NASDAQ: IBTX
Investor Presentation
2nd Quarter, 2020
Safe Harbor Statement
This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of Independent Bank Group, Inc. ("IBTX"). Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "could," "may," "should," "will" or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on IBTX's current expectations and assumptions regarding IBTX's 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. Many possible events or factors could affect IBTX's future financial results and performance and could cause actual results or performance to differ materially from anticipated results or performance. Such risks and uncertainties include, among others, risks relating to the coronavirus (COVID-19) pandemic and its effect on U.S. and world financial markets, potential regulatory actions, changes in consumer behaviors and impacts on and modifications to the operations and business of IBTX relating thereto, and the business, economic and political conditions in the markets in which IBTX operates. Except to the extent required by applicable law or regulation, IBTX disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Further information regarding IBTX and factors which could affect the forward-looking statements contained herein can be found in IBTX's Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2019, its Quarterly Report on Form 10-Q for the period ended March 31, 2020 and its other filings with the Securities and Exchange Commission.
NASDAQ: IBTX | 2 | |
Overview
- Community bank holding company with $15.6 billion in assets and 93 branches across Texas and Colorado.
- Innately conservative credit culture with a demonstrated history of maintaining resilient asset quality through previous downturns.
- Highly granular loan portfolio with a small average credit size and low hold limits.
- Loan growth driven by block-and-tackle community banking: loans made to relationship borrowers across our footprint in Texas and Colorado.
- Large insider ownership (15% of shares outstanding) aligns shareholder interests with day-to-day management and decision-making.
- Asset/liability neutral interest rate risk position helps mitigate the impact of a volatile interest rate environment.
- Disciplined growth both organically and through strategic acquisitions.
NASDAQ: IBTX | 3 | |
Company Snapshot
93
BRANCHES
1,445
EMPLOYEES
FOUNDED IN
1988
Denver, CO
HEADQUARTERS
McKinney, TX
Independent Bank Group, Inc.
NASDAQ: IBTX
Financial Highlights
as of and for the Quarter Ended March 31, 2020
Balance Sheet Highlights ($ millions) | |
Total Assets | $15,574 |
Loans Held for Investment, | $11,021 |
Excluding Mortgage Warehouse | |
Mortgage Warehouse Loans | $797 |
Total Deposits | $11,883 |
Total Stockholders' Equity | $2,386 |
Profitability Metrics1 | |
Adjusted EPS | $1.01 |
Adjusted ROAA | 1.17% |
Adjusted ROTCE | 13.66% |
Adjusted Efficiency Ratio | 51.17% |
Asset Quality Metrics2 | |
NPAs / Assets | 0.20% |
NPLs / Loans Held for Investment | 0.26% |
NCOs (Annualized) | 0.05% |
Capital Ratios | |
Tier 1 Capital / RWA | 10.38% |
Total Capital / RWA | 12.05% |
TCE / Tangible Assets1 | 8.94% |
Tier 1 Capital / Avg. Assets | 9.67% |
1Adjusted (non-GAAP) metrics. See Appendix for reconciliation to the closest applicable GAAP metrics.
2Nonperforming assets, which consist of nonperforming loans, OREO and other repossessed assets, totaled $31,602. Nonperforming loans, which consist of nonaccrual loans, loans delinquent 90 days and
still accruing interest, and troubled debt restructurings, and excludes loans acquired with deteriorated4 credit quality, totaled $28,493.
Experienced Leadership Team
David R. Brooks Chairman, CEO & President
Founder - led the investor group that acquired Independent Bank in 1988.
Michelle S. Hickox Chief Financial Officer
30 years in financial services; 8 years at the company.
James C. White Chief Operating Officer
32 years in financial services; 4 years at the company.
James P. Tippit Corporate Responsibility
14 years in financial services; 9 years at the company.
Daniel W. Brooks Vice Chairman, Chief Risk Officer
37 years in financial services; 31 years at the company.
Mark S. Haynie General Counsel
37 years of experience representing community banks in corporate, regulatory and securities matters.
Michael B. Hobbs Chief Lending Officer
25 years in financial services; joined the company in 2019 with the acquisition of Guaranty Bank & Trust, where he served as President.
Strong, Diverse Markets
Dallas/Ft. Worth - North Texas 39 Branches
Our company was founded in North Texas in 1988, and we have since built a large presence in the Dallas/Fort Worth MSA - one of the fastest-growing MSAs in the country, and one of the strongest markets in Texas. Dallas/Fort Worth boasts a diverse economy that has benefitted from a continued boom of corporate relocation activity to business-friendly Texas.
