Independent Bank Group, Inc. (Nasdaq:IBTX), the holding company for
Independent Bank, today announced net income available to common
shareholders of $9.4 million, or $0.55 per diluted share, for the
quarter ended March 31, 2015 compared to $4.8 million, or $0.38 per
diluted share, for the quarter ended March 31, 2014 and $10.0
million, or $0.59 per diluted share, for the quarter ended December
31, 2014.
Highlights
- Core earnings were $10.2 million, or $0.60 per diluted share,
for the quarter ended March 31, 2015 compared to $5.0 million, or
$0.39 per diluted share, for the quarter ended March 31, 2014 and
to $10.9 million, or $0.64 per diluted share, for the quarter ended
December 31, 2014.
- Annualized organic loan growth was 13% for the quarter.
- Asset quality remains strong, as reflected by a nonperforming
assets to total assets ratio of 0.43% and a nonperforming loans to
total loans ratio of 0.41% at March 31, 2015. The bank had net
recoveries during the quarter.
- Quarterly dividend increased $0.02 per share, or 33.3%, from
$0.06 per share to $0.08 per share.
Independent Bank Group Chairman and Chief Executive Officer,
David Brooks said, "We are pleased with our results from the first
quarter. We experienced solid loan growth across our footprint
without compromising our credit culture. Despite the
challenges brought on by the lower energy commodity prices, we feel
good about the quality of our existing loan portfolio and our
ability to continue to grow. Our core customers are still
making investments and the diversified Texas economy is holding up
well." Brooks added, "We strengthened our lending team by
hiring six new lenders in the first quarter and further enhanced
our infrastructure. We believe these efforts position us well
for a successful year."
First Quarter 2015 Operating Results
Net Interest Income
- Net interest income was $36.1 million for first quarter 2015
compared to $22.1 million for first quarter 2014 and $38.2 million
for fourth quarter 2014. The increase in net interest income from
the previous year was primarily due to increased average loan
balances resulting from organic loan growth as well as loans
acquired in the BOH Holdings and Houston City Bancshares
acquisitions in 2014. The decrease from the linked quarter is
due to an unusually high amount of loan prepayment fees recognized
in the fourth quarter of 2014 compared to normal levels of
prepayment fees during first quarter 2015 as well as the fewer
number of days in the first quarter for interest accruals.
- Net interest margin was 4.07% for first quarter 2015 compared
to 4.17% for first quarter 2014 and 4.28% for fourth quarter 2014.
The decrease from the prior year is due primarily to decreases in
loan yields related to the extended low rate environment and
decreased accretion on acquired loans (5 basis points). The
decrease from the linked quarter is due to decreased accretion from
acquired loans (9 basis points) and normalized levels of loan
prepayment fees.
- The yield on interest-earning assets was 4.59% for the first
quarter 2015 compared to 4.74% for first quarter 2014 and 4.82% for
fourth quarter 2014. The decrease from the prior year is primarily
as a result of competitive pricing on loans in our markets over the
entire year. The decrease from the linked quarter is related
primarily to a decrease in loan accretion and normalized levels of
loan prepayment fees.
- The cost of interest bearing liabilities, including borrowings,
was 0.68% for first quarter 2015 compared to 0.71% for both first
quarter 2014 and fourth quarter 2014. The decrease from the
prior year is due to a decrease in the cost of deposits and FHLB
advances. The decrease from the linked quarter is due to a
decrease in cost of FHLB advances and other borrowings due to
principal payments on higher rate advances.
- The average balance of total interest-earning assets grew by
$1.4 billion, from the first quarter 2014 and totaled $3.599
billion compared to $2.151 billion at March 31, 2014 and compared
to $3.536 billion at December 31, 2014. This increase from
first quarter 2014 is due to organic loan growth and loans acquired
in the BOH Holdings and Houston City Bancshares transactions in
2014. The increase from fourth quarter 2014 is due to organic
loan growth and higher liquid assets resulting from an increase in
deposits during first quarter 2015.
Noninterest Income
- Total noninterest income increased $1.6 million compared to
first quarter 2014 and increased $5 thousand compared to fourth
quarter 2014.
- The increase from the prior year reflects a $594 thousand
increase in deposit service charges, a $121 thousand increase in
BOLI income and a $133 thousand increase in wealth management
income. In addition, mortgage fee income increased $570 thousand
from first quarter 2014 due to increased mortgage loan production
in our Austin market and the addition of a mortgage lender in
Houston.
- The change from fourth quarter 2014 relates to a decrease in
gains on sales of securities of $362 thousand as there were no
security sales in first quarter 2015. This was offset by increases
in mortgage fee income of $124 thousand, gains on sales of OREO of
$118 thousand and wealth management fees of $118 thousand.
Noninterest Expense
- Total noninterest expense increased $8.3 million compared to
first quarter 2014 and decreased $545 thousand compared to fourth
quarter 2014.
- The increase in noninterest expense compared to first quarter
2014 is due primarily to an increase of $5.3 million in salaries
and benefits, $1.4 million in occupancy expenses, $192 thousand in
data processing expense, $215 thousand in FDIC assessment, $219
thousand in communication expenses, $215 thousand in
deposit-related expenses and $447 thousand of other noninterest
expense, all of which are directly related to the Bank of Houston
and Houston City Bancshares acquisitions, which closed in April and
October 2014, respectively.
