Independent Bank Group, Inc. Reports Fourth Quarter Financial Results and Declares Quarterly Dividend
- None.
- None.
Insights
The reported net income figures for Independent Bank Group, Inc. reveal a notable decline from the previous quarter and year-over-year. A financial analyst would scrutinize the earnings per share (EPS) decrease from $0.79 to $0.36 quarter-over-quarter and the significant drop from $4.70 to $1.04 for the full year. This contraction could be indicative of operational challenges or increased expenses that have impacted profitability. It's essential to consider macroeconomic factors such as interest rate changes, which could affect the bank's net interest margin and loan demand influenced by economic conditions in Texas and Colorado.
The dividend announcement of $0.38 per share suggests confidence by the board in the company's liquidity and profit distribution policy. However, the payout ratio and its sustainability would be a point of analysis, especially given the reduced net income. The organic loan growth rate of 11.0% is a positive sign of business expansion, but it's critical to assess the quality of these loans and the potential for increased defaults in an uncertain economic environment.
From a market perspective, the organic loan growth reported by Independent Bank Group is a strong indicator of market penetration and customer acquisition. The growth in core loan books, particularly in the context of the Texas and Colorado economies, could signal regional economic health and a competitive edge for the bank. An analysis of the banking sector in these regions would be necessary to benchmark Independent Bank Group's performance against its peers.
Stable credit metrics, such as the low nonperforming assets ratio and net charge-offs, suggest that the bank maintains a robust risk management framework. This is crucial for investor confidence, especially in a sector where risk assessment is paramount. The loan to deposit ratio of 93.6% indicates a balanced approach to lending and deposit gathering, which is vital for liquidity management.
An economist would evaluate the broader economic implications of Independent Bank Group's financial results. The capital ratios exceeding regulatory requirements reflect a strong capital buffer, which is essential for the bank's resilience in the face of economic downturns. The increase in book value and tangible book value per share suggests a solid accumulation of equity, which can be a positive signal for long-term financial stability.
Moreover, the healthy capital levels and the bank's strategic actions to strengthen its balance sheet over the past year may position it well to weather potential economic headwinds. It would be prudent to analyze the bank's performance within the context of the current economic cycle, interest rate forecasts and the potential impact of inflation on both the bank's operations and its customers' financial behavior.
For the year ended December 31, 2023, the Company reported net income of
The Company also announced that its Board of Directors declared a quarterly cash dividend of
Highlights
-
Organic loan growth of
11.0% annualized for the quarter -
Resilient credit metrics with nonperforming assets of
0.32% of total assets and net charge-offs of0.01% annualized for the quarter -
Grew book value per share by
$1.71 $58.20 $1.79 $32.90 -
Stable loan to deposit ratio of
93.6% at quarter-end -
Capital levels remain healthy, with ratios well above the standards to be considered well-capitalized under regulatory requirements, with an estimated total capital ratio of
11.57% , leverage ratio of8.94% , and (non-GAAP) tangible common equity (TCE) ratio of7.55%
“During the fourth quarter, we were pleased to see healthy growth in our core loan book as the growing
Fourth Quarter 2023 Balance Sheet Highlights
Loans
-
Total loans held for investment, excluding mortgage warehouse purchase loans, were
$14.2 billion $13.8 billion $13.6 billion $383.6 million 11.0% on an annualized basis, during fourth quarter 2023. -
Average mortgage warehouse purchase loans were
$408.4 million $425.9 million $297.1 million $17.5 million 4.1% from the linked quarter and an increase of$111.3 million 37.5% year over year.
Asset Quality
-
Nonperforming assets totaled
$61.4 million 0.32% of total assets at December 31, 2023, compared to$61.0 million 0.33% of total assets at September 30, 2023, and$64.1 million 0.35% of total assets at December 31, 2022. -
Nonperforming loans totaled
$51.8 million 0.37% of total loans held for investment at December 31, 2023, compared to$38.4 million 0.28% at September 30, 2023 and$40.1 million 0.29% at December 31, 2022. -
The increase in nonperforming loans for the year over year and linked period was primarily due to the addition of a
$13.3 million -
The slight increase in nonperforming assets for the linked quarter reflects the nonaccrual loan discussed above offset by the sale of a
$10.0 million $3.0 million $2.2 million $805 thousand -
Net charge-offs were
0.01% annualized both in the fourth quarter 2023 and the linked quarter and0.02% annualized in the prior year quarter.
Deposits, Borrowings and Liquidity
-
Total deposits were
$15.7 billion $15.3 billion $15.1 billion -
Estimated uninsured deposits, excluding public funds deposits, totaled
$4.6 billion 29.1% of total deposits as of December 31, 2023 compared to$4.6 billion 29.9% as of September 30, 2023. -
Total borrowings (other than junior subordinated debentures) were
$621.8 million $75.2 million $54.8 million $50.0 million $33.8 million $30.0 million $75.0 million
Capital
-
The Company continues to be well capitalized under regulatory guidelines. At December 31, 2023, the 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
9.58% ,8.94% ,9.93% and11.57% , respectively, compared to9.86% ,9.09% ,10.21% , and11.89% , respectively, at September 30, 2023 and10.09% ,9.49% ,10.45% , and12.35% , respectively at December 31, 2022.
Fourth Quarter 2023 Operating Results
Net Interest Income
-
Net interest income was
$106.3 million $141.8 million $109.0 million $725 thousand $1.1 million $940 thousand -
The average balance of total interest-earning assets grew by
$833.9 million $16.9 billion $16.1 billion $286.2 million $16.7 billion $713.1 million $317.1 million $209.2 million -
The yield on interest-earning assets was
5.44% for fourth quarter 2023 compared to4.67% for fourth quarter 2022 and5.31% for third quarter 2023. The increase in asset yield compared to the prior year and linked quarter is primarily a result of increases in the Fed Funds rate over the last year. The average loan yield, net of acquired loan accretion and PPP income was5.81% for the current quarter, compared to5.01% for prior year quarter and5.67% for the linked quarter. -
The cost of interest-bearing liabilities, including borrowings, was
3.98% for fourth quarter 2023 compared to1.81% for fourth quarter 2022 and3.72% for third quarter 2023. The increase from the linked quarter and prior year is reflective of higher funding costs, primarily on deposit products and FHLB advances as a result of Fed Funds rate increases. In addition, deposit funding costs were also higher due to promotional campaigns for certificate of deposit accounts. -
The net interest margin was
2.49% for fourth quarter 2023 compared to3.49% for fourth quarter 2022 and2.60% for third quarter 2023. The net interest margin excluding acquired loan accretion was2.47% for fourth quarter 2023 compared to3.46% for fourth quarter 2022 and2.58% for third quarter 2023. The decrease in net interest margin from the prior year and linked quarter was primarily due to the increased funding costs on deposits, offset by higher earnings on loans due to organic growth and rate increases for the respective periods. The year over year change also reflects increased funding costs on FHLB and other short-term advances, offset by higher earnings on other interest-bearing assets due to rate increases over the year.
