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Independent Bank Group, Inc. Reports Second Quarter Financial Results and Declares Quarterly Dividend

Independent Bank Group, Inc. (NASDAQ: IBTX) today announced net loss of $493.5 million, or $11.89 per diluted share, for the quarter ended June 30, 2024, which was significantly impacted by $518.0 million of goodwill impairment recognized as a result of the Company's stock price trading below book value and the announced merger with SouthState Corporation. Goodwill impairment is a non-cash charge and has no impact on cash flows, liquidity, (non-GAAP) tangible equity, or regulatory capital. Excluding the goodwill impairment charge and other non-recurring items, adjusted (non-GAAP) net income for the quarter ended June 30, 2024 was $24.9 million, or $0.60 per diluted share.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.38 per share of common stock. The dividend will be payable on August 19, 2024 to stockholders of record as of the close of business on August 5, 2024.

Highlights

  • Pending acquisition by SouthState Corporation announced on May 20, 2024
  • Net interest margin expanded by 5 basis points to 2.47% compared to 2.42% in linked quarter
  • Loan yields expanded by 10 basis points to 6.03%
  • Continued healthy credit metrics with nonperforming asset ratio of 0.35% and last twelve months' net charge-off to average total loans ratio of 0.03%
  • Total capital ratio grew by 7 basis points to 11.75%, and (non-GAAP) tangible common equity (TCE) ratio grew by 10 basis points to 7.72%

“During the quarter, we were pleased to see the anticipated expansion of our net interest margin as increases in loan yields began to outpace deposit cost pressures. We are encouraged by strong economic tailwinds across Texas and Colorado. Importantly, our loan portfolio remains bolstered by resilient credit quality across product types,” said Independent Bank Group Chairman & CEO David R. Brooks. “We look forward to remaining disciplined and focused on the execution of all our key strategic initiatives as we work toward the completion of our pending merger with SouthState Corporation. We are very excited to join SouthState, a company whose culture, business model, and credit discipline matches ours.”

Second Quarter 2024 Balance Sheet Highlights

Loans

  • Total loans held for investment, excluding mortgage warehouse purchase loans, were $14.0 billion at June 30, 2024 compared to $14.1 billion at March 31, 2024 and $13.6 billion at June 30, 2023. Loans held for investment, excluding mortgage warehouse purchase loans, decreased $72.1 million, or 2.1% on an annualized basis, during second quarter 2024.
  • Average mortgage warehouse purchase loans were $538.5 million for the quarter ended June 30, 2024 compared to $455.7 million for the quarter ended March 31, 2024, and $413.2 million for the quarter ended June 30, 2023, an increase of $82.8 million, or 18.2% from the linked quarter and an increase of $125.3 million, or 30.3% year over year.

Asset Quality

  • Nonperforming assets totaled $64.9 million, or 0.35% of total assets at June 30, 2024, compared to $65.1 million or 0.34% of total assets at March 31, 2024, and $60.5 million, or 0.32% of total assets at June 30, 2023.
  • Nonperforming loans totaled $56.1 million, or 0.40% of total loans held for investment at June 30, 2024, compared to $56.3 million, or 0.40% at March 31, 2024 and $37.9 million, or 0.28% at June 30, 2023.
  • The decrease in nonperforming loans for the linked quarter was primarily due to $906 thousand in charge-offs on one commercial relationship offset by individually insignificant net additions of nonperforming loans. The year over year period reflects $18.2 million in net additions primarily related to a $13.0 million commercial real estate loan added to nonaccrual in fourth quarter 2023 and a $2.0 million commercial relationship added in first quarter 2024.
  • The changes in nonperforming assets for the linked quarter and prior year reflects the nonperforming loan changes discussed above. In addition, the prior year change also includes reductions of $13.8 million in other real estate owned.
  • Net charge-offs were 0.10% annualized in the second quarter 2024 compared to 0.00% annualized in the linked quarter and (0.03)% annualized in the prior year quarter. The elevated level of charge-offs in second quarter 2024 was due primarily to the commercial relationship mentioned above as well as charge-offs totaling $2.6 million related to a single-family construction relationship.

Deposits, Borrowings and Liquidity

  • Total deposits were $15.8 billion at June 30, 2024 compared to $15.7 billion at March 31, 2024 and $14.9 billion at June 30, 2023.
  • Total borrowings (other than junior subordinated debentures) were $427.1 million at June 30, 2024, a decrease of $69.8 million from March 31, 2024 and a decrease of $753.1 million from June 30, 2023. The linked quarter change reflects the payoff of a $70.0 million BTFP advance. The year over year change primarily reflects reductions of $875.0 million in short-term FHLB advances and $33.8 million in line of credit borrowings, offset by a $155.0 million BTFP advance taken in first quarter 2024.

Capital

  • The Company continues to be well capitalized under regulatory guidelines. At June 30, 2024, 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 9.69%, 8.76%, 10.03% and 11.75%, respectively, compared to 9.60%, 8.91%, 9.94%, and 11.68%, respectively, at March 31, 2024 and 9.78%, 8.92%, 10.13%, and 11.95%, respectively at June 30, 2023.

Second Quarter 2024 Operating Results

Net Interest Income

  • Net interest income was $105.1 million for second quarter 2024 compared to $113.6 million for second quarter 2023 and $103.0 million for first quarter 2024. The decrease from the prior year was primarily due to the increased funding costs on our deposit products, including brokered deposits due to the interest rate environment over the period offset to a lesser extent by increased earnings on average loan balances. The increase from the linked quarter was primarily due to increased earnings on loans offset to a lesser extent by increased deposit funding costs for the quarter. The second quarter 2024 includes $1.0 million in acquired loan accretion compared to $870 thousand in second quarter 2023 and $753 thousand in first quarter 2024.
  • The average balance of total interest-earning assets grew by $298.6 million and totaled $17.1 billion for the quarter ended June 30, 2024 compared to $16.8 billion for the quarter ended June 30, 2023 and decreased minimally by $9.9 million from $17.1 billion for the quarter ended March 31, 2024. The increase from the prior year is primarily due to an increase in average loans of $608.0 million due to organic growth primarily occurring in the second half of 2023 offset by decreases in average securities and interest-bearing cash balances.
  • The yield on interest-earning assets was 5.62% for second quarter 2024 compared to 5.14% for second quarter 2023 and 5.53% for first quarter 2024. The increase in asset yield compared to the prior year and linked quarter is primarily a result of increases in the benchmark rates over the last year. The average loan yield, net of acquired loan accretion was 6.00% for the current quarter, compared to 5.51% for prior year quarter and 5.91% for the linked quarter.
  • The cost of interest-bearing liabilities, including borrowings, was 4.16% for second quarter 2024 compared to 3.37% for second quarter 2023 and 4.11% for first quarter 2024. The increase from the prior year is reflective of higher funding costs, primarily on deposit products as a result of Fed Funds rate increases in 2023 offset by decreased costs on FHLB advances, primarily due to lower holdings based on liquidity needs resulting in a shift in funding sources during the year-over-year period. The linked quarter change also reflects a slight increase in funding costs on deposits. Both period funding costs were negatively impacted by the shift from non-interest bearing deposits into interest-bearing products as well as an increase in higher cost brokered deposits for the respective periods.
  • The net interest margin was 2.47% for second quarter 2024 compared to 2.71% for second quarter 2023 and 2.42% for first quarter 2024. The net interest margin excluding acquired loan accretion was 2.45% for second quarter 2024 compared to 2.69% for second quarter 2023 and 2.40% for first quarter 2024. The decrease in net interest margin from the prior year was primarily due to the increased funding costs on deposits, offset by a reduction in funding costs on FHLB advances and higher earnings on loans due to organic growth and rate increases for the respective periods. The linked quarter change positively reflects the increased rates earned on fixed rate loans, which have reset at a faster pace than the offsetting increase in deposit funding costs for the quarter.

