Independent Bank Group, Inc. (NASDAQ: IBTX), the holding company
for Independent Bank, today announced net income of $35.7 million,
or $1.17 per diluted share, for the quarter ended
September 30, 2018 compared to $23.5 million, or $0.84 per
diluted share, for the quarter ended September 30, 2017 and
$29.6 million, or $1.02 per diluted share, for the quarter ended
June 30, 2018.
For 2018, net income and earnings per share were positively
impacted by the 14% reduction of the corporate U.S. statutory
federal tax rate from 35% to 21% as a result of the enactment of
the Tax Cuts and Jobs Act (TCJA), which became effective January 1,
2018.
Highlights
- Adjusted (non-GAAP) net income was $36.6 million, or $1.20 per
diluted share, compared to $32.2 million, or $1.11 per diluted
share, for second quarter 2018
- Net interest income increased 9.3% compared to second quarter
2018
- Adjusted (non-GAAP) return on average assets and return on
average equity increased to 1.45% and 9.34%, respectively
- Continued strong credit quality metrics with nonperforming
assets of 0.16%
- Successfully completed the operational conversion of Integrity
Bank
Independent Bank Group Chairman and CEO David R.
Brooks said, “We are pleased to report another solid quarter of
financial performance, with continued record earnings, return on
assets and return on equity. We are particularly pleased to report
a significant increase in net interest income even with the
expected moderation in our loan growth.” Brooks continued, “Our
credit metrics continue to be strong and asset quality remains the
foundation of our company. We look forward to completing the
Guaranty Bancorp transaction and a strong finish to the year."
Third Quarter 2018 Operating Results
Net Interest Income
- Net interest income was $86.3 million for third quarter 2018
compared to $72.9 million for third quarter 2017 and $78.9 million
for second quarter 2018. The increase in net interest income
from the previous year was primarily due to increased average loan
balances resulting from organic growth for the year over year
period as well as loans acquired in the Integrity Bancshares
acquisition in second quarter 2018. The net increase from the
linked quarter was due to increased average loan balances with
higher interest rates resulting from organic growth and a rising
rate environment.
- The average balance of total interest-earning assets grew by
$1.2 billion and totaled $8.7 billion at September 30, 2018
compared to $7.5 billion at September 30, 2017 and grew $722.3
million compared to $8.0 billion at June 30, 2018. The
increase from the prior year and the linked quarter was due
primarily to organic growth as well as $718.9 million in earning
assets acquired in the Integrity transaction.
- The yield on interest-earning assets was 4.99% for third
quarter 2018 compared to 4.47% for third quarter 2017 and 4.89% for
second quarter 2018. The increase from the prior year and
linked quarter was due primarily to higher rates on
interest-earning assets due to continued increases in the Fed Funds
rate during these periods. In addition, the increase from prior
year was due to loans and taxable securities acquired in the
Integrity transaction, which had higher effective interest
rates.
- The cost of interest bearing liabilities, including borrowings,
was 1.47% for third quarter 2018 compared to 0.84% for third
quarter 2017 and 1.27% for second quarter 2018. The increases
from the prior year and linked quarter were primarily due to higher
rates offered on our deposits, primarily commercial money market
accounts and certificates of deposit, resulting both from market
competition and general increases in interest rates on deposit
products tied to Fed Funds rates. In addition, rate increases on
short-term FHLB advances and junior subordinated debt impacted net
interest income.
- The net interest margin was 3.94% for third quarter 2018
compared to 3.85% for third quarter 2017 and 3.97% for second
quarter 2018. The adjusted (non-GAAP) net interest margin,
which excludes purchased loan accretion, was 3.89% for third
quarter 2018 compared to 3.80% for third quarter 2017 and 3.93% for
second quarter 2018. The increase in the net interest margin
from the prior year was primarily due to the multiple increases in
the Fed Funds target rate as well as earning assets shifting from
cash to loans. The decrease from the linked quarter is
primarily related to the aforementioned changes in our deposit
rates increasing at a faster pace than our interest earning asset
rates.
Noninterest Income
- Total noninterest income increased $619 thousand compared to
third quarter 2017 and increased $2.6 million compared to second
quarter 2018.
- The increase from the prior year is due primarily to a $542
thousand net increase in mortgage banking revenue as a result of
the mortgage hedging strategy initiated in July 2018 which
generated $1.6 million of income during third quarter 2018. This
increase was offset by a decrease in mortgage sales volume for the
year over year period resulting from a decrease in market demand
related to rising interest rates over the same period.
- The increase from the linked quarter primarily reflects
increases of $1.5 million in mortgage banking revenue as explained
above and $744 thousand in other noninterest income primarily
resulting from increases in correspondent bank earnings credits of
$232 thousand, merchant income of $171 thousand and miscellaneous
income of $214 thousand.
Noninterest Expense
- Total noninterest expense increased $4.8 million compared to
third quarter 2017 and increased $3.5 million compared to second
quarter 2018.
- The increase in expense compared to third quarter 2017 is due
primarily to increases of $4.4 million in salaries and benefits and
$1.4 million in other noninterest expense, offset by decreases of
$917 thousand in other real estate impairment expenses and $746
thousand in acquisition expenses. The increase in salaries and
benefits from prior year is primarily due to additional headcount
related to both the Integrity acquisition as well as organic growth
during the year. The increase in other noninterest expense is
primarily due to higher deposit and loan-related expenses as well
as an increase in advertising expense and charitable contributions
for the year over year period. Acquisition expenses were elevated
in third quarter 2017 due to professional fees and contract
termination fees incurred related to restructuring the acquired
Carlile branch system.
- The increase from the linked quarter is primarily related to
increases of $3.3 million in salaries and benefits, $595 thousand
in occupancy expenses, $522 thousand in data processing, and $391
thousand in other noninterest expenses, offset by a decrease of
$1.8 million in acquisition-related expenses. The overall increase
in salaries and benefits, occupancy and data processing from the
linked quarter is reflective of retention and conversion bonuses
paid in third quarter 2018 as well as three months of expenses in
third quarter 2018 compared to one month in second quarter related
to additional headcount, branch locations and accounts acquired in
the Integrity acquisition. Acquisition expense was elevated in the
linked quarter primarily due to professional fees and accrued
termination and conversion-related expenses related to the
Integrity transaction and professional fees related to the pending
Guaranty transaction.
Provision for Loan Losses
- Provision for loan loss was $1.5 million for third quarter
2018, a decrease of $348 thousand compared to $1.9 million for
third quarter 2017 and a decrease of $1.2 million compared to the
second quarter 2018. Provision expense is primarily reflective of
organic loan growth as well as charge-offs or specific reserves
taken during the respective period. The decrease in the provision
for loan loss was due to the more moderate loan growth and
continued strong credit metrics experienced in third quarter
2018.
- The allowance for loan losses was $42.2 million, or 0.56% of
total loans at September 30, 2018, compared to $37.8 million,
or 0.61% of total loans at September 30, 2017, and compared to
$43.3 million, or 0.58% of total loans, at June 30,
2018. The dollar increase from prior year is primarily due to
additional general reserves for organic loan growth. The dollar
amount of the allowance for loan loss and the allowance for loan
loss as a percentage of loans decreased from the linked quarter is
primarily due to a $2.5 million partial charge-off on an energy
credit relationship that was fully reserved prior to third quarter
2018. In addition, the decrease in the allowance for loan losses as
a percentage of loans from prior periods reflects that loans
acquired in the Integrity transaction were recorded at fair value
without an allowance at acquisition date.
