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Kroll Bond Rating Agency Releases Research Report "Comments on Independent Bank Group, Inc.'s Acquisition of Carlile Bancshares, Inc."

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NEW YORK--(BUSINESS WIRE)--

Kroll Bond Rating Agency (KBRA) comments on Independent Bank Group, Inc.'s Acquisition of Carlile Bancshares, Inc.

The report makes the following key points:

  • Independent Bank Group, Inc. (NASDAQ: IBTX), (IBTX or "the Company"), headquartered in McKinney, Texas, announced the signing of a definitive agreement to acquire Forth Worth, Texas based Carlile Bancshares, Inc. ("Carlile), the holding company and parent of Northstar Bank of Texas (FSR: B-). Based on financials as of September 30, 2016, IBTX will have approximately $8.0 billion in total assets after the completion of the deal.
  • Carlile's shareholders will receive 8.9 million shares of IBTX stock, based on a negotiated IBTX stock price of $47.40 per share. Carlile's option holders will receive a cash payment in the amount of approximately $13.7 million. The deal is anticipated to close in the second quarter of 2017 and has an aggregate value of $434 million. The transaction has a price to tangible book value (P/TBV) of 2.13x and a projected cost savings of 35%.
  • KBRA expects that the transaction will result in moderately improved financial condition for IBTX. Pro forma regulatory capital ratios are anticipated to be moderately stronger post acquisition given that the consideration is 100% common stock, in conjunction with the additional issuance of common stock to support growth and cash payment to the acquired institution's option holders.
  • The acquisition will allow the Company to enter key metropolitan markets in Colorado and expand IBTX's presence in the Dallas-Fort Worth metropolitan statistical area (MSA).
  • KBRA acknowledges that there are risks related to the expansion into new markets and system integration given the size of the acquired institution. The aforementioned risks are partially mitigated by the retention of key directors and personnel of the acquired institution and IBTX's solid track record of successful acquisitions.
  • In August 2016, KBRA affirmed the senior unsecured debt rating of BBB, subordinated debt rating of BBB- and short-term rating of K3 for Independent Bank Group, Inc. KBRA also affirmed the BBB+ deposit and senior unsecured debt ratings and the K2 short-term deposit and debt ratings for the lead subsidiary, Independent Bank. Additionally, a subordinated debt rating of BBB was assigned to the Bank. The outlook on all long-term ratings is stable.
  • In the short-term, KBRA believes the acquisition of Carlile Bancshares, Inc. will be neutral to the ratings of IBTX. The transaction may represent a mid-term or long-term net positive over time as it further extends IBTX's operations into economically vibrant and attractive metro markets.

The ratings are based on KBRA's Global Bank and Bank Holding Company Rating Methodology published on February 19, 2016.

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Analytical:
Kroll Bond Rating Agency
Samuel Apovor, 301-969-3244
Associate
sapovor@kbra.com
or
Christopher Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com
or
Joseph Scott, 646-731-2438
Managing Director
jscott@kbra.com

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