Exhibit 99.1
FOR IMMEDIATE RELEASE
October 26, 2010
Contact:
Daryl G. Byrd, President and CEO (337) 521-4003
John R. Davis, Senior Executive Vice President (337) 521-4005
IBERIABANK Corporation Reports Third Quarter Results
LAFAYETTE, LOUISIANA — IBERIABANK Corporation (NASDAQ: IBKC), holding company of the 123-year-old IBERIABANK (www.iberiabank.com) and IBERIABANKfsb (www.IBERIABANKfsb.com), reported improved asset quality ratios, capital strength, and earnings results for the quarter ended September 30, 2010. The Company’s levels of nonperforming assets, loans past due 30 days or more, and classified assets, and its commercial loan watch list each improved between June 30, 2010 and September 30, 2010. At quarter-end, the Company possessed one of the strongest regulatory capital ratios for bank holding companies with assets in excess of $5 billion. For the third quarter of 2010, the Company reported income available to common shareholders of $14 million and fully diluted earnings per share (“EPS”) of $0.52. Excluding one-time acquisition costs, earnings were $15 million and EPS was $0.56, or an increase of 34% compared to the second quarter of 2010 (“linked quarter basis”).
Daryl G. Byrd, President and Chief Executive Officer, commented, “The third quarter was a period of incremental improvement for our Company. Our extremely favorable credit quality measures showed continued improvement. Our excess cash and capital are methodically and patiently being deployed. Our business lines exhibited strength, and our newest business line, Iberia Capital Partners, has commenced operations.” Byrd continued, “Our IBERIABANK family welcomes the clients and associates of Sterling Bank, who joined our organization three months ago. We are very pleased with the successful assimilation of Sterling’s operations into IBERIABANK.”
Byrd continued, “Our industry has experienced significant upheaval recently regarding the suspension of residential mortgage foreclosure processes to ensure foreclosure documentation and procedures are accurate, adequately reviewed, and appropriately administered. A related industry concern is the potential forced repurchase of mortgage loans that were sold to investors, the origination of which was later found to involve questionable underwriting and documentation. We don’t foresee these items being significant issues for our Company given the types of lending we have historically focused upon, the quality of our underwriting, limited housing price pressures in our legacy markets, and the strength of our loan servicing and resolution processes.”
Operating Results Summary
Diluted net income to common shareholders in the third quarter of 2010 totaled $14 million, up 58% on a linked quarter basis, and down 44% compared to the same quarter last year. EPS was $0.52 in the third quarter of 2010, an increase of 58% on a linked quarter basis, and a decrease of 58% compared to the same quarter last year. For the third quarter of 2010, return on average assets (“ROA”) was 0.52%, return on average common equity (“ROE”) was 4.24%, and return on average tangible common equity was 5.64%.
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Acquisition and Merger. The Company completed its FDIC-assisted acquisition of selected assets and assumption of selected liabilities associated with Sterling Bank on July 23, 2010, including $54 million in investment securities, $151 million in loans (after discounts), and $287 million in deposits. Financial statements reflect the impact of that acquisition beginning on that date. Sterling Bank was formerly headquartered in Lantana, Florida, with six offices in the Miami-Fort Lauderdale Metropolitan Statistical Area (“MSA”). The conversions of branch and operating systems were successfully completed over the weekend of October 16-17, 2010.
On August 23, 2010, the Company announced its intention to merge its IBERIABANKfsb subsidiary into IBERIABANK. The merger is anticipated to be completed in the fourth quarter of 2010.
During the third quarter of 2010, the Company incurred one-time pre-tax acquisition and conversion-related costs of $1 million, or $0.04 per share on an after-tax basis, and $4 million, or $0.08 per share on an after-tax basis in the second quarter of 2010.
Excess Cash and Margin. The Company held $1.1 billion in excess cash on average in the second quarter of 2010, compared to $1.0 billion in the third quarter of 2010. The Company’s tax-equivalent net interest margin (“margin”) declined 14 basis points on a linked quarter basis to 2.91% in the third quarter of 2010. The aggregate excess cash position suppressed the margin approximately 45 and 37 basis points in the second and third quarters of 2010, respectively. The Company estimates the excess cash reduced EPS by $0.29 and $0.22 in the second and third quarters of 2010, respectively.
Surplus Capital. On March 8, 2010, the Company issued and sold 5,973,207 shares of common stock in an underwritten public offering, with net proceeds of $329 million. The Company estimates EPS was suppressed due to the additional outstanding shares by $0.09 and $0.14 per share in the second and third quarters of 2010, respectively.
Loan Loss Provision and FDIC Loss Share Accounting. In connection with the FDIC-Assisted transactions, the Company was required under generally accepted accounting principles to establish homogeneous pools of loans with common characteristics. In the third quarter of 2010 the Company recorded pre-tax provision expense of $2 million, or $0.05 per share, related to FDIC covered loans associated with those select loan pools. These figures compare to $6 million, or $0.15 per share, on a linked quarter basis.
Security Transactions And Debt Repayment. In the third quarter, the Company incurred an other than temporary impairment (“OTTI”) totaling $0.5 million on a revenue municipal security that was acquired in an acquisition in 2007. In September 2010, the Company sold $213 million in investment securities yielding 2.80%, resulting in a gain of $4.1 million. The Company also repaid $78 million in long-term debt at an annualized cost of 4.03%, resulting in a loss of $3.5 million and $25 million in sub-debt that carried an approximate net yield of 6.00% for a loss of $0.2 million. The losses associated with the debt repayment and the OTTI were recorded in the income statement under “other expense.”
Balance Sheet Summary
Total assets increased $184 million, or 2%, since June 30, 2010, to $10.6 billion at September 30, 2010. Over this period, total loans increased $31 million, or 1%, and total deposits increased $190 million, or 2%. Total shareholders’ equity increased $2 million, or less than 1%, since June 30, 2010.
The majority of assets acquired in the four FDIC-assisted transactions completed in 2009 and 2010 are covered under FDIC loss sharing arrangements (“covered assets”), and loan valuations incorporate estimated losses. As a result, a significant portion of the Company’s nonperforming assets has minimal loss exposure. Total Nonperforming Assets (“NPAs”) at September 30, 2010 were $972 million, down $57 million, or 6%, compared to June 30, 2010. Excluding $908 million in NPAs covered under the FDIC-assisted agreements, NPAs at September 30, 2010 were $65 million, down $4 million, or 6%, compared to June 30, 2010. On that basis, NPAs were 0.81% of total assets at September 30, 2010, compared to 0.86% of assets at June 30, 2010 and 0.93% one year ago.
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Loans
In the third quarter of 2010, total loans increased $31 million, or 1%. Excluding the FDIC-assisted transactions, loans increased $42 million, or 1%, over that period. Between the times at which the acquisitions were completed and September 30, 2010, loans acquired in the FDIC acquisitions decreased by approximately $381 million, or 20%.
The loan portfolio at September 30, 2010, was comprised of disparate components. Approximately 26% of the Company’s $5.8 billion loan portfolio at that date was comprised of assets covered under FDIC loss share agreements, which provide considerable protection against credit risk on those covered assets. The remaining $4.3 billion in loans at September 30, 2010, were associated with the Company’s legacy franchise, and underwritten under the Company’s guidelines.
Period-End Loan Volumes ($ in Millions)
Loans
| 9/30/09 | 12/31/09 | 3/31/10 | 6/30/10 | 9/30/10 | ||||||||||||||||
Commercial | $ | 2,556 | $ | 2,748 | $ | 2,825 | $ | 2,878 | $ | 2,947 | ||||||||||
Consumer | 923 | 914 | 912 | 929 | 926 | |||||||||||||||
Mortgage | 467 | 452 | 441 | 430 | 406 | |||||||||||||||
Non-FDIC Loans | $ | 3,946 | $ | 4,114 | $ | 4,178 | $ | 4,237 | $ | 4,279 | ||||||||||
Covered Loans | $ | 353 | $ | 1,670 | $ | 1,561 | $ | 1,524 | $ | 1,512 | ||||||||||
Total Loans | $ | 4,299 | $ | 5,784 | $ | 5,739 | $ | 5,761 | $ | 5,791 | ||||||||||
Non-FDIC Growth | 3 | % | 4 | % | 2 | % | 1 | % | 1 | % | ||||||||||
On a linked quarter basis, the yield on average total loans decreased 36 basis points to 6.14%. The decline in average loan yield was primarily driven by FDIC loss share covered assets and a 14 basis point decline in non-covered loans. Yields on commercial and consumer loans decreased 34 and 60 basis points, respectively, on a linked quarter basis. The yield on mortgage loans increased 16 basis points over that period.
