IBERIABANK Corporation Reports First Quarter Results

Apr 25, 2013, 20:45 ET from IBERIABANK Corporation

LAFAYETTE, La., April 25, 2013 /PRNewswire/ -- IBERIABANK Corporation (NASDAQ: IBKC), holding company of the 126-year-old IBERIABANK (www.iberiabank.com), reported operating results for the first quarter ended March 31, 2013.  For the quarter, the Company reported income available to common shareholders of $717,000, or $0.02 fully diluted earnings per share.  As announced on April 15, 2013, the results for the first quarter of 2013 were materially affected by increased costs related to the adoption of a new accounting standard ($0.12 per share after-tax) and an impairment charge and other factors related to and impacting loans acquired in failed bank acquisitions and the related FDIC loss share protection ($0.70 per share after-tax).  In addition, the Company incurred conversion and process improvement costs equal to $0.02 per share on an after-tax basis.  The negative impact of these items on the first quarter of 2013 totaled $38 million on a pre-tax basis, or $0.84 per share on an after-tax basis.  Excluding those items, EPS in the first quarter of 2013 was $0.86 per share on a non-GAAP operating basis excluding the adoption of the new accounting standard (refer to press release supplemental table).

Daryl G. Byrd, President and Chief Executive Officer, commented, "Adoption of the new accounting standard and seasonal influences masked a quarter of favorable progress in further strengthening our franchise.  We are very pleased with the solid core client growth and exceptional asset quality improvements we achieved in the first quarter.  Our balance sheet liquidity remains stout, as evidenced by our holding, on average, nearly $3 billion in cash equivalents and liquid, marketable investment securities during the first quarter.  We believe our strong capital position and recently completed investments in infrastructure provide us a competitive advantage to capitalize on future revenue enhancements and acquisition opportunities.  We are also well along the way in executing on our earnings improvement initiatives that we detailed today, and we believe will significantly benefit our operating efficiencies and profitability."

Byrd continued, "Seasonal influences weighed on our noninterest income and partially masked good core loan growth in the first quarter.  As we continue to diversify and expand our lending base, these seasonal influences are expected to have a diminishing impact, as other markets continue to experience strong consistent growth.  For example, during the first quarter, our Houston market crossed the $1 billion mark in loans outstanding and the $500 million deposit threshold.  We are very pleased with the continued client growth in our markets.  As evidenced by our phenomenal asset quality statistics, this growth has been achieved with very prudent underwriting standards."

Highlights for the First Quarter of 2013 and March 31, 2013:

  • On April 15, 2013, the Company disclosed an impairment charge associated with its indemnification assets from prior FDIC-assisted acquisitions that would be taken as of March 31, 2013, and accelerated indemnification asset ("IA") amortization in each of the eight quarters beginning with the first quarter of 2013.  Accordingly, results for the first quarter of 2013 include a pre-tax $32 million impairment charge shown in "Other Noninterest Expense."  In addition, the financial statements for the first quarter of 2013 reflect $5.5 million in accelerated IA amortization that is shown as a reduction in net interest income and reduced the net interest margin by 19 basis points during the first quarter of 2013.
  • Today the Company issued a separate press release providing details on ongoing operating improvement initiatives that commenced in the second quarter of 2012.  These Company initiatives are currently expected to achieve aggregate annual run-rate benefits of approximately $21 million, of which 92% are targeted expense reductions. In 2013, implementation costs are projected to total nearly $4 million, with approximately $11 million in aggregate pre-tax earnings improvements.  Full run-rate benefits are expected to be achieved by the first quarter of 2014, resulting in approximately $21 million of annual pre-tax earnings improvements in 2014 and beyond.  Additional details regarding the projected results of the initiatives are provided in the supplemental presentation available on the Company's website. The Company will report on a quarterly basis regarding its progress in achieving the targeted earnings enhancements.
  • Loan growth of $185 million, or 2%, between quarter-ends (10% annualized rate), excluding loans and other assets covered under FDIC loss share agreements ("Covered Assets").
  • Total deposits decreased $62 million, or 1%, between quarter ends. Seasonal deposits declined approximately $115 million during the first quarter. Excluding the decline in those temporary deposits, total deposits increased $53 million, or less than 1%, since year-end 2012.
  • The net interest margin declined 32 basis points on a linked quarter basis. The accelerated IA amortization accounted for 19 basis points of the margin decline, 8 basis points due to changes in covered loan yield, 2 basis points associated with the additional liquidity added during the first quarter, and 3 basis points due to all other factors.
  • Legacy asset quality improved considerably during the first quarter of 2013.  Nonperforming assets ("NPAs"), excluding Covered Assets and impaired loans acquired in acquisitions, equated to 0.83% of total assets at March 31, 2013, compared to 0.85% at December 31, 2012.  On that basis, loans past due 30 days or more declined $8 million, or 9%, to 1.13% of total loans at March 31, 2013, compared to 1.27% at year-end 2012.  Classified assets excluding Covered Assets decreased $18 million, or 8%, during the first quarter, and decreased from 1.99% of total assets at December 31, 2012, to 1.84% at March 31, 2013.
  • The Company recorded a negative loan loss provision in the first quarter of 2013 totaling $3 million, compared to a $5 million loan loss provision in the fourth quarter of 2012.  The provision improvement was driven by improved asset quality, slower loan growth, and favorable net charge-off levels.  Net charge-offs totaled $1.2 million in the first quarter of 2013, or an annualized 0.06% of average loans.  Over the last five quarters, net charge-offs averaged 0.07% of average loans.
  • Capital ratios remained strong. At March 31, 2013, the Company's tangible common equity ratio was 8.75%, tier 1 common ratio was 11.39%, and total risk based capital ratio was 13.80%.

