Independent Bank Group Earnings 2021-03-31

Balance Sheet	Income Statement	Cash Flow

ibtx-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended March 31, 2021.


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from to .

Commission file number 001-35854

Independent Bank Group, Inc.

(Exact name of registrant as specified in its charter)


Texas						13-4219346
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

7777 Henneman Way
McKinney,
Texas						75070-1711
(Address of principal executive offices)						(Zip Code)

(972) 562-9004

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Exchange on Which Registered

Common Stock, par value $0.01 per share

IBTX

NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

(Do not check if a smaller reporting company)

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Applicable Only to Corporate Issuers

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common Stock, Par Value $0.01 Per Share – 43,192,579 shares as of April 27, 2021.

INDEPENDENT BANK GROUP, INC. AND SUBSIDIARIES

Form 10-Q

March 31, 2021

***

Table of Contents

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

Independent Bank Group, Inc. and Subsidiaries

Consolidated Balance Sheets

March 31, 2021 (unaudited) and December 31, 2020

(Dollars in thousands, except share information)


	March 31,		December 31,
Assets	2021		2020
Cash and due from banks	$	248,231	$	250,485
Interest-bearing deposits in other banks	2,168,639		1,563,502

Cash and cash equivalents	2,416,870		1,813,987
Certificates of deposit held in other banks	4,482		4,482
Securities available for sale, at fair value	1,307,957		1,153,693
Loans held for sale (includes $53,930 and $71,769 carried at fair value, respectively)	57,799		82,647
Loans, net of allowance for credit losses of $165,827 and $87,820, respectively	12,604,930		12,978,238
Premises and equipment, net	250,002		249,467
Other real estate owned	475		475
Federal Home Loan Bank (FHLB) of Dallas stock and other restricted stock	20,338		20,305
Bank-owned life insurance (BOLI)	221,700		220,428
Deferred tax asset	18,804		3,933
Goodwill	994,021		994,021
Other intangible assets, net	84,925		88,070
Other assets	133,033		143,730
Total assets	$	18,115,336	$	17,753,476

Liabilities and Stockholders’ Equity
Deposits:
Noninterest-bearing	$	4,466,310	$	4,164,800
Interest-bearing	10,337,482		10,234,127
Total deposits	14,803,792		14,398,927
FHLB advances	375,000		375,000

Other borrowings	308,350		312,175

Junior subordinated debentures	54,072		54,023
Other liabilities	81,005		97,980
Total liabilities	15,622,219		15,238,105
Commitments and contingencies	—		—
Stockholders’ equity:
Preferred stock (0 and 0 shares outstanding, respectively)	—		—
Common stock (43,193,257 and 43,137,104 shares outstanding, respectively)	432		431
Additional paid-in capital	1,938,012		1,934,807
Retained earnings	535,375		543,800

Accumulated other comprehensive income	19,298		36,333
Total stockholders’ equity	2,493,117		2,515,371
Total liabilities and stockholders’ equity	$	18,115,336	$	17,753,476

See Notes to Consolidated Financial Statements

Table of Contents

Independent Bank Group, Inc. and Subsidiaries

Consolidated Statements of Income

Three Months Ended March 31, 2021 and 2020 (unaudited)

(Dollars in thousands, except per share information)


	Three Months Ended March 31,
	2021		2020
Interest income:
Interest and fees on loans	$	140,152	$	147,105
Interest on taxable securities	4,757		5,164
Interest on nontaxable securities	2,069		2,065
Interest on interest-bearing deposits and other	793		2,071
Total interest income	147,771		156,405
Interest expense:
Interest on deposits	13,007		28,071
Interest on FHLB advances	533		1,626
Interest on other borrowings	4,060		2,795
Interest on junior subordinated debentures	442		672
Total interest expense	18,042		33,164
Net interest income	129,729		123,241
Provision for credit losses	(2,500)		8,381
Net interest income after provision for credit losses	132,229		114,860
Noninterest income:
Service charges on deposit accounts	2,261		2,752
Investment management fees	2,043		1,986
Mortgage banking revenue	7,495		2,525
Loss on sale of loans	—		(42)


Gain on sale of other real estate	—		25

Gain on sale of securities available for sale	—		356
Loss on sale and disposal of premises and equipment	(7)		(63)
Increase in cash surrender value of BOLI	1,272		1,341
Other	5,545		5,692
Total noninterest income	18,609		14,572
Noninterest expense:
Salaries and employee benefits	43,659		38,660
Occupancy	9,606		10,037
Communications and technology	5,536		5,552
FDIC assessment	1,705		1,752
Advertising and public relations	238		611
Other real estate owned expenses, net	8		374

