Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Independent Bank Group, Inc. | exhibit991q12017.htm |
| 8-K - 8-K - Independent Bank Group, Inc. | form8-kibgpressrelease4x24.htm |
First Quarter 2017
Earnings Release Presentation
April 25, 2017
Exhibit 99.2
Safe Harbor Statement
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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 non-performing 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 Annual Report on Form 10-K
filed on March 8, 2017, 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.
Today's Presenters
David R. Brooks
Chairman of the Board, CEO and President, Director
• 37 years in the financial services industry; 29 years at Independent Bank
• Active in community banking since the early 1980s - led the investor group that
acquired Independent Bank in 1988
Michelle S. Hickox
Executive Vice President, Chief Financial Officer
•27 years in the financial services industry; 5 years at the Company
•Previously a Financial Services Audit Partner at McGladrey LLP
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First Quarter Key Highlights
• Core (non-gaap) net income was $16.0 million, or $0.84 per diluted
share, compared to $15.5 million, or $0.83 per diluted share, for
fourth quarter 2016, representing an increase in linked quarter core
net income of 3.2%
• Solid organic loan growth of 11.5% annualized for the quarter
• Positive increase in net interest margin to 3.67%, up from 3.59% for
fourth quarter 2016
• Continued strong credit quality metrics
• Return on average assets remained above 1% for the quarter,
improving to 1.08% from 1.03% for fourth quarter 2016
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First Quarter Selected Financial Data
($ in thousands except per share data)
As of and for the Quarter Ended
Balance Sheet Data March 31, 2017 December 31, 2016 March 31, 2016
Linked Quarter
Change Annual Change
Total assets $ 6,022,614 $ 5,852,801 $ 5,261,967 2.9 % 14.5 %
Loans held for investment (gross) 4,702,511 4,572,771 4,130,496 2.8 13.8
Total deposits 4,722,203 4,577,109 4,171,952 3.2 13.2
Total borrowings (excluding trust preferred securities) 568,115 568,045 444,745 — 27.7
Total capital 688,469 672,365 616,258 2.4 11.7
Earnings and Profitability Data
Net interest income $ 47,867 $ 46,526 $ 45,660 2.9 % 4.8 %
Net interest margin 3.67 % 3.59 % 4.08 % 2.2 % (10.0 )%
Non-interest income $ 4,583 $ 5,224 $ 4,470 (12.3 )% 2.5 %
Non-interest expense 28,028 27,361 28,519 2.4 % (1.7 )%
Net income 15,671 14,775 12,452 6.1 % 25.9 %
Basic EPS $ 0.83 $ 0.79 $ 0.67 5.1 % 23.9 %
Diluted EPS $ 0.82 $ 0.79 $ 0.67 3.8 % 22.4 %
Core net interest margin (1) (2) 3.66 % 3.58 % 3.96 % 2.2 % (7.6 )%
Core net income (1) $ 15,990 $ 15,541 $ 12,438 2.9 % 28.6 %
Core basic EPS (1) $ 0.85 $ 0.83 $ 0.67 2.4 % 26.9 %
Core diluted EPS (1) $ 0.84 $ 0.83 $ 0.67 1.2 % 25.4 %
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(1) See Appendix for Non-GAAP reconciliation
(2) Excludes income recognized on acquired loans of $123, $51 and $1,333, respectively.
Earnings Per Share and Core Earnings Per Share Trends (1)
Consistent Earnings Growth
(1) See Appendix for Non-GAAP reconciliation
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Interest Income Growth
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Interest Income, Net Interest Income and NIM Trends
Core EPS (1)
Core Efficiency Ratio
Core Efficiency Ratio Trends (1)
(1) See Appendix for non-GAAP Reconciliation
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Loan Portfolio Growth
Total Loans by Year and Current Annual Trend ($ in billions)(1)
(1) Includes loans held for sale.
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Loan Portfolio Composition
Loan Composition at 03/31/2017 CRE Loan Composition at 03/31/2017
Loans by Region at 03/31/2017
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Historically Strong Credit Culture
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NPLs / Loans
Note: Financial data as of and for years ended December 31, and quarter ended December 31, 2016 for peer data and March 31, 2017 for IBTX. Interim chargeoff data annualized.
Source: U.S. and Texas Commercial Bank numbers from SNL Financial.
