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INDEPENDENT BANK GROUP, INC. REPORTS SECOND QUARTER FINANCIAL RESULTS, PROVIDES COVID-19 UPDATE

·37-min read


McKinney, 07/27/2020 / 16:30, CST/CDT - EQS Newswire - Independent Bank Group Inc.


McKINNEY, TX / ACCESSWIRE / July 27, 2020 / Independent Bank Group, Inc. (NASDAQ:IBTX), the holding company for Independent Bank, today provided an update on its business and operations in light of the ongoing COVID-19 pandemic along with its financial results for the quarter ended June 30, 2020. Independent Bank Group remains focused on supporting the health and welfare of its employees, customers and communities and delivering consistent returns for shareholders during this difficult time.

Second Quarter 2020 Summary

COVID-19 Update - Employees, Customers and Communities

COVID-19 Update - Capital, Liquidity & Credit

Independent Bank Group Chairman, CEO and President David R. Brooks said, "Our teams across Texas and Colorado are continuing their tireless work to help our customers and communities through the current environment. This collective commitment of our almost 1,500 employees is reflected not only in our solid financial performance in the second quarter, but also in the resilient credit quality that has been the foundation of our company for over three decades." Brooks continued, "As the pandemic endures, our company will remain steadfast in its commitment to safe operations that prioritize the health and well-being of our customers and employees. Though much uncertainty remains, we believe our company is well-positioned to continue to build sustainable long term value for our stakeholders and to help facilitate the economic recovery across our footprint."

Second Quarter 2020 Balance Sheet Highlights

Loans

Asset Quality

Deposits, Borrowings and Liquidity

Capital

Second Quarter 2020 Operating Results

Net Interest Income

Noninterest Income

Noninterest Expense

Provision for Loan Loss

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, 2020 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, 2020 and will adjust amounts preliminarily reported, if necessary.

Termination of the Merger with Texas Capital Bancshares, Inc.

As previously disclosed, the Company entered into a merger agreement with Texas Capital Bancshares, Inc. (TCBI) on December 9, 2019, providing for a merger of equals of the Company and TCBI. However, as also previously disclosed, on May 22, 2020, the Company and TCBI entered into a Mutual Termination Agreement to terminate the merger agreement. Neither party paid a termination fee in connection with the termination of the merger agreement.

About Independent Bank Group

Independent Bank Group, through its wholly owned subsidiary, Independent Bank, provides a wide range of relationship-driven commercial banking products and services tailored to meet the needs of businesses, professionals and individuals. Independent Bank Group operates in four market regions located in the Dallas/Fort Worth, Austin and Houston areas in Texas and the Colorado Front Range area, including Denver, Colorado Springs and Fort Collins.

Conference Call

A conference call covering Independent Bank Group's second quarter earnings announcement will be held on Tuesday, July 28, 2020 at 8:30 a.m. (EDT) and can be accessed by the webcast link, https://webcasts.eqs.com/indepbankgroup20200728/en or by calling 1-877-407-0989 and by identifying the meeting number 13706219 or by identifying "Independent Bank Group Second Quarter 2020 Earnings Conference Call." The conference materials will also be available by accessing the Investor Relations page of our website, www.ibtx.com. A recording of the conference call and the conference materials will be available from July 29, 2020 through August 13, 2020 on 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 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 loan 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 disruption to local, regional, national and global economic activity caused by infectious disease outbreaks, including the recent outbreak of coronavirus, or COVID-19, and the significant impact that such outbreak has had and may have on the Company's growth, operations, earnings and asset quality; 2) the Company's ability to sustain its current internal growth rate and total growth rate; 3) 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; 4) 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; 5) the Company's dependence on its management team and its ability to attract, motivate and retain qualified personnel; 6) the concentration of the Company's business within its geographic areas of operation in Texas and Colorado; 7) changes in asset quality, including increases in default rates on loans and higher levels of nonperforming loans and loan charge-offs generally, and specifically resulting from the economic dislocation caused by the COVID-19 pandemic; 8) concentration of the loan portfolio of Independent Bank, before and after the completion of acquisitions of financial institutions, in commercial and residential real estate loans and changes in the prices, values and sales volumes of commercial and residential real estate; 9) the ability of Independent Bank to make loans with acceptable net interest margins and levels of risk of repayment and to otherwise invest in assets at acceptable yields and presenting acceptable investment risks; 10) 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 probable loan losses and other estimates generally, and specifically as a result of the effect of the COVID-19 pandemic; 11) lack of liquidity, including as a result of a reduction in the amount of sources of liquidity the Company currently has; 12) material increases or decreases in the amount of deposits held by Independent Bank or other financial institutions that the Company acquires and the cost of those deposits; 13) the Company's access to the debt and equity markets and the overall cost of funding its operations; 14) regulatory requirements to maintain minimum capital levels or maintenance of capital at levels sufficient to support the Company's anticipated growth; 15) changes in market interest rates that affect the pricing of the loans and deposits of each of Independent Bank and the financial institutions that the Company acquires and that affect the net interest income, other future cash flows, or the market value of the assets of each of Independent Bank and the financial institutions that the Company acquires, including investment securities; 16) 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; 17) effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services; 18) changes in economic and market conditions, including the economic dislocation resulting from the COVID-19 pandemic, that affect the amount and value of the assets of Independent Bank and of financial institutions that the Company acquires; 19) the institution and outcome of, and costs associated with, litigation and other legal proceedings against one of more of the Company, Independent Bank and financial institutions that the Company acquires or to which any of such entities is subject; 20) the occurrence of market conditions adversely affecting the financial industry generally, including the economic dislocation resulting from the COVID-19 pandemic; 21) 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 Bank as a financial institution with total assets greater than $10 billion; 22) 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; 23) governmental monetary and fiscal policies, including changes resulting from the implementation of the new Current Expected Credit Loss accounting standard; 24) changes in the scope and cost of FDIC insurance and other coverage; 25) the effects of war or other conflicts, acts of terrorism (including cyber attacks) or other catastrophic events, including natural disasters such as storms, droughts, tornadoes, hurricanes and flooding, that may affect general economic conditions; 26) 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; 27) the Company's revenues after previous or future acquisitions are less than expected; 28) 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; 29) 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; 30) 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 Bank, the effects of the integration of such operations being unsuccessful, and the effects of such integration being more difficult, time consuming, or costly than expected or not yielding the cost savings the Company expects; 31) the impact of investments that the Company or Independent Bank may have made or may make and the changes in the value of those investments; 32) 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 loan loss reserves relating to, and exposure to unrecoverable losses on, loans acquired; 33) 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; 34) general business and economic conditions in the Company's markets change or are less favorable than expected generally, and specifically as a result of the COVID-19 pandemic; 35) changes occur in business conditions and inflation generally, and specifically as a result of the COVID-19 pandemic; 36) an increase in the rate of personal or commercial customers' bankruptcies generally, and specifically as a result of the COVID-19 pandemic; 37) technology-related changes are harder to make or are more expensive than expected; 38) attacks on the security of, and breaches of, the Company's and Independent Bank's digital information systems, the costs the Company or Independent Bank incur to provide security against such attacks and any costs and liability the Company or Independent Bank incurs in connection with any breach of those systems; 39) the potential impact of technology and "FinTech" entities on the banking industry generally; 40) 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 March 2, 2020, as amended by the Company's Annual Report on Form 10-K/A filed with the SEC on March 6, 2020, the Company's Quarterly Reports on Form 10-Q, in each case under the caption "Risk Factors"; and 41) other economic, competitive, governmental, regulatory, technological and geopolitical factors affecting the Company's operations, pricing and services. 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 prospectus or made by the Company in any report, filing, document or information incorporated by reference in this prospectus, 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 caution 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 prospectus 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 loan 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.