Income Taxes
- Federal income tax expense of $9.1 million was recorded for the
quarter ended September 30, 2018, an effective rate of 20.4%
compared to tax expense of $11.7 million and an effective rate of
33.2% for the quarter ended September 30, 2017 and tax expense
of $7.5 million and an effective rate of 20.2% for the quarter
ended June 30, 2018. The lower tax rate in second and
third quarter 2018 is primarily due to the reduction of the
corporate U.S. statutory federal income tax rate from 35% to 21% as
a result of the TCJA.
Third Quarter 2018 Balance Sheet
Highlights:
Loans
- Total loans held for investment, net of mortgage warehouse
purchase loans, were $7.6 billion at September 30, 2018
compared to $7.5 billion at June 30, 2018 and $6.2 billion at
September 30, 2017. Loans held for investment increased
$74.1 million, or 1.0% for the quarter. Loans held for
investment increased $1.3 billion from September 30, 2017, or
21.3%, $651.8 of which was acquired in the Integrity acquisition,
offset by $98.9 million in loans sold with the branch sale in
fourth quarter 2017, and $775.0 million of which was organic
growth. Loans have grown organically 12.6%, annualized, from
December 31, 2017. Organic loan growth for the third quarter was
3.9% on an annualized basis.
- Average mortgage warehouse purchase loans were $136.1 million
for the quarter ended September 30, 2018 compared to $124.0
million for the quarter ended June 30, 2018, representing an
increase of $12.1 million, or 9.8% for the quarter, and
compared to $120.8 million for the quarter ended September 30,
2017, an increase of $15.3 million, or 12.7% year over year. The
change from the linked quarter and prior year quarter is reflective
of mortgage loan market activity during the respective
periods.
- Commercial real estate (CRE) loans were $4.0 billion at
September 30, 2018 compared to $3.9 billion at June 30,
2018 and $3.3 billion at September 30, 2017, or 51.7%, 51.4%
and 50.9% of total loans, respectively.
Asset Quality
- Total nonperforming assets decreased to $15.4 million, or 0.16%
of total assets at September 30, 2018, from $16.9 million, or
0.17% of total assets at June 30, 2018, and decreased from
$25.0 million, or 0.28% of total assets at September 30,
2017.
- Total nonperforming loans decreased to $10.7 million, or 0.14%
of total loans at September 30, 2018, from $12.6 million, or
0.17% of total loans at June 30, 2018, and decreased from
$14.7 million, or 0.24% of total loans at September 30,
2017.
- The net decrease in nonperforming assets and nonperforming
loans from the linked quarter is primarily due to a partial
charge-off of an energy nonaccrual loan relationship that had been
fully reserved prior to third quarter 2018 totaling $2.5 million,
offset by the addition of a commercial loan placed on nonaccrual
status totaling $991 thousand.
- The decrease in nonperforming assets from the prior year is
primarily due to dispositions in other real estate owned totaling
$5.5 million in addition to the above mentioned net nonaccrual
activity in third quarter 2018. The decrease in nonperforming loans
from the prior year is primarily due to the above mentioned
nonaccrual activity in addition to net nonaccrual dispositions of
$3.3 million for the year over year period.
- Charge-offs were 0.14% annualized in the third quarter 2018
compared to 0.08% annualized in the linked quarter and less than
0.01% annualized in the prior year quarter. The increase in the
third quarter 2018 charge-offs was primarily a result of the $2.5
million charge-off as mentioned above.
Deposits and Borrowings
- Total deposits were $7.8 billion at September 30, 2018
compared to $7.5 billion at June 30, 2018 and compared to $6.9
billion at September 30, 2017. The increase in deposits
from the prior year is primarily due to $593 million in deposits
acquired in the Integrity transaction in addition to organic
growth. The increase in deposits from the linked quarter is due to
organic growth in promotional deposit products and specialty
treasury deposits.
- Total borrowings (other than junior subordinated debentures)
were $482.2 million at September 30, 2018, a decrease of
$405.5 million from June 30, 2018 and a decrease of $201.3
million from September 30, 2017. The change in the
linked quarter reflects the use of short term FHLB advances as
needed for liquidity and balance sheet management. The change in
the prior year is due to aforementioned change in FHLB advances and
the issuance of $29.3 million, net of issuance costs, of 5.0% fixed
to floating rate subordinated debentures issued in fourth quarter
2017.
Capital
- Book value and tangible book value per common share (non-GAAP)
increased to $51.42 and $26.21, respectively, at September 30,
2018 compared to $50.49 and $25.23, respectively, at June 30,
2018 and compared to $46.09 and $22.57, respectively, at
September 30, 2017. The increase from prior year is due to the
retention of earnings, the additional capital from the Integrity
acquisition in second quarter 2018 and the issuance of common stock
in fourth quarter 2017. The increase from the linked quarter is due
to the retention of earnings.
- Independent Bank Group is well capitalized under regulatory
guidelines. At September 30, 2018, our estimated common equity
Tier 1 to risk-weighted assets, Tier 1 capital to average assets,
Tier 1 capital to risk-weighted assets and total capital to
risk-weighted asset ratios were 9.92%, 9.20%, 10.29% and 12.49%,
respectively, compared to 9.31%, 9.71%, 9.67%, and 11.85%,
respectively at June 30, 2018.
Subsequent Events
The Company is required, under generally
accepted accounting principles, to evaluate subsequent events
through the filing of its consolidated financial statements for the
quarter ended September 30, 2018 on Form 10-Q. As a
result, the Company will continue to evaluate the impact of any
subsequent events on critical accounting assumptions and estimates
made as of September 30, 2018 and will adjust amounts
preliminarily reported, if necessary.
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 in four market regions
located in the Dallas/Fort Worth, Austin and Houston, Texas and the
Colorado Front Range areas.
Conference Call
A conference call covering Independent Bank Group’s third
quarter earnings announcement will be held on Tuesday, October 23,
2018 at 8:30 a.m. (EDT) and can be accessed by the webcast link,
https://edge.media-server.com/m6/p/563bt9r7, or by calling
1-877-303-7611 and by identifying the conference ID number
2371657. The conference materials will also be available by
accessing the Investor Relations page of our website,
www.ibtx.com. A recording of the conference call and the
conference materials will be available from October 23, 2018
through November 1, 2018 on our website.
