INDEPENDENT BANK GROUP, INC. REPORTS FOURTH QUARTER FINANCIAL RESULTS AND DECLARES QUARTERLY DIVIDEND

McKinney, 02/01/2021 / 17:02, CST/CDT - EQS Newswire - Independent Bank Group Inc. MCKINNEY, TX / ACCESSWIRE / February 1, 2021 / Independent Bank Group, Inc. (NASDAQ:IBTX), the holding company for Independent Bank, today announced net income of $58.3 million, or $1.35 per diluted share, for the quarter ended December 31, 2020 compared to $50.2 million, or $1.17 per diluted share, for the quarter ended December 31, 2019 and $60.1 million, or $1.39 per diluted share, for the quarter ended September 30, 2020. For the year ended December 31, 2020, the Company reported net income of $201.2 million, or $4.67 per diluted share, compared to $192.7 million, or $4.46 per diluted share, for the year ended December 31, 2019, a 4.4% dollar increase. The Company also announced that its Board of Directors declared a quarterly cash dividend in the amount of $0.30 per share of common stock. The dividend will be payable on February 25, 2021 to stockholders of record as of the close of business on February 11, 2021. Highlights "These fourth quarter results mark a strong finish to a challenging year," said Independent Bank Group Chairman and CEO David R. Brooks. "Looking back on 2020, I am proud of how our teams rose to the occasion to support our customers and communities amidst great uncertainty. This disciplined execution of our granular community banking model, coupled with our resilient credit culture, resulted in solid full-year net income of $201.2 million." Brooks continued, "We begin this new year in a position of strength with healthy credit metrics, strong capital levels, and substantial liquidity. Looking ahead, we remain focused on disciplined execution and shareholder value creation. Our company operates in some of the most attractive markets in the country, and our experienced teams are well-positioned to seize opportunities and win new business as the economic recovery accelerates across our footprint." Fourth Quarter 2020 Operating Results Net Interest Income Noninterest Income Noninterest Expense Provision for Loan Loss Income Taxes Fourth Quarter 2020 Balance Sheet Highlights Loans Asset Quality Deposits, Borrowings and Liquidity Capital 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 December 31, 2020 on Form 10-K. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2020 and will adjust amounts preliminarily reported, if necessary. About Independent Bank Group Independent Bank Group, through its wholly owned subsidiary, Independent Bank, provides a wide range of relationship-driven commercial banking products and services tailored to meet the needs of businesses, professionals and individuals. Independent Bank Group operates in four market regions located in the Dallas/Fort Worth, Austin and Houston 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 fourth quarter earnings announcement will be held on Tuesday, February 2, 2021 at 8:30 a.m. (EDT) and can be accessed by the webcast link, https://webcasts.eqs.com/indepbankgroup20201026/en or by calling 1-877-407-0989 and by identifying the meeting number 13714597 or by identifying "Independent Bank Group Fourth Quarter 2020 Earnings Conference Call." The conference materials will also be available by accessing the Investor Relations page of our website, www.ifinancial.com. If you are unable to participate in the live event, a recording of the conference call will be accessible via the Investor Relations page of our website. Forward-Looking Statements From time to time the Company's comments and releases may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and other related federal security laws. Forward-looking statements include information about the Company's possible or assumed future results of operations, including its future revenues, income, expenses, provision for taxes, effective tax rate, earnings 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 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 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: Schwinn Feng Chief Marketing Officer (469) 301-2706 schwinn.feng@ibtx.com Independent Bank Group, Inc. and Subsidiaries Consolidated Financial Data Three Months Ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019 (Dollars in thousands, except for share data) (Unaudited)     As of and for the Quarter Ended       December 31, 2020     September 30, 2020     June 30, 2020     March 31, 2020     December 31, 2019   Selected Income Statement Data                               Interest income   $  152,062     $  151,798     $  151,241     $  156,405     $  164,386   Interest expense     19,236       19,791       22,869       33,164       36,317   Net interest income     132,826       132,007       128,372       123,241       128,069   Provision for loan losses     3,871       7,620       23,121       8,381       1,609   Net interest income after provision for loan losses     128,955       124,387       105,251       114,860       126,460   Noninterest income     19,912       25,165       25,414       14,572       18,229   Noninterest expense     75,227       73,409       83,069       74,429       80,343   Income tax expense     15,366       16,068       8,903       10,836       14,110   Net income     58,274       60,075       