UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
Commission File Number 0-25756
IBERIABANK Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Louisiana 72-1280718
- ------------------------------------------------ ---------------------------------------
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)
2110 West Pinhook Road
Lafayette, Louisiana 70508
- ------------------------------------------------ ---------------------------------------
(Address of principal executive office) (Zip Code)
(337) 267-4458
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ____
---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
The Registrant had 6,255,237 shares of common stock, $1.00 par value, which were
issued and outstanding as of May 10, 2001.
1
IBERIABANK CORPORATION AND SUBSIDIARY
TABLE OF CONTENTS
Part I. Financial Information Page
- ------- --------------------- ----
Item 1. Financial Statements
Consolidated Balance Sheets 3
(As of March 31, 2001 and December 31, 2000)
Consolidated Statements of Income 4
(For the three months ended March 31, 2001 and 2000)
Consolidated Statements of Shareholders' Equity 5
(For the three months ended March 31, 2001 and 2000)
Consolidated Statements of Cash Flows 6
(For the three months ended March 31, 2001 and 2000)
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
Part II. Other Information
- -------- -----------------
Item 1. Legal Proceedings 16
Item 2. Changes in Securities and Use of Proceeds 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 17
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
IBERIABANK CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars in thousands)
Assets
------
March 31, December 31,
2001 2000
----------- ------------
Cash and due from banks $ 29,729 $ 32,000
Interest-bearing deposits in banks 77,700 2,541
----------- ----------
Total cash and cash equivalents 107,429 34,541
Investment securities:
Available for sale, at fair value 190,923 268,223
Held to maturity (fair value of $82,763 and $75,940, respectively) 82,210 76,322
Federal Home Loan Bank stock, at cost 8,108 7,997
Loans held for sale 6,696 3,347
Loans, net of unearned income 937,722 940,525
Allowance for loan losses (10,332) (10,239)
----------- ----------
Loans, net 927,390 930,286
Accrued interest receivable 7,026 9,142
Premises and equipment, net 20,960 21,465
Goodwill and acquisition intangibles 37,997 38,796
Other assets 3,967 6,043
----------- ----------
Total Assets $1,392,706 $1,396,162
=========== ==========
Liabilities and Shareholders' Equity
------------------------------------
Liabilities:
Deposits:
Noninterest-bearing $ 138,887 $ 129,468
Interest-bearing 1,057,374 1,013,719
----------- ----------
Total deposits 1,196,261 1,143,187
Short-term borrowings 2,000 54,000
Securities sold under agreements to repurchase 3,797 0
Accrued interest payable 3,507 5,480
Long-term debt 47,165 60,843
Other liabilities 7,297 5,610
----------- ----------
Total Liabilities 1,260,027 1,269,120
----------- ----------
Shareholders' Equity:
Preferred stock of $1 par value; 5,000,000 shares authorized; -0- shares issued 0 0
Common stock of $1 par value; 25,000,000 shares authorized; 7,380,671 shares issued 7,381 7,381
Additional paid-in capital 69,435 69,231
Retained earnings 80,424 77,963
Unearned common stock held by ESOP (1,928) (2,067)
Unearned common stock held by RRP trust (2,482) (2,587)
Accumulated other comprehensive income 401 (2,293)
Treasury stock, at cost, 1,119,634 and 1,121,934 shares (20,552) (20,586)
----------- ----------
Total Shareholders' Equity 132,679 127,042
----------- ----------
Total Liabilities and Shareholders' Equity $1,392,706 $1,396,162
=========== ==========
See Notes to Consolidated Financial Statements
3
IBERIABANK CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except per share data)
For the Three Months
Ended March 31,
------------------------------------------------
2001 2000
---------------------- --------------------
Interest and Dividend Income:
Loans, including fees $ 20,268 $ 18,358
Investment securities:
Taxable interest and dividends 5,107 6,220
Tax-exempt interest 40 22
Interest-bearing demand deposits 372 55
---------------------- --------------------
Total interest and dividend income 25,787 24,655
---------------------- --------------------
Interest Expense:
Deposits 11,743 10,628
Short-term borrowings 441 814
Securities sold under agreements to repurchase 27 0
Long-term debt 819 842
---------------------- --------------------
Total interest expense 13,030 12,284
---------------------- --------------------
Net interest income 12,757 12,371
Provision for loan losses 714 481
---------------------- --------------------
Net interest income after provision for loan losses 12,043 11,890
---------------------- --------------------
Noninterest Income:
Service charges on deposit accounts 1,969 1,974
ATM fee income 350 301
Gain on sale of loans, net 267 9
Gain on sale of property 0 43
Gain on sale of investments, net (8) 0
Other income 645 832
---------------------- --------------------
Total noninterest income 3,223 3,159
---------------------- --------------------
Noninterest Expense:
Salaries and employee benefits 4,830 5,027
Occupancy and equipment 1,376 1,364
Amortization of acquisition intangibles 798 828
Franchise and shares tax 278 347
Communication and delivery 616 706
Marketing and business development 228 324
Data processing 305 316
Printing, stationery and supplies 205 167
Other expenses 1,083 1,263
---------------------- --------------------
Total noninterest expense 9,719 10,342
---------------------- --------------------
Income before income tax expense 5,547 4,707
Income tax expense 2,056 1,752
---------------------- --------------------
Net Income $ 3,491 $ 2,955
====================== ====================
Earnings per share - basic $ 0.59 $ 0.48
====================== ====================
Earnings per share - diluted $ 0.57 $ 0.48
====================== ====================
See Notes to Consolidated Financial Statements
4
IBERIABANK CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited)
(Dollars in thousands)
Unearned
Unearned Common Accumulated
Additional Common Stock Other Total
Common Paid In Retained Stock Held Held By Comprehensive Treasury Shareholders'
Stock Capital Earnings By ESOP RRP Trust Income Stock Equity
------- --------- --------- ------------ ----------- ------------- -------- --------
Balance, December 31, 1999 $ 7,381 $ 68,749 $ 69,065 $ (2,649) $ (3,024) $ (7,124) $ (15,209) $ 117,189
Comprehensive income:
Net income 2,955 2,955
Change in unrealized gain (loss)
on securities available for sale,
net of deferred taxes (1,952) (1,952)
---------
Total comprehensive income 1,003
Cash dividends declared (1,007) (1,007)
Common stock released by ESOP trust 51 149 200
Common stock earned by participants of
recognition and retention plan trust,
including tax benefit 13 140 153
Common stock acquired by RRP trust 128 (128) 0
Compensation expense on stock option plans 17 17
Treasury stock acquired at cost, 22,000 shares (297) (297)
Stock options exercised 0 0
------- -------- --------- ---------- --------- ---------- --------- ---------
Balance, March 31, 2000 $ 7,381 $ 68,958 $ 71,013 $ (2,500) $ (3,012) $ (9,076) $ (15,506) $ 117,258
======= ======== ========= ========== ========= ========== ========= =========
Balance, December 31, 2000 $ 7,381 $ 69,231 $ 77,963 $ (2,067) $ (2,587) $ (2,293) $ (20,586) $ 127,042
Comprehensive income:
Net income 3,491 3,491
Change in unrealized gain (loss)
on securities available for sale,
net of deferred taxes 2,694 2,694
---------
Total comprehensive income 6,185
Cash dividends declared (1,030) (1,030)
Common stock released by ESOP trust 188 139 327
Common stock earned by participants of
recognition and retention plan trust,
including tax benefit 11 105 116
Treasury stock acquired at cost 0
Stock options exercised 5 34 39
------- -------- --------- ---------- --------- ---------- --------- ---------
Balance, March 31, 2001 $ 7,381 $ 69,435 $ 80,424 $ (1,928) $ (2,482) $ 401 $ (20,552) $ 132,679
======= ======== ========= ========== ========= ========== ========= =========
See Notes to Consolidated Financial Statements
5
IBERIABANK CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
For the Three
Months
Ended March 31,
---------------------------------
2001 2000
---------- ----------
Cash Flows from Operating Activities:
Net income $ 3,491 $ 2,955
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,626 1,675
Provision for loan losses 714 481
Noncash compensation expense 385 322
Loss (Gain) on sale of assets 6 (61)
Loss on sale of investments 8 0