- The decrease from the linked quarter is primarily related to
decreased acquisition expenses of $526 thousand, decreased
compensation expense of $116 thousand, decreased occupancy expense
of $140 thousand and decreased professional fees of $285 thousand
which were offset by an increase in other real estate and loan
related expenses of $124 thousand, increased postage and courier
expenses of $73 thousand and other noninterest expense of $193
thousand.
Provision for Loan Losses
- Provision for loan loss expense was $1.7 million for the first
quarter, an increase of $417 thousand compared to $1.3 million for
first quarter 2014 and a decrease of $81 thousand compared to $1.8
million during fourth quarter 2014. The changes in provision
expense are directly related to organic loan growth in the
respective quarter. The change from fourth quarter 2014 also
reflects the net recoveries experienced during first quarter 2015
partially offset by a prudent recognition of the current energy
environment, including a specific allocation to a previously
classified energy loan that was placed on nonaccrual in first
quarter 2015.
- The allowance for loan losses was $20.2 million, or 0.61% of
total loans, at March 31, 2015, compared to $14.8 million, or 0.78%
of total loans at March 31, 2014, and compared to $18.6 million, or
0.58% of total loans at December 31, 2014. The decrease in the
allowance ratio to total loans from prior year is due to the
acquired loans in the BOH Holdings and Houston City Bancshares
transactions being recorded at fair value. As noted, loans
acquired in the BOH Holdings and Houston City Bancshares
transactions do not have an allocated allowance for loan losses as
of the date of acquisition. Rather, those loans were initially
recorded at an estimated fair value to reflect the probability of
losses on those loans as of the acquisition date, with adjustments
to the allowance for these loans only related to any subsequent
declining conditions. The slight increase in the allowance to
total loans from the linked quarter is primarily due to a specific
allocation to a previously classified loan in the energy
portfolio.
Income Taxes
- Federal income tax expense of $4.5 million was recorded for the
quarter ended March 31, 2015, an effective rate of 32.4% compared
to tax expense of $2.3 million and an effective rate of 32.8% for
the quarter ended March 31, 2014 and tax expense of $5.4 million
and an effective rate of 34.7% for the quarter ended December 31,
2014. The increase in the historical effective tax rates
during the fourth quarter of 2014 is primarily related to legal and
professional fees associated with facilitating acquisitions that
are not deductible for federal income tax purposes.
First Quarter 2015 Balance Sheet
Highlights:
Loans
- Total loans held for investment were $3.303 billion at March
31, 2015 compared to $3.201 billion at December 31, 2014 and to
$1.893 billion at March 31, 2014. This represented organic
loan growth of $102 million, or a 3.2% increase from December 31,
2014 and a 74.5% increase from March 31, 2014 (approximately 22.7%
of which was organic growth with the remainder coming from
acquisitions). The Company acquired $785 million in loans
during the second quarter 2014 and $195 million in the fourth
quarter related to the BOH Holdings and Houston City Bancshares
acquisitions, respectively.
- Since December 31, 2014, loan growth has been centered in
commercial real estate loans ($105 million), and C&I loans ($25
million).
- The C&I portfolio as of March 31, 2015 was $697.4 million
(21.1% of total loans) versus $672.1 million (21% of total loans)
at December 31, 2014. The energy portfolio was $239.0 million
(7.2% of total loans) at March 31, 2015 made up of 31 credits and
29 relationships. One credit with a balance of $4.3 million,
was classified as of March 31, 2015. Oil field service related
loans, which were obtained through acquisitions, represented an
additional $28.4 million (<1% of loans) at March 31,
2015. All energy related credits are being closely monitored
and the Company is in close contact with energy borrowers to
maintain a real time understanding of these borrowers' financial
condition and ability to positively respond to dynamic market
conditions.
Asset Quality
- Total nonperforming assets increased to $18.2 million, or 0.43%
of total assets at March 31, 2015 from $14.9 million, or 0.36% of
total assets at December 31, 2014 and from $12.0 million, or 0.51%
of total assets at March 31, 2014.
- Total nonperforming loans increased to $13.7 million, or 0.41%
of total loans at March 31, 2015 compared to $10.1 million, or
0.32% of total loans at December 31, 2014 and to $9.1 million, or
0.48% of total loans at March 31, 2014.
- The decrease in both ratios from the prior year is primarily
related to the increased size of the loan portfolio relative to
nonperforming assets. The increase in both ratios from the
linked quarter is related to the previously identified energy loan
that was classified at year end and was placed on nonaccrual status
during the first quarter 2015.
Deposits and Borrowings
- Total deposits were $3.387 billion at March 31, 2015 compared
to $3.250 billion at December 31, 2014 and compared to $1.891
billion at March 31, 2014.
- Noninterest bearing deposits have increased from 18.7% of total
deposits at March 31, 2014 to 23.8% at March 31, 2015.
- The average cost of interest bearing deposits decreased to
0.45% for the first quarter 2015 compared to 0.51% for the first
quarter 2014 and remained stable from the fourth quarter 2014.
- Total borrowings (other than junior subordinated debentures)
were $297.3 million at March 31, 2015, a decrease of $8.9 million
from December 31, 2014 and an increase of $110.5 million from March
31, 2014. The decrease from the linked quarter is primarily
related to maturities of longer term, higher rate FHLB
advances. The majority of the increase from the same quarter
in 2014 reflects FHLB advances assumed in the BOH Holdings
transaction as well as the issuance of $65 million in subordinated
debt in July 2014.
