Independent Bank (IBTX) - 2024 Q3 - Quarterly Results

Executive Summary Independent Bank Group, Inc. reported a net income recovery, expanded net interest margin, strengthened its balance sheet, and declared a dividend Net Income and EPS Independent Bank Group, Inc. reported a net income of $20.4 million, or $0.49 per diluted share, for Q3 2024, a decrease from Q3 2023 but a significant recovery from a net loss in Q2 2024. Adjusted net income also showed a similar trend Net Income and Diluted EPS (QoQ & YoY) (Thousands) | Metric | Q3 2024 | Q2 2024 | Q3 2023 | | :----------------- | :------------- | :------------- | :------------- | | Net Income | $20,400 | ($493,455) | $32,800 | | Diluted EPS | $0.49 | ($11.93) | $0.79 | | Adjusted Net Income| $20,600 | $24,900 | $32,600 | | Adjusted Diluted EPS| $0.50 | $0.60 | $0.79 | Dividend Declaration The Board of Directors declared a quarterly cash dividend of $0.38 per share of common stock, payable on November 14, 2024 - Quarterly cash dividend declared: $0.38 per share of common stock[2] Key Financial Highlights Q3 2024 saw an expansion in net interest margin and loan yields, alongside healthy credit metrics. The company also improved its book value and capital ratios, reflecting enhanced balance sheet strength - Net interest margin expanded by 3 basis points to 2.50%[3] - Loan yields expanded by 4 basis points to 6.07%[3] - Nonperforming asset ratio remained healthy at 0.37% and net charge-off ratio was 0.00% annualized[3] - Book value increased by $1.18 per share to $47.03, and tangible book value (non-GAAP) increased by $1.27 per share to $34.54[3] - Total capital ratio grew by 151 basis points to 13.26%, and tangible common equity (TCE) ratio (non-GAAP) grew by 20 basis points to 7.92%[3] CEO Commentary & Strategic Outlook CEO David R. Brooks highlighted net interest margin expansion and substantial balance sheet strengthening through subordinated debt replacement. The company also made a strategic decision to exit the mortgage warehouse line of business and is looking forward to completing its merger with SouthState Corporation - Net interest margin continued its expansion, slightly offset by excess liquidity[3] - Substantial enhancement of balance sheet strength due to replacing maturing subordinated debt, materially increasing total regulatory capital[3] - Strategic decision to exit the mortgage warehouse line of business, expected to further increase capital and liquidity[3] - Anticipates disciplined execution and completion of the pending merger with SouthState Corporation[3] Third Quarter 2024 Balance Sheet Highlights This section highlights the company's Q3 2024 balance sheet, detailing loans, asset quality, deposits, borrowings, and capital Loans Total loans held for investment, excluding mortgage warehouse purchase loans, slightly decreased quarter-over-quarter but increased year-over-year. The company announced its intention to exit the mortgage warehouse line of business Loans Held for Investment (Excluding Mortgage Warehouse Purchase Loans) (Billions) | Period | Amount (Billions) | | :----------------- | :---------------- | | Sep 30, 2024 | $13.9 | | Jun 30, 2024 | $14.0 | | Sep 30, 2023 | $13.8 | - Loans held for investment (excluding mortgage warehouse purchase loans) decreased $91.5 million (2.6% annualized) during Q3 2024[4] - Company intends to cease funding new mortgage warehouse purchase loans and exit the business during Q4 2024[4] Asset Quality Nonperforming assets and loans increased both quarter-over-quarter and year-over-year, primarily due to specific commercial real estate loans. However, net charge-offs remained at 0.00% annualized for the quarter Nonperforming Assets and Loans | Metric | Sep 30, 2024 | Jun 30, 2024 | Sep 30, 2023 | | :----------------------------------- | :------------- | :------------- | :------------- | | Nonperforming assets | $68.1 million | $64.9 million | $61.0 million | | Nonperforming assets to total assets | 0.37% | 0.35% | 0.33% | | Nonperforming loans | $59.3 million | $56.1 million | $38.4 million | | Nonperforming loans to total loans | 0.43% | 0.40% | 0.28% | - Increases in nonperforming loans and assets were primarily due to a $2.9 million commercial real estate loan added to nonaccrual and another $2.9 million commercial real estate loan