Commercial real estate (“CRE”) loans totaled $2.5 billion at September 30, 2010, and the average loan size was $635,000. At September 30, 2010, approximately $1.0 billion, or 40%, of the total CRE portfolio was covered under the loss share agreements with the FDIC. In addition, loans covered under those agreements were purchased at substantial discounts from the FDIC and are expected to offset much of the remaining credit loss exposure and servicing costs. The remaining $1.5 billion in legacy CRE loans included $617 million in owner-occupied loans (1.99% past due 30 days or more) and $930 million in non-owner occupied CRE loans (2.15% past due 30 days or more). The legacy CRE portfolio had loans past due 30 days or more (including nonaccruing loans) equal to 2.08% of the CRE loans outstanding, compared to 2.79% at June 30, 2010. Non-owner occupied CRE loans equated to 78% of total risk based capital at September 30, 2010. At September 30, 2010, many of the local legacy markets remained economically healthy compared to the national economy.
At September 30, 2010, approximately 25% of the Company’s direct consumer loan portfolio (net of discounts) was covered under the FDIC loss share agreements. The remaining legacy consumer portfolio maintained favorable asset quality. The average credit score of the legacy consumer loan portfolio was 722, and loans past due 30 days or more were 0.61% of consumer loans at September 30, 2010 (an improvement compared to 0.81% at June 30, 2010). Legacy home equity loans totaled $322 million at September 30, 2010, with 0.75% past due 30 days or more (0.82% at June 30, 2010). Legacy
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home equity lines of credit totaled $206 million, with 0.42% past due 30 days or more (0.80% at June 30, 2010). Annualized net charge-offs in this portfolio were 0.87% of total consumer loans in the third quarter of 2010 (0.58% in the second quarter of 2010). The weighted average loan-to-value at origination for this portfolio over the last three years was approximately 67%.
The indirect automobile portfolio totaled $267 million at September 30, 2010, down 1% compared to the portfolio at June 30, 2010. This portfolio equated to 5% of total loans and had 0.78% in loans past due 30 days or more (including nonaccruing loans) at September 30, 2010 (unchanged from 0.78% at June 30, 2010). Annualized net charge-offs in the indirect loan portfolio equated to approximately 0.11% of average loans in the third quarter of 2010 (an improvement from 0.15% in the second quarter of 2010). Approximately 87% of the indirect automobile portfolio was to borrowers in the Acadiana region of Louisiana, which currently experiences a relatively favorable unemployment rate (6.6% at August 2010, the 45th lowest unemployment rate of 372 MSAs in the United States).
Deposits
During the third quarter of 2010, total deposits increased $190 million, or 2%, and increased $33 million, or 1%, excluding the FDIC transactions. Between the consummation dates of the FDIC-assisted acquisitions and September 30, 2010, acquired deposits, excluding brokered deposits, increased approximately $221 million, or 8%, which was more favorable than the Company’s expectations at closing.
Period-End Deposit Volumes ($ in Millions)
Deposits
| 9/30/09 | 12/31/09 | 3/31/10 | 6/30/10 | 9/30/10 | ||||||||||||||||
Noninterest | $ | 629 | $ | 875 | $ | 825 | $ | 821 | $ | 857 | ||||||||||
NOW Accounts | 959 | 1,352 | 1,407 | 1,333 | 1,254 | |||||||||||||||
Savings/MMkt | 1,327 | 2,252 | 2,571 | 2,808 | 3,013 | |||||||||||||||
Time Deposits | 1,861 | 3,077 | 3,153 | 3,112 | 3,139 | |||||||||||||||
Total Deposits | $ | 4,776 | $ | 7,556 | $ | 7,956 | $ | 8,074 | $ | 8,264 | ||||||||||
Growth | 14 | % | 58 | % | 5 | % | 1 | % | 2 | % | ||||||||||
Noninterest bearing deposits totaled $857 million at September 30, 2010, up $37 million, or 4%, compared to June 30, 2010. Excluding the FDIC-assisted transactions, noninterest bearing deposits increased $19 million, or 3%, over this period. On a linked quarter basis, average noninterest bearing deposits increased $22 million, or 3%, and interest-bearing deposits increased $301 million, or 4%. The rate on average interest bearing deposits in the third quarter of 2010 was 1.32%, a decrease of 14 basis points on a linked quarter basis. In the month of September 2010, the average cost of interest bearing deposits was 1.24%.
In September 2010, the Company paid off $78 million in long-term debt at an annualized cost of 4.03%. The Company had only $30 million in short-term borrowings at September 30, 2010, or approximately 0.3% of total liabilities. The cost of average interest bearing liabilities was 1.44% in the third quarter of 2010, a decrease of 12 basis points on a linked quarter basis. For the month of September 2010, the average cost of interest bearing liabilities was 1.35%.
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Asset Quality
The Company’s credit quality statistics were significantly affected by the FDIC-assisted acquisitions. However, the loss share arrangements with the FDIC and discounts on the assets acquired are expected to provide substantial protection against losses on those assets. Under the loss share agreements in connection with the FDIC-assisted acquisitions, the FDIC will cover 80% of the losses on the disposition of loans and OREO up to $1.2 billion, or $965 million (the Company covered the remaining $241 million at the times of acquisition). In addition, the FDIC will cover 95% of losses that exceed a $970 million threshold level. The Company received a discount of approximately $515 million on the purchase of assets in the transactions.
Excluding the FDIC-assisted transactions, NPAs and loans past due 30 days or more decreased during the third quarter of 2010 at the Company. The legacy Company had troubled debt restructurings at September 30, 2010, totaling $18 million, compared to $8 million at June 30, 2010.
Summary Asset Quality Statistics
| IBERIABANK | IBERIABANK fsb | IBERIABANK Corp. | ||||||||||||||||||||||||||||||||||
($ thousands) | 1Q10* | 2Q10* | 3Q10* | 1Q10 | 2Q10 | 3Q10 | 1Q10* | 2Q10* | 3Q10* | |||||||||||||||||||||||||||
Nonaccruals | $ | 30,054 | $ | 25,512 | $ | 23,027 | $ | 24,570 | $ | 22,537 | $ | 18,054 | $ | 54,624 | $ | 48,049 | $ | 41,081 | ||||||||||||||||||
OREO & Foreclosed | 4,012 | 5,037 | 4,096 | 11,436 | 10,177 | 12,872 | 15,448 | 15,214 | 16,968 | |||||||||||||||||||||||||||
90+ Days Past Due | 1,852 | 3,229 | 2,666 | 1,316 | 2,416 | 4,151 | 3,168 | 5,645 | 6,817 | |||||||||||||||||||||||||||
Nonperforming Assets | $ | 35,918 | $ | 33,778 | $ | 29,789 | $ | 37,322 | $ | 35,130 | $ | 35,077 | $ | 73,240 | $ | 68,908 | $ | 64,865 | ||||||||||||||||||
NPAs/Assets | 0.63 | % | 0.54 | % | 0.48 | % | 2.27 | % | 2.11 | % | 2.06 | % | 0.98 | % | 0.86 | % | 0.81 | % | ||||||||||||||||||
NPAs/(Loans + OREO) | 1.13 | % | 1.04 | % | 0.92 | % | 3.64 | % | 3.49 | % | 3.32 | % | 1.75 | % | 1.62 | % | 1.51 | % | ||||||||||||||||||
LLR/Loans | 1.38 | % | 1.36 | % | 1.24 | % | 1.98 | % | 2.04 | % | 2.05 | % | 1.53 | % | 1.52 | % | 1.43 | % | ||||||||||||||||||
Net Charge-Offs/Loans | 0.08 | % | 0.65 | % | 0.60 | % | 1.41 | % | 0.31 | % | 0.48 | % | 0.41 | % | 0.57 | % | 0.57 | % | ||||||||||||||||||
| * | Excludes the impact of all FDIC-assisted acquisitions |
The FDIC-assisted transactions accounted for $908 million, or 93% of the Company’s $972 million in total NPAs at September 30, 2010, and the legacy IBERIABANK Corporation franchise accounted for the remaining $65 million in NPAs. Excluding the FDIC-assisted transactions, NPAs equated to 0.81% of total assets at September 30, 2010, compared to 0.86% at June 30, 2010. On this same basis, total loans past due 30 days or more (including nonaccruing loans) represented 1.48% of total loans at September 30, 2010, an improvement of 42 basis points, compared to 1.90% of total loans at June 30, 2010.
