Independent Bank Group Seeing Improved Deposit Costs And Okay Loan Growth In A Challenging Period

In a challenging environment, a bank with a respectable core deposit franchise and a good underwriting track record is not a bad call, and Independent Bank Group (IBTX) has rebounded sharply since calling off its merger of equals with Texas Capital Bancshares (TCBI) back in May – outperforming regional banking peers by more than 30%. While there are nits to pick with respect to Independent’s standalone performance since its last acquisition (Guaranty in 2018), I nevertheless believe this is a good lender with meaningful growth prospects in Texas and Colorado.

M&A has long been core to the IBTX growth story, and I see no reason to expect that to change. With deal activity picking up, including the recent PNC (PNC) acquisition of BBVA’s (BBVA) U.S. operations, I would expect IBTX to be back on the hunt. As the shares are relatively fairly valued on an “as is” basis, and I do have some concerns about execution where organic growth is concerned, I do believe accretive deals are important to driving further rerating here.

 

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Independent Bank Group Seeing Improved Deposit Costs And Okay Loan Growth In A Challenging Period