CONTACTS:

Analysts/Investors:

Paul Langdale
Senior Vice President, Director of Corporate Development
(972) 562-9004
plangdale@ibtx.com

Michelle Hickox
Executive Vice President, Chief Financial Officer
(972) 562-9004
mhickox@ibtx.com

Media:

James Tippit
Executive Vice President, Head of Corporate Responsibility
(972) 562-9004
jtippit@ibtx.com

Independent Bank Group, Inc. and Subsidiaries
Consolidated Financial Data
Three Months Ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019
(Dollars in thousands, except for share data)
(Unaudited)

 

 

As of and for the Quarter Ended

 

 

 

June 30, 2020

 

 

March 31, 2020

 

 

March 31, 2020

 

 

September 30, 2019

 

 

June 30, 2019

 

Selected Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

151,241

 

 

$

156,405

 

 

$

164,386

 

 

$

165,307

 

 

$

167,663

 

Interest expense

 

 

22,869

 

 

 

33,164

 

 

 

36,317

 

 

 

39,914

 

 

 

38,020

 

Net interest income

 

 

128,372

 

 

 

123,241

 

 

 

128,069

 

 

 

125,393

 

 

 

129,643

 

Provision for loan losses

 

 

23,121

 

 

 

8,381

 

 

 

1,609

 

 

 

5,233

 

 

 

4,739

 

Net interest income after provision for loan losses

 

 

105,251

 

 

 

114,860

 

 

 

126,460

 

 

 

120,160

 

 

 

124,904

 

Noninterest income

 

 

25,375

 

 

 

14,511

 

 

 

18,229

 

 

 

27,324

 

 

 

16,199

 

Noninterest expense

 

 

83,030

 

 

 

74,368

 

 

 

80,343

 

 

 

76,948

 

 

 

77,978

 

Income tax expense

 

 

8,903

 

 

 

10,836

 

 

 

14,110

 

 

 

14,903

 

 

 

13,389

 

Net income

 

 

38,693

 

 

 

44,167

 

 

 

50,236

 

 

 

55,633

 

 

 

49,736

 

Adjusted net income (1)

 

 

49,076

 

 

 

43,354

 

 

 

56,799

 

 

 

57,827

 

 

 

52,928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data (Common Stock)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.90

 

 

$

1.03

 

 

$

1.17

 

 

$

1.30

 

 

$

1.15

 

Diluted

 

 

0.90

 

 

 

1.03

 

 

 

1.17

 

 

 

1.30

 

 

 

1.15

 

Adjusted earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (1)

 

 

1.14

 

 

 

1.01

 

 

 

1.32

 

 

 

1.35

 

 

 

1.22

 

Diluted (1)

 

 

1.14

 

 

 

1.01

 

 

 

1.32

 

 

 

1.35

 

 

 

1.22

 

Dividends

 

 

0.25

 

 

 

0.25

 

 

 

0.25

 

 

 

