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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Independent Bank Group Inc | NASDAQ:IBTX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.74 | -1.24% | 58.85 | 57.70 | 60.00 | 60.19 | 58.68 | 60.19 | 279,160 | 21:03:00 |
Independent Bank Group, Inc. (NASDAQ: IBTX) today announced net loss of $493.5 million, or $11.89 per diluted share, for the quarter ended June 30, 2024, which was significantly impacted by $518.0 million of goodwill impairment recognized as a result of the Company's stock price trading below book value and the announced merger with SouthState Corporation. Goodwill impairment is a non-cash charge and has no impact on cash flows, liquidity, (non-GAAP) tangible equity, or regulatory capital. Excluding the goodwill impairment charge and other non-recurring items, adjusted (non-GAAP) net income for the quarter ended June 30, 2024 was $24.9 million, or $0.60 per diluted share.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.38 per share of common stock. The dividend will be payable on August 19, 2024 to stockholders of record as of the close of business on August 5, 2024.
Highlights
“During the quarter, we were pleased to see the anticipated expansion of our net interest margin as increases in loan yields began to outpace deposit cost pressures. We are encouraged by strong economic tailwinds across Texas and Colorado. Importantly, our loan portfolio remains bolstered by resilient credit quality across product types,” said Independent Bank Group Chairman & CEO David R. Brooks. “We look forward to remaining disciplined and focused on the execution of all our key strategic initiatives as we work toward the completion of our pending merger with SouthState Corporation. We are very excited to join SouthState, a company whose culture, business model, and credit discipline matches ours.”
Second Quarter 2024 Balance Sheet Highlights
Loans
Asset Quality
Deposits, Borrowings and Liquidity
Capital
Second Quarter 2024 Operating Results
Net Interest Income
Noninterest Income
Noninterest Expense
Provision for Credit Losses
Income Taxes
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 June 30, 2024 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 June 30, 2024 and will adjust amounts preliminarily reported, if necessary.
About Independent Bank Group, Inc.
Independent Bank Group, Inc. is a bank holding company headquartered in McKinney, Texas. Through its wholly owned subsidiary, Independent Bank, doing business as Independent Financial, Independent Bank Group serves customers across Texas and Colorado with a wide range of relationship-driven banking services tailored to meet the needs of businesses, professionals and individuals. Independent Bank Group, Inc. operates in four market regions located in the Dallas/Fort Worth, Austin and Houston areas in Texas and the Colorado Front Range area, including Denver, Colorado Springs and Fort Collins.
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 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 on loans and higher levels of nonperforming loans and loan charge-offs generally; 7) concentration of the loan portfolio of Independent Financial, 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 Financial to make loans with acceptable net interest margins and levels of risk of repayment and to otherwise invest in assets at acceptable yields and that present acceptable investment risks; 9) inaccuracy of the assumptions and estimates that the managements of the Company and the financial institutions that the Company acquires make in establishing reserves for credit losses and other estimates generally; 10) lack of liquidity, including as a result of a reduction in the amount of sources of liquidity the Company currently has; 11) material increases or decreases in the amount of insured and/or uninsured deposits held by Independent Financial 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 Financial and the financial institutions that the Company acquires and that affect the net interest income, other future cash flows, or the market value of the assets of each of Independent Financial and the financial institutions that the Company acquires, including investment securities; 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) changes in economic and market conditions, that affect the amount and value of the assets of Independent Financial and of financial institutions that the Company acquires; 18) the institution and outcome of, and costs associated with, litigation and other legal proceedings against one or more of the Company, Independent Financial and financial institutions that the Company acquired or will acquire or to which any of such entities is subject; 19) the occurrence of market conditions adversely affecting the financial industry generally; 20) the impact of recent and future legislative 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, as well as regulatory requirements applicable to, and resulting from regulatory supervision of, the Company and Independent Financial as a financial institution with total assets greater than $10 billion; 21) changes in accounting policies, practices, principles and