Independent Bank Group Reports First Quarter Financial Results

McKINNEY, Texas, April 30, 2013 (GLOBE NEWSWIRE) -- Independent Bank Group, Inc. (Nasdaq:IBTX), the holding company for Independent Bank, today announced net income of $5.7 million, or $0.68 per diluted share, for the quarter ended March 31, 2013 compared to $6.1 million, or $0.74 per diluted share, for the quarter ended December 31, 2012 and compared to $3.1 million, or $0.43 per diluted share, for the quarter ended March 31, 2012. The Company was an S corporation until April 1, 2013 and, as a result, had no federal income tax expense prior to that date. As a result, the income-related data in this release does not reflect a provision for federal income taxes. The Company is now taxed as a C corporation and future period results will reflect federal income tax expense.

On a core pre-provision earnings basis, first quarter 2013 net income was $6.5 million compared to $6.4 million for fourth quarter 2012 and compared to $4.2 million for first quarter 2012.

First Quarter 2013 Highlights:

Independent Bank Group Chairman and Chief Executive Officer David R. Brooks said, "We are pleased to have completed our initial public offering on April 8, 2013, raising $87 million to support our continued organic growth and growth through strategic acquisitions. Since the beginning of the year, loans and deposits have continued to grow and earnings have remained solid. We are especially encouraged by first quarter 2013 results in that our first quarter has historically been our weakest."
  • Organic loan production grew for the twenty-first consecutive quarter.
  • Continued year over year balance sheet growth, reflecting not only organic growth but also completed strategic acquisitions in the second and fourth quarters of 2012, with an increase in total assets of $456 million, 34.9%. Total assets grew organically by $173 million and $283 million through acquisitions, or 13.2% and 21.7%, respectively, from first quarter 2012.
  • Net interest margin increased to 4.68% for first quarter 2013 compared to 4.41% for fourth quarter 2012 and 4.31% for first quarter 2012. Net interest margin, excluding the impact of purchase accounting accretion, was 4.40% for first quarter 2013 compared to 4.35% for fourth quarter 2012 and 4.29% for first quarter 2012.
  • Average cost of interest bearing deposits declined by 10 basis points from fourth quarter 2012 and by 37 basis points year over year.
  • The efficiency ratio improved to 67.5% compared to 73.9% for first quarter 2012. On an adjusted basis, the core efficiency ratio improved to 66.8% for first quarter 2013 compared to 70.3% for first quarter 2012.
  • Continued strong asset quality, as reflected by a nonperforming assets to total assets ratio of 1.35%, a nonperforming loans to total loans ratio of 0.40%, and a net charge-offs to average loans ratio of 0.15% at March 31, 2013.

First Quarter 2013 Results:

Earnings Remain Solid

Core pre-provision earnings increased during the quarter due to continued loan growth and a reduction in cost of funds, both of which improved net interest income, the primary driver of overall operating income. Mr. Brooks noted, "A year over year double-digit increase in total loans and the reduction in our cost of funds have contributed to continued solid earnings performance. We also improved our efficiency ratio as a result of increased revenue and by leveraging our existing infrastructure."

Net Interest Income

  • Net interest income was $18.2 million for first quarter 2013 compared to $16.8 for fourth quarter 2012 and to $12.3 million for first quarter 2012.
  • Net interest margin was 4.68% for first quarter 2013 compared to 4.41% for fourth quarter 2012 and 4.31% for first quarter 2012. The yield on interest earning assets was 5.50% for first quarter 2013 compared to 5.31% for fourth quarter 2012 and 5.44% for first quarter 2012.
  • Net interest income includes recognition of $1.06 million in interest income from the repayment of acquired impaired loans during first quarter 2013 compared to $135 thousand in fourth quarter 2012 and $58 thousand in first quarter 2012.
  • The average balance of total interest-earning assets grew by $65.1 million, or 4.3% (17.2% on an annualized basis), from year end 2012 and totaled $1.579 billion compared to $1.514 billion at year end 2012 and compared to $1.135 billion at March 31, 2012. The year over year increase in interest earning assets is due, in part, to the acquisitions completed in the second and fourth quarters of 2012.

