EX-99.1 2 exhibit991q32024.htm EX-99.1 Document

                    
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Exhibit 99.1

Press Release
For Immediate Release
    

INDEPENDENT BANK GROUP, INC. REPORTS THIRD QUARTER FINANCIAL RESULTS AND DECLARES QUARTERLY DIVIDEND
October 21, 2024
McKINNEY, Texas, October 21, 2024 -- Independent Bank Group, Inc. (NASDAQ: IBTX) today announced net income of $20.4 million, or $0.49 per diluted share, for the quarter ended September 30, 2024, compared to $32.8 million, or $0.79 per diluted share for the quarter ended September 30, 2023 and net loss of $493,455 or ($11.93) per diluted share for the quarter ended June 30, 2024. Adjusted (non-GAAP) net income for the quarter ended September 30, 2024 was $20.6 million, or $0.50 per diluted share, compared to $32.6 million, or $0.79 per diluted share for the quarter ended September 30, 2023 and $24.9 million, or $0.60 per diluted share for the quarter ended June 30, 2024.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.38 per share of common stock. The dividend will be payable on November 14, 2024 to stockholders of record as of the close of business on October 31, 2024.
Highlights
•Net interest margin expanded by 3 basis points to 2.50%
•Loan yields expanded by 4 basis points to 6.07%
•Continued healthy credit metrics with nonperforming asset ratio of 0.37% and net charge-off ratio of 0.00%, annualized for the quarter
•Increased book value by $1.18 per share to $47.03 and (non-GAAP) tangible book value by $1.27 per share to $34.54
•Total capital ratio grew by 151 basis points to 13.26%, and (non-GAAP) tangible common equity (TCE) ratio grew by 20 basis points to 7.92%
“During the third quarter, we were pleased to see our net interest margin continue its expansion upward, slightly offset by the excess liquidity held during the quarter, as our loans continue to reprice. We also saw substantial enhancement of balance sheet strength in the third quarter as we replaced maturing subordinated debt which had lost capital treatment, resulting in a material increase to total regulatory capital. Also of note, we made the strategic decision to exit the mortgage warehouse line of business during the quarter, which should result in further increases to capital and liquidity once it has fully wound down,” said Independent Bank Group Chairman & CEO David R. Brooks. “As we enter the fourth quarter, we look forward to disciplined execution on all fronts while we work toward the completion of our pending merger with SouthState Corporation. We remain excited to join SouthState, a company whose culture, business model, and credit discipline matches ours.”
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Third Quarter 2024 Balance Sheet Highlights
Loans
•Total loans held for investment, excluding mortgage warehouse purchase loans, were $13.9 billion at September 30, 2024 compared to $14.0 billion at June 30, 2024 and $13.8 billion at September 30, 2023. Loans held for investment, excluding mortgage warehouse purchase loans, decreased $91.5 million, or 2.6% on an annualized basis, during third quarter 2024.
•Average mortgage warehouse purchase loans were $517.3 million for the quarter ended September 30, 2024 compared to $538.5 million for the quarter ended June 30, 2024, and $425.9 million for the quarter ended September 30, 2023, a decrease of $21.2 million, or 3.9% from the linked quarter and an increase of $91.4 million, or 21.5% year over year.
•During the quarter, the Company notified its mortgage warehouse customers that it intends to cease funding new mortgage warehouse purchase loans during the fourth quarter and exit the mortgage warehouse line of business.
Asset Quality
•Nonperforming assets totaled $68.1 million, or 0.37% of total assets at September 30, 2024, compared to $64.9 million or 0.35% of total assets at June 30, 2024, and $61.0 million, or 0.33% of total assets at September 30, 2023.
•Nonperforming loans totaled $59.3 million, or 0.43% of total loans held for investment at September 30, 2024, compared to $56.1 million, or 0.40% at June 30, 2024 and $38.4 million, or 0.28% at September 30, 2023.
•The increases in nonperforming loans and nonperforming assets for the linked quarter was primarily due to a $2.9 million commercial real estate loan added to nonaccrual and a $2.9 million commercial real estate loan that was past due 90 days and still accruing offset by net paydowns for the quarter.
•The increases in nonperforming loans and assets from the prior year reflects the nonperforming loan changes discussed above, as well as a commercial real estate loan totaling $13.0 million added to nonaccrual in fourth quarter 2023 and two commercial relationships totaling $3.4 million added to nonaccrual in the first half of 2024, offset by net paydowns in the year over year period. In addition, the prior year change in nonperforming assets also reflects reductions of $13.8 million in other real estate owned during the year over year period.
•Net charge-offs were 0.00% annualized in the third quarter 2024 compared to 0.10% annualized in the linked quarter and 0.01% annualized in the prior year quarter.
Deposits, Borrowings and Liquidity
•Total deposits were $16.0 billion at September 30, 2024 compared to $15.8 billion at June 30, 2024 and $15.3 billion at September 30, 2023.
•Total borrowings (other than junior subordinated debentures) were $454.8 million at September 30, 2024, an increase of $27.6 million from June 30, 2024 and a decrease of $91.9 million from September 30, 2023. The linked quarter change reflects a $33.8 million payoff of the Company's unsecured line of credit and the redemption of $110.0 million in subordinated debentures offset by the issuance of $175.0 million in new subordinated debentures (net of $3.8 million in issuance costs). The year over year change reflects the aforementioned changes in addition to a $155.0 million BTFP advance taken in first quarter 2024 offset by a reduction of $275.0 million in short-term FHLB advances for the year over year period.
Capital
•The Company continues to be well capitalized under regulatory guidelines. At September 30, 2024, the estimated common equity Tier 1 to risk-weighted assets, Tier 1 capital to average assets, Tier 1 capital to risk-weighted assets and total capital to risk-weighted asset ratios were 10.01%, 9.08%, 10.36% and 13.26%, respectively, compared to 9.69%, 8.76%, 10.03%, and 11.75%, respectively, at June 30, 2024 and 9.86%, 9.09%, 10.21%, and 11.89%, respectively at September 30, 2023.