Capital
- The tangible common equity to tangible assets and the Tier 1
capital to average assets ratios were 7.10% and 7.78%,
respectively, at March 31, 2015 compared to 7.07% and 8.15%,
respectively, at December 31, 2014 and 8.93% and 9.77%,
respectively, at March 31, 2014. The total stockholders' equity to
total assets ratio was 12.93%, 13.09% and 10.73% at March 31, 2015,
December 31, 2014 and March 31, 2014, respectively.
- Total capital to risk weighted assets decreased to 11.51% at
March 31, 2015 compared to 12.59% at December 31, 2014 and 13.08%
at March 31, 2014 due to organic growth and growth through the
acquisitions completed during 2014. The decrease in the March
31, 2015 ratio was also affected by increased risk weightings on
unfunded loan commitments due to changes in regulatory requirements
under the new Basel III capital rules.
- Book value and tangible book value per common share were $30.77
and $16.65, respectively, at March 31, 2015 compared to $30.35 and
$16.15, respectively, at December 31, 2014 and $20.05 and $16.37,
respectively, at March 31, 2014.
- Return on tangible equity (on an annualized basis) was 13.64%
for the first quarter 2015 compared to 9.84% and 14.08% for the
first quarter 2014 and fourth quarter 2014,
respectively. These returns are impacted by stock issued in
the acquisitions.
- Return on average assets and return on average equity (on an
annualized basis) were 0.92% and 7.31%, respectively, for first
quarter 2015 compared to 0.84% and 7.90%, respectively, for first
quarter 2014 and 0.97% and 7.65%, respectively, for fourth quarter
2014.
About Independent Bank Group
Independent Bank Group, through its wholly owned subsidiary,
Independent Bank, provides a wide range of relationship-driven
commercial banking products and services tailored to meet the needs
of businesses, professionals and individuals. Independent Bank
Group operates 40 banking offices in three market regions located
in the Dallas/Fort Worth, Austin and Houston, Texas areas.
Conference Call
A conference call covering Independent Bank Group's first
quarter earnings announcement will be held tomorrow, Tuesday, April
28, at 8:30 a.m. (EDT) and can be accessed by calling
1-877-303-7611 and by identifying the conference ID number
21885404. A recording of the conference call will be available
from April 28 2015 through May 5, 2015 by accessing our website,
www.ibtx.com.
Forward-Looking Statements
The numbers as of and for the quarter ended March 31, 2015 are
unaudited. From time to time, our comments and releases may
contain "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Act").
Forward-looking statements can be identified by words such as
"believes," "anticipates," "expects," "forecast," "guidance,"
"intends," "targeted," "continue," "remain," "should," "may,"
"plans," "estimates," "will," "will continue," "will remain,"
variations on such words or phrases, or similar references to
future occurrences or events in future periods; however, such words
are not the exclusive means of identifying such statements.
Examples of forward-looking statements include, but are not limited
to: (i) projections of revenues, expenses, income or loss, earnings
or loss per share, and other financial items; (ii) statements of
plans, objectives, and expectations of Independent Bank Group or
its management or Board of Directors; (iii) statements of future
economic performance; and (iv) statements of assumptions underlying
such statements. Forward-looking statements are based on
Independent Bank Group's current expectations and assumptions
regarding its business, the economy, and other future conditions.
Because forward-looking statements relate to the future, they are
subject to inherent uncertainties, risks, and changes in
circumstances that are difficult to predict. Independent Bank
Group's actual results may differ materially from those
contemplated by the forward-looking statements, which are neither
statements of historical fact nor guarantees or assurances of
future performance. Factors that could cause actual results to
differ from those discussed in the forward-looking statements
include, but are not limited to: (1) local, regional, national, and
international economic conditions and the impact they may have on
us and our customers and our assessment of that impact; (2)
volatility and disruption in national and international financial
markets; (3) government intervention in the U.S. financial system,
whether through changes in the discount rate or money supply or
otherwise; (4) changes in the level of non-performing assets and
charge-offs; (5) changes in estimates of future reserve
requirements based upon the periodic review thereof under relevant
regulatory and accounting requirements; (6) adverse conditions in
the securities markets that lead to impairment in the value of
securities in our investment portfolio; (7) inflation, deflation,
changes in market interest rates, developments in the securities
market, and monetary fluctuations; (8) the timely development and
acceptance of new products and services and perceived overall value
of these products and services by customers; (9) changes in
consumer spending, borrowings, and savings habits; (10)
technological changes; (11) the ability to increase market share
and control expenses; (12) changes in the competitive environment
among banks, bank holding companies, and other financial service
providers; (13) the effect of changes in laws and regulations
(including laws and regulations concerning taxes, banking,
securities, and insurance) with which we and our subsidiaries must
comply; (14) the effect of changes in accounting policies and
practices, as may be adopted by the regulatory agencies, as well as
the Public Company Accounting Oversight Board, the Financial
Accounting Standards Board, and other accounting standard setters;
(15) the costs and effects of legal and regulatory developments
including the resolution of legal proceedings; and (16) our success
at managing the risks involved in the foregoing items and (17) the
other factors that are described in the Company's Annual Report on
Form 10-K filed on February 27, 2015 under the heading "Risk
Factors" and other reports and statements filed by the Company with
the SEC. Any forward-looking statement made by the Company in this
release speaks only as of the date on which it is made. Factors or
events that could cause the Company's actual results to differ may
emerge from time to time, and it is not possible for the Company to
predict all of them. The Company undertakes no obligation to
publicly update any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as may
be required by law.
