Independent Bank Group, Inc.
Jan 25, 2017

Independent Bank Group Reports Fourth Quarter and Year-End Financial Results

MCKINNEY, Texas, Jan. 25, 2017 (GLOBE NEWSWIRE) -- Independent Bank Group, Inc. (NASDAQ:IBTX), the holding company for Independent Bank, today announced net income available to common shareholders of $14.8 million, or $0.79 per diluted share, for the quarter ended December 31, 2016 compared to $10.5 million, or $0.58 per diluted share, for the quarter ended December 31, 2015 and $14.5 million, or $0.78 per diluted share, for the quarter ended September 30, 2016.

For the year ended December 31, 2016, the Company reported net income available to common shareholders of $53.5 million (or $2.88 per diluted share) compared to $38.5 million (or $2.21 per diluted share) for the year ended December 31, 2015.

Highlights

"2016 was a great year for Independent Bank Group," said Independent Bank Group Chairman, Chief Executive Officer and President David Brooks.  "We reported record earnings for the year and the quarter which were driven by organic loan growth and continued focus on improving overall efficiency."  Brooks continued, "The Carlile Bancshares acquisition is another big step forward for our Company, expanding our presence in North and Central Texas and providing entry into the Colorado banking market.  We look forward to closing this acquisition and to a successful 2017."

Fourth Quarter 2016 Operating Results

Net Interest Income

Noninterest Income

Noninterest Expense

Provision for Loan Losses

Fourth Quarter 2016 Balance Sheet Highlights:

Loans

Asset Quality

Deposits and Borrowings

Capital

Subsequent Events

The Company is required, under general accepted accounting principles, to evaluate subsequent events through the filing of its consolidated financial statements for the year ended December 31, 2016 on Form 10-K.  As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2016 and will adjust amounts preliminarily reported, if necessary.

About Independent Bank Group

Independent Bank Group, through its wholly owned subsidiary, Independent Bank, provides a wide range of relationship-driven commercial banking products and services tailored to meet the needs of businesses, professionals and individuals. Independent Bank Group operates 41 banking offices in three market regions located in the Dallas/Fort Worth, Austin and Houston, Texas areas.

Conference Call

A conference call covering Independent Bank Group's fourth quarter earnings announcement will be held on Thursday, January 26, 2017 at 8:30 a.m. (EST) and can be accessed by calling 1-877-303-7611 and by identifying the conference ID number 46615431.  The conference materials will be available by accessing the Investor Relations page of our website, www.ibtx.com. A recording of the conference call and the conference materials will be available from January 26, 2017 through February 2, 2017 on our website.

Forward-Looking Statements

The numbers as of and for the quarter and/or year ended December 31, 2016 are unaudited. From time to time, our comments and releases may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements can be identified by words such as "believes," "anticipates," "expects," "forecast," "guidance," "intends," "targeted," "continue," "remain," "should," "may," "plans," "estimates," "will," "will continue," "will remain," variations on such words or phrases, or similar references to future occurrences or events in future periods; however, such words are not the exclusive means of identifying such statements.  Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Independent Bank Group or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements.  Forward-looking statements are based on Independent Bank Group's current expectations and assumptions regarding its business, the economy, and other future conditions.  Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict.  Independent Bank Group'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.  Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact; (2) volatility and disruption in national and international financial markets; (3) government intervention in the U.S. financial system, whether through changes in the discount rate or money supply or otherwise; (4) changes in the level of nonperforming assets and charge-offs; (5) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (6) adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; (7) inflation, deflation, changes in market interest rates, developments in the securities market, and monetary fluctuations; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by customers; (9) changes in consumer spending, borrowings, and savings habits; (10) technological changes; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, bank holding companies, and other financial service providers; (13) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which we and our subsidiaries must comply; (14) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of legal and regulatory developments including the resolution of legal proceedings; and (16) our success at managing the risks involved in the foregoing items and (17) the other factors that are described in the Company's Quarterly Report on Form 10-Q for the quarters ended September 30, 2016, June 30, 2016 and March 31, 2016, the Annual Report on Form 10-K filed on February 25, 2016, under the heading "Risk Factors", and other reports and statements filed by the Company with the SEC.  Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made.  Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them.  The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

