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IBERIABANK Corporation Reports Fourth Quarter Results; Achieves 2020 Financial Metrics For Full Year 2018

LAFAYETTE, La., Jan. 25, 2019 /PRNewswire/ -- IBERIABANK Corporation (IBKC), holding company of the 131-year-old IBERIABANK (www.iberiabank.com), reported financial results for the fourth quarter ended December 31, 2018. For the quarter, the Company reported net income available to common shareholders of $129.1 million, or $2.32 diluted earnings per common share ("EPS"). On a non-GAAP basis, EPS excluding non-core revenues and non-core expenses ("Core EPS") in the fourth quarter of 2018 was $1.86 per common share, compared to $1.33 in the year-ago period, an increase of 40% (refer to press release supplemental tables for a reconciliation of GAAP to non-GAAP metrics).

Daryl G. Byrd, President and Chief Executive Officer, commented, "Our focus on delivering sustainable, profitable growth culminated in another stellar quarter, allowing us to achieve our 2020 financial metrics for the third consecutive quarter, as well as the full year 2018.  Our strong balance sheet and outstanding performance for the year was achieved while improving our already excellent credit quality metrics and operating efficiency.  Continued financial progress, combined with a high quality and diverse franchise throughout the Southeast, position us to increase value for our clients and shareholders in 2019 and beyond."

Highlights for the fourth quarter of 2018 and at December 31, 2018:


For the three months ended


For the years ended December 31,


GAAP


Non-GAAP Core


GAAP


Non-GAAP Core


4Q18

3Q18


4Q18

3Q18


2018

2017


2018

2017

Earnings Per Common Share

$

2.32


$

1.73



$

1.86


$

1.74



$

6.46


$

2.59



$

6.69


$

4.47


Return on Average Assets

1.70

%

1.34

%


1.37

%

1.35

%


1.25

%

0.58

%


1.30

%

0.98

%

Return on Average Common Equity

13.38

%

10.21

%


10.75

%

10.27

%


9.63

%

3.95

%


9.97

%

6.82

%

Return on Average Tangible Common Equity

N/A


N/A



16.98

%

16.34

%


N/A


N/A



16.01

%

9.86

%

Efficiency Ratio

63.5

%

54.1

%


52.6

%

53.9

%


62.0

%

65.9

%


55.9

%

59.6

%

Tangible Efficiency Ratio (TE)

N/A


N/A



50.7

%

51.9

%


N/A


N/A



53.7

%

57.6

%

 

  • Strong improvement in both GAAP and Core EPS resulting from increases in both loans and deposits, margin expansion and focused expense management resulted in the Company achieving its 2020 financial metrics in both 4Q18 and for the full-year 2018.
  • Revenue growth and continued expense reduction produced positive operating leverage in the quarter and resulted in a Core Tangible Efficiency Ratio of 50.7%.
  • Credit metrics are strong and continue to improve. Criticized, classified, and non-performing assets were down 28%, 30%, and 5%, respectively, from the same time a year ago. The allowance for loan and lease losses (ALLL) to total loans and leases remained flat and covered 101% of non-performing loans.
  • The Company's reported and cash net interest margins improved 7 and 5 basis points on a linked quarter basis, to 3.81% and 3.52%, respectively.
  • Non-interest expense was relatively unchanged from the prior quarter. Core non-interest expense declined $2.0 million, or 5% on an annualized basis, from the prior quarter.
  • Total loan growth of $175.9 million, or 3% annualized. Loan growth continues to be impacted by accelerated payoffs.
  • Total deposits increased $570.0 million, or 10% annualized. As of December 31, 2018, total non-interest bearing deposits represented 28% of total deposits.
  • On November 5, 2018, the Company announced a new repurchase plan, its 11th plan, of up to 2,765,000 shares of the Company's outstanding common stock. The newly authorized plan equates to approximately 5% of the total common shares outstanding.
  • During 4Q18, the Company repurchased 1.21 million common shares, or 2.1% of the shares outstanding, at a weighted average price of $72.61 per common share. Of the shares repurchased, 709,290 shares were purchased under the 10th plan and 500,000 under the 11th plan.
  • On October 19, 2018, the Company announced a fourth quarter cash dividend equal to $0.41 per common share, payable on January 25, 2019. This equated to a 5% increase to the third quarter dividend, and was the third common dividend increase of 2018.

4Q18 Special Items

  • In connection with filing its 2017 income tax returns, the Company recorded a non-core, permanent net income tax benefit of approximately $65.3 million in the fourth quarter of 2018. This benefit was a result of deductions claimed on the 2017 income tax returns associated with unrealized losses on securities and loans and depreciation on real and personal property.
  • During 4Q18, the Company restructured portions of its investment portfolio selling approximately $1 billion of securities at a pre-tax loss of approximately $49.8 million ($37.9 million after-tax) and subsequently purchased $1 billion in securities during the quarter. The incremental yield on the purchased securities was 164 basis points.

