Company Announcements

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

MCKINNEY, Texas--(BUSINESS WIRE)--Apr. 25, 2022-- Independent Bank Group, Inc. (NASDAQ: IBTX) today announced net income of $50.7 million, or $1.18 per diluted share, for the quarter ended March 31, 2022, compared to $60.0 million, or $1.39 per diluted share, for the quarter ended March 31, 2021 and $54.2 million, or $1.26 per diluted share, for the quarter ended December 31, 2021.

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 May 19, 2022 to stockholders of record as of the close of business on May 5, 2022.

Highlights

  • Net income of $50.7 million, or $1.18 per diluted share and adjusted (non-GAAP) net income of $52.1 million, or $1.22 per diluted share
  • Organic loan growth of 13.1% annualized for the quarter (excluding warehouse and PPP)
  • Continued strong credit metrics with nonperforming asset ratio of 0.40% of total assets
  • Increase in the net interest margin to 3.22%, up from 3.00% in linked quarter
  • Solid capital levels with an estimated total capital ratio of 13.72%, leverage ratio of 9.38%, and (non-GAAP) tangible common equity (TCE) ratio of 8.62%

“We are pleased with these solid first quarter results that reflect the continued disciplined execution of our teams across Texas and Colorado,” said Independent Bank Group Chairman & CEO David R. Brooks. “During the quarter, healthy loan demand from our relationship borrowers allowed us to deliver 13.1% annualized loan growth, excluding warehouse and PPP. I am especially grateful to all of our bankers for their tireless dedication to winning new business and expanding existing relationships, as these healthy growth numbers are a reflection of their collective efforts. Looking ahead, we continue to be optimistic about the strength of our markets, and we remain excited for continued growth opportunities on the road ahead.”

First Quarter 2022 Operating Results

Net Interest Income

  • Net interest income was $131.1 million for first quarter 2022 compared to $129.7 million for first quarter 2021 and $132.7 million for fourth quarter 2021. The slight increase in net interest income from the prior year was driven by decreased funding costs for the year over year period, as well as higher earnings on taxable securities due to growth of the portfolio, offset by lower earnings on loans due to lower yields and accretion. The slight decrease from the linked quarter was due primarily to lower earnings on loans due to lower Paycheck Protection Program (PPP) fees and loan accretion income offset by decreased funding costs on deposit accounts. The first quarter 2022 includes $3.6 million in acquired loan accretion compared to $5.7 million in fourth quarter 2021 and $6.2 million in first quarter 2021. In addition, net PPP fees of $1.2 million were recognized in first quarter 2022 compared to $4.8 million in first quarter 2021 compared to $4.0 million in fourth quarter 2021, with total fees left to be recognized of $1.3 million as of March 31, 2022.
  • The average balance of total interest-earning assets grew by $533.8 million and totaled $16.5 billion for the quarter ended March 31, 2022 compared to $16.0 billion for the quarter ended March 31, 2021 and decreased $1.0 billion from $17.5 billion for the quarter ended December 31, 2021. The increase from prior year is primarily due to increases in average securities and interest bearing cash balances over the past year, offset by a net decrease in average loan balances, due primarily to lower mortgage warehouse loans and the forgiveness of PPP loans over the year. The decrease from the linked quarter is primarily due to the $1.3 billion reduction in average interest-bearing deposit balances offset by a $230.7 million increase in average balance of securities.
  • The yield on interest-earning assets was 3.46% for first quarter 2022 compared to 3.75% for first quarter 2021 and 3.30% for fourth quarter 2021. The increase in asset yield compared to the linked quarter is a result of an increase in securities yields as well as the reduction of lower yielding interest-bearing deposit balances discussed above, offset by a decrease in loan yields. The decrease from the prior year is due to overall lower yields on both loans and securities for the year over year period. The average loan yield, net of all accretion and PPP income was 4.09% for the current quarter, compared to 4.07% for the linked quarter and 4.06% from the prior year.
  • The cost of interest-bearing liabilities, including borrowings, was 0.36% for first quarter 2022 compared to 0.67% for first quarter 2021 and 0.46% for fourth quarter 2021. The decrease from the prior year and linked quarter is primarily due to lower rates offered on deposit products.
  • The net interest margin was 3.22% for first quarter 2022 compared to 3.29% for first quarter 2021 and 3.00% for fourth quarter 2021. The net interest margin excluding all loan accretion was 3.13% for both first quarter 2022 and first quarter 2021 and 2.87% for fourth quarter 2021. The decrease in net interest margin from the prior year was primarily due to the lower asset yields, increased liquidity and a decrease of $2.6 million in acquired loan accretion income, offset by the lower cost of funds on interest bearing liabilities. The linked quarter increase primarily resulted from the decrease in interest-bearing deposits, the higher securities yields and lower cost of funds on deposits.

Noninterest Income

  • Total noninterest income decreased $5.7 million compared to first quarter 2021 and decreased $2.2 million compared to fourth quarter 2021.
  • The decreases from the prior year and linked quarter primarily reflect decreases of $4.5 million and $1.4 million, respectively, in mortgage banking revenue and $1.0 million and $537 thousand, respectively in mortgage warehouse purchase fees offset by increases of $459 thousand and $1.0 million, respectively in other noninterest income.
  • Both mortgage banking revenue and mortgage warehouse purchase fees were lower in first quarter 2022 compared to prior year and linked quarter due to decreased volumes and margins resulting from rate increases over the year. Offsetting the decrease in mortgage banking revenue was a fair value gain on derivative hedging instruments of $320 thousand in first quarter 2022 compared to losses of $323 thousand and $379 thousand in first quarter 2021 and fourth quarter 2021, respectively.
  • Other noninterest income was elevated in first quarter 2022 primarily due to recognizing $784 thousand in BOLI benefit claims.