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Third Quarter 2024 Operating Results
Net Interest Income
•Net interest income was $106.8 million for third quarter 2024 compared to $109.0 million for third quarter 2023 and $105.1 million for second quarter 2024. The decrease from the prior year was primarily due to the increased funding costs on our deposit products offset to a lesser extent by increased earnings on average loan balances. The increase from the linked quarter was primarily due to increased earnings on loans and interest-bearing deposits offset by an increase in interest expense on deposits during the quarter. The third quarter 2024 includes $1.0 million in acquired loan accretion compared to $940 thousand in third quarter 2023 and $1.0 million in second quarter 2024.
•The average balance of total interest-earning assets grew by $349.9 million and totaled $17.0 billion for the quarter ended September 30, 2024 compared to $16.7 billion for the quarter ended September 30, 2023 and decreased slightly by $89.1 million from $17.1 billion for the quarter ended June 30, 2024. The increase from the prior year is primarily due to an increase in average loans of $369.4 million due to organic growth primarily occurring in the second half of 2023.
•The yield on interest-earning assets was 5.65% for third quarter 2024 compared to 5.31% for third quarter 2023 and 5.62% for second quarter 2024. The increase in asset yield compared to the prior year and linked quarter is primarily a result of increases in the benchmark rates over the last year. The average loan yield, net of acquired loan accretion was 6.04% for the current quarter, compared to 5.67% for prior year quarter and 6.00% for the linked quarter.
•The cost of interest-bearing liabilities, including borrowings, was 4.16% for third quarter 2024 compared to 3.72% for third quarter 2023 and 4.16% for second quarter 2024. The increase from the prior year is reflective of higher funding costs, primarily on deposit products as a result of Fed Funds rate increases in 2023 offset by decreased costs on FHLB advances, primarily due to lower holdings based on liquidity needs resulting in a shift in funding sources during the year-over-year period. The linked quarter cost of interest-bearing liabilities remains unchanged primarily due to a shift in the mix of deposits from higher rate accounts to lower rate accounts offset by the shift in borrowings from lower rate short-term borrowings to higher rate long-term borrowings.
•The net interest margin was 2.50% for third quarter 2024 compared to 2.60% for third quarter 2023 and 2.47% for second quarter 2024. The net interest margin excluding acquired loan accretion was 2.47% for third quarter 2024 compared to 2.58% for third quarter 2023 and 2.45% for second quarter 2024. The decrease in net interest margin from the prior year was primarily due to the increased funding costs on deposits, offset by a reduction in funding costs on advances and other borrowings due to lower average balances, as well as higher earnings on loans due to organic growth and rate increases for the respective periods. The linked quarter change positively reflects the increased rates on loans and lower rates paid on deposits offset by the shift in mix of short and long-term borrowings as discussed above.
Noninterest Income
•Total noninterest income decreased $185 thousand compared to third quarter 2023 and increased $28 thousand compared to second quarter 2024.
•The decrease from the prior year quarter primarily reflects a $740 thousand decrease in other noninterest income offset by increases of $295 thousand in investment management fees and $187 thousand in BOLI income.
Noninterest Expense
•Total noninterest expense increased $8.6 million compared to third quarter 2023 and decreased $517.0 million compared to second quarter 2024.
•The increase in noninterest expense in third quarter 2024 compared to the prior year is due primarily to increases of $6.4 million in salaries and benefits, $1.0 million in communications and technology expense and $543 thousand in FDIC assessment. In addition, there was $460 thousand of acquisition expenses incurred in the current quarter.
•The decrease from the linked quarter primarily reflects a decrease of $1.9 million in acquisition expenses offset by an increase of $1.4 million in FDIC assessment. In addition, there was a $518.0 million goodwill impairment charge that occurred in the linked quarter.
•The increase in salaries and benefits from the prior year primarily reflects increases in incentive and equity awards as well as increases in various employee benefits.
•The increase in communications and technology expense from the prior year was due to software cost increases among various technology and information security vendors, as well as an increase in cloud-based software expenses.
•The increase in FDIC assessment for the prior year and linked quarter reflects overall increases in the assessment rates, including the impact from the Company's current year loss position.
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Provision for Credit Losses
•The Company recorded a $4.7 million provision for credit losses for third quarter 2024, compared to provision expense of $340 thousand for third quarter 2023 and zero provision for the linked quarter. Provision expense (reversal) during a given period is generally dependent on changes in various factors, including economic conditions, credit quality and past due trends, as well as loan growth or decline and charge-offs or specific credit loss allocations taken during the respective period. The increased provision expense for third quarter 2024 is primarily due to $4.5 million in additional specific credit allocations on a commercial relationship.
•The allowance for credit losses on loans was $150.3 million, or 1.08% of total loans held for investment, net of mortgage warehouse purchase loans, at September 30, 2024, compared to $148.2 million, or 1.08% at September 30, 2023 and compared to $145.3 million, or 1.04% at June 30, 2024.
•The allowance for credit losses on off-balance sheet exposures was $3.4 million at September 30, 2024 compared to $4.4 million at September 30, 2023, compared to $3.5 million at June 30, 2024. Changes in the allowance for unfunded commitments are generally driven by the remaining unfunded amount and the expected utilization rate of a given loan segment.
Income Taxes
