IBERIABANK Corporation Reports First Quarter Results

LAFAYETTE, La., April 19, 2018 /PRNewswire/ -- IBERIABANK Corporation (NASDAQ: IBKC), holding company of the 131-year-old IBERIABANK (www.iberiabank.com), reported financial results for the first quarter ended March 31, 2018. For the quarter, the Company reported income available to common shareholders of $60.0 million, or $1.10 diluted earnings per common share ("EPS"). On a non-GAAP basis, EPS excluding non-core revenues and non-core expenses ("Core EPS") in the first quarter of 2018 was $1.37 per common share, compared to $1.02 in the year-ago period, an increase of 34% (refer to press release supplemental tables for a reconciliation of GAAP to non-GAAP metrics).

Daryl G. Byrd, President and Chief Executive Officer, commented, "I am very pleased with our first quarter 2018 results, as we achieved our Company's highest quarterly Core EPS result and are well- positioned for a strong year. More specifically, the quarter was in-line with our internal expectations, reflective of the predictable seasonality we have historically experienced.  As such, we also wanted to re-affirm our confidence in our previously provided 2018 guidance."

"Our results demonstrated continued franchise momentum, in particular the asset sensitive nature of our balance sheet, focus on core deposit growth and strong credit quality. While the results of our fee income businesses were consistent with our expectations, our ongoing efforts to retool the mortgage business should accelerate its performance and bottom-line contribution going forward.  In addition, the execution of synergy opportunities from the Sabadell and Gibraltar transactions should help to drive operating leverage over the balance of the year," Byrd added.

Byrd concluded, "Today, we are also releasing our 2020 Strategic Goals, outlining financial metrics we intend to achieve over the coming three years. Our team is committed to providing sustainable, profitable growth and realizing outstanding returns for our shareholders."

The Company completed its acquisition of Gibraltar Private Bank & Trust on March 23, 2018, and successfully and efficiently converted branch and operating systems of Gibraltar over the weekend of March 23-25.  The acquisition of Gibraltar added $1.5 billion in loans and $1.1 billion in deposits, based on preliminary purchase accounting adjustments. The Company incurred approximately $16.2 million in pre-tax merger-related expenses during the first quarter of 2018, resulting in a $0.23 reduction to GAAP EPS. Gibraltar operated eight offices in total, which will be consolidated into two offices. The Company anticipates that the operating metrics and expense savings provided at acquisition announcement will be fully achieved in 2018.

Highlights for the first quarter of 2018 and at March 31, 2018:

For the quarter, both GAAP and Core EPS improved on a linked quarter basis, both of which benefited from the recent enactment of the Tax Cuts and Jobs Act in the prior quarter.  Results were also impacted by certain non-core merger-related expenses associated with the branch and operating systems conversion of the Gibraltar acquisition.  Return metrics improved significantly in the quarter, while our efficiency ratio increased slightly, reflective of traditional revenue and expense headwinds the Company experiences in the first quarter of the year.    


For the three months ended


GAAP


Non-GAAP Core


1Q18

4Q17


1Q18

4Q17

Earnings Per Common Share

$

1.10


$

0.17



$

1.37


$

1.33


Return on Average Assets

0.92

%

0.15

%


1.13

%

1.03

%

Return on Average Common Equity

6.79

%

1.02

%


8.45

%

7.92

%

Return on Average Tangible Common Equity

N/A


N/A



13.83

%

12.73

%

Efficiency Ratio

67.9

%

63.3

%


61.1

%

57.5

%

Tangible Efficiency Ratio (TE)

N/A


N/A



58.8

%

55.3

%

 

  • First quarter 2018 results are in-line with full year 2018 guidance.  
  • The Company's reported net interest margin was relatively unchanged on a linked quarter basis, while the Company's cash net interest margin for the quarter was 3.42%, up 9 basis points from 4Q17.
  • Non-interest income in 1Q18 decreased $7.8 million on a linked quarter basis, primarily due to a seasonal decline in mortgage income and other fee income categories.
  • Non-interest expense increased $6.2 million on a linked quarter basis, largely due to merger and compensation-related expenses from the Gibraltar acquisition. Total merger-related expenses in 1Q18 of $16.2 million reduced GAAP EPS by $0.23 in the current quarter.
  • As previously announced, the Company rewarded certain associates a one-time cash bonus following the enactment of tax reform legislation in 1Q18.  These bonuses impacted both GAAP and Core EPS by $0.03 in the current quarter.
  • The effective tax rate in 1Q18 is in line with expectations at 21.6%. The reduction in the corporate tax rate effective January 1, 2018 benefited GAAP EPS by approximately $0.17 in the current quarter.
  • Total loan growth was $1.6 billion, or 8%, in 1Q18, of which $1.5 billion was acquired from Gibraltar.
  • Total deposits increased $1.5 billion, or 7%, in 1Q18, of which $1.1 billion was acquired from Gibraltar.
  • Credit metrics remain stable; net charge-offs decreased $5.8 million on a linked quarter basis and equated to an annualized 9 basis points of average loans. The provision for loan losses decreased $6.4 million, or 45%.

 

Table A - Summary Financial Results

(Dollars in thousands, except per share data)













For the Three Months Ended


3/31/2018



12/31/2017


% Change


3/31/2017


% Change

GAAP BASIS:











Income available to common shareholders

$

60,023




$

9,329



543.4



$

46,874



28.1


Earnings per common share - diluted

1.10




0.17



547.1



1.00



10.0













Average loans and leases, net of unearned income

$

20,181,390




$

19,941,500



1.2



$

15,045,755



34.1


Average total deposits

21,777,634




21,378,122



1.9



17,511,324



24.4


Net interest margin (TE) (1)

3.67


%


3.69


%



3.53


%













Total revenues (2)

$

277,455




$

287,844



(3.6)



$

217,942



27.3


Total non-interest expense (2)

188,296




182,065



3.4



138,796



35.7


Efficiency ratio (2)

67.9


%


63.3


%



63.7


%


Return on average assets

0.92




0.15





0.94




Return on average common equity

6.79




1.02





6.41















NON-GAAP BASIS (3):











Core revenues (2)

$

277,514




$

287,809



(3.6)



$

217,942



27.3


Core non-interest expense (2)

169,457




165,591



2.3



137,215



23.5


Core earnings per common share - diluted

1.37




1.33



3.0



1.02



34.3


Core tangible efficiency ratio (TE) (1) (2) (5)

58.8


%


55.3


%



61.3


%


Core return on average assets

1.13




1.03





0.96




Core return on average common equity

8.45




7.92





6.55




Core return on average tangible common equity (4)

13.83




12.73





8.99




Net interest margin (TE) - cash basis (1) (4)

3.42




3.33





3.30






(1) Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 35% for prior quarters and a rate of 21% for the current quarter.

(2) Certain prior period amounts have been reclassified to conform to the net presentation requirements of ASU No. 2014-09, Revenue from Contracts with Customers, which was adopted effective January 1, 2018. On average, the adoption resulted in a reduction of non-interest income and non-interest expense of approximately $2.3 million on a quarterly basis, and had no impact on net income.

(3) See Table 7 and Table 8 for GAAP to Non-GAAP reconciliations.

(4) See Table 6 for adjustments related to purchase discounts on acquired loans and related accretion.

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

Operating Results

The Company's reported net interest margin decreased 2 basis points on a linked quarter basis, to 3.67%, primarily as a result of lower accretion on the acquired loan portfolio, upward repricing of indexed public funds deposits and promotional deposit pricing, offset by increases in earning assets and legacy loan yields.  The Company's cash net interest margin for the quarter was 3.42%, up 9 basis points from 4Q17, driven by a recovery of interest upon payoff of a non-accrual loan and an improvement in loan yields, offset by an increase in expenses on deposits and borrowings.

Net interest income decreased $2.6 million, or 1%, on a linked quarter basis.  Average loans increased $239.9 million, or 1%, and the associated taxable-equivalent yield increased 2 basis points. All other average earning assets decreased a net of $112.4 million, or 2%, versus the prior quarter.  The yield on interest earning assets was 4 basis points higher at 4.26% compared to 4.22% in the prior quarter.