Noninterest Expense

  • Total noninterest expense increased $7.3 million compared to first quarter 2021 and increased $2.5 million compared to fourth quarter 2021.
  • The increase in noninterest expense in first quarter 2022 compared to the prior year is due primarily to increases of $5.9 million in salaries and benefits expenses and $922 thousand in other noninterest expense.
  • The net increase in noninterest expense in first quarter 2022 compared to the linked quarter is due primarily to increases of $3.3 million in salaries and benefits expenses offset by a $1.2 million decrease in other noninterest expense.
  • The increase in salaries and benefits from the prior year is due primarily to $4.8 million in higher salaries, bonus, payroll taxes, insurance expense and 401(k) match related to additional headcount, including executive and senior positions added during the year over year period in addition to annual merit increases in first quarter 2022. Offsetting this increase was $1.8 million in lower mortgage commissions and incentives due to lower volumes for the year over year period. In addition, deferred salaries expense, which reduces overall expense, was $3.3 million lower compared to the prior year as deferred salaries expense was elevated in first quarter 2021 due to the second round of PPP originations. The first quarter 2022 also reflects lower stock grant amortization of $791 thousand compared to the prior year, including $650 thousand of one-time catch up or accelerated vesting expense recorded in first quarter 2021.
  • The increase from the linked quarter relates to $1.2 million increase in payroll taxes which are seasonally higher first quarter in addition to payroll taxes recognized on the vesting of annual stock awards. There was also an increase of $633 thousand in 401(k) expense primarily related to the Company match on annual bonuses. The remaining increase is from salary adjustments, health insurance and contract labor for infrastructure projects, offset by lower mortgage commissions for the linked quarter.
  • The increase in other noninterest expense compared to the prior year is due to increases in business development, meals, travel, insurance and other miscellaneous expenses, while the linked quarter decrease is reflective of lower charitable contributions and loan-related expenses.

Provision for Credit Losses

  • The Company recorded a credit provision for credit losses of $1.4 million for first quarter 2022, compared to a $2.5 million credit provision expense for first quarter 2021 and a zero provision for the linked quarter. The components of the provision for credit losses in the current quarter is comprised of a $2.2 million credit provision on loans offset by a $757 thousand provision expense on off-balance sheet exposures. Provision expense during a given period is generally dependent on changes in various factors, including economic conditions and credit quality and past due trends, as well as loan growth and charge-offs or specific reserves taken during the respective period. The net zero or credit provision taken each quarter over the last year is primarily reflective of improvements in the economic forecast variables.
  • The allowance for credit losses on loans was $146.3 million, or 1.22% of total loans held for investment, net of mortgage warehouse purchase loans, at March 31, 2022, compared to $165.8 million, or 1.42% at March 31, 2021 and compared to $148.7 million, or 1.28% at December 31, 2021. The dollar and percentage decrease from the prior year and linked quarter is primarily due to continued improvement in economic forecast variables in addition to net charge-offs taken and provision expense for loan growth during the respective period.
  • The allowance for credit losses on off-balance sheet exposures was $5.5 million at March 31, 2022 compared to $1.1 million at March 31, 2021 compared to $4.7 million at December 31, 2021. 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. The increase from the linked quarter was primarily due to higher expected utilization on increased unfunded commitments related to the growth in the Company's commercial and energy portfolios off-set by decreased utilization on the SFR construction portfolio.

Income Taxes

  • Federal income tax expense of $12.3 million was recorded for the first quarter 2022, an effective rate of 19.5% compared to tax expense of $15.7 million and an effective rate of 20.8% for the prior year quarter and tax expense of $13.6 million and an effective rate of 20.1% for the linked quarter. The lower effective tax rate for first quarter 2022, compared to the prior and linked quarter was a result of a favorable permanent tax item related to a donation of real property during first quarter 2022, while the prior year change is also reflective of lower state tax rates for the year over year period.

     

First Quarter 2022 Balance Sheet Highlights

Loans

  • Total loans held for investment, net of mortgage warehouse purchase loans, were $12.0 billion at March 31, 2022 compared to $11.7 billion at both December 31, 2021 and March 31, 2021. PPP loans totaled $67.0 million, $112.1 million and $912.2 million as of March 31, 2022, December 31, 2021 and March 31, 2021, respectively. Loans excluding PPP loans and net of loan sales increased $372.1 million, or 13.1% on an annualized basis, during first quarter 2022.
  • Average mortgage warehouse purchase loans decreased to $549.6 million for the quarter ended March 31, 2022 from $801.7 million at December 31, 2021, and $1.2 billion for the quarter ended March 31, 2021, a decrease of $252.1 million, or 31.4% from the linked quarter and $602.0 million, or 52.3% decrease year over year. The changes from the linked quarter and prior year are reflective of decreased demand and lower volumes related to mortgage rate increases and shorter hold times for the year over year period.

Asset Quality

  • Total nonperforming assets increased to $71.1 million, or 0.40% of total assets at March 31, 2022, compared to $57.5 million or 0.31% of total assets at December 31, 2021, and increased from $61.0 million, or 0.34% of total assets at March 31, 2021.
  • Total nonperforming loans increased to $71.0 million, or 0.59% of total loans held for investment at March 31, 2022, compared to $57.3 million, or 0.49% at December 31, 2021 and $60.4 million, or 0.52% at March 31, 2021.
  • The increase in nonperforming loans and nonperforming assets from the linked quarter is primarily due to one commercial real estate loan totaling $15.3 million being added to nonaccrual during first quarter 2022 offset by paydowns or principal reductions on other nonperforming loans.
  • The increase in nonperforming loans and nonperforming assets from the prior year is primarily due to the $15.3 million commercial real estate loan discussed above, as well as another commercial real estate loan totaling $11.7 million and one commercial relationship totaling $14.4 million offset by net reductions in other nonperforming loans totaling $30.8 million and other real estate owned dispositions of $475 thousand for the year over year period.
  • Charge-offs were 0.01% annualized in the first quarter 2022 compared to 0.10% annualized in the linked quarter and 0.01% annualized in the prior year quarter. The elevated level of charge-offs in fourth quarter 2021 was primarily due to $3.0 million in charge-offs related to an acquired PCD leasing portfolio.