0.25

 

 

 

0.25

 

Book value

 

 

56.34

 

 

 

55.44

 

 

 

54.48

 

 

 

53.52

 

 

 

52.37

 

Tangible book value (1)

 

 

31.05

 

 

 

30.08

 

 

 

28.99

 

 

 

27.89

 

 

 

26.66

 

Common shares outstanding

 

 

43,041,119

 

 

 

43,041,776

 

 

 

42,950,228

 

 

 

42,952,642

 

 

 

42,953,818

 

Weighted average basic shares outstanding (2)

 

 

43,041,660

 

 

 

43,011,496

 

 

 

42,951,701

 

 

 

42,950,749

 

 

 

43,331,988

 

Weighted average diluted shares outstanding (2)

 

 

43,177,986

 

 

 

43,020,055

 

 

 

42,951,701

 

 

 

42,950,749

 

 

 

43,331,988

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Period End Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

16,986,025

 

 

$

15,573,868

 

 

$

14,958,207

 

 

$

14,959,127

 

 

$

14,708,922

 

Cash and cash equivalents

 

 

1,605,911

 

 

 

948,907

 

 

 

565,170

 

 

 

570,101

 

 

 

579,447

 

Securities available for sale

 

 

1,049,592

 

 

 

1,089,136

 

 

 

1,085,936

 

 

 

1,083,816

 

 

 

1,104,520

 

Loans, held for sale

 

 

72,865

 

 

 

39,427

 

 

 

35,645

 

 

 

32,929

 

 

 

106,489

 

Loans, held for investment (3)(4)

 

 

11,690,356

 

 

 

11,020,920

 

 

 

10,928,653

 

 

 

10,936,136

 

 

 

10,784,041

 

Mortgage warehouse purchase loans

 

 

903,630

 

 

 

796,609

 

 

 

687,317

 

 

 

660,650

 

 

 

453,492

 

Allowance for loan losses

 

 

80,055

 

 

 

58,403

 

 

 

51,461

 

 

 

50,447

 

 

 

51,075

 

Goodwill and other intangible assets

 

 

1,088,411

 

 

 

1,091,586

 

 

 

1,094,762

 

 

 

1,100,876

 

 

 

1,104,187

 

Other real estate owned

 

 

1,688

 

 

 

2,994

 

 

 

4,819

 

 

 

6,392

 

 

 

10,972

 

Noninterest-bearing deposits

 

 

3,984,404

 

 

 

3,156,270

 

 

 

3,240,185

 

 

 

3,218,055

 

 

 

3,153,001

 

Interest-bearing deposits

 

 

9,314,631

 

 

 

8,726,496

 

 

 

8,701,151

 

 

 

8,509,830

 

 

 

8,377,586

 

Borrowings (other than junior subordinated debentures)

 

 

1,116,462

 

 

 

1,152,860

 

 

 

527,251

 

 

 

767,642

 

 

 

792,534

 

Junior subordinated debentures

 

 

53,924

 

 

 

53,874

 

 

 

53,824

 

 

 

53,775

 

 

 

53,725

 

Total stockholders' equity

 

 

2,424,960

 

 

 

2,386,285

 

 

 

2,339,773

 

 

 

2,298,932

 

 

 

2,249,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Independent Bank Group, Inc. and Subsidiaries
Consolidated Financial Data
Three Months Ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019
(Dollars in thousands, except for share data)
(Unaudited)

 

 

As of and for the Quarter Ended

 

 

June 30,
2020

 

 

March 31,
2020

 

 

December 31, 2019

 

 

September 30, 2019

 

 

June 30, 2019

 

Selected Performance Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.94

%

 

 

1.19

%

 

 

1.32

%

 

 

1.50

%

 

 

1.39

%

Return on average equity

 

 

6.44

 

 

 

7.50

 

 

 

8.57

 

 

 

9.68

 

 

 

8.90

 

Return on tangible equity (5)

 

 

11.71

 

 

 

13.92

 

 

 

16.20

 

 

 

18.74

 

 

 

17.52

 

Adjusted return on average assets (1)

 

 

1.20

 

 

 

1.17

 

 

 

1.49

 

 

 

1.56

 

 

 

1.47

 

Adjusted return on average equity (1)

 

 

8.16

 

 

 

7.36

 

 

 

9.69

 

 

 

10.06

 

 

 

9.47

 

Adjusted return on tangible equity (1) (3)

 

 

14.86

 

 

 

13.66

 

 

 

18.32

 

 

 

19.48

 

 

 

18.65

 

Net interest margin

 

 

3.51

 

 

 

3.76

 

 

 

3.81

 

 

 

3.84

 

 

 

4.11

 

Adjusted net interest margin (6)

 

 

3.50

 

 

 

3.73

 

 

 

3.79

 

 

 

3.82

 

 

 

4.03

 

Efficiency ratio (7)

 

 

51.94

 

 

 

51.68

 

 

 

52.75

 

 

 

48.27       51.25  

Adjusted efficiency ratio (1)
    41.71       51.17       46.44       42.98       47.39  
 
                                       
Credit Quality Ratios (3) (8)
                                       