Table A - Summary Financial Results

For the Quarter Ended:

Selected Financial Data

3/31/2012

12/31/2012

3/31/2013

% Change

Net Income ($ in thousands)

$               19,393

$               23,208

$                     717

-97%

Per Share Data:

Fully Diluted Earnings 

$                    0.66

$                    0.79

$                    0.02

-97%

Operating Earnings (Non-GAAP) (1)

0.62

0.80

0.86

7%

Pre-provision Operating Earnings  (Non-GAAP)

0.68

0.91

0.78

-14%

Tangible Book Value 

37.23

37.34

36.93

-1%

As of and for the Quarter Ended:

Basis Point

Key Ratios 

3/31/2012

12/31/2012

3/31/2013

Change

Return on Average Assets

0.67%

0.73%

0.02%

(71)

bps

Return on Average Common Equity

5.21%

6.02%

0.19%

(583)

bps

Return on Average Tangible Common Equity (Non-GAAP)

7.43%

8.62%

0.55%

(807)

bps

Net Interest Margin (TE) (2)

3.59%

3.55%

3.23%

(32)

bps

Tangible Efficiency Ratio (TE) (2) (Non-GAAP)

74.6%

73.2%

102.4%

2,924

bps

Tangible Common Equity Ratio (Non-GAAP)

9.64%

8.66%

8.75%

9

bps

Tier 1 Leverage Ratio

10.51%

9.70%

9.37%

(33)

bps

Tier 1 Common Ratio (Non-GAAP)

13.48%

11.74%

11.39%

(35)

bps

Total Risk Based Capital Ratio

16.10%

14.19%

13.80%

(39)

bps

Net Charge-Offs to Average Loans (3)

0.09%

0.01%

0.06%

5

bps

Nonperforming Assets to Total Assets (3)

0.83%

0.85%

0.83%

(2)

bps

For Quarter Ended:

GAAP

Non GAAP

Adjusted Selected Key Ratios

3/31/2013

Adjustments(4)

3/31/2013

Return on Average Assets

0.02%

0.78%

0.80%

Return on Average Common Equity

0.19%

6.42%

6.61%

Return on Average Tangible Common Equity (Non-GAAP)

0.55%

8.91%

9.46%

Net Interest Margin (TE) (2)

3.23%

0.19%

3.42%

Tangible Efficiency Ratio (TE)(2)(Non-GAAP)

102.4%

(25.6%)

76.8%

(1)Excludes the impact of the adoption of the new accounting standard.

(2)Fully taxable equivalent basis.

(3)Excluding FDIC Covered Assets and acquired impaired loans.

(4)Adjusted results exclude the income statement impact of the additional amortization and impairment of the Company's  indemnification asset, net of tax where applicable, without adjustment to any balance sheet accounts.

Refer to press release supplemental table for a reconciliation of GAAP and non-GAAP measures.

Operating Results

On a linked quarter basis, average earning assets increased $437 million, or 4%.  Also on a linked quarter basis, the average earning asset yield declined 36 basis points, approximately half of which was due to accelerated IA amortization and the other half due to a reduction in average earning asset yields. The cost of interest bearing liabilities decreased seven basis points, and the tax-equivalent net interest margin declined 32 basis points.  The accelerated IA amortization accounted for approximately 19 basis points of the margin decline.  Tax-equivalent net interest income decreased $7.1 million, or 7%, of which $5.5 million of the decline was associated with the accelerated IA amortization.  The decline in the margin more than offset the benefit of strong growth in average earning assets in the first quarter of 2013.

Table B - Quarterly Average Yields/Cost (1)

 

For Quarter Ended:

Basis Point

3/31/2012

12/31/2012

3/31/2013

Change

Investment Securities

2.51%

2.09%

1.92%

(17)

bps

Covered Loans, net of loss share receivable

7.45%

7.68%

5.35%

(233)

bps

Noncovered Loans

4.78%

4.52%

4.44%

(8)

bps

Loans & Loss Share Receivable

4.87%

4.70%

4.36%

(34)

bps

Mortgage Loans Held For Sale

3.58%

2.96%

2.97%

1

bps

Other Earning Assets

0.71%

0.61%

0.52%

(9)

bps

  Total Earning Assets

4.25%

4.06%

3.70%

(36)

bps

Interest Bearing Deposits

0.72%

0.53%

0.47%

(6)

bps

Short-Term Borrowings

0.25%

0.21%

0.19%

(2)

bps

Long-Term Borrowings

2.92%

3.17%

3.16%

(1)

bps

  Total Interest Bearing Liabilities

0.82%

0.65%

0.58%

(7)

bps

Net Interest Spread

3.43%

3.41%

3.12%

(29)

bps

Net Interest Margin

3.59%

3.55%

3.23%

(32)

bps

(1) Earning asset yields are shown on a fully taxable equivalent basis.

The 17 basis point decline in average investment yield was the result of cash flows reinvested at lower interest rates and additional investment purchases with relatively short durations.  During the first quarter of 2013, the Company purchased approximately $225 million in securities with a weighted average duration of less than one month and a yield of less than 10 basis points. The covered loan yield (net of loss share receivable) decreased 233 basis points due primarily to the previously mentioned accelerated IA amortization.  The non-covered loan yield declined eight basis points primarily due to a 10 basis point decline in the commercial loan portfolio yield.

For the second quarter of 2013, the Company projects the prospective yield on the covered loan portfolio net of the FDIC IA to approximate 5.40% and projects the average balance of the net covered loan portfolio to decline approximately $135 million, based on current FDIC loss share accounting assumptions and estimates.  The IA amortization is projected to decline from approximately $28 million in the first quarter of 2013 to approximately $15 million in the second quarter of 2013, and decline thereafter at a rate of approximately $2 million per quarter.

The Company recorded a $3.4 million negative loan loss provision in the first quarter of 2013, as a result of significantly improved asset quality conditions in the legacy loan portfolio and acquired performing portfolio.  The Company reported net charge-offs of $1.2 million in the first quarter of 2013, or 0.06% of average loans on an annualized basis.

