three months ended March 31, 2023, compared to the same period in 2022, was primarily due to an increase of $960 thousand in BOLI income, an increase of $638 thousand in gain on equity market securities, and an increase of $532 thousand of servicing asset income.

49

Noninterest Expense

Noninterest expense is composed of all employee expenses and costs associated with operating our facilities, acquiring and retaining customer relationships and providing bank services. The major component of noninterest expense is salaries and employee benefits. Noninterest expense also includes operational expenses, such as occupancy and equipment expenses, depreciation and amortization of office equipment, professional fees and regulatory fees, data processing and software expenses, marketing expenses and amortization of intangibles.

The following table presents, for the periods indicated, the major categories of noninterest expense:

	For the Three Months Ended March 31,				Increase (Decrease)
	2023		2022
	(In thousands)
Salaries and employee benefits	$	31,865	$	27,513	$	4,352
Occupancy and equipment	4,973		4,517		456
Professional and regulatory fees	4,389		3,158		1,231
Data processing and software expense	4,720		2,921		1,799
Marketing	1,779		1,187		592
Amortization of intangibles	2,495		2,495		—
Telephone and communications	478		385		93
M&A expense	—		700		(700)
Other	5,916		3,696		2,220
Total noninterest expense	$	56,615	$	46,572	$	10,043

Noninterest expense for the three months ended March 31, 2023 increased $10.0 million, or 21.6%, to $56.6 million compared to noninterest expense of $46.6 million for the three months ended March 31, 2022. The most significant components of the increase were as follows:

Salaries and employee benefits. Salaries and employee benefits include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. These expenses are impacted by the amount of direct loan origination costs, which are required to be deferred in accordance with ASC 310-20. Salaries and employee benefits were $31.9 million for the three months ended March 31, 2023, an increase of $4.4 million, or 15.8%, compared to the same period in 2022. The increase was primarily attributable to a $3.1 million increase in salaries resulting from an increase in talent hired throughout 2022 that had a full quarter of expense recognized in first quarter of 2023, a $524 thousand increase in employee benefit expenses and a $492 thousand increase in severance.

Professional and regulatory fees. This category includes legal, professional, audit, regulatory, and Federal Deposit Insurance Corporation ("FDIC") assessment fees. The increase of $1.2 million, or 39.0%, for the three months ended March 31, 2023 was primarily attributable to increases in FDIC assessment fees of $577 thousand due to an increase in asset size, audit and regulatory fees of $441 thousand and legal and professional fees of $208 thousand, compared to the same period in 2022.

Data processing and software expense. This category of expenses includes expense related to data processing and software expenses, which increased $1.8 million for the three months ended March 31, 2023, compared to the same period in 2022. This increase is primarily due to an increase of $1.6 million in software expenses for the enhancement of systems to mitigate security risk due to the Bank’s growth and an increase of $201 thousand in data processing expenses.

Marketing. This category of expenses includes expenses related to advertising and promotions, which increased $592 thousand for the three months ended March 31, 2023, compared to the same period in 2022. This increase is primarily due to $544 thousand increase in advertising and promotions during the three months ended March 31, 2023, compared to the same period in 2022.

50

Other noninterest expense. This category includes loan operations and collections, supplies and printing, automatic teller and online expenses and other miscellaneous expenses. Other noninterest expense was $5.9 million for the three months ended March 31, 2023, compared to $3.7 million for the same period in 2022, an increase of $2.2 million, or 60.1%. This increase was primarily due to an increase of (i) $749 thousand in expenses for loan fee expenses, (ii) $429 thousand in expenses for third party banking services, (iii) $410 thousand in loan related legal expenses, (iv) $128 thousand in SBA fees, and (v) $124 thousand in subscriptions, in each case, during the three months ended March 31, 2023 as compared to the same period in 2022. The remaining changes were nominal amongst individual noninterest expense accounts.

Income Tax Expense

Income tax expense is a function of our pre-tax income, tax-exempt income and other nondeductible expenses. Deferred tax assets and liabilities reflect current statutory income tax rates in effect for the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. As of March 31, 2023, we did not believe a valuation allowance was necessary.

For the three months ended March 31, 2023, income tax expense totaled $11.0 million, an increase of $2.9 million, compared to an income tax expense of $8.1 million for the same period in 2022. For the three months ended March 31, 2023, we had an effective tax rate of 22.3%. The Company had a net discrete tax expense of $112 thousand associated with the recognition of an excess tax expense realized on share-based payment awards during the three months ended March 31, 2023. Excluding this discrete tax item, the Company had an effective tax rate of 22.1% for the three months ended March 31, 2023.

For the three months ended March 31, 2022, income tax expense totaled $8.1 million, a decrease of $891 thousand, compared to an income tax expense of $9.0 million for the same period in 2021. For the three months ended March 31, 2022, we had an effective tax rate of 19.5%. The decrease in the effective tax rate was primarily a result of the recognition of a $992 thousand excess tax benefit realized on share-based payment awards during the three months ended March 31, 2022. Excluding discrete tax items, the Company had an effective tax rate of 21.9% for the three months ended March 31, 2022.

Financial Condition

Our total assets increased $445.1 million, or 3.7%, from $12.15 billion as of December 31, 2022 to $12.61 billion as of March 31, 2023.  Our asset growth was due to the continued execution of our strategy to establish deep relationships in the Dallas-Fort Worth metroplex and the Houston metropolitan area. We believe these relationships will continue to bring in new customer accounts and grow balances from existing loan and deposit customers.

Loan Portfolio

Our primary source of income is interest on loans to individuals, professionals, small to medium-sized businesses and commercial companies primarily located in the Dallas-Fort Worth metroplex and Houston metropolitan area. Our loan portfolio consists primarily of commercial loans and real estate loans secured by commercial real estate (“CRE”) properties located in our primary market areas. Our loan portfolio represents the highest yielding component of our interest-earning asset base.

As of March 31, 2023, total LHI, excluding ACL, was $9.72 billion, an increase of $214.2 million, or 2.3%, compared to $9.50 billion as of December 31, 2022. The increase was the result of the continued execution and success of our loan growth strategy and previously unfunded balances that were funded during the quarter. In addition to these amounts, $42.8 million and $20.6 million in loans were classified as held for sale as of March 31, 2023 and December 31, 2022, respectively.

Total LHI, excluding MW loans, as a percentage of deposits were 102.4% and 99.3% as of March 31, 2023 and December 31, 2022, respectively. Total LHI, excluding MW loans, as a percentage of assets were 73.3% and 78.2% as of March 31, 2023 and December 31, 2022, respectively.

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The following table summarizes our loan portfolio by type of loan as of the dates indicated:

	As of March 31,				As of December 31,
	2023				2022				Increase (Decrease)
	Amount		% of Total		Amount		% of Total		Amount		% Change Quarter over Quarter
	(Dollars in thousands)
Commercial	$	2,895,957	29.9	%	$	2,942,348	31.0	%	$	(46,391)	(1.6)	%
MW	437,501		4.5		446,227		4.7		(8,726)		(2.0)	%
Real estate:
Owner Occupied CRE (“OOCRE”)	631,563		6.5		715,829		7.5		(84,266)		(11.8)	%
Non-owner Occupied CRE (“NOOCRE”)	2,505,344		25.9		2,341,379		24.6		163,965		7.0	%
Construction and land	1,831,349		18.9		1,787,400		18.8		43,949		2.5	%
Farmland	51,680		0.5		43,500		0.5		8,180		18.8	%
1-4 family residential	896,252		9.2		894,456		9.4		1,796		0.2	%
Multifamily	432,209		4.5		322,679		3.4		109,530		33.9	%
Consumer	8,316		0.1		7,806		0.1		510		6.5	%
Total LHI, carried at amortized cost(1)	$	9,690,171	100.0	%	$	9,501,624	100.0	%	$	188,547	2.0	%
Total LHFS	$	42,816			$	20,641

(1) Total LHI, carried at amortized cost, excludes $15.5 million and $19.0 million of deferred loan fees, net, as of March 31, 2023 and December 31, 2022, respectively.

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Nonperforming Assets

The following table presents information regarding nonperforming assets by category as of the dates indicated:

	As of March 31,			As of December 31,
	2023			2022
	(Dollars in thousands)
Nonperforming loans(1)
1-4 family residential	$	818		$	862
OOCRE	9,322			9,737
NOOCRE	20,783			21,377
Construction and land	1,583			—
Commercial	11,659			11,397
Consumer	71			169
Accruing loans 90 or more days past due	296			125
Total nonperforming loans	44,532			43,667
OREO	—			—
Total nonperforming assets	$	44,532		$	43,667
Nonperforming assets to total assets	0.35		%	0.36		%
Nonperforming loans to total loans, excluding MW loans	0.49		%	0.48		%

(1) At March 31, 2023 and December 31, 2022, nonaccrual loans included PCD loans of $8,141 and $8,545, respectively, not accounted for on a pooled basis along with $17 of PCD loans that are accounted for on a pooled basis at March 31, 2023.

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Potential Problem Loans

The following tables summarize our internal ratings of our loans as of the dates indicated.

	March 31, 2023
	Pass		Special Mention		Substandard		PCD		Total
	(Dollars in thousands)
Real estate:
Construction and land	$	1,741,408	$	59,836	$	30,105	$	—	$	1,831,349
Farmland	51,680		—		—		—		51,680
1 - 4 family residential	892,786		691		1,581		1,194		896,252
Multi-family residential	416,501		15,708		—		—		432,209
OOCRE	583,127		8,979		20,270		19,187		631,563
NOOCRE	2,298,484		79,948		113,702		13,210		2,505,344
Commercial	2,803,918		20,721		67,598		3,720		2,895,957
MW	418,420		18,873		208		—		437,501
Consumer	8,158		57		83		18		8,316
Total	$	9,214,482	$	204,813	$	233,547	$	37,329	$	9,690,171

	December 31, 2022
	Pass		Special Mention		Substandard		PCD		Total
	(Dollars in thousands)
Real estate:
Construction and land	$	1,764,634	$	21,222	$	—	$	1,544	$	1,787,400
Farmland	43,500		—		—		—		43,500
1 - 4 family residential	842,149		26,346		24,781		1,180		894,456
Multi-family residential	306,981		—		15,698		—		322,679
OOCRE	648,591		9,186		38,235		19,817		715,829
NOOCRE	2,167,498		105,963		55,170		12,748		2,341,379
Commercial	2,757,945		127,311		53,391		3,701		2,942,348
MW	444,393		1,626		208		—		446,227
Consumer	7,556		58		169		23		7,806
Total	$	8,983,247	$	291,712	$	187,652	$	39,013	$	9,501,624

ACL on LHI

We maintain an ACL that represents management’s best estimate of the credit losses and risks inherent in the loan portfolio. In determining the ACL, we estimate losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably determined. The balance of the ACL is based on internally assigned risk classifications of loans, historical loan loss rates, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions on certain historical loan loss rates.

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The following table presents, as of and for the periods indicated, an analysis of the ACL and other related data:

	March 31, 2023						December 31, 2022
	Allocated Allowance		% of Loan Portfolio		ACL to Loans		Allocated Allowance		% of Loan Portfolio		ACL to Loans
Construction and land	$	17,314	19.8	%	0.95	%	$	13,120	19.7	%	0.73	%
Farmland	168		0.5		0.33		127		0.4		0.29
1 - 4 family residential	9,541		9.7		1.06		9,533		9.9		1.07
Multi-family residential	3,484		4.7		0.81		2,607		3.6		0.81
OOCRE	8,813		6.8		1.40		8,707		7.9		1.22
NOOCRE	26,238		27.1		1.05		26,704		25.9		1.14
Commercial	32,717		31.3		1.13		30,142		32.5		1.02
Consumer	419		0.1		5.04		112		0.1		1.43
Total	$	98,694	100.0	%	1.07	%	$	91,052	100.0	%	1.01	%

The ACL increased $8.5 million to $98.7 million as of March 31, 2023 from December 31, 2022. The increase in the ACL compared to December 31, 2022, was primarily attributable to loan growth and changes in economic factors, offset by decreases in specific reserves and charge-offs.

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(Dollars in thousands)	Net (Charge-offs) Recoveries		Average Loans		Annualized Net (Charge-off) Recoveries to Average Loans
Three Months Ended March 31, 2023
Construction and land	$	—	$	1,913,734	—	%
Farmland	—		46,370		—
1 - 4 family residential	1		891,003		—
Multi-family residential	—		377,725		—
OOCRE	(116)		706,052		(0.07)
NOOCRE	—		2,329,895		—
Commercial	(687)		2,866,017		(0.10)
MW	—		360,172		—
Consumer	(56)		7,624		(2.98)
Total	$	(858)	$	9,498,592	(0.04)	%
Three Months Ended March 31, 2022
Construction and land	$	—	$	1,166,146	—	%
Farmland	—		50,500		—
1 - 4 family residential	—		548,733		—
Multi-family residential	—		294,666		—
OOCRE	(1,341)		721,108		(0.75)
NOOCRE	(153)		2,059,694		(0.03)
Commercial	(3,150)		2,059,103		(0.62)
MW	—		421,680		—
Consumer	(125)		10,058		(5.04)
Total	$	(4,769)	$	7,331,688	(0.26)	%

Net loans charged off decreased $3.9 million, or 82.0%. Although we believe that we have established our ACL in accordance with accounting principles generally accepted in the United States (“GAAP”) and that the ACL was adequate to provide for known and inherent losses in the portfolio at all times shown above, future provisions will be subject to ongoing evaluations of the risks in our loan portfolio. If we experience economic declines or if asset quality deteriorates, material additional provisions could be required.

Off-Balance Sheet Credit exposure

The ACL on off-balance-sheet credit exposures totaled $11.6 million and $10.1 million at March 31, 2023 and December 31, 2022, respectively. The level of the ACL on off-balance-sheet credit exposures depends upon the volume of outstanding commitments, underlying risk grades, the expected utilization of available funds and forecasted economic conditions impacting our loan portfolio.  

Equity Securities

As of March 31, 2023, we held equity securities with a readily determinable fair value of $9.9 million compared to $9.8 million as of December 31, 2022. These equity securities primarily represent investments in a publicly traded Community Reinvestment Act fund and are subject to market pricing volatility, with changes in fair value recorded in earnings.

The Company held equity securities without a readily determinable fair values and measured at cost of $10.6 million at March 31, 2023, compared to $10.1 million at December 31, 2022. The Company measures equity securities that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

FHLB Stock and FRB Stock

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As of March 31, 2023, we held FHLB stock and FRB stock of $116.1 million compared to $101.6 million as of December 31, 2022. The Bank is a member of its regional FRB and of the FHLB system. FHLB members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. Both FRB and FHLB stock are carried at cost, restricted for sale, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

Debt Securities

We use our debt securities portfolio to provide a source of liquidity, provide an appropriate return on funds invested, manage interest rate risk, meet collateral requirements and meet regulatory capital requirements. As of March 31, 2023, the carrying amount of debt securities totaled $1.15 billion, a decrease of $131.5 million, or 10.3%, compared to $1.28 billion as of December 31, 2022. The decrease was primarily due to the sale of debt securities of $109.8 million with a net loss of $5.3 million. Debt securities represented 9.1% and 10.6% of total assets as of March 31, 2023 and December 31, 2022, respectively.

All of our mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored entities. We do not hold any Fannie Mae or Freddie Mac preferred stock, corporate equity, collateralized debt obligations, collateralized loan obligations, structured investment vehicles, private label collateralized mortgage obligations, subprime, Alt-A, or second lien elements in our investment portfolio. As of March 31, 2023, our investment portfolio did not contain any securities that are directly backed by subprime or Alt-A mortgages.

Management evaluates AFS debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. The Company has 36 AFS debt securities that were in an unrealized loss position totaling $23.9 million as of March 31, 2023. The Company evaluated all debt securities and an ACL on debt securities of $885 thousand was recognized in the Company’s consolidated balance sheets as of March 31, 2023. The Company recorded no ACL for its held to maturity debt securities as of March 31, 2023 and December 31, 2022, respectively.

    As of March 31, 2023 and December 31, 2022, we did not own securities of any one issuer other than U.S. government agency securities for which aggregate cost exceeded 10.0% of our stockholders’ equity as of such respective dates.

Equity Method Investments

Equity method investment loss is comprised of losses on equity method investments, specifically our 49% investment in Thrive. We had $54.1 million in equity method investments as of March 31, 2023 and reported a loss of $1.5 million resulting from these investments for the three months ended March 31, 2023, which represents our proportionate share of our investee’s loss. The loss recorded during the three months ended March 31, 2023 is a result of Thrive's quarterly results slightly offset by their continued focus on expense reduction across the corporation and exiting long dated locks, which are no longer being entered into, which represented 50% of the loss reports for the three months ended March 31, 2023.

Deposits

Total deposits as of March 31, 2023 were $9.03 billion, a decrease of $88.5 million, or 1.0%, compared to $9.12 billion as of December 31, 2022. The decrease from December 31, 2022 was primarily the result of decreases of $246.5 million in interest-bearing transaction and savings deposits, $428.2 million in noninterest-bearing demand deposits, and $224.0 million in correspondent money market deposits. The decrease was partially offset by an increase of $810.2 million in certificates and other time deposits.

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	March 31, 2023
	Ending Balance		% of Total		Average Outstanding Balance
Noninterest-bearing	$	2,212,389	24.4	%	$	2,470,700
Interest-bearing transaction	866,609		9.6	%	715,481
Money market	2,518,922		27.9	%	2,646,708
Savings	106,480		1.2	%	113,736
Certificates and other time deposits	2,896,870		32.1	%	2,588,728
Correspondent money market accounts	433,468		4.8	%	675,070
Total deposits	$	9,034,738	100	%	$	9,210,423

	December 31, 2022
	Ending Balance		% of Total		Average Outstanding Balance
Noninterest-bearing	$	2,640,617	28.9	%	$	2,737,468
Interest-bearing transaction	622,814		6.8	%	594,461
Money market	2,773,623		30.4	%	2,715,476
Savings	118,293		1.3	%	126,269
Certificates and other time deposits	2,086,642		22.9	%	1,785,152
Correspondent money market accounts	881,245		9.7	%	885,730
Total deposits	$	9,123,234	100	%	$	8,844,556

Borrowings

We utilize short-term and long-term borrowings to supplement deposits to fund our lending and investment activities, each of which is discussed below.

FHLB Advances 

The FHLB allows us to borrow on a blanket floating lien status collateralized by certain securities and loans. As of March 31, 2023 and December 31, 2022, total borrowing capacity of $373.7 million and $787.3 million, respectively, was available under this arrangement with outstanding balances of $1.68 billion and $1.18 billion, respectively, and a weighted average interest rate of 4.46% for the three months ended March 31, 2023 and 1.73% for the year ended December 31, 2022. FHLB has also issued standby letters of credit to the Company for $1.13 billion and $1.03 billion as of March 31, 2023 and December 31, 2022, respectively. Our current FHLB advances mature within two years. Other than FHLB borrowings, we had no other short-term borrowings at the dates indicated.

FRB  

The FRB has an available borrower in custody arrangement, which allows us to borrow on a collateralized basis. Certain commercial and consumer loans are pledged under this arrangement. We maintain this borrowing arrangement to meet liquidity needs pursuant to our contingency funding plan. As of March 31, 2023 and December 31, 2022, $3.00 billion and $1.14 billion were available under this arrangement based on collateral values of pledged commercial and consumer loans. As of March 31, 2023 and December 31, 2022, no borrowings were outstanding under this arrangement. As of March 31, 2023, approximately $2.72 billion in commercial loans were pledged as collateral. In addition, we had available $614.7 million under the new Bank Term Funding Program (“BTFP”) with no borrowings outstanding under this program during the first quarter of 2023.

Junior subordinated debentures and subordinated notes

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The table below details our junior subordinated debentures and subordinated notes. Refer to Note 14 “Subordinated Debentures and Subordinated Notes” in our 2022 10-K for further discussion on the details of our junior subordinated debentures and subordinated notes.

	March 31, 2023
	Balance		Rate
	(Dollars in thousands)
Junior subordinated debentures
Parkway National Capital Trust I	$	3,093	6.72%
SovDallas Capital Trust I	8,609		8.75
Patriot Bancshares Capital Trust I	5,155		6.68
Patriot Bancshares Capital Trust II	17,011		6.67
Subordinated notes
4.75% Fixed-to-Floating Rate Subordinated Notes	75,000		4.75
4.125% Fixed-to-Floating Rate Subordinated Notes	125,000		4.13

Liquidity and Capital Resources

Liquidity

Liquidity management involves our ability to raise funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events. For the three months ended March 31, 2023 and the year ended December 31, 2022, our liquidity needs were primarily met by core deposits, wholesale borrowings, security and loan maturities and amortizing investment and loan portfolios. Use of brokered deposits, purchased funds from correspondent banks and overnight advances from the FHLB and the FRB are available and have been utilized to take advantage of the cost of these funding sources. We maintained five lines of credit with commercial banks that provide for extensions of credit with an availability to borrow up to an aggregate of $175.0 million as of March 31, 2023 and December 31, 2022. There were no advances under these lines of credit outstanding as of March 31, 2023 and December 31, 2022.

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The following table illustrates, during the periods presented, the mix of our funding sources and the average assets in which those funds are invested as a percentage of our average total assets for the period indicated. Average assets totaled $12.21 billion for the three months ended March 31, 2023 and $10.99 billion for the year ended December 31, 2022.

	For the
	Three Months Ended
	March 31, 2023		December 31, 2022
Sources of Funds:
Deposits:
Noninterest-bearing	20.2	%	25.3	%
Interest-bearing	34.0		35.8
Certificates and other time deposits	21.2		14.6
Advances from FHLB	9.2		8.1
Other borrowings	1.9		2.1
Other liabilities	1.4		1.1
Stockholders’ equity	12.1		13.0
Total	100.0	%	100.0	%
Uses of Funds:
Loans	77.0	%	74.9	%
Debt Securities	10.3		11.6
Interest-bearing deposits in other banks	3.9		1.5
Other noninterest-earning assets	8.8		12.0
Total	100.0	%	100.0	%
Average noninterest-bearing deposits to average deposits	26.8	%	33.4	%
Average loans, excluding MW, to average deposits	99.2	%	94.6	%

Our primary source of funds is deposits, and our primary use of funds is loans. We do not expect a change in the primary source or use of our funds in the foreseeable future. Our average LHI increased 14.5% for the three months ended March 31, 2023, compared to the year ended December 31, 2022. We invest excess deposits in interest-bearing deposits at other banks, the Federal Reserve or liquid debt securities until these monies are needed to fund loan growth.

As of March 31, 2023, we had $4.14 billion in outstanding commitments to extend credit, $985.2 million in unconditionally cancellable MW commitments and $106.0 million in commitments associated with outstanding standby and commercial letters of credit. As of December 31, 2022, we had $4.51 billion in outstanding commitments to extend credit, $1.09 billion in MW commitments and $98.2 million in commitments associated with outstanding standby and commercial letters of credit. Since commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements.

As of March 31, 2023, we had cash and cash equivalents of $808.4 million compared to $436.1 million as of December 31, 2022.

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Analysis of Cash Flows

	For the
	Three Months Ended
	March 31, 2023		December 31, 2022
	(In thousands)
Net cash provided by operating activities	$	34,539	$	68,218
Net cash used in investing activities	(66,508)		(564,784)
Net cash provided by financing activities	404,287		668,355
Net change in cash and cash equivalents	$	372,318	$	171,789

Cash Flows Provided by Operating Activities

    For the three months ended March 31, 2023, net cash provided by operating activities decreased by $33.7 million when compared to the same period in 2022. The decrease in cash from operating activities was primarily related to a decrease in accounts payable and other liabilities of $30.8 million.

Cash Flows Used in Investing Activities

    For the three months ended March 31, 2023, net cash used in investing activities decreased by $498.3 million when compared to the same period in 2022. The decrease in cash used in investing activities was primarily attributable to a $197.8 million decrease in originations of net LHI, a $141.4 million increase in maturities, and calls and paydowns of AFS debt securities, and a $116.5 million decrease in purchases of AFS debt securities.

Cash Flows Provided by Financing Activities

    For the three months ended March 31, 2023, net cash provided by financing activities decreased by $264.1 million when compared to the same period in 2022. The decrease in cash provided by financing activities was primarily attributable to a $614.5 million decrease in deposits and a $153.9 million decrease in proceeds from our common stock offering completed during the three months ended March 31, 2022. The decrease was partially offset by a $504.8 million increase in advances from FHLB.

    As of the three months ended March 31, 2023 and 2022, we had no exposure to future cash requirements associated with known uncertainties or capital expenditures of a material nature.

Capital Resources

Total stockholders’ equity increased to $1.49 billion as of March 31, 2023, compared to $1.45 billion as of December 31, 2022, an increase of $44.0 million, or 3.0%. The increase from December 31, 2022 to March 31, 2023 was primarily the result of $38.4 million of net income recognized during the three months ended March 31, 2023, $14.9 million in accumulated other comprehensive income, $2.9 million in stock-based compensation and a $534 thousand increase due to the exercise of employee stock options during the three months ended March 31, 2023. This increase was partially offset by $10.8 million in dividends declared and paid and $1.9 million of restricted stock units (“RSU”) vesting during the three months ended March 31, 2023.

By comparison, total stockholders’ equity increased to $1.45 billion as of March 31, 2022, compared to $1.32 billion as of December 31, 2021, an increase of $132.9 million, or 10.1%. The increase from December 31, 2021 to March 31, 2022 was primarily the result of our $153.8 million common stock offering, $33.5 million of net income recognized during the three months ended March 31, 2022, a $3.3 million in stock-based compensation recognized during the three months ended March 31, 2022 and a $98 thousand increase due to the exercise of employee stock options. This increase was partially offset by $45.1 million in other comprehensive income and $9.9 million in dividends declared and paid during the three months ended March 31, 2022.

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Capital management consists of providing equity to support our current and future operations. Our regulators view capital levels as important indicators of an institution’s financial soundness. As a general matter, FDIC-insured depository institutions and their holding companies are required to maintain minimum capital relative to the amount and types of assets they hold. We are subject to regulatory capital requirements at the bank holding company and bank levels. See Note 12 – “Capital Requirements and Restrictions on Retained Earnings” in the notes to our consolidated financial statements for additional discussion regarding the regulatory capital requirements applicable to us and the Bank. As of March 31, 2023 and December 31, 2022, we and the Bank were in compliance with all applicable regulatory capital requirements, and the Bank was classified as “well capitalized” for purposes of the PCA regulations. As we employ our capital and continue to grow our operations, our regulatory capital levels may decrease depending on our level of earnings. However, we expect to monitor and control our growth in order to remain in compliance with all regulatory capital standards applicable to us.

The following table presents the actual capital amounts and regulatory capital ratios for us and the Bank as of the dates indicated.

	As of March 31,				As of December 31,
	2023				2022
	Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
Veritex Holdings, Inc.
Total capital (to risk-weighted assets)	$	1,437,576	11.99	%	$	1,395,904	11.63	%
Tier 1 capital (to risk-weighted assets)	1,146,356		9.56		1,121,021		9.34
Common equity tier 1 (to risk-weighted assets)	1,116,632		9.32		1,091,353		9.09
Tier 1 capital (to average assets)	1,146,356		9.67		1,121,021		9.82
Veritex Community Bank
Total capital (to risk-weighted assets)	$	1,424,435	11.89	%	$	1,368,082	11.41	%
Tier 1 capital (to risk-weighted assets)	1,331,501		11.12		1,291,288		10.77
Common equity tier 1 (to risk-weighted assets)	1,331,501		11.12		1,291,288		10.77
Tier 1 capital (to average assets)	1,331,501		11.24		1,291,288		11.32

Contractual Obligations

In the ordinary course of the Company’s operations, we have entered into contractual obligations and have made other commitments to make future payments. Other than normal changes in the ordinary course of business and changes discussed within “Financial Condition—Borrowings,” there have been no significant changes in the types of contractual obligations or amounts due as of March 31, 2023 since December 31, 2022 as reported in our Annual Report on Form 10-K for the year ended December 31, 2022.

Critical Accounting Policies

    Our accounting policies are fundamental to understanding our management’s discussion and analysis of our results of operations and financial condition. We have identified certain significant accounting policies which involve a higher degree of judgment and complexity in making certain estimates and assumptions that affect amounts reported in our consolidated financial statements. The significant accounting policies which we believe to be the most critical in preparing our consolidated financial statements relate to ACL, business combinations, debt securities and goodwill. Since December 31, 2022, there have been no changes in critical accounting policies as described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our Form 10-K for the year ended December 31, 2022, except for those updates discussed in Note 1 - Summary of Significant Accounting Policies in the accompanying notes to the consolidated financial statements included in this report.

