focus ed
A N N U A L R E P O R T 2 0 1 5
A N N U A L R E P O R T 2 0 1 5
FINANCIAL HIGHLIGH TS
(Dollars in thousands, except per share data)
IN COM E DATA
For the Year Ending December 31,
2015 2014 % Change
Net Interest Income
Net Interest Income (TE) (1)
Net Income
Earnings Available to Common Shareholders - Basic
Earnings Allocated to Common Shareholders
$587,758 $460,111
468,720
105,382
105,382
103,731
596,362
142,844
142,844
141,164
28%
27%
36%
36%
36%
PE R S HARE DATA
Earnings Per Common Share - Basic
Earnings Per Common Share - Diluted
Book Value Per Common Share
Tangible Book Value Per Common Share (2)
Cash Dividends
NUM BE R OF SHARES OUTSTANDING
Basic Shares (Average)
Diluted Shares (Average)
Book Value Shares (Period End) (3)
KE Y R ATIOS
Return on Average Assets
Return on Average Common Equity
Return on Average Tangible Common Equity (2)
Net Interest Margin (TE) (1)
Efficiency Ratio
Tangible Efficiency Ratio (TE) (1) (2)
Average Loans to Average Deposits
Non-performing Assets to Total Assets (4)
Allowance for Loan Losses to Loans
Net Charge-offs to Average Loans
Average Equity to Average Total Assets
Tier 1 Leverage Ratio
Common Stock Dividend Payout Ratio
Tangible Common Equity Ratio
Tangible Common Equity to Risk-Weighted Assets
$3.69
3.68
58.87
40.35
1.36
$3.31
3.30
55.37
39.08
1.36
31,307
38,214
38,310 31,433
41,140 35,453
11%
12%
6%
3%
-
22%
22%
23%
0.78%
6.41%
9.65%
3.55%
70.6%
68.6%
87.6%
0.98%
0.97%
0.08%
12.29%
9.52%
38.5%
8.86%
9.93%
0.72%
6.17%
9.04%
3.51%
74.7%
72.5%
89.7%
1.43%
1.14%
0.05%
11.67%
9.35%
42.1%
8.59%
10.37%
(1) Fully taxable equivalent (TE) calculations include the tax benefit associated with related income sources that are tax-exempt using a marginal tax rate of 35%.
(2) Tangible calculations eliminate the effect of goodwill and acquisition-related intangible assets and the corresponding amortization expense on a tax-effected basis where applicable.
(3) Shares used for book value purposes exclude shares held in treasury at the end of the period.
(4) Non-performing assets consist of non-accruing loans, accruing loans 90 days or more past due, and other real estate owned, including repossessed assets.
Directors of IBERIABANK Corporation are: Elaine D. Abell; Harry V. Barton, Jr.; Ernest P. Breaux, Jr.; Daryl G. Byrd; John N. Casbon; Angus R. Cooper II; William H.
Fenstermaker; John E. Koerner III; O. Miles Pollard, Jr.; E. Stewart Shea III; and David H. Welch, Ph.D.
IBERIABANK Corporation is a financial holding company with consolidated assets at December 31, 2015 of $19.5 billion. IBERIABANK Corporation and its predecessor
organizations have served clients for 129 years. The Corporation’s subsidiaries include IBERIABANK, Lenders Title Company, IBERIA Wealth Advisors, IBERIA Capital
Partners, IB Aircraft Holdings, and IBERIA CDE.
foc u s e d
The year 2015 presented unique challenges to our Company, our industry, and the
world around us.
This year’s Annual Report describes the focus we continue to have as we strategically
navigate these extraordinary times to take advantage of client opportunities and
deliver shareholder value.
CO NT ENTS
2 President’s Letter to Shareholders
6 Chairman’s Letter to Shareholders
8 Our Mission
10 Serving Clients’ Needs
13 Our Constituents
16 Efficient Delivery
20 Managing Risk
23 Financial Strength
26 Financials
147
Corporate Information
PRESIDENT’S LETTER
TO S HAREHOL DERS
Dear Shareholders,
The year 2015 was a period of significant focus and progress for our Company. Advancements touched many
aspects of our franchise and our constituents. These advancements were achieved through team-driven initiatives,
continuous attention to detail, and outreach efforts. For example, our concentrated efforts to grow revenues and
reduce costs drove improvements in our operating efficiency, profitability, and equity. Similarly, excellent teamwork
and product enhancements resulted in greater sales of products and services, deepened client relationships, and
enhanced client satisfaction. Our diverse constituents are critical components to our success, and in 2015, we
expanded our outreach to our clients, the communities we serve, and many facets of the investment community.
To our shareholders, we demonstrated continued leadership in transparency, focus, and growth opportunity. We
achieved much in 2015, though we recognize that more remains to be accomplished.
In many respects, it was also a year of interesting contrasts. For example, we designed and successfully executed
initiatives to improve our operating performance and enhance our long-term franchise value. At the same time,
we proactively navigated dynamic courses of action to address unexpected interest rate challenges and the
volatile influence of economic imbalances in commodity prices impacting a select number of our clients. Similarly,
we continued to grow our client base through organic expansion of our legacy franchise, while simultaneously
reducing certain exposures in what we call a “risk-off trade” (described below). We successfully acquired and
integrated three healthy financial institutions, while we continued to resolve credits of failed institutions that we
acquired from the FDIC more than five years ago. We attained many record levels of financial performance,
yet the overhang of economic concerns throughout 2015 seemed to limit the transmission of those benefits
into a higher stock price by the end of the year. In this year of contrasts, we successfully stayed the course
and progressed towards our stated goals of enhanced financial performance. At the same time, we engaged
in proactive measures to protect our franchise. This multi-tasking effort requires significant clarity, focus, and
intensity — attributes we clearly demonstrated throughout 2015.
Unlike much of the banking industry, we experienced continued solid balance sheet growth in 2015. Over a
one-year period, our period-end total assets, loans, and deposits grew 24%, 25%, and 29%, respectively, or
were more than triple the industry’s rates of growth over that period. Our growth was derived from multiple
sources (acquisitions and legacy client growth), diverse and growing markets (including five new Metropolitan
Statistical Areas, or “MSAs”), and varied revenue sources (our fee-based and spread-based businesses).
AVERAGE LOANS ($ in Billions)
2 / Annual Report 2015
AVERAGE DEPOSI TS ($ in Billi ons)
Non-Interest Bearing
Interest-Bearing
Considered an “acquirer-of-choice” in the banking industry, we remain very selective in choosing our acquisition
partners. During 2015, we completed the acquisition of three high-quality companies with an aggregate $3
billion in total assets and 36 locations serving 76,000 clients. These transactions were also well priced, with a
weighted average purchase price equal to 1.6 times tangible book value per share and an 8.1% core deposit
premium – favorable prices by comparable acquisition standards. The acquisitions were completed in a very
timely manner and with minimal client disruptions. In the brief span of 122 days, our teams completed the
acquisitions of three bank holding companies and their four subsidiary banks, and successfully completed five
branch and operating system conversions, which is a record level of activity for our Company. The period of time
required to receive regulatory approvals, close the transactions, and complete the branch and operating system
conversions associated with these acquisitions averaged 111, 48, and 28 days, respectively. We incurred $24
million in aggregate one-time merger-related expenses, but these costs were $13 million, or about one-third,
less than our expectations. By the end of 2015, we achieved our targeted levels of expense savings and revenue
enhancements. Once completed, the acquisitions helped improve the operating leverage of our Company and
should provide us with tremendous future growth opportunities.
These acquisitions also included ancillary businesses that we believe hold great promise, including Small Business
Administration (“SBA”) 504 and 7(a) loan platforms and an equipment finance business, each of which has now
been deployed across our franchise footprint. Importantly, through these acquisitions we also added strong local
leadership in our Tampa, Orlando, Atlanta, and Jacksonville markets, along with Regional Market Presidents for
Florida and Georgia. The acquisitions added to the geographic diversification of our banking franchise, which
now serves 32 MSAs in seven states throughout the southeastern U.S.
3
Excluding the acquisitions, our legacy franchise exhibited strong client growth in 2015 as well. Between year-ends
2014 and 2015, our legacy loans grew $1.5 billion, or 16%; legacy total deposits climbed $968 million, or
8%; and legacy core deposits (which exclude time deposits) increased $1.3 billion, or 12%. This growth stands
in stark contrast to comparable industry averages of 8%, 4%, and 5%, respectively, according to Federal Reserve
data. Our client growth was achieved without a decrease in our strong asset quality, liquidity, or capital position,
and was consistent with our growth trends over the last 15 years.
These strong legacy growth measures were achieved despite a conscious decision and proactive efforts to
slow or pare back certain client exposures due to the changing regulatory environment and market conditions.
Commencing in 2014, we reduced our exposure to energy-related credits as a result of continuing weakness
in energy commodity prices. In addition, we tightened credit standards in certain markets that we believe posed
greater credit risk due to changing economic conditions in those markets. Finally, we decided to exit the indirect
automobile lending business in early 2015. As a result of these three targeted efforts, we reduced our legacy
loans by $442 million, or 4%, with an estimated opportunity cost to our 2015 income of approximately $5.5
million on a pre-tax basis.
Throughout 2015, many of our asset quality statistics remained stable or improved, and our asset quality at
the end of the year was stellar compared to peers. Despite that favorable credit performance, we maintain a
watchful eye over the potential impact that sustained low energy prices may have on our clients over time. We
experienced no charge-offs in our energy-related loan portfolio in 2015, though we added $19 million to our
loan loss reserves associated with energy-related credits. Similar to our proactive “risk-off trade,” this higher
reserve level reduced pre-tax income as well. We provided the investment community with an unprecedented
level of disclosure regarding our energy exposure throughout the year, along with a half-day “teach-in” session
hosted by our institutional brokerage firm, IBERIA Capital Partners, and an “investor-analyst day” hosted by our
Company that provided the investment community with a better understanding of energy-related topics. This
information and education sessions were very well received.
Given the unprecedented low interest rate environment and the market’s expectations for higher interest rates,
we positioned our balance sheet to prepare for higher interest rates in early 2015 (and increased that “asset
sensitive” position throughout the year.) Unfortunately, things did not turn out that way, though we certainly
were not alone in our expectations for higher short-term interest rates. At the start of 2015, the consensus of 47
top economists projected a 100-basis point increase in short-term interest rates by the end of 2015. Only 4%
of those economists were correct that the increase would be limited to a single 25-basis point increase. Also,
that small interest rate increase arrived at the very end of the year, which resulted in very little benefit to our
tax-equivalent net interest margin (“margin”) and net income in 2015. Driven not by rate increases but by our
efforts to improve balance sheet efficiency, continued success in acquired loan portfolio resolutions, and better
product pricing, our margin improved four basis points in 2015 compared to 2014.
The margin improvement, combined with favorable balance sheet growth and strong growth in our fee income
businesses, led to strong top-line operating revenue growth of $173 million, or 27%, compared to 2014.
4 / Annual Report 2015
Our fee income growth was multifaceted as well. Our fee income businesses, including IBERIABANK Mortgage
Company, Lenders Title Company, and IBERIA Financial Services, delivered record results in 2015. Some of our
products, such as treasury management services, client derivatives, syndications, and purchasing cards also
achieved record levels of income in 2015.
We were very focused and engaged in 2015 as we extracted cost savings from the acquisitions, executed targeted
expense savings initiatives, and assertively managed our ongoing expenses to control future expense growth. We
remain mindful of changing client preferences regarding channel usage, and we continue to adapt accordingly.
Our strategy of geographically diverse markets, “branch-lite” facility presence, and electronic delivery and usage
options fits very well with the undercurrent of changes that are occurring within the banking industry.
In 2015, we provided guidance to the investment community regarding our expected fully diluted operating
earnings per share (“EPS”) and other key performance drivers. While not unusual for us, given we have done
so in seven of the last 15 years, only 9% of our peers provided any form of earnings guidance to the investment
community in 2015. We also provided public updates regarding our progress and expectations of attaining
our strategic goals in 2016. Given our sustained revenue growth and efficiency focus, we are pleased to have
achieved our 2015 goals for client growth, operating earnings, and operating EPS. Remarkably, our quarterly
operating EPS improved throughout the year despite no material benefit from increased interest rates, the cost of
additional loan loss reserves for energy-related loans, and the foregone income in the “risk-off trade,” which we
believe may help protect future income.
We are very proud of the team effort that produced record operating EPS and exceptional client service in 2015.
We will strive for further improvement in revenue growth, cost containment, and expanded client relationships in
2016. Importantly, we remain driven to further improve our financial performance, and we believe we are well
positioned and operationally grounded to continue to manage challenges facing our industry.
On behalf of our Company’s leadership team and more than 3,000 associates, we thank you for your continued
support. Collectively, we are focused on generating long-term shareholder value.
Sincerely,
Daryl G. Byrd
President and Chief Executive Officer
5
C HA IRM AN’S L ETTER TO THE SHAREHOLDERS
Dear Shareholders,
Your Board of Directors continues to guide this
Company through very interesting times. The role
of Board members and the oversight and direction
we provide to the Company are multifaceted,
but our responsibilities start with listening. It has
been said that the words “listen” and “silent” are
so conceptually connected that they share the
same letters. We carefully listen to the Company’s
associates and
team, our clients,
community leaders, and regulators. Importantly,
we also listen to our shareholders, as demonstrated
by our second consecutive year of institutional
shareholder outreach and engagement.
leadership
the banking
We synthesize and challenge the inputs we receive,
compare them to our goals and risk tolerances,
and then utilize our many years of business and
leadership acumen to ensure the Company is
moving in the appropriate direction. We stay
attuned to structural changes, impediments, and
opportunities within
industry and
review and approve the Company’s strategic plan.
We set appropriate expectations and risk oversight,
review strategic and tactical plans, approve annual
budgets and risk appetite, and confirm that stated
plans are appropriately executed or recalibrated
due to changing conditions. Thereafter, we actively
review the performance of the Company. Your Board
engages various outside “thought leaders” and
consultants to assist the Board in the development
and
implementation of corporate governance
measures and executive compensation programs.
The Compensation Committee of the Board made
continuous improvements in the Company’s executive
compensation programs over the last two years,
based on consultant input and our shareholder
outreach initiatives. These program changes provide a
more direct
connection between pay and
performance, more rigor compared to pay packages
at our peer banks, and greater transparency to the
investment community. Our Company produced
many record operating results throughout 2015;
however, our Board and leadership team also
have very high expectations for performance. As
a result of these changes, the total compensation
of our Named Executive Officers declined 5% in
2015 compared to the prior year. We believe this
outcome provides evidence that the changes to our
executive compensation programs continue to have
the desired effects. We have listened and continue
to take appropriate actions.
We also carefully consider the necessary balance
between some of our constituencies’ near-term
expectations and maximizing
the Company’s
long-term shareholder value. Our Board believes we
operate with the balance required to maximize our
Company’s long-term value.
Shareholders receive long-term value from our
Company in two primary manners, and we are very
mindful of the importance of both factors. First,
shareholders benefit from the value of our common
stock and, more recently, from the value of our
preferred stock. As a publicly traded company, our
shareholders benefitted from a significant increase
in trading volume and liquidity in our common
shares during 2015. In 2015, we averaged $15
million in trades per trading day in our common
stock, an increase of 31% over 2014. Our common
stock is covered by 11 equity research analysts who
provide detailed research and advice to institutional
and retail shareholders. We recognize that our
share price is of paramount importance to our
shareholders, and our Company works diligently to
6 / Annual Report 2015
ensure its strategy, tactics, and financial results are
transparent and appropriate for the Company’s stated
risk tolerances. Unfortunately, our common stock
declined 15% during 2015, which ran counter to the
7% increase in the broad index of bank stocks (as
measured by the NASDAQ Bank Stock Index). Much
of the differential was the result of investors’ concerns
regarding direct or indirect exposure to energy. In
fact, a basket index of 14 publicly traded bank holding
companies with direct and indirect energy exposure
experienced an average 23% decline in stock price
over the last two years, compared to a 12% decline
in our stock price over that same two-year period.