38,693       44,167       50,236   Adjusted net income (1)     58,007       59,580       49,076       43,354       56,799                                             Per Share Data (Common Stock)                                         Earnings:                                         Basic   $  1.35     $  1.39     $  0.90     $  1.03     $  1.17   Diluted     1.35       1.39       0.90       1.03       1.17   Adjusted earnings:                                         Basic (1)     1.34       1.38       1.14       1.01       1.32   Diluted (1)     1.34       1.38       1.14       1.01       1.32   Dividends     0.30       0.25       0.25       0.25       0.25   Book value     58.31       57.26       56.34       55.44       54.48   Tangible book value (1)     33.23       32.17       31.05       30.08       28.99   Common shares outstanding     43,137,104       43,244,797       43,041,119       43,041,776       42,950,228   Weighted average basic shares outstanding (2)     43,177,824       43,234,913       43,041,660       43,011,496       42,951,701   Weighted average diluted shares outstanding (2)     43,177,824       43,234,913       43,177,986       43,020,055       42,951,701                                             Selected Period End Balance Sheet Data                                         Total assets   $  17,753,476     $  17,117,007     $  16,986,025     $  15,573,868     $  14,958,207   Cash and cash equivalents     1,813,987       1,453,733       1,605,911       948,907       565,170   Securities available for sale     1,153,693       1,076,619       1,049,592       1,089,136       1,085,936   Loans, held for sale     82,647       87,406       72,865       39,427       35,645   Loans, held for investment (3)(4)     11,622,298       11,651,855       11,690,356       11,020,920       10,928,653   Mortgage warehouse purchase loans     1,453,797       1,219,013       903,630       796,609       687,317   Allowance for loan losses     87,820       87,491       80,055       58,403       51,461   Goodwill and other intangible assets     1,082,091       1,085,236       1,088,411       1,091,586       1,094,762   Other real estate owned     475       1,642       1,688       2,994       4,819   Noninterest-bearing deposits     4,164,800       4,187,150       3,984,404       3,156,270       3,240,185   Interest-bearing deposits     10,234,127       9,610,410       9,314,631       8,726,496       8,701,151   Borrowings (other than junior subordinated debentures)     687,175       680,529       1,116,462       1,152,860       527,251   Junior subordinated debentures     54,023       53,973       53,924       53,874       53,824   Total stockholders' equity     2,515,371       2,476,373       2,424,960       2,386,285       2,339,773   Independent Bank Group, Inc. and Subsidiaries Consolidated Financial Data Three Months Ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019 (Dollars in thousands, except for share data) (Unaudited)     As of and for the Quarter Ended       December 31, 2020     September 30, 2020     June 30, 2020     March 31, 2020     December 31, 2019   Selected Performance Metrics                               Return on average assets     1.34 %     1.43 %     0.94 %     1.19 %     1.32 % Return on average equity     9.29       9.73       6.44       7.50       8.57   Return on tangible equity (5)     16.40       17.43       11.71       13.92       16.20   Adjusted return on average assets (1)     1.34       1.42       1.20       1.17       1.49   Adjusted return on average equity (1)     9.24       9.65       8.16       7.36       9.69   Adjusted return on tangible equity (1) (3)     16.33       17.29       14.86       13.66       18.32   Net interest margin     3.42       3.52       3.51       3.76       3.81   Adjusted net interest margin (6)     3.40       3.48       3.50       3.73       3.79   Efficiency ratio (7)     47.19       44.69       51.95       51.70       52.75   Adjusted efficiency ratio (1)     47.16       44.57       41.73       51.19       46.44                                             Credit Quality Ratios (3) (8)                                         Nonperforming assets to total assets     0.29 %     0.25 %     0.17 %     0.20 %     0.21 % Nonperforming loans to total loans held for investment     0.44       0.36       0.23			0.26				0.24
Nonperforming assets to total loans held for investment and other real estate			0.45				0.37				0.24				0.29				0.29
Allowance for loan losses to nonperforming loans			170.80				211.12				300.95				204.97				193.35
Allowance for loan losses to total loans held for investment			0.76				0.75				0.68				0.53				0.47
Net charge-offs to average loans outstanding (annualized)			0.11				0.01				0.05				0.05				0.02
Capital Ratios
Estimated common equity Tier 1 capital to risk-weighted assets			10.33	%			10.24	%			10.17	%			9.95	%			9.76	%
Estimated tier 1 capital to average assets			9.12				9.15				8.94				9.67				9.32
Estimated tier 1 capital to risk-weighted assets			10.74				10.66				10.60				10.38				10.19
Estimated total capital to risk-weighted assets			13.32				13.29				12.44				12.05				11.83
Total stockholders' equity to total assets			14.17				14.47				14.28				15.32				15.64
Tangible common equity to tangible assets (1)			8.60				8.68				8.41				8.94				8.98