Deposits, Borrowings and Liquidity

  • Total deposits were $14.9 billion at March 31, 2022 compared to $15.6 billion at December 31, 2021 and compared to $14.8 billion at March 31, 2021. The decrease in total deposits for the linked quarter is primarily due to outflows of specialty treasury products after the Fed rate increase as well as the winding down of the bankruptcy trustee deposit vertical.
  • Total borrowings (other than junior subordinated debentures) were $419.5 million at March 31, 2022, a decrease of $13.8 million from December 31, 2021 and a decrease of $263.8 million from March 31, 2021. The year over year change reflects the reduction of FHLB advances of $225 million and a $40.0 million redemption of subordinated debentures that occurred in third quarter 2021. The linked quarter change reflects a $14.0 million net paydown of the Company's unsecured line of credit.

Capital

  • The Company continues to be well capitalized under regulatory guidelines. At March 31, 2022, its 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 11.09%, 9.38%, 11.48% and 13.72%, respectively, compared to 11.12%, 8.80%, 11.52%, and 13.67%, respectively, at December 31, 2021 and 10.94%, 9.01%, 11.36%, and 14.13%, respectively at March 31, 2021.

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 March 31, 2022 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 March 31, 2022 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 first quarter earnings announcement will be held on Tuesday, April 26, 2022 at 8:30 a.m. (EDT) and can be accessed by the webcast link, https://webcast-eqs.com/indepbankgroup042622_en/en or by calling 1-877-407-0989 and by identifying the meeting number 13728479 or by identifying "Independent Bank Group First Quarter 2022 Earnings Conference Call." The conference materials will also be available by accessing the Investor Relations page of our website, www.ifinancial.com. If you are unable to participate in the live event, a recording of the conference call will be accessible via the Investor Relations page of our website.

Forward-Looking Statements

From time to time the Company’s comments and releases may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and other related federal security laws. Forward-looking statements include information about the Company’s possible or assumed future results of operations, including its future revenues, income, expenses, provision for taxes, effective tax rate, earnings per share and cash flows, its future capital expenditures and dividends, its future financial condition and changes therein, including changes in the Company’s loan portfolio and allowance for 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 effects of infectious disease outbreaks, including the ongoing COVID-19 pandemic and the significant impact that the COVID-19 pandemic and associated efforts to limit its spread have had and may continue to have on economic conditions and the Company's business, employees, customers, asset quality and financial performance; 2) the Company’s ability to sustain its current internal growth rate and total growth rate; 3) changes in geopolitical, business and economic events, occurrences and conditions, including changes in rates of inflation or deflation, nationally, regionally and in the Company’s target markets, particularly in Texas and Colorado; 4) worsening business and economic conditions nationally, regionally and in the Company’s target markets, particularly in Texas and Colorado, and the geographic areas in those states in which the Company operates; 5) the Company’s dependence on its management team and its ability to attract, motivate and retain qualified personnel; 6) the concentration of the Company’s business within its geographic areas of operation in Texas and Colorado; 7) changes in asset quality, including increases in default rates on loans and higher levels of nonperforming loans and loan charge-offs generally; 8) 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; 9) 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; 10) inaccuracy of the assumptions and estimates that the managements of the Company and the financial institutions that the Company acquires make in establishing reserves for credit losses and other estimates generally; 11) lack of liquidity, including as a result of a reduction in the amount of sources of liquidity the Company currently has; 12) material increases or decreases in the amount of deposits held by Independent Financial or other financial institutions that the Company acquires and the cost of those deposits; 13) the Company’s access to the debt and equity markets and the overall cost of funding its operations; 14) regulatory requirements to maintain minimum capital levels or maintenance of capital at levels sufficient to support the Company’s anticipated growth; 15) changes in market interest rates that affect the pricing of the loans and deposits of each of Independent 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; 16) fluctuations in the market value and liquidity of the securities the Company holds for sale, including as a result of changes in market interest rates; 17) effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services; 18) changes in economic and market conditions, that affect the amount and value of the assets of Independent Financial and of financial institutions that the Company acquires; 19) the institution and outcome of, and costs associated with, litigation and other legal proceedings against one or more of the Company, Independent Financial and financial institutions that the Company acquires or to which any of such entities is subject; 20) the occurrence of market conditions adversely affecting the financial industry generally; 21) the impact of recent and future legislative regulatory changes, including changes in banking, securities, and tax laws and regulations and their application by the Company’s regulators, and changes in federal government policies, as well as regulatory requirements applicable to, and resulting from regulatory supervision of, the Company and Independent Financial as a financial institution with total assets greater than $10 billion; 22) changes in accounting policies, practices, principles and guidelines, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the SEC and the Public Company Accounting Oversight Board, as the case may be; 23) governmental monetary and fiscal policies, including changes resulting from the implementation of the new Current Expected Credit Loss accounting standard; 24) changes in the scope and cost of FDIC insurance and other coverage; 25) the effects of war or other conflicts, including, but not limited to, the conflict between Russia and the Ukraine, 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; 26) the Company’s actual cost savings resulting from previous or future acquisitions are less than expected, the Company is unable to realize those cost savings as soon as expected, or the Company incurs additional or unexpected costs; 27) the Company’s revenues after previous or future acquisitions are less than expected; 28) the liquidity of, and changes in the amounts and sources of liquidity available to the Company, before and after the acquisition of any financial institutions that the Company acquires; 29) deposit attrition, operating costs, customer loss and business disruption before and after the Company completed acquisitions, including, without limitation, difficulties in maintaining relationships with employees, may be greater than the Company expected; 30) the effects of the combination of the operations of financial institutions that the Company has acquired in the recent past or may acquire in the future with the Company’s operations and the operations of Independent 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; 31) 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; 32) the quality of the assets of financial institutions and companies that the Company has acquired in the recent past or may acquire in the future being different than it determined or determine in its due diligence investigation in connection with the acquisition of such financial institutions and any inadequacy of credit loss reserves relating to, and exposure to unrecoverable losses on, loans acquired; 33) the Company’s ability to continue to identify acquisition targets and successfully acquire desirable financial institutions to sustain its growth, to expand its presence in the Company’s markets and to enter new markets; 34) changes in general business and economic conditions in the markets in which the Company currently operates and may operate in the future; 35) changes occur in business conditions and inflation generally; 36) an increase in the rate of personal or commercial customers’ bankruptcies generally; 37) technology-related changes are harder to make or are more expensive than expected; 38) attacks on the security of, and breaches of, the Company's and Independent Financial's digital 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 25, 2022, 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 March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021