Noninterest Income

  • Total noninterest income decreased $662 thousand compared to second quarter 2023 and increased $563 thousand compared to first quarter 2024.
  • The decrease from the prior year quarter primarily reflects a $708 thousand decrease in mortgage banking revenue due to lower volumes resulting from rate increases for the year over year period.
  • The increase from the linked quarter primarily reflects a $469 thousand increase in other noninterest income, comprised of net increases in various miscellaneous income streams.

Noninterest Expense

  • Total noninterest expense increased $521.2 million compared to second quarter 2023 and increased $518.4 million compared to first quarter 2024. Adjusted noninterest expense (non-GAAP) increased $2.7 million compared to second quarter 2023 and $1.2 million compared to first quarter 2024. As previously explained, a goodwill impairment charge of $518.0 million was recognized in second quarter 2024, in addition to $2.3 million in merger-related expenses and a $645 thousand credit true-up to the additional FDIC special assessment accrued in first quarter 2024.
  • As a result of entering into a merger agreement with SouthState Corporation along with continued stock price volatility in the banking sector during the quarter, the Company determined such events triggered an interim goodwill assessment. As required by GAAP, the Company recorded impairment to goodwill as its estimated fair value of equity, which is equal to the implied valuation of the merger transaction based upon the conversion ratio to SouthState’s stock price, was less than book value as of June 30, 2024.
  • The increase in adjusted noninterest expense (non-GAAP) in second quarter 2024 compared to the prior year is due primarily to increases of $2.1 million in salaries and benefits and $620 thousand in other noninterest expense offset by a $484 thousand decrease in professional fees.
  • The increase from the linked quarter primarily reflects increases of $1.7 million in salaries and benefits expense and $820 thousand in other noninterest expense offset by decreases of $586 thousand in FDIC assessment, as adjusted, and $508 thousand in professional fees.
  • The increase in salaries and benefits from the prior year is due primarily to $2.9 million higher combined salaries and bonus expenses compared to the prior year quarter offset by $386 thousand in lower contract labor costs and $670 thousand in lower employee insurance expenses. The linked quarter change reflects higher salaries, bonus and stock amortization expenses of $3.1 million due to a full quarter of salary increases and equity compensation expenses granted as part of the merit process that occurred in mid first quarter, offset by $859 thousand in lower employee insurance costs and $491 thousand lower payroll taxes, which are seasonably higher in the first quarter.
  • The decrease in professional fees from the prior year and linked quarter was primarily due to lower consulting fees due to less active projects and lower audit and tax-related expenses.
  • The increase in other noninterest expense from the prior year and linked quarter was primarily due to operational losses related to increased check and debit card fraud. The decrease in adjusted FDIC assessment compared to the linked quarter was due to improvements in the quarterly assessment's liquidity stress rates.

Provision for Credit Losses

  • The Company recorded zero provision for credit losses for second quarter 2024, compared to provision expense of $220 thousand for second quarter 2023 and provision reversal of $3.2 million for the linked quarter. Provision expense (reversal) 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 or decline and charge-offs or specific credit loss allocations taken during the respective period.
  • The allowance for credit losses on loans was $145.3 million, or 1.04% of total loans held for investment, net of mortgage warehouse purchase loans, at June 30, 2024, compared to $147.8 million, or 1.08% at June 30, 2023 and compared to $148.4 million, or 1.06% at March 31, 2024.
  • The allowance for credit losses on off-balance sheet exposures was $3.5 million at June 30, 2024 compared to $4.9 million at June 30, 2023, compared to $4.1 million at March 31, 2024. 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 $5.1 million was recorded for the second quarter 2024, an effective rate of (1.0)% compared to federal tax expense of $8.7 million and an effective rate of 20.8% for the prior year quarter and income tax expense of $6.5 million and an effective rate of 21.2% for the linked quarter. The decrease in the effective tax rate from the linked quarter was predominately due to the goodwill impairment charge, of which $512.4 million is not deductible for tax purposes. Excluding the goodwill impairment and other non-deductible expenses, the estimated tax rate for the second quarter is 20.5%.

Subsequent Events

The Company is required, under generally accepted accounting principles, to evaluate subsequent events through the filing of its consolidated financial statements for the quarter ended June 30, 2024 on Form 10-Q. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of June 30, 2024 and will adjust amounts preliminarily reported, if necessary.

About Independent Bank Group, Inc.

