Independent Bank Group, Inc. (NASDAQ: IBTX) today announced net income of $14.9 million, or $0.36 per diluted share, for the quarter ended December 31, 2023, compared to $32.8 million, or $0.79 per diluted share for the quarter ended September 30, 2023. Adjusted net income for the quarter ended December 31, 2023 was $25.5 million, or $0.62 per diluted share, compared to $32.6 million, or $0.79 per diluted share for the quarter ended September 30, 2023.

For the year ended December 31, 2023, the Company reported net income of $43.2 million, or $1.04 per diluted share, compared to $196.3 million, or $4.70 per diluted share, for the year ended December 31, 2022. Adjusted net income was $135.9 million, or $3.29 per diluted share in 2023 compared to $209.7 million, or $5.02 per diluted share in 2022.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.38 per share of common stock. The dividend will be payable on February 15, 2024 to stockholders of record as of the close of business on February 1, 2024.

Highlights

  • Organic loan growth of 11.0% annualized for the quarter
  • Resilient credit metrics with nonperforming assets of 0.32% of total assets and net charge-offs of 0.01% annualized for the quarter
  • Grew book value per share by $1.71 to $58.20 and tangible book value per share by $1.79 to $32.90
  • Stable loan to deposit ratio of 93.6% at quarter-end
  • Capital levels remain healthy, with ratios well above the standards to be considered well-capitalized under regulatory requirements, with an estimated total capital ratio of 11.57%, leverage ratio of 8.94%, and (non-GAAP) tangible common equity (TCE) ratio of 7.55%

“During the fourth quarter, we were pleased to see healthy growth in our core loan book as the growing Texas and Colorado economies boosted demand from our relationship borrowers. This growth came alongside continued strength in our credit metrics, as nonperforming assets and net charge-offs for the year remained at historically low levels,” said Independent Bank Group Chairman & CEO David R. Brooks. “Over the past year, we took deliberate actions to strengthen our balance sheet while leveraging our position across great markets to build stronger relationships with our customers. We have now entered 2024 with significant momentum, and we remain encouraged about our ability to continue to grow our franchise by serving our customers and communities in the year ahead. I am excited for the opportunities our teams have to continue to win business and capitalize on our strong incumbent position across four of the strongest metropolitan markets in the country.”

Fourth Quarter 2023 Balance Sheet Highlights

Loans

  • Total loans held for investment, excluding mortgage warehouse purchase loans, were $14.2 billion at December 31, 2023 compared to $13.8 billion at September 30, 2023 and $13.6 billion at December 31, 2022. Loans held for investment, excluding mortgage warehouse purchase loans, increased $383.6 million, or 11.0% on an annualized basis, during fourth quarter 2023.
  • Average mortgage warehouse purchase loans were $408.4 million for the quarter ended December 31, 2023 compared to $425.9 million for the quarter ended September 30, 2023, and $297.1 million for the quarter ended December 31, 2022, a decrease of $17.5 million, or 4.1% from the linked quarter and an increase of $111.3 million, or 37.5% year over year.

Asset Quality

  • Nonperforming assets totaled $61.4 million, or 0.32% of total assets at December 31, 2023, compared to $61.0 million or 0.33% of total assets at September 30, 2023, and $64.1 million, or 0.35% of total assets at December 31, 2022.
  • Nonperforming loans totaled $51.8 million, or 0.37% of total loans held for investment at December 31, 2023, compared to $38.4 million, or 0.28% at September 30, 2023 and $40.1 million, or 0.29% at December 31, 2022.
  • The increase in nonperforming loans for the year over year and linked period was primarily due to the addition of a $13.3 million commercial real estate loan to nonaccrual in fourth quarter 2023.
  • The slight increase in nonperforming assets for the linked quarter reflects the nonaccrual loan discussed above offset by the sale of a $10.0 million other real estate property and a $3.0 million write-down on another other real estate property during fourth quarter 2023. The year over year change in nonperforming assets was also impacted by $2.2 million in additional write-downs on other real estate and an $805 thousand branch facility that was closed and moved to other real estate.
  • Net charge-offs were 0.01% annualized both in the fourth quarter 2023 and the linked quarter and 0.02% annualized in the prior year quarter.

Deposits, Borrowings and Liquidity

  • Total deposits were $15.7 billion at December 31, 2023 compared to $15.3 billion at September 30, 2023 and compared to $15.1 billion at December 31, 2022.
  • Estimated uninsured deposits, excluding public funds deposits, totaled $4.6 billion, or 29.1% of total deposits as of December 31, 2023 compared to $4.6 billion, or 29.9% as of September 30, 2023.
  • Total borrowings (other than junior subordinated debentures) were $621.8 million at December 31, 2023, an increase of $75.2 million from September 30, 2023 and an increase of $54.8 million from December 31, 2022. The year over year change primarily reflects a $50.0 million increase in short-term FHLB advances and $33.8 million outstanding on the Company's unsecured line of credit at year-end offset by the redemption of $30.0 million of subordinated debentures in first quarter 2023. The linked quarter change reflects an increase of $75.0 million in FHLB advances.

Capital

  • The Company continues to be well capitalized under regulatory guidelines. At December 31, 2023, the estimated common equity Tier 1 to risk-weighted assets, Tier 1 capital to average assets, Tier 1 capital to risk-weighted assets and total capital to risk-weighted asset ratios were 9.58%, 8.94%, 9.93% and 11.57%, respectively, compared to 9.86%, 9.09%, 10.21%, and 11.89%, respectively, at September 30, 2023 and 10.09%, 9.49%, 10.45%, and 12.35%, respectively at December 31, 2022.

Fourth Quarter 2023 Operating Results

Net Interest Income

  • Net interest income was $106.3 million for fourth quarter 2023 compared to $141.8 million for fourth quarter 2022 and $109.0 million for third quarter 2023. The decrease from the prior year was primarily due to the increased funding costs on our deposit products and FHLB advances due to Fed rate increases over the last year offset to a lesser extent by increased earnings on interest-earning assets, primarily loans and interest-bearing cash accounts. The decrease from the linked quarter was primarily due to continued increases in deposit funding costs due to the competitive environment as well as increased brokered deposits offset by increased earnings on loans due to growth during the quarter. The fourth quarter 2023 includes $725 thousand in acquired loan accretion compared to $1.1 million in fourth quarter 2022 and $940 thousand in third quarter 2023.
  • The average balance of total interest-earning assets grew by $833.9 million and totaled $16.9 billion for the quarter ended December 31, 2023 compared to $16.1 billion for the quarter ended December 31, 2022 and increased $286.2 million from $16.7 billion for the quarter ended September 30, 2023. The increase from the prior year and linked quarter is primarily due to higher average loans of $713.1 million and $317.1 million due to organic growth for the respective periods while the prior year increase also reflects a $209.2 million increase in average interest-bearing cash balances.
  • The yield on interest-earning assets was 5.44% for fourth quarter 2023 compared to 4.67% for fourth quarter 2022 and 5.31% for third quarter 2023. The increase in asset yield compared to the prior year and linked quarter is primarily a result of increases in the Fed Funds rate over the last year. The average loan yield, net of acquired loan accretion and PPP income was 5.81% for the current quarter, compared to 5.01% for prior year quarter and 5.67% for the linked quarter.
  • The cost of interest-bearing liabilities, including borrowings, was 3.98% for fourth quarter 2023 compared to 1.81% for fourth quarter 2022 and 3.72% for third quarter 2023. The increase from the linked quarter and prior year is reflective of higher funding costs, primarily on deposit products and FHLB advances as a result of Fed Funds rate increases. In addition, deposit funding costs were also higher due to promotional campaigns for certificate of deposit accounts.
  • The net interest margin was 2.49% for fourth quarter 2023 compared to 3.49% for fourth quarter 2022 and 2.60% for third quarter 2023. The net interest margin excluding acquired loan accretion was 2.47% for fourth quarter 2023 compared to 3.46% for fourth quarter 2022 and 2.58% for third quarter 2023. The decrease in net interest margin from the prior year and linked quarter was primarily due to the increased funding costs on deposits, offset by higher earnings on loans due to organic growth and rate increases for the respective periods. The year over year change also reflects increased funding costs on FHLB and other short-term advances, offset by higher earnings on other interest-bearing assets due to rate increases over the year.

