Independent Bank expects loan growth to slow amid economic uncertainty, high interest rates - Dallas Business Journal

With the expectation that loan growth will decline this year, analysts wanted to drill down to better understand the bank's profit outlook. Independent's stock declined 3% on Tuesday to $59.28 per share. Shares of the bank are down 24% over the last 12 months.

Despite the expected slowdown, Brooks said he remains confident in Independent's outlook because of the"strength and resilience" in the Texas and Colorado markets where the bank operates. He also called out"sustained demand" from long-time customers. "There's a wide range of possibilities for 2023 and what happens with the economy," Brooks said."The markets we're in should give us some insulation...even if it's a pretty difficult overall economic slowdown. We still expect our loans will grow, and it just becomes a magnitude of how much."

One area where Brooks sees opportunity is in growing Independent's energy loans portfolio. The bank's energy loans portfolio as of Dec. 31 totaled $564.7 million, up 67% from the same time a year ago. However, energy loans still make up just 4% of the bank's overall loan book.Independent will continue to look at adding other lines of business, Brooks said. However, he said the bank will also take a cautious approach due to the economic uncertainty.

"There are avenues out there, which some banks may take, where you can go book a lot of really big loans or you can get into lines of business that you haven't been in historically," Brooks said."We think that's a uniquely bad thing to do at this point in the cycle so we're not going to be doing those kinds of things. We're going to be growing our loan book with our customers and our markets and continue to watch our risk.

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