Independent Bank of Austin Ranked #1 in ROAE among U.S. De Novos; Breaks Ground in Lakeway on New HQ Facility; BusinessWeek's SmallBiz Magazine notes local bank's intense growth

Share Article

Independent Bank of Austin, a State Savings Bank based in Lakeway, TX, ranks No. 1 in the nation in return on average equity (ROAE) among all 174 de novo (new) banks formed in 2005, according to Highline Data's most recent report for year-end 2006 performance. Additionally, it ranks No. 2 in ROAE from among more than 460 de novos formed in the years 2004, 2005 and 2006, just behind a new bank formed in 2004. Independent Bank -- the subject of media attention by American Banker, Community Banker, Independent Banker and BusinessWeek's SmallBiz magazine for its rapid growth and low overhead, broke ground in April along Ranch Road 620 between Lakeway and Bee Cave TX for its new corporate headquarters. Management expects to move into the 3,500-square-foot facility in late December.

Independent Bank of Austin, SSB, based in Lakeway, TX, ranks No. 1 in the nation in return on average equity (ROAE) among all 174 de novo (new) banks formed in 2005, according to Highline Data's most recent report for year-end 2006 performance.

"With an ROAE of 16.78%, we finished just behind Sallie Mae, a government student loan program, which is not a bank," noted Denny Buchanan, President and CEO of the 21-month-old state savings bank (Photo: http://www.ibankaustin.com/3004-01-IBA/UserFiles/Image/denny.jpg "Additionally, were number two in ROAE from among more than 460 de novos formed in the years 2004, 2005 and 2006, just behind a new bank formed in 2004.

"In fact, our ROAE would have been higher, but we added $3 million in new capital from our shareholders just before year-end to provide additional equity to fund our substantial growth," Buchanan observed.

Highline Data, headquartered in Cambridge, MA, and Austin, TX, 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. Independent Bank also had a 40.81 percent efficiency ratio - well below average for community banks in its asset class.

"This achievement is possible through a combination of factors," said Chairman Jack Buchanan (no kin to Denny). "Competitive rates, volume loans and low overhead." Chairman Buchanan oversees both the Lakeway headquarters and Independent's Georgetown branch (at 3613 Williams Dr., Ste. 201 in the Village Lake Office Condominiums), which serves Georgetown and Sun City businesses. (Photo: http://www.ibankaustin.com/3004-01-IBA/UserFiles/Image/denny.jpg)

"A dynamic Central Texas marketplace and new deposits are fueling our expanding loan portfolio, which is primarily comprised of commercial development, residential construction and mortgages," he emphasized. "We primarily target small home builders and their customers with the majority of our loans being for single-family construction projects. The average life of a loan is 13 months; the average size, about $500,000."

National Media Attention

American Banker, Independent, Community Banker and its "The De Novo Bank Yearbook 2007" have all taken recent note of Independent Bank's fast start, frugal operations and astonishing growth. Last month, BusinessWeek's SmallBiz magazine reported on "veteran banker" Denny Buchanan's entrepreneurial spirit and how "His bank turned a profit in record time, netting $1.4 million its first" full year of business. (Article URL: http://www.ibankaustin.com/3004-01-IBA/UserFiles/File/Business%20Week%202-2007.pdf )

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.

Management's original objective - to generate $100 million in assets within five to 10 years - was achieved in an amazing 18 months. A year-end estimate provided to state regulatory authorities indicates Independent Bank will surpass $120 million in deposits by July and $150 million by year-end 2008.

Independent's total assets at Dec. 31, 2006, were $101.7 million, up 11.4 percent over the $91.3 million 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. Fourth quarter 2006 net profit of $502,120 was up 10.9 percent over third quarter profit of $452,544. (First Quarter 2007 results will be reported later this month.)

Year-end 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, and customer relationships exceed 1,250.

New HQ Construction Underway

Following a seven-month delay on getting approvals from the Texas Dept. of Transportation for ingress and egress to the property, Independent Bank broke ground in April (at 3209 Ranch Road 620, across from Lake Travis High School) for its new corporate headquarters. The site is a portion of what was known as Schramm Ranch and fronts RR620 near the Alta Vista Development in a project to be known as Honey Creek Development Center. (Construction Photo: http://www.ibankaustin.com/3004-01-IBA/UserFiles/Image/Land%20Clearing%202.JPG )

Kerry Martin and Dan Brouillette, partners in SG Builders of Austin have begun construction on the 3,500-square-foot facility designed by architect Gary Devin of Solution Studio in Austin. Plans call for relocating operations there in late December.

The new offices, with spectacular canyon and Hill Country vistas, will be adjacent to a major planned community and rapidly expanding residential developments in southwest Travis County. The burgeoning business-residential corridor is between Bee Cave, TX, on Austin's southwest fringe and Georgetown in Williamson County, 25 miles north of the capitol city.

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.

NOTE TO EDITORS: Photos of the new HQ site and construction can be accessed at http://www.ibankaustin.com

FOR MORE INFORMATION OR INTERVIEWS:
Denny Buchanan, President/CEO, Independent Bank of Austin SSB, Lakeway, TX, 512-261-3355, fax 512-261-3356; or Preston F. Kirk, APR, Kirk Public Relations, Austin, TX, 830-693-4447; kirk @ 281.com

###

Share article on social media or email:

View article via:

Pdf Print

Contact Author

PRESTON F. KIRK, APR
Visit website