Iberiabank (IBKC) 8-K IBERIABANK Corporation Reports Second Quarter Results

2Q13 Earnings Conference Call

Supplemental Presentation

2Q13 Earnings Conference Call

Supplemental Presentation

July 23, 2013

July 23, 2013

Exhibit 99.2

Safe Harbor Language

To

the

extent

that

statements

in

this

presentation

and

the

accompanying

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.

Actual

results

could

differ

materially

because

of

factors

such

as

the

level

of

market

volatility,

our

ability

to

execute

our

growth

strategy,

including

the

availability

of

future

FDIC-assisted

failed

bank

opportunities,

unanticipated

losses

related

to

the

integration

of,

and

refinements

to

purchase

accounting

adjustments

for,

acquired

businesses

and

assets

and

assumed

liabilities

in

these

transactions,

adjustments

of

fair

values

of

acquired

assets

and

assumed

liabilities

and

of

deferred

taxes

in

acquisitions,

actual

results

deviating

from

the

Company’s

current

estimates

and

assumptions

of

timing

and

amounts

of

cash

flows,

credit

risk

of

our

customers,

effects

of

the

on-going

correction

in

residential

real

estate

prices

and

reduced

levels

of

home

sales,

sufficiency

of

our

allowance

for

loan

losses,

changes

in

interest

rates,

access

to

funding

sources,

reliance

on

the

services

of

executive

management,

competition

for

loans,

deposits

and

investment

dollars,

reputational

risk

and

social

factors,

changes

in

government

regulations

and

legislation,

increases

in

FDIC

insurance

assessments,

geographic

concentration

of

our

markets

and

economic

conditions

in

these

markets,

rapid

changes

in

the

financial

services

industry,

dependence

on

our

operational,

technological,

and

organizational

systems

or

infrastructure

and

those

of

third-party

providers

of

those

services,

hurricanes

and

other

adverse

weather

events,

the

modest

trading

volume

of

our

common

sock,

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,

subsequent

Quarterly

Reports

on

Form

10-Q,

and

other

filings

with

the

Securities

and

Exchange

Commission

(the

“SEC”),

available

at

the

SEC’s

website,

http://www.sec.gov,

and

the

Company’s

website,

http://www.iberiabank.com,

under

the

heading

“Investor

Information.”

All

information

in

this

presentation

and

the

accompanying

press

release

is

as

of

the

date

of

this

release.

The

Company

undertakes

no

duty

to

update

any

forward-looking

statement

to

conform

to

the

statement

to

actual

results

or

changes

in

the

Company’s

expectations.

Certain

tabular

presentations

may

not

reconcile

because

of

rounding.

2

2

3

•

Operating EPS of $0.80 driven by higher net interest margin, relatively flat operating

expenses and balanced organic loan and core deposit growth

•

Organic loan growth:

•

Core deposit growth:

•

Deployed

$335

million

in

excess

liquidity

through

increased

loan

originations

•

16 basis point net interest margin increase

•

Tax equivalent net interest income increased $4 million or 4% offsetting a $241 million

or 2% decline in average earning assets

•

$2 million loan loss provision -

$3 million provision on legacy portfolio offset by $1

million recovery on the non covered acquired portfolio

Introductory Comments

Second Quarter 2013 –

Summary Comments

$394 million since March 31, 2013 (+21% annualized)

$1.7 billion since year-end 2011 (+18% annualized)

$66 million since March 31, 2012 (+3% annualized)

$1.7 billion since year-end 2011 (+16% annualized)

12 bps due to deployment of excess liquidity into loans

5 bps due to decline in deposit costs

4

Financial Overview

Financial Overview

Performance Metrics –

Yields and Costs

•

Investment yield unchanged

at 1.92%

•

Net covered loan yield

declined 24 bps due to

lower income and higher

covered loan balances;

decline in non-covered loan

yield of 4 bps

•

Average noninterest bearing

deposits up $72 million

(15% annualized)

•

Margin improved 16 bps to

3.39%;