Aggregate noninterest income decreased $6 million, or 12%, on a linked quarter basis.  The primary changes in noninterest income on a linked quarter basis were:

  • Increased gains on the sale of investment securities equal to $2.4 million; offset by
  • Decreased mortgage income of $4.0 million, or 17%;
  • Decreased deposit service charge income of $0.5 million, or 7%;
  • Decreased title revenue of $0.5 million, or 9%; and
  • Decreased capital markets revenues of $0.3 million, or 17%.

In addition, the Company recorded a $2.2 million gain associated with the redemption of a business investment acquired in the acquisition of OMNI Bancshares, Inc. in the fourth quarter of 2012 and no similar gains were recorded in 2013.   The $4 million decline in mortgage income was the result of a lower net valuation of derivatives and mortgage loans held for sale due primarily to the changing interest rate environment and lower origination volumes.  Title revenue was lower on a linked quarter basis due to seasonality influences. Assets under management at IBERIA Wealth Advisors were $1.1 billion at March 31, 2013. 

In the first quarter of 2013, the Company originated $546 million in residential mortgage loans, down $131 million, or 19%, on a linked quarter basis (up $92 million compared to the same quarter last year).  The decline in origination volume was consistent with historical seasonal trends.  Client loan refinancing opportunities accounted for approximately 40% of mortgage loan applications in the first quarter of 2013, compared to 47% in the fourth quarter of 2012 and approximately 36% between March 31, 2013, and April 12, 2013.  The Company sold $616 million in mortgage loans during the first quarter of 2013, up $5 million, or less than 1%, on a linked quarter basis.  Margins on the sale of mortgage loans were fairly stable on a linked quarter basis.  The mortgage origination pipeline was approximately $281 million at March 31, 2013, compared to $241 million at December 31, 2012, and approximately $322 million at April 21, 2013.  Mortgage loan repurchases and make-whole payments were approximately $0.1 million in the first quarter of 2013, unchanged compared to the fourth quarter of 2012. 

Noninterest expense increased $31.5 million, or 28%, on a linked quarter basis.  The increase in expense is attributable to the previously disclosed $31.8 million IA impairment charge.  One-time acquisition and conversion costs associated with the Florida Gulf transaction in the first quarter of 2013 were $0.2 million, or less than $0.01 per share.  Excluding the aforementioned non-operating expenses, other changes in noninterest expense on a linked quarter basis were:

  • FHLB debt extinguishment costs of $2.3 million
  • Increased payroll tax expense of $1.9 million, or 72%; and
  • Increased franchise and share taxes of $1.1 million; offset by
  • Decreased mortgage commissions of $1.4 million, or 25%;
  • Decreased marketing and business development expense of $1.5 million, or 33%;
  • Decreased legal and professional expenses of $1.0 million, or 19%;
  • Decreased OREO expense of $0.9 million, or 49%;
  • Decreased credit and loan-related expense of $0.6 million, or 15%; and
  • Decreased FDIC insurance premium expense of $0.5 million, or 20%.

Loans

In the first quarter of 2013, total loans increased $96 million, or 1%.  The loan portfolio associated with FDIC-assisted acquisitions decreased $89 million, or 8%, compared to December 31, 2012.  Excluding loans associated with FDIC-assisted transactions, total loans increased $185 million, or 2%, over that period (10% annualized rate). The Company experienced several large commercial loan pay-downs during the first quarter of 2013.  In addition, in the first quarter of each year the Company has historically experienced slower loan growth than other quarters of the year.  Legacy commercial loans increased $113 million, or 2% (which includes $44 million in business banking loan growth, up 7%), legacy consumer loans increased $61 million, or 4%, and legacy mortgage loans increased $11 million, or 4%, during the quarter.  Loan origination growth during the first quarter of 2013 was strongest in the Houston, Lafayette, New Orleans, Baton Rouge, and Mobile markets.  Loans and commitments originated during the first quarter of 2013 totaled $873 million, with 57% fixed rate and 43% floating rate.  Energy-related loans outstanding totaled $632 million at March 31, 2013, equal to approximately 7% of total loans.  The Company had no student loans outstanding at March 31, 2013.

Table C - Period-End Loans ($ in Millions)

 

Period-End Balances ($ Millions)

% Change 

Mix

3/31/12

12/31/12

3/31/13

Year/Year

Qtr/Qtr

Annualized

12/31/12

3/31/13

Commercial

$     4,601

$     5,442

$     5,555

21%

2%

8%

64%

65%

Consumer

1,353

1,674

1,735

28%

4%

14%

20%

20%

Mortgage

263

290

301

15%

4%

16%

3%

3%

Non-FDIC Loans

$     6,217

$     7,406

$     7,591

22%

2%

10%

87%

88%

Covered Assets

1,261

1,093

1,004

-20%

-8%

-32%

13%

12%

Total Loans

$     7,478

$     8,499

$     8,595

15%

1%

5%

100%

100%

Deposits

Total deposits decreased $62 million, or 1%, from December 31, 2012 to March 31, 2013.  Noninterest bearing deposits increased $4 million, or less than 1%, and equated to 19% of total deposits at March 31, 2013.  NOW accounts decreased $43 million, or 2%, and money market and savings account volume increased $53 million, or 1%, at March 31, 2013.  Deposit growth in the first quarter was driven by commercial and retail client growth, partially offset by reduced levels of seasonal deposits.  By year-end 2012, the Company received an influx of approximately $140 million in seasonal client deposits (primarily NOW accounts).  Seasonal deposits decreased $115 million during the first quarter of 2013.  Excluding the estimated seasonal decline in deposits, deposits increased $53 million, or less than 1%, during the first quarter of 2013.  Period-end deposit growth during the first quarter of 2013 was strongest in the Little Rock, Birmingham, Naples, Lake Charles, and Fort Myers markets.

