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IBERIABANK Corporation Reports Second Quarter Results

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IBERIABANK Corporation Reports Second Quarter Results

PR Newswire

LAFAYETTE, La., July 20, 2018 /PRNewswire/ -- IBERIABANK Corporation (NASDAQ:IBKC), holding company of the 131-year-old IBERIABANK (www.iberiabank.com), reported financial results for the second quarter ended June 30, 2018. For the quarter, the Company reported net income available to common shareholders of $74.2 million, or $1.30 diluted earnings per common share ("EPS"). On a non-GAAP basis, EPS excluding non-core revenues and non-core expenses ("Core EPS") in the second quarter of 2018 was $1.71 per common share, compared to $1.10 in the year-ago period, an increase of 55% (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 strong financial performance this quarter is the result of solid franchise momentum, growth in loans and deposits, and a pickup in our fee income businesses. Building upon the client growth we have achieved, and managing expenses remain our fundamental objectives and key to successfully achieving earnings expectations for 2018 and beyond.

We are proud of our diversified franchise, and we have the right team and platforms in place to drive outstanding client growth amongst favorable economic conditions. We remain laser-focused on delivering sustainable, profitable returns for our shareholders, and we believe that our 2018 financial performance will position us to achieve or exceed our 2020 Strategic Goals," Byrd continued.

Highlights for the second quarter of 2018 and at June 30, 2018:

On a linked quarter basis, both GAAP and Core EPS significantly improved, driven by increases in loan interest income as a result of higher loan yields and a seasonal improvement in our fee income businesses in the second quarter. Merger-related expenses, branch closure expenses and an adjustment to provisional tax amounts comprised the majority of the variance between GAAP and Core EPS. Return metrics and efficiency ratios significantly improved in the current quarter primarily as a result of revenue growth.


For the three months ended


GAAP


Non-GAAP Core


2Q18

1Q18


2Q18

1Q18

Earnings Per Common Share

$

1.30


$

1.10



$

1.71


$

1.37


Return on Average Assets

1.01

%

0.92

%


1.32

%

1.13

%

Return on Average Common Equity

7.87

%

6.79

%


10.30

%

8.45

%

Return on Average Tangible Common Equity

N/A

N/A


16.70

%

13.83

%

Efficiency Ratio

63.5

%

67.9

%


56.6

%

61.1

%

Tangible Efficiency Ratio (TE)

N/A

N/A


54.3

%

58.8

%

 

  • Revenue growth and cost containment relative to the linked quarter produced positive operating leverage multiples of 3.8 on a GAAP basis and 5.4 on a Core basis.
  • The Company's reported and cash net interest margins improved 9 and 7 basis points on a linked quarter basis, to 3.76% and 3.49%, respectively, primarily driven by $7.4 million (or $0.10 impact to EPS after-tax, 11 basis points impact to reported net interest margin) of higher recoveries and incremental accelerated accretion on acquired loans, as well as rising short-term interest rates.
  • Non-interest income in 2Q18 increased $9.4 million, or 21%, on a linked quarter basis, primarily as a result of seasonal growth in the Company's fee income businesses, including increases in mortgage income and title revenue.
  • Non-interest expense increased $8.6 million on a linked quarter basis, primarily due to increased salary and employee benefits expenses and branch closure expenses. 2Q18 non-interest expense included $14.3 million in pre-tax merger-related expense ($0.20 impact to EPS after-tax), compared to $16.2 million ($0.23 impact to EPS after-tax) in 1Q18.
  • Total loan growth was $369.7 million, or 1.7% (6.8% annualized rate), in 2Q18.
  • Total deposits increased $459.3 million, or 2.0% (8.0% annualized rate), in 2Q18.
  • Credit metrics remain stable. Net charge-offs were $11.7 million, of which $4.2 million was covered by specific reserves recorded in prior periods.
  • Income tax expense was impacted by a $6.6 million (or $0.12 impact to EPS) write-down of deferred tax assets associated with the finalization of the accounting for the Sabadell acquisition and the related impact of the Tax Cuts and Jobs Act (the "Tax Act") on those adjustments.
  • Integration and assimilation of both Sabadell and Gibraltar remain on track and performing in-line with original expectations.  
  • On May 10, 2018, the Board of Directors of the Company authorized the repurchase of up to 1,137,500 shares of the Company's common stock. During 2Q18, the Company repurchased 400,000 common shares at a weighted average price of $76.67 per common share.

 

Table A - Summary Financial Results

(Dollars in thousands, except per share data)













For the Three Months Ended


6/30/2018



3/31/2018


% Change


6/30/2017


% Change

GAAP BASIS:











Income available to common shareholders

$

74,175




$

60,023



23.6



$

51,069



45.2


Earnings per common share - diluted

1.30




1.10



18.2

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