•

12 bps due to deployment of

low yielding excess liquidity

into higher yielding loans

•

Interest bearing deposit costs

declined 5 bps

3/31/2013

6/30/2013

Investment Securities

1.92%

1.92%

(0)

bps

Covered Loans & Loss Share Receivable

5.35%

5.11%

(24)

bps

Noncovered Loans

4.44%

4.40%

(4)

bps

Loans & Loss Share Receivable

4.36%

4.35%

(1)

bps

Mortgage Loans Held For Sale

2.97%

3.17%

20

bps

Other Earning Assets

0.52%

0.87%

35

bps

  Total Earning Assets

3.70%

3.80%

10

bps

Interest Bearing Deposits

0.47%

0.42%

(5)

bps

Short-Term Borrowings

0.19%

0.16%

(3)

bps

Long-Term Borrowings

3.16%

3.39%

23

bps

  Total Interest Bearing Liabilities

0.58%

0.51%

(7)

bps

Net Interest Spread

3.12%

3.29%

17

bps

Net Interest Margin

3.23%

3.39%

16

bps

(1)

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

Basis Point

Change

For Quarter Ended:

5

Financial Overview

Non-Interest Income Trends

•

Gains on sale of investments decreased $2.4 million or 102%

•

Mortgage loan income declined $1.2 million or  6%

•

Title insurance income increased $0.7 million, or 13%

•

Increased brokerage commissions of $0.3 million or 9%

•

Deposit service charge income increased $0.3 million, or 5%,

from 1Q13

2Q13 originations up 23% from 1Q13

Refinancings were 31% of production,

down from 40% in 1Q13

Sales up 11% in 2Q13 and up 27% over

2Q13

$18 million in 2Q13 revenues (down 6%)

due to pipeline valuations

Margins declined slightly; Small buyback

costs

Pipeline of $265 million at quarter-end

and $270 million on July 12    (+6%)

Noninterest Income ($000s)

2Q12

3Q12

4Q12

1Q13

2Q13

$ Change

% Change

Service Charges on Deposit Accounts

6,625

$   

6,952

$   

7,295

$   

6,797

$   

7,106

$   

309

$        

5%

ATM / Debit Card Fee Income

2,166

2,377

2,412

2,183

2,357

174

8%

BOLI Proceeds and CSV Income

905

916

909

939

901

(38)

-4%

Mortgage Income

18,185

23,215

22,935

18,931

17,708

(1,223)

-6%

Gain (Loss) on Sale of Investments, Net

901

41

(4)

2,359

(57)

(2,416)

-102%

Title Revenue

5,339

5,623

5,492

5,021

5,696

675

13%

Broker Commissions

3,102

3,092

4,192

3,534

3,863

329

9%

Other Noninterest Income

4,471

4,337

4,928

4,727

4,915

188

4%

Noninterest income excluding non-operating income

41,694

46,553

48,158

44,491

42,489

(2,002)

-5%

Non-operating income

-

-

2,196

-

-

-

-

Total Noninterest Income

41,694

$ 

46,553

$

50,354

$

44,491

$

42,489

$

(2,002)

$    

-5%

2Q13 vs. 1Q13

th

6

Financial Overview

Non-Interest Expense

•

Noninterest expenses excluding non-operating items

flat as compared to 1Q13

•

Total expenses down $28 million, or 19%, in 2Q13

•

Occupancy and branch closure costs up $5 million

•

No merger-related costs incurred, down $0.2 million

from 1Q13

Linked quarter increases/(decreases) of:

Mortgage commissions

1.8

$  

mil.

