Active Mover: IBERIABANK Corporation (NASDAQ: IBKC)

LAFAYETTE, La., June 21, 2019 – (), holding company of the 132-year-old IBERIABANK, stated net income available to common shareholders of $96.50M, or $1.75 diluted earnings per common share (“EPS”). On a non-GAAP basis, EPS excluding non-core revenues and non-core expenses (“Core EPS”) in the first quarter of 2019 was $1.72 per common share, contrast to $1.37 in the year-ago period, a boost of 26%.

Operating Results

Net interest income reduced $14.50M, or 5%, on a linked quarter basis. Average loans increased $235.50M, or 4% annualized, while the associated taxable-equivalent yield reduced 15 basis points. The yield on total earning assets was 6 basis points lower at 4.68% contrast to 4.74% in the prior quarter. The decline in loan yield was mainly driven by lower recoveries in the attained loan portfolio.

Average interest-bearing deposits increased $568.60M, or 14% annualized, and the cost of interest-bearing deposits raised 17 basis points to 1.40% on a linked quarter basis. Total average interest-bearing liabilities increased by $766.30M, or 16% annualized, and the cost of interest-bearing liabilities raised 19 basis points to 1.53%. The total cost of funding in the first quarter of 2019 was 1.17%, contrast to 1.00% in the prior quarter. The increase in cost of funds was mainly because of an unfavorable funding balance mix shift from lower cost deposits to wholesale borrowings, an upward repricing of remaining deposits, promotional activity in customer time deposits, and brokered wholesale CD issuances. The lower loan yields, together with the increase in cost of funds, resulted in a decrease in the stated and cash net interest margins of 22 and 10 basis points to 3.59% and 3.42%, respectively.

The provision for credit losses totaled $13.80M contrast to $13.10M in the prior quarter. Asset quality measures remained strong and stable. Net charge-offs to average loans on an annualized basis were 0.13% contrast to 0.14% in the prior quarter.  Non-performing assets to total assets were 0.58% contrast to 0.55% in the prior quarter. The allowance for loan and lease losses to total loans and leases remained unchanged at 0.62% and covered 94% of non-performing loans.

Non-interest income increased $51.50M, mainly driven by $49.80M in losses realized on sales of available-for-sale securities during the prior quarter. On a core basis, non-interest income increased $1.30M, or 2%, driven by higher customer swap commissions of $2.30M and higher mortgage income of $1.00M. These increases were partially offset mainly by decreases of $0.80M in title revenue and $0.60M in service charges on deposit accounts.

Non-interest expense reduced $10.20M, or 6%, contrast to the linked quarter, mainly driven by a $4.20M decrease in professional service expenses, a $3.30M decrease in salaries and employee benefits expenses, and a $1.90M decrease in credit and other loan related expenses. Non-core expense items resulted in a $2.50M reduction in GAAP non-interest expense, mainly from interest related to tax refunds received.

Income tax expense increased $76.50M to $30.30M when contrast to the prior quarter. This increase was mainly attributable to the $65.30M, non-core, permanent net tax benefit that was recorded in the fourth quarter of 2018 which resulted in a $46.10M income tax benefit.

Loans and Other Assets

Total loans increased $448.50M, or 8% annualized, to $23.00B at March 31, 2019. Period-end loan growth during the first quarter of 2019 was strongest in the Energy Group (mainly reserve-based lending), the Corporate Asset Finance Group (equipment financing business), and the Atlanta, South Florida Commercial, and Dallas markets. The Company believes it is well-positioned for diversified loan growth based on our planned presence in noteworthy MSAs in the Southeastern United States.

On an average balance and linked quarter basis, the investment portfolio increased $240.60M, or 20% annualized, to $5.00B, mainly because of purchases of available-for-sale securities and favorable fair value adjustments. On a period-end basis, investment securities were $5.10B, or 16% of total assets. About 96% of the investment portfolio is in available-for-sale securities, which experience unrealized losses as interest rates rise. The investment portfolio had an effective duration of 3.0 years at March 31, 2019, down from 3.4 years at December 31, 2018, and a $6.00M unrealized loss at March 31, 2019, down from a $62.90M loss at December 31, 2018. The average yield on investment securities increased 29 basis points to 2.90% in the first quarter of 2019. The investment portfolio mainly consists of government agency securities. Municipal securities comprised 7% of total investments at March 31, 2019.

Deposits and Funding

Total deposits increased $328.60M, or 6% annualized, to $24.10B at March 31, 2019. First quarter deposit growth included a $270.0M increase in brokered and reciprocal deposits. Deposit growth during the first quarter of 2019 was strongest in the Miami-Dade, Southwest Louisiana, and Palm Beach/Broward markets.

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