Average interest-bearing deposits increased $297.4 million, or 2%, and the average cost of interest-bearing deposits rose 9 basis points to 74 basis points on a linked quarter basis.  Total average interest-bearing liabilities remained essentially flat with the linked quarter, while the average costs of interest-bearing liabilities rose 10 basis points to 86 basis points. The total cost of interest-bearing liabilities rose primarily due to increased deposit pricing as previously discussed, and a higher rate paid on long-term FHLB advances.

The Company's provision for loan losses decreased 45% to $8.0 million primarily due to a decline in net charge-offs. The provision for loan losses covered net charge-offs in 1Q18 by 186% compared to 142% in 4Q17.

In 1Q18, non-interest income decreased $7.8 million compared to 4Q17. The primary changes in non-interest income on a linked quarter basis included a decrease in mortgage income of $4.1 million, a result of seasonal declines in mortgage production as well as a decrease in gains on sale of mortgage loans, a decrease in gains on the sale of SBA loans of $1.0 million, and an unfavorable market value adjustment on the Company's CRA mutual funds of $0.7 million. The Company is in the process of revamping its mortgage business through recent leadership changes and hiring of mortgage loan officers.  The Company believes it is well-positioned in the mortgage business for the remainder of 2018.

Non-interest expense increased $6.2 million on a linked quarter basis primarily due to higher merger-related expenses incurred in 1Q18 related to the Gibraltar acquisition. During the quarter, the Company's non-core non-interest expense included $16.2 million in merger and conversion-related expenses, $1.2 million in compensation-related expenses, and $2.1 million in branch closure and other impairment expenses.

Excluding these items, core non-interest expense increased $3.9 million, or 2%, primarily driven by an increase in provision for unfunded lending commitments largely attributable to the reversal in 4Q17 of excess hurricane-related provisioning, increased net costs of OREO of $1.1 million related to lower gains on sales of OREO, and $1.0 million in higher donations and business development expenses.

The efficiency ratio increased from 63.3% to 67.9%, while the non-GAAP core tangible efficiency ratio increased from 55.3% to 58.8%, on a linked quarter basis. Refer to Table A for a summary of financial results on both a GAAP and non-GAAP basis.

Table B - Summary Financial Condition Results

(Dollars in thousands, except per share data)

















As of and For the Three Months Ended



3/31/2018


12/31/2017


% Change


3/31/2017


% Change

PERIOD-END BALANCES:














Total loans and leases, net of unearned income

$

21,706,090




$

20,078,181




8.1



$

15,132,202




43.4



Total deposits

22,971,192




21,466,717




7.0



17,312,265




32.7
















ASSET QUALITY RATIOS:














Loans 30-89 days past due and still accruing as a percentage of total loans (1)

0.36

%



0.31

%





0.24

%





Loans 90 days or more past due and still accruing as a percentage of total loans (1)

0.04




0.03






0.05






Non-performing assets to total assets (1)(2)

0.64




0.64






1.00






Classified assets to total assets (3)

1.39




1.45






1.89



















CAPITAL RATIOS:














Tangible common equity ratio (Non-GAAP) (4) (5)

8.66

%



8.61

%





12.10

%





Tier 1 leverage ratio (6)

9.97




9.35






12.91






Total risk-based capital ratio (6)

12.48




12.37






16.92



















PER COMMON SHARE DATA:














Book value

$

66.38




$

66.17




0.3



$

65.25




1.7



Tangible book value (Non-GAAP) (4) (5)

42.91




42.56




0.8



50.46




(15.0)



Closing stock price

78.00




77.50




0.6



79.10




(1.4)



Cash dividends

0.38




0.37




2.7



0.36




5.6

















(1)

Past due and non-accrual loan amounts exclude acquired impaired loans, even if contractually past due or if the Company does not expect to receive payment in full, as the Company is currently accreting interest income over the expected life of the loans.

(2)

Non-performing assets consist of non-accruing loans, accruing loans 90 days or more past due and other real estate owned, including repossessed assets. Refer to Table 4 for further detail.

(3)

Classified assets include commercial loans rated substandard or worse and non-performing mortgage and consumer loans and include acquired impaired loans accounted for under ASC 310-30. Classified assets were $409 million, $404 million and $415 million at March 31, 2018, December 31, 2017, and March 31, 2017, respectively.

(4)

See Table 7 and Table 8 for GAAP to Non-GAAP reconciliations.

(5)

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

(6)

Regulatory capital ratios as of March 31, 2018 are preliminary.

Loans and Other Assets

Total loans increased $1.6 billion, or 8%, to $21.7 billion at March 31, 2018, primarily driven by $1.5 billion of loans acquired from Gibraltar. Excluding acquired loans, period-end loan growth during 1Q18 was strongest in the Corporate Asset Finance division (equipment financing business), the Energy Group (reserve-based lending) and the New Orleans, Louisiana market. The Company believes it is well-positioned for diversified loan growth based on our strategic presence in the South Florida, Atlanta and Texas markets, which are expected to benefit from favorable economic conditions.

Table C - Period-End Loans

(Dollars in thousands)



















As of and For the Three Months Ended








Linked Qtr Change


Year/Year Change


Mix


3/31/2018


12/31/2017


3/31/2017


$

%


Annualized


$

%


3/31/2018

12/31/2017

Legacy loans:

















Commercial(1)

$

11,094,464



$

10,781,778



$

9,581,229



312,686


2.9



11.8

%


1,513,235


15.8



74.4

%

74.5

%

Residential mortgage

1,280,580



1,176,365



901,859



104,215


8.9



35.9

%


378,721


42.0



8.6

%

8.1

%

Consumer

2,538,878



2,525,008



2,440,356



13,870


0.5



2.2

%


98,522


4.0



17.0

%

17.4

%

Total legacy loans

14,913,922



14,483,151



12,923,444



430,771


3.0



12.1

%


1,990,478


15.4



100.0

%

100.0

%


















Acquired loans:

















Balance at beginning of period

5,595,030



5,961,939



2,370,047



(366,909)


(6.2)





3,224,983


136.1





Loans acquired during the period

1,465,319







1,465,319


N/M





1,465,319


N/M





Net paydown activity

(268,181)



(366,909)



(161,289)



98,728


(26.9)





(106,892)


66.3





Total acquired loans

6,792,168



5,595,030



2,208,758



1,197,138


21.4





4,583,410


207.5





Total loans

$

21,706,090



$

20,078,181



$

15,132,202



1,627,909


8.1





6,573,888


43.4





(1) Includes equipment financing leases.

      N/M= not meaningful

On an average balance and linked quarter basis, the investment portfolio decreased $94.5 million in 1Q18, to $4.8 billion, partly due to unfavorable market valuation on available for sale securities.  Approximately 95% of the Company's investment portfolio is in available-for-sale securities, which experience unrealized losses as interest rates rise. On a period-end basis, the investment portfolio equated to $4.8 billion, or 16% of total assets, at March 31, 2018. The investment portfolio had an effective duration of 4.2 years and a $129.9 million unrealized loss at March 31, 2018, up from 3.7 years and a $57.2 million unrealized loss at December 31, 2017. The average yield on investment securities increased 1 basis point to 2.38% in 1Q18. The Company holds in its investment portfolio primarily government agency securities. Municipal securities comprised 9% of total investments at March 31, 2018.

Deposits and Funding

Total deposits increased $1.5 billion, or 7%, to $23.0 billion at March 31, 2018, primarily driven by $1.1 billion of deposits acquired from Gibraltar. Excluding acquired deposits, deposit growth during 1Q18 was strongest in the Lake Charles, Louisiana, Naples, Florida and Mobile, Alabama markets.

