Independent Bank Group, Inc. (NASDAQ:IBTX), the holding company for
Independent Bank, today announced net income available to common
shareholders of $8.1 million, or $0.47 per diluted share, for the
quarter ended September 30, 2015 compared to $8.9 million, or $0.54
per diluted share, for the quarter ended September 30, 2014 and
$10.5 million, or $0.61 per diluted share, for the quarter ended
June 30, 2015.
Highlights
- Return to historically strong organic loan growth with loans
increasing 18.1% on an annualized basis for the quarter and 13.7%
year to date.
- Core earnings were $8.9 million, or $0.52 per diluted share,
for the quarter ended September 30, 2015 compared to $9.5 million,
or $0.58 per diluted share, for the quarter ended September 30,
2014 and to $10.5 million, or $0.61 per diluted share, for the
quarter ended June 30, 2015.
- Prudent additional provision for loan loss further mitigating
potential risk related to continued lower energy pricing.
- Asset quality remains strong, as reflected by a nonperforming
assets to total assets ratio of 0.34% and a nonperforming loans to
total loans ratio of 0.33% at September 30, 2015. Net charge offs
were 0.07% annualized for the quarter.
- Prompt regulatory approval and integration progress on the
Grand Bank transaction enabling an expected November 1, 2015
closing.
Independent Bank Group Chairman and Chief Executive Officer,
David Brooks said, "This was a transitional quarter for our
Company. The strong organic loan growth reflects a return to our
historical levels and we expect the momentum seen at the end of the
quarter to continue. We also made a decision during the
quarter to take an additional provision for loan loss to minimize
uncertainty in our energy portfolio. The increase in the
reserve positions us well should oil prices stay low for an
extended period. We remain confident in our overall asset quality
and are taking the additional provision as a conservative approach
given challenges in the energy markets." Brooks continued, "We are
especially pleased with the progress made on the Grand Bank
transaction, and the earlier than anticipated closing will enable
us to begin to recognize the benefits of the acquisition in the
fourth quarter. We believe that all of these actions are positive
for the future."
Third Quarter 2015 Operating Results
Net Interest Income
- Net interest income was $38.1 million for third quarter 2015
compared to $32.4 million for third quarter 2014 and $37.8 million
for second quarter 2015. 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 Houston City Bancshares acquisition in October
2014. The increase from the linked quarter is primarily due to
higher average loan balances offset by a decrease in accretion
income compared to the second quarter.
- The net interest margin was 4.08% for third quarter 2015
compared to 4.04% for third quarter 2014 and 4.10% for second
quarter 2015. The increase from the prior year is due to a
change in the earning asset mix as well as a small decrease in
liability cost. The slight decrease from the linked quarter is
primarily due to decreased accretion income from acquired loans
(five basis points).
- The yield on interest-earning assets was 4.62% for the third
quarter 2015 compared to 4.60% for third quarter 2014 and 4.64% for
the second quarter 2015. The increase from the prior year is
primarily as a result of a change in mix of assets from securities
to loans. The decrease from the linked quarter is related
primarily to the decrease in acquired loan accretion income.
- The cost of interest bearing liabilities, including borrowings,
was 0.70% for third quarter 2015 compared to 0.73% for third
quarter 2014 and 0.69% for second quarter 2015. The decrease
from the prior year is due to lower rates on deposit accounts and
lower interest expense resulting from the retirement of higher rate
debentures during 2015. The increase from the linked quarter is due
to a slight increase in the rates paid on deposits.
- The average balance of total interest-earning assets grew by
$518.9 million and totaled $3.706 billion compared to $3.187
billion at September 30, 2014 and grew by $11 million compared to
$3.695 billion at June 30, 2015. This increase from third
quarter 2014 is due to organic loan growth and the Houston City
Bancshares transaction completed October 1, 2014.
Noninterest Income
- Total noninterest income decreased $411 thousand compared to
third quarter 2014 and decreased $310 thousand compared to second
quarter 2015.
- The decrease from the prior year reflects a $962 thousand
decrease in gain on sales of loans and an increase of $352 in loss
on sale of premises and equipment. Offsetting these decreases
was a $624 thousand increase in deposit service charges and a $273
thousand increase in mortgage fee income.
- The decrease from second quarter 2015 relates to a $76 thousand
decrease in mortgage fee income, a $135 thousand decrease in other
noninterest income, an increase of $374 thousand in loss on sale of
premises and equipment, and a decrease of $90 thousand in gain on
sale of securities. These decreases were offset by an increase
of $257 thousand in deposit service charges and a gain on sale of
loans of $116 thousand.
Noninterest Expense
- Total noninterest expense increased $3.7 million compared to
third quarter 2014 and increased $1.4 million compared to second
quarter 2015.
- The increase in noninterest expense compared to third quarter
2014 is due primarily to an increase of $2.4 million in salaries
and benefits expense, an increase of $682 thousand in occupancy
expense, an increase of $314 thousand in data processing
expense, an increase of $115 thousand in FDIC assessment
expense, an increase of $109 thousand in advertising and
public relations expense and an increase of $396 thousand in other
noninterest expense offset by a decrease of $336 thousand in
acquisition expenses. These increases in the noninterest
expenses relate primarily to the Houston City Bancshares
acquisition completed in October 2014.