Noninterest Income
-
Total noninterest income decreased
$613 thousand $3.0 million -
The decrease from the prior year quarter reflects a
$1.8 million $314 thousand $287 thousand $343 thousand $162 thousand -
The change from the linked quarter primarily reflects the loss on sale of other real estate mentioned above as well as decreases of
$417 thousand $752 thousand
Noninterest Expense
-
Total noninterest expense decreased
$3.6 million $13.8 million -
The net decrease in noninterest expense in fourth quarter 2023 compared to the prior year is due primarily to decreases of
$12.6 million $2.7 million $2.5 million $9.9 million $3.0 million -
The increase in noninterest expense from the linked quarter is due primarily to an
$8.3 million $3.0 million $994 thousand -
The decrease in salaries and benefits from the prior year is due primarily to
$7.1 million $4.7 million -
The decrease in professional fees compared to the prior year was primarily due to lower consulting fees of
$1.6 million $848 thousand -
The decrease in other noninterest expense from prior year is primarily due to asset impairment charges of
$3.3 million -
The increase in FDIC assessment compared to the prior year and linked quarter was due to increases in the assessment rate charged by the FDIC which took effect in 2023, as well as an increase in the liquidity stress rate. In addition, an
$8.3 million
Provision for Credit Losses
-
The Company recorded
$3.5 million $2.8 million $340 thousand -
The allowance for credit losses on loans was
$151.9 million 1.07% of total loans held for investment, net of mortgage warehouse purchase loans, at December 31, 2023, compared to$148.8 million 1.09% at December 31, 2022 and compared to$148.2 million 1.08% at September 30, 2023. -
The allowance for credit losses on off-balance sheet exposures was
$3.9 million $4.4 million
Income Taxes
-
Federal income tax expense of
$3.5 million 18.9% compared to tax expense of$10.7 million 20.7% for the prior year quarter and income tax expense of$8.2 million 20.1% for the linked quarter. The lower effective rate for fourth quarter 2023 resulted from the recognition of a tax benefit due to the expiration of the statute of limitations on an immaterial uncertain tax position.
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 year ended December 31, 2023 on Form 10-K. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2023 and will adjust amounts preliminarily reported, if necessary.
About Independent Bank Group, Inc.
Independent Bank Group, Inc. is a bank holding company headquartered in
Conference Call
A conference call covering Independent Bank Group’s fourth quarter earnings announcement will be held on Tuesday, January 23, 2024 at 8:30 am (ET) and can be accessed by the webcast link, https://www.webcast-eqs.com/independentbankgroup01232024_en/en or by calling 1-877-407-0989 and by identifying the meeting number 13743624 or by identifying "Independent Bank Group Fourth Quarter 2023 Earnings Conference Call." The conference materials will also be available by accessing the Investor Relations page of our website, https://ir.ifinancial.com. If you are unable to participate in the live event, a recording of the conference call will be accessible via the Investor Relations page of our website.
Forward-Looking Statements
From time to time the Company’s comments and releases may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and other related federal security laws. Forward-looking statements include information about the Company’s possible or assumed future results of operations, including its future revenues, income, expenses, provision for taxes, effective tax rate, earnings (loss) per share and cash flows, its future capital expenditures and dividends, its future financial condition and changes therein, including changes in the Company’s loan portfolio and allowance for credit losses, the Company’s future capital structure or changes therein, the plan and objectives of management for future operations, the Company’s future or proposed acquisitions, the future or expected effect of acquisitions on the Company’s operations, results of operations and financial condition, the Company’s future economic performance and the statements of the assumptions underlying any such statement. Such statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as “aim,” “anticipate,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is estimated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. The forward-looking statements that the Company makes are based on its current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to future results and occurrences, 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 the Company’s future financial results and performance and could cause those results or performance to differ materially from those expressed in the forward-looking statements. These possible events or factors include, but are not limited to: 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
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
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 credit losses and the effect of goodwill, other intangible assets 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 |
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Consolidated Financial Data |
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Three Months Ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022 |
|||||||||||||||
(Dollars in thousands, except for share data) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