Nonperforming assets to total assets
    0.17 %     0.20 %     0.21 %     0.12 %     0.19 %
Nonperforming loans to total loans held for investment
    0.23       0.26       0.24       0.11       0.16  
Nonperforming assets to total loans held for investment and other real estate
    0.24       0.29       0.29       0.17       0.26  
Allowance for loan losses to nonperforming loans
    300.95       204.97       193.35       424.17       302.15  
Allowance for loan losses to total loans held for investment
    0.68       0.53       0.47       0.46       0.47  
Net charge-offs to average loans outstanding (annualized)
    0.05       0.05       0.02       0.21       0.01  
 
                                       
Capital Ratios
                                       
Estimated common equity Tier 1 capital to risk-weighted assets
    10.17 %     9.95 %     9.76 %     9.42 %     9.22 %
Estimated tier 1 capital to average assets
    8.94       9.67       9.32       9.21       9.06  
Estimated tier 1 capital to risk-weighted assets
    10.60       10.38       10.19       9.85       9.66  
Estimated total capital to risk-weighted assets
    12.44       12.05       11.83       11.49       11.51  
Total stockholders' equity to total assets
    14.28       15.32       15.64       15.37       15.29  
Tangible common equity to tangible assets (1)
    8.41       8.94       8.98       8.65       8.42                                            

(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) Loans held for investment includes SBA PPP loans of $823,289 at June 30, 2020.
(5) Non-GAAP financial measure. Excludes average balance of goodwill and net other intangible assets.
(6) Non-GAAP financial measure. Excludes unexpected income recognized on credit impaired acquired loans of $354, $982, $791, $618 and $2,695, respectively.
(7) Efficiency ratio excludes amortization of other intangible assets. See reconciliation of non-GAAP financial measures.
(8) Credit metrics - Nonperforming assets, which consist of nonperforming loans, OREO and other repossessed assets, totaled $28,403, $31,601, $31,549, $18,407 and $27,999, respectively. Nonperforming loans, which consists of nonaccrual loans, loans delinquent 90 days and still accruing interest, and troubled debt restructurings, and excludes loans acquired with deteriorated credit quality, totaled $26,601, $28,493, $26,616, $11,893 and $16,904, respectively.

Independent Bank Group, Inc. and Subsidiaries
Consolidated Statements of Income
Three and Six Months Ended June 30, 2020 and 2019
(Dollars in thousands)
(Unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

143,405

 

 

$

157,431

 

 

$

290,510

 

 

$

302,962

 

Interest on taxable securities

 

 

4,828

 

 

 

5,277

 

 

 

9,992

 

 

 

10,727

 

Interest on nontaxable securities

 

 

2,168

 

 

 

2,127

 

 

 

4,233

 

 

 

4,352

 

Interest on interest-bearing deposits and other

 

 

840

 

 

 

2,828

 

 

 

2,911

 

 

 

5,198

 

Total interest income

 

 

151,241

 

 

 

167,663

 

 

 

307,646

 

 

 

323,239

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

18,327

 

 

 

31,322

 

 

 

46,398

 

 

 

59,164

 

Interest on FHLB advances

 

 

1,289

 

 

 

2,984

 

 

 

2,915

 

 

 

5,594

 

Interest on other borrowings

 

 

2,685

 

 

 

2,923

 

 

 

5,480

 

 

 

5,638

 

Interest on junior subordinated debentures

 

 

568

 

 

 

791

 

 

 

1,240

 

 

 

1,548

 

Total interest expense

 

 

22,869

 

 

 

38,020

 

 

 

56,033

 

 

 

71,944

 

Net interest income

 

 

128,372

 

 

 

129,643

 

 

 

251,613

 

 

 

251,295

 

Provision for loan losses

 

 

23,121

 

 

 

4,739

 

 

 

31,502

 

 

 

7,963

 

Net interest income after provision for loan losses

 

 

105,251

 

 

 

124,904

 

 

 

220,111

 

 

 

243,332

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

4,849

 

 

 

6,164

 

 

 

10,391

 

 

 

12,074

 

Investment management and trust

 

 

1,646

 

 

 

2,522

 

 

 

3,632

 

 

 

4,741

 

Mortgage banking revenue

 

 

10,479

 

 

 

3,702

 

 

 

13,004

 

 

 

6,795

 

Gain on sale of loans

 

 

689

 

 

 

-

 

 

 

647

 

 

 

-

 

Gain on sale of other real estate

 

 

12

 

 

 

312

 

 

 

37

 

 

 

312

 

Gain on sale of securities available for sale

 

 

26

 

 

 

20

 

 

 

382

 

 

 

265

 

Gain (loss) on sale and disposal of premises and equipment

 

 

340

 

 

 

(279

)

 

 

277

 

 

 

(270

)

Increase in cash surrender value of BOLI

 

 

1,331

 

 

 

1,374

 

 

 

2,672

 

 

 

2,733

 

Other

 

 

6,003

 

 

 

2,384

 

 

 

8,844

 

 

 

5,973

 

Total noninterest income

 

 

25,375

 

 

 

16,199

 

 

 

39,886

 

 

 

32,623

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

34,428

 

 

 

40,532

 

 

 

73,088

 

 

 

82,912

 

Occupancy

 

 

9,378

 

 

 

9,585

 

 

 

19,415

 

 

 

18,576

 

Communications and technology

 

 

5,925

 

 

 

5,776

 

 

 

11,477

 

 

 

10,840

 

FDIC assessment

 

 

1,989

 

 

 

962

 

 

 

3,741

 

 

 

2,210

 

Advertising and public relations

 

 

862

 