Table D - Period-End Deposits ($ in Millions)

 

Period-End Balances ($ Millions)

% Change 

Mix

3/31/12

12/31/12

3/31/13

Year/Year

Qtr/Qtr

Annualized

12/31/12

3/31/13

Noninterest

$     1,607

$     1,968

$     1,972

23%

0%

1%

18%

19%

NOW Accounts

1,967

2,523

2,480

26%

-2%

-7%

24%

23%

Savings/MMkt

3,503

4,103

4,156

19%

1%

5%

38%

39%

Time Deposits

2,384

2,154

2,078

-13%

-4%

-14%

20%

19%

Total Deposits

$     9,461

$    10,748

$    10,686

13%

-1%

-2%

100%

100%

 

On an average balance and linked quarter basis, noninterest-bearing deposits increased $10 million, or less than 1%, and interest-bearing deposits increased $378 million, or 5%.  The rate on average interest-bearing deposits in the first quarter of 2013 was 0.47%, a decrease of six basis points on a linked quarter basis.  Approximately $1.5 billion in time deposits are scheduled to re-price over the next 12 months at a weighted average cost of 0.75%.  An additional $0.2 billion in time deposits are scheduled to re-price the following 12 months at a weighted average cost of 1.17%.  During the first quarter of 2013, new and re-priced time deposits were booked at an average cost of 0.45%.  The Company experienced a time deposit retention rate of 93% in the first quarter of 2013 with an average 22 basis point reduction in rate.

Other Assets And Funding

The Company maintained a strong liquidity position in the first quarter of 2013.  Total cash and equivalents averaged $850 million in the first quarter of 2013, up $205 million, or 32%, on a linked quarter basis.  The Company increased its investment portfolio by $139 million on a linked quarter basis.  The investment portfolio equated to $2.1 billion, or 17% of total assets at March 31, 2013, up compared to 15% at December 31, 2012.  The investment portfolio had a modified duration of 3.1 years at March 31, 2013, up slightly compared to 2.8 years at December 31, 2012.  The lengthening of the modified duration was the result of slowing prepayment speeds as interest rates increased during the first quarter of 2013.  The unrealized gain in the portfolio decreased from $44 million at December 31, 2012, to $40 million at March 31, 2013.  The average yield on investment securities declined 17 basis points on a linked quarter basis to 1.92% in the first quarter of 2012.  The Company holds in its investment portfolio primarily government agency and municipal securities.  Municipal securities comprised only 9% of total investments at March 31, 2013.  The Company holds no sovereign debt or derivative exposure to foreign counterparties.

As a result of strong deposit growth, the Company paid off $90 million in long-term FHLB borrowings near the end of the first quarter.  The debt was scheduled to mature in May 2014 and had an effective rate of 2.54%.  The Company incurred a prepayment penalty of $2.3 million on the extinguishment of the debt.  On a linked quarter basis, average long-term debt decreased $12 million, or 3%, and the cost of debt decreased one basis point to 3.16%.  The cost of average interest bearing liabilities was 0.58% in the first quarter of 2013, a decrease of seven basis points on a linked quarter basis. For the month of March 2013, the average cost of interest bearing liabilities was 0.56%.

Asset Quality

Excluding $505 million in NPAs which were Covered Assets or acquired impaired loans marked to fair value, NPAs at March 31, 2013 were $96 million, down $3 million, or 3%, compared to December 31, 2012.  The decrease in NPAs was primarily attributable to the resolution of problem credits.  NPAs equated to 0.83% of total assets at March 31, 2013, compared to 0.85% of total assets at December 31, 2012.  Loans past due 30 days or more (including nonaccruing loans) decreased $8 million, or 9%, and represented 1.13% of total loans at March 31, 2013, down compared to 1.27% at December 31, 2012.  Classified assets declined $18 million, or 8%, during the first quarter of 2013.

Table E - Asset Quality Summary

Excludes the impact of all FDIC-assisted acquisitions and impaired loans

For Quarter Ended:

% or Basis Point Change

     ($ thousands)

3/31/2012

12/31/2012

3/31/2013

Year/Year

Qtr/Qtr

Nonperforming Assets

$   82,238

$   98,510

$   96,001

17%

-3%

Past Due Loans

79,928

93,358

85,399

7%

-9%

Classified Assets

194,034

231,586

213,589

10%

-8%

Nonperforming Assets/Assets

0.83%

0.85%

0.83%

(0)

 bps 

(2)

 bps 

NPAs/(Loans + OREO)

1.33%

1.34%

1.27%

(6)

 bps 

(7)

 bps 

Classified Assets/Total Assets

1.96%

1.99%

1.84%

(12)

 bps 

(15)

 bps 

(Past Dues & Nonaccruals)/Loans

1.29%

1.27%

1.13%

(16)

 bps 

(14)

 bps 

Provision For Credit Losses

$    1,004

$       362

$   (3,941)

-493%

-1190%

Net Charge-Offs/(Recoveries)

1,339

91

1,170

-13%

1180%

Provision Less Net Charge-Offs

$      (335)

$       270

$   (5,111)

-1424%

-1990%

Net Charge-Offs/Average Loans

0.09%

0.01%

0.06%

(3)

5

Reserve For Credit Losses/Loans

1.22%

1.08%

0.99%

(23)

(9)

Excluding Covered Assets and acquired impaired loans, troubled debt restructurings at March 31, 2013, totaled $19 million, or 0.25% of total loans (compared to 0.24% of total loans at December 31, 2012).  All but $2 million of the Company's troubled debt restructurings were included in NPAs at March 31, 2013.

Capital Position

The Company maintains favorable capital strength.  At March 31, 2013, the Company reported a tangible common equity ratio of 8.75%, up nine basis points compared to December 31, 2012.  At that date, the Company's preliminary Tier 1 leverage ratio was 9.37%, down 33 basis points compared to December 31, 2012.  The Company's preliminary total risk-based capital ratio at March 31, 2013 was 13.80%, down 39 basis points compared to December 31, 2012.  The declines in these capital ratios were primarily the result of the IA impairment charge and related costs.