Amortization of other intangible assets	3,145		3,176
Professional fees	3,670		4,214
Acquisition expense, including legal	—		549
Other	7,546		9,504
Total noninterest expense	75,113		74,429
Income before taxes	75,725		55,003
Income tax expense	15,745		10,836
Net income	$	59,980	$	44,167
Basic earnings per share	$	1.39	$	1.03
Diluted earnings per share	$	1.39	$	1.03

See Notes to Consolidated Financial Statements

Table of Contents

Independent Bank Group, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

Three Months Ended March 31, 2021 and 2020 (unaudited)

(Dollars in thousands)


	Three Months Ended March 31,
	2021		2020
Net income	$	59,980	$	44,167
Other comprehensive (loss) income before tax:
Change in net unrealized (losses) gains on available for sale securities during the year	(21,563)		14,976
Reclassification for amount realized through sales of securities available for sale included in net income	—		(356)
Other comprehensive (loss) income before tax	(21,563)		14,620
Income tax (benefit) expense	(4,528)		3,258
Other comprehensive (loss) income, net of tax	(17,035)		11,362
Comprehensive income	$	42,945	$	55,529

See Notes to Consolidated Financial Statements

Table of Contents

Independent Bank Group, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended March 31, 2021 and 2020 (unaudited)

(Dollars in thousands, except for par value, share and per share information)


	Preferred Stock $0.01 Par Value		Common Stock $0.01 Par Value			Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
	10 million shares authorized		100 million shares authorized
			Shares	Amount
Three Months Ended
Balance, December 31, 2020	$	—	43,137,104	$	431	$	1,934,807	$	543,800	$	36,333	$	2,515,371
Cumulative effect of change in accounting principle	—		—	—		—		(53,880)		—		(53,880)
Adjusted beginning balance	—		43,137,104	431		1,934,807		489,920		36,333		2,461,491
Net income	—		—	—		—		59,980		—		59,980
Other comprehensive loss, net of tax	—		—	—		—		—		(17,035)		(17,035)


Common stock repurchased	—		(22,835)	—		—		(1,489)		—		(1,489)
Restricted stock forfeited	—		(4,506)	—		—		—		—		—
Restricted stock granted	—		83,494	1		(1)		—		—		—
Stock based compensation expense	—		—	—		3,206		—		—		3,206


Cash dividends ($0.30 per share)	—		—	—		—		(13,036)		—		(13,036)
Balance, March 31, 2021	$	—	43,193,257	$	432	$	1,938,012	$	535,375	$	19,298	$	2,493,117

















Three Months Ended
Balance, December 31, 2019	$	—	42,950,228	$	430	$	1,926,359	$	393,674	$	19,310	$	2,339,773


Net income	—		—	—		—		44,167		—		44,167
Other comprehensive income, net of tax	—		—	—		—		—		11,362		11,362


Common stock repurchased	—		(2,629)	—		—		(145)		—		(145)

Restricted stock granted	—		94,177	—		—		—		—		—

Stock based compensation expense	—		—	—		1,882		—		—		1,882


Cash dividends ($0.25 per share)	—		—	—		—		(10,754)		—		(10,754)
Balance, March 31, 2020	$	—	43,041,776	$	430	$	1,928,241	$	426,942	$	30,672	$	2,386,285

See Notes to Consolidated Financial Statements

Table of Contents

Independent Bank Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2021 and 2020 (unaudited)

(Dollars in thousands)


	Three Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net income	$	59,980	$	44,167
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	3,160		3,154
Accretion income recognized on acquired loans	(6,245)		(9,142)
Amortization of other intangibles assets	3,145		3,176
Amortization of premium on securities, net	982		619
Amortization of discount and origination costs on borrowings	224		159
Stock based compensation expense	3,206		1,882
Excess tax (benefit) expense on restricted stock vested	(194)		80
FHLB stock dividends	(33)		(168)
Gain on sale of securities available for sale	—		(356)
Loss on sale and disposal of premises and equipment	7		63
Loss on sale of loans	—		42


Gain on sale of other real estate owned	—		(25)