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 "core earnings", "tangible book value", "tangible book value per common share", "core efficiency ratio", "Tier 1 capital to average assets", "Tier 1 capital to risk weighted assets", "tangible common equity to tangible assets", "net interest margin excluding purchase accounting accretion", "return on tangible equity", "adjusted return on average assets" and "adjusted return on average equity" and are supplemental measures that are not required by, or are not presented in accordance with, accounting principles generally accepted in the United States.  We consider the use of select non-GAAP financial measures and ratios to be useful for financial operational decision making and useful in evaluating period-to-period comparisons.  We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results.  We believe that management and investors benefit from referring to these non- GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

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

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

Independent Bank Group, Inc. and Subsidiaries
Consolidated Financial Data
Three Months Ended December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015
(Dollars in thousands, except for share data)
(Unaudited)

 As of and for the quarter ended
 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 December 31, 2015
Selected Income Statement Data          
Interest income$53,904  $52,740  $51,941  $51,464  $47,414 
Interest expense7,378  7,003  6,058  5,804  5,263 
Net interest income46,526   45,737  45,883  45,660  42,151 
Provision for loan losses2,197  2,123  2,123  2,997  1,970 
Net interest income after provision for loan losses44,329  43,614  43,760  42,663  40,181 
Noninterest income5,224  4,932  4,929  4,470  4,254 
Noninterest expense27,361  26,887  31,023  28,519  28,527 
Income tax expense7,417  7,155  5,857  6,162   5,347 
Net income14,775  14,504  11,809  12,452  10,561 
Preferred stock dividends       8   60 
Net income available to common shareholders14,775  14,504  11,809  12,444  10,501 
Core net interest income (1)46,475  45,621  45,618  44,327  41,635 
Core Pre-Tax Pre-Provision Earnings (1)25,540  24,253  22,713  21,590  18,875 
Core net income(1)15,541  14,819  13,764  12,438  11,377 
           
Per Share Data (Common Stock)          
Earnings:         
Basic$0.79  $0.78  $0.64  $0.67  $0.58 
Diluted0.79  0.78  0.64  0.67  0.58 
Core earnings:         
Basic (1)0.83  0.80  0.75  0.67  0.63 
Diluted (1)0.83  0.80  0.74  0.67  0.63 
Dividends0.10  0.08  0.08  0.08  0.08 
Book value35.63  34.79  34.08  33.38  32.79 
Tangible book value  (1)21.19  20.03  19.28  18.54  17.85 
Common shares outstanding18,870,312  18,488,628  18,475,978  18,461,480  18,399,194 
Weighted average basic shares outstanding (4)18,613,975  18,478,289  18,469,182  18,444,284  17,965,055 
Weighted average diluted shares outstanding (4)18,716,614  18,568,622  18,547,074  18,528,031  18,047,960 
           
Selected Period End Balance Sheet Data         
Total assets$5,852,801  $5,667,195  $5,446,797  $5,261,967  $5,055,000 
Cash and cash equivalents505,027  589,600  436,605  356,526  293,279 
Securities available for sale316,435  267,860  287,976  302,650  273,463 
Loans, held for sale9,795  7,097  13,942  8,515  12,299 
Loans, held for investment4,572,771  4,360,690  4,251,457  4,130,496  3,989,405 
Allowance for loan losses31,591  29,575  30,916  29,984  27,043 
Goodwill and core deposit intangible272,496  272,988  273,480  273,972  275,000 
Other real estate owned1,972  2,083  1,567  1,745  2,168 
Noninterest-bearing deposits1,117,927  1,143,479  1,107,620  1,070,611  1,071,656 
Interest-bearing deposits3,459,182  3,273,014  3,100,785  3,101,341  2,956,623 
Borrowings (other than junior subordinated debentures)568,045  577,974  578,169  444,745  371,283 
Junior subordinated debentures18,147  18,147  18,147  18,147  18,147 
Series A Preferred Stock        23,938 
Total stockholders' equity672,365  643,253  629,628  616,258  603,371 
               

Independent Bank Group, Inc. and Subsidiaries
Consolidated Financial Data
Three Months Ended December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015
(Dollars in thousands, except for share data)
(Unaudited)

 As of and for the quarter ended
 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 December 31, 2015
Selected Performance Metrics         
Return on average assets1.03% 1.04% 0.88% 0.95% 0.86%
Return on average equity (2)8.93  9.04  7.60  8.10  7.28 
Return on tangible equity (2) (5)15.24  15.80  13.52  14.57  13.37 
Adjusted return on average assets (1)1.08  1.07  1.03  0.95  0.93 
Adjusted return on average equity (1) (2)9.39  9.24  8.86   8.09  7.89 
Adjusted return on tangible equity (1) (2) (5)16.03  16.15  15.76  14.57  14.49 
Net interest margin3.59  3.66  3.96  4.08  3.96 
Core net interest margin (3)3.58  3.65   3.94  3.96  3.91 
Efficiency ratio52.87  53.06  61.05  56.89  61.47 
Core efficiency ratio (1)50.60  52.07  55.05  55.68  58.75 
               