past due 90 days in the linked quarter[5] - Net charge-offs were 0.00% annualized in Q3 2024, down from 0.10% in the linked quarter and 0.01% in the prior year quarter[5] Deposits, Borrowings and Liquidity Total deposits increased both quarter-over-quarter and year-over-year. Borrowings saw a net increase from the linked quarter due to new subordinated debentures offsetting payoffs and redemptions, but a decrease year-over-year due to reduced FHLB advances Deposits and Borrowings | Metric | Sep 30, 2024 | Jun 30, 2024 | Sep 30, 2023 | | :----------------- | :------------- | :------------- | :------------- | | Total deposits | $16.0 billion | $15.8 billion | $15.3 billion | | Total borrowings | $454.8 million | $427.1 million | $546.7 million | - Linked quarter change in borrowings reflects a $33.8 million payoff of unsecured line of credit and $110.0 million redemption of subordinated debentures, offset by $175.0 million issuance of new subordinated debentures[6] - Year-over-year change in borrowings reflects a $155.0 million BTFP advance taken in Q1 2024, offset by a $275.0 million reduction in short-term FHLB advances[6] Capital The company maintained its well-capitalized status under regulatory guidelines, with all key capital ratios showing improvement both quarter-over-quarter and year-over-year Estimated Capital Ratios | Ratio | Sep 30, 2024 | Jun 30, 2024 | Sep 30, 2023 | | :------------------------------------- | :----------- | :----------- | :----------- | | Common equity Tier 1 to risk-weighted assets | 10.01% | 9.69% | 9.86% | | Tier 1 capital to average assets | 9.08% | 8.76% | 9.09% | | Tier 1 capital to risk-weighted assets | 10.36% | 10.03% | 10.21% | | Total capital to risk-weighted assets | 13.26% | 11.75% | 11.89% | Third Quarter 2024 Operating Results This section details the company's Q3 2024 operating results, including net interest income, noninterest income, noninterest expense, and provision for credit losses Net Interest Income Net interest income decreased year-over-year due to increased funding costs but increased quarter-over-quarter driven by higher earnings on loans and interest-bearing deposits. The net interest margin expanded slightly from the linked quarter Net Interest Income and Margin | Metric | Q3 2024 | Q2 2024 | Q3 2023 | | :----------------- | :------------- | :------------- | :------------- | | Net Interest Income| $106.8 million | $105.1 million | $109.0 million | | Net Interest Margin| 2.50% | 2.47% | 2.60% | - Decrease in NII from prior year primarily due to increased funding costs on deposit products, partially offset by increased earnings on average loan balances[7] - Increase in NII from linked quarter primarily due to increased earnings on loans and interest-bearing deposits, offset by increased interest expense on deposits[7] - Yield on interest-earning assets was 5.65% in Q3 2024, up from 5.31% in Q3 2023 and 5.62% in Q2 2024, mainly due to increases in benchmark rates[7] - Cost of interest-bearing liabilities was 4.16% in Q3 2024, up from 3.72% in Q3 2023, reflecting higher funding costs on deposit products[7] Noninterest Income Total noninterest income slightly decreased year-over-year but increased marginally quarter-over-quarter, with a notable decrease in other noninterest income offset by gains in investment management fees and BOLI income Total Noninterest Income (Thousands) | Period | Amount (Thousands) | | :----------------- | :----------------- | | Q3 2024 | $13,461 | | Q2 2024 | $13,433 | | Q3 2023 | $13,646 | - Decrease from prior year quarter primarily reflects a $740 thousand decrease in other noninterest income, offset by increases in investment management fees ($295 thousand) and BOLI income ($187 thousand)[9] Noninterest Expense Total noninterest expense increased significantly year-over-year due to higher salaries, technology costs, and FDIC assessments, but decreased substantially quarter-over-quarter primarily due to the absence of a large goodwill impairment charge recorded in Q2 2024 Total Noninterest Expense (Thousands) | Period | Amount (Thousands) | | :----------------- | :----------------- | | Q3 2024 | $89,896 | | Q2 2024 | $606,911 | | Q3 2023 | $81,334 | - Increase from prior year due to increases of $6.4 million in salaries and benefits, $1.0 million in communications