(Dollars in thousands, except for share data)

(Unaudited)

 

 

As of and for the Quarter Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

Selected Income Statement Data

 

 

 

 

 

 

 

 

 

Interest income

$

140,865

 

 

$

145,954

 

$

144,032

 

$

145,805

 

 

$

147,771

 

Interest expense

 

9,717

 

 

 

13,303

 

 

15,387

 

 

16,508

 

 

 

18,042

 

Net interest income

 

131,148

 

 

 

132,651

 

 

128,645

 

 

129,297

 

 

 

129,729

 

Provision for credit losses

 

(1,443

)

 

 

 

 

 

 

(6,500

)

 

 

(2,500

)

Net interest income after provision for credit losses

 

132,591

 

 

 

132,651

 

 

128,645

 

 

135,797

 

 

 

132,229

 

Noninterest income

 

12,885

 

 

 

15,086

 

 

16,896

 

 

15,926

 

 

 

18,609

 

Noninterest expense

 

82,457

 

 

 

79,908

 

 

80,572

 

 

78,013

 

 

 

75,113

 

Income tax expense

 

12,279

 

 

 

13,642

 

 

12,629

 

 

15,467

 

 

 

15,745

 

Net income

 

50,740

 

 

 

54,187

 

 

52,340

 

 

58,243

 

 

 

59,980

 

Adjusted net income (1)

 

52,130

 

 

 

54,995

 

 

52,570

 

 

58,243

 

 

 

60,084

 

 

 

 

 

 

 

 

 

 

 

Per Share Data (Common Stock)

 

 

 

 

 

 

 

 

 

Earnings:

 

 

 

 

 

 

 

 

 

Basic

$

1.19

 

 

$

1.26

 

$

1.22

 

$

1.35

 

 

$

1.39

 

Diluted

 

1.18

 

 

 

1.26

 

 

1.21

 

 

1.35

 

 

 

1.39

 

Adjusted earnings:

 

 

 

 

 

 

 

 

 

Basic (1)

 

1.22

 

 

 

1.28

 

 

1.22

 

 

1.35

 

 

 

1.39

 

Diluted (1)

 

1.22

 

 

 

1.28

 

 

1.22

 

 

1.35

 

 

 

1.39

 

Dividends

 

0.38

 

 

 

0.36

 

 

0.34

 

 

0.32

 

 

 

0.30

 

Book value

 

58.94

 

 

 

60.26

 

 

59.77

 

 

58.89

 

 

 

57.72

 

Tangible book value (1)

 

34.02

 

 

 

35.25

 

 

34.79

 

 

33.98

 

 

 

32.74

 

Common shares outstanding

 

42,795,228

 

 

 

42,756,234

 

 

42,941,715

 

 

43,180,607

 

 

 

43,193,257

 

Weighted average basic shares outstanding (2)

 

42,768,079

 

 

 

42,874,182

 

 

43,044,683

 

 

43,188,050

 

 

 

43,178,522

 

Weighted average diluted shares outstanding (2)

 

42,841,471

 

 

 

42,940,354

 

 

43,104,075

 

 

43,247,195

 

 

 

43,222,943

 

 

 

 

 

 

 

 

 

 

 

Selected Period End Balance Sheet Data

 

 

 

 

 

 

 

 

 

Total assets

$

17,963,253

 

 

$

18,732,648

 

$

18,918,225

 

$

18,447,721

 

 

$

18,115,336

 

Cash and cash equivalents

 

1,604,256

 

 

 

2,608,444

 

 

3,059,826

 

 

2,794,700

 

 

 

2,416,870

 

Securities available for sale

 

1,938,726

 

 

 

2,006,727

 

 

1,781,574

 

 

1,574,435

 

 

 

1,307,957

 

Securities held to maturity

 

188,047

 

 

 

 

 

 

 

 

 

 

 

Loans, held for sale

 

22,743

 

 

 

32,124

 

 

31,471

 

 

43,684

 

 

 

57,799

 

Loans, held for investment (3)

 

11,958,759

 

 

 

11,650,598

 

 

11,463,714

 

 

11,576,332

 

 

 

11,665,058

 

Mortgage warehouse purchase loans

 

569,554

 

 

 

788,848

 

 

977,800

 

 

894,324

 

 

 

1,105,699

 

Allowance for credit losses on loans

 

146,313

 

 

 

148,706

 

 

150,281

 

 

154,791

 

 

 

165,827

 

Goodwill and other intangible assets

 

1,066,366

 

 

 

1,069,511

 

 

1,072,656

 

 

1,075,801

 

 

 

1,078,946

 

Other real estate owned

 

 

 

 

 

 

 

