IBERIABANK Corporation Announces Agreement To Acquire Old Florida Bancshares, Inc.

IBERIABANK Corporation

("IBKC"), holding company of the 127-year-old IBERIABANK (www.iberiabank.com) and Old Florida Bancshares, Inc. ("Old Florida"), holding company of Old Florida Bank and New Traditions Bank (www.oldflorida.com) jointly announced today the signing of a definitive agreement for IBKC to acquire Old Florida via merger. The proposed merger of Old Florida with and into IBKC has been approved by the Board of Directors of each company and is expected to close in the first quarter of 2015. Completion of the transaction is subject to customary closing conditions, including the receipt of required regulatory approvals and the approval of Old Florida's shareholders. John O. Burden, Sr., President and Chief Executive Officer of Old Florida, will be named Executive Vice President and Market President for IBERIABANK's Central Florida franchise after the acquisition is consummated. John Burden commented, "We couldn't be more excited about this combination and look forward to partnering with IBERIABANK. Old Florida and IBERIABANK share a similar approach to banking – one that is grounded in a fundamental belief that success is driven by people and relationships at the local level. Culturally, both companies emphasize and value mutual respect, collaboration and community involvement. This is how we built Old Florida and how IBERIABANK has been growing for over 127 years. This step is the perfect opportunity to take our business to the next level – benefiting our clients, team members and shareholders." Daryl G. Byrd, President and Chief Executive Officer of IBKC, added, "We are very pleased to have the opportunity to enter the Orlando market by joining forces with Randy and John Burden and their exceptional team at Old Florida Bancshares. With a population of over two million people, the Orlando market is dynamic and possesses a deep commercial and industrial client base that is particularly attractive to us. Old Florida's focus on these types of commercial clients, combined with quality credit underwriting and a strong core deposit base, provides an excellent fit with our unique culture and business model. We also believe Old Florida will complement our current southeast and southwest Florida franchises, along with our recently announced agreement to acquire Florida Bank Group, which has operations in Tampa, Jacksonville, Tallahassee, and Sarasota. Old Florida's specialty niche businesses of SBA 504 lending and equipment financing provide interesting potential upside across our footprint as well." Under the terms of the merger agreement, shareholders of Old Florida will receive IBKC common stock. Old Florida common shares are assumed to total approximately 10,894,845 shares at closing, assuming approximately 10,562,259 common shares outstanding and approximately 332,586 common shares associated with the conversion of the convertible preferred stock into common shares. Stock Consideration. Each Old Florida common share will be exchanged for 0.34 share of IBKC common stock, subject to certain market price adjustments provided for in the merger agreement. Based on IBKC's closing stock price on October 24, 2014, of $64.13 per share, the stock consideration would equate to $21.80 per Old Florida common share, or approximately $238 million. Unvested Stock Option Consideration. At September 30, 2014, Old Florida had approximately 2.1 million stock option shares outstanding with a weighted average exercise price of $11.66 per share. These stock options are anticipated to be in-the-money at closing. The merger agreement provides that any Old Florida stock options that remain outstanding immediately prior to closing, whether or not vested, will be cashed out at consummation of the merger. Based on IBKC's closing stock price on October 24, 2014, of $64.13, the cash value for optional shares would be $21.3 million. The cash value of the stock options and stock consideration would equate to aggregate consideration of approximately $259 million. IBKC currently estimates annual pre-tax expense reductions associated with the transaction will be approximately 30% of Old Florida's run-rate expenses in 2014. The expense savings are estimated to be fully achieved, on a run-rate basis, within six months of closing. Acquisition and conversion related costs (including lease termination costs) are estimated to be approximately $21.6 million on a pre-tax basis. The transaction is expected to be 2%-3% accretive to IBKC's fully diluted earnings per share ("EPS") in 2016 and 2017. The transaction is expected to be neutral to IBKC's capital ratios, and to be approximately 2% dilutive to tangible book value per share on a pro forma basis at closing. The tangible book value dilution is anticipated to be earned back in less than four years. The estimated internal rate of return for the transaction is expected to be greater than 20%, and, therefore, in excess of IBKC's cost of capital.