Stephens Investor Field Trip
February 2018
David Brooks, Chairman, CEO and President
Michelle Hickox, EVP and CFO
Exhibit 99.1
Safe Harbor Statement
1
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. Many possible events or factors could affect our future financial results and performance and could cause such results or performance to differ materially from
those expressed in forward looking statements. These factors include, but are not limited to, the following: (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 and loans and higher levels
of nonperforming loans and loan charge-offs; (7) concentration of the loan portfolio of Independent Bank, 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 Bank to make loans with acceptable net
interest margins and levels of risk of repayment and to otherwise invest in assets at acceptable yields and presenting acceptable investment risks; (9) inaccuracy of the assumptions and estimates that
the managements of Independent Bank and the financial institutions that it acquires make in establishing reserves for probable loan losses and other estimates; (10) lack of liquidity, including as a
result of a reduction in the amount of sources of liquidity, that the Company currently has; (11) material increases or decreases in the amount of deposits held by Independent Bank or other financial
institutions that the Company acquires and the cost of those deposits; (12) the Company’s access to the debt and equity markets and the overall cost of funding its operations; (13) regulatory
requirements to maintain minimum capital levels or maintenance of capital at levels sufficient to support the Company’s anticipated growth; (14) changes in market interest rates that affect the
pricing of the loans and deposits of each of Independent Bank and the financial institutions that the Company acquires and the net interest income of each of Independent Bank and the financial
institutions that the Company acquires; (15) 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; (16)
effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services; (17) the institution and outcome of, and costs associated
with, litigation and other legal proceedings against one of more of the Company, Independent Bank and financial institutions that the Company acquires or to which any of such entities is subject;
(18) the occurrence of market conditions adversely affecting the financial industry generally; (19) the impact of recent and future legislative and regulatory changes, including changes in banking,
securities and tax laws and regulations and their application by the Company’s regulators, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act,
specifically the Dodd-Frank Act stress testing requirements as the Company approaches $10 billion in total assets, and changes in federal government policies; (20) changes in accounting policies
and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the SEC and the Public Company Accounting Oversight Board, or PCAOB, as the case
may be; (21) governmental monetary and fiscal policies; (22) changes in the scope and cost of FDIC insurance and other coverage; (23) the effects of war or other conflicts, acts of terrorism
(including cyber attacks) or other catastrophic events, including storms, droughts, tornadoes, hurricanes and flooding, that may affect general economic conditions; (24) the Company’s actual cost
savings resulting from previous or future acquisitions are less than expected, it is unable to realize those cost savings as soon as expected, or it incurs additional or unexpected costs; (25) the
Company’s revenues after previous or future acquisitions are less than expected; (26) the liquidity of, and changes in the amounts and sources of liquidity available to, us, before and after the
acquisition of any financial institutions that the Company acquires; (27) deposit attrition, operating costs, customer loss and business disruption before and after the Company’s completed
acquisitions, including, without limitation, difficulties in maintaining relationships with employees, may be greater than the Company expected; (28) the effects of the combination of the operations
of financial institutions that the Company acquired in the recent past or may acquire in the future with the Company’s operations and the operations of Independent Bank, 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 that the Company
expects; (29) the impact of investments that the Company or Independent Bank may have made or may make and the changes in the value of those investments; (30) 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 the Company determined or determine in its due diligence
investigation in connection with the acquisition of such financial institutions and any inadequacy of loan loss reserves relating to, and exposure to unrecoverable losses on, loans acquired; (31) 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 its markets and to enter new
markets; (32) technology-related changes are harder to make or are more expensive than expected; (33) attacks on the security of, and breaches of, the Company or Independent Bank’s digital
information systems, the costs the Company or Independent Bank incur to provide security against such attacks and any costs and liability the Company or Independent Bank incurs in connection
with any breach of those systems; (34) the potential impact of technology and ―FinTech‖ entities on the banking industry generally, and (35) our success at managing the risks involved in the
foregoing items; and (36) the other factors that are described in the Company’s Annual Report on Form 10-K filed on March 8, 2017, under the heading ―Risk Factors‖, and other reports and
statements filed by the Company with the SEC. Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could
cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update
any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
(1) Excludes mortgage warehouse purchase loans
(2) Includes $5,528 charge to remeasure deferred taxes as a result of the enactment of the Tax Cuts and Jobs Act
(3) Excludes income recognized on acquired loans of $2,463
(4) Non-GAAP financial measure. See Appendix for reconciliation.