Amortization of premium/discount on (34) 18
investments
Current provision for deferred income taxes 349 0
FHLB stock dividends (111) (104)
Net change in loans held for sale (3,349) 3,851
Other, net 1,697 587
---------- ----------
Net Cash Provided by Operating Activities 4,782 9,724
---------- ----------
Cash Flows From Investing Activities:
Activity in available for sale securities:
Sales 75,723 0
Maturities, prepayments and calls 5,847 9,575
Activity in held to maturity securities:
Maturities, prepayments and calls 3,237 2,069
Purchases (9,120) 0
Decrease (increase) in loans receivable, net 1,841 (35,691)
Proceeds from sale of premises and equipment 0 113
Purchases of premises and equipment (148) (280)
Proceeds from disposition of real estate owned 515 385
---------- ----------
Net Cash (Used In) Provided By Investing Activities 77,895 (23,829)
---------- ----------
Cash Flows From Financing Activities:
Increase (decrease) in deposits 53,074 38,838
Net change in repurchase agreements 3,798 0
Net change in short-term borrowings (52,000) (26,800)
Repayments of long-term debt (13,678) (2,303)
Dividends paid to shareholders (1,022) (959)
Proceeds from sale of treasury stock for stock options excercised 39 0
Payments to repurchase common stock 0 (297)
---------- ----------
Net Cash Provided by (Used In) Financing Activities (9,789) 8,479
---------- ----------
Net (Decrease) Increase In Cash and Cash Equivalents 72,888 (5,626)
Cash and Cash Equivalents at Beginning of Period 34,541 47,713
---------- ----------
Cash and Cash Equivalents at End of Period $ 107,429 $ 42,087
========== ==========
Supplemental Schedule of Noncash Activities:
Acquisition of real estate in settlement of loans $ 341 $ 256
========== ==========
Supplemental Disclosures:
Cash paid for:
Interest on deposits and borrowings $ 15,007 $ 14,497
========== ==========
Income taxes $ 300 $ 30
========== ==========
Income tax refunds $ - $ -
========== ==========
See Notes to Consolidated Financial Statements
6
IBERIABANK CORPORATION AND SUBSIDIARY
Notes to Consolidated Financial Statements
(unaudited)
1. Summary of Significant Accounting Policies
Basis of Financial Statement Presentation
The accompanying consolidated financial statements were prepared in
accordance with the instructions to Form 10-Q, and therefore, do not include
information or footnotes necessary for a complete presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. All normal, recurring adjustments, which, in
the opinion of management, are necessary for a fair presentation of the
financial statements, have been included. These interim financial statements
should be read in conjunction with the audited financial statements and note
disclosures for IBERIABANK Corporation previously filed with the Securities
and Exchange Commission in the Company's Annual Report on Form 10-K for the
year ended December 31, 2000.
Business
The principal business of IBERIABANK Corporation (the "Company") is conducted
through its wholly owned subsidiary, IBERIABANK (the "Bank"), headquartered
in Lafayette, Louisiana. The Bank operates 41 offices in its market areas
located in south central Louisiana, northeast Louisiana and the greater New
Orleans area. The Bank provides a variety of financial services to
individuals and businesses throughout its service area. Primary deposit
products are checking, savings and certificate of deposit accounts and
primary lending products are consumer, commercial and mortgage loans. The
Bank offers discount brokerage services through its wholly owned subsidiary,
Iberia Financial Services, LLC. The Bank also provides insurance services to
its clients through IBERIABANK Insurance Services, LLC, a joint venture
between the Bank and Burch, Marcus, Pool, Krupp, Daniel & Babineaux, Inc.
The Bank is subject to examination and regulation by the Office of Financial
Institutions of the State of Louisiana, which is the Bank's chartering
authority and primary regulator. The Bank is also subject to regulation by
the FDIC and to certain reserve requirements established by the Federal
Reserve Board ("FRB"). As a Louisiana chartered commercial bank, deposits are
insured by the Federal Deposit Insurance Corporation ("FDIC") to the maximum
extent permitted by law. The Bank is a member of the Federal Home Loan Bank
of Dallas ("FHLB").