Impairment of other assets	9		—
Deferred tax expense	4,771		2,471
Provision for credit losses	(2,500)		8,381
Increase in cash surrender value of BOLI	(1,272)		(1,341)
Net gain on mortgage loans held for sale	(5,299)		(3,916)
Originations of loans held for sale	(217,882)		(107,580)
Proceeds from sale of loans held for sale	248,029		107,714
Net change in other assets	10,833		(10,935)
Net change in other liabilities	(23,033)		1,980
Net cash provided by operating activities	77,888		40,425
Cash flows from investing activities:
Proceeds from maturities, calls and pay downs of securities available for sale	7,200,419		1,528,836
Proceeds from sale of securities available for sale	—		13,100
Purchases of securities available for sale	(7,372,228)		(1,530,779)




Purchases of FHLB stock and other restricted stock	—		(25,211)
Proceeds from redemptions of FHLB stock and other restricted stock	—		106
Proceeds from sale of loans	—		1,455
Net loans originated held for investment	(33,926)		(89,252)
Originations of mortgage warehouse purchase loans	(8,419,896)		(4,523,819)
Proceeds from pay-offs of mortgage warehouse purchase loans	8,767,994		4,414,527
Additions to premises and equipment	(3,811)		(5,948)
Proceeds from sale of premises and equipment	21		66
Proceeds from sale of other real estate owned	—		4,200








Net cash provided by (used in) investing activities	138,573		(212,719)

Table of Contents

Independent Bank Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

Three Months Ended March 31, 2021 and 2020 (unaudited)

(Dollars in thousands)


	Three Months Ended March 31,
	2021		2020
Cash flows from financing activities:
Net increase (decrease) in demand deposits, money market and savings accounts	456,447		(9,596)
Net decrease in time deposits	(51,582)		(48,974)
Proceeds from FHLB advances	—		1,100,000
Repayments of FHLB advances	—		(450,000)

Proceeds from other borrowings	2,500		—
Repayments of other borrowings	(6,500)		(24,500)


Repurchase of common stock	(1,489)		(145)


Dividends paid	(12,954)		(10,754)
Net cash provided by financing activities	386,422		556,031
Net change in cash and cash equivalents	602,883		383,737
Cash and cash equivalents at beginning of period	1,813,987		565,170
Cash and cash equivalents at end of period	$	2,416,870	$	948,907

See Notes to Consolidated Financial Statements

Table of Contents

Independent Bank Group, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(Dollars in thousands, except for share and per share information)

Note 1. Summary of Significant Accounting Policies

Nature of operations: Independent Bank Group, Inc. (IBG) through its subsidiary, Independent Bank, a Texas state banking corporation, doing business as Independent Financial, (Bank) (collectively known as the Company), provides a full range of banking services to individual and corporate customers in the North, Central and Southeast, Texas areas and along the Colorado Front Range, through its various branch locations in those areas. The Company is engaged in traditional community banking activities, which include commercial and retail lending, deposit gathering, investment and liquidity management activities. The Company’s primary deposit products are demand deposits, money market accounts and certificates of deposit and its primary lending products are commercial business and real estate, real estate mortgage and consumer loans.

Basis of presentation: The accompanying consolidated financial statements include the accounts of IBG and all other entities in which IBG has controlling financial interest. All material intercompany transactions and balances have been eliminated in consolidation. In addition, the Company wholly-owns nine statutory business trusts that were formed for the purpose of issuing trust preferred securities and do not meet the criteria for consolidation.

The consolidated interim financial statements are unaudited, but include all adjustments, which, in the opinion of management, are necessary for a fair presentation of the results of the periods presented. All such adjustments were of a normal and recurring nature. These financial statements should be read in conjunction with the financial statements and the notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The consolidated balance sheet at December 31, 2020 has been derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

Accounting standards codification: The Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) is the officially recognized source of authoritative U.S. generally accepted accounting principles (GAAP) applicable to all public and non-public non-governmental entities. Rules and interpretive releases of the SEC under the authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. All other accounting literature is considered non-authoritative. Citing particular content in the ASC involves specifying the unique numeric path to the content through the Topic, Subtopic, Section and Paragraph structure.