 

475

 

 

 

475

 

Noninterest-bearing deposits

 

5,003,728

 

 

 

5,066,588

 

 

4,913,580

 

 

4,634,530

 

 

 

4,466,310

 

Interest-bearing deposits

 

9,846,543

 

 

 

10,487,320

 

 

10,610,602

 

 

10,429,261

 

 

 

10,337,482

 

Borrowings (other than junior subordinated debentures)

 

419,545

 

 

 

433,371

 

 

631,697

 

 

681,023

 

 

 

683,350

 

Junior subordinated debentures

 

54,270

 

 

 

54,221

 

 

54,171

 

 

54,122

 

 

 

54,072

 

Total stockholders' equity

 

2,522,460

 

 

 

2,576,650

 

 

2,566,693

 

 

2,542,885

 

 

 

2,493,117

 

Independent Bank Group, Inc. and Subsidiaries

Consolidated Financial Data

Three Months Ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021

(Dollars in thousands, except for share data)

(Unaudited)

 

 

As of and for the Quarter Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

Selected Performance Metrics

 

 

 

 

 

 

 

 

 

Return on average assets

1.12

%

 

1.11

%

 

1.11

%

 

1.28

%

 

1.37

%

Return on average equity

7.99

 

 

8.35

 

 

8.10

 

 

9.27

 

 

9.78

 

Return on tangible equity (4)

13.64

 

 

14.30

 

 

13.93

 

 

16.19

 

 

17.29

 

Adjusted return on average assets (1)

1.15

 

 

1.13

 

 

1.11

 

 

1.28

 

 

1.37

 

Adjusted return on average equity (1)

8.21

 

 

8.48

 

 

8.13

 

 

9.27

 

 

9.80

 

Adjusted return on tangible equity (1) (4)

14.02

 

 

14.51

 

 

14.00

 

 

16.19

 

 

17.32

 

Net interest margin

3.22

 

 

3.00

 

 

3.01

 

 

3.14

 

 

3.29

 

Efficiency ratio (5)

55.07

 

 

51.96

 

 

53.20

 

 

51.55

 

 

48.52

 

Adjusted efficiency ratio (1)(5)

54.37

 

 

51.33

 

 

52.99

 

 

51.48

 

 

48.39

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Ratios (3) (6)

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

0.40

%

 

0.31

%

 

0.44

%

 

0.29

%

 

0.34

%

Nonperforming loans to total loans held for investment

0.59

 

 

0.49

 

 

0.72

 

 

0.45

 

 

0.52

 

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

0.59

 

 

0.49

 

 

0.72

 

 

0.46

 

 

0.52

 

Allowance for credit losses on loans to nonperforming loans

205.99

 

 

259.35

 

 

181.69

 

 

294.88

 

 

274.71

 

Allowance for credit losses to total loans held for investment

1.22

 

 

1.28

 

 

1.31

 

 

1.34

 

 

1.42

 

Net charge-offs to average loans outstanding (annualized)

0.01

 

 

0.10

 

 

 

 

0.13

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

 

Estimated common equity Tier 1 capital to risk-weighted assets

11.09

%

 

11.12

%

 

11.06

%

 

11.14

%

 

10.94

%

Estimated tier 1 capital to average assets

9.38

 

 

8.80

 

 

8.94

 

 

9.03

 

 

9.01

 

Estimated tier 1 capital to risk-weighted assets

11.48

 

 

11.52

 

 

11.46

 

 

11.55

 

 

11.36

 

Estimated total capital to risk-weighted assets

13.72

 

 

13.67

 

 

13.64

 

 

14.23

 

 

14.13

 

Total stockholders' equity to total assets

14.04

 

 

13.75

 

 

13.57

 

 

13.78

 

 

13.76

 

Tangible common equity to tangible assets (1)

8.62

 

 

8.53

 

 

8.37

 

 

8.45

 

 

8.30

 

 

____________

(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 and includes SBA PPP loans of $67,011, $112,128, $243,919, $490,485 and $912,176, respectively.

(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 $71,143, $57,452, $82,829, $53,081 and $60,954, respectively. Nonperforming loans, which consists of nonaccrual loans, loans delinquent 90 days and still accruing interest, and troubled debt restructurings totaled $71,029, $57,338, $82,714, $52,492 and $60,365, respectively.

Independent Bank Group, Inc. and Subsidiaries

Consolidated Statements of Income

Three Months Ended March 31, 2022 and 2021

(Dollars in thousands)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

2022

 

2021

Interest income:

 

 

 

 

Interest and fees on loans

 

$

129,179

 

 

$

140,152

 

Interest on taxable securities

 

 

8,359

 

 

 

4,757

 

Interest on nontaxable securities

 

 

2,333

 

 

 

2,069

 

Interest on interest-bearing deposits and other

 

 

994

 

 

 

793

 

Total interest income

 

 

140,865

 

 

 

147,771

 

Interest expense:

 

 

 

 

Interest on deposits

 

 

5,610

 

 

 

13,007

 

Interest on FHLB advances

 

 

179

 

 

 

533

 

Interest on other borrowings

 

 

3,482

 

 

 

4,060

 

Interest on junior subordinated debentures

 

 

446

 

 

 

442

 

Total interest expense

 

 

9,717

 

 

 

18,042

 

Net interest income

 

 

131,148

 

 

 

129,729

 

Provision for credit losses

 

 

(1,443

)

 

 

(2,500

)

Net interest income after provision for credit losses

 

 

132,591

 

 

 

132,229

 

Noninterest income:

 

 

 

 

Service charges on deposit accounts

 

 

2,752

 

 

 

2,261

 

Investment management fees

 

 

2,451

 

 

 

2,043

 

Mortgage banking revenue

 

 

3,026

 

 

 

7,495

 

Mortgage warehouse purchase program fees

 