•Federal income tax expense of $5.3 million was recorded for the third quarter 2024, an effective rate of 20.5% compared to federal tax expense of $8.2 million and an effective rate of 20.1% for the prior year quarter and income tax expense of $5.1 million and an effective rate of (1.0)% for the linked quarter. The effective tax rate in the linked quarter was primarily due to the goodwill impairment charge, of which $512.4 million is not deductible for tax purposes.
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Subsequent Events
The Company is required, under generally accepted accounting principles, to evaluate subsequent events through the filing of its consolidated financial statements for the quarter ended September 30, 2024 on Form 10-Q. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of September 30, 2024 and will adjust amounts preliminarily reported, if necessary.
About Independent Bank Group, Inc.
Independent Bank Group, Inc. is a bank holding company headquartered in McKinney, Texas. Through its wholly owned subsidiary, Independent Bank, doing business as Independent Financial, Independent Bank Group serves customers across Texas and Colorado with a wide range of relationship-driven banking services tailored to meet the needs of businesses, professionals and individuals. Independent Bank Group, Inc. operates in four market regions located in the Dallas/Fort Worth, Austin and Houston areas in Texas and the Colorado Front Range area, including Denver, Colorado Springs and Fort Collins.
Forward-Looking Statements
From time to time the Company’s comments and releases may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and other related federal security laws. Forward-looking statements include information about the Company’s possible or assumed future results of operations, including its future revenues, income, expenses, provision for taxes, effective tax rate, earnings (loss) per share and cash flows, its future capital expenditures and dividends, its future financial condition and changes therein, including changes in the Company’s loan portfolio and allowance for credit losses, the Company’s future capital structure or changes therein, the plan and objectives of management for future operations, the Company’s future or proposed acquisitions, the future or expected effect of acquisitions on the Company’s operations, results of operations and financial condition, the Company’s future economic performance and the statements of the assumptions underlying any such statement. Such statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as “aim,” “anticipate,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is estimated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. The forward-looking statements that the Company makes are based on its current expectations and assumptions regarding its 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. The Company’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. Many possible events or factors could affect the Company’s future financial results and performance and could cause those results or performance to differ materially from those expressed in the forward-looking statements. These possible events or factors include, but are not limited to: 1) the Company’s ability to sustain its current internal growth rate and total growth rate; 2) changes in geopolitical, business and economic events, occurrences and conditions, including changes in rates of inflation or deflation, nationally, regionally and in the Company’s target markets, particularly in Texas and Colorado; 3) worsening business and economic conditions nationally, regionally and in the Company’s target markets, particularly in Texas and Colorado, and the geographic areas in those states in which the Company operates; 4) the Company’s dependence on its management team and its ability to attract, motivate and retain qualified personnel; 5) the concentration of the Company’s business within its geographic areas of operation in Texas and Colorado; 6) changes in asset quality, including increases in default rates on loans and higher levels of nonperforming loans and loan charge-offs generally; 7) concentration of the loan portfolio of Independent Financial, before and after the completion of acquisitions of financial institutions, in commercial and residential real estate loans and changes in the prices, values and sales volumes of commercial and residential real estate; 8) the ability of Independent Financial to make loans with acceptable net interest margins and levels of risk of repayment and to otherwise invest in assets at acceptable yields and that present acceptable investment risks; 9) inaccuracy of the assumptions and estimates that the managements of the Company and the financial institutions that the Company acquires make in establishing reserves for credit losses and other estimates generally; 10) lack of liquidity, including as a result of a reduction in the amount of sources of liquidity the Company currently has; 11) material increases or decreases in the amount of insured and/or uninsured deposits held by Independent Financial or other financial institutions that the Company acquires and the cost of those deposits; 12) adverse developments in the banking industry related to soundness of other financial institutions, and the potential impact of such developments on customer confidence, liquidity, and regulatory responses, including regulatory oversight, examinations, and any potential related findings and actions; (13) the Company’s access to the debt and equity
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markets and the overall cost of funding its operations; 14) regulatory requirements to maintain minimum capital levels or maintenance of capital at levels sufficient to support the Company’s anticipated growth; 15) changes in market interest rates that affect the pricing of the loans and deposits of each of Independent Financial and the financial institutions that the Company acquires and that affect the net interest income, other future cash flows, or the market value of the assets of each of Independent Financial and the financial institutions that the Company acquires, including investment securities; 16) fluctuations in the market value and liquidity of the securities the Company holds for sale, including as a result of changes in market interest rates; 17) effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services; 18) the effects of infectious disease outbreaks and the significant impact and associated efforts to limit such spread has had or may have an economic conditions and the Company's business, employees, customers, asset quality, and financial performance; 19) changes in economic and market conditions, that