Attached files
| file | filename |
|---|---|
| EX-99.3 - EX-99.3 - Independent Bank Group, Inc. | d386441dex993.htm |
| EX-99.2 - EX-99.2 - Independent Bank Group, Inc. | d386441dex992.htm |
| EX-23.1 - EX-23.1 - Independent Bank Group, Inc. | d386441dex231.htm |
| 8-K/A - FORM 8-K/A - Independent Bank Group, Inc. | d386441d8ka.htm |
Exhibit 99.4
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
OF THE COMPANY AND ITS SUBSIDIARIES GIVING EFFECT TO THE ACQUISITION OF
CARLILE BANCSHARES, INC. AS OF MARCH 31, 2017
AND
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
OF THE COMPANY AND ITS SUBSIDIARIES GIVING EFFECT TO THE ACQUISITION OF CARLILE
BANCSHARES, INC. FOR THE
THREE MONTHS ENDED MARCH 31, 2017 AND THE YEAR ENDED DECEMBER 31, 2016
Unaudited Pro Forma Combined Condensed Consolidated Financial Information
The following unaudited pro forma combined condensed consolidated balance sheet as of March 31, 2017, and the unaudited pro forma combined condensed consolidated statements of income for the three months ended March 31, 2017, and the year ended December 31, 2016, and have been prepared to reflect the acquisition of Carlile Bancshares, Inc. (Carlile) by Independent Bank Group, Inc. (IBTX), which was completed on April 1, 2017. The unaudited pro forma combined condensed consolidated financial information is set forth as if the acquisition had occurred as of March 31, 2017, with respect to financial condition data and as of January 1, 2016, with respect to operations data and includes the 400,000 shares of IBTX common stock issued and sold by IBTX for cash in the aggregate net amount of $19,950,000 (after underwriting discounts) on November 29, 2016, as well as 8,804,699 shares of Independent common stock issued in the merger.
The unaudited pro forma combined condensed consolidated financial statements give effect to the acquisition of Carlile as a business combination under U.S. generally accepted accounting principles (GAAP). The transaction was accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification (ASC) Topic 805, Business Combinations. Under ASC 805, all of the assets acquired and liabilities assumed in a business combination are recognized at their fair values, while transaction and restructuring costs associated with the business combination are expensed as incurred. The excess of the purchase price over the fair value of assets acquired and liabilities assumed is allocated to goodwill. The pro forma adjustments are based on estimates made for the purpose of preparing these pro forma statements and are described in the accompanying notes. IBTX’s management believes that the estimates used in these pro forma financial statements are reasonable under the circumstances.
The pro forma adjustments included herein are subject to change as additional information becomes available and additional analyses are performed. The final allocation of the purchase price will be determined after further valuation analyses under GAAP are performed with respect to the fair values of certain tangible and intangible assets and liabilities as of the date of acquisition. The final adjustments may be materially different from the unaudited pro forma adjustments presented herein. In addition, the pro forma financial statements do not include the effects of any potential cost savings which management believes will result from combining certain operating procedures.
The Company anticipates that the acquisition of Carlile will provide the combined company with the ability to better serve its customers, reach new customers and reduce operating expenses. In addition, certain subjective estimates have been utilized in determining the pro forma adjustments applied to the historical results of operations of Carlile. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings or opportunities to earn additional revenue and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies been combined during these periods.
The unaudited pro forma combined condensed consolidated financial statements are provided for informational purposes only and are not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the transaction been completed as of the dates indicated or that may be achieved in the future. The preparation of the unaudited pro forma combined condensed consolidated financial statements and related adjustments required management to make certain assumptions and estimates. The unaudited pro forma combined condensed consolidated financial information is based on, and should be read together with, the historical consolidated financial statements and related notes of the Registrant included in its Annual Report on Form 10-K for the year ended December 31, 2016, and Carlile’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2016, included as Exhibit 99.2 in this Current Report on Form 8-K/A.