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

Forward-Looking Statements

From time to time the Company’s comments and releases may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and other related federal security laws. Forward-looking statements include information about the Company’s possible or assumed future results of operations, including its future revenues, income, expenses, provision for taxes, effective tax rate, earnings (loss) per share and cash flows, its future capital expenditures and dividends, its future financial condition and changes therein, including changes in the Company’s loan portfolio and allowance for credit losses, the Company’s future capital structure or changes therein, the plan and objectives of management for future operations, the Company’s future or proposed acquisitions, the future or expected effect of acquisitions on the Company’s operations, results of operations and financial condition, the Company’s future economic performance and the statements of the assumptions underlying any such statement. Such statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as “aim,” “anticipate,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is estimated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. The forward-looking statements that the Company makes are based on its current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. The Company’s actual results may differ materially from those contemplated by the forward looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Many possible events or factors could affect the Company’s future financial results and performance and could cause those results or performance to differ materially from those expressed in the forward-looking statements. These possible events or factors include, but are not limited to: 1) the Company’s ability to sustain its current internal growth rate and total growth rate; 2) changes in geopolitical, business and economic events, occurrences and conditions, including changes in rates of inflation or deflation, nationally, regionally and in the Company’s target markets, particularly in Texas and Colorado; 3) worsening business and economic conditions nationally, regionally and in the Company’s target markets, particularly in Texas and Colorado, and the geographic areas in those states in which the Company operates; 4) the Company’s dependence on its management team and its ability to attract, motivate and retain qualified personnel; 5) the concentration of the Company’s business within its geographic areas of operation in Texas and Colorado; 6) changes in asset quality, including increases in default rates on loans and higher levels of nonperforming loans and loan charge-offs generally; 7) concentration of the loan portfolio of Independent Financial, before and after the completion of acquisitions of financial institutions, in commercial and residential real estate loans and changes in the prices, values and sales volumes of commercial and residential real estate; 8) the ability of Independent Financial to make loans with acceptable net interest margins and levels of risk of repayment and to otherwise invest in assets at acceptable yields and that present acceptable investment risks; 9) inaccuracy of the assumptions and estimates that the managements of the Company and the financial institutions that the Company acquires make in establishing reserves for credit losses and other estimates generally; 10) lack of liquidity, including as a result of a reduction in the amount of sources of liquidity the Company currently has; 11) material increases or decreases in the amount of insured and/or uninsured deposits held by Independent Financial or other financial institutions that the Company acquires and the cost of those deposits; 12) the Company’s access to the debt and equity markets and the overall cost of funding its operations; 13) regulatory requirements to maintain minimum capital levels or maintenance of capital at levels sufficient to support the Company’s anticipated growth; 14) changes in market interest rates that affect the pricing of the loans and deposits of each of Independent Financial and the financial institutions that the Company acquires and that affect the net interest income, other future cash flows, or the market value of the assets of each of Independent Financial and the financial institutions that the Company acquires, including investment securities; 15) fluctuations in the market value and liquidity of the securities the Company holds for sale, including as a result of changes in market interest rates; 16) effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services; 17) changes in economic and market conditions, that affect the amount and value of the assets of Independent Financial and of financial institutions that the Company acquires; 18) the institution and outcome of, and costs associated with, litigation and other legal proceedings against one or more of the Company, Independent Financial and financial institutions that the Company acquired or will acquire or to which any of such entities is subject; 19) the occurrence of market conditions adversely affecting the financial industry generally; 20) the impact of recent and future legislative regulatory changes, including changes in banking, securities, and tax laws and regulations and their application by the Company’s regulators, and changes in federal government policies, as well as regulatory requirements applicable to, and resulting from regulatory supervision of, the Company and Independent Financial as a financial institution with total assets greater than $10 billion; 21) changes in accounting policies, practices, principles and guidelines, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the SEC and the Public Company Accounting Oversight Board, as the case may be; 22) governmental monetary and fiscal policies; 23) changes in the scope and cost of FDIC insurance and other coverage; 24) the effects of war or other conflicts, including, but not limited to, the conflicts between Russia and the Ukraine and Israel and Hamas, acts of terrorism (including cyberattacks) or other catastrophic events, including natural disasters such as storms, droughts, tornadoes, hurricanes and flooding, that may affect general economic conditions; 25) the Company’s actual cost savings resulting from previous or future acquisitions are less than expected, the Company is unable to realize those cost savings as soon as expected, or the Company incurs additional or unexpected costs; 26) the Company’s revenues after previous or future acquisitions are less than expected; 27) the liquidity of, and changes in the amounts and sources of liquidity available to the Company, before and after the acquisition of any financial institutions that the Company acquires; 28) deposit attrition, operating costs, customer loss and business disruption before and after the Company completed acquisitions, including, without limitation, difficulties in maintaining relationships with employees, may be greater than the Company expected; 29) the effects of the combination of the operations of financial institutions that the Company has acquired in the recent past or may acquire in the future with the Company’s operations and the operations of Independent Financial, the effects of the integration of such operations being unsuccessful, and the effects of such integration being more difficult, time consuming, or costly than expected or not yielding the cost savings the Company expects; 30) the impact of investments that the Company or Independent Financial may have made or may make and the changes in the value of those investments; 31) the quality of the assets of financial institutions and companies that the Company has acquired in the recent past or may acquire in the future being different than it determined or determine in its due diligence investigation in connection with the acquisition of such financial institutions and any inadequacy of credit loss reserves relating to, and exposure to unrecoverable losses on, loans acquired; 32) the Company’s ability to continue to identify acquisition targets and successfully acquire desirable financial institutions to sustain its growth, to expand its presence in the Company’s markets and to enter new markets; 33) changes in general business and economic conditions in the markets in which the Company currently operates and may operate in the future; 34) changes occur in business conditions and inflation generally; 35) an increase in the rate of personal or commercial customers’ bankruptcies generally; 36) technology-related changes are harder to make or are more expensive than expected; 37) attacks on the security of, and breaches of, the Company's and Independent Financial's digital infrastructure or information systems, the costs the Company or Independent Financial incur to provide security against such attacks and any costs and liability the Company or Independent Financial incurs in connection with any breach of those systems; 38) the potential impact of climate change and related government regulation on the Company and its customers; 39) the potential impact of technology and “FinTech” entities on the banking industry generally; 40) other economic, competitive, governmental, regulatory, technological and geopolitical factors affecting the Company's operations, pricing and services; 41) the possibility that the Company’s pending merger with SouthState Corporation (the “Merger”) does not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Merger); 42) the risk that the benefits from the Merger may not be fully realized or may take longer to realize than expected; 43) the risk of disruption to the parties’ businesses as a result of the announcement and pendency of the Merger; 44) the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and 45) the other factors that are described or referenced in Part I, Item 1A, of the Company’s Annual Report on Form 10-K filed with the SEC on February 20, 2024, the Company’s Quarterly Reports on Form 10-Q, in each case under the caption “Risk Factors;” and The Company urges you to consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company. As a result of these and other matters, including changes in facts, assumptions not being realized or other factors, the actual results relating to the subject matter of any forward-looking statement may differ materially from the anticipated results expressed or implied in that forward-looking statement. Any forward-looking statement made in this filing or made by the Company in any report, filing, document or information incorporated by reference in this filing, speaks only as of the date on which it is made. The Company undertakes no obligation to update any such forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. The Company believes that these assumptions or bases have been chosen in good faith and that they are reasonable. However, the Company cautions you that assumptions as to future occurrences or results almost always vary from actual future occurrences or results, and the differences between assumptions and actual occurrences and results can be material. Therefore, the Company cautions you not to place undue reliance on the forward-looking statements contained in this filing or incorporated by reference herein.