and technology expense, and $543 thousand in FDIC assessment[10] - Decrease from linked quarter primarily reflects a $518.0 million goodwill impairment charge that occurred in Q2 2024[10] Provision for Credit Losses The company recorded a higher provision for credit losses in Q3 2024 compared to prior periods, mainly due to additional specific credit allocations on a commercial relationship. The allowance for credit losses on loans remained stable as a percentage of total loans Provision for Credit Losses (Thousands) | Period | Amount (Thousands) | | :----------------- | :----------------- | | Q3 2024 | $4,700 | | Q2 2024 | $0 | | Q3 2023 | $340 | - Increased provision expense for Q3 2024 primarily due to $4.5 million in additional specific credit allocations on a commercial relationship[12] Allowance for Credit Losses on Loans | Metric | Sep 30, 2024 | Jun 30, 2024 | Sep 30, 2023 | | :----------------------------------------- | :------------- | :------------- | :------------- | | Allowance for credit losses on loans | $150.3 million | $145.3 million | $148.2 million | | % of total loans held for investment (net of mortgage warehouse purchase loans) | 1.08% | 1.04% | 1.08% | Income Taxes Federal income tax expense for Q3 2024 was $5.3 million with an effective rate of 20.5%, comparable to the prior year quarter. The effective tax rate in the linked quarter was significantly lower due to a non-deductible goodwill impairment charge Federal Income Tax Expense and Effective Rate (Thousands) | Period | Tax Expense (Thousands) | Effective Rate | | :----------------- | :---------------------- | :------------- | | Q3 2024 | $5,266 | 20.5% | | Q2 2024 | $5,125 | (1.0)% | | Q3 2023 | $8,246 | 20.1% | - The effective tax rate in Q2 2024 was primarily due to a $512.4 million goodwill impairment charge that was not deductible for tax purposes[13] Subsequent Events The company is required to evaluate subsequent events through the filing of its Form 10-Q for Q3 2024 and will adjust preliminary reported amounts if necessary - Company will evaluate subsequent events through the filing of its consolidated financial statements for Q3 2024 on Form 10-Q[14] - Impact of any subsequent events on critical accounting assumptions and estimates made as of September 30, 2024, will be evaluated, and amounts adjusted if necessary[14] About Independent Bank Group, Inc. Independent Bank Group, Inc. is a bank holding company based in McKinney, Texas, operating through its subsidiary, Independent Bank (doing business as Independent Financial). It provides relationship-driven banking services across Texas (Dallas/Fort Worth, Austin, Houston) and Colorado (Front Range area, including Denver, Colorado Springs, and Fort Collins) - Headquartered in McKinney, Texas, operating as a bank holding company[15] - Serves customers across Texas and Colorado with a wide range of relationship-driven banking services[15] - Operates in four market regions: Dallas/Fort Worth, Austin, Houston in Texas, and the Colorado Front Range area[15] Forward-Looking Statements This section contains a standard disclaimer regarding forward-looking statements, highlighting that such statements are subject to risks and uncertainties and actual results may differ materially from expectations. It lists numerous potential events and factors that could affect future financial results and performance, including economic conditions, regulatory changes, and merger-related risks - Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from those contemplated[16] - Key risk factors include changes in geopolitical, business, and economic conditions, asset quality, liquidity, regulatory requirements, market interest rates, competition, and the pending merger with SouthState Corporation[16][17] - The company undertakes no obligation to update forward-looking statements, except as required by law[18] Non-GAAP Financial Measures The press release includes certain non-GAAP financial measures, such as 'adjusted net income' and 'tangible book value,' which are considered useful for evaluating performance by excluding items not indicative of primary business operating results. The company acknowledges their limitations and provides GAAP equivalents and reconciliations - Non-GAAP measures like 'adjusted net income' and 'tangible book