Table D - Period-End Deposits

(Dollars in thousands)








Linked Qtr Change


Year/Year Change


Mix


3/31/2018


12/31/2017


3/31/2017


$

%

Annualized


$

%


3/31/2018

12/31/2017

Non-interest-bearing

$

6,595,495


$

6,209,925


$

5,031,583


385,570


6.2


25.1

%


1,563,912


31.1



28.7

%

28.9

%

NOW accounts

4,500,181


4,348,939


3,085,720


151,242


3.5


14.2

%


1,414,461


45.8



19.6

%

20.3

%

Money market accounts

8,271,969


7,674,291


6,372,855


597,678


7.8


31.6

%


1,899,114


29.8



36.0

%

35.7

%

Savings accounts

874,741


846,074


813,009


28,667


3.4


13.8

%


61,732


7.6



3.8

%

4.0

%

Time deposits

2,728,806


2,387,488


2,009,098


341,318


14.3


58.0

%


719,708


35.8



11.9

%

11.1

%

Total deposits

$

22,971,192


$

21,466,717


$

17,312,265


1,504,475


7.0


28.4

%


5,658,927


32.7



100.0

%

100.0

%

Asset Quality

Non-performing assets ("NPAs") to total assets remained flat at 64 basis points on a linked quarter basis. Accruing loans past due 30 to 89 days equated to 0.36% of total loans at 1Q18, compared to 0.31% at 4Q17.

Net charge-offs totaled $4.3 million in 1Q18, down $5.8 million, or 57%, compared to 4Q17.  Annualized net charge-offs equated to 9 basis points of average loans in 1Q18, an 11 basis points decrease on a linked quarter basis.

Refer to Table 4 - Loans and Asset Quality Data for further information.

Capital Position

At March 31, 2018, the Company reported a non-GAAP tangible common equity ratio of 8.66%, up 5 basis points compared to December 31, 2017, and the preliminary Tier 1 leverage ratio was 9.97%, up 62 basis points compared to December 31, 2017. The Company's preliminary calculation of its total risk-based capital ratio at March 31, 2018, was 12.48%, up 11 basis points compared to December 31, 2017.

At March 31, 2018, book value per common share was $66.38, up $0.21 per share, compared to December 31, 2017. Tangible book value per common share was $42.91, up $0.35 per share, compared to December 31, 2017. Based on the closing stock price of the Company's common stock of $78.40 per share on April 19, 2018, this price equated to 1.18 times March 31, 2018 book value per common share and 1.83 times March 31, 2018 tangible book value per common share.

Dividends On Capital Stock. The declaration of dividends is at the discretion of the Board of Directors. The following details the recent dividend declarations:

Common Stock. On March 20, 2018, the Company declared a quarterly cash dividend of $0.38 per common share, a 3% increase compared to the common dividend declared in December 2017. The dividend is payable on April 27, 2018, to shareholders of record as of March 30, 2018.

Preferred Stock. On March 20, 2018, the Company declared a quarterly cash dividend of $0.4125 per depositary share of Series C Preferred Stock that is payable on May 1, 2018.

Common Stock Repurchase Program. On May 4, 2016, the Board of Directors of the Company authorized the repurchase of up to 950,000 shares of the Company's common stock. The Company did not repurchase common shares under the authorized program during the first quarter of 2018. The Company has approximately 747,000 shares of common stock remaining that may be purchased under the currently authorized program.

IBERIABANK Corporation

IBERIABANK Corporation is a regional financial holding company with offices in Louisiana, Arkansas, Tennessee, Alabama, Texas, Florida, Georgia, South Carolina, North Carolina, and New York offering commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, mortgage, and title insurance services.

The Company's common stock trades on the NASDAQ Global Select Market under the symbol "IBKC". The Company's Series B Preferred Stock and Series C Preferred Stock also trade on the NASDAQ Global Select Market under the symbols "IBKCP" and "IBKCO", respectively.  The Company's common stock market capitalization was approximately $4.5 billion, based on the NASDAQ Global Select Market closing stock price on April 19, 2018.

The following 10 investment firms currently provide equity research coverage on the Company:

  • Bank of America Merrill Lynch
  • FIG Partners, LLC
  • Hovde Group, LLC
  • Jefferies & Co., Inc.
  • Keefe, Bruyette & Woods, Inc.
  • Piper Jaffray & Co.
  • Raymond James & Associates, Inc.
  • Sandler O'Neill + Partners, L.P.
  • Stephens, Inc.
  • SunTrust Robinson-Humphrey

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 20, 2018, beginning at 8:30 a.m. Central Time by dialing 1-888-317-6003. The confirmation code for the call is 9690151.  A replay of the call will be available until midnight Central Time on April 27, 2018 by dialing 1-877-344-7529. The confirmation code for the replay is 10118181.  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 "Financial Information" and "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.  Non-GAAP measures in this press release include, but are not limited to, descriptions such as core, tangible, and pre-tax pre-provision.  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 in management's opinion can distort period-to-period comparisons of the Company's performance. Transactions that are typically excluded from non-GAAP performance measures include realized and unrealized gains/losses on former bank owned real estate, realized gains/losses on securities, income tax gains/losses, merger-related charges and recoveries, litigation charges and recoveries, and debt repayment penalties. 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 presented in the supplemental tables at the end of this release.  Please refer to the supplemental tables for these reconciliations.

Caution About Forward-Looking Statements

This press release contains "forward-looking statements," which may include forecasts of our financial results and condition, expectations for our operations and businesses, and our assumptions for those forecasts and expectations. Do not place undue reliance on forward-looking statements. Due to various factors, actual results may differ materially from our forward-looking statements. Factors that could cause our actual results to differ materially from our forward-looking statements are described under "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Risk Factors" and "Regulation and Supervision" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and in other documents subsequently filed by the Company with the Securities and Exchange Commission, available at the SEC's website, http://www.sec.gov, and the Company's website, http://www.iberiabank.com. To the extent that statements in this press release relate to future plans, objectives, financial results or performance by the Company, these statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are generally identified by use of words such as "may," "believe," "expect," "anticipate," "intend," "will," "should," "plan," "estimate," "predict," "continue" and "potential" or the negative of these terms or other comparable terminology.

Forward-looking statements represent management's beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements. All information is as of the date of this press release. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason.

Table 1 - IBERIABANK CORPORATION

FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share data)

















As of and For the Three Months Ended

INCOME DATA:

3/31/2018


12/31/2017


% Change


3/31/2017


% Change


Net interest income

$

232,889




$

235,502




(1.1)



$

172,818




34.8



Net interest income (TE) (1)

234,353




238,314




(1.7)



175,309




33.7



Total revenues (2)

277,455




287,844




(3.6)



217,942




27.3



Provision for loan losses

7,986




14,393




(44.5)



6,154




29.8



Non-interest expense (2)

188,296




182,065




3.4



138,796




35.7



Net income available to common shareholders

60,023




9,329




543.4



46,874




28.1
















PER COMMON SHARE DATA:














Earnings available to common shareholders - basic

$

1.11




$

0.17




552.9



$

1.01




9.9



Earnings available to common shareholders - diluted

1.10




0.17




547.1



1.00




10.0



Core earnings (Non-GAAP) (3)

1.37




1.33




3.0



1.02




34.3



Book value

66.38




66.17




0.3



65.25




1.7



Tangible book value (Non-GAAP) (3) (4)

42.91




42.56




0.8



50.46




(15.0)



Closing stock price

78.00




77.50




0.6



79.10




(1.4)



Cash dividends

0.38




0.37




2.7



0.36




5.6
















KEY RATIOS AND OTHER DATA (7):










Net interest margin (TE) (1)

3.67

%



3.69

%





3.53

%





Efficiency ratio (2)

67.9




63.3






63.7






Core tangible efficiency ratio (TE) (Non-GAAP) (1) (2) (3) (4)

58.8




55.3






61.3






Return on average assets

0.92




0.15






0.94






Return on average common equity

6.79




1.02






6.41






Core return on average tangible common equity (Non-GAAP) (3)(4)

13.83




12.73






8.99






Effective tax rate

21.6




88.8






30.9






Full-time equivalent employees

3,726




3,552






3,161



















CAPITAL RATIOS:














Tangible common equity ratio (Non-GAAP) (3) (4)

8.66

%



8.61

%





12.10

%





Tangible common equity to risk-weighted assets (4)

10.27




10.20






14.48






Tier 1 leverage ratio (5)

9.97




9.35






12.91






Common equity Tier 1 (CET 1) (transitional) (5)

N/A




10.57






14.64






Common equity Tier 1 (CET 1) (fully phased-in) (5)

10.77




10.53






14.60






Tier 1 capital (transitional) (5)

11.32




11.16






15.38






Total risk-based capital ratio (5)

12.48




12.37






16.92






Common stock dividend payout ratio

36.0




213.6






39.0






Classified assets to Tier 1 capital (8)

15.2




16.1






15.2



















ASSET QUALITY RATIOS:










Non-performing assets to total assets (6)

0.64

%



0.64

%





1.00

%





ALLL to loans and leases

0.67




0.70






0.96






Net charge-offs to average loans (annualized)

0.09




0.20






0.16






Non-performing assets to total loans and OREO (6)

0.87




0.89






1.45




















(1)

Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 35% for prior quarters and a rate of 21% for the current quarter.