Severance expense

1.6

Litigation

0.2

FHLB debt extinguishment

(2.3)

OREO expense

(0.6)

Occupancy expense

(0.5)

0.2

$  

Noninterest Expense ($000s)

2Q12

3Q12

4Q12

1Q13

2Q13

$ Change

% Change

Mortgage Commissions

5,612

$      

6,006

$      

5,747

$      

4,327

$      

6,127

$      

1,800

$      

42%

Hospitalization Expense

3,404

3,773

4,005

4,407

3,994

(413)

-9%

Other Salaries and Benefits

48,011

49,270

50,675

53,668

53,694

26

0%

Salaries and Employee Benefits

57,028

$   

59,049

$   

60,426

$   

62,402

$   

63,815

$   

1,413

$      

2%

Credit/Loan Related

4,835

4,846

4,386

3,739

4,168

429

11%

Occupancy and Equipment

12,852

13,500

14,413

14,774

14,321

(453)

-3%

Amortization of Acquisition Intangibles

1,289

1,287

1,285

1,183

1,181

(2)

0%

All Other Noninterest Expense

27,105

26,611

30,328

28,050

26,681

(1,369)

-5%

Nonint. Exp. (Ex-Non-Operating Exp.)

103,109

$ 

105,293

$ 

110,838

$ 

110,148

$ 

110,166

$ 

18

$           

0%

Severance

1,053

712

370

97

1,670

1,573

1616%

Occupancy and Branch Closure Costs

2,743

284

711

375

4,925

4,550

1214%

Impairment of Indemnification Asset

-

-

-

31,813

-

(31,813)

-100%

Debt Prepayment

-

-

-

2,307

-

(2,307)

-100%

Termination of Debit Card Rewards Program

-

-

-

-

450

450

100%

Consulting and Professional

1,661

574

339

-

150

150

100%

Merger-Related Expenses

456

2,985

1,183

157

-

(157)

-100%

Total Noninterest Expense

109,022

$ 

109,848

$ 

113,441

$ 

144,898

$ 

117,361

$ 

(27,536)

$  

-19%

Tangible Efficiency Ratio - excl Nonop Exp

74.4%

71.2%

72.5%

76.0%

74.2%

2Q13 vs. 1Q13

7

Financial Overview

Non-Operating Items

•

Amortization of indemnification asset of $5.0 million in 2Q13 ($0.11 EPS)

•

Branch closure expense of $4.9 million in 2Q13 ($0.11 EPS)

•

2Q13 Severance expense of $1.7 million ($0.04 EPS)

(1)

Per share amounts may not appear to foot due to rounding

(2)

After-tax amounts estimated based on a 35% marginal tax rate

(3)

Includes the impact of the adoption of ASU 2012-06 in the three-month periods ending June 30, 2013 and March 31, 2013

(4)

Adjustments represent additonal amortization on the Company's loss share receivable due to the adoption of ASU 2012-06 for the three month-periods ending June 30, 2013 and

March 31, 2013.  The amounts  included above represents the incremental amortization as calculated using the yield on the covered portfolio for the three month period ending

December 31, 2012. The Company expects the additional  amortization (calculated on the same basis as the amount above) over the next four quarters to be as follows:

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(1)

(dollars in thousands)

8

Financial Overview

Performance Metrics –

Quarterly Trends

•

Average earning

assets down $241

million (-2%)

•

T/E net interest

income up $4

million (+4%)

•

Provision of $2

million:

•

Net charge-offs:

$1.1 million (0.05%

annualized rate)

•

Non covered

acquired loan loss

provision reversal:

$1.5 million

•

All other

provision: $3.3

million

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

Net Income ($ in thousands)

12,560

$ 

21,234

$ 

23,208

$   

717

$       

15,590

$ 

2074%

Per Share Data:

Fully Diluted Earnings

0.43

$      

0.73

$      

0.79

$        

0.02

$      

0.53

$      

2011%

Operating Earnings (Non-GAAP)

(1)

0.54

0.83

0.80

0.86

0.80

-7%

Pre-provision Operating Earnings  (Non-GAAP)

0.73

0.92

0.91

0.66

0.73

10%

Tangible Book Value

37.28

37.07

37.34

36.93

36.30

-2%

Key Ratios:

Return on Average Assets

0.43%

0.69%

0.73%

0.02%

0.49%

46

bps

Return on Average Common Equity

3.36%

5.56%

6.02%

0.19%

4.09%

390

bps

Return on Average Tangible Common Equity (Non-GAAP)

4.86%

7.91%

8.62%

0.55%

5.96%

541

bps

Net Interest Margin (TE)

(2)