Denver - Colorado Front Range 33 Branches
The Colorado Front Range is one of the strongest and fastest-growing areas of the country. In the 2019 U.S. News & World Report ranking of the best places to live in the United States, Denver came in at No. 2, and Colorado Springs came in at No. 3. The confluence of a diverse economy and strong quality of life indicators has drawn a deep talent pool that helps position the Colorado Front Range for continued growth.
Austin - Central Texas 8 Branches
This market includes the tech hub of Austin, Texas, which U.S. News & World Report rated the No. 1 best place to live in the United States in its 2019 ranking. The market boasts a growing wave of corporate expansions by tech firms into the Austin market, as well as a thriving public sector presence.
Greater Houston 13 Branches
The Greater Houston MSA serves for a regional center for international trade, energy and manufacturing. The city is regularly ranked as one of the most diverse cities in the United States, and is the home to numerous universities as well as a thriving medical industry.
NASDAQ: IBTX | 5 | |
Demonstrated Record of Healthy Growth
Growth in Total Assets ($ in millions)
CAGR Since 2013 (Organic): 32.9%
CAGR Since 2013 (Total): 38.0%
- Established history of growing assets both organically and through strategic acquisitions.
- Demonstrated expertise in integrating M&A transactions, adding $9.7 billion in acquired assets since our IPO.
- Track record of building scalable platforms for future growth.
Entered | $5,853 |
Houston | |
$5,055 | |
Market | |
$620 | |
$4,133 | |
$1,671 |
$2,164
$168
Entered
Colorado
Market$9,850
$8,684$852
$2,444
$14,958
$3,943
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||
Assets Acquired in Fiscal Year | ||||||||||||||
IPO Date: April 3, 2013 | ||||||||||||||
NASDAQ: IBTX | Note: Acquired assets includes impact of purchase accounting. | 6 | ||||||||||||
Historically Strong Credit Culture
NPLs / Loans
4.41%
4.15% 4.11%
NCOs / Average Loans1
3.36% | |||||||||||
3.43% | |||||||||||
3.03% | 2.91% | 2.67% | |||||||||
2.25% | |||||||||||
2.38% | |||||||||||
1.71% | |||||||||||
1.89% | 1.83% | 1.57% | |||||||||
1.62% | 1.31% | ||||||||||
1.50% | |||||||||||
1.49% | 1.50% | 1.12% | 1.04% | ||||||||
0.98% | |||||||||||
1.14% | |||||||||||
0.81% | 0.91% | ||||||||||
0.53% | 0.68% | 0.62% | 0.64% | ||||||||
0.32% | 0.37% | 0.39% | 0.26% | ||||||||
0.24% | 0.24% | ||||||||||
0.16% | |||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
2.67% 2.67%
1.50%
1.22%
0.31% 0.21%
1.64%
1.13% | ||||||||
0.74% | 0.70% | |||||||
0.39% | 0.49% | 0.43% | 0.46% | 0.48% | 0.46% | 0.48% | 0.49% | |
0.28% | ||||||||
0.19% | 0.16% | 0.18% | 0.18% | 0.17% | 0.16% | |||
0.10% | ||||||||
0.11% | 0.06% | 0.09% | 0.02% | 0.12% | 0.01% | 0.06% | 0.07% | 0.05% |
0.03% |
Q1 | ||
IBTX | Texas Average | U.S. Average |
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||
YTD | ||||||||||||||||
IBTX | Texas Average | U.S. Average | ||||||||||||||
12020 YTD numbers are annualized.
NASDAQ: IBTX Note: Financial data as of and for the quarter ended December 31, 2019 for peer data and for the three months ended 7 March 31, 2020 for IBTX. Interim charge-off data annualized. Source: S&P Global Market Intelligence.
Loan Loss Coverage
IBTX Allowance for Credit Losses
as of 3/31/2020
Illustrative Retrospective Impact of CECL Adoption
~$58.0 Million
$22.0 Million | ||
$58.4 Million | $58.4 Million | |
0.53% of LHFI | 3/31/2020 ALLL | |
(Excluding Mortgage Warehouse) |
- IBTX deferred CECL adoption as provided under the CARES Act until the earlier of December 31, 2020, or the termination of the President's national emergency declaration, with a retrospective effective date of January 1, 2020.
- Current anticipated "Day One", January 1, 2020, impact from the adoption of CECL is estimated to boost reserves to approximately 1.26% of loans held for investment (excluding mortgage warehouse):
~$138.4 Million
~1.26% of LHFI
(Excluding Mortgage Warehouse)
As of 3/31/2020 | Estimated Retrospective |
Adoption of CECL |
Loan Loss Reserve PCD Credit Mark Est. CECL Day 1 Impact
- This illustration excludes additional provision expense to be taken in future 2020 quarters.