Company Snapshot
Overview Branch Map as of December 31, 2017
DFW Metropolitan
Colorado
• Headquartered in McKinney, Texas
• 100+ years of operating history
• 70 banking offices
• Dallas-Fort Worth metropolitan area
• Greater Austin area
• Houston metropolitan area
• Colorado Front Range area
• Acquired six financial institutions, adding $4.9 billion in assets, since IPO
in 2013
• Ninth largest bank by deposits headquartered in Texas
Financial Highlights as of and for the
Quarter Ended December 31, 2017
Balance Sheet Highlights ($ in millions)
Total Assets $ 8,684
Total Loans Held for Investment 6,474
Total Deposits 6,633
Equity 1,336
Asset Quality
Nonperforming Asset Ratio 0.26 %
Nonperforming Loans to Total Loans Held for Investment (1) 0.24
Net Charge-off Ratio (annualized) 0.02
Capital Ratios
Tier 1 Risk Based 10.04 %
Total Risk Based 12.55
Tangible Common Equity to Tangible Assets 8.37
Profitability
Net Income (2) $ 19.2
Adjusted Net Interest Margin (3)(4) 3.84 %
Adjusted Efficiency Ratio (4) 50.06
Adjusted Return on average assets (4) 1.15
2
Houston Metropolitan
Greater Austin
Fourth Quarter Key Highlights
3
• Solid earnings with increases across major income related metrics
◦ Adjusted (non-GAAP) net income was $25.3 million, or $0.90 per diluted share,
compared to $24.8 million, or $0.89 per diluted share, for third quarter 2017
◦ Adjusted (non-GAAP) return on average assets increased to 1.15%, from third
quarter 2017 of 1.13%
◦ Improved adjusted (non-GAAP) efficiency ratio of 50.1%, compared to 51.2% for
third quarter 2017
• Organic loan growth of 11.6% for the quarter (annualized) and 12.2% since year end
2016
• Announced acquisition of Integrity Bancshares, Inc. and its subsidiary, Integrity Bank,
that is projected to be accretive to earnings per share with minimal dilution to tangible
book value
• Completed a primary/secondary equity offering, raising $26.8 million (net of offering
costs) and a $30 million subordinated debt offering, which enhanced the Company's
capital position
• Sharpened footprint and focus on Colorado Front Range with the successful sale of nine
Colorado branches transferring approximately $99 million in loans and $160 million in
deposits
Fourth Quarter Selected Financial Data
($ in thousands except per share data)
As of and for the Quarter Ended
Balance Sheet Data
December 31,
2017
September 30,
2017
December 31,
2016
Linked
Quarter
Change
Annual
Change
Total assets $ 8,684,463 $ 8,891,114 $ 5,852,801 (2.3 )% 48.4 %
Loans held for investment (gross,
excluding mortgage warehouse
purchase loans) 6,309,549 6,226,343 4,572,771 1.3 38.0
Mortgage warehouse purchase
loans 164,694 138,561 — 18.9 100.0
Total deposits 6,632,822 6,872,631 4,577,109 (3.5 ) 44.9
Total borrowings (excluding junior
subordinated debentures) 667,578 683,492 568,045 (2.3 ) 17.5
Total stockholders' equity 1,336,018 1,281,460 672,365 4.3 98.7
Earnings and Profitability Data
Net interest income $ 75,254 $ 72,857 $ 46,526 3.3 % 61.7 %
Net interest margin 3.97 % 3.85 % 3.59 % 3.1 10.6
Non-interest income $ 13,579 $ 12,130 $ 5,224 11.9 159.9
Non-interest expense 49,553 47,904 27,361 3.4 81.1
Net income (1) 19,193 23,514 14,775 (18.4 ) 29.9
Basic EPS $ 0.69 $ 0.85 $ 0.79 (18.8 ) (12.7 )
Diluted EPS $ 0.68 $ 0.84 $ 0.79 (19.0 ) (13.9 )
Adjusted net interest margin (2) (3) 3.84 % 3.80 % 3.58 % 1.1 7.3
Adjusted net income (3) $ 25,313 $ 24,829 $ 15,541 1.9 62.9
Adjusted basic EPS (3) $ 0.91 $ 0.89 $ 0.83 2.2 9.6
Adjusted diluted EPS (3) $ 0.90 $ 0.89 $ 0.83 1.1 8.4
Return on average assets 0.87 % 1.07 % 1.03 % (18.7 ) (15.5 )
Adjusted return on average assets (3) 1.15 % 1.13 % 1.08 % 1.8 6.5
4
(1) Includes $5,528 charge to remeasure deferred taxes as a result of the enactment of the Tax Cuts and Jobs Act for the quarter ended December 31, 2017.
