IBERIABANK Corporation Reports First Quarter Results

LAFAYETTE, La., April 25, 2019 /PRNewswire/ -- IBERIABANK Corporation (NASDAQ: IBKC), holding company of the 132-year-old IBERIABANK (www.iberiabank.com), reported financial results for the first quarter ended March 31, 2019. For the quarter, the Company reported net income available to common shareholders of $96.5 million, or $1.75 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 2019 was $1.72 per common share, compared to $1.37 in the year-ago period, an increase of 26% (refer to press release supplemental tables for a reconciliation of GAAP to non-GAAP metrics).

Daryl G. Byrd, President and Chief Executive Officer, commented, "We are pleased to report another quarter of solid earnings and a very good start to 2019. Our results for the quarter reflect outstanding growth in loans, improvement in fee income, and continued reduction of non-interest expense. We had a lower net interest margin than we anticipated, which I expect to improve in future quarters. We believe the foundation laid in 2018 and in the first quarter sets us up well to deliver strong results in 2019."

Highlights for the first quarter of 2019 and at March 31, 2019:

	For the three months ended
	GAAP							Non-GAAP Core
	1Q19			4Q18				1Q19			4Q18
Earnings Per Common Share	$	1.75		$	2.32			$	1.72		$	1.86
Return on Average Assets	1.32		%	1.70		%		1.29		%	1.37		%
Return on Average Common Equity	9.85		%	13.38		%		9.66		%	10.75		%
Return on Average Tangible Common Equity	N/A			N/A				15.03		%	16.98		%
Efficiency Ratio	52.4		%	63.5		%		53.2		%	52.6		%
Tangible Efficiency Ratio (TE)	N/A			N/A				51.3		%	50.7		%

 

• Strong 1Q19 for both GAAP and Core EPS, improving 59% and 26%, respectively on a year-over-year basis, as a result of excellent loan growth, non-interest income, and continued expense management.
• Total loan growth of $448.5 million, or 8% annualized. Loan growth was driven by strong originations and loan prepayments slowing.
• The Company's reported and cash net interest margins decreased 22 and 10 basis points on a linked quarter basis, to 3.59% and 3.42%, respectively. The decline in margin was primarily driven by lower recoveries as expected and higher cost of funding. Funding costs increased as the Company realized seasonal declines in lower cost deposits and strong loan growth primarily funded with wholesale funding sources.
• Strong growth in non-interest income influenced by the current yield curve.
• Mortgage income increased $1.5 million, or 14% on a linked quarter basis and 23% as compared to 1Q18.
• The Company realized record swap income of $4.2 million, up 124% on a linked quarter basis.
• The linked quarter increase of $51.5 million was primarily driven by $49.8 million in losses on sales of available securities that occurred during 4Q18.
• Continued focus on non-interest expense which decreased $10.2 million, or 6% on a linked quarter basis. Core non-interest expense declined $5.1 million, or 3%, from 4Q18.
• Year-over-year reduced FTEs by 342, or almost 10%, including employees from the Gibraltar acquisition.
• Produced the lowest quarterly level of non-interest expense to average assets over the past 15 years.
• Continued improvement in operating leverage.
• Credit metrics remained strong and stable. The provision expense rose slightly from the prior quarter to provide adequate reserve coverage of strong loan growth. We see no signs of deterioration in the portfolio.
• During 1Q19, the Company repurchased 387,921 common shares at a weighted average price of $77.19 per common share.
• On March 19, 2019, the Company announced a first quarter cash dividend equal to $0.43 per common share, payable on April 26, 2019. This equated to a 5% increase to the 4Q18 dividend.

Special Items

• On April 4, 2019, the Company issued and sold 4.0 million depositary shares, each representing 1/400th interest in a share of non-cumulative perpetual preferred stock. The Series D preferred stock has an initial coupon equal to 6.100% for a period of five years, and thereafter floats at a rate of LIBOR plus 385.9 basis points. The Company raised approximately $100.0 million in gross proceeds from the transaction. Proceeds from the transaction are currently expected to be used for repurchases of common stock. This re-stacking of capital is expected to provide a few incremental pennies of EPS and enhance the Company's ROTCE by approximately 50 basis points in 2020, based on IBKC's current stock price. The impact of this offering will be immaterial on 2019 earnings.

 

Table A - Summary Financial Results
(Dollars in thousands, except per share data)
	For the Three Months Ended
	3/31/2019					12/31/2018				% Change			3/31/2018				% Change
GAAP BASIS:
Income available to common shareholders	$	96,533				$	129,090			(25.2)			$	60,023			60.8
Earnings per common share - diluted	1.75					2.32				(24.6)			1.10				59.1
Average loans and leases, net of unearned income	$	22,599,686				$	22,364,188			1.1			$	20,181,390			12.0
Average total deposits	23,678,400					23,484,576				0.8			21,777,634				8.7
Net interest margin (TE) (1)	3.59			%		3.81			%				3.67			%
Total revenues	$	302,993				$	265,990			13.9			$	277,455			9.2
Total non-interest expense	158,753					168,989				(6.1)			188,071				(15.6)
Efficiency ratio	52.4			%		63.5			%				67.8			%
Return on average assets	1.32					1.70							0.92
Return on average common equity	9.85					13.38							6.79
NON-GAAP BASIS (2):
Core revenues	$	302,993				$	316,249			(4.2)			$	277,514			9.2
Core non-interest expense	161,239					166,379				(3.1)			169,232				(4.7)
Core earnings per common share - diluted	1.72					1.86				(7.5)			1.37				25.5
Core tangible efficiency ratio (TE) (1) (3)	51.3			%		50.7			%				58.8			%
Core return on average assets	1.29					1.37							1.13
Core return on average common equity	9.66					10.75							8.45
Core return on average tangible common equity	15.03					16.98							13.83
Net interest margin (TE) - cash basis (1)	3.42					3.52							3.42

(1)	Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 21%.
(2)	See Table 7 and Table 8 for GAAP to Non-GAAP reconciliations.
(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.

Operating Results

Net interest income decreased $14.5 million, or 5%, on a linked quarter basis. Average loans increased $235.5 million, or 4% annualized, while the associated taxable-equivalent yield decreased 15 basis points. The yield on total earning assets was 6 basis points lower at 4.68% compared to 4.74% in the prior quarter. The decline in loan yield was primarily driven by lower recoveries in the acquired loan portfolio.

Average interest-bearing deposits increased $568.6 million, or 14% annualized, and the cost of interest-bearing deposits rose 17 basis points to 1.40% on a linked quarter basis. Total average interest-bearing liabilities increased by $766.3 million, or 16% annualized, and the cost of interest-bearing liabilities rose 19 basis points to 1.53%. The total cost of funding in the first quarter of 2019 was 1.17%, compared to 1.00% in the prior quarter. The increase in cost of funds was primarily due to an unfavorable funding balance mix shift from lower cost deposits to wholesale borrowings, an upward repricing of remaining deposits, promotional activity in customer time deposits, and brokered wholesale CD issuances. The lower loan yields, along with the increase in cost of funds, resulted in a decrease in the reported and cash net interest margins of 22 and 10 basis points to 3.59% and 3.42%, respectively.