As of and for the Quarter Ended |
||||||||||||||
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
||||||
Selected Income Statement Data |
|
|
|
|
|
|
|
|
|
||||||
Interest income |
$ |
232,522 |
|
$ |
222,744 |
|
$ |
215,294 |
|
$ |
201,176 |
|
|
$ |
189,769 |
Interest expense |
|
126,217 |
|
|
113,695 |
|
|
101,687 |
|
|
73,254 |
|
|
|
47,982 |
Net interest income |
|
106,305 |
|
|
109,049 |
|
|
113,607 |
|
|
127,922 |
|
|
|
141,787 |
Provision for credit losses |
|
3,480 |
|
|
340 |
|
|
220 |
|
|
90 |
|
|
|
2,833 |
Net interest income after provision for credit losses |
|
102,825 |
|
|
108,709 |
|
|
113,387 |
|
|
127,832 |
|
|
|
138,954 |
Noninterest income |
|
10,614 |
|
|
13,646 |
|
|
14,095 |
|
|
12,754 |
|
|
|
11,227 |
Noninterest expense |
|
95,125 |
|
|
81,334 |
|
|
85,705 |
|
|
189,380 |
|
|
|
98,774 |
Income tax expense (benefit) |
|
3,455 |
|
|
8,246 |
|
|
8,700 |
|
|
(11,284 |
) |
|
|
10,653 |
Net income (loss) |
|
14,859 |
|
|
32,775 |
|
|
33,077 |
|
|
(37,510 |
) |
|
|
40,754 |
Adjusted net income (1) |
|
25,509 |
|
|
32,624 |
|
|
33,726 |
|
|
44,083 |
|
|
|
49,433 |
|
|
|
|
|
|
|
|
|
|
||||||
Per Share Data (Common Stock) |
|
|
|
|
|
|
|
|
|
||||||
Earnings (loss): |
|
|
|
|
|
|
|
|
|
||||||
Basic |
$ |
0.36 |
|
$ |
0.79 |
|
$ |
0.80 |
|
$ |
(0.91 |
) |
|
$ |
0.99 |
Diluted |
|
0.36 |
|
|
0.79 |
|
|
0.80 |
|
|
(0.91 |
) |
|
|
0.99 |
Adjusted earnings: |
|
|
|
|
|
|
|
|
|
||||||
Basic (1) |
|
0.62 |
|
|
0.79 |
|
|
0.82 |
|
|
1.07 |
|
|
|
1.20 |
Diluted (1) |
|
0.62 |
|
|
0.79 |
|
|
0.82 |
|
|
1.07 |
|
|
|
1.20 |
Dividends |
|
0.38 |
|
|
0.38 |
|
|
0.38 |
|
|
0.38 |
|
|
|
0.38 |
Book value |
|
58.20 |
|
|
56.49 |
|
|
57.00 |
|
|
56.95 |
|
|
|
57.91 |
Tangible book value (1) |
|
32.90 |
|
|
31.11 |
|
|
31.55 |
|
|
31.42 |
|
|
|
32.25 |
Common shares outstanding |
|
41,281,919 |
|
|
41,284,003 |
|
|
41,279,460 |
|
|
41,281,904 |
|
|
|
41,190,677 |
Weighted average basic shares outstanding (2) |
|
41,283,041 |
|
|
41,284,964 |
|
|
41,280,312 |
|
|
41,223,376 |
|
|
|
41,193,716 |
Weighted average diluted shares outstanding (2) |
|
41,388,564 |
|
|
41,381,034 |
|
|
41,365,275 |
|
|
41,316,798 |
|
|
|
41,285,383 |
|
|
|
|
|
|
|
|
|
|
||||||
Selected Period End Balance Sheet Data |
|
|
|
|
|
|
|
|
|
||||||
Total assets |
$ |
19,035,102 |
|
$ |
18,519,872 |
|
$ |
18,719,802 |
|
$ |
18,798,354 |
|
|
$ |
18,258,414 |
Cash and cash equivalents |
|
721,989 |
|
|
711,709 |
|
|
902,882 |
|
|
1,048,590 |
|
|
|
654,322 |
Securities available for sale |
|
1,593,751 |
|
|
1,545,904 |
|
|
1,637,682 |
|
|
1,675,415 |
|
|
|
1,691,784 |
Securities held to maturity |
|
205,232 |
|
|
205,689 |
|
|
206,146 |
|
|
206,602 |
|
|
|
207,059 |
Loans, held for sale |
|
16,420 |
|
|
18,068 |
|
|
18,624 |
|
|
16,576 |
|
|
|
11,310 |
Loans, held for investment (3) |
|
14,160,853 |
|
|
13,781,102 |
|
|
13,628,025 |
|
|
13,606,039 |
|
|
|
13,597,264 |
Mortgage warehouse purchase loans |
|
549,689 |
|
|
442,302 |
|
|
491,090 |
|
|
400,547 |
|
|
|
312,099 |
Allowance for credit losses on loans |
|
151,861 |
|
|
148,249 |
|
|
147,804 |
|
|
146,850 |
|
|
|
148,787 |
Goodwill and other intangible assets |
|
1,044,581 |
|
|
1,047,687 |
|
|
1,050,798 |
|
|
1,053,909 |
|
|
|
1,057,020 |
Other real estate owned |
|
9,490 |
|
|
22,505 |
|
|
22,505 |
|
|
22,700 |
|
|
|
23,900 |
Noninterest-bearing deposits |
|
3,530,704 |
|
|
3,703,784 |
|
|
3,905,492 |
|
|
4,148,360 |
|
|
|
4,736,830 |
Interest-bearing deposits |
|
12,192,331 |
|
|
11,637,185 |
|
|
10,968,014 |
|
|
9,907,327 |
|
|
|
10,384,587 |
Borrowings (other than junior subordinated debentures) |
|
621,821 |
|
|
546,666 |
|
|
1,180,262 |
|
|
2,137,607 |
|
|
|
567,066 |
Junior subordinated debentures |
|
54,617 |
|
|
54,568 |
|
|
54,518 |
|
|
54,469 |
|
|
|
54,419 |
Total stockholders' equity |
|
2,402,593 |
|
|
2,332,098 |
|
|
2,353,042 |
|
|
2,350,857 |
|
|
|
2,385,383 |
Independent Bank Group, Inc. and Subsidiaries |
||||||||||||||
Consolidated Financial Data |
||||||||||||||
Three Months Ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022 |
||||||||||||||
(Dollars in thousands, except for share data) |
||||||||||||||
(Unaudited) |
||||||||||||||
|
As of and for the Quarter Ended |
|||||||||||||
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|||||
Selected Performance Metrics |
|
|
|
|
|
|
|
|
|
|||||
Return on average assets |
0.31 |
% |
|
0.70 |
% |
|
0.71 |
% |
|
(0.83 |
)% |
|
0.90 |
% |
Return on average equity |
2.51 |
|
|
5.51 |
|
|
5.62 |
|
|
(6.39 |
) |
|
6.85 |
|
Return on tangible equity (4) |
4.54 |
|
|
9.92 |
|
|
10.14 |
|
|
(11.48 |
) |
|
12.42 |
|
Adjusted return on average assets (1) |
0.54 |
|
|
0.70 |
|
|
0.73 |
|
|
0.98 |
|
|
1.09 |
|
Adjusted return on average equity (1) |
4.32 |
|
|
5.48 |
|
|
5.73 |
|
|
7.51 |
|
|
8.31 |
|
Adjusted return on tangible equity (1) (4) |
7.79 |
|
|
9.87 |
|
|
10.34 |
|
|
13.49 |
|
|
15.07 |
|
Net interest margin |
2.49 |
|
|
2.60 |
|
|
2.71 |
|
|
3.17 |
|
|
3.49 |
|
Efficiency ratio (5) |
78.70 |
|
|
63.75 |
|
|
64.68 |
|
|
132.41 |
|
|
62.52 |
|
Adjusted efficiency ratio (1) (5) |
67.96 |
|
|
63.84 |
|
|
63.93 |
|
|
58.17 |
|
|
55.51 |
|
|
|
|
|
|
|
|
|
|
|
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Credit Quality Ratios (3) (6) |
|
|
|
|
|
|
|
|
|
|||||
Nonperforming assets to total assets |
0.32 |
% |
|
0.33 |
% |
|
0.32 |
% |
|
0.32 |
% |
|
0.35 |
% |
Nonperforming loans to total loans held for investment |
0.37 |
|
|
0.28 |
|
|
0.28 |
|
|
0.27 |
|
|
0.29 |
|
Nonperforming assets to total loans held for investment and other real estate |
0.43 |
|
|
0.44 |
|
|
0.44 |
|
|
0.44 |
|
|
0.47 |
|