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Loans Past Due
Loans Past Due 30 Days Or More And Nonaccruing Loans As % Of Loans Outstanding
By Entity: | 6/30/09 | 9/30/09 | 12/31/09 | 3/31/10 | 6/30/10 | 9/30/10 | ||||||||||||||||||
IBERIABANK (Ex-FDIC Covered Assets) | ||||||||||||||||||||||||
30+ days past due | 0.33 | % | 0.32 | % | 0.58 | % | 0.67 | % | 0.81 | % | 0.32 | % | ||||||||||||
Non-accrual | 0.47 | % | 0.45 | % | 0.38 | % | 0.94 | % | 0.78 | % | 0.70 | % | ||||||||||||
Total Past Due | 0.80 | % | 0.77 | % | 0.96 | % | 1.61 | % | 1.59 | % | 1.02 | % | ||||||||||||
IBERIABANKfsb | ||||||||||||||||||||||||
30+ days past due | 1.73 | % | 1.09 | % | 1.12 | % | 0.88 | % | 0.60 | % | 1.14 | % | ||||||||||||
Non-accrual | 1.68 | % | 2.45 | % | 2.78 | % | 2.42 | % | 2.26 | % | 1.73 | % | ||||||||||||
Total Past Due | 3.41 | % | 3.54 | % | 3.90 | % | 3.30 | % | 2.86 | % | 2.87 | % | ||||||||||||
Consolidated (Ex-FDIC Covered Assets) | ||||||||||||||||||||||||
30+ days past due | 0.64 | % | 0.50 | % | 0.72 | % | 0.73 | % | 0.77 | % | 0.52 | % | ||||||||||||
Non-accrual | 0.74 | % | 0.92 | % | 0.97 | % | 1.31 | % | 1.13 | % | 0.96 | % | ||||||||||||
Total Past Due | 1.38 | % | 1.42 | % | 1.69 | % | 2.04 | % | 1.90 | % | 1.48 | % | ||||||||||||
Consolidated With FDIC Covered Assets | ||||||||||||||||||||||||
30+ days past due | 1.06 | % | 3.60 | % | 3.09 | % | 3.48 | % | 1.98 | % | ||||||||||||||
Non-accrual | 2.79 | % | 12.70 | % | 14.23 | % | 13.01 | % | 12.95 | % | ||||||||||||||
Total Past Due | 3.85 | % | 16.30 | % | 17.32 | % | 16.49 | % | 14.93 | % | ||||||||||||||
At September 30, 2010, the allowance for loan losses was 2.28%, up compared to 1.67% at June 30, 2010. In accordance with generally accepted accounting principles, the assets acquired in the FDIC-assisted transactions were marked to market at consummation, including estimated loan impairments. Excluding the acquired loans, the Company’s ratio of loan loss reserves to loans decreased from 1.52% at June 30, 2010 to 1.43% at September 30, 2010.
The Company reported net charge-offs of $5 million in the third quarter of 2010, compared to $6 million in the second quarter of 2010. The ratio of net charge-offs to average loans was 0.36% in the third quarter of 2010, compared to 0.44% in the second quarter of 2010. The Company recorded a $5 million loan loss provision in the third quarter of 2010, down 60% compared to the level recorded in the second quarter of 2010. Excluding provision expense associated with the FDIC-assisted acquisitions, the loan loss provision declined from $6 million to $3 million on a linked quarter basis. Management considers the loan loss reserve adequate to absorb credit losses inherent in the loan portfolio at September 30, 2010.
Investments
Total investment securities increased $160 million, or 9%, to $1.9 billion during the third quarter of 2010. As a percentage of total assets, the investment portfolio increased from 17% at June 30, 2010 to 18% at September 30, 2010. The investment portfolio had a modified duration of 2.4 years at September 30, 2010, compared to 2.7 years at June 30, 2010. The unrealized gain in the investment portfolio decreased $2 million, or 5%, from $38 million at June 30, 2010 to $36 million at September 30, 2010. Based on projected prepayment speeds and other assumptions at September 30, 2010, the portfolio was expected to generate approximately $710 million in cash flows, or about 38% of the portfolio, over the next 15 months. The average yield on investment securities decreased 33 basis points on a linked quarter basis, to 2.90% in the third quarter of 2010. The Company holds in its investment portfolio primarily government agency and municipal securities.
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Capital Position
The Company maintains strong capital ratios compared to peers. The equity-to-assets ratio was 12.31% at September 30, 2010, compared to 12.51% at June 30, 2010. At September 30, 2010, the Company reported a tangible common equity ratio of 10.05%, compared to 10.28% at June 30, 2010 and 9.59% one year ago. The Company’s Tier 1 leverage ratio was 10.81%, compared to 11.15% at June 30, 2010 and 11.55% one year ago. The Company’s total risk based capital ratio at September 30, 2010 was 19.90%, compared to 21.72% at June 30, 2010 and 16.83% one year ago. The Company’s tangible common equity to risk weighted assets ratio was 17.23%, compared to 18.60% at June 30, 2010, and 13.38% one year ago.
Regulatory Capital Ratios
At September 30, 2010
Capital Ratio | Well Capitalized | IBERIABANK | IBERIABANK fsb | IBERIABANK Corporation | ||||||||||||
Tier 1 Leverage | 5.00 | % | 7.63 | % | 9.60 | % | 10.81 | % | ||||||||
Tier 1 Risk Based | 6.00 | % | 14.18 | % | 11.80 | % | 18.64 | % | ||||||||
Total Risk Based | 10.00 | % | 15.44 | % | 13.04 | % | 19.90 | % | ||||||||
At September 30, 2010, book value per share was $48.37, up $0.06, compared to June 30, 2010, and up 17% compared to one year ago. Tangible book value per share decreased $0.21 over that period to $38.50, and up 33% compared to one year ago.
On September 15, 2010, the Company declared a quarterly cash dividend of $0.34 per share. This dividend level equated to an annualized dividend rate of $1.36 per share and an indicated dividend yield of 2.56%, based on the closing stock price of the Company’s common stock on October 26, 2010 of $53.14 per share. This price equated to 1.10 times September 30, 2010 book value per share of $48.37 and 1.38 times tangible book value per share of $38.50.
Interest Rate Risk Position
The Company’s interest rate risk modeling at September 30, 2010 indicated the Company is asset sensitive over a 12-month time frame. A 100 basis point instantaneous and parallel upward shift in interest rates is estimated to increase net interest income over 12 months by approximately 5.7%. Similarly, a 100 basis point decrease in interest rates is expected to decrease net interest income by approximately 0.6%. At September 30, 2010, approximately 50% of the Company’s loan portfolio had fixed interest rates. Eliminating fixed rate loans that mature within a one-year time frame reduces this percentage to 46%. Approximately 70% of the Company’s time deposit base will re-price within 12 months from September 30, 2010.
Operating Results
The Company’s average excess liquidity position decreased from approximately $1.1 billion to $1.0 billion on a linked quarter basis, maintaining pressure on the yield on earning assets. The yield on average investment securities and loans declined 33 and 36 basis points, respectively, on a linked quarter basis. The average earning asset yield decreased 25 basis points, while the cost of interest bearing deposits and liabilities decreased 14 and 12 basis points, respectively. As a result, the net interest spread and margin declined 12 and 14 basis points, respectively, on a linked quarter basis. Tax- equivalent net interest income decreased $1 million, or 1%, on a linked quarter basis, as average earning assets increased $344 million, or 4%, on a linked quarter basis.