Forward-Looking Statements
The numbers as of and for the quarter ended September 30,
2018 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 the Company 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 the
Company'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. The Company'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. Many possible
events or factors could affect our future financial results and
performance and could cause such results or performance to differ
materially from those expressed in forward looking
statements. These factors include, but are not limited to,
the following: (1) the Company’s ability to sustain its current
internal growth rate and total growth rate; (2) changes in
geopolitical, business and economic events, occurrences and
conditions, including changes in rates of inflation or deflation,
nationally, regionally and in the Company’s target markets,
particularly in Texas and Colorado; (3) worsening business and
economic conditions nationally, regionally and in the Company’s
target markets, particularly in Texas and Colorado, and the
geographic areas in those states in which the Company operates; (4)
the Company’s dependence on its management team and its ability to
attract, motivate and retain qualified personnel; (5) the
concentration of the Company’s business within its geographic areas
of operation in Texas and Colorado; (6) changes in asset quality,
including increases in default rates and loans and higher levels of
nonperforming loans and loan charge-offs; (7) concentration of the
loan portfolio of Independent Bank, before and after the completion
of acquisitions of financial institutions, in commercial and
residential real estate loans and changes in the prices, values and
sales volumes of commercial and residential real estate; (8) the
ability of Independent Bank to make loans with acceptable net
interest margins and levels of risk of repayment and to otherwise
invest in assets at acceptable yields and presenting acceptable
investment risks; (9) inaccuracy of the assumptions and estimates
that the managements of Independent Bank and the financial
institutions that it acquires make in establishing reserves for
probable loan losses and other estimates; (10) lack of liquidity,
including as a result of a reduction in the amount of sources of
liquidity, that the Company currently has; (11) material increases
or decreases in the amount of deposits held by Independent Bank or
other financial institutions that the Company acquires and the cost
of those deposits; (12) the Company’s access to the debt and equity
markets and the overall cost of funding its operations; (13)
regulatory requirements to maintain minimum capital levels or
maintenance of capital at levels sufficient to support the
Company’s anticipated growth; (14) changes in market interest rates
that affect the pricing of the loans and deposits of each of
Independent Bank and the financial institutions that the Company
acquires and the net interest income of each of Independent Bank
and the financial institutions that the Company acquires; (15)
fluctuations in the market value and liquidity of the securities
the Company holds for sale, including as a result of changes in
market interest rates; (16) effects of competition from a wide
variety of local, regional, national and other providers of
financial, investment and insurance services; (17) the institution
and outcome of, and costs associated with, litigation and other
legal proceedings against one of more of the Company, Independent
Bank and financial institutions that the Company acquires or to
which any of such entities is subject; (18) the occurrence of
market conditions adversely affecting the financial industry
generally; (19) the impact of recent and future legislative and
regulatory changes, including changes in banking, securities and
tax laws and regulations and their application by the Company’s
regulators, and changes in federal government policies; (20)
changes in accounting policies and practices, as may be adopted by
the bank regulatory agencies, the Financial Accounting Standards
Board, the SEC and the Public Company Accounting Oversight Board,
or PCAOB, as the case may be; (21) governmental monetary and fiscal
policies; (22) changes in the scope and cost of FDIC insurance and
other coverage; (23) the effects of war or other conflicts, acts of
terrorism (including cyber attacks) or other catastrophic events,
including storms, droughts, tornadoes, hurricanes and flooding,
that may affect general economic conditions; (24) the Company’s
actual cost savings resulting from previous or future acquisitions
are less than expected, it is unable to realize those cost savings
as soon as expected, or it incurs additional or unexpected costs;
(25) the Company’s revenues after previous or future acquisitions
are less than expected; (26) the liquidity of, and changes in the
amounts and sources of liquidity available to, us, before and after
the acquisition of any financial institutions that the Company
acquires; (27) deposit attrition, operating costs, customer loss
and business disruption before and after the Company’s completed
acquisitions, including, without limitation, difficulties in
maintaining relationships with employees, may be greater than the
Company expected; (28) the effects of the combination of the
operations of financial institutions that the Company acquired in
the recent past or may acquire in the future with the Company’s
operations and the operations of Independent Bank, the effects of
the integration of such operations being unsuccessful, and the
effects of such integration being more difficult, time-consuming or
costly than expected or not yielding the cost savings that the
Company expects; (29) the impact of investments that the Company or
Independent Bank may have made or may make and the changes in the
value of those investments; (30) the quality of the assets of
financial institutions and companies that the Company has acquired
in the recent past or may acquire in the future being different
than the Company determined or determine in its due diligence
investigation in connection with the acquisition of such financial
institutions and any inadequacy of loan loss reserves relating to,
and exposure to unrecoverable losses on, loans acquired; (31) the
Company’s ability to continue to identify acquisition targets and
successfully acquire desirable financial institutions to sustain
its growth, to expand its presence in its markets and to enter new
markets; (32) technology-related changes are harder to make or are
more expensive than expected; (33) attacks on the security of, and
breaches of, the Company or Independent Bank’s digital information
systems, the costs the Company or Independent Bank incur to provide
security against such attacks and any costs and liability the
Company or Independent Bank incurs in connection with any breach of
those systems; (34) the potential impact of technology and
“FinTech” entities on the banking industry generally; (35) our
success at managing the risks involved in the foregoing items; and
(36) the other factors that are described in the Company’s Annual
Report on Form 10-K filed on February 27, 2018, 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 “adjusted net income”, "adjusted
earnings", “tangible book value”, “tangible book value per common
share”, “adjusted efficiency ratio”, “tangible common equity to
tangible assets”, “adjusted net interest margin”, "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 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.
Contacts:
Analysts/Investors:
Michelle Hickox Executive Vice President and Chief Financial
Officer (972) 562-9004 mhickox@ibtx.com |
Mark
HaynieExecutive Vice President and General Counsel (972) 562-9004
mhaynie@ibtx.com |
Media:
Peggy SmolenSenior Vice President, Marketing
& Communications Director(972) 562-9004psmolen@ibtx.com |
Source: Independent Bank Group, Inc.
