Brady Gailey's questions to IBTX leadership • Q4 2023
Question
Asked about the bank's sensitivity to falling interest rates, the definition of "historic profitability" metrics, and the outlook for M&A activity.
Answer
A 100 basis point rate cut would lead to a "meaningful double-digit pickup in net income." Historic profitability is defined as a NIM in the mid-3% range (3.50-3.60%), a ~1.20-1.25% ROA, and a 15-16% ROTCE, which they aim to achieve by the second half of 2025. The bank remains interested in M&A and expects activity could increase in the latter half of 2024, with plans to participate.