- The increase from the linked quarter is primarily related to
increases of $268 thousand in salaries and benefits, $90 thousand
in occupancy expenses, $120 thousand in data processing expenses,
$164 thousand in legal and professional fees, $265 thousand in
acquisition expenses and $332 thousand in other noninterest
expense, including increased costs related to monitoring our energy
portfolio. Compensation expense increases are due to accruals
for incentive compensation related to strong loan growth and
mortgage activity for the quarter. Acquisition expense
increased due to the Grand Bank transaction. Legal fees were
higher due to increased activity on existing litigation. In
addition, certain occupancy and noninterest expenses were elevated
in the third quarter due to timing of certain projects.
Provision for Loan Losses
- Provision for loan loss expense was $3.9 million for the third
quarter 2015, an increase of $3.0 million compared to $976 thousand
for third quarter 2014 and an increase of $2.2 million compared to
$1.7 million during second quarter 2015. This provision
expense is directly related to organic loan growth in the
respective period as well as an increase in the allocation for our
energy portfolio, including an additional impairment of $1.2
million on one nonperforming energy loan that was identified in the
first quarter 2015.
- The allowance for loan losses was $25.1 million, or 0.71% of
total loans, at September 30, 2015, compared to $16.8 million, or
0.58% of total loans at September 30, 2014, and compared to $21.8
million, or 0.64% of total loans at June 30, 2015. The increase in
the allowance is due to organic loan growth, specific allocations
on impaired assets, and increased qualitative factors in the
general allocation in recognition of decreases in commodity prices
to serve as a significant additional energy-related
allocation. As of September 30, 2015, the allowance allocated
to energy was 3.4% of the energy loan portfolio balance.
Income Taxes
- Federal income tax expense of $3.9 million was recorded for the
quarter ended September 30, 2015, an effective rate of 32.4%
compared to tax expense of $4.5 million and an effective rate of
33.6% for the quarter ended September 30, 2014 and tax expense of
$5.2 million and an effective rate of 33.0% for the quarter ended
June 30, 2015.
Third Quarter 2015 Balance Sheet
Highlights:
Loans
- Total loans held for investment were $3.529 billion at
September 30, 2015 compared to $3.376 billion at June 30, 2015 and
to $2.891 billion at September 30, 2014. This represented
organic loan growth of $153.7 million, or a 4.6% increase from June
30, 2015 and an 22.1% increase from September 30, 2014
(approximately 15.3% of which was organic growth with the remainder
coming from the Houston City Bancshares acquisition).
- The energy portfolio was $209.6 million (5.9% of total loans)
at September 30, 2015 made up of 27 credits and 26
relationships. This represented a $17 million reduction from
the previous quarter. As of September 30, 2015, there was one
nonperforming classified energy credit with a balance of $4.2
million and two performing classified energy credits with balances
totaling $28.5 million. Oil field service related loans, which
were obtained through acquisitions, represented an additional $23.0
million (<1% of loans) at September 30, 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 changing market conditions.
Asset Quality
- Total nonperforming assets decreased to $15.1 million, or 0.34%
of total assets at September 30, 2015 from $16.3 million, or 0.37%
at June 30, 2015 and increased from $12.5 million, or 0.33% of
total assets at September 30, 2014.
- Total nonperforming loans decreased to $11.7 million, or 0.33%
of total loans at September 30, 2015 compared to $13.3 million, or
0.40% of total loans at June 30, 2015 and increased from $8.4
million, or 0.29% of total loans at September 30, 2014.
- The decrease in nonperforming assets from the linked quarter is
due to the repossession of collateral on a nonaccrual loan and
related chargedown of $485 thousand and disposition of $846
thousand in other real estate properties. The net increase in
nonperforming assets from the prior year is primarily due to the
recognition of a $4.2 million energy loan that was placed on
nonaccrual in the first quarter of 2015 offset by decreases due to
the chargedown discussed above and total dispositions of $2.3
million in other real estate properties during 2015.
- The decrease in nonperforming loans from the linked quarter is
primarily related to the removal of a $1.4 million commercial loan
which was removed from nonaccrual during the third quarter due to
repossession of collateral. The increase in nonperforming
loans from the prior year is primarily due to the recognition of
the $4.2 million energy loan discussed above offset by the $1.4
million nonaccrual loan removed in the third quarter as discussed
above.
Deposits and Borrowings
- Total deposits were $3.534 billion at September 30, 2015
compared to $3.467 billion at June 30, 2015 and compared to $2.814
billion at September 30, 2014.
- The average cost of interest bearing deposits decreased to
0.48% for the third quarter 2015 compared to 0.49% for the third
quarter 2014 and increased from 0.47% for the second quarter
2015.