(2)

Certain prior period amounts have been reclassified to conform to the net presentation requirements of ASU No. 2014-09, Revenue from Contracts with Customers, which was adopted effective January 1, 2018. On average, the adoption resulted in a reduction of non-interest income and non-interest expense of approximately $2.3 million on a quarterly basis, and had no impact on net income.

(3)

See Table 7 and Table 8 for GAAP to Non-GAAP reconciliations.

(4)

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

(5)

Regulatory capital ratios as of March 31, 2018 are preliminary.

(6)

Non-performing assets consist of non-accruing loans, accruing loans 90 days or more past due and other real estate owned, including repossessed assets. For purposes of this table, past due and non-accrual loan amounts exclude acquired impaired loans, even if contractually past due or if the Company does not expect to receive payment in full, as the Company is currently accreting interest income over the expected life of the loans.

(7)

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

(8)

Classified assets include commercial loans rated substandard or worse and non-performing mortgage and consumer loans and include acquired impaired loans accounted for under ASC 310-30.

 

Table 2 - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Dollars in thousands, except per share data)


















For the Three Months Ended






Linked Qtr
Change








Year/Year
Change


3/31/2018


12/31/2017


$

%


9/30/2017


6/30/2017


3/31/2017


$

%

Interest income

$

270,543



$

269,703



840


0.3



$

246,972



$

204,575



$

192,533



78,010


40.5


Interest expense

37,654



34,201



3,453


10.1



30,089



20,932



19,715



17,939


91.0


Net interest income

232,889



235,502



(2,613)


(1.1)



216,883



183,643



172,818



60,071


34.8


Provision for loan losses

7,986



14,393



(6,407)


(44.5)



18,514



12,050



6,154



1,832


29.8


Net interest income after provision for loan losses

224,903



221,109



3,794


1.7



198,369



171,593



166,664



58,239


34.9


Mortgage income

9,595



13,675



(4,080)


(29.8)



16,050



19,730



14,115



(4,520)


(32.0)


Service charges on deposit accounts

12,908



12,581



327


2.6



12,534



11,410



11,153



1,755


15.7


Title revenue

5,027



5,398



(371)


(6.9)



5,643



6,190



4,741



286


6.0


Broker commissions(1)

2,221



1,958



263


13.4



2,094



2,562



2,547



(326)


(12.8)


ATM/debit card fee income(1)

2,633



2,583



50


1.9



2,486



2,646



2,483



150


6.0


Income from bank owned life insurance

1,282



1,267



15


1.2



1,263



1,241



1,311



(29)


(2.2)


(Loss) gain on sale of available-for-sale securities

(59)



35



(94)


(268.6)



(242)



59





(59)


N/M


Other non-interest income(1)

10,959



14,845



(3,886)


(26.2)



11,015



10,000



8,774



2,185


24.9


Total non-interest income(1)

44,566



52,342



(7,776)


(14.9)



50,843



53,838



45,124



(558)


(1.2)


Salaries and employee benefits

104,586



104,387



199


0.2



106,970



86,317



81,853



22,733


27.8


Occupancy and equipment

20,047



19,211



836


4.4



19,139



16,292



16,021



4,026


25.1


Amortization of acquisition intangibles

5,102



4,642



460


9.9



4,527



1,651



1,770



3,332


188.2


Data processing(1)

12,393



11,416



977


8.6



12,300



6,713



6,362



6,031


94.8


Professional services

7,391



9,441



(2,050)


(21.7)



22,550



11,219



5,335



2,056


38.5


Credit and other loan related expense

4,618



3,170



1,448


45.7



7,532



3,780



4,526



92


2.0


Other non-interest expense(1)

34,159



29,798



4,361


14.6



27,744



19,408



22,929



11,230


49.0


Total non-interest expense(1)

188,296



182,065



6,231


3.4



200,762



145,380



138,796



49,500


35.7


Income before income taxes

81,173



91,386



(10,213)


(11.2)



48,450



80,051



72,992



8,181


11.2


Income tax expense

17,552



81,108



(63,556)


(78.4)



18,806



28,033



22,519



(4,967)


(22.1)


Net income

63,621



10,278



53,343


519.0



29,644



52,018



50,473



13,148


26.0


Less: Preferred stock dividends

3,598



949



2,649


279.1



3,598



949



3,599



(1)



Net income available to common shareholders

$

60,023



$

9,329



50,694


543.4



$

26,046



$

51,069



$

46,874



13,149


28.1


















Income available to common shareholders - basic

$

60,023



$

9,329



50,694


543.4



$

26,046



$

51,069



$

46,874



13,149


28.1


Less: Earnings allocated to unvested restricted stock

639



101



538


532.7



283



361



346



293


84.7


Earnings allocated to common shareholders

$

59,384



$

9,228



50,156


543.5



$

25,763



$

50,708



$

46,528



12,856


27.6


















Earnings per common share - basic

$

1.11



$

0.17



0.94


552.9



$

0.49



$

1.00



$

1.01



0.1


9.9


















Earnings per common share - diluted

1.10



0.17



0.93


547.1



0.49



0.99



1.00



0.1


10.0


Impact of non-core items (Non-GAAP) (2)

0.27



1.16



(0.89)


(76.7)



0.51



0.11



0.02



0.25


1,250.0


Earnings per share - diluted, excluding non-core items (Non-GAAP) (2)

$

1.37



$

1.33



0.04


3.0



$

1.00



$

1.10



$

1.02



0.35


34.3


















NUMBER OF COMMON SHARES OUTSTANDING (in thousands)
















Weighted average common shares outstanding - basic

53,616



53,287



329


0.6



52,424



50,630



46,123



7,493


16.2


Weighted average common shares outstanding - diluted

53,967



53,621



346


0.6



52,770



50,984



46,496



7,471


16.1


Book value shares (period end)

56,779



53,872



2,907


5.4



53,864



51,015



50,970



5,809


11.4




(1)  Certain prior period amounts have been reclassified to conform to the net presentation requirements of ASU No. 2014-09, Revenue from Contracts with Customers, which was adopted effective January 1, 2018. On average, the adoption resulted in a reduction of non-interest income and non-interest expense of approximately $2.3 million on a quarterly basis, and had no impact on net income.

(2)  See Table 7 and Table 8 for GAAP to Non-GAAP reconciliations.