value' are used to provide supplemental information for financial operational decision making and period-to-period comparisons[19] - These measures exclude certain expenditures or assets (e.g., goodwill, intangible assets, credit loss provisions) that are not considered indicative of primary operating results[20] - Limitations include potential incomparability with peers and significant impact of excluded items on financial statements. Reconciliations to GAAP measures are provided[20][21] Contacts Contact information for investor/analyst relations and media inquiries is provided - Analysts/Investors Contact: Paul Langdale, Executive Vice President, Chief Financial Officer (972) 562-9004, Paul.Langdale@ifinancial.com[22] - Media Contact: Wendi Costlow, Executive Vice President, Chief Marketing Officer (972) 562-9004, Wendi.Costlow@ifinancial.com[22] Consolidated Financial Data This section presents a comprehensive overview of the company's selected income statement, per share, balance sheet data, and key financial ratios Selected Income Statement, Per Share, and Balance Sheet Data This section presents a summary of key income statement, per share, and period-end balance sheet data for the past five quarters, providing a snapshot of the company's financial performance and position Selected Income Statement Data (Thousands) | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :----------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Interest income | $241,716 | $239,085 | $235,205 | $232,522 | $222,744 | | Interest expense | $134,878 | $133,937 | $132,174 | $126,217 | $113,695 | | Net interest income | $106,838 | $105,148 | $103,031 | $106,305 | $109,049 | | Provision for credit losses | $4,700 | $0 | ($3,200) | $3,480 | $340 | | Net income (loss) | $20,437 | ($493,455) | $24,150 | $14,859 | $32,775 | Per Share Data (Common Stock) | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :----------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Diluted Earnings (loss) | $0.49 | ($11.93) | $0.58 | $0.36 | $0.79 | | Adjusted diluted earnings | $0.50 | $0.60 | $0.63 | $0.62 | $0.79 | | Dividends | $0.38 | $0.38 | $0.38 | $0.38 | $0.38 | | Book value | $47.03 | $45.85 | $58.02 | $58.20 | $56.49 | | Tangible book value | $34.54 | $33.27 | $32.85 | $32.90 | $31.11 | Selected Period End Balance Sheet Data (Thousands) | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :----------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total assets | $18,583,149 | $18,359,162 | $18,871,452 | $19,035,102 | $18,519,872 | | Loans, held for investment | $13,896,238 | $13,988,169 | $14,059,277 | $14,160,853 | $13,781,102 | | Total deposits | $15,995,068 | $15,842,676 | $15,671,715 | $15,723,035 | $15,340,969 | | Total stockholders' equity | $1,948,898 | $1,897,083 | $2,400,807 | $2,402,593 | $2,332,098 | Selected Performance, Credit Quality, and Capital Ratios This section details key performance, credit quality, and capital ratios, showing improvements in profitability metrics (adjusted), capital adequacy, and stable credit quality despite an increase in nonperforming assets Selected Performance Metrics | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :----------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Return on average assets | 0.44% | (10.55)% | 0.51% | 0.31% | 0.70% | | Adjusted return on average assets | 0.45% | 0.53% | 0.55% | 0.54% | 0.70% | | Net interest margin | 2.50% | 2.47% | 2.42% | 2.49% | 2.60% | | Efficiency ratio | 72.32% | 509.32% | 73.68% | 78.70% | 63.75% | | Adjusted efficiency ratio | 72.17% | 71.09% | 71.63% | 67.96% | 63.84% | Credit Quality Ratios | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :----------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Nonperforming assets to total assets | 0.37% | 0.35% | 0.34% | 0.32% | 0.33% | | Nonperforming loans to total loans held for investment | 0.43% | 0.40% | 0.40% | 0.37% | 0.28% | | Net charge-offs to average loans outstanding (annualized) | 0.00% | 0.10% | 0.00% | 0.01% | 0.01% | Capital Ratios | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :----------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Estimated common equity Tier 1 capital to risk-weighted assets | 10.01% | 9.69% | 9.60% | 9.58% | 9.86% | | Estimated total capital to risk-weighted