|
Independent Bank Group, Inc. and SubsidiariesConsolidated Financial
DataThree Months Ended September 30, 2018, June 30, 2018,
March 31, 2018, December 31, 2017 and September 30, 2017(Dollars in
thousands, except for share data)(Unaudited) |
|
|
|
As of and for the quarter
ended |
|
September 30, 2018 |
|
June 30, 2018 |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
Selected Income Statement Data |
|
|
|
|
|
|
|
|
|
Interest income |
$ |
109,289 |
|
|
$ |
97,082 |
|
|
$ |
88,114 |
|
|
$ |
87,420 |
|
|
$ |
84,672 |
|
Interest expense |
23,021 |
|
|
18,173 |
|
|
14,147 |
|
|
12,166 |
|
|
11,815 |
|
Net interest income |
86,268 |
|
|
78,909 |
|
|
73,967 |
|
|
75,254 |
|
|
72,857 |
|
Provision for loan losses |
1,525 |
|
|
2,730 |
|
|
2,695 |
|
|
1,897 |
|
|
1,873 |
|
Net interest income after provision for loan
losses |
84,743 |
|
|
76,179 |
|
|
71,272 |
|
|
73,357 |
|
|
70,984 |
|
Noninterest income |
12,749 |
|
|
10,133 |
|
|
9,455 |
|
|
13,579 |
|
|
12,130 |
|
Noninterest expense |
52,655 |
|
|
49,158 |
|
|
44,958 |
|
|
49,553 |
|
|
47,904 |
|
Income tax expense |
9,141 |
|
|
7,519 |
|
|
6,805 |
|
|
18,190 |
|
|
11,696 |
|
Net income |
35,696 |
|
|
29,635 |
|
|
28,964 |
|
|
19,193 |
|
|
23,514 |
|
Adjusted net income (1) |
36,593 |
|
|
32,239 |
|
|
29,231 |
|
|
25,313 |
|
|
24,829 |
|
|
|
|
|
|
|
|
|
|
|
Per Share Data (Common Stock) |
|
|
|
|
|
|
|
|
|
Earnings: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.17 |
|
|
$ |
1.02 |
|
|
$ |
1.02 |
|
|
$ |
0.69 |
|
|
$ |
0.85 |
|
Diluted |
1.17 |
|
|
1.02 |
|
|
1.02 |
|
|
0.68 |
|
|
0.84 |
|
Adjusted earnings: |
|
|
|
|
|
|
|
|
|
Basic (1) |
1.20 |
|
|
1.11 |
|
|
1.03 |
|
|
0.91 |
|
|
0.89 |
|
Diluted (1) |
1.20 |
|
|
1.11 |
|
|
1.03 |
|
|
0.90 |
|
|
0.89 |
|
Dividends |
0.14 |
|
|
0.14 |
|
|
0.12 |
|
|
0.10 |
|
|
0.10 |
|
Book value |
51.42 |
|
|
50.49 |
|
|
47.76 |
|
|
47.28 |
|
|
46.09 |
|
Tangible book value (1) |
26.21 |
|
|
25.23 |
|
|
24.37 |
|
|
23.76 |
|
|
22.57 |
|
Common shares outstanding |
30,477,648 |
|
|
30,468,413 |
|
|
28,362,973 |
|
|
28,254,893 |
|
|
27,804,877 |
|
Weighted average basic shares outstanding (3) |
30,473,603 |
|
|
29,065,426 |
|
|
28,320,792 |
|
|
27,933,201 |
|
|
27,797,779 |
|
Weighted average diluted shares outstanding (3) |
30,563,717 |
|
|
29,157,817 |
|
|
28,426,145 |
|
|
28,041,371 |
|
|
27,901,579 |
|
|
|
|
|
|
|
|
|
|
|
Selected Period End Balance Sheet Data |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
9,891,464 |
|
|
$ |
10,017,037 |
|
|
$ |
8,811,014 |
|
|
$ |
8,684,463 |
|
|
$ |
8,891,114 |
|
Cash and cash equivalents |
290,170 |
|
|
447,049 |
|
|
398,102 |
|
|
431,102 |
|
|
763,017 |
|
Securities available for sale |
760,995 |
|
|
791,065 |
|
|
762,662 |
|
|
763,002 |
|
|
747,147 |
|
Loans held for sale |
27,730 |
|
|
30,056 |
|
|
28,017 |
|
|
39,202 |
|
|
25,854 |
|
Loans held for investment, excluding mortgage warehouse purchase
loans |
7,554,124 |
|
|
7,479,977 |
|
|
6,527,681 |
|
|
6,309,549 |
|
|
6,226,343 |
|
Mortgage warehouse purchase loans |
150,267 |
|
|
164,790 |
|
|
124,700 |
|
|
164,694 |
|
|
138,561 |
|
Allowance for loan losses |
42,166 |
|
|
43,308 |
|
|
41,960 |
|
|
39,402 |
|
|
37,770 |
|
Goodwill and core deposit intangible |
768,317 |
|
|
769,630 |
|
|
663,371 |
|
|
664,702 |
|
|
653,899 |
|
Other real estate owned |
4,610 |
|
|
4,200 |
|
|
5,463 |
|
|
7,126 |
|
|
10,189 |
|
Noninterest-bearing deposits |
2,235,377 |
|
|
2,170,639 |
|
|
1,836,929 |
|
|
1,907,770 |
|
|
1,939,342 |
|
Interest-bearing deposits |
5,547,475 |
|
|
5,362,766 |
|
|
4,957,731 |
|
|
4,725,052 |
|
|
4,933,289 |
|
Borrowings (other than junior subordinated debentures) |
482,207 |
|
|
887,724 |
|
|
617,636 |
|
|
667,578 |
|
|
683,492 |
|
Junior subordinated debentures |
27,803 |
|
|
27,753 |
|
|
27,704 |
|
|
27,654 |
|
|
27,604 |
|
Total stockholders' equity |
1,567,184 |
|
|
1,538,269 |
|
|
1,354,699 |
|
|
1,336,018 |
|
|
1,281,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent Bank Group, Inc. and SubsidiariesConsolidated Financial
DataThree Months Ended September 30, 2018, June 30, 2018,
March 31, 2018, December 31, 2017 and September 30, 2017(Dollars in
thousands, except for share data)(Unaudited) |
|
|
As of and for the quarter
ended |
|
September 30, 2018 |
|
June 30, 2018 |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
Selected Performance Metrics |
|
|
|
|
|
|
|
|
|
Return on average assets |
1.41 |
% |
|
1.30 |
% |
|
1.35 |
% |
|
0.87 |
% |
|
1.07 |
% |
Return on average equity |
9.11 |
|
|
8.38 |
|
|
8.72 |
|
|
5.79 |
|
|
7.33 |
|
Return on tangible equity (4) |
18.01 |
|
|
16.49 |
|
|
17.19 |
|
|
11.72 |
|
|
15.12 |
|
Adjusted return on average assets (1) |
1.45 |
|
|
1.41 |
|
|
1.37 |
|
|
1.15 |
|
|
1.13 |
|
Adjusted return on average equity (1) |
9.34 |
|
|
9.12 |
|
|
8.80 |
|
|
7.64 |
|
|
7.74 |
|
Adjusted return on tangible equity (1) (4) |
18.47 |
|
|
17.94 |
|
|
17.34 |
|
|
15.46 |
|
|
15.96 |
|
Net interest margin |
3.94 |
|
|
3.97 |
|
|
4.00 |
|
|
3.97 |
|
|
3.85 |
|
Adjusted net interest margin (2) |
3.89 |
|
|
3.93 |
|
|
3.96 |
|
|
3.84 |
|
|
3.80 |
|
Efficiency ratio |
51.64 |
|
|
53.64 |
|
|
52.30 |
|
|
54.29 |
|
|
54.71 |
|
Adjusted efficiency ratio (1) |
49.77 |
|
|
49.50 |
|
|
51.40 |
|
|
50.06 |
|
|
51.19 |
|
|
|
|
|
|
|
|
|
|
|
Credit Quality Ratios (5) |
|
|
|
|
|
|
|
|
|
Nonperforming assets to total assets |
0.16 |
% |
|
0.17 |
% |
|
0.23 |
% |
|
0.26 |
% |
|
0.28 |
% |
Nonperforming loans to total loans held for investment (6) |
0.14 |
|
|
0.17 |
|
|
0.23 |
|
|
0.24 |
|
|
0.24 |
|
Nonperforming assets to total loans held for investment and other
real estate (6) |
0.20 |
|
|
0.23 |
|
|
0.31 |
|
|
0.36 |
|
|
0.40 |
|
Allowance for loan losses to non-performing loans |
395.37 |
|
|
344.70 |
|
|
281.20 |
|
|
255.62 |
|
|
257.76 |
|
Allowance for loan losses to total loans held for investment
(6) |
0.56 |
|
|
0.58 |
|
|
0.64 |
|
|
0.62 |
|
|
0.61 |
|
Net charge-offs to average loans outstanding (annualized) |
0.14 |
|
|
0.08 |
|
|
0.01 |
|
|
0.02 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios |
|
|
|
|
|
|
|
|
|
Estimated common equity tier 1 capital to risk-weighted assets |
9.92 |
% |
|
9.31 |
% |
|
9.59 |
% |
|
9.61 |
% |
|
9.17 |
% |
Estimated tier 1 capital to average assets |
9.20 |
|
|
9.71 |
|
|
9.18 |
|
|
8.92 |
|
|
8.30 |
|
Estimated tier 1 capital to risk-weighted assets |
10.29 |
|
|
9.67 |
|
|
10.00 |
|
|
10.05 |
|
|
9.60 |
|
Estimated total capital to risk-weighted assets |
12.49 |
|
|
11.85 |
|
|
12.48 |
|
|
12.56 |
|
|
11.72 |
|
Total stockholders' equity to total assets |
15.84 |
|
|
15.36 |
|
|
15.38 |
|
|
15.38 |
|
|
14.41 |
|
Tangible common equity to tangible assets (1) |
8.76 |
|
|
8.31 |
|
|
8.49 |
|
|
8.37 |
|
|
7.62 |
|
(1) Non-GAAP financial measure. See reconciliation.(2)
Non-GAAP financial measure. Excludes income recognized on
acquired loans of $1,051, $954, $739, $2,463 and $905,
respectively.(3) Total number of shares includes participating
shares (those with dividend rights).(4) Non-GAAP financial
measure. Excludes average balance of goodwill and net core
deposit intangibles.(5) Nonperforming loans and assets excludes
loans acquired with deteriorated credit quality(6) Excludes
mortgage warehouse purchase loans.