 

⁽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 $804,397, $825,966 and $823,289 at December 31, 2020, September 30, 2020 and June 30, 2020, respectively.
⁽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 $579, $1,294, $354, $982 and $791, 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 $52,005, $43,197, $28,403, $31,601 and $31,549, 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 $51,416, $41,441, $26,601, $28,493 and $26,616, respectively.

Independent Bank Group, Inc. and Subsidiaries
Annual Selected Financial Information
Years Ended December 31, 2020 and 2019
(Unaudited)

		Years Ended December 31,
		2020				2019
Per Share Data
Net income - basic$			4.67			$	4.46
Net income - diluted			4.67				4.46
Cash dividends			1.05				1.00
Book value			58.31				54.48
Outstanding Shares
Period-end shares			43,137,104				42,950,228
Weighted average shares - basic(1)			43,116,965				43,245,418
Weighted average shares - diluted(1)			43,116,965				43,245,418
Selected Annual Ratios
Return on average assets			1.23	%			1.32	%
Return on average equity			8.26				8.50
Net interest margin			3.55				3.95

⁽¹⁾ Total number of shares includes participating shares (those with dividend rights).

Independent Bank Group, Inc. and Subsidiaries
Consolidated Statements of Income
Three Months and Years Ended December 31, 2020 and 2019
(Dollars in thousands)
(Unaudited)

		Three Months Ended December 31,								Years Ended December 31,
		2020				2019				2020				2019
Interest income:
Interest and fees on loans		$	144,437			$	153,963			$	579,085			$	611,589
Interest on taxable securities			4,651				5,223				19,150				21,324
Interest on nontaxable securities			2,113				2,056				8,472				8,482
Interest on interest-bearing deposits and other			861				3,144				4,799				11,537
Total interest income			152,062				164,386				611,506				652,932
Interest expense:
Interest on deposits			14,189				30,834				76,266				123,384
Interest on FHLB advances			541				1,849				4,170				10,173
Interest on other borrowings			4,054				2,916				12,462				11,590
Interest on junior subordinated debentures			452				718				2,162				3,028
Total interest expense			19,236				36,317				95,060				148,175
Net interest income			132,826				128,069				516,446				504,757
Provision for loan losses			3,871				1,609				42,993				14,805
Net interest income after provision for loan losses			128,955				126,460				473,453				489,952
Noninterest income:
Service charges on deposit accounts			2,422				2,898				9,303				12,145
Investment management and trust			1,990				2,092				7,546				9,330
Mortgage banking revenue			8,765				3,842				36,491				15,461
(Loss) gain on sale of loans			(291	)			-				356				6,779
Gain on sale of branch			-				-				-				1,549
Gain on sale of trust business			-				1,319				-				1,319
(Loss) gain on sale of other real estate			(73	)			24				(36	)			875
Gain on sale of securities available for sale			-				10				382				275
Gain (loss) on sale and disposal of premises and equipment			59				-				370				(585	)
Increase in cash surrender value of BOLI			1,340				1,390				5,347				5,525
Other			5,700				6,654				25,304				25,503
Total noninterest income			19,912				18,229				85,063				78,176
Noninterest expense:
Salaries and employee benefits			42,199				42,126				157,540				162,683
Occupancy			10,078				9,676				39,210				37,654
Communications and technology			5,920				5,650				23,113				22,248
FDIC assessment			1,574				994				6,912				1,065
Advertising and public relations			451				585				2,416				2,527
Other real estate owned expenses, net			28				116				487				418
Impairment of other real estate			-				377				784				1,801
Amortization of other intangible assets			3,145				3,175				12,671				12,880
Professional fees			3,364				3,165				12,630				7,936
Acquisition expense, including legal			-				5,270				16,225				33,445
Other			8,468				9,209				34,146				39,207
Total noninterest expense			75,227				80,343				306,134				321,864
Income before taxes			73,640				64,346				252,382				246,264
Income tax expense			15,366				14,110				51,173				53,528
Net income		$	58,274			$	50,236			$	201,209			$	192,736