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Quarterly Average Yields/Cost (Taxable Equivalent Basis)
| 2Q09 | 3Q09 | 4Q09 | 1Q10 | 2Q10 | 3Q10 | |||||||||||||||||||
Earning Asset Yield | 4.99 | % | 4.66 | % | 4.64 | % | 4.45 | % | 4.38 | % | 4.13 | % | ||||||||||||
Cost Of Int-Bearing Liabs | 2.12 | % | 1.96 | % | 1.74 | % | 1.47 | % | 1.56 | % | 1.44 | % | ||||||||||||
Net Interest Spread | 2.87 | % | 2.69 | % | 2.90 | % | 2.97 | % | 2.82 | % | 2.70 | % | ||||||||||||
Net Interest Margin | 3.17 | % | 3.02 | % | 3.13 | % | 3.16 | % | 3.05 | % | 2.91 | % | ||||||||||||
Aggregate noninterest income increased $6 million, or 20%, on a linked quarter basis. The primary changes on a linked quarter basis were a higher level of gains on the sale of investment securities (up $4 million) and mortgage loans (up $3 million), as well as higher brokerage income (up $1 million), partially offset by lower income on deposit account service charges, credit card fees, and commercial loan income.
The Company’s mortgage origination business experienced substantial strength in the third quarter of 2010. The Company originated $521 million in mortgage loans during the third quarter of 2010, up $79 million, or 18%, on a linked quarter basis. Client loan refinancing opportunities accounted for approximately 52% of mortgage loan applications in the third quarter of 2010, and approximately 56% between September 30, 2010 and October 15, 2010. The Company sold $466 million in mortgage loans during the third quarter of 2010, up $66 million, or 17%, compared to the second quarter of 2010. Sales margins remained fairly stable on a linked quarter basis. Gains on the sale of mortgage loans totaled $14 million in the third quarter of 2010, an increase of $3 million, or 27%, on a linked quarter basis. The mortgage pipeline was approximately $220 million at September 30, 2010, and has since risen to approximately $236 million at October 15, 2010.
Noninterest expense increased $5 million, or 6%, on a linked quarter basis. In aggregate, one-time merger-related costs totaled $1 million in the third quarter of 2010, compared to $4 million in the second quarter. Excluding one-time merger-related costs, noninterest expense increased $7 million on a linked quarter basis. The drivers of the expense increase were the penalty on the repayment of long-term debt ($3.5 million), and increases in mortgage commissions, other real estate expense, and credit and other loan expense (up approximately $1 million each). The Company incurred approximately $0.3 million in expense associated with the repurchase of mortgage loans from investors during the third quarter of 2010. The combined tangible efficiency ratio of the Company’s financial institution subsidiaries was approximately 62.1% in the third quarter of 2010.
IBERIABANK Corporation
IBERIABANK Corporation is a multi-bank financial holding company with 224 combined offices, including 144 bank branch offices in Louisiana, Arkansas, Tennessee, Alabama, Texas, and Florida, 26 title insurance offices in Arkansas and Louisiana, and mortgage representatives in 54 locations in 12 states.
The Company opened four new bank branch offices since June 30, 2010. Offices were opened in Mobile and Fairhope, Alabama, reaching a total of three offices serving the greater Mobile area. Two additional offices were opened in Houston, Texas, reaching a total of four offices serving the Houston market.
The Company’s common stock trades on the NASDAQ Global Select Market under the symbol “IBKC.” The Company’s market capitalization was approximately $1.4 billion, based on the NASDAQ closing stock price on October 26, 2010.
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The following twelve investment firms currently provide equity research coverage on IBERIABANK Corporation:
| • | B. Riley & Company |
| • | FIG Partners, LLC |
| • | Howe Barnes Hoefer & Arnett, Inc. |
| • | Keefe, Bruyette & Woods |
| • | Morgan Keegan & Company, Inc. |
| • | Raymond James & Associates, Inc. |
| • | Robert W. Baird & Company |
| • | Stephens, Inc. |
| • | Sterne, Agee & Leach |
| • | Stifel Nicolaus & Company |
| • | SunTrust Robinson-Humphrey |
| • | Wunderlich Securities |
Conference Call
In association with this earnings release, the Company will host a live conference call to discuss the financial results for the quarter just completed. The telephone conference call will be held on Wednesday, October 27, 2010, beginning at 9:30 a.m. Central Time by dialing 1-800-230-1951. The confirmation code for the call is 173672. A replay of the call will be available until midnight Central Time on November 3, 2010 by dialing 1-800-475-6701. The confirmation code for the replay is 173672. The Company has prepared a PowerPoint presentation that supplements information contained in this press release. The PowerPoint presentation may be accessed on the Company’s web site,www.iberiabank.com, under “Investor Relations” and then “Presentations.”
Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with GAAP. The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or nonrecurring transactions. Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP disclosures are included as tables at the end of this release.
Forward Looking Statements
To the extent that statements in this press release relate to future plans, objectives, financial results or performance of IBERIABANK Corporation, these statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which are based on management’s current information, estimates and assumptions and the current economic environment, are generally identified by the use of the words “plan”, “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions. IBERIABANK Corporation’s actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties.
9
Actual results could differ materially because of factors such as the current level of market volatility and our ability to execute our growth strategy, including the availability of future FDIC-assisted failed bank opportunities, unanticipated losses related to the integration of, and accounting for, acquired businesses and assets and assumed liabilities in FDIC-assisted transactions, adjustments of fair values of acquired assets and assumed liabilities and of deferred taxes in FDIC-assisted acquisitions, credit risk of our customers, effects of the on-going correction in residential real estate prices and reduced levels of home sales, sufficiency of our allowance for loan losses, changes in interest rates, access to funding sources, reliance on the services of executive management, competition for loans, deposits and investment dollars, reputational risk and social factors, changes in government regulations and legislation, increases in FDIC insurance assessments, geographic concentration of our markets and economic conditions in these markets, rapid changes in the financial services industry, dependence on our operational, technological, and organizational infrastructure, hurricanes and other adverse weather events, the volatility and low trading volume of our common stock, and valuation of intangible assets. These and other factors that may cause actual results to differ materially from these forward-looking statements are discussed in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission, available at the SEC’s website,www.sec.gov, and the Company’s website,www.iberiabank.com. All information in this release is as of the date of this release. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.