guidelines, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the SEC and the Public Company Accounting Oversight Board, as the case may be; 22) governmental monetary and fiscal policies; 23) changes in the scope and cost of FDIC insurance and other coverage; 24) the effects of war or other conflicts, including, but not limited to, the conflicts between Russia and the Ukraine and Israel and Hamas, acts of terrorism (including cyberattacks) or other catastrophic events, including natural disasters such as storms, droughts, tornadoes, hurricanes and flooding, that may affect general economic conditions; 25) the Company’s actual cost savings resulting from previous or future acquisitions are less than expected, the Company is unable to realize those cost savings as soon as expected, or the Company incurs additional or unexpected costs; 26) the Company’s revenues after previous or future acquisitions are less than expected; 27) the liquidity of, and changes in the amounts and sources of liquidity available to the Company, before and after the acquisition of any financial institutions that the Company acquires; 28) deposit attrition, operating costs, customer loss and business disruption before and after the Company completed acquisitions, including, without limitation, difficulties in maintaining relationships with employees, may be greater than the Company expected; 29) the effects of the combination of the operations of financial institutions that the Company has acquired in the recent past or may acquire in the future with the Company’s operations and the operations of Independent Financial, 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 the Company expects; 30) the impact of investments that the Company or Independent Financial may have made or may make and the changes in the value of those investments; 31) 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 it determined or determine in its due diligence investigation in connection with the acquisition of such financial institutions and any inadequacy of credit loss reserves relating to, and exposure to unrecoverable losses on, loans acquired; 32) 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 the Company’s markets and to enter new markets; 33) changes in general business and economic conditions in the markets in which the Company currently operates and may operate in the future; 34) changes occur in business conditions and inflation generally; 35) an increase in the rate of personal or commercial customers’ bankruptcies generally; 36) technology-related changes are harder to make or are more expensive than expected; 37) attacks on the security of, and breaches of, the Company's and Independent Financial's digital infrastructure or information systems, the costs the Company or Independent Financial incur to provide security against such attacks and any costs and liability the Company or Independent Financial incurs in connection with any breach of those systems; 38) the potential impact of climate change and related government regulation on the Company and its customers; 39) the potential impact of technology and “FinTech” entities on the banking industry generally; 40) other economic, competitive, governmental, regulatory, technological and geopolitical factors affecting the Company's operations, pricing and services; 41) the possibility that the Company’s pending merger with SouthState Corporation (the “Merger”) does not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Merger); 42) the risk that the benefits from the Merger may not be fully realized or may take longer to realize than expected; 43) the risk of disruption to the parties’ businesses as a result of the announcement and pendency of the Merger; 44) the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and 45) the other factors that are described or referenced in Part I, Item 1A, of the Company’s Annual Report on Form 10-K filed with the SEC on February 20, 2024, the Company’s Quarterly Reports on Form 10-Q, in each case under the caption “Risk Factors;” and The Company urges you to consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company. As a result of these and other matters, including changes in facts, assumptions not being realized or other factors, the actual results relating to the subject matter of any forward-looking statement may differ materially from the anticipated results expressed or implied in that forward-looking statement. Any forward-looking statement made in this filing or made by the Company in any report, filing, document or information incorporated by reference in this filing, speaks only as of the date on which it is made. The Company undertakes no obligation to update any such forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. The Company believes that these assumptions or bases have been chosen in good faith and that they are reasonable. However, the Company cautions you that assumptions as to future occurrences or results almost always vary from actual future occurrences or results, and the differences between assumptions and actual occurrences and results can be material. Therefore, the Company cautions you not to place undue reliance on the forward-looking statements contained in this filing or incorporated by reference herein.