Noninterest Income

  • Total noninterest income decreased $613 thousand compared to fourth quarter 2022 and decreased $3.0 million compared to third quarter 2023.
  • The decrease from the prior year quarter reflects a $1.8 million loss on sale of an other real estate property recognized in fourth quarter 2023 offset by increases of $314 thousand in service charge income and $287 thousand in investment management fees. Furthermore, there was $343 thousand in loss on sale of loans and increased losses of $162 thousand on premises and equipment in the fourth quarter 2022.
  • The change from the linked quarter primarily reflects the loss on sale of other real estate mentioned above as well as decreases of $417 thousand in mortgage banking revenue and $752 thousand in other noninterest income. The decrease in mortgage banking revenue for the quarter is due to lower volumes and margins, while the decrease in noninterest income is due to lower acquired loan recoveries and decreases in various types of other miscellaneous income.

Noninterest Expense

  • Total noninterest expense decreased $3.6 million compared to fourth quarter 2022 and increased $13.8 million compared to third quarter 2023.
  • The net decrease in noninterest expense in fourth quarter 2023 compared to the prior year is due primarily to decreases of $12.6 million in salaries and benefits expense, $2.7 million in professional fees and $2.5 million in other noninterest expense offset by a $9.9 million increase in FDIC assessment in addition to a $3.0 million impairment write-down on an other real estate property.
  • The increase in noninterest expense from the linked quarter is due primarily to an $8.3 million increase in FDIC assessment as well as the $3.0 million impairment expense on the other real estate property mentioned above and $994 thousand in higher salaries and benefits expense in the current quarter.
  • The decrease in salaries and benefits from the prior year is due primarily to $7.1 million severance and accelerated stock vesting expenses in fourth quarter 2022. In addition, there were lower combined salaries, bonus, employee insurance, payroll taxes and 401(k) expenses of $4.7 million in fourth quarter 2023 compared to the prior year quarter, due to overall strategic efforts to manage expenses. The linked quarter change was primarily impacted by a third quarter 2023 downward adjustment to performance-based executive compensation equity awards.
  • The decrease in professional fees compared to the prior year was primarily due to lower consulting fees of $1.6 million as well as lower legal fees of $848 thousand.
  • The decrease in other noninterest expense from prior year is primarily due to asset impairment charges of $3.3 million recognized in fourth quarter 2022 compared to none in fourth quarter 2023, offset by increases in charitable contributions and other miscellaneous expenses.
  • The increase in FDIC assessment compared to the prior year and linked quarter was due to increases in the assessment rate charged by the FDIC which took effect in 2023, as well as an increase in the liquidity stress rate. In addition, an $8.3 million special assessment, charged to recover uninsured deposit losses due to bank failures in early 2023, was recorded in fourth quarter 2023.

Provision for Credit Losses

  • The Company recorded $3.5 million provision for credit losses for fourth quarter 2023, compared to $2.8 million for fourth quarter 2022 and $340 thousand for the linked quarter. Provision expense during a given period is generally dependent on changes in various factors, including economic conditions, credit quality and past due trends, as well as loan growth and charge-offs or specific credit loss allocations taken during the respective period. The higher provision expense in both fourth quarters 2023 and 2022 primarily reflects loan growth during those periods.
  • The allowance for credit losses on loans was $151.9 million, or 1.07% of total loans held for investment, net of mortgage warehouse purchase loans, at December 31, 2023, compared to $148.8 million, or 1.09% at December 31, 2022 and compared to $148.2 million, or 1.08% at September 30, 2023.
  • The allowance for credit losses on off-balance sheet exposures was $3.9 million at December 31, 2023 and December 31, 2022, compared to $4.4 million at September 30, 2023. Changes in the allowance for unfunded commitments are generally driven by the remaining unfunded amount and the expected utilization rate of a given loan segment.

Income Taxes

  • Federal income tax expense of $3.5 million was recorded for the fourth quarter 2023, an effective rate of 18.9% compared to tax expense of $10.7 million and an effective rate of 20.7% for the prior year quarter and income tax expense of $8.2 million and an effective rate of 20.1% for the linked quarter. The lower effective rate for fourth quarter 2023 resulted from the recognition of a tax benefit due to the expiration of the statute of limitations on an immaterial uncertain tax position.

Subsequent Events

The Company is required, under generally accepted accounting principles, to evaluate subsequent events through the filing of its consolidated financial statements for the year ended December 31, 2023 on Form 10-K. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2023 and will adjust amounts preliminarily reported, if necessary.

About Independent Bank Group, Inc.

Independent Bank Group, Inc. is a bank holding company headquartered in McKinney, Texas. Through its wholly owned subsidiary, Independent Bank, doing business as Independent Financial, Independent Bank Group serves customers across Texas and Colorado with a wide range of relationship-driven banking services tailored to meet the needs of businesses, professionals and individuals. Independent Bank Group, Inc. operates in four market regions located in the Dallas/Fort Worth, Austin and Houston areas in Texas and the Colorado Front Range area, including Denver, Colorado Springs and Fort Collins.

Conference Call

A conference call covering Independent Bank Group’s fourth quarter earnings announcement will be held on Tuesday, January 23, 2024 at 8:30 am (ET) and can be accessed by the webcast link, https://www.webcast-eqs.com/independentbankgroup01232024_en/en or by calling 1-877-407-0989 and by identifying the meeting number 13743624 or by identifying "Independent Bank Group Fourth Quarter 2023 Earnings Conference Call." The conference materials will also be available by accessing the Investor Relations page of our website, https://ir.ifinancial.com. If you are unable to participate in the live event, a recording of the conference call will be accessible via the Investor Relations page of our website.