NCOs / Average Loans
Provision expense and Net chargeoff trends
Provision and Chargeoffs
• Historically low chargeoffs
• Q3 2016 - $3MM chargeoff related to impaired energy loan
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($ in
thousands)
Energy Lending
(in millions)
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(in millions)
Deposit Mix and Pricing
(1)
(1) Average rate for total deposits
2017 YTD Average Rate for Interest-bearing deposits:
0.58%
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Capital
Total Capital and TCE/TA Ratios (1)
(1) See Appendix for non-GAAP Reconciliation 15
($ in thousands except per share data) March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
Net Interest Income - Reported (a) 47,867 46,526 45,737 45,883 45,660
Income recognized on acquired loans (123 ) (51 ) (116 ) (265 ) (1,333 )
Adjusted Net Interest Income (b) 47,744 46,475 45,621 45,618 44,327
Provision Expense - Reported (c) 2,023 2,197 2,123 2,123 2,997
Noninterest Income - Reported (d) 4,583 5,224 4,932 4,929 4,470
Loss on sale of branch — — 43 — —
Gain on sale of OREO/repossessed assets — — (4 ) (10 ) (48 )
Gain on sale of securities — — — (4 ) —
Loss / (Gain) on sale of PP&E (5 ) — 9 (3 ) (38 )
Adjusted Noninterest Income (e) 4,578 5,224 4,980 4,912 4,384
Noninterest Expense - Reported (f) 28,028 27,361 26,887 31,023 28,519
Senior leadership restructuring — — — (2,575 ) —
OREO impairment — — (51 ) — (55 )
IPO related stock grant and bonus expense (125 ) (127 ) (104 ) (156 ) (156 )
Acquisition expense (459 ) (1,075 ) (384 ) (475 ) (1,187 )
Adjusted Noninterest Expense (g) 27,444 26,159 26,348 27,817 27,121
Core Net Income (1) (b) - (c) + (e) - (g)= (h) 15,990 15,541 14,819 13,764 12,438
Core Efficiency Ratio (g) / (b + e) 52.45 % 50.60 % 52.07 % 55.05 % 55.68 %
Average shares for basic EPS (i) 18,908,679 18,613,975 18,478,289 18,469,182 18,444,284
Average shares for diluted EPS (j) 19,015,810 18,716,614 18,568,622 18,547,074 18,528,031
Core Basic EPS (h) / (i) $ 0.85 $ 0.83 $ 0.80 $ 0.75 $ 0.67
Core Diluted EPS (h) / (j) $ 0.84 $ 0.83 $ 0.80 $ 0.74 $ 0.67
Supplemental Information - Non-GAAP Financial Measures (unaudited)
Reconciliation of Core Earnings, Core Efficiency Ratio and Core EPS--Quarterly Periods
APPENDIX
(1) Assumes actual effective tax rate of 30.0%, 33.4%, 33.0%, 33.2% and 33.1%, for the quarters ended March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016 and March 31, 2016,
respectively. 16
($ in thousands except per share data) Year Ended December 31,
2016 2015 2014
Net Interest Income - Reported (a) $ 183,806 $ 154,098 $ 124,145
Write-off of debt origination warrants — — —
Income recognized on acquired loans (1,765 ) (1,272 ) (1,960 )
Adjusted Net Interest Income (b) $ 182,041 $ 152,826 $ 122,185
Provision Expense - Reported (c) 9,440 9,231 5,359
Noninterest Income - Reported (d) 19,555 16,128 13,624
Gain on sale of loans — (116 ) (1,078 )
Loss on sale of branch 43 — —
Gain on sale of OREO/repossessed assets (62 ) (290 ) (71 )
Gain on sale of securities (4 ) (134 ) (362 )
Loss / (Gain) on sale of PP&E (32 ) 358 22
Adjusted Noninterest Income (e) 19,500 15,946 12,135
Noninterest Expense - Reported (f) 113,790 103,198 88,512
Executive team restructuring (2,575 ) — —
Adriatica expenses — — (23 )
OREO impairment (106 ) (35 ) (22 )
IPO related stock grant and bonus expense (543 ) (624 ) (630 )
Registration statements — — (619 )
Core system conversion — — (265 )
Acquisition expense (3,121 ) (3,954 ) (9,237 )
Adjusted Noninterest Expense (g) 107,445 98,585 77,716
Core Net Income (1) (b) - (c) + (e) - (g)= (h) $ 56,563 $ 41,056 $ 34,427
Core Efficiency Ratio (g) / (b + e) 53.31 % 58.41 % 57.86 %
Average shares for basic EPS (i) 18,501,663 17,321,513 15,458,666
Average shares for diluted EPS (j) 18,588,309 17,406,108 15,557,120
Core Basic EPS (h) / (i) $ 3.06 $ 2.37 $ 2.23
Core Diluted EPS (h) / (j) $ 3.04 $ 2.36 $ 2.21
Supplemental Information - Non-GAAP Financial Measures (unaudited)
Reconciliation of Core Earnings, Core Efficiency Ratio and Core EPS--Annual Periods
APPENDIX
(1) Assumes actual effective tax rate of 33.2%, 32.6% and 32.8% for the years ended December 31, 2016, 2015, and 2014, respectively.
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Supplemental Information - Non-GAAP Financial Measures (unaudited)
Reconciliation of Tangible Common Equity to Tangible Assets
APPENDIX
Tangible Common Equity To Tangible Assets 3/31/17 12/31/16 12/31/2015 12/31/14 12/31/13
($ in thousands)
Tangible Common Equity
Total common stockholders' equity $ 688,469 $ 672,365 $ 603,371 $ 516,913 $ 233,772
Adjustments:
Goodwill (258,319 ) (258,319 ) (258,643 ) (229,457 ) (34,704 )
Core deposit intangibles, net (13,685 ) (14,177 ) (16,357 ) (12,455 ) (3,148 )
Tangible Common Equity $ 416,465 $ 399,869 $ 328,371 $ 275,001 $ 195,920
Tangible Assets
Total Assets $ 6,022,614 $ 5,852,801 $ 5,055,000 $ 4,132,639 $ 2,163,984
Adjustments:
Goodwill (258,319 ) (258,319 ) (258,643 ) (229,457 ) (34,704 )
Core deposit intangibles (13,685 ) (14,177 ) (16,357 ) (12,455 ) (3,148 )
Tangible Assets $ 5,750,610 $ 5,580,305 $ 4,780,000 $ 3,890,727 $ 2,126,132
Tangible Common Equity To Tangible Assets 7.24 % 7.17 % 6.87 % 7.07 % 9.21 %
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