62

Special Cautionary Notice Regarding Forward-Looking Statements

    This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to the expected payment date of our quarterly cash dividend, impact of certain changes in our accounting policies, standards and interpretations, a continuation of recent turmoil in the banking industry, responsive measures to mitigate and manage it and related supervisory and regulatory actions and costs and our future financial performance, business and growth strategy, projected plans and objectives, as well as other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “targets,” “outlooks,” “seeks,” “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 words. You should understand that the following important factors could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements:

•risks related to the concentration of our business in Texas, and specifically within the Dallas-Fort Worth metroplex and the Houston metropolitan area, including risks associated with any downturn in the real estate sector and risks associated with a decline in the values of single family homes in the Dallas-Fort Worth metroplex and the Houston metropolitan area;

•the effects of regional or national civil unrest;

•changes in market interest rates that affect the pricing of our loans and deposits and our net interest income;

•risks related to our strategic focus on lending to small to medium-sized businesses;

•the sufficiency of the assumptions and estimates we make in establishing reserves for potential loan losses;

•our ability to implement our growth strategy, including identifying and consummating suitable acquisitions;

•our ability to recruit and retain successful bankers that meet our expectations in terms of customer relationships and profitability;

•changes in our accounting policies, standards and interpretations;

•our ability to retain executive officers and key employees and their customer and community relationships;

•risks associated with our CRE and construction loan portfolios, including the risks inherent in the valuation of the collateral securing such loans;

•risks associated with our commercial loan portfolio, including the risk of deterioration in value of the general business assets that generally secure such loans;

•our level of nonperforming assets and the costs associated with resolving problem loans, if any, and complying with government-imposed foreclosure moratoriums;

•potential changes in the prices, values and sales volumes of commercial and residential real estate securing our real estate loans;

•risks related to the significant amount of credit that we have extended to a limited number of borrowers and in a limited geographic area;

•credit risks of borrowers, including any increase in those risks due to changing economic conditions, inflation and interest rates;

•our ability to maintain adequate liquidity (including in compliance with CBLR standards and the effect of the transition to the CECL methodology for allowances and related adjustments) and to raise necessary capital to fund our acquisition strategy and operations or to meet increased minimum regulatory capital levels;

•potential fluctuations in the market value and liquidity of our debt securities;

•the effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services;

•our ability to maintain an effective system of disclosure controls and procedures and internal control over financial reporting;

•risks associated with fraudulent and negligent acts by our customers, employees or vendors;

•our ability to keep pace with technological change or difficulties when implementing new technologies;

•risks associated with difficulties and/or terminations with third-party service providers and the services they provide;

•risks associated with unauthorized access, cyber-crime and other threats to data security;

•potential impairment on the goodwill we have recorded or may record in connection with business acquisitions;

•our ability to comply with various governmental and regulatory requirements applicable to financial institutions;

63

•the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators, and economic stimulus programs;

•uncertainty regarding the future of LIBOR and any replacement alternatives on our business;

•governmental monetary and fiscal policies, including the policies of the Federal Reserve;

•our ability to comply with supervisory actions by federal and state banking agencies;

•changes in the scope and cost of FDIC, insurance and other coverage; and

•systemic risks associated with the soundness of other financial institutions.

Other factors not identified above, including those described under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2022 and the information contained in this Quarterly Report on Form 10-Q, may also cause actual results to differ materially from those described in our forward-looking statements. Most of these factors are difficult to anticipate and are generally beyond our control. You should consider these factors in connection with considering any forward-looking statements that may be made by us. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

    As a financial institution, our primary component of market risk is interest rate volatility. Our asset, liability and funds management policy provides management with the guidelines for effective funds management, and we have established a measurement system for monitoring our net interest rate sensitivity position. We manage our sensitivity position within our established guidelines.

    Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the market value of all interest-earning assets and interest-bearing liabilities, other than those which have a short term to maturity. Interest rate risk is the potential of economic losses due to future interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair market values. The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing income.

    We manage our exposure to interest rates by structuring our balance sheet in the ordinary course of business. With exception of our cash flow hedges designated as a hedging instrument, we do not enter into instruments such as leveraged derivatives, interest rate swaps, financial options, financial future contracts or forward delivery contracts for the purpose of reducing interest rate risk. We enter into interest rate swaps, caps and collars as an accommodation to our customers in connection with our interest rate swap program. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets.

    Our exposure to interest rate risk is managed by the Asset-Liability Committee of the Bank in accordance with policies approved by its board of directors. The committee formulates strategies based on appropriate levels of interest rate risk. In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors. The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings. Additionally, the committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer and commercial deposit activity. Management employs methodologies to manage interest rate risk, which include an analysis of relationships between interest-earning assets and interest-bearing liabilities, and an interest rate shock simulation model.

We use an interest rate risk simulation model and shock analysis to test the interest rate sensitivity of net interest income and the balance sheet, respectively. Contractual maturities and repricing opportunities of loans are incorporated in the model as are prepayment assumptions, maturity data and call options within the investment portfolio.

We utilize static balance sheet rate shocks to estimate the potential impact on net interest income of changes in interest

rates under various rate scenarios. This analysis estimates a percentage of change in the metric from the stable rate base scenario versus alternative scenarios of rising and falling market interest rates by instantaneously shocking a static balance sheet.  Internal policy regarding internal rate risk simulations currently specifies that for instantaneous parallel shifts of the yield curve, estimated net income at risk for the subsequent one-year period should not decline by more than 5.0% for a 100 basis point shift, 10.0% for a 200 basis point shift, and 15.0% for a 300 basis point shift.

64

    The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of the dates indicated:

	As of March 31, 2023				As of December 31, 2022
	Percent Change		Percent Change		Percent Change		Percent Change
Change in Interest	in Net Interest		in Fair Value		in Net Interest		in Fair Value
Rates (Basis Points)	Income		of Equity		Income		of Equity
+ 300	11.53	%	1.82	%	13.00	%	4.65	%
+ 200	7.82	%	1.49	%	8.88	%	3.36	%
+ 100	3.93	%	0.95	%	4.46	%	1.77	%
Base	—	%	—	%	—	%	—	%
−100	(4.42)	%	(1.53)	%	(4.72)	%	(2.55)	%

    The results are primarily due to behavior of demand, money market and savings deposits during such rate fluctuations. We have found that, historically, interest rates on these deposits change more slowly than changes in the discount and federal funds rates. This assumption is incorporated into the simulation model and is generally not fully reflected in a gap analysis. The assumptions incorporated into the model are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various strategies.

Item 4.  Controls and Procedures

Evaluation of disclosure controls and procedures — As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of its disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply judgment in evaluating its controls and procedures. Based on this evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) were effective as of the end of the period covered by this Report.

There were no significant changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are from time to time subject to claims and litigation arising in the ordinary course of business. These claims and litigation may include, among other things, allegations of violation of banking and other applicable regulations, competition law, labor laws and consumer protection laws, as well as claims or litigation relating to intellectual property, securities, breach of contract and tort. We intend to defend ourselves vigorously against any pending or future claims and litigation.

At this time, in the opinion of management, the likelihood is remote that the impact of such proceedings, either individually or in the aggregate, would have a material adverse effect on our consolidated results of operations, financial condition or cash flows. However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which they are resolved. In addition, regardless of their merits or their ultimate outcomes, such matters are costly, divert management’s attention and may materially adversely affect our reputation, even if resolved in our favor.

Item 1A.  Risk Factors

In evaluating an investment in our common stock, investors should consider carefully, among other things, the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, as well as the information contained in this Quarterly Report on Form 10-Q and our other reports and registration statements filed with the SEC.

    Other than the risk factor set forth below, there has been no material change in the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Recent negative developments in the banking industry could adversely affect our current and projected business operations and our financial condition and results of operations.

The recent bank failures and related negative media attention have generated significant market trading volatility among publicly traded bank holding companies and, in particular, regional bank holding companies like the Company. These developments have negatively impacted customer confidence in regional banks, which could prompt customers to maintain their deposits with larger financial institutions. Further, competition for deposits has increased in recent periods, and the cost of funding has similarly increased, putting pressure on our net interest margin. If we were required to sell a portion of our securities portfolio to address liquidity needs, we may incur losses, including as a result of the negative impact of rising interest rates on the value of our securities portfolio, which could negatively affect our earnings and our capital. If we were required to raise additional capital in the current environment, any such capital raise may be on unfavorable terms, thereby negatively impacting book value and profitability. While we have taken actions to improve our funding, there is no guarantee that such actions will be successful or sufficient in the event of sudden liquidity needs.

We also anticipate increased regulatory scrutiny and regulatory initiatives, such as new regulations or heightened supervisory expectations, intended to address the recent negative developments in the banking industry, all of which may increase the Company’s costs of doing business and reduce its profitability. Regulators, customers and investors may, among other things, view our deposit composition, level of uninsured deposits, potential losses embedded in held-to-maturity securities, contingent liquidity, CRE composition and concentration, capital position and oversight and internal control structures regarding the foregoing as presenting higher risk in comparison with large national banks or smaller community banks. In addition, the FDIC estimates that the two recent failures of Silicon Valley Bank and Signature Bank resulted in losses of approximately $22.5 billion, of which $19.2 billion is attributable to the protection of uninsured depositors under the Systemic Risk Exception. Federal law requires that any losses to the FDIC’s Deposit Insurance Fund related to this action be repaid by a special assessment on banks. The impact of the assessment to the Company for these failures or any potential future failures is not yet known, but is expected to negatively impact operating results.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

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Item 6.  Exhibits

 

Exhibit Number	Description of Exhibit
2.3	Agreement and Plan of Reorganization dated July 23, 2018, by and among Veritex Holdings, Inc., MustMS, Inc. and Green Bancorp, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed July 24, 2018).
3.2	Third Amended and Restated Bylaws of Veritex Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed July 25, 2017).
31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following materials from Veritex Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in Inline XBRL (Inline eXtensible Business Reporting Language): (i) Cover Page, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Income, (iv) Consolidated Statements of Comprehensive Income, (v) Consolidated Statements of Changes in Stockholders’ Equity, (vi) Consolidated Statements of Cash Flows, and (vii) Notes to Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

______________________________

* Filed with this Quarterly Report on Form 10-Q

** Furnished with this Quarterly Report on Form 10-Q

67

SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VERITEX HOLDINGS, INC.
	(Registrant)
Date: May 10, 2023	/s/ C. Malcolm Holland, III
	C. Malcolm Holland, III
	Chairman and Chief Executive Officer
	(Principal Executive Officer)
Date: May 10, 2023	/s/ Terry S. Earley
	Terry S. Earley
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

68

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, C. Malcolm Holland, III, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Veritex Holdings, Inc. for the quarter ended March 31, 2023;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2023

/s/ C. Malcolm Holland, III

C. Malcolm Holland, III

Chairman of the Board & Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Terry S. Earley, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Veritex Holdings, Inc. for the quarter ended March 31, 2023;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2023

/s/ Terry S. Earley

Terry S. Earley

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

    In connection with the Quarterly Report on Form 10-Q of Veritex Holdings, Inc. (the “Company”) for the quarter ended March 31, 2023 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, C. Malcolm Holland, III, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ C. Malcolm Holland, III

C. Malcolm Holland, III

Chairman of the Board & Chief Executive Officer

Date: May 10, 2023

EX-32.2

Exhibit 32.2

CERTIFICATION

    In connection with the Quarterly Report on Form 10-Q of Veritex Holdings, Inc. (the “Company”) for the quarter ended March 31, 2023 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Terry S. Earley, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Terry S. Earley

Terry S. Earley

Chief Financial Officer

Date: May 10, 2023

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2023	May 09, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-36682
Entity Registrant Name	VERITEX HOLDINGS, INC.
Entity Incorporation, State or Country Code	TX
Entity Tax Identification Number	27-0973566
Entity Address, Address Line One	8214 Westchester Drive, Suite 800
Entity Address, City or Town	Dallas,
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75225
City Area Code	(972)
Local Phone Number	349-6200
Title of 12(b) Security	Common Stock, par value $0.01
Trading Symbol	VBTX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		54,247,973
Entity Central Index Key	0001501570
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
ASSETS
Cash and due from banks	$ 57,628	$ 60,551
Interest bearing deposits in other banks	750,767	375,526
Total cash and cash equivalents	808,395	436,077
Debt securities available-for-sale (“AFS”), at fair value	966,123	1,096,292
Debt securities held-to-maturity (“HTM”) (fair value of $161,778 and $158,781, at March 31, 2023 and December 31, 2022, respectively)	184,836	186,168
Equity securities	20,522	19,864
Investment in unconsolidated subsidiaries	1,018	1,018
Federal Home Loan Bank of Dallas (“FHLB”) Stock and Federal Reserve Bank (“FRB”) Stock	116,081	101,568
Total investments	1,288,580	1,404,910
Loans held for sale (“LHFS”)	42,816	20,641
Loans held for investment (“LHI”), mortgage warehouse (“MW”)	437,501	446,227
LHI, excluding MW	9,237,159	9,036,424
Less: Allowance for credit losses (“ACL”)	(98,694)	(91,052)
Total LHI, net	9,575,966	9,391,599
Bank-owned life insurance (“BOLI”)	84,962	84,496
Premises and equipment, net	107,540	108,824
Intangible assets, net of accumulated amortization	51,086	53,213
Goodwill	404,452	404,452
Other assets	245,690	250,149
Total assets	12,609,487	12,154,361
Deposits:
Noninterest-bearing deposits	2,212,389	2,640,617
Interest-bearing transaction and savings deposits	3,492,011	3,738,535
Certificates and other time deposits	2,896,870	2,086,642
Correspondent money market deposits	433,468	657,440
Total deposits	9,034,738	9,123,234
Accounts payable and other liabilities	171,985	177,579
Advances from FHLB	1,680,000	1,175,000
Subordinated debentures and subordinated notes	229,027	228,775
Total liabilities	11,115,750	10,704,588
Stockholders’ equity:
Common stock, $0.01 par value: Authorized shares - 75,000,000 Issued shares - 60,867,127 and 60,668,049 at March 31, 2023 and December 31, 2022, respectively	609	607
Additional paid-in capital (“APIC”)	1,308,345	1,306,852
Retained earnings	406,873	379,299
Accumulated other comprehensive (loss) income (“AOCI”)	(54,508)	(69,403)
Treasury stock, 6,638,094 and 6,638,094 shares at cost at March 31, 2023 and December 31, 2022, respectively	(167,582)	(167,582)
Total stockholders’ equity	1,493,737	1,449,773
Total liabilities and stockholders’ equity	$ 12,609,487	$ 12,154,361

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Held-to-maturity debt securities, fair value	$ 161,778	$ 158,781
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	60,867,127	60,668,049
Treasury stock (in shares)	6,638,094	6,638,094

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$ 151,707	$ 71,443
Debt securities	10,988	7,762
Deposits in financial institutions and Fed Funds sold	5,534	262
Equity securities and other investments	1,408	910
Total interest and dividend income	169,637	80,377
INTEREST EXPENSE
Transaction and savings deposits	29,857	1,751
Certificates and other time deposits	20,967	1,380
Advances from FHLB	12,358	1,547
Subordinated debentures and subordinated notes	3,066	2,659
Total interest expense	66,248	7,337
NET INTEREST INCOME	103,389	73,040
Provision (benefit) for credit losses	9,385	(500)
Provision for credit losses on unfunded commitments	1,497	493
Net interest income after provision (benefit) for credit losses	92,507	73,047
NONINTEREST INCOME
Service charges and fees on deposit accounts	5,017	4,710
Loan fees	2,064	2,794
Loss on sales of debt securities	(5,321)	0
Gain on sale of mortgage LHFS	6	307
Government guaranteed loan income, net	9,688	4,891
Equity method investment (loss) income	(1,521)	367
Customer swap income	217	946
Other	3,381	1,082
Total noninterest income	13,531	15,097
NONINTEREST EXPENSE
Salaries and employee benefits	31,865	27,513
Occupancy and equipment	4,973	4,517
Professional and regulatory fees	4,389	3,158
Data processing and software expense	4,720	2,921
Marketing	1,779	1,187
Amortization of intangibles	2,495	2,495
Telephone and communications	478	385
Merger and acquisition (“M&A”) expense	0	700
Other	5,916	3,696
Total noninterest expense	56,615	46,572
Income before income tax expense	49,423	41,572
Income tax expense	11,012	8,102
NET INCOME	$ 38,411	$ 33,470
Basic earnings per share (“EPS”) (in dollars per share)	$ 0.71	$ 0.66
Diluted EPS (in dollars per share)	$ 0.70	$ 0.65

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 38,411	$ 33,470
Net unrealized gains (losses) on debt securities AFS:
Change in net unrealized gain (loss) on debt securities AFS during the period, net	2,547	(49,076)
Amortization from transfer of debt securities from AFS to HTM	3,622	4,255
Reclassification adjustment for net losses included in net income	5,321	0
Net unrealized gain (loss) on debt securities AFS	11,490	(44,821)
Net unrealized gain (loss) on derivative instruments designated as cash flow hedges	7,078	(13,381)
Other comprehensive gain (loss), before tax	18,568	(58,202)
Income tax benefit (expense)	3,673	(13,114)
Other comprehensive gain (loss), net of tax	14,895	(45,088)
COMPREHENSIVE INCOME (LOSS)	$ 53,306	$ (11,618)

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	APIC	Retained Earnings	AOCI
Beginning balance (in shares) at Dec. 31, 2021		49,372,329
Beginning balance at Dec. 31, 2021	$ 1,315,079	$ 560	$ (167,582)	$ 1,142,758	$ 275,273	$ 64,070
Beginning balance (in shares) at Dec. 31, 2021			6,638,094
Increase (Decrease) in Stockholders' Equity
Restricted stock units (“RSU”) vested, net of shares withheld to cover taxes (in shares)		187,801
Restricted stock units (“RSU”) vested, net of shares withheld to cover taxes	(2,837)	$ 2		(2,839)
Exercise of employee stock options, no shares withheld to cover taxes and exercise price (in shares)		34,320
Exercise of employee stock options, no shares withheld to cover taxes and exercise price	98			98
Stock based compensation	3,318			3,318
Common stock follow on offering (in shares)		4,314,474
Common stock follow on offering	153,869	$ 43		153,826
Net income	33,470				33,470
Dividends paid	(9,913)				(9,913)
Other comprehensive income (loss)	(45,088)					(45,088)
Ending balance (in shares) at Mar. 31, 2022		53,908,924
Ending balance at Mar. 31, 2022	1,447,996	$ 605	$ (167,582)	1,297,161	298,830	18,982
Ending balance (in shares) at Mar. 31, 2022			6,638,094
Beginning balance (in shares) at Dec. 31, 2022		54,029,955
Beginning balance at Dec. 31, 2022	$ 1,449,773	$ 607	$ (167,582)	1,306,852	379,299	(69,403)
Beginning balance (in shares) at Dec. 31, 2022	6,638,094		6,638,094
Increase (Decrease) in Stockholders' Equity
Restricted stock units (“RSU”) vested, net of shares withheld to cover taxes (in shares)		161,081
Restricted stock units (“RSU”) vested, net of shares withheld to cover taxes	$ (1,926)	$ 2		(1,928)
Exercise of employee stock options, no shares withheld to cover taxes and exercise price (in shares)		37,997
Exercise of employee stock options, no shares withheld to cover taxes and exercise price	534			534
Stock based compensation	2,887			2,887
Net income	38,411				38,411
Dividends paid	(10,837)				(10,837)
Other comprehensive income (loss)	14,895					14,895
Ending balance (in shares) at Mar. 31, 2023		54,229,033
Ending balance at Mar. 31, 2023	$ 1,493,737	$ 609	$ (167,582)	$ 1,308,345	$ 406,873	$ (54,508)
Ending balance (in shares) at Mar. 31, 2023	6,638,094		6,638,094

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Restricted Stock Units
Shares withheld to cover tax withholdings (in shares)	71,465	67,965
Employee Stock Options
Shares withheld to cover tax withholdings (in shares)	121	5,738
Shares withheld to cover exercise price (in shares)	9,729	28,064

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net income	$ 38,411	$ 33,470
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed assets and intangibles	4,764	4,378
Net amortization (accretion) of time deposit premium, debt discount and debt issuance costs	240	(16)
Provision (benefit) for credit losses and unfunded commitments	10,882	(7)
Accretion of loan discount	(1,014)	(1,598)
Stock-based compensation expense	2,887	3,318
Excess tax expense (benefit) from stock compensation	112	(992)
Net amortization of premiums on debt securities	885	811
Unrealized (gain) loss on equity securities recognized in earnings	(126)	513
Change in cash surrender value and mortality rates of BOLI	(466)	(447)
Loss on sales of debt securities	5,321	0
Change in fair value of government guaranteed loans using fair value option	(2,239)	(379)
Gain on sales of mortgage LHFS	(6)	(307)
Gain on sales of government guaranteed loans	(7,449)	(4,161)
Net impairment of servicing asset	(424)	280
Originations of LHFS	(25,136)	(12,613)
Proceeds from sales of LHFS	5,520	21,293
Equity method investment loss (income)	1,521	(367)
Decrease (increase) in other assets	(3,119)	(9,687)
(Decrease) increase in accounts payable and other liabilities	3,975	34,729
Net cash provided by operating activities	34,539	68,218
Cash flows from investing activities:
Purchases of AFS debt securities	(149,982)	(266,490)
Proceeds from sales of AFS debt securities	109,793	0
Proceeds from maturities, calls and pay downs of AFS debt securities	175,289	33,880
Purchases of HTM debt securities	0	(5,068)
Maturity, calls and paydowns of HTM debt securities	800	25
Purchases of other investments	(15,045)	(91)
Proceeds from sales of equity securities	0	1,470
Net loans originated	(134,513)	(332,290)
Proceeds from sale of government guaranteed loans	(52,868)	4,910
Net additions (disposals) to premises and equipment	18	(1,130)
Net cash used in investing activities	(66,508)	(564,784)
Cash flows from financing activities:
Net (decrease) increase in deposits	(88,484)	525,987
Net increase in advances from FHLB	505,000	224
Net change in securities sold under agreement to repurchase	0	927
Net proceeds on sale of common stock in public offering	0	153,869
Payments to tax authorities for stock-based compensation	(1,926)	(2,837)
Proceeds from exercise of employee stock options	534	98
Dividends paid	(10,837)	(9,913)
Net cash provided by financing activities	404,287	668,355
Net increase in cash and cash equivalents	372,318	171,789
Cash and cash equivalents at beginning of period	436,077	379,784
Cash and cash equivalents at end of period	$ 808,395	$ 551,573

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Nature of Organization

In this report, the words “Veritex,” “the Company,” “we,” “us,” and “our” refer to the combined entities of Veritex Holdings, Inc. and its subsidiaries, including Veritex Community Bank. The word “Holdco” refers to Veritex Holdings, Inc. The word “the Bank” refers to Veritex Community Bank.

Veritex is a Texas state banking organization, with corporate offices in Dallas, Texas, and currently operates 18 branches located in the Dallas-Fort Worth metroplex and 10 branches in the Houston metropolitan area. The Bank provides a full range of banking services, including commercial and retail lending and the acceptance of checking and savings deposits, to individual and corporate customers. The Texas Department of Banking and the Board of Governors of the Federal Reserve System (the “Federal Reserve”) are the primary regulators of the Company and the Bank, and both regulatory agencies perform periodic examinations to ensure regulatory compliance.

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Veritex Holdings, Inc. and its subsidiaries, including Veritex Community Bank.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), but do not include all of the information and footnotes required for complete financial statements. Intercompany transactions and balances are eliminated in consolidation. In management’s opinion, these unaudited consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated balance sheets at March 31, 2023 and December 31, 2022, consolidated statements of income, consolidated changes in stockholders’ equity and consolidated statements of comprehensive income for the three months ended March 31, 2023 and 2022 and consolidated statements of cash flows for the three months ended March 31, 2023 and 2022.

Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown herein are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Quarterly Reports on Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 28, 2023.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reclassifications

Certain items in the Company’s prior year financial statements were reclassified to conform to the current presentation. PPP loans of $1,995 were reported separately as LHI PPP loans, carried at fair value, as of December 31, 2022 and have been reclassed to LHI, excluding MW loans.

EPS is based upon the weighted average shares outstanding. The table below sets forth the reconciliation between weighted average shares used for calculating basic and diluted EPS for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
Numerator:
Net income	$	38,411	$	33,470
Denominator:
Weighted average shares outstanding for basic EPS	54,149		50,695
Dilutive effect of employee stock-based awards	457		876
Adjusted weighted average shares outstanding	54,606		51,571
EPS:
Basic	$	0.71	$	0.66
Diluted	$	0.70	$	0.65

For the three months ended March 31, 2023, there were 834 antidilutive shares excluded from the diluted EPS weighted average shares outstanding, 440 relating to RSUs and 214 relating to stock options.

For the three months ended March 31, 2022, there were 80 antidilutive shares excluded from the diluted EPS weighted average shares outstanding related to RSUs and none related to stock options.

Recent Accounting Pronouncements

ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326)” (“ASU 2022-02”) eliminates the guidance on troubled debt restructurings and requires entities to evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. ASU 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination for loans and leases. ASU 2022-02 is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The adoption of ASU 2022-02 did not have a significant impact on our financial statements. See Note 4 - LHI and ACL for new financial statement disclosures applicable under this standard.

ASU No. 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” ASU 2023-02 is intended to improve the accounting and disclosures for investments in tax credit structures. ASU 2023-02 allows entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. Previously, this method was only available for qualifying tax equity investments in low-income housing tax credit structures. ASU 2023-02 will be effective for us on January 1, 2024, though early adoption is permitted, and its adoption is not expected to have a significant effect on our financial statements.

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Supplemental Statement of Cash Flows

3 Months Ended

Mar. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Supplemental Statement of Cash Flows

Supplemental Statement of Cash Flows

Other supplemental cash flow information is presented below:

	Three Months Ended March 31,
	2023		2022
	(in thousands)
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	54,189	$	5,368
Cash paid for income taxes	—		—
Supplemental Disclosures of Non-Cash Flow Information:
Transfer of AFS debt securities to HTM debt securities	—		117,001
Net foreclosure of OREO and repossessed assets	—		1,062

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Securities

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Securities

Securities

Equity Securities With a Readily Determinable Fair Value

The Company held equity securities with a fair value of $9,918 and $9,792 at March 31, 2023 and December 31, 2022, respectively. The Company did not realize a loss on equity securities with a readily determinable fair value during the three months ended March 31, 2023 or 2022, respectively. The gross unrealized gain (loss) recognized on equity securities with readily determinable fair values recorded in other noninterest income in the Company’s consolidated statements of income were as follows:

	Three Months Ended March 31,
	2023		2022
Unrealized gain (loss) recognized on equity securities with a readily determinable fair value	$	126	$	(513)

Equity Securities Without a Readily Determinable Fair Value

The Company held equity securities without a readily determinable fair values and measured at cost of $10,604 and $10,072 as of March 31, 2023 and December 31, 2022, respectively.

Securities purchased under agreements to resell

As of March 31, 2023, we held no securities purchased under agreements to resell and we recognized no interest income during the three months ended March 31, 2023. As of March 31, 2022, we held securities purchased under agreements to resell of $100.8 million and we recognized interest income of $270 thousand during the three months ended March 31, 2022. Securities purchased under agreements to resell typically mature 30 days from the settlement date, qualify as a secured borrowing and are measured at amortized cost.

Debt Securities

Debt securities have been classified in the consolidated balance sheets according to management’s intent. The amortized cost, related gross unrealized gains and losses, ACL and the fair value of AFS and HTM debt securities are as follows:

	March 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
AFS
Corporate bonds	$	244,190	$	1,218	$	23,900	$	885	$	220,623
Municipal securities	46,910		57		3,345		—		43,622
Mortgage-backed securities	130,343		24		14,703		—		115,664
Collateralized mortgage obligations	524,593		—		41,940		—		482,653
Asset-backed securities	38,966		622		2,075		—		37,513
Collateralized loan obligations	69,750		—		3,702		—		66,048
	$	1,054,752	$	1,921	$	89,665	$	885	$	966,123
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
HTM
Mortgage-backed securities	$	35,999	$	—	$	6,302	$	—	$	29,697
Collateralized mortgage obligations	35,616		—		4,748		—		30,868
Municipal securities	113,221		98		12,106		—		101,213
	$	184,836	$	98	$	23,156	$	—	$	161,778

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
AFS
Corporate bonds	$	268,179	$	1,445	$	17,379	$	—	$	252,245
Municipal securities	49,886		3		4,198		—		45,691
Mortgage-backed securities	156,408		23		17,420		—		139,011
Collateralized mortgage obligations	609,456		—		55,850		—		553,606
Asset-backed securities	42,015		289		2,613		—		39,691
Collateralized loan obligations	69,750		—		3,702		—		66,048
	$	1,195,694	$	1,760	$	101,162	$	—	$	1,096,292
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
HTM
Mortgage-backed securities	$	36,342	$	—	$	6,753	$	—	$	29,589
Collateralized mortgage obligations	36,169		—		5,884		—		30,285
Municipal securities	113,657		6		14,756		—		98,907
	$	186,168	$	6	$	27,393	$	—	$	158,781

The Company elected to transfer 25 AFS debt securities with an aggregate fair value of $117,001 to a classification of HTM debt securities on January 1, 2022. In accordance with FASB ASC 320-10-35-10, the transfer from AFS to HTM must be recorded at the fair value of the AFS debt securities at the time of transfer. The net unrealized holding gain of $4,387, net of tax, at the date of transfer was retained in AOCI, with the associated pre-tax amount retained in the carrying value of the HTM debt securities. Such amounts will be amortized to comprehensive income over the remaining life of the securities.