On October 26, 2011, the Company announced a share repurchase program totaling 900,000 shares of common stock. No shares were repurchased under this program during the first quarter of 2013.  A total of 46,692 shares remain under the currently authorized share repurchase program.

At March 31, 2013, book value per share was $51.33, down $0.55 per share compared to December 31, 2012. Tangible book value per share was $36.93, down $0.41 per share compared to December 31, 2012.  Based on the closing stock price of the Company's common stock of $49.13 per share on April 25, 2013, this price equated to 0.96 times March 31, 2013 book value and 1.33 times March 31, 2013 tangible book value per share.

On March 19, 2013, the Company declared a quarterly cash dividend of $0.34 per share. This dividend level equated to an annualized dividend rate of $1.36 per share and an indicated dividend yield of 2.77%.

IBERIABANK Corporation

IBERIABANK Corporation is a financial holding company with 276 combined offices, including 181 bank branch offices and two LPOs in Louisiana, Arkansas, Tennessee, Alabama, Texas, and Florida, 21 title insurance offices in Arkansas and Louisiana, mortgage representatives in 62 locations in 12 states, nine locations with representatives of IBERIA Wealth Advisors in four states, and one IBERIA Capital Partners, LLC office in New Orleans.  During the first quarter of 2013, four bank branch offices were closed and no branch offices were opened.

The Company's common stock trades on the NASDAQ Global Select Market under the symbol "IBKC."  The Company's market capitalization was approximately $1.5 billion, based on the NASDAQ closing stock price on April 25, 2013.

The following 10 investment firms currently provide equity research coverage on IBERIABANK Corporation:

  • FIG Partners, LLC
  • Jefferies & Co., Inc.
  • Keefe, Bruyette & Woods
  • Oppenheimer & Co., Inc.
  • Raymond James & Associates, Inc.
  • Robert W. Baird & Company
  • Stephens, Inc.
  • Sterne, Agee & Leach
  • SunTrust Robinson-Humphrey
  • Wunderlich Securities

Conference Call

In association with this earnings release, the Company will host a live conference call to discuss the financial results for the quarter just completed. The telephone conference call will be held on Friday, April 26, 2013, beginning at 8:00 a.m. Central Time by dialing 1-800-288-8968. The confirmation code for the call is 290483.  A replay of the call will be available until midnight Central Time on May 3, 2013 by dialing 1-800-475-6701. The confirmation code for the replay is 290483.  The Company has prepared a PowerPoint presentation that supplements information contained in this press release.  The PowerPoint presentation may be accessed on the Company's web site, www.iberiabank.com, under "Investor Relations" and then "Presentations."

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with GAAP. The Company's management uses these non-GAAP financial measures in their analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.  Reconciliations of GAAP to non-GAAP disclosures are included as tables at the end of this release.  Refer to press release supplemental table for this reconciliation.

Forward Looking Statements

To the extent that statements in this press release and the accompanying PowerPoint presentation relate to future plans, objectives, financial results or performance of IBERIABANK Corporation, these statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which are based on management's current information, estimates and assumptions and the current economic environment, are generally identified by the use of the words "plan", "believe", "expect", "intend", "anticipate", "estimate", "project" or similar expressions. IBERIABANK Corporation's actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties.

Actual results could differ materially because of factors such as the level of market volatility, our ability to execute our growth strategy, including the availability of future FDIC-assisted failed bank opportunities, unanticipated losses related to the integration of, and refinements to purchase accounting adjustments for, acquired businesses and assets and assumed liabilities in these transactions, adjustments of fair values of acquired assets and assumed liabilities and of deferred taxes in acquisitions,actual results deviating from the Company's current estimates and assumptions of timing and amounts of cash flows, credit risk of our customers, effects of the on-going correction in residential real estate prices and reduced levels of home sales, sufficiency of our allowance for loan losses, changes in interest rates, access to funding sources, reliance on the services of executive management, competition for loans, deposits and investment dollars, reputational risk and social factors, changes in government regulations and legislation, increases in FDIC insurance assessments, geographic concentration of our markets and economic conditions in these markets, rapid changes in the financial services industry, dependence on our operational, technological, and organizational systems or infrastructure and those of third-party providers of those services, hurricanes and other adverse weather events, the modest trading volume of our common stock, and valuation of intangible assets.  These and other factors that may cause actual results to differ materially from these forward-looking statements are discussed in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission (the "SEC"), available at the SEC's website, http://www.sec.gov, and at the Company's website, http://www.iberiabank.com, under the heading "Investor Information."  All information in this release and the accompanying PowerPoint presentation is as of the date of this release.  The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations. Certain tabular presentations may not reconcile because of rounding.

Table 1 - IBERIABANK CORPORATION

FINANCIAL HIGHLIGHTS

 For The Quarter Ended 

 For The Quarter Ended 

 March 31, 

 December 31, 

2013

2012

% Change

2012

% Change

Income Data (in thousands):

Net Interest Income

$           92,871

$           91,861

1%

$            99,990

(7%)

Net Interest Income  (TE)   (1)

95,335

94,233

1%

102,439

(7%)

Net Income 

717

19,393

(96%)

23,208

(97%)

Earnings Available to Common Shareholders- Basic

717

19,393

(96%)

23,208

(97%)

Earnings Available to Common Shareholders- Diluted

697

19,029

(96%)

22,780

(97%)

Per Share Data:

Earnings Available to Common Shareholders - Basic

$                0.02

$                0.66

(96%)

$                0.79

(97%)

Earnings Available to Common Shareholders - Diluted

0.02

0.66

(96%)

0.79

(97%)

Operating Earnings (Non-GAAP) (2)

0.86

0.62

39%

0.80

7%

Book Value 

51.33

50.67

1%

51.88

(1%)

Tangible Book Value (3)

36.93

37.23

(1%)

37.34

(1%)

Cash Dividends

0.34

0.34

-

0.34

-

Closing Stock Price

50.02

53.47

(6%)