The provision for credit losses totaled $13.8 million compared to $13.1 million in the prior quarter. Asset quality measures remained strong and stable. Net charge-offs to average loans on an annualized basis were 0.13% compared to 0.14% in the prior quarter.  Non-performing assets to total assets were 0.58% compared to 0.55% in the prior quarter. The allowance for loan and lease losses to total loans and leases remained unchanged at 0.62% and covered 94% of non-performing loans.

Non-interest income increased $51.5 million, primarily driven by $49.8 million in losses realized on sales of available-for-sale securities during the prior quarter. On a core basis, non-interest income increased $1.3 million, or 2%, driven by higher customer swap commissions of $2.3 million and higher mortgage income of $1.0 million. These increases were partially offset primarily by decreases of $0.8 million in title revenue and $0.6 million in service charges on deposit accounts.

Non-interest expense decreased $10.2 million, or 6%, compared to the linked quarter, primarily driven by a $4.2 million decrease in professional service expenses, a $3.3 million decrease in salaries and employee benefits expenses, and a $1.9 million decrease in credit and other loan related expenses. Non-core expense items resulted in a $2.5 million reduction in GAAP non-interest expense, primarily from interest related to tax refunds received. Refer to Tables 7 and 8 for GAAP to Non-GAAP reconciliations.

Income tax expense increased $76.5 million to  $30.3 million when compared to the prior quarter. This increase was primarily attributable to the $65.3 million, non-core, permanent net tax benefit that was recorded in the fourth quarter of 2018 which resulted in a $46.1 million income tax benefit.

On a linked quarter basis, the efficiency ratio improved to 52.4% from 63.5%, primarily due to a decrease in non-interest expense, while the non-GAAP core tangible efficiency ratio was relatively unchanged at 51.3% compared to 50.7%. First quarter operating results reflect a continued focus on expense discipline and revenue enhancement efforts. 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
		3/31/2019					12/31/2018					% Change			3/31/2018					% Change
PERIOD-END BALANCES:
	Total loans and leases, net of unearned income	$	22,968,295				$	22,519,815				2.0			$	21,706,090				5.8
	Total deposits	24,092,062					23,763,431					1.4			22,971,192					4.9
ASSET QUALITY RATIOS:
	Loans 30-89 days past due and still accruing as a percentage of total loans (1)	0.20		%			0.25		%						0.36		%
	Loans 90 days or more past due and still accruing as a percentage of total loans (1)	0.02					0.01								0.04
	Non-performing assets to total assets (1)(2)	0.58					0.55								0.64
	Classified assets to total assets (3)	1.01					0.98								1.49
CAPITAL RATIOS:
	Tangible common equity ratio (Non-GAAP) (4) (5)	9.01		%			8.84		%						8.66		%
	Tier 1 leverage ratio (6)	9.67					9.63								9.97
	Total risk-based capital ratio (6)	12.33					12.33								12.48
PER COMMON SHARE DATA:
	Book value	$	73.50				$	71.61				2.6			$	66.38				10.7
	Tangible book value (Non-GAAP) (4) (5)	49.48					47.61					3.9			42.91					15.3
	Closing stock price	71.71					64.28					11.6			78.00					(8.1)
	Cash dividends	0.43					0.41					4.9			0.38					13.2

(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, non-performing mortgage and consumer loans, and OREO and foreclosed property and include acquired impaired loans accounted for under ASC 310-30. Classified assets were $315 million, $302 million and $439 million at March 31, 2019, December 31, 2018, and March 31, 2018, 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, 2019 are preliminary.

Loans and Other Assets

Total loans increased $448.5 million, or 8% annualized, to $23.0 billion at March 31, 2019. Period-end loan growth during the first quarter of 2019 was strongest in the Energy Group (primarily reserve-based lending), the Corporate Asset Finance Group (equipment financing business), and the Atlanta, South Florida Commercial, and Dallas markets. The Company believes it is well-positioned for diversified loan growth based on our strategic presence in significant MSAs in the Southeastern United States.

Table C - Period-End Loans
(Dollars in thousands)
	As of and For the Three Months Ended
													Linked Qtr Change								Year/Year Change					Mix
	3/31/2019				12/31/2018				3/31/2018				$		%			Annualized			$		%			3/31/2019		12/31/2018
Legacy loans:
Commercial loans and leases	$	13,047,438			$	12,396,515			$	11,094,464			650,923		5.3			21.3	%		1,952,974		17.6			73.8	%	73.2	%
Residential mortgage loans	2,172,421				2,023,760				1,280,580				148,661		7.3			29.8	%		891,841		69.6			12.3	%	11.9	%
Consumer and other loans	2,463,370				2,529,705				2,538,878				(66,335)		(2.6)			(10.6)	%		(75,508)		(3.0)			13.9	%	14.9	%
Total legacy loans	17,683,229				16,949,980				14,913,922				733,249		4.3			17.5	%		2,769,307		18.6			100.0	%	100.0	%
Acquired loans:
Balance at beginning of period	5,569,835				5,992,144				5,595,030				(422,309)		(7.0)						(25,195)		(0.5)
Loans acquired during the period	—				—				1,465,319				—		—						(1,465,319)		(100.0)
Net paydown activity	(284,769)				(422,309)				(268,181)				137,540		(32.6)						(16,588)		6.2
Total acquired loans	5,285,066				5,569,835				6,792,168				(284,769)		(5.1)						(1,507,102)		(22.2)
Total loans	$	22,968,295			$	22,519,815			$	21,706,090			448,480		2.0						1,262,205		5.8

On an average balance and linked quarter basis, the investment portfolio increased $240.6 million, or 20% annualized, to $5.0 billion, mainly due to purchases of available-for-sale securities and favorable fair value adjustments. On a period-end basis, investment securities were $5.1 billion, or 16% of total assets. Approximately 96% of the investment portfolio is in available-for-sale securities, which experience unrealized losses as interest rates rise. The investment portfolio had an effective duration of 3.0 years at March 31, 2019, down from 3.4 years at December 31, 2018, and a $6.0 million unrealized loss at March 31, 2019, down from a $62.9 million loss at December 31, 2018. The average yield on investment securities increased 29 basis points to 2.90% in the first quarter of 2019. The investment portfolio primarily consists of government agency securities. Municipal securities comprised 7% of total investments at March 31, 2019.

Deposits and Funding

Total deposits increased $328.6 million, or 6% annualized, to $24.1 billion at March 31, 2019. First quarter deposit growth included a $270 million increase in brokered and reciprocal deposits. Deposit growth during the first quarter of 2019 was strongest in the Miami-Dade, Southwest Louisiana, and Palm Beach/Broward markets.