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

		December 31,
Assets		2020				2019
Cash and due from banks		$	250,485			$	186,299
Interest-bearing deposits in other banks			1,563,502				378,871
Cash and cash equivalents			1,813,987				565,170
Certificates of deposit held in other banks			4,482				5,719
Securities available for sale, at fair value			1,153,693				1,085,936
Loans held for sale			82,647				35,645
Loans, net			12,978,238				11,562,814
Premises and equipment, net			249,467				242,874
Other real estate owned			475				4,819
Federal Home Loan Bank (FHLB) of Dallas stock and other restricted stock			20,305				30,052
Bank-owned life insurance (BOLI)			220,428				215,081
Deferred tax asset			3,933				6,943
Goodwill			994,021				994,021
Other intangible assets, net			88,070				100,741
Other assets			143,730				108,392
Total assets		$	17,753,476			$	14,958,207
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing		$	4,164,800			$	3,240,185
Interest-bearing			10,234,127				8,701,151
Total deposits			14,398,927				11,941,336
FHLB advances			375,000				325,000
Other borrowings			312,175				202,251
Junior subordinated debentures			54,023				53,824
Other liabilities			97,980				96,023
Total liabilities			15,238,105				12,618,434
Commitments and contingencies
Stockholders' equity:
Preferred stock			-				-
Common stock			431				430
Additional paid-in capital			1,934,807				1,926,359
Retained earnings			543,800				393,674
Accumulated other comprehensive income			36,333				19,310
Total stockholders' equity			2,515,371				2,339,773
Total liabilities and stockholders' equity		$	17,753,476			$	14,958,207

Independent Bank Group, Inc. and Subsidiaries
Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis
Three Months Ended December 31, 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 December 31,
		2020												2019
		Average Outstanding Balance				Interest				Yield/ Rate (4)				Average Outstanding Balance				Interest				Yield/ Rate (4)
Interest-earning assets:
Loans (1)		$	12,889,298			$	144,437				4.46	%		$	11,566,271			$	153,963				5.28	%
Taxable securities			776,138				4,651				2.38				756,669				5,223				2.74
Nontaxable securities			348,706				2,113				2.41				321,377				2,056				2.54
Interest bearing deposits and other			1,438,835				861				0.24				674,247				3,144				1.85
Total interest-earning assets			15,452,977				152,062				3.91				13,318,564				164,386				4.90
Noninterest-earning assets			1,799,134												1,772,818
Total assets		$	17,252,111											$	15,091,382
Interest-bearing liabilities:
Checking accounts		$	5,001,394			$	5,715				0.45	%		$	4,106,716			$	11,332				1.09	%
Savings accounts			650,736				272				0.17				568,007				331				0.23
Money market accounts			2,645,792				4,375				0.66				2,112,390				9,262				1.74
Certificates of deposit			1,467,194				3,827				1.04				1,873,835				9,909				2.10
Total deposits			9,765,116				14,189				0.58				8,660,948				30,834				1.41
FHLB advances			375,000				541				0.57				457,880				1,849				1.60
Other borrowings			308,429				4,054				5.23				203,888				2,916				5.67
Junior subordinated debentures			54,005				452				3.33				53,807				718				5.29
Total interest-bearing liabilities			10,502,550				19,236				0.73				9,376,523				36,317				1.54
Noninterest-bearing checking accounts			4,150,325												3,277,539
Noninterest-bearing liabilities			102,918												111,144
Stockholders' equity			2,496,318												2,326,176
Total liabilities and equity		$	17,252,111											$	15,091,382
Net interest income						$	132,826											$	128,069
Interest rate spread											3.18	%											3.36	%
Net interest margin (2)											3.42												3.81
Net interest income and margin (tax equivalent basis) (3)						$	133,798				3.44							$	129,057				3.84
Average interest-earning assets to interest-bearing liabilities											147.14												142.04

⁽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
For The Years Ended December 31, 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.