Noninterest Income
  • Total noninterest income decreased $1.1 million, or 32%, compared to fourth quarter 2012 and increased $535 thousand, or 30%, compared to the first quarter 2012.
  • The decrease in noninterest income compared to fourth quarter 2012 is the result of a $1.3 million gain recognized in fourth quarter 2012 from the sale of certain property by the Company's subsidiary, IBG Adriatica Holdings. The Company did not experience any material gain from the sale of property by IBG Adriatica during first quarter 2013.
  • The increase in noninterest income compared to first quarter 2012 reflects an increase of $330 thousand in deposit service fees, a $103 thousand increase in mortgage fee income, and a $78 thousand increase in gains (losses) upon the sale of other real estate.

Noninterest Expense
  • Total noninterest expense increased $594 thousand compared to fourth quarter 2012 and $3.4 million compared to first quarter 2012.
  • The increase in noninterest expense compared to fourth quarter 2012 is primarily due to a $448 thousand impairment in property held as Other Real Estate and also to increased salary expense related to the addition of new members to our lending team.
  • The increase in noninterest expense compared to the prior year period includes increases in compensation and occupancy expense of $1.9 million and $493 thousand, respectively, resulting from the completion of two acquisitions in 2012 and the opening of our Uptown Dallas branch.

Provision for Loan Losses
  • Provision for loan loss expense was $1.030 million for the quarter, an increase of $101 thousand compared to $929 thousand for fourth quarter 2012 and an increase of $455 thousand compared to $575 thousand during first quarter 2012. This increase was to properly reserve for the growth in the loan portfolio during the quarter.
  • The allowance for loan losses was $12.0 million, or 209.73% and 0.85% of nonperforming loans and total loans, respectively, at March 31, 2013, compared to $11.5 million, or 104.02% and 0.84% of nonperforming loans and total loans, respectively, at December 31, 2012, and compared to $9.3 million, or 113.88% and 0.93% of nonperforming loans and total loans, respectively, at March 31, 2012.

Income Taxes and Dividends
  • The Company was an S corporation during all periods discussed in this release and the Company had no federal income tax expense for the reported periods. The Company became a C corporation on April 1, 2013 and its results of operations for future periods will include federal income tax expense. If the Company had been a C corporation, in the first quarter 2013, the fourth quarter 2012 and the first quarter 2012, we estimate that our effective tax rate for those quarters would have been 32.8%, 30.1% and 30.1%, respectively.
  • The Company paid two dividends during first quarter 2013. The first dividend, paid in January 2013, was $3.0 million compared to the $3.1 million dividend paid in fourth quarter 2012 and was a $1.6 million increase over the $1.4 million dividend paid in first quarter 2012. The second dividend was paid on March 29, 2013 to pay the S-corporation shareholders' estimated federal income tax on S-corporation earnings through the date of the S-corporation revocation. The amount of the second dividend was $2.3 million.

First Quarter 2013 Balance Sheet Highlights

Continued Growth

The Company's underlying organic growth continued during the quarter. Loans and deposits increased from year end 2012 and year over year. Overall asset quality remains strong and the Company remains well capitalized. Mr. Brooks stated, "We believe that our overall credit quality remains strong with past dues, charge-offs, ORE, and total nonperforming assets and loans at historically low levels."

Loans

  • Total loans held for investment were $1.416 billion at March 31, 2013 compared to $1.370 billion at December 31, 2012 and compared to $1.003 billion at March 31, 2012. This represented a 3.4% increase (13.6% on an annualized basis) since year end and 41.2% since March 31, 2012.
  • Total loans (including mortgage loans held for sale) were $1.422 billion at March 31, 2013 compared to $1.379 billion at December 31, 2012 and compared to $1.005 billion at March 31, 2012.
  • Since March 31, 2012, loan growth has been centered in commercial real estate loans ($209 million), C&I loans ($55 million), and residential real estate loans ($107 million).