|
Independent Bank Group, Inc. and
SubsidiariesConsolidated Statements of IncomeThree and Nine Months
Ended September 30, 2018 and 2017(Dollars in
thousands)(Unaudited) |
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Interest income: |
|
|
|
|
|
|
|
|
Interest and fees on loans |
|
$ |
103,104 |
|
|
$ |
79,325 |
|
|
$ |
277,993 |
|
|
$ |
208,263 |
|
Interest on taxable securities |
|
3,840 |
|
|
2,539 |
|
|
10,244 |
|
|
5,606 |
|
Interest on nontaxable securities |
|
1,103 |
|
|
1,124 |
|
|
3,475 |
|
|
2,657 |
|
Interest on interest-bearing deposits and other |
|
1,242 |
|
|
1,684 |
|
|
2,773 |
|
|
3,968 |
|
Total interest income |
|
109,289 |
|
|
84,672 |
|
|
294,485 |
|
|
220,494 |
|
Interest expense: |
|
|
|
|
|
|
|
|
Interest on deposits |
|
17,380 |
|
|
8,033 |
|
|
40,006 |
|
|
20,043 |
|
Interest on FHLB advances |
|
3,121 |
|
|
1,749 |
|
|
7,854 |
|
|
4,271 |
|
Interest on repurchase agreements and other
borrowings |
|
2,100 |
|
|
1,716 |
|
|
6,299 |
|
|
5,137 |
|
Interest on junior subordinated debentures |
|
420 |
|
|
317 |
|
|
1,182 |
|
|
819 |
|
Total interest expense |
|
23,021 |
|
|
11,815 |
|
|
55,341 |
|
|
30,270 |
|
Net interest income |
|
86,268 |
|
|
72,857 |
|
|
239,144 |
|
|
190,224 |
|
Provision for loan losses |
|
1,525 |
|
|
1,873 |
|
|
6,950 |
|
|
6,368 |
|
Net interest income after provision for loan
losses |
|
84,743 |
|
|
70,984 |
|
|
232,194 |
|
|
183,856 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
3,589 |
|
|
3,677 |
|
|
10,607 |
|
|
9,364 |
|
Mortgage banking revenue |
|
5,111 |
|
|
4,569 |
|
|
12,134 |
|
|
10,855 |
|
Gain on sale of loans |
|
— |
|
|
351 |
|
|
— |
|
|
351 |
|
Loss on sale of branch |
|
— |
|
|
(127 |
) |
|
— |
|
|
(127 |
) |
Gain (loss) on sale of other real estate |
|
95 |
|
|
— |
|
|
213 |
|
|
(36 |
) |
(Loss) gain on sale of securities available for
sale |
|
(115 |
) |
|
— |
|
|
(349 |
) |
|
52 |
|
Gain (loss) on sale of premises and equipment |
|
220 |
|
|
(21 |
) |
|
123 |
|
|
(15 |
) |
Increase in cash surrender value of BOLI |
|
831 |
|
|
778 |
|
|
2,328 |
|
|
1,959 |
|
Other |
|
3,018 |
|
|
2,903 |
|
|
7,281 |
|
|
5,305 |
|
Total noninterest income |
|
12,749 |
|
|
12,130 |
|
|
32,337 |
|
|
27,708 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
30,114 |
|
|
25,684 |
|
|
82,072 |
|
|
69,610 |
|
Occupancy |
|
6,613 |
|
|
6,380 |
|
|
18,295 |
|
|
16,399 |
|
Data processing |
|
2,989 |
|
|
2,546 |
|
|
7,861 |
|
|
6,449 |
|
FDIC assessment |
|
760 |
|
|
1,077 |
|
|
2,213 |
|
|
3,156 |
|
Advertising and public relations |
|
583 |
|
|
380 |
|
|
1,300 |
|
|
994 |
|
Communications |
|
810 |
|
|
771 |
|
|
2,544 |
|
|
2,098 |
|
Other real estate owned expenses, net |
|
62 |
|
|
61 |
|
|
271 |
|
|
223 |
|
Impairment of other real estate |
|
— |
|
|
917 |
|
|
85 |
|
|
1,037 |
|
Core deposit intangible amortization |
|
1,519 |
|
|
1,409 |
|
|
4,243 |
|
|
3,311 |
|
Professional fees |
|
1,175 |
|
|
1,273 |
|
|
3,427 |
|
|
3,212 |
|
Acquisition expense, including legal |
|
1,682 |
|
|
2,428 |
|
|
5,671 |
|
|
8,247 |
|
Other |
|
6,348 |
|
|
4,978 |
|
|
18,789 |
|
|
12,524 |
|
Total noninterest expense |
|
52,655 |
|
|
47,904 |
|
|
146,771 |
|
|
127,260 |
|
Income before taxes |
|
44,837 |
|
|
35,210 |
|
|
117,760 |
|
|
84,304 |
|
Income tax expense |
|
9,141 |
|
|
11,696 |
|
|
23,465 |
|
|
26,985 |
|
Net income |
|
$ |
35,696 |
|
|
$ |
23,514 |
|
|
$ |
94,295 |
|
|
$ |
57,319 |
|
|
Independent
Bank Group, Inc. and SubsidiariesConsolidated Balance SheetsAs of
September 30, 2018 and December 31, 2017(Dollars in
thousands)(Unaudited) |
|
|
September 30, |
|
December 31, |
Assets |
2018 |
|
2017 |
Cash and due from banks |
$ |
149,641 |
|
|
$ |
187,574 |
|
Interest-bearing deposits in other banks |
140,529 |
|
|
243,528 |
|
Cash and cash equivalents |
290,170 |
|
|
431,102 |
|
Certificates of deposit held in other banks |
1,225 |
|
|
12,985 |
|
Securities available for sale, at fair value |
760,995 |
|
|
763,002 |
|
Loans held for sale ($15,964 at fair value at September 30,
2018) |
27,730 |
|
|
39,202 |
|
Loans, net |
7,658,989 |
|
|
6,432,273 |
|
Premises and equipment, net |
156,320 |
|
|
147,835 |
|
Other real estate owned |
4,610 |
|
|
7,126 |
|
Federal Home Loan Bank (FHLB) of Dallas stock and other restricted
stock |
26,617 |
|
|
29,184 |
|
Bank-owned life insurance (BOLI) |
128,679 |
|
|
113,170 |
|
Deferred tax asset |
14,565 |
|
|
9,763 |
|
Goodwill |
721,784 |
|
|
621,458 |
|
Core deposit intangible, net |