Non-GAAP Financial Measures

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

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

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

Independent Bank Group, Inc. and Subsidiaries

Consolidated Financial Data

Three Months Ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023

(Dollars in thousands, except for share data)

(Unaudited)

 

 

As of and for the Quarter Ended

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

Selected Income Statement Data

 

 

 

 

 

 

 

 

 

Interest income

$

239,085

 

 

$

235,205

 

 

$

232,522

 

$

222,744

 

$

215,294

Interest expense

 

133,937

 

 

 

132,174

 

 

 

126,217

 

 

113,695

 

 

101,687

Net interest income

 

105,148

 

 

 

103,031

 

 

 

106,305

 

 

109,049

 

 

113,607

Provision for credit losses

 

 

 

 

(3,200

)

 

 

3,480

 

 

340

 

 

220

Net interest income after provision for credit losses

 

105,148

 

 

 

106,231

 

 

 

102,825

 

 

108,709

 

 

113,387

Noninterest income

 

13,433

 

 

 

12,870

 

 

 

10,614

 

 

13,646

 

 

14,095

Noninterest expense

 

606,911

 

 

 

88,473

 

 

 

95,125

 

 

81,334

 

 

85,705

Income tax expense

 

5,125

 

 

 

6,478

 

 

 

3,455

 

 

8,246

 

 

8,700

Net (loss) income

 

(493,455

)

 

 

24,150

 

 

 

14,859

 

 

32,775

 

 

33,077

Adjusted net income (1)

 

24,884

 

 

 

26,001

 

 

 

25,509

 

 

32,624

 

 

33,726

 

 

 

 

 

 

 

 

 

 

Per Share Data (Common Stock)

 

 

 

 

 

 

 

 

 

Earnings (loss):

 

 

 

 

 

 

 

 

 

Basic

$

(11.93

)

 

$

0.58

 

 

$

0.36

 

$

0.79

 

$

0.80

Diluted

 

(11.89

)

 

 

0.58

 

 

 

0.36

 

 

0.79

 

 

0.80

Adjusted earnings:

 

 

 

 

 

 

 

 

 

Basic (1)

 

0.60

 

 

 

0.63

 

 

 

0.62

 

 

0.79

 

 

0.82

Diluted (1)

 

0.60

 

 

 

0.63

 

 

 

0.62

 

 

0.79

 

 

0.82

Dividends

 

0.38

 

 

 

0.38

 

 

 

0.38

 

 

0.38

 

 

0.38

Book value

 

45.85

 

 

 

58.02

 

 

 

58.20

 

 

56.49

 

 

57.00

Tangible book value (1)

 

33.27

 

 

 

32.85

 

 

 

32.90

 

 

31.11

 

 

31.55

Common shares outstanding

 

41,376,169

 

 

 

41,377,745

 

 

 

41,281,919

 

 

41,284,003

 

 

41,279,460

Weighted average basic shares outstanding (2)

 

41,377,917

 

 

 

41,322,744

 

 

 

41,283,041

 

 

41,284,964

 

 

41,280,312

Weighted average diluted shares outstanding (2)

 

41,488,442

 

 

 

41,432,042

 

 

 

41,388,564

 

 

41,381,034

 

 

41,365,275

 

 

 

 

 

 

 

 

 

 

Selected Period End Balance Sheet Data

 

 

 

 

 

 

 

 

 

Total assets

$

18,359,162

 

 

$

18,871,452

 

 

$

19,035,102

 

$

18,519,872

 

$

18,719,802

Cash and cash equivalents

 

770,749

 

 

 

729,998

 

 

 

721,989

 

 

711,709

 

 

902,882

Securities available for sale

 

1,494,470

 

 

 

1,543,247

 

 

 

1,593,751

 

 

1,545,904

 

 

1,637,682

Securities held to maturity

 

204,319

 

 

 

204,776

 

 

 

205,232

 

 

205,689

 

 

206,146

Loans, held for sale

 

12,012

 

 

 

21,299

 

 

 

16,420

 

 

18,068

 

 

18,624

Loans, held for investment (3)

 

13,988,169

 

 

 

14,059,277

 

 

 

14,160,853

 

 

13,781,102

 

 

13,628,025

Mortgage warehouse purchase loans

 

633,654

 

 

 

554,616

 

 

 

549,689

 

 

442,302

 

 

491,090

Allowance for credit losses on loans

 

145,323

 

 

 

148,437

 

 

 

151,861

 

 

148,249

 

 

147,804

Goodwill and other intangible assets

 

520,553

 

 

 

1,041,506

 

 

 

1,044,581

 

 

1,047,687

 

 

1,050,798

Other real estate owned

 

8,685

 

 

 

8,685

 

 

 

9,490

 

 

22,505

 

 

22,505

Noninterest-bearing deposits

 

3,378,493

 

 

 

3,300,773

 

 

 

3,530,704

 

 

3,703,784

 

 

3,905,492

Interest-bearing deposits

 

12,464,183

 

 

 

12,370,942

 

 

 

12,192,331

 

 

11,637,185

 

 

10,968,014

Borrowings (other than junior subordinated debentures)

 

427,129

 

 

 

496,975

 

 

 

621,821

 

 

546,666

 

 

1,180,262

Junior subordinated debentures

 

54,717

 

 

 

54,667

 

 

 

54,617

 

 

54,568

 

 

54,518

Total stockholders' equity

 

1,897,083

 

 

 

2,400,807

 

 

 

2,402,593

 

 

2,332,098

 

 

2,353,042

Independent Bank Group, Inc. and Subsidiaries

Consolidated Financial Data

Three Months Ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023

(Dollars in thousands, except for share data)

(Unaudited)

 

 

As of and for the Quarter Ended

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

Selected Performance Metrics

 

 

 

 

 

 

 

 

 

Return on average assets

(10.55

)%

 

0.51

%

 

0.31

%

 

0.70

%

 

0.71

%

Return on average equity

(87.53

)

 

4.05

 

 

2.51

 

 

5.51

 

 

5.62

 

Return on tangible equity (4)

(146.65

)

 

7.16

 

 

4.54

 

 

9.92

 

 

10.14

 

Adjusted return on average assets (1)

0.53

 

 

0.55

 

 

0.54

 

 

0.70

 

 

0.73

 

Adjusted return on average equity (1)

4.41

 

 

4.36

 

 

4.32

 

 

5.48

 

 

5.73

 

Adjusted return on tangible equity (1) (4)

7.40

 

 

7.71

 

 

7.79

 

 

9.87

 

 

10.34

 

Net interest margin

2.47

 

 

2.42

 

 

2.49

 

 

2.60

 

 

2.71

 

Efficiency ratio (5)

509.32

 

 

73.68

 

 

78.70

 

 

63.75

 

 

64.68

 

Adjusted efficiency ratio (1) (5)

71.09

 

 

71.63

 

 

67.96

 

 

63.84

 

 

63.93

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Ratios (3) (6)

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

0.35

%

 

0.34

%

 