- Total borrowings (other than junior subordinated debentures)
were $334.5 million at September 30, 2015, an increase of $63.0
million from June 30, 2015 and a decrease of $67.9 million from
September 30, 2014. These changes reflect changes in the
balances of short term FHLB advances during the applicable
period.
Capital
- The tangible common equity to tangible assets and the Tier 1
capital to average assets ratios were 7.15% and 8.67% (estimated),
respectively, at September 30, 2015 compared to 7.11% and 8.40%,
respectively, at June 30, 2015 and 7.32% and 8.50%,
respectively, at September 30, 2014. The total stockholders' equity
to total assets ratio was 12.69%, 12.79% and 13.35% at September
30, 2015, June 30, 2015 and September 30, 2014, respectively. Total
capital to risk weighted assets was 11.86% at September 30, 2015
(estimated) compared to 12.05% at June 30, 2015 and 13.36% at
September 30, 2014. The declines in capital ratios from prior
periods is due to growth in assets during the quarter.
- Book value and tangible book value per common share were $31.81
and $17.72, respectively, at September 30, 2015 compared to $31.30
and $17.18, respectively, at June 30, 2015 and $29.10 and $15.78,
respectively, at September 30, 2014.
- Return on tangible equity (on an annualized basis) was 10.75%
for the third quarter 2015 compared to 14.32% and 14.48% for the
third quarter 2014 and second quarter 2015, respectively.
- Return on average assets and return on average equity (on an
annualized basis) were 0.76% and 5.96%, respectively, for third
quarter 2015 compared to 0.95% and 7.60%, respectively, for third
quarter 2014 and 0.99% and 7.91%, respectively, for second quarter
2015.
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 third
quarter earnings announcement will be held on Thursday, October 22,
at 8:30 a.m. (EDT) and can be accessed by calling 1-877-303-7611
and by identifying the conference ID number 43430269. A
recording of the conference call will be available from October 22,
2015 through October 29, 2015 by accessing our website,
www.ibtx.com.
Forward-Looking Statements
The numbers as of and for the quarter ended September 30, 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 Quarterly Report
on Form 10-Q for the quarter ended June 30, 2015, the Company's
Annual Report on Form 10-K filed on February 27, 2015, and the
Company's Amendment No. 1 to Form S-4 Registration Statement filed
on September 24, 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 September 30, 2015, June 30,
2015, March 31, 2015, December 31, 2014 and September 30, 2014
(Dollars in thousands, except for share data) (Unaudited)
|
As of and for the quarter
ended |
|
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
December 31, 2014 |
September 30, 2014 |
Selected Income Statement
Data |
|
|
|
|
|
Interest income |
$ 43,130 |
$ 42,747 |
$ 40,736 |
$ 42,952 |
$ 36,940 |
Interest expense |
5,041 |
4,967 |
4,658 |
4,777 |
4,509 |
Net interest income |
38,089 |
37,780 |
36,078 |
38,175 |
32,431 |
Provision for loan losses |
3,932 |
1,659 |
1,670 |
1,751 |
976 |
Net interest income after
provision for loan losses |
34,157 |
36,121 |
34,408 |
36,424 |
31,455 |
Noninterest income |
3,799 |
4,109 |
3,966 |
3,961 |
4,210 |
Noninterest expense |
25,830 |
24,455 |
24,386 |
24,931 |
22,162 |
Income tax expense |
3,924 |
5,204 |
4,536 |
5,356 |
4,543 |
Net income |
8,202 |
10,571 |
9,452 |
10,098 |
8,960 |
Preferred stock dividends |
60 |
60 |
60 |
60 |
60 |
Net income available to common
shareholders |
8,142 |
10,511 |
9,392 |
10,038 |
8,900 |
Core net interest income (1) |
38,001 |
37,225 |
35,965 |
37,187 |
32,259 |
Core Pre-Tax Pre-Provision Earnings (1) |
17,123 |
17,379 |
16,810 |
18,003 |
15,266 |
Core Earnings (1) |
8,917 |
10,532 |
10,230 |
10,889 |
9,546 |