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 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
Consolidated Financial Data
Three Months Ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023
(Dollars in thousands, except for share data)
(Unaudited)
As of and for the Quarter Ended
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
Selected Income Statement Data
Interest income
$
239,085
$
235,205
$
232,522
$
222,744
$
215,294
Interest expense
133,937
132,174
126,217
113,695
101,687
Net interest income
105,148
103,031
106,305
109,049
113,607
Provision for credit losses
—
(3,200
)
3,480
340
220
Net interest income after provision for credit losses
105,148
106,231
102,825
108,709
113,387
Noninterest income
13,433
12,870
10,614
13,646
14,095
Noninterest expense
606,911
88,473
95,125
81,334
85,705
Income tax expense
5,125
6,478
3,455
8,246
8,700
Net (loss) income
(493,455
)
24,150
14,859
32,775
33,077
Adjusted net income (1)
24,884
26,001
25,509
32,624
33,726
Per Share Data (Common Stock)
Earnings (loss):
Basic
$
(11.93
)
$
0.58
$
0.36
$
0.79
$
0.80
Diluted
(11.89
)
0.58
0.36
0.79
0.80
Adjusted earnings:
Basic (1)
0.60
0.63
0.62
0.79
0.82
Diluted (1)
0.60
0.63
0.62
0.79
0.82
Dividends
0.38
0.38
0.38
0.38
0.38
Book value
45.85
58.02
58.20
56.49
57.00
Tangible book value (1)
33.27
32.85
32.90
31.11
31.55
Common shares outstanding
41,376,169
41,377,745
41,281,919
41,284,003
41,279,460
Weighted average basic shares outstanding (2)
41,377,917
41,322,744
41,283,041
41,284,964
41,280,312
Weighted average diluted shares outstanding (2)
41,488,442
41,432,042
41,388,564
41,381,034
41,365,275
Selected Period End Balance Sheet Data
Total assets
$
18,359,162
$
18,871,452
$
19,035,102
$
18,519,872
$
18,719,802
Cash and cash equivalents
770,749
729,998
721,989
711,709
902,882
Securities available for sale
1,494,470
1,543,247
1,593,751
1,545,904
1,637,682
Securities held to maturity
204,319
204,776
205,232
205,689
206,146
Loans, held for sale
12,012
21,299
16,420
18,068
18,624
Loans, held for investment (3)
13,988,169
14,059,277
14,160,853
13,781,102
13,628,025
Mortgage warehouse purchase loans
633,654
554,616
549,689
442,302
491,090
Allowance for credit losses on loans
145,323
148,437
151,861
148,249
147,804
Goodwill and other intangible assets
520,553
1,041,506
1,044,581
1,047,687
1,050,798
Other real estate owned
8,685
8,685
9,490
22,505
22,505
Noninterest-bearing deposits
3,378,493
3,300,773
3,530,704
3,703,784
3,905,492
Interest-bearing deposits
12,464,183
12,370,942
12,192,331
11,637,185
10,968,014
Borrowings (other than junior subordinated debentures)
427,129
496,975
621,821
546,666
1,180,262
Junior subordinated debentures
54,717
54,667
54,617
54,568
54,518
Total stockholders' equity
1,897,083
2,400,807
2,402,593
2,332,098
2,353,042
Independent Bank Group, Inc. and Subsidiaries
Consolidated Financial Data
Three Months Ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023
(Dollars in thousands, except for share data)
(Unaudited)
As of and for the Quarter Ended
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
Selected Performance Metrics
Return on average assets
(10.55
)%
0.51
%
0.31
%
0.70
%
0.71
%
Return on average equity
(87.53
)
4.05
2.51
5.51
5.62
Return on tangible equity (4)
(146.65
)
7.16
4.54
9.92
10.14
Adjusted return on average assets (1)
0.53
0.55
0.54
0.70
0.73
Adjusted return on average equity (1)
4.41
4.36
4.32
5.48
5.73
Adjusted return on tangible equity (1) (4)
7.40
7.71
7.79
9.87
10.34
Net interest margin
2.47
2.42
2.49
2.60
2.71
Efficiency ratio (5)
509.32
73.68
78.70
63.75
64.68
Adjusted efficiency ratio (1) (5)
71.09
71.63
67.96
63.84
63.93
Credit Quality Ratios (3) (6)
Nonperforming assets to total assets
0.35
%
0.34
%
0.32
%
0.33
%
0.32
%
Nonperforming loans to total loans held for investment
0.40
0.40
0.37
0.28
0.28
Nonperforming assets to total loans held for investment and other real estate
0.46
0.46
0.43
0.44
0.44
Allowance for credit losses on loans to nonperforming loans
258.83
263.85
293.17
385.81
389.84
Allowance for credit losses to total loans held for investment
1.04
1.06
1.07
1.08
1.08
Net charge-offs (recoveries) to average loans outstanding (annualized)
0.10
—
0.01
0.01
(0.03
)
Capital Ratios
Estimated common equity Tier 1 capital to risk-weighted assets
9.69
%
9.60
%
9.58
%
9.86
%
9.78
%
Estimated tier 1 capital to average assets
8.76
8.91
8.94
9.09
8.92
Estimated tier 1 capital to risk-weighted assets
10.03
9.94
9.93
10.21
10.13
Estimated total capital to risk-weighted assets
11.75
11.68
11.57
11.89
11.95
Total stockholders' equity to total assets
10.33
12.72
12.62
12.59
12.57
Tangible common equity to tangible assets (1)
7.72
7.62
7.55
7.35
7.37
____________
(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 $64,946, $65,057, $61,404, $61,044 and $60,533, respectively. Nonperforming loans, which consists of nonaccrual loans and loans delinquent 90 days and still accruing interest totaled $56,147, $56,258, $51,800, $38,425 and $37,914, respectively.