3.59%

3.58%

3.55%

3.23%

3.39%

16

bps

Tangible Efficiency Ratio (TE)

(2)

(Non-GAAP)

78.2%

74.3%

73.2%

102.4%

81.9%

(2,051)

bps

Tangible Common Equity Ratio (Non-GAAP)

9.37%

9.01%

8.66%

8.75%

8.69%

(6)

bps

Tier 1 Leverage Ratio

10.42%

10.01%

9.70%

9.37%

9.59%

22

bps

Tier 1 Common Ratio (Non-GAAP)

12.97%

12.04%

11.74%

11.39%

11.08%

(31)

bps

Total Risk Based Capital Ratio

15.54%

14.54%

14.19%

13.80%

13.45%

(35)

bps

Net Charge-Offs to Average Loans

(3)

0.07%

0.11%

0.01%

0.06%

0.05%

(1)

bps

Nonperforming Assets to Total Assets

(3)

0.84%

0.81%

0.85%

0.83%

0.86%

3

bps

(1)

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

(2)

Fully taxable equivalent basis.

(3)

Excluding FDIC Covered Assets and acquired impaired loans.

%/Basis Point

Change

For Quarter Ended:

9

Interest Rate Risk

Quarterly Re-pricing Schedule

•

$1.7 Billion in time deposits re-price over next 12 months at weighted average 0.68% rate

•

During 2Q13, new and re-priced time deposits were booked at an average cost of 0.32%

•

In 2Q13, retention rate of  time deposits was 83% with average reduction in rate of 25 basis points

$ in millions

Note:  Amounts exclude re-pricing of assets and liabilities from prior quarters

Excludes FDIC loans and receivable, non-accrual loans and market value adjustments

3Q13

4Q13

1Q14

2Q14

3Q14

Cash Equivalents

Balance

162.2

$      

-

$         

-

$         

-

$         

-

$         

Rate

1.28%

0.00%

0.00%

0.00%

0.00%

Investments

Balance

101.5

$      

85.1

$       

82.9

$       

83.2

$       

83.7

$       

Rate

2.83%

2.79%

2.59%

2.84%

3.04%

Fixed Rate Loans

Balance

337.2

$      

247.7

$      

237.0

$      

233.6

$      

207.6

$      

Rate

5.30%

5.15%

5.12%

5.09%

5.08%

Variable Rate Loans

Balance

3,736.7

$   

16.7

$       

16.8

$       

24.1

$       

4.0

$         

Rate

3.34%

4.30%

4.46%

4.61%

4.68%

Held for Sale Loans

Balance

162.0

$      

-

$         

-

$         

-

$         

-

$         

Rate

2.85%

0.00%

0.00%

0.00%

0.00%

Time Deposits

Balance

609.4

$      

419.9

$      

374.1

$      

250.7

$      

79.8

$       

Rate

0.52%

0.76%

0.85%

0.66%

0.84%

Repos

Balance

289.4

$      

-

$         

-

$         

-

$         

-

$         

Rate

0.15%

0.00%

0.00%

0.00%

0.00%

Borrowed Funds

Balance

135.0

$      

1.0

$         

0.8

$         

1.6

$         

8.8

$         

Rate

3.47%

4.20%

3.92%

4.15%

4.51%

10

Interest Rate Risk

Simulations

Source: Bancware model, as of June 30, 2013

* Assumes instantaneous and parallel shift in interest rates based on static balance sheet

•

Asset sensitive from an interest rate risk position

•

The degree of asset sensitivity is a function of the reaction of

competitors to changes in deposit pricing

•

Forward curve has a slightly positive impact over 12 months

Base

Blue

Forward

Change In:

-200 bp*

-100 bp*

Case

+100 bp*

+200 bp*

Chip

Curve

Net Interest

Income

-4.4%

-1.7%

0.0%

3.3%

6.8%

0.1%

0.9%

Economic

Value of

Equity

-15.5%

-13.5%

0.0%

4.7%

8.3%

0.0%

0.0%

11

Operating Improvement Initiative

Composition of Expected Benefits –

Updated for 2Q13

Expense Initiatives

Compensation

Branch closures

Other reductions

Branch closings

Closing 11 branch offices 

(+2 branches from 1Q13)