Asset Quality
  • Total nonperforming assets declined to $23.9 million, or 1.35% of total assets at March 31, 2013, compared to $27.6 million or 1.59% of total assets at December 31, 2012 and compared to $32.8 million, or 2.51% of total assets at March 31, 2012.
  • Total nonperforming loans declined to $5.7 million, or 0.40% of total loans at March 31, 2013 compared to $11.0 million, or 0.81% of total loans at December 31, 2012 and compared to $8.2 million, or 0.82% of total loans at March 31, 2012.

Deposits and Borrowings
  • Total deposits were $1.415 billion at March 31, 2013 compared to $1.391 billion at December 31, 2012 and compared to $1.057 billion at March 31, 2012.
  • The average cost of interest bearing deposits declined by 10 basis points during the first quarter to 0.61% compared to 0.71% during fourth quarter 2012.
  • The average cost of interest bearing deposits declined 37 basis points compared to 0.98% during first quarter 2012.
  • Total borrowings (other than junior subordinated debentures) were $200 million at March 31, 2013, a decrease of $1 million from December 31, 2012 and an increase of $76 million from March 31, 2012. These amounts do not reflect any repayment of indebtedness with the proceeds of our initial public offering that we consummated on April 8, 2013.

Capital
  • The tangible common equity to tangible assets and the Tier 1 capital to average assets ratios were 5.33% and 6.29%, respectively, at March 2013 compared to 5.42% and 6.45%, respectively, at December 31, 2012 and 7.27% and 8.38%, respectively, at March 31, 2012. The total stockholders' equity to total assets ratio was 7.04%, 7.16%, 8.25% at March 31, 2013, December 31, 2012 and March 31, 2012, respectively. The capital ratios at March 31, 2012 include capital raised to complete the acquisition of I Bank Holding Company which was not consummated until April 1, 2012. The capital ratios at March 31, 2013 do not include the proceeds of the offering which were received on April 8, 2013.
  • Book value and tangible book value per common share were $15.01 and $11.16, respectively, at March 31, 2013 compared to $15.06 and $11.19, respectively, at December 31, 2012 and $13.75 and $12.00, respectively, at March 31, 2012.
  • Return on average assets and return on average equity (on an annualized basis) were 1.33% and 18.49%, respectively, for first quarter 2013 compared to 1.43% and 20.0%, respectively, for fourth quarter 2012 and 1.16% and 17.36%, respectively, for first quarter 2012. On a core pre-provision earnings basis, return on average assets and return on average equity (on an annualized basis) were 1.52% and 21.14%, respectively, for first quarter 2013 compared to 1.50% and 20.99%, respectively, for fourth quarter 2012 and 1.33% and 18.46%, respectively, for first quarter 2012.

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 30 banking offices in 26 communities in two market regions located in the Dallas/Fort Worth metropolitan area and the greater Austin area. As of March 31, 2013, Independent Bank Group had total assets of $1.764 billion, total loans of $1.422 billion and total deposits of $1.415 billion.

Conference Call

A conference call covering Independent Bank Group's quarter earnings announcement will be held today, Tuesday, April 30, at 7:30 a.m. (CDT) and can be accessed by calling 1-559-726-1300 and entering the passcode 334099#. A recording of the conference call will be available from April 30, 2013 through May 7, 2013 by calling 1-559-726-1399 and entering the passcode 334099#.

Forward-Looking Statements

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 Form S-1 Registration Statement, as amended, which became effective April 2, 2013, under the heading "Risk Factors." 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 pre-provision 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", "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 non-GAAP 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 Selected Financial Data 
Three months ended March 31, 2013, March 31, 2012 and December 31, 2012
(Dollars in thousands, except for per share data)
(Unaudited)
  As of and for the Quarter ended
  March 31 December 31,
  2013 2012 2012
Selected Income Statement Data      
Interest income  $ 21,421  $ 15,506  $ 20,214
Interest expense  3,206  3,204  3,423
Net interest income  18,215  12,302  16,791
Provision for loan losses 1,030   575  929
Net interest income after provision for loan losses  17,185    11,727  15,862
Noninterest income  2,426  1,891  3,556
Noninterest expense  13,923  10,494  13,329
Net income   5,688  3,124  6,089
Pro forma net income-after tax (2)  3,822  2,184  4,256
Core Pre-Provision Earnings (1)  6,499  4,212  6,392
       