(2) Non-GAAP financial measure. Excludes income recognized on acquired loans of $2,463, $905 and $51, respectively.
(3) See Appendix for non-GAAP reconciliation
5
Among Strongest Economies in USA
• Texas ranks #3 for Fortune 500 companies with 50 companies headquartered in Texas (2017)
• Forbes list Texas #2 as best state for business and #1 in economic climate (2017)
• Second fastest economic growth
• Headquarters to 100 of the1,000 largest public and private companies in the United States
• Population - 28.7 million, 2nd largest State (2018)
• Second fastest-growing state with a growth rate of 1.41% in 2018
• Projected household income growth of 9.51% through 2023 versus 8.86% for the Nation (2017)
• Texas unemployment rate of 4.0% which is more favorable than the United States at 4.2% (September 2017)
• Home to six top universities and eleven professional sports teams
• U.S. News ranks three of the major metro areas in their top 20 in the 100 Best Places to Live in the USA 2017
(#1) Austin (#15) Dallas-Fort Worth (#20) Houston
• Three out of four of Texas’ major metro areas were ranked in the top 15 on Forbes’ The Best Cities For Jobs 2017. (Forbes,
May, 2017)
(#1) Dallas (#7) Austin (#12) San Antonio
Source: S&P Global Market Intelligence, Forbes, World Population Review, Texas Wide Open Spaces, U.S. Census Bureau, Bureau of Labor Statistics, Dallas Office of Economic Development,
Dallas Chamber of Commerce, Austin Chamber of Commerce, Greater Houston Partnership, Denver.org., Choose Colorado, Select Georgia, Denver Post, U.S. News
Texas
Colorado
• Forbes list Colorado #8 as best state for business and #3 in economic climate (2017)
• Colorado is expected to have the second fastest job growth over the next five years per EMSI data.
• Population - 5.7 million, 21st largest State (2018)
• 2018 growth rate of 1.37%
• Projected household income growth of 9.54% through 2021 versus 8.86% for the Nation (2017)
• Colorado unemployment rate of 2.5% which is more favorable to United States at 4.2% (September 2017)
• Home to six top universities and five professional sports teams
• U.S. News ranks two of the major metro areas in their top 20 in the 100 Best Places to Live in the USA 2017
(#2) Denver (#11) Colorado Springs
• Colorado consistently ranks among the top five states for business
• High levels of education are a key factor in the booming growth of the area's economy and workforce.
• Denver was ranked #11 in the top 15 on Forbes’ The Best Cities For Jobs 2017. (Forbes, May, 2017)
6
Market Highlights
Source: S&P Global Market Intelligence, World Population Review, Forbes, Dallas.org, U.S. Census Bureau, Bureau of Labor Statistics, Dallas Office of Economic Development, Dallas Chamber of
Commerce, Austin Chamber of Commerce, Greater Houston Partnership, Denver.org., Choose Colorado, Select Georgia, Denver Post, U.S. News, Dallas news, Houston .org, Policom Corporation,
newgeography.com
(1) Population data from S&P Global Market Intelligence as of June 2017
IBTX operates in five of the top twenty The Best Places For Business
And Careers (Forbes.com, 2017 Ranking)
(#4) Denver
(#8) Austin
(#10) Dallas
(#17) Fort Collins
(#18) Colorado Springs
Metropolitan Statistical Area IBTX
Market
Rank
2017
# of
IBTX
Branches
2017
Total
Population (1)
Dallas-Fort Worth-Arlington, TX 12 38 7,418,556
Houston-The Woodlands-Sugar Land,
TX
23 10 6,980,780
Austin-Round Rock, TX 11 6 2,130,664
Sherman-Denison, TX 3 6 129,797
Waco, TX 11 2 270,857
Colorado Springs, CO 11 4 729,498
Denver-Aurora-Lakewood, CO 44 2 2,933,089
Greeley, CO 21 1 304,882
Fort Collins, CO 22 1 350,005
Total 70 21,248,128
DFW Metroplex/North Texas Region
• The seventh largest MSA in the United States (2017)
• 26% of total state population
• Ranked 7th in Strongest U.S. MSA (2018)
• 656 locally-headquartered companies with 1,000+ employees
Austin/Central Texas Region
• Austin is the 11th largest city in the United States
• Fastest Growing MSA among top 50 MSAs in U.S. (2018)
• Ranked 1st in Strongest U.S. MSA (2018)
• Headquarters to several public high tech companies
Houston Region
• The fourth largest MSA in the United States (2017)
• 24% of total state population
• 4th largest city in the United States and the largest in Texas
(2017)
Denver
• 21st most populous city in the United States
• Ranked 10th in Strongest U.S. MSA (2018)
• Annual population growth of 1.9% per year since 2010
Colorado Springs
• Home to the largest Military base in Colorado
• 2nd largest city in Colorado
Greeley
• Annual population growth of 2.1% per year since 2010
Fort Collins
• The 4th largest city in Colorado
• Ranked 8th in Best Cities for Job Growth (2017)
• Fort Collins is the 4th largest city in Colorado
IBTX Demonstrated Growth
7
(1) Includes $5,528 charge to remeasure deferred taxes as a result of the enactment of the Tax Cuts and Jobs Act for the year and quarter ended December 31, 2017.