Allowance for credit losses on loans to nonperforming loans |
293.17 |
|
|
385.81 |
|
|
389.84 |
|
|
393.69 |
|
|
371.14 |
|
Allowance for credit losses to total loans held for investment |
1.07 |
|
|
1.08 |
|
|
1.08 |
|
|
1.08 |
|
|
1.09 |
|
Net charge-offs (recoveries) to average loans outstanding (annualized) |
0.01 |
|
|
0.01 |
|
|
(0.03 |
) |
|
0.04 |
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Capital Ratios |
|
|
|
|
|
|
|
|
|
|||||
Estimated common equity Tier 1 capital to risk-weighted assets |
9.58 |
% |
|
9.86 |
% |
|
9.78 |
% |
|
9.70 |
% |
|
10.09 |
% |
Estimated tier 1 capital to average assets |
8.94 |
|
|
9.09 |
|
|
8.92 |
|
|
9.01 |
|
|
9.49 |
|
Estimated tier 1 capital to risk-weighted assets |
9.93 |
|
|
10.21 |
|
|
10.13 |
|
|
10.05 |
|
|
10.45 |
|
Estimated total capital to risk-weighted assets |
11.57 |
|
|
11.89 |
|
|
11.95 |
|
|
11.88 |
|
|
12.35 |
|
Total stockholders' equity to total assets |
12.62 |
|
|
12.59 |
|
|
12.57 |
|
|
12.51 |
|
|
13.06 |
|
Tangible common equity to tangible assets (1) |
7.55 |
|
|
7.35 |
|
|
7.37 |
|
|
7.31 |
|
|
7.72 |
|
____________ |
(1) Non-GAAP financial measure. See reconciliation. |
(2) Total number of shares includes participating shares (those with dividend rights). |
(3) Loans held for investment excludes mortgage warehouse purchase loans. |
(4) Non-GAAP financial measure. Excludes average balance of goodwill and net other intangible assets. |
(5) Efficiency ratio excludes amortization of other intangible assets. See reconciliation of Non-GAAP financial measures. |
(6) Credit metrics - Nonperforming assets, which consist of nonperforming loans, OREO and other repossessed assets, totaled |
Independent Bank Group, Inc. and Subsidiaries |
|||||||
Annual Selected Financial Information |
|||||||
Years Ended December 31, 2023 and 2022 |
|||||||
(Unaudited) |
|||||||
|
Years Ended December 31, |
||||||
|
2023 |
|
2022 |
||||
Per Share Data |
|
|
|
||||
Net income - basic |
$ |
1.05 |
|
|
$ |
4.71 |
|
Net income - diluted |
|
1.04 |
|
|
|
4.70 |
|
Adjusted net income - basic (1) |
|
3.29 |
|
|
|
5.03 |
|
Adjusted net income - diluted (1) |
|
3.29 |
|
|
|
5.02 |
|
Cash dividends |
|
1.52 |
|
|
|
1.52 |
|
Book value |
|
58.20 |
|
|
|
57.91 |
|
|
|
|
|
||||
Outstanding Shares |
|
|
|
||||
Period-end shares |
|
41,281,919 |
|
|
|
41,190,677 |
|
Weighted average shares - basic (2) |
|
41,268,134 |
|
|
|
41,710,829 |
|
Weighted average shares - diluted (2) |
|
41,362,543 |
|
|
|
41,794,088 |
|
|
|
|
|
||||
Selected Annual Ratios |
|
|
|
||||
Return on average assets |
|
0.23 |
% |
|
|
1.09 |
% |
Return on average equity |
|
1.83 |
|
|
|
8.04 |
|
Adjusted return on average assets (1) |
|
0.73 |
|
|
|
1.16 |
|
Adjusted return on average equity (1) |
|
5.76 |
|
|
|
8.59 |
|
Net interest margin |
|
2.74 |
|
|
|
3.46 |
|
(1) Non-GAAP financial measure. See reconciliation. |
(2) Total number of shares includes participating shares (those with dividend rights). |
Independent Bank Group, Inc. and Subsidiaries |
||||||||||||||||
Consolidated Statements of Income |
||||||||||||||||
Three Months and Years Ended December 31, 2023 and 2022 |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Interest income: |
|
|
|
|
|
|
|
|
||||||||
Interest and fees on loans |
|
$ |
212,028 |
|
|
$ |
174,445 |
|
|
$ |
792,659 |
|
|
$ |
602,210 |
|
Interest on taxable securities |
|
|
8,424 |
|
|
|
8,036 |
|
|
|
31,747 |
|
|
|
32,944 |
|
Interest on nontaxable securities |
|
|
2,532 |
|
|
|
2,631 |
|
|
|
10,279 |
|
|
|
10,360 |
|
Interest on interest-bearing deposits and other |
|
|
9,538 |
|
|
|
4,657 |
|
|
|
37,051 |
|
|
|
9,503 |
|
Total interest income |
|
|
232,522 |
|
|
|
189,769 |
|
|
|
871,736 |
|
|
|
655,017 |
|
Interest expense: |
|
|
|
|
|
|
|
|
||||||||
Interest on deposits |
|
|
115,400 |
|
|
|
42,322 |
|
|
|
358,405 |
|
|
|
77,628 |
|
Interest on FHLB advances |
|
|
5,802 |
|
|
|
1,231 |
|
|
|
35,705 |
|
|
|
2,017 |
|
Interest on other borrowings |
|
|
3,770 |
|
|
|
3,465 |
|
|
|
16,018 |
|
|
|
14,451 |
|
Interest on junior subordinated debentures |
|
|
1,245 |
|
|
|
964 |
|
|
|
4,725 |
|
|
|
2,713 |
|
Total interest expense |
|
|
126,217 |
|
|
|
47,982 |
|
|
|
414,853 |
|
|
|
96,809 |
|
Net interest income |
|
|
106,305 |
|
|
|
141,787 |
|
|
|
456,883 |
|
|
|
558,208 |
|
Provision for credit losses |
|
|
3,480 |
|
|
|
2,833 |
|
|
|
4,130 |
|
|
|
4,490 |
|
Net interest income after provision for credit losses |
|
|
102,825 |
|
|
|
138,954 |
|
|
|
452,753 |
|
|
|
553,718 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
||||||||
Service charges on deposit accounts |
|
|
3,522 |
|
|
|
3,208 |
|
|
|
13,958 |
|
|
|
12,204 |
|
Investment management fees |
|
|
2,435 |
|
|
|
2,148 |
|
|
|
9,650 |
|
|
|
9,146 |
|
Mortgage banking revenue |
|
|
1,357 |
|
|
|
1,243 |
|
|
|
7,003 |
|
|
|
8,938 |
|
Mortgage warehouse purchase program fees |
|
|
478 |
|
|
|
391 |
|
|
|
1,892 |
|
|
|
2,676 |
|
Loss on sale of loans |
|
|
— |
|
|
|
(343 |
) |
|
|
(14 |
) |
|
|
(1,844 |
) |
Loss on sale of other real estate |
|
|
(1,797 |
) |
|
|
— |
|
|
|
(1,797 |
) |
|
|
— |
|
(Loss) gain on sale and disposal of premises and equipment |
|
|
(22 |
) |
|
|
(184 |
) |
|
|
323 |
|
|
|
(494 |
) |
Increase in cash surrender value of BOLI |
|
|
1,516 |
|
|
|
1,384 |
|
|
|
5,768 |
|
|
|
5,371 |
|
Other |
|
|
3,125 |
|
|
|
3,380 |
|
|
|
14,326 |
|
|
|
15,469 |
|
Total noninterest income |
|
|
10,614 |
|
|
|
11,227 |
|
|
|
51,109 |
|
|
|
51,466 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
||||||||
Salaries and employee benefits |
|
|
44,612 |
|
|
|
57,250 |
|
|
|