0.32

%

 

0.33

%

 

0.32

%

Nonperforming loans to total loans held for investment

0.40

 

 

0.40

 

 

0.37

 

 

0.28

 

 

0.28

 

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

0.46

 

 

0.46

 

 

0.43

 

 

0.44

 

 

0.44

 

Allowance for credit losses on loans to nonperforming loans

258.83

 

 

263.85

 

 

293.17

 

 

385.81

 

 

389.84

 

Allowance for credit losses to total loans held for investment

1.04

 

 

1.06

 

 

1.07

 

 

1.08

 

 

1.08

 

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

0.10

 

 

 

 

0.01

 

 

0.01

 

 

(0.03

)

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

 

Estimated common equity Tier 1 capital to risk-weighted assets

9.69

%

 

9.60

%

 

9.58

%

 

9.86

%

 

9.78

%

Estimated tier 1 capital to average assets

8.76

 

 

8.91

 

 

8.94

 

 

9.09

 

 

8.92

 

Estimated tier 1 capital to risk-weighted assets

10.03

 

 

9.94

 

 

9.93

 

 

10.21

 

 

10.13

 

Estimated total capital to risk-weighted assets

11.75

 

 

11.68

 

 

11.57

 

 

11.89

 

 

11.95

 

Total stockholders' equity to total assets

10.33

 

 

12.72

 

 

12.62

 

 

12.59

 

 

12.57

 

Tangible common equity to tangible assets (1)

7.72

 

 

7.62

 

 

7.55

 

 

7.35

 

 

7.37

 

____________

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

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

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

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

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

(6) Credit metrics - Nonperforming assets, which consist of nonperforming loans, OREO and other repossessed assets, totaled $64,946, $65,057, $61,404, $61,044 and $60,533, respectively. Nonperforming loans, which consists of nonaccrual loans and loans delinquent 90 days and still accruing interest totaled $56,147, $56,258, $51,800, $38,425 and $37,914, respectively.

Independent Bank Group, Inc. and Subsidiaries

Consolidated Statements of Income (Loss)

Three and Six Months Ended June 30, 2024 and 2023

(Dollars in thousands)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Interest income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

219,291

 

 

$

193,612

 

 

$

434,802

 

 

$

377,906

 

Interest on taxable securities

 

 

8,032

 

 

 

7,791

 

 

 

15,677

 

 

 

15,649

 

Interest on nontaxable securities

 

 

2,524

 

 

 

2,586

 

 

 

5,042

 

 

 

5,189

 

Interest on interest-bearing deposits and other

 

 

9,238

 

 

 

11,305

 

 

 

18,769

 

 

 

17,726

 

Total interest income

 

 

239,085

 

 

 

215,294

 

 

 

474,290

 

 

 

416,470

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on deposits

 

 

125,248

 

 

 

78,144

 

 

 

247,758

 

 

 

140,405

 

Interest on FHLB advances

 

 

1,750

 

 

 

18,025

 

 

 

4,605

 

 

 

23,849

 

Interest on other borrowings

 

 

5,716

 

 

 

4,361

 

 

 

11,298

 

 

 

8,440

 

Interest on junior subordinated debentures

 

 

1,223

 

 

 

1,157

 

 

 

2,450

 

 

 

2,247

 

Total interest expense

 

 

133,937

 

 

 

101,687

 

 

 

266,111

 

 

 

174,941

 

Net interest income

 

 

105,148

 

 

 

113,607

 

 

 

208,179

 

 

 

241,529

 

Provision for credit losses

 

 

 

 

 

220

 

 

 

(3,200

)

 

 

310

 

Net interest income after provision for credit losses

 

 

105,148

 

 

 

113,387

 

 

 

211,379

 

 

 

241,219

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

3,586

 

 

 

3,519

 

 

 

7,186

 

 

 

6,868

 

Investment management fees

 

 

2,813

 

 

 

2,444

 

 

 

5,457

 

 

 

4,745

 

Mortgage banking revenue

 

 

1,540

 

 

 

2,248

 

 

 

3,175

 

 

 

3,872

 

Mortgage warehouse purchase program fees

 

 

655

 

 

 

535

 

 

 

1,195

 

 

 

859

 

(Loss) gain on sale of loans

 

 

 

 

 

(7

)

 

 

74

 

 

 

(7

)

Gain on sale of other real estate

 

 

 

 

 

 

 

 

13

 

 

 

 

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

 

 

(11

)

 

 

354

 

 

 

(11

)

 

 

401

 

Increase in cash surrender value of BOLI

 

 

1,572

 

 

 

1,410

 

 

 

3,127

 

 

 

2,787

 

Other

 

 

3,278

 

 

 

3,592

 

 

 

6,087

 

 

 

7,324

 

Total noninterest income

 

 

13,433

 

 

 

14,095

 

 

 

26,303

 

 

 

26,849

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

49,060

 

 

 

46,940

 

 

 

96,393

 

 

 

93,215

 

Occupancy

 

 

12,076

 

 

 

11,640

 

 

 

24,625

 

 

 

23,199

 

Communications and technology

 

 

7,676

 

 

 

7,196

 

 

 

15,361

 

 

 

14,286

 

FDIC assessment

 

 

2,816

 

 

 

3,806

 

 

 

8,958

 

 

 

6,518

 

Advertising and public relations

 

 

853

 

 

 

1,004

 

 

 

1,268

 

 

 

1,608

 

Other real estate owned (income) expenses, net

 

 

(37

)

 

 

(185

)

 

 

28

 

 

 

(229

)

Impairment of other real estate

 

 

 

 

 

1,000

 

 

 

345

 

 

 

2,200

 

Amortization of other intangible assets

 

 

2,953

 

 

 

3,111

 

 

 

6,028

 

 

 

6,222

 

Litigation settlement

 

 

 

 

 

 

 

 

 

 

 

102,500

 

Professional fees

 

 

1,301

 

 

 

1,785

 

 

 

3,110

 

 

 

4,850

 

Acquisition expense, including legal

 

 

2,338

 

 

 

 

 

 

2,338

 

 

 

 

Goodwill impairment

 

 

518,000

 

 

 

 

 

 

518,000

 

 

 

 

Other

 

 

9,875

 

 

 

9,408

 

 

 

18,930

 

 

 

20,716

 

Total noninterest expense

 

 

606,911

 

 

 

85,705

 

 

 

695,384

 

 

 

275,085

 

(Loss) income before taxes

 

 

(488,330

)

 

 

41,777

 

 

 

(457,702

)

 

 

(7,017

)

Income tax expense (benefit)

 

 

5,125

 

 

 

8,700

 

 

 

11,603

 

 

 

(2,584

)

Net (loss) income

 

$

(493,455

)

 

$

33,077

 

 