 

 

812

 

 

 

1,473

 

 

 

1,475

 

Other real estate owned expenses, net

 

 

42

 

 

 

79

 

 

 

416

 

 

 

150

 

Impairment of other real estate

 

 

738

 

 

 

988

 

 

 

738

 

 

 

1,424

 

Amortization of other intangible assets

 

 

3,175

 

 

 

3,235

 

 

 

6,351

 

 

 

6,470

 

Professional fees

 

 

2,181

 

 

 

1,544

 

 

 

6,395

 

 

 

2,714

 

Acquisition expense, including legal

 

 

15,629

 

 

 

3,723

 

 

 

16,178

 

 

 

18,710

 

Other

 

 

8,683

 

 

 

10,742

 

 

 

18,126

 

 

 

19,092

 

Total noninterest expense

 

 

83,030

 

 

 

77,978

 

 

 

157,398

 

 

 

164,573

 

Income before taxes

 

 

47,596

 

 

 

63,125

 

 

 

102,599

 

 

 

111,382

 

Income tax expense

 

 

8,903

 

 

 

13,389

 

 

 

19,739

 

 

 

24,515

 

Net income

 

$

38,693

 

 

$

49,736

 

 

$

82,860

 

 

$

86,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Independent Bank Group, Inc. and Subsidiaries
Consolidated Balance Sheets
As of June 30, 2020 and December 31, 2019
(Dollars in thousands)
(Unaudited)

 

 

June 30,

 

 

December 31,

 

Assets

 

2020

 

 

2019

 

Cash and due from banks

 

$

191,812

 

 

$

186,299

 

Interest-bearing deposits in other banks

 

 

1,414,099

 

 

 

378,871

 

Cash and cash equivalents

 

 

1,605,911

 

 

 

565,170

 

Certificates of deposit held in other banks

 

 

4,481

 

 

 

5,719

 

Securities available for sale, at fair value

 

 

1,049,592

 

 

 

1,085,936

 

Loans held for sale

 

 

72,865

 

 

 

35,645

 

Loans, net

 

 

12,497,449

 

 

 

11,562,814

 

Premises and equipment, net

 

 

243,310

 

 

 

242,874

 

Other real estate owned

 

 

1,688

 

 

 

4,819

 

Federal Home Loan Bank (FHLB) of Dallas stock and other restricted stock

 

 

57,294

 

 

 

30,052

 

Bank-owned life insurance (BOLI)

 

 

217,753

 

 

 

215,081

 

Deferred tax asset

 

 

3,208

 

 

 

6,943

 

Goodwill

 

 

994,021

 

 

 

994,021

 

Other intangible assets, net

 

 

94,390

 

 

 

100,741

 

Other assets

 

 

144,063

 

 

 

108,392

 

Total assets

 

$

16,986,025

 

 

$

14,958,207

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

3,984,404

 

 

$

3,240,185

 

Interest-bearing

 

 

9,314,631

 

 

 

8,701,151

 

Total deposits

 

 

13,299,035

 

 

 

11,941,336

 

FHLB advances

 

 

925,000

 

 

 

325,000

 

Other borrowings

 

 

191,462

 

 

 

202,251

 

Junior subordinated debentures

 

 

53,924

 

 

 

53,824

 

Other liabilities

 

 

91,644

 

 

 

96,023

 

Total liabilities

 

 

14,561,065

 

 

 

12,618,434

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

-

 

 

 

-

 

Common stock

 

 

430

 

 

 

430

 

Additional paid-in capital

 

 

1,930,722

 

 

 

1,926,359

 

Retained earnings

 

 

454,878

 

 

 

393,674

 

Accumulated other comprehensive income (loss)

 

 

38,930

 

 

 

19,310

 

Total stockholders' equity

 

 

2,424,960

 

 

 

2,339,773

 

Total liabilities and stockholders' equity

 

$

16,986,025

 

 

$

14,958,207

 

 

 

 

 

 

 

 

 

 

Independent Bank Group, Inc. and Subsidiaries
Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis
Three Months Ended June 30, 2020 and 2019
(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,

 

 

 

2020

 

 

2019

 

 

 

Average
Outstanding
Balance

 

 

Interest

 

 

Yield/

Rate (4)

 

 

Average
Outstanding
Balance

 

 

Interest

 

 

Yield/

Rate (4)

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

12,297,599

 

 

$

143,405

 

 

 

4.69

%

 

$

11,088,633

 

 

$

157,431

 

 

 

5.69

%

Taxable securities

 

 

750,381

 

 

 

4,828

 

 

 

2.59

 

 

 

776,869

 

 

 

5,277

 

 

 

2.72

 

Nontaxable securities

 

 

348,204

 

 

 

2,168

 

 

 

2.50

 

 

 

332,552

 

 

 

2,127

 

 

 

2.57

 

Interest bearing deposits and other

 

 

1,296,048

 

 

 

840

 

 

 

0.26

 

 

 

446,075

 

 

 

2,828

 

 

 

2.54

 

Total interest-earning assets

 

 

14,692,232

 

 

 

151,241

 

 

 

4.14

 

 

 

12,644,129

 

 

 

167,663

 

 

 

5.32

 

Noninterest-earning assets

 

 

1,793,324

 

 

 

 

 

 

 

 

 

 

 

1,753,723

 

 

 

 

 

 

 

 

 

Total assets

 