10
IBERIABANK CORPORATION
FINANCIAL HIGHLIGHTS
| For The Quarter Ended September 30, | For The Quarter Ended June 30, | |||||||||||||||||||
| 2010 | 2009 | %Change | 2010 | %Change | ||||||||||||||||
Income Data (in thousands): | ||||||||||||||||||||
Net Interest Income | $ | 69,933 | $ | 40,666 | 72 | % | $ | 70,139 | (0 | %) | ||||||||||
Net Interest Income (TE) (1) | 71,702 | 42,297 | 70 | % | 72,730 | (1 | %) | |||||||||||||
Net Income | 13,940 | 24,952 | (44 | %) | 8,840 | 58 | % | |||||||||||||
Earnings Available to Common Shareholders - Basic | 13,940 | 24,952 | (44 | %) | 8,840 | 58 | % | |||||||||||||
Earnings Available to Common Shareholders - Diluted | 13,652 | 24,344 | (44 | %) | 8,651 | 58 | % | |||||||||||||
Per Share Data: | ||||||||||||||||||||
Earnings Available to Common Shareholders - Basic | $ | 0.52 | $ | 1.23 | (58 | %) | $ | 0.33 | 55 | % | ||||||||||
Earnings Available to Common Shareholders - Diluted | 0.52 | 1.22 | (58 | %) | 0.33 | 58 | % | |||||||||||||
Book Value Per Common Share | 48.37 | 41.41 | 17 | % | 48.31 | 0 | % | |||||||||||||
Tangible Book Value Per Common Share (2) | 38.50 | 28.88 | 33 | % | 38.71 | (1 | %) | |||||||||||||
Cash Dividends | 0.34 | 0.34 | — | 0.34 | — | |||||||||||||||
Number of Shares Outstanding: | ||||||||||||||||||||
Basic Shares (Average) | 26,840,723 | 20,253,317 | 33 | % | 26,804,334 | 0 | % | |||||||||||||
Diluted Shares (Average) | 26,460,084 | 19,944,420 | 33 | % | 26,506,308 | (0 | %) | |||||||||||||
Book Value Shares (Period End)(3) | 26,872,742 | 20,623,541 | 30 | % | 26,865,543 | 0 | % | |||||||||||||
Key Ratios:(4) | ||||||||||||||||||||
Return on Average Assets | 0.52 | % | 1.62 | % | 0.34 | % | ||||||||||||||
Return on Average Common Equity | 4.24 | % | 11.77 | % | 2.73 | % | ||||||||||||||
Return on Average Tangible Common Equity(2) | 5.64 | % | 17.26 | % | 3.73 | % | ||||||||||||||
Net Interest Margin (TE)(1) | 2.91 | % | 3.02 | % | 3.05 | % | ||||||||||||||
Efficiency Ratio | 75.3 | % | 44.7 | % | 75.1 | % | ||||||||||||||
Tangible Efficiency Ratio (TE)(1) (2) | 72.6 | % | 43.5 | % | 71.8 | % | ||||||||||||||
Average Loans to Average Deposits | 70.4 | % | 91.0 | % | 70.6 | % | ||||||||||||||
Nonperforming Assets to Total Assets(5) | 9.21 | % | 2.33 | % | 9.93 | % | ||||||||||||||
Allowance for Loan Losses to Loans | 2.28 | % | 1.14 | % | 1.67 | % | ||||||||||||||
Net Charge-offs to Average Loans | 0.36 | % | 2.26 | % | 0.44 | % | ||||||||||||||
Average Equity to Average Total Assets | 12.26 | % | 13.67 | % | 12.56 | % | ||||||||||||||
Tier 1 Leverage Ratio | 10.81 | % | 11.55 | % | 11.15 | % | ||||||||||||||
Common Stock Dividend Payout Ratio | 65.5 | % | 28.1 | % | 103.3 | % | ||||||||||||||
Tangible Common Equity Ratio | 10.05 | % | 9.59 | % | 10.28 | % | ||||||||||||||
Tangible Common Equity to Risk-Weighted Assets | 17.23 | % | 13.38 | % | 18.60 | % | ||||||||||||||
| (1) | Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a marginal tax rate of 35%. |
| (2) | Tangible calculations eliminate the effect of goodwill and acquisition related intangible assets and the corresponding amortization expense on a tax-effected basis where applicable. |
| (3) | Shares used for book value purposes exclude shares held in treasury at the end of the period. |
| (4) | All ratios are calculated on an annualized basis for the period indicated. |
| (5) | Nonperforming assets consist of nonaccruing loans, accruing loans 90 days or more past due and other real estate owned, including repossessed assets. |
IBERIABANK CORPORATION
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands except per share data)
BALANCE SHEET (End of Period) | September 30, | June 30, 2010 | December 31, 2009 | |||||||||||||||||
| 2010 | 2009 | % Change | ||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and Due From Banks | $ | 99,670 | $ | 66,579 | 49.7 | % | $ | 93,531 | $ | 94,674 | ||||||||||
Interest-bearing Deposits in Banks | 804,012 | 273,982 | 193.5 | % | 1,031,205 | 80,723 | ||||||||||||||
Total Cash and Equivalents | 903,682 | 340,561 | 165.4 | % | 1,124,736 | 175,397 | ||||||||||||||
Investment Securities Available for Sale | 1,587,088 | 1,024,868 | 54.9 | % | 1,441,994 | 1,320,476 | ||||||||||||||
Investment Securities Held to Maturity | 320,707 | 70,951 | 352.0 | % | 305,629 | 260,361 | ||||||||||||||
Total Investment Securities | 1,907,795 | 1,095,819 | 74.1 | % | 1,747,623 | 1,580,837 | ||||||||||||||
Mortgage Loans Held for Sale | 171,545 | 52,796 | 224.9 | % | 114,914 | 66,945 | ||||||||||||||
Loans, Net of Unearned Income | 5,791,378 | 4,298,845 | 34.7 | % | 5,760,550 | 5,784,365 | ||||||||||||||
Allowance for Loan Losses | (131,954 | ) | (48,787 | ) | 170.5 | % | (96,000 | ) | (55,768 | ) | ||||||||||
Loans, net | 5,659,424 | 4,250,058 | 33.2 | % | 5,664,550 | 5,728,597 | ||||||||||||||
Loss Share Receivable | 906,014 | 86,955 | 941.9 | % | 822,858 | 1,034,734 | ||||||||||||||
Premises and Equipment | 201,626 | 130,453 | 54.6 | % | 195,464 | 137,426 | ||||||||||||||
Goodwill and Other Intangibles | 265,266 | 258,186 | 2.7 | % | 257,865 | 260,144 | ||||||||||||||
Mortgage Servicing Rights | 212 | 219 | (3.3 | %) | 235 | 229 | ||||||||||||||
Other Assets | 545,184 | 251,473 | 116.8 | % | 448,219 | 716,093 | ||||||||||||||
Total Assets | $ | 10,560,748 | $ | 6,466,520 | 63.3 | % | $ | 10,376,464 | $ | 9,700,402 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Noninterest-bearing Deposits | $ | 856,882 | $ | 628,800 | 36.3 | % | $ | 820,254 | $ | 874,885 | ||||||||||
Interest-bearing Deposits | 7,407,257 | 4,146,933 | 78.6 | % | 7,253,657 | 6,681,263 | ||||||||||||||
Total Deposits | 8,264,139 | 4,775,733 | 73.0 | % | 8,073,911 | 7,556,148 | ||||||||||||||
Short-term Borrowings | 30,190 | 15,000 | 101.3 | % | 15,000 | 90,000 | ||||||||||||||
Securities Sold Under Agreements to Repurchase | 259,058 | 193,234 | 34.1 | % | 184,969 | 173,351 | ||||||||||||||
Long-term Debt | 440,915 | 526,106 | (16.2 | %) | 586,130 | 745,864 | ||||||||||||||
Other Liabilities | 266,698 | 105,866 | 151.9 | % | 218,625 | 180,824 | ||||||||||||||
Total Liabilities | 9,261,000 | 5,615,939 | 64.9 | % | 9,078,635 | 8,746,187 | ||||||||||||||
Total Shareholders’ Equity | 1,299,748 | 850,581 | 52.8 | % | 1,297,829 | 954,215 | ||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 10,560,748 | $ | 6,466,520 | 63.3 | % | $ | 10,376,464 | $ | 9,700,402 | ||||||||||