affect the amount and value of the assets of Independent Financial and of financial institutions that the Company acquires; 20) the institution and outcome of, and costs associated with, litigation and other legal proceedings against one or more of the Company, Independent Financial and financial institutions that the Company acquired or will acquire or to which any of such entities is subject; 21) the occurrence of market conditions adversely affecting the financial industry generally; 22) the impact of recent and future legislative regulatory changes, including changes in banking, securities, and tax laws and regulations and their application by the Company’s regulators, and changes in federal government policies, as well as regulatory requirements applicable to, and resulting from regulatory supervision of, the Company and Independent Financial as a financial institution with total assets greater than $10 billion; 23) changes in accounting policies, practices, principles and guidelines, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the SEC and the Public Company Accounting Oversight Board, as the case may be; 24) governmental monetary and fiscal policies; 25) changes in the scope and cost of FDIC insurance and other coverage; 26) the effects of war or other conflicts, including, but not limited to, the conflicts between Russia and the Ukraine and Israel and Hamas, acts of terrorism (including cyberattacks) or other catastrophic events, including natural disasters such as storms, droughts, tornadoes, hurricanes and flooding, that may affect general economic conditions; 27) the Company’s actual cost savings resulting from previous or future acquisitions are less than expected, the Company is unable to realize those cost savings as soon as expected, or the Company incurs additional or unexpected costs; 28) the Company’s revenues after previous or future acquisitions are less than expected; 29) the liquidity of, and changes in the amounts and sources of liquidity available to the Company, before and after the acquisition of any financial institutions that the Company acquires; 30) deposit attrition, operating costs, customer loss and business disruption before and after the Company completed acquisitions, including, without limitation, difficulties in maintaining relationships with employees, may be greater than the Company expected; 31) the effects of the combination of the operations of financial institutions that the Company has acquired in the recent past or may acquire in the future with the Company’s operations and the operations of Independent Financial, the effects of the integration of such operations being unsuccessful, and the effects of such integration being more difficult, time consuming, or costly than expected or not yielding the cost savings the Company expects; 32) the impact of investments that the Company or Independent Financial may have made or may make and the changes in the value of those investments; 33) the quality of the assets of financial institutions and companies that the Company has acquired in the recent past or may acquire in the future being different than it determined or determine in its due diligence investigation in connection with the acquisition of such financial institutions and any inadequacy of credit loss reserves relating to, and exposure to unrecoverable losses on, loans acquired; 34) the Company’s ability to continue to identify acquisition targets and successfully acquire desirable financial institutions to sustain its growth, to expand its presence in the Company’s markets and to enter new markets; 35) changes in general business and economic conditions in the markets in which the Company currently operates and may operate in the future; 36) changes occur in business conditions and inflation generally; 37) an increase in the rate of personal or commercial customers’ bankruptcies generally; 38) technology-related changes are harder to make or are more expensive than expected; 39) attacks on the security of, and breaches of, the Company's and Independent Financial's digital information systems, the costs the Company or Independent Financial incur to provide security against such attacks and any costs and liability the Company or Independent Financial incurs in connection with any breach of those systems; 40) the potential impact of climate change and related government regulation on the Company and its customers; 41) the potential impact of technology and “FinTech” entities on the banking industry generally; 42) other economic, competitive, governmental, regulatory, technological and geopolitical factors affecting the Company's operations, pricing and services; 43) the possibility that the Company’s pending merger with SouthState Corporation (the “Merger”) does not close when expected or at all because required regulatory or other approvals or conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Merger); 44) the risk that the benefits from the Merger may not be fully realized or may take longer to realize than expected; 45) the risk of disruption to the parties’ businesses as a result of the announcement and pendency of the Merger; 46) the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and 47) the other factors that are described or referenced in Part I, Item 1A, of the Company’s Annual Report on Form 10-K filed with the SEC on February 20, 2024, Part I, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, the Company’s other Quarterly Reports on Form 10-Q, in each case under the caption “Risk Factors.” The Company urges you to consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company. As a result of these and other matters, including changes in facts, assumptions not being realized or other factors, the actual results relating to the subject
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matter of any forward-looking statement may differ materially from the anticipated results expressed or implied in that forward-looking statement. Any forward-looking statement made in this filing or made by the Company in any report, filing, document or information incorporated by reference in this filing, speaks only as of the date on which it is made. The Company undertakes no obligation to update any such forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. The Company believes that these assumptions or bases have been chosen in good faith and that they are reasonable. However, the Company cautions you that assumptions as to future occurrences or results almost always vary from actual future occurrences or results, and the differences between assumptions and actual occurrences and results can be material. Therefore, the Company cautions you not to place undue reliance on the forward-looking statements contained in this filing or incorporated by reference herein.