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this
press release contains certain non-GAAP financial measures. These
measures and ratios include "core earnings", "tangible book value",
"tangible book value per common share", "core efficiency ratio",
"Tier 1 capital to average assets", "Tier 1 capital to risk
weighted assets", "tangible common equity to tangible assets", "net
interest margin excluding purchase accounting accretion", "return
on tangible equity", "adjusted return on average assets" and
"adjusted return on average equity" and are supplemental measures
that are not required by, or are not presented in accordance with,
accounting principles generally accepted in the United States. We
consider the use of select non-GAAP financial measures and ratios
to be useful for financial operational decision making and useful
in evaluating period-to-period comparisons. We believe that these
non-GAAP financial measures provide meaningful supplemental
information regarding our performance by excluding certain
expenditures or assets that we believe are not indicative of our
primary business operating results. We believe that management and
investors benefit from referring to these non-GAAP financial
measures in assessing our performance and when planning,
forecasting, analyzing and comparing past, present and future
periods.
We believe that these measures provide useful information to
management and investors that is supplementary to our financial
condition, results of operations and cash flows computed in
accordance with GAAP; however we acknowledge that our non‑GAAP
financial measures have a number of limitations relative to GAAP
financial measures. Certain non-GAAP financial measures exclude
items of income, expenditures, expenses, assets, or liabilities,
including provisions for loan losses and the effect of goodwill,
core deposit intangibles and income from accretion on acquired
loans arising from purchase accounting adjustments, that we believe
cause certain aspects of our results of operations or financial
condition to be not indicative of our primary operating results.
All of these items significantly impact our financial statements.
Additionally, the items that we exclude in our adjustments are not
necessarily consistent with the items that our peers may exclude
from their results of operations and key financial measures and
therefore may limit the comparability of similarly named financial
measures and ratios. We compensate for these limitations by
providing the equivalent GAAP measures whenever we present the
non-GAAP financial measures and by including a reconciliation of
the impact of the components adjusted for in the non-GAAP financial
measure so that both measures and the individual components may be
considered when analyzing our performance.
A reconciliation of our non-GAAP financial measures to the
comparable GAAP financial measures is included at the end of the
financial statements tables.
Independent Bank Group, Inc. and
Subsidiaries |
Consolidated Financial Data |
Three Months Ended March 31,
2015, December 31, 2014, September 30, 2014, June 30, 2014 and
March 31, 2014 |
(Dollars in thousands, except for
share data) |
(Unaudited) |
|
|
|
As of and for the quarter
ended |
|
March 31, 2015 |
December 31, 2014 |
September 30, 2014 |
June 30, 2014 |
March 31, 2014 |
Selected Income Statement
Data |
|
|
|
|
|
Interest income |
$40,736 |
$42,952 |
$36,940 |
$35,078 |
$25,162 |
Interest expense |
4,658 |
4,777 |
4,509 |
3,674 |
3,027 |
Net interest income |
36,078 |
38,175 |
32,431 |
31,404 |
22,135 |
Provision for loan losses |
1,670 |
1,751 |
976 |
1,379 |
1,253 |
Net interest income after
provision for loan losses |
34,408 |
36,424 |
31,455 |
30,025 |
20,882 |
Noninterest income |
3,966 |
3,961 |
4,210 |
3,119 |
2,334 |
Noninterest expense |
24,386 |
24,931 |
22,162 |
25,343 |
16,076 |
Income tax expense |
4,536 |
5,356 |
4,543 |
2,682 |
2,339 |
Net income |
9,452 |
10,098 |
8,960 |
5,119 |
4,801 |
Preferred stock dividends |
60 |
60 |
60 |
49 |
— |
Net income available to common
shareholders |
9,392 |
10,038 |
8,900 |
5,070 |
4,801 |
Core net interest income (1) |
35,965 |
37,187 |
32,259 |
30,967 |
21,772 |
Core Pre-Tax Pre-Provision Earnings (1) |
16,810 |
18,003 |
15,266 |
14,683 |
8,652 |
Core Earnings (1) |
10,230 |
10,889 |
9,546 |
9,020 |
4,972 |
|
|
|
|
|
|