Independent Bank Group, Inc. and Subsidiaries
Consolidated Statements of Income (Loss)
Three and Six Months Ended June 30, 2024 and 2023
(Dollars in thousands)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Interest income:
Interest and fees on loans
$
219,291
$
193,612
$
434,802
$
377,906
Interest on taxable securities
8,032
7,791
15,677
15,649
Interest on nontaxable securities
2,524
2,586
5,042
5,189
Interest on interest-bearing deposits and other
9,238
11,305
18,769
17,726
Total interest income
239,085
215,294
474,290
416,470
Interest expense:
Interest on deposits
125,248
78,144
247,758
140,405
Interest on FHLB advances
1,750
18,025
4,605
23,849
Interest on other borrowings
5,716
4,361
11,298
8,440
Interest on junior subordinated debentures
1,223
1,157
2,450
2,247
Total interest expense
133,937
101,687
266,111
174,941
Net interest income
105,148
113,607
208,179
241,529
Provision for credit losses
—
220
(3,200
)
310
Net interest income after provision for credit losses
105,148
113,387
211,379
241,219
Noninterest income:
Service charges on deposit accounts
3,586
3,519
7,186
6,868
Investment management fees
2,813
2,444
5,457
4,745
Mortgage banking revenue
1,540
2,248
3,175
3,872
Mortgage warehouse purchase program fees
655
535
1,195
859
(Loss) gain on sale of loans
—
(7
)
74
(7
)
Gain on sale of other real estate
—
—
13
—
(Loss) gain on sale and disposal of premises and equipment
(11
)
354
(11
)
401
Increase in cash surrender value of BOLI
1,572
1,410
3,127
2,787
Other
3,278
3,592
6,087
7,324
Total noninterest income
13,433
14,095
26,303
26,849
Noninterest expense:
Salaries and employee benefits
49,060
46,940
96,393
93,215
Occupancy
12,076
11,640
24,625
23,199
Communications and technology
7,676
7,196
15,361
14,286
FDIC assessment
2,816
3,806
8,958
6,518
Advertising and public relations
853
1,004
1,268
1,608
Other real estate owned (income) expenses, net
(37
)
(185
)
28
(229
)
Impairment of other real estate
—
1,000
345
2,200
Amortization of other intangible assets
2,953
3,111
6,028
6,222
Litigation settlement
—
—
—
102,500
Professional fees
1,301
1,785
3,110
4,850
Acquisition expense, including legal
2,338
—
2,338
—
Goodwill impairment
518,000
—
518,000
—
Other
9,875
9,408
18,930
20,716
Total noninterest expense
606,911
85,705
695,384
275,085
(Loss) income before taxes
(488,330
)
41,777
(457,702
)
(7,017
)
Income tax expense (benefit)
5,125
8,700
11,603
(2,584
)
Net (loss) income
$
(493,455
)
$
33,077
$
(469,305
)
$
(4,433
)
Independent Bank Group, Inc. and Subsidiaries
Consolidated Balance Sheets
As of June 30, 2024 and December 31, 2023
(Dollars in thousands)
(Unaudited)
June 30,
December 31,
Assets
2024
2023
Cash and due from banks
$
93,978
$
98,396
Interest-bearing deposits in other banks
676,771
623,593
Cash and cash equivalents
770,749
721,989
Certificates of deposit held in other banks
248
248
Securities available for sale, at fair value
1,494,470
1,593,751
Securities held to maturity, net of allowance for credit losses of $0 and $0, respectively, fair value of $165,869 and $170,997, respectively
204,319
205,232
Loans held for sale (includes $8,268 and $12,016 carried at fair value, respectively)
12,012
16,420
Loans, net of allowance for credit losses of $145,323 and $151,861, respectively
14,476,500
14,558,681
Premises and equipment, net
351,694