N/M = not meaningful


 

TABLE 3 - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)
















PERIOD-END BALANCES




Linked Qtr Change








Year/Year Change

ASSETS

3/31/2018


12/31/2017


$


%


9/30/2017


6/30/2017


3/31/2017


$


%

Cash and due from banks

$

253,527



$

319,156



(65,629)



(20.6)



$

298,173



$

301,910



$

276,979



(23,452)



(8.5)


Interest-bearing deposits in other banks

310,565



306,568



3,997



1.3



583,043



167,450



1,024,139



(713,574)



(69.7)


Total cash and cash equivalents

564,092



625,724



(61,632)



(9.8)



881,216



469,360



1,301,118



(737,026)



(56.6)


Investment securities available for sale

4,542,486



4,590,062



(47,576)



(1.0)



4,736,339



4,009,299



3,823,953



718,533



18.8


Investment securities held to maturity

224,241



227,318



(3,077)



(1.4)



175,906



84,517



86,018



138,223



160.7


Total investment securities

4,766,727



4,817,380



(50,653)



(1.1)



4,912,245



4,093,816



3,909,971



856,756



21.9


Mortgage loans held for sale

110,348



134,916



(24,568)



(18.2)



141,218



140,959



122,333



(11,985)



(9.8)


Loans and leases, net of unearned income

21,706,090



20,078,181



1,627,909



8.1



19,795,085



15,556,016



15,132,202



6,573,888



43.4


Allowance for loan and lease losses

(144,527)



(140,891)



(3,636)



2.6



(136,628)



(146,225)



(144,890)



363



(0.3)


Loans and leases, net

21,561,563



19,937,290



1,624,273



8.1



19,658,457



15,409,791



14,987,312



6,574,251



43.9


Premises and equipment, net

329,454



331,413



(1,959)



(0.6)



330,800



318,167



303,978



25,476



8.4


Goodwill and other intangible assets

1,338,573



1,277,464



61,109



4.8



1,281,479



757,025



758,340



580,233



76.5


Other assets

801,880



779,942



21,938



2.8



771,220



601,609



625,427



176,453



28.2


Total assets

$

29,472,637



$

27,904,129



1,568,508



5.6



$

27,976,635



$

21,790,727



$

22,008,479



7,464,158



33.9




















LIABILITIES AND SHAREHOLDERS' EQUITY













Non-interest-bearing deposits

$

6,595,495



$

6,209,925



385,570



6.2



$

5,963,943



$

5,020,195



$

5,031,583



1,563,912



31.1


NOW accounts

4,500,181



4,348,939



151,242



3.5



3,547,761



3,089,482



3,085,720



1,414,461



45.8


Savings and money market accounts

9,146,710



8,520,365



626,345



7.4



9,165,417



6,815,513



7,185,864



1,960,846



27.3


Certificates of deposit

2,728,806



2,387,488



341,318



14.3



2,657,150



1,927,926



2,009,098



719,708



35.8


Total deposits

22,971,192



21,466,717



1,504,475



7.0



21,334,271



16,853,116



17,312,265



5,658,927



32.7


Short-term borrowings

375,000



475,000



(100,000)



(21.1)



975,008



250,000



80,000



295,000



368.8


Securities sold under agreements to repurchase

525,496



516,297



9,199



1.8



548,696



333,935



368,696



156,800



42.5


Trust preferred securities

120,110



120,110







120,110



120,110



120,110






Other long-term debt

1,329,192



1,375,725



(46,533)



(3.4)



1,007,474



547,133



507,975



821,217



161.7


Other liabilities

250,740



253,489



(2,749)



(1.1)



264,302



183,191



161,458



89,282



55.3


Total liabilities

25,571,730



24,207,338



1,364,392



5.6



24,249,861



18,287,485



18,550,504



7,021,226



37.8


Total shareholders' equity

3,900,907



3,696,791



204,116



5.5



3,726,774



3,503,242



3,457,975



442,932



12.8


Total liabilities and shareholders' equity

$

29,472,637



$

27,904,129



1,568,508



5.6



$

27,976,635



$

21,790,727



$

22,008,479



7,464,158



33.9


 

TABLE 3 Continued - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)



















AVERAGE BALANCES


Linked Qtr Change








Year/Year Change

ASSETS

3/31/2018


12/31/2017


$


%


9/30/2017


6/30/2017


3/31/2017


$


%

Cash and due from banks

$

308,319



$

307,328



991



0.3



$

277,968



$

277,047



$

302,585



5,734



1.9


Interest-bearing deposits in other banks

486,298



538,733



(52,435)



(9.7)



615,445



555,431



1,023,688



(537,390)



(52.5)


Total cash and cash equivalents

794,617



846,061



(51,444)



(6.1)



893,413



832,478



1,326,273



(531,656)



(40.1)


Investment securities available for sale

4,544,836



4,674,496



(129,660)



(2.8)



4,593,798



3,970,021



3,679,817



865,019



23.5


Investment securities held to maturity

226,229



191,067



35,162



18.4



114,895



85,516



87,246



138,983



159.3


Total investment securities

4,771,065



4,865,563



(94,498)



(1.9)



4,708,693



4,055,537



3,767,063



1,004,002



26.7


Mortgage loans held for sale

109,027



126,216



(17,189)



(13.6)



132,309



145,274



175,512



(66,485)



(37.9)


Loans and leases, net of unearned income

20,181,390



19,941,500



239,890



1.2



18,341,154



15,284,007



15,045,755



5,135,635



34.1


Allowance for loan and lease losses

(144,295)



(138,927)



(5,368)



3.9



(147,046)



(146,448)



(145,326)



1,031



(0.7)


Loans and leases, net

20,037,095



19,802,573



234,522



1.2



18,194,108



15,137,559



14,900,429



5,136,666



34.5


Premises and equipment, net

331,640



329,957



1,683



0.5



327,917



309,622



305,245



26,395



8.6


Goodwill and other intangible assets

1,281,598



1,277,293



4,305



0.3



1,047,355



757,528



758,887



522,711



68.9


Other assets

807,177



787,400



19,777



2.5



793,126



605,539



628,092



179,085



28.5


Total assets

$

28,132,219



$

28,035,063



97,156



0.3



$

26,096,921



$

21,843,537



$

21,861,501



6,270,718



28.7




















LIABILITIES AND SHAREHOLDERS' EQUITY













Non-interest-bearing deposits

$

6,278,507



$

6,176,347



102,160



1.7



$

5,601,071



$

4,992,598



$

4,976,945



1,301,562



26.2


NOW accounts

4,363,557



3,987,908



375,649



9.4



3,203,657



3,124,243



3,239,085



1,124,472



34.7


Savings and money market accounts

8,664,085



8,769,464



(105,379)



(1.2)



8,566,873



7,079,773



7,211,545



1,452,540



20.1


Certificates of deposit

2,471,485



2,444,403



27,082



1.1



2,413,727



1,964,234



2,083,749



387,736



18.6


Total deposits

21,777,634



21,378,122



399,512



1.9



19,785,328



17,160,848



17,511,324



4,266,310



24.4


Short-term borrowings

506,056



729,111



(223,055)



(30.6)



1,180,165



38,320



99,000



407,056



411.2


Securities sold under agreements to repurchase

477,862



494,757



(16,895)



(3.4)



439,077



314,090



311,726



166,136



53.3


Trust preferred securities

120,110



120,110







120,110



120,110



120,110






Other long-term debt

1,257,213



1,300,114



(42,901)



(3.3)



622,655



508,522



498,384



758,829



152.3


Other liabilities

275,869



264,790



11,079



4.2



273,163



200,673



221,993



53,876



24.3


Total liabilities

24,414,744



24,287,004



127,740



0.5



22,420,498



18,342,563



18,762,537



5,652,207



30.1


Total shareholders' equity

3,717,475



3,748,059



(30,584)



(0.8)



3,676,423



3,500,974



3,098,964



618,511



20.0


Total liabilities and shareholders' equity

$

28,132,219



$

28,035,063



97,156



0.3



$

26,096,921



$

21,843,537



$

21,861,501



6,270,718



28.7


 

Table 4 - IBERIABANK CORPORATION

LOANS AND ASSET QUALITY DATA

(Dollars in thousands)














Linked Qtr Change








Year/Year Change

LOANS

3/31/2018


12/31/2017


$


%


9/30/2017


6/30/2017


3/31/2017


$


%

Commercial loans and leases:


















Real estate- construction

$

1,199,625



$

1,240,396



(40,771)



(3.3)



$

1,298,282



$

1,100,504



$

946,477



253,148



26.7


Real estate- owner-occupied (1)