Forward-Looking Statements

From time to time the Company’s comments and releases may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and other related federal security laws. Forward-looking statements include information about the Company’s possible or assumed future results of operations, including its future revenues, income, expenses, provision for taxes, effective tax rate, earnings (loss) per share and cash flows, its future capital expenditures and dividends, its future financial condition and changes therein, including changes in the Company’s loan portfolio and allowance for credit losses, the Company’s future capital structure or changes therein, the plan and objectives of management for future operations, the Company’s future or proposed acquisitions, the future or expected effect of acquisitions on the Company’s operations, results of operations and financial condition, the Company’s future economic performance and the statements of the assumptions underlying any such statement. Such statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as “aim,” “anticipate,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is estimated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. The forward-looking statements that the Company makes are based on its current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. The Company’s actual results may differ materially from those contemplated by the forward looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Many possible events or factors could affect the Company’s future financial results and performance and could cause those results or performance to differ materially from those expressed in the forward-looking statements. These possible events or factors include, but are not limited to: 1) the Company’s ability to sustain its current internal growth rate and total growth rate; 2) changes in geopolitical, business and economic events, occurrences and conditions, including changes in rates of inflation or deflation, nationally, regionally and in the Company’s target markets, particularly in Texas and Colorado; 3) worsening business and economic conditions nationally, regionally and in the Company’s target markets, particularly in Texas and Colorado, and the geographic areas in those states in which the Company operates; 4) the Company’s dependence on its management team and its ability to attract, motivate and retain qualified personnel; 5) the concentration of the Company’s business within its geographic areas of operation in Texas and Colorado; 6) changes in asset quality, including increases in default rates on loans and higher levels of nonperforming loans and loan charge-offs generally; 7) concentration of the loan portfolio of Independent Financial, before and after the completion of acquisitions of financial institutions, in commercial and residential real estate loans and changes in the prices, values and sales volumes of commercial and residential real estate; 8) the ability of Independent Financial to make loans with acceptable net interest margins and levels of risk of repayment and to otherwise invest in assets at acceptable yields and that present acceptable investment risks; 9) inaccuracy of the assumptions and estimates that the managements of the Company and the financial institutions that the Company acquires make in establishing reserves for credit losses and other estimates generally; 10) lack of liquidity, including as a result of a reduction in the amount of sources of liquidity the Company currently has; 11) material increases or decreases in the amount of insured and/or uninsured deposits held by Independent Financial or other financial institutions that the Company acquires and the cost of those deposits; 12) the Company’s access to the debt and equity markets and the overall cost of funding its operations; 13) regulatory requirements to maintain minimum capital levels or maintenance of capital at levels sufficient to support the Company’s anticipated growth; 14) changes in market interest rates that affect the pricing of the loans and deposits of each of Independent Financial and the financial institutions that the Company acquires and that affect the net interest income, other future cash flows, or the market value of the assets of each of Independent Financial and the financial institutions that the Company acquires, including investment securities; 15) fluctuations in the market value and liquidity of the securities the Company holds for sale, including as a result of changes in market interest rates; 16) effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services; 17) changes in economic and market conditions, that affect the amount and value of the assets of Independent Financial and of financial institutions that the Company acquires; 18) the institution and outcome of, and costs associated with, litigation and other legal proceedings against one or more of the Company, Independent Financial and financial institutions that the Company acquired or will acquire or to which any of such entities is subject; 19) the occurrence of market conditions adversely affecting the financial industry generally; 20) the impact of recent and future legislative regulatory changes, including changes in banking, securities, and tax laws and regulations and their application by the Company’s regulators, and changes in federal government policies, as well as regulatory requirements applicable to, and resulting from regulatory supervision of, the Company and Independent Financial as a financial institution with total assets greater than $10 billion; 21) changes in accounting policies, practices, principles and guidelines, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the SEC and the Public Company Accounting Oversight Board, as the case may be; 22) governmental monetary and fiscal policies; 23) changes in the scope and cost of FDIC insurance and other coverage; 24) the effects of war or other conflicts, including, but not limited to, the conflicts between Russia and the Ukraine and Israel and Hamas, acts of terrorism (including cyberattacks) or other catastrophic events, including natural disasters such as storms, droughts, tornadoes, hurricanes and flooding, that may affect general economic conditions; 25) the Company’s actual cost savings resulting from previous or future acquisitions are less than expected, the Company is unable to realize those cost savings as soon as expected, or the Company incurs additional or unexpected costs; 26) the Company’s revenues after previous or future acquisitions are less than expected; 27) the liquidity of, and changes in the amounts and sources of liquidity available to the Company, before and after the acquisition of any financial institutions that the Company acquires; 28) deposit attrition, operating costs, customer loss and business disruption before and after the Company completed acquisitions, including, without limitation, difficulties in maintaining relationships with employees, may be greater than the Company expected; 29) the effects of the combination of the operations of financial institutions that the Company has acquired in the recent past or may acquire in the future with the Company’s operations and the operations of Independent Financial, the effects of the integration of such operations being unsuccessful, and the effects of such integration being more difficult, time consuming, or costly than expected or not yielding the cost savings the Company expects; 30) the impact of investments that the Company or Independent Financial may have made or may make and the changes in the value of those investments; 31) the quality of the assets of financial institutions and companies that the Company has acquired in the recent past or may acquire in the future being different than it determined or determine in its due diligence investigation in connection with the acquisition of such financial institutions and any inadequacy of credit loss reserves relating to, and exposure to unrecoverable losses on, loans acquired; 32) the Company’s ability to continue to identify acquisition targets and successfully acquire desirable financial institutions to sustain its growth, to expand its presence in the Company’s markets and to enter new markets; 33) changes in general business and economic conditions in the markets in which the Company currently operates and may operate in the future; 34) changes occur in business conditions and inflation generally; 35) an increase in the rate of personal or commercial customers’ bankruptcies generally; 36) technology-related changes are harder to make or are more expensive than expected; 37) attacks on the security of, and breaches of, the Company's and Independent Financial's digital infrastructure or information systems, the costs the Company or Independent Financial incur to provide security against such attacks and any costs and liability the Company or Independent Financial incurs in connection with any breach of those systems; 38) the potential impact of climate change and related government regulation on the Company and its customers; 39) the potential impact of technology and “FinTech” entities on the banking industry generally; 40) other economic, competitive, governmental, regulatory, technological and geopolitical factors affecting the Company's operations, pricing and services; and 41) the other factors that are described or referenced in Part I, Item 1A, of the Company’s Annual Report on Form 10-K filed with the SEC on February 21, 2023, the Company’s Quarterly Reports on Form 10-Q, in each case under the caption “Risk Factors”; and The Company urges you to consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company. As a result of these and other matters, including changes in facts, assumptions not being realized or other factors, the actual results relating to the subject matter of any forward-looking statement may differ materially from the anticipated results expressed or implied in that forward-looking statement. Any forward-looking statement made in this filing or made by the Company in any report, filing, document or information incorporated by reference in this filing, speaks only as of the date on which it is made. The Company undertakes no obligation to update any such forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. The Company believes that these assumptions or bases have been chosen in good faith and that they are reasonable. However, the Company cautions you that assumptions as to future occurrences or results almost always vary from actual future occurrences or results, and the differences between assumptions and actual occurrences and results can be material. Therefore, the Company cautions you not to place undue reliance on the forward-looking statements contained in this filing or incorporated by reference herein.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. These measures and ratios include “adjusted net income,” “adjusted earnings,” “tangible book value,” “tangible book value per common share,” “adjusted efficiency ratio,” “tangible common equity to tangible assets,” “adjusted net interest margin,” “return on tangible equity,” “adjusted return on average assets” and “adjusted return on average equity” and are supplemental measures that are not required by, or are not presented in accordance with, accounting principles generally accepted in the United States. We consider the use of select non-GAAP financial measures and ratios to be useful for financial operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

We believe that these measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however we acknowledge that our financial measures have a number of limitations relative to GAAP financial measures. Certain non-GAAP financial measures exclude items of income, expenditures, expenses, assets, or liabilities, including provisions for credit losses and the effect of goodwill, other intangible assets and income from accretion on acquired loans arising from purchase accounting adjustments, that we believe cause certain aspects of our results of operations or financial condition to be not indicative of our primary operating results. All of these items significantly impact our financial statements. Additionally, the items that we exclude in our adjustments are not necessarily consistent with the items that our peers may exclude from their results of operations and key financial measures and therefore may limit the comparability of similarly named financial measures and ratios. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

A reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statements tables.