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary, IBERIABANK, as well as all of the Bank's
subsidiaries. All significant intercompany balances and transactions have
been eliminated in consolidation.
7
2. Loans Receivable
Loans receivable at March 31, 2001 and December 31, 2000 consisted of the
following:
March 31, December 31,
($000) 2001 2000
------------------------------------------------------------------------
Residential mortgage loans:
Residential 1-4 family $ 270,622 $ 279,193
Construction 5,118 7,482
---------- ----------
Total residential mortgage loans 275,740 286,675
---------- ----------
Commercial loans:
Business 81,289 78,986
Real estate 199,283 196,479
---------- ----------
Total commercial loans 280,572 275,465
---------- ----------
Consumer loans:
Home equity 108,339 108,070
Automobile 25,446 25,297
Indirect automobile 209,260 205,143
Credit card loans 9,191 9,559
Other 29,174 30,316
---------- ----------
Total consumer loans 381,410 378,385
---------- ----------
Total loans receivable $ 937,722 $ 940,525
========== ==========
3. Earnings Per Share
Basic earnings per share were based on 5,873,500 weighted average shares
outstanding during the three month period ended March 31, 2001. Diluted
earnings per share were based on 6,126,465 weighted average shares
outstanding during the three month period ended March 31, 2001. For the three
months ended March 31, 2001, the weighted average number of common shares
outstanding excludes (a) the weighted average unreleased shares owned by the
Employee Stock Ownership Plan ("ESOP") of 199,694; (b) the weighted average
shares owned by the Management Recognition Plan and Trust of 185,798 and (c)
the weighted average shares purchased in Treasury Stock of 1,121,678.
8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Form 10-Q may contain certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Examples of
forward-looking statements include, but are not limited to, estimates with
respect to the financial condition, results of operations and business of the
Company that are subject to various factors which would cause actual results
to differ materially from the estimates. These factors include, but are not
limited to, general economic conditions, changes in interest rates, deposit
flows, loan demand, real estate values, and competition; changes in
accounting principles, policies, or guidelines; changes in legislation or
regulation; and other economic, competitive, governmental, regulatory, and
technological factors affecting the Company's operations, pricing, products
and services.
CHANGES IN FINANCIAL CONDITION
------------------------------
General -- At March 31, 2001, the consolidated assets of the Company
totaled $1.4 billion, a decrease of $3.5 million, or 0.2%, from December 31,
2000. The following discussion describes the major changes in the Company's
financial condition during the first quarter of the year.
Cash and Cash Equivalents -- Interest-bearing deposits at other
institutions increased $75.2 million, or 2,957.9%, to $77.7 million at March
31, 2001, compared to $2.5 million at December 31, 2000. Such increase was
due primarily to increased liquidity as a result of deposit growth and the
sale of investment securities detailed below.
Investment Securities Available for Sale -- The Company's investment
securities available for sale decreased $77.3 million, or 28.8%, to $190.9
million at March 31, 2001, compared to $268.2 million at December 31, 2000.
The decrease was due to sales of investment securities of $75.7 million and
prepayments and maturities totaling $5.8 million, which was partially offset
by an increase of $4.1 million in the market value of such securities. During
the first quarter of 2001, a favorable rate environment provided the
opportunity to reduce market risk by selling securities from the Company's
portfolio at a minimal loss. A portion of the funds generated through these
sales were used to reduce borrowings and purchase municipal and short-term
corporate securities. Excess funds are invested overnight and will be used to
fund future loan growth and other purchases of securities. The Company will
continue to monitor market conditions for additional opportunities.
Investment Securities Held to Maturity -- The Company's investment
securities held to maturity increased $5.9 million, or 7.7%, to $82.2 million
at March 31, 2001, compared to $76.3 million at December 31, 2000. This
increase was the result of purchases of $9.1 million, which was partially
offset by prepayments and maturities of $3.2 million.