2,612,244



2,529,885



82,359



3.3



2,448,826



2,242,275



2,230,041



382,203



17.1


Real estate- non-owner occupied

5,437,082



5,167,949



269,133



5.2



5,020,778



3,839,777



3,844,823



1,592,259



41.4


Commercial and industrial (6)

5,325,682



5,135,067



190,615



3.7



5,016,437



4,195,096



3,975,734



1,349,948



34.0


   Total commercial loans and leases

14,574,633



14,073,297



501,336



3.6



13,784,323



11,377,652



10,997,075



3,577,558



32.5




















Residential mortgage loans

3,971,067



3,056,352



914,715



29.9



3,024,970



1,346,467



1,296,358



2,674,709



206.3




















Consumer loans:


















Home equity

2,421,186



2,292,275



128,911



5.6



2,320,233



2,158,948



2,146,796



274,390



12.8


Automobile

123,057



127,531



(4,474)



(3.5)



130,847



135,012



142,139



(19,082)



(13.4)


Credit card

93,261



96,368



(3,107)



(3.2)



88,454



87,088



84,113



9,148



10.9


Other

522,886



432,358



90,528



20.9



446,258



450,849



465,721



57,165



12.3


   Total consumer loans

3,160,390



2,948,532



211,858



7.2



2,985,792



2,831,897



2,838,769



321,621



11.3


   Total loans and leases

$

21,706,090



$

20,078,181



1,627,909



8.1



$

19,795,085



$

15,556,016



$

15,132,202



6,573,888



43.4















Allowance for loan and lease losses (2)

$

(144,527)



$

(140,891)



(3,636)



2.6



$

(136,628)



$

(146,225)



$

(144,890)



363



(0.3)


Loans and leases, net

21,561,563



19,937,290



1,624,273



8.1



19,658,457



15,409,791



14,987,312



6,574,251



43.9




















Reserve for unfunded commitments

(13,432)



(13,208)



(224)



1.7



(21,032)



(10,462)



(11,660)



(1,772)



15.2


Allowance for credit losses

(157,959)



(154,099)



(3,860)



2.5



(157,660)



(156,687)



(156,550)



(1,409)



0.9




















ASSET QUALITY DATA

















Non-accrual loans (3)

$

153,975



$

145,388



8,587



5.9



$

145,491



$

177,942



$

191,581



(37,606)



(19.6)


Other real estate owned and foreclosed assets

27,117



26,533



584



2.2



28,338



19,718



20,055



7,062



35.2


Accruing loans more than 90 days past due (3)

8,288



6,900



1,388



20.1



2,190



802



7,913



375



4.7


Total non-performing

assets (3)(4)

$

189,380



$

178,821



10,559



5.9



$

176,019



$

198,462



$

219,549



(30,169)



(13.7)




















Loans 30-89 days past due (3)

$

78,293



$

61,717



16,576



26.9



$

58,327



$

50,871



$

36,104



42,189



116.9




















Non-performing assets to total assets (3)(4)

0.64

%


0.64

%






0.63

%


0.91

%


1.00

%





Non-performing assets to total loans and OREO (3)(4)

0.87



0.89







0.89



1.27



1.45






ALLL to non-performing

loans (3)(5)

89.1



92.5







92.5



81.8



72.6






ALLL to non-performing

assets (3)(4)

76.3



78.8







77.6



73.7



66.0






ALLL to total loans

0.67



0.70







0.69



0.94



0.96
























Quarter-to-date charge-offs

$

9,116



$

12,526



(3,410)



(27.2)



$

30,460



$

12,189



$

7,291



1,825



25.0


Quarter-to-date recoveries

(4,813)



(2,425)



(2,388)



98.5



(1,644)



(1,289)



(1,235)



(3,578)



289.7


Quarter-to-date net charge-offs

$

4,303



$

10,101



(5,798)



(57.4)



$

28,816



$

10,900



$

6,056



(1,753)



(28.9)




















Net charge-offs to average loans (annualized)

0.09

%


0.20

%






0.62

%


0.29

%


0.16

%








(1)

Real estate- owner-occupied is defined as loans with a "1E1" Call Report Code (loans secured by owner-occupied non-farm non-residential properties).

(2)

The allowance for loan and lease losses includes impairment reserves attributable to acquired impaired loans.

(3)

For purposes of this table, past due and non-accrual loan amounts exclude acquired impaired loans, even if contractually past due or if the Company does not expect to receive payment in full, as the Company is currently accreting interest income over the expected life of the loans.

(4)

Non-performing assets consist of non-accruing loans, accruing loans 90 days or more past due and other real estate owned, including repossessed assets.

(5)

Non-performing loans consist of non-accruing loans and accruing loans 90 days or more past due.

(6)

Includes equipment financing leases.

 

TABLE 5 - IBERIABANK CORPORATION

QUARTERLY AVERAGE BALANCES, NET INTEREST INCOME AND YIELDS/RATES

(Dollars in thousands)












For the Three Months Ended


3/31/2018


12/31/2017


Basis Point
Change

ASSETS

Average
Balance

Interest
Income/Expense

Yield/Rate
(TE)(1)


Average
Balance

Interest
Income/Expense

Yield/Rate
(TE)(1)


Yield/Rate
(TE)(1)

Earning assets:










Commercial loans and leases

$

14,087,635


$

164,660


4.76

%


$

13,964,340


$

163,974


4.70

%


6

Residential mortgage loans

3,151,775


34,494


4.38



3,049,947


35,007


4.59



(21)

Consumer loans

2,941,980


38,915


5.36



2,927,213


38,836


5.26



10

   Total loans and leases

20,181,390


238,069


4.79



19,941,500


237,817


4.77



2

Mortgage loans held for sale

109,027


1,154


4.23



126,216


1,251


3.96



27

Investment securities (2)

4,843,448


28,094


2.38



4,893,538


27,714


2.37



1

Other earning assets

679,902


3,226


1.92



725,042


2,921


1.60



32

Total earning assets

25,813,767


270,543


4.26



25,686,296


269,703


4.22



4

Allowance for loan and lease losses

(144,295)





(138,927)






Non-earning assets

2,462,747





2,487,694






Total assets

$

28,132,219





$

28,035,063
















LIABILITIES AND SHAREHOLDERS' EQUITY









Interest-bearing liabilities:










NOW accounts

$

4,363,557


$

7,081


0.66

%


$

3,987,908


$

5,404


0.54

%


12

Savings and money market accounts

8,664,085


14,579


0.68



8,769,464


13,345


0.60



8

Certificates of deposit

2,471,485


6,584


1.08



2,444,403


6,115


0.99



9

Total interest-bearing deposits (3)

15,499,127


28,244


0.74



15,201,775


24,864


0.65



9

Short-term borrowings

983,918


2,524


1.04



1,223,868


2,901


0.94



10

Long-term debt

1,377,323


6,886


2.03



1,420,224


6,436


1.80



23

   Total interest-bearing liabilities

17,860,368


37,654


0.86



17,845,867


34,201


0.76



10

Non-interest-bearing deposits

6,278,507





6,176,347






Non-interest-bearing liabilities

275,869





264,790






Total liabilities

24,414,744





24,287,004






Total shareholders' equity

3,717,475





3,748,059






Total liabilities and shareholders' equity

$

28,132,219





$

28,035,063
















Net interest income/Net interest spread

$

232,889


3.40

%



$

235,502


3.46

%


(6)

Taxable equivalent benefit


1,464


0.02




2,812


0.04



(2)

Net interest income (TE)/Net interest margin (TE) (1)


$

234,353


3.67

%



$

238,314


3.69

%


(2)












(1) Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 35% for prior quarters and a rate of 21% for the current quarter.

(2) Balances exclude unrealized gain or loss on securities available for sale and the impact of trade date accounting.

(3) Total deposit costs for the three months ended March 31, 2018 and December 31, 2017 were 0.53% and 0.46%, respectively.