Credit Quality Ratios              
Nonperforming assets to total assets0.34% 0.23% 0.34% 0.62% 0.36%
Nonperforming loans to total loans0.39  0.26  0.40  0.72  0.37 
Nonperforming assets to total loans and other real estate0.43  0.30  0.44  0.79   0.45 
Allowance for loan losses to non-performing loans177.06  264.42  179.97  100.35  181.99 
Allowance for loan losses to total loans0.69  0.68  0.73  0.73   0.68 
Net charge-offs to average loans outstanding (annualized)0.02  0.32  0.11  0.01   
               
Capital Ratios              
Estimated common equity tier 1 capital to risk-weighted assets (1)8.20% 7.92% 7.89% 7.92% 7.94%
Estimated tier 1 capital to average assets7.82  7.46  7.42  7.36  8.28 
Estimated tier 1 capital to risk-weighted assets (1)8.55  8.29  8.27  8.32  8.92 
Estimated total capital to risk-weighted assets11.38  11.24   11.35  10.47  11.14 
Total stockholders' equity to total assets11.49  11.35   11.56  11.71  11.94 
Tangible common equity to tangible assets (1)7.17  6.86  6.88  6.86  6.87 
          
(1) Non-GAAP financial measures.  See reconciliation.
(2) Excludes average balance of Series A preferred stock.
(3) Excludes income recognized on acquired loans of $51, $116, $265, $1,333 and $516, respectively.
(4) Total number of shares includes participating shares (those with dividend rights).
(5)  Excludes average balance of goodwill and net core deposit intangibles.
 

Independent Bank Group, Inc. and Subsidiaries
Annual Selected Financial Information
Years Ended December 31, 2016 and 2015
(Unaudited)

 Years Ended December 31,
 2016 2015
Per Share Data   
Net income - basic$2.89  $2.23 
Net income - diluted2.88  2.21 
Cash dividends0.34  0.32 
Book value35.63  32.79 
    
Outstanding Shares   
Period-end shares18,870,312  18,399,194 
Weighted average shares - basic18,501,663   17,321,513 
Weighted average shares - diluted18,588,309  17,406,108 
    
Selected Annual Ratios   
Return on average assets0.98% 0.88%
Return on average equity8.42   7.13 
Net interest margin3.81  4.05 
       

Independent Bank Group, Inc. and Subsidiaries
Consolidated Statements of Income
Three Months and Years Ended December 31, 2016 and 2015
(Dollars in thousands)
(Unaudited)

  Three months ended December 31, Years ended December 31,
  2016 2015 2016 2015
Interest income:        
Interest and fees on loans $52,055  $46,154  $203,577  $169,504 
Interest on taxable securities 614  615  2,681  2,168 
Interest on nontaxable securities 479  459  1,768  1,783 
Interest on interest-bearing deposits and other 756  186  2,023  572 
Total interest income 53,904  47,414  210,049  174,027 
Interest expense:         
Interest on deposits 4,452  3,230  16,075  12,024 
Interest on FHLB advances 1,057  834  4,119  3,077 
Interest on repurchase agreements and other borrowings 1,705  1,060  5,428  4,289 
Interest on junior subordinated debentures 164  139  621  539 
Total interest expense 7,378  5,263  26,243  19,929 
Net interest income 46,526  42,151  183,806  154,098 
Provision for loan losses 2,197  1,970  9,440  9,231 
Net interest income after provision for loan losses 44,329   40,181  174,366  144,867 
Noninterest income:         
Service charges on deposit accounts 1,935  1,857  7,222  6,898 
Mortgage fee income 1,719  1,187  7,038  5,269 
Gain on sale of loans       116 
Loss on sale of branch     (43)  
Gain on sale of other real estate   70  57  290 
Gain on sale of securities available for sale   44  4  134 
Gain (loss) on sale of premises and equipment   16  32  (358)
Increase in cash surrender value of BOLI 411  271  1,348  1,077 
Other 1,159  809  3,897  2,702 
Total noninterest income 5,224  4,254  19,555  16,128 
Noninterest expense:        
Salaries and employee benefits 15,118  16,549  66,762  60,541 
Occupancy 3,982  4,004  16,101  16,058 
Data processing 1,177  1,244  4,752  3,384 
FDIC assessment 1,171  706  3,889  2,259 
Advertising and public relations 332  126  1,107  1,038 
Communications 468  576  2,116  2,219 
Net other real estate owned expenses (including taxes) 25  (15) 205  169 
Other real estate impairment     106  35 
Core deposit intangible amortization 492  453  1,964  1,555 
Professional fees 858  1,183  3,212  3,191 
Acquisition expense, including legal 785  627  1,517  1,420 
Other 2,953  3,074  12,059  11,329 
Total noninterest expense 27,361  28,527  113,790  103,198 
Income before taxes 22,192  15,908  80,131   57,797 
Income tax expense 7,417  5,347  26,591  19,011 
Net income $14,775  $10,561  $53,540  $38,786 
                 