Table D - Period-End Deposits
(Dollars in thousands)
													Linked Qtr Change							Year/Year Change					Mix
	3/31/2019				12/31/2018				3/31/2018				$		%		Annualized			$		%			3/31/2019		12/31/2018
Non-interest-bearing	$	6,448,613			$	6,542,490			$	6,595,495			(93,877)		(1.4)		(5.8)	%		(146,882)		(2.2)			26.8	%	27.5	%
NOW accounts	4,452,966				4,514,113				4,500,181				(61,147)		(1.4)		(5.5)	%		(47,215)		(1.0)			18.5	%	19.0	%
Money market accounts	8,348,509				8,237,291				8,271,969				111,218		1.4		5.5	%		76,540		0.9			34.6	%	34.7	%
Savings accounts	770,754				828,914				874,741				(58,160)		(7.0)		(28.5)	%		(103,987)		(11.9)			3.2	%	3.5	%
Time deposits	4,071,220				3,640,623				2,728,806				430,597		11.8		48.0	%		1,342,414		49.2			16.9	%	15.3	%
Total deposits	$	24,092,062			$	23,763,431			$	22,971,192			328,631		1.4		5.6	%		1,120,870		4.9			100.0	%	100.0	%

Asset Quality

Credit quality remained strong and stable. Non-performing assets to total assets were 0.58% at March 31, 2019, compared to 0.55% in the prior quarter. Loans 30-89 days past due and still accruing decreased $12.0 million, or 21%, compared to the prior quarter and represented 0.20% of total loans and leases, compared to 0.25% in the prior quarter. As a percentage of average loans and leases, annualized net charge-offs were 0.13%, down one basis point compared to the prior quarter.

The allowance for loan and lease losses was $143.0 million, up $2.4 million compared to the prior quarter. As of March 31, 2019, the allowance for loan and lease losses was 0.62% of total loans and leases, unchanged compared to December 31, 2018. The allowance for loan and lease losses covered non-performing loans by 94% compared to 101% in the prior quarter.

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

Capital Position

At March 31, 2019, the non-GAAP tangible common equity ratio was 9.01%, up 17 basis points compared to December 31, 2018, and the preliminary Tier 1 leverage ratio was 9.67%, up 4 basis points compared to December 31, 2018. The preliminary calculation of the total risk-based capital ratio at March 31, 2019, was 12.33%, flat compared to December 31, 2018.

At March 31, 2019, book value per common share was $73.50, up $1.89 per share, compared to December 31, 2018. Tangible book value per common share was $49.48, up $1.87 per share, compared to December 31, 2018. Based on the closing stock price of the Company's common stock of $77.14 per share on April 24, 2019, this price equated to 1.05 times March 31, 2019 book value per common share and 1.56 times March 31, 2019 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 19, 2019, the Company declared a quarterly cash dividend of $0.43 per common share, a 5% increase to the common dividend declared on January 25, 2019. This dividend is payable on April 26, 2019, to shareholders of record as of March 29, 2019.

Preferred Stock. On April 11, 2019, the Company declared a quarterly cash dividend of $0.4125 per depositary share of Series C Preferred Stock that is payable on May 1, 2019 to shareholders of record as of April 21, 2019.

On April 4, 2019, the Company sold 4.0 million depositary shares, each representing 1/400th interest in a share of non-cumulative perpetual preferred stock. The Series D preferred stock has an initial coupon equal to 6.100% for a period of five years, and thereafter floats at a rate of LIBOR plus 385.9 basis points. The Company raised approximately $100.0 million in gross proceeds from the transaction.

Common Stock Repurchase Program. On November 5, 2018, the Board of Directors authorized a new repurchase plan of up to 2,765,000 shares of the Company's common stock. This repurchase authorization equated to approximately 5% of total common shares outstanding. Stock repurchases under this program will be made from time to time, on the open market or in privately negotiated transactions at the discretion of the management of the Company. The timing of these repurchases will depend on market conditions and other requirements. The Company currently anticipates the share repurchase program will extend over a two-year time frame, or earlier if the shares have been repurchased. During the first quarter of 2019, the Company repurchased 387,921 common shares, at a weighted average price of $77.19 per common share.  At March 31, 2019, the Company had approximately 1,877,079 remaining shares that may be repurchased under the current Board-approved plan.

2019 Financial Guidance

2019 Guidance
Average Earning Assets		$28.6B ~ $28.9B
Consolidated Loan Growth		5% ~ 7%
Consolidated Deposit Growth		5% ~ 7%
Provision Expense		$45MM ~ $50MM
Non-Interest Income (Core Basis)		$215MM ~ $225MM
Non-Interest Expense (Core Basis)		$675MM ~ $690MM
Net Interest Margin		3.55% ~ 3.65%
Tax Rate		23.0% ~ 24.0%
Preferred Dividend		$17.0MM ~ $18.0MM
Share Repurchase Activity		$230MM ~ $240MM
Credit Quality		Stable

 

• Updated guidance includes no interest rate increases in 2019 and interest rate curve as of March 31, 2019.
• Preferred Dividend range increases to reflect new Series D preferred dividends.
• We expect to buy common shares with the proceeds of our recent preferred stock offering, which is included in the guide.

IBERIABANK Corporation

IBERIABANK Corporation is a financial holding company with locations in Louisiana, Arkansas, Tennessee, Alabama, Texas, Florida, Georgia, South Carolina, North Carolina, Mississippi, Missouri, 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, Series C Preferred Stock, and Series D Preferred Stock also trade on the NASDAQ Global Select Market under the symbols "IBKCP", "IBKCO", and "IBKCN", respectively. The Company's common stock market capitalization was approximately $4.2 billion, based on the NASDAQ Global Select Market closing stock price on April 24, 2019.

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 Thursday, April 25, 2019, beginning at 8:30 a.m. Central Time by dialing 1-888-317-6003. The confirmation code for the call is 6428111. A replay of the call will be available until midnight Central Time on May 2, 2019, by dialing 1-877-344-7529. The confirmation code for the replay is 10128769. 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, debt repayment penalties, and gains, losses, and impairment charges on long-lived assets. 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, 2018, and in other documents subsequently filed by the Company with the Securities and Exchange Commission, available at the SEC's website, www.sec.gov, and the Company's website, 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:		3/31/2019					12/31/2018					% Change			3/31/2018					% Change
	Net interest income	$	250,484				$	265,021				(5.5)			$	232,889				7.6
	Net interest income (TE) (1)	251,833					266,448					(5.5)			234,353					7.5
	Total revenues	302,993					265,990					13.9			277,455					9.2
	Provision for credit losses	13,763					13,094					5.1			8,211					67.6
	Non-interest expense	158,753					168,989					(6.1)			188,071					(15.6)
	Net income available to common shareholders	96,533					129,090					(25.2)			60,023					60.8
PER COMMON SHARE DATA:
	Earnings available to common shareholders - basic	$	1.76				$	2.33				(24.5)			$	1.11				58.6
	Earnings available to common shareholders - diluted	1.75					2.32					(24.6)			1.10					59.1
	Core earnings (Non-GAAP) (2)	1.72					1.86					(7.5)			1.37					25.5
	Book value	73.50					71.61					2.6			66.38					10.7
	Tangible book value (Non-GAAP) (2) (3)	49.48					47.61					3.9			42.91					15.3
	Closing stock price	71.71					64.28					11.6			78.00					(8.1)
	Cash dividends	0.43					0.41					4.9			0.38					13.2
KEY RATIOS AND OTHER DATA (6):
	Net interest margin (TE) (1)	3.59		%			3.81		%						3.67		%
	Efficiency ratio	52.4					63.5								67.8
	Core tangible efficiency ratio (TE) (Non-GAAP) (1) (2) (3)	51.3					50.7								58.8
	Return on average assets	1.32					1.70								0.92
	Return on average common equity	9.85					13.38								6.79
	Core return on average tangible common equity (Non-GAAP) (2)(3)	15.03					16.98								13.83
	Effective tax rate	23.3					(55.0)								21.6
	Full-time equivalent employees	3,384					3,403								3,726
CAPITAL RATIOS:
	Tangible common equity ratio (Non-GAAP) (2) (3)	9.01		%			8.84		%						8.66		%
	Tangible common equity to risk-weighted assets (3)	10.60					10.43								10.27
	Tier 1 leverage ratio (4)	9.67					9.63								9.97
	Common equity Tier 1 (CET 1) ratio (4)	10.73					10.72								10.77
	Tier 1 capital ratio (4)	11.25					11.25								11.32
	Total risk-based capital ratio (4)	12.33					12.33								12.48
	Common stock dividend payout ratio	24.3					17.8								36.0
	Classified assets to Tier 1 capital (7)	11.2					10.7								16.3
ASSET QUALITY RATIOS:
	Non-performing assets to total assets (5)	0.58		%			0.55		%						0.64		%
	ALLL to total loans and leases	0.62					0.62								0.67
	Net charge-offs to average loans (annualized)	0.13					0.14								0.09
	Non-performing assets to total loans and OREO (5)	0.79					0.75								0.87