|
|
|
|
|
|
Per Share Data (Common
Stock) |
|
|
|
|
|
Earnings: |
|
|
|
|
|
Basic |
$ 0.48 |
$ 0.61 |
$ 0.55 |
$ 0.59 |
$ 0.54 |
Diluted |
0.47 |
0.61 |
0.55 |
0.59 |
0.54 |
Core earnings: |
|
|
|
|
|
Basic (1) |
0.52 |
0.62 |
0.60 |
0.64 |
0.58 |
Diluted (1) |
0.52 |
0.61 |
0.60 |
0.64 |
0.58 |
Dividends |
0.08 |
0.08 |
0.08 |
0.06 |
0.06 |
Book value |
31.81 |
31.30 |
30.77 |
30.35 |
29.10 |
Tangible book value (1) |
17.72 |
17.18 |
16.65 |
16.15 |
15.78 |
Common shares outstanding |
17,111,394 |
17,108,394 |
17,119,793 |
17,032,669 |
16,370,313 |
Weighted average basic shares outstanding
(4) |
17,110,090 |
17,111,958 |
17,091,663 |
17,032,452 |
16,370,506 |
Weighted average diluted shares outstanding
(4) |
17,199,281 |
17,198,981 |
17,169,596 |
17,123,423 |
16,469,231 |
|
|
|
|
|
|
Selected Period End Balance Sheet
Data |
|
|
|
|
|
Total assets |
$ 4,478,339 |
$ 4,375,727 |
$ 4,258,364 |
$ 4,132,639 |
$ 3,746,682 |
Cash and cash equivalents |
353,950 |
424,196 |
358,798 |
324,047 |
249,769 |
Securities available for sale |
200,188 |
180,465 |
198,149 |
206,062 |
235,844 |
Loans, held for sale |
6,218 |
7,237 |
7,034 |
4,453 |
1,811 |
Loans, held for investment |
3,529,275 |
3,375,553 |
3,303,248 |
3,201,084 |
2,890,924 |
Allowance for loan losses |
25,088 |
21,764 |
20,227 |
18,552 |
16,840 |
Goodwill and core deposit intangible |
241,171 |
241,534 |
241,722 |
241,912 |
218,025 |
Other real estate owned |
2,323 |
2,958 |
4,587 |
4,763 |
4,084 |
Noninterest-bearing deposits |
884,272 |
886,087 |
806,912 |
818,022 |
715,843 |
Interest-bearing deposits |
2,649,768 |
2,581,397 |
2,579,766 |
2,431,576 |
2,097,817 |
Borrowings (other than junior subordinated
debentures) |
334,485 |
271,504 |
297,274 |
306,147 |
402,389 |
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 |
23,938 |
Total stockholders' equity |
568,257 |
559,447 |
550,728 |
540,851 |
500,311 |
Independent Bank Group, Inc. and Subsidiaries Consolidated
Financial Data Three Months Ended September 30, 2015, June 30,
2015, March 31, 2015, December 31, 2014 and September 30, 2014
(Dollars in thousands, except for share data) (Unaudited)
|
As of and for the quarter
ended |
|
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
December 31, 2014 |
September 30, 2014 |
Selected Performance
Metrics |
|
|
|
|
|
Return on average assets |
0.76% |
0.99% |
0.92% |
0.97% |
0.95% |
Return on average equity (2) |
5.96 |
7.91 |
7.31 |
7.65 |
7.60 |
Return on tangible equity (2) (6) |
10.75 |
14.48 |
13.64 |
14.08 |
14.32 |
Adjusted return on average assets (1) |
0.83 |
0.99 |
1.00 |
1.05 |
1.02 |
Adjusted return on average equity (1)
(2) |
6.53 |
7.93 |
7.96 |
8.30 |
8.15 |
Adjusted return on tangible equity (1) (2)
(6) |
11.77 |
14.51 |
14.86 |
15.27 |
15.36 |
Net interest margin |
4.08 |
4.10 |
4.07 |
4.28 |
4.04 |
Adjusted net interest margin (3) |
4.07 |
4.04 |
4.05 |
4.17 |
4.02 |
Efficiency ratio |
61.66 |
58.38 |
60.90 |
59.17 |
60.48 |
Core efficiency ratio (1) |
59.25 |
57.81 |
57.76 |
55.85 |
56.87 |
|
|
|
|
|
|
Credit Quality Ratios |
|
|
|
|
|
Nonperforming assets to total assets |
0.34% |
0.37% |
0.43% |
0.36% |
0.33% |
Nonperforming loans to total loans |
0.33 |
0.40 |
0.41 |
0.32 |
0.29 |
Nonperforming assets to total loans and other
real estate |
0.43 |
0.48 |
0.55 |
0.46 |
0.43 |
Allowance for loan losses to non-performing
loans |
214.21 |
163.12 |
148.06 |
183.43 |
200.83 |
Allowance for loan losses to total loans |
0.71 |
0.64 |
0.61 |
0.58 |
0.58 |
Net charge-offs to average loans outstanding
(annualized) |
0.07 |
0.01 |
— |
0.01 |
0.05 |
|
|
|
|
|
|
Capital Ratios |
|
|
|
|
|
Estimated common equity tier 1 capital to
risk-weighted assets (5) |
8.26% |
8.33% |
8.62% |
n/a |
n/a |
Estimated tier 1 capital to average
assets |
8.67 |
8.40 |
7.78 |
8.15 |
8.50 |