$

16,485,556

 

 

 

 

 

 

 

 

 

 

$

14,397,852

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

4,350,985

 

 

$

6,044

 

 

 

0.56

%

 

$

3,846,970

 

 

$

10,653

 

 

 

1.11

%

Savings accounts

 

 

598,237

 

 

 

260

 

 

 

0.17

 

 

 

524,642

 

 

 

332

 

 

 

0.25

 

Money market accounts

 

 

2,304,386

 

 

 

4,540

 

 

 

0.79

 

 

 

2,074,568

 

 

 

11,041

 

 

 

2.13

 

Certificates of deposit

 

 

1,707,470

 

 

 

7,483

 

 

 

1.76

 

 

 

1,782,799

 

 

 

9,296

 

 

 

2.09

 

Total deposits

 

 

8,961,078

 

 

 

18,327

 

 

 

0.82

 

 

 

8,228,979

 

 

 

31,322

 

 

 

1.53

 

FHLB advances

 

 

1,076,648

 

 

 

1,289

 

 

 

0.48

 

 

 

500,330

 

 

 

2,984

 

 

 

2.39

 

Other borrowings

 

 

184,393

 

 

 

2,685

 

 

 

5.86

 

 

 

201,540

 

 

 

2,923

 

 

 

5.82

 

Junior subordinated debentures

 

 

53,906

 

 

 

568

 

 

 

4.24

 

 

 

53,708

 

 

 

791

 

 

 

5.91

 

Total interest-bearing liabilities

 

 

10,276,025

 

 

 

22,869

 

 

 

0.90

 

 

 

8,984,557

 

 

 

38,020

 

 

 

1.70

 

Noninterest-bearing checking accounts

 

 

3,699,045

 

 

 

 

 

 

 

 

 

 

 

3,093,478

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities

 

 

92,448

 

 

 

 

 

 

 

 

 

 

 

78,305

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

2,418,038

 

 

 

 

 

 

 

 

 

 

 

2,241,512

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

16,485,556

 

 

 

 

 

 

 

 

 

 

$

14,397,852

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

128,372

 

 

 

 

 

 

 

 

 

 

$

129,643

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

 

 

 

 

3.24

%

 

 

 

 

 

 

 

 

 

 

3.62

%

Net interest margin (2)

 

 

 

 

 

 

 

 

 

 

3.51

 

 

 

 

 

 

 

 

 

 

 

4.11

 

Net interest income and margin (tax equivalent basis) (3)

 

 

 

 

 

$

129,344

 

 

 

3.54

 

 

 

 

 

 

$

130,568

 

 

 

4.14

 

Average interest-earning assets to interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

142.98

 

 

 

 

 

 

 

 

 

 

 

140.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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, 2020 and 2019
(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,

 

 

 

2020

 

 

2019

 

 

 

Average
Outstanding
Balance

 

 

Interest

 

 

Yield/Rate (4)

 

 

Average
Outstanding
Balance

 

 

Interest

 

 

Yield/Rate (4)

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

11,917,473

 

 

$

290,510

 

 

 

4.90

%

 

$

10,899,746

 

 

$

302,962

 

 

 

5.61

%

Taxable securities

 

 

757,608

 

 

 

9,992

 

 

 

2.65

 

 

 

774,837

 

 

 

10,727

 

 

 

2.79

 

Nontaxable securities

 

 

338,923

 

 

 

4,233

 

 

 

2.51

 

 

 

333,757

 

 

 

4,352

 

 

 

2.63

 

Interest bearing deposits and other

 

 

916,812

 

 

 

2,911

 

 

 

0.64

 

 

 

413,248

 

 

 

5,198

 

 

 

2.54

 

Total interest-earning assets

 

 

13,930,816

 

 

 

307,646

 

 

 

4.44

 

 

 

12,421,588

 

 

 

323,239

 

 

 

5.25

 

Noninterest-earning assets

 

 

1,794,757

 

 

 

 

 

 

 

 

 

 

 

1,766,074

 

 

 

 

 

 

 

 

 

Total assets

 

$

15,725,573

 

 

 

 

 

 

 

 

 

 

$

14,187,662

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

4,341,287

 

 

$

17,017

 

 

 

0.79

%

 

$

3,877,885

 

 

$

20,751

 

 

 

1.08

%

Savings accounts

 

 

574,327

 

 

 

525

 

 

 

0.18

 

 

 

514,816

 

 

 

656

 

 

 

0.26

 

Money market accounts

 

 

2,177,205

 

 

 

12,353

 

 

 

1.14

 

 

 

1,987,400

 

 

 

20,652

 

 

 

2.10

 

Certificates of deposit

 

 

1,762,340

 

 

 

16,503

 

 

 

1.88

 

 

 

1,720,679

 

 

 

17,105

 

 

 

2.00

 

Total deposits

 

 

8,855,159

 

 

 

46,398

 

 

 

1.05

 

 

 

8,100,780

 

 

 

59,164

 

 

 

1.47

 

FHLB advances

 

 

743,407

 

 

 

2,915

 

 

 

0.79

 

 

 

473,329

 

 

 

5,594

 

 

 

2.38

 

Other borrowings

 

 

189,618

 

 

 

5,480

 

 

 

5.81

 

 

 

193,656

 

 

 

5,638

 

 

 

5.87

 

Junior subordinated debentures

 

 

53,881

 