$

(469,305

)

 

$

(4,433

)

Independent Bank Group, Inc. and Subsidiaries

Consolidated Balance Sheets

As of June 30, 2024 and December 31, 2023

(Dollars in thousands)

(Unaudited)

 

 

June 30,

 

December 31,

Assets

 

2024

 

 

 

2023

 

Cash and due from banks

$

93,978

 

 

$

98,396

 

Interest-bearing deposits in other banks

 

676,771

 

 

 

623,593

 

Cash and cash equivalents

 

770,749

 

 

 

721,989

 

Certificates of deposit held in other banks

 

248

 

 

 

248

 

Securities available for sale, at fair value

 

1,494,470

 

 

 

1,593,751

 

Securities held to maturity, net of allowance for credit losses of $0 and $0, respectively, fair value of $165,869 and $170,997, respectively

 

204,319

 

 

 

205,232

 

Loans held for sale (includes $8,268 and $12,016 carried at fair value, respectively)

 

12,012

 

 

 

16,420

 

Loans, net of allowance for credit losses of $145,323 and $151,861, respectively

 

14,476,500

 

 

 

14,558,681

 

Premises and equipment, net

 

351,694

 

 

 

355,833

 

Other real estate owned

 

8,685

 

 

 

9,490

 

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

 

14,253

 

 

 

34,915

 

Bank-owned life insurance (BOLI)

 

248,624

 

 

 

245,497

 

Deferred tax asset

 

84,769

 

 

 

92,665

 

Goodwill

 

476,021

 

 

 

994,021

 

Other intangible assets, net

 

44,532

 

 

 

50,560

 

Other assets

 

172,286

 

 

 

155,800

 

Total assets

$

18,359,162

 

 

$

19,035,102

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

3,378,493

 

 

$

3,530,704

 

Interest-bearing

 

12,464,183

 

 

 

12,192,331

 

Total deposits

 

15,842,676

 

 

 

15,723,035

 

FHLB advances

 

 

 

 

350,000

 

Other borrowings

 

427,129

 

 

 

271,821

 

Junior subordinated debentures

 

54,717

 

 

 

54,617

 

Other liabilities

 

137,557

 

 

 

233,036

 

Total liabilities

 

16,462,079

 

 

 

16,632,509

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock (0 and 0 shares outstanding, respectively)

 

 

 

 

 

Common stock (41,376,169 and 41,281,919 shares outstanding, respectively)

 

414

 

 

 

413

 

Additional paid-in capital

 

1,972,019

 

 

 

1,966,686

 

Retained earnings

 

114,763

 

 

 

616,724

 

Accumulated other comprehensive loss

 

(190,113

)

 

 

(181,230

)

Total stockholders’ equity

 

1,897,083

 

 

 

2,402,593

 

Total liabilities and stockholders’ equity

$

18,359,162

 

 

$

19,035,102

 

Independent Bank Group, Inc. and Subsidiaries

Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis

Three Months Ended June 30, 2024 and 2023

(Dollars in thousands)

(Unaudited)

 

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

   

 

 

Three Months Ended June 30,

 

 

2024

 

2023

 

 

Average

Outstanding

Balance

 

Interest

 

Yield/Rate (4)

 

Average

Outstanding

Balance

 

Interest

 

Yield/Rate (4)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

14,635,773

 

$

219,291

 

6.03

%

 

$

14,027,773

 

$

193,612

 

5.54

%

Taxable securities

 

 

1,385,384

 

 

8,032

 

2.33

 

 

 

1,456,873

 

 

7,791

 

2.14

 

Nontaxable securities

 

 

392,178

 

 

2,524

 

2.59

 

 

 

418,575

 

 

2,586

 

2.48

 

Interest-bearing deposits and other

 

 

682,216

 

 

9,238

 

5.45

 

 

 

893,752

 

 

11,305

 

5.07

 

Total interest-earning assets

 

 

17,095,551

 

 

239,085

 

5.62

 

 

 

16,796,973

 

 

215,294

 

5.14

 

Noninterest-earning assets

 

 

1,708,326

 

 

 

 

 

 

1,855,477

 

 

 

 

Total assets

 

$

18,803,877

 

 

 

 

 

$

18,652,450

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

5,446,233

 

$

49,661

 

3.67

%

 

$

5,646,603

 

$

41,943

 

2.98

%

Savings accounts

 

 

514,419

 

 

225

 

0.18

 

 

 

638,292

 

 

83

 

0.05

 

Money market accounts

 

 

2,020,883

 

 

21,072

 

4.19

 

 

 

1,421,920

 

 

11,012

 

3.11

 

Certificates of deposit

 

 

4,349,560

 

 

54,290

 

5.02

 

 

 

2,614,849

 

 

25,106

 

3.85

 

Total deposits

 

 

12,331,095

 

 

125,248

 

4.09

 

 

 

10,321,664

 

 

78,144

 

3.04

 

FHLB advances

 

 

128,571

 

 

1,750

 

5.47

 

 

 

1,412,637

 

 

18,025

 

5.12

 

Other borrowings - short-term

 

 

200,243

 

 

2,646

 

5.31

 

 

 

74,643

 

 

1,291

 

6.94

 

Other borrowings - long-term

 

 

238,325

 

 

3,070

 

5.18

 

 

 

237,708

 

 

3,070

 

5.18

 

Junior subordinated debentures

 

 

54,699

 

 

1,223

 

8.99

 

 

 

54,501

 

 

1,157

 

8.51

 

Total interest-bearing liabilities

 

 

12,952,933

 

 

133,937

 

4.16

 

 

 

12,101,153

 

 

101,687

 

3.37

 

Noninterest-bearing demand accounts

 

 

3,334,724

 

 

 

 

 

 

3,979,818

 

 

 

 

Noninterest-bearing liabilities

 

 

248,931

 

 

 

 

 

 

211,253

 

 

 

 

Stockholders’ equity

 

 

2,267,289

 

 

 

 

 

 

2,360,226

 

 

 

 

Total liabilities and equity

 

$

18,803,877

 

 

 

 

 

$

18,652,450

 

 

 

 

Net interest income

 

 

 

$

105,148

 

 

 

 

 

$

113,607

 

 

Interest rate spread

 

 

 

 

 

1.46

%

 

 

 

 

 

1.77

%

Net interest margin (2)

 

 

 

 

 

2.47

 

 

 

 

 

 

2.71

 

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

 

 

 

$

106,223

 

2.50

 

 

 

 

$

114,642

 

2.74

 

Average interest-earning assets to interest-bearing liabilities

 

 

 

 

 

131.98

 

 

 

 

 

 

138.80

 

____________

(1) Average loan balances include nonaccrual loans.

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

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

(4) Yield and rates for the three month periods are annualized.