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 “adjusted net income,” “adjusted earnings,” “tangible book value,” “tangible book value per common share,” “adjusted efficiency ratio,” “tangible common equity to tangible assets,” “adjusted net interest margin,” “return on tangible equity,” “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 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 credit losses and the effect of goodwill, other intangible assets 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.
CONTACTS:
Analysts/Investors:
Paul Langdale
Executive Vice President, Chief Financial Officer
(972) 562-9004
Paul.Langdale@ifinancial.com
Media:
Wendi Costlow
Executive Vice President, Chief Marketing Officer
(972) 562-9004
Wendi.Costlow@ifinancial.com
Source: Independent Bank Group, Inc.
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Independent Bank Group, Inc. and Subsidiaries
Consolidated Financial Data
Three Months Ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023
(Dollars in thousands, except for share data)
(Unaudited)
As of and for the Quarter Ended
September 30, 2024June 30, 2024March 31, 2024December 31, 2023September 30, 2023
Selected Income Statement Data
Interest income$241,716 $239,085 $235,205 $232,522 $222,744 
Interest expense134,878 133,937 132,174 126,217 113,695 
Net interest income106,838 105,148 103,031 106,305 109,049 
Provision for credit losses4,700 — (3,200)3,480 340 
Net interest income after provision for credit losses102,138 105,148 106,231 102,825 108,709 
Noninterest income13,461 13,433 12,870 10,614 13,646 
Noninterest expense89,896 606,911 88,473 95,125 81,334 
Income tax expense5,266 5,125 6,478 3,455 8,246 
Net income (loss)20,437 (493,455)24,150 14,859 32,775 
Adjusted net income (1)
20,588 24,884 26,001 25,509 32,624 
Per Share Data (Common Stock)
Earnings (loss):
Basic$0.49 $(11.93)$0.58 $0.36 $0.79 
Diluted0.49 (11.93)0.58 0.36 0.79 
Adjusted earnings:
Basic (1)
0.50 0.60 0.63 0.62 0.79 
Diluted (1)
0.50 0.60 0.63 0.62 0.79 
Dividends0.38 0.38 0.38 0.38 0.38 
Book value47.03 45.85 58.02 58.20 56.49 
Tangible book value (1)
34.54 33.27 32.85 32.90 31.11 
Common shares outstanding41,439,096 41,376,169 41,377,745 41,281,919 41,284,003 
Weighted average basic shares outstanding (2)
41,432,637 41,377,917 41,322,744 41,283,041 41,284,964 
Weighted average diluted shares outstanding (2)
41,497,514 41,377,917 41,432,042 41,388,564 41,381,034 
Selected Period End Balance Sheet Data
Total assets$18,583,149 $18,359,162 $18,871,452 $19,035,102 $18,519,872 
Cash and cash equivalents1,348,055 770,749 729,998 721,989 711,709 
Securities available for sale1,510,572 1,494,470 1,543,247 1,593,751 1,545,904 
Securities held to maturity203,863 204,319 204,776 205,232 205,689 
Loans, held for sale12,806 12,012 21,299 16,420 18,068 
Loans, held for investment (3)
13,896,238 13,988,169 14,059,277 14,160,853 13,781,102 
Mortgage warehouse purchase loans392,691 633,654 554,616 549,689 442,302 
Allowance for credit losses on loans 150,285 145,323 148,437 151,861 148,249 
Goodwill and other intangible assets517,660 520,553 1,041,506 1,044,581 1,047,687 
Other real estate owned8,685 8,685 8,685 9,490 22,505 
Noninterest-bearing deposits3,447,184 3,378,493 3,300,773 3,530,704 3,703,784 
Interest-bearing deposits12,547,884 12,464,183 12,370,942 12,192,331 11,637,185 
Borrowings (other than junior subordinated debentures)454,762 427,129 496,975 621,821 546,666 
Junior subordinated debentures54,766 54,717 54,667 54,617 54,568 
Total stockholders' equity1,948,898 1,897,083 2,400,807 2,402,593 2,332,098 
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Independent Bank Group, Inc. and Subsidiaries
Consolidated Financial Data
Three Months Ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023
(Dollars in thousands, except for share data)
(Unaudited)
As of and for the Quarter Ended
September 30, 2024June 30, 2024March 31, 2024December 31, 2023September 30, 2023
Selected Performance Metrics
Return on average assets0.44 %(10.55)%0.51 %0.31 %0.70 %
Return on average equity4.24 (87.53)4.05 2.51 5.51 
Return on tangible equity (4)
5.81 (146.65)7.16 4.54 9.92 
Adjusted return on average assets (1)
0.45 0.53 0.55 0.54 0.70 
Adjusted return on average equity (1)
4.27 4.41 4.36 4.32 5.48 
Adjusted return on tangible equity (1) (4)
5.86 7.40 7.71 7.79 9.87 
Net interest margin2.50 2.47 2.42 2.49 2.60 
Efficiency ratio (5)
72.32 509.32 73.68 78.70 63.75 
Adjusted efficiency ratio (1) (5)
72.17 71.09 71.63 67.96 63.84 
Credit Quality Ratios (3) (6)
Nonperforming assets to total assets0.37 %0.35 %0.34 %0.32 %0.33 %
Nonperforming loans to total loans held for investment0.43 0.40 0.40 0.37 0.28 
Nonperforming assets to total loans held for investment and other real estate0.49 0.46 0.46 0.43 0.44 
Allowance for credit losses on loans to nonperforming loans253.57 258.83 263.85 293.17 385.81 
Allowance for credit losses to total loans held for investment1.08 1.04 1.06 1.07 1.08 
Net charge-offs to average loans outstanding (annualized)— 0.10 — 0.01 0.01 
Capital Ratios
Estimated common equity Tier 1 capital to risk-weighted assets10.01 %9.69 %9.60 %9.58 %9.86 %
Estimated tier 1 capital to average assets9.08 8.76 8.91 8.94 9.09 
Estimated tier 1 capital to risk-weighted assets10.36 10.03 9.94 9.93 10.21 
Estimated total capital to risk-weighted assets13.26 11.75 11.68 11.57 11.89 
Total stockholders' equity to total assets10.49 10.33 12.72 12.62 12.59 
Tangible common equity to tangible assets (1)
7.92 7.72 7.62 7.55 7.35 
____________
(1) Non-GAAP financial measure. See reconciliation.
(2) Total number of shares includes participating shares (those with dividend rights).
(3) Loans held for investment excludes mortgage warehouse purchase loans.
(4) Non-GAAP financial measure. Excludes average balance of goodwill and net other intangible assets.
(5) Efficiency ratio excludes amortization of other intangible assets. See reconciliation of Non-GAAP financial measures.
(6) Credit metrics - Nonperforming assets, which consist of nonperforming loans, OREO and other repossessed assets, totaled $68,067, $64,946, $65,057, $61,404 and $61,044, respectively. Nonperforming loans, which consists of nonaccrual loans and loans delinquent 90 days and still accruing interest totaled $59,268, $56,147, $56,258, $51,800 and $38,425, respectively.