2019 Financial Guidance

2019 Guidance

Average Earning Assets

$28.6B ~ $28.9B

Consolidated Loan Growth

5% ~ 7%

Consolidated Deposit Growth

5% ~ 7%

Provision Expense

$42MM ~ $50MM

Non-Interest Income (Core Basis)

$215MM ~ $225MM

Non-Interest Expense (Core Basis)

$685MM ~ $700MM

Net Interest Margin

3.60% ~ 3.70%

Tax Rate

23.0% ~ 24.0%

Preferred Dividend & Unrestricted Shares

$12.5MM ~ $13.5MM

Share Repurchase Activity

$135MM ~ $150MM

Credit Quality

Stable

 

  • Guidance includes one mid-year interest rate hike in 2019
  • Increased range of provision to $42-$50 million
  • Annual effective tax rate range increased to 23.0% to 24.0%
  • Includes the impact of the recent restructuring of the investment portfolio
  • Anticipate historical seasonal softness influencing 1Q19 results

               

Table A - Summary Financial Results

(Dollars in thousands, except per share data)













For the Three Months Ended


12/31/2018



9/30/2018


% Change


12/31/2017


% Change

GAAP BASIS:











Income available to common shareholders

$

129,090




$

97,866



31.9



$

9,329



1,283.7


Earnings per common share - diluted

2.32




1.73



34.1



0.17



1,264.7













Average loans and leases, net of unearned income

$

22,364,188




$

22,162,373



0.9



$

19,941,500



12.1


Average total deposits

23,484,576




23,241,529



1.0



21,378,122



9.9


Net interest margin (TE) (1)

3.81


%


3.74


%



3.69


%













Total revenues (2)

$

265,990




$

312,312



(14.8)



$

287,844



(7.6)


Total non-interest expense (2)

168,989




169,062





183,633



(8.0)


Efficiency ratio (2)

63.5


%


54.1


%



63.8


%


Return on average assets

1.70




1.34





0.15




Return on average common equity

13.38




10.21





1.02















NON-GAAP BASIS (3):











Core revenues (2)

$

316,249




$

312,311



1.3



$

287,809



9.9


Core non-interest expense (2)

166,379




168,362



(1.2)



167,159



(0.5)


Core earnings per common share - diluted

1.86




1.74



6.9



1.33



39.8


Core tangible efficiency ratio (TE) (1) (2) (4)

50.7


%


51.9


%



55.8


%


Core return on average assets

1.37




1.35





1.03




Core return on average common equity

10.75




10.27





7.92




Core return on average tangible common equity

16.98




16.34





12.73




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

3.52




3.47





3.33
















(1)  Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 21% for 2018 and a rate of 35% for 2017.

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

(3)  See Table 9 and Table 10 for GAAP to Non-GAAP reconciliations.

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

Operating Results

Net interest income increased $5.8 million, or 2%, on a linked quarter basis. Average loans increased $201.8 million, or 4% annualized, and the associated taxable-equivalent yield increased 17 basis points. The yield on total earning assets was 17 basis points higher at 4.74% compared to 4.57% in the linked quarter.

Average interest-bearing deposits increased $281.3 million, or 7% annualized, and the average cost of interest-bearing deposits rose 17 basis points to 123 basis points on a linked quarter basis. Total average interest-bearing liabilities increased by $121.5 million, or 3% annualized, and the average cost of interest-bearing liabilities rose 14 basis points to 134 basis points. The total cost of interest-bearing liabilities rose primarily due to an upward repricing of deposits, promotional activity in customer time deposits, and brokered wholesale CD issuances. The total cost of funding in the fourth quarter of 2018 was 100 basis points, compared to 89 basis points in the linked quarter.

The increase in average earning assets and higher loan yields, offset by the increase in average interest-bearing liabilities and cost of funds, resulted in improvements in the Company's reported and cash net interest margins of 7 and 5 basis points to 3.81% and 3.52%, respectively.   

Credit metrics are strong and continue to improve. Criticized, classified, and non-performing assets were down 28%, 30%, and 5%, respectively, from the same time a year ago. The ALLL to total loans and leases remained flat and covered 101% of non-performing loans.

Non-interest income decreased $52.1 million compared to the linked quarter, primarily driven by $49.8 million in losses on sales of available-for-sale securities. Non-interest income on a linked quarter basis also included a $2.4 million decline in mortgage income and a $0.7 million decline in broker commissions. These decreases were partially offset by increases of $0.4 million in commercial loan fee income and $0.3 million in income from new market tax credit investments.

Non-interest expense remained relatively flat when compared to the linked quarter. Professional services expenses increased $3.1 million and were offset by decreases in insurance and net costs of OREO of $1.9 million and $1.8 million, respectively. During the fourth quarter of 2018, non-interest expense included $2.6 million in non-core expenses, primarily from tax-related professional services expenses.

Excluding these items, core non-interest expense decreased $2.0 million, or 1%, primarily driven by decreases of $2.8 million in net costs of OREO and $1.9 million in insurance expenses, partially offset by increases of $1.5 million in salary and employee benefits expenses and $0.6 million in marketing expenses.

Income tax expense decreased $76.5 million on a linked quarter basis to an income tax benefit position of $46.1 million as the result of a $65.3 million non-core, permanent net tax benefit recorded in the fourth quarter of 2018. This benefit was a result of deductions claimed on the Company's 2017 income tax returns partially offset by the repricing of its current and deferred income tax position associated with the Tax Cuts and Jobs Act of 2017.