Contracts

Consumer products

IT Maintenance

Consulting

Marketing & Technology

Telephone

Other Items

Business travel

Occupancy expense

Professional services

Revenue Enhancements

Loan related fee income

Mortgage mandatory delivery

Increased origination activity

Service fees

$ in millions

$20.8 million pre-tax net benefit

realized in 2014 and beyond

40% of initiatives, representing

34% of total benefits, were

completed through June 2013

Salary & Benefits

40%

Branch Closings

18%

Contracts

13%

Marketing & Technology

7%

Other Expense

13%

  Total Expense

92%

Revenue Enhancements

8%

100%

12

Operating Improvement Initiative

Timing

of Expected Net Benefits

$ in thousands

$20.8 million annual pre-tax earnings run-rate improvement by 1Q14

92% expense reductions

8% revenue improvements

Aggregate

anticipated

$8.0

million

pre-tax

implementation

costs

–

up

from

$3.9

million in 1Q13

91% or $7.0 million of total implementation costs were incurred in 2Q13

Net benefit of $3.8 million in 2013

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2013

2014

2015

Actual

Estimated

Estimated

Estimated

Estimated

Estimated

Estimated

Estimated

Estimated

Estimated

Estimated

Expense Reductions

:

Branch closings

$585

$749

$951

$951

$951

$951

$951

$951

$2,286

$3,806

$3,806

Contracts

$229

$359

$490

$645

$645

$645

$645

645

1,078

2,580

2,580

Marketing & Technology

$63

$190

$236

$236

$236

$236

$236

236

490

945

945

Other expense

$436

$1,048

$1,196

$896

$896

$896

$896

$896

2,680

3,583

3,583

Salary & benefits

$1,056

$1,628

$2,018

$2,078

$2,078

$2,078

$2,078

2,078

4,702

8,310

8,310

$2,369

$3,974

$4,892

$4,806

$4,806

$4,806

$4,806

$4,806

$11,235

$19,224

$19,224

Revenue improvements

-

213

389

389

389

389

389

389

601

1,555

1,555

Total earnings enhancement

$2,369

$4,186

$5,280

$5,195

$5,195

$5,195

$5,195

$5,195

$11,836

$20,779

$20,779

Implementation cost

(7,037)

(1,000)

-

-

-

-

-

-

(8,036)

-

-

Net Benefit

($4,667)

$3,187

$5,280

$5,195

$5,195

$5,195

$5,195

$5,195

$3,800

$20,779

$20,779

Impact to Full Year

Quarterly Impact:

13

Asset Quality

Non-Performing Assets Trends

$ in thousands

14

Asset Quality

Legacy Portfolio

Asset Quality Summary

(Excludes FDIC covered assets and acquired impaired loans)

•

NPAs equated to 0.86%

of total assets, up 3 bps

compared to 1Q13

•

$183 million in classified

assets (-14% from

1Q13)

•

$108 million special

mention loans (-3% from

1Q13)

•

Net charge-offs of $1.0

million or an annualized

rate of 0.05% of

average loans

•

$3.3 million provision for

legacy franchise in

2Q13

     ($ thousands)

6/30/2012

3/31/2013

6/30/2013

Nonaccrual Loans

66,545

$     

66,659

$     

71,556

$     

8%

7%

OREO

18,681

26,515

25,893

39%

-2%

Accruing Loans 90+ Days Past Due

1,275

2,827

2,118

66%

-25%

Nonperforming Assets

86,501

96,001

99,567

15%

4%

Past Due Loans

84,653

85,398

93,872

11%

10%

Classified Loans

200,872

213,589

183,414

-9%

-14%

Nonperforming Assets/Assets

0.84%

0.83%

0.86%

2

bps

3

bps

NPAs/(Loans + OREO)