9
            
Independent Bank Group, Inc. and Subsidiaries
Consolidated Statements of Income (Loss)
Three and Nine Months Ended September 30, 2024 and 2023
(Dollars in thousands)
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Interest income:
Interest and fees on loans$221,169 $202,725 $655,971 $580,631 
Interest on taxable securities7,174 7,674 22,851 23,323 
Interest on nontaxable securities2,482 2,558 7,524 7,747 
Interest on interest-bearing deposits and other10,891 9,787 29,660 27,513 
Total interest income241,716 222,744 716,006 639,214 
Interest expense:
Interest on deposits127,075 102,600 374,833 243,005 
Interest on FHLB advances— 6,054 4,605 29,903 
Interest on other borrowings6,573 3,808 17,871 12,248 
Interest on junior subordinated debentures1,230 1,233 3,680 3,480 
Total interest expense134,878 113,695 400,989 288,636 
Net interest income106,838 109,049 315,017 350,578 
Provision for credit losses4,700 340 1,500 650 
Net interest income after provision for credit losses102,138 108,709 313,517 349,928 
Noninterest income:
Service charges on deposit accounts3,617 3,568 10,803 10,436 
Investment management fees2,765 2,470 8,222 7,215 
Mortgage banking revenue1,682 1,774 4,857 5,646 
Mortgage warehouse purchase program fees617 555 1,812 1,414 
(Loss) gain on sale of loans— (7)74 (14)
Gain on sale of other real estate— — 13 — 
(Loss) gain on sale and disposal of premises and equipment(9)(56)(20)345 
Increase in cash surrender value of BOLI1,652 1,465 4,779 4,252 
Other3,137 3,877 9,224 11,201 
Total noninterest income13,461 13,646 39,764 40,495 
Noninterest expense:
Salaries and employee benefits50,039 43,618 146,432 136,833 
Occupancy12,326 12,408 36,951 35,607 
Communications and technology7,937 6,916 23,298 21,202 
FDIC assessment4,196 3,653 13,154 10,171 
Advertising and public relations479 587 1,747 2,195 
Other real estate owned expenses (income), net141 (253)169 (482)
Impairment of other real estate— — 345 2,200 
Amortization of other intangible assets2,893 3,111 8,921 9,333 
Litigation settlement— — — 102,500 
Professional fees1,296 1,262 4,406 6,112 
Acquisition expense, including legal460 — 2,798 — 
Goodwill impairment— — 518,000 — 
Other10,129 10,032 29,059 30,748 
Total noninterest expense89,896 81,334 785,280 356,419 
Income (loss) before taxes25,703 41,021 (431,999)34,004 
Income tax expense5,266 8,246 16,869 5,662 
Net income (loss)$20,437 $32,775 $(448,868)$28,342 
10
            
Independent Bank Group, Inc. and Subsidiaries
Consolidated Balance Sheets
As of September 30, 2024 and December 31, 2023
(Dollars in thousands)
(Unaudited)

September 30,December 31,
Assets20242023
Cash and due from banks$103,157 $98,396 
Interest-bearing deposits in other banks1,244,898 623,593 
Cash and cash equivalents1,348,055 721,989 
Certificates of deposit held in other banks— 248 
Securities available for sale, at fair value1,510,572 1,593,751 
Securities held to maturity, net of allowance for credit losses of $0 and $0, respectively, fair value of $172,306 and $170,997, respectively203,863 205,232 
Loans held for sale (includes $10,037 and $12,016 carried at fair value, respectively)12,806 16,420 
Loans, net of allowance for credit losses of $150,285 and $151,861, respectively
14,138,644 14,558,681 
Premises and equipment, net350,252 355,833 
Other real estate owned8,685 9,490 
Federal Home Loan Bank (FHLB) of Dallas stock and other restricted stock14,489 34,915 
Bank-owned life insurance (BOLI)250,276 245,497 
Deferred tax asset67,733 92,665 
Goodwill476,021 994,021 
Other intangible assets, net41,639 50,560 
Other assets160,114 155,800 
Total assets$18,583,149 $19,035,102 
Liabilities and Stockholders’ Equity
Deposits:
Noninterest-bearing$3,447,184 $3,530,704 
Interest-bearing12,547,884 12,192,331 
Total deposits15,995,068 15,723,035 
FHLB advances— 350,000 
Other borrowings454,762 271,821 
Junior subordinated debentures54,766 54,617 
Other liabilities129,655 233,036 
Total liabilities16,634,251 16,632,509 
Commitments and contingencies— — 
Stockholders’ equity:
Preferred stock (0 and 0 shares outstanding, respectively)— — 
Common stock (41,439,096 and 41,281,919 shares outstanding, respectively)414 413 
Additional paid-in capital1,974,143 1,966,686 
Retained earnings117,652 616,724 
Accumulated other comprehensive loss(143,311)(181,230)
Total stockholders’ equity1,948,898 2,402,593 
Total liabilities and stockholders’ equity$18,583,149 $19,035,102 

11
            
Independent Bank Group, Inc. and Subsidiaries
Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis
Three Months Ended September 30, 2024 and 2023
(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.