181,445 |
|
|
|
212,087 |
|
Occupancy |
|
|
11,823 |
|
|
|
11,412 |
|
|
|
47,430 |
|
|
|
42,938 |
|
Communications and technology |
|
|
7,511 |
|
|
|
6,661 |
|
|
|
28,713 |
|
|
|
24,937 |
|
FDIC assessment |
|
|
11,982 |
|
|
|
2,052 |
|
|
|
22,153 |
|
|
|
6,883 |
|
Advertising and public relations |
|
|
412 |
|
|
|
523 |
|
|
|
2,607 |
|
|
|
2,106 |
|
Other real estate owned (income) expenses, net |
|
|
(28 |
) |
|
|
(168 |
) |
|
|
(510 |
) |
|
|
31 |
|
Impairment of other real estate |
|
|
3,015 |
|
|
|
— |
|
|
|
5,215 |
|
|
|
— |
|
Amortization of other intangible assets |
|
|
3,106 |
|
|
|
3,111 |
|
|
|
12,439 |
|
|
|
12,491 |
|
Litigation settlement |
|
|
— |
|
|
|
— |
|
|
|
102,500 |
|
|
|
— |
|
Professional fees |
|
|
1,837 |
|
|
|
4,581 |
|
|
|
7,949 |
|
|
|
15,571 |
|
Other |
|
|
10,855 |
|
|
|
13,352 |
|
|
|
41,603 |
|
|
|
41,845 |
|
Total noninterest expense |
|
|
95,125 |
|
|
|
98,774 |
|
|
|
451,544 |
|
|
|
358,889 |
|
Income before taxes |
|
|
18,314 |
|
|
|
51,407 |
|
|
|
52,318 |
|
|
|
246,295 |
|
Income tax expense |
|
|
3,455 |
|
|
|
10,653 |
|
|
|
9,117 |
|
|
|
50,004 |
|
Net income |
|
$ |
14,859 |
|
|
$ |
40,754 |
|
|
$ |
43,201 |
|
|
$ |
196,291 |
|
Independent Bank Group, Inc. and Subsidiaries |
|||||||
Consolidated Balance Sheets |
|||||||
As of December 31, 2023 and 2022 |
|||||||
(Dollars in thousands) |
|||||||
(Unaudited) |
|||||||
|
December 31, |
||||||
Assets |
2023 |
|
2022 |
||||
Cash and due from banks |
$ |
98,396 |
|
|
$ |
134,183 |
|
Interest-bearing deposits in other banks |
|
623,593 |
|
|
|
520,139 |
|
Cash and cash equivalents |
|
721,989 |
|
|
|
654,322 |
|
Certificates of deposit held in other banks |
|
248 |
|
|
|
496 |
|
Securities available for sale, at fair value |
|
1,593,751 |
|
|
|
1,691,784 |
|
Securities held to maturity, net of allowance for credit losses of |
|
205,232 |
|
|
|
207,059 |
|
Loans held for sale (includes |
|
16,420 |
|
|
|
11,310 |
|
Loans, net of allowance for credit losses of |
|
14,558,681 |
|
|
|
13,760,576 |
|
Premises and equipment, net |
|
355,833 |
|
|
|
355,368 |
|
Other real estate owned |
|
9,490 |
|
|
|
23,900 |
|
Federal Home Loan Bank (FHLB) of |
|
34,915 |
|
|
|
23,436 |
|
Bank-owned life insurance (BOLI) |
|
245,497 |
|
|
|
240,448 |
|
Deferred tax asset |
|
92,665 |
|
|
|
78,669 |
|
Goodwill |
|
994,021 |
|
|
|
994,021 |
|
Other intangible assets, net |
|
50,560 |
|
|
|
62,999 |
|
Other assets |
|
155,800 |
|
|
|
154,026 |
|
Total assets |
$ |
19,035,102 |
|
|
$ |
18,258,414 |
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity |
|
|
|
||||
Deposits: |
|
|
|
||||
Noninterest-bearing |
$ |
3,530,704 |
|
|
$ |
4,736,830 |
|
Interest-bearing |
|
12,192,331 |
|
|
|
10,384,587 |
|
Total deposits |
|
15,723,035 |
|
|
|
15,121,417 |
|
FHLB advances |
|
350,000 |
|
|
|
300,000 |
|
Other borrowings |
|
271,821 |
|
|
|
267,066 |
|
Junior subordinated debentures |
|
54,617 |
|
|
|
54,419 |
|
Other liabilities |
|
233,036 |
|
|
|
130,129 |
|
Total liabilities |
|
16,632,509 |
|
|
|
15,873,031 |
|
Commitments and contingencies |
|
— |
|
|
|
— |
|
Stockholders’ equity: |
|
|
|
||||
Preferred stock (0 and 0 shares outstanding, respectively) |
|
— |
|
|
|
— |
|
Common stock (41,281,919 and 41,190,677 shares outstanding, respectively) |
|
413 |
|
|
|
412 |
|
Additional paid-in capital |
|
1,966,686 |
|
|
|
1,959,193 |
|
Retained earnings |
|
616,724 |
|
|
|
638,354 |
|
Accumulated other comprehensive loss |
|
(181,230 |
) |
|
|
(212,576 |
) |
Total stockholders’ equity |
|
2,402,593 |
|
|
|
2,385,383 |
|
Total liabilities and stockholders’ equity |
$ |
19,035,102 |
|
|
$ |
18,258,414 |
|
Independent Bank Group, Inc. and Subsidiaries |
||||||||||||||||||
Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis |
||||||||||||||||||
Three Months Ended December 31, 2023 and 2022 |
||||||||||||||||||
(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 December 31, |
||||||||||||||||
|
|
2023 |
|
2022 |
||||||||||||||
|
|
Average
|
|
Interest |
|
Yield/
|
|
Average
|
|
Interest |
|
Yield/
|
||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans (1) |
|
$ |
14,435,383 |
|
$ |
212,028 |
|
5.83 |
% |
|
$ |
13,722,274 |
|
$ |
174,445 |
|
5.04 |
% |
Taxable securities |
|
|
1,414,824 |
|
|
8,424 |
|
2.36 |
|
|
|
1,475,585 |
|
|
8,036 |
|
2.16 |
|
Nontaxable securities |
|
|
396,855 |
|
|
2,532 |
|
2.53 |
|
|
|
424,519 |
|
|
2,631 |
|
2.46 |
|
Interest-bearing deposits and other |
|
|
695,617 |
|
|
9,538 |
|
5.44 |
|
|
|
486,369 |
|
|
4,657 |
|
3.80 |
|
Total interest-earning assets |
|
|
16,942,679 |
|
|
232,522 |
|
5.44 |
|
|
|
16,108,747 |
|
|
189,769 |
|
4.67 |
|
Noninterest-earning assets |
|
|
1,872,663 |
|
|
|
|
|
|
1,885,384 |
|
|
|
|
||||
Total assets |
|
$ |
18,815,342 |
|
|
|
|
|
$ |
17,994,131 |
|
|
|
|
||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Checking accounts |
|
$ |
5,476,149 |
|
$ |
48,532 |
|
3.52 |
% |
|
$ |
5,989,205 |
|
$ |
25,440 |
|
1.69 |
% |
Savings accounts |
|
|
556,935 |
|
|
136 |
|
0.10 |
|
|
|
778,692 |
|
|
98 |
|
0.05 |
|
Money market accounts |
|
|
1,701,198 |
|
|
17,502 |
|
4.08 |
|
|
|
1,935,083 |
|
|
10,380 |
|
2.13 |
|
Certificates of deposit |
|
|
4,082,882 |
|
|
49,230 |
|
4.78 |
|
|
|
1,280,598 |
|
|
6,404 |
|
1.98 |
|
Total deposits |
|
|
11,817,164 |
|
|
115,400 |
|
3.87 |
|
|
|
9,983,578 |
|
|
42,322 |
|
1.68 |
|
FHLB advances |
|
|
416,576 |
|
|
5,802 |
|
5.53 |
|
|
|
218,478 |
|
|
1,231 |
|
2.24 |
|
Other borrowings - short-term |
|
|
39,728 |
|
|
699 |
|
6.98 |
|
|
|
— |
|
|
— |
|
— |
|
Other borrowings - long-term |
|
|
238,017 |
|
|
3,071 |
|
5.12 |
|
|
|