Estimated tier 1 capital to risk-weighted
assets (1) (5) |
9.37 |
9.49 |
9.31 |
9.83 |
10.34 |
Estimated total capital to risk-weighted
assets (5) |
11.86 |
12.05 |
11.88 |
12.59 |
13.36 |
Total stockholders' equity to total
assets |
12.69 |
12.79 |
12.93 |
13.09 |
13.35 |
Tangible common equity to tangible assets
(1) |
7.15 |
7.11 |
7.10 |
7.07 |
7.32 |
Independent Bank Group, Inc. and Subsidiaries Consolidated
Statements of Income Three and Nine Months Ended September 30, 2015
and 2014 (Dollars in thousands) (Unaudited)
|
Three Months
Ended September 30, |
Nine Months Ended
September 30, |
|
2015 |
2014 |
2015 |
2014 |
Interest income: |
|
|
|
|
Interest and fees on loans |
$ 42,145 |
$ 35,633 |
$ 123,350 |
$ 93,637 |
Interest on taxable
securities |
393 |
711 |
1,553 |
2,187 |
Interest on nontaxable
securities |
461 |
404 |
1,324 |
1,028 |
Interest on federal funds sold
and other |
131 |
192 |
386 |
328 |
Total interest income |
43,130 |
36,940 |
126,613 |
97,180 |
Interest expense: |
|
|
|
|
Interest on deposits |
3,067 |
2,530 |
8,794 |
6,874 |
Interest on FHLB advances |
773 |
975 |
2,243 |
2,792 |
Interest on repurchase
agreements and other borrowings |
1,064 |
871 |
3,229 |
1,142 |
Interest on junior subordinated
debentures |
137 |
133 |
400 |
402 |
Total interest expense |
5,041 |
4,509 |
14,666 |
11,210 |
Net interest income |
38,089 |
32,431 |
111,947 |
85,970 |
Provision for loan losses |
3,932 |
976 |
7,261 |
3,608 |
Net interest income after provision
for loan losses |
34,157 |
31,455 |
104,686 |
82,362 |
Noninterest income: |
|
|
|
|
Service charges on deposit
accounts |
2,165 |
1,541 |
5,878 |
4,205 |
Mortgage fee income |
1,353 |
1,080 |
4,082 |
2,777 |
Gain on sale of loans |
116 |
1,078 |
116 |
1,078 |
Gain on sale of other real
estate |
41 |
20 |
220 |
59 |
Gain on sale of securities
available for sale |
— |
— |
90 |
— |
Loss on sale of premises and
equipment |
(374) |
(22) |
(374) |
(22) |
Increase in cash surrender
value of BOLI |
268 |
281 |
806 |
690 |
Other |
230 |
232 |
1,056 |
876 |
Total noninterest
income |
3,799 |
4,210 |
11,874 |
9,663 |
Noninterest expense: |
|
|
|
|
Salaries and employee
benefits |
14,918 |
12,551 |
43,992 |
37,797 |
Occupancy |
4,117 |
3,435 |
12,054 |
9,200 |
Data processing |
786 |
472 |
2,140 |
1,420 |
FDIC assessment |
541 |
426 |
1,553 |
1,246 |
Advertising and public
relations |
313 |
204 |
912 |
618 |
Communications |
550 |
498 |
1,643 |
1,220 |
Net other real estate owned
expenses (including taxes) |
88 |
122 |
184 |
258 |
Operations of IBG Adriatica,
net |
— |
— |
— |
23 |
Other real estate
impairment |
10 |
22 |
35 |
22 |
Core deposit intangible
amortization |
363 |
361 |
1,102 |
859 |
Professional fees |
841 |
828 |
2,008 |
1,792 |
Acquisition expense, including
legal |
293 |
629 |
793 |
2,628 |
Other |
3,010 |
2,614 |
8,255 |
6,498 |
Total noninterest
expense |
25,830 |
22,162 |
74,671 |
63,581 |
Income before taxes |
12,126 |
13,503 |
41,889 |
28,444 |
Income tax expense |
3,924 |
4,543 |
13,664 |
9,564 |
Net income |
$ 8,202 |
$ 8,960 |
$ 28,225 |
$ 18,880 |
Consolidated Balance Sheets As of September 30, 2015 and
December 31, 2014 (Dollars in thousands, except share information)
(Unaudited)
|
September 30, |
December 31, |
Assets |
2015 |
2014 |
Cash and due from banks |
$ 126,991 |
$ 153,158 |
Interest-bearing deposits in other banks |
226,959 |
170,889 |
Cash and cash
equivalents |
353,950 |
324,047 |
Securities available for sale |
200,188 |
206,062 |
Loans held for sale |
6,218 |
4,453 |
Loans, net of allowance for loan losses |
3,503,081 |
3,182,045 |
Premises and equipment, net |
91,154 |
88,902 |
Other real estate owned |
2,323 |
4,763 |
Federal Home Loan Bank (FHLB) of Dallas stock
and other restricted stock |
13,187 |
12,321 |
Bank-owned life insurance (BOLI) |
40,590 |
39,784 |