The following tables disclose the Company’s AFS debt securities in an unrealized loss position for which an ACL has not been recorded, aggregated by investment category and length of time that individual debt securities have been in a continuous loss position:

	March 31, 2023
	Less Than 12 Months				12 Months or More				Totals
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AFS
Corporate bonds	$	—	$	—	$	15,710	$	311	$	15,710	$	311
Municipal securities	27,477		306		11,317		3,039		38,794		3,345
Mortgage-backed securities	3,410		67		111,436		14,636		114,846		14,703
Collateralized mortgage obligations	131,159		3,404		351,494		38,536		482,653		41,940
Asset-backed securities	3,224		150		16,978		1,925		20,202		2,075
Collateralized loan obligations	—		—		66,048		3,702		66,048		3,702
	$	165,270	$	3,927	$	572,983	$	62,149	$	738,253	$	66,076
HTM
Mortgage-backed securities	$	—	$	—	$	29,697	$	6,302	$	29,697	$	6,302
Collateralized mortgage obligations	3,829		220		27,039		4,528		30,868		4,748
Municipal securities	12,170		94		76,434		12,012		88,604		12,106
	$	15,999	$	314	$	133,170	$	22,842	$	149,169	$	23,156

	December 31, 2022
	Less Than 12 Months				12 Months or More				Totals
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AFS
Corporate bonds	$	197,946	$	15,697	$	15,568	$	1,682	$	213,514	$	17,379
Municipal securities	33,919		848		8,813		3,350		42,732		4,198
Mortgage-backed securities	115,467		11,104		22,780		6,317		138,247		17,421
Collateralized mortgage obligations	482,358		42,553		71,198		13,296		553,556		55,849
Asset-backed securities	15,195		991		11,207		1,621		26,402		2,612
Collateralized loan obligations	23,673		1,328		42,375		2,375		66,048		3,703
	$	868,558	$	72,521	$	171,941	$	28,641	$	1,040,499	$	101,162
HTM
Mortgage-backed securities	$	804	$	85	$	28,784	$	6,668	$	29,588	$	6,753
Collateralized mortgage obligations	25,285		4,676		4,999		1,208		30,284		5,884
Municipal securities	85,671		11,411		9,161		3,345		94,832		14,756
	$	111,760	$	16,172	$	42,944	$	11,221	$	154,704	$	27,393

Management evaluates AFS debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

The number of AFS debt securities in an unrealized loss position totaled 114 and 175 at March 31, 2023 and December 31, 2022, respectively. Management does not have the intent to sell any of these debt securities and believes that it is more likely than not that the Company will not have to sell any such debt securities before a recovery of cost. The fair value is

expected to recover as the debt securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of March 31, 2023, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions, and therefore no losses have been recognized in the Company’s consolidated statements of income.

    The amortized costs and estimated fair values of AFS debt securities, by contractual maturity, as of the dates indicated, are shown in the table below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities, collateralized mortgage obligations, asset-backed securities, and collateralized loan obligations typically are issued with stated principal amounts, and the securities are backed by pools of mortgage loans and other loans that have varying maturities. The terms of mortgage-backed securities, collateralized mortgage obligations, asset-backed securities, and collateralized loan obligations thus approximates the terms of the underlying mortgages and loans and can vary significantly due to prepayments. Therefore, these securities are not included in the maturity categories below.

	March 31, 2023
	AFS				HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due from one year to five years	$	29,466	$	30,422	$	456	$	445
Due from five years to ten years	205,272		182,451		13,221		12,946
Due after ten years	56,362		51,372		99,544		87,822
	291,100		264,245		113,221		101,213
Mortgage-backed securities and collateralized mortgage obligations	654,936		598,317		71,615		60,565
Asset-backed securities	38,966		37,513		—		—
Collateralized loan obligations	69,750		66,048		—		—
	$	1,054,752	$	966,123	$	184,836	$	161,778

	December 31, 2022
	AFS				HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due from one year to five years	$	53,692	$	54,179	$	—	$	—
Due from five years to ten years	205,911		190,406		8,275		8,129
Due after ten years	58,462		53,351		105,382		90,778
	318,065		297,936		113,657		98,907
Mortgage-backed securities and collateralized mortgage obligations	765,864		692,617		72,511		59,874
Asset-backed securities	42,015		39,691		—		—
Collateralized loan obligations	69,750		66,048		—		—
	$	1,195,694	$	1,096,292	$	186,168	$	158,781

Proceeds from sales of debt securities AFS and gross gains and losses for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
	2023		2022
Proceeds from sales	$	109,793	$	—
Gross realized losses	5,321		—

As of March 31, 2023 and December 31, 2022, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders' equity. There was a blanket floating lien on all debt securities held by the Company to secure FHLB advances as of March 31, 2023 and December 31, 2022.

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LHI and ACL

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

LHI and ACL

LHI and ACL

LHI in the accompanying consolidated balance sheets are summarized as follows:

	March 31, 2023		December 31, 2022
LHI, carried at amortized cost:
Real estate:
Construction and land	$	1,831,349	$	1,787,400
Farmland	51,680		43,500
1 - 4 family residential	896,252		894,456
Multi-family residential	432,209		322,679
Owner occupied commercial real estate (“OOCRE”)	631,563		715,829
Non-owner occupied commercial real estate (“NOOCRE”)	2,505,344		2,341,379
Commercial	2,895,957		2,942,348
MW	437,501		446,227
Consumer	8,316		7,806
	9,690,171		9,501,624
Deferred loan fees, net	(15,511)		(18,973)
ACL	(98,694)		(91,052)
LHI carried at amortized cost, net	9,575,966		9,391,599
Total LHI, net	$	9,575,966	$	9,391,599

Included in the total LHI, net, as of March 31, 2023 and December 31, 2022 was an accretable discount related to purchased performing and purchased credit deteriorated (“PCD”) loans acquired in the approximate amounts of $7,476 and $8,260, respectively. The discount is being accreted into income on a level-yield basis over the life of the loans. In addition, included in the net loan portfolio as of March 31, 2023 and December 31, 2022 is a discount on retained loans from sale of originated U.S. Small Business Administration (“SBA”) and U.S. Department of Agriculture (“USDA”) loans of $6,554 and $5,238, respectively. During the year ended December 31, 2022, the Company purchased $223,924 in pooled residential real estate loans at a net discount. The remaining net purchase discount of $3,909 is included in the total LHI, net, and will be amortized on a straight line basis over five years.

ACL

The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The activity in the ACL related to LHI is as follows:

	Three Months Ended March 31, 2023
	Construction and Land		Farmland		Residential		Multifamily		OOCRE		NOOCRE		Commercial		Consumer		Total
Balance at beginning of the period	$	13,120	$	127	$	9,533	$	2,607	$	8,707	$	26,704	$	30,142	$	112	$	91,052
Credit loss (benefit) expense non-PCD loans	4,240		41		12		877		238		(499)		2,995		363		8,267
Credit (benefit) loss expense PCD loans	(46)		—		(5)		—		(16)		33		267		—		233
Charge-offs	—		—		—		—		(116)		—		(1,051)		(62)		(1,229)
Recoveries	—		—		1		—		—		—		364		6		371
Ending Balance	$	17,314	$	168	$	9,541	$	3,484	$	8,813	$	26,238	$	32,717	$	419	$	98,694

	Three Months Ended March 31, 2022
	Construction and Land		Farmland		Residential		Multifamily		OOCRE		NOOCRE		Commercial		Consumer		Total
Balance at beginning of the period	$	7,293	$	187	$	5,982	$	2,664	$	9,215	$	30,548	$	21,632	$	233	$	77,754
Credit (benefit) loss expense non-PCD loans	1,595		(29)		224		(537)		813		(4,114)		4,044		622		2,618
Credit (benefit) loss expense PCD loans	(5)		—		(72)		—		(1,264)		673		(2,442)		(8)		(3,118)
Charge-offs	—		—		—		—		(1,341)		(553)		(3,294)		(134)		(5,322)
Recoveries	—		—		—		—		—		400		144		9		553
Ending Balance	$	8,883	$	158	$	6,134	$	2,127	$	7,423	$	26,954	$	20,084	$	722	$	72,485

The majority of the Company's loan portfolio consists of loans to businesses and individuals in the Dallas-Fort Worth metroplex and the Houston metropolitan area. This geographic concentration subjects the loan portfolio to the general economic conditions within these areas. The risks created by this concentration have been considered by management in the determination of the adequacy of the ACL. Management believes the ACL was adequate to cover estimated losses on loans as of March 31, 2023 and 2022.

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:

	March 31, 2023					December 31, 2022
		Real Property(1)		ACL Allocation			Real Property(1)		ACL Allocation
Construction and land		$	1,583	$	—		$	—	$	—
OOCRE		1,181		—			1,193		129
NOOCRE		20,696		1,939			20,896		2,138
Commercial		1,231		477			1,240		396
Consumer		12		—			15		—
Total		$	24,703	$	2,416		$	23,344	$	2,663

(1) Loans reported exclude PCD loans that transitioned upon adoption of ASC 326 and accounted for on a pooled basis.

Nonaccrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due in accordance with the terms of the loan agreement. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Nonaccrual loans aggregated by class of loans, as of March 31, 2023 and December 31, 2022, were as follows:

	March 31, 2023				December 31, 2022
	Nonaccrual		Nonaccrual With No ACL		Nonaccrual		Nonaccrual With No ACL
Real estate:
Construction and land	$	1,583	$	1,583	$	—	$	—
1 - 4 family residential	818		818		862		$	862
OOCRE	9,322		9,322		9,737		8,545
NOOCRE	20,783		12,784		21,377		13,178
Commercial	11,659		2,633		11,397		2,521
Consumer	71		71		169		169
Total	$	44,236	$	27,211	$	43,542	$	25,275

    There were $8,141 and $8,545 of PCD loans that are not accounted for on a pooled basis included in nonaccrual loans at March 31, 2023 and December 31, 2022, respectively.

    During the three months ended March 31, 2023 and 2022, interest income not recognized on nonaccrual loans was $772 and $889, respectively.

An age analysis of past due loans, aggregated by class of loans and including past due nonaccrual loans, as of March 31, 2023 and December 31, 2022, is as follows:

	March 31, 2023
	30 to 59 Days		60 to 89 Days		90 Days or Greater		Total Past Due (1)		Total Current		PCD		Total Loans		Total 90 Days Past Due and Still Accruing(2)
Real estate:
Construction and land	$	619	$	—	$	1,583	$	2,202	$	1,829,147	$	—	$	1,831,349	$	—
Farmland	—		—		—		—		51,680		—		51,680		—
1 - 4 family residential	5,331		442		296		6,069		888,989		1,194		896,252		296
Multi-family residential	—		—		—		—		432,209		—		432,209		—
OOCRE	2,833		1,405		1,181		5,419		606,957		19,187		631,563		—
NOOCRE	—		—		20,696		20,696		2,471,438		13,210		2,505,344		—
Commercial	1,152		3,219		2,785		7,156		2,885,081		3,720		2,895,957		—
MW	208		—		—		208		437,293		—		437,501		—
Consumer	113		10		—		123		8,175		18		8,316		—
Total	$	10,256	$	5,076	$	26,541	$	41,873	$	9,610,969	$	37,329	$	9,690,171	$	296

(1) Total past due loans includes $17 of PCD loans as of March 31, 2023.

(2) Loans 90 days past due and still accruing excludes $1,449 of PCD loans as of March 31, 2023.

	December 31, 2022
	30 to 59 Days		60 to 89 Days		90 Days or Greater		Total Past Due(1)		Total Current		PCD		Total Loans		Total 90 Days Past Due and Still Accruing(2)
Real estate:
Construction and land	$	1,121	$	2,111	$	—	$	3,232	$	1,782,624	$	1,544	$	1,787,400	$	—
Farmland	—		—		—		—		43,500		—		43,500		—
1 - 4 family residential	4,319		129		499		4,947		888,329		1,180		894,456		123
Multi-family residential	1,000		—		—		1,000		321,679		—		322,679		—
OOCRE	3,342		1,186		1,193		5,721		690,291		19,817		715,829		—
NOOCRE	5,156		—		20,896		26,052		2,302,579		12,748		2,341,379		—
Commercial	3,088		2,188		1,675		6,951		2,931,696		3,701		2,942,348		—
MW	—		—		—		—		446,227		—		446,227		—
Consumer	352		—		45		397		7,386		23		7,806		2
Total	$	18,378	$	5,614	$	24,308	$	48,300	$	9,414,311	$	39,013	$	9,501,624	$	125

(1) Total past due loans includes $13,178 of PCD loans as of December 31, 2022.

(2) Loans 90 days past due and still accruing excludes $2,004 of PCD loans and $669 of PPP loans as of December 31, 2022.

There were $296 loans past due 90 days and still accruing as of March 31, 2023. Loans past due 90 days and still accruing were $125 as of December 31, 2022. These loans are also considered well-secured, and are in the process of collection with plans in place for the borrowers to bring the notes fully current or to subsequently be renewed. The Company believes that it will collect all principal and interest due on each of the loans past due 90 days and still accruing.

Modifications to Borrowers Experiencing Financial Difficulty

The Company adopted Accounting Standards Update (“ASU”) 2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measure of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty.

An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted during the three months ended March 31, 2023:

Loan Modifications Made to Borrowers Experiencing Financial Difficulty
	Interest Rate Reduction
	Amortized Cost Basis		% of Loan Class		Financial Impact
1-4 Family Residential Rentals1	$	42,647	4.8	%	Reduced weighted-average contractual interest rate from floating 7.5% to fixed 6.0%
Total	$	42,647

1 1-4 Family Residential Rentals is included in the 1-4 family residential loan portfolio and is reported as such in accordance with Federal Financial Institutions Examination Counsel guidelines.

No modifications to borrowers in financial difficulty had a payment default during the period and were modified in the 12 months before default to borrowers experiencing financial difficulty:

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months:

Payment Status
	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due
1-4 Family Residential Rentals	$	42,647	$	—	$	—	$	—
Total	$	42,647	$	—	$	—	$	—

The Company has not committed to lend additional amounts to customers with outstanding loans classified as TLMs as of March 31, 2023 or December 31, 2022.

Credit Quality Indicators

    From a credit risk standpoint, the Company classifies its loans in one of the following categories: (i) pass, (ii) special mention, (iii) substandard or (iv) doubtful. Loans classified as loss are charged-off. Loans not rated special mention, substandard, doubtful or loss are classified as pass loans.

    The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on criticized credits monthly. Ratings are adjusted to reflect the degree of risk and loss that is felt to be inherent in each credit as of each monthly reporting period. All classified credits are evaluated for impairment. If impairment is determined to exist, a specific reserve is established. The Company’s methodology is structured so that specific reserves are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss).

    Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness, however, such concerns are generally not so pronounced that the Company expects to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits with a lower rating.

    Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed.

    Credits rated doubtful are those in which full collection of principal appears highly questionable, and in which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt. Based upon available information, positive action by the Company is required to avert or minimize loss. Credits rated doubtful are generally also placed on non-accrual.

    Credits classified as PCD are those that, at acquisition date, have experienced a more-than-insignificant deterioration in credit quality since origination. All loans considered to be purchased-credit impaired loans prior to January 1, 2020 were converted to PCD loans upon adoption of ASC 326. The Company elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. Loans are only removed from the existing pools if they are foreclosed, written off, paid off, or sold.

The Company considers the guidance in ASC 310-20 when determining whether a modification, extension or renewal of a loan constitutes a current period origination. Generally, current period renewals of credit are re-underwritten at the point of renewal and considered current period originations for purposes of the table below. Based on the most recent analysis performed, the risk category of loans by class of loans based on year or origination is as follows:

	Term Loans Amortized Cost Basis by Origination Year1
	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2023
Construction and land:
Pass	$	2,440	$	503,556	$	731,203	$	243,188	$	43,087	$	17,882	$	200,052	$	—	$	1,741,408
Special mention	—		1,470		25,948		11,487		20,641		290		—		—		59,836
Substandard	—		—		4,583		25,522		—		—		—		—		30,105
Total construction and land	$	2,440	$	505,026	$	761,734	$	280,197	$	63,728	$	18,172	$	200,052	$	—	$	1,831,349
Construction and land gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Farmland:
Pass	$	2,044	$	2,514	$	22,640	$	18,397	$	19	$	5,034	$	1,032	$	—	$	51,680
Total farmland	$	2,044	$	2,514	$	22,640	$	18,397	$	19	$	5,034	$	1,032	$	—	$	51,680
Farmland gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1 - 4 family residential:
Pass	$	13,449	$	139,484	$	183,529	$	86,358	$	41,883	$	294,800	$	115,517	$	17,766	$	892,786
Special mention	—		—		—		—		—		691		—		—		691
Substandard	—		—		—		—		—		1,382		199		—		1,581
PCD	—		—		—		—		—		1,194		—		—		1,194
Total 1 - 4 family residential	$	13,449	$	139,484	$	183,529	$	86,358	$	41,883	$	298,067	$	115,716	$	17,766	$	896,252
1-4 family residential gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multi-family residential:
Pass	$	5,190	$	73,744	$	121,248	$	136,876	$	8,306	$	35,226	$	35,911	$	—	$	416,501
Special mention	—		—		—		—		1,945		13,763		—		—		15,708
Total multi-family residential	$	5,190	$	73,744	$	121,248	$	136,876	$	10,251	$	48,989	$	35,911	$	—	$	432,209
Multi-family residential gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
OOCRE:
Pass	$	5,931	$	126,121	$	105,907	$	89,064	$	42,865	$	209,887	$	3,352	$	—	$	583,127
Special mention	—		—		2,298		—		1,943		4,738		—		—		8,979
Substandard	—		—		—		1,442		—		18,828		—		—		20,270
PCD	—		—		—		—		—		19,187		—		—		19,187
Total OOCRE	$	5,931	$	126,121	$	108,205	$	90,506	$	44,808	$	252,640	$	3,352	$	—	$	631,563
OOCRE gross charge-offs	$	—	$	—	$	—	$	5	$	5	$	106	$	—	$	—	$	116
NOOCRE:
Pass	$	47,684	$	761,518	$	568,395	$	263,632	$	152,268	$	487,869	$	16,523	$	595	$	2,298,484
Special mention	—		—		—		22,849		18,536		38,563		—		—		79,948
Substandard	—		—		2,783		—		2,232		108,687		—		—		113,702
PCD	—		—		—		—		—		13,210		—		—		13,210
Total NOOCRE	$	47,684	$	761,518	$	571,178	$	286,481	$	173,036	$	648,329	$	16,523	$	595	$	2,505,344
NOOCRE gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial:
Pass	$	101,857	$	388,951	$	123,908	$	69,297	$	84,702	$	66,526	$	1,968,105	$	572	$	2,803,918
Special mention	—		—		1,113		—		71		5,467		14,070		—		20,721
Substandard	—		17,894		3,292		5,121		3,982		16,125		21,110		74		67,598
PCD	—		—		—		—		—		3,720		—		—		3,720
Total commercial	$	101,857	$	406,845	$	128,313	$	74,418	$	88,755	$	91,838	$	2,003,285	$	646	$	2,895,957
Commercial gross charge-offs	$	—	$	—	$	—	$	48	$	479	$	524	$	—	$	—	$	1,051
MW:
Pass	$	1,868	$	55,891	$	252	$	288	$	741	$	174	$	359,206	$	—	$	418,420
Special mention	—		—		—		—		—		—		18,873		—		18,873
Substandard	—		—		—		—		—		208		—		—		208
Total MW	$	1,868	$	55,891	$	252	$	288	$	741	$	382	$	378,079	$	—	$	437,501
Mortgage warehouse gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer:
Pass	$	1,388	$	1,437	$	412	$	804	$	168	$	2,240	$	1,709	$	—	$	8,158
Special mention	—		—		—		—		—		57		—		—		57
Substandard	—		—		—		—		16		67		—		—		83
PCD	—		—		—		—		—		18		—		—		18
Total consumer	$	1,388	$	1,437	$	412	$	804	$	184	$	2,382	$	1,709	$	—	$	8,316
Consumer gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	62	$	—	$	—	$	62
Total Pass	$	181,851	$	2,053,216	$	1,857,494	$	907,904	$	374,039	$	1,119,638	$	2,701,407	$	18,933	$	9,214,482
Total Special Mention	—		1,470		29,359		34,336		43,136		63,569		32,943		—		204,813
Total Substandard	—		17,894		10,658		32,085		6,230		145,297		21,309		74		233,547
Total PCD	—		—		—		—		—		37,329		—		—		37,329
Total	$	181,851	$	2,072,580	$	1,897,511	$	974,325	$	423,405	$	1,365,833	$	2,755,659	$	19,007	$	9,690,171
Total gross charge-offs	$	—	$	—	$	—	$	53	$	484	$	692	$	—	$	—	$	1,229

1 Term loans amortized cost basis by origination year excludes $15,511 of deferred loan fees, net.

	Term Loans Amortized Cost Basis by Origination Year1
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31,
Construction and land:
Pass	$	347,855	$	709,208	$	378,229	$	69,241	$	30,673	$	14,025	$	215,263	$	140	$	1,764,634
Special mention	—		18,662		2,560		—		—		—		—		—		21,222
PCD	—		—		—		—		—		1,544		—		—		1,544
Total construction and land	$	347,855	$	727,870	$	380,789	$	69,241	$	30,673	$	15,569	$	215,263	$	140	$	1,787,400
Farmland:
Pass	$	2,546	$	16,242	$	18,530	$	21	$	—	$	5,069	$	1,092	$	—	$	43,500
Total farmland	$	2,546	$	16,242	$	18,530	$	21	$	—	$	5,069	$	1,092	$	—	$	43,500

1 - 4 family residential:
Pass	$	135,006	$	188,635	$	87,861	$	43,293	$	41,960	$	257,768	$	86,900	$	726	$	842,149
Special mention	—		—		—		—		—		278		26,068		—		26,346
Substandard	—		184		—		—				1,028		23,569		—		24,781
PCD	—		—		—		—		—		1,180		—		—		1,180
Total 1 - 4 family residential	$	135,006	$	188,819	$	87,861	$	43,293	$	41,960	$	260,254	$	136,537	$	726	$	894,456
Multi-family residential:
Pass	$	72,044	$	80,793	$	110,426	$	8,402	$	32,822	$	2,494	$	—	$	—	$	306,981
Total multi-family residential	$	72,044	$	80,793	$	110,426	$	10,356	$	46,566	$	2,494	$	—	$	—	$	322,679
OOCRE:
Pass	$	191,044	$	106,698	$	84,230	$	43,965	$	49,461	$	167,968	$	5,225	$	—	$	648,591
Special mention	—		2,321		1,409		1,964		—		3,447		—		45		9,186
Substandard	—		—		—		—		23,231		15,004		—		—		38,235
PCD	—		—		—		—		—		19,817		—		—		19,817
Total OOCRE	$	191,044	$	109,019	$	85,639	$	45,929	$	72,692	$	206,236	$	5,225	$	45	$	715,829
NOOCRE:
Pass	$	752,476	$	531,735	$	215,076	$	149,246	$	196,424	$	305,434	$	16,642	$	465	$	2,167,498
Special mention	—		—		22,774		19,464		12,274		51,451		—		—		105,963
Substandard	—		—		—		1,310		7,659		46,201		—		—		55,170
PCD	—		—		—		—		12,697		51		—		—		12,748
Total NOOCRE	$	752,476	$	531,735	$	237,850	$	170,020	$	229,054	$	403,137	$	16,642	$	465	$	2,341,379
Commercial:
Pass	$	473,084	$	132,396	$	90,543	$	83,996	$	40,030	$	31,269	$	1,906,074	$	553	$	2,757,945
Special mention	—		666		—		4,543		7,385		270		114,447		—		127,311
Substandard	17,894		4,058		5,189		4,195		10,954		4,732		6,292		77		53,391
PCD	—		—		—		—		273		3,428		—		—		3,701
Total commercial	$	490,978	$	137,120	$	95,732	$	92,734	$	58,642	$	39,699	$	2,026,813	$	630	$	2,942,348
MW:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	444,393	$	—	$	444,393
Substandard	—		—		—		—		46		162		—		—		208
Total MW	$	—	$	—	$	—	$	—	$	46	$	162	$	446,019	$	—	$	446,227
Consumer:
Pass	$	1,965	$	452	$	872	$	216	$	135	$	2,298	$	1,618	$	—	$	7,556
Special mention	—		—		—		—		—		58		—		—		58
Substandard	—		—		—		—		—		169		—		—		169
PCD	—		—		—		—		—		23		—		—		23
Total consumer	$	1,965	$	452	$	872	$	216	$	135	$	2,548	$	1,618	$	—	$	7,806
Total Pass	$	1,976,020	$	1,766,159	$	985,767	$	398,380	$	391,505	$	786,325	$	2,677,207	$	1,884	$	8,983,247
Total Special Mention	—		21,649		26,743		25,971		19,659		55,504		142,141		45		291,712
Total Substandard	17,894		4,242		5,189		7,459		55,634		67,296		29,861		77		187,652
Total PCD	—		—		—		—		12,970		26,043		—		—		39,013
Total	$	1,993,914	$	1,792,050	$	1,017,699	$	431,810	$	479,768	$	935,168	$	2,849,209	$	2,006	$	9,501,624

1 Term loans amortized cost basis by origination year excludes $18,973 of deferred loan fees, net.

Servicing Assets

The Company was servicing loans of approximately $571,611 and $518,612 as of March 31, 2023 and 2022, respectively. A summary of the changes in the related servicing assets are as follows:

	Three Months Ended March 31,
	2023		2022
Balance at beginning of period	$	14,880	$	17,705
Increase from loan sales	959		1,491
Servicing asset impairment, net of recoveries	424		(280)
Amortization charged as a reduction to income	(1,015)		(748)
Balance at end of period	$	15,248	$	18,168

Fair value of servicing assets is estimated by discounting estimated future cash flows from the servicing assets using discount rates that approximate current market rates over the expected lives of the loans being serviced. A valuation allowance is recorded when the fair value is below the carrying amount of the asset. As of March 31, 2023 and 2022 there was a valuation allowance of $2,027 and $908, respectively.

The Company may also receive a portion of subsequent interest collections on loans sold that exceed the contractual servicing fees. In that case, the Company records an interest-only strip based on its relative fair market value and the other components of the loans. There was no interest-only strip receivable recorded at March 31, 2023 and December 31, 2022.

The following table reflects principal sold and related gain for SBA and USDA LHI. The gain on sale of these loans is recorded in government guaranteed loan income, net in the Company’s consolidated statements of income.

	Three Months Ended March 31,
	2023		2022
SBA LHI principal sold	$	6,340	$	4,376
Gain on sale of SBA LHI	148		533
USDA LHI principal sold	44,002		20,000
Gain on sale of USDA LHI	6,984		3,628

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Fair Value

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value

Fair ValueThe following table summarizes assets measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	March 31, 2023
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
AFS debt securities	$	—	$	966,123	$	—	$	966,123
Equity securities with a readily determinable fair value	9,918		—		—		9,918
LHFS(1)	—		41,747		—		41,747
Interest rate swap designated as hedging instruments	—		28,246		—		28,246
Correspondent interest rate swaps not designated as hedging instruments	—		29,358		—		29,358
Customer interest rate swaps not designated as hedging instruments	—		1,912		—		1,912
Correspondent interest rate caps and collars not designated as hedging instruments	—		1,351		—		1,351
Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	44,880	$	—	$	44,880
Correspondent interest rate swaps not designated as hedging instruments	—		2,454		—		2,454
Customer interest rate swaps not designated as hedging instruments	—		28,282		—		28,282
Customer interest rate caps and collars not designated as hedging instruments	—		1,351		—		1,351

1) Represents LHFS elected to be carried at fair value.

	December 31, 2022
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
AFS debt securities	$	—	$	1,096,292	$	—	$	1,096,292
Equity securities with a readily determinable fair value	9,792		—		—		9,792
PPP loans	—		—		1,995		1,995
LHFS(1)	—		19,775		—		19,775
Interest rate swap designated as hedging instruments	—		26,523		—		26,523
Correspondent interest rate swaps not designated as hedging instruments	—		38,839		—		38,839
Customer interest rate swaps not designated as hedging instruments	—		1,004		—		1,004
Correspondent interest rate caps and collars not designated as hedging instruments	—		1,494		—		1,494
Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	54,171	$	—	$	54,171
Correspondent interest rate swaps not designated as hedging instruments	—		1,126		—		1,126
Customer interest rate swaps not designated as hedging instruments	—		38,188		—		38,188
Customer interest rate caps and collars not designated as hedging instruments	—		1,494		—		1,494

(1) Represents LHFS elected to be carried at fair value upon origination or acquisition..

There were no transfers between Level 2 and Level 3 during the three months ended March 31, 2023 and December 31, 2022.

The following table summarizes assets measured at fair value on a non-recurring basis as of March 31, 2023 and December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	Fair Value Measurements Using
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
As of March 31, 2023
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	6,814	$	6,814
Servicing assets with a valuation allowance	—		—		8,895		8,895
As of December 31, 2022
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	7,969	$	7,969
Servicing assets with a valuation allowance	—		—		10,984		10,984

At March 31, 2023, collateral dependent loans with an allowance had a recorded investment of $9,230, with $2,416 specific allowance for credit loss allocated. At December 31, 2022, collateral dependent loans with an allowance had a carrying value of $10,632, with $2,663 of specific allowance for credit loss allocated.

At March 31, 2023, servicing assets of $10,922 had a valuation allowance totaling $2,027. At December 31, 2022, servicing assets of $13,435 had a valuation allowance totaling $2,451.

There were no liabilities measured at fair value on a non-recurring basis as of March 31, 2023 or December 31, 2022.

Fair Value of Financial Instruments

    The Company’s methods of determining fair value of financial instruments in this Note are consistent with its methodologies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Please refer to Note 17 in the Company’s Annual Report on Form 10-K for information on these methods.