(2) See Appendix for non-GAAP reconciliation
Interest Income, Net Interest Income and NIM
Earnings Per Share and Adjusted Earnings Per Share Trends (diluted)
8
(1) See Appendix for non-GAAP reconciliation
Adjusted Efficiency Ratio
Adjusted Efficiency Ratio Trends
(1)
Deposit Mix and Pricing
(1) Average rate for total deposits
2017 YTD Average Rate for Interest-bearing deposits:
0.63%
9
Loan Portfolio Composition
Loan Composition at 12/31/2017 CRE Loan Composition at 12/31/2017
Loans by Region at 12/31/2017
10
2017 YTD adjusted loan yield: 4.88% (1)
(1) Non-GAAP financial measure. Excludes $4,063 of income recognized on acquired loans.
Commercial Real Estate (CRE)
and Construction and Development (C&D)
11
Retail CRE and C&D Composition at 12/31/2017 CRE and C&D Concentrations at 12/31/2017
• 574 Retail Loans
• 33 Loans > $5MM
• 1.64 AVG DSCR (1)
• 63% AVG LTV (1)
(1) Loans greater than $500 thousand
Loans > $500 thousand
Energy Lending
(in millions)
12
Historically Strong Credit Culture
13
NPLs / Loans
Note: Financial data as of and for quarter ended September 30, 2017 for peer data and December 31, 2017 for IBTX. Interim chargeoff data annualized.
Source: U.S. and Texas Commercial Bank numbers from S&P Global Market Intelligence.
NCOs / Average Loans
Total Capital, Tier 1 and TCE/TA Ratios (1)
Capital
(1) See Appendix for non-GAAP reconciliation 14
Acquisition of Integrity Bancshares
· Houston bank established in 2007
· Over $800 million in total assets as of September 30, 2017
– 37% total asset CAGR since inception
· Noninterest bearing deposits to total deposits of ~33%
· High performing bank with ROAA, ROAE, and Net
Interest Margin consistently above peers
· Strong ROAA driven by a yield on loans of ~5.5%, and a
sub 55% efficiency ratio (2)
· Skilled team of experienced bankers
· Attractive market footprint, including branch locations in
central Houston, The Woodlands, Katy and Southeast
Houston
Financial Summary (1)
Source: S&P Global Market Intelligence and Integrity Bancshares, Inc. as of September 30, 2017
(1) Data as of and for the nine months ended September 30, 2017
(2) Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income 15
Balance Sheet Data
Total Assets ($M) 804.9
Total Loans ($M) 661.3
Total Deposits ($M) 678.9
Loans to Deposits (%) 97.3
Profitability Data (YTD)
Net Income ($M) 6.9
Return on Average Assets (%) 1.23
Net Interest Margin (%) 4.27
Efficiency Ratio (%) (2) 54.4
Asset Quality (%)
Nonperforming Assets to Assets (%) 0.21
Reserve to Loans (%) 1.19
Net Charge-offs Avg. Loans (%) 0.01
Continued Houston Expansion
• Integrity’s Central Houston/downtown headquarters
provides for close proximity and easy access to the
central business district
• New market expansion into Katy and Southeast Houston
• Immediate accretion to earnings per share; tangible book
value earnback of less than 1.5 years
• Pro forma, Independent will be ranked 9th in deposit
market share in the Houston MSA amongst Texas-based
banks
Houston MSA(1) Deposit Market Share
Pro Forma Houston Footprint
Source: S&P Global Market Intelligence
(1) Houston MSA includes Houston, The Woodlands and Sugar Land; Texas headquartered banks only
Note: Deposit data as of June 30, 2017 per FDIC filings 16
2017
Rank Texas Institutions
2017
Branches
2017
Deposits
($M)
2017
Market
Share (%)
1 Prosperity Bancshares Inc. 58 5,029 2.15
2 Cullen/Frost Bankers Inc. 35 4,404 1.88
3 Woodforest Financial Grp Inc. 103 3,347 1.43
4 Comerica Inc. 48 3,166 1.35
5 Cadence Bancorp. 10 3,096 1.32