49.12

2%

Key Ratios: (4)

Operating Ratios:

Return on Average Assets

0.02%

0.67%

0.73%

Return on Average Common Equity

0.19%

5.21%

6.02%

Return on Average Tangible Common Equity (3)

0.55%

7.43%

8.62%

Net Interest Margin  (TE)  (1)

3.23%

3.59%

3.55%

Efficiency Ratio

105.5%

77.3%

75.5%

Tangible Efficiency Ratio  (TE)  (1) (3)

102.4%

74.6%

73.2%

Full-time Equivalent Employees

2,718

2,591

2,697

Capital Ratios:

Tangible Common Equity Ratio (Non-GAAP)

8.75%

9.64%

8.66%

Tangible Common Equity to Risk-Weighted Assets

11.64%

13.80%

12.01%

Tier 1 Leverage Ratio

9.37%

10.51%

9.70%

Tier 1 Capital Ratio

12.54%

14.84%

12.92%

Total Risk Based Capital Ratio

13.80%

16.10%

14.19%

Common Stock Dividend Payout Ratio

N/M

51.8%

43.2%

Asset Quality Ratios:

Excluding FDIC Covered Assets and acquired impaired loans

Nonperforming Assets to Total Assets (5)

0.83%

0.83%

0.85%

Allowance for Credit Losses to Loans

0.99%

1.22%

1.08%

Net Charge-offs to Average Loans 

0.06%

0.09%

0.01%

Nonperforming Assets to Total Loans and OREO (5)

1.27%

1.33%

1.34%

 For The Quarter Ended 

 For The Quarter Ended 

 March 31, 

 December 31, 

 September 30, 

 June 30, 

2013

2013

2012

2012

2012

Balance Sheet Summary (in thousands):

End of Period

Average

Average

Average

Average

Excess Liquidity (6)

$         443,358

$         629,406

$         432,752

$         238,203

$         294,171

Total Investment Securities

2,149,990

2,096,229

1,957,542

2,005,975

2,048,001

Loans, Net of Unearned Income

8,594,975

8,543,538

8,384,218

8,016,829

7,592,677

Loans, Net of Unearned Income, Excluding Covered Loans and SOP 03-3

7,532,774

7,454,309

7,212,648

6,810,490

6,400,351

Total Assets

12,951,199

13,075,008

12,692,665

12,182,554

11,817,101

Total Deposits

10,686,267

10,703,883

10,315,944

9,705,957

9,463,392

Total Shareholders' Equity

1,524,070

1,531,068

1,533,561

1,519,338

1,504,102

(1)

Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a marginal tax rate of 35%.

(2)

Excludes the impact of the adoption of the new accounting standard.

(3)

Tangible calculations eliminate the effect of goodwill and acquisition related intangible assets and the corresponding amortization expense on a tax-effected basis where applicable.

(4)

All ratios are calculated on an annualized basis for the period indicated.

(5)

Nonperforming assets consist of nonaccruing loans, accruing loans 90 days or more past due and other real estate owned, including repossessed assets.

(6)

Excess Liquidity includes interest-bearing deposits in banks and fed funds sold, but excludes liquidity sources and uses from off-balance sheet arrangements.

N/M - Comparison of the information presented is not meaningful given the periods presented.

 

Table 2 - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(dollars in thousands except per share data)

BALANCE SHEET (End of Period)

March 31,

December 31,

2013

2012

% Change

2012

% Change

ASSETS

Cash and Due From Banks

$            183,158

$            196,572

(6.8%)

$            248,214

(26.2%)

Interest-bearing Deposits in Banks

443,358

396,209

11.9%

722,763

(38.7%)

   Total Cash and Equivalents

626,516

592,781

5.7%

970,977

(35.5%)

Investment Securities Available for Sale

1,951,548

1,811,023

7.8%

1,745,004

11.8%

Investment Securities Held to Maturity

198,442

190,084

4.4%

205,062

(3.2%)

   Total Investment Securities

2,149,990

2,001,107

7.4%

1,950,066

10.3%

Mortgage Loans Held for Sale

188,037

128,125

46.8%

267,475

(29.7%)

Loans, Net of Unearned Income

8,594,975

7,478,306

14.9%

8,498,580

1.1%

Allowance for Credit Losses

(189,725)

(177,192)

7.1%

(251,603)

(24.6%)

   Loans, Net

8,405,250

7,301,114

15.1%

8,246,977

1.9%

Loss Share Receivable

284,471

537,448

(47.1%)

423,069

(32.8%)

Premises and Equipment

304,353

292,403

4.1%

303,523

0.3%

Goodwill and Other Intangibles

428,522

396,908

8.0%

429,584

(0.2%)

Other Assets

564,060

541,397

4.2%

538,007

4.8%

   Total Assets

$      12,951,199

$      11,791,283

9.8%

$      13,129,678

(1.4%)

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing Deposits

$         1,971,809

$         1,607,244

22.7%

$         1,967,662

0.2%

NOW Accounts

2,480,305

1,966,960

26.1%

2,523,252

(1.7%)

Savings and Money Market Accounts

4,155,973

3,502,606

18.7%

4,103,183

1.3%

Certificates of Deposit

2,078,180

2,384,601

(12.8%)

2,154,180

(3.5%)

   Total Deposits

10,686,267

9,461,411

12.9%

10,748,277

(0.6%)

Short-term Borrowings

-

-

-

-

-

Securities Sold Under Agreements to Repurchase

294,156

266,489

10.4%

303,045

(2.9%)

Trust Preferred Securities

111,862

111,862

0.0%

111,862

0.0%

Other Long-term Debt

211,184

317,980

(33.6%)

311,515

(32.2%)

Other Liabilities

123,660

137,911

(10.3%)

125,111

(1.2%)

   Total Liabilities

11,427,129

10,295,653

11.0%

11,599,810

(1.5%)