		For The Years Ended December 31,
		2020												2019
		Average Outstanding Balance				Interest				Yield/Rate				Average Outstanding Balance				Interest				Yield/Rate
Interest-earning assets:
Loans (1)		$	12,329,965			$	579,085				4.70	%		$	11,179,161			$	611,589				5.47	%
Taxable securities			749,273				19,150				2.56				770,927				21,324				2.77
Nontaxable securities			344,609				8,472				2.46				329,687				8,482				2.57
Interest bearing deposits and other			1,141,164				4,799				0.42				504,309				11,537				2.29
Total interest-earning assets			14,565,011				611,506				4.20				12,784,084				652,932				5.11
Noninterest-earning assets			1,792,725												1,771,231
Total assets		$	16,357,736											$	14,555,315
Interest-bearing liabilities:
Checking accounts		$	4,577,137			$	28,244				0.62	%		$	3,953,986			$	44,171				1.12	%
Savings accounts			607,996				1,067				0.18				540,741				1,335				0.25
Money market accounts			2,368,980				21,089				0.89				2,047,554				40,837				1.99
Certificates of deposit			1,645,014				25,866				1.57				1,795,391				37,041				2.06
Total deposits			9,199,127				76,266				0.83				8,337,672				123,384				1.48
FHLB advances			613,251				4,170				0.68				464,404				10,173				2.19
Other borrowings			224,489				12,462				5.55				201,066				11,590				5.76
Junior subordinated debentures			53,931				2,162				4.01				53,733				3,028				5.64
Total interest-bearing liabilities			10,090,798				95,060				0.94				9,056,875				148,175				1.64
Noninterest-bearing checking accounts			3,736,230												3,139,805
Noninterest-bearing liabilities			95,234												91,532
Stockholders' equity			2,435,474												2,267,103
Total liabilities and equity		$	16,357,736											$	14,555,315
Net interest income						$	516,446											$	504,757
Interest rate spread											3.26	%											3.47	%
Net interest margin (2)											3.55												3.95
Net interest income and margin (tax equivalent basis) (3)						$	520,274				3.57							$	508,498				3.98
Average interest-earning assets to interest-bearing liabilities											144.34												141.15

⁽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 December 31, 2020 and December 31, 2019
(Dollars in thousands)
(Unaudited)

		Totals loans by category
		December 31, 2020								December 31, 2019
		Amount				% of Total				Amount				% of Total
Commercial (1)(2)		$	3,902,266				29.7	%		$	2,482,356				21.3	%
Real estate:
Commercial real estate			6,096,676				46.3				5,872,653				50.4
Commercial construction, land and land development			1,245,801				9.5				1,236,623				10.6
Residential real estate (3)			1,435,112				10.9				1,550,872				13.3
Single-family interim construction			326,575				2.5				378,120				3.2
Agricultural			85,014				0.6				97,767				0.9
Consumer			66,952				0.5				32,603				0.3
Other			346				-				621				-
Total loans			13,158,742				100.0	%			11,651,615				100.0	%
Deferred loan fees (2)			(10,037	)							(1,695	)
Allowance for loan losses			(87,820	)							(51,461	)
Total loans, net		$	13,060,885							$	11,598,459

⁽¹⁾ Includes mortgage warehouse purchase loans of $1,453,797 and $687,317 at December 31, 2020 and December 31, 2019, respectively.
⁽²⁾ Includes SBA PPP loans of $804,397 with net deferred loan fees of $9,770 at December 31, 2020.
⁽³⁾ Includes loans held for sale of $82,647 and $35,645 at December 31, 2020 and December 31, 2019, respectively.