Deferred tax asset |
5,863 |
2,235 |
Goodwill |
229,818 |
229,457 |
Core deposit intangible, net |
11,353 |
12,455 |
Other assets |
20,614 |
26,115 |
Total
assets |
$ 4,478,339 |
$ 4,132,639 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Deposits: |
|
|
Noninterest-bearing |
884,272 |
818,022 |
Interest-bearing |
2,649,768 |
2,431,576 |
Total
deposits |
3,534,040 |
3,249,598 |
FHLB advances |
263,346 |
229,405 |
Repurchase agreements |
— |
4,012 |
Other borrowings |
68,548 |
69,410 |
Other borrowings, related parties |
2,591 |
3,320 |
Junior subordinated debentures |
18,147 |
18,147 |
Other liabilities |
23,410 |
17,896 |
Total
liabilities |
3,910,082 |
3,591,788 |
Commitments and contingencies |
|
|
Stockholders' equity: |
|
|
Series A Preferred Stock |
23,938 |
23,938 |
Common stock |
171 |
170 |
Additional paid-in capital |
479,615 |
476,609 |
Retained earnings |
61,670 |
37,731 |
Accumulated other comprehensive
income |
2,863 |
2,403 |
Total stockholders'
equity |
568,257 |
540,851 |
Total liabilities and
stockholders' equity |
$ 4,478,339 |
$ 4,132,639 |
Independent Bank Group, Inc. and Subsidiaries Consolidated
Average Balance Sheet Amounts, Interest Earned and Yield Analysis
Three Months Ended September 30, 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 September 30, |
|
2015 |
2014 |
|
Average
Outstanding Balance |
Interest |
Yield/
Rate |
Average
Outstanding Balance |
Interest |
Yield/
Rate |
Interest-earning
assets: |
|
|
|
|
|
|
Loans |
$ 3,411,536 |
$ 42,145 |
4.90% |
$ 2,878,566 |
$ 35,633 |
4.91% |
Taxable securities |
119,997 |
393 |
1.30 |
170,804 |
711 |
1.65 |
Nontaxable securities |
65,440 |
461 |
2.79 |
69,784 |
404 |
2.30 |
Federal funds sold and
other |
109,031 |
131 |
0.48 |
67,908 |
192 |
1.12 |
Total interest-earning
assets |
3,706,004 |
$ 43,130 |
4.62 |
3,187,062 |
$ 36,940 |
4.60 |
Noninterest-earning assets |
564,600 |
|
|
534,261 |
|
|
Total
assets |
$ 4,270,604 |
|
|
$ 3,721,323 |
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
Checking accounts |
$ 1,279,575 |
$ 1,416 |
0.44% |
$ 1,126,424 |
$ 1,288 |
0.45% |
Savings accounts |
143,914 |
66 |
0.18 |
125,027 |
92 |
0.29 |
Money market accounts |
289,895 |
211 |
0.29 |
111,675 |
94 |
0.33 |
Certificates of deposit |
841,009 |
1,374 |
0.65 |
696,272 |
1,056 |
0.60 |
Total
deposits |
2,554,393 |
3,067 |
0.48 |
2,059,398 |
2,530 |
0.49 |
FHLB advances |
212,267 |
773 |
1.44 |
303,458 |
975 |
1.27 |
Repurchase agreements and other
borrowings |
76,313 |
1,064 |
5.53 |
56,413 |
871 |
6.13 |
Junior subordinated
debentures |
18,147 |
137 |
3.00 |
18,147 |
133 |
2.91 |
Total interest-bearing
liabilities |
2,861,120 |
5,041 |
0.70 |
2,437,416 |
4,509 |
0.73 |
Noninterest-bearing checking
accounts |
836,212 |
|
|
785,054 |
|
|
Noninterest-bearing
liabilities |
7,395 |
|
|
10,647 |
|
|
Stockholders' equity |
565,877 |
|
|
488,206 |
|
|
Total liabilities and
equity |
$ 4,270,604 |
|
|
$ 3,721,323 |
|
|
Net interest income |
|
$ 38,089 |
|
|
$ 32,431 |
|
Interest rate spread |
|
|
3.92% |
|
|
3.87% |
Net interest margin |
|
|
4.08 |
|
|
4.04 |
Average interest earning assets to
interest bearing liabilities |
|
|
129.53 |
|
|
130.76 |
Independent Bank Group, Inc. and Subsidiaries Consolidated
Average Balance Sheet Amounts, Interest Earned and Yield Analysis
Nine Months Ended September 30, 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 Nine
Months Ended September 30, |
|
2015 |
2014 |
|
Average Outstanding
Balance |
Interest |
Yield/ Rate |
Average Outstanding
Balance |
Interest |
Yield/ Rate |
Interest-earning
assets: |
|
|
|
|
|
|
Loans |
$ 3,336,034 |
$ 123,350 |
4.94% |
$ 2,454,773 |
$ 93,637 |
5.10% |
Taxable securities |
127,250 |
1,553 |
1.63 |
177,144 |
2,187 |
1.65 |
Nontaxable securities |
67,603 |
1,324 |
2.62 |
54,414 |
1,028 |
2.53 |
