Established in 2000, Private Capital Management, LLC (“PCM”) is a wholly owned subsidiary of Independent
Bank, doing business as Independent Financial. Independent Bank is a wholly owned subsidiary of
Independent Bank Group, Inc. (“IBTX”) (NASDAQ: IBTX). PCM is registered as an investment advisor with
the United States Securities and Exchange Commission (“SEC”) (CRD#165306).
Investment and Financial Planning Services. PCM provides fiduciary investment advisory and financial
planning services to individuals, businesses, corporate pension and profit-sharing plans, charitable
institutions, trusts, estates, and foundations. PCM’s services, corporate structure and compliance are
designed to ensure that we are serving our clients’ best interests. PCM provides investment management
services through the construction and monitoring of diversified portfolios composed primarily of no-load
mutual funds, exchange listed securities, foreign issuers, certificates of deposit, index funds, options, certain
insurance products, structured notes, private investments and other pooled investments, stocks, bonds, and
exchange-traded funds (“ETFs”).
PCM also recommends to qualified clients where appropriate, under the client’s particular circumstances,
investments in private placement offerings. Advice and recommendations are tailored to the individual needs
of our clients and clients can request reasonable restrictions on investing in certain securities or types of
securities, subject to PCM’s agreement.
Client accounts are generally managed by the firm on a discretionary basis unless otherwise agreed to in
writing. With respect to discretionary accounts, PCM has the authority to make trades within clients’ accounts
without the client’s prior consent.
Based on the needs of each client determined on a case-by-case basis, and subject to the mutual agreement
of PCM, PCM will offer a variety of financial planning services. Financial planning services include a review
of material aspects of a client’s current financial situation as well as anticipated future needs. Due to the
unique circumstances of each client, financial plans vary in length and scope, but will involve a review of the
client’s risk tolerance, financial goals and objectives, and investment time horizon. In developing the plan, a
variety of financial aspects will be addressed, which can include some or all of the following, or other factors
not referenced but which are material to the particular client’s financial circumstances: retirement planning,
investment management, risk management review, estate planning review, tax planning strategies, education
planning, philanthropy, debt management, business planning, and executive compensation planning. Once
the financial plan is mutually agreed upon, PCM will be responsible for investment management related
aspects thereof unless otherwise agreed.
Financial planning services are based on the client’s financial situation at the time and are based on financial
information disclosed by the client to PCM, current and anticipated market decisions, and each client’s stated
financial goals. In connection with these services, certain assumptions must be made with respect to inflation
rates and the use of past trends, future projections, and performance of various asset classes. PCM does
not offer any guarantees or promises that its clients’ financial goals and objectives will be met, or that
investment portfolios will achieve anticipated returns.
Clients should notify PCM promptly of any changes to their financial goals, objectives, or financial situation.
PCM will rely on the information provided by clients to manage their portfolios and provide services.
ERISA Plan and 401(k) Services. PCM provides investment advisory and consulting services to participant
directed retirement plans per the terms and conditions of a Retirement Plan Services Agreement between
PCM and the Plan. For such engagements, PCM shall assist the Plan Sponsor with the selection of an
investment platform from which Plan participants shall make their respective investment choices (which may
include investment strategies devised and managed by PCM), and, to the extent engaged to do so, may also
provide corresponding education to assist the participants
with their decision-making process.
Structured Notes. PCM may purchase Structured Notes for client accounts. A Structured Note is a financial
instrument that combines two elements, a zero-coupon debt security and exposure to an underlying asset or
assets. It is essentially a note, carrying counter party risk of the issuer. However, the return on the note is
linked to the return of an underlying asset or assets (such an index or basket of indexes representing various
asset classes). It is this latter feature that makes each structured product unique, and they can be tailored
to a specific market or economic view. Structured Notes will generally be subject to liquidity constraints, such
that the sale thereof before maturity will be limited, and any sale before the maturity date could result in a
substantial loss. There can be no assurance that the Structured Notes investment will be profitable, equal
any historical performance level(s), or prove successful. Please Note: If the issuer of the Structured
Note defaults, the entire value of the investment could be lost. Structured Notes may not be transferable to
other broker dealers or custodians. In the event that a client has any questions regarding the purchase
of Structured Notes for their account, or would like to place restrictions on the purchase of Structured
Notes for their accounts, PCM’s Chief Compliance Officer, Justin Apt, CFA, remains available to
address them. See Risks Associated with Structured Notes at Item 8 below.
PCM receives no compensation from any of the securities or investment products recommended to clients.
PCM is a wholly owned subsidiary of Independent Bank, doing business as Independent Financial. PCM will
recommend Independent Financial’s banking products and/or services to clients when deemed appropriate
and in the particular client’s best interest; however, PCM does not receive compensation for such
recommendations, but these nonetheless represent a conflict given Independent Financial’s ownership of
PCM. In such cases, the client ultimately has the authority to determine whether and to what extent, the client
wishes to utilize Independent Financial’s products or services.
Clients are allowed to hold or purchase certain assets in the same brokerage account as the account used
by PCM to manage investments. Unless the client has expressly given PCM discretionary or nondiscretionary
control over these assets in writing, PCM will not manage these assets and will term them “Unmanaged
Assets” on all communications. Additionally, at the request of the client, PCM may also provide
statements/reports on other accounts held by the client over which PCM has no discretionary or decision-
making authority (“Report Only Accounts”). The fact that such an asset or account appears on statements
and reports does not mean that PCM is providing any advice or taking on any responsibility or discretionary
authority regarding these Unmanaged Assets or Report Only Accounts. Unmanaged Assets and Report Only
Accounts shall remain the sole and exclusive responsibility of the client. PCM will not provide updates, advice,
recommendations, or research of any kind regarding the Unmanaged Assets or Report Only Accounts. PCM
will not determine if an Unmanaged Asset or Report Only Account is in conformity with a client’s stated goals,
financial profile, or investment objectives; however, PCM may take into consideration the existence of client’s
Unmanaged Assets and Report Only Accounts when making recommendations or investments with respect
to the managed portion of a client’s account/portfolio in order to facilitate conformance with the client’s stated
goals, financial profile, and investment objectives. Unmanaged Assets and Report Only Accounts are the
sole and exclusive responsibility of the client.
As of December 31, 2023 PCM reported discretionary regulatory assets under management (“AUM”) of
$1,739,578,553 and non-discretionary AUM of $4,953,514.
Additional Services
Subject to the mutual agreement of the parties, PCM can provide additional services related to items such
as business succession planning, estate administration, executive compensation planning, financial
planning, and consulting to participant directed retirement plans.