NASDAQ: IBTX | 8 | |
Focus on Performance and Results
Earnings Per Share (Diluted)
Efficiency Ratio
$3.45
$3.04
$2.36 $2.88 $2.97
$2.21
$5.08
$4.47
$4.33 $4.46
59.71%
56.13%
54.99%
57.49% | 53.01% |
52.35% | |
52.34% | |
51.46% | |
50.47% | |
45.95% |
2015 | 2016 | 2017 | 2018 | 2019 | ||
EPS (2) | Adjusted EPS (1) | |||||
2015 | 2016 | 2017 | 2018 | 2019 |
Efficiency Ratio | Adjusted Efficiency Ratio (1) | |||
Return on Average Assets
Return on Tangible Common Equity
1.39%
1.35%
1.12%
1.03%
0.93%
0.98% 0.96%
0.88%
1.51%
1.32%
18.85% | ||
17.58% | ||
15.61% | 15.65% | 17.06% |
16.55% | ||
13.96% | ||
14.78% | ||
13.10% | 13.47% | |
2015 | 2016 | 2017 | 2018 | 2019 | |
ROAA | Adjusted ROAA (1) | ||||
2015 | 2016 | 2017 | 2018 | 2019 | |
ROTCE | Adjusted ROTCE (1) | ||||
(1) | Adjusted (non-GAAP) metrics. See Appendix for reconciliation to the closest applicable GAAP metrics. | ||
NASDAQ: IBTX | 9 | ||
(2) | The year ended December 31, 2017, includes a $5.528 million charge to re-measure deferred taxes as a result of the |
enactment of the Tax Cuts and Jobs Act ("TCJA").
Delivering Shareholder Value
Tangible Book Value Per Share1 ($) | We have consistently grown tangible book value | |||
per share each year since our IPO. | ||||
$30.00 | $30.08 | We have returned capital to our shareholders | ||
through our quarterly dividend and by repurchasing | ||||
$28.99 | ||||
$27.44 | our company's common stock. | |||
$25.00 | Our significant insider ownership helps ensure | |||
$23.76 | that shareholder interests are well-represented both | |||
at the board table and on a day-to-day basis inside | ||||
$20.00 | $21.19 | the company. | ||
$17.85 | Annual Dividend Per Share | |||||||
$15.00 | $15.89 | $16.15 | $1.00 | |||||
$10.00 | ||||||||
$0.54 | ||||||||
$5.00 | $0.34 | $0.40 | ||||||
$0.32 | ||||||||
$0.24 | ||||||||
$- | ||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||
NASDAQ: IBTX | 1Adjusted (non-GAAP) metrics. See Appendix for reconciliation to the closest applicable GAAP metrics. | 10 |
2020Q1 Balance Sheet Details
Loan Portfolio Overview
Construction &
Development
10.7%
Agricultural
0.9%
C&I
22.0%
Consumer
0.4%
1-4 Family
Construction
3.2%
1-4 Family
13.3%
$11,021 Million | |||
Loans HFI | |||
LHFI COMPOSITION (3/31/2020) | |||
3/31/2020 | |||
$797 Million | |||
Mortgage Warehouse | |||
3/31/2020 | |||
Owner Occupied | |||
0.29% | |||
29.8% | |||
CRE | |||
NPAs/LHFI | |||
3/31/2020 | |||
49.5% | 0.05% | ||
CRE | |||
Non-Owner | NCOs/Avg. Loans | ||
Occupied CRE | 2020Q1 Annualized | ||
70.2% |
204.97%
Allowance/NPLs
3/31/2020
North
Texas
38.9%
5.09%
2020 YTD Adjusted Loan Yield1
1Adjusted (non-GAAP) metric. Excludes $982 thousand of unexpected income recognized on credit impaired acquired loans.