Three Months Ended September 30,
20242023
Average
Outstanding
Balance		Interest
Yield/
Rate (4)
Average
Outstanding
Balance		Interest
Yield/
Rate (4)
Interest-earning assets:
Loans (1)
$14,487,650 $221,169 6.07 %$14,118,264 $202,725 5.70 %
Taxable securities1,326,655 7,174 2.15 1,411,578 7,674 2.16 
Nontaxable securities387,537 2,482 2.55 410,391 2,558 2.47 
Interest-bearing deposits and other804,594 10,891 5.38 716,271 9,787 5.42 
Total interest-earning assets17,006,436 241,716 5.65 16,656,504 222,744 5.31 
Noninterest-earning assets1,292,346 1,864,096 
Total assets$18,298,782 $18,520,600 
Interest-bearing liabilities:
Checking accounts$5,490,570 $51,584 3.74 %$5,596,274 $47,657 3.38 %
Savings accounts497,721 304 0.24 590,577 90 0.06 
Money market accounts2,181,715 22,893 4.17 1,565,181 15,200 3.85 
Certificates of deposit4,216,985 52,294 4.93 3,566,496 39,653 4.41 
Total deposits12,386,991 127,075 4.08 11,318,528 102,600 3.60 
FHLB advances— — — 463,967 6,054 5.18 
Other borrowings - short-term166,005 2,106 5.05 41,087 738 7.13 
Other borrowings - long-term279,725 4,467 6.35 237,862 3,070 5.12 
Junior subordinated debentures54,749 1,230 8.94 54,550 1,233 8.97 
Total interest-bearing liabilities12,887,470 134,878 4.16 12,115,994 113,695 3.72 
Noninterest-bearing demand accounts3,361,194 3,798,091 
Noninterest-bearing liabilities132,968 246,340 
Stockholders’ equity1,917,150 2,360,175 
Total liabilities and equity$18,298,782 $18,520,600 
Net interest income$106,838 $109,049 
Interest rate spread1.49 %1.59 %
Net interest margin (2)
2.50 2.60 
Net interest income and margin (tax equivalent basis) (3)
$107,971 2.53 $110,077 2.62 
Average interest-earning assets to interest-bearing liabilities131.96 137.48 
____________
(1) Average loan balances include nonaccrual loans.
(2) Net interest margins for the periods presented represent: (i) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest-earning assets for the period.
(3) A tax-equivalent adjustment has been computed using a federal income tax rate of 21%.
(4) Yield and rates for the three month periods are annualized.
12
            
Independent Bank Group, Inc. and Subsidiaries
Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis
Nine Months Ended September 30, 2024 and 2023
(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.

Nine Months Ended September 30,
20242023
Average
Outstanding
Balance		Interest
Yield/Rate (4)
Average
Outstanding
Balance		Interest
Yield/Rate (4)
Interest-earning assets:
Loans (1)
$14,578,678 $655,971 6.01 %$14,026,604 $580,631 5.53 %
Taxable securities1,367,468 22,851 2.23 1,444,280 23,323 2.16 
Nontaxable securities392,657 7,524 2.56 417,459 7,747 2.48 
Interest-bearing deposits and other730,098 29,660 5.43 724,787 27,513 5.08 
Total interest-earning assets17,068,901 716,006 5.60 16,613,130 639,214 5.14 
Noninterest-earning assets1,609,929 1,855,135 
Total assets$18,678,830 $18,468,265 
Interest-bearing liabilities:
Checking accounts$5,494,894 $151,144 3.67 %$5,836,196 $128,493 2.94 %
Savings accounts515,145 693 0.18 652,067 263 0.05 
Money market accounts2,024,517 63,418 4.18 1,587,340 38,646 3.26 
Certificates of deposit4,285,623 159,578 4.97 2,604,697 75,603 3.88 
Total deposits12,320,179 374,833 4.06 10,680,300 243,005 3.04 
FHLB advances112,044 4,605 5.49 817,436 29,903 4.89 
Other borrowings - short-term184,049 7,264 5.27 40,196 2,082 6.93 
Other borrowings - long-term252,175 10,607 5.62 247,258 10,166 5.50 
Junior subordinated debentures54,699 3,680 8.99 54,501 3,480 8.54 
Total interest-bearing liabilities12,923,146 400,989 4.14 11,839,691 288,636 3.26 
Noninterest-bearing demand accounts3,354,693 4,058,686 
Noninterest-bearing liabilities207,665 203,021 
Stockholders’ equity2,193,326 2,366,867 
Total liabilities and equity$18,678,830 $18,468,265 
Net interest income$315,017 $350,578 
Interest rate spread1.46 %1.88 %
Net interest margin (2)
2.47 2.82 
Net interest income and margin (tax equivalent basis) (3)
$318,302 2.49 $353,680 2.85 
Average interest-earning assets to interest-bearing liabilities132.08 140.32 
____________
(1) Average loan balances include nonaccrual loans.
(2) Net interest margins for the periods presented represent: (i) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest-earning assets for the period.
(3) A tax-equivalent adjustment has been computed using a federal income tax rate of 21%.
(4) Yield and rates for the nine month periods are annualized.



13
            
Independent Bank Group, Inc. and Subsidiaries
Loan Portfolio Composition
As of September 30, 2024 and December 31, 2023
(Dollars in thousands)
(Unaudited)

Total Loans By Class
September 30, 2024December 31, 2023
Amount % of TotalAmount% of Total
Commercial
$2,123,443 14.8 %$2,266,851 15.4 %
Mortgage warehouse purchase loans392,691 2.7 549,689 3.7 
Real estate:
Commercial real estate8,311,344 58.2 8,289,124 56.3 
Commercial construction, land and land development1,140,863 8.0 1,231,484 8.4 
Residential real estate (1)
1,715,099 12.0 1,686,206 11.5 
Single-family interim construction430,283 3.0 517,928 3.5 
Agricultural113,851 0.8 109,451 0.7 
Consumer74,161 0.5 76,229 0.5 
Total loans14,301,735 100.0 %14,726,962 100.0 %
Allowance for credit losses(150,285)(151,861)
Total loans, net$14,151,450 $14,575,101 
____________
(1) Includes loans held for sale of $12,806 and $16,420 at September 30, 2024 and December 31, 2023, respectively.