355,833
Other real estate owned
8,685
9,490
Federal Home Loan Bank (FHLB) of Dallas stock and other restricted stock
14,253
34,915
Bank-owned life insurance (BOLI)
248,624
245,497
Deferred tax asset
84,769
92,665
Goodwill
476,021
994,021
Other intangible assets, net
44,532
50,560
Other assets
172,286
155,800
Total assets
$
18,359,162
$
19,035,102
Liabilities and Stockholders’ Equity
Deposits:
Noninterest-bearing
$
3,378,493
$
3,530,704
Interest-bearing
12,464,183
12,192,331
Total deposits
15,842,676
15,723,035
FHLB advances
—
350,000
Other borrowings
427,129
271,821
Junior subordinated debentures
54,717
54,617
Other liabilities
137,557
233,036
Total liabilities
16,462,079
16,632,509
Commitments and contingencies
—
—
Stockholders’ equity:
Preferred stock (0 and 0 shares outstanding, respectively)
—
—
Common stock (41,376,169 and 41,281,919 shares outstanding, respectively)
414
413
Additional paid-in capital
1,972,019
1,966,686
Retained earnings
114,763
616,724
Accumulated other comprehensive loss
(190,113
)
(181,230
)
Total stockholders’ equity
1,897,083
2,402,593
Total liabilities and stockholders’ equity
$
18,359,162
$
19,035,102
Independent Bank Group, Inc. and Subsidiaries
Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis
Three Months Ended June 30, 2024 and 2023
(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 June 30,
2024
2023
Average Outstanding Balance
Interest
Yield/Rate (4)
Average Outstanding Balance
Interest
Yield/Rate (4)
Interest-earning assets:
Loans (1)
$
14,635,773
$
219,291
6.03
%
$
14,027,773
$
193,612
5.54
%
Taxable securities
1,385,384
8,032
2.33
1,456,873
7,791
2.14
Nontaxable securities
392,178
2,524
2.59
418,575
2,586
2.48
Interest-bearing deposits and other
682,216
9,238
5.45
893,752
11,305
5.07
Total interest-earning assets
17,095,551
239,085
5.62
16,796,973
215,294
5.14
Noninterest-earning assets
1,708,326
1,855,477
Total assets
$
18,803,877
$
18,652,450
Interest-bearing liabilities:
Checking accounts
$
5,446,233
$
49,661
3.67
%
$
5,646,603
$
41,943
2.98
%
Savings accounts
514,419
225
0.18
638,292
83
0.05
Money market accounts
2,020,883
21,072
4.19
1,421,920
11,012
3.11
Certificates of deposit
4,349,560
54,290
5.02
2,614,849
25,106
3.85
Total deposits
12,331,095
125,248
4.09
10,321,664
78,144
3.04
FHLB advances
128,571
1,750
5.47
1,412,637
18,025
5.12
Other borrowings - short-term
200,243
2,646
5.31
74,643
1,291
6.94
Other borrowings - long-term
238,325
3,070
5.18
237,708
3,070
5.18
Junior subordinated debentures
54,699
1,223
8.99
54,501
1,157
8.51
Total interest-bearing liabilities
12,952,933
133,937
4.16
12,101,153
101,687
3.37
Noninterest-bearing demand accounts
3,334,724
3,979,818
Noninterest-bearing liabilities
248,931
211,253
Stockholders’ equity
2,267,289
2,360,226
Total liabilities and equity
$
18,803,877
$
18,652,450
Net interest income
$
105,148
$
113,607
Interest rate spread
1.46
%
1.77
%
Net interest margin (2)
2.47
2.71
Net interest income and margin (tax equivalent basis) (3)
$
106,223
2.50
$
114,642
2.74
Average interest-earning assets to interest-bearing liabilities
131.98
138.80
____________
(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 21%.
(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
Six Months Ended June 30, 2024 and 2023
(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.