Independent Bank Group, Inc. and Subsidiaries

Consolidated Financial Data

Three Months Ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022

(Dollars in thousands, except for share data)

(Unaudited)

 

 

As of and for the Quarter Ended

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

Selected Income Statement Data

 

 

 

 

 

 

 

 

 

Interest income

$

232,522

 

$

222,744

 

$

215,294

 

$

201,176

 

 

$

189,769

Interest expense

 

126,217

 

 

113,695

 

 

101,687

 

 

73,254

 

 

 

47,982

Net interest income

 

106,305

 

 

109,049

 

 

113,607

 

 

127,922

 

 

 

141,787

Provision for credit losses

 

3,480

 

 

340

 

 

220

 

 

90

 

 

 

2,833

Net interest income after provision for credit losses

 

102,825

 

 

108,709

 

 

113,387

 

 

127,832

 

 

 

138,954

Noninterest income

 

10,614

 

 

13,646

 

 

14,095

 

 

12,754

 

 

 

11,227

Noninterest expense

 

95,125

 

 

81,334

 

 

85,705

 

 

189,380

 

 

 

98,774

Income tax expense (benefit)

 

3,455

 

 

8,246

 

 

8,700

 

 

(11,284

)

 

 

10,653

Net income (loss)

 

14,859

 

 

32,775

 

 

33,077

 

 

(37,510

)

 

 

40,754

Adjusted net income (1)

 

25,509

 

 

32,624

 

 

33,726

 

 

44,083

 

 

 

49,433

 

 

 

 

 

 

 

 

 

 

Per Share Data (Common Stock)

 

 

 

 

 

 

 

 

 

Earnings (loss):

 

 

 

 

 

 

 

 

 

Basic

$

0.36

 

$

0.79

 

$

0.80

 

$

(0.91

)

 

$

0.99

Diluted

 

0.36

 

 

0.79

 

 

0.80

 

 

(0.91

)

 

 

0.99

Adjusted earnings:

 

 

 

 

 

 

 

 

 

Basic (1)

 

0.62

 

 

0.79

 

 

0.82

 

 

1.07

 

 

 

1.20

Diluted (1)

 

0.62

 

 

0.79

 

 

0.82

 

 

1.07

 

 

 

1.20

Dividends

 

0.38

 

 

0.38

 

 

0.38

 

 

0.38

 

 

 

0.38

Book value

 

58.20

 

 

56.49

 

 

57.00

 

 

56.95

 

 

 

57.91

Tangible book value (1)

 

32.90

 

 

31.11

 

 

31.55

 

 

31.42

 

 

 

32.25

Common shares outstanding

 

41,281,919

 

 

41,284,003

 

 

41,279,460

 

 

41,281,904

 

 

 

41,190,677

Weighted average basic shares outstanding (2)

 

41,283,041

 

 

41,284,964

 

 

41,280,312

 

 

41,223,376

 

 

 

41,193,716

Weighted average diluted shares outstanding (2)

 

41,388,564

 

 

41,381,034

 

 

41,365,275

 

 

41,316,798

 

 

 

41,285,383

 

 

 

 

 

 

 

 

 

 

Selected Period End Balance Sheet Data

 

 

 

 

 

 

 

 

 

Total assets

$

19,035,102

 

$

18,519,872

 

$

18,719,802

 

$

18,798,354

 

 

$

18,258,414

Cash and cash equivalents

 

721,989

 

 

711,709

 

 

902,882

 

 

1,048,590

 

 

 

654,322

Securities available for sale

 

1,593,751

 

 

1,545,904

 

 

1,637,682

 

 

1,675,415

 

 

 

1,691,784

Securities held to maturity

 

205,232

 

 

205,689

 

 

206,146

 

 

206,602

 

 

 

207,059

Loans, held for sale

 

16,420

 

 

18,068

 

 

18,624

 

 

16,576

 

 

 

11,310

Loans, held for investment (3)

 

14,160,853

 

 

13,781,102

 

 

13,628,025

 

 

13,606,039

 

 

 

13,597,264

Mortgage warehouse purchase loans

 

549,689

 

 

442,302

 

 

491,090

 

 

400,547

 

 

 

312,099

Allowance for credit losses on loans

 

151,861

 

 

148,249

 

 

147,804

 

 

146,850

 

 

 

148,787

Goodwill and other intangible assets

 

1,044,581

 

 

1,047,687

 

 

1,050,798

 

 

1,053,909

 

 

 

1,057,020

Other real estate owned

 

9,490

 

 

22,505

 

 

22,505

 

 

22,700

 

 

 

23,900

Noninterest-bearing deposits

 

3,530,704

 

 

3,703,784

 

 

3,905,492

 

 

4,148,360

 

 

 

4,736,830

Interest-bearing deposits

 

12,192,331

 

 

11,637,185

 

 

10,968,014

 

 

9,907,327

 

 

 

10,384,587

Borrowings (other than junior subordinated debentures)

 

621,821

 

 

546,666

 

 

1,180,262

 

 

2,137,607

 

 

 

567,066

Junior subordinated debentures

 

54,617

 

 

54,568

 

 

54,518

 

 

54,469

 

 

 

54,419

Total stockholders' equity

 

2,402,593

 

 

2,332,098

 

 

2,353,042

 

 

2,350,857

 

 

 

2,385,383

Independent Bank Group, Inc. and Subsidiaries

Consolidated Financial Data

Three Months Ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022

(Dollars in thousands, except for share data)

(Unaudited)

 

 

As of and for the Quarter Ended

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

Selected Performance Metrics

 

 

 

 

 

 

 

 

 

Return on average assets

0.31

%

 

0.70

%

 

0.71

%

 

(0.83

)%

 

0.90

%

Return on average equity

2.51

 

 

5.51

 

 

5.62

 

 

(6.39

)

 

6.85

 

Return on tangible equity (4)

4.54

 

 

9.92

 

 

10.14

 

 

(11.48

)

 

12.42

 

Adjusted return on average assets (1)

0.54

 

 

0.70

 

 

0.73

 

 

0.98

 

 

1.09

 

Adjusted return on average equity (1)

4.32

 

 

5.48

 

 

5.73

 

 

7.51

 

 

8.31

 

Adjusted return on tangible equity (1) (4)

7.79

 

 

9.87

 

 

10.34

 

 

13.49

 

 

15.07

 

Net interest margin

2.49

 

 

2.60

 

 

2.71

 

 

3.17

 

 

3.49

 

Efficiency ratio (5)

78.70

 

 

63.75

 

 

64.68

 

 

132.41

 

 

62.52

 

Adjusted efficiency ratio (1) (5)

67.96

 

 

63.84

 

 

63.93

 

 

58.17

 

 

55.51

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Ratios (3) (6)

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

0.32

%

 

0.33

%

 

0.32

%

 

0.32

%

 

0.35

%

Nonperforming loans to total loans held for investment

0.37

 

 

0.28

 

 

0.28

 

 

0.27

 

 

0.29

 

Nonperforming assets to total loans held for investment and other real estate

0.43

 

 

0.44

 

 

0.44

 

 

0.44

 

 

0.47

 

Allowance for credit losses on loans to nonperforming loans

293.17

 

 

385.81

 

 

389.84

 

 

393.69

 

 

371.14

 

Allowance for credit losses to total loans held for investment

1.07

 

 

1.08

 

 

1.08

 

 

1.08

 

 

1.09

 

Net charge-offs (recoveries) to average loans outstanding (annualized)

0.01

 

 

0.01

 

 

(0.03

)

 

0.04

 

 

0.02

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

 

Estimated common equity Tier 1 capital to risk-weighted assets

9.58

%

 

9.86

%

 

9.78

%

 

9.70

%

 

10.09

%

Estimated tier 1 capital to average assets

8.94

 

 

9.09

 

 

8.92

 

 

9.01

 

 

9.49

 

Estimated tier 1 capital to risk-weighted assets

9.93

 

 

10.21

 

 

10.13

 

 

10.05

 

 

10.45

 

Estimated total capital to risk-weighted assets

11.57

 

 

11.89

 

 

11.95

 

 

11.88

 

 

12.35

 

Total stockholders' equity to total assets

12.62

 

 

12.59

 

 

12.57

 

 

12.51

 

 

13.06

 

Tangible common equity to tangible assets (1)

7.55

 

 

7.35

 

 

7.37

 

 

7.31

 

 

7.72

 

____________

(1) Non-GAAP financial measure. See reconciliation.

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

(3) Loans held for investment excludes mortgage warehouse purchase loans.

(4) Non-GAAP financial measure. Excludes average balance of goodwill and net other intangible assets.

(5) Efficiency ratio excludes amortization of other intangible assets. See reconciliation of Non-GAAP financial measures.