 

TABLE 5 Continued - IBERIABANK CORPORATION

QUARTERLY AVERAGE BALANCES, NET INTEREST INCOME AND YIELDS/RATES

(Dollars in thousands)














For the Three Months Ended


9/30/2017


6/30/2017


3/31/2017

ASSETS

Average
Balance

Interest
Income/Expense

Yield/Rate
(TE)(1)


Average
Balance

Interest Income/Expense

Yield/Rate (TE)(1)


Average Balance

Interest Income/Expense

Yield/Rate (TE)(1)

Earning assets:












Commercial loans and leases

$

12,951,243


$

146,003


4.52

%


$

11,136,842


$

127,301


4.64

%


$

10,917,714


$

119,605


4.50

%

Residential mortgage loans

2,464,348


28,645


4.65



1,319,207


14,345


4.35



1,273,069


12,848


4.04


Consumer loans

2,925,563


42,240


5.73



2,827,958


37,619


5.34



2,854,972


36,524


5.19


   Total loans and leases

18,341,154


216,888


4.73



15,284,007


179,265


4.74



15,045,755


168,977


4.59


Mortgage loans held for sale

132,309


1,209


3.66



145,274


1,249


3.44



175,512


971


2.21


Investment securities (2)

4,709,526


26,246


2.32



4,029,491


22,307


2.32



3,741,128


19,927


2.24


Other earning assets

789,223


2,629


1.32



650,083


1,754


1.08



1,123,087


2,658


0.96


  Total earning assets

23,972,212


246,972


4.14



20,108,855


204,575


4.13



20,085,482


192,533


3.93


Allowance for loan and lease losses

(147,046)





(146,448)





(145,326)




Non-earning assets

2,271,755





1,881,130





1,921,345




   Total assets

$

26,096,921





$

21,843,537





$

21,861,501
















LIABILITIES AND SHAREHOLDERS' EQUITY











Interest-bearing liabilities:












NOW accounts

$

3,203,657


$

4,384


0.54

%


$

3,124,243


$

3,507


0.45

%


$

3,239,085


$

3,090


0.39

%

Savings and money market accounts

8,566,873


11,650


0.54



7,079,773


9,030


0.51



7,211,545


8,329


0.47


Certificates of deposit

2,413,727


5,766


0.95



1,964,234


4,576


0.93



2,083,749


4,638


0.90


Total interest-bearing deposits (3)

14,184,257


21,800


0.61



12,168,250


17,113


0.56



12,534,379


16,057


0.52


Short-term borrowings

1,619,242


4,152


1.02



352,410


226


0.26



410,726


277


0.27


Long-term debt

742,765


4,137


2.21



628,632


3,593


2.29



618,494


3,381


2.22


Total interest-bearing liabilities

16,546,264


30,089


0.72



13,149,292


20,932


0.64



13,563,599


19,715


0.59


Non-interest-bearing deposits

5,601,071





4,992,598





4,976,945




Non-interest-bearing liabilities

273,163





200,673





221,993




Total liabilities

22,420,498





18,342,563





18,762,537




Total shareholders' equity

3,676,423





3,500,974





3,098,964




Total liabilities and shareholders' equity

$

26,096,921





$

21,843,537





$

21,861,501
















Net interest income/Net interest spread


$

216,883


3.42

%



$

183,643


3.49

%



$

172,818


3.34

%

Taxable equivalent benefit


2,585


0.04




2,492


0.05




2,491


0.05


Net interest income (TE)/Net interest margin (TE) (1)


$

219,468


3.64

%



$

186,135


3.71

%



$

175,309


3.53

%




(1) Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 35% for prior quarters and a rate of 21% for the current quarter.

(2) Balances exclude unrealized gain or loss on securities available for sale and the impact of trade date accounting.

(3) Total deposit costs for the three months ended September 30, 2017, June 30, 2017, and March 31, 2017 were 0.44%, 0.40% and 0.37%, respectively.

 

Table 6 - IBERIABANK CORPORATION

LEGACY AND ACQUIRED LOAN PORTFOLIO VOLUMES AND YIELDS

(Dollars in millions)






















For the Three Months Ended


3/31/2018


12/31/2017


9/30/2017


6/30/2017


3/31/2017

AS REPORTED (US GAAP)

Income

Average
Balance

Yield


Income

Average
Balance

Yield


Income

Average
Balance

Yield


Income

Average
Balance

Yield


Income

Average
Balance

Yield

Legacy loans, net

$

166


$

14,556


4.61

%


$

157


$

14,235


4.39

%


$

148


$

13,638


4.29

%


$

140


$

13,150


4.27

%


$

131


$

12,760


4.12

%

Acquired loans

72


5,625


5.20



81


5,706


5.61



69


4,703


5.86



39


2,134


7.40



38


2,286


6.81


Total loans

$

238


$

20,181


4.77

%


$

238


$

19,941


4.74

%


$

217


$

18,341


4.70

%


$

179


$

15,284


4.70

%


$

169


$

15,046


4.55

%






















3/31/2018


12/31/2017


9/30/2017


6/30/2017


3/31/2017

ADJUSTMENTS

Income

Average
Balance

Yield


Income

Average
Balance

Yield


Income

Average
Balance

Yield


Income

Average
Balance

Yield


Income

Average
Balance

Yield

Legacy loans, net

$


$


0.00

%


$


$


0.00

%


$


$


0.00

%


$


$


0.00

%


$


$


0.00

%

Acquired loans

(15)


142


(1.16)



(21)


161


(1.60)



(20)


120


(1.76)



(12)


72


(2.46)



(11)


87


(2.08)


Total loans

$

(15)


$

142


(0.32)

%


$

(21)


$

161


(0.46)

%


$

(20)


$

120


(0.45)

%


$

(12)


$

72


(0.34)

%


$

(11)


$

87


(0.31)

%






















3/31/2018


12/31/2017


9/30/2017


6/30/2017


3/31/2017

AS ADJUSTED (CASH YIELD, NON-GAAP)

Income

Average
Balance

Yield


Income

Average
Balance

Yield


Income

Average
Balance

Yield


Income

Average
Balance

Yield


Income

Average
Balance

Yield

Legacy loans, net

$

166


$

14,556


4.61

%


$

157


$

14,235


4.39

%


$

148


$

13,638


4.29

%


$

140


$

13,150


4.27

%


$

131


$

12,760


4.12

%

Acquired loans

57


5,767


4.04



60


5,867


4.01



49


4,823


4.10



27


2,206


4.94



27


2,373


4.73


Total loans

$

223


$

20,323


4.45

%


$

217


$

20,102


4.28

%


$

197


$

18,461


4.25

%


$

167


$

15,356


4.36

%


$

158


$

15,133


4.24

%

 

Table 7 - IBERIABANK CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Dollars in thousands, except per share amounts)




















For the Three Months Ended


3/31/2018


12/31/2017


9/30/2017


Pre-tax


After-tax


Per share (2)


Pre-tax


After-tax


Per share (2)


Pre-tax


After-tax


Per share (2)

Net income

$

81,173



$

63,621



$

1.17



$

91,386



$

10,278



$

0.19



$

48,450



$

29,644



$

0.56


Less: Preferred stock dividends



3,598



0.07





949



0.02





3,598



0.07


Income available to common shareholders (GAAP)

$

81,173



$

60,023



$

1.10



$

91,386



$

9,329



$

0.17



$

48,450



$

26,046



$

0.49




















Non-interest income adjustments (1)(3):

















(Gain) loss on sale of investments and other non-interest income

59



44





(35)



(22)





242



157






















Non-interest expense adjustments (1)(3):

















Merger-related expense

16,227



12,517



0.23



11,373



8,487



0.16



28,478



19,255



0.36


Compensation-related expense

1,221



928



0.02



1,457



947



0.01



1,092



710



0.02


Impairment of long-lived assets, net of (gain) loss on sale

2,074



1,576



0.03



3,177



2,065



0.04



3,661



2,380



0.04


Litigation expense









1,228



0.02



5,692



4,696



0.09


Other non-core non-interest expense

(683)