Total Shareholders' Equity

1,524,070

1,495,630

1.9%

1,529,868

(0.4%)

   Total Liabilities and Shareholders' Equity

$      12,951,199

$      11,791,283

9.8%

$      13,129,678

(1.4%)

BALANCE SHEET (Average)

March 31,

December 31,

September 30,

June 30,

March 31,

2013

2012

2012

2012

2012

ASSETS

Cash and Due From Banks

$            220,746

$            212,404

$            192,891

$            188,260

$            189,182

Interest-bearing Deposits in Banks

629,406

432,752

236,653

294,171

326,810

Investment Securities

2,096,229

1,957,542

2,005,975

2,048,001

2,047,168

Mortgage Loans Held for Sale

178,387

212,432

182,543

135,273

117,186

Loans, Net of Unearned Income

8,543,538

8,384,218

8,016,829

7,592,677

7,381,188

Allowance for Credit Losses

(245,384)

(196,634)

(180,798)

(173,023)

(185,952)

Loss Share Receivable

384,319

411,328

448,746

508,443

573,776

Other Assets

1,267,767

1,278,623

1,279,715

1,223,299

1,238,723

   Total Assets

$      13,075,008

$      12,692,665

$      12,182,554

$      11,817,101

$      11,688,081

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing Deposits

$         1,937,890

$         1,928,361

$         1,773,302

$         1,640,327

$         1,530,504

NOW Accounts

2,464,922

2,207,032

2,023,769

1,985,248

1,924,371

Savings and Money Market Accounts

4,170,123

3,935,675

3,701,947

3,524,641

3,481,073

Certificates of Deposit

2,130,948

2,244,876

2,206,939

2,313,176

2,445,008

   Total Deposits

10,703,883

10,315,944

9,705,957

9,463,392

9,380,956

Short-term Borrowings

500

9,239

121,957

27,857

4,220

Securities Sold Under Agreements to Repurchase

292,448

262,027

245,486

245,401

219,846

Trust Preferred Securities

111,862

111,862

113,905

111,862

111,862

Long-term Debt

300,071

312,190

324,923

313,451

324,468

Other Liabilities

135,176

147,842

150,988

151,036

149,947

   Total Liabilities

11,543,940

11,159,104

10,663,216

10,312,999

10,191,299

Total Shareholders' Equity

1,531,068

1,533,561

1,519,338

1,504,102

1,496,782

   Total Liabilities and Shareholders' Equity

$      13,075,008

$      12,692,665

$      12,182,554

$      11,817,101

$      11,688,081

 

 

Table 3 - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(dollars in thousands except per share data)

For The Three Months Ended

INCOME STATEMENT

March 31,

December 31,

2013

2012

% Change

2012

% Change

Interest Income

$     106,416

$     109,187

(2.5%)

$      114,779

(7.3%)

Interest Expense

13,545

17,326

(21.8%)

14,789

(8.4%)

   Net Interest Income

92,871

91,861

1.1%

99,990

(7.1%)

(Reversal of) Provision for Credit Losses

(3,377)

2,857

(218.2%)

4,866

(169.4%)

   Net Interest Income After (Reversal of ) Provision for Loan Losses

96,248

89,004

8.1%

95,124

1.2%

Service Charges

6,797

5,980

13.7%

7,295

(6.8%)

ATM / Debit Card Fee Income

2,183

2,024

7.9%

2,412

(9.5%)

BOLI Proceeds and Cash Surrender Value Income

939

951

(1.3%)

909

3.3%

Mortgage Income

18,931

13,718

38.0%

22,935

(17.5%)

Gain (Loss) on Sale of Investments, Net

2,359

2,836

(16.8%)

(4)

(59185.2%)

Title Revenue

5,021

4,533

10.8%

5,492

(8.6%)

Broker Commissions

3,534

3,060

15.5%

4,192

(15.7%)

Other Noninterest Income

4,727

4,294

10.1%

7,123

(33.6%)

   Total Noninterest Income

44,491

37,396

19.0%

50,354

(11.6%)

Salaries and Employee Benefits

62,529

54,819

14.1%

60,899

2.7%

Occupancy and Equipment

15,195

12,719

19.5%

15,176

0.1%

Amortization of Acquisition Intangibles

1,183

1,290

(8.3%)

1,285

(7.9%)

Other Noninterest Expense

65,991

31,045

112.6%

36,081

82.9%

   Total Noninterest Expense

144,898

99,873

45.1%

113,441

27.7%

   Income (Loss) Before Income Taxes

(4,159)

26,527

(115.7%)

32,037

(113.0%)

Income Taxes

(4,876)

7,134

(168.3%)

8,829

(155.2%)

   Net Income 

$             717

$       19,393

(96.3%)

$         23,208

(96.9%)

   Preferred Stock Dividends

-

-

-

-

-

   Earnings Available to Common Shareholders - Basic

717

19,393

(96.3%)

23,208

(96.9%)

   Earnings Allocated to Unvested Restricted Stock

(20)

(364)

(94.5%)

(428)

(95.3%)

   Earnings Available to Common Shareholders - Diluted 

697

19,029

(96.3%)

22,780

(96.9%)

Earnings Per Share, Diluted

$            0.02

$            0.66

(96.3%)

$             0.79

(96.9%)

Impact of Non-Operating Expenses and New Accounting Standard (Non-GAAP)

$            0.84

$          (0.04)

(2063.7%)

$             0.01

9742.9%

Earnings Per Share, Diluted, Excluding Non-operating Expenses (Non-GAAP)

$            0.86

$            0.62

39.2%

$             0.80

7.5%

NUMBER OF SHARES OUTSTANDING

Basic Shares - All Classes  (Average)

29,502,711

29,384,220

0.4%

29,401,395

0.3%

Diluted Shares - Common Shareholders (Average)

28,979,168

28,928,276

0.2%

28,904,317

0.3%

Book Value Shares  (Period End)  (1)