(6) Credit metrics - Nonperforming assets, which consist of nonperforming loans, OREO and other repossessed assets, totaled $61,404, $61,044, $60,533, $60,115 and $64,109, respectively. Nonperforming loans, which consists of nonaccrual loans, loans delinquent 90 days and still accruing interest, and troubled debt restructurings (TDR) totaled $51,800, $38,425, $37,914, $37,301 and $40,089, respectively. With the adoption of ASU 2022-02, effective January 1, 2023, TDR accounting has been eliminated.

Independent Bank Group, Inc. and Subsidiaries

Annual Selected Financial Information

Years Ended December 31, 2023 and 2022

(Unaudited)

 

 

Years Ended December 31,

 

2023

 

2022

Per Share Data

 

 

 

Net income - basic

$

1.05

 

 

$

4.71

 

Net income - diluted

 

1.04

 

 

 

4.70

 

Adjusted net income - basic (1)

 

3.29

 

 

 

5.03

 

Adjusted net income - diluted (1)

 

3.29

 

 

 

5.02

 

Cash dividends

 

1.52

 

 

 

1.52

 

Book value

 

58.20

 

 

 

57.91

 

 

 

 

 

Outstanding Shares

 

 

 

Period-end shares

 

41,281,919

 

 

 

41,190,677

 

Weighted average shares - basic (2)

 

41,268,134

 

 

 

41,710,829

 

Weighted average shares - diluted (2)

 

41,362,543

 

 

 

41,794,088

 

 

 

 

 

Selected Annual Ratios

 

 

 

Return on average assets

 

0.23

%

 

 

1.09

%

Return on average equity

 

1.83

 

 

 

8.04

 

Adjusted return on average assets (1)

 

0.73

 

 

 

1.16

 

Adjusted return on average equity (1)

 

5.76

 

 

 

8.59

 

Net interest margin

 

2.74

 

 

 

3.46

 

(1) Non-GAAP financial measure. See reconciliation.

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

Independent Bank Group, Inc. and Subsidiaries

Consolidated Statements of Income

Three Months and Years Ended December 31, 2023 and 2022

(Dollars in thousands)

(Unaudited)

 

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

 

2023

 

2022

 

2023

 

2022

Interest income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

212,028

 

 

$

174,445

 

 

$

792,659

 

 

$

602,210

 

Interest on taxable securities

 

 

8,424

 

 

 

8,036

 

 

 

31,747

 

 

 

32,944

 

Interest on nontaxable securities

 

 

2,532

 

 

 

2,631

 

 

 

10,279

 

 

 

10,360

 

Interest on interest-bearing deposits and other

 

 

9,538

 

 

 

4,657

 

 

 

37,051

 

 

 

9,503

 

Total interest income

 

 

232,522

 

 

 

189,769

 

 

 

871,736

 

 

 

655,017

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on deposits

 

 

115,400

 

 

 

42,322

 

 

 

358,405

 

 

 

77,628

 

Interest on FHLB advances

 

 

5,802

 

 

 

1,231

 

 

 

35,705

 

 

 

2,017

 

Interest on other borrowings

 

 

3,770

 

 

 

3,465

 

 

 

16,018

 

 

 

14,451

 

Interest on junior subordinated debentures

 

 

1,245

 

 

 

964

 

 

 

4,725

 

 

 

2,713

 

Total interest expense

 

 

126,217

 

 

 

47,982

 

 

 

414,853

 

 

 

96,809

 

Net interest income

 

 

106,305

 

 

 

141,787

 

 

 

456,883

 

 

 

558,208

 

Provision for credit losses

 

 

3,480

 

 

 

2,833

 

 

 

4,130

 

 

 

4,490

 

Net interest income after provision for credit losses

 

 

102,825

 

 

 

138,954

 

 

 

452,753

 

 

 

553,718

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

3,522

 

 

 

3,208

 

 

 

13,958

 

 

 

12,204

 

Investment management fees

 

 

2,435

 

 

 

2,148

 

 

 

9,650

 

 

 

9,146

 

Mortgage banking revenue

 

 

1,357

 

 

 

1,243

 

 

 

7,003

 

 

 

8,938

 

Mortgage warehouse purchase program fees

 

 

478

 

 

 

391

 

 

 

1,892

 

 

 

2,676

 

Loss on sale of loans

 

 

 

 

 

(343

)

 

 

(14

)

 

 

(1,844

)

Loss on sale of other real estate

 

 

(1,797

)

 

 

 

 

 

(1,797

)

 

 

 

(Loss) gain on sale and disposal of premises and equipment

 

 

(22

)

 

 

(184

)

 

 

323

 

 

 

(494

)

Increase in cash surrender value of BOLI

 

 

1,516

 

 

 

1,384

 

 

 

5,768

 

 

 

5,371

 

Other

 

 

3,125

 

 

 

3,380

 

 

 

14,326

 

 

 

15,469

 

Total noninterest income

 

 

10,614

 

 

 

11,227

 

 

 

51,109

 

 

 

51,466

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

44,612

 

 

 

57,250

 

 

 

181,445

 

 

 

212,087

 

Occupancy

 

 

11,823

 

 

 

11,412

 

 

 

47,430

 

 

 

42,938

 

Communications and technology

 

 

7,511

 

 

 

6,661

 

 

 

28,713

 

 

 

24,937

 

FDIC assessment

 

 

11,982

 

 

 

2,052

 

 

 

22,153

 

 

 

6,883

 

Advertising and public relations

 

 

412

 

 

 

523

 

 

 

2,607

 

 

 

2,106

 

Other real estate owned (income) expenses, net

 

 

(28

)

 

 

(168

)

 

 

(510

)

 

 

31

 

Impairment of other real estate

 

 

3,015

 

 

 

 

 

 

5,215

 

 

 

 

Amortization of other intangible assets

 

 

3,106

 

 

 

3,111

 

 

 

12,439

 

 

 

12,491

 

Litigation settlement

 

 

 

 

 

 

 

 

102,500

 

 

 

 

Professional fees

 

 

1,837

 

 

 

4,581

 

 

 

7,949

 

 

 

15,571

 

Other

 

 

10,855

 

 

 

13,352

 

 

 

41,603

 

 

 

41,845

 

Total noninterest expense

 

 

95,125

 

 

 

98,774

 

 

 

451,544

 

 

 

358,889

 

Income before taxes

 

 

18,314

 

 

 

51,407

 

 

 

52,318

 

 

 

246,295

 

Income tax expense

 

 

3,455

 

 

 

10,653

 

 

 

9,117

 

 

 

50,004

 

Net income

 

$

14,859

 

 

$

40,754

 

 

$

43,201

 

 

$

196,291

 

Independent Bank Group, Inc. and Subsidiaries

Consolidated Balance Sheets

As of December 31, 2023 and 2022

(Dollars in thousands)

(Unaudited)

 

 

December 31,

Assets

2023

 

2022

Cash and due from banks

$

98,396

 

 

$

134,183

 

Interest-bearing deposits in other banks

 

623,593

 

 

 

520,139

 

Cash and cash equivalents

 

721,989

 

 

 

654,322

 

Certificates of deposit held in other banks

 

248

 

 

 

496

 

Securities available for sale, at fair value

 

1,593,751

 

 

 

1,691,784

 

Securities held to maturity, net of allowance for credit losses of $0 and $0, respectively

 

205,232

 

 

 

207,059

 

Loans held for sale (includes $12,016 and $10,612 carried at fair value, respectively)

 

16,420

 

 

 

11,310

 

Loans, net of allowance for credit losses of $151,861 and $148,787, respectively

 

14,558,681

 

 

 

13,760,576

 

Premises and equipment, net

 

355,833

 

 

 

355,368

 

Other real estate owned

 

9,490

 

 

 

23,900

 

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

 

34,915

 

 

 

23,436

 

Bank-owned life insurance (BOLI)

 

245,497

 

 

 

240,448

 

Deferred tax asset

 