LHFI BY REGION (3/31/2020) | Colorado |
27.1% | |
Houston 21.5%
Central
Texas
12.5%
NASDAQ: IBTX | 12 |
Construction & Development
C&D PORTFOLIO
LOANS > $500 THOUSAND
(3/31/2020)
Land/Land
Development,
21.7%
$1.6 Billion
C&D Portfolio Size
105%
C&D / Bank Regulatory
Capital
3/31/2020
96.2%
CRE
SFRConstruction,
Construction,60.1%
18.2%
Multifamily,
14.5%
Hotel/Motel,
9.6%
Industrial,
5.1%
CRE CONSTRUCTION PORTFOLIO
LOANS > $500 THOUSAND (3/31/2020)
Healthcare,
9.0%
Misc. CRE,
23.6%
Retail, 20.8%
Office, 17.4%
Loans in IBTX Markets
(Texas and Colorado)
$2.3 Million
Average Loan Size
610
C&D Loans
36.2%
Owner Occupied C&D
Loans
NASDAQ: IBTX
13
Commercial Real Estate
CRE COMPOSITION (3/31/2020)
Multifamily, 7.5%
Mixed Use (Non-Retail),
1.9%
Office and Office
Warehouse, 25.4%
Miscellaneous, 6.2%
Restaurant, 2.7%
Mini Storage, 2.8%
Retail, 25.8%
Convenience Store, 2.6%
Church, 2.2%
Healthcare, 6.3%
Daycare/School, 2.4%
Industrial, 8.2% | ||
Hotel/Motel, 6.0% |
NASDAQ: IBTX
$5.4 Billion
CRE Loans
3/31/2020
369%
CRE / Regulatory Bank Capital
3/31/2020
14
Retail CRE
RETAIL CRE & C&D COMPOSITION
LOANS > $500 THOUSAND
3/31/2020
Big Box, 2.4%
Mixed Use,
8.9%
Free Standing
- Single Tenant, 20.1%
Strip Center,
68.6%
$1.7 Billion
Retail Loan Portfolio Size
3/31/2020
1,048
Total Retail Loans
3/31/2020
94.2%
Loans in IBTX Markets
(Texas and Colorado)
$1.6 Million
Average Loan Size
3/31/2020
70
Number of Loans >$5m
3/31/2020
$8.3 Million
Avg. Size of Loans >$5m
3/31/2020
Retail CRE has been a core competency of IBTX for decades. The retail book is comprised of over 1,000 granular loans that have been conservatively underwritten with the same credit principles that have guided IBTX through previous economic cycles.
NASDAQ: IBTX | 15 | |
Hotel & Motel
- We maintain a granular book of hotel loans in our markets, the majority of which are branded, limited/select service properties in our core markets across Texas and Colorado.
- We have very limited exposure to those segments of the hotel industry that have been most impacted by the COVID-19 pandemic (i.e. resort and conference hotels).
- Construction has continued uninterrupted as an "essential industry" in both TX and CO through the COVID-19 pandemic.
$432.3 Million
Hotel & Motel Loan
Portfolio Size
3/31/2020
$5.0 Million
Average Loan Size
3/31/2020
57.3%
Average LTV
3/31/2020
Hotel Loans by Type | Hotel Loans by Location | Hotel Loans by Product Type |
81.5% | 40.8% | 17.0% |
4.1% | ||
78.9%
8.7%
18.5%50.5%
Full Service Brand | |||||
Limited/Select Service Brand | |||||
CRE Construction & Development | Texas | Colorado | Other | Boutique/Independent | |
NASDAQ: IBTX | 16 |
Energy Lending
- We have a small, conservatively-underwritten energy book that is mostly of recent vintage.
- By volume, the exploration and production segment of the energy portfolio is secured by 46% oil/liquids assets and 54% by natural gas assets.
- Energy assets are well-diversified by basin across the United States.
- The majority of our loans have hedging in place, and those loans that do not have hedging in place are personally guaranteed.
NASDAQ: IBTX
$181.5 Million
Size of Energy Portfolio
3/31/2020
86.7% / 13.3%
E&P Loans / Services Loans
3/31/2020
4.0%
Energy Reserve / Energy Loans
3/31/2020
1.6%
Energy Loans / Total LHFI
3/31/2020
Energy by Type
$millions
$157.4 $24.1
E&P Services
17
Securities Portfolio
Our investment portfolio consists of a diversified mix of liquid, low-risk securities designed to help augment the bank's liquidity position and manage interest rate risk toward our target "net neutral" position.
INVESTMENT PORTFOLIO COMPOSITION
3/31/2020
U.S. Treasury
Securities, 4.6%
CRA, 2.7% | Agency |
Securities, 16.0% | |
Corporates, 0.5% | |
Taxable | |
Municipals, 2.3% | |
Mortgage-Backed | |
Securities, 42.0% | |
Tax-Exempt | |
Municipals, 31.9% |
NASDAQ: IBTX
As of March 31, 2020:
2.7%
Yield
4.36
Duration
7.0%
of Total Assets
$1.1 Billion
Portfolio Size
18
Deposit Mix & Pricing
DEPOSIT MIX
3/31/2020
IRAs, 0.7% | Noninterest-Bearing |
Demand, 26.6% |
CDs >$100k, 7.4% | ||
CDs <$100k, 2.2% | ||
Brokered CDs, 0.5% | Money Market, 15.5% | Interest-Bearing |
Checking, 28.8% | ||
Public Funds, 13.6%
Savings, 4.7%
NASDAQ: IBTX
As of March 31, 2020:
$11,883 Million
Total Deposits
0.95%
Cost of Deposits1
1.29%
Avg. Interest-Bearing Rate
26.6%
Noninterest-Bearing Deposits
1Average rate for total deposits.
