DALLAS - Veritex (NASDAQ:VBTX) Holdings, Inc. (NASDAQ:VBTX), the parent company of Veritex Community Bank, has launched a stock buyback program, authorizing the repurchase of up to $50 million of its outstanding common stock, the company announced today. This program, which is set to expire on March 31, 2025, may be adjusted or discontinued at any time at the discretion of the Board of Directors.
The buyback is expected to be financed through the company's available cash and operational cash flow. Veritex has stated that the repurchase of shares will be conducted based on the company's assessment of market conditions and other factors, without committing to a specific number of shares to be bought back.
Concurrently, Veritex disclosed the completion of a restructuring of its available-for-sale (AFS) debt security portfolio earlier this month. The bank sold approximately $120.1 million in lower-yielding AFS debt securities, which had a yield of 3.11%, at a pre-tax loss of $6.5 million. Proceeds from this sale, amounting to roughly $115.9 million, were reinvested in higher-yielding AFS securities with a yield of 6.24%.
Veritex Holdings, headquartered in Dallas, Texas, operates through its wholly-owned subsidiary, Veritex Community Bank. The bank serves the Dallas-Fort Worth and Houston metropolitan areas and is regulated by the Texas Department of Banking and the Federal Reserve System.
The company's press release also contained forward-looking statements regarding the potential outcomes of its stock buyback program and financial strategies. However, these statements are subject to various assumptions, risks, and uncertainties that may cause actual results to differ from expectations.
This initiative reflects Veritex's ongoing efforts to manage its capital and enhance shareholder value. The announcement is based on a press release statement from Veritex Holdings, Inc.
InvestingPro Insights
In light of Veritex Holdings' recent announcement of a stock buyback program, certain metrics and insights from InvestingPro provide a deeper understanding of the company's financial position. With a market capitalization of approximately $1.12 billion and a Price/Earnings (P/E) ratio of 10.27, Veritex appears to be valued conservatively in the market. The slight adjustment in the P/E ratio to 10.35 over the last twelve months as of Q4 2023 suggests stability in earnings valuation over time.
Despite a slight decline in revenue growth of -3.07% over the last twelve months as of Q4 2023, Veritex has maintained a robust operating income margin of 40.8%, which indicates efficient management of its operations and profitability.
This aligns with one of the InvestingPro Tips that highlight analysts' predictions of the company remaining profitable this year, a continuation of its profitability over the last twelve months.
Investors considering Veritex's stock buyback should note that the company's gross profit margins have been identified as a weak point, as per another InvestingPro Tip. This could be a factor to watch, as it may impact the company's financial flexibility and the effectiveness of its capital return initiatives.
For those looking for more comprehensive analysis, InvestingPro offers additional insights on Veritex Holdings. To explore these further, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With this, subscribers can access a broader range of InvestingPro Tips, which currently include five analyst revisions on earnings expectations and detailed metrics that could influence investment decisions.
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