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IBERIABANK Corporation Reports First Quarter Results

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LAFAYETTE, La., April 25, 2019 /PRNewswire/ -- IBERIABANK Corporation (NASDAQ:IBKC), holding company of the 132-year-old IBERIABANK (www.iberiabank.com), reported financial results for the first quarter ended March 31, 2019. For the quarter, the Company reported net income available to common shareholders of $96.5 million, 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, compared to $1.37 in the year-ago period, an increase of 26% (refer to press release supplemental tables for a reconciliation of GAAP to non-GAAP metrics).

Daryl G. Byrd, President and Chief Executive Officer, commented, "We are pleased to report another quarter of solid earnings and a very good start to 2019. Our results for the quarter reflect outstanding growth in loans, improvement in fee income, and continued reduction of non-interest expense. We had a lower net interest margin than we anticipated, which I expect to improve in future quarters. We believe the foundation laid in 2018 and in the first quarter sets us up well to deliver strong results in 2019."

Highlights for the first quarter of 2019 and at March 31, 2019:


For the three months ended


GAAP


Non-GAAP Core


1Q19

4Q18


1Q19

4Q18

Earnings Per Common Share

$

1.75


$

2.32



$

1.72


$

1.86


Return on Average Assets

1.32

%

1.70

%


1.29

%

1.37

%

Return on Average Common Equity

9.85

%

13.38

%


9.66

%

10.75

%

Return on Average Tangible Common Equity

N/A


N/A



15.03

%

16.98

%

Efficiency Ratio

52.4

%

63.5

%


53.2

%

52.6

%

Tangible Efficiency Ratio (TE)

N/A


N/A



51.3

%

50.7

%

 

  • Strong 1Q19 for both GAAP and Core EPS, improving 59% and 26%, respectively on a year-over-year basis, as a result of excellent loan growth, non-interest income, and continued expense management.
  • Total loan growth of $448.5 million, or 8% annualized. Loan growth was driven by strong originations and loan prepayments slowing.
  • The Company's reported and cash net interest margins decreased 22 and 10 basis points on a linked quarter basis, to 3.59% and 3.42%, respectively. The decline in margin was primarily driven by lower recoveries as expected and higher cost of funding. Funding costs increased as the Company realized seasonal declines in lower cost deposits and strong loan growth primarily funded with wholesale funding sources.
  • Strong growth in non-interest income influenced by the current yield curve.
    • Mortgage income increased $1.5 million, or 14% on a linked quarter basis and 23% as compared to 1Q18.
    • The Company realized record swap income of $4.2 million, up 124% on a linked quarter basis.
    • The linked quarter increase of $51.5 million was primarily driven by $49.8 million in losses on sales of available securities that occurred during 4Q18.
  • Continued focus on non-interest expense which decreased $10.2 million, or 6% on a linked quarter basis. Core non-interest expense declined $5.1 million, or 3%, from 4Q18.
    • Year-over-year reduced FTEs by 342, or almost 10%, including employees from the Gibraltar acquisition.
    • Produced the lowest quarterly level of non-interest expense to average assets over the past 15 years.
    • Continued improvement in operating leverage.
  • Credit metrics remained strong and stable. The provision expense rose slightly from the prior quarter to provide adequate reserve coverage of strong loan growth. We see no signs of deterioration in the portfolio.
  • During 1Q19, the Company repurchased 387,921 common shares at a weighted average price of $77.19 per common share.
  • On March 19, 2019, the Company announced a first quarter cash dividend equal to $0.43 per common share, payable on April 26, 2019. This equated to a 5% increase to the 4Q18 dividend.

Special Items

  • On April 4, 2019, the Company issued and sold 4.0 million depositary shares, each representing 1/400th interest in a share of non-cumulative perpetual preferred stock. The Series D preferred stock has an initial coupon equal to 6.100% for a period of five years, and thereafter floats at a rate of LIBOR plus 385.9 basis points. The Company raised approximately $100.0 million in gross proceeds from the transaction. Proceeds from the transaction are currently expected to be used for repurchases of common stock. This re-stacking of capital is expected to provide a few incremental pennies of EPS and enhance the Company's ROTCE by approximately 50 basis points in 2020, based on IBKC's current stock price. The impact of this offering will be immaterial on 2019 earnings.

 

Table A - Summary Financial Results

(Dollars in thousands, except per share data)













For the Three Months Ended


3/31/2019



12/31/2018


% Change


3/31/2018


% Change

GAAP BASIS:











Income available to common shareholders

$

96,533




$

129,090



(25.2)



$

60,023



60.8


Earnings per common share - diluted

1.75




2.32



(24.6)

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