92,665

 

 

 

78,669

 

Goodwill

 

994,021

 

 

 

994,021

 

Other intangible assets, net

 

50,560

 

 

 

62,999

 

Other assets

 

155,800

 

 

 

154,026

 

Total assets

$

19,035,102

 

 

$

18,258,414

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

3,530,704

 

 

$

4,736,830

 

Interest-bearing

 

12,192,331

 

 

 

10,384,587

 

Total deposits

 

15,723,035

 

 

 

15,121,417

 

FHLB advances

 

350,000

 

 

 

300,000

 

Other borrowings

 

271,821

 

 

 

267,066

 

Junior subordinated debentures

 

54,617

 

 

 

54,419

 

Other liabilities

 

233,036

 

 

 

130,129

 

Total liabilities

 

16,632,509

 

 

 

15,873,031

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock (0 and 0 shares outstanding, respectively)

 

 

 

 

 

Common stock (41,281,919 and 41,190,677 shares outstanding, respectively)

 

413

 

 

 

412

 

Additional paid-in capital

 

1,966,686

 

 

 

1,959,193

 

Retained earnings

 

616,724

 

 

 

638,354

 

Accumulated other comprehensive loss

 

(181,230

)

 

 

(212,576

)

Total stockholders’ equity

 

2,402,593

 

 

 

2,385,383

 

Total liabilities and stockholders’ equity

$

19,035,102

 

 

$

18,258,414

 

Independent Bank Group, Inc. and Subsidiaries

Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis

Three Months Ended December 31, 2023 and 2022

(Dollars in thousands)

(Unaudited)

 

The analysis below shows average interest-earning assets and interest-bearing liabilities together with the average yield on the interest-earning assets and the average cost of the interest-bearing liabilities for the periods presented.

 

 

 

Three Months Ended December 31,

 

 

2023

 

2022

 

 

Average Outstanding Balance

 

Interest

 

Yield/ Rate (4)

 

Average Outstanding Balance

 

Interest

 

Yield/ Rate (4)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

14,435,383

 

$

212,028

 

5.83

%

 

$

13,722,274

 

$

174,445

 

5.04

%

Taxable securities

 

 

1,414,824

 

 

8,424

 

2.36

 

 

 

1,475,585

 

 

8,036

 

2.16

 

Nontaxable securities

 

 

396,855

 

 

2,532

 

2.53

 

 

 

424,519

 

 

2,631

 

2.46

 

Interest-bearing deposits and other

 

 

695,617

 

 

9,538

 

5.44

 

 

 

486,369

 

 

4,657

 

3.80

 

Total interest-earning assets

 

 

16,942,679

 

 

232,522

 

5.44

 

 

 

16,108,747

 

 

189,769

 

4.67

 

Noninterest-earning assets

 

 

1,872,663

 

 

 

 

 

 

1,885,384

 

 

 

 

Total assets

 

$

18,815,342

 

 

 

 

 

$

17,994,131

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

5,476,149

 

$

48,532

 

3.52

%

 

$

5,989,205

 

$

25,440

 

1.69

%

Savings accounts

 

 

556,935

 

 

136

 

0.10

 

 

 

778,692

 

 

98

 

0.05

 

Money market accounts

 

 

1,701,198

 

 

17,502

 

4.08

 

 

 

1,935,083

 

 

10,380

 

2.13

 

Certificates of deposit

 

 

4,082,882

 

 

49,230

 

4.78

 

 

 

1,280,598

 

 

6,404

 

1.98

 

Total deposits

 

 

11,817,164

 

 

115,400

 

3.87

 

 

 

9,983,578

 

 

42,322

 

1.68

 

FHLB advances

 

 

416,576

 

 

5,802

 

5.53

 

 

 

218,478

 

 

1,231

 

2.24

 

Other borrowings - short-term

 

 

39,728

 

 

699

 

6.98

 

 

 

 

 

 

 

Other borrowings - long-term

 

 

238,017

 

 

3,071

 

5.12

 

 

 

267,005

 

 

3,465

 

5.15

 

Junior subordinated debentures

 

 

54,600

 

 

1,245

 

9.05

 

 

 

54,402

 

 

964

 

7.03

 

Total interest-bearing liabilities

 

 

12,566,085

 

 

126,217

 

3.98

 

 

 

10,523,463

 

 

47,982

 

1.81

 

Noninterest-bearing checking accounts

 

 

3,658,034

 

 

 

 

 

 

4,988,091

 

 

 

 

Noninterest-bearing liabilities

 

 

246,571

 

 

 

 

 

 

122,940

 

 

 

 

Stockholders’ equity

 

 

2,344,652

 

 

 

 

 

 

2,359,637

 

 

 

 

Total liabilities and equity

 

$

18,815,342

 

 

 

 

 

$

17,994,131

 

 

 

 

Net interest income

 

 

 

$

106,305

 

 

 

 

 

$

141,787

 

 

Interest rate spread

 

 

 

 

 

1.46

%

 

 

 

 

 

2.86

%

Net interest margin (2)

 

 

 

 

 

2.49

 

 

 

 

 

 

3.49

 

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

 

 

 

$

107,376

 

2.51

 

 

 

 

$

142,845

 

3.52

 

Average interest-earning assets to interest-bearing liabilities

 

 

 

 

 

134.83

 

 

 

 

 

 

153.07

 

____________

(1) Average loan balances include nonaccrual loans.

(2) Net interest margins for the periods presented represent: (i) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest-earning assets for the period.

(3) A tax-equivalent adjustment has been computed using a federal income tax rate of 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, 2023 and 2022

(Dollars in thousands)

(Unaudited)

 

The analysis below shows average interest-earning assets and interest-bearing liabilities together with the average yield on the interest-earning assets and the average cost of the interest-bearing liabilities for the periods presented.

 

 

 

For The Years Ended December 31,

 

 

2023

 

2022

 

 

Average Outstanding Balance

 

Interest

 

Yield/ Rate

 

Average Outstanding Balance

 

Interest

 

Yield/ Rate

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

14,129,639

 

$

792,659

 

5.61

%

 

$

13,148,633

 

$

602,210

 

4.58

%

Taxable securities

 

 

1,436,856

 

 

31,747

 

2.21

 

 

 

1,617,454

 

 

32,944

 

2.04

 

Nontaxable securities

 

 

412,266

 

 

10,279

 

2.49

 

 

 

429,057

 

 

10,360

 

2.41

 

Interest-bearing deposits and other

 

 

717,434

 

 

37,051

 

5.16

 

 

 

921,391

 

 

9,503

 

1.03

 

Total interest-earning assets

 

 

16,696,195

 

 

871,736

 

5.22

 

 

 

16,116,535

 

 

655,017

 

4.06

 

Noninterest-earning assets

 

 

1,859,553

 

 

 

 

 

 

1,892,555

 

 

 

 

Total assets

 

$

18,555,748

 

 

 

 

 

$

18,009,090

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

5,745,444

 

$

177,025

 

3.08

%

 

$

6,002,530

 

$

45,405

 

0.76

%

Savings accounts

 

 

628,088

 

 

399

 

0.06

 

 

 

787,937

 

 

387

 

0.05

 

Money market accounts

 

 

1,616,038

 

 

56,148

 

3.47

 

 

 

2,130,908

 

 

21,562

 

1.01

 

Certificates of deposit

 

 

2,977,281

 

 

124,833

 

4.19

 

 

 

1,027,561

 

 

10,274

 

1.00

 

Total deposits

 

 

10,966,851

 

 

358,405

 

3.27

 

 

 

9,948,936

 

 

77,628

 

0.78

 

FHLB advances

 

 

716,397

 

 

35,705

 

4.98

 

 

 

150,890

 

 

2,017

 

1.34

 

Other borrowings - short-term

 

 

40,078

 

 

2,781

 

6.94

 