(1)	Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 21%.
(2)	See Table 7 and Table 8 for GAAP to Non-GAAP reconciliations.
(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)	Regulatory capital ratios as of March 31, 2019 are preliminary.
(5)	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.
(6)	All ratios are calculated on an annualized basis for the periods indicated.
(7)	Classified assets include commercial loans rated substandard or worse, non-performing mortgage and consumer loans, and OREO and foreclosed property 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
	3/31/2019				12/31/2018				$		%			9/30/2018				6/30/2018				3/31/2018				$		%
Interest income	$	326,084			$	330,196			(4,112)		(1.2)			$	317,067			$	303,823			$	270,543			55,541		20.5
Interest expense	75,600				65,175				10,425		16.0			57,842				47,710				37,654				37,946		100.8
Net interest income	250,484				265,021				(14,537)		(5.5)			259,225				256,113				232,889				17,595		7.6
Provision for credit losses	13,763				13,094				669		5.1			11,384				7,696				8,211				5,552		67.6
Net interest income after provision for credit losses	236,721				251,927				(15,206)		(6.0)			247,841				248,417				224,678				12,043		5.4
Mortgage income	11,849				10,379				1,470		14.2			12,729				13,721				9,595				2,254		23.5
Service charges on deposit accounts	12,810				13,425				(615)		(4.6)			13,520				12,950				12,908				(98)		(0.8)
Title revenue	5,225				5,996				(771)		(12.9)			6,280				6,846				5,027				198		3.9
Broker commissions	1,953				1,951				2		0.1			2,627				2,396				2,221				(268)		(12.1)
ATM/debit card fee income	2,582				2,267				315		13.9			2,470				2,925				2,633				(51)		(1.9)
Income from bank owned life insurance	1,797				2,023				(226)		(11.2)			1,744				1,261				1,282				515		40.2
(Loss) gain on sale of available-for-sale securities	—				(49,844)				49,844		100.0			—				3				(59)				59		100.0
Trust department income	4,167				4,319				(152)		(3.5)			3,993				4,243				3,426				741		21.6
Other non-interest income	12,126				10,453				1,673		16.0			9,724				9,595				7,533				4,593		61.0
Total non-interest income	52,509				969				51,540		5,318.9			53,087				53,940				44,566				7,943		17.8
Salaries and employee benefits	98,296				101,551				(3,255)		(3.2)			101,159				107,445				104,586				(6,290)		(6.0)
Occupancy and equipment	18,564				18,379				185		1.0			18,889				19,931				20,047				(1,483)		(7.4)
Amortization of acquisition intangibles	5,009				5,083				(74)		(1.5)			5,382				6,111				5,102				(93)		(1.8)
Computer services expense	9,157				8,942				215		2.4			9,036				9,309				12,393				(3,236)		(26.1)
Professional services	4,450				8,628				(4,178)		(48.4)			5,519				7,160				7,391				(2,941)		(39.8)
Credit and other loan related expense	2,859				4,776				(1,917)		(40.1)			4,830				5,089				4,393				(1,534)		(34.9)
Other non-interest expense	20,418				21,630				(1,212)		(5.6)			24,247				41,731				34,159				(13,741)		(40.2)
Total non-interest expense	158,753				168,989				(10,236)		(6.1)			169,062				196,776				188,071				(29,318)		(15.6)
Income before income taxes	130,477				83,907				46,570		55.5			131,866				105,581				81,173				49,304		60.7
Income tax expense (benefit)	30,346				(46,132)				76,478		165.8			30,401				30,457				17,552				12,794		72.9
Net income	100,131				130,039				(29,908)		(23.0)			101,465				75,124				63,621				36,510		57.4
Less: Preferred stock dividends	3,598				949				2,649		279.1			3,599				949				3,598				—		—
Net income available to common shareholders	$	96,533			$	129,090			(32,557)		(25.2)			$	97,866			$	74,175			$	60,023			36,510		60.8
Income available to common shareholders - basic	$	96,533			$	129,090			(32,557)		(25.2)			$	97,866			$	74,175			$	60,023			36,510		60.8
Less: Earnings allocated to unvested restricted stock	933				1,214				(281)		(23.1)			908				767				639				294		46.0
Earnings allocated to common shareholders	$	95,600			$	127,876			(32,276)		(25.2)			$	96,958			$	73,408			$	59,384			36,216		61.0
Earnings per common share - basic	$	1.76			$	2.33			(0.57)		(24.5)			$	1.74			$	1.31			$	1.11			0.65		58.6
Earnings per common share - diluted	1.75				2.32				(0.57)		(24.6)			1.73				1.30				1.10				0.65		59.1
Impact of non-core items (Non-GAAP) (1)	(0.03)				(0.46)				0.43		93.5			0.01				0.41				0.27				(0.30)		(111.1)
Earnings per share - diluted, excluding non-core items (Non-GAAP)(1)	$	1.72			$	1.86			(0.14)		(7.5)			$	1.74			$	1.71			$	1.37			0.35		25.5
NUMBER OF COMMON SHARES OUTSTANDING (in thousands)
Weighted average common shares outstanding - basic	54,177				54,892				(715)		(1.3)			55,571				55,931				53,616				561		1.0
Weighted average common shares outstanding - diluted	54,539				55,215				(676)		(1.2)			55,945				56,287				53,967				572		1.1
Book value shares (period end)	54,551				54,796				(245)		(0.4)			56,007				56,390				56,779				(2,228)		(3.9)

(1)

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

 