The estimated fair values and carrying values of all financial instruments not measured at fair value on a recurring basis under current authoritative guidance as of March 31, 2023 and December 31, 2022 were as follows:

			Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
March 31, 2023
Financial assets:
Cash and cash equivalents	$	808,395	$	—	$	808,395	$	—
HTM debt securities	184,836		—		161,778		—
LHFS(1)	1,069		—		—		1,069
LHI(2)	9,575,966		—		—		9,321,175
Accrued interest receivable	42,242		—		42,242		—
BOLI	84,962		—		84,962		—
Servicing asset	6,353		—		6,353		—
Equity securities without a readily determinable fair value	10,604		N/A		N/A		N/A
FHLB and FRB stock	116,081		N/A		N/A		N/A
Financial liabilities:
Deposits	$	9,034,738	$	—	$	8,296,710	$	—
Advances from FHLB	1,680,000		—		1,681,089		—
Accrued interest payable	18,651		—		18,651		—
Subordinated debentures and subordinated notes	229,027		—		229,027		—
December 31, 2022
Financial assets:
Cash and cash equivalents	$	436,077	$	—	$	436,077	$	—
HTM debt securities	186,168		—		158,781		—
Securities purchased under agreements to resell	—		—		—		—
LHFS1)	866		—		866		—
LHI(2)	9,399,614		—		—		9,163,616
Accrued interest receivable	44,035		—		44,035		—
BOLI	84,496		—		84,496		—
Servicing asset	3,896		—		3,896		—
Equity securities without a readily determinable fair value	10,072		N/A		N/A		N/A
FHLB and FRB stock	101,568		N/A		N/A		N/A
Financial liabilities:
Deposits	$	9,123,234	$	—	$	8,341,419	$	—
Advances from FHLB	1,175,000		—		1,156,852		—
Accrued interest payable	8,795		—		8,795		—
Subordinated debentures and subordinated notes	228,775		—		228,775		—
Securities sold under agreement to repurchase	—		—		—		—

(1) LHFS represent mortgage LHFS that are carried at lower of cost or market.

(2) LHI includes MW and is carried at amortized cost.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

The Company primarily uses derivatives to manage exposure to market risk, including interest rate risk and credit risk and to assist customers with their risk management objectives. Management will designate certain derivatives as hedging instruments in a qualifying hedge accounting relationship. The Company’s remaining derivatives consist of derivatives held for customer accommodation or other purposes.

The fair value of derivative positions outstanding is included in other assets and accounts payable and other liabilities on the accompanying consolidated balance sheets and in the net change in each of these financial statement line items in the

accompanying consolidated statements of cash flows. For derivatives not designated as hedging instruments, swap fee income and gains and losses due to changes in fair value are included in other noninterest income and the operating section of the consolidated statement of cash flows. For derivatives designated as hedging instruments, the entire change in the fair value related to the derivative instrument is recognized as a component of other comprehensive income and subsequently reclassified into interest income or interest expense when the forecasted transaction affects income. The notional amounts and estimated fair values as of March 31, 2023 and December 31, 2022 are as shown in the table below.

	March 31, 2023						December 31, 2022
			Estimated Fair Value						Estimated Fair Value
	Notional Amount		Asset Derivative		Liability Derivative		Notional Amount		Asset Derivative		Liability Derivative
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on money market deposit account payments	$	250,000	$	17,257	$	—	$	250,000	$	21,234	$	—
Interest rate swaps on customer loan interest payments	375,000		—		41,126		375,000		—		49,211
Interest rate collars on customer loan interest payments	450,000		3,445		3,754		450,000		3,267		4,960
Interest rate floor on customer loan interest payments	200,000		7,544		—		100,000		2,022		—
Total derivatives designated as hedging instruments	$	1,275,000	$	28,246	$	44,880	$	1,175,000	$	26,523	$	54,171
Derivatives not designated as hedging instruments:
Financial institution counterparty:
Interest rate swaps	$	805,488	$	29,358	$	2,454	$	805,311	$	38,839	$	1,126
Interest rate caps and corridors	123,870		1,351		—		68,370		1,494		—
Commercial customer counterparty:
Interest rate swaps	805,488		1,912		28,282		805,311		1,004		38,188
Interest rate caps and corridors	123,870		—		1,351		68,370		—		1,494
Total derivatives not designated as hedging instruments	$	1,858,716	$	32,621	$	32,087	$	1,747,362	$	41,337	$	40,808
Offsetting derivative assets/liabilities			(25,703)		(25,703)				(30,982)		(30,982)
Total derivatives	$	3,133,716	$	35,164	$	51,264	$	2,922,362	$	36,878	$	63,997

Pre-tax (loss) gain included in the consolidated statements of income and related to derivative instruments for the three months ended March 31, 2023 and 2022 were as follows.

	For the Three Months Ended March 31, 2023						For the Three Months Ended March 31, 2022
	(Loss) gain recognized in other comprehensive income on derivative		Gain (loss) reclassified from accumulated other comprehensive income into income		Location of (loss) gain reclassified from accumulated other comprehensive income into income		Gain (loss) recognized in other comprehensive income on derivative		(Loss) gain reclassified from accumulated other comprehensive income into income		Location of (loss) gain reclassified from accumulated other comprehensive income into income
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on borrowing advances	$	(1,082)	$	1,082	Interest Expense		$	(264)	$	264	Interest Expense
Interest rate swap on money market deposit account payments	(3,977)		2,568		Interest Expense		9,389		(171)		Interest Expense
Derivatives on customer loan interest payments	12,136		(3,807)		Interest Income		(22,506)		1,078		Interest Income
Total	$	7,077	$	(157)			$	(13,381)	$	1,171
					Net gain recognized in other noninterest income						Net gain recognized in other noninterest income
Derivatives not designated as hedging instruments:
Interest rate swaps, caps, floors and collars					$	212					$	719

Cash Flow Hedges

We enter into cash flow hedge relationships to mitigate exposure to the variability of future cash flows or other forecasted transactions. The Company uses interest rate swaps, floors, caps and collars to manage overall cash flow changes related to interest rate risk exposure on benchmark interest rate loans. To qualify for hedge accounting, a formal assessment is prepared to determine whether the hedging relationship, both at inception and on an ongoing basis, is expected to be highly effective in achieving offsetting cash flows attributable to the hedged risk during the term of the cash flow hedge. At inception a statistical regression analysis is prepared to determine hedge effectiveness. At each reporting period thereafter, a statistical regression or qualitative analysis is performed. If it is determined that hedge effectiveness has not been or will not continue to be highly effective, then hedge accounting ceases and any gain or loss in AOCI is recognized in earnings immediately. The cash flow hedges are recorded at fair value in other assets and other liabilities on the consolidated balance sheets with changes in fair value recorded in AOCI, net of tax. Amounts recorded to AOCI are reclassified into earnings in the same period in which the hedged asset or liability affects earnings and are presented in the same income statement line item as the earnings effect of the hedged asset or liability.    

Interest Rate Swap, Floor, Cap and Collar Agreements Not Designated as Hedging Derivatives

    In order to accommodate the borrowing needs of certain commercial customers, the Company has entered into interest rate swap or cap agreements with those customers. These interest rate derivative contracts effectively allow the Company’s customers to convert a variable rate loan into a fixed rate loan. In order to offset the exposure and manage interest rate risk, at the time an agreement was entered into with a customer, the Company entered into an interest rate swap or cap with a correspondent bank counterparty with offsetting terms. These derivative instruments are not designated as accounting hedges and changes in the net fair value are recognized in noninterest income or expense. Because the Company acts as an intermediary for its customers, changes in the fair value of the underlying derivative contracts substantially offset each other and do not have a material impact on the Company’s results of operations. The fair value amounts are included in other assets and other liabilities.

The following is a summary of the interest rate swaps, caps and collars outstanding as of March 31, 2023 and December 31, 2022.

	March 31, 2023
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
Non-hedging derivative instruments:
Customer interest rate derivative:
Interest rate swaps - receive fixed/pay floating	$	805,488	2.41% - 8.47%	LIBOR 1 month + 3.0% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 4.8 years	$	(27,071)
Interest rate caps and corridors	$	123,870	3.50% - 5.90%	SOFR CME 1 month + 0.0%	Wtd. Avg. 1.6 years	$	(1,351)
Correspondent interest rate derivative:
Interest rate swaps - pay fixed/receive floating	$	805,488	2.41% - 8.47%	LIBOR 1 month + 3.0% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 4.8 years	$	26,904
Interest rate caps and corridors	$	123,870	3.50% - 5.90%	SOFR CME 1 month + 0.0%	Wtd. Avg. 1.6 years	$	1,351
	December 31, 2022
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
Non-hedging derivative instruments:
Customer interest rate derivative:
Interest rate swaps - receive fixed/pay floating	$	805,311	2.41% - 8.47%	LIBOR 1 month + 2.8% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 5.1 years	$	(37,183)
Interest rate caps and corridors	$	68,370	3.50%	LIBOR 1 month + 0.0%	Wtd. Avg. 1.8 years	$	(1,494)
Correspondent interest rate derivative:
Interest rate swaps - pay fixed/receive floating	$	805,311	2.41% - 8.47%	LIBOR 1 month + 2.8% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 5.1 years	$	37,713
Interest rate caps and corridors	$	68,370	3.50%	LIBOR 1 month + 0.0%	Wtd. Avg. 1.8 years	$	1,494

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Off-Balance Sheet Loan Commitments

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Off-Balance Sheet Loan Commitments

Off-Balance Sheet Loan Commitments

The Company is party to financial instruments with off-balance sheet (“OBS”) risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, MW commitments and standby and commercial letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets.

The Company’s exposure to credit loss in the event of nonperformance by the other party to a financial instrument for commitments to extend credit, MW commitments and standby and commercial letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

The following table sets forth the approximate amounts of these financial instruments as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
Commitments to extend credit	$	4,138,471	$	4,511,671
MW commitments	985,207		1,088,558
Standby and commercial letters of credit	105,950		98,179
Total	$	5,229,628	$	5,698,408

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Management evaluates each customer’s creditworthiness on a case-by-case basis and substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of future loan funding. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the borrower.

MW commitments are unconditionally cancellable and represent the unused capacity on MW facilities the Company has approved. The Company reserves the right to refuse to buy any mortgage loans offered for sale by a customer, for any reason, at the Company’s sole and absolute discretion.

Standby and commercial letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby and commercial letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company’s policy for obtaining collateral and the nature of such collateral is substantially the same as that involved in making commitments to extend credit.

The table below presents the activity in the allowance for unfunded commitment credit losses related to those financial instruments discussed above. This ACL on unfunded commitments is recorded in accounts payable and other liabilities on the consolidated balance sheets:

	Three Months Ended March 31,
	2023		2022
Beginning balance for ACL on unfunded commitments	$	10,086	$	9,266
Provision for credit losses on unfunded commitments	1,497		493
Ending balance of ACL on unfunded commitments	$	11,583	$	9,759

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Stock-Based Awards

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Awards

Stock-Based Awards

2010 Stock Option and Equity Incentive Plan (“2010 Incentive Plan”)

    The Company recognized no stock compensation expense related to the 2010 Incentive Plan for the three months ended March 31, 2023 and 2022.

A summary of option activity under the 2010 Incentive Plan for the three months ended March 31, 2023 and 2022, and changes during the periods then ended, is presented below:

	2010 Incentive Plan
	Non-Performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	1,000	$	10.43
Outstanding and exercisable at March 31, 2022	1,000	$	10.43	1.07
Outstanding at January 1, 2023	1,000	$	10.43	1.07	$	147
Exercised	(1,000)	10.43
Outstanding and exercisable at March 31, 2023	—	$	—	—	$	—

As of March 31, 2023, December 31, 2022 and March 31, 2022 there was no unrecognized stock compensation expense related to non-performance based stock options.

A summary of the fair value of the Company’s stock options exercised under the 2010 Incentive Plan for the three months ended March 31, 2023 and 2022 is presented below:

	Fair Value of Options Exercised as of March 31,
	2023		2022
Nonperformance-based stock options exercised	$	16	$	—

2022 Equity Plan and Green Acquired Omnibus Plans

Grants of Restricted Stock Units

    During the three months ending March 31, 2023, the Company granted non-performance-based RSUs and performance-based restricted stock units (“PSUs”) under the 2022 Amended and Restated Omnibus Incentive Plan (the “2022 Equity Plan”) and the Veritex (Green) 2014 Omnibus Equity Incentive Plan (the “Veritex (Green) 2014 Plan”). The majority of the RSUs granted to employees during the three months ending March 31, 2023 have an annual graded vesting over a three year period from the grant date.

    The PSUs granted in February 2023 are subject to a service, performance and market conditions. The performance and market condition determine the number of awards to vest. The service period is from February 1, 2023 to January 31, 2026, the performance conditions performance period is from January 1, 2023 to December 31, 2025 and the market condition performance period is from February 1, 2023 to January 31, 2026. A Monte Carlo simulation was used to estimate the fair value of PSUs on the grant date.

Stock Compensation Expense

Stock compensation expense for options, RSUs and PSUs granted under the 2022 Equity Plan and the Veritex (Green) 2014 Plan were as follows:

	Three Months Ended March 31,
	2023		2022
2022 Equity Plan	$	2,465	$	2,904
Veritex (Green) 2014 Plan	422		414

2022 Equity Plan

A summary of the status of the Company’s stock options under the 2022 Equity Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	2022 Equity Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	710,043	$	24.38
Exercised	(38,128)	23.34
Outstanding at March 31, 2022	671,915	$	24.44	6.65
Options exercisable at March 31, 2022	518,237	$	24.45	6.35
Outstanding at January 1, 2023	657,494	$	24.47
Forfeited	(1,666)	17.38
Cancelled	(3,804)	29.13
Exercised	(3,951)	21.38
Outstanding at March 31, 2023	648,073	$	24.48	5.24	$	123
Options exercisable at March 31, 2023	610,073	$	24.74	5.13	$	114

As of March 31, 2023, December 31, 2022 and March 31, 2022, there was $122, $172 and $626 of total unrecognized compensation expense related to options awarded under the 2022 Equity Plan, respectively. The unrecognized compensation expense at March 31, 2023 is expected to be recognized over the remaining weighted average requisite service period of 0.01 years.

A summary of the status of the Company’s RSUs under the 2022 Equity Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	2022 Equity Plan
	Non-performance-Based
	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	598,051	$	23.39
Granted	169,355	40.77
Vested into shares	(96,141)	24.69
Forfeited	(2,350)	26.12
Outstanding at March 31, 2022	668,915	$	27.59
Outstanding at January 1, 2023	955,104	$	28.38
Granted	224,165	27.90
Vested into shares	(162,952)	30.23
Forfeited	(16,394)	31.77
Outstanding at March 31, 2023	999,923	$	27.87

A summary of the status of the Company’s PSUs under the 2022 Equity Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	2022 Equity Plan
	Performance-Based
	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	156,471	$	24.17
Granted	39,429	40.38
Outstanding at March 31, 2022	132,564	$	30.15
Outstanding at January 1, 2023	126,707	$	31.19
Granted	53,310	27.55
Vested into shares	(41,781)	26.42
Outstanding at March 31, 2023	129,768	$	30.28

As of March 31, 2023, December 31, 2022 and March 31, 2022, there was $15,278, $17,160 and $16,882 of total unrecognized compensation related to RSUs and PSUs awarded under the 2022 Equity Plan, respectively. The unrecognized compensation expense at March 31, 2023 is expected to be recognized over the remaining weighted average requisite service period of 1.68 years.

    A summary of the fair value of the Company’s stock options exercised, RSUs and PSUs vested under the 2022 Equity Plan during the three months ended March 31, 2023 and 2022 is presented below:

	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2023	2022
Non-performance-based stock options exercised	31	1,562
RSUs vested	3,044	2,524
PSUs vested	1,070	2,270

Veritex (Green) 2014 Plan

A summary of the status of the Company’s stock options under the Veritex (Green) 2014 Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	Veritex (Green) 2014 Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	217,804	$	19.62
Exercised	(28,622)	21.34
Outstanding at March 31, 2022	189,182	$	19.37	5.57
Options exercisable at March 31, 2022	180,830	$	18.81	5.45
Outstanding at January 1, 2023	155,212	$	19.83
Cancelled	(505)	21.38
Exercised	(13,266)	21.38
Outstanding at March 31, 2023	141,441	$	21.86	4.87	$	287
Options exercisable at March 31, 2023	141,441	$	21.86	4.87	$	287
Weighted average fair value of options granted during the period		$	—

As of March 31, 2023 and December 31, 2022 there was no unrecognized compensation expense related to options awarded under the Veritex (Green) 2014 Plan. As of March 31, 2022 there was $75 of total unrecognized compensation expense related to options awarded under the Veritex (Green) 2014 Plan, respectively.

A summary of the status of the Company’s RSUs under the Veritex (Green) 2014 Plan as of March 31, 2023 and 2022 and changes during the three months then ended, is as follows:

	Veritex (Green) 2014 Plan
	Non-performance-Based
	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	122,784	$	21.13
Granted	4,231	40.38
Vested into shares	(32,931)	21.80
Forfeited	(2,558)	29.13
Outstanding at March 31, 2022	91,526	$	21.55
Outstanding at January 1, 2023	86,233	$	21.09
Vested into shares	(19,282)	29.66
Forfeited	(2,232)	29.13
Outstanding at March 31, 2023	64,719	$	18.26

A summary of the status of the Company’s PSUs under the Veritex (Green) 2014 Plan as of March 31, 2023 and 2022 and changes during the three months then ended, is as follows:

	Veritex (Green) 2014 Plan
	Performance-Based
	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	35,899	$	22.26
Granted	4,411	40.38
Incremental PSUs granted upon performance condition met	10,566	$	19.69
Vested into shares	(31,703)	$	19.69
Outstanding at March 31, 2022	19,173	$	29.26
Outstanding at January 1, 2023	19,173	$	30.74
Vested into shares	(8,531)	25.94
Outstanding at March 31, 2023	10,642	$	31.93

As of March 31, 2023, December 31, 2022 and March 31, 2022, there was $3,260, $3,825, and $1,399, respectively, of total unrecognized compensation related to outstanding RSUs and PSUs awarded under the Veritex (Green) 2014 Plan to be recognized over a remaining weighted average requisite service period of 2.20 years.

    A summary of the fair value of the Company’s stock options exercised and RSUs vested under the Veritex (Green) 2014 Plan during the three months ended March 31, 2023 and 2022 presented below:

	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2023		2022
Non-performance-based stock options exercised	$	18	$	1,143
RSUs vested	1,990		718
PSU vested	227		624

Green 2010 Plan

In addition to the Veritex (Green) 2014 Plan discussed earlier in this Note, the Company assumed the Green Bancorp Inc. 2010 Stock Option Plan (“Green 2010 Plan”).

A summary of the status of the Company’s stock options under the Green 2010 Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	Green 2010 Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	66,143	$	12.56
Exercised	(1,372)	13.07
Outstanding at March 31, 2022	64,771	$	12.55	1.95 years
Outstanding at January 1, 2023	43,162	$	13.11
Exercised	(29,630)	13.22
Outstanding at March 31, 2023	13,532	$	12.86	3.94 years	$	73

A summary of the fair value of the Company’s stock options exercised under the Green 2010 Plan during the three months ended March 31, 2023 and 2022 presented below:

	Fair Value of Options Exercised as of March 31,
	2023	2022
Nonperformance-based stock options exercised	365	56

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Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

    Income tax expense for the three months ended March 31, 2023 and 2022 was as follows:

	Three Months Ended March 31,
	2023			2022
Income tax expense for the period	$	11,012		$	8,102
Effective tax rate	22.3		%	19.5		%

For the three months ended March 31, 2023, the Company had an effective tax rate of 22.3%. The Company had a net discrete tax expense of $112 thousand associated with the recognition of an excess tax expense realized on share-based payment awards during the three months ended March 31, 2023. Excluding this discrete tax item, the Company had an effective tax rate of 22.1% for the three months ended March 31, 2023.

For the three months ended March 31, 2022, the Company had an effective tax rate of 19.5%. The Company had a net discrete tax benefit of $992 associated with the recognition of an excess tax benefit realized on share-based payment awards during the three months ended March 31, 2022 . Excluding this discrete tax item, the Company had an effective tax rate of 21.9% for the three months ended March 31, 2022.

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Legal Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Legal Contingencies

Legal Contingencies

Litigation

The Company may from time to time be involved in legal actions arising from normal business activities. In the opinion of management, there are no claims for which it is reasonably possible that an adverse outcome would have a material effect on the Company's financial position, liquidity or results of operations. The Company is not aware of any material unasserted claims.

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Capital Requirements and Restrictions on Retained Earnings

3 Months Ended

Mar. 31, 2023

Regulatory Capital Requirements under Banking Regulations [Abstract]

Capital Requirements and Restrictions on Retained Earnings

Capital Requirements and Restrictions on Retained Earnings

Under applicable U.S. banking laws, there are legal restrictions limiting the amount of dividends the Company can declare. Approval of the regulatory authorities is required if, among other things, the effect of the dividends declared would cause regulatory capital of the Company to fall below specified minimum levels.

The Company on a consolidated basis and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements triggers certain mandatory actions and may lead to additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action (“PCA”), the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and PCA classification are also subject to qualitative judgments by the regulators about components of capital, risk weightings of assets, and other factors. In addition, an institution may be downgraded to, or deemed to be in, a capital category that is lower than indicated by its capital ratios, if it is determined to be in an unsafe or unsound condition or if it receives an unsatisfactory examination rating with respect to certain matters.

As a result of our no longer using the CBLR framework, we are subject to various quantitative measures established by regulation to ensure capital adequacy. These generally applicable capital requirements require a banking organization that does not operate under the CBLR framework to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. The capital rules implementing Basel III also include a “capital conservation buffer” of 2.5% on top of each of the minimum risk-based capital ratios, and a banking organization with any risk-based capital ratio that meets or exceeds the minimum requirement but does not meet the capital conservation buffer will face constraints on dividends, equity repurchases and discretionary bonus payments based on the amount of the shortfall. Additionally, to be categorized as “well capitalized,” a bank that does not operate under the CBLR framework is required to maintain minimum total risk-based common equity Tier 1, Tier 1, and total capital ratios and Tier 1 leverage ratios as set forth in the table below.

As of March 31, 2023 and December 31, 2022, the Company’s and the Bank’s capital ratios exceeded those levels necessary to be categorized as “well capitalized”. There are no conditions or events since March 31, 2023 that management believes have changed the Company’s category.

In the first quarter of 2020, U.S. federal regulatory authorities issued an interim final rule that provides banking organizations that adopt CECL during the 2020 calendar year with the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided during the initial two-year delay (i.e., a five-year transition in total). In connection with our adoption of CECL on January 1, 2020, the Company elected to utilize the five-year CECL transition. As a result, the effects of CECL on the Company’s and the Bank’s regulatory capital was delayed through the year 2021, with the effects phased-in over a three-year period from January 1, 2022 through December 31, 2024.

A comparison of the Company’s and Bank’s actual capital amounts and ratios to required capital amounts and ratios is presented in the following table:

	Actual				For Capital  Adequacy Purposes				To Be Well Capitalized Under PCA Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of March 31, 2023
Total capital (to risk-weighted assets “RWA”)
Company	$	1,437,576	11.99	%	$	959,183	8.0	%	n/a		n/a
Bank	1,424,435		11.89		958,409		8.0		$	1,198,011	10.0	%
Tier 1 capital (to RWA)
Company	1,146,356		9.56		719,470		6.0		n/a		n/a
Bank	1,331,501		11.12		718,436		6.0		957,914		8.0
Common equity tier 1 (to RWA)
Company	1,116,632		9.32		539,146		4.5		n/a		n/a
Bank	1,331,501		11.12		538,827		4.5		778,305		6.5
Tier 1 capital (to average assets)
Company	1,146,356		9.67		474,191		4.0		n/a		n/a
Bank	1,331,501		11.24		473,844		4.0		592,305		5.0
As of December 31, 2022
Total capital (to RWA)
Company	$	1,395,904	11.63	%	$	960,209	8.0	%	n/a		n/a
Bank	1,368,082		11.41		959,216		8.0		$	1,199,020	10.0	%
Tier 1 capital (to RWA)
Company	1,121,021		9.34		720,142		6.0		n/a		n/a
Bank	1,291,288		10.77		719,381		6.0		959,174		8.0
Common equity tier 1 (to RWA)
Company	1,091,353		9.09		540,274		4.5		n/a		n/a
Bank	1,291,288		10.77		539,535		4.5		779,329		6.5
Tier 1 capital (to average assets)
Company	1,121,021		9.82		456,628		4.0		n/a		n/a
Bank	1,291,288		11.32		456,286		4.0		570,357		5.0

Dividend Restrictions

Dividends paid by the Bank are subject to certain restrictions imposed by regulatory agencies. Capital requirements further limit the amount of dividends that may be paid by the Bank. No dividends were paid by the Bank to the Holdco during the three months ended March 31, 2023 and March 31, 2022.

Dividends of $10,837, or $0.20, and $9,913, or $0.20, per outstanding share of the Company’s common stock were paid by the Company during the three months ended March 31, 2023 and 2022, respectively.

The Bank is subject to limitations on dividend payouts if, among other things, it does not have a capital conservation buffer of 2.5% or more. The Bank had a capital conservation buffer of 3.89% as of March 31, 2023.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Veritex Holdings, Inc. and its subsidiaries, including Veritex Community Bank.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), but do not include all of the information and footnotes required for complete financial statements. Intercompany transactions and balances are eliminated in consolidation. In management’s opinion, these unaudited consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated balance sheets at March 31, 2023 and December 31, 2022, consolidated statements of income, consolidated changes in stockholders’ equity and consolidated statements of comprehensive income for the three months ended March 31, 2023 and 2022 and consolidated statements of cash flows for the three months ended March 31, 2023 and 2022.

Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown herein are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Quarterly Reports on Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 28, 2023.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reclassifications

ReclassificationsCertain items in the Company’s prior year financial statements were reclassified to conform to the current presentation.

EPS

EPS is based upon the weighted average shares outstanding.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326)” (“ASU 2022-02”) eliminates the guidance on troubled debt restructurings and requires entities to evaluate all loan modifications to determine if they result in a new loan or a continuation of the existing loan. ASU 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination for loans and leases. ASU 2022-02 is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The adoption of ASU 2022-02 did not have a significant impact on our financial statements. See Note 4 - LHI and ACL for new financial statement disclosures applicable under this standard.

ASU No. 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” ASU 2023-02 is intended to improve the accounting and disclosures for investments in tax credit structures. ASU 2023-02 allows entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. Previously, this method was only available for qualifying tax equity investments in low-income housing tax credit structures. ASU 2023-02 will be effective for us on January 1, 2024, though early adoption is permitted, and its adoption is not expected to have a significant effect on our financial statements.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of Reconciliation Between Weighted Average Shares Used for Calculating Basic and Diluted EPS

The table below sets forth the reconciliation between weighted average shares used for calculating basic and diluted EPS for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
Numerator:
Net income	$	38,411	$	33,470
Denominator:
Weighted average shares outstanding for basic EPS	54,149		50,695
Dilutive effect of employee stock-based awards	457		876
Adjusted weighted average shares outstanding	54,606		51,571
EPS:
Basic	$	0.71	$	0.66
Diluted	$	0.70	$	0.65

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Supplemental Statement of Cash Flows (Tables)

3 Months Ended

Mar. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Schedule of Other Supplemental Cash Flow Information

Other supplemental cash flow information is presented below:

	Three Months Ended March 31,
	2023		2022
	(in thousands)
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	54,189	$	5,368
Cash paid for income taxes	—		—
Supplemental Disclosures of Non-Cash Flow Information:
Transfer of AFS debt securities to HTM debt securities	—		117,001
Net foreclosure of OREO and repossessed assets	—		1,062

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Securities (Tables)

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Gross Unrealized Loss Recognized on Equity Securities

The gross unrealized gain (loss) recognized on equity securities with readily determinable fair values recorded in other noninterest income in the Company’s consolidated statements of income were as follows:

	Three Months Ended March 31,
	2023		2022
Unrealized gain (loss) recognized on equity securities with a readily determinable fair value	$	126	$	(513)

Schedule of Carrying Amount and Approximate Fair Values of Available-for-Sale Securities

The amortized cost, related gross unrealized gains and losses, ACL and the fair value of AFS and HTM debt securities are as follows:

	March 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
AFS
Corporate bonds	$	244,190	$	1,218	$	23,900	$	885	$	220,623
Municipal securities	46,910		57		3,345		—		43,622
Mortgage-backed securities	130,343		24		14,703		—		115,664
Collateralized mortgage obligations	524,593		—		41,940		—		482,653
Asset-backed securities	38,966		622		2,075		—		37,513
Collateralized loan obligations	69,750		—		3,702		—		66,048
	$	1,054,752	$	1,921	$	89,665	$	885	$	966,123
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
HTM
Mortgage-backed securities	$	35,999	$	—	$	6,302	$	—	$	29,697
Collateralized mortgage obligations	35,616		—		4,748		—		30,868
Municipal securities	113,221		98		12,106		—		101,213
	$	184,836	$	98	$	23,156	$	—	$	161,778

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
AFS
Corporate bonds	$	268,179	$	1,445	$	17,379	$	—	$	252,245
Municipal securities	49,886		3		4,198		—		45,691
Mortgage-backed securities	156,408		23		17,420		—		139,011
Collateralized mortgage obligations	609,456		—		55,850		—		553,606
Asset-backed securities	42,015		289		2,613		—		39,691
Collateralized loan obligations	69,750		—		3,702		—		66,048
	$	1,195,694	$	1,760	$	101,162	$	—	$	1,096,292
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		ACL		Fair Value
HTM
Mortgage-backed securities	$	36,342	$	—	$	6,753	$	—	$	29,589
Collateralized mortgage obligations	36,169		—		5,884		—		30,285
Municipal securities	113,657		6		14,756		—		98,907
	$	186,168	$	6	$	27,393	$	—	$	158,781

Schedule of Investment Securities That Have Been in a Continuous Unrealized Loss Position

The following tables disclose the Company’s AFS debt securities in an unrealized loss position for which an ACL has not been recorded, aggregated by investment category and length of time that individual debt securities have been in a continuous loss position:

	March 31, 2023
	Less Than 12 Months				12 Months or More				Totals
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AFS
Corporate bonds	$	—	$	—	$	15,710	$	311	$	15,710	$	311
Municipal securities	27,477		306		11,317		3,039		38,794		3,345
Mortgage-backed securities	3,410		67		111,436		14,636		114,846		14,703
Collateralized mortgage obligations	131,159		3,404		351,494		38,536		482,653		41,940
Asset-backed securities	3,224		150		16,978		1,925		20,202		2,075
Collateralized loan obligations	—		—		66,048		3,702		66,048		3,702
	$	165,270	$	3,927	$	572,983	$	62,149	$	738,253	$	66,076
HTM
Mortgage-backed securities	$	—	$	—	$	29,697	$	6,302	$	29,697	$	6,302
Collateralized mortgage obligations	3,829		220		27,039		4,528		30,868		4,748
Municipal securities	12,170		94		76,434		12,012		88,604		12,106
	$	15,999	$	314	$	133,170	$	22,842	$	149,169	$	23,156

	December 31, 2022
	Less Than 12 Months				12 Months or More				Totals
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AFS
Corporate bonds	$	197,946	$	15,697	$	15,568	$	1,682	$	213,514	$	17,379
Municipal securities	33,919		848		8,813		3,350		42,732		4,198
Mortgage-backed securities	115,467		11,104		22,780		6,317		138,247		17,421
Collateralized mortgage obligations	482,358		42,553		71,198		13,296		553,556		55,849
Asset-backed securities	15,195		991		11,207		1,621		26,402		2,612
Collateralized loan obligations	23,673		1,328		42,375		2,375		66,048		3,703
	$	868,558	$	72,521	$	171,941	$	28,641	$	1,040,499	$	101,162
HTM
Mortgage-backed securities	$	804	$	85	$	28,784	$	6,668	$	29,588	$	6,753
Collateralized mortgage obligations	25,285		4,676		4,999		1,208		30,284		5,884
Municipal securities	85,671		11,411		9,161		3,345		94,832		14,756
	$	111,760	$	16,172	$	42,944	$	11,221	$	154,704	$	27,393

Schedule of Amortized Costs and Estimated Fair Values of Securities Available for Sale, By Contractual Maturity

The amortized costs and estimated fair values of AFS debt securities, by contractual maturity, as of the dates indicated, are shown in the table below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities, collateralized mortgage obligations, asset-backed securities, and collateralized loan obligations typically are issued with stated principal amounts, and the securities are backed by pools of mortgage loans and other loans that have varying maturities. The terms of mortgage-backed securities, collateralized mortgage obligations, asset-backed securities, and collateralized loan obligations thus approximates the terms of the underlying mortgages and loans and can vary significantly due to prepayments. Therefore, these securities are not included in the maturity categories below.