 

 

15,918

 

 

593

 

3.73

 

Other borrowings - long-term

 

 

244,929

 

 

13,237

 

5.40

 

 

 

266,746

 

 

13,858

 

5.20

 

Junior subordinated debentures

 

 

54,526

 

 

4,725

 

8.67

 

 

 

54,328

 

 

2,713

 

4.99

 

Total interest-bearing liabilities

 

 

12,022,781

 

 

414,853

 

3.45

 

 

 

10,436,818

 

 

96,809

 

0.93

 

Noninterest-bearing checking accounts

 

 

3,957,699

 

 

 

 

 

 

5,018,631

 

 

 

 

Noninterest-bearing liabilities

 

 

214,001

 

 

 

 

 

 

111,326

 

 

 

 

Stockholders’ equity

 

 

2,361,267

 

 

 

 

 

 

2,442,315

 

 

 

 

Total liabilities and equity

 

$

18,555,748

 

 

 

 

 

$

18,009,090

 

 

 

 

Net interest income

 

 

 

$

456,883

 

 

 

 

 

$

558,208

 

 

Interest rate spread

 

 

 

 

 

1.77

%

 

 

 

 

 

3.13

%

Net interest margin (2)

 

 

 

 

 

2.74

 

 

 

 

 

 

3.46

 

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

 

 

 

$

461,056

 

2.76

 

 

 

 

$

562,633

 

3.49

 

Average interest-earning assets to interest-bearing liabilities

 

 

 

 

 

138.87

 

 

 

 

 

 

154.42

 

____________

(1) Average loan balances include nonaccrual loans.

(2) Net interest margins for the periods presented represent: (i) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest-earning assets for the period.

(3) A tax-equivalent adjustment has been computed using a federal income tax rate of 21%.

Independent Bank Group, Inc. and Subsidiaries

Loan Portfolio Composition

As of December 31, 2023 and 2022

(Dollars in thousands)

(Unaudited)

 

Total Loans By Class

 

 

 

 

 

 

December 31, 2023

 

December 31, 2022

 

 

Amount

 

% of Total

 

Amount

 

% of Total

Commercial

 

$

2,266,851

 

 

15.4

%

 

$

2,240,959

 

 

16.1

%

Mortgage warehouse purchase loans

 

 

549,689

 

 

3.7

 

 

 

312,099

 

 

2.2

 

Real estate:

 

 

 

 

 

 

 

 

Commercial real estate

 

 

8,289,124

 

 

56.3

 

 

 

7,817,447

 

 

56.2

 

Commercial construction, land and land development

 

 

1,231,484

 

 

8.4

 

 

 

1,231,071

 

 

8.8

 

Residential real estate (1)

 

 

1,686,206

 

 

11.5

 

 

 

1,604,169

 

 

11.5

 

Single-family interim construction

 

 

517,928

 

 

3.5

 

 

 

508,839

 

 

3.7

 

Agricultural

 

 

109,451

 

 

0.7

 

 

 

124,422

 

 

0.9

 

Consumer

 

 

76,229

 

 

0.5

 

 

 

81,667

 

 

0.6

 

Total loans

 

 

14,726,962

 

 

100.0

%

 

 

13,920,673

 

 

100.0

%

Allowance for credit losses

 

 

(151,861

)

 

 

 

 

(148,787

)

 

 

Total loans, net

 

$

14,575,101

 

 

 

 

$

13,771,886

 

 

 

____________

(1) Includes loans held for sale of $16,420 and $11,310 at December 31, 2023 and 2022, respectively.

Independent Bank Group, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Three Months Ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022

(Dollars in thousands, except for share data)

(Unaudited)

 

 

 

For the Three Months Ended

 

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

ADJUSTED NET INCOME

 

 

 

 

 

 

 

 

 

 

Net Interest Income - Reported

(a)

$

106,305

 

 

$

109,049

 

 

$

113,607

 

 

$

127,922

 

 

$

141,787

 

Provision Expense - Reported

(b)

 

3,480

 

 

 

340

 

 

 

220

 

 

 

90

 

 

 

2,833

 

Noninterest Income - Reported

(c)

 

10,614

 

 

 

13,646

 

 

 

14,095

 

 

 

12,754

 

 

 

11,227

 

Loss on sale of loans

 

 

 

 

 

7

 

 

 

7

 

 

 

 

 

 

343

 

Loss on sale of other real estate

 

 

1,797

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss (gain) on sale and disposal of premises and equipment

 

 

22

 

 

 

56

 

 

 

(354

)

 

 

(47

)

 

 

184

 

Recoveries on loans charged off prior to acquisition

 

 

(64

)

 

 

(279

)

 

 

(13

)

 

 

(117

)

 

 

(36

)

Adjusted Noninterest Income

(d)

 

12,369

 

 

 

13,430

 

 

 

13,735

 

 

 

12,590

 

 

 

11,718

 

Noninterest Expense - Reported

(e)

 

95,125

 

 

 

81,334

 

 

 

85,705

 

 

 

189,380

 

 

 

98,774

 

Litigation settlement

 

 

 

 

 

 

 

 

 

 

 

(102,500

)

 

 

 

Separation expense (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,131

)

OREO impairment

 

 

(3,015

)

 

 

 

 

 

(1,000

)

 

 

(1,200

)

 

 

 

FDIC special assessment

 

 

(8,329

)

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of assets

 

 

 

 

 

 

 

 

(153

)

 

 

(802

)

 

 

(3,286

)

Acquisition expense (2)

 

 

(27

)

 

 

(27

)

 

 

(27

)

 

 

(26

)

 

 

(40

)

Adjusted Noninterest Expense

(f)

 

83,754

 

 

 

81,307

 

 

 

84,525

 

 

 

84,852

 

 

 

88,317

 

Income Tax Expense (Benefit) - Reported

(g)

 

3,455

 

 

 

8,246

 

 

 

8,700

 

 

 

(11,284

)

 

 

10,653

 

Net Income (Loss) - Reported

(a) - (b) + (c) - (e) - (g) = (h)

 

14,859

 

 

 

32,775

 

 

 

33,077

 

 

 

(37,510

)

 

 

40,754

 

Adjusted Net Income (3)

(a) - (b) + (d) - (f) = (i)

$

25,509

 

 

$

32,624

 

 

$

33,726

 

 

$

44,083

 

 

$

49,433

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED PROFITABILITY (4)

 

 

 

 

 

 

 

 

 

 

Total Average Assets

(j)

$

18,815,342

 

 

$

18,520,600

 

 

$

18,652,450

 

 

$

18,228,521

 

 

$

17,994,131

 

Total Average Stockholders' Equity

(k)

 

2,344,652

 

 

 

2,360,175

 

 

 

2,360,226

 

 

 

2,380,421

 

 

 

2,359,637

 

Total Average Tangible Stockholders' Equity (5)

(l)

 

1,299,026

 

 

 

1,311,417

 

 

 

1,308,368

 

 

 

1,325,475

 

 

 

1,301,558

 

Reported Return on Average Assets

(h) / (j)

 

0.31

%

 

 

0.70

%

 

 

0.71

%

 

 

(0.83

)%

 

 

0.90

%

Reported Return on Average Equity

(h) / (k)

 

2.51

 

 

 

5.51

 

 

 

5.62

 

 

 

(6.39

)

 

 

6.85

 

Reported Return on Average Tangible Equity

(h) / (l)

 

4.54

 

 

 

9.92

 

 

 

10.14

 

 

 

(11.48

)

 

 

12.42

 

Adjusted Return on Average Assets (6)

(i) / (j)

 

0.54

 

 

 

0.70

 

 

 

0.73

 

 

 

0.98

 

 

 

1.09

 

Adjusted Return on Average Equity (6)

(i) / (k)

 

4.32

 

 

 

5.48

 

 

 

5.73

 

 

 

7.51

 

 

 

8.31

 

Adjusted Return on Tangible Equity (6)

(i) / (l)

 

7.79

 

 

 

9.87

 

 

 

10.34

 

 

 

13.49

 

 

 

15.07

 

 

 

 

 

 

 

 

 

 

 

 

EFFICIENCY RATIO

 

 

 

 

 

 

 

 

 

 

Amortization of other intangible assets

(m)

$

3,106

 

 

$

3,111

 

 

$

3,111

 

 

$

3,111

 

 

$

3,111

 

Reported Efficiency Ratio

(e - m) / (a + c)

 

78.70

%

 

 

63.75

%

 

 

64.68

%

 

 

132.41

%

 

 

62.52

%

Adjusted Efficiency Ratio

(f - m) / (a + d)

 

67.96

 

 

 

63.84

 

 

 

63.93

 

 

 

58.17

 

 

 

55.51

 

____________

(1) Separation expenses include severance and accelerated vesting expense for stock awards related to the separation of certain employees. The quarter ended December 31, 2022 reflects a reduction in workforce due to the restructuring of certain departments and business lines.