We believe that we are significantly different from
those peers; however, investors still have difficulty in
differentiating companies in this trading environment
and, in particular, during 2015.
The second manner through which shareholders
receive value is cash dividends. Our Company
has paid quarterly cash dividends to its common
shareholders for 83 consecutive quarters. We are
proud that we never suspended or reduced our
quarterly cash dividend on our common stock.
Beginning in February 2016, we commenced paying
semi-annual cash dividends on our preferred stock.
Our Company continued to expand in 2015 in
terms of both size and geographic reach. Entrance
into new metropolitan markets requires local market
knowledge and unique client insight in order to be
successful in those markets. We have gained this
expertise through local market leadership and our
newest advisory boards in Central Florida, Tampa
Bay, and Atlanta. We are delighted and honored that
the 35 members of these advisory boards joined our
Company in 2015. In aggregate, we now have 18
advisory boards with 218 members serving markets
throughout Louisiana, Texas, Arkansas, Tennessee,
Alabama, Georgia, and Florida.
Our geographic diversification has benefitted our
Company in many ways. During 2015, 84% of our
markets exhibited loan growth and 88% experienced
deposit growth. Our Company serves over 292,000
households with over 548,000 loan and deposit
loan
accounts. During 2015, our mortgage
origination business helped a family into a new home
every 10 minutes per business day and originated
loans in 1,083 different communities, with about
one-third of those clients being new homebuyers. The
size and scope of our Company has changed over the
years; however, our successful attention to exceptional
client service, conservative business practices, and
shareholder focus remains steadfast.
We are pleased to report another year of significant
financial improvement, strong high-quality growth,
enhanced diversification, and long-term value creation.
The banking industry continues to evolve, and
we believe that we remain well prepared for the
complexities, challenges, and opportunities that those
changes will manifest.
On behalf of the Board of Directors of your Company,
we thank you for the opportunity to continue to serve
you.
Sincerely,
William H. Fenstermaker
Chairman of the Board
7
FO CUSED
O N O UR M IS SIO N
MISSION STATEMENT
In 2000, our Company turned its strategic attention to building
a strong franchise and brand throughout selected markets in
the southeastern U.S. where we believe our business model can
be successfully deployed. As succinctly described in our mission
statement below, we are focused on delivering favorable
results for our clients, associates, regulators, communities,
and shareholders.
Provide exceptional value-based client service
•
• Great place to work
• Growth that is consistent with high performance
•
•
Shareholder focused
Strong sense of community
Each year, we highlight a theme in our annual report that conveys to shareholders a simple description
of the year’s activities. This year we selected “focus.” We believe that this theme provides an accurate
conceptual representation of the heightened level of concentrated planning and execution regarding
our drive for improved efficiency and profitability. As portrayed throughout this report, “focus” is often
associated with commanding a sharper image; however, the word “focus” was scientifically first applied
to heat. When scientists in the 1600s described the point at which rays of sunlight converge from a
magnifying glass to cause fire, they selected the word “focus,” a Latin phrase for fireplace or hearth. In
many respects, these concepts of concentration and passionate intensity describe our drive for improved
performance. Furthermore, the word “focus” has three common meanings, each of which aptly describes
our efforts and results in 2015.
8 / Annual Report 2015
Adj usting t o make an ima ge clear. Throughout 2015, we placed great
emphasis on specific steps needed to improve our operating performance.
We also went to great lengths to describe to the investment community the
actions we were taking and the intended results. Be it our transparency in
energy exposure, earnings and interest rate risk guidance to the investment
community, or clarity in regard to the roadmap to achieving our goals, we
strove for clarity and sharp focus throughout the year.
Center of act iv it y a nd a tt e nt ion . We became a “center of activity
and attention” in 2015, in both favorable ways and by association with
unexpected industry changes. We are regarded as one of the more
acquisitive consolidators in an industry experiencing a period of accelerated
consolidation. We have also been labeled as an “energy bank” as a result of
our historical presence and client exposure to changing energy commodity
prices, and an “interest-sensitive bank,” though interest rates did not behave
as expected and actually changed very little during the year.
The p oint of int e nsit y t hro ugh m agni fi cati on w h e re li gh t
and hea t c ome toge t he r. While concentrating the sun’s rays through
a magnifying glass may cause combustion, it could only do so if held in
place for an extended period of time. Similarly, concentration, intensity, and
consistency in our efforts drove our revenue enhancements and expense
reductions, resulting in improvements in operating efficiency and profitability.
Our methodical planning and fervent execution on many fronts contributed
to significant improvements in our operating performance throughout the
year.
“
Concentrate all
your thoughts
upon the work
at hand. The
sun’s rays do
not burn until
brought into
focus.”
— Alexander Graham Bell
(1847–1922)
9
FOCUSE D
ON SERV IN G C LI ENTS ’ NE E DS
“
Desire is the key
to motivation,
but it’s
determination
and commitment
to an unrelenting
pursuit of
your goal a
commitment
to excellence
that will enable
you to attain
the success you
seek.”
— Mario G. Andretti (1940–)
The most important aspects of our business are to serve as our clients’ trusted financial
advisor and to help address their financial needs and achieve their financial goals.
Success in that regard may be measured by attracting new clients and expanding
relationships with current clients through increased growth in loans, deposits, and other
products and services. Between year-ends 2014 and 2015, our legacy loans climbed
$1.5 billion, or 16%, while acquired and covered loans increased $1.4 billion, or 77%.
Similarly, legacy deposits increased $1.0 billion, or 8%, and we acquired $2.7 billion in
deposits in 2015. Each of these measures was favorable compared to our peer averages
and the industry as a whole.
A diverse group of markets produced the strongest loan and deposit growth in 2015.
Between year-ends 2014 and 2015, loan growth was strongest in the Southeast Florida,
Dallas, Birmingham, Sarasota, Houston, New Orleans, and Memphis markets. Deposit
growth over that period was strongest in Houston, Florida Keys, Dallas, New Orleans,
Naples, Shreveport, and Mobile. We believe that there are clear benefits to market
diversification.
We also expanded our client base into new markets in 2015, with the completed
acquisitions in Tampa, Jacksonville, Orlando, and Atlanta, along with the expansion of
our mortgage origination business into the Nashville MSA.
Expanding relationships with small businesses has been an area of emphasis for our
Company for the last several years. Excluding the impact of acquisitions, our business
banking loans increased $213 million, or 24%, between year-ends 2014 and 2015.
Similarly, business banking checking
accounts exhibited strong growth
as well, with a 20% increase
in accounts opened
in 2015
compared to 2014.
As a result of deepening our
current client relationships and
expanding new client relationships,
we experienced a record level of
revenues in 2015 and continuous
revenue growth throughout 2015.
Our total tax-equivalent revenues
to $815 million, an
equated
increase of 27% over 2014, and
a record for the Company. Many
of our
income businesses
and product specialties produced
record levels of client transactions
and revenues during 2015.
fee
Supporting the changing needs of our clients is critical. Atlanta client
Polaris recently built its state-of-the-art Outpatient Spine Surgery and
Wellness Center. This facility provides patients exceptional medical and
rehabilitation solutions for complete spinal health.
10 / Annual Report 2015
SMALL BUSINESS RELATI ONS HI PS (# in Thousands)
TAX-EQUIVALENT O PERATI NG R EVE NU ES ($ in Millions)
Mo r t gag e Loan Orig in atio ns. IBERIABANK Mortgage Company (“IMC”) originated a record level of $2.5
billion in mortgage loans in 2015, a 47% increase over 2014, compared to the mortgage industry growth
rate of 29%, as measured by the Mortgage Bankers Association. IMC also relied less on loan refinancings
than the industry. IMC’s loan refinancing levels were 23% of total originations, or approximately half of the
industry average of 46%, in 2015. IMC sold $2.4 billion in loans to secondary market investors in 2015, up
47% compared to 2014, which was also a record level for IMC.
Ti t le I n surance. Lenders Title Company (“LTC”) grew revenues by 11% in 2015 and increased the number
of client closings by 12%. Importantly, LTC became significantly more efficient throughout the year, resulting
in a 44% improvement in income before taxes compared to 2014.
SBA Lending. Loans originated under the Small Business Administration (“SBA”) programs increased
considerably in 2015 as a result of the synergies derived from bank acquisitions completed in 2015. The
acquisition of Old Florida Bancshares, Inc., brought us the SBA 504 lending expertise of Mercantile Capital
Corporation. Since its founding in 2002, Mercantile closed 611 loans in 40 states, with aggregate project
costs totaling $1.7 billion. In 2015, Mercantile closed 26% more loans compared to the prior year. The
loans were closed in 14 states, with $143 million in total project costs, its highest level of production since
2012. The acquisition of Georgia Commerce Bancshares, Inc., brought SBA 7(a) lending expertise to the
Company and is now offered in seven states. The SBA platforms acquired in 2015 provide excellent strategic
fits for our Company.
11
Eq uipm ent Financ e. The Old Florida acquisition also brought expertise in specialty equipment
finance secured by new and used income-producing equipment. The Company provides financing
for many types of specialty equipment, including loaders, excavators, cranes, graders, lifts, and
logging and crushing equipment, with typical terms ranging from three to five years. Equipment
financing loans increased 30% in 2015 compared to 2014.
Trea su r y Managem ent . The Company continued to expand client relationships with treasury
management products and services that focus on optimizing commercial clients’ cash flow
management. In 2015, treasury management net fee
e
s
income increased 31% compared to 2014, which was
a record level for the Company.
Clie nt D er i va ti ve s. The Company provides a full
l
w
range of interest rate hedging products that allow
qualified clients to lock in attractive long-term interest
st
rates on certain commercial loans without increasing
g
our Company’s exposure to potential rising interest
st
6
rates. In 2015, the Company closed a record 46
transactions for clients in 15 different markets. Net
et
%
revenues generated from this activity increased 73%
compared to 2014.
Syn di ca ti ons. The Company has
full-service
e
s
syndications expertise that manages the Company’s
agented loan transactions throughout its footprint.
One of the key functions of this business is to manage
credit risk by maintaining more granular loan exposures
while maintaining strong client relationships. The
syndications team arranged over $600 million in loans
in 2015 in nine different markets. Syndication fees
increased 66% in 2015 compared to 2014.
Ret ai l B ro kerage . IBERIA Financial Services (“IFS”)
)
s
completed more than 27,000 transactions for clients
in 2015, an increase of 17% compared to 2014. Over
r
that period, IFS’s total revenues increased 15%.
Inst i t u t io nal Bro ke rage . IBERIA Capital Partners
s
(“ICP”) experienced reduced activity, primarily during
g
the second half of 2015, due to the rapid decline in
n
%
energy prices. As a result, ICP’s revenues declined 29%
in 2015 compared to 2014.
Wea lt h Manageme nt.
IBERIA Wealth Advisors
s
n
(“IWA”) assets under management totaled $1.4 billion
at year-end 2015, up 3% compared to the prior
year-end. IWA’s total revenues increased 15% in 2015
compared to 2014.
12 / Annual Report 2015
We are focused on supporting the growth of our clients.
(cid:34)(cid:85)(cid:77)(cid:66)(cid:79)(cid:85)(cid:66)(cid:14)(cid:67)(cid:66)(cid:84)(cid:70)(cid:69)(cid:1)(cid:46)(cid:66)(cid:68)(cid:76)(cid:1)(cid:42)(cid:42)(cid:1)(cid:80)(cid:81)(cid:70)(cid:83)(cid:66)(cid:85)(cid:70)(cid:84)(cid:1)(cid:84)(cid:70)(cid:87)(cid:70)(cid:83)(cid:66)(cid:77)(cid:1)(cid:73)(cid:74)(cid:72)(cid:73)(cid:14)(cid:81)(cid:83)(cid:80)(cid:670)(cid:77)(cid:70)
(cid:83)(cid:70)(cid:84)(cid:85)(cid:66)(cid:86)(cid:83)(cid:66)(cid:79)(cid:85)(cid:84)(cid:1)(cid:74)(cid:79)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:41)(cid:66)(cid:83)(cid:85)(cid:84)(cid:670)(cid:70)(cid:77)(cid:69)(cid:14)(cid:43)(cid:66)(cid:68)(cid:76)(cid:84)(cid:80)(cid:79)(cid:1)(cid:34)(cid:85)(cid:77)(cid:66)(cid:79)(cid:85)(cid:66)(cid:1)
International Airport, including Popeye’s Chicken,
Phillips Seafood, Atlanta Bread & Bar, Baja Fresh,
(cid:39)(cid:66)(cid:78)(cid:74)(cid:72)(cid:77)(cid:74)(cid:66)(cid:1)(cid:49)(cid:74)(cid:91)(cid:91)(cid:70)(cid:83)(cid:74)(cid:66)(cid:13)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:56)(cid:70)(cid:1)(cid:43)(cid:86)(cid:74)(cid:68)(cid:70)(cid:1)(cid:42)(cid:85)(cid:15)
Family matters with Lafayette client M&M Sales Co., Inc.
Family matters with Lafayette client M&M Sales Co Inc
This third generation family business has grown from a
traditional vending service company to now include
(cid:68)(cid:86)(cid:84)(cid:85)(cid:80)(cid:78)(cid:1)(cid:78)(cid:74)(cid:68)(cid:83)(cid:80)(cid:78)(cid:66)(cid:83)(cid:76)(cid:70)(cid:85)(cid:84)(cid:13)(cid:1)(cid:80)(cid:71)(cid:670)(cid:68)(cid:70)(cid:1)(cid:84)(cid:86)(cid:81)(cid:81)(cid:77)(cid:74)(cid:70)(cid:84)(cid:13)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:68)(cid:80)(cid:71)(cid:71)(cid:70)(cid:70)(cid:1)(cid:84)(cid:70)(cid:83)(cid:87)(cid:74)(cid:68)(cid:70)(cid:1)
for businesses throughout Louisiana.
FOCUSE D
ON O UR CO NSTI T UENTS
Our Company’s success is driven through the support we provide and receive from our
constituents. Serving our clients’ needs is of critical importance, because without a demand for
our products and services, our Company would not exist. We also relate to other constituents as
well, such as our regulatory agencies and common and preferred shareholders. We could not
operate without the foundation they provide us. Finally, we can only be as successful to the degree
our associates and communities are successful. As a result, we strive to fulfill the needs of our
constituents and act upon the supportive feedback they provide us to improve our organization.
Our Cl i ents . Our clients prefer to use multiple channels to do their banking business with us.
As we see greater emphasis on the electronic delivery of our products and services, we continue
to move in lockstep with our clients’ changing preferences. In early 2015, we launched online
appointment-setting to ease the transition for our clients between online shopping and in-branch
purchases of financial products and services. We also piloted the acceptance of cash deposits in
ATMs during the year. In early 2016, we launched a new online account opening platform for
consumer deposits to streamline the application process as well as a new marketing website to
improve the ability of our clients to conveniently find solutions to their financial needs.
Our Re gulators and Au ditors . Our regulators and independent registered public
accounting firm provide us with significant industry insight and feedback as we balance our view
between risk and opportunity. Our holding company is regulated under continuous supervision of
the Federal Reserve Bank of Atlanta, and securities matters are supervised by the Securities and
Exchange Commission. Our bank operates under the close scrutiny of the Federal Reserve Bank
and the Louisiana Office of Financial Institutions, and deposit insurance is provided by the Federal
Deposit Insurance Corporation. Various rule promulgations are enacted, which significantly
impact the operations of our Company, including the Dodd-Frank Act, Basel III, the Consumer
Financial Protection Bureau (“CFPB”), and many others. In addition, some of our business units
face additional audit scrutiny by agencies focused on those particular businesses. For example,
our mortgage origination business has a number of national regulatory agencies including FNMA,
FHLMC, GNMA, CFPB, Federal Housing Administration, U.S. Department of Veterans Affairs,
U.S. Department of Agriculture, and the Office of Housing and Urban Development that audit
and review various aspects. In addition, state regulatory agencies scrutinize our lending practices
in the 10 states in which we operate and the mortgage aggregators to which our loans are sold.