PF-1
Pro Forma Combined Consolidated Balance Sheet
March 31, 2017
(Unaudited) (dollars in thousands)
| Independent | Carlile | Pro forma Adjustments | Pro Forma Independent with Carlile Consolidated |
|||||||||||||||||
| As of March 31, 2017 |
As of March 31, 2017 |
Debits | Credits | As of March 31, 2017 |
||||||||||||||||
| Assets: |
||||||||||||||||||||
| Cash and cash equivalents |
$ | 515,123 | $ | 148,444 | $ | — | $ | 22,113 | (j)(k) | $ | 641,454 | |||||||||
| Certificates of deposit held in other banks |
5,892 | 11,025 | — | — | 16,917 | |||||||||||||||
| Securities available for sale |
350,409 | 336,506 | — | — | 686,915 | |||||||||||||||
| Loans held for sale |
5,081 | 12,782 | — | — | 17,863 | |||||||||||||||
| Loans (gross) |
4,700,084 | 1,389,671 | — | 16,000 | (a) | 6,073,755 | ||||||||||||||
| Allowance for loan losses |
(33,431 | ) | (15,866 | ) | 15,866 | (b) | — | (33,431 | ) | |||||||||||
| Premises and equipment, net |
88,286 | 60,948 | 6,402 | (c) | — | 155,636 | ||||||||||||||
| Other real estate owned |
2,896 | 10,666 | — | 3,000 | (d) | 10,562 | ||||||||||||||
| Goodwill |
258,319 | 117,564 | 347,464 | (e) | 117,564 | (e) | 605,783 | |||||||||||||
| Core deposit intangible, net |
13,685 | 7,398 | 35,241 | (f) | 7,398 | (f) | 48,926 | |||||||||||||
| Deferred tax asset |
7,950 | 20,140 | 3,514 | (g) | 13,478 | (g) | 18,126 | |||||||||||||
| Other assets |
108,320 | 89,306 | — | 10,791 | (i) | 186,835 | ||||||||||||||
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| Total Assets |
$ | 6,022,614 | $ | 2,188,584 | $ | 408,487 | $ | 190,344 | $ | 8,429,341 | ||||||||||
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| Liabilities and Stockholders’ Equity |
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| Deposits: |
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| Noninterest bearing |
$ | 1,126,113 | $ | 640,345 | $ | — | $ | — | $ | 1,766,458 | ||||||||||
| Interest bearing |
3,596,090 | 1,181,593 | — | — | 4,777,683 | |||||||||||||||
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| Total deposits |
4,722,203 | 1,821,938 | — | — | 6,544,141 | |||||||||||||||
| FHLB advances |
460,727 | — | — | — | 460,727 | |||||||||||||||
| Repurchase agreements |
— | 18,003 | — | — | 18,003 | |||||||||||||||
| Other borrowings |
107,388 | — | — | — | 107,388 | |||||||||||||||
| Junior subordinated debentures |
18,147 | 12,566 | 3,195 | (h) | — | 27,518 | ||||||||||||||
| Other liabilities |
25,680 | 9,662 | — | — | 35,342 | |||||||||||||||
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| Total Liabilities |
5,334,145 | 1,862,169 | 3,195 | — | 7,193,119 | |||||||||||||||
| Stockholders’ equity: |
— | |||||||||||||||||||
| Total Stockholders’ Equity |
688,469 | 326,415 | 326,415 | 547,753 | (j)(k) | 1,236,222 | ||||||||||||||
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| Total Liabilities and Stockholders’ Equity |
$ | 6,022,614 | $ | 2,188,584 | $ | 329,610 | $ | 547,753 | $ | 8,429,341 | ||||||||||
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Footnotes to Pro Forma Combined Consolidated Balance Sheet:
| (a) | Estimated fair market value adjustment on the acquired loan portfolio. |
| (b) | Eliminate Carlile’s allowance for loan loss. |
| (c) | Estimated fair market value adjustment on premises acquired, mostly attributable to land value. |
| (d) | Estimated fair market value adjustment on acquired other real estate owned. |
| (e) | Eliminate Carlile’s existing goodwill and record estimated goodwill for amount of consideration and liabilities assumed over fair value of the assets received. |
| (f) | Eliminate Carlile’s existing core deposit intangible and record the estimated core deposit intangible value of the acquired non time deposits. |
| (g) | Estimated adjustment on acquired deferred assets and the tax effect of purchase accounting adjustments at 35%. |
| (h) | Estimated fair value adjustment on acquired junior subordinated debentures |
| (i) | Eliminate Carlile capital accounts and merger costs paid prior to close for change of control agreements and investment banking fees. |
| (j) | Record transaction expenses at 1% of the aggregate merger consideration. |
PF-2
Footnotes to Pro Forma Combined Consolidated Balance Sheet (continued):
| (k) | Issue 8,804,699 shares of our common stock (using an Average Stock Price of $62.7044 per share) to former Carlile shareholders and pay $17.8 million in cash to Carlile option holders for a total consideration of $570 million. The estimated fair values of the assets acquired and liabilities assumed in the merger are as follows: |
| (dollars in thousands) | ||||
| Assets of acquired bank: |
||||
| Cash and cash equivalents |
$ | 148,444 | ||
| Certificates of deposit held in other banks |
11,025 | |||
| Securities available for sale |
336,506 | |||
| Loans |
1,386,453 | |||
| Premises and equipment |
67,350 | |||
| Core deposit intangible |
35,241 | |||
| Goodwill |
347,464 | |||
| Other real estate |
7,666 | |||
| Deferred tax asset |
10,176 | |||
| Other assets |
78,515 | |||
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| Total assets acquired |
2,428,840 | |||
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| Liabilities of acquired bank: |
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| Deposits |
1,821,938 | |||
| Junior subordinated debentures |
9,371 | |||
| Other liabilities |
27,665 | |||
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| Total liabilities assumed |
1,858,974 | |||
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| Net assets acquired |
569,866 | |||
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| Common stock issued |
552,093 | |||
| Cash paid |
17,773 | |||
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| Total purchase price |
$ | 569,866 | ||
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Fair value estimates for loans, OREO, deposits, premises, junior subordinated debt and the core deposit intangible are subject to adjustment upon receipt and review of third party appraisals.