(2) Acquisition expenses includes compensation related expenses for equity awards granted at acquisition.

(3) Assumes an adjusted effective tax rate of 18.9%, 20.1%, 20.8%, 20.7%, and 20.7%, respectively. First quarter 2023 normalized rate excludes the effect of the litigation settlement.

(4) Quarterly metrics are annualized.

(5) Excludes average balance of goodwill and net other intangible assets.

(6) Calculated using adjusted net income.

Independent Bank Group, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Years Ended December 31, 2023 and 2022

(Dollars in thousands, except for share data)

(Unaudited)

 

 

 

For The Years Ended December 31,

 

 

2023

 

2022

ADJUSTED NET INCOME

 

 

 

 

Net Interest Income - Reported

(a)

$

456,883

 

 

$

558,208

 

Provision Expense - Reported

(b)

 

4,130

 

 

 

4,490

 

Noninterest Income - Reported

(c)

 

51,109

 

 

 

51,466

 

Loss on sale of loans

 

 

14

 

 

 

1,844

 

Loss on sale of other real estate

 

 

1,797

 

 

 

 

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

 

 

(323

)

 

 

494

 

Recoveries on loans charged off prior to acquisition

 

 

(473

)

 

 

(192

)

Adjusted Noninterest Income

(d)

 

52,124

 

 

 

53,612

 

Noninterest Expense - Reported

(e)

 

451,544

 

 

 

358,889

 

Litigation settlement

 

 

(102,500

)

 

 

 

Separation expense (1)

 

 

 

 

 

(11,046

)

Economic development employee incentive grant

 

 

 

 

 

1,000

 

OREO impairment

 

 

(5,215

)

 

 

 

FDIC special assessment

 

 

(8,329

)

 

 

 

Impairment of assets

 

 

(955

)

 

 

(4,442

)

Acquisition expense (2)

 

 

(107

)

 

 

(300

)

Adjusted Noninterest Expense

(f)

 

334,438

 

 

 

344,101

 

Income Tax Expense - Reported

(g)

 

9,117

 

 

 

50,004

 

Net Income - Reported

(a) - (b) + (c) - (e) - (g) = (h)

 

43,201

 

 

 

196,291

 

Adjusted Net Income (3)

(a) - (b) + (d) - (f) = (i)

$

135,942

 

 

$

209,747

 

 

 

 

 

 

ADJUSTED PROFITABILITY

 

 

 

 

Total Average Assets

(j)

$

18,555,748

 

 

$

18,009,090

 

Total Average Stockholders' Equity

(k)

 

2,361,267

 

 

 

2,442,315

 

Total Average Tangible Stockholders' Equity (4)

(l)

 

1,311,000

 

 

 

1,379,603

 

Reported Return on Average Assets

(h) / (j)

 

0.23

%

 

 

1.09

%

Reported Return on Average Equity

(h) / (k)

 

1.83

 

 

 

8.04

 

Reported Return on Average Tangible Equity

(h) / (l)

 

3.30

 

 

 

14.23

 

Adjusted Return on Average Assets (5)

(i) / (j)

 

0.73

 

 

 

1.16

 

Adjusted Return on Average Equity (5)

(i) / (k)

 

5.76

 

 

 

8.59

 

Adjusted Return on Tangible Equity (5)

(i) / (l)

 

10.37

 

 

 

15.20

 

 

 

 

 

 

EFFICIENCY RATIO

 

 

 

 

Amortization of other intangible assets

(m)

$

12,439

 

 

$

12,491

 

Reported Efficiency Ratio

(e - m) / (a + c)

 

86.44

%

 

 

56.82

%

Adjusted Efficiency Ratio

(f - m) / (a + d)

 

63.26

 

 

 

54.20

 

 

 

 

 

 

____________

(1) Separation expenses include severance and accelerated vesting expense for stock awards related to the separation of certain employees. The year ended December 31, 2022 reflects a reduction in workforce due to the restructuring of certain departments and business lines, payments made due to the separation of executive officers and payments made related to the dissolution of a Company department.

(2) Acquisition expenses includes compensation related expenses for equity awards granted at acquisition.

(3) Assumes an adjusted effective tax rate of 20.2% and 20.3% , respectively.

(4) Excludes average balance of goodwill and net other intangible assets.

(5) Calculated using adjusted net income.

Independent Bank Group, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

As of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022

(Dollars in thousands, except per share information)

(Unaudited)

 

Tangible Book Value & Tangible Common Equity To Tangible Assets Ratio

 

 

 

 

 

 

 

 

 

 

 

As of the Quarter Ended

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

Tangible Common Equity

 

 

 

 

 

 

 

 

 

Total common stockholders' equity

$

2,402,593

 

 

$

2,332,098

 

 

$

2,353,042

 

 

$

2,350,857

 

 

$

2,385,383

 

Adjustments:

 

 

 

 

 

 

 

 

 

Goodwill

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

Other intangible assets, net

 

(50,560

)

 

 

(53,666

)

 

 

(56,777

)

 

 

(59,888

)

 

 

(62,999

)

Tangible common equity

$

1,358,012

 

 

$

1,284,411

 

 

$

1,302,244

 

 

$

1,296,948

 

 

$

1,328,363

 

 

 

 

 

 

 

 

 

 

 

Tangible Assets

 

 

 

 

 

 

 

 

 

Total assets

$

19,035,102

 

 

$

18,519,872

 

 

$

18,719,802

 

 

$

18,798,354

 

 

$

18,258,414

 

Adjustments:

 

 

 

 

 

 

 

 

 

Goodwill

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

Other intangible assets, net

 

(50,560

)

 

 

(53,666

)

 

 

(56,777

)

 

 

(59,888

)

 

 

(62,999

)

Tangible assets

$

17,990,521

 

 

$

17,472,185

 

 

$

17,669,004

 

 

$

17,744,445

 

 

$

17,201,394

 

Common shares outstanding

 

41,281,919

 

 

 

41,284,003

 

 

 

41,279,460

 

 

 

41,281,904

 

 

 

41,190,677

 

Tangible common equity to tangible assets

 

7.55

%

 

 

7.35

%

 

 

7.37

%

 

 

7.31

%

 

 

7.72

%

Book value per common share

$

58.20

 

 

$

56.49

 

 

$

57.00

 

 

$

56.95

 

 

$

57.91

 

Tangible book value per common share

 

32.90

 

 

 

31.11

 

 

 

31.55

 

 

 

31.42

 

 

 

32.25

 

 

Analysts/Investors: Paul Langdale Executive Vice President, Chief Financial Officer (972) 562-9004 Paul.Langdale@ifinancial.com Media: Wendi Costlow Executive Vice President, Chief Marketing Officer (972) 562-9004 Wendi.Costlow@ifinancial.com

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