Per Share Data (Common
Stock) |
|
|
|
|
|
Earnings: |
|
|
|
|
|
Basic |
$0.55 |
$0.59 |
$0.54 |
$0.32 |
$0.38 |
Diluted |
0.55 |
0.59 |
0.54 |
0.32 |
0.38 |
Core earnings: |
|
|
|
|
|
Basic (1) |
0.60 |
0.64 |
0.58 |
0.57 |
0.40 |
Diluted (1) |
0.60 |
0.64 |
0.58 |
0.57 |
0.39 |
Dividends |
0.08 |
0.06 |
0.06 |
0.06 |
0.06 |
Book value |
30.77 |
30.35 |
29.10 |
28.54 |
20.05 |
Tangible book value (1) |
16.65 |
16.15 |
15.78 |
15.22 |
16.37 |
Common shares outstanding |
17,119,793 |
17,032,669 |
16,370,313 |
16,370,707 |
12,592,935 |
Weighted average basic shares outstanding
(4) |
17,091,663 |
17,032,452 |
16,370,506 |
15,788,927 |
12,583,874 |
Weighted average diluted shares outstanding
(4) |
17,169,596 |
17,123,423 |
16,469,231 |
15,890,310 |
12,685,517 |
|
|
|
|
|
|
Selected Period End Balance Sheet
Data |
|
|
|
|
|
Total assets |
$4,258,364 |
$4,132,639 |
$3,746,682 |
$3,654,311 |
$2,353,675 |
Cash and cash equivalents |
358,798 |
324,047 |
249,769 |
192,528 |
97,715 |
Securities available for sale |
198,149 |
206,062 |
235,844 |
249,856 |
204,539 |
Loans, held for sale |
7,034 |
4,453 |
1,811 |
5,500 |
2,191 |
Loans, held for investment |
3,303,248 |
3,201,084 |
2,890,924 |
2,844,543 |
1,893,082 |
Allowance for loan losses |
20,227 |
18,552 |
16,840 |
16,219 |
14,841 |
Goodwill and core deposit intangible |
241,722 |
241,912 |
218,025 |
217,954 |
46,388 |
Other real estate owned |
4,587 |
4,763 |
4,084 |
3,788 |
2,909 |
Noninterest-bearing deposits |
806,912 |
818,022 |
715,843 |
711,475 |
352,735 |
Interest-bearing deposits |
2,579,766 |
2,431,576 |
2,097,817 |
2,141,943 |
1,537,942 |
Borrowings (other than junior subordinated
debentures) |
297,274 |
306,147 |
402,389 |
281,105 |
186,727 |
Junior subordinated debentures |
18,147 |
18,147 |
18,147 |
18,147 |
18,147 |
Series A Preferred Stock |
23,938 |
23,938 |
23,938 |
23,938 |
— |
Total stockholders' equity |
550,728 |
540,851 |
500,311 |
491,091 |
252,508 |
Independent Bank Group, Inc. and
Subsidiaries |
Consolidated Financial Data |
Three Months Ended March 31,
2015, December 31, 2014, September 30, 2014, June 30, 2014 and
March 31, 2014 |
(Dollars in thousands, except for
share data) |
(Unaudited) |
|
|
|
As of and for the quarter
ended |
|
March 31, 2015 |
December 31, 2014 |
September 30, 2014 |
June 30, 2014 |
March 31, 2014 |
Selected Performance
Metrics |
|
|
|
|
|
Return on average assets |
0.92% |
0.97% |
0.95% |
0.60% |
0.84% |
Return on average equity (2) |
7.31 |
7.65 |
7.60 |
4.68 |
7.90 |
Return on tangible equity (2) (6) |
13.64 |
14.08 |
14.32 |
8.27 |
9.84 |
Adjusted return on average assets (1) |
1.00 |
1.05 |
1.02 |
1.06 |
0.87 |
Adjusted return on average equity (1)
(2) |
7.96 |
8.30 |
8.15 |
8.25 |
8.18 |
Adjusted return on tangible equity (1) (2)
(6) |
14.86 |
15.27 |
15.36 |
14.72 |
10.19 |
Net interest margin |
4.07 |
4.28 |
4.04 |
4.26 |
4.17 |
Adjusted net interest margin (3) |
4.05 |
4.17 |
4.02 |
4.20 |
4.10 |
Efficiency ratio |
60.90 |
59.17 |
60.48 |
73.41 |
65.70 |
Core efficiency ratio (1) |
57.76 |
55.85 |
56.87 |
56.92 |
64.05 |
|
|
|
|
|
|
Credit Quality Ratios |
|
|
|
|
|
Nonperforming assets to total assets |
0.43% |
0.36% |
0.33% |
0.35% |
0.51% |
Nonperforming loans to total loans |
0.41 |
0.32 |
0.29 |
0.32 |
0.48 |
Nonperforming assets to total loans and other
real estate |
0.55 |
0.46 |
0.43 |
0.45 |
0.63 |
Allowance for loan losses to non-performing
loans |
148.06 |
183.43 |
200.83 |
177.86 |
162.96 |
Allowance for loan losses to total loans |
0.61 |
0.58 |
0.58 |
0.57 |
0.78 |
Net charge-offs to average loans outstanding
(annualized) |
— |
0.01 |
0.05 |
— |
0.08 |
|
|
|
|
|
|
Capital Ratios |
|
|
|
|
|
Common equity tier 1 capital to risk-weighted
assets (5) |
8.35% |
n/a |
n/a |
n/a |
n/a |
Tier 1 capital to average assets |
7.78 |
8.15% |
8.50% |
9.07% |
9.77% |
Tier 1 capital to risk-weighted assets (1)
(5) |
9.02 |
9.83 |
10.34 |
10.21 |
11.96 |
Total capital to risk-weighted assets
(5) |
11.51 |
12.59 |
13.36 |
11.00 |
13.08 |
Total stockholders' equity to total
assets |
12.93 |
13.09 |
13.35 |
13.44 |
10.73 |
Tangible common equity to tangible assets
(1) |
7.10 |
7.07 |
7.32 |
7.25 |
8.93 |
|
|
|
|
|
|
(1) Non-GAAP financial
measures. See reconciliation. |
(2) Excludes average balance of
Series A preferred stock. |
(3) Excludes income recognized on
acquired loans of $113, $988, $172, $437 and $363,
