DALLAS, TX – Veritex Holdings, Inc. (NASDAQ:VBTX), a Texas-based commercial bank with a market capitalization of $1.45 billion, announced today that it will redeem all of its outstanding 4.75% Fixed-to-Floating Rate Subordinated Notes, totaling $75 million. According to InvestingPro analysis, the company currently trades below its Fair Value, offering potential upside for investors. The redemption of these notes, which were initially issued in a private placement on November 8, 2019, is scheduled to occur on February 18, 2025, at par value plus accrued interest.
The 2019 Notes switched to a floating interest rate on November 15, 2024, based on the secured overnight financing rate plus 347 basis points. The company plans to use cash on hand to fulfill the redemption payment. With a solid dividend yield of 3.04% and trading at just 0.89 times book value, Veritex maintains an attractive shareholder return profile.
This financial move is part of Veritex Holdings’ broader strategy and follows standard procedures for the management of the company’s capital structure. It is not indicative of any underlying issues with the company’s performance or financial stability.
Investors and stakeholders are advised that forward-looking statements included in the company’s announcement contain assumptions and estimates that are subject to risks and uncertainties. InvestingPro subscribers can access detailed financial health metrics and additional ProTips to better understand the company’s risk profile and growth potential.
Get access to the comprehensive Pro Research Report, available for over 1,400 US stocks, including Veritex Holdings. These may include changes in macroeconomic and industry trends that could affect future results. Veritex Holdings has directed investors to consider the risk factors and management’s discussion and analysis sections in its most recent Annual Report on Form 10-K and subsequent SEC filings for a more comprehensive understanding of these factors.
In other recent news, Veritex Holdings announced a successful third quarter in 2024, with operating earnings reaching $32.2 million and pretax pre-provision earnings of $44.6 million. Despite a decrease in total loans, the bank reported growth in revenue and an improved net interest margin. Analyst firms Piper Sandler and DA Davidson have both reacted positively to these developments, maintaining their upbeat ratings while increasing their price targets for Veritex to $30 and $33 respectively.
The bank’s strategic positioning within the Houston and Dallas-Fort Worth metropolitan areas has been noted as a competitive advantage, with potential mergers and acquisitions activity within the banking industry expected to provide further opportunities. Veritex has also announced plans to re-enter the construction lending market, emphasizing its focus on credit quality and operational efficiency.
These recent developments have reinforced analysts’ confidence in the bank’s performance. Piper Sandler highlighted Veritex’s strides in improving credit trends, reducing commercial real estate concentrations, and enhancing the deposit mix. DA Davidson also noted the firm’s strong core deposit franchise and stable net interest margin as positive indicators.
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