Similarly, the title insurance business is regulated by the Louisiana Department of Insurance and
the Arkansas Insurance Department. Finally, our financial statements undergo significant review
by our independent registered public accounting firm, Ernst & Young. We believe that we gain
significant insight from our independent external review and regulatory colleagues.
Our Sh are hol ders. As a publicly traded entity, our common and preferred shareholders own
our Company, and therefore ultimately determine the direction in which our Company proceeds.
At year-end 2015, institutional shareholders controlled approximately 78% of the Company’s
common stock outstanding, and retail investors controlled approximately 20% of our common
shares. In August 2015, we successfully raised approximately $80 million in gross proceeds from
the sale of depositary shares representing an ownership interest in non-cumulative perpetual
preferred stock to investors. We believe the preferred stock sale was fairly priced and well timed.
Net proceeds from the preferred stock sale further strengthened our Company’s capital position,
and the depositary shares trade on the NASDAQ Global Select Market.
“
Concentration
is the secret
of strength
in politics, in
war, in trade,
in short, in all
management
of human
affairs.”
— Ralph Waldo Emerson
(1803–1882)
13
Our Communities. Our Company
serves clients primarily in 32 metropolitan
markets in the southeastern United States,
although two businesses – credit card and
SBA 504 lending – operate nationwide.
Many of the markets we serve have business
drivers that differ from each other, thus
creating significant market diversification
for our Company. For example, our markets
include state capitals (Baton Rouge, Little
Rock, and Atlanta); tourism centers (New
Orleans, Orlando, Southwest Florida, and
the Florida Keys); transportation centers
(Memphis); industrial centers (Birmingham,
Lake Charles, and Northwest Arkansas);
energy centers (Houston and Lafayette);
(Jacksonville and
port-driven markets
Mobile); aerospace centers (Huntsville);
large diverse trade centers (Dallas, Atlanta,
Tampa, and Southeast Florida); and smaller
(Shreveport, Northeast
regional hubs
Louisiana, and Northeast Arkansas). Each
market has its own unique characteristics
and economic drivers, and no one market
is solely dependent on another market for
its economic well-being.
ioridda KKeys partner
iwi hth U iUni dted WWay t do donate hsch lool su lppliies.
Our associates in the Florida Keys partner with United Way to donate school supplies.
OOur associiates iin hthe FlFl
We are focused on supporting our communities. It is our privilege to support
charitable, educational, cultural, and business development efforts that make a
difference in the communities we serve.
We maintain strong local client connections through a decentralized market-centric business model, with local Market
Presidents and local advisory boards in most of the markets we serve. At year-end 2015, we had 18 advisory boards
throughout our footprint. We continue to invest heavily in these communities. In 2015 compared to 2014, our community
development lending more than doubled, institutional Community Reinvestment Act (“CRA”) investments increased 41%,
CRA contributions in our markets increased 8%, and our CRA service hours increased 11%. In addition, we opened five new
branch offices, many of which are located in low-to-moderate income neighborhoods in New Orleans, Houston, Dallas,
and Memphis. We are proud that our market-centric approach continues to attract high-quality clients and associates to
our organization.
Ou r A ss oci ate s. We are an important employer in many of the markets we serve. We employed front-line associates
in 32 MSAs, but we also had back-office functions in many markets as well. As shown in the chart on the next page,
we had associates representing 10 or more different departments in 12 of the markets we serve. Some departments
are concentrated in select markets outside of the headquarters location where significant business expertise resides. For
example, mortgage origination and title insurance is in Little Rock, finance and wealth management is in Birmingham,
consumer loan support is in Baton Rouge, business banking support and risk management are in New Orleans, SBA
lending is in Atlanta and Orlando, treasury management is in Dallas, and human resources is in Lafayette.
A significant differentiating factor for our Company continues to be our ability to attract and retain exceptionally talented
individuals. We are proud to be named the Best Place to Work by our associates in New Orleans, our largest market of
employment, in a poll conducted by The Times-Picayune. In 2015, we added 391 associates, of which 95% joined us from
acquisitions completed during the year. The average tenure of our associate base is more than six years of service, 36%
longer than the nationwide median for all workers.
14 / Annual Report 2015
IBE RIA BANK CORPORATION
AS SOC IATE LOCATIONS
At December 31, 2015
IBKC Markets
% of
Associates Departments
# of
1. New Orleans
2.
3.
4.
Lafayette
Little Rock
Birmingham
5. Other Acadiana
6. Orlando
7.
Baton Rouge
8. Northeast Arkansas
9.
Lake Charles
10. Houston
11. Atlanta
12. Tampa Bay
13. Naples
14. Memphis
15. Northwest Arkansas
16. Shreveport
17. Sarasota
18. Dallas
19. Fort Myers
20. Monroe
21. Southeast Florida
22. Mobile
23. Bradenton
24. Florida Keys
25. Central Georgia
26. San Antonio
27.
Jacksonville
28. Huntsville
All Other
15%
11%
9%
8%
5%
5%
4%
4%
3%
3%
3%
3%
3%
3%
2%
2%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
3%
43
37
23
32
9
15
15
10
10
14
16
9
20
7
8
5
9
11
7
6
8
5
4
3
1
1
3
3
23
We are also focused intently on efficiency. While our full-time equivalent
workforce increased 14% in 2015, our period-end total assets grew
24% over the same period. During 2015, our branch-related associates
grew by 16%, associates in our fee income businesses increased by
8%, and our back office staffing (excluding SBA lending and equipment
financing businesses) climbed 13%. As shown in the chart below, our
measures of associate efficiency, which are defined by the levels of loans
and deposits per full-time equivalent associate, increased consistently
over the last several years.
FULL-TIME EQUIVALENT ASSOC I AT ES
LOANS & DEPO SI TS PER FT E ASSO CI ATE ( $ in Mi ll io ns; Peri od- En d )
Loans
Deposits
Our improved associate efficiency, increased level of investment in
the communities we serve, enhanced client products and services
implemented in 2015 and early 2016, and continued strong relations
and collaboration with our regulators serve our Company well. Our
drive to improve our operating efficiency has not impeded our attention
to detail in delivering high-quality service to clients.
15
“
That’s been one
of my mantras
focus and
simplicity.”
— Steven P. Jobs (1955–2011)
FOCUSE D
ON EF FI C IE NT DE LIV ERY
Our Company has grown at a brisk pace since its change of strategic direction in
2000. Over the last two years, we placed greater focus on gaining efficiencies from our
acquisitions and our legacy franchise. The targeted efficiencies included rationalizing our
physical branch infrastructure, streamlining delivery of our products and services through
more efficient delivery channels, leveraging advances in technology, and gaining synergies
as a result of becoming a larger organization. Our focus remains to grow revenues and
improve expense efficiency while delivering exceptional service to our clients.
Branc h Infras truc t ure. Over the last three years, we acquired 62 branch locations,
including 36 branches in 2015 in the vibrant Tampa, Jacksonville, Orlando, and Atlanta
markets. During that period, we
also closed or consolidated 16
branches in 2013, 13 branches in
2014, 11 branches in 2015, and
19 branches in the first quarter
of 2016, for a total of 59 closed
branches. The branches we closed
and consolidated were either
redundant to our other branches,
unprofitable, and/or had limited
future growth prospects. We
reported a small financial gain on
the 11 branches that were closed
in 2015. In addition, we sold
our former headquarters building
in New Iberia, Louisiana, at a
financial loss of $1.3 million and
engaged in a sale/leaseback of a
signature location in Naples that
we acquired from the FDIC, which
resulted in a net gain of $6.7
Oretha Castle Haley Branch
Oretha Castle Haley Branch,
New Orleans
16 / Annual Report 2015
million, $1.9 million of which was recognized in 2015. The branch closures in the first quarter of 2016
are estimated to provide a net savings of $1 million per quarter with an estimated payback period of
approximately two years to recoup the upfront closure costs.
During this three-year period, we also opened nine new branches, including five branches in 2015. Many
of the new branches were in larger metropolitan markets and serve clients in diverse market segments.
The average physical size of the new prototype branches are half the size and half the cost of historical
freestanding branches and less than one-quarter of the cost to build out the branch, thus providing more
efficient means to product and service delivery.
The net effect of closing and consolidating nearly as many branches as we acquired, and opening a few
newer and more efficient branches, was a limited increase in the number of branches. Combining the limited
branch growth with a $5.8 billion increase in loans and $5.4 billion growth in deposits over the three-year
period resulted in a sizable increase in loans and deposits per branch of 44% and 30%, respectively.
Additional branch closures in the first quarter of 2016 are expected to further improve those figures on a
pro forma basis by 11% and 9%, respectively. Our branch and non-branch facilities rationalization efforts
will continue as clients continue to utilize and migrate to other channels.
LOANS & DEPOSITS PER BRAN CH O FFIC E ($ in Millions; Period-End)
Loans
Deposits
Ot he r C lient C hanne ls . Our clients use multiple channels to do their banking business with us, including
the use of our ATMs, call center, online banking, and mobile banking. Clients are now using our ATMs not
just for withdrawing cash and checking balances, but also for making deposits. Our ATM image deposit
capture grew 23% in 2015 compared to 2014. During 2015, our number of active online banking users
increased by 16% compared to the prior year, and active mobile banking users increased by 21%. Finally,
the rollout of using mobile devices to make deposits has shown promising growth as well. In 2015, mobile
deposit capture grew 62% compared to the prior year.
Te chno l ogy. Significant improvements to our online banking and client bill pay services were completed
in early 2016, and upgrades to our online banking and mobile banking platforms are targeted for
completion later in the year. We launched a new website in early 2016 built on updated infrastructure
that provides significant user enhancements. The new website provides improved functionality, including
easier user navigation, optimization for mobile device use, enhanced search features and calculators, and
convenient access to products and services throughout the Company. We continue to explore opportunities
to leverage our technology platform and improve our client experience. In a parallel manner, our efforts to
improve our technology require vigilance and focus on cybersecurity protection, which remained an area
of focus and investment for our Company in 2015.
17
BRANCH ES OPENED IN 2015
Binghampton Branch, Memphis
Medical Branch, Memphis
Carrollton Branch, Dallas
Beltway Branch, Houston
Sy nergi es. Within the last three years, the Company has launched and completed three earnings improvement
initiatives. The first program was launched in 2013 and achieved $24 million in annualized pre-tax run-rate
savings. The second initiative was launched in 2014 and resulted in an additional $11 million in pre-tax run-rate
earnings improvements. Finally, the third initiative was announced and completed in 2015, which targeted
and achieved annualized pre-tax earnings improvements of approximately $15 million. While these initiatives
incorporated facilities-related savings, they also included significant expense reductions in staffing, fee income
enhancements, contract cancellations and renegotiations, balance sheet restructurings, telecom savings, and
many other expense and fee improvements. As a result of the expense reductions, revenue enhancements, and
vigilance in monitoring and challenging ongoing expenses, our taxable equivalent tangible operating efficiency
ratio (which is a measure of expenses relative to revenues, where a lower ratio is better) improved from 68% in
2014 to 65% in 2015 and showed considerable improvement throughout 2015. By the fourth quarter of 2015,
our tangible operating efficiency ratio had declined to 61%, very close to our strategic goal of attaining a ratio
below 60% by the fourth quarter of 2016.
TANGIBLE OPERATING EFFIC IENCY R AT IO ( Taxab le E quiv al ent )
18 / Annual Report 2015
OUR FOOTPRINT
As of March 31, 2016
Legend
IBERIABANK
IBERIABANK Mortgage
Lenders Title Company/United Title & American Abstract
IBERIA Wealth Advisors
IBERIA Capital Partners
19
FOCUSE D
ON M AN AGI NG RI SK
Four of the most significant forms of risk in the banking industry are credit, liquidity,
interest rate, and operational risks. During 2015, we reduced certain targeted credit risk
exposure, strengthened our overall liquidity profile, became more asset-sensitive from
an interest rate risk position, and continued to assertively manage our operational risk.
C red it Risk . We manage credit risk by maintaining a conservative credit underwriting
process and strong credit culture, ensuring sufficient credit depth exists throughout the
Company, carefully regulating our credit concentration limits and risk appetite, maintaining
granularity and balance within our loan portfolio, and providing for diversification within
the portfolio to limit loss exposures due to unforeseen events. We also actively oversee
the loan portfolio to ensure event-driven surprises are addressed early and assertively.
Our strong credit culture and experience also leads us to proactively address potential
credit concerns at early stages. For example, during 2015 we assertively addressed three
particular areas of concern in a manner that we termed a “risk-off trade.”
First, we began to exit the indirect automobile lending business in January 2015, a service
we had successfully provided to select automobile dealers in our Company’s footprint for
20 years. We concluded that the compliance risk associated with that business in general
had become unbalanced relative to potential returns on a risk-adjusted basis. As a result,
our indirect automobile loans declined $151 million, or 38%, during 2015, and will
continue to decline until all of those loans have matured or have been paid off.
Second, we tightened our credit standards in markets that we believe posed greater risk
of future credit concerns due to declining energy prices, which resulted in a $91 million
decline in loans in 2015.
Third, we proactively reduced our energy-related loan exposure. This effort began in
2014, became a primary focus throughout 2015, and will continue in 2016. In 2015,
we reduced our energy loans by an aggregate $200 million, or 23%.
The impacts of these three “risk-off trade” actions were a cumulative $442 million reduction
in loans in the year ending December 31, 2015, and an estimated opportunity cost of
$5.5 million on a pre-tax basis for the year. While we experienced no energy-related
charge-offs in 2015, we believe that the proactive actions we took and foregone income
on those loans were an appropriate near-term sacrifice in exchange for avoidance of
potential future losses, particularly if energy prices continue to stay low for an extended
period of time. Our strong client and market diversification provides us the flexibility to
adjust as conditions warrant.
As a result of our credit management process over the legacy loan portfolio, our credit
quality statistics historically have been in the top quartile of our peers. Our credit quality
results in 2015 were consistent with our historically solid performance. Many of our
legacy credit statistics in 2015 were in the top 15% of our peer group and, as shown in
the table on the following page, many of our credit statistics improved in 2015, despite
some early-stage economic weakening in a few markets that we serve.
“
The game has
its ups and
downs, but
you can never
lose focus of
your individual
goals, and
you can’t let
yourself be beat
because of lack
of effort.”
— Michael J. Jordan (1963–)
20 / Annual Report 2015
ASSET QUALITY MEASURES
Legacy Basis (Excluding Acqui re d and Co ve re d Loa ns)
Asset Quality Measure
Preference
12/31/14
12/31/15
Y-O-Y Change Peer Average*
NPAs/Assets
Accruing Past Dues/Loans
Past Due Loans/Loans
Net Charge-offs/Avg. Loans
Loan Loss Reserve/Loans
Lower
Lower
Lower
Lower
Higher
0.41%
0.31
0.68
0.06
0.79
0.42% +1 basis point
0.19
0.64
0.10
0.84
-12
-4
+4
+5
0.92%
1.01
1.95
0.21
1.10
* Peers are U.S. bank holding companies with total assets between $10 billion and $30 billion.