Price	52.22	EPS	3
Shares	43	P/E	16
MCap	2,248	P/FCF	16
Net Debt	-570	EBIT	294
TEV	1,678	TEV/EBIT	6
TTM 2019-09-30, in MM, except price, ratios

10-Q	2021-03-31	Filed 2021-04-29
10-K	2020-12-31	Filed 2021-03-01
10-Q	2020-09-30	Filed 2020-10-29
10-Q	2020-06-30	Filed 2020-07-30
10-Q	2020-03-31	Filed 2020-05-01
10-K	2019-12-31	Filed 2020-03-02
10-Q	2019-09-30	Filed 2019-10-24
10-Q	2019-06-30	Filed 2019-07-25
10-Q	2019-03-31	Filed 2019-04-25
10-K	2018-12-31	Filed 2019-02-28
10-Q	2018-09-30	Filed 2018-10-25
10-Q	2018-06-30	Filed 2018-07-26
10-Q	2018-03-31	Filed 2018-04-26
10-K	2017-12-31	Filed 2018-02-27
10-Q	2017-09-30	Filed 2017-10-26
10-Q	2017-06-30	Filed 2017-07-27
10-Q	2017-03-31	Filed 2017-04-27
10-K	2016-12-31	Filed 2017-03-08
10-Q	2016-09-30	Filed 2016-10-27
10-Q	2016-06-30	Filed 2016-07-27
10-Q	2016-03-31	Filed 2016-04-27
10-K	2015-12-31	Filed 2016-02-25
10-Q	2015-09-30	Filed 2015-10-30
10-Q	2015-06-30	Filed 2015-07-31
10-Q	2015-03-31	Filed 2015-05-01
10-K	2014-12-31	Filed 2015-02-27
10-Q	2014-09-30	Filed 2014-11-04
10-Q	2014-06-30	Filed 2014-08-11
10-Q	2014-03-31	Filed 2014-05-05
10-K	2013-12-31	Filed 2014-03-27
10-Q	2013-09-30	Filed 2013-11-05
10-Q	2013-06-30	Filed 2013-08-08
10-Q	2013-03-31	Filed 2013-05-15

8-K	2020-11-02
8-K	2020-10-26
8-K	2020-09-10
8-K	2020-09-08
8-K	2020-08-27
8-K	2020-08-10
8-K	2020-07-29
8-K	2020-07-27
8-K	2020-06-10
8-K	2020-06-03
8-K	2020-05-26
8-K	2020-05-22
8-K	2020-04-29
8-K	2020-04-27
8-K	2020-02-03
8-K	2020-01-29
8-K	2020-01-27
8-K	2020-01-21
8-K	2019-12-09
8-K	2019-12-09
8-K	2019-11-11
8-K	2019-11-05
8-K	2019-10-23
8-K	2019-10-21
8-K	2019-08-07
8-K	2019-07-25
8-K	2019-07-24
8-K	2019-07-22
8-K	2019-05-23
8-K	2019-05-15
8-K	2019-05-13
8-K	2019-04-24
8-K	2019-04-23
8-K	2019-04-22
8-K	2019-01-30
8-K	2019-01-30
8-K	2019-01-28
8-K	2019-01-17
8-K	2019-01-01
8-K	2018-12-27
8-K	2018-12-17
8-K	2018-11-07
8-K	2018-10-24
8-K	2018-10-23
8-K	2018-09-24
8-K	2018-07-31
8-K	2018-07-25
8-K	2018-07-23
8-K	2018-06-07
8-K	2018-06-01
8-K	2018-05-24
8-K	2018-05-22
8-K	2018-05-21
8-K	2018-04-25
8-K	2018-04-23
8-K	2018-03-16
8-K	2018-02-01
8-K	2018-01-31
8-K	2018-01-29
8-K	2018-01-17
8-K	2018-01-08

EX-10.2	exhibit102performancerestr.htm
EX-31.1	exhibit31_1q12021.htm
EX-31.2	exhibit31_2q312021.htm
EX-32.1	exhibit32_1q12021.htm
EX-32.2	exhibit32_2q12021.htm


PART I.	Financial Information

Item 1.	Financial Statements
	Consolidated Balance Sheets-Unaudited	1
	Consolidated Statements of Income-Unaudited	2
	Consolidated Statements of Comprehensive Income-Unaudited	3
	Consolidated Statements of Changes in Stockholders’ Equity-Unaudited	4
	Consolidated Statements of Cash Flows-Unaudited	5
	Notes to Consolidated Financial Statements-Unaudited	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	58

Item 4.	Controls and Procedures	59

PART II.	Other Information

Item 1.	Legal Proceedings	60

Item 1A.	Risk Factors	61

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	61

Item 3.	Defaults Upon Senior Securities	61

Item 4.	Mine Safety Disclosures	61

Item 5.	Other Information	61

Item 6.	Exhibits	62

Signatures

IBTX 10Q Quarterly Report

Independent Bank Group Earnings 2021-03-31