Federal funds sold and
other |
136,420 |
386 |
0.38 |
77,940 |
328 |
0.56 |
Total interest-earning
assets |
3,667,307 |
$ 126,613 |
4.62 |
2,764,271 |
$ 97,180 |
4.70 |
Noninterest-earning assets |
554,655 |
|
|
323,291 |
|
|
Total
assets |
$ 4,221,962 |
|
|
$ 3,087,562 |
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
Checking accounts |
$ 1,287,810 |
$ 4,206 |
0.44% |
$ 1,012,012 |
$ 3,522 |
0.47% |
Savings accounts |
143,539 |
198 |
0.18 |
123,862 |
273 |
0.29 |
Money market accounts |
260,768 |
490 |
0.25 |
101,243 |
232 |
0.31 |
Certificates of deposit |
839,155 |
3,900 |
0.62 |
626,008 |
2,847 |
0.61 |
Total
deposits |
2,531,272 |
8,794 |
0.46 |
1,863,125 |
6,874 |
0.49 |
FHLB advances |
212,005 |
2,243 |
1.41 |
243,232 |
2,792 |
1.53 |
Repurchase agreements and other
borrowings |
76,605 |
3,229 |
5.64 |
26,946 |
1,142 |
5.67 |
Junior subordinated
debentures |
18,147 |
400 |
2.95 |
18,147 |
402 |
2.96 |
Total interest-bearing
liabilities |
2,838,029 |
14,666 |
0.69 |
2,151,450 |
11,210 |
0.70 |
Noninterest-bearing checking
accounts |
819,649 |
|
|
528,481 |
|
|
Noninterest-bearing
liabilities |
7,722 |
|
|
8,968 |
|
|
Stockholders' equity |
556,562 |
|
|
398,663 |
|
|
Total liabilities and
equity |
$ 4,221,962 |
|
|
$ 3,087,562 |
|
|
Net interest income |
|
$ 111,947 |
|
|
$ 85,970 |
|
Interest rate spread |
|
|
3.93% |
|
|
4.00% |
Net interest margin |
|
|
4.08 |
|
|
4.16 |
Average interest earning assets to
interest bearing liabilities |
|
|
129.22 |
|
|
128.48 |
Independent Bank Group, Inc. and Subsidiaries Loan Portfolio
Composition As of September 30, 2015 and December 31, 2014 (Dollars
in thousands) (Unaudited)
The following table sets forth loan totals by
category as of the dates presented: |
|
|
|
|
|
September 30,
2015 |
December 31,
2014 |
|
Amount |
% of Total |
Amount |
% of Total |
Commercial |
$ 668,001 |
18.9% |
$ 672,052 |
21.0% |
Real estate: |
|
|
|
|
Commercial real estate |
1,777,401 |
50.3 |
1,450,434 |
45.2 |
Commercial construction, land
and land development |
324,007 |
9.2 |
334,964 |
10.5 |
Residential real estate
(1) |
555,951 |
15.7 |
518,478 |
16.2 |
Single-family interim
construction |
140,144 |
4.0 |
138,278 |
4.3 |
Agricultural |
37,207 |
1.0 |
38,822 |
1.2 |
Consumer |
32,621 |
0.9 |
52,267 |
1.6 |
Other |
161 |
— |
242 |
— |
Total loans |
3,535,493 |
100.0% |
3,205,537 |
100.0% |
Deferred loan fees |
(1,106) |
|
(487) |
|
Allowance for losses |
(25,088) |
|
(18,552) |
|
Total loans, net |
$ 3,509,299 |
|
$ 3,186,498 |
|
(1) Includes loans held for sale at September
30, 2015 and December 31, 2014 of $6,218 and $4,453,
respectively. |
|
|
|
|
Independent Bank Group, Inc. and Subsidiaries Reconciliation of
Non-GAAP Financial Measures Three Months Ended September 30, 2015,
June 30, 2015, March 31, 2015, December 31, 2014 and September 30,
2014 (Dollars in thousands, except for share data)
(Unaudited)
|
|
For the Three Months
Ended |
|
|
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
December 31, 2014 |
September 30, 2014 |
Net Interest Income -
Reported |
(a) |
$ 38,089 |
$ 37,780 |
$ 36,078 |
$ 38,175 |
$ 32,431 |
Income recognized on acquired loans |
|
(88) |
(555) |
(113) |
(988) |
(172) |
Adjusted Net Interest
Income |
(b) |
38,001 |
37,225 |
35,965 |
37,187 |
32,259 |
Provision Expense -
Reported |
(c) |
3,932 |
1,659 |
1,670 |
1,751 |
976 |
Noninterest Income -
Reported |
(d) |
3,799 |
4,109 |
3,966 |
3,961 |
4,210 |
Gain on sale of loans |
|
(116) |
— |
— |
— |
(1,078) |
Gain on sale of OREO |
|
(41) |
(49) |
(130) |
(12) |
(20) |
Gain on sale of securities |
|
— |
(90) |
— |
(362) |
— |
Loss on sale of premises and equipment |
|
374 |
— |
— |
— |
22 |
Adjusted Noninterest
Income |
(e) |
4,016 |
3,970 |
3,836 |
3,587 |
3,134 |
Noninterest Expense -
Reported |
(f) |
25,830 |
24,455 |
24,386 |
24,931 |