	March 31, 2023
	AFS				HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due from one year to five years	$	29,466	$	30,422	$	456	$	445
Due from five years to ten years	205,272		182,451		13,221		12,946
Due after ten years	56,362		51,372		99,544		87,822
	291,100		264,245		113,221		101,213
Mortgage-backed securities and collateralized mortgage obligations	654,936		598,317		71,615		60,565
Asset-backed securities	38,966		37,513		—		—
Collateralized loan obligations	69,750		66,048		—		—
	$	1,054,752	$	966,123	$	184,836	$	161,778

	December 31, 2022
	AFS				HTM
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due from one year to five years	$	53,692	$	54,179	$	—	$	—
Due from five years to ten years	205,911		190,406		8,275		8,129
Due after ten years	58,462		53,351		105,382		90,778
	318,065		297,936		113,657		98,907
Mortgage-backed securities and collateralized mortgage obligations	765,864		692,617		72,511		59,874
Asset-backed securities	42,015		39,691		—		—
Collateralized loan obligations	69,750		66,048		—		—
	$	1,195,694	$	1,096,292	$	186,168	$	158,781

Schedule of Proceeds From Sales of Debt Securities AFS and Gross Gains and Losses

Proceeds from sales of debt securities AFS and gross gains and losses for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
	2023		2022
Proceeds from sales	$	109,793	$	—
Gross realized losses	5,321		—

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LHI and ACL (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Summary of Loans in the Accompanying Consolidated Balance Sheets

LHI in the accompanying consolidated balance sheets are summarized as follows:

	March 31, 2023		December 31, 2022
LHI, carried at amortized cost:
Real estate:
Construction and land	$	1,831,349	$	1,787,400
Farmland	51,680		43,500
1 - 4 family residential	896,252		894,456
Multi-family residential	432,209		322,679
Owner occupied commercial real estate (“OOCRE”)	631,563		715,829
Non-owner occupied commercial real estate (“NOOCRE”)	2,505,344		2,341,379
Commercial	2,895,957		2,942,348
MW	437,501		446,227
Consumer	8,316		7,806
	9,690,171		9,501,624
Deferred loan fees, net	(15,511)		(18,973)
ACL	(98,694)		(91,052)
LHI carried at amortized cost, net	9,575,966		9,391,599
Total LHI, net	$	9,575,966	$	9,391,599

Schedule of Activity in Allowance for Credit Loss

The activity in the ACL related to LHI is as follows:

	Three Months Ended March 31, 2023
	Construction and Land		Farmland		Residential		Multifamily		OOCRE		NOOCRE		Commercial		Consumer		Total
Balance at beginning of the period	$	13,120	$	127	$	9,533	$	2,607	$	8,707	$	26,704	$	30,142	$	112	$	91,052
Credit loss (benefit) expense non-PCD loans	4,240		41		12		877		238		(499)		2,995		363		8,267
Credit (benefit) loss expense PCD loans	(46)		—		(5)		—		(16)		33		267		—		233
Charge-offs	—		—		—		—		(116)		—		(1,051)		(62)		(1,229)
Recoveries	—		—		1		—		—		—		364		6		371
Ending Balance	$	17,314	$	168	$	9,541	$	3,484	$	8,813	$	26,238	$	32,717	$	419	$	98,694

	Three Months Ended March 31, 2022
	Construction and Land		Farmland		Residential		Multifamily		OOCRE		NOOCRE		Commercial		Consumer		Total
Balance at beginning of the period	$	7,293	$	187	$	5,982	$	2,664	$	9,215	$	30,548	$	21,632	$	233	$	77,754
Credit (benefit) loss expense non-PCD loans	1,595		(29)		224		(537)		813		(4,114)		4,044		622		2,618
Credit (benefit) loss expense PCD loans	(5)		—		(72)		—		(1,264)		673		(2,442)		(8)		(3,118)
Charge-offs	—		—		—		—		(1,341)		(553)		(3,294)		(134)		(5,322)
Recoveries	—		—		—		—		—		400		144		9		553
Ending Balance	$	8,883	$	158	$	6,134	$	2,127	$	7,423	$	26,954	$	20,084	$	722	$	72,485

Schedule of Amortized Cost Basis of Collateral Dependent Loans

The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:

	March 31, 2023					December 31, 2022
		Real Property(1)		ACL Allocation			Real Property(1)		ACL Allocation
Construction and land		$	1,583	$	—		$	—	$	—
OOCRE		1,181		—			1,193		129
NOOCRE		20,696		1,939			20,896		2,138
Commercial		1,231		477			1,240		396
Consumer		12		—			15		—
Total		$	24,703	$	2,416		$	23,344	$	2,663

(1) Loans reported exclude PCD loans that transitioned upon adoption of ASC 326 and accounted for on a pooled basis.

Schedule of Non-Accrual Loans

Nonaccrual loans aggregated by class of loans, as of March 31, 2023 and December 31, 2022, were as follows:

	March 31, 2023				December 31, 2022
	Nonaccrual		Nonaccrual With No ACL		Nonaccrual		Nonaccrual With No ACL
Real estate:
Construction and land	$	1,583	$	1,583	$	—	$	—
1 - 4 family residential	818		818		862		$	862
OOCRE	9,322		9,322		9,737		8,545
NOOCRE	20,783		12,784		21,377		13,178
Commercial	11,659		2,633		11,397		2,521
Consumer	71		71		169		169
Total	$	44,236	$	27,211	$	43,542	$	25,275

Schedule of Age Analysis of Past Due Loans, Aggregated by Class of Loans

An age analysis of past due loans, aggregated by class of loans and including past due nonaccrual loans, as of March 31, 2023 and December 31, 2022, is as follows:

	March 31, 2023
	30 to 59 Days		60 to 89 Days		90 Days or Greater		Total Past Due (1)		Total Current		PCD		Total Loans		Total 90 Days Past Due and Still Accruing(2)
Real estate:
Construction and land	$	619	$	—	$	1,583	$	2,202	$	1,829,147	$	—	$	1,831,349	$	—
Farmland	—		—		—		—		51,680		—		51,680		—
1 - 4 family residential	5,331		442		296		6,069		888,989		1,194		896,252		296
Multi-family residential	—		—		—		—		432,209		—		432,209		—
OOCRE	2,833		1,405		1,181		5,419		606,957		19,187		631,563		—
NOOCRE	—		—		20,696		20,696		2,471,438		13,210		2,505,344		—
Commercial	1,152		3,219		2,785		7,156		2,885,081		3,720		2,895,957		—
MW	208		—		—		208		437,293		—		437,501		—
Consumer	113		10		—		123		8,175		18		8,316		—
Total	$	10,256	$	5,076	$	26,541	$	41,873	$	9,610,969	$	37,329	$	9,690,171	$	296

(1) Total past due loans includes $17 of PCD loans as of March 31, 2023.

(2) Loans 90 days past due and still accruing excludes $1,449 of PCD loans as of March 31, 2023.

	December 31, 2022
	30 to 59 Days		60 to 89 Days		90 Days or Greater		Total Past Due(1)		Total Current		PCD		Total Loans		Total 90 Days Past Due and Still Accruing(2)
Real estate:
Construction and land	$	1,121	$	2,111	$	—	$	3,232	$	1,782,624	$	1,544	$	1,787,400	$	—
Farmland	—		—		—		—		43,500		—		43,500		—
1 - 4 family residential	4,319		129		499		4,947		888,329		1,180		894,456		123
Multi-family residential	1,000		—		—		1,000		321,679		—		322,679		—
OOCRE	3,342		1,186		1,193		5,721		690,291		19,817		715,829		—
NOOCRE	5,156		—		20,896		26,052		2,302,579		12,748		2,341,379		—
Commercial	3,088		2,188		1,675		6,951		2,931,696		3,701		2,942,348		—
MW	—		—		—		—		446,227		—		446,227		—
Consumer	352		—		45		397		7,386		23		7,806		2
Total	$	18,378	$	5,614	$	24,308	$	48,300	$	9,414,311	$	39,013	$	9,501,624	$	125

(1) Total past due loans includes $13,178 of PCD loans as of December 31, 2022.

(2) Loans 90 days past due and still accruing excludes $2,004 of PCD loans and $669 of PPP loans as of December 31, 2022.

Schedule of Loans Modified as TDRs

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted during the three months ended March 31, 2023:

Loan Modifications Made to Borrowers Experiencing Financial Difficulty
	Interest Rate Reduction
	Amortized Cost Basis		% of Loan Class		Financial Impact
1-4 Family Residential Rentals1	$	42,647	4.8	%	Reduced weighted-average contractual interest rate from floating 7.5% to fixed 6.0%
Total	$	42,647

1 1-4 Family Residential Rentals is included in the 1-4 family residential loan portfolio and is reported as such in accordance with Federal Financial Institutions Examination Counsel guidelines.

No modifications to borrowers in financial difficulty had a payment default during the period and were modified in the 12 months before default to borrowers experiencing financial difficulty:

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months:

Payment Status
	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due
1-4 Family Residential Rentals	$	42,647	$	—	$	—	$	—
Total	$	42,647	$	—	$	—	$	—

Summary of Internal Ratings of Loans, Including Purchased Credit Impaired Loans

Based on the most recent analysis performed, the risk category of loans by class of loans based on year or origination is as follows:

	Term Loans Amortized Cost Basis by Origination Year1
	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2023
Construction and land:
Pass	$	2,440	$	503,556	$	731,203	$	243,188	$	43,087	$	17,882	$	200,052	$	—	$	1,741,408
Special mention	—		1,470		25,948		11,487		20,641		290		—		—		59,836
Substandard	—		—		4,583		25,522		—		—		—		—		30,105
Total construction and land	$	2,440	$	505,026	$	761,734	$	280,197	$	63,728	$	18,172	$	200,052	$	—	$	1,831,349
Construction and land gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Farmland:
Pass	$	2,044	$	2,514	$	22,640	$	18,397	$	19	$	5,034	$	1,032	$	—	$	51,680
Total farmland	$	2,044	$	2,514	$	22,640	$	18,397	$	19	$	5,034	$	1,032	$	—	$	51,680
Farmland gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1 - 4 family residential:
Pass	$	13,449	$	139,484	$	183,529	$	86,358	$	41,883	$	294,800	$	115,517	$	17,766	$	892,786
Special mention	—		—		—		—		—		691		—		—		691
Substandard	—		—		—		—		—		1,382		199		—		1,581
PCD	—		—		—		—		—		1,194		—		—		1,194
Total 1 - 4 family residential	$	13,449	$	139,484	$	183,529	$	86,358	$	41,883	$	298,067	$	115,716	$	17,766	$	896,252
1-4 family residential gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multi-family residential:
Pass	$	5,190	$	73,744	$	121,248	$	136,876	$	8,306	$	35,226	$	35,911	$	—	$	416,501
Special mention	—		—		—		—		1,945		13,763		—		—		15,708
Total multi-family residential	$	5,190	$	73,744	$	121,248	$	136,876	$	10,251	$	48,989	$	35,911	$	—	$	432,209
Multi-family residential gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
OOCRE:
Pass	$	5,931	$	126,121	$	105,907	$	89,064	$	42,865	$	209,887	$	3,352	$	—	$	583,127
Special mention	—		—		2,298		—		1,943		4,738		—		—		8,979
Substandard	—		—		—		1,442		—		18,828		—		—		20,270
PCD	—		—		—		—		—		19,187		—		—		19,187
Total OOCRE	$	5,931	$	126,121	$	108,205	$	90,506	$	44,808	$	252,640	$	3,352	$	—	$	631,563
OOCRE gross charge-offs	$	—	$	—	$	—	$	5	$	5	$	106	$	—	$	—	$	116
NOOCRE:
Pass	$	47,684	$	761,518	$	568,395	$	263,632	$	152,268	$	487,869	$	16,523	$	595	$	2,298,484
Special mention	—		—		—		22,849		18,536		38,563		—		—		79,948
Substandard	—		—		2,783		—		2,232		108,687		—		—		113,702
PCD	—		—		—		—		—		13,210		—		—		13,210
Total NOOCRE	$	47,684	$	761,518	$	571,178	$	286,481	$	173,036	$	648,329	$	16,523	$	595	$	2,505,344
NOOCRE gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial:
Pass	$	101,857	$	388,951	$	123,908	$	69,297	$	84,702	$	66,526	$	1,968,105	$	572	$	2,803,918
Special mention	—		—		1,113		—		71		5,467		14,070		—		20,721
Substandard	—		17,894		3,292		5,121		3,982		16,125		21,110		74		67,598
PCD	—		—		—		—		—		3,720		—		—		3,720
Total commercial	$	101,857	$	406,845	$	128,313	$	74,418	$	88,755	$	91,838	$	2,003,285	$	646	$	2,895,957
Commercial gross charge-offs	$	—	$	—	$	—	$	48	$	479	$	524	$	—	$	—	$	1,051
MW:
Pass	$	1,868	$	55,891	$	252	$	288	$	741	$	174	$	359,206	$	—	$	418,420
Special mention	—		—		—		—		—		—		18,873		—		18,873
Substandard	—		—		—		—		—		208		—		—		208
Total MW	$	1,868	$	55,891	$	252	$	288	$	741	$	382	$	378,079	$	—	$	437,501
Mortgage warehouse gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer:
Pass	$	1,388	$	1,437	$	412	$	804	$	168	$	2,240	$	1,709	$	—	$	8,158
Special mention	—		—		—		—		—		57		—		—		57
Substandard	—		—		—		—		16		67		—		—		83
PCD	—		—		—		—		—		18		—		—		18
Total consumer	$	1,388	$	1,437	$	412	$	804	$	184	$	2,382	$	1,709	$	—	$	8,316
Consumer gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	62	$	—	$	—	$	62
Total Pass	$	181,851	$	2,053,216	$	1,857,494	$	907,904	$	374,039	$	1,119,638	$	2,701,407	$	18,933	$	9,214,482
Total Special Mention	—		1,470		29,359		34,336		43,136		63,569		32,943		—		204,813
Total Substandard	—		17,894		10,658		32,085		6,230		145,297		21,309		74		233,547
Total PCD	—		—		—		—		—		37,329		—		—		37,329
Total	$	181,851	$	2,072,580	$	1,897,511	$	974,325	$	423,405	$	1,365,833	$	2,755,659	$	19,007	$	9,690,171
Total gross charge-offs	$	—	$	—	$	—	$	53	$	484	$	692	$	—	$	—	$	1,229

1 Term loans amortized cost basis by origination year excludes $15,511 of deferred loan fees, net.

	Term Loans Amortized Cost Basis by Origination Year1
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31,
Construction and land:
Pass	$	347,855	$	709,208	$	378,229	$	69,241	$	30,673	$	14,025	$	215,263	$	140	$	1,764,634
Special mention	—		18,662		2,560		—		—		—		—		—		21,222
PCD	—		—		—		—		—		1,544		—		—		1,544
Total construction and land	$	347,855	$	727,870	$	380,789	$	69,241	$	30,673	$	15,569	$	215,263	$	140	$	1,787,400
Farmland:
Pass	$	2,546	$	16,242	$	18,530	$	21	$	—	$	5,069	$	1,092	$	—	$	43,500
Total farmland	$	2,546	$	16,242	$	18,530	$	21	$	—	$	5,069	$	1,092	$	—	$	43,500

1 - 4 family residential:
Pass	$	135,006	$	188,635	$	87,861	$	43,293	$	41,960	$	257,768	$	86,900	$	726	$	842,149
Special mention	—		—		—		—		—		278		26,068		—		26,346
Substandard	—		184		—		—				1,028		23,569		—		24,781
PCD	—		—		—		—		—		1,180		—		—		1,180
Total 1 - 4 family residential	$	135,006	$	188,819	$	87,861	$	43,293	$	41,960	$	260,254	$	136,537	$	726	$	894,456
Multi-family residential:
Pass	$	72,044	$	80,793	$	110,426	$	8,402	$	32,822	$	2,494	$	—	$	—	$	306,981
Total multi-family residential	$	72,044	$	80,793	$	110,426	$	10,356	$	46,566	$	2,494	$	—	$	—	$	322,679
OOCRE:
Pass	$	191,044	$	106,698	$	84,230	$	43,965	$	49,461	$	167,968	$	5,225	$	—	$	648,591
Special mention	—		2,321		1,409		1,964		—		3,447		—		45		9,186
Substandard	—		—		—		—		23,231		15,004		—		—		38,235
PCD	—		—		—		—		—		19,817		—		—		19,817
Total OOCRE	$	191,044	$	109,019	$	85,639	$	45,929	$	72,692	$	206,236	$	5,225	$	45	$	715,829
NOOCRE:
Pass	$	752,476	$	531,735	$	215,076	$	149,246	$	196,424	$	305,434	$	16,642	$	465	$	2,167,498
Special mention	—		—		22,774		19,464		12,274		51,451		—		—		105,963
Substandard	—		—		—		1,310		7,659		46,201		—		—		55,170
PCD	—		—		—		—		12,697		51		—		—		12,748
Total NOOCRE	$	752,476	$	531,735	$	237,850	$	170,020	$	229,054	$	403,137	$	16,642	$	465	$	2,341,379
Commercial:
Pass	$	473,084	$	132,396	$	90,543	$	83,996	$	40,030	$	31,269	$	1,906,074	$	553	$	2,757,945
Special mention	—		666		—		4,543		7,385		270		114,447		—		127,311
Substandard	17,894		4,058		5,189		4,195		10,954		4,732		6,292		77		53,391
PCD	—		—		—		—		273		3,428		—		—		3,701
Total commercial	$	490,978	$	137,120	$	95,732	$	92,734	$	58,642	$	39,699	$	2,026,813	$	630	$	2,942,348
MW:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	444,393	$	—	$	444,393
Substandard	—		—		—		—		46		162		—		—		208
Total MW	$	—	$	—	$	—	$	—	$	46	$	162	$	446,019	$	—	$	446,227
Consumer:
Pass	$	1,965	$	452	$	872	$	216	$	135	$	2,298	$	1,618	$	—	$	7,556
Special mention	—		—		—		—		—		58		—		—		58
Substandard	—		—		—		—		—		169		—		—		169
PCD	—		—		—		—		—		23		—		—		23
Total consumer	$	1,965	$	452	$	872	$	216	$	135	$	2,548	$	1,618	$	—	$	7,806
Total Pass	$	1,976,020	$	1,766,159	$	985,767	$	398,380	$	391,505	$	786,325	$	2,677,207	$	1,884	$	8,983,247
Total Special Mention	—		21,649		26,743		25,971		19,659		55,504		142,141		45		291,712
Total Substandard	17,894		4,242		5,189		7,459		55,634		67,296		29,861		77		187,652
Total PCD	—		—		—		—		12,970		26,043		—		—		39,013
Total	$	1,993,914	$	1,792,050	$	1,017,699	$	431,810	$	479,768	$	935,168	$	2,849,209	$	2,006	$	9,501,624

1 Term loans amortized cost basis by origination year excludes $18,973 of deferred loan fees, net.

Schedule of Summary of Changes in Servicing Assets

A summary of the changes in the related servicing assets are as follows:

	Three Months Ended March 31,
	2023		2022
Balance at beginning of period	$	14,880	$	17,705
Increase from loan sales	959		1,491
Servicing asset impairment, net of recoveries	424		(280)
Amortization charged as a reduction to income	(1,015)		(748)
Balance at end of period	$	15,248	$	18,168

Schedule of Loans Held-for-Sale, Principal Sold

The following table reflects principal sold and related gain for SBA and USDA LHI. The gain on sale of these loans is recorded in government guaranteed loan income, net in the Company’s consolidated statements of income.

	Three Months Ended March 31,
	2023		2022
SBA LHI principal sold	$	6,340	$	4,376
Gain on sale of SBA LHI	148		533
USDA LHI principal sold	44,002		20,000
Gain on sale of USDA LHI	6,984		3,628

XML

Fair Value (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on a Recurring Basis

The following table summarizes assets measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	March 31, 2023
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
AFS debt securities	$	—	$	966,123	$	—	$	966,123
Equity securities with a readily determinable fair value	9,918		—		—		9,918
LHFS(1)	—		41,747		—		41,747
Interest rate swap designated as hedging instruments	—		28,246		—		28,246
Correspondent interest rate swaps not designated as hedging instruments	—		29,358		—		29,358
Customer interest rate swaps not designated as hedging instruments	—		1,912		—		1,912
Correspondent interest rate caps and collars not designated as hedging instruments	—		1,351		—		1,351
Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	44,880	$	—	$	44,880
Correspondent interest rate swaps not designated as hedging instruments	—		2,454		—		2,454
Customer interest rate swaps not designated as hedging instruments	—		28,282		—		28,282
Customer interest rate caps and collars not designated as hedging instruments	—		1,351		—		1,351

1) Represents LHFS elected to be carried at fair value.

	December 31, 2022
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
AFS debt securities	$	—	$	1,096,292	$	—	$	1,096,292
Equity securities with a readily determinable fair value	9,792		—		—		9,792
PPP loans	—		—		1,995		1,995
LHFS(1)	—		19,775		—		19,775
Interest rate swap designated as hedging instruments	—		26,523		—		26,523
Correspondent interest rate swaps not designated as hedging instruments	—		38,839		—		38,839
Customer interest rate swaps not designated as hedging instruments	—		1,004		—		1,004
Correspondent interest rate caps and collars not designated as hedging instruments	—		1,494		—		1,494
Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	54,171	$	—	$	54,171
Correspondent interest rate swaps not designated as hedging instruments	—		1,126		—		1,126
Customer interest rate swaps not designated as hedging instruments	—		38,188		—		38,188
Customer interest rate caps and collars not designated as hedging instruments	—		1,494		—		1,494

(1) Represents LHFS elected to be carried at fair value upon origination or acquisition..

Schedule of Assets Measured at Fair Value on a Non-Recurring Basis

The following table summarizes assets measured at fair value on a non-recurring basis as of March 31, 2023 and December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	Fair Value Measurements Using
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
As of March 31, 2023
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	6,814	$	6,814
Servicing assets with a valuation allowance	—		—		8,895		8,895
As of December 31, 2022
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	7,969	$	7,969
Servicing assets with a valuation allowance	—		—		10,984		10,984

Schedule of Estimated Fair Values and Carrying Values of All Financial Instruments

The estimated fair values and carrying values of all financial instruments not measured at fair value on a recurring basis under current authoritative guidance as of March 31, 2023 and December 31, 2022 were as follows:

			Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
March 31, 2023
Financial assets:
Cash and cash equivalents	$	808,395	$	—	$	808,395	$	—
HTM debt securities	184,836		—		161,778		—
LHFS(1)	1,069		—		—		1,069
LHI(2)	9,575,966		—		—		9,321,175
Accrued interest receivable	42,242		—		42,242		—
BOLI	84,962		—		84,962		—
Servicing asset	6,353		—		6,353		—
Equity securities without a readily determinable fair value	10,604		N/A		N/A		N/A
FHLB and FRB stock	116,081		N/A		N/A		N/A
Financial liabilities:
Deposits	$	9,034,738	$	—	$	8,296,710	$	—
Advances from FHLB	1,680,000		—		1,681,089		—
Accrued interest payable	18,651		—		18,651		—
Subordinated debentures and subordinated notes	229,027		—		229,027		—
December 31, 2022
Financial assets:
Cash and cash equivalents	$	436,077	$	—	$	436,077	$	—
HTM debt securities	186,168		—		158,781		—
Securities purchased under agreements to resell	—		—		—		—
LHFS1)	866		—		866		—
LHI(2)	9,399,614		—		—		9,163,616
Accrued interest receivable	44,035		—		44,035		—
BOLI	84,496		—		84,496		—
Servicing asset	3,896		—		3,896		—
Equity securities without a readily determinable fair value	10,072		N/A		N/A		N/A
FHLB and FRB stock	101,568		N/A		N/A		N/A
Financial liabilities:
Deposits	$	9,123,234	$	—	$	8,341,419	$	—
Advances from FHLB	1,175,000		—		1,156,852		—
Accrued interest payable	8,795		—		8,795		—
Subordinated debentures and subordinated notes	228,775		—		228,775		—
Securities sold under agreement to repurchase	—		—		—		—

(1) LHFS represent mortgage LHFS that are carried at lower of cost or market.

(2) LHI includes MW and is carried at amortized cost.

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Balance Sheet

The notional amounts and estimated fair values as of March 31, 2023 and December 31, 2022 are as shown in the table below.

	March 31, 2023						December 31, 2022
			Estimated Fair Value						Estimated Fair Value
	Notional Amount		Asset Derivative		Liability Derivative		Notional Amount		Asset Derivative		Liability Derivative
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on money market deposit account payments	$	250,000	$	17,257	$	—	$	250,000	$	21,234	$	—
Interest rate swaps on customer loan interest payments	375,000		—		41,126		375,000		—		49,211
Interest rate collars on customer loan interest payments	450,000		3,445		3,754		450,000		3,267		4,960
Interest rate floor on customer loan interest payments	200,000		7,544		—		100,000		2,022		—
Total derivatives designated as hedging instruments	$	1,275,000	$	28,246	$	44,880	$	1,175,000	$	26,523	$	54,171
Derivatives not designated as hedging instruments:
Financial institution counterparty:
Interest rate swaps	$	805,488	$	29,358	$	2,454	$	805,311	$	38,839	$	1,126
Interest rate caps and corridors	123,870		1,351		—		68,370		1,494		—
Commercial customer counterparty:
Interest rate swaps	805,488		1,912		28,282		805,311		1,004		38,188
Interest rate caps and corridors	123,870		—		1,351		68,370		—		1,494
Total derivatives not designated as hedging instruments	$	1,858,716	$	32,621	$	32,087	$	1,747,362	$	41,337	$	40,808
Offsetting derivative assets/liabilities			(25,703)		(25,703)				(30,982)		(30,982)
Total derivatives	$	3,133,716	$	35,164	$	51,264	$	2,922,362	$	36,878	$	63,997

Derivative Instruments, (Loss) Gain

Pre-tax (loss) gain included in the consolidated statements of income and related to derivative instruments for the three months ended March 31, 2023 and 2022 were as follows.

	For the Three Months Ended March 31, 2023						For the Three Months Ended March 31, 2022
	(Loss) gain recognized in other comprehensive income on derivative		Gain (loss) reclassified from accumulated other comprehensive income into income		Location of (loss) gain reclassified from accumulated other comprehensive income into income		Gain (loss) recognized in other comprehensive income on derivative		(Loss) gain reclassified from accumulated other comprehensive income into income		Location of (loss) gain reclassified from accumulated other comprehensive income into income
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on borrowing advances	$	(1,082)	$	1,082	Interest Expense		$	(264)	$	264	Interest Expense
Interest rate swap on money market deposit account payments	(3,977)		2,568		Interest Expense		9,389		(171)		Interest Expense
Derivatives on customer loan interest payments	12,136		(3,807)		Interest Income		(22,506)		1,078		Interest Income
Total	$	7,077	$	(157)			$	(13,381)	$	1,171
					Net gain recognized in other noninterest income						Net gain recognized in other noninterest income
Derivatives not designated as hedging instruments:
Interest rate swaps, caps, floors and collars					$	212					$	719

Schedule of Derivative Instruments Outstanding

The following is a summary of the interest rate swaps, caps and collars outstanding as of March 31, 2023 and December 31, 2022.