Per Share Data (Common Stock)      
Earnings:      
Basic  $ 0.69  $ 0.44  $ 0.74
Diluted  0.68  0.43  0.74
Pro forma earnings:      
Basic  0.46  0.30  0.50
Diluted  0.46  0.30  0.50
Dividends  0.65  0.20  0.38
Book value  15.01  13.75  15.06
Tangible book value (1)  11.16  12.00  11.19
       
Selected Period End Balance Sheet Data      
Total assets  $ 1,764,134  $ 1,307,760  $ 1,740,060
Cash and cash equivalents  80,890  97,175  102,290
Securities available for sale  114,540  91,089  113,355
Total loans (gross)  1,421,996  1,005,083  1,378,676
Allowance for loan losses  11,984  9,328  11,478
Goodwill and core deposit intangible  31,817  13,744  31,965
Other real estate owned  8,459  8,350  6,847
Adriatica real estate owned  9,724  16,279  9,727
Noninterest-bearing deposits  243,235  170,768  259,664
Interest-bearing deposits  1,171,864  886,390  1,131,076
Borrowings (other than junior subordinated debentures)  200,234  124,473  201,118
Junior subordinated debentures  18,147  14,538  18,147
Total stockholders' equity  124,142 107,844  124,510
 
 
Independent Bank Group, Inc. and Subsidiaries
Consolidated Selected Financial Data
Three months ended March 31, 2013, March 31, 2012 and December 31, 2012
(Dollars in thousands, except for per share data)
(Unaudited)
  As of and for the Quarter ended
  March 31 December 31,
  2013 2012 2012
       
Selected Performance Metrics      
Return on average assets 1.33% 1.16% 1.43%
Return on average equity  18.49  17.36  20.00
Pro forma return on average assets (2)  0.89  0.79  1.00
Pro forma return on average equity (2)  12.43  11.86  13.98
Adjusted return on average assets (1)  1.52  1.33  1.50
Adjusted return on average equity (1)  21.14  18.46 20.99
Net interest margin  4.68  4.31  4.41
Net interest margin-less acquired loan income (3)  4.40    4.29  4.35
Efficiency ratio  67.45  73.94  65.41
Core efficiency ratio (1)  66.80  70.30  66.30
       
Credit Quality Ratios      
Nonperforming assets to total assets 1.35% 2.51%  1.59%
Nonperforming loans to total loans  0.40  0.82  0.81
Allowance for loan losses to non-performing loans    209.73  113.88  104.02
Allowance for loan losses to total loans  0.85  0.93  0.84
Net charge-offs to average loans outstanding   0.15  0.12  0.10
       
Capital Ratios      
Tier 1 capital to average assets 6.29% 8.38% 6.45%
Tier 1 capital to risk-weighted assets (1)  8.01  10.72  8.22
Total capital to risk-weighted assets  10.20  13.23  10.51
Total stockholders' equity to total assets  7.04  8.25  7.16
Tangible common equity to tangible assets (1)  5.33  7.27  5.42
 
(1) Non GAAP financial measures. See reconciliation.
(2) Income tax expense calculated using effective tax rate as if Company had been a C corporation for periods presented (32.8%, 30.1 % and 30.1%, respectively).
(3) Income recognized on acquired loans totaled $1,068, $58 and $135, respectively.
 