assets | 13.26% | 11.75% | 11.68% | 11.57% | 11.89% | | Tangible common equity to tangible assets | 7.92% | 7.72% | 7.62% | 7.55% | 7.35% | Consolidated Statements of Income (Loss) This section provides detailed consolidated statements of income (loss) for the three and nine months ended September 30, 2024, and 2023, showing a comprehensive breakdown of interest income and expense, noninterest income and expense, and net income (loss) Consolidated Statements of Income (Loss) (Thousands) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total interest income | $241,716 | $222,744 | $716,006 | $639,214 | | Total interest expense | $134,878 | $113,695 | $400,989 | $288,636 | | Net interest income | $106,838 | $109,049 | $315,017 | $350,578 | | Provision for credit losses | $4,700 | $340 | $1,500 | $650 | | Total noninterest income | $13,461 | $13,646 | $39,764 | $40,495 | | Total noninterest expense | $89,896 | $81,334 | $785,280 | $356,419 | | Income (loss) before taxes | $25,703 | $41,021 | ($431,999) | $34,004 | | Net income (loss) | $20,437 | $32,775 | ($448,868) | $28,342 | Consolidated Balance Sheets This section presents the consolidated balance sheets as of September 30, 2024, and December 31, 2023, detailing assets, liabilities, and stockholders' equity. Notable changes include an increase in cash and cash equivalents and interest-bearing deposits, and a decrease in goodwill Consolidated Balance Sheets (Thousands) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :----------------------------------- | :----------- | :----------- | | Total assets | $18,583,149 | $19,035,102 | | Cash and cash equivalents | $1,348,055 | $721,989 | | Securities available for sale | $1,510,572 | $1,593,751 | | Loans, net | $14,138,644 | $14,558,681 | | Goodwill | $476,021 | $994,021 | | Total deposits | $15,995,068 | $15,723,035 | | FHLB advances | $0 | $350,000 | | Other borrowings | $454,762 | $271,821 | | Total liabilities | $16,634,251 | $16,632,509 | | Total stockholders' equity | $1,948,898 | $2,402,593 | Consolidated Average Balance Sheet Amounts, Interest Earned and Yield Analysis This section analyzes average balance sheet amounts, interest earned, and yield for three and nine-month periods, highlighting changes in interest rate spread and net interest margin Three Months Ended September 30, 2024 and 2023 This section provides an analysis of average interest-earning assets and interest-bearing liabilities, along with their respective yields and costs, for the three months ended September 30, 2024, and 2023. It highlights changes in interest rate spread and net interest margin Average Balance Sheet and Yield Analysis (Three Months, Thousands) | Metric | Sep 30, 2024 Average Balance (Thousands) | Sep 30, 2024 Interest (Thousands) | Sep 30, 2024 Yield/Rate (%) | Sep 30, 2023 Average Balance (Thousands) | Sep 30, 2023 Interest (Thousands) | Sep 30, 2023 Yield/Rate (%) | | :----------------------------------- | :--------------------------- | :-------------------- | :---------------------- | :--------------------------- | :-------------------- | :---------------------- | | Total interest-earning assets | $17,006,436 | $241,716 | 5.65% | $16,656,504 | $222,744 | 5.31% | | Total interest-bearing liabilities | $12,887,470 | $134,878 | 4.16% | $12,115,994 | $113,695 | 3.72% | | Net interest income | | $106,838 | | | $109,049 | | | Interest rate spread | | | 1.49% | | | 1.59% | | Net interest margin | | | 2.50% | | | 2.60% | Nine Months Ended September 30, 2024 and 2023 This section provides an analysis of average interest-earning assets and interest-bearing liabilities, along with their respective yields and costs, for the nine months ended September 30, 2024, and 2023, showing trends in interest rate spread and net interest margin over a longer period Average Balance Sheet and Yield Analysis (Nine Months, Thousands) | Metric | Sep 30, 2024 Average Balance (Thousands) | Sep 30, 2024 Interest (Thousands) | Sep 30, 2024 Yield/Rate (%) | Sep 30, 2023 Average Balance (Thousands) | Sep 30, 2023 Interest (Thousands) | Sep 30, 2023 Yield/Rate (%) | | :----------------------------------- | :--------------------------- | :-------------------- | :---------------------- | :--------------------------- | :-------------------- | :---------------------- | | Total interest-earning