respectively. |
(4) Total number of shares
includes participating shares (those with dividend rights). |
(5) March 31, 2015 ratios
calculated under Basel III rules, which became effective January 1,
2015. |
(6) Excludes average
balance of goodwill and net core deposit intangibles. |
Independent Bank Group, Inc. and
Subsidiaries |
Consolidated Statements of
Income |
Three Months Ended March 31, 2015
and 2014 |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
Three Months
Ended March 31, |
|
2015 |
2014 |
Interest income: |
|
|
Interest and fees on loans |
$39,580 |
$24,123 |
Interest on taxable
securities |
609 |
699 |
Interest on nontaxable
securities |
414 |
257 |
Interest on federal funds sold
and other |
133 |
83 |
Total interest income |
40,736 |
25,162 |
Interest expense: |
|
|
Interest on deposits |
2,709 |
1,907 |
Interest on FHLB advances |
752 |
852 |
Interest on repurchase
agreements and other borrowings |
1,069 |
135 |
Interest on junior subordinated
debentures |
128 |
133 |
Total interest expense |
4,658 |
3,027 |
Net interest income |
36,078 |
22,135 |
Provision for loan losses |
1,670 |
1,253 |
Net interest income after provision
for loan losses |
34,408 |
20,882 |
Noninterest income: |
|
|
Service charges on deposit
accounts |
1,805 |
1,211 |
Mortgage fee income |
1,300 |
730 |
Gain on sale of other real
estate |
130 |
39 |
Increase in cash surrender
value of BOLI |
270 |
149 |
Other |
461 |
205 |
Total noninterest
income |
3,966 |
2,334 |
Noninterest expense: |
|
|
Salaries and employee
benefits |
14,424 |
9,134 |
Occupancy |
3,910 |
2,538 |
Data processing |
688 |
496 |
FDIC assessment |
519 |
304 |
Advertising and public
relations |
346 |
234 |
Communications |
539 |
320 |
Net other real estate owned
expenses (including taxes) |
59 |
79 |
Operations of IBG Adriatica,
net |
— |
23 |
Core deposit intangible
amortization |
372 |
199 |
Professional fees |
490 |
368 |
Acquisition expense, including
legal |
472 |
476 |
Other |
2,567 |
1,905 |
Total noninterest
expense |
24,386 |
16,076 |
Income before taxes |
13,988 |
7,140 |
Income tax expense |
4,536 |
2,339 |
Net income |
$9,452 |
$4,801 |
Consolidated Balance Sheets |
As of March 31, 2015 and December
31, 2014 |
(Dollars in thousands, except
share information) |
(Unaudited) |
|
|
|
|
March 31, |
December 31, |
Assets |
2015 |
2014 |
Cash and due from banks |
$136,525 |
$153,158 |
Interest-bearing deposits in other banks |
222,273 |
170,889 |
Cash and cash
equivalents |
358,798 |
324,047 |
Securities available for sale |
198,149 |
206,062 |
Loans held for sale |
7,034 |
4,453 |
Loans, net of allowance for loan losses |
3,283,021 |
3,182,045 |
Premises and equipment, net |
88,163 |
88,902 |
Other real estate owned |
4,587 |
4,763 |
Federal Home Loan Bank (FHLB) of Dallas stock
and other restricted stock |
12,333 |
12,321 |
Bank-owned life insurance (BOLI) |
40,054 |
39,784 |
Deferred tax asset |
2,351 |
2,235 |
Goodwill |
229,639 |
229,457 |
Core deposit intangible, net |
12,083 |
12,455 |
Other assets |
22,152 |
26,115 |
Total
assets |
$4,258,364 |
$4,132,639 |
|
|
|
Liabilities and Stockholders' Equity |
Deposits: |
|
|
Noninterest-bearing |
806,912 |
818,022 |
Interest-bearing |
2,579,766 |
2,431,576 |
Total
deposits |
3,386,678 |
3,249,598 |
FHLB advances |
219,386 |
229,405 |
Repurchase agreements |
5,783 |
4,012 |
Other borrowings |
68,785 |
69,410 |
Other borrowings, related parties |
3,320 |
3,320 |
Junior subordinated debentures |
18,147 |
18,147 |
Other liabilities |
5,537 |
17,896 |
Total
liabilities |
3,707,636 |
3,591,788 |
Commitments and contingencies |
|
|
Stockholders' equity: |
|
|
Series A Preferred Stock |
23,938 |
23,938 |
Common stock |
171 |
170 |
Additional paid-in capital |
477,564 |
476,609 |
Retained earnings |
45,754 |
37,731 |
Accumulated other comprehensive
income |
3,301 |
2,403 |
Total stockholders'
equity |
550,728 |
540,851 |
Total
liabilities and stockholders' equity |
$4,258,364 |
$4,132,639 |
Independent Bank Group, Inc. and
Subsidiaries |
Consolidated Average Balance
Sheet Amounts, Interest Earned and Yield Analysis |
Three Months Ended March 31, 2015
and 2014 |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
The analysis below shows average
interest earning assets and interest bearing liabilities together
with the average yield on the interest earning assets and the