19
Capital
Holding Company Capital Ratios as of 03/31/2020
12.05%
10.38% | |||||
9.67% | 9.95% | 10.00% | |||
8.94% | |||||
8.00% | |||||
6.50%
5.00%
TCE Ratio (1) | Tier 1 Leverage Ratio | CET1 Ratio | Tier 1 Ratio | Total Capital Ratio |
Minimum Required to Be Considered Well Capitalized Under Basel III
NASDAQ: IBTX | (1) Adjusted (non-GAAP) metrics. See Appendix for reconciliation to the closest applicable GAAP metrics. | 20 |
2020Q1 Results & COVID-19 Update
COVID-19 Update
Employees, Customers & Communities
- The Company is supporting the health and safety of its employees and customers through responsible operations.
- All branches currently operate on a "drive-thru only" or "lobby appointment only" model.
- The Company has implemented a work-from-home plan where corporate employees work remotely.
- Extra precautions are being taken to safeguard health and safety in branch facilities.
- To help facilitate the economic recovery, the Company is participating in the Coronavirus Aid, Relief and Economic Security Act (CARES Act) Paycheck Protection Program (PPP) by originating these Small Business Administration (SBA) loans for its customers. As of April 27, 2020, the Company has received SBA authorization for over 4,600 PPP loans totaling over $730 million in aggregate for existing customers.
- The Company is working with borrowers on a case by case basis to provide temporary relief as appropriate.
- The Company has made donations totaling $100,000 to support food banks across its footprint, which will provide 355,000 meals to those most vulnerable during the crisis.
Capital, Liquidity & Credit
- Capital remains strong, with ratios well above the standards to be considered well-capitalized under regulatory requirements, with an estimate total capital ratio of 12.05%, leverage ratio of 9.67%, and (non-GAAP) tangible common equity (TCE) ratio of 8.94% as of March 31, 2020.
- Liquidity remains strong, with cash and securities representing approximately 13.1% of assets as of March 31, 2020. The Company maintains the ability to access considerable sources of contingent liquidity at the Federal Home Loan Bank and the Federal Reserve.
- Asset quality remains solid, reflecting a long history of resilient credit quality and disciplined underwriting that the Company has built over three decades.
NASDAQ: IBTX | 22 | |
2020Q1 Results
For the quarter ended March 31, 2020, the Company reported:
- Net income of $44.2 million, or $1.03 per diluted share and adjusted (non-GAAP) net income of $43.4 million, or $1.01 per diluted share;
- Return on average assets of 1.19% and adjusted (non- GAAP) return on average assets of 1.17%;
- Return on average equity of 7.50%, (non-GAAP) return on tangible equity of 13.92%, and adjusted (non-GAAP) return on tangible equity of 13.66%, and;
- Organic loan growth of 3.4% for the quarter, annualized.
NASDAQ: IBTX
$1.03 | $1.01 |
EPS | Adj. EPS |
$44.2 Million | $43.4 Million |
Net Income | Adj. Net Income |
51.68% | 51.17% |
Efficiency Ratio | Adj. Eff. Ratio |
1.19% | 1.17% |
ROAA | Adj. ROAA |
13.92% | 13.66% |
ROTCE | Adj. ROTCE |
1Adjusted (non-GAAP) metrics. See Appendix for reconciliation to the closest applicable GAAP metrics.
23
2020Q1 Selected Financials
$ in thousands, except per share data | As of and for the Quarter Ended | |||
Selected Balance Sheet Data | March 31, 2020 | December 31, 2019 | March 31, 2019 | |
Total Assets | 15,573,868 | 14,958,207 | 14,145,383 | |
LHFI, Excluding Mortgage Warehouse Loans | 11,020,920 | 10,928,653 | 10,692,183 | |
Mortgage Warehouse Loans | 796,609 | 687,317 | 251,258 | |
Total Deposits | 11,882,766 | 11,941,336 | 11,239,426 | |
Total Borrowings (Other Than Junior Subordinated Debentures) | 1,152,860 | 527,251 | 538,425 | |
Total Stockholders' Equity | 2,386,285 | 2,339,773 | 2,234,202 | |
Selected Earnings and Profitability Data | ||||
Net Interest Income | 123,241 | 128,069 | 121,652 | |
Net Interest Margin | 3.76% | 3.81% | 4.05% | |
Adjusted Net Interest Margin1 | 3.73% | 3.79% | 4.01% | |
Noninterest Income | 14,511 | 18,229 | 16,424 | |
Noninterest Expense | 74,368 | 80,343 | 86,595 | |
Net Income | 44,167 | 50,236 | 37,131 | |
Adjusted Net Income2 | 43,354 | 56,799 | 52,028 | |
Basic EPS | 1.03 | 1.17 | 0.85 | |
Adjusted Basic EPS2 | 1.01 | 1.32 | 1.19 | |
Diluted EPS | 1.03 | 1.17 | 0.85 | |
Adjusted Diluted EPS2 | 1.01 | 1.32 | 1.19 | |
Return on Average Assets | 1.19% | 1.32% | 1.08% | |
Adjusted Return on Average Assets2 | 1.17% | 1.49% | 1.51% |
1Adjusted net interest margin, excludes unexpected income recognized on credit impaired acquired loans of $982, $791, and $1,016 respectively. 2Adjusted (non-GAAP) metrics. See Appendix for reconciliation to the closest applicable GAAP metrics.