 

958

 

 

 

1,969

 

Loss on sale of loans

 

 

(1,484

)

 

 

 

Loss on sale and disposal of premises and equipment

 

 

(163

)

 

 

(7

)

Increase in cash surrender value of BOLI

 

 

1,310

 

 

 

1,272

 

Other

 

 

4,035

 

 

 

3,576

 

Total noninterest income

 

 

12,885

 

 

 

18,609

 

Noninterest expense:

 

 

 

 

Salaries and employee benefits

 

 

49,555

 

 

 

43,659

 

Occupancy

 

 

10,000

 

 

 

9,606

 

Communications and technology

 

 

5,901

 

 

 

5,536

 

FDIC assessment

 

 

1,493

 

 

 

1,705

 

Advertising and public relations

 

 

456

 

 

 

238

 

Other real estate owned expenses, net

 

 

 

 

 

8

 

Amortization of other intangible assets

 

 

3,145

 

 

 

3,145

 

Professional fees

 

 

3,439

 

 

 

3,670

 

Other

 

 

8,468

 

 

 

7,546

 

Total noninterest expense

 

 

82,457

 

 

 

75,113

 

Income before taxes

 

 

63,019

 

 

 

75,725

 

Income tax expense

 

 

12,279

 

 

 

15,745

 

Net income

 

$

50,740

 

 

$

59,980

 

 

Independent Bank Group, Inc. and Subsidiaries

Consolidated Balance Sheets

As of March 31, 2022 and December 31, 2021

(Dollars in thousands)

(Unaudited)

 

 

March 31,

 

December 31,

Assets

2022

 

2021

Cash and due from banks

$

350,387

 

 

$

243,926

Interest-bearing deposits in other banks

 

1,253,869

 

 

 

2,364,518

Cash and cash equivalents

 

1,604,256

 

 

 

2,608,444

Certificates of deposit held in other banks

 

2,997

 

 

 

3,245

Securities available for sale, at fair value

 

1,938,726

 

 

 

2,006,727

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

 

188,047

 

 

 

Loans held for sale (includes $21,461 and $28,249 carried at fair value, respectively)

 

22,743

 

 

 

32,124

Loans, net of allowance for credit losses of $146,313 and $148,706, respectively

 

12,382,000

 

 

 

12,290,740

Premises and equipment, net

 

324,000

 

 

 

308,023

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

 

21,571

 

 

 

21,573

Bank-owned life insurance (BOLI)

 

236,387

 

 

 

235,637

Deferred tax asset

 

45,439

 

 

 

26,178

Goodwill

 

994,021

 

 

 

994,021

Other intangible assets, net

 

72,345

 

 

 

75,490

Other assets

 

130,721

 

 

 

130,446

Total assets

$

17,963,253

 

 

$

18,732,648

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

5,003,728

 

 

$

5,066,588

Interest-bearing

 

9,846,543

 

 

 

10,487,320

Total deposits

 

14,850,271

 

 

 

15,553,908

FHLB advances

 

150,000

 

 

 

150,000

Other borrowings

 

269,545

 

 

 

283,371

Junior subordinated debentures

 

54,270

 

 

 

54,221

Other liabilities

 

116,707

 

 

 

114,498

Total liabilities

 

15,440,793

 

 

 

16,155,998

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock (0 and 0 shares outstanding, respectively)

 

 

 

 

Common stock (42,795,228 and 42,756,234 shares outstanding, respectively)

 

428

 

 

 

428

Additional paid-in capital

 

1,947,909

 

 

 

1,945,497

Retained earnings

 

657,154

 

 

 

625,484

Accumulated other comprehensive (loss) income

 

(83,031

)

 

 

5,241

Total stockholders’ equity

 

2,522,460

 

 

 

2,576,650

Total liabilities and stockholders’ equity

$

17,963,253

 

 

$

18,732,648

Independent Bank Group, Inc. and Subsidiaries

Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis

Three Months Ended March 31, 2022 and 2021

(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 March 31,

 

 

2022

 

2021

 

 

Average
Outstanding
Balance

 

Interest

 

Yield/
Rate (4)

 

Average
Outstanding
Balance

 

Interest

 

Yield/
Rate (4)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

12,319,734

 

$

129,179

 

4.25

%

 

$

12,880,741

 

$

140,152

 

4.41

%

Taxable securities

 

 

1,689,214

 

 

8,359

 

2.01

 

 

 

946,206

 

 

4,757

 

2.04

 

Nontaxable securities

 

 

411,761

 

 

2,333

 

2.30

 

 

 

352,445

 

 

2,069

 

2.38

 

Interest bearing deposits and other

 

 

2,114,246

 

 

994

 

0.19

 

 

 

1,821,787

 

 

793

 

0.18

 

Total interest-earning assets

 

 

16,534,955

 

 

140,865

 

3.46

 

 

 

16,001,179

 

 

147,771

 

3.75

 

Noninterest-earning assets

 

 

1,904,397

 

 

 

 

 

 

1,786,683

 

 

 

 

Total assets

 

$

18,439,352

 

 

 

 

 

$

17,787,862

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

6,237,403

 

$

3,082

 

0.20

%

 

$

5,491,549

 

$

6,074

 

0.45

%

Savings accounts

 

 

780,380

 

 

94

 

0.05

 

 

 

670,500

 

 

260

 

0.16

 

Money market accounts

 

 

2,337,951

 

 

1,703

 

0.30

 

 

 

2,702,886

 

 

4,026

 

0.60

 

Certificates of deposit

 

 

973,494

 

 

731

 

0.30

 

 

 

1,391,037

 

 

2,647

 

0.77

 

Total deposits

 

 

10,329,228

 

 

5,610

 

0.22

 

 

 

10,255,972

 

 

13,007

 

0.51

 

FHLB advances

 

 

150,000

 