On a linked quarter basis, the efficiency ratio increased to 63.5% from 54.1%, primarily due to losses on sales of  available-for-sale securities in the fourth quarter, while the non-GAAP core tangible efficiency ratio improved to 50.7% from 51.9%. The Company continues to focus on cost containment and revenue enhancement efforts to deliver positive operating leverage. Refer to Table A for a summary of financial results on both a GAAP and non-GAAP basis.

Table B - Summary Financial Condition Results

(Dollars in thousands, except per share data)

















As of and For the Three Months Ended



12/31/2018


9/30/2018


% Change


12/31/2017


% Change

PERIOD-END BALANCES:














Total loans and leases, net of unearned income

$

22,519,815




$

22,343,906




0.8



$

20,078,181




12.2



Total deposits

23,763,431




23,193,446




2.5



21,466,717




10.7
















ASSET QUALITY RATIOS:














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

0.25

%



0.32

%





0.31

%





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

0.01




0.06






0.03






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

0.55




0.63






0.64






Classified assets to total assets (3)

0.98




1.20






1.54



















CAPITAL RATIOS:














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

8.82

%



8.69

%





8.61

%





Tier 1 leverage ratio (6)

9.60




9.65






9.35






Total risk-based capital ratio (6)

12.31




12.42






12.37



















PER COMMON SHARE DATA:














Book value

$

71.49




$

68.03




5.1



$

66.17




8.0



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

47.48




44.72




6.2



42.56




11.6



Closing stock price

64.28




81.35




(21.0)



77.50




(17.1)



Cash dividends

0.41




0.39




5.1



0.37




10.8

















(1)

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

(2)

Non-performing assets consist of non-accruing loans, accruing loans 90 days or more past due and other real estate owned, including repossessed assets. Refer to Table 5 for further detail.

(3)

Classified assets include commercial loans rated substandard or worse and non-performing mortgage and consumer loans and OREO and foreclosed property and include acquired impaired loans accounted for under ASC 310-30. Classified assets were $302 million, $360 million and $429 million at December 31, 2018, September 30, 2018, and December 31, 2017, respectively.

(4)

See Table 9 and Table 10 for GAAP to Non-GAAP reconciliations.

(5)

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

(6)

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


Loans and Other Assets

Total loans increased $175.9 million, or 3% annualized, to $22.5 billion at December 31, 2018. Period-end loan growth during the fourth quarter of 2018 was strongest in the Energy Group (primarily reserve-based lending), the Corporate Asset Finance Group (equipment financing business), and the New Orleans, Baton Rouge and Birmingham markets. The Company believes it is well-positioned for diversified loan growth based on our strategic presence in significant MSAs in the Southeastern United States.

Table C - Period-End Loans

(Dollars in thousands)



















As of and For the Three Months Ended








Linked Qtr Change


Year/Year Change


Mix


12/31/2018


9/30/2018


12/31/2017


$

%


Annualized


$

%


12/31/2018

9/30/2018

Legacy loans:

















Commercial(1)

$

12,396,515



$

11,971,771



$

10,781,778



424,744


3.5



14.1

%


1,614,737


15.0



73.2

%

73.2

%

Residential mortgage

2,023,760



1,836,119



1,176,365



187,641


10.2



40.5

%


847,395


72.0



11.9

%

11.2

%

Consumer

2,529,705



2,543,872



2,525,008



(14,167)


(0.6)



(2.2)

%


4,697


0.2



14.9

%

15.6

%

Total legacy loans

16,949,980



16,351,762



14,483,151



598,218


3.7



14.5

%


2,466,829


17.0



100.0

%

100.0

%


















Acquired loans:

















Balance at beginning of period

5,992,144



6,465,748



5,961,939



(473,604)


(7.3)





30,205


0.5





Loans acquired during the period

















Net paydown activity

(422,309)



(473,604)



(366,909)



51,295


(10.8)





(55,400)


15.1





Total acquired loans

5,569,835



5,992,144



5,595,030



(422,309)


(7.0)





(25,195)


(0.5)





Total loans

$

22,519,815



$

22,343,906



$

20,078,181



175,909


0.8





2,441,634


12.2





(1) Includes equipment financing leases.


On an average balance and linked quarter basis, the investment portfolio decreased $111.0 million, or 9% annualized, to $4.8 billion, mainly due to sales of available-for-sale securities. On a period-end and linked quarter basis, the investment portfolio increased $143.3 million, or 12% annualized, to $5.0 billion, mainly due to favorable market value adjustments coupled with purchases of available-for-sale securities late in the fourth quarter. Approximately 96% of the Company's investment portfolio is in available-for-sale securities, which experience unrealized losses as interest rates rise. The investment portfolio had an effective duration of 3.4 years at December 31, 2018, down from 4.0 years at September 30, 2018, and a $62.9 million unrealized loss at December 31, 2018, down from a $181.1 million loss at September 30, 2018. The average yield on investment securities increased 18 basis points to 2.61% in the fourth quarter of 2018. The Company holds in its investment portfolio primarily government agency securities. Municipal securities comprised 7% of total investments at December 31, 2018.