The significant decline in energy commodity prices in 2015 elevated concerns regarding the creditworthiness of
borrowers directly tied to the energy business or with indirect exposure through other sources of repayment that
are negatively influenced by declining energy prices. At December 31, 2015, only $8.4 million of energy-related
loans, or 1.2% of total energy loans and 0.06% of our total loans, were non-performing. In addition, we
experienced no energy-related charge-offs over the last several years. We increased the energy-related reserve
for loan losses from $7.6 million at year-end 2014 to $26.7 million at year-end 2015, equal to a $19.1 million,
or 251%, increase during the year.
Li qu i di t y Ris k. Our liquidity position remained strong throughout 2015, driven by two primary factors. First,
the acquisitions completed in 2015 brought disproportionally more liquidity than our legacy franchise had before
the acquisitions were completed. Second, excluding the acquisitions, deposit growth exceeded loan growth, due
in part to the continued resolution of the FDIC-covered loans and targeted reductions in certain loan categories
in the previously mentioned risk-off trade. Between year-ends 2014 and 2015, FDIC-related loans declined $215
million, or 48%. On an average balance basis, FDIC-related loans declined $332 million, or 57%, in 2015
compared to 2014.
Our loan-to-deposit ratio declined from 91.4% at year-end 2014 to 88.6% at year-end 2015, and our liquidity
ratio increased from 10.4% at year-end 2014 to 12.0% at year-end 2015.
NON-PERFORMI NG AS SETS-TO-TOTAL AS SET S
Legacy Only
With Covered & Acquired Loans
I nt ere st Rate Ris k. Over the last several years, we increasingly positioned the balance sheet of our Company
to benefit from a general increase in interest rates. At the start of 2015, economists projected the Federal Reserve
would engineer four 25-basis-point increases in short-term interest rates during 2015. Given the asset-sensitive
nature of our balance sheet, each 25-basis-point increase was estimated to add approximately a six- to seven-cent
21
INTEREST RATE RISK (12-Month Ne t Interest Inc om e I mpa ct )
+100 Basis Point Shift
Next +100 Basis Points
positive impact to our operating EPS per quarter that the increase was in place. Unfortunately, this did not occur as
expected. The Federal Reserve increased short-term rates only once during 2015, and that event occurred near
the very end of the year, which provided very limited positive benefit to our 2015 financial results.
During 2015, proportionally more of our loans migrated to become variable-rate-based. We also had a record
year in assisting qualified clients engage in interest rate swaps to convert floating rate loans to become fixed-
rate-based, and thus protect those clients from interest rate fluctuations. These transactions provide us with fee
income and allow us to maintain an appropriate interest rate risk profile without taking on additional interest rate
risk. We maintained a stable liquidity position throughout the year, and we did not reach for greater yield or take
significant “duration bets” in our investment portfolio. During 2015, our investment portfolio increased in size,
but the growth in the investment portfolio was fairly proportional to the total size of our Company. The cash flow
duration of the investment portfolio lengthened only slightly, and the yield on the investment portfolio declined
six basis points. Our core deposit funding improved as average non-interest bearing deposits grew $1.1 billion,
or 37%, in 2015 compared to 2014, and interest-bearing deposits climbed $2.4 billion, or 28%.
Ope ra t i onal Ris k. We manage our operational risk through a comprehensive framework developed and
managed under the Enterprise Risk Management umbrella. Operational managers from throughout the
organization meet and share information on a regular basis through our Board Risk Committee. Participants
in this process focus on emerging and top risks, current corporate risk events, and key risk indicators. They
then develop and implement risk mitigation strategies and work toward improving internal controls in order to
minimize our exposure to risk going forward. In 2015, our attention centered on many industry-related issues,
including model risk, payment card fraud, cybersecurity, data breach, and scalability.
One key area of operational risk focus in 2015 was the implementation of a model risk management framework
that features a comprehensive validation program designed to identify and manage model risk on a risk-assessed
basis. We also developed an operational risk working group in 2015 to proactively address rising fraud concerns
related to debit and credit card products.
Another top trending operational risk for our industry is cybersecurity. We continue to increase our efforts to
raise cybersecurity awareness to our associates as well as our clients. We work diligently to identify risks within
our infrastructure, implement new technologies, and improve our processes to strengthen our defenses against
potential cyberattacks.
Finally, as we continue to expand, we recognize the compounded benefits and risks of scalability. In 2015, we
reviewed processes and systems currently in place with a view toward potential future needs. Our review found
limited current major impediments and focused our attention on potential improved workflows and potential
better use of available technology. Each of these operational risk themes provided us with the basis for additional
analysis to determine which avenues require greater attention.
22 / Annual Report 2015
FO CUSED
ON FI NA NC IA L STRE NGTH
Trending in financial strength can be measured in various ways, but of primary interest
are improving operating earnings trends, capital strength, lower levels of short-term and
long-term debt, and abundant liquidity. All four were areas of focus for our Company in
2015, and all four areas experienced favorable trends during the year.
Op erat in g Earnings . Our primary goal in 2015 was to achieve a significant improvement
in our operating profitability through revenue growth and expense containment. Over the
last several years, we have stressed the importance of growing our two primary sources
of revenues – spread income, which is achieved through expansion of our margin and
balance sheet growth, and non-interest revenues, which are primarily derived from our fee
income businesses. At the same time, we needed to gain efficiencies by decreasing certain
operating expenses and holding other expenses stable. We were successful in that regard
in 2015.
On the revenue side, we worked to gain more efficient use of our balance sheet through
deployment of excess liquidity; replacement of non-earning assets with earning assets;
increased non-interest bearing deposits and other liabilities; and reduced the leverage of
assets and liabilities that were being carried at low or negative spreads. Through those
balance sheet changes and focused attention on gaining appropriate risk-adjusted returns
in loan and deposit pricing, we achieved a four-basis-point improvement in our margin
in 2015. The margin improvement, combined with strong legacy and acquired loan and
deposit growth, led to a $128 million, or 28%, increase in our net interest income in
2015 compared to 2014. Similarly, non-interest income grew $47 million, or 27%, in
2015 compared to 2014, driven by higher levels of income from mortgage origination,
title insurance, retail brokerage, treasury management, and other revenue sources. In
aggregate, total tax-equivalent operating revenues grew $173 million, or 27%, over this
period to a record level of $815 million.
On the expense side, we achieved the targeted synergies associated with the three
acquisitions completed in 2015. We also closed 11 branches in 2015, closed 19 additional
branches in the first quarter of 2016, and successfully completed our third expense savings
initiative. The strong revenue growth was approximately twice the $89 million growth in
operating expenses in 2015, and thus, we experienced a significant improvement in our
operating efficiency during the year. Our tangible operating efficiency ratio improved from
68% in 2014 to 65% in 2015, and reached 61% by the fourth quarter of 2015, very close
to our 60% goal that we are striving to achieve by the fourth quarter of 2016.
Our reported earnings increased $37 million, or 36%. We reported $4 million in
non-operating income in 2015 compared to $3 million in 2014. We incurred $36 million
in non-operating expenses in 2015 compared to $29 million in 2014. The majority of those
expenses were related to the acquisitions and the expense savings initiatives. Excluding the
non-operating income and expense, our operating net income grew $43 million, or 36%.
This was a record level of operating net income for our Company. We achieved $4.18
in operating EPS in 2015, up 12% compared to 2014, and also a record level for our
Company.
“
I know the price
of success:
dedication,
hard work, and
an unremitting
devotion to the
things you want
to see happen.”
— Frank Lloyd Wright
(1867–1959)
23
OPERATING & NON-OPERAT ING E ARN INGS ($ in Millions)
Operating Earnings
Non-Operating Earnings
O PE RATI NG EARNINGS PER SH ARE
Of particular interest is the fact that these levels of operating earnings and EPS were achieved despite very little
benefit from interest rates, the foregone opportunity benefit of approximately $6 million in lost net interest income
due to the risk-off trade, and the additional cost of the $19 million increase in energy-related loan loss reserves.
Cap it a l St reng th. With dividends per common share held constant and the growth in EPS, our dividend payout
ratio declined from 42% in 2014 to 38% in 2015 on a reported basis and from 37% to 34%, respectively, on
an operating basis. This improving trend was even more pronounced on a quarterly basis during 2015. As the
year progressed, we generated more capital organically than needed to support our balance sheet growth, which
resulted in improvements in our book value per common share, tangible book value per common share, and
many of our capital ratios.
Our tangible common equity ratio and Tier 1 leverage ratio grew 27 and 17 basis-points, respectively, between
year-ends 2014 and 2015. Conversely, our total risk-based capital ratio declined 16-basis points as a result of a
regulatory phase-out of the treatment of trust preferred securities in accordance to BASEL III capital requirements,
the expiration of FDIC loss-share coverage on certain commercial loans that were acquired in FDIC-assisted
transactions, and the full implementation of risk weighting according to BASEL III capital requirements. These
three factors were the primary cause for the reduction in our total risk-based capital ratio during 2015.
24 / Annual Report 2015
In August 2015, we sold depositary shares representing an ownership interest in cumulative perpetual preferred
stock to investors, generating $77 million in net proceeds that is considered Tier 1 capital for regulatory purposes.
Dividends on the preferred stock are paid semi-annually. The depositary shares trade on the NASDAQ Global
Select Market under the symbol “IBKCP.” Approximately 2.5 million depositary shares traded in 2015, equal to
about three-quarters of outstanding shares.
S ho r t -Te rm and Lo ng-Te rm Debt . Throughout much of 2015, we paid down both short-term and long-term
debt, and therefore strengthened the Company’s balance sheet. On an average balance basis, short-term debt
(excluding repurchase agreements) declined $310 million, or 62%, in 2015 compared to 2014, and decreased
$493 million, or 82%, at year-end 2015 compared to year-end 2014. Average long-term debt increased $53
million, or 16%, due primarily to the acquisitions that were completed in 2015. At year-end 2015, long-term debt
was down $63 million, or 16%, compared to year-end 2014.
COMMON STOCK DIVIDEND PAYOU T RATIO
Operating Basis
Reported
AVERAGE SHORT-TERM & LONG-TE RM DEBT ($ in Millions)
Short-Term Debt
Long-Term Debt
We made very good progress in 2015 towards the Company’s strategic goals, and achievements in 2015 will
benefit future periods in significant ways. First, efficiency gains that were achieved have a compounding effect in
future periods as the Company continues to grow. Second, over time, many of the fee income businesses will gain
further traction with the client bases that were acquired over the last several years. Third, current headwinds from
sustained low interest rates and certain risk-off trade foregone interest will eventually have diminishing impacts.
Finally, future periods will benefit from the branch closures that were completed in the first quarter of 2016. The
Company remains well positioned for future growth opportunities as the banking industry continues to evolve.
25
FI NAN CIALS 2 01 5
27
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
29
Selected Consolidated Financial and Other Data
74
75
Management Report on Internal Control
Over Financial Reporting
Report of Independent Registered Public
Accounting Firm
77
Financial Statements
26 / Annual Report 2015
This Annual Report, including the Financial Review and the Financial Statements and related Notes, contains forward-looking
statements, which may include forecasts of our financial results and condition, expectations for our operations and business,
and our assumptions for those forecasts and expectations. Do not unduly rely on forward-looking statements. Actual results
may differ materially from our forward-looking statements due to several factors. Factors that could cause our actual results to
differ materially from our forward-looking statements are described in this Report, including in the “Forward-Looking
Statements” and “Risk Factors” sections, and in the “Regulation and Supervision” section of our Annual Report on Form 10-K
for the year ended December 31, 2015 (“2015 Form 10-K”).
When we refer to “the Company,” “we,” “our” or “us” in this Report, we mean IBERIABANK Corporation and Subsidiaries
(consolidated). When we refer to the “Parent,” we mean IBERIABANK Corporation. See the Glossary of Acronyms at the end
of this Report for terms used throughout this Report.
To the extent that statements in this Report relate to future plans, objectives, financial results or performance of the Company,
these statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995. Such statements, which are based on management’s current information, estimates and assumptions and the
current economic environment, are generally identified by use of the words “may”, “plan”, “believe”, “expect”, “intend”,
“will”, “should”, “continue”, “potential”, “anticipate”, “estimate”, “predict”, “project” or similar expressions, or the negative of
these terms or other comparable terminology, including statements related to the expected timing of the closing of proposed
mergers, the expected returns and other benefits of the proposed mergers to shareholders, expected improvement in operating
efficiency resulting from the mergers, estimated expense reductions, the impact on and timing of the recovery of the impact on
tangible book value, and the effect of the mergers on the Company’s capital ratios. The Company’s actual strategies and results
in future periods may differ materially from those currently expected due to various risks and uncertainties.
Actual results could differ materially because of factors such as the level of market volatility, our ability to execute our growth
strategy, including the availability of future bank acquisition opportunities, unanticipated losses related to the integration of,
and refinements to purchase accounting adjustments for, acquired businesses and assets and assumed liabilities in these
transactions, adjustments of fair values of acquired assets and assumed liabilities and of deferred taxes in acquisitions, actual
results deviating from the Company’s current estimates and assumptions of timing and amounts of cash flows, credit risk of our
customers, actual results deviating from the Company's current estimates, assumptions of timing and the amount of cash flows,
our ability to satisfy new capital and liquidity standards such as those imposed by the Dodd-Frank Act and those adopted by the
Basel Committee and federal banking regulators, sufficiency of our allowance for loan losses, changes in interest rates, access
to funding sources, reliance on the services of executive management, competition for loans, deposits and investment dollars,
reputational risk and social factors, changes in government regulations and legislation, increases in FDIC insurance
assessments, geographic concentration of our markets and economic and business conditions in these markets, or nationally,
including the impact of oil and gas prices, rapid changes in the financial services industry, dependence on our operational,
technological, and organizational systems or infrastructure and those of third-party providers of those services, hurricanes and
other adverse weather events, and valuation of intangible assets. Those and other factors that may cause actual results to differ
materially from these forward-looking statements are discussed in the Company’s Annual Report on Form 10-K and other
filings with the Securities and Exchange Commission (the “SEC”), available at the SEC’s website, http://www.sec.gov, and the
Company’s website, http://www.iberiabank.com, under the heading “Investor Relations.” All information in this discussion is
as of the date of this Report. The Company undertakes no duty to update any forward-looking statement to conform the
statement to actual results or changes in the Company’s expectations.
Included in this discussion and analysis are descriptions of the composition, performance, and credit quality of the Company’s
loan portfolio. The Company has two primary descriptions of loans that are used to categorize the portfolio into its distinct risks
and rewards to the consolidated financial statements: legacy loans and acquired loans. The accounting for acquired loans can
differ materially from that of legacy loans. Additionally, certain acquired loans were acquired with loss protection provided by
the FDIC, and the risks of the loans and foreclosed real estate acquired are significantly different from those assets not similarly
covered by loss share agreements. Accordingly, the Company reports acquired loans subject to the loss share agreements as
covered loans.
27
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
EXECUTIVE OVERVIEW
The Company is a $19.5 billion bank holding company primarily concentrated in commercial banking in the southeastern
United States. We are shareholder- and client-focused, expect high performance from our associates, believe in a strong sense
of community, and strive to make the Company a great place to work. The Company focuses on improving long-term
shareholder returns by setting challenging financial goals and executing on these goals even when faced with difficult
economic and regulatory environments. The Company believes that shareholder value is created by investing in our people to
ensure that we attract, develop, and retain talented team members, providing exceptional products and services to our
customers in order to grow our high-quality client base, and improving the efficiency of our operations through expense
reduction and revenue enhancement initiatives. Our Company has a growth strategy that includes both organic growth and
growth through acquisitions and we have successfully executed this strategy over the last decade. We are mindful of the risks
associated with growth and we recognize that a robust risk management process is essential to enhance and protect shareholder
value. The Company continues to invest in a comprehensive risk management structure to stay ahead of potential threats and
challenges, appropriately balancing risk with profitability, and ensuring that our strategic goals deliver the intended results.