Consolidated Balance Sheets
As of December 31, 2016 and 2015
(Dollars in thousands, except share information)
(Unaudited)

 December 31,
Assets2016 2015
Cash and due from banks$158,686  $129,096 
Interest-bearing deposits in other banks336,341  164,183 
Federal funds sold10,000   
Cash and cash equivalents505,027  293,279 
Certificates of deposit held in other banks2,707  61,746 
Securities available for sale316,435  273,463 
Loans held for sale9,795  12,299 
Loans, net of allowance for loan losses4,539,063  3,960,809 
Premises and equipment, net89,898  93,015 
Other real estate owned1,972  2,168 
Federal Home Loan Bank (FHLB) of Dallas stock and other restricted stock26,536  14,256 
Bank-owned life insurance (BOLI)57,209  40,861 
Deferred tax asset9,631  5,892 
Goodwill258,319  258,643 
Core deposit intangible, net14,177  16,357  
Other assets22,032  22,212 
Total assets$5,852,801  $5,055,000 
    
Liabilities, Temporary Equity and Stockholders' Equity   
Deposits:   
  Noninterest-bearing$1,117,927  $1,071,656 
  Interest-bearing3,459,182  2,956,623 
    Total deposits4,577,109  4,028,279 
FHLB advances 460,746  288,325 
Repurchase agreements  12,160 
Other borrowings107,249   68,295 
Other borrowings, related parties50  2,503 
Junior subordinated debentures18,147  18,147 
Other liabilities17,135  9,982 
    Total liabilities5,180,436  4,427,691 
Commitments and contingencies   
    
Temporary equity:  Series A preferred stock  23,938 
Stockholders' equity:   
Common stock189  184 
Additional paid-in capital555,325  530,107 
Retained earnings117,951  70,698 
Accumulated other comprehensive income (loss)(1,100) 2,382 
Total stockholders' equity672,365  603,371 
Total liabilities, temporary equity and stockholders' equity$5,852,801  $5,055,000 
        

Independent Bank Group, Inc. and Subsidiaries
Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis
Three Months Ended December 31, 2016 and 2015
(Dollars in thousands)
(Unaudited)

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

 Three Months Ended December 31,
 2016 2015
 Average
Outstanding
Balance
 Interest Yield/
Rate
 Average
Outstanding
Balance
  Interest Yield/
Rate
Interest-earning assets:           
Loans$4,423,306  $52,055  4.68% $3,812,493  $46,154  4.80%
Taxable securities227,053  614   1.08  177,535  615  1.37 
Nontaxable securities75,613  479  2.52  73,590  459  2.47 
Interest-bearing deposits and other428,772  756  0.70  156,073   186  0.47 
Total interest-earning assets5,154,744  $53,904  4.16  4,219,691  $47,414  4.46 
Noninterest-earning assets574,416      627,684     
Total assets$5,729,160      $4,847,375     
Interest-bearing liabilities:            
Checking accounts$1,889,725  $2,081  0.44% $1,328,031  $1,443  0.43%
Savings accounts153,630  64  0.17  143,289  65  0.18 
Money market accounts416,653  526  0.50  495,690  339  0.27 
Certificates of deposit870,489  1,781  0.81  850,789  1,383  0.64 
Total deposits3,330,497  4,452  0.53  2,817,799  3,230  0.45 
FHLB advances468,579  1,057  0.90  267,266  834   1.24 
Other borrowings107,267  1,705  6.32  81,852  1,060  5.14 
Junior subordinated debentures18,147  164   3.60  18,147  139  3.04 
Total interest-bearing liabilities3,924,490  7,378  0.75  3,185,064  5,263  0.66 
Noninterest-bearing checking accounts1,127,379      1,050,728      
Noninterest-bearing liabilities18,922      15,485     
Stockholders' equity658,369      596,098     
Total liabilities and equity$5,729,160       $4,847,375     
Net interest income  $46,526      $42,151   
Interest rate spread    3.41%     3.80%
Net interest margin     3.59      3.96 
Average interest earning assets to interest bearing liabilities    131.35      132.48 
               