Deposits and Funding

Total deposits increased $570.0 million, or 10% annualized, to $23.8 billion at December 31, 2018. Fourth quarter deposits included a $457 million increase in brokered and public fund deposits. Deposit growth during the fourth quarter of 2018 was strongest in the Energy Group and the New Orleans, Acadiana, and Atlanta markets.

Table D - Period-End Deposits

(Dollars in thousands)








Linked Qtr Change


Year/Year Change


Mix


12/31/2018


9/30/2018


12/31/2017


$

%

Annualized


$

%


12/31/2018

9/30/2018

Non-interest-bearing

$

6,542,490



$

6,544,926



$

6,209,925



(2,436)



%


332,565


5.4



27.5

%

28.2

%

NOW accounts

4,514,113



4,247,533



4,348,939



266,580


6.3


24.9

%


165,174


3.8



19.0

%

18.3

%

Money market accounts

8,237,291



8,338,682



7,674,291



(101,391)


(1.2)


(4.8)

%


563,000


7.3



34.7

%

36.0

%

Savings accounts

828,914



820,354



846,074



8,560


1.0


4.1

%


(17,160)


(2.0)



3.5

%

3.5

%

Time deposits

3,640,623



3,241,951



2,387,488



398,672


12.3


48.8

%


1,253,135


52.5



15.3

%

14.0

%

Total deposits

$

23,763,431



$

23,193,446



$

21,466,717



569,985


2.4


9.7

%


2,296,714


10.7



100.0

%

100.0

%


Asset Quality

Credit quality continues to improve and reflects the Company's continued discipline and focus and high quality clients. On a linked quarter basis, classified assets decreased $58.1 million and were down $127.2 million, or 30%, from the same time a year ago. The Company's classified assets to total assets were 0.98% in the fourth quarter of 2018 compared to 1.20% in the linked quarter and 1.54% one year ago.

Refer to Table 5 - Loans and Asset Quality Data for further information.

Capital Position

At December 31, 2018, the Company reported a non-GAAP tangible common equity ratio of 8.82%, up 13 basis points compared to September 30, 2018, and the preliminary Tier 1 leverage ratio was 9.60%, down 5 basis points compared to September 30, 2018. The Company's preliminary calculation of its total risk-based capital ratio at December 31, 2018, was 12.31%, down 11 basis points compared to September 30, 2018.

At December 31, 2018, book value per common share was $71.49, up $3.46 per share, compared to September 30, 2018. Tangible book value per common share was $47.48, up $2.76 per share, compared to September 30, 2018. Based on the closing stock price of the Company's common stock of $72.34 per share on January 24, 2019, this price equated to 1.01 times December 31, 2018 book value per common share and 1.52 times December 31, 2018 tangible book value per common share.

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

Common Stock. On October 19, 2018, the Company declared a quarterly cash dividend of $0.41 per common share, a 5% increase to the common dividend declared in August 2018. This dividend is payable on January 25, 2019, to shareholders of record on December 31, 2018. The common stock dividend increased 7% from 2017 to 2018.

Preferred Stock. On January 3, 2019, the Company declared a semi-annual cash dividend of $0.8281 per depositary share of Series B Preferred Stock that is payable on February 1, 2019. On January 3, 2019, the Company also declared a quarterly cash dividend of $0.4125 per depositary share of Series C Preferred Stock that is payable on February 1, 2019.

Common Stock Repurchase Program. On November 5, 2018, the Company announced the completion of its previously announced repurchase plan of  approximately 2% of common shares outstanding. The Company's recently completed share repurchase program was announced on May 10, 2018 and completed on November 5, 2018. During that time,  the Company purchased 1,137,500 shares of its common stock at a weighted average price of $77.54 per share. On November 5, 2018, the Board of Directors authorized a new repurchase plan of up to 2,765,000 shares of the Company's common stock. This repurchase authorization equated to approximately 5% of total common shares outstanding. Stock repurchases under this program will be made from time to time, on the open market or in privately negotiated transactions at the discretion of the management of the Company. The timing of these repurchases will depend on market conditions and other requirements. The Company currently anticipates the share repurchase program will extend over a two-year time frame, or earlier if the shares have been repurchased. During the fourth quarter of 2018, the Company repurchased 1,209,290 common shares, at a weighted average price of $72.61 per common share, of which 709,290 were repurchased under the completed Board-authorized plan. At December 31, 2018, there were approximately 2,265,000 remaining shares that may be repurchased under the current Board-approved plan.

IBERIABANK Corporation

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

The Company's common stock trades on the NASDAQ Global Select Market under the symbol "IBKC". The Company's Series B Preferred Stock and Series C Preferred Stock also trade on the NASDAQ Global Select Market under the symbols "IBKCP" and "IBKCO", respectively.  The Company's common stock market capitalization was approximately $4.0 billion, based on the NASDAQ Global Select Market closing stock price on January 24, 2019.

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

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

Conference Call

In association with this earnings release, the Company will host a live conference call to discuss the financial results for the quarter just completed. The telephone conference call will be held on Friday, January 25, 2019, beginning at 8:00 a.m. Central Time by dialing 1-888-317-6003. The confirmation code for the call is 7663126. A replay of the call will be available until midnight Central Time on February 1, 2019, by dialing 1-877-344-7529. The confirmation code for the replay is 10127114. The Company has prepared a PowerPoint presentation that supplements information contained in this press release. The PowerPoint presentation may be accessed on the Company's web site, www.iberiabank.com, under "Investor Relations" and then "Financial Information" and "Presentations."