	March 31, 2023
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
Non-hedging derivative instruments:
Customer interest rate derivative:
Interest rate swaps - receive fixed/pay floating	$	805,488	2.41% - 8.47%	LIBOR 1 month + 3.0% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 4.8 years	$	(27,071)
Interest rate caps and corridors	$	123,870	3.50% - 5.90%	SOFR CME 1 month + 0.0%	Wtd. Avg. 1.6 years	$	(1,351)
Correspondent interest rate derivative:
Interest rate swaps - pay fixed/receive floating	$	805,488	2.41% - 8.47%	LIBOR 1 month + 3.0% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 4.8 years	$	26,904
Interest rate caps and corridors	$	123,870	3.50% - 5.90%	SOFR CME 1 month + 0.0%	Wtd. Avg. 1.6 years	$	1,351
	December 31, 2022
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
Non-hedging derivative instruments:
Customer interest rate derivative:
Interest rate swaps - receive fixed/pay floating	$	805,311	2.41% - 8.47%	LIBOR 1 month + 2.8% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 5.1 years	$	(37,183)
Interest rate caps and corridors	$	68,370	3.50%	LIBOR 1 month + 0.0%	Wtd. Avg. 1.8 years	$	(1,494)
Correspondent interest rate derivative:
Interest rate swaps - pay fixed/receive floating	$	805,311	2.41% - 8.47%	LIBOR 1 month + 2.8% - 5.0% SOFR CME 1 month + 0.0% - 3.8% SOFR-NYFD 30 day avg + 2.5% - 3.0%	Wtd. Avg. 5.1 years	$	37,713
Interest rate caps and corridors	$	68,370	3.50%	LIBOR 1 month + 0.0%	Wtd. Avg. 1.8 years	$	1,494

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Off-Balance Sheet Loan Commitments (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of the Approximate Amounts of Financial Instruments with Off-Balance Sheet Risk

The following table sets forth the approximate amounts of these financial instruments as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
Commitments to extend credit	$	4,138,471	$	4,511,671
MW commitments	985,207		1,088,558
Standby and commercial letters of credit	105,950		98,179
Total	$	5,229,628	$	5,698,408

Schedule of Allowance for Unfunded Commitments

This ACL on unfunded commitments is recorded in accounts payable and other liabilities on the consolidated balance sheets:

	Three Months Ended March 31,
	2023		2022
Beginning balance for ACL on unfunded commitments	$	10,086	$	9,266
Provision for credit losses on unfunded commitments	1,497		493
Ending balance of ACL on unfunded commitments	$	11,583	$	9,759

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Stock-Based Awards (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Option Activity

A summary of option activity under the 2010 Incentive Plan for the three months ended March 31, 2023 and 2022, and changes during the periods then ended, is presented below:

	2010 Incentive Plan
	Non-Performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	1,000	$	10.43
Outstanding and exercisable at March 31, 2022	1,000	$	10.43	1.07
Outstanding at January 1, 2023	1,000	$	10.43	1.07	$	147
Exercised	(1,000)	10.43
Outstanding and exercisable at March 31, 2023	—	$	—	—	$	—

A summary of the status of the Company’s stock options under the 2022 Equity Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	2022 Equity Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	710,043	$	24.38
Exercised	(38,128)	23.34
Outstanding at March 31, 2022	671,915	$	24.44	6.65
Options exercisable at March 31, 2022	518,237	$	24.45	6.35
Outstanding at January 1, 2023	657,494	$	24.47
Forfeited	(1,666)	17.38
Cancelled	(3,804)	29.13
Exercised	(3,951)	21.38
Outstanding at March 31, 2023	648,073	$	24.48	5.24	$	123
Options exercisable at March 31, 2023	610,073	$	24.74	5.13	$	114

A summary of the status of the Company’s stock options under the Veritex (Green) 2014 Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	Veritex (Green) 2014 Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	217,804	$	19.62
Exercised	(28,622)	21.34
Outstanding at March 31, 2022	189,182	$	19.37	5.57
Options exercisable at March 31, 2022	180,830	$	18.81	5.45
Outstanding at January 1, 2023	155,212	$	19.83
Cancelled	(505)	21.38
Exercised	(13,266)	21.38
Outstanding at March 31, 2023	141,441	$	21.86	4.87	$	287
Options exercisable at March 31, 2023	141,441	$	21.86	4.87	$	287
Weighted average fair value of options granted during the period		$	—

A summary of the status of the Company’s stock options under the Green 2010 Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	Green 2010 Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	66,143	$	12.56
Exercised	(1,372)	13.07
Outstanding at March 31, 2022	64,771	$	12.55	1.95 years
Outstanding at January 1, 2023	43,162	$	13.11
Exercised	(29,630)	13.22
Outstanding at March 31, 2023	13,532	$	12.86	3.94 years	$	73

Schedule of Fair Value of Stock Options Exercised or Restricted Stock Units Vested

A summary of the fair value of the Company’s stock options exercised under the 2010 Incentive Plan for the three months ended March 31, 2023 and 2022 is presented below:

	Fair Value of Options Exercised as of March 31,
	2023		2022
Nonperformance-based stock options exercised	$	16	$	—

A summary of the fair value of the Company’s stock options exercised, RSUs and PSUs vested under the 2022 Equity Plan during the three months ended March 31, 2023 and 2022 is presented below:

	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2023	2022
Non-performance-based stock options exercised	31	1,562
RSUs vested	3,044	2,524
PSUs vested	1,070	2,270

A summary of the fair value of the Company’s stock options exercised and RSUs vested under the Veritex (Green) 2014 Plan during the three months ended March 31, 2023 and 2022 presented below:

	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2023		2022
Non-performance-based stock options exercised	$	18	$	1,143
RSUs vested	1,990		718
PSU vested	227		624

A summary of the fair value of the Company’s stock options exercised under the Green 2010 Plan during the three months ended March 31, 2023 and 2022 presented below:

	Fair Value of Options Exercised as of March 31,
	2023	2022
Nonperformance-based stock options exercised	365	56

Schedule of Share-based Compensation Expense

Stock compensation expense for options, RSUs and PSUs granted under the 2022 Equity Plan and the Veritex (Green) 2014 Plan were as follows:

	Three Months Ended March 31,
	2023		2022
2022 Equity Plan	$	2,465	$	2,904
Veritex (Green) 2014 Plan	422		414

Summary of Status of the Company's Restricted Shares or Restricted Stock Units

A summary of the status of the Company’s RSUs under the 2022 Equity Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	2022 Equity Plan
	Non-performance-Based
	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	598,051	$	23.39
Granted	169,355	40.77
Vested into shares	(96,141)	24.69
Forfeited	(2,350)	26.12
Outstanding at March 31, 2022	668,915	$	27.59
Outstanding at January 1, 2023	955,104	$	28.38
Granted	224,165	27.90
Vested into shares	(162,952)	30.23
Forfeited	(16,394)	31.77
Outstanding at March 31, 2023	999,923	$	27.87

A summary of the status of the Company’s PSUs under the 2022 Equity Plan as of March 31, 2023 and 2022, and changes during the three months then ended, is as follows:

	2022 Equity Plan
	Performance-Based
	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	156,471	$	24.17
Granted	39,429	40.38
Outstanding at March 31, 2022	132,564	$	30.15
Outstanding at January 1, 2023	126,707	$	31.19
Granted	53,310	27.55
Vested into shares	(41,781)	26.42
Outstanding at March 31, 2023	129,768	$	30.28

A summary of the status of the Company’s RSUs under the Veritex (Green) 2014 Plan as of March 31, 2023 and 2022 and changes during the three months then ended, is as follows:

	Veritex (Green) 2014 Plan
	Non-performance-Based
	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	122,784	$	21.13
Granted	4,231	40.38
Vested into shares	(32,931)	21.80
Forfeited	(2,558)	29.13
Outstanding at March 31, 2022	91,526	$	21.55
Outstanding at January 1, 2023	86,233	$	21.09
Vested into shares	(19,282)	29.66
Forfeited	(2,232)	29.13
Outstanding at March 31, 2023	64,719	$	18.26

A summary of the status of the Company’s PSUs under the Veritex (Green) 2014 Plan as of March 31, 2023 and 2022 and changes during the three months then ended, is as follows:

	Veritex (Green) 2014 Plan
	Performance-Based
	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	35,899	$	22.26
Granted	4,411	40.38
Incremental PSUs granted upon performance condition met	10,566	$	19.69
Vested into shares	(31,703)	$	19.69
Outstanding at March 31, 2022	19,173	$	29.26
Outstanding at January 1, 2023	19,173	$	30.74
Vested into shares	(8,531)	25.94
Outstanding at March 31, 2023	10,642	$	31.93

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Income Tax Expense

Income tax expense for the three months ended March 31, 2023 and 2022 was as follows:

	Three Months Ended March 31,
	2023			2022
Income tax expense for the period	$	11,012		$	8,102
Effective tax rate	22.3		%	19.5		%

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Capital Requirements and Restrictions on Retained Earnings (Tables)

3 Months Ended

Mar. 31, 2023

Regulatory Capital Requirements under Banking Regulations [Abstract]

Schedule of Comparison of the Company's and Bank's Actual Capital Amounts and Ratios to Required Capital Amounts and Ratios

A comparison of the Company’s and Bank’s actual capital amounts and ratios to required capital amounts and ratios is presented in the following table:

	Actual				For Capital  Adequacy Purposes				To Be Well Capitalized Under PCA Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of March 31, 2023
Total capital (to risk-weighted assets “RWA”)
Company	$	1,437,576	11.99	%	$	959,183	8.0	%	n/a		n/a
Bank	1,424,435		11.89		958,409		8.0		$	1,198,011	10.0	%
Tier 1 capital (to RWA)
Company	1,146,356		9.56		719,470		6.0		n/a		n/a
Bank	1,331,501		11.12		718,436		6.0		957,914		8.0
Common equity tier 1 (to RWA)
Company	1,116,632		9.32		539,146		4.5		n/a		n/a
Bank	1,331,501		11.12		538,827		4.5		778,305		6.5
Tier 1 capital (to average assets)
Company	1,146,356		9.67		474,191		4.0		n/a		n/a
Bank	1,331,501		11.24		473,844		4.0		592,305		5.0
As of December 31, 2022
Total capital (to RWA)
Company	$	1,395,904	11.63	%	$	960,209	8.0	%	n/a		n/a
Bank	1,368,082		11.41		959,216		8.0		$	1,199,020	10.0	%
Tier 1 capital (to RWA)
Company	1,121,021		9.34		720,142		6.0		n/a		n/a
Bank	1,291,288		10.77		719,381		6.0		959,174		8.0
Common equity tier 1 (to RWA)
Company	1,091,353		9.09		540,274		4.5		n/a		n/a
Bank	1,291,288		10.77		539,535		4.5		779,329		6.5
Tier 1 capital (to average assets)
Company	1,121,021		9.82		456,628		4.0		n/a		n/a
Bank	1,291,288		11.32		456,286		4.0		570,357		5.0

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Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 branch shares	Mar. 31, 2022 shares	Dec. 31, 2022 USD ($)
Segment Reporting Information [Line Items]
PPP Loans | $			$ 1,995
Excluded from diluted EPS weighted average shares (in shares)	834	80
Restricted Stock Units
Segment Reporting Information [Line Items]
Excluded from diluted EPS weighted average shares (in shares)	440
Employee Stock Options
Segment Reporting Information [Line Items]
Excluded from diluted EPS weighted average shares (in shares)	214	0
Dallas-Fort Worth
Segment Reporting Information [Line Items]
Number of branches | branch	18
Houston
Segment Reporting Information [Line Items]
Number of branches | branch	10

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Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net income	$ 38,411	$ 33,470
Denominator:
Weighted average shares outstanding for basic EPS (in shares)	54,149	50,695
Dilutive effect of employee stock based awards (in shares)	457	876
Adjusted weighted average shares outstanding (in shares)	54,606	51,571
EPS:
Basic (in dollars per share)	$ 0.71	$ 0.66
Diluted (in dollars per share)	$ 0.70	$ 0.65

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Supplemental Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$ 54,189	$ 5,368
Cash paid for income taxes	0	0
Supplemental Disclosures of Non-Cash Flow Information:
Transfer of AFS debt securities to HTM debt securities	0	117,001
Net foreclosure of OREO and repossessed assets	$ 0	$ 1,062

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Securities - Securities (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Equity securities	$ 9,918,000		$ 9,792,000
Realized gain (loss) on equity securities	0	$ 0
Unrealized gain (loss) recognized on equity securities with a readily determinable fair value	126,000	(513,000)
Equity securities without a readily determinable fair value	10,604,000		$ 10,072,000
Securities purchased under agreements to resell	0	100,800,000
Interest income, securities purchased under agreements to resell	$ 0	$ 270,000

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Securities - Carrying Amount and Fair Values (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 1,054,752	$ 1,195,694
Gross Unrealized Gains	1,921	1,760
Gross Unrealized Losses	89,665	101,162
ACL	885	0
Fair Value	966,123	1,096,292
HTM
Amortized Cost	184,836	186,168
Gross Unrealized Gains	98	6
Gross Unrealized Losses	23,156	27,393
ACL	0	0
Fair Value	161,778	158,781
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	244,190	268,179
Gross Unrealized Gains	1,218	1,445
Gross Unrealized Losses	23,900	17,379
ACL	885	0
Fair Value	220,623	252,245
Municipal securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	46,910	49,886
Gross Unrealized Gains	57	3
Gross Unrealized Losses	3,345	4,198
ACL	0	0
Fair Value	43,622	45,691
HTM
Amortized Cost	113,221	113,657
Gross Unrealized Gains	98	6
Gross Unrealized Losses	12,106	14,756
ACL	0	0
Fair Value	101,213	98,907
Mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	130,343	156,408
Gross Unrealized Gains	24	23
Gross Unrealized Losses	14,703	17,420
ACL	0	0
Fair Value	115,664	139,011
HTM
Amortized Cost	35,999	36,342
Gross Unrealized Gains	0	0
Gross Unrealized Losses	6,302	6,753
ACL	0	0
Fair Value	29,697	29,589
Collateralized mortgage obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	524,593	609,456
Gross Unrealized Gains	0	0
Gross Unrealized Losses	41,940	55,850
ACL	0	0
Fair Value	482,653	553,606
HTM
Amortized Cost	35,616	36,169
Gross Unrealized Gains	0	0
Gross Unrealized Losses	4,748	5,884
ACL	0	0
Fair Value	30,868	30,285
Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	38,966	42,015
Gross Unrealized Gains	622	289
Gross Unrealized Losses	2,075	2,613
ACL	0	0
Fair Value	37,513	39,691
Collateralized loan obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	69,750	69,750
Gross Unrealized Gains	0	0
Gross Unrealized Losses	3,702	3,702
ACL	0	0
Fair Value	$ 66,048	$ 66,048

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Securities - Narrative (Details) $ in Thousands	Jan. 01, 2022 USD ($) Security	Mar. 31, 2023 investment	Dec. 31, 2022 investment
Investments, Debt and Equity Securities [Abstract]
Number of AFS positions elected for transfer | Security	25
Aggregate fair value of AFS transferred	$ 117,001
Net unrealized holding gain	$ 4,387
Number of investment positions in an unrealized loss position | investment		114	175

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Securities - Unrealized Loss Position (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
AFS Fair Value
Less Than 12 Months	$ 165,270	$ 868,558
12 Months or More	572,983	171,941
Totals	738,253	1,040,499
AFS Unrealized Loss
Less Than 12 Months	3,927	72,521
12 Months or More	62,149	28,641
Totals	66,076	101,162
HTM Fair Value
Less Than 12 Months	15,999	111,760
12 Months or More	133,170	42,944
Totals	149,169	154,704
HTM Unrealized Loss
Less Than 12 Months	314	16,172
12 Months or More	22,842	11,221
Totals	23,156	27,393
Corporate bonds
AFS Fair Value
Less Than 12 Months	0	197,946
12 Months or More	15,710	15,568
Totals	15,710	213,514
AFS Unrealized Loss
Less Than 12 Months	0	15,697
12 Months or More	311	1,682
Totals	311	17,379
Municipal securities
AFS Fair Value
Less Than 12 Months	27,477	33,919
12 Months or More	11,317	8,813
Totals	38,794	42,732
AFS Unrealized Loss
Less Than 12 Months	306	848
12 Months or More	3,039	3,350
Totals	3,345	4,198
HTM Fair Value
Less Than 12 Months	12,170	85,671
12 Months or More	76,434	9,161
Totals	88,604	94,832
HTM Unrealized Loss
Less Than 12 Months	94	11,411
12 Months or More	12,012	3,345
Totals	12,106	14,756
Mortgage-backed securities
AFS Fair Value
Less Than 12 Months	3,410	115,467
12 Months or More	111,436	22,780
Totals	114,846	138,247
AFS Unrealized Loss
Less Than 12 Months	67	11,104
12 Months or More	14,636	6,317
Totals	14,703	17,421
HTM Fair Value
Less Than 12 Months	0	804
12 Months or More	29,697	28,784
Totals	29,697	29,588
HTM Unrealized Loss
Less Than 12 Months	0	85
12 Months or More	6,302	6,668
Totals	6,302	6,753
Collateralized mortgage obligations
AFS Fair Value
Less Than 12 Months	131,159	482,358
12 Months or More	351,494	71,198
Totals	482,653	553,556
AFS Unrealized Loss
Less Than 12 Months	3,404	42,553
12 Months or More	38,536	13,296
Totals	41,940	55,849
HTM Fair Value
Less Than 12 Months	3,829	25,285
12 Months or More	27,039	4,999
Totals	30,868	30,284
HTM Unrealized Loss
Less Than 12 Months	220	4,676
12 Months or More	4,528	1,208
Totals	4,748	5,884
Asset-backed securities
AFS Fair Value
Less Than 12 Months	3,224	15,195
12 Months or More	16,978	11,207
Totals	20,202	26,402
AFS Unrealized Loss
Less Than 12 Months	150	991
12 Months or More	1,925	1,621
Totals	2,075	2,612
Collateralized loan obligations
AFS Fair Value
Less Than 12 Months	0	23,673
12 Months or More	66,048	42,375
Totals	66,048	66,048
AFS Unrealized Loss
Less Than 12 Months	0	1,328
12 Months or More	3,702	2,375
Totals	$ 3,702	$ 3,703

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Securities - Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Available For Sale Amortized Cost
Due from one year to five years	$ 29,466	$ 53,692
Due from five years to ten years	205,272	205,911
Due after ten years	56,362	58,462
Total investment securities available for sale, single maturity date	291,100	318,065
Amortized Cost	1,054,752	1,195,694
Available For Sale Fair value
Due from one year to five years	30,422	54,179
Due from five years to ten years	182,451	190,406
Due after ten years	51,372	53,351
Total investment securities available for sale	264,245	297,936
Fair value	966,123	1,096,292
Held-to-Maturity Amortized Cost
Due from one year to five years	456	0
Due from five years to ten years	13,221	8,275
Due after ten years	99,544	105,382
Total investment securities held to maturity, single maturity date	113,221	113,657
Amortized Cost	184,836	186,168
Held-to-Maturity Fair Value
Due from one year to five years	445	0
Due from five years to ten years	12,946	8,129
Due after ten years	87,822	90,778
Total investment securities held to maturity	101,213	98,907
Fair value	161,778	158,781
Mortgage-backed securities and collateralized mortgage obligations
Available For Sale Amortized Cost
Amortized cost	654,936	765,864
Amortized Cost	130,343	156,408
Available For Sale Fair value
Fair value	598,317	692,617
Fair value	115,664	139,011
Held-to-Maturity Amortized Cost
Amortized cost	71,615	72,511
Amortized Cost	35,999	36,342
Held-to-Maturity Fair Value
Fair value	60,565	59,874
Asset-backed securities
Available For Sale Amortized Cost
Amortized cost	38,966	42,015
Amortized Cost	38,966	42,015
Available For Sale Fair value
Fair value	37,513	39,691
Fair value	37,513	39,691
Held-to-Maturity Amortized Cost
Amortized cost	0	0
Held-to-Maturity Fair Value
Fair value	0	0
Collateralized loan obligations
Available For Sale Amortized Cost
Amortized cost	69,750	69,750
Amortized Cost	69,750	69,750
Available For Sale Fair value
Fair value	66,048	66,048
Fair value	66,048	66,048
Held-to-Maturity Amortized Cost
Amortized cost	0	0
Held-to-Maturity Fair Value
Fair value	$ 0	$ 0

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Securities - Proceeds From Sale of Debt Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales	$ 109,793	$ 0
Gross realized losses	$ 5,321	$ 0

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LHI and ACL - Balance Sheet Summary (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Loans and Allowance for Credit Losses
Loans	$ 9,690,171	$ 9,501,624
Deferred loan fees, net	(15,511)	(18,973)
Less: Allowance for credit losses (“ACL”)	(98,694)	(91,052)	$ (72,485)	$ (77,754)
LHI carried at amortized cost, net	9,575,966	9,391,599
Total LHI, net	9,575,966	9,391,599
Contractual principal balance	7,476	8,260
Discount on retained loans from sale	6,554	5,238
Real Estate | Construction and land
Loans and Allowance for Credit Losses
Loans	1,831,349	1,787,400
Less: Allowance for credit losses (“ACL”)	(17,314)	(13,120)	(8,883)	(7,293)
Real Estate | Farmland
Loans and Allowance for Credit Losses
Loans	51,680	43,500
Less: Allowance for credit losses (“ACL”)	(168)	(127)	(158)	(187)
Real Estate | Residential Real Estate
Loans and Allowance for Credit Losses
Purchase of real estate loans		223,924
Discount on retained loans from sale	$ 3,909
Remaining discount amortization period	5 years
Real Estate | Residential Real Estate | 1 - 4 family residential
Loans and Allowance for Credit Losses
Loans	$ 896,252	894,456
Less: Allowance for credit losses (“ACL”)	(9,541)	(9,533)	(6,134)	(5,982)
Real Estate | Residential Real Estate | Multi-family residential
Loans and Allowance for Credit Losses
Loans	432,209	322,679
Less: Allowance for credit losses (“ACL”)	(3,484)	(2,607)	(2,127)	(2,664)
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”)
Loans and Allowance for Credit Losses
Loans	631,563	715,829
Less: Allowance for credit losses (“ACL”)	(8,813)	(8,707)	(7,423)	(9,215)
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”)
Loans and Allowance for Credit Losses
Loans	2,505,344	2,341,379
Less: Allowance for credit losses (“ACL”)	(26,238)	(26,704)	(26,954)	(30,548)
Commercial
Loans and Allowance for Credit Losses
Loans	2,895,957	2,942,348
Less: Allowance for credit losses (“ACL”)	(32,717)	(30,142)	(20,084)	(21,632)
MW
Loans and Allowance for Credit Losses
Loans	437,501	446,227
Consumer
Loans and Allowance for Credit Losses
Loans	8,316	7,806
Less: Allowance for credit losses (“ACL”)	$ (419)	$ (112)	$ (722)	$ (233)

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LHI and ACL - Allowance for Credit Loss Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Analysis of allowance for loan losses
Beginning balance	$ 91,052	$ 77,754
Credit (benefit) loss expense	9,385	(500)
Charge-offs	(1,229)	(5,322)
Recoveries	371	553
Ending balance	98,694	72,485
Non-PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	8,267	2,618
PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	233	(3,118)
Real Estate | Construction and land
Analysis of allowance for loan losses
Beginning balance	13,120	7,293
Charge-offs	0	0
Recoveries	0	0
Ending balance	17,314	8,883
Real Estate | Construction and land | Non-PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	4,240	1,595
Real Estate | Construction and land | PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	(46)	(5)
Real Estate | Farmland
Analysis of allowance for loan losses
Beginning balance	127	187
Charge-offs	0	0
Recoveries	0	0
Ending balance	168	158
Real Estate | Farmland | Non-PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	41	(29)
Real Estate | Farmland | PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	0	0
Real Estate | Residential Real Estate | 1 - 4 family residential
Analysis of allowance for loan losses
Beginning balance	9,533	5,982
Charge-offs	0	0
Recoveries	1	0
Ending balance	9,541	6,134
Real Estate | Residential Real Estate | 1 - 4 family residential | Non-PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	12	224
Real Estate | Residential Real Estate | 1 - 4 family residential | PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	(5)	(72)
Real Estate | Residential Real Estate | Multi-family residential
Analysis of allowance for loan losses
Beginning balance	2,607	2,664
Charge-offs	0	0
Recoveries	0	0
Ending balance	3,484	2,127
Real Estate | Residential Real Estate | Multi-family residential | Non-PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	877	(537)
Real Estate | Residential Real Estate | Multi-family residential | PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	0	0
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”)
Analysis of allowance for loan losses
Beginning balance	8,707	9,215
Charge-offs	(116)	(1,341)
Recoveries	0	0
Ending balance	8,813	7,423
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | Non-PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	238	813
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	(16)	(1,264)
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”)
Analysis of allowance for loan losses
Beginning balance	26,704	30,548
Charge-offs	0	(553)
Recoveries	0	400
Ending balance	26,238	26,954
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | Non-PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	(499)	(4,114)
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	33	673
Commercial
Analysis of allowance for loan losses
Beginning balance	30,142	21,632
Charge-offs	(1,051)	(3,294)
Recoveries	364	144
Ending balance	32,717	20,084
Commercial | Non-PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	2,995	4,044
Commercial | PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	267	(2,442)
Consumer
Analysis of allowance for loan losses
Beginning balance	112	233
Charge-offs	(62)	(134)
Recoveries	6	9
Ending balance	419	722
Consumer | Non-PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	363	622
Consumer | PCD Loans
Analysis of allowance for loan losses
Credit (benefit) loss expense	$ 0	$ (8)

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LHI and ACL - Collateral Dependent Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Servicing Asset at Amortized Cost [Line Items]
Loans	$ 9,690,171	$ 9,501,624
ACL Allocation	98,694	91,052	$ 72,485	$ 77,754
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”)
Servicing Asset at Amortized Cost [Line Items]
Loans	631,563	715,829
ACL Allocation	8,813	8,707	7,423	9,215
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”)
Servicing Asset at Amortized Cost [Line Items]
Loans	2,505,344	2,341,379
ACL Allocation	26,238	26,704	26,954	30,548
Commercial
Servicing Asset at Amortized Cost [Line Items]
Loans	2,895,957	2,942,348
ACL Allocation	32,717	30,142	20,084	21,632
Consumer
Servicing Asset at Amortized Cost [Line Items]
Loans	8,316	7,806
ACL Allocation	419	112	$ 722	$ 233
Real Property
Servicing Asset at Amortized Cost [Line Items]
Loans	24,703	23,344
Real Property | Real Estate | Commercial Real Estate | Construction and land
Servicing Asset at Amortized Cost [Line Items]
Loans	1,583	0
Real Property | Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”)
Servicing Asset at Amortized Cost [Line Items]
Loans	1,181	1,193
Real Property | Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”)
Servicing Asset at Amortized Cost [Line Items]
Loans	20,696	20,896
Real Property | Commercial
Servicing Asset at Amortized Cost [Line Items]
Loans	1,231	1,240
Real Property | Consumer
Servicing Asset at Amortized Cost [Line Items]
Loans	12	15
Collateralized
Servicing Asset at Amortized Cost [Line Items]
ACL Allocation	2,416	2,663
Collateralized | Real Estate | Commercial Real Estate | Construction and land
Servicing Asset at Amortized Cost [Line Items]
ACL Allocation	0	0
Collateralized | Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”)
Servicing Asset at Amortized Cost [Line Items]
ACL Allocation	0	129
Collateralized | Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”)
Servicing Asset at Amortized Cost [Line Items]
ACL Allocation	1,939	2,138
Collateralized | Commercial
Servicing Asset at Amortized Cost [Line Items]
ACL Allocation	477	396
Collateralized | Consumer
Servicing Asset at Amortized Cost [Line Items]
ACL Allocation	$ 0	$ 0

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LHI and ACL - Nonaccrual (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Loans and Allowance for Credit Losses
Nonaccrual	$ 44,236		$ 43,542
Nonaccrual With No ACL	27,211		25,275
Financing receivable, nonaccrual, interest income	772	$ 889
PCD Loans
Loans and Allowance for Credit Losses
Financing receivable, nonaccrual, interest income	8,141		8,545
Commercial
Loans and Allowance for Credit Losses
Nonaccrual	11,659		11,397
Nonaccrual With No ACL	2,633		2,521
Consumer
Loans and Allowance for Credit Losses
Nonaccrual	71		169
Nonaccrual With No ACL	71		169
Construction and land | Residential Real Estate | Real Estate
Loans and Allowance for Credit Losses
Nonaccrual	1,583		0
Nonaccrual With No ACL	1,583		0
1 - 4 family residential | Residential Real Estate | Real Estate
Loans and Allowance for Credit Losses
Nonaccrual	818		862
Nonaccrual With No ACL	818		862
Owner occupied commercial real estate (“OOCRE”) | Commercial Real Estate | Real Estate
Loans and Allowance for Credit Losses
Nonaccrual	9,322		9,737
Nonaccrual With No ACL	9,322		8,545
Non-owner occupied commercial real estate (“NOOCRE”) | Commercial Real Estate | Real Estate
Loans and Allowance for Credit Losses
Nonaccrual	20,783		21,377
Nonaccrual With No ACL	$ 12,784		$ 13,178