INCOME STATEMENT | For The Three Months Ended September 30, | For The Nine Months Ended September 30, | ||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | ||||||||||||||||
Interest Income | $ | 99,818 | $ | 63,554 | 57.1 | % | $ | 298,655 | $ | 184,849 | ||||||||||
Interest Expense | 29,885 | 22,888 | 30.6 | % | 89,377 | 69,620 | ||||||||||||||
Net Interest Income | 69,933 | 40,666 | 72.0 | % | 209,278 | 115,229 | ||||||||||||||
Provision for Loan Losses | 5,128 | 25,295 | (79.7 | %) | 31,227 | 36,110 | ||||||||||||||
Net Interest Income After Provision for Loan Losses | 64,805 | 15,371 | 321.6 | % | 178,051 | 79,119 | ||||||||||||||
Service Charges | 6,085 | 5,983 | 1.7 | % | 18,361 | 16,734 | ||||||||||||||
ATM / Debit Card Fee Income | 2,562 | 1,958 | 30.9 | % | 7,444 | 5,635 | ||||||||||||||
BOLI Proceeds and Cash Surrender Value Income | 726 | 729 | (0.4 | %) | 2,153 | 2,163 | ||||||||||||||
Gain on Acquisition | — | 57,831 | (100.0 | %) | 3,781 | 57,831 | ||||||||||||||
Gain on Sale of Loans, net | 13,518 | 7,264 | 86.1 | % | 31,517 | 26,602 | ||||||||||||||
Gain (Loss) on Sale of Investments, net | 4,176 | (25 | ) | 16931.4 | % | 5,158 | 5,857 | |||||||||||||
Title Revenue | 4,852 | 4,638 | 4.6 | % | 13,368 | 14,349 | ||||||||||||||
Broker Commissions | 2,320 | 1,329 | 74.6 | % | 5,204 | 3,544 | ||||||||||||||
Other Noninterest Income | 2,542 | 1,527 | 66.4 | % | 8,851 | 4,278 | ||||||||||||||
Total Noninterest Income | 36,781 | 81,234 | (54.7 | %) | 95,837 | 136,993 | ||||||||||||||
Salaries and Employee Benefits | 40,932 | 29,161 | 40.4 | % | 116,323 | 80,041 | ||||||||||||||
Occupancy and Equipment | 8,779 | 5,856 | 49.9 | % | 24,493 | 17,269 | ||||||||||||||
Amortization of Acquisition Intangibles | 1,316 | 627 | 109.9 | % | 3,595 | 1,870 | ||||||||||||||
Other Noninterest Expense | 29,344 | 18,896 | 55.3 | % | 78,736 | 48,965 | ||||||||||||||
Total Noninterest Expense | 80,371 | 54,540 | 47.4 | % | 223,147 | 148,145 | ||||||||||||||
Income Before Income Taxes | 21,215 | 42,065 | (49.6 | %) | 50,741 | 67,967 | ||||||||||||||
Income Taxes | 7,275 | 17,113 | (57.5 | %) | 14,958 | 25,396 | ||||||||||||||
Net Income | $ | 13,940 | $ | 24,952 | (44.1 | %) | $ | 35,783 | $ | 42,571 | ||||||||||
Preferred Stock Dividends | — | — | — | — | (3,350 | ) | ||||||||||||||
Earnings Available to Common Shareholders - Basic | 13,940 | 24,952 | (44.1 | %) | 35,783 | 39,221 | ||||||||||||||
Earnings Allocated to Unvested Restricted Stock | (288 | ) | (608 | ) | (52.7 | %) | (716 | ) | (1,035 | ) | ||||||||||
Earnings Available to Common Shareholders - Diluted | 13,652 | 24,344 | (43.9 | %) | 35,067 | 38,186 | ||||||||||||||
Earnings Per Share, diluted | $ | 0.52 | $ | 1.22 | (57.7 | %) | $ | 1.40 | $ | 2.22 | ||||||||||
IBERIABANK CORPORATION
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands except per share data)
| For The Quarter Ended | ||||||||||||||||||||
BALANCE SHEET (Average) | September 30, 2010 | June 30, 2010 | March 31, 2010 | December 31, 2009 | September 30, 2009 | |||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and Due From Banks | $ | 95,687 | $ | 95,822 | $ | 92,145 | $ | 75,435 | $ | 59,975 | ||||||||||
Interest-bearing Deposits in Banks | 959,466 | 1,007,124 | 387,929 | 305,371 | 299,591 | |||||||||||||||
Investment Securities | 1,919,056 | 1,617,372 | 1,569,301 | 1,327,579 | 1,074,896 | |||||||||||||||
Mortgage Loans Held for Sale | 131,944 | 82,502 | 50,810 | 58,785 | 60,350 | |||||||||||||||
Loans, Net of Unearned Income | 5,830,711 | 5,616,203 | 5,737,876 | 5,070,584 | 4,049,351 | |||||||||||||||
Allowance for Loan Losses | (92,941 | ) | (63,115 | ) | (55,133 | ) | (49,442 | ) | (45,711 | ) | ||||||||||
Loss Share Receivable | 865,810 | 914,437 | 1,033,377 | 590,804 | 38,784 | |||||||||||||||
Other Assets | 935,828 | 1,050,169 | 1,054,224 | 787,488 | 592,455 | |||||||||||||||
Total Assets | $ | 10,645,561 | $ | 10,320,514 | $ | 9,870,529 | $ | 8,166,604 | $ | 6,129,691 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Noninterest-bearing Deposits | $ | 840,765 | $ | 818,985 | $ | 824,959 | $ | 749,262 | $ | 583,229 | ||||||||||
Interest-bearing Deposits | 7,440,136 | 7,138,919 | 6,887,249 | 5,424,348 | 3,864,927 | |||||||||||||||
Total Deposits | 8,280,901 | 7,957,904 | 7,712,208 | 6,173,610 | 4,448,156 | |||||||||||||||
Short-term Borrowings | 17,402 | 17,967 | 32,769 | 31,054 | 2,174 | |||||||||||||||
Securities Sold Under Agreements to Repurchase | 214,411 | 176,357 | 168,303 | 188,339 | 210,115 | |||||||||||||||
Long-term Debt | 567,166 | 639,923 | 736,458 | 681,789 | 536,877 | |||||||||||||||
Other Liabilities | 260,155 | 231,875 | 162,675 | 174,133 | 94,189 | |||||||||||||||
Total Liabilities | 9,340,035 | 9,024,026 | 8,812,413 | 7,248,925 | 5,291,511 | |||||||||||||||
Total Shareholders’ Equity | 1,305,526 | 1,296,488 | 1,058,116 | 917,679 | 838,180 | |||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 10,645,561 | $ | 10,320,514 | $ | 9,870,529 | $ | 8,166,604 | $ | 6,129,691 | ||||||||||
| 2010 | 2009 | |||||||||||||||||||
INCOME STATEMENT | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | |||||||||||||||
Interest Income | $ | 99,818 | $ | 101,217 | $ | 97,620 | $ | 85,538 | $ | 63,554 | ||||||||||
Interest Expense | 29,885 | 31,078 | 28,414 | 27,982 | 22,888 | |||||||||||||||
Net Interest Income | 69,933 | 70,139 | 69,206 | 57,556 | 40,666 | |||||||||||||||
Provision for Loan Losses | 5,128 | 12,899 | 13,201 | 9,260 | 25,295 | |||||||||||||||
Net Interest Income After Provision for Loan Losses | 64,805 | 57,240 | 56,005 | 48,296 | 15,371 | |||||||||||||||
Total Noninterest Income | 36,781 | 30,704 | 28,353 | 196,353 | 81,234 | |||||||||||||||
Total Noninterest Expense | 80,371 | 75,775 | 67,000 | 75,114 | 54,540 | |||||||||||||||
Income Before Income Taxes | 21,215 | 12,169 | 17,358 | 169,535 | 42,065 | |||||||||||||||
Income Taxes | 7,275 | 3,329 | 4,354 | 60,633 | 17,113 | |||||||||||||||
Net Income | $ | 13,940 | $ | 8,840 | $ | 13,004 | $ | 108,902 | $ | 24,952 | ||||||||||
Preferred Stock Dividends | — | — | — | — | — | |||||||||||||||
Earnings Available to Common Shareholders - Basic | $ | 13,940 | $ | 8,840 | $ | 13,004 | $ | 108,902 | $ | 24,952 | ||||||||||
Earnings Allocated to Unvested Restricted Stock | (288 | ) | (189 | ) | (252 | ) | (2,717 | ) | (608 | ) | ||||||||||