average cost of the interest bearing liabilities for the periods
presented. |
|
|
|
|
|
|
|
|
For The Three
Months Ended March 31, |
|
2015 |
2014 |
|
Average
Outstanding Balance |
Interest |
Yield/
Rate |
Average
Outstanding Balance |
Interest |
Yield/
Rate |
Interest-earning
assets: |
|
|
|
|
|
|
Loans |
$3,254,038 |
$39,580 |
4.93% |
$1,835,154 |
$24,123 |
5.33% |
Taxable securities |
134,015 |
609 |
1.84 |
174,880 |
699 |
1.62 |
Nontaxable securities |
69,245 |
414 |
2.42 |
32,282 |
257 |
3.23 |
Federal funds sold and
other |
141,968 |
133 |
0.38 |
108,676 |
83 |
0.31 |
Total interest-earning
assets |
3,599,266 |
$40,736 |
4.59 |
2,150,992 |
$25,162 |
4.74 |
Noninterest-earning assets |
554,741 |
|
|
179,940 |
|
|
Total
assets |
$4,154,007 |
|
|
$2,330,932 |
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
Checking accounts |
$1,267,242 |
$1,358 |
0.43% |
$814,583 |
$998 |
0.50% |
Savings accounts |
143,754 |
65 |
0.18 |
122,038 |
88 |
0.29 |
Money market accounts |
236,589 |
100 |
0.17 |
91,836 |
56 |
0.25 |
Certificates of deposit |
818,773 |
1,186 |
0.59 |
487,408 |
765 |
0.64 |
Total
deposits |
2,466,358 |
2,709 |
0.45 |
1,515,865 |
1,907 |
0.51 |
FHLB advances |
219,842 |
752 |
1.39 |
178,375 |
852 |
1.94 |
Repurchase agreements and other
borrowings |
76,951 |
1,069 |
5.63 |
11,773 |
135 |
4.65 |
Junior subordinated
debentures |
18,147 |
128 |
2.86 |
18,147 |
133 |
2.97 |
Total interest-bearing
liabilities |
2,781,298 |
4,658 |
0.68 |
1,724,160 |
3,027 |
0.71 |
Noninterest-bearing checking
accounts |
819,330 |
|
|
350,136 |
|
|
Noninterest-bearing
liabilities |
8,542 |
|
|
10,229 |
|
|
Stockholders' equity |
544,837 |
|
|
246,407 |
|
|
Total liabilities and
equity |
$4,154,007 |
|
|
$2,330,932 |
|
|
Net interest income |
|
$36,078 |
|
|
$22,135 |
|
Interest rate spread |
|
|
3.91% |
|
|
4.03% |
Net interest margin |
|
|
4.07 |
|
|
4.17 |
Average interest earning assets to
interest bearing liabilities |
|
|
129.41 |
|
|
124.76 |
Independent Bank Group, Inc. and
Subsidiaries |
Loan Portfolio Composition |
As of March 31, 2015 and December
31, 2014 |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
The following table sets forth
loan totals by category as of the dates presented: |
|
|
|
|
|
|
March 31,
2015 |
December 31,
2014 |
|
Amount |
% of Total |
Amount |
% of Total |
Commercial |
$697,449 |
21.1% |
$672,052 |
21.0% |
Real estate: |
|
|
|
|
Commercial real estate |
1,555,462 |
47.0 |
1,450,434 |
45.2 |
Commercial construction, land
and land development |
301,944 |
9.1 |
334,964 |
10.5 |
Residential real estate
(1) |
522,750 |
15.8 |
518,478 |
16.2 |
Single-family interim
construction |
148,202 |
4.5 |
138,278 |
4.3 |
Agricultural |
37,650 |
1.1 |
38,822 |
1.2 |
Consumer |
47,387 |
1.4 |
52,267 |
1.6 |
Other |
139 |
— |
242 |
— |
Total loans |
3,310,983 |
100.0% |
3,205,537 |
100.0% |
Deferred loan fees |
(701) |
|
(487) |
|
Allowance for losses |
(20,227) |
|
(18,552) |
|
Total loans, net |
$3,290,055 |
|
$3,186,498 |
|
|
|
|
|
|
(1) Includes loans held for sale
at March 31, 2015 and December 31, 2014 of $7,034 and $4,453,
respectively. |
Independent Bank Group, Inc. and
Subsidiaries |
Reconciliation of Non-GAAP
Financial Measures |
Three Months Ended March 31,
2015, December 31, 2014, September 30, 2014, June 30, 2014 and
March 31, 2014 |
(Dollars in thousands, except for
share data) |
(Unaudited) |
|
|
|
|
|
For the Three Months
Ended |
|
|
March 31, 2015 |
December 31, 2014 |
September 30, 2014 |
June 30, 2014 |
March 31, 2014 |
Net Interest Income -
Reported |
(a) |
$36,078 |
$38,175 |
$32,431 |
$31,404 |
$22,135 |
Income recognized on acquired loans |
|
(113) |
(988) |
(172) |
(437) |
(363) |
Adjusted Net Interest
Income |
(b) |
35,965 |
37,187 |
32,259 |
30,967 |
21,772 |
Provision Expense -
Reported |
(c) |
1,670 |
1,751 |
976 |
1,379 |
1,253 |
Noninterest Income -
Reported |
(d) |
3,966 |
3,961 |
4,210 |
3,119 |
2,334 |
Gain on sale of loans |
|
— |
— |
(1,078) |
— |
— |
Gain on sale of OREO |
|
(130) |
(12) |
(20) |
— |
(39) |
Gain on sale of securities |
|
— |
(362) |
— |
— |
— |
Loss on sale of premises and equipment |
|
— |
— |
22 |
— |
— |
Adjusted Noninterest
Income |
(e) |
3,836 |
3,587 |
3,134 |
3,119 |
2,295 |
Noninterest Expense -
Reported |
(f) |
24,386 |
24,931 |
22,162 |
25,343 |
16,076 |
Adriatica Expenses |
|
— |
— |
— |
— |
(23) |
OREO Impairment |
|
— |
— |
(22) |