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LHI and ACL - Past Due (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Non-Accrual and Past Due Loans
Loans	$ 9,690,171,000	$ 9,501,624,000
Total 90 days past due and still accruing	296,000	125,000
PCD
Non-Accrual and Past Due Loans
Loans	37,329,000	39,013,000
Total Past Due
Non-Accrual and Past Due Loans
Loans	41,873,000	48,300,000
30 to 59 Days
Non-Accrual and Past Due Loans
Loans	10,256,000	18,378,000
60 to 89 Days
Non-Accrual and Past Due Loans
Loans	5,076,000	5,614,000
90 Days or Greater
Non-Accrual and Past Due Loans
Loans	26,541,000	24,308,000
PPP loans excluded		669,000
Total Current
Non-Accrual and Past Due Loans
Loans	9,610,969,000	9,414,311,000
Real Estate | Construction and land
Non-Accrual and Past Due Loans
Loans	1,831,349,000	1,787,400,000
Total 90 days past due and still accruing	0	0
Real Estate | Construction and land | PCD
Non-Accrual and Past Due Loans
Loans		1,544,000
Real Estate | Construction and land | Total Past Due
Non-Accrual and Past Due Loans
Loans	2,202,000	3,232,000
Real Estate | Construction and land | 30 to 59 Days
Non-Accrual and Past Due Loans
Loans	619,000	1,121,000
Real Estate | Construction and land | 60 to 89 Days
Non-Accrual and Past Due Loans
Loans	0	2,111,000
Real Estate | Construction and land | 90 Days or Greater
Non-Accrual and Past Due Loans
Loans	1,583,000	0
Real Estate | Construction and land | Total Current
Non-Accrual and Past Due Loans
Loans	1,829,147,000	1,782,624,000
Real Estate | Farmland
Non-Accrual and Past Due Loans
Loans	51,680,000	43,500,000
Total 90 days past due and still accruing	0	0
Real Estate | Farmland | Total Past Due
Non-Accrual and Past Due Loans
Loans	0	0
Real Estate | Farmland | 30 to 59 Days
Non-Accrual and Past Due Loans
Loans	0	0
Real Estate | Farmland | 60 to 89 Days
Non-Accrual and Past Due Loans
Loans	0	0
Real Estate | Farmland | 90 Days or Greater
Non-Accrual and Past Due Loans
Loans	0	0
Real Estate | Farmland | Total Current
Non-Accrual and Past Due Loans
Loans	51,680,000	43,500,000
Real Estate | Residential Real Estate | 1 - 4 family residential
Non-Accrual and Past Due Loans
Loans	896,252,000	894,456,000
Total 90 days past due and still accruing	296,000	123,000
Real Estate | Residential Real Estate | 1 - 4 family residential | PCD
Non-Accrual and Past Due Loans
Loans	1,194,000	1,180,000
Real Estate | Residential Real Estate | 1 - 4 family residential | Total Past Due
Non-Accrual and Past Due Loans
Loans	6,069,000	4,947,000
Real Estate | Residential Real Estate | 1 - 4 family residential | 30 to 59 Days
Non-Accrual and Past Due Loans
Loans	5,331,000	4,319,000
Real Estate | Residential Real Estate | 1 - 4 family residential | 60 to 89 Days
Non-Accrual and Past Due Loans
Loans	442,000	129,000
Real Estate | Residential Real Estate | 1 - 4 family residential | 90 Days or Greater
Non-Accrual and Past Due Loans
Loans	296,000	499,000
Real Estate | Residential Real Estate | 1 - 4 family residential | Total Current
Non-Accrual and Past Due Loans
Loans	888,989,000	888,329,000
Real Estate | Residential Real Estate | Multi-family residential
Non-Accrual and Past Due Loans
Loans	432,209,000	322,679,000
Total 90 days past due and still accruing	0	0
Real Estate | Residential Real Estate | Multi-family residential | Total Past Due
Non-Accrual and Past Due Loans
Loans	0	1,000,000
Real Estate | Residential Real Estate | Multi-family residential | 30 to 59 Days
Non-Accrual and Past Due Loans
Loans	0	1,000,000
Real Estate | Residential Real Estate | Multi-family residential | 60 to 89 Days
Non-Accrual and Past Due Loans
Loans	0	0
Real Estate | Residential Real Estate | Multi-family residential | 90 Days or Greater
Non-Accrual and Past Due Loans
Loans	0	0
Real Estate | Residential Real Estate | Multi-family residential | Total Current
Non-Accrual and Past Due Loans
Loans	432,209,000	321,679,000
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”)
Non-Accrual and Past Due Loans
Loans	631,563,000	715,829,000
Total 90 days past due and still accruing	0	0
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | PCD
Non-Accrual and Past Due Loans
Loans	19,187,000	19,817,000
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | Total Past Due
Non-Accrual and Past Due Loans
Loans	5,419,000	5,721,000
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | 30 to 59 Days
Non-Accrual and Past Due Loans
Loans	2,833,000	3,342,000
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | 60 to 89 Days
Non-Accrual and Past Due Loans
Loans	1,405,000	1,186,000
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | 90 Days or Greater
Non-Accrual and Past Due Loans
Loans	1,181,000	1,193,000
Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | Total Current
Non-Accrual and Past Due Loans
Loans	606,957,000	690,291,000
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”)
Non-Accrual and Past Due Loans
Loans	2,505,344,000	2,341,379,000
Total 90 days past due and still accruing	0	0
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | PCD
Non-Accrual and Past Due Loans
Loans	13,210,000	12,748,000
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | Total Past Due
Non-Accrual and Past Due Loans
Loans	20,696,000	26,052,000
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | 30 to 59 Days
Non-Accrual and Past Due Loans
Loans	0	5,156,000
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | 60 to 89 Days
Non-Accrual and Past Due Loans
Loans	0	0
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | 90 Days or Greater
Non-Accrual and Past Due Loans
Loans	20,696,000	20,896,000
Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | Total Current
Non-Accrual and Past Due Loans
Loans	2,471,438,000	2,302,579,000
Commercial
Non-Accrual and Past Due Loans
Loans	2,895,957,000	2,942,348,000
Total 90 days past due and still accruing	0	0
Commercial | PCD
Non-Accrual and Past Due Loans
Loans	3,720,000	3,701,000
Commercial | Total Past Due
Non-Accrual and Past Due Loans
Loans	7,156,000	6,951,000
Commercial | 30 to 59 Days
Non-Accrual and Past Due Loans
Loans	1,152,000	3,088,000
Commercial | 60 to 89 Days
Non-Accrual and Past Due Loans
Loans	3,219,000	2,188,000
Commercial | 90 Days or Greater
Non-Accrual and Past Due Loans
Loans	2,785,000	1,675,000
Commercial | Total Current
Non-Accrual and Past Due Loans
Loans	2,885,081,000	2,931,696,000
MW
Non-Accrual and Past Due Loans
Loans	437,501,000	446,227,000
Total 90 days past due and still accruing	0	0
MW | Total Past Due
Non-Accrual and Past Due Loans
Loans	208,000	0
MW | 30 to 59 Days
Non-Accrual and Past Due Loans
Loans	208,000	0
MW | 60 to 89 Days
Non-Accrual and Past Due Loans
Loans	0	0
MW | 90 Days or Greater
Non-Accrual and Past Due Loans
Loans	0	0
MW | Total Current
Non-Accrual and Past Due Loans
Loans	437,293,000	446,227,000
Consumer
Non-Accrual and Past Due Loans
Loans	8,316,000	7,806,000
Total 90 days past due and still accruing	0	2,000
Consumer | PCD
Non-Accrual and Past Due Loans
Loans	18,000	23,000
Consumer | Total Past Due
Non-Accrual and Past Due Loans
Loans	123,000	397,000
Consumer | 30 to 59 Days
Non-Accrual and Past Due Loans
Loans	113,000	352,000
Consumer | 60 to 89 Days
Non-Accrual and Past Due Loans
Loans	10,000	0
Consumer | 90 Days or Greater
Non-Accrual and Past Due Loans
Loans	0	45,000
Consumer | Total Current
Non-Accrual and Past Due Loans
Loans	8,175,000	7,386,000
PCD Loans
Non-Accrual and Past Due Loans
Total 90 days past due and still accruing	17,000	13,178,000
PCD Loans | PCD
Non-Accrual and Past Due Loans
Loans	37,329,000	39,013,000
PCD Loans | 90 Days or Greater
Non-Accrual and Past Due Loans
Total 90 days past due and still accruing	1,449,000	2,004,000
PCD Loans | Real Estate | Construction and land | PCD
Non-Accrual and Past Due Loans
Loans	0	1,544,000
PCD Loans | Real Estate | Farmland | PCD
Non-Accrual and Past Due Loans
Loans	0	0
PCD Loans | Real Estate | Residential Real Estate | 1 - 4 family residential | PCD
Non-Accrual and Past Due Loans
Loans	1,194,000	1,180,000
PCD Loans | Real Estate | Residential Real Estate | Multi-family residential | PCD
Non-Accrual and Past Due Loans
Loans	0	0
PCD Loans | Real Estate | Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | PCD
Non-Accrual and Past Due Loans
Loans	19,187,000	19,817,000
PCD Loans | Real Estate | Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | PCD
Non-Accrual and Past Due Loans
Loans	13,210,000	12,748,000
PCD Loans | Commercial | PCD
Non-Accrual and Past Due Loans
Loans	3,720,000	3,701,000
PCD Loans | MW | PCD
Non-Accrual and Past Due Loans
Loans	0	0
PCD Loans | Consumer | PCD
Non-Accrual and Past Due Loans
Loans	$ 18,000	$ 23,000

XML

LHI and ACL - Trouble Debt Restructuring (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, troubled debt restructuring, postmodification	$ 42,647
30 to 59 Days
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, troubled debt restructuring, postmodification	0
60 to 89 Days
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, troubled debt restructuring, postmodification	0
90 Days or Greater
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, troubled debt restructuring, postmodification	0
1 - 4 family residential | Real Estate | Residential Real Estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, troubled debt restructuring, postmodification	42,647
1 - 4 family residential | Real Estate | Residential Real Estate | 30 to 59 Days
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, troubled debt restructuring, postmodification	0
1 - 4 family residential | Real Estate | Residential Real Estate | 60 to 89 Days
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, troubled debt restructuring, postmodification	0
1 - 4 family residential | Real Estate | Residential Real Estate | 90 Days or Greater
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, troubled debt restructuring, postmodification	0
Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, troubled debt restructuring, postmodification	42,647
Interest Rate Reduction | 1 - 4 family residential | Real Estate | Residential Real Estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing receivable, troubled debt restructuring, postmodification	$ 42,647
Financing receivable, troubled debt restructuring, postmodification percentage (in percent)	4.80%
Contractual Interest Rate Reduction | Real Estate | Residential Real Estate | Minimum
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate (in percent)	7.50%
Contractual Interest Rate Reduction | Real Estate | Residential Real Estate | Maximum
Financing Receivable, Troubled Debt Restructuring [Line Items]
Weighted-average contractual interest rate (in percent)	6.00%

XML

LHI and ACL - Credit Quality Indicators (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Total consumer loans held for investment
Year one	$ 181,851		$ 1,993,914
Year two	2,072,580		1,792,050
Year three	1,897,511		1,017,699
Year four	974,325		431,810
Year five	423,405		479,768
Prior	1,365,833		935,168
Revolving Loans Amortized Cost Basis	2,755,659		2,849,209
Revolving Loans Converted to Term	19,007		2,006
Total	9,690,171		9,501,624
Total gross charge-offs
2023	0
2022	0
2021	0
2020	53
2019	484
Prior	692
Revolving Loans Amortized Cost Basis, Write Off	0
Revolving Loans Converted to Term, Write Off	0
Total	1,229	$ 5,322
Deferred loan fees, net	15,511		18,973
Pass
Total consumer loans held for investment
Year one	181,851		1,976,020
Year two	2,053,216		1,766,159
Year three	1,857,494		985,767
Year four	907,904		398,380
Year five	374,039		391,505
Prior	1,119,638		786,325
Revolving Loans Amortized Cost Basis	2,701,407		2,677,207
Revolving Loans Converted to Term	18,933		1,884
Total	9,214,482		8,983,247
Special mention
Total consumer loans held for investment
Year one	0		0
Year two	1,470		21,649
Year three	29,359		26,743
Year four	34,336		25,971
Year five	43,136		19,659
Prior	63,569		55,504
Revolving Loans Amortized Cost Basis	32,943		142,141
Revolving Loans Converted to Term	0		45
Total	204,813		291,712
Substandard
Total consumer loans held for investment
Year one	0		17,894
Year two	17,894		4,242
Year three	10,658		5,189
Year four	32,085		7,459
Year five	6,230		55,634
Prior	145,297		67,296
Revolving Loans Amortized Cost Basis	21,309		29,861
Revolving Loans Converted to Term	74		77
Total	233,547		187,652
PCD
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	0		12,970
Prior	37,329		26,043
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	37,329		39,013
Commercial
Total consumer loans held for investment
Year one	101,857		490,978
Year two	406,845		137,120
Year three	128,313		95,732
Year four	74,418		92,734
Year five	88,755		58,642
Prior	91,838		39,699
Revolving Loans Amortized Cost Basis	2,003,285		2,026,813
Revolving Loans Converted to Term	646		630
Total	2,895,957		2,942,348
Total gross charge-offs
2023	0
2022	0
2021	0
2020	48
2019	479
Prior	524
Revolving Loans Amortized Cost Basis, Write Off	0
Revolving Loans Converted to Term, Write Off	0
Total	1,051	3,294
Commercial | Pass
Total consumer loans held for investment
Year one	101,857		473,084
Year two	388,951		132,396
Year three	123,908		90,543
Year four	69,297		83,996
Year five	84,702		40,030
Prior	66,526		31,269
Revolving Loans Amortized Cost Basis	1,968,105		1,906,074
Revolving Loans Converted to Term	572		553
Total	2,803,918		2,757,945
Commercial | Special mention
Total consumer loans held for investment
Year one	0		0
Year two	0		666
Year three	1,113		0
Year four	0		4,543
Year five	71		7,385
Prior	5,467		270
Revolving Loans Amortized Cost Basis	14,070		114,447
Revolving Loans Converted to Term	0		0
Total	20,721		127,311
Commercial | Substandard
Total consumer loans held for investment
Year one	0		17,894
Year two	17,894		4,058
Year three	3,292		5,189
Year four	5,121		4,195
Year five	3,982		10,954
Prior	16,125		4,732
Revolving Loans Amortized Cost Basis	21,110		6,292
Revolving Loans Converted to Term	74		77
Total	67,598		53,391
Commercial | PCD
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	0		273
Prior	3,720		3,428
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	3,720		3,701
MW
Total consumer loans held for investment
Year one	1,868		0
Year two	55,891		0
Year three	252		0
Year four	288		0
Year five	741		46
Prior	382		162
Revolving Loans Amortized Cost Basis	378,079		446,019
Revolving Loans Converted to Term	0		0
Total	437,501		446,227
Total gross charge-offs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis, Write Off	0
Revolving Loans Converted to Term, Write Off	0
Total	0
MW | Pass
Total consumer loans held for investment
Year one	1,868		0
Year two	55,891		0
Year three	252		0
Year four	288		0
Year five	741		0
Prior	174		0
Revolving Loans Amortized Cost Basis	359,206		444,393
Revolving Loans Converted to Term	0		0
Total	418,420		444,393
MW | Special mention
Total consumer loans held for investment
Year one	0
Year two	0
Year three	0
Year four	0
Year five	0
Prior	0
Revolving Loans Amortized Cost Basis	18,873
Revolving Loans Converted to Term	0
Total	18,873
MW | Substandard
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	0		46
Prior	208		162
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	208		208
Consumer
Total consumer loans held for investment
Year one	1,388		1,965
Year two	1,437		452
Year three	412		872
Year four	804		216
Year five	184		135
Prior	2,382		2,548
Revolving Loans Amortized Cost Basis	1,709		1,618
Revolving Loans Converted to Term	0		0
Total	8,316		7,806
Total gross charge-offs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	62
Revolving Loans Amortized Cost Basis, Write Off	0
Revolving Loans Converted to Term, Write Off	0
Total	62	134
Consumer | Pass
Total consumer loans held for investment
Year one	1,388		1,965
Year two	1,437		452
Year three	412		872
Year four	804		216
Year five	168		135
Prior	2,240		2,298
Revolving Loans Amortized Cost Basis	1,709		1,618
Revolving Loans Converted to Term	0		0
Total	8,158		7,556
Consumer | Special mention
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	0		0
Prior	57		58
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	57		58
Consumer | Substandard
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	16		0
Prior	67		169
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	83		169
Consumer | PCD
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	0		0
Prior	18		23
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	18		23
Construction and land | Real Estate
Total consumer loans held for investment
Year one	2,440		347,855
Year two	505,026		727,870
Year three	761,734		380,789
Year four	280,197		69,241
Year five	63,728		30,673
Prior	18,172		15,569
Revolving Loans Amortized Cost Basis	200,052		215,263
Revolving Loans Converted to Term	0		140
Total	1,831,349		1,787,400
Total gross charge-offs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis, Write Off	0
Revolving Loans Converted to Term, Write Off	0
Total	0	0
Construction and land | Real Estate | Pass
Total consumer loans held for investment
Year one	2,440		347,855
Year two	503,556		709,208
Year three	731,203		378,229
Year four	243,188		69,241
Year five	43,087		30,673
Prior	17,882		14,025
Revolving Loans Amortized Cost Basis	200,052		215,263
Revolving Loans Converted to Term	0		140
Total	1,741,408		1,764,634
Construction and land | Real Estate | Special mention
Total consumer loans held for investment
Year one	0		0
Year two	1,470		18,662
Year three	25,948		2,560
Year four	11,487		0
Year five	20,641		0
Prior	290		0
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	59,836		21,222
Construction and land | Real Estate | Substandard
Total consumer loans held for investment
Year one	0
Year two	0
Year three	4,583
Year four	25,522
Year five	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	30,105
Construction and land | Real Estate | PCD
Total consumer loans held for investment
Year one			0
Year two			0
Year three			0
Year four			0
Year five			0
Prior			1,544
Revolving Loans Amortized Cost Basis			0
Revolving Loans Converted to Term			0
Total			1,544
Farmland | Real Estate
Total consumer loans held for investment
Year one	2,044		2,546
Year two	2,514		16,242
Year three	22,640		18,530
Year four	18,397		21
Year five	19		0
Prior	5,034		5,069
Revolving Loans Amortized Cost Basis	1,032		1,092
Revolving Loans Converted to Term	0		0
Total	51,680		43,500
Total gross charge-offs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis, Write Off	0
Revolving Loans Converted to Term, Write Off	0
Total	0	0
Farmland | Real Estate | Pass
Total consumer loans held for investment
Year one	2,044		2,546
Year two	2,514		16,242
Year three	22,640		18,530
Year four	18,397		21
Year five	19		0
Prior	5,034		5,069
Revolving Loans Amortized Cost Basis	1,032		1,092
Revolving Loans Converted to Term	0		0
Total	51,680		43,500
Residential Real Estate | Single Family | Real Estate
Total consumer loans held for investment
Year one	13,449		135,006
Year two	139,484		188,819
Year three	183,529		87,861
Year four	86,358		43,293
Year five	41,883		41,960
Prior	298,067		260,254
Revolving Loans Amortized Cost Basis	115,716		136,537
Revolving Loans Converted to Term	17,766		726
Total	896,252		894,456
Total gross charge-offs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis, Write Off	0
Revolving Loans Converted to Term, Write Off	0
Total	0	0
Residential Real Estate | Single Family | Real Estate | Pass
Total consumer loans held for investment
Year one	13,449		135,006
Year two	139,484		188,635
Year three	183,529		87,861
Year four	86,358		43,293
Year five	41,883		41,960
Prior	294,800		257,768
Revolving Loans Amortized Cost Basis	115,517		86,900
Revolving Loans Converted to Term	17,766		726
Total	892,786		842,149
Residential Real Estate | Single Family | Real Estate | Special mention
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	0		0
Prior	691		278
Revolving Loans Amortized Cost Basis	0		26,068
Revolving Loans Converted to Term	0		0
Total	691		26,346
Residential Real Estate | Single Family | Real Estate | Substandard
Total consumer loans held for investment
Year one	0		0
Year two	0		184
Year three	0		0
Year four	0		0
Year five	0
Prior	1,382		1,028
Revolving Loans Amortized Cost Basis	199		23,569
Revolving Loans Converted to Term	0		0
Total	1,581		24,781
Residential Real Estate | Single Family | Real Estate | PCD
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	0		0
Prior	1,194		1,180
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	1,194		1,180
Residential Real Estate | Multi-family residential | Real Estate
Total consumer loans held for investment
Year one	5,190		72,044
Year two	73,744		80,793
Year three	121,248		110,426
Year four	136,876		10,356
Year five	10,251		46,566
Prior	48,989		2,494
Revolving Loans Amortized Cost Basis	35,911		0
Revolving Loans Converted to Term	0		0
Total	432,209		322,679
Total gross charge-offs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis, Write Off	0
Revolving Loans Converted to Term, Write Off	0
Total	0	0
Residential Real Estate | Multi-family residential | Real Estate | Pass
Total consumer loans held for investment
Year one	5,190		72,044
Year two	73,744		80,793
Year three	121,248		110,426
Year four	136,876		8,402
Year five	8,306		32,822
Prior	35,226		2,494
Revolving Loans Amortized Cost Basis	35,911		0
Revolving Loans Converted to Term	0		0
Total	416,501		306,981
Residential Real Estate | Multi-family residential | Real Estate | Special mention
Total consumer loans held for investment
Year one	0
Year two	0
Year three	0
Year four	0
Year five	1,945
Prior	13,763
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	15,708
Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | Real Estate
Total consumer loans held for investment
Year one	5,931		191,044
Year two	126,121		109,019
Year three	108,205		85,639
Year four	90,506		45,929
Year five	44,808		72,692
Prior	252,640		206,236
Revolving Loans Amortized Cost Basis	3,352		5,225
Revolving Loans Converted to Term	0		45
Total	631,563		715,829
Total gross charge-offs
2023	0
2022	0
2021	0
2020	5
2019	5
Prior	106
Revolving Loans Amortized Cost Basis, Write Off	0
Revolving Loans Converted to Term, Write Off	0
Total	116	1,341
Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | Real Estate | Pass
Total consumer loans held for investment
Year one	5,931		191,044
Year two	126,121		106,698
Year three	105,907		84,230
Year four	89,064		43,965
Year five	42,865		49,461
Prior	209,887		167,968
Revolving Loans Amortized Cost Basis	3,352		5,225
Revolving Loans Converted to Term	0		0
Total	583,127		648,591
Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | Real Estate | Special mention
Total consumer loans held for investment
Year one	0		0
Year two	0		2,321
Year three	2,298		1,409
Year four	0		1,964
Year five	1,943		0
Prior	4,738		3,447
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		45
Total	8,979		9,186
Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | Real Estate | Substandard
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	1,442		0
Year five	0		23,231
Prior	18,828		15,004
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	20,270		38,235
Commercial Real Estate | Owner occupied commercial real estate (“OOCRE”) | Real Estate | PCD
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	0		0
Prior	19,187		19,817
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	19,187		19,817
Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | Real Estate
Total consumer loans held for investment
Year one	47,684		752,476
Year two	761,518		531,735
Year three	571,178		237,850
Year four	286,481		170,020
Year five	173,036		229,054
Prior	648,329		403,137
Revolving Loans Amortized Cost Basis	16,523		16,642
Revolving Loans Converted to Term	595		465
Total	2,505,344		2,341,379
Total gross charge-offs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis, Write Off	0
Revolving Loans Converted to Term, Write Off	0
Total	0	$ 553
Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | Real Estate | Pass
Total consumer loans held for investment
Year one	47,684		752,476
Year two	761,518		531,735
Year three	568,395		215,076
Year four	263,632		149,246
Year five	152,268		196,424
Prior	487,869		305,434
Revolving Loans Amortized Cost Basis	16,523		16,642
Revolving Loans Converted to Term	595		465
Total	2,298,484		2,167,498
Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | Real Estate | Special mention
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		22,774
Year four	22,849		19,464
Year five	18,536		12,274
Prior	38,563		51,451
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	79,948		105,963
Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | Real Estate | Substandard
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	2,783		0
Year four	0		1,310
Year five	2,232		7,659
Prior	108,687		46,201
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	113,702		55,170
Commercial Real Estate | Non-owner occupied commercial real estate (“NOOCRE”) | Real Estate | PCD
Total consumer loans held for investment
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	0		12,697
Prior	13,210		51
Revolving Loans Amortized Cost Basis	0		0
Revolving Loans Converted to Term	0		0
Total	$ 13,210		$ 12,748

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LHI and ACL - Servicing Assets (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Servicing Asset at Amortized Cost [Line Items]
Servicing asset	$ 571,611,000	$ 518,612,000
Summary of changes in related servicing assets
Balance at beginning of period	14,880,000	17,705,000
Increase from loan sales	959,000	1,491,000
Servicing asset impairment, net of recoveries	424,000	(280,000)
Amortization charged as a reduction to income	(1,015,000)	(748,000)
Balance at end of period	15,248,000	18,168,000
Valuation allowance recorded	2,027,000	908,000
Proceeds from sale of loans	5,520,000	21,293,000
Gain on sale of loans	6,000	307,000
SBA LHI
Summary of changes in related servicing assets
Proceeds from sale of loans	6,340,000	4,376,000
Gain on sale of loans	148,000	533,000
USDA LHI
Summary of changes in related servicing assets
Proceeds from sale of loans	44,002,000	20,000,000
Gain on sale of loans	6,984,000	$ 3,628,000
Interest-only strip
Summary of changes in related servicing assets
Interest receivable	$ 0		$ 0

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Fair Value - Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Assets measured at fair value
AFS debt securities	$ 966,123	$ 1,096,292
Equity securities with a readily determinable fair value	9,918	9,792
PPP loans		1,995
Derivative asset	35,164	36,878
Derivative liability	51,264	63,997
Designated as hedging instrument
Assets measured at fair value
Derivative asset	28,246	26,523
Derivative liability	44,880	54,171
Non-hedging derivatives
Assets measured at fair value
Derivative asset	32,621	41,337
Derivative liability	32,087	40,808
Recurring
Assets measured at fair value
AFS debt securities	966,123	1,096,292
Equity securities with a readily determinable fair value	9,918	9,792
PPP loans		1,995
LHFS	41,747	19,775
Recurring | Level 1 Inputs
Assets measured at fair value
AFS debt securities	0	0
Equity securities with a readily determinable fair value	9,918	9,792
PPP loans		0
LHFS	0	0
Recurring | Level 2 Inputs
Assets measured at fair value
AFS debt securities	966,123	1,096,292
Equity securities with a readily determinable fair value	0	0
PPP loans		0
LHFS	41,747	19,775
Recurring | Level 3 Inputs
Assets measured at fair value
AFS debt securities	0	0
Equity securities with a readily determinable fair value	0	0
PPP loans		1,995
LHFS	0	0
Interest rate swaps | Recurring | Designated as hedging instrument
Assets measured at fair value
Derivative asset	28,246	26,523
Derivative liability	44,880	54,171
Interest rate swaps | Recurring | Level 1 Inputs | Designated as hedging instrument
Assets measured at fair value
Derivative asset	0	0
Derivative liability	0	0
Interest rate swaps | Recurring | Level 2 Inputs | Designated as hedging instrument
Assets measured at fair value
Derivative asset	28,246	26,523
Derivative liability	44,880	54,171
Interest rate swaps | Recurring | Level 3 Inputs | Designated as hedging instrument
Assets measured at fair value
Derivative asset	0	0
Derivative liability	0	0
Interest rate swaps | Financial institution counterparty | Non-hedging derivatives
Assets measured at fair value
Derivative asset	29,358	38,839
Derivative liability	2,454	1,126
Interest rate swaps | Financial institution counterparty | Recurring | Non-hedging derivatives
Assets measured at fair value
Derivative asset	29,358	38,839
Derivative liability	2,454	1,126
Interest rate swaps | Financial institution counterparty | Recurring | Level 1 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative asset	0	0
Derivative liability	0	0
Interest rate swaps | Financial institution counterparty | Recurring | Level 2 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative asset	29,358	38,839
Derivative liability	2,454	1,126
Interest rate swaps | Financial institution counterparty | Recurring | Level 3 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative asset	0	0
Derivative liability	0	0
Interest rate swaps | Commercial customer counterparty | Non-hedging derivatives
Assets measured at fair value
Derivative asset	1,912	1,004
Derivative liability	28,282	38,188
Interest rate swaps | Commercial customer counterparty | Recurring | Non-hedging derivatives
Assets measured at fair value
Derivative asset	1,912	1,004
Derivative liability	28,282	38,188
Interest rate swaps | Commercial customer counterparty | Recurring | Level 1 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative asset	0	0
Derivative liability	0	0
Interest rate swaps | Commercial customer counterparty | Recurring | Level 2 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative asset	1,912	1,004
Derivative liability	28,282	38,188
Interest rate swaps | Commercial customer counterparty | Recurring | Level 3 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative asset	0	0
Derivative liability	0	0
Interest rate caps and corridors | Financial institution counterparty | Recurring | Non-hedging derivatives
Assets measured at fair value
Derivative asset	1,351	1,494
Interest rate caps and corridors | Financial institution counterparty | Recurring | Level 1 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative asset	0	0
Interest rate caps and corridors | Financial institution counterparty | Recurring | Level 2 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative asset	1,351	1,494
Interest rate caps and corridors | Financial institution counterparty | Recurring | Level 3 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative asset	0	0
Interest rate caps and corridors | Commercial customer counterparty | Recurring | Non-hedging derivatives
Assets measured at fair value
Derivative liability	1,351	1,494
Interest rate caps and corridors | Commercial customer counterparty | Recurring | Level 1 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative liability	0	0
Interest rate caps and corridors | Commercial customer counterparty | Recurring | Level 2 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative liability	1,351	1,494
Interest rate caps and corridors | Commercial customer counterparty | Recurring | Level 3 Inputs | Non-hedging derivatives
Assets measured at fair value
Derivative liability	$ 0	$ 0