Loans Held for Sale -- Loans held for sale increased $3.3 million, or
100.1%, to $6.7 million at March 31, 2001 compared to $3.3 million at
December 31, 2000. This group of loans has normally been fixed rate single-
family residential mortgage loans to be sold in the secondary market. The
increase was largely attributable to increased demand by consumers for fixed
rate loans in the current rate environment. In most cases, loans in this
category are sold within thirty days.
Loans Receivable -- Loans, net of unearned income, decreased $2.8 million, or
0.3%, to $937.7 million at March 31, 2001 compared to $940.5 million at
December 31, 2000. Such decrease was primarily the result of a $10.9 million,
or 3.8%, reduction in residential mortgage loans. In addition to normal
mortgage paydowns, there was greater demand by customers for fixed rates on
both new and refinanced mortgage loans. These loans are transferred from the
portfolio into loans held for sale. This decrease was partially offset by
growth in commercial loans of $5.1 million, or 1.9%, and growth in consumer
loans of $3.0 million, or 0.8%. The Company's loan to deposit ratio at March
31, 2001 was 78.4% compared to 82.3% at December 31, 2000.
9
Deposits -- Deposits increased $53.1 million, or 4.6%, to $1.2 billion at
March 31, 2001, compared to $1.1 billion at December 31, 2000. The increase
in deposits is believed to have been largely due to normal cyclical increases
in the first quarter of the year related to income taxes in combination with
the result of increased calling efforts and development of customer
relationships. All deposit categories increased during the first quarter of
the year. Deposit growth consisted of the following: a $19.9 million increase
in savings and money market deposit account balances, a $13.8 million
increase in time deposits, a $10.4 million increase in interest-bearing
checking accounts, a $4.3 million increase in noninterest-bearing checking
accounts, and a $4.7 million increase in other deposit accounts.
Short-term Borrowings -- The Company's short-term borrowings decreased
$52.0 million, or 96.3%, to $2.0 million at March 31, 2001, compared to $54.0
million at December 31, 2000. The decrease in short-term borrowings was the
result of the repayment of $54.0 million of Federal Home Loan Bank short term
advances with a duration of one month or less, which was partially offset by
a $2.0 million loan advance from SunTrust Bank. The decrease in short-term
advances was primarily the result of funding from deposit growth and sales of
investment securities.
Securities Sold Under Agreements to Repurchase (Repo) -- Repos represent
a new cash management tool offered by the Company during the first quarter of
2001 to corporate customers and provide an additional source of liquidity for
the Company. Funds in this category are collateralized by specific
securities owned by the Company. At March 31, 2001, the Company's Repo
balance was $3.8 million.
Long-term Borrowings -- Long-term debt decreased $13.7 million, or 22.5%,
to $47.2 million at March 31, 2001, compared to $60.8 million at December 31,
2000. The decrease in long-term debt was due to the maturity of the Union
Planters Bank line of credit debt of $9.2 million during the current quarter
and normal amortization payments on Federal Home Loan Bank long-term
advances.
Shareholders' Equity -- Total shareholders' equity increased $5.6
million, or 4.4%, to $132.7 million at March 31, 2001, compared to $127.0
million at December 31, 2000. The increase was the result of the Company's
net income of $3.5 million, a $2.7 million increase in accumulated other
comprehensive income, after taxes, $327,000 of common stock released by the
ESOP trust, $116,000 of common stock earned by participants in the
Recognition and Retention Plan, and $39,000 from the sale of treasury stock
for stock options exercised. Such increases were partially offset by cash
dividends of $1.0 million declared on common stock.
RESULTS OF OPERATIONS
---------------------
General -- The Company reported net income of $3.5 million for the three
months ended March 31, 2001, compared to $3.0 million earned during the three
months ended March 31, 2000, an increase of $536,000, or 18.1%. The Company's
net interest income increased $386,000 and noninterest income increased
$64,000 for the same period. The provision for loan losses increased by
$233,000, noninterest expense decreased $623,000 and income tax expense
increased $304,000 during the three months ended March 31, 2001 compared to
the first quarter of 2000.