TABLE 3 - IBERIABANK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
PERIOD-END BALANCES									Linked Qtr Change																		Year/Year Change
ASSETS	3/31/2019				12/31/2018		$			%			9/30/2018				6/30/2018				3/31/2018				$			%
Cash and due from banks	$	280,680			$	294,186			(13,506)			(4.6)			$	291,083			$	299,268			$	253,527			27,153			10.7
Interest-bearing deposits in other banks	391,217				396,267				(5,050)			(1.3)			184,852				428,120				310,565				80,652			26.0
Total cash and cash equivalents	671,897				690,453				(18,556)			(2.7)			475,935				727,388				564,092				107,805			19.1
Investment securities available for sale	4,873,778				4,783,579				90,199			1.9			4,634,124				4,650,915				4,542,486				331,292			7.3
Investment securities held to maturity	198,958				207,446				(8,488)			(4.1)			213,561				221,030				224,241				(25,283)			(11.3)
Total investment securities	5,072,736				4,991,025				81,711			1.6			4,847,685				4,871,945				4,766,727				306,009			6.4
Mortgage loans held for sale	128,451				107,734				20,717			19.2			42,976				78,843				110,348				18,103			16.4
Loans and leases, net of unearned income	22,968,295				22,519,815				448,480			2.0			22,343,906				22,075,783				21,706,090				1,262,205			5.8
Allowance for loan and lease losses	(142,966)				(140,571)				(2,395)			1.7			(136,950)				(136,576)				(144,527)				1,561			(1.1)
Loans and leases, net	22,825,329				22,379,244				446,085			2.0			22,206,956				21,939,207				21,561,563				1,263,766			5.9
Premises and equipment, net	297,342				300,507				(3,165)			(1.1)			304,605				326,213				329,454				(32,112)			(9.7)
Goodwill and other intangible assets	1,319,992				1,324,269				(4,277)			(0.3)			1,313,478				1,320,664				1,338,573				(18,581)			(1.4)
Other assets	944,442				1,039,783				(95,341)			(9.2)			926,752				861,902				801,880				142,562			17.8
Total assets	$	31,260,189			$	30,833,015			427,174			1.4			$	30,118,387			$	30,126,162			$	29,472,637			1,787,552			6.1
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest-bearing deposits	$	6,448,613			$	6,542,490			(93,877)			(1.4)			$	6,544,926			$	6,814,441			$	6,595,495			(146,882)			(2.2)
NOW accounts	4,452,966				4,514,113				(61,147)			(1.4)			4,247,533				4,453,152				4,500,181				(47,215)			(1.0)
Savings and money market accounts	9,119,263				9,066,205				53,058			0.6			9,159,036				9,318,331				9,146,710				(27,447)			(0.3)
Time deposits	4,071,220				3,640,623				430,597			11.8			3,241,951				2,844,534				2,728,806				1,342,414			49.2
Total deposits	24,092,062				23,763,431				328,631			1.4			23,193,446				23,430,458				22,971,192				1,120,870			4.9
Short-term borrowings	845,000				1,167,000				(322,000)			(27.6)			790,000				595,000				375,000				470,000			125.3
Securities sold under agreements to repurchase	261,131				315,882				(54,751)			(17.3)			452,719				459,213				525,496				(264,365)			(50.3)
Trust preferred securities	120,110				120,110				—			—			120,110				120,110				120,110				—			—
Other long-term debt	1,355,345				1,046,041				309,304			29.6			1,346,700				1,318,504				1,329,192				26,153			2.0
Other liabilities	444,710				364,274				80,436			22.1			273,051				289,468				250,740				193,970			77.4
Total liabilities	27,118,358				26,776,738				341,620			1.3			26,176,026				26,212,753				25,571,730				1,546,628			6.0
Total shareholders' equity	4,141,831				4,056,277				85,554			2.1			3,942,361				3,913,409				3,900,907				240,924			6.2
Total liabilities and shareholders' equity	$	31,260,189			$	30,833,015			427,174			1.4			$	30,118,387			$	30,126,162			$	29,472,637			1,787,552			6.1

 

TABLE 3 Continued - IBERIABANK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
AVERAGE BALANCES									Linked Qtr Change																		Year/Year Change
ASSETS	3/31/2019				12/31/2018				$			%			9/30/2018				6/30/2018				3/31/2018				$			%
Cash and due from banks	$	291,659			$	281,509			10,150			3.6			$	279,918			$	296,907			$	308,319			(16,660)			(5.4)
Interest-bearing deposits in other banks	332,638				385,619				(52,981)			(13.7)			259,455				392,906				486,298				(153,660)			(31.6)
Total cash and cash equivalents	624,297				667,128				(42,831)			(6.4)			539,373				689,813				794,617				(170,320)			(21.4)
Investment securities available for sale	4,816,855				4,567,564				249,291			5.5			4,673,454				4,629,177				4,544,836				272,019			6.0
Investment securities held to maturity	202,601				211,333				(8,732)			(4.1)			216,419				222,764				226,229				(23,628)			(10.4)
Total investment securities	5,019,456				4,778,897				240,559			5.0			4,889,873				4,851,941				4,771,065				248,391			5.2
Mortgage loans held for sale	95,588				63,033				32,555			51.6			87,823				72,917				109,027				(13,439)			(12.3)
Loans and leases, net of unearned income	22,599,686				22,364,188				235,498			1.1			22,162,373				21,830,720				20,181,390				2,418,296			12.0
Allowance for loan and lease losses	(140,915)				(138,675)				(2,240)			1.6			(139,075)				(145,565)				(144,295)				3,380			(2.3)
Loans and leases, net	22,458,771				22,225,513				233,258			1.0			22,023,298				21,685,155				20,037,095				2,421,676			12.1
Premises and equipment, net	299,741				302,956				(3,215)			(1.1)			315,259				327,686				331,640				(31,899)			(9.6)
Goodwill and other intangible assets	1,322,288				1,318,200				4,088			0.3			1,316,527				1,338,420				1,281,598				40,690			3.2
Other assets	1,013,359				977,740				35,619			3.6			874,078				804,920				807,177				206,182			25.5
Total assets	$	30,833,500			$	30,333,467			500,033			1.6			$	30,046,231			$	29,770,852			$	28,132,219			2,701,281			9.6
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest-bearing deposits	$	6,271,313			$	6,646,071			(374,758)			(5.6)			$	6,684,343			$	6,795,878			$	6,278,507			(7,194)			(0.1)
NOW accounts	4,458,634				4,212,304				246,330			5.8			4,296,392				4,494,064				4,363,557				95,077			2.2
Savings and money market accounts	9,089,099				9,169,184				(80,085)			(0.9)			9,237,614				9,146,302				8,664,085				425,014			4.9
Time deposits	3,859,354				3,457,017				402,337			11.6			3,023,180				2,719,627				2,471,485				1,387,869			56.2
Total deposits	23,678,400				23,484,576				193,824			0.8			23,241,529				23,155,871				21,777,634				1,900,766			8.7
Short-term borrowings	859,576				602,593				256,983			42.6			820,087				609,965				506,056				353,520			69.9
Securities sold under agreements to repurchase	291,643				386,563				(94,920)			(24.6)			376,078				427,508				477,862				(186,219)			(39.0)
Trust preferred securities	120,110				120,110				—			—			120,110				120,110				120,110				—			—
Other long-term debt	1,343,752				1,308,086				35,666			2.7			1,260,900				1,261,515				1,257,213				86,539			6.9
Other liabilities	434,516				470,501				(35,985)			(7.6)			292,445				281,820				275,869				158,647			57.5
Total liabilities	26,727,997				26,372,429				355,568			1.3			26,111,149				25,856,789				24,414,744				2,313,253			9.5
Total shareholders' equity	4,105,503				3,961,038				144,465			3.6			3,935,082				3,914,063				3,717,475				388,028			10.4
Total liabilities and shareholders' equity	$	30,833,500			$	30,333,467			500,033			1.6			$	30,046,231			$	29,770,852			$	28,132,219			2,701,281			9.6