 

 

1,240

 

 

 

4.63

 

 

 

53,683

 

 

 

1,548

 

 

 

5.81

 

Total interest-bearing liabilities

 

 

9,842,065

 

 

 

56,033

 

 

 

1.14

 

 

 

8,821,448

 

 

 

71,944

 

 

 

1.64

 

Noninterest-bearing checking accounts

 

 

3,398,116

 

 

 

 

 

 

 

 

 

 

 

3,059,110

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities

 

 

91,768

 

 

 

 

 

 

 

 

 

 

 

76,521

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

2,393,624

 

 

 

 

 

 

 

 

 

 

 

2,230,583

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

15,725,573

 

 

 

 

 

 

 

 

 

 

$

14,187,662

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

251,613

 

 

 

 

 

 

 

 

 

 

$

251,295

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

 

 

 

 

3.30

%

 

 

 

 

 

 

 

 

 

 

3.61

%

Net interest margin (2)

 

 

 

 

 

 

 

 

 

 

3.63

 

 

 

 

 

 

 

 

 

 

 

4.08

 

Net interest income and margin (tax equivalent basis) (3)

 

 

 

 

 

$

253,498

 

 

 

3.66

 

 

 

 

 

 

$

253,133

 

 

 

4.11

 

Average interest-earning assets to interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

141.54

 

 

 

 

 

 

 

 

 

 

 

140.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 six month periods are annualized.

Independent Bank Group, Inc. and Subsidiaries
Loan Portfolio Composition
As of June 30, 2020 and December 31, 2019
(Dollars in thousands)
(Unaudited)

Totals loans by category

 

June 30, 2020

 

 

December 31, 2019

 

 

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

Commercial (1)(2)

 

$

3,417,423

 

 

 

27.0

%

 

$

2,482,356

 

 

 

21.3

%

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

5,813,311

 

 

 

45.9

 

 

 

5,872,653

 

 

 

50.4

 

Commercial construction, land and land development

 

 

1,363,849

 

 

 

10.8

 

 

 

1,236,623

 

 

 

10.6

 

Residential real estate (3)

 

 

1,546,975

 

 

 

12.2

 

 

 

1,550,872

 

 

 

13.3

 

Single-family interim construction

 

 

370,957

 

 

 

2.9

 

 

 

378,120

 

 

 

3.2

 

Agricultural

 

 

95,784

 

 

 

0.8

 

 

 

97,767

 

 

 

0.9

 

Consumer

 

 

58,215

 

 

 

0.4

 

 

 

32,603

 

 

 

0.3

 

Other

 

 

337

 

 

 

-

 

 

 

621

 

 

 

-

 

Total loans

 

 

12,666,851

 

 

 

100.0

%

 

 

11,651,615

 

 

 

100.0

%

Deferred loan fees (2)

 

 

(16,482

)

 

 

 

 

 

 

(1,695

)

 

 

 

 

Allowance for loan losses

 

 

(80,055

)

 

 

 

 

 

 

(51,461

)

 

 

 

 

Total loans, net

 

$

12,570,314

 

 

 

 

 

 

$

11,598,459

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes mortgage warehouse purchase loans of $903,630 and $687,317 at June 30, 2020 and December 31, 2019, respectively.
(2) Includes SBA PPP loans of $823,289 with net deferred loan fees of $18,722 at June 30, 2020.
(3) Includes loans held for sale of $72,865 and $35,645 at June 30, 2020 and December 31, 2019, respectively.

Independent Bank Group, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Three Months Ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019
(Dollars in thousands, except for share data)
(Unaudited)

 

 

 

For the Three Months Ended

 

 

 

 

June 30, 2020

 

 

March 31, 2020

 

 

December 31, 2019

 

 

September 30, 2019

 

 

June 30, 2019

 

ADJUSTED NET INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income - Reported

(a)

 

$

128,372

 

 

$

123,241

 

 

$

128,069

 

 

$

125,393

 

 

$

129,643

 

Unexpected income recognized on credit impaired acquired loans

 

 

 

(354

)

 

 

(982

)

 

 

(791

)

 

 

(618

)

 

 

(2,695

)

Adjusted Net Interest Income

(b)

 

 

128,018

 

 

 

122,259

 

 

 

127,278

 

 

 

124,775

 

 

 

126,948

 

Provision Expense - Reported

(c)

 

 

23,121

 

 

 

8,381

 

 

 

1,609

 

 

 

5,233

 

 

 

4,739

 

Noninterest Income - Reported

(d)

 

 

25,375

 

 

 

14,511

 

 

 

18,229

 

 

 

27,324

 

 

 

16,199

 

(Gain) loss on sale of loans

 

 

 

(689

)

 

 

42

 

 

 

-

 

 

 

(6,779

)

 

 

-

 

Gain on sale of branch

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,549

)

 

 

-

 

Gain on sale of trust business

 

 

 

-

 

 

 

-

 

 

 

(1,319

)

 

 

-

 

 

 

-

 

Gain on sale of other real estate

 

 

 

(12

)

 

 

(25

)

 

 

(24

)

 

 

(539

)

 

 

(312

)

Gain on sale of securities available for sale

 

 

 

(26

)

 

 

(356

)

 

 

(10

)

 

 

-

 

 

 

(20

)

(Gain) loss on sale and disposal of premises and equipment

 

 

 

(340

)

 