— |
— |
IPO related stock grant and bonus
expense |
|
(156) |
(156) |
(156) |
(156) |
(162) |
Registration statements |
|
— |
(163) |
(456) |
— |
— |
Core system conversion implementation
expenses |
|
— |
— |
— |
(265) |
— |
Acquisition Expense (5) |
|
(1,239) |
(1,841) |
(1,401) |
(5,519) |
(476) |
Adjusted Noninterest
Expense |
(g) |
22,991 |
22,771 |
20,127 |
19,403 |
15,415 |
Pre-Tax Pre-Provision
Earnings |
(a) + (d) - (f) |
$15,658 |
$17,205 |
$14,479 |
$9,180 |
$8,393 |
Core Pre-Tax Pre-Provision
Earnings |
(b) + (e) - (g) |
$16,810 |
$18,003 |
$15,266 |
$14,683 |
$8,652 |
Core Earnings (2) |
(b) - (c) + (e) - (g) |
$10,230 |
$10,889 |
$9,546 |
$9,020 |
$4,972 |
Reported Efficiency
Ratio |
(f) / (a + d) |
60.90% |
59.17% |
60.48% |
73.41% |
65.70% |
Core Efficiency Ratio |
(g) / (b + e) |
57.76% |
55.85% |
56.87% |
56.92% |
64.05% |
Adjusted Return on Average Assets
(1) |
|
1.00% |
1.05% |
1.02% |
1.06% |
0.87% |
Adjusted Return on Average Equity
(1) |
|
7.96% |
8.30% |
8.15% |
8.25% |
8.18% |
Adjusted Return on Tangible Equity
(1) |
|
14.86% |
15.27% |
15.36% |
14.72% |
10.19% |
Total Average Assets |
|
$4,154,007 |
$4,098,671 |
$3,721,323 |
$3,403,619 |
$2,330,932 |
Total Average Stockholders' Equity (3) |
|
$520,899 |
$520,800 |
$464,528 |
$438,713 |
$246,407 |
Total Average Tangible Stockholders' Equity
(3) (4) |
|
$279,149 |
$282,907 |
$246,500 |
$245,830 |
$197,899 |
|
(1) Calculated using core
earnings |
(2) Assumes actual
effective tax rate of 32.4%, 33.0%, 33.2%, 32.2% and 32.8%,
respectively. March 31, 2015, December 31, 2014, September 30,
2014, June 30, 2014 and March 31, 2014 tax rate adjusted for effect
of non-deductible acquisition expenses. |
(3) Excludes average balance
of Series A preferred stock. |
(4) Excludes average balance
of goodwill and net core deposit intangibles. |
(5) Acquisition expenses
include $767 thousand, $843 thousand, $772 thousand, $3.996 million
and $0 of compensation and bonus expenses in addition to $472
thousand, $998 thousand, $629 thousand, $1.523 million and $476
thousand of merger-related expenses for the quarters ended March
31, 2015, December 31, 2014, September 30, 2014, June 30, 2014 and
March 31, 2014, respectively. |
|
Independent Bank Group, Inc. and
Subsidiaries |
Reconciliation of Non-GAAP
Financial Measures |
As of March 31, 2015 and December
31, 2014 |
(Dollars in thousands, except per
share information) |
(Unaudited) |
|
|
|
Tangible Book Value Per Common
Share |
|
|
|
March 31, |
December 31, |
|
2015 |
2014 |
Tangible Common Equity |
|
|
Total common stockholders' equity |
$526,790 |
$516,913 |
Adjustments: |
|
|
Goodwill |
(229,639) |
(229,457) |
Core deposit intangibles, net |
(12,083) |
(12,455) |
Tangible common equity |
$285,068 |
$275,001 |
Tangible assets |
$4,016,642 |
$3,890,727 |
Common shares outstanding |
17,119,793 |
17,032,669 |
Tangible common equity to tangible
assets |
7.10% |
7.07% |
Book value per common share |
$30.77 |
$30.35 |
Tangible book value per common share |
16.65 |
16.15 |
|
|
|
Tier 1 Capital to Risk-Weighted
Assets Ratio |
|
|
|
March 31, |
December 31, |
|
2015 |
2014 |
Tier 1 Common Equity |
|
|
Total common stockholders' equity - GAAP |
$526,790 |
$516,913 |
Adjustments: |
|
|
Unrealized gain on available-for-sale
securities |
(3,301) |
(2,403) |
Goodwill |
(229,639) |
(229,457) |
Core deposit intangibles, net |
(12,083) |
(12,455) |
Qualifying Restricted Core Capital Elements
(junior subordinated debentures) |
17,600 |
17,600 |
Tier 1 common equity |
$299,367 |
$290,198 |
Preferred Stock |
23,938 |
23,938 |
Tier 1 Equity |
$323,305 |
$314,136 |
Total Risk-Weighted
Assets |
|
|
On balance sheet |
$3,291,476 |
$3,059,172 |
Off balance sheet |
294,601 |
136,241 |
Total risk-weighted
assets |
$3,586,077 |
$3,195,413 |
Total common stockholders' equity to
risk-weighted assets ratio |
14.69% |
16.18% |
Tier 1 equity to risk-weighted assets
ratio |
9.02 |
9.83 |
Tier 1 common equity to risk-weighted assets
ratio |
8.35 |
9.08 |
CONTACT: Analysts/Investors:
Torry Berntsen
President and Chief Operating Officer
(972) 562-9004
tberntsen@ibtx.com
Michelle Hickox
Executive Vice President and Chief Financial Officer
(972) 562-9004
mhickox@ibtx.com
Media:
Robb Temple
Executive Vice President and Chief Administrative Officer
(972) 562-9004
rtemple@ibtx.com
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