46,533 |
|
|
43,244 |
|
Other assets |
53,247 |
|
|
34,119 |
|
Total assets |
$ |
9,891,464 |
|
|
$ |
8,684,463 |
|
|
|
|
|
Liabilities and Stockholders’
Equity |
|
|
|
Deposits: |
|
|
|
Noninterest-bearing |
$ |
2,235,377 |
|
|
$ |
1,907,770 |
|
Interest-bearing |
5,547,475 |
|
|
4,725,052 |
|
Total deposits |
7,782,852 |
|
|
6,632,822 |
|
FHLB advances |
345,000 |
|
|
530,667 |
|
Other borrowings |
137,207 |
|
|
136,911 |
|
Junior subordinated debentures |
27,803 |
|
|
27,654 |
|
Other liabilities |
31,418 |
|
|
20,391 |
|
Total liabilities |
8,324,280 |
|
|
7,348,445 |
|
Commitments and contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock |
— |
|
|
— |
|
Common stock |
305 |
|
|
283 |
|
Additional paid-in capital |
1,313,981 |
|
|
1,151,990 |
|
Retained earnings |
267,118 |
|
|
184,232 |
|
Accumulated other comprehensive loss |
(14,220 |
) |
|
(487 |
) |
Total stockholders’ equity |
1,567,184 |
|
|
1,336,018 |
|
Total liabilities and stockholders’
equity |
$ |
9,891,464 |
|
|
$ |
8,684,463 |
|
Independent Bank Group,
Inc. and SubsidiariesConsolidated Average Balance Sheet Amounts,
Interest Earned and Yield AnalysisThree Months Ended September 30,
2018 and 2017(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. |
|
|
|
Three Months Ended
September 30, |
|
|
2018 |
|
2017 |
|
|
AverageOutstandingBalance |
|
Interest |
|
Yield/Rate (3) |
|
AverageOutstandingBalance |
|
Interest |
|
Yield/Rate (3) |
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1) |
|
$ |
7,667,237 |
|
|
$ |
103,104 |
|
|
5.34 |
% |
|
$ |
6,286,990 |
|
|
$ |
79,325 |
|
|
5.01 |
% |
Taxable securities |
|
628,873 |
|
|
3,840 |
|
|
2.42 |
|
|
576,770 |
|
|
2,539 |
|
|
1.75 |
|
Nontaxable securities |
|
172,556 |
|
|
1,103 |
|
|
2.54 |
|
|
188,053 |
|
|
1,124 |
|
|
2.37 |
|
Interest-bearing deposits and other |
|
218,104 |
|
|
1,242 |
|
|
2.26 |
|
|
461,092 |
|
|
1,684 |
|
|
1.45 |
|
Total interest-earning assets |
|
8,686,770 |
|
|
$ |
109,289 |
|
|
4.99 |
|
|
7,512,905 |
|
|
$ |
84,672 |
|
|
4.47 |
|
Noninterest-earning assets |
|
1,341,454 |
|
|
|
|
|
|
1,213,942 |
|
|
|
|
|
Total assets |
|
$ |
10,028,224 |
|
|
|
|
|
|
$ |
8,726,847 |
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Checking accounts |
|
$ |
2,986,694 |
|
|
$ |
7,380 |
|
|
0.98 |
% |
|
$ |
2,864,775 |
|
|
$ |
4,102 |
|
|
0.57 |
% |
Savings accounts |
|
296,941 |
|
|
212 |
|
|
0.28 |
|
|
306,380 |
|
|
104 |
|
|
0.13 |
|
Money market accounts |
|
1,069,013 |
|
|
5,226 |
|
|
1.94 |
|
|
619,051 |
|
|
1,459 |
|
|
0.94 |
|
Certificates of deposit |
|
1,128,540 |
|
|
4,562 |
|
|
1.60 |
|
|
1,074,883 |
|
|
2,368 |
|
|
0.87 |
|
Total deposits |
|
5,481,188 |
|
|
17,380 |
|
|
1.26 |
|
|
4,865,089 |
|
|
8,033 |
|
|
0.66 |
|
FHLB advances |
|
587,537 |
|
|
3,121 |
|
|
2.11 |
|
|
541,129 |
|
|
1,749 |
|
|
1.28 |
|
Other borrowings and repurchase agreements |
|
137,286 |
|
|
2,100 |
|
|
6.07 |
|
|
123,285 |
|
|
1,716 |
|
|
5.52 |
|
Junior subordinated debentures |
|
27,786 |
|
|
420 |
|
|
6.00 |
|
|
27,587 |
|
|
317 |
|
|
4.56 |
|
Total interest-bearing
liabilities |
|
6,233,797 |
|
|
23,021 |
|
|
1.47 |
|
|
5,557,090 |
|
|
11,815 |
|
|
0.84 |
|
Noninterest-bearing checking accounts |
|
2,206,612 |
|
|
|
|
|
|
1,863,971 |
|
|
|
|
|
Noninterest-bearing liabilities |
|
33,313 |
|
|
|
|
|
|
33,836 |
|
|
|
|
|
Stockholders’ equity |
|
1,554,502 |
|
|
|
|
|
|
1,271,950 |
|
|
|
|
|
Total liabilities and equity |
|
$ |
10,028,224 |
|
|
|
|
|
|
$ |
8,726,847 |
|
|
|
|
|
Net interest income |
|
|
|
$ |
86,268 |
|
|
|
|
|
|
$ |
72,857 |
|
|
|
Interest rate spread |
|
|
|
|
|
3.53 |
% |
|
|
|
|
|
3.63 |
% |
Net interest margin (2) |
|
|
|
|
|
3.94 |
|
|
|
|
|
|
3.85 |
|
Net interest income and margin (tax equivalent basis)
(4) |
|
|
|
$ |
86,732 |
|
|
3.96 |
|
|
|
|
$ |
73,148 |
|
|
3.86 |
|
Average interest earning assets to interest bearing
liabilities |
|
|
|
|
|
139.35 |
|
|
|
|
|
|
135.19 |
|
(1) Average loan balances include nonaccrual loans.(2) Net
interest margins for the periods presented represent: (i) the
difference between interest income on interest-earning assets and
the interest expense on interest-bearing liabilities, divided by
(ii) average interest-earning assets for the period.(3) Yield and
rates for the three month periods are annualized.(4) A
tax-equivalent adjustment has been computed using a federal income
tax rate of 21% and 35% for the three months ended
September 30, 2018 and 2017, respectively.