22,162 |
OREO Impairment |
|
(10) |
(25) |
— |
— |
(22) |
IPO related stock grant and bonus
expense |
|
(156) |
(156) |
(156) |
(156) |
(156) |
Registration statements |
|
— |
— |
— |
(163) |
(456) |
Acquisition Expense (5) |
|
(770) |
(458) |
(1,239) |
(1,841) |
(1,401) |
Adjusted Noninterest
Expense |
(g) |
24,894 |
23,816 |
22,991 |
22,771 |
20,127 |
Pre-Tax Pre-Provision
Earnings |
(a) + (d) - (f) |
$ 16,058 |
$ 17,434 |
$ 15,658 |
$ 17,205 |
$ 14,479 |
Core Pre-Tax Pre-Provision
Earnings |
(b) + (e) - (g) |
$ 17,123 |
$ 17,379 |
$ 16,810 |
$ 18,003 |
$ 15,266 |
Core Earnings (2) |
(b) - (c) + (e) - (g) |
$ 8,917 |
$ 10,532 |
$ 10,230 |
$ 10,889 |
$ 9,546 |
Reported Efficiency
Ratio |
(f) / (a + d) |
61.66% |
58.38% |
60.90% |
59.17% |
60.48% |
Core Efficiency
Ratio |
(g) / (b + e) |
59.25% |
57.81% |
57.76% |
55.85% |
56.87% |
Adjusted Return on Average Assets
(1) |
|
0.83% |
0.99% |
1.00% |
1.05% |
1.02% |
Adjusted Return on Average Equity
(1) |
|
6.53% |
7.93% |
7.96% |
8.30% |
8.15% |
Adjusted Return on Tangible Equity
(1) |
|
11.77% |
14.51% |
14.86% |
15.27% |
15.36% |
Total Average Assets |
|
$ 4,270,604 |
$ 4,259,334 |
$ 4,154,007 |
$ 4,098,671 |
$ 3,721,323 |
Total Average Stockholders' Equity (3) |
|
$ 541,939 |
$ 532,715 |
$ 520,899 |
$ 520,800 |
$ 464,528 |
Total Average Tangible Stockholders' Equity
(3) (4) |
|
$ 300,578 |
$ 291,166 |
$ 279,149 |
$ 282,907 |
$ 246,500 |
(1) Calculated using core
earnings |
(2) Assumes actual
effective tax rate of 32.4%, 33.0%, 32.4%, 33.0% and 33.2%,
respectively. December 31, 2014 and September 30, 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 $477 thousand, $430 thousand, $767 thousand, $843 thousand
and $772 thousand of compensation and bonus expenses in addition to
$293 thousand, $28 thousand, $472 thousand, $998 thousand and $629
thousand of merger-related expenses for the quarters ended
September 30, 2015, June 30, 2015, March 31, 2015, December 31,
2014 and September 30, 2014, respectively. |
|
Independent Bank Group, Inc. and Subsidiaries Reconciliation of
Non-GAAP Financial Measures As of September 30, 2015 and December
31, 2014 (Dollars in thousands, except per share information)
(Unaudited)
Tangible Book Value Per Common
Share |
|
|
|
September 30, |
December 31, |
|
2015 |
2014 |
Tangible Common Equity |
|
|
Total common stockholders' equity |
$ 544,319 |
$ 516,913 |
Adjustments: |
|
|
Goodwill |
(229,818) |
(229,457) |
Core deposit intangibles, net |
(11,353) |
(12,455) |
Tangible common equity |
$ 303,148 |
$ 275,001 |
Tangible assets |
$ 4,237,168 |
$ 3,890,727 |
Common shares outstanding |
17,111,394 |
17,032,669 |
Tangible common equity to tangible
assets |
7.15% |
7.07% |
Book value per common share |
$ 31.81 |
$ 30.35 |
Tangible book value per common share |
17.72 |
16.15 |
Tier 1 Common and Tier 1 Capital to
Risk-Weighted Assets Ratio |
|
|
|
September 30, |
December 31, |
|
2015 |
2014 |
Tier 1 Common Equity |
|
|
Total common stockholders' equity - GAAP |
$ 544,319 |
$ 516,913 |
Adjustments: |
|
|
Unrealized gain on available-for-sale
securities |
(2,863) |
(2,403) |
Goodwill |
(229,818) |
(229,457) |
Core deposit intangibles, net |
(2,952) |
(12,455) |
Tier 1 common equity |
$ 308,686 |
$ 272,598 |
Qualifying Restricted Core Capital Elements
(junior subordinated debentures) |
17,600 |
17,600 |
Preferred Stock |
23,938 |
23,938 |
Tier 1 Equity |
$ 350,224 |
$ 314,136 |
Total Risk-Weighted
Assets |
$ 3,738,305 |
$ 3,195,413 |
Estimated total common stockholders' equity
to risk-weighted assets ratio |
14.56% |
16.18% |
Estimated tier 1 equity to risk-weighted
assets ratio |
9.37 |
9.83 |
Estimated tier 1 common equity to
risk-weighted assets ratio |
8.26 |
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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