Six Months Ended June 30,
2024
2023
Average Outstanding Balance
Interest
Yield/Rate
Average Outstanding Balance
Interest
Yield/Rate
Interest-earning assets:
Loans (1)
$
14,624,693
$
434,802
5.98
%
$
13,980,015
$
377,906
5.45
%
Taxable securities
1,388,098
15,677
2.27
1,460,902
15,649
2.16
Nontaxable securities
395,246
5,042
2.57
421,052
5,189
2.49
Interest-bearing deposits and other
692,441
18,769
5.45
723,305
17,726
4.94
Total interest-earning assets
17,100,478
474,290
5.58
16,585,274
416,470
5.06
Noninterest-earning assets
1,770,464
1,856,383
Total assets
$
18,870,942
$
18,441,657
Interest-bearing liabilities:
Checking accounts
$
5,497,080
$
99,560
3.64
%
$
5,958,145
$
80,836
2.74
%
Savings accounts
523,952
389
0.15
683,321
173
0.05
Money market accounts
1,945,055
40,525
4.19
1,598,603
23,446
2.96
Certificates of deposit
4,320,318
107,284
4.99
2,115,827
35,950
3.43
Total deposits
12,286,405
247,758
4.06
10,355,896
140,405
2.73
FHLB advances
168,681
4,605
5.49
997,099
23,849
4.82
Other borrowings - short-term
193,170
5,158
5.37
39,743
1,344
6.82
Other borrowings - long-term
238,248
6,140
5.18
252,034
7,096
5.68
Junior subordinated debentures
54,674
2,450
9.01
54,476
2,247
8.32
Total interest-bearing liabilities
12,941,178
266,111
4.14
11,699,248
174,941
3.02
Noninterest-bearing demand accounts
3,351,407
4,191,141
Noninterest-bearing liabilities
245,426
181,000
Stockholders’ equity
2,332,931
2,370,268
Total liabilities and equity
$
18,870,942
$
18,441,657
Net interest income
$
208,179
$
241,529
Interest rate spread
1.44
%
2.04
%
Net interest margin (2)
2.45
2.94
Net interest income and margin (tax equivalent basis) (3)
$
210,330
2.47
$
243,604
2.96
Average interest-earning assets to interest-bearing liabilities
132.14
141.76
____________
(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 21%.
Independent Bank Group, Inc. and Subsidiaries
Loan Portfolio Composition
As of June 30, 2024 and December 31, 2023
(Dollars in thousands)
(Unaudited)
Total Loans By Class
June 30, 2024
December 31, 2023
Amount
% of Total
Amount
% of Total
Commercial
$
2,152,792
14.7
%
$
2,266,851
15.4
%
Mortgage warehouse purchase loans
633,654
4.3
549,689
3.7
Real estate:
Commercial real estate
8,406,528
57.5
8,289,124
56.3
Commercial construction, land and land development
1,131,384
7.7
1,231,484
8.4
Residential real estate (1)
1,699,220
11.6
1,686,206
11.5
Single-family interim construction
427,678
2.9
517,928
3.5
Agricultural
110,416
0.8
109,451
0.7
Consumer
72,163
0.5
76,229
0.5
Total loans
14,633,835
100.0
%
14,726,962
100.0
%
Allowance for credit losses
(145,323
)
(151,861
)
Total loans, net
$
14,488,512
$
14,575,101
____________
(1) Includes loans held for sale of $12,012 and $16,420 at June 30, 2024 and December 31, 2023, respectively.