1.33%

1.27%

1.25%

(8)

bps

(2)

bps

Classified Assets/Total Assets

1.94%

1.84%

1.59%

(35)

bps

(25)

bps

(Past Dues & Nonaccruals)/Loans

1.30%

1.13%

1.18%

(12)

bps

5

bps

Provision For Loan Losses

4,271

$       

(3,941)

$      

3,344

$       

-22%

-185%

Net Charge-Offs/(Recoveries)

1,102

1,170

1,029

-7%

-12%

Provision Less Net Charge-Offs

3,169

$       

(5,111)

$      

2,315

$       

-27%

-145%

Net Charge-Offs/Average Loans

0.07%

0.06%

0.05%

(2)

bps

(1)

bps

Allowance For Loan Losses/Loans

1.23%

0.99%

0.84%

(39)

bps

(15)

bps

Allowance For Credit Losses/Loans

1.23%

0.99%

0.97%

(26)

bps

(2)

bps

For Quarter Ended:

% or Basis Point Change

Year/Year

Qtr/Qtr

15

Asset Quality

Total Portfolio Trends

     ($thousands)

Nonaccruals

625,938

$ 

463,075

$ 

409,775

$ 

-35%

-12%

OREO & Foreclosed

129,917

131,836

129,607

0%

-2%

90+ Days Past Due

8,270

5,697

4,126

-50%

-28%

  Nonperforming Assets

764,126

$ 

600,608

$ 

543,508

$ 

-29%

-10%

NPAs/Assets

6.30%

4.63%

4.24%

(206)

bps

(39)

bps

NPAs/(Loans + OREO)

9.71%

6.87%

6.02%

(369)

bps

(85)

bps

LLR/Loans

2.42%

2.21%

1.83%

(59)

bps

(38)

bps

ACL/Loans

2.42%

2.21%

1.95%

(47)

bps

(26)

bps

Net Charge-Offs/Loans

0.06%

0.06%

0.05%

(1)

bps

(1)

bps

Past Dues:

30-89 Days Past Due

46,391

$   

33,227

$   

35,204

$   

-24%

6%

90+ days Past Due

8,270

5,697

4,126

-50%

-28%

Nonaccual Loans

625,938

463,075

409,775

-35%

-12%

Total 30+ Past Dues

680,599

$ 

501,999

$ 

449,105

$ 

-34%

-11%

% Loans

8.80%

5.84%

5.04%

(376)

(80)

Total Portfolio

2Q12

1Q13

2Q13

% or Basis Point Change

Year/Year

Qtr/Qtr

16

Markets

Loan Growth

Organic Loan Growth

$ in millions

*

Organic

loan

growth

excludes

the

outstanding

balance

of

loans

acquired

in

non-covered

transactions

(e.g.,

OMNI,

Cameron,

and Florida Gulf) at the date of the acquisition in the respective acquisition periods

2nd Quarter 2013:

•

$394 million, or

+5% (+21%

annualized)

Since YE 2011:

•

$1.7 billion, or

+28% (+19%

annualized)

Since YE 2009:

•

$2.8 billion, or

+69% (+20%

annualized)

•

The FDIC

covered loan

portfolio declined

45%, or $752

million (13%

annualized rate)

17

Markets

Net Loan Growth By State –

2Q13

$ in millions

Excludes covered loan portfolio

18

Markets

Quarterly Organic Loan Growth

*Organic loan growth excludes the outstanding balance of  loans acquired in all transactions at the date of the acquisition in the respective acquisition periods

•

First quarter of each year tends

to exhibit slower loan growth

than other quarters

19

Markets

Loan Originations 2Q13 –Top Markets

$ in millions

•

$1.2 billion in total

funded loans and

unfunded loan

commitments

originated in 2Q13

•

Significant growth in

Houston, New

Orleans, Lafayette,

Birmingham and Baton

Rouge

•

Continued growth in

other markets in which

we have invested

heavily

Loan commitments and originations include renewals

20

Excludes acquired deposits

Organic Deposit Growth

•

Core deposit growth

of $66 million, or

+0.08% (+3%

annualized)

•

Decrease of $45

million, or -0.4% in

2Q13 (-2%

Annualized)