 

Table 4 - IBERIABANK CORPORATION
LOANS AND ASSET QUALITY DATA
(Dollars in thousands)
									Linked Qtr Change																		Year/Year Change
LOANS	3/31/2019				12/31/2018				$			%			9/30/2018				6/30/2018				3/31/2018				$			%
Commercial loans and leases:
Real estate- construction	$	1,219,647			$	1,196,366			23,281			1.9			$	1,127,988			$	1,183,367			$	1,199,625			20,022			1.7
Real estate- owner-occupied (1)	2,408,079				2,395,822				12,257			0.5			2,458,964				2,455,685				2,449,513				(41,434)			(1.7)
Real estate- non-owner occupied	6,147,864				5,796,117				351,747			6.1			5,794,931				5,653,252				5,599,813				548,051			9.8
Commercial and industrial (6)	5,852,568				5,737,017				115,551			2.0			5,581,040				5,512,416				5,325,682				526,886			9.9
Total commercial loans and leases	15,628,158				15,125,322				502,836			3.3			14,962,923				14,804,720				14,574,633				1,053,525			7.2
Residential mortgage loans	4,415,267				4,359,156				56,111			1.3			4,300,163				4,124,538				3,971,067				444,200			11.2
Consumer and other loans:
Home equity	2,220,648				2,304,694				(84,046)			(3.6)			2,350,176				2,410,617				2,421,186				(200,538)			(8.3)
Other	704,222				730,643				(26,421)			(3.6)			730,644				735,908				739,204				(34,982)			(4.7)
Total consumer and other loans	2,924,870				3,035,337				(110,467)			(3.6)			3,080,820				3,146,525				3,160,390				(235,520)			(7.5)
Total loans and leases	$	22,968,295			$	22,519,815			448,480			2.0			$	22,343,906			$	22,075,783			$	21,706,090			1,262,205			5.8
Allowance for loan and lease losses (2)	$	(142,966)			$	(140,571)			(2,395)			1.7			$	(136,950)			$	(136,576)			$	(144,527)			1,561			(1.1)
Loans and leases, net	22,825,329				22,379,244				446,085			2.0			22,206,956				21,939,207				21,561,563				1,263,766			5.9
Reserve for unfunded commitments	(15,981)				(14,830)				(1,151)			7.8			(14,721)				(14,433)				(13,432)				(2,549)			19.0
Allowance for credit losses	(158,947)				(155,401)				(3,546)			2.3			(151,671)				(151,009)				(157,959)				(988)			0.6
ASSET QUALITY DATA
Non-accrual loans (3)	$	148,056			$	137,184			10,872			7.9			$	143,595			$	131,155			$	153,975			(5,919)			(3.8)
Other real estate owned and foreclosed assets	30,606				30,394				212			0.7			32,418				22,267				27,117				3,489			12.9
Accruing loans more than 90 days past due (3)	4,111				2,128				1,983			93.2			12,452				9,314				8,288				(4,177)			(50.4)
Total non-performing assets (3)(4)	$	182,773			$	169,706			13,067			7.7			$	188,465			$	162,736			$	189,380			(6,607)			(3.5)
Loans 30-89 days past due (3)	$	45,334			$	57,332			(11,998)			(20.9)			$	70,624			$	43,159			$	78,293			(32,959)			(42.1)
Non-performing assets to total assets (3)(4)	0.58		%		0.55		%								0.63		%		0.54		%		0.64		%
Non-performing assets to total loans and OREO (3)(4)	0.79				0.75										0.84				0.74				0.87
ALLL to non-performing loans (3)(5)	94.0				100.9										87.8				97.2				89.1
ALLL to non-performing assets (3)(4)	78.2				82.8										72.7				83.9				76.3
ALLL to total loans and leases	0.62				0.62										0.61				0.62				0.67
Quarter-to-date charge-offs	$	8,918			$	10,806			(1,888)			(17.5)			$	12,006			$	13,618			$	9,116			(198)			(2.2)
Quarter-to-date recoveries	(1,586)				(3,097)				1,511			(48.8)			(3,049)				(1,968)				(4,813)				3,227			(67.0)
Quarter-to-date net charge-offs	$	7,332			$	7,709			(377)			(4.9)			$	8,957			$	11,650			$	4,303			3,029			70.4
Net charge-offs to average loans (annualized)	0.13		%		0.14		%								0.16		%		0.21		%		0.09		%

(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
	3/31/2019									12/31/2018									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	$	15,253,655		$	194,510		5.19	%		$	14,978,169		$	196,881		5.24	%		(5)
Residential mortgage loans	4,385,634			47,829			4.36			4,345,811			53,836			4.96			(60)
Consumer and other loans	2,960,397			42,540			5.83			3,040,208			44,275			5.78			5
Total loans and leases	22,599,686			284,879			5.11			22,364,188			294,992			5.26			(15)
Mortgage loans held for sale	95,588			1,054			4.41			63,033			721			4.58			(17)
Investment securities (2)	5,052,922			36,125			2.90			4,782,844			30,559			2.61			29
Other earning assets	533,745			4,026			3.06			581,673			3,924			2.68			38
Total earning assets	28,281,941			326,084			4.68			27,791,738			330,196			4.74			(6)
Allowance for loan and lease losses	(140,915)									(138,675)
Non-earning assets	2,692,474									2,680,404
Total assets	$	30,833,500								$	30,333,467
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
NOW accounts	$	4,458,634		$	11,396		1.04	%		$	4,212,304		$	9,420		0.89	%		15
Savings and money market accounts	9,089,099			28,762			1.28			9,169,184			26,062			1.13			15
Time deposits	3,859,354			20,077			2.11			3,457,017			16,666			1.91			20
Total interest-bearing deposits (3)	17,407,087			60,235			1.40			16,838,505			52,148			1.23			17
Short-term borrowings	1,151,219			5,716			2.01			989,156			4,104			1.65			36
Long-term debt	1,463,862			9,649			2.67			1,428,196			8,923			2.48			19
Total interest-bearing liabilities	20,022,168			75,600			1.53			19,255,857			65,175			1.34			19
Non-interest-bearing deposits	6,271,313									6,646,071
Non-interest-bearing liabilities	434,516									470,501
Total liabilities	26,727,997									26,372,429
Total shareholders' equity	4,105,503									3,961,038
Total liabilities and shareholders' equity	$	30,833,500								$	30,333,467
Net interest income/Net interest spread				$	250,484		3.15	%					$	265,021		3.40	%		(25)
Taxable equivalent benefit				1,349			0.02						1,427			0.02			—
Net interest income (TE)/Net interest margin (TE) (1)				$	251,833		3.59	%					$	266,448		3.81	%		(22)

(1)	Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 21%.
(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, 2019 and December 31, 2018 were 1.03% and 0.88%, respectively.