6 Texas Capital Bancshares Inc. 2 2,539 1.09
7 Allegiance Bancshares Inc. 16 2,125 0.91
8 Green Bancorp Inc. 13 1,916 0.82
Pro Forma 14 1,661 0.71
9 CBTX Inc. 16 1,324 0.57
10 Post Oak Bancshares Inc. 12 1,114 0.48
12 Independent Bank Group Inc. 10 1,013 0.43
17 Integrity Bancshares Inc. 4 648 0.28
Acquisition Terms and Merger Multiples
Aggregate Deal Value $181.6 million (1)
Shares Issued 2,072,131 shares of IBTX stock
Aggregate Cash Consideration $31,600,000
Consideration Structured as 80% stock / 20% cash
Minimum Tangible Common Equity $84 million required at close
Approval Requirements Integrity Bancshares shareholders, as well as customary regulatory
approvals
Anticipated Closing Second quarter of 2018
Major Assumptions
Cost Saves 35%
Loan and OREO Mark $7.9 Million
(1) Based on an IBTX closing stock price of $72.40 on January 30, 2018
(2) Based on an IBTX stock price of $61.00
(3) Integrity Bancshares financial data as of September 30, 2017
(4) Core deposits calculated as total deposits less CDs > $100,000
17
Integrity Bancshares - Transaction Multiples
Negotiated Value (2) Current Value (1)
$158.0 million $181.6 million
Price / Tangible Book Value (3) 1.88x 2.16x
Price / LTM Net Income (3) 17.2x 19.3x
Price / Est. 2018 Net Income 14.7x 13.3x
Core Deposit Premium (3)(4) 12.4% 13.4%
18
Impact of Potentially Crossing $10 Billion in Assets
• We believe we will likely cross the $10 billion threshold by the third quarter of
2018
• The Durbin amendment is anticipated to take effect in July of 2019, with estimated
current annual interchange revenue lost of $2.3 million
• DFAST preparation currently in process with estimated total implementation costs
of $2 million, and a total ongoing annual cost of $500,000 to $1 million
• We continue to invest in the people, processes and systems necessary to operate
successfully as a $10+ billion institution
Experienced Management Team
19
Name / Title Background
David R. Brooks
Chairman of the Board, CEO & President, Director
· -38 years in the financial services industry; 30 years at Independent Bank
· -Active in community banking since the early 1980s - led the investor group that acquired
Independent Bank in 1988
Daniel W. Brooks
Vice Chairman, Chief Risk Officer, Director
· -35 years in the financial services industry; 29 years at Independent Bank
· -Active in community banking since the late 1980s
Brian E. Hobart
Vice Chairman, Chief Lending Officer
· -24 years in the financial services industry; 13 years at Independent Bank
· -Since 2009 has functioned as Chief Lending Officer of the Company
Michelle S. Hickox
EVP, Chief Financial Officer
· -28 years in the financial services industry; 6 years at Independent Bank
· -Previously a Financial Services Audit Partner at RSM US LLP
James C. White
EVP, Chief Operations Officer
· -Over 30 years in the financial services industry
· -Previously served as EVP/COO of Texas Capital Bank
Appendix
20
Supplemental Information - Non-GAAP Financial Measures (unaudited)
Reconciliation of Adjusted Net Income, Adjusted Efficiency Ratio and Adjusted EPS--Quarterly Periods
(1) Excludes $5,528 charge to remeasure deferred taxes as a result of the enactment of the Tax Cuts and Jobs Act and $259 thousand of one-time nondeductible tax expense and assumes the resulting
normalized effective tax rate of 33.2% for the quarter ended December 31, 2017. Assumes an actual effective tax rate of 33.2%, 32.1%, 30.0% and 33.4%, for the quarters ended September 31, 2017,
March 31, 2017 and December 31, 2016, respectively.