14
            
Independent Bank Group, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Three Months Ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023
(Dollars in thousands, except for share data)
(Unaudited)

For the Three Months Ended
September 30, 2024June 30, 2024March 31, 2024December 31, 2023September 30, 2023
ADJUSTED NET INCOME
Net Interest Income - Reported(a)$106,838 $105,148 $103,031 $106,305 $109,049 
Provision for Credit Losses - Reported(b)4,700 — (3,200)3,480 340 
Noninterest Income - Reported(c)13,461 13,433 12,870 10,614 13,646 
(Gain) loss on sale of loans— — (74)— 7 
(Gain) loss on sale of other real estate— — (13)1,797 — 
Loss on sale and disposal of premises and equipment9 11 — 22 56 
Recoveries on loans charged off prior to acquisition(6)(57)(5)(64)(279)
Adjusted Noninterest Income(d)13,464 13,387 12,778 12,369 13,430 
Noninterest Expense - Reported(e)89,896 606,911 88,473 95,125 81,334 
OREO impairment— — (345)(3,015)— 
FDIC special assessment273 645 (2,095)(8,329)— 
Goodwill and asset impairment— (518,000)— — — 
Acquisition expense (1)
(460)(2,338)— (27)(27)
Adjusted Noninterest Expense(f)89,709 87,218 86,033 83,754 81,307 
Income Tax Expense - Reported(g)5,266 5,125 6,478 3,455 8,246 
Net Income (Loss) - Reported(a) - (b) + (c) - (e) - (g) = (h)20,437 (493,455)24,150 14,859 32,775 
Adjusted Net Income (2)
(a) - (b) + (d) - (f) = (i)$20,588 $24,884 $26,001 $25,509 $32,624 
ADJUSTED PROFITABILITY (3)
Total Average Assets(j)$18,298,782 $18,803,877 $18,938,008 $18,815,342 $18,520,600 
Total Average Stockholders' Equity(k)1,917,150 2,267,289 2,398,573 2,344,652 2,360,175 
Total Average Tangible Stockholders' Equity (4)
(l)1,398,494 1,353,313 1,356,042 1,299,026 1,311,417 
Reported Return on Average Assets(h) / (j)0.44 %(10.55)%0.51 %0.31 %0.70 %
Reported Return on Average Equity(h) / (k)4.24 (87.53)4.05 2.51 5.51 
Reported Return on Average Tangible Equity(h) / (l)5.81 (146.65)7.16 4.54 9.92 
Adjusted Return on Average Assets (5)
(i) / (j)0.45 0.53 0.55 0.54 0.70 
Adjusted Return on Average Equity (5)
(i) / (k)4.27 4.41 4.36 4.32 5.48 
Adjusted Return on Tangible Equity (5)
(i) / (l)5.86 7.40 7.71 7.79 9.87 
EFFICIENCY RATIO
Amortization of other intangible assets(m)$2,893 $2,953 $3,075 $3,106 $3,111 
Reported Efficiency Ratio(e - m) / (a + c)72.32 %509.32 %73.68 %78.70 %63.75 %
Adjusted Efficiency Ratio(f - m) / (a + d)72.17 71.09 71.63 67.96 63.84 
____________
(1) Prior to 2024, acquisition expenses include compensation related expenses for equity awards granted at acquisition. Second and third quarter 2024 includes merger-related expenses related to the announced merger with SouthState Corporation.
(2) Assumes an adjusted effective tax rate of 20.5%, 20.5%, 21.2%, 18.9%, and 20.1%, respectively. Second quarter 2024 normalized rate excludes the effect of nondeductible acquisition expenses and goodwill impairment charges.
(3) Quarterly metrics are annualized.
(4) Excludes average balance of goodwill and net other intangible assets.
(5) Calculated using adjusted net income.
15
            
Independent Bank Group, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
As of September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023
(Dollars in thousands, except per share information)
(Unaudited)

Tangible Book Value & Tangible Common Equity To Tangible Assets Ratio
As of the Quarter Ended
September 30, 2024June 30, 2024March 31, 2024December 31, 2023September 30, 2023
Tangible Common Equity
Total common stockholders' equity$1,948,898 $1,897,083 $2,400,807 $2,402,593 $2,332,098 
Adjustments:
Goodwill(476,021)(476,021)(994,021)(994,021)(994,021)
Other intangible assets, net(41,639)(44,532)(47,485)(50,560)(53,666)
Tangible common equity$1,431,238 $1,376,530 $1,359,301 $1,358,012 $1,284,411 
Tangible Assets
Total assets$18,583,149 $18,359,162 $18,871,452 $19,035,102 $18,519,872 
Adjustments:
Goodwill(476,021)(476,021)(994,021)(994,021)(994,021)
Other intangible assets, net(41,639)(44,532)(47,485)(50,560)(53,666)
Tangible assets$18,065,489 $17,838,609 $17,829,946 $17,990,521 $17,472,185 
Common shares outstanding41,439,096 41,376,169 41,377,745 41,281,919 41,284,003 
Tangible common equity to tangible assets7.92 %7.72 %7.62 %7.55 %7.35 %
Book value per common share$47.03 $45.85 $58.02 $58.20 $56.49 
Tangible book value per common share34.54 33.27 32.85 32.90 31.11 

16