•

$84 million (4%)

growth in NIB deposits

for 2Q13

•

$110 million (5%)

decline in time

deposits in 2Q13

Total Deposit Growth

Markets

Organic Deposit Growth

$ in millions

2nd Quarter 2013:

21

Markets

Non-Interest Bearing Deposit Accounts

•

Strong account growth in

high-focus markets

22

Markets

Noninterest Bearing Deposits

% of Total Deposits

•

Since 2010, total

noninterest bearing

deposits have

increased $1.2 billion

or +134% (+54%

annualized rate)

•

Strong growth in 2Q13;

+$84 million on a

linked quarter basis

(17% annualized rate)

•

Top 2Q13 noninterest

bearing deposit growth

markets include

Houston, New Orleans,

Birmingham, and

Baton Rouge

Noninterest bearing deposits at period-end

23

Markets

2Q13 Highlights

•

Loan pricing and structure remain competitive for target commercial and

business banking clients.

•

Houston, New Orleans, Acadiana, Birmingham and Baton Rouge showed

strong commercial loan originations

•

Loans and commitments originated during 2Q13 of $1.2 billion with 50% fixed

rate and 50% floating rate

•

Commercial loans originated and funded in 2Q13 totaled $499 million with a

mix of 35% fixed and 65% floating ($826 in commercial loan commitments

during the quarter)

•

Strong commercial pipeline of $738 million at quarter-end

•

Small business loan originations, including lines of credit, grew $87 million or

13% in 2Q13 (50% annualized)

•

Period-end core deposit growth of $66 million, with non-interest bearing

deposits up $84 million ($72 million linked quarter growth on an

average

balance basis)

24

Retail and Small Business

2Q13 Progress

•

Completed closure and consolidation of 3 branches in the second quarter of 2013, as

planned, with another 10 branches to be closed in the third quarter.

•

Balanced loan growth with Small Business, Consumer and Mortgage accounting for 46%

of total bank-wide loan growth:

•

Small Business of $61 million

•

Indirect of $10 million

•

Direct Consumer and Mortgage of $108 million

•

Small Business account growth decreased 5% on a linked quarter basis and

increased 16% from 2Q12

•

Consumer accounts growth decreased 7% on a linked quarter basis and up 38%

from 2Q12

•

Continued emphasis on branch efficiency, productivity and enhanced digital delivery,

with Retail staffing mid July down 7.8% from end of first qtr, with staff costs down 6.7%.

FTEs and staff costs to decline further in 3rd qtr with branch closures.

•

Continued investment with the addition of 4 new business bankers

during the 2nd quarter

•

Checking account growth in new accounts remains strong, with account openings off

slightly from prior quarter:

25

Wealth And Capital Markets

2Q13 Progress

•

ICP/IWA revenues

of $3.0 million (up

3% compared to

1Q13 and up 46%

from 2Q12)

•

ICP currently

provides research

coverage on 72

public energy

companies

•

IWA assets under

management

increased 1%, to

$1.1 billion at June

30, 2013

Appendix

26

27

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

$0

$200

$400

$600

$800

$1,000

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Projected Average Loan Balances and Net Yields

Projected Average Balance

Projected Net Yield

Appendix

Expected Amortization Comparison

28

Appendix

Expected Amortization Comparison

$(30.00)

$(25.00)

$(20.00)

$(15.00)

$(10.00)

$(5.00)

$-

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Millions

Indemnification Asset Expected Amortization ($ in Millions)

Current Method

Legacy Method

29

Appendix

FDIC Covered Loan Portfolio Roll Forward

Average

Income /

Expense

Average

Yield

Average

Income /

Expense

Average

Yield

Average

Income /

Expense

Average

Yield

Average

Income /

Expense

Average

Yield

Covered Loans

1,153,954

55,400

18.878%

1,112,153

49,550

17.528%

1,039,469

41,607

16.047%

954,555

30,324

12.619%

Mortgage Loans

169,580

5,306

12.517%

155,989

5,318

13.636%

180,902

4,398

9.724%

170,420

4,135

9.706%

Indirect Automobile

(0)