267,005 |
|
|
3,465 |
|
5.15 |
|
Junior subordinated debentures |
|
|
54,600 |
|
|
1,245 |
|
9.05 |
|
|
|
54,402 |
|
|
964 |
|
7.03 |
|
Total interest-bearing liabilities |
|
|
12,566,085 |
|
|
126,217 |
|
3.98 |
|
|
|
10,523,463 |
|
|
47,982 |
|
1.81 |
|
Noninterest-bearing checking accounts |
|
|
3,658,034 |
|
|
|
|
|
|
4,988,091 |
|
|
|
|
||||
Noninterest-bearing liabilities |
|
|
246,571 |
|
|
|
|
|
|
122,940 |
|
|
|
|
||||
Stockholders’ equity |
|
|
2,344,652 |
|
|
|
|
|
|
2,359,637 |
|
|
|
|
||||
Total liabilities and equity |
|
$ |
18,815,342 |
|
|
|
|
|
$ |
17,994,131 |
|
|
|
|
||||
Net interest income |
|
|
|
$ |
106,305 |
|
|
|
|
|
$ |
141,787 |
|
|
||||
Interest rate spread |
|
|
|
|
|
1.46 |
% |
|
|
|
|
|
2.86 |
% |
||||
Net interest margin (2) |
|
|
|
|
|
2.49 |
|
|
|
|
|
|
3.49 |
|
||||
Net interest income and margin (tax equivalent basis) (3) |
|
|
|
$ |
107,376 |
|
2.51 |
|
|
|
|
$ |
142,845 |
|
3.52 |
|
||
Average interest-earning assets to interest-bearing liabilities |
|
|
|
|
|
134.83 |
|
|
|
|
|
|
153.07 |
|
||||
____________ |
(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) A tax-equivalent adjustment has been computed using a federal income tax rate of |
(4) Yield and rates for the three month periods are annualized. |
Independent Bank Group, Inc. and Subsidiaries |
||||||||||||||||||
Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis |
||||||||||||||||||
For The Years Ended December 31, 2023 and 2022 |
||||||||||||||||||
(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 Years Ended December 31, |
||||||||||||||||
|
|
2023 |
|
2022 |
||||||||||||||
|
|
Average
|
|
Interest |
|
Yield/
|
|
Average
|
|
Interest |
|
Yield/
|
||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans (1) |
|
$ |
14,129,639 |
|
$ |
792,659 |
|
5.61 |
% |
|
$ |
13,148,633 |
|
$ |
602,210 |
|
4.58 |
% |
Taxable securities |
|
|
1,436,856 |
|
|
31,747 |
|
2.21 |
|
|
|
1,617,454 |
|
|
32,944 |
|
2.04 |
|
Nontaxable securities |
|
|
412,266 |
|
|
10,279 |
|
2.49 |
|
|
|
429,057 |
|
|
10,360 |
|
2.41 |
|
Interest-bearing deposits and other |
|
|
717,434 |
|
|
37,051 |
|
5.16 |
|
|
|
921,391 |
|
|
9,503 |
|
1.03 |
|
Total interest-earning assets |
|
|
16,696,195 |
|
|
871,736 |
|
5.22 |
|
|
|
16,116,535 |
|
|
655,017 |
|
4.06 |
|
Noninterest-earning assets |
|
|
1,859,553 |
|
|
|
|
|
|
1,892,555 |
|
|
|
|
||||
Total assets |
|
$ |
18,555,748 |
|
|
|
|
|
$ |
18,009,090 |
|
|
|
|
||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Checking accounts |
|
$ |
5,745,444 |
|
$ |
177,025 |
|
3.08 |
% |
|
$ |
6,002,530 |
|
$ |
45,405 |
|
0.76 |
% |
Savings accounts |
|
|
628,088 |
|
|
399 |
|
0.06 |
|
|
|
787,937 |
|
|
387 |
|
0.05 |
|
Money market accounts |
|
|
1,616,038 |
|
|
56,148 |
|
3.47 |
|
|
|
2,130,908 |
|
|
21,562 |
|
1.01 |
|
Certificates of deposit |
|
|
2,977,281 |
|
|
124,833 |
|
4.19 |
|
|
|
1,027,561 |
|
|
10,274 |
|
1.00 |
|
Total deposits |
|
|
10,966,851 |
|
|
358,405 |
|
3.27 |
|
|
|
9,948,936 |
|
|
77,628 |
|
0.78 |
|
FHLB advances |
|
|
716,397 |
|
|
35,705 |
|
4.98 |
|
|
|
150,890 |
|
|
2,017 |
|
1.34 |
|
Other borrowings - short-term |
|
|
40,078 |
|
|
2,781 |
|
6.94 |
|
|
|
15,918 |
|
|
593 |
|
3.73 |
|
Other borrowings - long-term |
|
|
244,929 |
|
|
13,237 |
|
5.40 |
|
|
|
266,746 |
|
|
13,858 |
|
5.20 |
|
Junior subordinated debentures |
|
|
54,526 |
|
|
4,725 |
|
8.67 |
|
|
|
54,328 |
|
|
2,713 |
|
4.99 |
|
Total interest-bearing liabilities |
|
|
12,022,781 |
|
|
414,853 |
|
3.45 |
|
|
|
10,436,818 |
|
|
96,809 |
|
0.93 |
|
Noninterest-bearing checking accounts |
|
|
3,957,699 |
|
|
|
|
|
|
5,018,631 |
|
|
|
|
||||
Noninterest-bearing liabilities |
|
|
214,001 |
|
|
|
|
|
|
111,326 |
|
|
|
|
||||
Stockholders’ equity |
|
|
2,361,267 |
|
|
|
|
|
|
2,442,315 |
|
|
|
|
||||
Total liabilities and equity |
|
$ |
18,555,748 |
|
|
|
|
|
$ |
18,009,090 |
|
|
|
|
||||
Net interest income |
|
|
|
$ |
456,883 |
|
|
|
|
|
$ |
558,208 |
|
|
||||
Interest rate spread |
|
|
|
|
|
1.77 |
% |
|
|
|
|
|
3.13 |
% |
||||
Net interest margin (2) |
|
|
|
|
|
2.74 |
|
|
|
|
|
|
3.46 |
|
||||
Net interest income and margin (tax equivalent basis) (3) |
|
|
|
$ |
461,056 |
|
2.76 |
|
|
|
|
$ |
562,633 |
|
3.49 |
|
||
Average interest-earning assets to interest-bearing liabilities |
|
|
|
|
|
138.87 |
|
|
|
|
|
|
154.42 |
|
||||
____________ |
(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) A tax-equivalent adjustment has been computed using a federal income tax rate of |
Independent Bank Group, Inc. and Subsidiaries |
||||||||||||||
Loan Portfolio Composition |
||||||||||||||
As of December 31, 2023 and 2022 |
||||||||||||||
(Dollars in thousands) |
||||||||||||||
(Unaudited) |
||||||||||||||
Total Loans By Class |
|
|
|
|
||||||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
||||||||||
|
|
Amount |
|
% of Total |
|
Amount |
|
% of Total |
||||||
Commercial |
|
$ |
2,266,851 |
|
|
15.4 |
% |
|
$ |
2,240,959 |
|
|
16.1 |
% |
Mortgage warehouse purchase loans |
|
|
549,689 |
|
|
3.7 |
|
|
|
312,099 |
|
|
2.2 |
|
Real estate: |
|
|
|
|
|
|
|
|
||||||
Commercial real estate |
|
|
8,289,124 |
|
|
56.3 |
|
|
|
7,817,447 |
|
|
56.2 |
|
Commercial construction, land and land development |
|
|
1,231,484 |
|
|
8.4 |
|
|
|
1,231,071 |
|
|
8.8 |
|
Residential real estate (1) |
|
|
1,686,206 |
|
|
11.5 |
|
|
|
1,604,169 |
|
|
11.5 |
|
Single-family interim construction |
|
|
517,928 |
|
|
3.5 |
|
|
|
508,839 |
|
|
3.7 |
|
Agricultural |
|
|
109,451 |
|
|
0.7 |
|
|
|
124,422 |
|
|
0.9 |
|
Consumer |
|
|
76,229 |
|
|
0.5 |
|
|
|
81,667 |
|
|
0.6 |
|
Total loans |
|
|
14,726,962 |