 

TABLE 5 Continued - IBERIABANK CORPORATION
QUARTERLY AVERAGE BALANCES, NET INTEREST INCOME AND YIELDS/RATES
(Dollars in thousands)
	For the Three Months Ended
	9/30/2018									6/30/2018									3/31/2018
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	$	14,825,572		$	191,014		5.13	%		$	14,631,985		$	178,830		4.92	%		$	14,087,635		$	164,660		4.76	%
Residential mortgage loans	4,230,471			48,145			4.55			4,041,259			47,215			4.67			3,151,775			34,494			4.38
Consumer and other loans	3,106,330			43,966			5.62			3,157,476			44,431			5.64			2,941,980			38,915			5.36
Total loans and leases	22,162,373			283,125			5.09			21,830,720			270,476			4.98			20,181,390			238,069			4.79
Mortgage loans held for sale	87,823			1,037			4.72			72,917			836			4.59			109,027			1,154			4.23
Investment securities (2)	5,016,163			29,793			2.43			4,958,769			29,325			2.42			4,843,448			28,094			2.38
Other earning assets	456,120			3,112			2.71			580,477			3,186			2.20			679,902			3,226			1.92
Total earning assets	27,722,479			317,067			4.57			27,442,883			303,823			4.46			25,813,767			270,543			4.26
Allowance for loan and lease losses	(139,075)									(145,565)									(144,295)
Non-earning assets	2,462,827									2,473,534									2,462,747
Total assets	$	30,046,231								$	29,770,852								$	28,132,219
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
NOW accounts	$	4,296,392		$	8,841		0.82	%		$	4,494,064		$	8,620		0.77	%		$	4,363,557		$	7,081		0.66	%
Savings and money market accounts	9,237,614			23,076			0.99			9,146,302			18,434			0.81			8,664,085			14,579			0.68
Time deposits	3,023,180			12,484			1.64			2,719,627			9,105			1.34			2,471,485			6,584			1.08
Total interest-bearing deposits (3)	16,557,186			44,401			1.06			16,359,993			36,159			0.89			15,499,127			28,244			0.74
Short-term borrowings	1,196,165			4,727			1.57			1,037,473			3,327			1.29			983,918			2,524			1.04
Long-term debt	1,381,010			8,714			2.50			1,381,625			8,224			2.39			1,377,323			6,886			2.03
Total interest-bearing liabilities	19,134,361			57,842			1.20			18,779,091			47,710			1.02			17,860,368			37,654			0.86
Non-interest-bearing deposits	6,684,343									6,795,878									6,278,507
Non-interest-bearing liabilities	292,445									281,820									275,869
Total liabilities	26,111,149									25,856,789									24,414,744
Total shareholders' equity	3,935,082									3,914,063									3,717,475
Total liabilities and shareholders' equity	$	30,046,231								$	29,770,852								$	28,132,219
Net interest income/Net interest spread				$	259,225		3.37	%					$	256,113		3.44	%					$	232,889		3.40	%
Taxable equivalent benefit				1,461			0.02						1,449			0.02						1,464			0.02
Net interest income (TE)/Net interest margin (TE) (1)				$	260,686		3.74	%					$	257,562		3.76	%					$	234,353		3.67	%

(1)	Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 21%.
(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, 2018, June 30, 2018, and March 31, 2018, were 0.76%, 0.63% and 0.53%, respectively.

 

Table 6 - IBERIABANK CORPORATION
LEGACY AND ACQUIRED LOAN PORTFOLIO VOLUMES AND YIELDS
(Dollars in millions)
	For the Three Months Ended
	3/31/2019									12/31/2018									9/30/2018									6/30/2018									3/31/2018
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	$	213		$	17,192		5.02	%		$	209		$	16,616		4.99	%		$	193		$	15,957		4.80	%		$	179		$	15,217		4.73	%		$	166		$	14,556		4.61	%
Acquired loans	72			5,408			5.35			86			5,748			5.97			90			6,205			5.78			91			6,614			5.51			72			5,625			5.20
Total loans	$	285		$	22,600		5.10	%		$	295		$	22,364		5.24	%		$	283		$	22,162		5.08	%		$	270		$	21,831		4.97	%		$	238		$	20,181		4.77	%
	3/31/2019									12/31/2018									9/30/2018									6/30/2018									3/31/2018
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	(11)			136			(0.92)			(19)			144			(1.46)			(17)			144			(1.23)			(16)			142			(1.12)			(15)			142			(1.16)
Total loans	$	(11)		$	136		(0.22)	%		$	(19)		$	144		(0.38)	%		$	(17)		$	144		(0.35)	%		$	(16)		$	142		(0.34)	%		$	(15)		$	142		(0.32)	%
	3/31/2019									12/31/2018									9/30/2018									6/30/2018									3/31/2018
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	$	213		$	17,192		5.02	%		$	209		$	16,616		4.99	%		$	193		$	15,957		4.80	%		$	179		$	15,217		4.73	%		$	166		$	14,556		4.61	%
Acquired loans	61			5,544			4.43			67			5,892			4.51			73			6,349			4.55			75			6,756			4.39			57			5,767			4.04
Total loans	$	274		$	22,736		4.88	%		$	276		$	22,508		4.86	%		$	266		$	22,306		4.73	%		$	254		$	21,973		4.63	%		$	223		$	20,323		4.45	%

 