Net Interest Income -- Net interest income increased $386,000, or 3.1%, to
$12.8 million for the three months ended March 31, 2001, compared to $12.4
million for the three months ended March 31, 2000. The increase was due to a
$1.1 million, or 4.6% increase in interest income, which was offset by a
$746,000, or 6.1% increase in interest expense. The increase in interest
income was the result of a $27.1 million, or 2.2%, increase in the average
balance of earning assets, together with a 24 basis point increase in the
yield earned on earning assets. The increase in interest expense was the
result of a 32 basis point increase in the cost of interest-bearing
liabilities, which was partially offset by a $525,000, or 0.1%, decrease in
the average balance of interest-bearing liabilities. The Company's interest
rate spread and net interest margin amounted to 3.30% and 3.95%,
respectively, during the three months ended March 31, 2001, compared to 3.38%
and 3.90%, respectively, for the comparable period in 2000.
Table 1 presents average balance sheets, net interest income and average
interest rates for the quarterly periods ended March 31, 2001 and 2000.
10
TABLE 1:
Average Balances, Net Interest Income and Interest Yields / Rates
The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest income of the Company from earning
assets and the resultant average yields; (ii) the total dollar amount of
interest expense on interest-bearing liabilities and the resultant average rate,
(iii) net interest income; (iv) net interest spread; and (v) net interest
margin. Information is based on average daily balances during the indicated
periods.
Three Months Ended March 31,
------------------------------------------------------------------------------
2001 2000
-------------------------------------- --------------------------------------
Average Average
Average Yield/ Average Yield/
(Dollars in thousands) Balance Interest Rate(1) Balance Interest Rate(1)
- ------------------------------------------------------------------------------------------- --------------------------------------
Earning assets:
Loans receivable:
Mortgage loans $ 283,034 $ 5,556 7.85% $ 274,799 $ 5,385 7.84%
Commercial loans 275,082 6,111 8.89 243,159 5,507 8.96
Consumer and other loans 376,713 8,538 9.19 337,800 7,412 8.83
---------- ---------- ---------- -------
Total Loans 934,829 20,205 8.70 855,758 18,304 8.55
---------- ---------- ---------- -------
Loans Held for Sale 3,663 63 6.88 2,742 54 7.88
Investment securities 320,611 5,147 6.42 398,006 6,242 6.27
Other earning assets 29,180 372 5.17 4,662 55 4.74
---------- ---------- ---------- -------
Total earning assets 1,288,283 25,787 8.05 1,261,168 24,655 7.81
---------- -------
Less: Allowance for Loan Losses (10,191) (8,765)
Nonearning assets 99,860 102,185
---------- ----------
Total assets $1,377,952 $1,354,588
========== ==========
Interest-bearing liabilities:
Deposits:
Demand deposits $ 264,733 1,620 2.48 $ 251,113 1,426 2.28
Savings deposits 193,338 1,703 3.57 178,039 1,591 3.59
Certificates of deposits 576,876 8,420 5.92 577,336 7,611 5.30
---------- ---------- ---------- -------
Total deposits 1,034,947 11,743 4.60 1,006,488 10,628 4.25
Borrowings 74,722 1,260 6.75 105,670 1,656 6.20
Repurchase agreements 1,964 27 5.50 0 0 0.00
---------- ---------- ---------- -------
Total interest-bearing liabilities 1,111,633 13,030 4.75 1,112,158 12,284 4.43
---------- -------
Noninterest-bearing demand deposits 126,046 116,002
Noninterest-bearing liabilities 10,058 10,548
---------- ----------
Total liabilities 1,247,737 1,238,708
Shareholders' Equity 130,215 115,880
---------- ----------
Total liabilities and shareholders' equity $1,377,952 $1,354,588
========== ==========
Net earning assets $ 176,650 $ 149,010
========== ==========
Net interest spread $ 12,757 3.30% $12,371 3.38%
========== ==== ======= ====
Net interest margin 3.95% 3.90%
==== ====
Ratio of average earning assets to
average interest-bearing liabilities 115.89% 113.40%
========== ==========
_________________________
(1) Annualized
11
Interest Income -- The Company's total interest income was $25.8 million for
the three months ended March 31, 2001, compared to $24.7 million for the
three months ended March 31, 2000. The reason for the $1.1 million, or 4.6%,
increase in interest income was a $1.9 million, or 10.4%, increase in
interest income from loans and a $317,000, or 576.4%, increase in interest on
deposits held at other institutions, which was partially offset by a $1.1
million, or 17.5%, decrease in interest and dividends on investment
securities. The increase in interest income from loans was the result of a
$79.1 million, or 9.2%, increase in the average balance of loans, together
with a 15 basis point increase in the yield earned thereon. The decrease in
interest income from investment securities was the result of a $77.4 million,
or 19.4%, decrease in the average balance of investment securities, which was
partially offset by a 15 basis point increase in the yield earned thereon.