2015 Financial Performance
The Company completed an outstanding year of financial results in 2015. We achieved a record level of operating diluted EPS,
identified and executed upon expense reduction and revenue enhancement initiatives to drive improvements in operating
leverage and profitability, produced strong loan and deposit growth organically and through acquisitions, maintained strong
credit quality metrics, and managed our risk exposure through diversification into new geographic markets and targeted
reductions in energy and energy-sensitive markets and indirect automobile lending.
Highlights of the Company’s performance in 2015 include:
• Diluted EPS (GAAP) of $3.68, up 12% from $3.30 in 2014, and record level operating diluted EPS (non-GAAP) of
$4.18, compared to operating diluted EPS of $3.72 in 2014 (see table 32 for reconciliation of GAAP to non-GAAP
measures).
• Net interest income of $587.8 million, up 28% from $460.1 million in 2014, and net interest margin on a taxable
equivalent basis of 3.55%, compared to 3.51% in 2014.
• Non-interest income of $220.4 million, up 27% from $173.6 million in 2014, including record levels of revenues in
mortgage, title, treasury management, purchasing card, wealth management, retail brokerage, and client derivatives.
• Return on average assets of 0.78% and operating return on average assets (non-GAAP) of 0.88%, an increase of six
basis points and seven basis points, respectively, compared to 2014.
• Efficiency ratio of 70.6%, an improvement of 416 basis points, or 4%, over 2014, and tangible operating efficiency
ratio (non-GAAP) of 64.5%, compared to 68.4% in 2014.
• Net income of $142.8 million, up 35% from $105.4 million in 2014.
• Record loan originations in 2015, with legacy loans up $1.5 billion, or 16%, and total loans up $2.9 billion, or 25%,
even with planned risk-related reductions of $442 million in the energy and indirect automobile lending portfolios.
• Strong credit performance with a net charge-off ratio of 0.08% of average loans, fairly consistent with 2014's ratio of
0.07% of average loans.
• Deposit growth, including the impact of acquisitions, of $3.7 billion, or 29%, over 2014.
•
Issued non-cumulative perpetual preferred stock, raising $76.8 million in net proceeds, and maintained strong capital
levels as our estimated Common Equity Tier 1 ratio under Basel III on a fully-phased in basis was 9.94% at December
31, 2015.
• Successfully completed 3 bank acquisitions and 5 related system conversions.
28
TABLE 1—SELECTED FINANCIAL INFORMATION
(Dollars in thousands)
Key Ratios
Efficiency Ratio
Tangible operating efficiency ratio (TE) (Non-GAAP)
Return on average assets
Return on average assets, operating basis (Non-GAAP)
Net interest margin (TE)
Non-interest income
Non-interest income, operating (Non-GAAP)
Non-interest expense
Non-interest expense, operating (Non-GAAP)
2015 Acquisitions
Years Ended December 31
2015
2014
2013
2012
2011
70.57 %
64.54 %
0.78 %
0.88 %
3.55 %
74.73 %
68.37 %
0.72 %
0.81 %
3.51 %
84.50 %
74.53 %
0.50 %
0.71 %
3.38 %
$ 220,393
216,360
570,305
533,845
$ 173,628
170,871
473,614
445,094
$ 168,958
166,624
472,796
428,254
$ 175,997
170,026
432,185
418,174
77.49 %
73.31 %
0.63 %
0.67 %
79.50 %
72.85 %
0.49 %
0.61 %
3.58 %
3.51 %
$ 131,859
128,384
373,731
352,334
Over the past 12 years, the Company has executed targeted acquisitions that would prove to be a strong strategic fit for the
Company and provide additional value to existing shareholders. These acquisitions have provided significant growth and
allowed for geographic, industry, and product diversification. The 2015 year was no exception, as the Company further
diversified its business, expanding its presence in Florida and Georgia through the acquisitions of Florida Bank Group on
February 28, 2015, Old Florida on March 31, 2015, and Georgia Commerce on May 31, 2015.
The Company acquired Florida Bank Group for total consideration of $90.5 million, which expanded its presence to the Tampa,
Tallahassee, and Jacksonville, Florida markets, and included loans of $307.5 million and deposits of $392.2 million, after
preliminary fair value adjustments. The Company acquired Old Florida for total consideration of $253.2 million, which added
loans of $1.1 billion and deposits of $1.4 billion, after preliminary fair value adjustments, and expanded the Company's
presence to the Orlando, Florida market. The Company also acquired Georgia Commerce for total consideration of $190.3
million, which established the Company's presence in the Atlanta, Georgia market, and added $793.4 million in loans
and$908.0 million in deposits, after preliminary fair value adjustments.
The acquired assets and liabilities, which include preliminary fair value adjustments and are subject to change, are presented in
Note 3, Acquisition Activity, to the consolidated financial statements. The following table is a summary of the Company's
acquisition activity over the past five years:
TABLE 2—SUMMARY OF ACQUISITION ACTIVITY FROM 2011 TO 2015
(Dollars in millions)
Acquisition
OMNI BANCSHARES, Inc.
Cameron Bancshares, Inc.
Florida Gulf Bancorp, Inc.
Trust One Bank - Memphis Operations
Teche Holding Company
First Private Holdings, Inc.
Florida Bank Group, Inc.
Old Florida Bancshares, Inc.
Georgia Commerce Bancshares, Inc.
Total Acquisitions, 2011-2015
Total
Tangible
Assets
Acquired
Total
Loans and
Loans Held
for Sale
Acquired
Total
Deposits
Acquired
Goodwill
Other
Intangible
Assets
Acquisition
Date
2011 $
2011
2012
2014
2014
2014
2015
2015
2015
680.7 $
685.0
307.3
180.2
854.4
350.9
537.6
1,541.1
1,023.7
441.4 $
382.1
215.8
86.5
700.5
299.3
307.5
1,068.9
793.4
635.6 $
567.3
286.0
191.3
639.6
312.3
392.2
1,389.8
908.0
$ 6,160.9 $ 4,295.4 $ 5,322.1 $
29
63.8 $
71.4
32.4
8.6
80.4
26.3
15.7
99.6
87.3
485.5 $
0.8
5.2
—
2.6
7.4
0.5
4.5
6.8
6.7
34.5
In addition, during 2014, the Company’s subsidiary, LTC, acquired certain assets from The Title Company, LLC, a title office
in Baton Rouge, Louisiana, and Louisiana Abstract and Title, LLC, a title office in Shreveport, Louisiana. These two
acquisitions were immaterial and the assets recognized were primarily from goodwill and additional intangible assets.
The Company believes these acquisitions, as well as a continued focus on high quality organic growth, improvements in
operating efficiency, and development of fee-based businesses, will allow the Company to achieve its long-term objectives into
2016 and continue to improve long-term shareholder value.
2016 Outlook
The Company's long-term financial goals are as follows:
• Return on Average Tangible Common Equity of 13% to 17% (operating basis);
• Tangible Operating Efficiency Ratio of less than 60%;
• Legacy Asset Quality in the top 10% of our peers;
• Double-digit percentage growth in diluted operating EPS.
Despite a challenging economic environment, as discussed below, the Company expects to meet several of these financial goals
in 2016 and our 2016 budget is consistent with this achievement. The Company has budgeted operating expenses of
approximately $560 million for the full year of 2016 and provision expense of $35 million. Absent an increase in interest rates,
the budgeted margin for 2016 is projected to be 3.55% and budgeted 2016 operating EPS is in line with current street
expectations of $4.58. The Company believes that its market diversification will limit the impact of the deteriorating market
conditions in west Louisiana and Houston, Texas due to the decline in energy prices and related uncertainty in the energy
sector.
Excess oil supply and weakening global demand have weighed heavily on oil prices, which reached a 12-year low at less than
$27 per barrel in January 2016. The Company remains cautious regarding the effects on its markets most impacted by the oil
and gas industry. The Company has made a concerted effort through stringent underwriting standards and conservative
concentration limits to balance risk and return as it relates to energy exposures. We have managed our risk through targeted
reductions in energy-related loans, which are down 23% from $880.6 million, or 7.7% of our total loan portfolio at December
31, 2014, to $680.8 million, or 4.8% of our total loan portfolio at December 31, 2015. The Company has experienced a
downward migration in energy credits as expected during 2015, with 22% of the energy loan portfolio criticized, and 12%
classified, at year-end. At December 31, 2015, the Company had $26.7 million in aggregate reserves for energy-related loans,
which is 4% of the energy outstandings, and covers energy NPAs of $8.4 million by 315%. The Company has not incurred any
energy-related charge-offs over the past several years; however, some economic softening, as exhibited by increasing
unemployment rates, is being seen in the specific market areas we operate that are most impacted by energy prices, primarily
Louisiana and the Houston area of Texas. Future losses will depend on the duration and severity of the depression of
commodity prices. The Company will continue to manage risk by reducing and exiting energy relationships that no longer fit
our credit profile and recording an additional provision, if necessary.
The mortgage origination locked pipeline was $227 million at December 31, 2015, compared to $137 million at December 31,
2014. Mortgage income for the current year was $81.1 million, up $29.3 million, or 57%, from 2014. Mortgage volume in 2016
is projected to be $2.5 billion, which is consistent with 2015 actual volume. The flat production is driven by the expectation
that the 2015 refinance volume will dissipate and be replaced by originations in new market areas as a result of recent
acquisitions. At December 31, 2015, the commercial loan pipeline was approximately $700 million.
The Company experienced growth in its title, treasury management and client derivatives businesses in 2015. IBERIA
Financial Services ("IFS") revenues increased 15% over 2014. Revenues for IBERIA Wealth Advisors ("IWA") were up 15%
compared to 2014. Assets under management at IWA were $1.4 billion at December 31, 2015, up 3% compared to December
31, 2014. Despite stable growth in these fee income businesses, IBERIA Capital Partners L.L.C. ("ICP"), the Company's
energy investment banking boutique, has faced headwinds, with revenues decreasing 29% from 2014. In 2016 the Company
expects revenues for both IFS and IWA to increase approximately 7%, while revenues for ICP are expected to decrease
approximately 14% from 2015.
Expense control continues to be a primary focus of the Company and includes branch efficiency efforts. During 2015, the
Company closed or consolidated 11 bank branches, acquired 36 branches, and opened five branches. An additional 19 branches
are scheduled to be closed or consolidated in the first quarter of 2016, resulting in projected annual net run-rate savings of at
least $1 million per quarter starting in the second quarter of 2016. The Company incurred $3.4 million in net pre-tax non-
operating expenses in the fourth quarter of 2015 associated with branch closures and will incur an estimated additional $2.7
30
million in the first quarter of 2016. The estimated pay-back period associated with branch closures and consolidations in 2016
is approximately two years.
FINANCIAL OVERVIEW
Selected consolidated financial and other data for the past five years is shown in the following tables.
TABLE 3—SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA(1,2)
(Dollars in thousands, except per share data)
Income Statement Data
Interest and dividend income
Interest expense
Net interest income
Provision for loan losses
Net interest income after
provision for loan losses
Non-interest income
Non-interest expense
Income before income tax
expense
Income tax expense
Net income
Earnings per common share –
basic
Earnings per common share –
diluted
Cash dividends per common
share
Years Ended December 31
2015
2014
2013
2012
2011
2015 vs. 2014
$ Change % Change
$ 646,858 $ 504,815 $ 437,197 $ 445,200 $ 420,327
82,069
338,258
25,867
46,953
390,244
5,145
63,450
381,750
20,671
59,100
587,758
30,908
44,704
460,111
19,060
142,043
14,396
127,647
11,848
556,850
220,393
570,305
441,051
173,628
473,614
385,099
168,958
472,796
361,079
175,997
432,185
312,391
131,859
373,731
115,799
46,765
96,691
206,938
64,094
70,519
16,981
$ 142,844 $ 105,382 $ 65,128 $ 76,395 $ 53,538
141,065
35,683
104,891
28,496
81,261
16,133
65,873
28,411
37,462
$
3.69
$
3.31
$
2.20
$
2.59
$
1.88
0.38
3.68
3.30
2.20
2.59
1.87
0.38
1.36
1.36
1.36
1.36
1.36
—
28
32
28
62
26
27
20
47
80
36
11
12
—
(Dollars in thousands, except
per share data)
Balance Sheet Data
Total assets
Cash and cash
equivalents
Loans, net of unearned
income
Investment securities
Goodwill and other
intangible assets, net
Deposits
Borrowings
Shareholders’ equity
Book value per share (3)
Tangible book value
per share (3) (5)
As of December 31
2015
2014
2013
2012
2011
2015 vs. 2014
$ Change
% Change
$ 19,504,068 $ 15,757,904 $ 13,365,550 $ 13,129,678 $ 11,757,928 $ 3,746,164
24 %
510,267
548,095
391,396
970,977
573,296
(37,828 )
(7 )
14,327,428
2,899,214
11,441,044
2,275,813
9,492,019
2,090,906
8,498,580
1,950,066
7,388,037
1,997,969
2,886,384
623,401
765,655
548,130
425,442
429,584
16,178,748 12,520,525 10,737,000 10,748,277
726,422
1,529,868
51.88
1,248,996
1,852,148
55.37
961,043
1,530,346
51.38
667,064
2,498,835
58.87
401,888
217,525
9,289,013 3,658,223
(581,932 )
646,687
3.50
848,276
1,482,661
50.48
25
27
40
29
(47 )
35
6
40.35
39.08
37.15
37.34
36.80
1.27
3
31
Key Ratios (4)
Return on average assets
Return on average common equity
Return on average tangible common equity (5)
Equity to assets at end of period
Earning assets to interest-bearing liabilities at end of period
Interest rate spread (6)
Net interest margin (TE) (6) (7)
Non-interest expense to average assets
Efficiency ratio (8)
Tangible operating efficiency ratio (TE) (Non-GAAP) (5) (7) (8)
Common stock dividend payout ratio
Asset Quality Data (Legacy)
Non-performing assets to total assets at end of period (9)
Allowance for credit losses to non-performing loans at end of
period (9)
Allowance for credit losses to total loans at end of period
Consolidated Capital Ratios
Tier 1 leverage capital ratio
Common Equity Tier 1 (CET1)
Tier 1 risk-based capital ratio
Total risk-based capital ratio
As of and For the Years Ended December 31
2015
2014
2013
2012
2011
0.78 %
6.41
9.65
12.81
142.28
3.41
3.55
3.10
70.57
64.54
38.46
0.72 %
6.17
9.04
11.75
135.15
3.40
3.51
3.24
74.73
68.37
42.05
0.50%
4.26
6.17
11.45
132.74
3.26
3.38
3.64
84.60
74.53
62.11
0.63 %
5.05
7.21
11.65
124.93
3.43
3.58
3.57
77.49
73.31
52.50
0.49%
3.77
5.30
12.61
121.74
3.34
3.51
3.43
79.50
72.85
73.61
0.42 %
0.41 %
0.61%
0.69 %
0.86%
209.41
0.96
246.26
0.91
175.35
0.95
150.57
1.10
132.98
1.40
9.52 %
10.07
10.70
12.14
9.35 %
N/A
11.17
12.30
9.70%
N/A
11.57
12.82
9.70 %
10.45%
N/A
12.92
14.19
N/A
14.94
16.20
(1) Certain balances and amounts have been restated for the effect of the adoption of ASU No. 2014-01 on January 1, 2015.
(2) 2011 data is impacted by the Company’s acquisitions of OMNI and Cameron on May 31, 2011 and FTC on June 14,
2011. 2012 data is impacted by the Company’s acquisition of Florida Gulf on July 31, 2012. 2014 data is impacted by the
Company’s acquisitions of certain assets and liabilities of Trust One - Memphis on January 17, 2014, Teche on May 31,
2014, and First Private on June 30, 2014. 2015 data is impacted by the Company’s acquisitions of Florida Bank Group on
February 28, 2015, Old Florida on March 31, 2015, and Georgia Commerce on May 31, 2015.