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Fair Value - Non-recurring Basis (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Assets measured at fair value
Valuation allowance recorded	$ 2,027,000		$ 908,000
Non-recurring
Assets measured at fair value
Collateral dependent loans with an ACL	6,814,000	$ 7,969,000
Servicing assets with a valuation allowance	8,895,000	10,984,000
Collateral dependent loans with an ACL, gross	9,230,000	10,632,000
Impaired loans, specific allowance	2,416,000	2,663,000
Servicing asset at fair value, gross	10,922,000	13,435,000
Valuation allowance for servicing asset		2,451,000
Liabilities measured at fair value	0	0
Non-recurring | Level 1 Inputs
Assets measured at fair value
Collateral dependent loans with an ACL	0	0
Servicing assets with a valuation allowance	0	0
Non-recurring | Level 2 Inputs
Assets measured at fair value
Collateral dependent loans with an ACL	0	0
Servicing assets with a valuation allowance	0	0
Non-recurring | Level 3 Inputs
Assets measured at fair value
Collateral dependent loans with an ACL	6,814,000	7,969,000
Servicing assets with a valuation allowance	$ 8,895,000	$ 10,984,000

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Fair Value - Financial Instruments (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Financial assets:
HTM debt securities	$ 161,778,000	$ 158,781,000
Securities purchased under agreements to resell	0		$ 100,800,000
Equity securities without a readily determinable fair value	10,604,000	10,072,000
FHLB and FRB stock	116,081,000	101,568,000
Financial liabilities:
Subordinated debentures and subordinated notes	229,027,000	228,775,000
Carrying Amount
Financial assets:
Cash and cash equivalents	808,395,000	436,077,000
HTM debt securities	184,836,000	186,168,000
Securities purchased under agreements to resell		0
LHFS	1,069,000	866,000
LHI		9,399,614,000
Accrued interest receivable	42,242,000	44,035,000
BOLI	84,962,000	84,496,000
Servicing asset	6,353,000	3,896,000
Equity securities without a readily determinable fair value	10,604,000	10,072,000
FHLB and FRB stock	116,081,000	101,568,000
Financial liabilities:
Deposits	9,034,738,000	9,123,234,000
Advances from FHLB	1,680,000,000	1,175,000,000
Accrued interest payable	18,651,000	8,795,000
Subordinated debentures and subordinated notes	229,027,000	228,775,000
Securities sold under agreements to repurchase		0
Level 1 Inputs | Fair Value
Financial assets:
Cash and cash equivalents	0	0
HTM debt securities	0	0
Securities purchased under agreements to resell		0
LHFS	0	0
LHI		0
Accrued interest receivable	0	0
BOLI	0	0
Servicing asset	0	0
Financial liabilities:
Deposits	0	0
Advances from FHLB	0	0
Accrued interest payable	0	0
Subordinated debentures and subordinated notes	0	0
Securities sold under agreements to repurchase		0
Level 2 Inputs | Fair Value
Financial assets:
Cash and cash equivalents	808,395,000	436,077,000
HTM debt securities	161,778,000	158,781,000
Securities purchased under agreements to resell		0
LHFS	0	866,000
LHI		0
Accrued interest receivable	42,242,000	44,035,000
BOLI	84,962,000	84,496,000
Servicing asset	6,353,000	3,896,000
Financial liabilities:
Deposits	8,296,710,000	8,341,419,000
Advances from FHLB	1,681,089,000	1,156,852,000
Accrued interest payable	18,651,000	8,795,000
Subordinated debentures and subordinated notes	229,027,000	228,775,000
Securities sold under agreements to repurchase		0
Level 3 Inputs | Fair Value
Financial assets:
Cash and cash equivalents	0	0
HTM debt securities	0	0
Securities purchased under agreements to resell		0
LHFS	1,069,000	0
LHI		9,163,616,000
Accrued interest receivable	0	0
BOLI	0	0
Servicing asset	0	0
Financial liabilities:
Deposits	0	0
Advances from FHLB	0	0
Accrued interest payable	0	0
Subordinated debentures and subordinated notes	0	0
Securities sold under agreements to repurchase		$ 0
Real Estate, Commercial and Consumer Portfolio Segments | Carrying Amount
Financial assets:
LHI	9,575,966,000
Real Estate, Commercial and Consumer Portfolio Segments | Level 1 Inputs | Fair Value
Financial assets:
LHI	0
Real Estate, Commercial and Consumer Portfolio Segments | Level 2 Inputs | Fair Value
Financial assets:
LHI	0
Real Estate, Commercial and Consumer Portfolio Segments | Level 3 Inputs | Fair Value
Financial assets:
LHI	$ 9,321,175,000

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Derivative Financial Instruments - Balance Sheet Information (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Derivative [Line Items]
Notional Amount	$ 3,133,716	$ 2,922,362
Asset Derivative
Gross derivatives	35,164	36,878
Offsetting derivative assets	(25,703)	(30,982)
Liability Derivative
Gross derivatives	51,264	63,997
Offsetting derivative liabilities	(25,703)	(30,982)
Designated as hedging instrument
Derivative [Line Items]
Notional Amount	1,275,000	1,175,000
Asset Derivative
Gross derivatives	28,246	26,523
Liability Derivative
Gross derivatives	44,880	54,171
Designated as hedging instrument | Interest rate swap on money market deposit account payments
Derivative [Line Items]
Notional Amount	250,000	250,000
Asset Derivative
Gross derivatives	17,257	21,234
Liability Derivative
Gross derivatives	0	0
Designated as hedging instrument | Interest rate swaps on customer loan interest payments
Derivative [Line Items]
Notional Amount	375,000	375,000
Asset Derivative
Gross derivatives	0	0
Liability Derivative
Gross derivatives	41,126	49,211
Designated as hedging instrument | Interest rate collars on customer loan interest payments
Derivative [Line Items]
Notional Amount	450,000	450,000
Asset Derivative
Gross derivatives	3,445	3,267
Liability Derivative
Gross derivatives	3,754	4,960
Designated as hedging instrument | Interest rate floor on customer loan interest payments
Derivative [Line Items]
Notional Amount	200,000	100,000
Asset Derivative
Gross derivatives	7,544	2,022
Liability Derivative
Gross derivatives	0	0
Non-hedging derivatives
Derivative [Line Items]
Notional Amount	1,858,716	1,747,362
Asset Derivative
Gross derivatives	32,621	41,337
Liability Derivative
Gross derivatives	32,087	40,808
Financial institution counterparty | Non-hedging derivatives | Interest rate swaps
Derivative [Line Items]
Notional Amount	805,488	805,311
Asset Derivative
Gross derivatives	29,358	38,839
Liability Derivative
Gross derivatives	2,454	1,126
Financial institution counterparty | Non-hedging derivatives | Interest rate caps and corridors
Derivative [Line Items]
Notional Amount	123,870	68,370
Asset Derivative
Gross derivatives	1,351	1,494
Liability Derivative
Gross derivatives	0	0
Commercial customer counterparty | Non-hedging derivatives | Interest rate swaps
Derivative [Line Items]
Notional Amount	805,488	805,311
Asset Derivative
Gross derivatives	1,912	1,004
Liability Derivative
Gross derivatives	28,282	38,188
Commercial customer counterparty | Non-hedging derivatives | Interest rate caps and corridors
Derivative [Line Items]
Notional Amount	123,870	68,370
Asset Derivative
Gross derivatives	0	0
Liability Derivative
Gross derivatives	$ 1,351	$ 1,494

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Derivative Financial Instruments - AOCI Reclassification (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
(Loss) gain recognized in other comprehensive income on derivative	$ 7,077	$ (13,381)
(Loss) gain reclassified from accumulated other comprehensive income into income	(157)	1,171
Interest rate swap on borrowing advances | Interest Expense | Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
(Loss) gain recognized in other comprehensive income on derivative	(1,082)	(264)
(Loss) gain reclassified from accumulated other comprehensive income into income	1,082	264
Interest rate swap on money market deposit account payments | Interest Expense | Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
(Loss) gain recognized in other comprehensive income on derivative	(3,977)	9,389
(Loss) gain reclassified from accumulated other comprehensive income into income	2,568	(171)
Derivatives on customer loan interest payments | Interest Income | Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
(Loss) gain recognized in other comprehensive income on derivative	12,136	(22,506)
(Loss) gain reclassified from accumulated other comprehensive income into income	(3,807)	1,078
Interest rate swaps, caps, floors and collars | Non-hedging derivatives
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net gain recognized in other noninterest income	$ 212	$ 719

XML

Derivative Financial Instruments - Summary of Interest Rate Swaps Outstanding (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Derivative [Line Items]
Notional Amount	$ 3,133,716	$ 2,922,362
Non-hedging derivatives
Derivative [Line Items]
Notional Amount	1,858,716	1,747,362
Non-hedging derivatives | Commercial customer counterparty | Interest rate swaps
Derivative [Line Items]
Notional Amount	$ 805,488	$ 805,311
Maturity (in years)	4 years 9 months 18 days	5 years 1 month 6 days
Fair Value	$ (27,071)	$ (37,183)
Non-hedging derivatives | Commercial customer counterparty | Interest Rate Cap
Derivative [Line Items]
Notional Amount		$ 68,370
Maturity (in years)		1 year 9 months 18 days
Fair Value		$ (1,494)
Non-hedging derivatives | Commercial customer counterparty | Interest rate caps and corridors
Derivative [Line Items]
Notional Amount	$ 123,870	$ 68,370
Maturity (in years)	1 year 7 months 6 days
Fair Value	$ (1,351)
Non-hedging derivatives | Commercial customer counterparty | LIBOR | Interest Rate Cap
Derivative [Line Items]
Floating Rate	0.00%
Non-hedging derivatives | Commercial customer counterparty | Minimum | Interest rate swaps
Derivative [Line Items]
Fixed Rate	2.41%	2.41%
Non-hedging derivatives | Commercial customer counterparty | Minimum | Interest Rate Cap
Derivative [Line Items]
Fixed Rate		3.50%
Non-hedging derivatives | Commercial customer counterparty | Minimum | Interest rate caps and corridors
Derivative [Line Items]
Fixed Rate	3.50%
Non-hedging derivatives | Commercial customer counterparty | Minimum | LIBOR | Interest rate swaps
Derivative [Line Items]
Floating Rate	3.00%	2.80%
Non-hedging derivatives | Commercial customer counterparty | Minimum | LIBOR | Interest Rate Cap
Derivative [Line Items]
Floating Rate		0.00%
Non-hedging derivatives | Commercial customer counterparty | Minimum | Secured Overnight Financing Rate (SOFR) - CME | Interest rate swaps
Derivative [Line Items]
Floating Rate	0.00%	0.00%
Non-hedging derivatives | Commercial customer counterparty | Minimum | Secured Overnight Financing Rate (SOFR) - NYFD | Interest rate swaps
Derivative [Line Items]
Floating Rate	2.50%	2.50%
Non-hedging derivatives | Commercial customer counterparty | Maximum | Interest rate swaps
Derivative [Line Items]
Fixed Rate	8.47%	8.47%
Non-hedging derivatives | Commercial customer counterparty | Maximum | Interest rate caps and corridors
Derivative [Line Items]
Fixed Rate	5.90%
Non-hedging derivatives | Commercial customer counterparty | Maximum | LIBOR | Interest rate swaps
Derivative [Line Items]
Floating Rate	5.00%	5.00%
Non-hedging derivatives | Commercial customer counterparty | Maximum | Secured Overnight Financing Rate (SOFR) - CME | Interest rate swaps
Derivative [Line Items]
Floating Rate	3.80%	3.80%
Non-hedging derivatives | Commercial customer counterparty | Maximum | Secured Overnight Financing Rate (SOFR) - NYFD | Interest rate swaps
Derivative [Line Items]
Floating Rate	3.00%	3.00%
Non-hedging derivatives | Financial institution counterparty | Interest rate swaps
Derivative [Line Items]
Notional Amount	$ 805,488	$ 805,311
Maturity (in years)	4 years 9 months 18 days	5 years 1 month 6 days
Fair Value	$ 26,904	$ 37,713
Non-hedging derivatives | Financial institution counterparty | Interest Rate Cap
Derivative [Line Items]
Notional Amount		$ 68,370
Maturity (in years)		1 year 9 months 18 days
Fair Value		$ 1,494
Non-hedging derivatives | Financial institution counterparty | Interest rate caps and corridors
Derivative [Line Items]
Notional Amount	$ 123,870	$ 68,370
Maturity (in years)	1 year 7 months 6 days
Fair Value	$ 1,351
Non-hedging derivatives | Financial institution counterparty | Minimum | Interest rate swaps
Derivative [Line Items]
Fixed Rate	2.41%	2.41%
Non-hedging derivatives | Financial institution counterparty | Minimum | Interest Rate Cap
Derivative [Line Items]
Fixed Rate		3.50%
Non-hedging derivatives | Financial institution counterparty | Minimum | Interest rate caps and corridors
Derivative [Line Items]
Fixed Rate	3.50%
Non-hedging derivatives | Financial institution counterparty | Minimum | LIBOR | Interest rate swaps
Derivative [Line Items]
Floating Rate	3.00%	2.80%
Non-hedging derivatives | Financial institution counterparty | Minimum | LIBOR | Interest Rate Cap
Derivative [Line Items]
Floating Rate		0.00%
Non-hedging derivatives | Financial institution counterparty | Minimum | LIBOR | Interest rate caps and corridors
Derivative [Line Items]
Floating Rate	0.00%
Non-hedging derivatives | Financial institution counterparty | Minimum | Secured Overnight Financing Rate (SOFR) - CME | Interest rate swaps
Derivative [Line Items]
Floating Rate	0.00%	0.00%
Non-hedging derivatives | Financial institution counterparty | Minimum | Secured Overnight Financing Rate (SOFR) - NYFD | Interest rate swaps
Derivative [Line Items]
Floating Rate	2.50%	2.50%
Non-hedging derivatives | Financial institution counterparty | Maximum | Interest rate swaps
Derivative [Line Items]
Fixed Rate	8.47%	8.47%
Non-hedging derivatives | Financial institution counterparty | Maximum | Interest Rate Cap
Derivative [Line Items]
Fixed Rate
Non-hedging derivatives | Financial institution counterparty | Maximum | Interest rate caps and corridors
Derivative [Line Items]
Fixed Rate	5.90%
Non-hedging derivatives | Financial institution counterparty | Maximum | LIBOR | Interest rate swaps
Derivative [Line Items]
Floating Rate	5.00%	5.00%
Non-hedging derivatives | Financial institution counterparty | Maximum | Secured Overnight Financing Rate (SOFR) - CME | Interest rate swaps
Derivative [Line Items]
Floating Rate	3.80%	3.80%
Non-hedging derivatives | Financial institution counterparty | Maximum | Secured Overnight Financing Rate (SOFR) - NYFD | Interest rate swaps
Derivative [Line Items]
Floating Rate	3.00%	3.00%

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Off-Balance Sheet Loan Commitments - Financial Instruments Approximate Value (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Financial instruments with off-balance sheet risk
Total commitments	$ 5,229,628	$ 5,698,408
Commitments to extend credit
Financial instruments with off-balance sheet risk
Total commitments	4,138,471	4,511,671
MW commitments
Financial instruments with off-balance sheet risk
Total commitments	985,207	1,088,558
Standby and commercial letters of credit
Financial instruments with off-balance sheet risk
Total commitments	$ 105,950	$ 98,179

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Off-Balance Sheet Loan Commitments - Allowance for Unfunded Commitments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Allowance For Unfunded Commitments [Roll Forward]
Beginning balance for ACL on unfunded commitments	$ 10,086	$ 9,266
Provision for credit losses on unfunded commitments	1,497	493
Ending balance of ACL on unfunded commitments	$ 11,583	$ 9,759

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Stock-Based Awards - 2010 Plan Options (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Shares Underlying Options
Options exercisable at end of period (in shares)	0	1,000
Weighted Exercise Price
Options exercisable at end of period (in dollars per share)	$ 0	$ 10.43
Weighted Average Contractual Term
Exercisable		1 year 25 days
Aggregate Intrinsic Value
Exercisable	$ 0
2010 Stock Option and Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 0	$ 0
Shares Underlying Options
Outstanding at the end of period (in shares)	0
Weighted Exercise Price
Outstanding at the end of period (in dollars per share)	$ 0
Aggregate Intrinsic Value
Outstanding (in dollars)	$ 0
Non Performance Based Stock Options
Shares Underlying Options
Outstanding at the end of period (in shares)		1,000
Weighted Exercise Price
Outstanding at the end of period (in dollars per share)		$ 10.43
Weighted Average Contractual Term
Outstanding (years)		1 year 25 days
Non Performance Based Stock Options | 2010 Stock Option and Equity Incentive Plan
Shares Underlying Options
Outstanding at beginning of period (in shares)	1,000	1,000
Exercised (in shares)		(1,000)
Weighted Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 10.43	$ 10.43
Exercised (in dollars per share)		$ 10.43
Weighted Average Contractual Term
Outstanding (years)	1 year 25 days
Aggregate Intrinsic Value
Outstanding (in dollars)			$ 147,000
Unrecognized compensation expense	$ 0	$ 0	$ 0
Non-performance-based stock options exercised	$ 16,000	$ 0

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Stock-Based Awards - 2022 Grant Terms and Stock Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, cliff vesting period (in years)	3 years
2022 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 2,465	$ 2,904
Veritex (Green) 2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 422	$ 414

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Stock-Based Awards - 2022 Equity Plan - Options (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Shares Underlying Options
Options exercisable at end of period (in shares)	0	1,000
Weighted Exercise Price
Options exercisable at end of period (in dollars per share)	$ 0	$ 10.43
Weighted Average Contractual Term
Exercisable		1 year 25 days
Aggregate Intrinsic Value
Exercisable	$ 0
Non Performance Based Stock Options
Shares Underlying Options
Outstanding at the end of period (in shares)		1,000
Weighted Exercise Price
Outstanding at the end of period (in dollars per share)		$ 10.43
Weighted Average Contractual Term
Outstanding (years)		1 year 25 days
2022 Equity Plan | Non Performance Based Stock Options
Shares Underlying Options
Outstanding at beginning of period (in shares)	657,494	710,043
Forfeited (in shares)	(1,666)
Cancelled (in shares)	(3,804)
Exercised (in shares)	(3,951)	(38,128)
Outstanding at the end of period (in shares)	648,073	671,915
Options exercisable at end of period (in shares)	610,073	518,237
Weighted Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 24.47	$ 24.38
Forfeited (in dollars per share)	17.38
Cancelled (in dollars per share)	29.13
Exercised (in dollars per share)	21.38	23.34
Outstanding at the end of period (in dollars per share)	24.48	24.44
Options exercisable at end of period (in dollars per share)	$ 24.74	$ 24.45
Weighted Average Contractual Term
Outstanding (years)	5 years 2 months 26 days	6 years 7 months 24 days
Exercisable	5 years 1 month 17 days	6 years 4 months 6 days
Aggregate Intrinsic Value
Outstanding (in dollars)	$ 123
Exercisable	114
Unrecognized compensation expense	$ 0	$ 75	$ 0

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Stock-Based Awards - 2022 Equity Plan - RSUs and PSUs (Details) - 2022 Equity Plan - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
RSUs
Units
Outstanding at the beginning of the period (in shares)	955,104	598,051
Granted (in shares)	224,165	169,355
Vested into shares (in shares)	(162,952)	(96,141)
Forfeited (in shares)	(16,394)	(2,350)
Outstanding at the end of the period (in shares)	999,923	668,915
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)	$ 28.38	$ 23.39
Granted (in dollars per share)	27.90	40.77
Vested into shares (in dollars per share)	30.23	24.69
Forfeited (in dollars per share)	31.77	26.12
Outstanding at the end of the period (in dollars per share)	$ 27.87	$ 27.59
Additional disclosures
Equity instrument other than option, units vested	$ 3,044	$ 2,524
PSUs
Units
Outstanding at the beginning of the period (in shares)	126,707	156,471
Granted (in shares)	53,310	39,429
Vested into shares (in shares)	(41,781)
Outstanding at the end of the period (in shares)	129,768	132,564
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)	$ 31.19	$ 24.17
Granted (in dollars per share)	27.55	40.38
Vested into shares (in dollars per share)	26.42
Outstanding at the end of the period (in dollars per share)	$ 30.28	$ 30.15
Additional disclosures
Equity instrument other than option, units vested	$ 1,070	$ 2,270
Restricted Stock Units and Performance Stock Based Units
Additional disclosures
Unrecognized compensation expense	$ 3,260	1,399	$ 3,825
Requisite service period to recognize compensation cost (in years)	1 year 8 months 4 days
Non Performance Based Stock Options
Additional disclosures
Unrecognized compensation expense	$ 0	75	$ 0
Non-performance-based stock options exercised	$ 31	$ 1,562

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Stock-Based Awards - Veritex Green 2014 Plan - Options (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Shares Underlying Options
Options exercisable at end of period (in shares)	0	1,000
Weighted Exercise Price
Options exercisable at end of period (in dollars per share)	$ 0	$ 10.43
Weighted Average Contractual Term
Exercisable		1 year 25 days
Aggregate Intrinsic Value
Exercisable	$ 0
Non Performance Based Stock Options
Shares Underlying Options
Outstanding at the end of period (in shares)		1,000
Weighted Exercise Price
Outstanding at the end of period (in dollars per share)		$ 10.43
Weighted Average Contractual Term
Outstanding (years)		1 year 25 days
Veritex (Green) 2014 Plan | Non Performance Based Stock Options
Shares Underlying Options
Outstanding at beginning of period (in shares)	155,212,000	217,804,000
Cancelled (in shares)	(505,000)
Exercised (in shares)	(13,266,000)	(28,622,000)
Outstanding at the end of period (in shares)	141,441,000	189,182,000
Options exercisable at end of period (in shares)	141,441,000	180,830,000
Weighted Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 19.83	$ 19.62
Cancelled (in dollars per share)	21.38
Exercised (in dollars per share)	21.38	21.34
Outstanding at the end of period (in dollars per share)	21.86	19.37
Options exercisable at end of period (in dollars per share)	$ 21.86	$ 18.81
Weighted Average Contractual Term
Outstanding (years)	4 years 10 months 13 days	5 years 6 months 25 days
Exercisable	4 years 10 months 13 days	5 years 5 months 12 days
Aggregate Intrinsic Value
Outstanding (in dollars)	$ 287
Exercisable	$ 287
Weighted average fair value of options granted during the period (in dollars per share)	$ 0
Unrecognized compensation expense	$ 122	$ 626	$ 172
Requisite service period to recognize compensation cost (in years)	3 days

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Stock-Based Awards - Veritex (Green) 2014 Plan - RSUs and PSUs (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Incremental PSUs granted upon performance condition met (in shares)		10,566
Weighted Average Grant Date Fair Value
Incremental PSUs granted upon performance condition met (in dollars per share)		$ 19.69
Veritex (Green) 2014 Plan | RSUs
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Outstanding at the beginning of the period (in shares)	86,233	122,784
Granted (in shares)		4,231
Vested into shares (in shares)	(19,282)	(32,931)
Forfeited (in shares)	(2,232)	(2,558)
Outstanding at the end of the period (in shares)	64,719	91,526
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)	$ 21.09	$ 21.13
Granted (in dollars per share)		40.38
Vested into shares (in dollars per share)	29.66	21.80
Forfeited (in dollars per share)	29.13	29.13
Outstanding at the end of the period (in dollars per share)	$ 18.26	$ 21.55
Veritex (Green) 2014 Plan | PSUs
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Outstanding at the beginning of the period (in shares)	19,173	35,899
Granted (in shares)		4,411
Vested into shares (in shares)	(8,531)	(31,703)
Outstanding at the end of the period (in shares)	10,642	19,173
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)	$ 30.74	$ 22.26
Granted (in dollars per share)		40.38
Vested into shares (in dollars per share)	25.94	19.69
Outstanding at the end of the period (in dollars per share)	$ 31.93	$ 29.26
Veritex (Green) 2014 Plan | Restricted Stock Units and Performance Stock Based Units
Weighted Average Grant Date Fair Value
Unrecognized compensation expense	$ 15,278	$ 16,882	$ 17,160
Requisite service period to recognize compensation cost (in years)	2 years 2 months 12 days

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Stock-Based Awards - Veritex (Green) 2014 Plan - Fair Value Options Exercised and Restricted Stock Units Vested (Details) - Veritex (Green) 2014 Plan - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Non Performance Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-performance-based stock options exercised	$ 18	$ 1,143
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instrument other than option, units vested	1,990	718
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instrument other than option, units vested	$ 227	$ 624

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Stock-Based Awards - Green Bancorp Inc. 2010 Option Plan (Details) - Non Performance Based Stock Options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Shares Underlying Options
Outstanding at the end of period (in shares)		1,000
Weighted Exercise Price
Outstanding at the end of period (in dollars per share)		$ 10.43
Weighted Average Contractual Term
Outstanding (years)		1 year 25 days
Green Bancorp Inc. 2010 Stock Option Plan
Shares Underlying Options
Outstanding at beginning of period (in shares)	43,162	66,143
Exercised (in shares)	(29,630)	(1,372)
Outstanding at the end of period (in shares)	13,532	64,771
Weighted Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 13.11	$ 12.56
Exercised (in dollars per share)	13.22	13.07
Outstanding at the end of period (in dollars per share)	$ 12.86	$ 12.55
Weighted Average Contractual Term
Outstanding (years)	3 years 11 months 8 days	1 year 11 months 12 days
Aggregate Intrinsic Value
Outstanding (in dollars)	$ 73
Non-performance-based stock options exercised	$ 365	$ 56

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Income tax expense for the period	$ 11,012	$ 8,102
Effective tax rate	22.30%	19.50%
Net discrete tax expense (benefit), true-up adjustment	$ 112	$ (992)
Effective tax rate excluding discrete tax item	22.10%	21.90%

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Capital Requirements and Restrictions on Retained Earnings (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) $ / shares	Mar. 31, 2022 USD ($) $ / shares	Dec. 31, 2022 USD ($)
Total capital (to risk-weighted assets “RWA”)
Actual amount	$ 1,437,576,000		$ 1,395,904,000
Actual ratio (as a percent)	0.1199		0.1163
For capital adequacy purposes amount	$ 959,183,000		$ 960,209,000
For capital adequacy purposes ratio (as a percent)	0.080		0.080
Tier 1 capital (to RWA)
Actual amount	$ 1,146,356,000		$ 1,121,021,000
Actual ratio (as a percent)	0.0956		0.0934
For capital adequacy purposes amount	$ 719,470,000		$ 720,142,000
For capital adequacy purposes ratio (as a percent)	0.060		0.060
Common equity tier 1 (to RWA)
Actual amount	$ 1,116,632,000		$ 1,091,353,000
Actual ratio (as a percent)	9.32%		9.09%
For capital adequacy purposes amount	$ 539,146,000		$ 540,274,000
For capital adequacy purposes amount (as a percent)	4.50%		4.50%
Tier 1 capital (to average assets)
Actual amount	$ 1,146,356,000		$ 1,121,021,000
Actual ratio (as a percent)	0.0967		0.0982
For capital adequacy purposes amount	$ 474,191,000		$ 456,628,000
For capital adequacy purposes ratio (as a percent)	0.040		0.040
Dividends paid	$ 10,837,000	$ 9,913,000
Bank's capital conservation buffer	0.0389
Bank
Total capital (to risk-weighted assets “RWA”)
Actual amount	$ 1,424,435,000		$ 1,368,082,000
Actual ratio (as a percent)	0.1189		0.1141
For capital adequacy purposes amount	$ 958,409,000		$ 959,216,000
For capital adequacy purposes ratio (as a percent)	0.080		0.080
To be well capitalized under prompt corrective action provisions amount	$ 1,198,011,000		$ 1,199,020,000
To be well capitalized under prompt corrective action provisions ratio (as a percent)	0.100		0.100
Tier 1 capital (to RWA)
Actual amount	$ 1,331,501,000		$ 1,291,288,000
Actual ratio (as a percent)	0.1112		0.1077
For capital adequacy purposes amount	$ 718,436,000		$ 719,381,000
For capital adequacy purposes ratio (as a percent)	0.060		0.060
To be well capitalized under prompt corrective action provisions amount	$ 957,914,000		$ 959,174,000
To be well capitalized under prompt corrective action provisions ratio (as a percent)	0.080		0.080
Common equity tier 1 (to RWA)
Actual amount	$ 1,331,501,000		$ 1,291,288,000
Actual ratio (as a percent)	11.12%		10.77%
For capital adequacy purposes amount	$ 538,827,000		$ 539,535,000
For capital adequacy purposes amount (as a percent)	4.50%		4.50%
To be well capitalized under prompt corrective action provisions amount	$ 778,305,000		$ 779,329,000
To be well capitalized under prompt corrective action provisions ratio (as a percent)	6.50%		6.50%
Tier 1 capital (to average assets)
Actual amount	$ 1,331,501,000		$ 1,291,288,000
Actual ratio (as a percent)	0.1124		0.1132
For capital adequacy purposes amount	$ 473,844,000		$ 456,286,000
For capital adequacy purposes ratio (as a percent)	0.040		0.040
To be well capitalized under prompt corrective action provisions amount	$ 592,305,000		$ 570,357,000
To be well capitalized under prompt corrective action provisions ratio (as a percent)	0.050		0.050
Dividends paid to Holdco	$ 0	0
Veritex Holdings, Inc.
Tier 1 capital (to average assets)
Dividends paid	$ 10,837,000	$ 9,913,000
Dividends paid (in dollars per share) | $ / shares	$ 0.20	$ 0.20