21
APPENDIX
For the Quarters Ended
($ in thousands except per share data) December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016
Net Interest Income - Reported (a) 75,254 72,857 69,500 47,867 46,526
Income recognized on acquired loans (2,463 ) (905 ) (572 ) (123 ) (51 )
Adjusted Net Interest Income (b) 72,791 71,952 68,928 47,744 46,475
Provision Expense - Reported (c) 1,897 1,873 2,472 2,023 2,197
Noninterest Income - Reported (d) 13,579 12,130 10,995 4,583 5,224
Gain on sale of loans — (338 ) (13 ) — —
(Gain) loss on sale of branch (3,044 ) 127 — — —
(Gain) loss on sale of OREO and repossessed assets
(876 ) — 26 — —
Gain on sale of securities (72 ) — (52 ) — —
Loss (gain) on sale of premises and equipment 6 21 (1 ) (5 ) —
Recoveries on charged off loans acquired (65 ) (994 ) (123 ) — —
Adjusted Noninterest Income (e) 9,528 10,946 10,832 4,578 5,224
Noninterest Expense - Reported (f) 49,553 47,904 51,328 28,028 27,361
OREO impairment (375 ) (917 ) (120 ) — —
IPO related stock grant (128 ) (128 ) (127 ) (125 ) (127 )
Acquisition expense (6,509 ) (3,013 ) (7,278 ) (459 ) (1,075 )
Adjusted Noninterest Expense (g) 42,541 43,846 43,803 27,444 26,159
Income Tax Expense Reported (h) 18,190 11,696 8,561 6,728 7,417
Adjusted Net Income (1) (b) - (c) + (e) - (g) = (i) 25,313 24,829 22,746 15,990 15,541
Average shares for basic EPS (j) 27,933,201 27,797,779 27,782,584 18,908,679 18,613,975
Average shares for diluted EPS (k) 28,041,371 27,901,579 27,887,485 19,015,810 18,716,614
Adjusted Basic EPS (i) / (j) $ 0.91 $ 0.89 $ 0.82 $ 0.85 $ 0.83
Adjusted Diluted EPS (i) / (k) $ 0.90 $ 0.89 $ 0.82 $ 0.84 $ 0.83
EFFICIENCY RATIO
Amortization of core deposit intangibles (l) $ 1,328 $ 1,409 $ 1,410 $ 492 $ 492
Reported Efficiency Ratio (f - l) / (a + d) 54.29 % 54.71 % 62.01 % 52.50 % 51.92 %
Adjusted Efficiency Ratio (g - l) / (b + e) 50.06 % 51.19 % 53.15 % 51.51 % 49.65 %
PROFITABILITY
Total Average Assets (m) $ 8,702,597 $ 8,726,847 $ 8,478,360 $ 5,880,473 $ 5,729,160
Return on Average Assets (annualized) (a - c + d - f - h) / (m) 0.87 % 1.07 % 0.86 % 1.08 % 1.03 %
Adjusted Return on Average Assets (annualized) (i) / (m) 1.15 % 1.13 % 1.08 % 1.10 % 1.08 %
Reconciliation of Adjusted Net Income, Adjusted Efficiency Ratio and Adjusted EPS--Annual Periods
(1) Excludes $5,528 charge to remeasure deferred taxes as a result of the enactment of the Tax Cuts and Jobs Act and $259 thousand of one-time nondeductible tax expense
and assumes the resulting normalized effective tax rate of 32.4% for the year ended December 31, 2017. Assumes actual effective tax rate of 33.2% and 32.6% for the years
ended December 31, 2016, and 2015, respectively.