Independent Bank Group, Inc. and Subsidiaries
Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis
Years Ended December 31, 2016 and 2015
(Dollars in thousands)
(Unaudited)

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

 For The Years Ended December 31,
 2016 2015
 Average
Outstanding
Balance
 Interest Yield/
Rate
 Average
Outstanding
Balance
 Interest Yield/
Rate
Interest-earning assets:            
Loans$4,234,368  $203,577  4.81% $3,456,128  $169,504  4.90%
Taxable securities221,905  2,681  1.21  139,924  2,168  1.55 
Nontaxable securities74,227  1,768  2.38  69,112  1,783  2.58 
Federal funds sold and other290,316  2,023   0.70  141,374  572  0.40 
Total interest-earning assets4,820,816  $210,049  4.36  3,806,538  $174,027  4.57 
Noninterest-earning assets648,726      589,014     
Total assets$5,469,542       $4,395,552     
Interest-bearing liabilities:           
Checking accounts$1,761,509  $7,770  0.44% $1,297,948  $5,649  0.44%
Savings accounts150,223  260  0.17  143,476  263   0.18 
Money market accounts429,647  1,911  0.44  319,982  829  0.26 
Certificates of deposit830,964  6,134   0.74  842,087  5,283  0.63 
Total deposits3,172,343  16,075  0.51  2,603,493  12,024  0.46 
FHLB advances465,010  4,119  0.89  225,934  3,077  1.36 
Other borrowings87,943  5,428  6.17  78,074  4,289  5.49 
Junior subordinated debentures18,147  621  3.42  18,147  539  2.97 
Total interest-bearing liabilities3,743,443  26,243  0.70  2,925,648  19,929  0.68 
Noninterest-bearing checking accounts1,076,340      895,789     
Noninterest-bearing liabilities13,895      9,688     
Stockholders' equity635,864      564,427     
Total liabilities and equity$5,469,542      $4,395,552     
Net interest income  $183,806      $154,098   
Interest rate spread    3.66%     3.89%
Net interest margin    3.81       4.05 
Average interest earning assets to interest bearing liabilities    128.78      130.11 
               

Independent Bank Group, Inc. and Subsidiaries
Loan Portfolio Composition
As of December 31, 2016 and 2015
(Dollars in thousands)
(Unaudited)

The following table sets forth loan totals by category as of the dates presented:    
     
  December 31, 2016 December 31, 2015
  Amount % of Total Amount % of Total
Commercial $630,805  13.7% $731,818  18.3%
Real estate:              
Commercial real estate 2,459,221  53.7  1,949,734  48.7 
Commercial construction, land and land development 531,481  11.6  419,611  10.5 
Residential real estate (1)  644,340  14.1  620,289  15.5 
Single-family interim construction 235,475   5.1  187,984  4.7 
Agricultural 53,548  1.2  50,178  1.3 
Consumer 27,530  0.6   41,966  1.0 
Other 166     124   
Total loans 4,582,566  100.0% 4,001,704  100.0%
Deferred loan fees (2,117)   (1,553)  
Allowance for losses (31,591)   (27,043)  
Total loans, net $4,548,858    $3,973,108   
 
(1) Includes loans held for sale at December 31, 2016 and 2015 of $9,795 and $12,299, respectively.
 

Independent Bank Group, Inc. and Subsidiaries
Consolidated Financial Data
Three Months Ended December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015
(Dollars in thousands, except for share data)
(Unaudited)