-

0.000%

(0)

-

0.000%

(0)

-

0.000%

-

-

0.000%

Credit Card

853

14

6.746%

860

14

6.664%

824

13

6.565%

789

14

7.147%

Consumer

149,877

5,282

14.020%

148,001

5,308

14.267%

130,960

3,509

10.867%

126,164

2,594

8.248%

Line Of Credit-Consumer Loans

72,598

3,462

18.971%

69,910

3,661

20.831%

41,802

3,200

31.044%

40,543

2,967

29.355%

Commercial & Business Banking

761,048

41,335

21.257%

737,394

35,250

18.706%

684,981

30,487

17.803%

616,642

20,613

13.224%

Loans in Process

(3)

-

0.000%

(1)

-

0.000%

(1)

-

0.000%

(3)

-

0.000%

Overdrafts

0

-

0.000%

0

-

0.000%

0

-

0.000%

0

-

0.000%

FDIC Loss Share Receivable

448,746

(33,488)

-29.201%

411,328

(28,201)

-26.828%

384,319

(27,702)

-28.832%

268,700

(18,130)

-26.692%

Net Covered Loan Portfolio

1,602,700

21,912

7.596%

1,523,481

21,349

7.678%

1,423,788

13,905

5.351%

1,223,255

12,194

5.110%

Average

Income /

Expense

Average

Yield

Average

Income /

Expense

Average

Yield

Average

Income /

Expense

Average

Yield

Average

Income /

Expense

Average

Yield

Covered Loans

1,153,954

55,400

18.878%

1,112,153

49,550

17.528%

1,039,469

41,607

16.047%

954,555

30,324

12.619%

CapitalSouth Bank

169,584

6,480

15.034%

150,872

6,737

17.537%

138,793

4,109

11.855%

131,981

3,610

10.852%

Orion Bank

651,176

35,154

21.221%

641,252

29,720

18.235%

597,706

25,287

16.960%

548,977

17,685

12.789%

Century Bank

244,874

8,047

12.967%

232,967

7,137

12.108%

219,726

6,401

11.703%

199,836

4,943

9.869%

Sterling Bank

88,322

5,718

25.371%

87,063

5,956

26.806%

83,245

5,810

27.941%

73,762

4,087

21.956%

FDIC Loss Share Receivable

448,746

(33,488)

-29.201%

411,328

(28,201)

-26.828%

384,319

(27,702)

-28.832%

268,700

(18,130)

-26.692%

CapitalSouth Bank

40,443

(3,213)

-31.088%

35,811

(3,431)

-37.492%

29,301

(2,388)

-32.596%

18,955

(2,347)

-48.987%

Orion Bank

271,457

(22,983)

-33.130%

251,749

(17,944)

-27.892%

235,594

(17,330)

-29.423%

164,219

(10,492)

-25.277%

Century Bank

101,167

(3,875)

-14.987%

92,076

(3,200)

-13.601%

90,384

(4,100)

-18.146%

65,145

(3,105)

-18.857%

Sterling Bank

35,680

(3,417)

-37.472%

31,691

(3,625)

-44.761%

29,040

(3,884)

-53.502%

20,382

(2,185)

-42.404%

Net Covered Loan Portfolio

1,153,954

21,912

7.596%

1,112,153

21,349

7.678%

1,039,469

13,905

5.351%

954,555

12,194

5.110%

CapitalSouth Bank

169,584

3,267

7.706%

150,872

3,305

8.764%

138,793

1,721

4.961%

131,981

1,262

3.826%

Orion Bank

651,176

12,171

7.477%

641,252

11,776

7.345%

597,706

7,958

5.326%

548,977

7,192

5.240%

Century Bank

244,874

4,173

6.816%

232,967

3,937

6.760%

219,726

2,301

4.188%

199,836

1,837

3.678%

Sterling Bank

88,322

2,301

10.420%

87,063

2,331

10.709%

83,245

1,925

9.252%

73,762

1,903

10.317%

2Q2013

3Q2012

4Q2012

1Q2013

2Q2013

3Q2012

4Q2012

1Q2013