NASDAQ: IBTX | 24 | |
NASDAQ: IBTX
Contact Information
Investors & Analysts
For more information, please contact:
Paul Langdale
SVP, Director of Corporate Development Direct - (469) 301-2637
Email - plangdale@ibtx.com
25
Appendix: Non-GAAP Reconciliation
APPENDIX
Supplemental Information - Reconciliation of Non-GAAP Financial Measures (Unaudited)
Reconciliation of Adjusted Net Income, EPS, Efficiency Ratio and Profitability Ratios - Quarterly Periods
As of and for the Quarter Ended | |||||||
($ in thousands except per share data) | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||
Net Interest Income - Reported | (a) | $ | 123,241 | $ | 128,069 | $ | 121,652 |
Unexpected income recognized on credit impaired acquired loans | (982) | (791) | (1,016) | ||||
Adjusted Net Interest Income | (b) | 122,259 | 127,278 | 120,636 | |||
Provision Expense - Reported | (c) | 8,381 | 1,609 | 3,224 | |||
Noninterest Income - Reported | (d) | 14,511 | 18,229 | 16,424 | |||
Loss on sale of loans | 42 | - | - | ||||
Gain on sale of trust business | - | (1,319) | - | ||||
Gain on sale of other real estate | (25) | (24) | - | ||||
Gain on sale of securities available for sale | (356) | (10) | (245) | ||||
Loss (gain) on sale and disposal of premises and equipment | 63 | - | (9) | ||||
Recoveries on loans charged off prior to acquisition | (84) | (425) | (1,311) | ||||
Adjusted Noninterest Income | (e) | 14,151 | 16,451 | 14,859 | |||
Noninterest Expense - Reported | (f) | 74,368 | 80,343 | 86,595 | |||
Separation expense | - | (3,421) | - | ||||
OREO impairment | - | (377) | (436) | ||||
Impairment of assets | (126) | - | - | ||||
COVID-19 expense - equipment and community support | (262) | - | - | ||||
Acquisition expense | (1,008) | (6,619) | (19,171) | ||||
Adjusted Noninterest Expense | (g) | 72,972 | 69,926 | 66,988 | |||
Income Tax Expense - Reported | (h) | 10,836 | 14,110 | 11,126 | |||
Adjusted Net Income (1) | (b) - (c) + (e) - (g) = (i) | $ | 43,354 | $ | 56,799 | $ | 52,028 |
Average shares for basic EPS | (j) | 43,011,496 | 42,951,701 | 43,759,348 | |||
Average shares for diluted EPS | (k) | 43,020,055 | 42,951,701 | 43,759,348 | |||
Reported Basic EPS | (a - c + d - f - h) / (j) | $ | 1.03 | $ | 1.17 | $ | 0.85 |
Reported Diluted EPS | (a - c + d - f - h) / (k) | $ | 1.03 | $ | 1.17 | $ | 0.82 |
Adjusted Basic EPS | (i) / (j) | $ | 1.01 | $ | 1.32 | $ | 1.19 |
Adjusted Diluted EPS | (i) / (k) | $ | 1.01 | $ | 1.32 | $ | 1.19 |
EFFICIENCY RATIO | |||||||
Amortization of other intangible assets | (l) | $ | 3,176 | $ | 3,175 | $ | 3,235 |
Reported Efficiency Ratio | (f - l) / (a + d) | 51.68% | 52.75% | 60.37% | |||
Adjusted Efficiency Ratio | (g - l) / (b + e) | 51.17% | 46.44% | 47.05% | |||
PROFITABILITY (2) | |||||||
Total Average Assets | (m) | $ | 14,965,628 | $ | 15,091,382 | $ | 13,975,192 |
Total Average Stockholders Common Equity | (n) | $ | 2,369,225 | $ | 2,326,176 | $ | 2,219,533 |
Total Average Tangible Common Equity (3) | (o) | $ | 1,276,545 | $ | 1,230,344 | $ | 1,111,668 |
Reported Return on Average Assets | (a - c + d - f - h) / (m) | 1.19% | 1.32% | 1.08% | |||
Reported Return on Average Common Equity | (a - c + d - f - h) / (n) | 7.50% | 8.57% | 6.78% | |||
Reported Return on Average Common Tangible | (a - c + d - f - h) / (o) | 13.92% | 16.20% | 13.55% | |||
Adjusted Return on Average Assets | (i) / (m) | 1.17% | 1.49% | 1.51% | |||
Adjusted Return on Average Common Equity | (i) / (n) | 7.36% | 9.69% | 9.51% | |||
Adjusted Return on Tangible Common Equity | (i) / (o) | 13.66% | 18.32% | 18.98% |
- Assumes an adjusted effective tax rate of 21.3%, 21.3%, 20.3%, for the quarters ended March 31, 2020, December 31, 2019 and March 31, 2019, respectively.