Earnings Available to Common Shareholders - Diluted | $ | 13,652 | $ | 8,651 | $ | 12,752 | $ | 106,185 | $ | 24,344 | ||||||||||
Earnings Per Share, basic | $ | 0.52 | $ | 0.33 | $ | 0.60 | $ | 5.27 | $ | 1.23 | ||||||||||
Earnings Per Share, diluted | $ | 0.52 | $ | 0.33 | $ | 0.59 | $ | 5.23 | $ | 1.22 | ||||||||||
Book Value Per Share | $ | 48.37 | $ | 48.31 | $ | 48.29 | $ | 46.04 | $ | 41.41 | ||||||||||
Return on Average Assets | 0.52 | % | 0.34 | % | 0.53 | % | 5.29 | % | 1.62 | % | ||||||||||
Return on Average Common Equity | 4.24 | % | 2.73 | % | 4.98 | % | 46.93 | % | 11.77 | % | ||||||||||
Return on Average Tangible Common Equity | 5.64 | % | 3.73 | % | 6.94 | % | 66.25 | % | 17.26 | % | ||||||||||
IBERIABANK CORPORATION
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
LOANS RECEIVABLE | September 30, | June 30, 2010 | December 31, 2009 | |||||||||||||||||
| 2010 | 2009 | % Change | ||||||||||||||||||
Residential Mortgage Loans: | ||||||||||||||||||||
Residential 1-4 Family | $ | 647,657 | $ | 519,601 | 24.6 | % | $ | 767,502 | $ | 975,395 | ||||||||||
Construction/ Owner Occupied | 14,564 | 19,737 | (26.2 | %) | 23,251 | 32,857 | ||||||||||||||
Total Residential Mortgage Loans | 662,221 | 539,338 | 22.8 | % | 790,753 | 1,008,252 | ||||||||||||||
Commercial Loans: | ||||||||||||||||||||
Real Estate | 2,483,420 | 1,808,787 | 37.3 | % | 2,484,828 | 2,500,433 | ||||||||||||||
Business | 1,415,088 | 1,005,862 | 40.7 | % | 1,348,217 | 1,217,326 | ||||||||||||||
Total Commercial Loans | 3,898,508 | 2,814,649 | 38.5 | % | 3,833,045 | 3,717,759 | ||||||||||||||
Consumer Loans: | ||||||||||||||||||||
Indirect Automobile | 266,859 | 267,801 | (0.4 | %) | 268,936 | 259,339 | ||||||||||||||
Home Equity | 821,608 | 525,721 | 56.3 | % | 722,272 | 649,821 | ||||||||||||||
Automobile | 30,511 | 30,782 | (0.9 | %) | 30,640 | 30,552 | ||||||||||||||
Credit Card Loans | 42,370 | 42,527 | (0.4 | %) | 42,301 | 44,561 | ||||||||||||||
Other | 69,301 | 78,027 | (11.2 | %) | 72,603 | 74,081 | ||||||||||||||
Total Consumer Loans | 1,230,649 | 944,858 | 30.2 | % | 1,136,752 | 1,058,354 | ||||||||||||||
Total Loans Receivable | 5,791,378 | 4,298,845 | 34.7 | % | 5,760,550 | 5,784,365 | ||||||||||||||
Allowance for Loan Losses | (131,954 | ) | (48,787 | ) | (96,000 | ) | (55,768 | ) | ||||||||||||
Loans Receivable, Net | $ | 5,659,424 | $ | 4,250,058 | $ | 5,664,550 | $ | 5,728,597 | ||||||||||||
ASSET QUALITY DATA | September 30, | June 30, 2010 | December 31, 2009 | |||||||||||||||||
| 2010 | 2009 | % Change | ||||||||||||||||||
Nonaccrual Loans | $ | 871,353 | $ | 123,304 | 606.7 | % | $ | 870,153 | $ | 893,441 | ||||||||||
Foreclosed Assets | 173 | 55 | 213.8 | % | 12 | 35 | ||||||||||||||
Other Real Estate Owned | 57,322 | 22,906 | 150.2 | % | 45,831 | 74,056 | ||||||||||||||
Accruing Loans More Than 90 Days Past Due | 43,593 | 4,698 | 828.0 | % | 113,891 | 43,952 | ||||||||||||||
Total Nonperforming Assets | $ | 972,441 | $ | 150,963 | 544.2 | % | $ | 1,029,887 | $ | 1,011,485 | ||||||||||
Nonperforming Assets to Total Assets | 9.21 | % | 2.33 | % | 294.5 | % | 9.93 | % | 10.43 | % | ||||||||||
Nonperforming Assets to Total Loans and OREO | 16.6 | % | 3.49 | % | 375.9 | % | 17.74 | % | 17.27 | % | ||||||||||
Allowance for Loan Losses to Nonperforming Loans(1) | 14.4 | % | 38.1 | % | (62.2 | %) | 9.8 | % | 5.9 | % | ||||||||||
Allowance for Loan Losses to Nonperforming Assets | 13.6 | % | 32.3 | % | (58.0 | %) | 9.3 | % | 5.5 | % | ||||||||||
Allowance for Loan Losses to Total Loans | 2.28 | % | 1.14 | % | 100.7 | % | 1.67 | % | 0.96 | % | ||||||||||
Year to Date Charge-offs | $ | 22,638 | $ | 29,892 | (24.3 | %) | $ | 14,596 | $ | 33,267 | ||||||||||
Year to Date Recoveries | (6,103 | ) | (1,554 | ) | 292.8 | % | (3,391 | ) | $ | (2,646 | ) | |||||||||
Year to Date Net Charge-offs | $ | 16,535 | $ | 28,338 | (41.7 | %) | $ | 11,205 | $ | 30,621 | ||||||||||
Quarter to Date Net Charge-offs | $ | 5,330 | $ | 22,980 | (76.8 | %) | $ | 6,111 | $ | 2,283 | ||||||||||
(1) Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due. |
| |||||||||||||||||||
DEPOSITS | September 30, | June 30, 2010 | December 31, 2009 | |||||||||||||||||
| 2010 | 2009 | % Change | ||||||||||||||||||
Noninterest-bearing Demand Accounts | $ | 856,882 | $ | 628,800 | 36.3 | % | $ | 820,254 | $ | 874,885 | ||||||||||
NOW Accounts | 1,254,498 | 959,041 | 30.8 | % | 1,333,120 | 1,351,609 | ||||||||||||||
Savings and Money Market Accounts | 3,013,378 | 1,326,202 | 127.2 | % | 2,808,412 | 2,253,065 | ||||||||||||||
Certificates of Deposit | 3,139,381 | 1,861,690 | 68.6 | % | 3,112,125 | 3,076,589 | ||||||||||||||
Total Deposits | $ | 8,264,139 | $ | 4,775,733 | 73.0 | % | $ | 8,073,911 | $ | 7,556,148 | ||||||||||
IBERIABANK CORPORATION
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Taxable Equivalent Basis
(dollars in thousands)
| For The Quarter Ended | ||||||||||||||||||||||||
| September 30, 2010 | June 30, 2010 | September 30, 2009 | ||||||||||||||||||||||
| Average Balance | Average Yield/Rate (%) | Average Balance | Average Yield/Rate (%) | Average Balance | Average Yield/Rate (%) | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Earning Assets: | ||||||||||||||||||||||||
Loans Receivable: | ||||||||||||||||||||||||
Mortgage Loans | $ | 710,112 | 7.42 | % | $ | 902,597 | 7.26 | % | $ | 501,196 | 5.60 | % | ||||||||||||
Commercial Loans (TE)(1) | 3,918,156 | 5.88 | % | 3,644,349 | 6.22 | % | 2,614,911 | 4.74 | % | |||||||||||||||
Consumer and Other Loans | 1,202,443 | 6.21 | % | 1,069,257 | 6.81 | % | 933,244 | 6.42 | % | |||||||||||||||
Total Loans | 5,830,711 | 6.14 | % | 5,616,203 | 6.50 | % | 4,049,351 | 5.23 | % | |||||||||||||||
Mortgage Loans Held for Sale | 131,944 | 4.26 | % | 82,502 | 4.65 | % | 60,350 | 4.72 | % | |||||||||||||||
Investment Securities (TE)(1)(2) | 1,843,511 | 2.90 | % | 1,573,403 | 3.23 | % | 1,040,275 | 4.03 | % | |||||||||||||||
Other Earning Assets | 1,898,123 | (0.84 | %) | 2,088,590 | (0.05 | %) | 380,080 | 0.24 | % | |||||||||||||||
Total Earning Assets | 9,704,289 | 4.13 | % | 9,360,698 | 4.38 | % | 5,530,056 | 4.66 | % | |||||||||||||||
Allowance for Loan Losses | (92,941 | ) | (63,115 | ) | (45,711 | ) | ||||||||||||||||||
Nonearning Assets | 1,034,213 | 1,022,931 | 645,346 | |||||||||||||||||||||
Total Assets | $ | 10,645,561 | $ | 10,320,514 | $ | 6,129,691 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