 
Independent Bank Group, Inc. and Subsidiaries
Consolidated Statements of Income
Three months ended March 31, 2013, March 31, 2012 and December 31, 2012
(Dollars in thousands)
(Unaudited)
   Quarter ended
   March 31 December 31,
  2013 2012 2012
       
Interest income:      
Interest and fees on loans  $ 20,759  $ 14,899  $ 19,596
Interest on taxable securities  366  385  355
Interest on nontaxable securities  249  199  221
Interest on federal funds sold and other  47  23  42
Total interest income  21,421  15,506  20,214
       
Interest expense:      
Interest on deposits  1,728  2,134  1,980
Interest on FHLB advances  828  492  687
Interest on notes payable and other borrowings  515   450  606
Interest on junior subordinated debentures  135  128  150
Total interest expense  3,206  3,204  3,423
       
Net interest income  18,215  12,302  16,791
       
Provision for loan losses  1,030  575  929
       
Net interest income after provision  17,185  11,727  15,862
       
Noninterest income:      
Service charges on deposit accounts  1,139  809  913
Mortgage fee income  1,066  963  1,151
Gain (loss) on sale of other real estate  25  (53)  1,210
Loss on sale of securities available for sale  --    (3)  -- 
Gain on sale of premises and equipment  1  1  3
Increase in cash surrender value of BOLI  81  82  82
Other  114  92  197
Total noninterest income  2,426  1,891  3,556
       
Noninterest expense:      
Salaries and employee benefits  7,748  5,840  7,659
Occupancy  2,147  1,670  2,002
Data processing  296  267  347
FDIC assessment  246  199  176
Advertising and public relations  216  154  104
Communications  340  308  349
Net other real estate owned expenses  166  73  15
Operations of IBG Adriatica , net  197  300  91
Other real estate impairment  448   --   38
Core deposit intangible  176  142  176
Professional fees  272  243  352
Acquisition expense, including legal  137  216  590
Other  1,534  1,082  1,430
Total noninterest expense  13,923  10,494  13,329
Net income  $ 5,688  $ 3,124  $ 6,089
 
 
Independent Bank Group, Inc. and Subsidiaries
Consolidated Balance Sheets
As of March 31, 2013, March 31, 2012 and December 31, 2012
(Dollars in thousands)
(Unaudited)
   March 31,   March 31,   December 31, 
 Assets  2013  2012  2012
       
 Cash and due from banks   $ 17,560  $ 17,300  $ 30,920
 Federal Reserve Excess Balance Account ("EBA")   63,330  79,875  71,370
 Cash and cash equivalents  80,890  97,175  102,290
       
 Certificates of deposit held in other banks   4,682  --   7,720
 Securities available for sale   114,540  91,089  113,355
 Loans held for sale  6,090  2,455  9,162
 Loans, net of allowance for loan losses of $11,984      
 $9,328 and $11,478, respectively  1,403,922  993,301  1,358,036
 Premises and equipment, net   72,903  61,099  70,581
 Other real estate owned  8,459  8,350  6,847
 Adriatica real estate   9,724   16,279  9,727
 Goodwill  28,742  11,222  28,714
 Core deposit intangible, net   3,075  2,522  3,251
 Federal Home Loan Bank ("FHLB") of Dallas stock and other restricted stock  8,170  4,885  8,165
 Bank-owned life insurance ("BOLI")   11,005  10,679  10,924
 Deferred tax asset  --   --   -- 
 Other assets  11,932  8,704  11,288
       
 Total assets  $ 1,764,134  $ 1,307,760  $ 1,740,060
       
 Liabilities and Stockholders' Equity
       
 Deposits:      
 Noninterest-bearing  243,235  170,768  259,664
 Interest-bearing  1,171,864  886,390  1,131,076
 Total deposits  1,415,099  1,057,158  1,390,740
       
 FHLB advances  164,552  82,244  164,601
 Notes payable   15,082  25,314  15,729
 Other borrowings  20,600  16,915  20,788
 Junior subordinated debentures   18,147  14,538  18,147
 Dividends payable  2,324   --   -- 
 Other liabilities  4,188  3,747  5,545
 Total liabilities  1,639,992  1,199,916  1,615,550
       
 Commitments and contingencies       
       
 Stockholders' equity:      
 Common stock   83  78  83
 Additional paid-in capital  88,973  79,478  88,791
 Retained earnings  33,624  26,320  33,290
 Treasury stock, at cost   (232)  (24)  (232)
 Accumulated other comprehensive income  1,694  1,992  2,578
 Total stockholders' equity  124,142  107,844  124,510
       