PF-3
Pro Forma Consolidated Income Statement
Three Months Ended March 31, 2017
(Unaudited) (dollars in thousands, except per share)
| Three Months Ended March 31, 2017 | ||||||||||||||||
| Independent | Carlile | Pro Forma Adjustments |
Pro Forma Independent with Carlile |
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| Interest income |
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| Interest and fees on loans |
$ | 53,744 | $ | 17,846 | $ | 1,000 | (a) | $ | 72,590 | |||||||
| Interest on securities |
1,305 | 1,797 | — | 3,102 | ||||||||||||
| Interest on other |
890 | 334 | — | 1,224 | ||||||||||||
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| Total interest income |
55,939 | 19,977 | 1,000 | 76,916 | ||||||||||||
| Interest expense |
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| Interest on deposits |
5,029 | 1,115 | — | 6,144 | ||||||||||||
| Interest on other borrowings |
3,043 | 213 | 40 | (b) | 3,296 | |||||||||||
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| Total interest expense |
8,072 | 1,328 | 40 | 9,440 | ||||||||||||
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| Net interest income |
47,867 | 18,649 | 960 | 67,476 | ||||||||||||
| Provision for loan losses |
2,023 | 338 | — | 2,361 | ||||||||||||
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| Net interest income after provision |
45,844 | 18,311 | 960 | 65,115 | ||||||||||||
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| Noninterest income |
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| Service charges |
1,927 | 1,023 | — | 2,950 | ||||||||||||
| Mortgage fee income |
1,267 | 2,525 | — | 3,792 | ||||||||||||
| Gain on sale of assets |
5 | 194 | — | 199 | ||||||||||||
| Other |
1,384 | 3,136 | — | 4,520 | ||||||||||||
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| Total noninterest income |
4,583 | 6,878 | — | 11,461 | ||||||||||||
| Noninterest expense |
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| Salaries and employee benefits |
16,837 | 12,398 | — | 29,235 | ||||||||||||
| Occupancy |
3,872 | 2,273 | 4 | (c) | 6,149 | |||||||||||
| Merger expenses |
146 | 155 | (301 | )(d) | — | |||||||||||
| Other |
7,173 | 4,799 | 696 | (e) | 12,668 | |||||||||||
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| Total noninterest expense |
28,028 | 19,625 | (399 | ) | 48,052 | |||||||||||
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| Income before taxes |
22,399 | 5,564 | 561 | 28,524 | ||||||||||||
| Income tax expense |
6,728 | 1,423 | 196 | (f) | 8,347 | |||||||||||
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| Net income |
$ | 15,671 | $ | 4,141 | $ | 365 | $ | 20,177 | ||||||||
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| Pro Forma Combined Per Share Data (Common Stock) | ||||||||||||||||
| Earnings: |
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| Basic |
$ | 0.83 | $ | 0.72 | ||||||||||||
| Diluted |
0.82 | 0.72 | ||||||||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
18,908,679 | 28,113,378 | ||||||||||||||
| Diluted |
19,015,810 | 28,200,024 | ||||||||||||||
Footnotes to Pro Forma adjustments:
| (a) | Adjustment to interest income for accretion on Carlile acquired loans based on expected fair market value adjustment to such loans. |
| (b) | Adjustment to interest expense for amortization on Carlile acquired junior subordinated debt based on expected fair market value adjustment on such debt. |
| (c) | Expected depreciation expense on increase in Carlile acquired buildings based upon expected fair market value. |
| (d) | Nonrecurring costs attributable to the acquisition for professional fees. |
| (e) | Expected amortization of the core deposit intangible based on a 10 year life using the straight line method. |
| (f) | Tax adjustment related to other pro forma adjustments is calculated at a 35% rate. |
PF-4
Pro Forma Consolidated Income Statement
Year Ended December 31, 2016
(Unaudited) (dollars in thousands, except per share)
| Year Ended December 31, 2016 | ||||||||||||||||