Independent Bank Group,
Inc. and SubsidiariesConsolidated Average Balance Sheet Amounts,
Interest Earned and Yield AnalysisNine Months Ended September 30,
2018 and 2017(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. |
|
|
|
Nine Months Ended September
30, |
|
|
2018 |
|
2017 |
|
|
Average Outstanding
Balance |
|
Interest |
|
Yield/ Rate
(3) |
|
Average Outstanding
Balance |
|
Interest |
|
Yield/ Rate
(3) |
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1) |
|
$ |
7,083,329 |
|
|
$ |
277,993 |
|
|
5.25 |
% |
|
$ |
5,701,324 |
|
|
$ |
208,263 |
|
|
4.88 |
% |
Taxable securities |
|
607,591 |
|
|
10,244 |
|
|
2.25 |
|
|
452,317 |
|
|
5,606 |
|
|
1.66 |
|
Nontaxable securities |
|
181,614 |
|
|
3,475 |
|
|
2.56 |
|
|
144,132 |
|
|
2,657 |
|
|
2.46 |
|
Interest-bearing deposits and other |
|
181,234 |
|
|
2,773 |
|
|
2.05 |
|
|
420,330 |
|
|
3,968 |
|
|
1.26 |
|
Total interest-earning assets |
|
8,053,768 |
|
|
$ |
294,485 |
|
|
4.89 |
|
|
6,718,103 |
|
|
$ |
220,494 |
|
|
4.39 |
|
Noninterest-earning assets |
|
1,240,761 |
|
|
|
|
|
|
990,811 |
|
|
|
|
|
Total assets |
|
$ |
9,294,529 |
|
|
|
|
|
|
$ |
7,708,914 |
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Checking accounts |
|
$ |
2,962,162 |
|
|
$ |
18,555 |
|
|
0.84 |
% |
|
$ |
2,510,550 |
|
|
$ |
8,828 |
|
|
0.47 |
% |
Savings accounts |
|
287,176 |
|
|
462 |
|
|
0.22 |
|
|
255,602 |
|
|
267 |
|
|
0.14 |
|
Money market accounts |
|
898,260 |
|
|
11,737 |
|
|
1.75 |
|
|
610,819 |
|
|
4,451 |
|
|
0.97 |
|
Certificates of deposit |
|
966,769 |
|
|
9,252 |
|
|
1.28 |
|
|
1,025,997 |
|
|
6,497 |
|
|
0.85 |
|
Total deposits |
|
5,114,367 |
|
|
40,006 |
|
|
1.05 |
|
|
4,402,968 |
|
|
20,043 |
|
|
0.61 |
|
FHLB advances |
|
545,420 |
|
|
7,854 |
|
|
1.93 |
|
|
487,820 |
|
|
4,271 |
|
|
1.17 |
|
Other borrowings and repurchase agreements |
|
137,641 |
|
|
6,299 |
|
|
6.12 |
|
|
118,331 |
|
|
5,137 |
|
|
5.80 |
|
Junior subordinated debentures |
|
27,736 |
|
|
1,182 |
|
|
5.70 |
|
|
24,448 |
|
|
819 |
|
|
4.48 |
|
Total interest-bearing
liabilities |
|
5,825,164 |
|
|
55,341 |
|
|
1.27 |
|
|
5,033,567 |
|
|
30,270 |
|
|
0.80 |
|
Noninterest-bearing checking accounts |
|
2,004,763 |
|
|
|
|
|
|
1,578,061 |
|
|
|
|
|
Noninterest-bearing liabilities |
|
23,694 |
|
|
|
|
|
|
26,234 |
|
|
|
|
|
Stockholders’ equity |
|
1,440,908 |
|
|
|
|
|
|
1,071,052 |
|
|
|
|
|
Total liabilities and equity |
|
$ |
9,294,529 |
|
|
|
|
|
|
$ |
7,708,914 |
|
|
|
|
|
Net interest income |
|
|
|
$ |
239,144 |
|
|
|
|
|
|
$ |
190,224 |
|
|
|
Interest rate spread |
|
|
|
|
|
3.62 |
% |
|
|
|
|
|
3.59 |
% |
Net interest margin (2) |
|
|
|
|
|
3.97 |
|
|
|
|
|
|
3.79 |
|
Net interest income and margin (tax equivalent basis)
(4) |
|
|
|
$ |
240,477 |
|
|
3.99 |
|
|
|
|
$ |
192,136 |
|
|
3.82 |
|
Average interest earning assets to interest bearing
liabilities |
|
|
|
|
|
138.26 |
|
|
|
|
|
|
133.47 |
|
(1) Average loan balances include nonaccrual loans.(2) Net
interest margins for the periods presented represent: (i) the
difference between interest income on interest-earning assets and
the interest expense on interest-bearing liabilities, divided by
(ii) average interest-earning assets for the period.(3) Yield and
rates for the nine month periods are annualized.(4) A
tax-equivalent adjustment has been computed using a federal income
tax rate of 21% and 35% for the nine months ended
September 30, 2018 and 2017, respectively.
Independent Bank Group, Inc. and SubsidiariesLoan Portfolio
CompositionAs of September 30, 2018 and December 31,
2017(Dollars in thousands)(Unaudited) |
|
Totals loans by category |
|
|
|
|
|
|
September 30,
2018 |
|
December 31,
2017 |
|
|
Amount |
|
% of Total |
|
Amount |
|
% of Total |
Commercial (1) |
|
$ |
1,313,170 |
|
|
17.1 |
% |
|
$ |
1,059,984 |
|
|
16.3 |
% |
Real estate: |
|
|
|
|
|
|
|
|
Commercial real estate |
|
3,996,384 |
|
|
51.7 |
|
|
3,369,892 |
|
|
51.7 |
|
Commercial construction, land and land
development |
|
920,823 |
|
|
11.9 |
|
|
744,868 |
|
|
11.5 |
|
Residential real estate (2) |
|
1,038,479 |
|
|
13.4 |
|
|
931,495 |
|
|
14.3 |
|
Single-family interim construction |
|
357,604 |
|
|
4.6 |
|
|
289,680 |
|
|
4.4 |
|
Agricultural |
|
70,738 |
|
|
0.9 |
|
|
82,583 |
|
|
1.3 |
|
Consumer |
|
34,648 |
|
|
0.4 |
|
|
34,639 |
|
|
0.5 |
|
Other |
|
275 |
|
|
— |
|
|
304 |
|
|
— |
|
Total loans |
|
7,732,121 |
|
|
100.0 |
% |
|
6,513,445 |
|
|
100.0 |
% |
Deferred loan fees |
|
(3,236 |
) |
|
|
|
(2,568 |
) |
|
|
Allowance for loan losses |
|
(42,166 |
) |
|
|
|
(39,402 |
) |
|
|
Total loans, net |
|
$ |
7,686,719 |
|
|
|
|
$ |
6,471,475 |
|
|
|
(1) Includes mortgage warehouse purchase loans of $150,267 and
$164,694 at September 30, 2018 and December 31, 2017,
respectively.(2) Includes loans held for sale at September 30,
2018 and December 31, 2017 of $27,730 and $39,202,
respectively.