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with GAAP. The Company's management uses these non-GAAP financial measures in their analysis of the Company's performance.  Non-GAAP measures in this press release include, but are not limited to, descriptions such as core, tangible, and pre-tax pre-provision.  These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that in management's opinion can distort period-to-period comparisons of the Company's performance. Transactions that are typically excluded from non-GAAP performance measures include realized and unrealized gains/losses on former bank owned real estate, realized gains/losses on securities, income tax gains/losses, merger-related charges and recoveries, litigation charges and recoveries, debt repayment penalties, and gains, losses, and impairment charges on long-lived assets. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.  Reconciliations of GAAP to non-GAAP disclosures are presented in the supplemental tables at the end of this release.  Please refer to the supplemental tables for these reconciliations.

Caution About Forward-Looking Statements

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

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

 

Table 1 - IBERIABANK CORPORATION

FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share data)

















As of and For the Three Months Ended

INCOME DATA:

12/31/2018


9/30/2018


% Change


12/31/2017


% Change


Net interest income

$

265,021




$

259,225




2.2



$

235,502




12.5



Net interest income (TE) (1)

266,448




260,686




2.2



238,310




11.8



Total revenues (2)

265,990




312,312




(14.8)



287,844




(7.6)



Provision for credit losses

13,094




11,384




15.0



12,825




2.1



Non-interest expense (2)

168,989




169,062






183,633




(8.0)



Net income available to common shareholders

129,090




97,866




31.9



9,329




1,283.7
















PER COMMON SHARE DATA:














Earnings available to common shareholders - basic

$

2.33




$

1.74




33.9



$

0.17




1,270.6



Earnings available to common shareholders - diluted

2.32




1.73




34.1



0.17




1,264.7



Core earnings (Non-GAAP) (3)

1.86




1.74




6.9



1.33




39.8



Book value

71.49




68.03




5.1



66.17




8.0



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

47.48




44.72




6.2



42.56




11.6



Closing stock price

64.28




81.35




(21.0)



77.50




(17.1)



Cash dividends

0.41




0.39




5.1



0.37




10.8
















KEY RATIOS AND OTHER DATA (7):










Net interest margin (TE) (1)

3.81

%



3.74

%





3.69

%





Efficiency ratio (2)

63.5




54.1






63.8






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

50.7




51.9






55.8






Return on average assets

1.70




1.34






0.15






Return on average common equity

13.38




10.21






1.02






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

16.98




16.34






12.73






Effective tax rate

(55.0)




23.1






88.8






Full-time equivalent employees

3,403




3,429






3,552



















CAPITAL RATIOS:














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

8.82

%



8.69

%





8.61

%





Tangible common equity to risk-weighted assets (4)

10.41




10.17






10.20






Tier 1 leverage ratio (5)

9.60




9.65






9.35






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

10.69




10.79






10.57






Tier 1 capital ratio (5)

11.22




11.33






11.16






Total risk-based capital ratio (5)

12.31




12.42






12.37






Common stock dividend payout ratio

17.8




21.8






213.6






Classified assets to Tier 1 capital (8)

10.8




12.9






17.1



















ASSET QUALITY RATIOS:










Non-performing assets to total assets (6)

0.55

%



0.63

%





0.64

%





ALLL to total loans and leases

0.62




0.61






0.70






Net charge-offs to average loans (annualized)

0.14




0.16






0.20






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

0.75




0.84






0.89




















(1)

Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a rate of 21% for 2018 and a rate of 35% for 2017.

(2)

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

(3)

See Table 9 and Table 10 for GAAP to Non-GAAP reconciliations.

(4)

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

(5)

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

(6)

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

(7)

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

(8)

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

 


Table 2 - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Dollars in thousands, except per share data)


















For the Three Months Ended






Linked Qtr
Change








Year/Year Change


12/31/2018


9/30/2018


$

%


6/30/2018


3/31/2018


12/31/2017


$

%

Interest income

$

330,196



$

317,067



13,129


4.1



$

303,823



$

270,543



$

269,703



60,493


22.4


Interest expense

65,175



57,842



7,333


12.7



47,710



37,654



34,201



30,974


90.6


Net interest income

265,021



259,225



5,796


2.2



256,113



232,889



235,502



29,519


12.5


Provision for credit losses

13,094



11,384



1,710


15.0



7,696



8,211



12,825



269


2.1


Net interest income after provision for credit losses

251,927



247,841



4,086


1.6



248,417



224,678



222,677



29,250


13.1


Mortgage income

10,379



12,729



(2,350)


(18.5)



13,721



9,595



13,675



(3,296)


(24.1)


Service charges on deposit accounts

13,425



13,520



(95)


(0.7)



12,950



12,908



12,581



844


6.7


Title revenue

5,996



6,280



(284)


(4.5)



6,846



5,027



5,398



598


11.1


Broker commissions(1)

1,951



2,627



(676)


(25.7)



2,396



2,221



1,958



(7)


(0.4)


ATM/debit card fee income(1)

2,267



2,470



(203)