| Independent | Carlile | Pro Forma Adjustments |
Pro Forma Independent with Carlile |
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| Interest income |
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| Interest and fees on loans |
$ | 203,577 | $ | 78,618 | $ | 4,000 | (a) | $ | 286,195 | |||||||
| Interest on securities |
4,449 | 7,682 | — | 12,131 | ||||||||||||
| Interest on other |
2,023 | 952 | — | 2,975 | ||||||||||||
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| Total interest income |
210,049 | 87,252 | 4,000 | 301,301 | ||||||||||||
| Interest expense |
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| Interest on deposits |
16,075 | 4,358 | — | 20,433 | ||||||||||||
| Interest on other borrowings |
10,168 | 850 | 160 | (b) | 11,178 | |||||||||||
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| Total interest expense |
26,243 | 5,208 | 160 | 31,611 | ||||||||||||
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| Net interest income |
183,806 | 82,044 | 3,840 | 269,690 | ||||||||||||
| Provision for loan losses |
9,440 | 14,726 | — | 24,166 | ||||||||||||
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| Net interest income after provision |
174,366 | 67,318 | 3,840 | 245,524 | ||||||||||||
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| Noninterest income |
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| Service charges |
7,222 | 4,127 | — | 11,349 | ||||||||||||
| Mortgage fee income |
7,038 | 13,745 | — | 20,783 | ||||||||||||
| Gain on sale of assets |
93 | — | — | 93 | ||||||||||||
| Other |
5,202 | 10,589 | — | 15,791 | ||||||||||||
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| Total noninterest income |
19,555 | 28,461 | — | 48,016 | ||||||||||||
| Noninterest expense |
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| Salaries and employee benefits |
66,762 | 45,689 | — | 112,451 | ||||||||||||
| Occupancy |
16,101 | 9,858 | 15 | (c) | 25,974 | |||||||||||
| Merger expenses |
1,517 | 1,217 | (659 | )(d) | 2,075 | |||||||||||
| Other |
29,410 | 21,851 | 2,784 | (e) | 54,045 | |||||||||||
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| Total noninterest expense |
113,790 | 78,615 | 2,140 | 194,545 | ||||||||||||
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| Income before taxes |
80,131 | 17,164 | 1,700 | 98,995 | ||||||||||||
| Income tax expense |
26,591 | 3,979 | 595 | (f) | 31,165 | |||||||||||
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| Net income |
53,540 | 13,185 | 1,105 | 67,830 | ||||||||||||
| Net income attributable to noncontrolling interest |
— | (315 | ) | — | (315 | ) | ||||||||||
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| Net income to shareholders |
$ | 53,540 | $ | 12,870 | $ | 1,105 | $ | 67,515 | ||||||||
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| Pro Forma Combined Per Share Data (Common Stock) |
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| Earnings: |
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| Basic |
$ | 2.89 | $ | 2.44 | ||||||||||||
| Diluted |
2.88 | 2.43 | ||||||||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
18,501,663 | 27,706,362 | ||||||||||||||
| Diluted |
18,588,309 | 27,813,494 | ||||||||||||||
Footnotes to Pro Forma adjustments:
| (a) | Adjustment to interest income for accretion on Carlile acquired loans based on expected fair market value adjustment to such loans. |
| (b) | Adjustment to interest expense for amortization on Carlile acquired junior subordinated debt based on expected fair market value adjustment on such debt. |
| (c) | Expected depreciation expense on increase in Carlile acquired buildings based upon expected fair market value. |
| (d) | Nonrecurring costs attributable to the acquisition for IBTX professional fees. |
| (e) | Expected amortization of the core deposit intangible based on a 10 year life using the straight line method. |
| (f) | Tax adjustment related to other pro forma adjustments is calculated at a 35% rate. |
PF-5