22
Supplemental Information - Non-GAAP Financial Measures (unaudited)
For the Year Ended December 31,
($ in thousands except per share data) 2017 2016 2015
Net Interest Income - Reported (a) 265,478 183,806 154,098
Income recognized on acquired loans (4,063 ) (1,765 ) (1,272 )
Adjusted Net Interest Income (b) 261,415 182,041 152,826
Provision Expense - Reported (c) 8,265 9,440 9,231
Noninterest Income - Reported (d) 41,287 19,555 16,128
Gain on sale of loans (351 ) — (116 )
(Gain) loss on sale of branch (2,917 ) 43 —
Gain on sale of OREO and repossessed assets
(850 ) (62 ) (290 )
Gain on sale of securities (124 ) (4 ) (134 )
Loss (gain) on sale of premises and equipment 21 (32 ) 358
Recoveries on charged off loans acquired (1,182 ) — —
Adjusted Noninterest Income (e) 35,884 19,500 15,946
Noninterest Expense - Reported (f) 176,813 113,790 103,198
Senior leadership restructuring — (2,575 ) —
OREO Impairment (1,412 ) (106 ) (35 )
IPO related stock grant (508 ) (543 ) (624 )
Acquisition Expense (17,259 ) (3,121 ) (3,954 )
Adjusted Noninterest Expense (g) 157,634 107,445 98,585
Income Tax Expense Reported (h) $ 45,175 $ 26,591 $ 19,011
Adjusted Net Income (1) (b) - (c) + (e) - (g) = (i) 88,878 56,563 41,056
Average shares for basic EPS (j) 25,636,292 18,501,663 17,321,513
Average shares for diluted EPS (k) 25,742,362 18,588,309 17,406,108
Adjusted Basic EPS (i) / (j) $ 3.47 $ 3.06 $ 2.37
Adjusted Diluted EPS (i) / (k) $ 3.45 $ 3.04 $ 2.36
EFFICIENCY RATIO
Amortization of core deposit intangibles (l) $ 4,639 $ 1,964 $ 1,555
Reported Efficiency Ratio (f - l) / (a + d) 56.13 % 54.99 % 59.71 %
Adjusted Efficiency Ratio (g - l) / (b + e) 51.46 % 52.34 % 57.49 %
PROFITABILITY
Total Average Assets (m) $ 7,966,421 $ 5,469,542 $ 4,395,552
Return on Average Assets (annualized) (a - c + d - f - h) / (m) 0.96 % 0.98 % 0.88 %
Adjusted Return on Average Assets (annualized) (i) / (m) 1.12 % 1.03 % 0.93 %
APPENDIX
Supplemental Information - Non-GAAP Financial Measures (unaudited)
Reconciliation of Tangible Common Equity to Tangible Assets
APPENDIX
23
Tangible Common Equity To Tangible Assets 12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 12/31/2015 12/31/14
($ in thousands)
Tangible Common Equity
Total common stockholders' equity $ 1,336,018 $ 1,281,460 $ 1,259,592 $ 688,469 $ 672,365 $ 603,371 $ 516,913
Adjustments:
Goodwill (621,458 ) (606,701 ) (607,263 ) (258,319 ) (258,319 ) (258,643 ) (229,457 )
Core deposit intangibles, net (43,244 ) (47,198 ) (48,992 ) (13,685 ) (14,177 ) (16,357 ) (12,455 )
Tangible Common Equity $ 671,316 $ 627,561 $ 603,337 $ 416,465 $ 399,869 $ 328,371 $ 275,001
Tangible Assets
Total Assets $ 8,684,463 $ 8,891,114 $ 8,593,979 $ 6,022,614 $ 5,852,801 $ 5,055,000 $ 4,132,639
Adjustments:
Goodwill (621,458 ) (606,701 ) (607,263 ) (258,319 ) (258,319 ) (258,643 ) (229,457 )
Core deposit intangibles (43,244 ) (47,198 ) (48,992 ) (13,685 ) (14,177 ) (16,357 ) (12,455 )
Tangible Assets $ 8,019,761 $ 8,237,215 $ 7,937,724 $ 5,750,610 $ 5,580,305 $ 4,780,000 $ 3,890,727
Tangible Common Equity To Tangible Assets 8.37 % 7.62 % 7.60 % 7.24 % 7.17 % 6.87 % 7.07 %
Contact Information
24
Corporate Headquarters Analysts/Investors:
Independent Bank Group, Inc. Michelle Hickox
1600 Redbud Blvd Executive Vice President and Chief Financial Officer
Suite 400 (972) 562-9004
McKinney, TX 75069 mhickox@ibtx.com
Media:
972-562-9004 Telephone Peggy Smolen
972-562-7734 Fax Marketing & Communications Director
www.ibtx.com (972) 562-9004
psmolen@ibtx.com