- Annualized.
(3) Excludes average balance of goodwill and net other intangible assets. | 27 |
APPENDIX
Supplemental Information - Reconciliation of Non-GAAP Financial Measures (Unaudited)
Reconciliation of Adjusted Net Income, EPS, Efficiency Ratio and Profitability Ratios - Annual Periods
For the Year Ended December 31, | |||||||||||
($ in thousands except per share data) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||
Net Interest Income - Reported | (a) | $ | 504,757 | $ | 326,252 | $ | 265,478 | $ | 183,806 | $ | 154,098 |
Unexpected income recognized on credit impaired acquired loans | (5,120) | (3,711) | (4,063) | (1,765) | (1,272) | ||||||
Adjusted Net Interest Income | (b) | 499,637 | 322,541 | 261,415 | 182,041 | 152,826 | |||||
Provision Expense - Reported | (c) | 14,805 | 9,860 | 8,265 | 9,440 | 9,231 | |||||
Noninterest Income - Reported | (d) | 78,176 | 42,224 | 41,287 | 19,555 | 16,128 | |||||
Gain on sale of loans | (6,779) | - | (351) | - | (116) | ||||||
(Gain) loss on sale of branch | (1,549) | - | (2,917) | 43 | - | ||||||
Gain on sale of trust business | (1,319) | - | - | - | - | ||||||
Gain on sale of other real estate | (875) | (269) | (850) | (62) | (290) | ||||||
(Gain) loss on sale of securities available for sale | (275) | 581 | (124) | (4) | (134) | ||||||
Loss (gain) on sale and disposal of premises and equipment | 585 | (123) | 21 | (32) | 358 | ||||||
Recoveries on loans charged off prior to acquisition | (2,101) | (962) | (1,182) | - | - | ||||||
Adjusted Noninterest Income | (e) | 65,863 | 41,451 | 35,884 | 19,500 | 15,946 | |||||
Noninterest Expense - Reported | (f) | 321,864 | 198,619 | 176,813 | 113,790 | 103,198 | |||||
Separation expense | (3,421) | - | - | (2,575) | - | ||||||
OREO impairment | (1,801) | (85) | (1,412) | (106) | (35) | ||||||
IPO related stock grants | - | (136) | (508) | (543) | (624) | ||||||
Impairment of assets | (1,173) | - | - | - | - | ||||||
Acquisition expense | (42,744) | (8,958) | (17,259) | (3,121) | (3,954) | ||||||
Adjusted Noninterest Expense | (g) | 272,725 | 189,440 | 157,634 | 107,445 | 98,585 | |||||
Income Tax Expense - Reported | (h) | 53,528 | 31,738 | 45,175 | 26,591 | 19,011 | |||||
Adjusted Net Income (1) | (b) - (c) + (e) - (g) = (i) | $ | 219,582 | $ | 132,183 | $ | 88,878 | $ | 56,563 | $ | 41,056 |
Average shares for basic EPS | (j) | 43,245,418 | 29,599,119 | 25,636,292 | 18,501,663 | 17,321,513 | |||||
Average shares for diluted EPS | (k) | 43,245,418 | 29,599,119 | 25,742,362 | 18,588,309 | 17,406,108 | |||||
Reported Basic EPS(3) | (a - c + d - f - h) / (j) | $ | 4.46 | $ | 4.33 | $ | 2.98 | $ | 2.89 | $ | 2.23 |
Reported Diluted EPS(3) | (a - c + d - f - h) / (k) | $ | 4.46 | $ | 4.33 | $ | 2.97 | $ | 2.88 | $ | 2.21 |
Adjusted Basic EPS(3) | (i) / (j) | $ | 5.08 | $ | 4.47 | $ | 3.47 | $ | 3.06 | $ | 2.37 |
Adjusted Diluted EPS(3) | (i) / (k) | $ | 5.08 | $ | 4.47 | $ | 3.45 | $ | 3.04 | $ | 2.36 |
EFFICIENCY RATIO | |||||||||||
Amortization of other intangible assets | (l) | $ | 12,880 | $ | 5,739 | $ | 4,639 | $ | 1,964 | $ | 1,555 |
Reported Efficiency Ratio | (f - l) / (a + d) | 53.01% | 52.35% | 56.13% | 54.99% | 59.71% | |||||
Adjusted Efficiency Ratio | (g - l) / (b + e) | 45.95% | 50.47% | 51.46% | 52.34% | 57.49% | |||||
PROFITABILITY | |||||||||||