 

179

 

0.48

 

 

 

375,000

 

 

533

 

0.58

 

Other borrowings - short-term

 

 

3,478

 

 

17

 

1.98

 

 

 

4,245

 

 

21

 

2.01

 

Other borrowings - long-term

 

 

266,483

 

 

3,465

 

5.27

 

 

 

305,789

 

 

4,039

 

5.36

 

Junior subordinated debentures

 

 

54,253

 

 

446

 

3.33

 

 

 

54,055

 

 

442

 

3.32

 

Total interest-bearing liabilities

 

 

10,803,442

 

 

9,717

 

0.36

 

 

 

10,995,061

 

 

18,042

 

0.67

 

Noninterest-bearing checking accounts

 

 

4,959,264

 

 

 

 

 

 

4,225,459

 

 

 

 

Noninterest-bearing liabilities

 

 

100,862

 

 

 

 

 

 

80,332

 

 

 

 

Stockholders’ equity

 

 

2,575,784

 

 

 

 

 

 

2,487,010

 

 

 

 

Total liabilities and equity

 

$

18,439,352

 

 

 

 

 

$

17,787,862

 

 

 

 

Net interest income

 

 

 

$

131,148

 

 

 

 

 

$

129,729

 

 

Interest rate spread

 

 

 

 

 

3.10

%

 

 

 

 

 

3.08

%

Net interest margin (2)

 

 

 

 

 

3.22

 

 

 

 

 

 

3.29

 

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

 

 

 

$

132,179

 

3.24

 

 

 

 

$

130,689

 

3.31

 

Average interest-earning assets to interest-bearing liabilities

 

 

 

 

 

153.05

 

 

 

 

 

 

145.53

 

 

____________

(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

Loan Portfolio Composition

As of March 31, 2022 and December 31, 2021

(Dollars in thousands)

(Unaudited)

 

Total Loans By Class

 

 

 

 

 

 

March 31, 2022

 

December 31, 2021

 

 

Amount

 

% of Total

 

Amount

 

% of Total

Commercial (1)

 

$

1,972,642

 

 

15.7

%

 

$

1,983,886

 

 

15.9

%

Mortgage warehouse purchase loans

 

 

569,554

 

 

4.6

 

 

 

788,848

 

 

6.3

 

Real estate:

 

 

 

 

 

 

 

 

Commercial real estate

 

 

6,843,972

 

 

54.5

 

 

 

6,617,455

 

 

53.1

 

Commercial construction, land and land development

 

 

1,203,328

 

 

9.6

 

 

 

1,180,181

 

 

9.5

 

Residential real estate (2)

 

 

1,371,564

 

 

10.9

 

 

 

1,332,246

 

 

10.7

 

Single-family interim construction

 

 

397,774

 

 

3.2

 

 

 

380,627

 

 

3.0

 

Agricultural

 

 

111,184

 

 

0.9

 

 

 

106,512

 

 

0.8

 

Consumer

 

 

81,038

 

 

0.6

 

 

 

81,815

 

 

0.7

 

Total loans

 

 

12,551,056

 

 

100.0

%

 

 

12,471,570

 

 

100.0

%

Allowance for credit losses

 

 

(146,313

)

 

 

 

 

(148,706

)

 

 

Total loans, net

 

$

12,404,743

 

 

 

 

$

12,322,864

 

 

 

 

____________

(1) Includes SBA PPP loans of $67,011 with net deferred loan fees of $1,339 and $112,128 with net deferred fees of $2,552 at March 31, 2022 and December 31, 2021, respectively.

(2) Includes loans held for sale of $22,743 and $32,124 at March 31, 2022 and December 31, 2021, respectively.

Independent Bank Group, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Three Months Ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021

(Dollars in thousands, except for share data)

(Unaudited)

 

 

 

For the Three Months Ended

 

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

ADJUSTED NET INCOME

 

 

 

 

 

 

 

 

 

 

Net Interest Income - Reported

(a)

$

131,148

 

 

$

132,651

 

 

$

128,645

 

 

$

129,297

 

 

$

129,729

 

Provision Expense - Reported

(b)

 

(1,443

)

 

 

 

 

 

 

 

 

(6,500

)

 

 

(2,500

)

Noninterest Income - Reported

(c)

 

12,885

 

 

 

15,086

 

 

 

16,896

 

 

 

15,926

 

 

 

18,609

 

Loss (gain) on sale of loans

 

 

1,484

 

 

 

(30

)

 

 

 

 

 

(26

)

 

 

 

Gain on sale of other real estate

 

 

 

 

 

 

 

 

(63

)

 

 

 

 

 

 

Gain on sale of securities available for sale

 

 

 

 

 

(13

)

 

 

 

 

 

 

 

 

 

Loss on sale and disposal of premises and equipment

 

 

163

 

 

 

243

 

 

 

41

 

 

 

13

 

 

 

7

 

Recoveries on loans charged off prior to acquisition

 

 

(51

)

 

 

(27

)

 

 

(21

)

 

 

(204

)

 

 

(129

)

Adjusted Noninterest Income

(d)

 

14,481

 

 

 

15,259

 

 

 

16,853

 

 

 

15,709

 

 

 

18,487

 

Noninterest Expense - Reported

(e)

 

82,457

 

 

 

79,908

 

 

 

80,572

 

 

 

78,013

 

 

 

75,113

 

Impairment of assets

 

 

 

 

 

 

 

 

(115

)

 

 

 

 

 

(9

)

COVID-19 expense (1)

 

 

 

 

 

(614

)

 

 

 

 

 

 

 

 

 

Acquisition expense (2)

 

 

(130

)

 

 

(225

)

 

 

(214

)

 

 

(217

)

 

 

(244

)

Adjusted Noninterest Expense

(f)

 

82,327

 

 

 

79,069

 

 