(8.2)



2,925



2,633



2,583



(316)


(12.2)


Income from bank owned life insurance

2,023



1,744



279


16.0



1,261



1,282



1,267



756


59.7


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

(49,844)





(49,844)


(100.0)



3



(59)



35



(49,879)


(142,511.4)


Trust department income

4,319



3,993



326


8.2



4,243



3,426



3,081



1,238


40.2


Other non-interest income(1)

10,453



9,724



729


7.5



9,595



7,533



11,764



(1,311)


(11.1)


Total non-interest income(1)

969



53,087



(52,118)


(98.2)



53,940



44,566



52,342



(51,373)


(98.1)


Salaries and employee benefits

101,551



101,159



392


0.4



107,445



104,586



104,387



(2,836)


(2.7)


Occupancy and equipment

18,379



18,889



(510)


(2.7)



19,931



20,047



19,211



(832)


(4.3)


Amortization of acquisition intangibles

5,083



5,382



(299)


(5.6)



6,111



5,102



4,642



441


9.5


Computer services expense(1)

8,942



9,036



(94)


(1.0)



9,309



12,393



11,416



(2,474)


(21.7)


Professional services

8,628



5,519



3,109


56.3



7,160



7,391



9,441



(813)


(8.6)


Credit and other loan related expense

4,776



4,830



(54)


(1.1)



5,089



4,393



4,738



38


0.8


Other non-interest expense(1)

21,630



24,247



(2,617)


(10.8)



41,731



34,159



29,798



(8,168)


(27.4)


Total non-interest expense(1)

168,989



169,062



(73)




196,776



188,071



183,633



(14,644)


(8.0)


Income before income taxes

83,907



131,866



(47,959)


(36.4)



105,581



81,173



91,386



(7,479)


(8.2)


Income tax (benefit) expense

(46,132)



30,401



(76,533)


(251.7)



30,457



17,552



81,108



(127,240)


(156.9)


Net income

130,039



101,465



28,574


28.2



75,124



63,621



10,278



119,761


1,165.2


Less: Preferred stock dividends

949



3,599



(2,650)


(73.6)



949



3,598



949





Net income available to common shareholders

$

129,090



$

97,866



31,224


31.9



$

74,175



$

60,023



$

9,329



119,761


1,283.7


















Income available to common shareholders - basic

$

129,090



$

97,866



31,224


31.9



$

74,175



$

60,023



$

9,329



119,761


1,283.7


Less: Earnings allocated to unvested restricted stock

1,214



908



306


33.7



767



639



101



1,113


1,102.0


Earnings allocated to common shareholders

$

127,876



$

96,958



30,918


31.9



$

73,408



$

59,384



$

9,228



118,648


1,285.7


















Earnings per common share - basic

$

2.33



$

1.74



0.59


33.9



$

1.31



$

1.11



$

0.17



2.16


1,270.6


















Earnings per common share - diluted

2.32



1.73



0.59


34.1



1.30



1.10



0.17



2.15


1,264.7


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

(0.46)



0.01



(0.47)


(4,700.0)



0.41



0.27



1.16



(1.62)


(139.7)


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

$

1.86



$

1.74



0.12


6.9



$

1.71



$

1.37



$

1.33



0.53


39.8


















NUMBER OF COMMON SHARES OUTSTANDING (in thousands)
















Weighted average common shares outstanding - basic

54,892



55,571



(679)


(1.2)



55,931



53,616



53,287



1,605


3.0


Weighted average common shares outstanding - diluted

55,215



55,945



(730)


(1.3)



56,287



53,967



53,621



1,594


3.0


Book value shares (period end)

54,796



56,007



(1,211)


(2.2)



56,390



56,779



53,872



924


1.7



















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

(2)  See Table 9 and Table 10 for GAAP to Non-GAAP reconciliations.

 


Table 3 - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Dollars in thousands, except per share data)









For the Years Ended






Change


12/31/2018


12/31/2017


$

%

Interest income

$

1,221,629



$

913,783



307,846


33.7


Interest expense

208,381



104,937



103,444


98.6


Net interest income

1,013,248



808,846



204,402


25.3


Provision for credit losses

40,385



51,708



(11,323)


(21.9)


Net interest income after provision for credit losses

972,863



757,138



215,725


28.5


Mortgage income

46,424



63,570



(17,146)


(27.0)


Service charges on deposit accounts

52,803



47,678



5,125


10.7


Title revenue

24,149



21,972



2,177


9.9


Broker commissions (1)

9,195



9,161



34


0.4


ATM/debit card fee income (1)

10,295



10,199



96


0.9


Income from bank owned life insurance

6,310



5,082



1,228


24.2


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

(49,900)



(148)



(49,752)


(33,616.2)


Trust department income

15,981



9,705



6,276


64.7


Other non-interest income (1)

37,305



34,928



2,377


6.8


Total non-interest income (1)

152,562



202,147



(49,585)


(24.5)


Salaries and employee benefits

414,741



379,527



35,214


9.3


Occupancy and equipment

77,246



70,663



6,583


9.3


Amortization of acquisition intangibles

21,678



12,590



9,088


72.2


Computer services expense (1)

39,680



36,790



2,890


7.9


Professional services

28,698



48,545



(19,847)


