Fourth Quarter Net Profit up 10.9% at Independent Bank of Austin; Assets, Deposits Rise Sharply at Lakeway, Georgetown Operations; Bank No. 3 in ROAE for U.S. de novos (2005); National Media Attention
Independent Bank of Austin, SSB, based in Lakeway, TX with a branch between Georgetown and Sun City, achieved the $100 million mark in assets in less than 18 months after its founding. The community bank, opening extremely leanly, making loans from day one and profitable within its first 90 days, again reports a sharp increase in net profits, total assets, deposits, and loans. In its 2005 de nove bank class it ranks No. 1 in Texas and No. 3 in the U.S. for Return on Average Equity for the 174 banks begun that year.
LAKEWAY and GEORGETOWN, TX (PRWEB) February 1, 2007 -- Independent Bank of Austin, SSB, based in Lakeway, TX, reported today a fourth quarter 2006 net profit of $502,120, up 10.9 percent over third quarter profit of $452,544 (www.ibankaustin.com).
Total assets at Dec. 31, 2006, for the 18-month-old bank were $101.7 million, up 11.4 percent over the $91.3 million reported at Sept. 30, 2006, and up 89.8 percent over the year-end 2005 total. Loans at Dec. 31 represented $87.8 million, up 10.2 percent over the $79.7 million reported in the second quarter.
Deposits were $88.4 million, up 8.01 percent over the $81.8 million reported at Sept. 30, 2006. Local deposits were up 7.8 percent over the prior quarter, "a further reflection that the communities we serve are both in need of and accepting of a quality, local community bank operation," management stated.
Independent Bank's branch office (at 3613 Williams Dr., Ste. 201 in the Village Lake Office Condominiums) serving Georgetown and Sun City businesses and residents also reflected significant growth in deposits. Deposits at Dec. 31 were $21.1 million, up 12.8 percent over deposits of $18.7 million at the end of the third quarter.
The bank, which officially opened its doors June 6, 2005, with $7.5 million in capitalization provided by about 65 investors, was making loans the day it opened and making money within three months. It established a limited service branch between Georgetown and the burgeoning Sun City retirement development in September 2005. Independent recently raised an additional $3 million in additional capital from its current shareholders to provide added equity needed to fund the bank's substantial growth.
"Our sustained growth in earnings, loans and deposits throughout 2006 underscores the dynamic economic activity in our Central Texas marketplace," said Denny Buchanan, President and CEO (Photo: http://www.ibankaustin.com/3004-01-IBA/UserFiles/Image/denny.jpg
"New deposits are helping fund our expanding loan portfolio, which is primarily comprised of commercial development, residential construction and mortgages. We recognize the need for diversified revenue sources over the long term, as well as strict attention to cost containment," Buchanan stated.
Independent mainly targets small home builders and their customers with the majority of its loans for single-family construction projects. The average life of a loan is 13 months; the average size, about $500,000.
"Management's original objective -- to generate $100 million in assets within five to 10 years - was achieved in an amazing18 months," he noted. "Our year-end estimates to regulatory authorities projects Independent Bank at $120 million by July 2007 and $150 million by year-end 2008."
"We're not in the market to build (Independent Bank) up and sell it," Julie Buchanan, a co-founding partner and V.P.-Operations, told American Banker magazine in late October. "We want to build it to a level we are comfortable managing -- where we know what is going on. If you get over $150 million (in assets), it is another ballgame."
National Ranking . . . National Attention
The most recent report (Sept 30, 2006) from Highline Data, headquartered in Cambridge, MA, and Austin, TX, ranks Independent Bank third nationally with a 16.1 percent return on average equity (ROAE) among the 174 de novo banks started in the United States in 2005. On another positive note, its 41.58 percent efficiency ratio is well below average for community banks in its asset class.
Highline Data is an industry leader in insurance and banking financial data. Its Highline Banking Data Services provides web-based, integrated information suites and community banking resources.
In the American Banker coverage, Danny Payne, Commissioner of the Texas Department of Savings and Mortgage Lending, said Independent is one of the most successful start-ups he's ever seen, adding that a recent examination found it was very healthy. "The smaller loan sizes spread out Independent's risk and ease the state regulator's jitters about real estate lending," Mr. Payne said.
He was quoted: "I'm comfortable with their business plan and their extraordinary growth. I've kept a close eye on them. I'm quite comfortable that these folks know what they are doing."
The January issue of Community Banker, which includes "The De Novo Bank Yearbook 2007," commented in the article "How Startups Balance Growth and Profitability": "There's nothing flashy about Independent Bank of Austin SSB, except for its financial performance."
The writer noted the cramped rented office space, low overhead, used office furniture and the fact that officers "wear multiple hats"..."hands-on managers."
"Our expanding services, prompt lending decisions and competitive rates on customer deposits reinforce our 'The People's Bank' philosophy," Denny Buchanan said. "Those qualities helped us grow customer relationships 13.6 percent in the past 90 days to a Dec. 31 total of 1,250."
Independent Bank offers a highly competitive Platinum Account paying a 4.50 percent to 5.00 percent (APY) interest rate. These accounts, available to individuals and corporations, require deposits of $50,000 or more, with unlimited check writing for individuals. For all current rates, see www.ibankaustin.com or call 512-261-3355.
FOURTH QUARTER COMPARISONS - 2006 & 2005
Assets Dec. 31, 2006 Dec. 31, 2005
Cash $1,072,000 $386,000
Investments & Interest-bearing Cash
$9,316,000 $6,070,000
Fed funds sold $3,042,000 $1,559,000
Loans $87,590,000 $45,162,000
Less Reserves ($839,000) ($453,000)
Fixed Assets $720,000 $342,000
Other Assets $859,000 $535,000
Total Assets $101,760,000 $53,601,000
Liabilities
Deposits $88,461,000 $45,965,000
Other Liabilities $1,449,000 $259,000
Total Liabilities $89,910,000 $46,225,000
Equity
Common Stock $8,000,000 $6,000,000
Surplus $3,034,000 $1,500,000
Undivided Profits $817,000 ($124,000)
Total Equity $11,851,000 $7,376,000
Total Liabilities and Equity
$101,760,000 $53,601,000
Additional financial performance can be seen at http://www2.fdic.gov/Call_TFR_Rpts/search.asp
Independent Bank is approved by the Texas Savings and Mortgage Lending Dept. and the Federal Deposit Insurance Corp. (FDIC). The bank's deposits are insured by the FDIC.
FOR MORE INFORMATION OR INTERVIEWS:
Denny Buchanan, President/CEO, Independent Bank of Austin SSB, Lakeway, TX, 512-261-3355, fax 512-261-3356; www.ibankaustin.com
Preston F. Kirk, APR, Kirk Public Relations, Austin, TX, 830-693-4447
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