 Total liabilities and stockholders' equity  $ 1,764,134  $ 1,307,760  $ 1,740,060
 
 
Independent Bank Group, Inc. and Subsidiaries
Consolidated Average Balance Sheet Amounts, Interest Earned, and Yield Analysis
Three months ended March 31, 2013 and March 31, 2012
(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 Quarter Ended March 31,
  2013 2012
  Average     Average    
  Outstanding   Yield/ Outstanding   Yield/
  Balance Interest Rate Balance Interest Rate (1)
Interest-earning assets:            
Loans  $ 1,397,215  $ 20,759 6.03%  $ 998,316  $ 14,899 5.94%
Taxable securities  82,370  366 1.80  68,994  385 2.22
Nontaxable securities  31,815  249 3.17  22,330  199 3.55
Federal funds sold and other  68,012  47 0.28  45,219  23 0.20
Total interest-earning assets  1,579,412  21,421 5.50  1,134,859  15,506 5.44
Noninterest-earning assets  154,513      137,042    
Total assets  $ 1,733,924      $ 1,271,901    
             
Interest-bearing liabilities:            
Checking accounts  694,492  946 0.55  482,706  1,116 0.92
Savings accounts  114,429  91 0.32  103,275  224 0.86
Limited access money market accounts  38,610  24 0.25  12,253  27 0.89
Certificates of deposit  304,147  667 0.89  268,464  767 1.14
Total deposits  1,151,679  1,728 0.61  866,698  2,134 0.98
FHLB advances  164,582  828 2.04  82,269  492 2.38
Notes payable and other borrowings  36,100  515 5.79  39,125  450 4.58
Junior subordinated debentures  18,147  135 3.02  14,538  128 3.50
Total interest-bearing liabilities  1,370,507  3,206 0.95  1,002,630  3,204 1.27
Noninterest-bearing checking accounts  235,125      153,975    
Noninterest-bearing liabilities  3,561      23,520    
Stockholders' equity   124,731      91,776    
Total liabilities and equity  $ 1,733,924      $ 1,271,901    
             
Net interest income    $ 18,215      $ 12,302  
             
Interest rate spread     4.55%     4.16%
Net interest margin     4.68     4.31
 
 
Independent Bank Group, Inc. and Subsidiaries
Loan Portfolio Composition
As of March 31, 2013, March 31, 2012 and December 31, 2012
(Dollars in thousands)
(Unaudited)
 
The following table sets forth loan totals by category as of the dates presented:
 
  As of March 31, As of December 31, 2012
  2013 2012 2012
  Amount % of Total Amount % of Total Amount % of Total
Commercial  $ 175,910  12.37%  $ 120,764 12.02 $169,882  12.32
Real estate:            
Commercial real estate  679,762  47.80  470,858 46.85 $648,494  47.04
Commercial construction, land and land development  100,586  7.07  86,823 8.64 $97,329  7.06
Residential real estate (1)  332,529  23.38  225,426 22.43 $315,349  22.87
Single-family interim  const.  54,167  3.81  30,383 3.02 $67,920  4.93
Agricultural  36,806  2.59  35,954 3.58 $40,127  2.91
Consumer  42,032  2.96  34,819 3.46 $39,502  2.87
Other  204  0.01  56 0.01 73  -- 
Total loans  1,421,996  100%  1,005,083 100.00  1,378,676 100.00
Other items:            
Allowance for losses  (12,084)    (9,328)    (11,478)  
Total loans, net  $ 1,409,911    $ 995,755    $ 1,367,198  
             
(1) Includes loans held for sale at March 31, 2013, March 31, 2012 and December 31, 2012 of $6,090, $2,455 and $9,162, respectively.
 