Independent Bank Group, Inc. and Subsidiaries

Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis

Six Months Ended June 30, 2024 and 2023

(Dollars in thousands)

(Unaudited)

 

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

 

 

 

Six Months Ended June 30,

 

 

2024

 

2023

 

 

 

Average

Outstanding

Balance

 

Interest

 

Yield/Rate

 

Average

Outstanding

Balance

 

Interest

 

Yield/Rate

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

14,624,693

 

$

434,802

 

5.98

%

 

$

13,980,015

 

$

377,906

 

5.45

%

Taxable securities

 

 

1,388,098

 

 

15,677

 

2.27

 

 

 

1,460,902

 

 

15,649

 

2.16

 

Nontaxable securities

 

 

395,246

 

 

5,042

 

2.57

 

 

 

421,052

 

 

5,189

 

2.49

 

Interest-bearing deposits and other

 

 

692,441

 

 

18,769

 

5.45

 

 

 

723,305

 

 

17,726

 

4.94

 

Total interest-earning assets

 

 

17,100,478

 

 

474,290

 

5.58

 

 

 

16,585,274

 

 

416,470

 

5.06

 

Noninterest-earning assets

 

 

1,770,464

 

 

 

 

 

 

1,856,383

 

 

 

 

Total assets

 

$

18,870,942

 

 

 

 

 

$

18,441,657

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

5,497,080

 

$

99,560

 

3.64

%

 

$

5,958,145

 

$

80,836

 

2.74

%

Savings accounts

 

 

523,952

 

 

389

 

0.15

 

 

 

683,321

 

 

173

 

0.05

 

Money market accounts

 

 

1,945,055

 

 

40,525

 

4.19

 

 

 

1,598,603

 

 

23,446

 

2.96

 

Certificates of deposit

 

 

4,320,318

 

 

107,284

 

4.99

 

 

 

2,115,827

 

 

35,950

 

3.43

 

Total deposits

 

 

12,286,405

 

 

247,758

 

4.06

 

 

 

10,355,896

 

 

140,405

 

2.73

 

FHLB advances

 

 

168,681

 

 

4,605

 

5.49

 

 

 

997,099

 

 

23,849

 

4.82

 

Other borrowings - short-term

 

 

193,170

 

 

5,158

 

5.37

 

 

 

39,743

 

 

1,344

 

6.82

 

Other borrowings - long-term

 

 

238,248

 

 

6,140

 

5.18

 

 

 

252,034

 

 

7,096

 

5.68

 

Junior subordinated debentures

 

 

54,674

 

 

2,450

 

9.01

 

 

 

54,476

 

 

2,247

 

8.32

 

Total interest-bearing liabilities

 

 

12,941,178

 

 

266,111

 

4.14

 

 

 

11,699,248

 

 

174,941

 

3.02

 

Noninterest-bearing demand accounts

 

 

3,351,407

 

 

 

 

 

 

4,191,141

 

 

 

 

Noninterest-bearing liabilities

 

 

245,426

 

 

 

 

 

 

181,000

 

 

 

 

Stockholders’ equity

 

 

2,332,931

 

 

 

 

 

 

2,370,268

 

 

 

 

Total liabilities and equity

 

$

18,870,942

 

 

 

 

 

$

18,441,657

 

 

 

 

Net interest income

 

 

 

$

208,179

 

 

 

 

 

$

241,529

 

 

Interest rate spread

 

 

 

 

 

1.44

%

 

 

 

 

 

2.04

%

Net interest margin (2)

 

 

 

 

 

2.45

 

 

 

 

 

 

2.94

 

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

 

 

 

$

210,330

 

2.47

 

 

 

 

$

243,604

 

2.96

 

Average interest-earning assets to interest-bearing liabilities

 

 

 

 

 

132.14

 

 

 

 

 

 

141.76

 

____________

(1) Average loan balances include nonaccrual loans.

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

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

Independent Bank Group, Inc. and Subsidiaries

Loan Portfolio Composition

As of June 30, 2024 and December 31, 2023

(Dollars in thousands)

(Unaudited)

 

Total Loans By Class

 

 

 

 

 

 

June 30, 2024

 

December 31, 2023

 

 

Amount

 

% of Total

 

Amount

 

% of Total

Commercial

 

$

2,152,792

 

 

14.7

%

 

$

2,266,851

 

 

15.4

%

Mortgage warehouse purchase loans

 

 

633,654

 

 

4.3

 

 

 

549,689

 

 

3.7

 

Real estate:

 

 

 

 

 

 

 

 

Commercial real estate

 

 

8,406,528

 

 

57.5

 

 

 

8,289,124

 

 

56.3

 

Commercial construction, land and land development

 

 

1,131,384

 

 

7.7

 

 

 

1,231,484

 

 

8.4

 

Residential real estate (1)

 

 

1,699,220

 

 

11.6

 

 

 

1,686,206

 

 

11.5

 

Single-family interim construction

 

 

427,678

 

 

2.9

 

 

 

517,928

 

 

3.5

 

Agricultural

 

 

110,416

 

 

0.8

 

 

 

109,451

 

 

0.7

 

Consumer

 

 

72,163

 

 

0.5

 

 

 

76,229

 

 

0.5

 

Total loans

 

 

14,633,835

 

 

100.0

%

 

 

14,726,962

 

 

100.0

%

Allowance for credit losses

 

 

(145,323

)

 

 

 

 

(151,861

)

 

 

Total loans, net

 

$

14,488,512

 

 

 

 

$

14,575,101

 

 

 

____________

(1) Includes loans held for sale of $12,012 and $16,420 at June 30, 2024 and December 31, 2023, respectively.

Independent Bank Group, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Three Months Ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023

(Dollars in thousands, except for share data)

(Unaudited)

 

 

 

For the Three Months Ended

 

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

ADJUSTED NET INCOME

 

 

 

 

 

 

 

 

 

 

Net Interest Income - Reported

(a)

$

105,148

 

 

$

103,031

 

 

$

106,305

 

 

$

109,049

 

 

$

113,607

 

Provision for Credit Losses - Reported

(b)

 

 

 

 

(3,200

)

 

 

3,480

 

 

 

340

 

 

 

220

 

Noninterest Income - Reported

(c)

 

13,433

 

 

 

12,870

 

 

 

10,614

 

 

 

13,646

 

 

 

14,095

 

(Gain) loss on sale of loans

 

 

 

 

 

(74

)

 

 

 

 

 

7

 

 

 

7

 

(Gain) loss on sale of other real estate

 

 

 

 

 

(13

)

 

 

1,797

 

 

 

 

 

 

 

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

 

 

11

 

 

 

 

 

 

22

 

 

 

56

 

 

 

(354

)

Recoveries on loans charged off prior to acquisition

 

 