Table 7 - IBERIABANK CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, except per share amounts)
	For the Three Months Ended
	3/31/2019												12/31/2018												9/30/2018
	Pre-tax				After-tax				Per share (2)				Pre-tax				After-tax				Per share (2)				Pre-tax				After-tax				Per share (2)
Net income	$	130,477			$	100,131			$	1.82			$	83,907			$	130,039			$	2.34			$	131,866			$	101,465			$	1.79
Less: Preferred stock dividends	—				3,598				0.07				—				949				0.02				—				3,599				0.06
Income available to common shareholders (GAAP)	$	130,477			$	96,533			$	1.75			$	83,907			$	129,090			$	2.32			$	131,866			$	97,866			$	1.73
Non-interest income adjustments (1)(3):
Loss (gain) on sale of investments	—				—				—				49,844				37,882				0.68				(1)				(1)				—
Other non-core non-interest income	—				—				—				415				316				—				—				—				—
Total non-interest income adjustments	—				—				—				50,259				38,198				0.68				(1)				(1)				—
Non-interest expense adjustments (1)(3):
Merger-related expense	(334)				(254)				—				(238)				(353)				—				973				743				0.01
Compensation-related expense	(9)				(7)				—				184				140				—				1,104				839				0.01
Impairment of long-lived assets, net of (gain) loss on sale	986				749				0.01				64				49				—				3,286				2,497				0.05
Gain on early termination of loss share agreements	—				—				—				—				—				—				(2,708)				(2,058)				(0.04)
Other non-core non-interest expense	(3,129)				(2,378)				(0.04)				2,600				1,976				0.04				(1,955)				(1,486)				(0.02)
Total non-interest expense adjustments	(2,486)				(1,890)				(0.03)				2,610				1,812				0.04				700				535				0.01
Income tax expense (benefit) - impact of the Tax Cuts and Jobs Act	—				—				—				—				(65,317)				(1.18)				—				—				—
Core earnings (Non-GAAP)	127,991				94,643				1.72				136,776				103,783				1.86				132,565				98,400				1.74
Provision for credit losses (1)	13,763				10,460								13,094				9,951								11,384				8,652
Pre-provision earnings, as adjusted (Non-GAAP) (3)	$	141,754			$	105,103							$	149,870			$	113,734							$	143,949			$	107,052
	For the Three Months Ended
	6/30/2018												3/31/2018
	Pre-tax				After-tax				Per share (2)				Pre-tax				After-tax				Per share (2)
Net income	$	105,581			$	75,124			$	1.32			$	81,173			$	63,621			$	1.17
Less: Preferred stock dividends	—				949				0.02				—				3,598				0.07
Income available to common shareholders (GAAP)	$	105,581			$	74,175			$	1.30			$	81,173			$	60,023			$	1.10
Non-interest income adjustments (1)(3):
(Gain) loss on sale of investments	(3)				(2)				—				59				44				—
Non-interest expense adjustments (1)(3):
Merger-related expense	14,333				11,012				0.20				16,227				12,517				0.23
Compensation-related expense	1,781				1,354				0.02				1,221				928				0.02
Impairment of long-lived assets, net of (gain) loss on sale	5,413				4,114				0.07				2,074				1,576				0.03
Other non-core non-interest expense	(95)				(72)				—				(683)				(520)				(0.01)
Total non-interest expense adjustments	21,432				16,408				0.29				18,839				14,501				0.27
Income tax expense - impact of the Tax Cuts and Jobs Act	—				6,572				0.12				—				—				—
Income tax expense (benefit) - other	—				—				—				—				173				—
Core earnings (Non-GAAP)	127,010				97,153				1.71				100,071				74,741				1.37
Provision for credit losses (1)	7,696				5,849								8,211				6,240
Pre-provision earnings, as adjusted (Non-GAAP) (3)	$	134,706			$	103,002							$	108,282			$	80,981

(1)	Excluding preferred stock dividends and merger-related expense, after-tax amounts are calculated using a tax rate of 24%, 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, and gains, losses, and impairment charges on long-lived assets.

 

Table 8 - IBERIABANK CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
	For the Three Months Ended
	3/31/2019				12/31/2018				9/30/2018				6/30/2018				3/31/2018
Net interest income (GAAP)	$	250,484			$	265,021			$	259,225			$	256,113			$	232,889
Taxable equivalent benefit	1,349				1,427				1,461				1,449				1,464
Net interest income (TE) (Non-GAAP) (1)	251,833				266,448				260,686				257,562				234,353
Non-interest income (GAAP)	52,509				969				53,087				53,940				44,566
Taxable equivalent benefit	478				539				463				336				341
Non-interest income (TE) (Non-GAAP) (1)	52,987				1,508				53,550				54,276				44,907
Taxable equivalent revenues (Non-GAAP) (1)	304,820				267,956				314,236				311,838				279,260
Securities (gains) losses and other non-interest income	—				50,259				(1)				(3)				59
Core taxable equivalent revenues (Non-GAAP) (1)	$	304,820			$	318,215			$	314,235			$	311,835			$	279,319
Total non-interest expense (GAAP)	$	158,753			$	168,989			$	169,062			$	196,776			$	188,071
Less: Intangible amortization expense	5,009				5,083				5,382				6,111				5,102
Tangible non-interest expense (Non-GAAP) (2)	153,744				163,906				163,680				190,665				182,969
Less: Merger-related expense	(334)				(238)				973				14,333				16,227
Compensation-related expense	(9)				184				1,104				1,781				1,221
Impairment of long-lived assets, net of (gain) loss on sale	986				64				3,286				5,413				2,074
Gain on early termination of loss share agreements	—				—				(2,708)				—				—
Other non-core non-interest expense	(3,129)				2,600				(1,955)				(95)				(683)
Core tangible non-interest expense (Non-GAAP) (2)	$	156,230			$	161,296			$	162,980			$	169,233			$	164,130
Return on average assets (GAAP)	1.32		%		1.70		%		1.34		%		1.01		%		0.92		%
Effect of non-core revenues and expenses	(0.03)				(0.33)				0.01				0.31				0.21
Core return on average assets (Non-GAAP)	1.29		%		1.37		%		1.35		%		1.32		%		1.13		%
Efficiency ratio (GAAP)	52.4		%		63.5		%		54.1		%		63.5		%		67.8		%
Effect of tax benefit related to tax-exempt income	(0.3)				(0.4)				(0.3)				(0.4)				(0.4)
Efficiency ratio (TE) (Non-GAAP) (1)	52.1		%		63.1		%		53.8		%		63.1		%		67.4		%
Effect of amortization of intangibles	(1.6)				(1.9)				(1.7)				(1.9)				(1.8)
Effect of non-core items	0.8				(10.5)				(0.2)				(6.9)				(6.8)
Core tangible efficiency ratio (TE) (Non-GAAP) (1) (2)	51.3		%		50.7		%		51.9		%		54.3		%		58.8		%
Return on average common equity (GAAP)	9.85		%		13.38		%		10.21		%		7.87		%		6.79		%
Effect of non-core revenues and expenses	(0.19)				(2.63)				0.06				2.43				1.66
Core return on average common equity (Non-GAAP)	9.66		%		10.75		%		10.27		%		10.30		%		8.45		%
Effect of intangibles (2)	5.37				6.23				6.07				6.40				5.38
Core return on average tangible common equity (Non-GAAP) (2)	15.03		%		16.98		%		16.34		%		16.70		%		13.83		%
Total shareholders' equity (GAAP)	$	4,141,831			$	4,056,277			$	3,942,361			$	3,913,409			$	3,900,907
Less:  Goodwill and other intangibles	1,310,458				1,315,462				1,305,915				1,314,165				1,332,672
Preferred stock	132,097				132,097				132,097				132,097				132,097
Tangible common equity (Non-GAAP) (2)	$	2,699,276			$	2,608,718			$	2,504,349			$	2,467,147			$	2,436,138
Total assets (GAAP)	$	31,260,189			$	30,833,015			$	30,118,387			$	30,126,162			$	29,472,637
Less:  Goodwill and other intangibles	1,310,458				1,315,462				1,305,915				1,314,165				1,332,672
Tangible assets (Non-GAAP) (2)	$	29,949,731			$	29,517,553			$	28,812,472			$	28,811,997			$	28,139,965
Tangible common equity ratio (Non-GAAP) (2)	9.01		%		8.84		%		8.69		%		8.56		%		8.66		%

(1)	Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 21%.
(2)	Tangible calculations eliminate the effect of goodwill and acquisition-related intangibles and the corresponding amortization expense on a tax-effected basis where applicable.

 

 

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SOURCE IBERIABANK Corporation

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