(3) Shares used for book value purposes are net of shares held in treasury at the end of 2014, 2013, 2012, and 2011.
(4) With the exception of end-of-period ratios, all ratios are based on average daily balances during the respective periods.
(5) Tangible calculations eliminate the effect of goodwill and acquisition-related intangible assets and the corresponding
amortization expense on a tax-effected basis where applicable.
(6)
Interest rate spread represents the difference between the weighted average yield on earning assets and the weighted
average cost of interest-bearing liabilities. Net interest margin represents net interest income as a percentage of average
net earning assets.
(7) Fully taxable equivalent ("TE") calculations include the tax benefit associated with related income sources that are tax-
exempt using a marginal tax rate of 35%.
(8) The efficiency ratio represents non-interest expense as a percentage of total revenues. Total revenues are the sum of net
interest income and non-interest income.
(9) Non-performing loans consist of non-accruing loans and loans 90 days or more past due. Non-performing assets consist
of non-performing loans and repossessed assets.
The Company’s net income available to common shareholders for the year ended December 31, 2015 totaled $142.8 million, or
$3.68 per diluted share, compared to $105.4 million, or $3.30 per diluted share, for 2014. On an operating basis (non-GAAP),
diluted EPS was $4.18, up $0.46 from $3.72 in 2014. Key components of the Company’s 2015 performance are summarized
below.
• Net interest income increased $127.6 million, or 28%, in 2015 when compared to 2014, a result of a $142.0 million, or
28%, increase in interest and dividend income partially offset by a $14.4 million, or 32%, increase in interest expense.
Net interest income for 2015 reflects a $3.4 billion increase in average earning assets and a five basis point increase in
32
average yield on earning assets, offset by a $2.1 billion increase in average interest-bearing liabilities and a four basis
point increase in funding costs when compared to 2014. As a result, net interest margin on a tax-equivalent basis
increased four basis points to 3.55% from 3.51% when comparing the periods.
• The Company recorded a provision for loan losses of $30.9 million in 2015, $11.8 million higher than the provision
recorded in 2014. The increase in the provision was due primarily to legacy loan growth ($1.5 billion, or 16%, growth
since December 31, 2014), as well as an increase in legacy loan charge-offs, with relatively flat recoveries, and general
energy sector weakness. As of December 31, 2015, the total allowance for loan losses as a percent of total loans was
0.97% compared to 1.14% at December 31, 2014.
• Non-interest income increased $46.8 million, or 27%, when compared to 2014, a result of a $29.3 million increase in
mortgage income, a $6.6 million increase in service charges, a $2.3 million increase in title revenue, and a $2.0 million
increase in ATM/debit card fee income. These increases were partially offset by a $1.1 million decrease in BOLI income
and a $1.2 million decrease in broker commissions. All other non-interest income categories also increased $8.8 million
due to increases in trust income, credit card income, and gain on sales of fixed assets.
• From 2014 to 2015, non-interest expense increased $96.7 million, or 20%, while operating non-interest expense increased
$88.8 million, or 20%. The increase in operating non-interest expense was attributable primarily to the Company’s
acquisition-driven growth over the past twelve months, including higher salary and employee benefit costs of $63.5
million and increased occupancy and equipment and other branch expenses resulting from the Company’s expanded
footprint.
• The Company paid a quarterly cash dividend of $0.34 per common share in each quarter of 2015, resulting in dividends
of $1.36 for the year-to-date period. These amounts were consistent with the dividends paid in 2014 and 2013.
• Total assets at December 31, 2015 were $19.5 billion, up $3.7 billion, or 24%, from December 31, 2014. Legacy loan
growth of $1.5 billion across many of the Company’s markets, net increases in acquired loans of $1.4 billion, and $623.4
million in additional investment securities drove the increase in total assets.
• Total loans net of unearned income at December 31, 2015 were $14.3 billion, an increase of $2.9 billion, or 25%, from
December 31, 2014. Loan growth during 2015 was driven by a $1.5 billion, or 16%, increase in legacy loans and a $1.4
billion, or 77%, net increase in acquired loans.
• Total deposits increased $3.7 billion, or 29%, to $16.2 billion at December 31, 2015. Non-interest-bearing deposits
increased $1.2 billion, or 36%, while interest-bearing deposits increased $2.5 billion, or 27%. Acquired deposits of $2.7
billion accounted for the majority of the increase from year-end 2014, while $1.0 billion resulted from organic deposit
growth. Although deposit competition remained intense, the Company was able to generate growth across many of its
deposit products at reasonable rates.
• Shareholders’ equity increased $646.7 million, or 35% from year-end 2014. The increase was primarily driven by
7.5 million common shares issued in the Florida Bank Group, Old Florida, and Georgia Commerce acquisitions, which
resulted in additional equity of $474.8 million. Net proceeds from the issuance of preferred stock of $76.8 million as well
as undistributed net income of $87.9 million also contributed to the increase. These increases were partially offset by a
$9.1 million decrease in accumulated other comprehensive income (net of tax), a result of the change in the net unrealized
holding gain in the Company’s available for sale investment portfolio at the end of 2015.
APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
In preparing the consolidated financial statements and accompanying notes, management is required to apply significant
judgment to various accounting, reporting, and disclosure matters. The accounting principles and methods used by the
Company conform to GAAP and general banking accounting practices. The estimates and assumptions most significant to the
Company are summarized in the following discussion and are further analyzed in the notes to the consolidated financial
statements.
Allowance for Credit Losses
The allowance for credit losses has two components, the allowance for loan losses (contra asset) and the reserve for unfunded
commitments (liability). Further, the allowance for loan losses consists of (i) probable incurred credit losses for legacy and
acquired non-impaired loans and (ii) expected losses on acquired impaired loans.
33
Allowance for Legacy and Acquired Non-Impaired Loans
The legacy and acquired non-impaired ACL, which represents management’s estimate of probable losses inherent in the
Company’s legacy and acquired non-impaired loan portfolio, involves a high degree of judgment and complexity. The
Company’s policy is to establish reserves through provisions for credit losses on the consolidated statements of comprehensive
income for estimated losses on delinquent and other problem loans, as well as loans which have not yet explicitly exhibited
factors indicating credit weakness, when it is determined that losses have been incurred on such loans. Management’s
determination of the appropriateness of the legacy and acquired non-impaired ACL is based on various factors requiring
judgments and estimates, including management’s evaluation of the credit quality of the portfolio (determined through the
assignment of risk ratings, assessments of past due status, and scores from credit agencies), historical loss experience, current
economic conditions, the volume and type of lending conducted by the Company, composition of the portfolio, the amount of
the Company’s classified assets, seasoning of the loan portfolio, the status of past due principal and interest payments, value of
collateral, the ability to monetize guarantor support and other relevant factors. Estimates in which management exercises
significant judgment are the assessments of risk ratings, collateral values, and guarantor support on the Company’s commercial
loan portfolio and the application of qualitative adjustments to the quantitative measurements across all portfolios. Other
changes in estimates included in the estimation of the ACL may also have a significant impact on the consolidated financial
statements. For further discussion of the ACL, see Note 1, Summary of Significant Accounting Policies, and Note 6,
Allowance for Credit Losses, to the consolidated financial statements.
Accounting for Acquired Impaired Loans and the Allowance for Acquired Impaired Loans
The Company accounts for its acquisitions under ASC Topic No. 805, Business Combinations, which requires the use of the
acquisition method of accounting. Accordingly, all acquired loans are recorded at fair value on the acquisition date applying the
fair value methodology prescribed in ASC Topic No. 820, Fair Value Measurement, and in the case of covered loans excludes
the shared-loss agreements with the FDIC. No ACL related to the acquired loans is recorded on the acquisition date, as the fair
value of the loans acquired incorporates assumptions regarding credit risk. The fair value measurements include estimates
related to market interest rates and projections of future cash flows that incorporate expectations of prepayments and the
amount and timing of principal, interest and other cash flows, as well as any shortfalls thereof.
Acquired loans are evaluated at acquisition and classified as purchased impaired (“acquired impaired”) or purchased non-
impaired (“acquired non-impaired”). Purchased impaired loans exhibit (in management’s judgment) credit deterioration since
origination to the extent that it is probable at the time of acquisition that the Company will be unable to collect all contractually
required payments, and includes all covered loans. All other acquired loans are classified as purchased non-impaired.
Over the life of the purchased impaired loans, the Company continues to estimate the amount and timing of cash flows
expected to be collected on individual loans or on pools of loans sharing common risk characteristics. These expected cash flow
estimates are updated for new information on a quarterly basis. Once cash flow estimates are updated, the Company evaluates
whether the present value of these cash flows, determined using effective interest rates, have decreased and if so, recognizes
provisions for credit losses in its consolidated statement of comprehensive income. For any significant increases in cash flows
expected to be collected, the Company adjusts the amount of accretable yield recognized on a prospective basis over the
respective loan’s or pool’s remaining life.
Valuation of Goodwill, Intangible Assets and Other Purchase Accounting Adjustments
As previously mentioned, the Company accounts for acquisitions in accordance with ASC Topic No. 805, Business
Combinations, which requires the use of the acquisition method of accounting. Under this method, the Company is required to
record the assets acquired, including identified intangible assets, and liabilities assumed, at their respective fair values, which in
many instances involves estimates based on third party valuations, such as appraisals, or internal valuations based on
discounted cash flow analyses or other valuation techniques. The determination of the useful lives of intangible assets is
subjective, as is the appropriate amortization method for such intangible assets. In addition, business combinations typically
result in recording goodwill.
As discussed in Note 1 to the consolidated financial statements, the Company performs a goodwill evaluation at least annually
or whenever events or changes in circumstances indicate that it is more likely than not the fair value of a reporting unit is less
than its respective carrying amount. For the annual October 1, 2015 impairment evaluation, management elected to bypass the
qualitative assessment for each respective reporting unit (IBERIABANK, IMC, and LTC) and performed Step 1 of the goodwill
impairment test. Step 1 of the goodwill impairment test requires the Company to compare the fair value of each reporting unit
with its carrying amount, including goodwill. Accordingly, the Company determined the fair value of each reporting unit and
compared the fair value to each respective reporting unit’s carrying amount. The Company determined that none of the
reporting unit’s fair values were below their respective carrying amounts. The Company concluded goodwill was not impaired
34
as of October 1, 2015. Further, no events or changes in circumstances between October 1, 2015 and December 31, 2015
indicated that it was more likely than not the fair value of any reporting unit had been reduced below its carrying value.
Based on the testing performed in 2015 and 2014, management concluded that for the IBERIABANK, IMC, and LTC reporting
units, goodwill was not impaired at any time during those periods.
Goodwill impairment evaluations require management to utilize significant judgments and assumptions including, but not
limited to, the general economic environment and banking industry, reporting unit future performance (i.e., forecasts), events or
circumstances affecting a respective reporting unit (e.g., interest rate environment), and changes in the Company stock price,
amongst other relevant factors. Management’s judgments and assumptions are based on the best information available at the
time. Results could vary in subsequent reporting periods if conditions differ substantially from the assumptions utilized in
completing the evaluations.
For additional information on goodwill and intangible assets, see Note 1, Summary of Significant Accounting Policies, and
Note 10, Goodwill and Other Acquired Intangible Assets, to the consolidated financial statements.
Income Taxes
In the ordinary course of business, we conduct transactions in various taxing jurisdictions (Federal, state, and local) that are
subject to complex income tax laws and regulations, which may differ by jurisdiction. The Company is often required to
exercise significant judgment regarding the interpretation of these tax laws and regulations, in which the Company’s anticipated
and actual payment could significantly vary based upon the taxing authority’s interpretation. Adjustments to current, accrued,
or deferred taxes may occur due to modifications in tax rates, newly enacted laws, resolution of items with taxing authorities,
alterations to interpretative statutory, judicial, and regulatory guidance that affects the Company’s tax positions, or other facts
and circumstances.
RESULTS OF OPERATIONS
The Company reported income available to common shareholders of $142.8 million, $105.4 million, and $65.1 million for the
years ended December 31, 2015, 2014, and 2013, respectively. EPS on a diluted basis was $3.68 for 2015, $3.30 for 2014, and
$2.20 for 2013.
The following discussion provides additional information on the Company’s operating results for the years ended December 31,
2015, 2014, and 2013, segregated by major income statement caption.
Net Interest Income/Net Interest margin
Net interest income is the difference between interest realized on earning assets and interest paid on interest-bearing liabilities
and is also the driver of core earnings. As such, it is subject to constant scrutiny by management. The rate of return and relative
risk associated with earning assets are weighed to determine the appropriateness and mix of earning assets. Additionally, the
need for lower cost funding sources is weighed against relationships with clients and future growth opportunities. The
Company’s net interest spread, which is the difference between the yields earned on average earning assets and the rates paid
on average interest-bearing liabilities, was 3.41%, 3.40%, and 3.26%, during the years ended December 31, 2015, 2014, and
2013, respectively. The Company’s net interest margin on a taxable equivalent (“TE”) basis, which is net interest income (TE)
as a percentage of average earning assets, was 3.55%, 3.51%, and 3.38%, respectively, for the same periods.
35
The following table sets forth information regarding (i) the total dollar amount of interest income from earning assets and the
resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average
rates; (iii) net interest income; (iv) net interest spread; and (v) net interest margin. Information is based on average daily
balances during the indicated periods. Investment security market value adjustments and trade-date accounting adjustments are
not considered to be earning assets and, as such, the net effect of these adjustments is included in non-earning assets.
TABLE 4—AVERAGE BALANCES, NET INTEREST INCOME AND INTEREST YIELDS / RATES
(Dollars in thousands)
Earning Assets:
Loans(1), (2):
Commercial loans
Mortgage loans
Consumer and other loans
Total loans
Loans held for sale
Investment securities
FDIC loss share receivable
Other earning assets
Total earning assets
Allowance for loan losses
Non-earning assets
Total assets
Interest-bearing liabilities
Deposits:
NOW accounts
Savings and money market
accounts
Certificates of deposit
Total interest-bearing deposits
Short-term borrowings
Long-term debt
Total interest-bearing
liabilities
Non-interest-bearing demand
deposits
Non-interest-bearing liabilities
Total liabilities
Shareholders’ equity
Total liabilities and
shareholders’ equity
Net earning assets
Net interest income/
Net interest spread
Net interest income (TE) /
Net interest margin (TE) (3)
2015
Interest
Income/
Expense
Average
Balance
Yield/
Rate
Average
Balance
2014
Interest
Income/
Expense
Yield/
Rate
Average
Balance
2013
Interest
Income/
Expense
Yield/
Rate
$ 9,292,251 $ 411,351
53,948
141,667
606,966
6,164
53,165
(23,500 )
4,063
646,858
1,165,524
2,815,554
13,273,329
176,793
2,595,806
52,494
553,629
16,652,051
4.42 % $ 7,284,247 $ 359,801
44,563
869,510
4.63 %
122,342
2,310,339
5.03 %
526,706
4.57 % 10,464,096
5,153
130,425
3.49 %
44,677
2,148,963
2.17 %
120,567
(74,617 )
(44.15 )%
2,896
371,490
0.73 %
504,815
3.90 % 13,235,541
4.95 % $ 6,386,364 $ 350,451
30,598
520,872
5.13 %
107,887
1,954,766
5.30 %
488,936
8,862,002
5.04 %
5,108
144,961
3.95 %
38,230
2,081,523
2.23 %
266,856
(97,849 )
(61.04 )%
2,772
380,050
0.78 %
437,197
3.85 % 11,735,392
5.50 %
5.87 %
5.52 %
5.53 %
3.52 %
2.01 %
(36.16)%
0.73 %
3.78 %
(130,808 )
1,881,463
$ 18,402,706
(134,830 )
1,531,283
$ 14,631,994
(184,217 )
1,452,813
$ 13,003,988
$ 2,620,570
6,903
0.26 % $ 2,240,137
6,006
0.27 % $ 2,337,831
7,557
0.32 %
6,274,498
2,260,237
21,063
19,137
11,155,305
426,011
388,220
47,103
797
11,200
11,969,536
59,100
0.34 %
0.85 %
0.42 %
0.18 %
2.85 %
0.49 %
4,616,026
1,889,858
12,802
14,282
8,746,021
782,033
335,211
33,090
1,364
10,250
9,863,265
44,704
0.28 %
0.76 %
0.38 %
0.17 %
3.02 %
0.45 %
4,207,343
1,964,702
11,685
16,604
0.28 %
0.85 %
8,509,876
303,352
316,775
35,846
490
10,617
0.42 %
0.16 %
3.31 %
9,130,003
46,953
0.51 %
3,996,821
175,315
16,141,672
2,261,034
$ 18,402,706
$ 4,682,515
2,916,509
144,861
12,924,635
1,707,359
$ 14,631,994
$ 3,372,276
2,216,959
129,833
11,476,795
1,527,193
$ 13,003,988
$ 2,605,389
$ 587,758
3.41 %
$ 460,111
3.40 %
$ 390,244
3.26 %
$ 596,362
3.55 %
$ 468,720
3.51 %
$ 399,696
3.38 %
(1) Total loans include non-accrual loans for all periods presented.