29,691,781

29,515,866

0.6%

29,489,745

0.7%

2013

2012

INCOME STATEMENT

First

Fourth

Third

Second

First

Quarter

Quarter 

Quarter

Quarter

Quarter

Interest Income

$     106,416

$     114,779

$      111,951

$      109,283

$      109,187

Interest Expense

13,545

14,789

15,225

16,111

17,326

   Net Interest Income

92,871

99,990

96,726

93,172

91,861

(Reversal of) Provision for Credit Losses

(3,377)

4,866

4,053

8,895

2,857

   Net Interest Income After (Reversal of) Provision for Loan Losses

96,248

95,124

92,673

84,277

89,004

Total Noninterest Income

44,491

50,354

46,553

41,694

37,396

Total Noninterest Expense

144,898

113,441

109,848

109,022

99,873

   Income (Loss) Before Income Taxes

(4,159)

32,037

29,378

16,949

26,527

Income Taxes

(4,876)

8,829

8,144

4,389

7,134

   Net Income

$             717

$       23,208

$        21,234

$         12,560

$         19,393

   Preferred Stock Dividends

-

-

-

-

-

   Earnings Available to Common Shareholders - Basic

717

23,208

21,234

12,560

19,393

   Earnings Allocated to Unvested Restricted Stock

(20)

(428)

(406)

(240)

(364)

   Earnings Available to Common Shareholders - Diluted

$             697

$       22,780

$        20,828

$         12,320

$         19,029

Earnings Per Share, Basic

$            0.02

$            0.79

$            0.73

$             0.43

$             0.66

Earnings Per Share, Diluted 

$            0.02

$            0.79

$            0.73

$             0.43

$             0.66

Book Value Per Common Share

$          51.33

$         51.88

$          51.44

$           50.68

$           50.67

Tangible Book Value Per Common Share

$          36.93

$         37.34

$          37.07

$           37.28

$           37.23

Return on Average Assets

0.02%

0.73%

0.69%

0.43%

0.67%

Return on Average Common Equity

0.19%

6.02%

5.56%

3.36%

5.21%

Return on Average Tangible Common Equity

0.55%

8.62%

7.91%

4.86%

7.43%

(1) Shares used for book value purposes exclude shares held in treasury at the end of the period.  

 

 

 

Table 4 - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(dollars in thousands)

LOANS

March 31,

December 31,

2013

2012

% Change

2012

% Change

Residential Mortgage Loans:

478,617

472,476

1.3%

477,204

0.3%

Commercial Loans:

   Real Estate

3,587,692

3,263,960

9.9%

3,631,543

(1.2%)

   Business

2,621,644

2,160,583

21.3%

2,537,718

3.3%

      Total Commercial Loans

6,209,336

5,424,543

14.5%

6,169,261

0.6%

Consumer Loans:

   Indirect Automobile

342,117

288,064

18.8%

327,985

4.3%

   Home Equity

1,261,171

1,092,989

15.4%

1,251,125

0.8%

   Automobile

66,240

42,458

56.0%

60,240

10.0%

   Credit Card Loans

51,642

46,801

10.3%

52,628

(1.9%)

   Other 

185,852

110,975

67.5%

160,137

16.1%

      Total Consumer Loans

1,907,022

1,581,287

20.6%

1,852,115

3.0%

      Total Loans 

8,594,975

7,478,306

14.9%

8,498,580

1.1%

Allowance for Credit Losses

(189,725)

(177,192)

(251,603)

   Loans, Net

$     8,405,250

$     7,301,114

$     8,246,977

ASSET QUALITY DATA (1)

March 31,

December 31,

2013

2012

% Change

2012

% Change

Nonaccrual Loans

$        463,075

$        677,619

(31.7%)

$        540,867

(14.4%)

Foreclosed Assets

1,375

64

2046.4%

1,473

(6.6%)

Other Real Estate Owned

130,461

126,593

3.1%

120,063

8.7%

Accruing Loans More Than 90 Days Past Due 

5,697

7,320

(22.2%)

4,404

29.3%

Total Nonperforming Assets

$        600,608

$        811,596

(26.0%)

$        666,807

(9.9%)

Loans 30-89 Days Past Due

$          33,227

$           35,228

(5.7%)

$          47,899

(30.6%)

Nonperforming Assets to Total Assets 

4.63%

6.88%

(32.7%)

5.08%

(8.8%)

Nonperforming Assets to Total Loans and OREO 

6.87%

10.67%

(35.6%)

7.74%

(11.2%)

Allowance for Credit Losses to Nonperforming Loans (2)

40.6%

25.9%

56.8%

46.1%

(12.1%)

Allowance for Credit Losses to Nonperforming Assets

31.6%

21.8%

44.9%

37.7%

(16.2%)

Allowance for Credit Losses to Total Loans

2.21%

2.37%

(6.8%)

2.96%

(25.4%)

Year to Date Charge-offs 

$             2,103

$             2,485

(15.4%)

$          10,101

N/M

Year to Date Recoveries

(893)

(790)

12.9%

(5,277)

N/M

Year to Date Net Charge-offs (Recoveries)

$             1,210

$             1,695

(28.6%)

$             4,824

N/M

Quarter to Date Net Charge-offs (Recoveries)

$             1,210

$             1,695

(28.6%)

$                  89

1256.9%

Quarter to Date Net Charge-offs to Average Loans (Annualized)

0.06%

0.09%

(37.8%)

0.00%

1257.5%

 

(1)For purposes of this table, nonperforming assets include all loans meeting nonperforming asset criteria, including assets acquired in FDIC-assisted transactions.

(2)Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due.  

N/M - Comparison of the information presented is not meaningful given the periods presented.

 

Table 5 - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(dollars in thousands)

LOANS (Ex-Covered Assets and Acquired Impaired Loans)(1)

March 31,

December 31,

2013

2012

% Change

2012

% Change

Residential Mortgage Loans:

300,555

235,926

27.4%