|
|
100.0 |
% |
|
|
13,920,673 |
|
|
100.0 |
% |
Allowance for credit losses |
|
|
(151,861 |
) |
|
|
|
|
(148,787 |
) |
|
|
||
Total loans, net |
|
$ |
14,575,101 |
|
|
|
|
$ |
13,771,886 |
|
|
|
||
____________ |
(1) Includes loans held for sale of |
Independent Bank Group, Inc. and Subsidiaries |
||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures |
||||||||||||||||||||
Three Months Ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022 |
||||||||||||||||||||
(Dollars in thousands, except for share data) |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
|
|
For the Three Months Ended |
||||||||||||||||||
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
||||||||||
ADJUSTED NET INCOME |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Interest Income - Reported |
(a) |
$ |
106,305 |
|
|
$ |
109,049 |
|
|
$ |
113,607 |
|
|
$ |
127,922 |
|
|
$ |
141,787 |
|
Provision Expense - Reported |
(b) |
|
3,480 |
|
|
|
340 |
|
|
|
220 |
|
|
|
90 |
|
|
|
2,833 |
|
Noninterest Income - Reported |
(c) |
|
10,614 |
|
|
|
13,646 |
|
|
|
14,095 |
|
|
|
12,754 |
|
|
|
11,227 |
|
Loss on sale of loans |
|
|
— |
|
|
|
7 |
|
|
|
7 |
|
|
|
— |
|
|
|
343 |
|
Loss on sale of other real estate |
|
|
1,797 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss (gain) on sale and disposal of premises and equipment |
|
|
22 |
|
|
|
56 |
|
|
|
(354 |
) |
|
|
(47 |
) |
|
|
184 |
|
Recoveries on loans charged off prior to acquisition |
|
|
(64 |
) |
|
|
(279 |
) |
|
|
(13 |
) |
|
|
(117 |
) |
|
|
(36 |
) |
Adjusted Noninterest Income |
(d) |
|
12,369 |
|
|
|
13,430 |
|
|
|
13,735 |
|
|
|
12,590 |
|
|
|
11,718 |
|
Noninterest Expense - Reported |
(e) |
|
95,125 |
|
|
|
81,334 |
|
|
|
85,705 |
|
|
|
189,380 |
|
|
|
98,774 |
|
Litigation settlement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(102,500 |
) |
|
|
— |
|
Separation expense (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,131 |
) |
OREO impairment |
|
|
(3,015 |
) |
|
|
— |
|
|
|
(1,000 |
) |
|
|
(1,200 |
) |
|
|
— |
|
FDIC special assessment |
|
|
(8,329 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Impairment of assets |
|
|
— |
|
|
|
— |
|
|
|
(153 |
) |
|
|
(802 |
) |
|
|
(3,286 |
) |
Acquisition expense (2) |
|
|
(27 |
) |
|
|
(27 |
) |
|
|
(27 |
) |
|
|
(26 |
) |
|
|
(40 |
) |
Adjusted Noninterest Expense |
(f) |
|
83,754 |
|
|
|
81,307 |
|
|
|
84,525 |
|
|
|
84,852 |
|
|
|
88,317 |
|
Income Tax Expense (Benefit) - Reported |
(g) |
|
3,455 |
|
|
|
8,246 |
|
|
|
8,700 |
|
|
|
(11,284 |
) |
|
|
10,653 |
|
Net Income (Loss) - Reported |
(a) - (b) + (c) - (e) - (g) = (h) |
|
14,859 |
|
|
|
32,775 |
|
|
|
33,077 |
|
|
|
(37,510 |
) |
|
|
40,754 |
|
Adjusted Net Income (3) |
(a) - (b) + (d) - (f) = (i) |
$ |
25,509 |
|
|
$ |
32,624 |
|
|
$ |
33,726 |
|
|
$ |
44,083 |
|
|
$ |
49,433 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
ADJUSTED PROFITABILITY (4) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Average Assets |
(j) |
$ |
18,815,342 |
|
|
$ |
18,520,600 |
|
|
$ |
18,652,450 |
|
|
$ |
18,228,521 |
|
|
$ |
17,994,131 |
|
Total Average Stockholders' Equity |
(k) |
|
2,344,652 |
|
|
|
2,360,175 |
|
|
|
2,360,226 |
|
|
|
2,380,421 |
|
|
|
2,359,637 |
|
Total Average Tangible Stockholders' Equity (5) |
(l) |
|
1,299,026 |
|
|
|
1,311,417 |
|
|
|
1,308,368 |
|
|
|
1,325,475 |
|
|
|
1,301,558 |
|
Reported Return on Average Assets |
(h) / (j) |
|
0.31 |
% |
|
|
0.70 |
% |
|
|
0.71 |
% |
|
|
(0.83 |
)% |
|
|
0.90 |
% |
Reported Return on Average Equity |
(h) / (k) |
|
2.51 |
|
|
|
5.51 |
|
|
|
5.62 |
|
|
|
(6.39 |
) |
|
|
6.85 |
|
Reported Return on Average Tangible Equity |
(h) / (l) |
|
4.54 |
|
|
|
9.92 |
|
|
|
10.14 |
|
|
|
(11.48 |
) |
|
|
12.42 |
|
Adjusted Return on Average Assets (6) |
(i) / (j) |
|
0.54 |
|
|
|
0.70 |
|
|
|
0.73 |
|
|
|
0.98 |
|
|
|
1.09 |
|
Adjusted Return on Average Equity (6) |
(i) / (k) |
|
4.32 |
|
|
|
5.48 |
|
|
|
5.73 |
|
|
|
7.51 |
|
|
|
8.31 |
|
Adjusted Return on Tangible Equity (6) |
(i) / (l) |
|
7.79 |
|
|
|
9.87 |
|
|
|
10.34 |
|
|
|
13.49 |
|
|
|
15.07 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EFFICIENCY RATIO |
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortization of other intangible assets |
(m) |
$ |
3,106 |
|
|
$ |
3,111 |
|
|
$ |
3,111 |
|
|
$ |
3,111 |
|
|
$ |
3,111 |
|
Reported Efficiency Ratio |
(e - m) / (a + c) |
|
78.70 |
% |
|
|
63.75 |
% |
|
|
64.68 |
% |
|
|
132.41 |
% |
|
|
62.52 |
% |
Adjusted Efficiency Ratio |
(f - m) / (a + d) |
|
67.96 |
|
|
|
63.84 |
|
|
|
63.93 |
|
|
|
58.17 |
|
|
|
55.51 |
|
____________ |
(1) Separation expenses include severance and accelerated vesting expense for stock awards related to the separation of certain employees. The quarter ended December 31, 2022 reflects a reduction in workforce due to the restructuring of certain departments and business lines. |
(2) Acquisition expenses includes compensation related expenses for equity awards granted at acquisition. |
(3) Assumes an adjusted effective tax rate of |
(4) Quarterly metrics are annualized. |
(5) Excludes average balance of goodwill and net other intangible assets. |
(6) Calculated using adjusted net income. |
Independent Bank Group, Inc. and Subsidiaries |
||||||||
Reconciliation of Non-GAAP Financial Measures |
||||||||
Years Ended December 31, 2023 and 2022 |
||||||||
(Dollars in thousands, except for share data) |
||||||||
(Unaudited) |
||||||||
|
|
For The Years Ended December 31, |
||||||
|
|
2023 |
|
2022 |
||||
ADJUSTED NET INCOME |
|
|
|
|
||||
Net Interest Income - Reported |
(a) |
$ |
456,883 |
|
|
$ |
558,208 |
|