Total Average Assets | (m) | $ | 14,555,315 | $ | 9,478,937 | $ | 7,966,421 | $ | 5,469,542 | $ | 4,395,552 |
Total Average Stockholders Common Equity | (n) | $ | 2,267,103 | $ | 1,476,688 | $ | 1,139,573 | $ | 635,864 | $ | 540,489 |
Total Average Tangible Common Equity (2) | (o) | $ | 1,164,915 | $ | 751,911 | $ | 568,071 | $ | 362,287 | $ | 294,133 |
Reported Return on Average Assets | (a - c + d - f - h) / (m) | 1.32% | 1.35% | 0.96% | 0.98% | 0.88% | |||||
Reported Return on Average Common Equity (3) | (a - c + d - f - h) / (n) | 8.50% | 8.69% | 6.71% | 8.42% | 7.13% | |||||
Return on Average Tangible Common Equity(3) | (a - c + d - f - h) / (o) | 16.55% | 17.06% | 13.47% | 14.78% | 13.10% | |||||
Adjusted Return on Average Assets | (i) / (m) | 1.51% | 1.39% | 1.12% | 1.03% | 0.93% | |||||
Adjusted Return on Average Common Equity(3) | (i) / (n) | 9.69% | 8.95% | 7.80% | 8.90% | 7.60% | |||||
Adjusted Return on Tangible Common Equity(3) | (i) / (o) | 18.85% | 17.58% | 15.65% | 15.61% | 13.96% |
(1) | Assumes an adjusted effective tax rate of 21.0%, 19.7%, 32.4%, 33.2%, and 32.6% for the years ended December 31, 2019, 2018, 2017, 2016, and 2015, respectively. | |
(2) | Excludes average balance of goodwill and net other intangible assets and preferred stock. | |
28 | ||
(3) | 2015 net income adjusted to exclude 2015 YTD preferred stock dividend of $240. |
APPENDIX
Supplemental Information - Reconciliation of Non-GAAP Financial Measures (Unaudited)
Reconciliation of Tangible Common Equity to Tangible Assets and Tangible Book Value Per Common Share
($ in thousands, except per share information) | March 31, 2020 | December 31, 2019 | December 31, 2018 | December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||
Tangible Common Equity | ||||||||||||
Total common stockholders equity | $ | 2,386,285 | $ | 2,339,773 | $ | 1,606,433 | $ | 1,336,018 | $ | 672,365 | $ | 603,371 |
Adjustments: | ||||||||||||
Goodwill | (994,021) | (994,021) | (721,797) | (621,458) | (258,319) | (258,643) | ||||||
Other intangible assets, net | (97,565) | (100,741) | (45,042) | (43,244) | (14,669) | (16,357) | ||||||
Tangible Common Equity | $ | 1,294,699 | $ | 1,245,011 | $ | 839,594 | $ | 671,316 | $ | 399,377 | $ | 328,371 |
Tangible Assets | ||||||||||||
Total Assets | $ | 15,573,868 | $ | 14,958,207 | $ | 9,849,965 | $ | 8,684,463 | $ | 5,852,801 | $ | 5,055,000 |
Adjustments: | ||||||||||||
Goodwill | (994,021) | (994,021) | (721,797) | (621,458) | (258,319) | (258,643) | ||||||
Other intangible assets, net | (97,565) | (100,741) | (45,042) | (43,244) | (14,669) | (16,357) | ||||||
Tangible Assets | $ | 14,482,282 | $ | 13,863,445 | $ | 9,083,126 | $ | 8,019,761 | $ | 5,579,813 | $ | 4,780,000 |
Common shares outstanding | 43,041,776 | 42,950,228 | 30,600,582 | 28,254,893 | 18,870,312 | 18,399,194 | ||||||
Tangible Common Equity To Tangible Assets | 8.94% | 8.98% | 9.24% | 8.37% | 7.16% | 6.87% | ||||||
Book value per common share | $55.44 | $54.48 | $52.50 | $47.28 | $35.63 | $32.79 | ||||||
Tangible book value per common share | $30.08 | $28.99 | $27.44 | $23.76 | $21.16 | $17.85 |
29
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Independent Bank Group Inc. published this content on 27 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 May 2020 21:52:06 UTC