Market Overview

IBERIABANK Corporation Reports Third Quarter Results

Share:

IBERIABANK Corporation Reports Third Quarter Results

PR Newswire

LAFAYETTE, La., Oct. 19, 2018 /PRNewswire/ -- IBERIABANK Corporation (NASDAQ:IBKC), holding company of the 131-year-old IBERIABANK (www.iberiabank.com), reported financial results for the third quarter ended September 30, 2018. For the quarter, the Company reported net income available to common shareholders of $97.9 million, or $1.73 diluted earnings per common share ("EPS"). On a non-GAAP basis, EPS excluding non-core revenues and non-core expenses ("Core EPS") in the third quarter of 2018 was $1.74 per common share, compared to $1.00 in the year-ago period, an increase of 74% (refer to press release supplemental tables for a reconciliation of GAAP to non-GAAP metrics). Excluding quarters where we had bargain purchase gains, Core EPS
was a record in the third quarter of 2018.

Daryl G. Byrd, President and Chief Executive Officer, commented, "We are pleased to report another quarter of solid financial performance driven by loan growth, increased revenues, and a reduced expense base. Today, we are providing initial financial guidance for 2019.  Our focus on delivering sustainable, profitable returns to our shareholders is reflected in our guidance as we continue to work toward achieving our 2020 Strategic Goals, which we expect to attain in 2019."

Highlights for the third quarter of 2018 and at September 30, 2018:


For the three months ended


GAAP


Non-GAAP Core


3Q18

2Q18


3Q18

2Q18

Earnings Per Common Share

$

1.73


$

1.30



$

1.74


$

1.71


Return on Average Assets

1.34

%

1.01

%


1.35

%

1.32

%

Return on Average Common Equity

10.21

%

7.87

%


10.27

%

10.30

%

Return on Average Tangible Common Equity

N/A

N/A


16.34

%

16.70

%

Efficiency Ratio

54.2

%

63.5

%


54.0

%

56.6

%

Tangible Efficiency Ratio (TE)

N/A

N/A


52.0

%

54.3

%

 

  • On a linked quarter basis, both GAAP and Core EPS improved driven by loan growth, margin stability and expense reduction. 
  • Revenue growth and declining expense produced positive operating leverage in the quarter.
  • Solid returns in 3Q18 allowed the company to achieve previously announced 2020 Strategic Goals for the second consecutive quarter.
  • The Company's reported and cash net interest margins declined 2 basis points on a linked quarter basis, to 3.74% and 3.47%, respectively.
  • Non-interest expense declined $27.5 million on a linked quarter basis. On a core basis, non-interest expense decreased $6.8 million.
  • Total loan growth was $268.1 million, or 5% annualized.
  • Total deposits decreased $237.0 million, or -4% annualized. As of September, 30, 2018, total non-interest bearing deposits represented 28% of total deposits. Third quarter deposits were significantly influenced by several large commercial deposit outflows, which were expected.
  • Credit metrics remained stable. Classified assets are down 20% from the same time a year ago.
  • As previously announced, during 3Q18 the Company closed 22 retail branches and expects to realize $2 million in operating expense savings per quarter.
  • During 3Q18, the Company repurchased 363,210 common shares at a weighted average price of $83.63 per common share.
  • The Company announced a third quarter cash dividend equal to $0.39 per common share, a 3% increase compared to the common dividend declared in June 2018.
  • On October 19, 2018, the Company announced a fourth quarter cash dividend equal to $0.41 per common share, payable on January 25, 2019, to shareholders of record on December 31, 2018.  This equates to a 5% increase to the third quarter common dividend. This announcement marks the third common dividend increase in 2018.

4Q18 Special Items

In connection with filing its 2017 income tax returns, the Company anticipates recognizing a non-core, permanent net income tax benefit of approximately $55 million in the fourth quarter of 2018. This anticipated benefit is based on the repricing of  its current and deferred income tax position associated with the Tax Cuts and Jobs Act of 2017 following the filing of the Company's remaining state income tax returns and the receipt of written consent from the IRS on a tax accounting method change.  The Company expects these items to be finalized in the fourth quarter of 2018.

2019 Financial Guidance

The Company is providing initial financial guidance for 2019 as listed below:

2019 Guidance

Average Earning Assets

$28.6B ~ $28.9B

Consolidated Loan Growth

5% ~ 7%

Consolidated Deposit Growth

5% ~ 7%

Provision Expense

$35MM ~ $49MM

Non-Interest Income (Core Basis)

$215MM ~ $225MM

Non-Interest Expense (Core Basis)

$685MM ~ $700MM

Net Interest Margin

3.60% ~ 3.70%

Tax Rate

22.5% ~ 23.5%

Preferred Dividend & Unrestricted Shares

$12.5 ~ $13.5

Share Repurchase Activity

$135MM ~ $150MM

Credit Quality

Stable

 

  • Guidance includes two interest rate increases in 2019.
  • Impact of deployment alternatives related to the $55 million non-core permanent tax in 2018 are not included in the guidance at this time. Once received, management and the Board of Directors will evaluate deployment alternatives, which may include increased dividends, additional share repurchases, and/or balance sheet management strategies.

 

Table A - Summary Financial Results

(Dollars in thousands, except per share data)













For the Three Months Ended


9/30/2018



6/30/2018


% Change


9/30/2017


% Change

View Comments and Join the Discussion!