  For the Three Months Ended
  December 31, 2016September 30, 2016June 30, 2016March 31, 2016December 31, 2015
Net Interest Income - Reported(a)$46,526  $45,737 $45,883 $45,660 $42,151 
Income recognized on acquired loans (51)(116)(265)(1,333)(516)
Adjusted Net Interest Income(b)46,475 45,621 45,618 44,327  41,635 
Provision Expense - Reported(c)2,197 2,123 2,123 2,997  1,970 
Noninterest Income - Reported(d)5,224 4,932 4,929 4,470  4,254 
Loss on sale of branch  43    
Gain on sale of OREO and repossessed assets  (4)(10)(48)(70)
Gain on sale of securities   (4) (44)
(Gain) loss on sale of premises and equipment  9 (3)(38)(16)
Adjusted Noninterest Income(e)5,224 4,980 4,912 4,384 4,124 
Noninterest Expense - Reported(f)27,361 26,887 31,023 28,519 28,527 
Senior leadership restructure (6)   (2,575)  
OREO Impairment  (51) (55) 
IPO related stock grant (127)(104)(156)(156)(156)
Acquisition Expense (5) (1,075)(384)(475)(1,187)(1,487)
Adjusted Noninterest Expense(g)26,159 26,348 27,817 27,121 26,884 
Pre-Tax Pre-Provision Income(a) + (d) - (f)$24,389 $23,782 $19,789 $21,611 $17,878 
Core Pre-Tax Pre-Provision Income(b) + (e) - (g)$25,540 $24,253 $22,713 $21,590 $18,875 
Core Net Income (2)(b) - (c) + (e) - (g)$15,541  $14,819 $13,764 $12,438 $11,377 
 Reported Efficiency Ratio(f) / (a + d)52.87%53.06%61.05%56.89% 61.47%
 Core Efficiency Ratio(g) / (b + e)50.60%52.07%55.05%55.68 %58.75%
Adjusted Return on Average Assets (1) 1.08%1.07%1.03 %0.95%0.93%
Adjusted Return on Average Equity (1) 9.39%9.24%8.86%8.09%7.89%
Adjusted Return on Tangible Equity (1) 16.03%16.15%15.76%14.57%14.49%
Total Average Assets $5,729,160 $5,535,203 $5,367,935 $5,242,289 $4,847,375 
Total Average Stockholders' Equity (3) $658,369 $638,355 $624,981 $618,059 $572,160 
Total Average Tangible Stockholders' Equity (3) (4) $385,635 $365,127 $351,263  $343,418 $311,549 
(1) Calculated using core net income 
(2)  Assumes actual effective tax rate of 33.4%, 33.0%, 33.2%, 33.1% and 32.7%, respectively.  December 31, 2015 tax rate adjusted for effect of non-deductible acquisition expenses.
(3) Excludes average balance of Series A preferred stock.
(4)  Excludes average balance of goodwill and net core deposit intangibles.
(5)  Acquisition expenses include $290 thousand, $381 thousand, $385 thousand, $548 thousand, and $860 thousand of compensation and bonus expenses in addition to $785 thousand, $3 thousand, $90 thousand, $639 thousand, and $627 thousand of merger-related expenses for the quarters ended December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016, and December 31, 2015, respectively.
(6) Includes $1,952 related to the former Houston Region CEO's Separation Agreement.
 

Independent Bank Group, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
As of December 31, 2016 and 2015
(Dollars in thousands, except per share information)
(Unaudited)

Tangible Book Value Per Common Share    
 December 31,
 2016 2015
Tangible Common Equity   
Total common stockholders' equity$672,365  $603,371 
Adjustments:   
Goodwill(258,319) (258,643)
Core deposit intangibles, net(14,177) (16,357)
Tangible common equity$399,869  $328,371 
Tangible assets$5,580,305  $4,780,000 
Common shares outstanding18,870,312  18,399,194 
Tangible common equity to tangible assets7.17% 6.87%
Book value per common share$35.63  $ 32.79 
Tangible book value per common share21.19  17.85 


Tier 1 Common and Tier 1 Capital to Risk-Weighted Assets Ratio   
 December 31,
 2016 2015
Tier 1 Common Equity   
Total common stockholders' equity - GAAP$672,365  $603,371 
Adjustments:   
Unrealized loss (gain) on available-for-sale securities1,100  (2,382)
Goodwill(258,319) (258,643)
Qualifying core deposit intangibles, net(5,529) (4,253)
Tier 1 common equity$409,617  $338,093 
Qualifying restricted core capital elements (junior subordinated debentures)17,600  17,600 
Series A preferred stock   23,938 
Tier 1 Equity$427,217  $379,631 
    
Total Risk-Weighted Assets$4,996,229  $4,256,662 
Estimated tier 1 equity to risk-weighted assets ratio8.55% 8.92%
Estimated tier 1 common equity to risk-weighted assets ratio8.20  7.94 
    

 

Contacts:



Analysts/Investors:

Michelle Hickox

Executive Vice President and Chief Financial Officer

(972) 562-9004

mhickox@ibtx.com



Media:

Peggy Smolen

Marketing & Communications Director

(972) 562-9004

psmolen@ibtx.com



Source: Independent Bank Group, Inc.

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