Provision Expense - Reported |
(b) |
|
4,130 |
|
|
|
4,490 |
|
Noninterest Income - Reported |
(c) |
|
51,109 |
|
|
|
51,466 |
|
Loss on sale of loans |
|
|
14 |
|
|
|
1,844 |
|
Loss on sale of other real estate |
|
|
1,797 |
|
|
|
— |
|
(Gain) loss on sale and disposal of premises and equipment |
|
|
(323 |
) |
|
|
494 |
|
Recoveries on loans charged off prior to acquisition |
|
|
(473 |
) |
|
|
(192 |
) |
Adjusted Noninterest Income |
(d) |
|
52,124 |
|
|
|
53,612 |
|
Noninterest Expense - Reported |
(e) |
|
451,544 |
|
|
|
358,889 |
|
Litigation settlement |
|
|
(102,500 |
) |
|
|
— |
|
Separation expense (1) |
|
|
— |
|
|
|
(11,046 |
) |
Economic development employee incentive grant |
|
|
— |
|
|
|
1,000 |
|
OREO impairment |
|
|
(5,215 |
) |
|
|
— |
|
FDIC special assessment |
|
|
(8,329 |
) |
|
|
— |
|
Impairment of assets |
|
|
(955 |
) |
|
|
(4,442 |
) |
Acquisition expense (2) |
|
|
(107 |
) |
|
|
(300 |
) |
Adjusted Noninterest Expense |
(f) |
|
334,438 |
|
|
|
344,101 |
|
Income Tax Expense - Reported |
(g) |
|
9,117 |
|
|
|
50,004 |
|
Net Income - Reported |
(a) - (b) + (c) - (e) - (g) = (h) |
|
43,201 |
|
|
|
196,291 |
|
Adjusted Net Income (3) |
(a) - (b) + (d) - (f) = (i) |
$ |
135,942 |
|
|
$ |
209,747 |
|
|
|
|
|
|
||||
ADJUSTED PROFITABILITY |
|
|
|
|
||||
Total Average Assets |
(j) |
$ |
18,555,748 |
|
|
$ |
18,009,090 |
|
Total Average Stockholders' Equity |
(k) |
|
2,361,267 |
|
|
|
2,442,315 |
|
Total Average Tangible Stockholders' Equity (4) |
(l) |
|
1,311,000 |
|
|
|
1,379,603 |
|
Reported Return on Average Assets |
(h) / (j) |
|
0.23 |
% |
|
|
1.09 |
% |
Reported Return on Average Equity |
(h) / (k) |
|
1.83 |
|
|
|
8.04 |
|
Reported Return on Average Tangible Equity |
(h) / (l) |
|
3.30 |
|
|
|
14.23 |
|
Adjusted Return on Average Assets (5) |
(i) / (j) |
|
0.73 |
|
|
|
1.16 |
|
Adjusted Return on Average Equity (5) |
(i) / (k) |
|
5.76 |
|
|
|
8.59 |
|
Adjusted Return on Tangible Equity (5) |
(i) / (l) |
|
10.37 |
|
|
|
15.20 |
|
|
|
|
|
|
||||
EFFICIENCY RATIO |
|
|
|
|
||||
Amortization of other intangible assets |
(m) |
$ |
12,439 |
|
|
$ |
12,491 |
|
Reported Efficiency Ratio |
(e - m) / (a + c) |
|
86.44 |
% |
|
|
56.82 |
% |
Adjusted Efficiency Ratio |
(f - m) / (a + d) |
|
63.26 |
|
|
|
54.20 |
|
|
|
|
|
|
||||
____________ |
(1) Separation expenses include severance and accelerated vesting expense for stock awards related to the separation of certain employees. The year ended December 31, 2022 reflects a reduction in workforce due to the restructuring of certain departments and business lines, payments made due to the separation of executive officers and payments made related to the dissolution of a Company department. |
(2) Acquisition expenses includes compensation related expenses for equity awards granted at acquisition. |
(3) Assumes an adjusted effective tax rate of |
(4) Excludes average balance of goodwill and net other intangible assets. |
(5) Calculated using adjusted net income. |
Independent Bank Group, Inc. and Subsidiaries |
|||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures |
|||||||||||||||||||
As of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022 |
|||||||||||||||||||
(Dollars in thousands, except per share information) |
|||||||||||||||||||
(Unaudited) |
|||||||||||||||||||
|
|||||||||||||||||||
Tangible Book Value & Tangible Common Equity To Tangible Assets Ratio |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of the Quarter Ended |
||||||||||||||||||
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
||||||||||
Tangible Common Equity |
|
|
|
|
|
|
|
|
|
||||||||||
Total common stockholders' equity |
$ |
2,402,593 |
|
|
$ |
2,332,098 |
|
|
$ |
2,353,042 |
|
|
$ |
2,350,857 |
|
|
$ |
2,385,383 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill |
|
(994,021 |
) |
|
|
(994,021 |
) |
|
|
(994,021 |
) |
|
|
(994,021 |
) |
|
|
(994,021 |
) |
Other intangible assets, net |
|
(50,560 |
) |
|
|
(53,666 |
) |
|
|
(56,777 |
) |
|
|
(59,888 |
) |
|
|
(62,999 |
) |
Tangible common equity |
$ |
1,358,012 |
|
|
$ |
1,284,411 |
|
|
$ |
1,302,244 |
|
|
$ |
1,296,948 |
|
|
$ |
1,328,363 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tangible Assets |
|
|
|
|
|
|
|
|
|
||||||||||
Total assets |
$ |
19,035,102 |
|
|
$ |
18,519,872 |
|
|
$ |
18,719,802 |
|
|
$ |
18,798,354 |
|
|
$ |
18,258,414 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill |
|
(994,021 |
) |
|
|
(994,021 |
) |
|
|
(994,021 |
) |
|
|
(994,021 |
) |
|
|
(994,021 |
) |
Other intangible assets, net |
|
(50,560 |
) |
|
|
(53,666 |
) |
|
|
(56,777 |
) |
|
|
(59,888 |
) |
|
|
(62,999 |
) |
Tangible assets |
$ |
17,990,521 |
|
|
$ |
17,472,185 |
|
|
$ |
17,669,004 |
|
|
$ |
17,744,445 |
|
|
$ |
17,201,394 |
|
Common shares outstanding |
|
41,281,919 |
|
|
|
41,284,003 |
|
|
|
41,279,460 |
|
|
|
41,281,904 |
|
|
|
41,190,677 |
|
Tangible common equity to tangible assets |
|
7.55 |
% |
|
|
7.35 |
% |
|
|
7.37 |
% |
|
|
7.31 |
% |
|
|
7.72 |
% |
Book value per common share |
$ |
58.20 |
|
|
$ |
56.49 |
|
|
$ |
57.00 |
|
|
$ |
56.95 |
|
|
$ |
57.91 |
|
Tangible book value per common share |
|
32.90 |
|
|
|
31.11 |
|
|
|
31.55 |
|
|
|
31.42 |
|
|
|
32.25 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240122349379/en/
Analysts/Investors:
Paul Langdale
Executive Vice President, Chief Financial Officer
(972) 562-9004
Paul.Langdale@ifinancial.com
Media:
Wendi Costlow
Executive Vice President, Chief Marketing Officer
(972) 562-9004
Wendi.Costlow@ifinancial.com
Source: Independent Bank Group, Inc.
FAQ
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