The increase in interest from deposits at other institutions was the result
of a $24.5 million, or 525.9%, increase in the average balance of deposits at
other institutions, together with a 43 basis point increase in the yield
earned thereon.
Interest Expense -- The Company's total interest expense was $13.0 million
during the three months ended March 31, 2001, compared to $12.3 million for
the three months ended March 31, 2000. The reason for the $746,000, or 6.1%,
increase in total interest expense was due to a $1.1 million, or 10.5%,
increase in interest expense on deposits as a result of a $28.5 million, or
2.8%, increase in the average balance of interest-bearing deposits, together
with a 35 basis point increase in the cost of such deposits, which was
partially offset by a $396,000, or 23.9%, decrease in interest expense on
borrowings as a result of a $30.9 million, or 29.3%, decrease in the average
balance of borrowings, which was partially offset by a 55 basis point
increase in the cost of such borrowings.
Provision For Loan Losses -- The provision for loan losses represents a
charge to current earnings necessary to maintain the allowance for loan
losses at an appropriate level based on management's analysis of the
potential risk in the loan portfolio. The amount of the provision is a
function of various factors, including historical experience, the volume and
type of lending conducted by the Company, the amount of the Company's
classified assets, seasoning of the loan portfolio, the status of past due
principal and interest payments, general economic conditions, particularly as
they relate to the Company's market area and other factors related to the
collectibility of the Company's loan portfolio. The provision for loan losses
was $714,000 for the three months ended March 31, 2001 as compared to
$481,000 for the same period in 2000. The higher provision is attributable to
loan growth and changes in the mix of loans from period to period. The
allowance for loan losses as a percentage of outstanding loans, net of
unearned income, was 1.10% at March 31, 2001, compared to 1.02% at March 31,
2000.
Nonperforming assets, consisting of nonaccruing loans, accruing loans more
than 90 days past due and foreclosed property, amounted to $9.0 million, or
0.65% of total assets at March 31, 2001, compared to $8.0 million, or 0.57%
of total assets at December 31, 2000. The higher level of nonperforming
loans was due to an increase in debt to a single credit relationship, which
has been nonperforming and is in bankruptcy. The additional loan was
structured as debtor-in-possession financing and was made to finance the
purchase of a building to improve the Company's collateral position on the
existing obligation. If the property is not sold by a date set by the court,
the Company will take the property over through the foreclosure process and
pursue its sale directly. Without consideration of this nonperforming loan,
total nonperforming assets would have declined during the quarter. As of
March 31, 2001, the ratio of the Company's allowance for loan losses to
nonperforming loans was 118.1%, compared to 135.8% at December 31, 2000.
Noninterest Income -- Noninterest income increased $64,000, or 2.0%,
remaining relatively stable at $3.2 million for each of the three months
ended March 31, 2001 and 2000. The increase was due primarily to a $258,000
increase in gains on the sale of mortgage loans in the secondary market and a
$49,000, or 16.3%, increase in ATM fee income, both of which were partially
offset by a decrease in brokerage fees of $91,000 and $109,000 in all other
noninterest income. Additionally, the first quarter of 2000 included a
$43,000 gain on the sale of property.
