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

• IBTX's third quarter results were driven in large part by provisioning, but revenue was better than expected and lower deposit costs helped the net interest margin.
• Criticized and non-performing loan ratios are moving up, but the reserves look adequate and IBTX has a strong history of quality underwriting.
• Organic growth (as measured by deposit share in major MSAs) has not been so great, but I do expect management to return to M&A soon.
• IBTX shares look modestly undervalued as is, and accretive deals can boost the long-term upside.

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