(40.9)


Credit and other loan related expense

19,088



18,411



677


3.7


Other non-interest expense (1)

121,767



99,880



21,887


21.9


Total non-interest expense (1)

722,898



666,406



56,492


8.5


Income before income taxes

402,527



292,879



109,648


37.4


Income tax expense

32,278



150,466



(118,188)


(78.5)


Net income

370,249



142,413



227,836


160.0


Less: Preferred stock dividends

9,095



9,095





Net income available to common shareholders

$

361,154



$

133,318



227,836


170.9









Income available to common shareholders - basic

$

361,154



$

133,318



227,836


170.9


Less: Earnings allocated to unvested restricted stock

3,583



1,210



2,373


196.1


Earnings allocated to common shareholders

$

357,571



$

132,108



225,463


170.7









Earnings per common share - basic

$

6.50



$

2.61



3.89


149.0









Earnings per common share - diluted

6.46



2.59



3.87


149.4


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

0.23



1.88



(1.65)


(87.8)


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

$

6.69



$

4.47



2.22


49.7









NUMBER OF COMMON SHARES OUTSTANDING (in thousands)







Weighted average common shares outstanding - basic

55,008



50,640



4,368


8.6


Weighted average common shares outstanding - diluted

55,359



50,992



4,367


8.6


Book value shares (period end)

54,796



53,872



924


1.7










(1)  Certain prior period amounts have been reclassified to conform to the net presentation requirements of ASU No. 2014-09, Revenue from Contracts with Customers, which was adopted effective January 1, 2018. The adoption resulted in a reduction of non-interest income and non-interest expense of approximately $8.9 million and had no impact on net income.


(2)  See Table 9 and Table 10 for GAAP to Non-GAAP reconciliations.

 


TABLE 4 - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)
















PERIOD-END BALANCES




Linked Qtr Change








Year/Year Change

ASSETS

12/31/2018


9/30/2018


$


%


6/30/2018


3/31/2018


12/31/2017


$


%

Cash and due from banks

$

294,186



$

291,083



3,103



1.1



$

299,268



$

253,527



$

319,156



(24,970)



(7.8)


Interest-bearing deposits in other banks

396,267



184,852



211,415



114.4



428,120



310,565



306,568



89,699



29.3


Total cash and cash equivalents

690,453



475,935



214,518



45.1



727,388



564,092



625,724



64,729



10.3


Investment securities available for sale

4,783,579



4,634,124



149,455



3.2



4,650,915



4,542,486



4,590,062



193,517



4.2


Investment securities held to maturity

207,446



213,561



(6,115)



(2.9)



221,030



224,241



227,318



(19,872)



(8.7)


Total investment securities

4,991,025



4,847,685



143,340



3.0



4,871,945



4,766,727



4,817,380



173,645



3.6


Mortgage loans held for sale

107,734



42,976



64,758



150.7



78,843



110,348



134,916



(27,182)



(20.1)


Loans and leases, net of unearned income

22,519,815



22,343,906



175,909



0.8



22,075,783



21,706,090



20,078,181



2,441,634



12.2


Allowance for loan and lease losses

(140,571)



(136,950)



(3,621)



2.6



(136,576)



(144,527)



(140,891)



320



(0.2)


Loans and leases, net

22,379,244



22,206,956



172,288



0.8



21,939,207



21,561,563



19,937,290



2,441,954



12.2


Premises and equipment, net

300,507



304,605



(4,098)



(1.3)



326,213



329,454



331,413



(30,906)



(9.3)


Goodwill and other intangible assets

1,324,269



1,313,478



10,791



0.8



1,320,664



1,338,573



1,277,464



46,805



3.7


Other assets

1,032,934



926,752



106,182



11.5



861,902



801,880



779,942



252,992



32.4


Total assets

$

30,826,166



$

30,118,387



707,779



2.3



$

30,126,162



$

29,472,637



$

27,904,129



2,922,037



10.5




















LIABILITIES AND SHAREHOLDERS' EQUITY













Non-interest-bearing deposits

$

6,542,490



$

6,544,926



(2,436)





$

6,814,441



$

6,595,495



$

6,209,925



332,565



5.4


NOW accounts

4,514,113



4,247,533



266,580



6.3



4,453,152



4,500,181



4,348,939



165,174



3.8


Savings and money market accounts

9,066,205



9,159,036



(92,831)



(1.0)



9,318,331



9,146,710



8,520,365



545,840



6.4


Time deposits

3,640,623



3,241,951



398,672



12.3



2,844,534



2,728,806



2,387,488



1,253,135



52.5


Total deposits

23,763,431



23,193,446



569,985



2.5



23,430,458



22,971,192



21,466,717



2,296,714



10.7


Short-term borrowings

1,167,000



790,000



377,000



47.7



595,000



375,000



475,000



692,000



145.7


Securities sold under agreements to repurchase

315,882



452,719



(136,837)



(30.2)



459,213



525,496



516,297



(200,415)



(38.8)


Trust preferred securities

120,110



120,110







120,110



120,110



120,110






Other long-term debt

1,046,041



1,346,700



(300,659)



(22.3)



1,318,504



1,329,192



1,375,725



(329,684)



(24.0)