Independent Bank Group, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Three Months Ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023
(Dollars in thousands, except for share data)
(Unaudited)
For the Three Months Ended
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
ADJUSTED NET INCOME
Net Interest Income - Reported
(a)
$
105,148
$
103,031
$
106,305
$
109,049
$
113,607
Provision for Credit Losses - Reported
(b)
—
(3,200
)
3,480
340
220
Noninterest Income - Reported
(c)
13,433
12,870
10,614
13,646
14,095
(Gain) loss on sale of loans
—
(74
)
—
7
7
(Gain) loss on sale of other real estate
—
(13
)
1,797
—
—
Loss (gain) on sale and disposal of premises and equipment
11
—
22
56
(354
)
Recoveries on loans charged off prior to acquisition
(57
)
(5
)
(64
)
(279
)
(13
)
Adjusted Noninterest Income
(d)
13,387
12,778
12,369
13,430
13,735
Noninterest Expense - Reported
(e)
606,911
88,473
95,125
81,334
85,705
OREO impairment
—
(345
)
(3,015
)
—
(1,000
)
FDIC special assessment
645
(2,095
)
(8,329
)
—
—
Goodwill and asset impairment
(518,000
)
—
—
—
(153
)
Acquisition expense (1)
(2,338
)
—
(27
)
(27
)
(27
)
Adjusted Noninterest Expense
(f)
87,218
86,033
83,754
81,307
84,525
Income Tax Expense - Reported
(g)
5,125
6,478
3,455
8,246
8,700
Net (Loss) Income - Reported
(a) - (b) + (c) - (e) - (g) = (h)
(493,455
)
24,150
14,859
32,775
33,077
Adjusted Net Income (2)
(a) - (b) + (d) - (f) = (i)
$
24,884
$
26,001
$
25,509
$
32,624
$
33,726
ADJUSTED PROFITABILITY (3)
Total Average Assets
(j)
$
18,803,877
$
18,938,008
$
18,815,342
$
18,520,600
$
18,652,450
Total Average Stockholders' Equity
(k)
2,267,289
2,398,573
2,344,652
2,360,175
2,360,226
Total Average Tangible Stockholders' Equity (4)
(l)
1,353,313
1,356,042
1,299,026
1,311,417
1,308,368
Reported Return on Average Assets
(h) / (j)
(10.55
)%
0.51
%
0.31
%
0.70
%
0.71
%
Reported Return on Average Equity
(h) / (k)
(87.53
)
4.05
2.51
5.51
5.62
Reported Return on Average Tangible Equity
(h) / (l)
(146.65
)
7.16
4.54
9.92
10.14
Adjusted Return on Average Assets (5)
(i) / (j)
0.53
0.55
0.54
0.70
0.73
Adjusted Return on Average Equity (5)
(i) / (k)
4.41
4.36
4.32
5.48
5.73
Adjusted Return on Tangible Equity (5)
(i) / (l)
7.40
7.71
7.79
9.87
10.34
EFFICIENCY RATIO
Amortization of other intangible assets
(m)
$
2,953
$
3,075
$
3,106
$
3,111
$
3,111
Reported Efficiency Ratio
(e - m) / (a + c)
509.32
%
73.68
%
78.70
%
63.75
%
64.68
%
Adjusted Efficiency Ratio
(f - m) / (a + d)
71.09
71.63
67.96
63.84
63.93
____________
(1) Prior to 2024, acquisition expenses include compensation related expenses for equity awards granted at acquisition. Second quarter 2024 includes merger-related expenses related to the announced merger with SouthState Corporation.
(2) Assumes an adjusted effective tax rate of 20.5%, 21.2%, 18.9%, 20.1%, and 20.8%, respectively. Second quarter 2024 normalized rate excludes the effect of nondeductible acquisition expenses and goodwill impairment charges.
(3) Quarterly metrics are annualized.
(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 June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023
(Dollars in thousands, except per share information)
(Unaudited)
Tangible Book Value & Tangible Common Equity To Tangible Assets Ratio
As of the Quarter Ended
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
Tangible Common Equity
Total common stockholders' equity
$
1,897,083
$
2,400,807
$
2,402,593
$
2,332,098
$
2,353,042
Adjustments:
Goodwill
(476,021
)
(994,021
)
(994,021
)
(994,021
)
(994,021
)
Other intangible assets, net
(44,532
)
(47,485
)
(50,560
)
(53,666
)
(56,777
)
Tangible common equity
$
1,376,530
$
1,359,301
$
1,358,012
$
1,284,411
$
1,302,244
Tangible Assets
Total assets
$
18,359,162
$
18,871,452
$
19,035,102
$
18,519,872
$
18,719,802
Adjustments:
Goodwill
(476,021
)
(994,021
)
(994,021
)
(994,021
)
(994,021
)
Other intangible assets, net
(44,532
)
(47,485
)
(50,560
)
(53,666
)
(56,777
)
Tangible assets
$
17,838,609
$
17,829,946
$
17,990,521
$
17,472,185
$
17,669,004
Common shares outstanding
41,376,169
41,377,745
41,281,919
41,284,003
41,279,460
Tangible common equity to tangible assets
7.72
%
7.62
%
7.55
%
7.35
%
7.37
%
Book value per common share
$
45.85
$
58.02
$
58.20
$
56.49
$
57.00
Tangible book value per common share
33.27
32.85
32.90
31.11
31.55
View source version on businesswire.com: https://www.businesswire.com/news/home/20240724185557/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
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