12
Noninterest Expense -- Noninterest expense decreased $623,000, or 6.0%, for
the three months ended March 31, 2001, to $9.7 million, compared to $10.3
million for the three months ended March 31, 2000. Such decrease was due in
part to the reduction of $314,000 in salaries and employee benefits due
primarily to a reduction of full-time equivalent employees and an increase in
deferred expense associated with loan origination. This was partially offset
by an increase of $117,000 in the ESOP retirement contribution expense caused
by the increase in the average fair market value of the Company's common
stock. Additional decreases of $90,000 in communication and delivery expense,
$96,000 in marketing and business development, and $191,000 in all other
miscellaneous noninterest expenses reflects management's continued emphasis
on controlling discretionary expenses. Other expense decreases included
$69,000 in the franchise and share tax assessment and $30,000 in the
amortization of goodwill and acquisition intangibles. These decreases were
offset in part by increases of $38,000 in printing, stationery and supplies
and $12,000 in occupancy and equipment.
Income Tax Expense -- Income tax expense increased $304,000, or 17.4%, for
the three months ended March 31, 2001 to $2.1 million, compared to $1.8
million for the three months ended March 31, 2000. The increase in income tax
expense was due primarily to the increase in income before income taxes. The
effective tax rate for the quarters ended March 31, 2001 and 2000 was 37.1%
and 37.2%, respectively.
13
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Company's liquidity, represented by cash and cash equivalents, is a
product of its operating, investing and financing activities. The Company's
primary sources of funds are deposits, amortization, prepayments and
maturities of outstanding loans, investment securities and other short-term
investments and funds provided from operations. While scheduled payments
from the amortization of loans, maturing investment securities, and short-
term investments are relatively predictable sources of funds, deposit flows
and loan and investment security prepayments are greatly influenced by
general interest rates, economic conditions and competition. In addition,
the Company obtains additional funds through borrowings, which provide
liquidity to meet lending requirements. The Bank has been able to generate
sufficient cash through its deposits as well as borrowings. At March 31,
2001, the Company had $47.2 million in outstanding advances from the Federal
Home Loan Bank of Dallas and $2.0 million in outstanding debt from SunTrust
Bank.
Liquidity management is both a daily and long-term function of business
management. Excess liquidity is generally invested in short-term investments
such as overnight deposits. On a longer-term basis, the Company maintains a
strategy of investing in various lending products. The Company uses its
sources of funds primarily to meet its ongoing commitments and fund loan
commitments. At March 31, 2001, the total approved loan commitments
outstanding amounted to $12.8 million. At the same time, commitments under
unused lines of credit, including credit card lines, amounted to $140.9
million. Certificates of deposit scheduled to mature in twelve months or
less at March 31, 2001 totaled $447.0 million. Based on past experience
management believes that a significant portion of maturing deposits will
remain with the Company. The Company anticipates it will continue to have
sufficient funds to meet its liquidity requirements.
At March 31, 2001, the Company and the Bank had regulatory capital which was
in excess of regulatory requirements. The current requirements and the
Company's actual levels as of March 31, 2001 are detailed below (dollars in
thousands):
Required Capital Actual Capital
------------------ ------------------
Amount Percent Amount Percent
-------- -------- -------- --------
Tier 1 Leverage $53,598 4.00% $ 94,269 7.04%
Tier 1 Risk-Based $35,554 4.00% $ 94,269 10.61%
Total Risk-Based $71,107 8.00% $104,601 11.77%
14
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Quantitative and qualitative disclosures about market risk are presented at
December 31, 2000 in Item 7A of the Company's Annual Report on Form 10-K,
filed with the Securities and Exchange Commission on March 31, 2001.
Management believes there have been no material changes in the Company's
market risk since December 31, 2000.
15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
Not Applicable
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
Not Applicable
Item 3. Defaults Upon Senior Securities
-------------------------------
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not Applicable
Item 5. Other Information
-----------------
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
---------------------------------
Not Applicable
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
IBERIABANK Corporation
Date: May 15, 2001 By: /s/ Daryl G. Byrd
------------- ------------------------
Daryl G. Byrd
President and Chief Executive Officer
Date: May 15, 2001 By: /s/ Marilyn W. Burch
-------------- --------------------------
Marilyn W. Burch
Executive Vice President and Chief Financial
Officer
17