 
Independent Bank Group, Inc. and Subsidiaries
Reconciliation of Non GAAP Financial Measures
Three months ended March 31, 2013, March 31, 2012 and December 31, 2012
(Dollars in thousands except for per share data)
(Unaudited)
 
The following tables reconcile non GAAP financial measures:
 
  For the Quarter Ended
  31-Mar-13 31-Mar-12 31-Dec-12
       
Net Interest Income - Reported (a)  $ 18,215  $ 12,302 $ 16,791
Income recognized on acquired loans (b)  (1,068)  (58)  (135)
Net Interest Income less accretion on acquired loans (a + b = c)  17,147  12,244  16,656
       
Provision Expense - Reported  1,030  575  929
       
Noninterest Income - Reported (d)  2,426  1,891  3,556
Loss / (Gain) on Sale of OREO  (25)  53  (1,210)
Loss / (Gain) on Sale of Securities     3  -- 
Loss / (Gain) on Sale of PP&E  (1)  (1)  -- 
Adjusted Noninterest Income (e)  2,400  1,946  2,346
       
Noninterest Expense - Reported (f)  13,923  10,494  13,329
Adriatica Expenses  (197)  (300)  (91)
OREO Impairment  (448)  --   (38)
OREO Back Property Tax  (93)  --   -- 
Acquisition Expense  (137)  (216)  (590)
Adjusted Noninterest Expense (g)  13,048  9,978  12,610
       
Pre-Provision Earnings (a + d) – f) $ 6,718  $ 3,699 $ 7,018
       
Core Pre-Provision Earnings (c + e)  – g)  $ 6,499  $ 4,212  $ 6,392
       
Reported Efficiency Ratio (f ÷ (a + b)) 67.5% 73.9% 65.4%
       
Core Efficiency Ratio (g ÷ (c + e)) 66.8% 70.3% 66.3%
       
Adjusted  Return on Average Assets 1.52% 1.33% 1.50%
       
Adjusted  Return on Average Equity 21.14% 18.46% 20.99%
       
Total Average Assets $1,733,924 $1,271,901 $1,698,779
Total Average Stockholders' Equity $ 124,731 $  91,776 $  121,121
 
 
Independent Bank Group, Inc. and Subsidiaries
Reconciliation of Non GAAP Financial Measures
Three months ended March 31, 2013, March 31, 2012 and December 31, 2012
(Dollars in thousands except for per share data)
(Unaudited)
 
 
Tangible Book Value Per Common Share
  March 31, December 31,
  2013 2012 2012
Tangible Common Equity      
Total stockholders' equity  $ 124,142  $ 107,844  $ 124,510
Adjustments:      
Goodwill  28,742  11,222  28,742
Core deposit intangibles  3,075  2,522  3,251
Tangible common equity  $ 92,325  $ 94,100  $ 92,517
       
Common shares outstanding  8,269,707  7,842,288  8,269,707
       
Book value per common share  $ 15.01  $ 13.75  $ 15.06
Tangible book value per common share  11.16  12.00  11.19
 
 
Tier 1 Capital to Risk-Weighted Assets Ratio
  March 31, December 31,
  2013 2012 2012
Tier 1 Common Equity      
Total stockholders' equity - GAAP  $ 124,142  $ 107,844  $ 124,510
Adjustments:      
Unrealized gain on available-for-sale securities  1,694  1,992  2,578
Goodwill  28,742  11,222  28,742
Other intangibles  3,075  2,522  3,251
Other disallowed assets  --  --  --
Qualifying Restricted Core Capital Elements (TRUPS)  17,600  14,100  17,600
Tier 1 common equity  $  108,231  $ 106,208  $ 107,539
Total Risk-Weighted Assets      
On balance sheet  $ 1,339,808  $ 980,934  $1,297,795
Off balance sheet  10,623  9,610  10,860
Total risk-weighted assets  $ 1,350,431  $ 990,544  $1,308,655
       
Total stockholders' equity to risk-weighted assets ratio  9.19%  10.89%  9.51%
Tier 1 common equity to risk-weighted assets ratio  8.01  10.72  8.22
CONTACT: Analysts/Investors:         Torry Berntsen         President and Chief Operating Officer         (972) 562-9004         tberntsen@independent-bank.com                  Michelle Hickox         Chief Financial Officer         (972) 562-9004         mhickox@independent-bank.com                  Media:         Eileen Ponce         (469) 742-9437         eponce@independent-bank.com

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