NOW Accounts | $ | 1,281,554 | 0.67 | % | $ | 1,347,510 | 0.74 | % | $ | 945,141 | 0.77 | % | ||||||||||||
Savings and Money Market Accounts | 2,953,907 | 1.18 | % | 2,678,399 | 1.54 | % | 1,222,273 | 1.31 | % | |||||||||||||||
Certificates of Deposit | 3,204,675 | 1.71 | % | 3,113,010 | 1.71 | % | 1,697,513 | 2.69 | % | |||||||||||||||
Total Interest-bearing Deposits | 7,440,136 | 1.32 | % | 7,138,919 | 1.46 | % | 3,864,927 | 1.78 | % | |||||||||||||||
Short-term Borrowings | 231,813 | 0.39 | % | 194,324 | 0.40 | % | 212,289 | 0.68 | % | |||||||||||||||
Long-term Debt | 567,166 | 3.35 | % | 639,923 | 3.01 | % | 536,877 | 3.75 | % | |||||||||||||||
Total Interest-bearing Liabilities | 8,239,115 | 1.44 | % | 7,973,166 | 1.56 | % | 4,614,093 | 1.96 | % | |||||||||||||||
Noninterest-bearing Demand Deposits | 840,765 | 818,985 | 583,229 | |||||||||||||||||||||
Noninterest-bearing Liabilities | 260,155 | 231,875 | 94,189 | |||||||||||||||||||||
Total Liabilities | 9,340,035 | 9,024,026 | 5,291,511 | |||||||||||||||||||||
Shareholders’ Equity | 1,305,526 | 1,296,488 | 838,180 | |||||||||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 10,645,561 | $ | 10,320,514 | $ | 6,129,691 | ||||||||||||||||||
Net Interest Spread | $ | 69,933 | 2.70 | % | $ | 70,139 | 2.82 | % | $ | 40,666 | 2.69 | % | ||||||||||||
Tax-equivalent Benefit | 1,769 | 0.07 | % | 2,591 | 0.08 | % | 1,631 | 0.12 | % | |||||||||||||||
Net Interest Income (TE) / Net Interest Margin (TE)(1) | $ | 71,702 | 2.91 | % | $ | 72,730 | 3.05 | % | $ | 42,297 | 3.02 | % | ||||||||||||
| (1) | Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a marginal tax rate of 35%. |
| (2) | Balances exclude unrealized gain or loss on securities available for sale and impact of trade date accounting. |
IBERIABANK CORPORATION
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Taxable Equivalent Basis
(dollars in thousands)
| For The Nine Months Ended | ||||||||||||||||
| September 30, 2010 | September 30, 2009 | |||||||||||||||
| Average Balance | Average Yield/Rate (%) | Average Balance | Average Yield/Rate (%) | |||||||||||||
ASSETS | ||||||||||||||||
Earning Assets: | ||||||||||||||||
Loans Receivable: | ||||||||||||||||
Mortgage Loans | $ | 867,399 | 6.75 | % | $ | 504,817 | 5.63 | % | ||||||||
Commercial Loans (TE)(1) | 3,754,208 | 5.93 | % | 2,439,238 | 4.70 | % | ||||||||||
Consumer and Other Loans | 1,107,893 | 6.49 | % | 917,286 | 6.51 | % | ||||||||||
Total Loans | 5,729,500 | 6.16 | % | 3,861,341 | 5.25 | % | ||||||||||
Mortgage Loans Held for Sale | 88,716 | 4.45 | % | 77,107 | 4.76 | % | ||||||||||
Investment Securities (TE)(1)(2) | 1,653,686 | 3.16 | % | 1,005,094 | 4.36 | % | ||||||||||
Other Earning Assets | 1,879,796 | (0.16 | %) | 219,248 | 0.40 | % | ||||||||||
Total Earning Assets | 9,351,698 | 4.31 | % | 5,162,790 | 4.87 | % | ||||||||||
Allowance for Loan Losses | (70,453 | ) | (43,149 | ) | ||||||||||||
Nonearning Assets | 1,003,918 | 647,334 | ||||||||||||||
Total Assets | $ | 10,285,163 | $ | 5,766,975 | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Interest-bearing Liabilities | ||||||||||||||||
Deposits: | ||||||||||||||||
NOW Accounts | $ | 1,341,581 | 0.72 | % | $ | 934,387 | 0.84 | % | ||||||||
Savings and Money Market Accounts | 2,680,060 | 1.44 | % | 1,110,934 | 1.42 | % | ||||||||||
Certificates of Deposit | 3,132,881 | 1.61 | % | 1,584,666 | 2.90 | % | ||||||||||
Total Interest-bearing Deposits | 7,154,522 | 1.38 | % | 3,629,987 | 1.92 | % | ||||||||||
Short-term Borrowings | 209,297 | 0.39 | % | 190,555 | 0.74 | % | ||||||||||
Long-term Debt | 647,229 | 3.03 | % | 543,699 | 4.01 | % | ||||||||||
Total Interest-bearing Liabilities | 8,011,048 | 1.49 | % | 4,364,241 | 2.13 | % | ||||||||||
Noninterest-bearing Demand Deposits | 828,294 | 569,371 | ||||||||||||||
Noninterest-bearing Liabilities | 224,850 | 84,546 | ||||||||||||||
Total Liabilities | 9,064,192 | 5,018,158 | ||||||||||||||
Shareholders’ Equity | 1,220,971 | 748,817 | ||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 10,285,163 | $ | 5,766,975 | ||||||||||||
Net Interest Spread | $ | 209,278 | 2.82 | % | $ | 115,229 | 2.74 | % | ||||||||
Tax-equivalent Benefit | 6,193 | 0.08 | % | 4,385 | 0.11 | % | ||||||||||
Net Interest Income (TE) / Net Interest Margin (TE)(1) | $ | 215,471 | 3.04 | % | $ | 119,614 | 3.07 | % | ||||||||
| (1) | Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a marginal tax rate of 35%. |
| (2) | Balances exclude unrealized gain or loss on securities available for sale and impact of trade date accounting. |
IBERIABANK CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(dollars in thousands)
| For The Quarter Ended | ||||||||||||
| 9/30/2010 | 6/30/2010 | 9/30/2009 | ||||||||||
Net Interest Income | $ | 69,933 | $ | 70,139 | $ | 40,666 | ||||||
Effect of Tax Benefit on Interest Income | 1,769 | 2,591 | 1,631 | |||||||||
Net Interest Income (TE)(1) | 71,702 | 72,730 | 42,297 | |||||||||
Noninterest Income | 36,781 | 30,704 | 81,234 | |||||||||
Effect of Tax Benefit on Noninterest Income | 391 | 386 | 393 | |||||||||
Noninterest Income (TE)(1) | 37,172 | 31,090 | 81,627 | |||||||||
Total Revenues (TE)(1) | $ | 108,874 | $ | 103,820 | $ | 123,924 | ||||||
Total Noninterest Expense | $ | 80,371 | $ | 75,775 | $ | 54,540 | ||||||
Less Intangible Amortization Expense | (1,316 | ) | (1,269 | ) | (627 | ) | ||||||
Tangible Operating Expense(2) | $ | 79,055 | $ | 74,506 | $ | 53,913 | ||||||
Return on Average Common Equity | 4.24 | % | 2.73 | % | 11.77 | % | ||||||
Effect of Intangibles(2) | 1.40 | % | 1.00 | % | 5.49 | % | ||||||
Return on Average Tangible Common Equity(2) | 5.64 | % | 3.73 | % | 17.26 | % | ||||||
Efficiency Ratio | 75.3 | % | 75.1 | % | 44.7 | % | ||||||
Effect of Tax Benefit Related to Tax Exempt Income | (1.5 | %) | (2.1 | %) | (0.7 | %) | ||||||
Efficiency Ratio (TE)(1) | 73.8 | % | 73.0 | % | 44.0 | % | ||||||
Effect of Amortization of Intangibles | (1.2 | %) | (1.2 | %) | (0.5 | %) | ||||||
Tangible Efficiency Ratio (TE)(1) (2) | 72.6 | % | 71.8 | % | 43.5 | % | ||||||
| (1) | Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a marginal tax rate of 35%. |
| (2) | Tangible calculations eliminate the effect of goodwill and acquisition related intangible assets and the corresponding amortization expense on a tax-effected basis where applicable. |