 

63

 

 

 

-

 

 

 

315

 

 

 

279

 

Recoveries on loans charged off prior to acquisition

 

 

 

(3,640

)

 

 

(84

)

 

 

(425

)

 

 

(107

)

 

 

(258

)

Adjusted Noninterest Income

(e)

 

 

20,668

 

 

 

14,151

 

 

 

16,451

 

 

 

18,665

 

 

 

15,888

 

Noninterest Expense - Reported

(f)

 

 

83,030

 

 

 

74,368

 

 

 

80,343

 

 

 

76,948

 

 

 

77,978

 

Separation expense

 

 

 

-

 

 

 

-

 

 

 

(3,421

)

 

 

-

 

 

 

-

 

OREO impairment

 

 

 

(738

)

 

 

-

 

 

 

(377

)

 

 

-

 

 

 

(988

)

Impairment of assets

 

 

 

-

 

 

 

(126

)

 

 

-

 

 

 

(1,173

)

 

 

-

 

COVID-19 expense (4)

 

 

 

(1,451

)

 

 

(262

)

 

 

-

 

 

 

-

 

 

 

-

 

Acquisition expense (5)

 

 

 

(15,644

)

 

 

(1,008

)

 

 

(6,619

)

 

 

(10,885

)

 

 

(6,069

)

Adjusted Noninterest Expense

(g)

 

 

65,197

 

 

 

72,972

 

 

 

69,926

 

 

 

64,890

 

 

 

70,921

 

Adjusted Net Income (1)

(b) - (c) + (e) - (g)

 

$

49,076

 

 

$

43,354

 

 

$

56,799

 

 

$

57,827

 

 

$

52,928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED PROFITABILITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Return on Average Assets (2)

 

 

 

1.20

%

 

 

1.17

%

 

 

1.49

%

 

 

1.56

%

 

 

1.47

%

Adjusted Return on Average Equity (2)

 

 

 

8.16

%

 

 

7.36

%

 

 

9.69

%

 

 

10.06

%

 

 

9.47

%

Adjusted Return on Tangible Equity (2)

 

 

 

14.86

%

 

 

13.66

%

 

 

18.32

%

 

 

19.48

%

 

 

18.65

%

Total Average Assets

 

 

16,485,556

 

 

14,965,628

 

 

15,091,382

 

 

14,742,618

 

 

14,397,852

 

Total Average Stockholders' Equity

 

 

2,418,038

 

 

2,369,225

 

 

2,326,176

 

 

2,279,878

 

 

2,241,512

 

Total Average Tangible Stockholders' Equity (3)

 

 

1,328,568

 

 

1,276,545

 

 

1,230,344

 

 

1,177,851

 

 

1,138,340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EFFICIENCY RATIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of other intangible assets

(h)

 

3,175

 

 

3,176

 

 

3,175

 

 

3,235

 

 

3,235

 

Reported Efficiency Ratio

(f - h) / (a + d)

 

 

51.94

%

 

 

51.68

%

 

 

52.75

%

 

 

48.27

%

 

 

51.25

%

Adjusted Efficiency Ratio

(g - h) / (b + e)

 

 

41.71

%

 

 

51.17

%

 

 

46.44

%

 

 

42.98

%

 

 

47.39

%

(1) Assumes an adjusted effective tax rate of 18.7%, 21.3%, 21.3%, 21.1%, and 21.2% for the quarters ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019, respectively.
(2) Calculated using adjusted net income.
(3) Excludes average balance of goodwill and net other intangible assets.
(4) COVID-19 expense includes expenses such as employee's premium pay, personal protection and cleaning supplies, remote work equipment, advertising and communications, and community support/donations.
(5) Acquisition expenses include $15, $459, $1,349, $1,420 and $2,346 of compensation related expenses in addition to $15,629, $549, $5,270, $9,465 and $3,723 of merger-related expenses for the quarters ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019, respectively.

Independent Bank Group, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
As of June 30, 2020 and December 31, 2019
(Dollars in thousands, except per share information)
(Unaudited)

Tangible Book Value & Tangible Common Equity To Tangible Asset Ratio

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Tangible Common Equity

 

 

 

 

 

 

Total common stockholders' equity

 

2,424,960

 

 

2,339,773

 

Adjustments:

 

 

 

 

 

 

 

 

Goodwill

 

 

(994,021

)

 

 

(994,021

)

Other intangible assets, net

 

 

(94,390

)

 

 

(100,741

)

Tangible common equity

 

1,336,549

 

 

1,245,011

 

 

 

 

 

 

 

 

 

 

Tangible Assets

 

 

 

 

 

 

 

 

Total assets

 

16,986,025

 

 

14,958,207

 

Adjustments:

 

 

 

 

 

 

 

 

Goodwill

 

 

(994,021

)

 

 

(994,021

)

Other intangible assets, net

 

 

(94,390

)

 

 

(100,741

)

Tangible assets

 

15,897,614

 

 

13,863,445

 

Common shares outstanding

 

 

43,041,119

 

 

 

42,950,228

 

Tangible common equity to tangible assets

 

 

8.41

%

 

 

8.98

%

Book value per common share

 

56.34

 

 

54.48

 

Tangible book value per common share

 

 

31.05

 

 

 

28.99

 

SOURCE: Independent Bank Group Inc.

07/27/2020 EQS Newswire / EQS Group AG

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