Independent Bank Group, Inc. and SubsidiariesReconciliation of
Non-GAAP Financial MeasuresThree Months Ended September 30,
2018, June 30, 2018, March 31, 2018, December 31, 2017 and
September 30, 2017(Dollars in thousands, except for share
data)(Unaudited) |
|
|
|
For the Three Months Ended |
|
|
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
September 30, 2017 |
ADJUSTED NET INCOME |
|
|
|
|
|
|
Net Interest Income - Reported |
(a) |
$ |
86,268 |
|
$ |
78,909 |
|
$ |
73,967 |
|
$ |
75,254 |
|
$ |
72,857 |
|
Income recognized on acquired loans |
|
(1,051 |
) |
(954 |
) |
(739 |
) |
(2,463 |
) |
(905 |
) |
Adjusted Net Interest Income |
(b) |
85,217 |
|
77,955 |
|
73,228 |
|
72,791 |
|
71,952 |
|
Provision Expense - Reported |
(c) |
1,525 |
|
2,730 |
|
2,695 |
|
1,897 |
|
1,873 |
|
Noninterest Income - Reported |
(d) |
12,749 |
|
10,133 |
|
9,455 |
|
13,579 |
|
12,130 |
|
Gain on sale of loans |
|
— |
|
— |
|
— |
|
— |
|
(338 |
) |
(Gain) loss on sale of branch |
|
— |
|
— |
|
— |
|
(3,044 |
) |
127 |
|
Gain on sale of OREO and repossessed assets |
|
(95 |
) |
(58 |
) |
(60 |
) |
(876 |
) |
— |
|
Loss (gain) on sale of securities |
|
115 |
|
10 |
|
224 |
|
(72 |
) |
— |
|
(Gain) loss on sale of premises and equipment |
|
(220 |
) |
89 |
|
8 |
|
6 |
|
21 |
|
Recoveries on loans charged off prior to
acquisition |
|
(230 |
) |
(336 |
) |
(287 |
) |
(65 |
) |
(994 |
) |
Adjusted Noninterest Income |
(e) |
12,319 |
|
9,838 |
|
9,340 |
|
9,528 |
|
10,946 |
|
Noninterest Expense - Reported |
(f) |
52,655 |
|
49,158 |
|
44,958 |
|
49,553 |
|
47,904 |
|
OREO impairment |
|
— |
|
— |
|
(85 |
) |
(375 |
) |
(917 |
) |
IPO related stock grants |
|
— |
|
(11 |
) |
(125 |
) |
(128 |
) |
(128 |
) |
Acquisition Expense (4) |
|
(2,594 |
) |
(4,296 |
) |
(974 |
) |
(6,509 |
) |
(3,013 |
) |
Adjusted Noninterest Expense |
(g) |
50,061 |
|
44,851 |
|
43,774 |
|
42,541 |
|
43,846 |
|
Adjusted Net Income (1) |
(b)
- (c) + (e) - (g) |
$ |
36,593 |
|
$ |
32,239 |
|
$ |
29,231 |
|
$ |
25,313 |
|
$ |
24,829 |
|
|
|
|
|
|
|
|
ADJUSTED PROFITABILITY |
|
|
|
|
|
|
Adjusted Return on Average Assets (2) |
|
1.45 |
% |
1.41 |
% |
1.37 |
% |
1.15 |
% |
1.13 |
% |
Adjusted Return on Average Equity (2) |
|
9.34 |
% |
9.12 |
% |
8.80 |
% |
7.64 |
% |
7.74 |
% |
Adjusted Return on Tangible Equity (2) |
|
18.47 |
% |
17.94 |
% |
17.34 |
% |
15.46 |
% |
15.96 |
% |
Total Average Assets |
|
$ |
10,028,224 |
|
$ |
9,164,915 |
|
$ |
8,675,596 |
|
$ |
8,702,597 |
|
$ |
8,726,847 |
|
Total Average Stockholders' Equity |
|
$ |
1,554,502 |
|
$ |
1,418,536 |
|
$ |
1,347,401 |
|
$ |
1,314,955 |
|
$ |
1,271,950 |
|
Total Average Tangible Stockholders' Equity (3) |
|
$ |
786,126 |
|
$ |
720,653 |
|
$ |
683,525 |
|
$ |
649,541 |
|
$ |
617,115 |
|
|
|
|
|
|
|
|
EFFICIENCY RATIO |
|
|
|
|
|
|
Amortization of core deposit intangibles |
(h) |
$ |
1,519 |
|
$ |
1,393 |
|
$ |
1,331 |
|
$ |
1,328 |
|
$ |
1,409 |
|
Reported Efficiency Ratio |
(f
- h) / (a + d) |
51.64 |
% |
53.64 |
% |
52.30 |
% |
54.29 |
% |
54.71 |
% |
Adjusted Efficiency Ratio |
(g
- h) / (b + e) |
49.77 |
% |
49.50 |
% |
51.40 |
% |
50.06 |
% |
51.19 |
% |
(1) Assumes an effective tax rate of 20.4%, 19.8%, 19.0%, 33.2%
and 33.2% for the quarters ended September 30, 2018, June 30,
2018, March 31, 2018, December 31, 2017 and September 30, 2017,
respectively. The quarters ended September 30, 2018 and June 30,
2018 exclude $11 thousand and $152 thousand of nondeductible
acquisition expense, respectively, and the quarter ended December
31, 2017 excludes $5,528 thousand charge to remeasure deferred
taxes as a result of the enactment of the TCJA and $259 thousand of
nondeductible tax expense.(2) Calculated using adjusted net
income.(3) Excludes average balance of goodwill and net core
deposit intangibles.(4) Acquisition expenses include $912 thousand,
$852 thousand, $429 thousand, $1,858 thousand and $585 thousand, of
compensation and bonus expenses in addition to $1,682 thousand,
$3,444 thousand, $545 thousand, $4,651 thousand and $2,428 thousand
of merger-related expenses for the quarters ended
September 30, 2018, June 30, 2018, March 31, 2018, December
31, 2017 and September 30, 2017, respectively.
|
Independent Bank Group, Inc. and
SubsidiariesReconciliation of Non-GAAP Financial MeasuresAs of
September 30, 2018 and December 31, 2017(Dollars in
thousands, except per share information)(Unaudited) |
|
Tangible Book Value & Tangible Common Equity To
Tangible Asset Ratio |
|
|
|
|
September 30, |
|
December 31, |
|
2018 |
|
2017 |
Tangible Common Equity |
|
|
|
Total common stockholders' equity |
$ |
1,567,184 |
|
|
$ |
1,336,018 |
|
Adjustments: |
|
|
|
Goodwill |
(721,784 |
) |
|
(621,458 |
) |
Core deposit intangibles, net |
(46,533 |
) |
|
(43,244 |
) |
Tangible common equity |
$ |
798,867 |
|
|
$ |
671,316 |
|
|
|
|
|
Tangible Assets |
|
|
|
Total assets |
$ |
9,891,464 |
|
|
$ |
8,684,463 |
|
Adjustments: |
|
|
|
Goodwill |
$ |
(721,784 |
) |
|
$ |
(621,458 |
) |
Core deposit intangibles |
$ |
(46,533 |
) |
|
$ |
(43,244 |
) |
Tangible assets |
$ |
9,123,147 |
|
|
$ |
8,019,761 |
|
Common shares outstanding |
30,477,648 |
|
|
28,254,893 |
|
Tangible common equity to tangible assets |
8.76 |
% |
|
8.37 |
% |
Book value per common share |
$ |
51.42 |
|
|
$ |
47.28 |
|
Tangible book value per common share |
26.21 |
|
|
23.76 |
|
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