(2)
Interest income includes loan fees of $2.8 million, $2.4 million, and $2.7 million for the years ended December 31, 2015,
2014, and 2013, respectively.
(3) Taxable equivalent yields are calculated using a marginal tax rate of 35%.
Net interest income increased $127.6 million, or 28%, to $587.8 million in 2015 when compared to 2014. The increase in net
interest income was the result of a $3.4 billion increase in average earning assets and a five basis point improvement in the
earning asset yield when compared to 2014. These improvements were offset by a $2.1 billion, or 21%, increase in average
interest-bearing liabilities and a four basis point increase in the average cost of interest-bearing liabilities. The average balance
36
sheet growth over the past twelve months was primarily a result of acquisitions, although the Company has also experienced
organic growth in its legacy loan portfolio and deposits.
Average loans made up 80% and 79% of average earning assets in 2015 and 2014, respectively. Average loans increased $2.8
billion, or 27%, from 2014 to 2015 as a result of growth in both the legacy and acquired loan portfolios. Investment securities
made up 16% of average earning assets during both 2015 and 2014.
Average interest-bearing deposits made up 93% of average interest-bearing liabilities during 2015, compared to 89% during
2014. Average short-term borrowings made up 4% and 8% of average interest-bearing liabilities in 2015 and 2014, respectively.
Average long-term debt made up 3% of average interest-bearing liabilities in both 2015 and 2014.
The five basis point increase in yield on total earning assets when comparing 2015 to 2014 was driven by a decrease in
amortization of the Company’s FDIC loss share receivable, which resulted in a negative yield for this asset, partially offset by
the mix of lower yielding loans recently acquired. The decrease in amortization on the loss share receivables was the result of
the contractual expiration of loss share coverage in late 2014 and early 2015 on certain acquired portfolios covered by loss
share agreements with the FDIC.
37
The average mix of earning assets and interest bearing liabilities are shown in the following charts.
38
The following table sets forth information regarding average loan balances and average yields, segregated into the legacy and
acquired portfolios, for the periods indicated.
TABLE 5—AVERAGE LOAN BALANCE AND YIELDS
Years Ended December 31
2015
2014
2013
(Dollars in thousands)
Legacy loans
Acquired loans
Total loans
FDIC loss share receivables
Total loans and FDIC loss share
receivables
Average
Balance
$ 10,354,265
2,919,064
13,273,329
52,494
Average
Balance
Average
Yield
3.95 % $ 8,860,141
1,603,955
6.84
10,464,096
4.57
120,567
(44.15)
Average
Balance
Average
Yield
4.00 % $ 7,532,732
1,329,270
10.54
8,862,002
5.04
266,856
(61.04 )
Average
Yield
4.12 %
13.15
5.53
(36.16 )
$ 13,325,823
4.38% $ 10,584,663
4.29 % $ 9,128,858
4.31 %
39
The following table displays the dollar amount of changes in interest income and interest expense for major components of
earning assets and interest-bearing liabilities. The table distinguishes between (i) changes attributable to volume (changes in
average volume between periods times the average yield/rate for the two periods), (ii) changes attributable to rate (changes in
average rate between periods times the average volume for the two periods), and (iii) total increase (decrease). Changes
attributable to both volume and rate are allocated ratably between the volume and rate categories.
TABLE 6—SUMMARY OF CHANGES IN NET INTEREST INCOME
(Dollars in thousands)
Earning assets:
Loans:
Commercial loans
Mortgage loans
Consumer and other loans
Loans held for sale
Investment securities
FDIC loss share receivable
Other earning assets
Net change in income on earning assets
Interest-bearing liabilities:
Deposits:
NOW accounts
Savings and money market accounts
Certificates of deposit
Borrowings
2015 Compared to 2014
2014 Compared to 2013
Change Attributable To
Change Attributable To
Volume
Rate
Net Increase
(Decrease)
Volume
Rate
Net Increase
(Decrease)
$
94,541 $
14,027
26,726
1,670
9,113
34,307
611
180,995
(42,991) $
(4,642)
(7,401)
(659)
(625)
16,810
556
(38,952)
51,550 $
9,385
19,325
1,011
8,488
51,117
1,167
142,043
48,269 $
18,286
18,566
(540)
773
70,004
767
156,125
(38,919) $
(4,321)
(4,111)
585
5,674
(46,772)
(643)
(88,507)
9,350
13,965
14,455
45
6,447
23,232
124
67,618
1,004
7,196
3,007
774
(107)
1,065
1,848
(391)
897
8,261
4,855
383
(305)
1,821
(615)
1,523
(1,246)
(704)
(1,707)
(1,016)
(1,551)
1,117
(2,322)
507
Net change in expense on interest-bearing
liabilities
Change in net interest spread
11,981
$ 169,014 $
2,415
14,396
(41,367) $ 127,647 $ 153,701 $
2,424
(4,673)
(83,834) $
(2,249)
69,867
Interest income includes income earned on interest-earning assets as well as applicable loan fees earned. Interest income that
would have been earned on non-accrual loans had they been on accrual status is not included in the tables above.
For the year ended December 31, 2015, earning asset volume, both for acquired earning assets and organic growth, drove the
$142.0 million increase in interest income. Average loan balances increased $2.8 billion, or 27%, over 2014 and can be
attributed to legacy loan growth, as well as loans acquired from Florida Bank Group, Old Florida, and Georgia Commerce. The
declining balance of the FDIC loss share receivable and related amortization also contributed $51.1 million to the increase in
interest income.
Interest expense on interest-bearing liabilities increased $14.4 million, or 32%, primarily due to a $14.0 million, or 42%,
increase in interest expense on interest-bearing deposits. The increase in interest expense on interest-bearing deposits in 2015
included growth of $2.4 billion in the average balance and a four basis point increase in the rate paid on interest-bearing
deposits compared to 2014. Interest expense on the Company’s borrowings increased $0.4 million as a result of an increase in
average long-term debt of $53.0 million when compared to 2014.
For the year ended December 31, 2014, earning asset volume, both for acquired earning assets and organic growth, drove the
$67.6 million increase in interest income. Average loan balances increased $1.6 billion, or 18%, over 2013 and can be attributed
to acquired loan growth from the Trust One, Teche, and First Private acquisitions. In addition to loan volume increases, interest
income growth was also a result of a 22 basis point increase in the yield on investment securities due to an increase in average
investment securities of $67.4 million, or 3%, between 2013 and 2014. The declining balance of the FDIC loss share receivable
and related amortization also contributed $23.2 million to the increase in interest income.
Driven by a decrease of six basis points in the rate paid on interest-bearing liabilities during 2014, interest expense decreased
$2.2 million, or 5%, from 2013. Despite an increase of $236.1 million in average interest-bearing deposits (a result of both
40
acquired deposits and organic deposit growth), interest expense on interest-bearing deposits decreased 8%, or $2.8 million,
from 2013, as the average rate paid on these deposits decreased to 0.38% for the twelve months of 2014, a four basis point
decline. Higher-yielding time deposits across many markets either matured or were repriced during 2014, driving the expense
and rate decreases. Interest expense on the Company’s short-term and long-term borrowings, however, increased from 2013,
due to a $478.7 million increase in average short-term borrowings and an $18.4 million increase in average long-term debt
offset by a 29 basis point decrease in the rate paid on long-term debt.
Provision for Loan Losses
Management of the Company formally assesses the ACL quarterly and will make provisions for loan losses and unfunded
lending commitments as necessary in order to maintain the appropriateness of the ACL at the balance sheet date. The provision
for loan losses exceeded net charge-offs by $10.8 million for the year ended December 31, 2015. For the year ended December
31, 2014, net charge-offs exceeded the provision for loan losses by $1.4 million.
On a consolidated basis, the Company recorded a provision for loan losses of $30.9 million for the year ended December 31,
2015, an $11.8 million increase from the provision recorded for the same period of 2014. The Company also recorded a
provision for unfunded lending commitments of $2.3 million during the current year, included in “credit and other loan-related
expense” in the Company’s consolidated statement of comprehensive income. As a result, the Company’s total provision for
credit losses was $33.2 million in 2015, which is $13.5 million, or 69%, above the provision recorded in 2014. The Company’s
total provision for loan losses in 2015 included a provision for changes in expected cash flows on the acquired loan portfolios
of $3.2 million and a $27.7 million provision recorded on legacy loans. The increase in provision was due primarily to legacy
loan growth of $1.5 billion, or 16%, from December 31, 2014, as well as higher net loan charge-offs and general energy sector
weakness. Net charge-offs to average loans in the legacy portfolio were 0.10% as of December 31, 2015, compared to 0.06%
as of December 31, 2014.
On a consolidated basis, the Company recorded a provision for loan losses of $19.1 million for the year ended December 31,
2014, a $13.9 million increase from the provision recorded for the same period of 2013. The Company also recorded a
provision for unfunded lending commitments of $0.6 million during 2014. As a result, the Company’s total provision for credit
losses was $19.7 million in 2014, $13.3 million above the provision recorded in 2013. The Company’s total provision for loan
losses in 2014 included provision for changes in expected cash flows on the acquired loan portfolios of $4.8 million and a
$14.3 million provision recorded on legacy loans, based primarily on loan growth. Net charge-offs to average loans in the
legacy portfolio were consistent between 2013 and 2014 at 0.06%.
Refer to the "Asset Quality" section of MD&A and Note 6, Allowance for Credit Losses, to the consolidated financial
statements for additional details on the provision for loan losses and unfunded commitments.
Non-interest Income
The Company’s operating results for the year ended December 31, 2015 included non-interest income of $220.4 million
compared to $173.6 million and $169.0 million for the years ended December 31, 2014 and 2013, respectively. The increase in
non-interest income from 2014 to 2015 was primarily a result of an increase in mortgage income and service charges on deposit
accounts. Non-interest income as a percentage of total gross revenue (defined as total interest and non-interest income) in 2015
was 25% compared to 26% of total gross revenue in the prior year.
41
The following table illustrates the primary components of non-interest income.
TABLE 7—NON-INTEREST INCOME
2015 vs. 2014
2014 vs. 2013
(Dollars in thousands)
Mortgage income
Service charges on deposit accounts
Title revenue
Broker commissions
ATM/debit card fee income
Income from bank owned life insurance
Gain on sale of available for sale securities
Trust income
Credit card income
Other non-interest income
2013
2015
2014
$ 81,122 $ 51,797 $ 64,197
28,871
20,526
16,333
9,510
3,647
2,277
5,536
6,298
11,763
$ 220,393 $ 173,628 $ 168,958
35,573
20,492
18,783
12,023
5,473
771
6,019
9,718
12,979
42,197
22,837
17,592
13,989
4,356
1,575
6,974
10,675
19,076
$ Change
% Change $ Change % Change
(19)
23
—
15
26
50
(66)
9
54
10
3
(12,400 )
6,702
(34 )
2,450
2,513
1,826
(1,506 )
483
3,420
1,216
4,670
57
19
11
(6 )
16
(20 )
104
16
10
47
27
29,325
6,624
2,345
(1,191 )
1,966
(1,117 )
804
955
957
6,097
46,765
In 2015, record levels of mortgage production and strong sales resulted in a $29.3 million increase in mortgage income over
2014. The Company originated $2.5 billion in mortgage loans in 2015, up $789.1 million, or 47%, from 2014. The Company
sold $2.5 billion in mortgage loans, up $799.5 million, or 47%, from 2014. Derivative valuation adjustments were $5.3 million
higher in 2015 than 2014. In 2014, IMC sales volume slowed compared to 2013, which resulted in a $12.4 million decrease in
mortgage income from 2013. Sales proceeds decreased $604.3 million, or 26%, from 2013 to 2014, while derivative valuation
adjustments were $6.2 million lower in 2014 than 2013.
Service charges on deposit accounts increased $6.6 million in 2015 over the prior year, and $6.7 million between 2014 and
2013, both due primarily to an increase in deposit accounts as a result of the acquisitions during 2015 and 2014.
Other fluctuations in non-interest income during 2015 included increases from title revenue, ATM/debit card fee income, trust
income and credit card income, offset partially by decreases in broker commissions and BOLI income. Other non-interest
income increased $6.1 million, or 47%, due to increases in commission income, gains on sales of fixed assets, and other
commercial loan income. Other fluctuations in non-interest income from 2013 to 2014 included increases in ATM/debit card
fee income, broker commissions, BOLI income and credit card income offset partially by a decrease in the gain on available for
sale securities.
Non-interest Expense
The Company’s results for 2015 included non-interest expense of $570.3 million, an increase of $96.7 million over 2014.
Ongoing attention to expense control is part of the Company’s corporate culture. However, the Company’s recent investments
in acquisitions, product expansion, and operating systems have led to increases in several components of non-interest expense.
The Company currently operates 320 combined offices, an increase of 40 offices from December 31, 2014 after adjusting for
closed or consolidated branches and offices.
In the current year, the increase in non-interest expenses over 2014 was due to direct merger-related and severance expenses of
$26.7 million in 2015 compared to $22.0 million in 2014 as a result of the Company's acquisitions in both years. For the year,
the Company’s efficiency ratio was 70.6%, compared to 74.7% in 2014. Excluding non-operating income and expense and the
effect of amortization of intangibles, the Company’s tangible operating efficiency ratio (TE) (Non-GAAP) would have been
64.5% in 2015, compared to 68.4% in 2014.
42
The following table illustrates the primary components of non-interest expense.