 

80,243

 

 

 

77,796

 

 

 

74,860

 

Income Tax Expense - Reported

(g)

 

12,279

 

 

 

13,642

 

 

 

12,629

 

 

 

15,467

 

 

 

15,745

 

Net Income - Reported

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

 

50,740

 

 

 

54,187

 

 

 

52,340

 

 

 

58,243

 

 

 

59,980

 

Adjusted Net Income (3)

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

$

52,130

 

 

$

54,995

 

 

$

52,570

 

 

$

58,243

 

 

$

60,084

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED PROFITABILITY

 

 

 

 

 

 

 

 

 

 

Total Average Assets

(j)

$

18,439,352

 

 

$

19,374,914

 

 

$

18,766,344

 

 

$

18,283,775

 

 

$

17,787,862

 

Total Average Stockholders' Equity

(k)

$

2,575,784

 

 

$

2,574,374

 

 

$

2,563,986

 

 

$

2,520,003

 

 

$

2,487,010

 

Total Average Tangible Stockholders' Equity (4)

(l)

$

1,508,370

 

 

$

1,503,815

 

 

$

1,490,259

 

 

$

1,443,130

 

 

$

1,407,016

 

Reported Return on Average Assets

(h) / (j)

 

1.12

%

 

 

1.11

%

 

 

1.11

%

 

 

1.28

%

 

 

1.37

%

Reported Return on Average Equity

(h) / (k)

 

7.99

%

 

 

8.35

%

 

 

8.10

%

 

 

9.27

%

 

 

9.78

%

Reported Return on Average Tangible Equity

(h) / (l)

 

13.64

%

 

 

14.30

%

 

 

13.93

%

 

 

16.19

%

 

 

17.29

%

Adjusted Return on Average Assets (5)

(i) / (j)

 

1.15

%

 

 

1.13

%

 

 

1.11

%

 

 

1.28

%

 

 

1.37

%

Adjusted Return on Average Equity (5)

(i) / (k)

 

8.21

%

 

 

8.48

%

 

 

8.13

%

 

 

9.27

%

 

 

9.80

%

Adjusted Return on Tangible Equity (5)

(i) / (l)

 

14.02

%

 

 

14.51

%

 

 

14.00

%

 

 

16.19

%

 

 

17.32

%

 

 

 

 

 

 

 

 

 

 

 

EFFICIENCY RATIO

 

 

 

 

 

 

 

 

 

 

Amortization of other intangible assets

(m)

$

3,145

 

 

$

3,145

 

 

$

3,145

 

 

$

3,145

 

 

$

3,145

 

Reported Efficiency Ratio

(e - m) / (a + c)

 

55.07

%

 

 

51.96

%

 

 

53.20

%

 

 

51.55

%

 

 

48.52

%

Adjusted Efficiency Ratio

(f - m) / (a + d)

 

54.37

%

 

 

51.33

%

 

 

52.99

%

 

 

51.48

%

 

 

48.39

%

 

____________

(1) COVID-19 expense includes expenses for COVID testing kits, vaccination incentive bonuses, and personal protection and cleaning supplies.

(2) Acquisition expenses includes compensation related expenses.

(3) Assumes an adjusted effective tax rate of 19.5%, 20.1%, 19.4%, 21.0%, and 20.8%, 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 March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021

(Dollars in thousands, except per share information)

(Unaudited)

 

Tangible Book Value & Tangible Common Equity To Tangible Assets Ratio

 

 

 

 

 

 

 

 

 

 

 

As of the Quarter Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

Tangible Common Equity

 

 

 

 

 

 

 

 

 

Total common stockholders' equity

$

2,522,460

 

 

$

2,576,650

 

 

$

2,566,693

 

 

$

2,542,885

 

 

$

2,493,117

 

Adjustments:

 

 

 

 

 

 

 

 

 

Goodwill

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

Other intangible assets, net

 

(72,345

)

 

 

(75,490

)

 

 

(78,635

)

 

 

(81,780

)

 

 

(84,925

)

Tangible common equity

$

1,456,094

 

 

$

1,507,139

 

 

$

1,494,037

 

 

$

1,467,084

 

 

$

1,414,171

 

 

 

 

 

 

 

 

 

 

 

Tangible Assets

 

 

 

 

 

 

 

 

 

Total assets

$

17,963,253

 

 

$

18,732,648

 

 

$

18,918,225

 

 

$

18,447,721

 

 

$

18,115,336

 

Adjustments:

 

 

 

 

 

 

 

 

 

Goodwill

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

 

 

(994,021

)

Other intangible assets, net

 

(72,345

)

 

 

(75,490

)

 

 

(78,635

)

 

 

(81,780

)

 

 

(84,925

)

Tangible assets

$

16,896,887

 

 

$

17,663,137

 

 

$

17,845,569

 

 

$

17,371,920

 

 

$

17,036,390

 

Common shares outstanding

 

42,795,228

 

 

 

42,756,234

 

 

 

42,941,715

 

 

 

43,180,607

 

 

 

43,193,257

 

Tangible common equity to tangible assets

 

8.62

%

 

 

8.53

%

 

 

8.37

%

 

 

8.45

%

 

 

8.30

%

Book value per common share

$

58.94

 

 

$

60.26

 

 

$

59.77

 

 

$

58.89

 

 

$

57.72

 

Tangible book value per common share

 

34.02

 

 

 

35.25

 

 

 

34.79

 

 

 

33.98

 

 

 

32.74

 

 

Analysts/Investors:
Paul Langdale
Executive Vice President
Director of Corporate Development & Strategy
(972) 562-9004
Paul.Langdale@ifinancial.com

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

Media:
James Tippit
Executive Vice President, Corporate Responsibility
(972) 562-9004
James.Tippit@ifinancial.com

Source: Independent Bank Group, Inc.