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

		For the Three Months Ended
		December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019
ADJUSTED NET INCOME
Net Interest Income - Reported	(a)	$	132,826			$	132,007			$	128,372			$	123,241			$	128,069
Unexpected income recognized on credit impaired acquired loans		(579)				(1,294)				(354)				(982)				(791)
Adjusted Net Interest Income	(b)	132,247				130,713				128,018				122,259				127,278
Provision Expense - Reported	(c)	3,871				7,620				23,121				8,381				1,609
Noninterest Income - Reported	(d)	19,912				25,165				25,414				14,572				18,229
Loss (gain) on sale of loans		291				-				(689)				42				-
Gain on sale of trust business		-				-				-				-				(1,319)
Loss (gain) on sale of other real estate		73				-				(12)				(25)				(24)
Gain on sale of securities available for sale		-				-				(26)				(356)				(10)
(Gain) loss on sale and disposal of premises and equipment		(59)				(34)				(340)				63				-
Recoveries on loans charged off prior to acquisition		(450)				(138)				(3,640)				(84)				(425)
Adjusted Noninterest Income	(e)	19,767				24,993				20,707				14,212				16,451
Noninterest Expense - Reported	(f)	75,227				73,409				83,069				74,429				80,343
Separation expense		-				-				-				-				(3,421)
OREO impairment		-				(46)				(738)				-				(377)
Impairment of assets		-				(336)				-				(126)				-
COVID-19 expense (4)		(61)				(141)				(1,451)				(262)				-
Acquisition expense (5)		(326)				(316)				(15,644)				(1,008)				(6,619)
Adjusted Noninterest Expense	(g)	74,840				72,570				65,236				73,033				69,926
Income Tax Expense - Reported	(h)	15,366				16,068				8,903				10,836				14,110
Net Income - Reported	(a) - (c) + (d) - (f) - (h) = (i)	58,274				60,075				38,693				44,167				50,236
Adjusted Net Income (1)	(b) - (c) + (e) - (g) = (j)	$	58,007			$	59,580			$	49,076			$	43,354			$	56,799
ADJUSTED PROFITABILITY
Total Average Assets	(k)	$	17,252,111			$	16,713,895			$	16,485,556			$	14,965,628			$	15,091,382
Total Average Stockholders' Equity	(l)	$	2,496,318			$	2,457,423			$	2,418,038			$	2,369,225			$	2,326,176
Total Average Tangible Stockholders' Equity (3)	(m)	$	1,413,167			$	1,371,094			$	1,328,568			$	1,276,545			$	1,230,344
Reported Return on Average Assets	(i) / (k)	1.34		%		1.43		%		0.94		%		1.19		%		1.32		%
Reported Return on Average Equity	(i) / (l)	9.29		%		9.73		%		6.44		%		7.50		%		8.57		%
Reported Return on Average Tangible Equity	(i) / (m)	16.40		%		17.43		%		11.71		%		13.92		%		16.20		%
Adjusted Return on Average Assets (2)	(j) / (k)	1.34		%		1.42		%		1.20		%		1.17		%		1.49		%
Adjusted Return on Average Equity (2)	(j) / (l)	9.24		%		9.65		%		8.16		%		7.36		%		9.69		%
Adjusted Return on Tangible Equity (2)	(j) / (m)	16.33		%		17.29		%		14.86		%		13.66		%		18.32		%
EFFICIENCY RATIO
Amortization of other intangible assets	(n)	$	3,145			$	3,175			$	3,175			$	3,176			$	3,175
Reported Efficiency Ratio	(f - n) / (a + d)	47.19		%		44.69		%		51.95		%		51.70		%		52.75		%
Adjusted Efficiency Ratio	(g - n) / (b + e)	47.16		%		44.57		%		41.73		%		51.19		%		46.44		%

⁽¹⁾ Assumes an adjusted effective tax rate of 20.9%, 21.1%, 18.7%, 21.3%, and 21.3% for the quarters ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 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 $326, $269, $15, $459 and $1,349 of compensation related expenses in addition to $0, $47, $15,629, $549 and $5,270 of merger-related expenses for the quarters ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, respectively.

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

Tangible Book Value & Tangible Common Equity To Tangible Asset Ratio		December 31,
		2020				2019
Tangible Common Equity
Total common stockholders' equity		$	2,515,371			$	2,339,773
Adjustments:
Goodwill			(994,021	)			(994,021	)
Other intangible assets, net			(88,070	)			(100,741	)
Tangible common equity		$	1,433,280			$	1,245,011
Tangible Assets
Total assets		$	17,753,476			$	14,958,207
Adjustments:
Goodwill			(994,021	)			(994,021	)
Other intangible assets, net			(88,070	)