(520)



(0.01)



467



358



0.01



377



245




Total non-interest expense adjustments

18,839



14,501



0.27



16,474



13,085



0.24



39,300



27,286



0.51


Income tax expense (benefit) - provisional impact of TCJA (4)









51,023



0.94








Income tax expense (benefit) - other



173







(1,237)



(0.02)








Core earnings (Non-GAAP)

100,071



74,741



1.37



107,825



72,178



1.33



87,992



53,489



1.00


Provision for loan losses (1)

7,986



6,309





14,393



9,355





18,514



12,034




Pre-provision earnings, as adjusted (Non-GAAP) (3)

$

108,057



$

81,050





$

122,218



$

81,533





$

106,506



$

65,523



























































For the Three Months Ended








6/30/2017


3/31/2017








Pre-tax


After-tax


Per share (2)


Pre-tax


After-tax


Per share (2)







Net income

$

80,051



$

52,018



$

1.01



$

72,992



$

50,473



$

1.08








Less: Preferred stock dividends



949



0.02





3,599



0.08








Income available to common shareholders (GAAP)

$

80,051



$

51,069



$

0.99



$

72,992



$

46,874



$

1.00


























Non-interest income adjustments (1)(3):

















(Gain) loss on sale of investments and other non-interest income

(59)



(38)


































Non-interest expense adjustments (1)(3):

















Merger-related expense

1,066



789



0.02



54



35










Compensation-related expense

378



246





98



63










Impairment of long-lived assets, net of (gain) loss on sale

(1,306)



(849)



(0.02)



1,429



929



0.02








Litigation expense

6,000



5,481



0.11














Total non-interest expense adjustments

6,138



5,667



0.11



1,581



1,027



0.02








Core earnings (Non-GAAP)

86,130



56,698



1.10



74,573



47,901



1.02








Provision for loan losses (1)

12,050



7,833





6,154



4,000










Pre-provision earnings, as adjusted (Non-GAAP) (3)

$

98,180



$

64,531





$

80,727



$

51,901












(1) Excluding preferred stock dividends, merger-related expense, and litigation expense, after-tax amounts are calculated using a tax rate of 24% in 2018 and 35% in 2017, which approximates the marginal tax rate.

(2) Diluted per share amounts may not appear to foot due to rounding.

(3) Adjustments to GAAP results include certain significant activities or transactions that, in management's opinion, can distort period-to-period comparisons of the Company's performance. These adjustments include, but are not limited to, realized and unrealized gains or losses on former bank-owned real estate, realized gains or losses on the sale of investment securities, merger-related expenses, litigation charges and recoveries, debt prepayment penalties, and gains, losses, and impairment charges on long-lived assets.

(4) Estimated net impact of the Tax Cuts and Jobs Act ("TCJA") enacted on December 22, 2017 is subject to refinement in future periods as further information becomes available.

 

Table 8 - IBERIABANK CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Dollars in thousands)












For the Three Months Ended


3/31/2018


12/31/2017


9/30/2017


6/30/2017


3/31/2017

Net interest income (GAAP)

$

232,889



$

235,502



$

216,883



$

183,643



$

172,818


Taxable equivalent benefit

1,464



2,812



2,585



2,492



2,491


Net interest income (TE) (Non-GAAP) (1)

234,353



238,314



219,468



186,135



175,309












Non-interest income (GAAP) (3)

44,566



52,342



50,843



53,838



45,124


Taxable equivalent benefit

341



683



680



668



706


Non-interest income (TE) (Non-GAAP) (1) (3)

44,907



53,025



51,523



54,506



45,830


Taxable equivalent revenues (Non-GAAP) (1) (3)

279,260



291,339



270,991



240,641



221,139


Securities (gains) losses and other non-interest income

59



(35)



242



(59)




Core taxable equivalent revenues (Non-GAAP) (1) (3)

$

279,319



$

291,304



$

271,233



$

240,582



$

221,139












Total non-interest expense (GAAP) (3)

$

188,296



$

182,065



$

200,762



$

145,380



$

138,796


Less: Intangible amortization expense

5,102



4,642



4,527



1,651



1,770


Tangible non-interest expense (Non-GAAP) (2) (3)

183,194



177,423



196,235



143,729



137,026


Less: Merger-related expense

16,227



11,373



28,478



1,066



54


Compensation-related expense

1,221



1,457



1,092



378



98


Impairment of long-lived assets, net of (gain) loss on sale

2,074



3,177



3,661



(1,306)



1,429


Litigation expense





5,692



6,000




Other non-core non-interest expense

(683)



467



377






Core tangible non-interest expense (Non-GAAP) (2) (3)

$

164,355



$

160,949



$

156,935



$

137,591



$

135,445












Return on average assets (GAAP)

0.92

%


0.15

%


0.45

%


0.96

%


0.94

%

Effect of non-core revenues and expenses

0.21



0.88



0.42



0.10



0.02


Core return on average assets (Non-GAAP)

1.13

%


1.03

%


0.87

%


1.06

%


0.96

%











Efficiency ratio (GAAP) (3)

67.9

%


63.3

%


75.0

%


61.2

%


63.7

%

Effect of tax benefit related to tax-exempt income (3)

(0.5)



(0.8)



(1.0)



(0.8)



(0.9)


Efficiency ratio (TE) (Non-GAAP) (1) (3)

67.4

%


62.5

%


74.0

%


60.4

%


62.8

%

Effect of amortization of intangibles

(1.8)



(1.6)



(1.7)



(0.7)



(0.8)


Effect of non-core items

(6.8)



(5.6)



(14.4)



(2.5)



(0.7)


Core tangible efficiency ratio (TE) (Non-GAAP) (1) (2) (3)

58.8

%


55.3

%


57.9

%


57.2

%


61.3

%











Return on average common equity (GAAP)

6.79

%


1.02

%


2.92

%


6.08

%


6.41

%

Effect of non-core revenues and expenses

1.66



6.90



3.07



0.67



0.14


Core return on average common equity (Non-GAAP)

8.45

%


7.92

%


5.99

%


6.75

%


6.55

%

Effect of intangibles (2)

5.38



4.81



2.96



2.11



2.44


Core return on average tangible common equity (Non-GAAP) (2)

13.83

%


12.73

%


8.95

%


8.86

%


8.99

%











Total shareholders' equity (GAAP)

$

3,900,907



$

3,696,791



$

3,726,774



$

3,503,242



$

3,457,975


Less:  Goodwill and other intangibles

1,332,672



1,271,807



1,276,241



752,336



753,991


Preferred stock

132,097



132,097



132,097



132,097



132,097


Tangible common equity (Non-GAAP) (2)

$

2,436,138



$

2,292,887



$

2,318,436



$

2,618,809



$

2,571,887












Total assets (GAAP)

$

29,472,637



$

27,904,129



$

27,976,635



$

21,790,727



$

22,008,479


Less:  Goodwill and other intangibles

1,332,672



1,271,807



1,276,241



752,336



753,991


Tangible assets (Non-GAAP) (2)

$

28,139,965



$

26,632,322



$

26,700,394



$

21,038,391



$

21,254,488


Tangible common equity ratio (Non-GAAP) (2)

8.66

%


8.61

%


8.68

%


12.45

%


12.10

%



(1) Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 35% for prior quarters and a rate of 21% for the current quarter.

(2) Tangible calculations eliminate the effect of goodwill and acquisition-related intangibles and the corresponding amortization expense on a tax-effected basis where applicable.

(3) Certain prior period amounts have been reclassified to conform to the net presentation requirements of ASU No. 2014-09, Revenue from Contracts with Customers, which was adopted effective January 1, 2018. On average, the adoption resulted in a reduction of non-interest income and non-interest expense of approximately $2.3 million on a quarterly basis, and had no impact on net income.

 

SOURCE IBERIABANK Corporation

For further information: Daryl G. Byrd, President and CEO (337) 521-4003; Jefferson G. Parker, Vice Chairman, Director of Capital Markets and Investor Relations (504) 310-7314