assets | $17,068,901 | $716,006 | 5.60% | $16,613,130 | $639,214 | 5.14% | | Total interest-bearing liabilities | $12,923,146 | $400,989 | 4.14% | $11,839,691 | $288,636 | 3.26% | | Net interest income | | $315,017 | | | $350,578 | | | Interest rate spread | | | 1.46% | | | 1.88% | | Net interest margin | | | 2.47% | | | 2.82% | Loan Portfolio Composition This section details the composition of the loan portfolio as of September 30, 2024, and December 31, 2023, showing the distribution across various categories such as commercial, real estate (commercial, construction, residential), agricultural, and consumer loans Loan Portfolio Composition (Thousands) | Loan Type | Sep 30, 2024 Amount (Thousands) | Sep 30, 2024 % of Total | Dec 31, 2023 Amount (Thousands) | Dec 31, 2023 % of Total | | :--------------------------------------- | :------------------ | :---------------------- | :------------------ | :---------------------- | | Commercial | $2,123,443 | 14.8% | $2,266,851 | 15.4% | | Mortgage warehouse purchase loans | $392,691 | 2.7% | $549,689 | 3.7% | | Commercial real estate | $8,311,344 | 58.2% | $8,289,124 | 56.3% | | Commercial construction, land and land development | $1,140,863 | 8.0% | $1,231,484 | 8.4% | | Residential real estate | $1,715,099 | 12.0% | $1,686,206 | 11.5% | | Single-family interim construction | $430,283 | 3.0% | $517,928 | 3.5% | | Agricultural | $113,851 | 0.8% | $109,451 | 0.7% | | Consumer | $74,161 | 0.5% | $76,229 | 0.5% | | Total loans | $14,301,735 | 100.0% | $14,726,962 | 100.0% | Reconciliation of Non-GAAP Financial Measures This section reconciles GAAP to non-GAAP financial measures, including adjusted net income, profitability, efficiency ratios, tangible book value, and tangible common equity Adjusted Net Income, Profitability, and Efficiency Ratio This section provides a reconciliation of GAAP net income to adjusted net income, and reported profitability and efficiency ratios to their adjusted non-GAAP counterparts, for the past five quarters. Adjustments typically remove non-recurring or non-operational items to provide a clearer view of core performance Adjusted Net Income (Thousands) | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :----------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Net Income (Loss) - Reported | $20,437 | ($493,455) | $24,150 | $14,859 | $32,775 | | Adjusted Net Income | $20,588 | $24,884 | $26,001 | $25,509 | $32,624 | Adjusted Profitability Ratios | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Reported Return on Average Assets| 0.44% | (10.55)% | 0.51% | 0.31% | 0.70% | | Adjusted Return on Average Assets| 0.45% | 0.53% | 0.55% | 0.54% | 0.70% | | Reported Return on Average Equity| 4.24% | (87.53)% | 4.05% | 2.51% | 5.51% | | Adjusted Return on Average Equity| 4.27% | 4.41% | 4.36% | 4.32% | 5.48% | Efficiency Ratios | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :----------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Reported Efficiency Ratio| 72.32% | 509.32% | 73.68% | 78.70% | 63.75% | | Adjusted Efficiency Ratio| 72.17% | 71.09% | 71.63% | 67.96% | 63.84% | Tangible Book Value & Tangible Common Equity Ratios This section reconciles total assets and total common stockholders' equity to tangible assets and tangible common equity, respectively, by adjusting for goodwill and other intangible assets. It also presents the tangible common equity to tangible assets ratio and tangible book value per common share Tangible Assets (Thousands) | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :----------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total assets | $18,583,149 | $18,359,162 | $18,871,452 | $19,035,102 | $18,519,872 | | 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 | Tangible Common Equity (Thousands) | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :----------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total common stockholders' equity | $1,948,898 | $1,897,083 | $2,400,807 | $2,402,593 | $2,332,098 | | 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 Ratios and Per Share Values | Metric | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Tangible common equity to tangible assets | 7.92% | 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 share | $34.54 | $33.27 | $32.85 | $32.90 | $31.11 |