(57

)

 

 

(5

)

 

 

(64

)

 

 

(279

)

 

 

(13

)

Adjusted Noninterest Income

(d)

 

13,387

 

 

 

12,778

 

 

 

12,369

 

 

 

13,430

 

 

 

13,735

 

Noninterest Expense - Reported

(e)

 

606,911

 

 

 

88,473

 

 

 

95,125

 

 

 

81,334

 

 

 

85,705

 

OREO impairment

 

 

 

 

 

(345

)

 

 

(3,015

)

 

 

 

 

 

(1,000

)

FDIC special assessment

 

 

645

 

 

 

(2,095

)

 

 

(8,329

)

 

 

 

 

 

 

Goodwill and asset impairment

 

 

(518,000

)

 

 

 

 

 

 

 

 

 

 

 

(153

)

Acquisition expense (1)

 

 

(2,338

)

 

 

 

 

 

(27

)

 

 

(27

)

 

 

(27

)

Adjusted Noninterest Expense

(f)

 

87,218

 

 

 

86,033

 

 

 

83,754

 

 

 

81,307

 

 

 

84,525

 

Income Tax Expense - Reported

(g)

 

5,125

 

 

 

6,478

 

 

 

3,455

 

 

 

8,246

 

 

 

8,700

 

Net (Loss) Income - Reported

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

 

(493,455

)

 

 

24,150

 

 

 

14,859

 

 

 

32,775

 

 

 

33,077

 

Adjusted Net Income (2)

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

$

24,884

 

 

$

26,001

 

 

$

25,509

 

 

$

32,624

 

 

$

33,726

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED PROFITABILITY (3)

 

 

 

 

 

 

 

 

 

 

Total Average Assets

(j)

$

18,803,877

 

 

$

18,938,008

 

 

$

18,815,342

 

 

$

18,520,600

 

 

$

18,652,450

 

Total Average Stockholders' Equity

(k)

 

2,267,289

 

 

 

2,398,573

 

 

 

2,344,652

 

 

 

2,360,175

 

 

 

2,360,226

 

Total Average Tangible Stockholders' Equity (4)

(l)

 

1,353,313

 

 

 

1,356,042

 

 

 

1,299,026

 

 

 

1,311,417

 

 

 

1,308,368

 

Reported Return on Average Assets

(h) / (j)

 

(10.55

)%

 

 

0.51

%

 

 

0.31

%

 

 

0.70

%

 

 

0.71

%

Reported Return on Average Equity

(h) / (k)

 

(87.53

)

 

 

4.05

 

 

 

2.51

 

 

 

5.51

 

 

 

5.62

 

Reported Return on Average Tangible Equity

(h) / (l)

 

(146.65

)

 

 

7.16

 

 

 

4.54

 

 

 

9.92

 

 

 

10.14

 

Adjusted Return on Average Assets (5)

(i) / (j)

 

0.53

 

 

 

0.55

 

 

 

0.54

 

 

 

0.70

 

 

 

0.73

 

Adjusted Return on Average Equity (5)

(i) / (k)

 

4.41

 

 

 

4.36

 

 

 

4.32

 

 

 

5.48

 

 

 

5.73

 

Adjusted Return on Tangible Equity (5)

(i) / (l)

 

7.40

 

 

 

7.71

 

 

 

7.79

 

 

 

9.87

 

 

 

10.34

 

 

 

 

 

 

 

 

 

 

 

 

EFFICIENCY RATIO

 

 

 

 

 

 

 

 

 

 

Amortization of other intangible assets

(m)

$

2,953

 

 

$

3,075

 

 

$

3,106

 

 

$

3,111

 

 

$

3,111

 

Reported Efficiency Ratio

(e - m) / (a + c)

 

509.32

%

 

 

73.68

%

 

 

78.70

%

 

 

63.75

%

 

 

64.68

%

Adjusted Efficiency Ratio

(f - m) / (a + d)

 

71.09

 

 

 

71.63

 

 

 

67.96

 

 

 

63.84

 

 

 

63.93

 

____________

(1) Prior to 2024, acquisition expenses include compensation related expenses for equity awards granted at acquisition. Second quarter 2024 includes merger-related expenses related to the announced merger with SouthState Corporation.

(2) Assumes an adjusted effective tax rate of 20.5%, 21.2%, 18.9%, 20.1%, and 20.8%, respectively. Second quarter 2024 normalized rate excludes the effect of nondeductible acquisition expenses and goodwill impairment charges.

(3) Quarterly metrics are annualized.

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

(5) Calculated using adjusted net income.

Independent Bank Group, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

As of June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023

(Dollars in thousands, except per share information)

(Unaudited)

 

Tangible Book Value & Tangible Common Equity To Tangible Assets Ratio

  

 

 

 

 

 

 

 

 

 

 

As of the Quarter Ended

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

Tangible Common Equity

 

 

 

 

 

 

 

 

 

Total common stockholders' equity

$

1,897,083

 

 

$

2,400,807

 

 

$

2,402,593

 

 

$

2,332,098

 

 

$

2,353,042

 

Adjustments:

 

 

 

 

 

 

 

 

 

Goodwill

 

(476,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

Other intangible assets, net

 

(44,532

)

 

 

(47,485

)

 

 

(50,560

)

 

 

(53,666

)

 

 

(56,777

)

Tangible common equity

$

1,376,530

 

 

$

1,359,301

 

 

$

1,358,012

 

 

$

1,284,411

 

 

$

1,302,244

 

 

 

 

 

 

 

 

 

 

 

Tangible Assets

 

 

 

 

 

 

 

 

 

Total assets

$

18,359,162

 

 

$

18,871,452

 

 

$

19,035,102

 

 

$

18,519,872

 

 

$

18,719,802

 

Adjustments:

 

 

 

 

 

 

 

 

 

Goodwill

 

(476,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

Other intangible assets, net

 

(44,532

)

 

 

(47,485

)

 

 

(50,560

)

 

 

(53,666

)

 

 

(56,777

)

Tangible assets

$

17,838,609

 

 

$

17,829,946

 

 

$

17,990,521

 

 

$

17,472,185

 

 

$

17,669,004

 

Common shares outstanding

 

41,376,169

 

 

 

41,377,745

 

 

 

41,281,919

 

 

 

41,284,003

 

 

 

41,279,460

 

Tangible common equity to tangible assets

 

7.72

%

 

 

7.62

%

 

 

7.55

%

 

 

7.35

%

 

 

7.37

%

Book value per common share

$

45.85

 

 

$

58.02

 

 

$

58.20

 

 

$

56.49

 

 

$

57.00

 

Tangible book value per common share

 

33.27

 

 

 

32.85

 

 

 

32.90

 

 

 

31.11

 

 

 

31.55

 

 

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