Other liabilities

364,274



273,051



91,223



33.4



289,468



250,740



253,489



110,785



43.7


Total liabilities

26,776,738



26,176,026



600,712



2.3



26,212,753



25,571,730



24,207,338



2,569,400



10.6


Total shareholders' equity

4,049,428



3,942,361



107,067



2.7



3,913,409



3,900,907



3,696,791



352,637



9.5


Total liabilities and shareholders' equity

$

30,826,166



$

30,118,387



707,779



2.3



$

30,126,162



$

29,472,637



$

27,904,129



2,922,037



10.5


 

TABLE 4 Continued - IBERIABANK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)



















AVERAGE BALANCES


Linked Qtr Change








Year/Year Change

ASSETS

12/31/2018


9/30/2018


$


%


6/30/2018


3/31/2018


12/31/2017


$


%

Cash and due from banks

$

281,509



$

279,918



1,591



0.6



$

296,907



$

308,319



$

307,328



(25,819)



(8.4)


Interest-bearing deposits in other banks

385,619



259,455



126,164



48.6



392,906



486,298



538,733



(153,114)



(28.4)


Total cash and cash equivalents

667,128



539,373



127,755



23.7



689,813



794,617



846,061



(178,933)



(21.1)


Investment securities available for sale

4,567,564



4,673,454



(105,890)



(2.3)



4,629,177



4,544,836



4,674,496



(106,932)



(2.3)


Investment securities held to maturity

211,333



216,419



(5,086)



(2.4)



222,764



226,229



191,067



20,266



10.6


Total investment securities

4,778,897



4,889,873



(110,976)



(2.3)



4,851,941



4,771,065



4,865,563



(86,666)



(1.8)


Mortgage loans held for sale

63,033



87,823



(24,790)



(28.2)



72,917



109,027



126,216



(63,183)



(50.1)


Loans and leases, net of unearned income

22,364,188



22,162,373



201,815



0.9



21,830,720



20,181,390



19,941,500



2,422,688



12.1


Allowance for loan and lease losses

(138,675)



(139,075)



400



(0.3)



(145,565)



(144,295)



(138,927)



252



(0.2)


Loans and leases, net

22,225,513



22,023,298



202,215



0.9



21,685,155



20,037,095



19,802,573



2,422,940



12.2


Premises and equipment, net

302,956



315,259



(12,303)



(3.9)



327,686



331,640



329,957



(27,001)



(8.2)


Goodwill and other intangible assets

1,318,200



1,316,527



1,673



0.1



1,338,420



1,281,598



1,277,293



40,907



3.2


Other assets

977,666



874,078



103,588



11.9



804,920



807,177



787,400



190,266



24.2


Total assets

$

30,333,393



$

30,046,231



287,162



1.0



$

29,770,852



$

28,132,219



$

28,035,063



2,298,330



8.2




















LIABILITIES AND SHAREHOLDERS' EQUITY













Non-interest-bearing deposits

$

6,646,071



$

6,684,343



(38,272)



(0.6)



$

6,795,878



$

6,278,507



$

6,176,347



469,724



7.6


NOW accounts

4,212,304



4,296,392


(84,088)



(2.0)



4,494,064


4,363,557


3,987,908


224,396



5.6


Savings and money market accounts

9,169,184



9,237,614


(68,430)



(0.7)



9,146,302


8,664,085


8,769,464


399,720



4.6


Time deposits

3,457,017



3,023,180


433,837



14.4



2,719,627


2,471,485


2,444,403


1,012,614



41.4


Total deposits

23,484,576



23,241,529


243,047



1.0



23,155,871


21,777,634


21,378,122


2,106,454



9.9


Short-term borrowings

602,593



820,087


(217,494)



(26.5)



609,965


506,056


729,111


(126,518)



(17.4)


Securities sold under agreements to repurchase

386,563



376,078


10,485



2.8



427,508


477,862


494,757


(108,194)



(21.9)


Trust preferred securities

120,110



120,110






120,110


120,110


120,110





Other long-term debt

1,308,086



1,260,900


47,186



3.7



1,261,515


1,257,213


1,300,114


7,972



0.6


Other liabilities

470,501



292,445


178,056



60.9



281,820


275,869


264,790


205,711



77.7


Total liabilities

26,372,429



26,111,149


261,280



1.0



25,856,789


24,414,744


24,287,004


2,085,425



8.6


Total shareholders' equity

3,960,964



3,935,082


25,882



0.7



3,914,063


3,717,475


3,748,059


212,905



5.7


Total liabilities and shareholders' equity

$

30,333,393



$

30,046,231



287,162



1.0



$

29,770,852



$

28,132,219



$

28,035,063



2,298,330



8.2


 


...

Table 5 - IBERIABANK CORPORATION

LOANS AND ASSET QUALITY DATA

(Dollars in thousands)














Linked Qtr Change








Year/Year Change

LOANS

12/31/2018


9/30/2018


$


%


6/30/2018


3/31/2018


12/31/2017


$


%

Commercial loans and leases:


















Real estate- construction

$

1,196,366



$

1,127,988



68,378



6.1



$

1,183,367



$

1,199,625



$

1,240,396



(44,030)



(3.5)


Real estate- owner-occupied (1)