TABLE 8—NON-INTEREST EXPENSE
2015 vs. 2014
2014 vs. 2013
(Dollars in thousands)
Salaries and employee benefits
Net occupancy and equipment
Communication and delivery
Marketing and business development
Data processing
Amortization of acquisition intangibles
Professional services
Costs of OREO property, net
Credit and other loan-related expense
Insurance
Travel and entertainment
Impairment of FDIC loss share receivables
and other long-lived assets
Other non-interest expense
2013
2015
2014
$ 322,586 $ 259,086 $ 244,984
58,037
12,024
10,143
17,853
4,720
18,217
1,943
15,853
11,272
8,126
59,571
12,029
11,707
27,249
5,807
18,975
2,748
13,692
14,359
9,033
68,541
13,506
13,176
34,424
7,811
22,368
748
16,653
16,670
9,525
$ Change
% Change $ Change % Change
6
25 14,102
3
1,534
15
12
5
—
15
1,564
13
53
9,396
26
23
1,087
35
758
4
18
41
805
(73)
22
(14)
(2,161 )
27
3,087
16
11
907
5
63,500
8,970
1,477
1,469
7,175
2,004
3,393
(2,000 )
2,961
2,311
492
6,954
37,343
37,893
31,731
$ 570,305 $ 473,614 $ 472,796
6,437
32,921
517
4,422
96,691
8
13
20
(31,456 )
1,190
818
(83)
4
—
Salaries and employee benefits increased $63.5 million in 2015 when compared to 2014, primarily the result of increased
staffing due to the growth of the Company, specifically from the three completed acquisitions during the year. The Company
had 3,151 full-time equivalent employees at the end of 2015, an increase of 394, or 14%, from the end of 2014. The Company
also had an increase of $8.8 million in commissions and incentives and $6.6 million increase in phantom stock expense for
grants in 2015 that contributed to the overall increase in salaries and employee benefits. When comparing 2014 to 2013, the
Company had an increase in salaries and employee benefits of $14.1 million, or 6%, related to the completion of three smaller
acquisitions in 2014 and cost-savings initiatives. Full-time equivalent employees increased 7% from 2,576 employees at the
end of 2013 to 2,757 at the end of 2014.
Net occupancy and equipment expenses were up $9.0 million from 2014, primarily due to additional growth from acquisitions
in 2015, as the Company incurred security equipment monitoring costs, and increased rent expense and depreciation from
additional branches. From 2013 to 2014, net occupancy and equipment expenses were up $1.5 million, primarily due to merger-
related expenses in 2014, as the Company incurred lease termination, signage, and other expenses related to the Company’s
three 2014 acquisitions.
Data processing increased $7.2 million in 2015 from 2014 and $9.4 million in 2014 from 2013. The increase is due primarily to
increases in merger-related computer services expense of $4.0 million and $6.3 million, respectively, as well as the increased
costs of strengthening the Company's cybersecurity.
Due to the continued growth of the Company, professional services expense in 2015 was $3.4 million higher than in 2014. This
increase was primarily a result of merger-related legal expenses, increased consulting services for process improvements, and
exam and supervisory review. Professional services expense in 2014 was $0.8 million higher than in 2013. In 2014, the
Company incurred $3.4 million in merger-related expenses, including legal and audit fees, offset by a $2.2 million decrease in
consulting expenses that were incurred in 2013 to improve various Company and business-line specific processes.
Expense related to the impairment of FDIC loss share receivables and other long-lived assets increased $0.5 million in 2015 as
compared to 2014. The $7.0 million expense recognized in 2015 was primarily the result of write-downs related to branch
closure and consolidation efforts. The year ended December 31, 2014 included an impairment charge of $5.1 million on FDIC
loss share receivables. In 2013, an impairment charge of $31.8 million was recognized on FDIC loss share receivables.
The $4.4 million, or 13%, increase in other non-interest expense in 2015 was primarily due to increases in ATM/debit card
expense (due to a higher volume of ATM/debit card transactions and higher interchange and issuance expenses) and deposit
insurance expense (due to deposit growth year over year). Other non-interest expense in 2014 included increases in almost all
other categories when compared to 2013, which was consistent with growth in the Company’s customer base and footprint.
43
Income Taxes
For the years ended December 31, 2015, 2014, and 2013, the Company recorded income tax expense of $64.1 million, $35.7
million, and $16.1 million, respectively, which resulted in an effective income tax rate of 31.0% in 2015, 25.3% in 2014, and
19.9% in 2013.
The difference between the effective tax rate and the statutory federal and state tax rates relates to items that are non-taxable or
non-deductible, primarily the effect of tax-exempt income and various tax credits. The effective tax rates in 2014 and 2015
have increased primarily due to the increase in pre-tax income without a corresponding proportional increase in tax credits. In
addition, the 2015 effective tax rate was negatively impacted by the post-merger effect of the 2015 acquisitions, which
contributed to the increase in the Company's state effective tax rate given the higher statutory tax rates in Florida and Georgia.
FINANCIAL CONDITION
EARNING ASSETS
Interest income associated with earning assets is the Company’s primary source of income. Earning assets are composed of
interest-earning or dividend-earning assets, including loans, securities, short-term investments, and loans held for sale. As a
result of both acquired assets and organic growth, earning assets increased $3.5 billion, or 24%, during 2015. Earning assets
averaged $16.7 billion during 2015, a $3.4 billion, or 26%, increase when compared to 2014. Major components of earning
assets at December 31 are shown in the following table:
TABLE 9—EARNING ASSETS COMPOSITION
(Ending Balances)
2015
2014
Increase (Decrease)
(Dollars in thousands)
Legacy Loans
Commercial Loans
Mortgage Loans
Consumer Loans
Total Legacy Loans
Acquired Loans
Total Loans, Net of Unearned Income
FDIC Loss Share Receivables
Total Loans and FDIC Loss Share Receivables
Investment Securities
Other Earning Assets
Total Earning Assets
$
8,133,341 $
694,023
2,363,156
11,190,520
3,136,908
14,327,428
39,878
14,367,306
2,899,214
506,532
7,002,198 $
527,694
2,138,822
9,668,714
1,772,330
11,441,044
69,627
11,510,671
2,275,813
515,715
$ 17,773,052 $ 14,302,199 $
1,131,143
166,329
224,334
1,521,806
1,364,578
2,886,384
(29,749)
2,856,635
623,401
(9,183)
3,470,853
16 %
32
10
16
77
25
(43 )
25
27
(2 )
24 %
44
The year-end mix of earning assets is shown in the following charts.
45
The following discussion highlights the Company’s major categories of earning assets.
Investment Securities
Investment securities increased by $623.4 million, or 27%, to $2.9 billion over the past year due to both acquired investment
securities and open-market security purchases. Investment securities increased to 15% of total assets at December 31, 2015
from 14% at December 31, 2014. Investment securities were 16% of average earning assets for both 2015 and 2014. The
following table shows the carrying values of securities by category as of December 31 for the years indicated.
(Dollars in thousands)
2015
2014
2013
2012
2011
TABLE 10—CARRYING VALUE OF SECURITIES
Securities available for sale:
U.S. Government-
sponsored enterprise
obligations
Obligations of states and
political subdivisions
Mortgage-backed
securities
Other securities
Securities held to maturity:
U.S. Government-
sponsored enterprise
obligations
Obligations of states and
political subdivisions
Mortgage-backed
securities
$ 252,083
9 % $ 315,553
14 % $ 395,561
19 % $ 285,724
15 % $ 342,488
17 %
187,961
7
90,190
4
107,479
5
127,075
7
143,805
7
2,264,813
95,429
2,800,286
78
3
97
1,751,615
1,432,278
1,330,656
1,317,374
2,158,853
1,936,797
1,745,004
1,805,205
68
1,479 —
92
68
1,549 —
90
66
1,538 —
90
77
1,495 —
95
—
—
10,000
—
34,478
69,979
28,949
98,928
2
1
3
77,597
29,363
116,960
4
1
5
84,290
35,341
154,109
2
4
2
8
69,949
88,909
4
4
85,172
81,053
4
4
46,204
205,062
2
10
26,539
192,764
2
10
$ 2,899,214
100 % $ 2,275,813
100 % $ 2,090,906
100 % $ 1,950,066
100 % $ 1,997,969
100 %
At December 31, 2015, all of the Company's mortgage-backed securities were issued by government-sponsored enterprises.
The Company does not hold any Fannie Mae or Freddie Mac preferred stock, corporate equity, collateralized debt obligations,
collateralized loan obligations, or structured investment vehicles, nor does it hold any private label collateralized mortgage
obligations, subprime, Alt-A, sovereign debt, or second lien elements in its investment portfolio.
The following table summarizes activity in the Company’s investment securities portfolio during 2015 and 2014. There were no
transfers of securities between investment categories during 2015.
TABLE 11—INVESTMENT PORTFOLIO ACTIVITY
(Dollars in thousands)
Balance at beginning of period
Purchases
Acquisitions
Sales, net of gains
Principal maturities, prepayments and calls, net of gains
Amortization of premiums and accretion of discounts
Unrealized gains (losses)
Balance at end of period
Available for
Sale
Held to
Maturity
2015
2014
$ 2,158,853 $ 1,936,797 $
1,063,460
309,485
(227,029 )
703,179
44,386
(60,931 )
(473,142 )
(488,699 )
(17,268 )
(14,073 )
(12,827 )
36,948
$ 2,800,286 $ 2,158,853 $
2015
116,960 $
5,833
—
—
(22,939 )
(926 )
—
98,928 $
2014
154,109
—
—
—
(36,180 )
(969 )
—
116,960
Funds generated as a result of sales and prepayments of investment securities are used to fund loan growth and purchase other
securities. The Company continues to monitor market conditions and take advantage of market opportunities with appropriate
risk and return elements.
46
The Company assesses the nature of the unrealized losses in its investment portfolio at least quarterly to determine if there are
losses that are deemed other-than-temporary. In its analysis of these securities, management considers numerous factors to
determine whether there are instances where the amortized cost basis of the debt securities would not be fully recoverable
including, the length of time and extent to which the fair value of the securities was less than their amortized cost, whether
adverse conditions were present in the operations, geographic area or industry of the issuer, the payment structure of the
security, including scheduled interest and principal payments, changes to the rating of the security by a rating agency, and
subsequent recoveries or additional declines in fair value after the balance sheet date.
Management believes it has considered these factors, as well as all relevant information available, when determining the
expected future cash flows of the securities in question. Based on its analysis, the Company concluded no declines in the
market value of the Company’s investment securities were deemed to be other-than-temporary at December 31, 2015 and 2014.
Note 4 to the consolidated financial statements provides further information on the Company’s investment securities.
Loans
The Company’s total loan portfolio increased $2.9 billion, or 25%, to $14.3 billion at December 31, 2015, which was driven by
legacy loan growth of $1.5 billion and a $1.4 billion net increase in acquired loans. By loan type, the increase was primarily
from commercial loan growth of $2.4 billion and consumer loan growth of $386.6 million during 2015, 31% and 15% higher,
respectively, than at the end of 2014.
The major categories of loans outstanding at December 31, 2015 and 2014 are presented in the following tables, segregated into
legacy and acquired loans.
TABLE 12—SUMMARY OF LOANS
December 31, 2015
Residential Mortgage
Consumer and Other
Commercial
Commercial
and
Industrial
Real
Estate
(Dollars in
thousands)
Legacy
Acquired
Total loans
Energy-
related
1 - 4
Family
Construction
$ 4,504,062 $ 2,952,102 $ 677,177 $ 610,986 $
1,569,449
$ 6,073,511 $ 3,444,578 $ 680,766 $ 1,112,282 $
501,296
492,476
3,589
83,037 $
—
83,037 $
Indirect
automobile
Home
Equity
Credit
Card
246,214 $ 1,575,643 $ 77,261 $ 464,038 $ 11,190,520
3,136,908
582
246,298 $ 2,066,167 $ 77,843 $ 542,946 $ 14,327,428
490,524
78,908
Other
84
Total
December 31, 2014
Residential Mortgage
Consumer and Other
Indirect
automobile
Home
Equity
Credit
Card
396,766 $ 1,290,976 $ 72,745 $ 378,335 $ 9,668,714
Other
Total
392
648
1,772,330
397,158 $ 1,601,105 $ 73,393 $ 475,009 $ 11,441,044
310,129
96,674
Commercial
Commercial
and
Industrial
Real
Estate
Energy-
related
1 - 4
Family
Construction
Legacy
$ 3,676,811 $ 2,452,521 $ 872,866 $ 495,638 $
Acquired
684,968
119,174
7,742
552,603
Total Loans $ 4,361,779 $ 2,571,695 $ 880,608 $ 1,048,241 $
32,056 $
—
32,056 $
47
Loan Portfolio Components
The Company believes its loan portfolio is diversified by product and geography throughout its footprint. The year-end loan
portfolio is segregated into various components and markets in the following charts.
48
From a market perspective, total loan growth (excluding acquired loans) was seen primarily in the Houston, southeast Florida,
Dallas, and Birmingham markets. Loans in the Houston market increased $198.5 million, or 16%, during 2015, while loans in
the southeast Florida market increased $129.8 million, or 73%. Dallas had year-to-date loan growth of $114.8 million, or 35%,
and Birmingham experienced growth of $92.8 million, or 14%, since the end of 2014.
The loan portfolio by market for the years ending December 31, 2015 and 2014 are shown in the following charts.
49
The Company’s loan to deposit ratio at December 31, 2015 and 2014 was 89% and 91%, respectively. The percentage of fixed-
rate loans to total loans decreased from 49% at the end of 2014 to 48% at December 31, 2015. The table below sets forth the
composition of the loan portfolio at December 31, followed by a discussion of activity by major loan type.
(Dollars in thousands)
2015
2014
2013
2012
2011
TABLE 13—TOTAL LOANS BY LOAN TYPE
Commercial loans:
Real estate
Commercial and industrial
Energy-related
Total commercial loans
Residential mortgage loans:
Residential 1-4 family
Construction/owner-occupied
Total residential mortgage
loans
Consumer and other loans:
Home equity
Indirect automobile
Other
Total consumer and other
loans
Total loans
Commercial Loans
$ 6,073,511
3,444,578
680,766
10,198,855
42 % $ 4,361,779
2,571,695
24
880,608
5
7,814,082
71
38 % $ 3,786,501
2,324,235
23
752,682
8
6,863,418
69
40 % $ 3,578,363
2,015,081
24
575,817
8
6,169,261
72
42 % $ 3,290,294
1,669,601
24
7
409,230
5,369,125
73
44 %
23
6
73
1,112,282
8
83,037 —
1,048,241
9
32,056 —
577,082
6
9,450 —
471,183
5
6,021 —
522,357
7
16,143 —
1,195,319
8
1,080,297
9
586,532
6
477,204
5
538,500
7
2,066,167
246,298
620,789
15
2
4
1,601,105
397,158
548,402
14
3
5
1,291,792
375,236
375,041
14
4
4
1,251,125
327,985
273,005
15
4
3
1,019,110
261,896
199,406
14
3
3
2,933,254
20
$ 14,327,428 100% $ 11,441,044 100 % $ 9,492,019 100 % $ 8,498,580 100% $ 7,388,037 100 %
2,546,665
1,480,412
1,852,115
2,042,069
22
22
21
22
Total commercial loans increased $2.4 billion, or 31%, from December 31, 2014, with $1.1 billion, or 16%, in legacy loan
growth and an increase in acquired commercial loans of $1.3 billion, or 154%. The Company continued to attract and retain
commercial customers in 2015 as commercial loans were 71% of the total loan portfolio at December 31, 2015, compared to
69% at December 31, 2014. Unfunded commitments on commercial loans were $3.6 billion at December 31, 2015, an increase
of $269.7 million, or 8%, when compared to the end of the prior year.
Commercial real estate loans include loans to commercial customers for long-term financing of land and buildings or for land
development or construction of a building. These loans are repaid from revenues repaid through operations of the businesses,
rents of properties, sales of properties and refinances. Commercial real estate loans increased $1.7 billion, or 39%, during the
year, consisting of increases in legacy commercial real estate loans of $827.3 million, or 23%, and acquired commercial real
estate loans of $884.5 million, or 129%. At December 31, 2015, commercial real estate loans totaled $6.1 billion, or 42% of the
total loan portfolio, compared to 38% at December 31, 2014. The Company’s underwriting standards generally provide for loan
terms of three to five years, with amortization schedules of generally no more than twenty years. Low loan-to-value ratios are
generally maintained and usually limited to no more than 80% at the time of origination.
Commercial and industrial loans represent loans to commercial customers to finance general working capital needs, equipment
purchases and other projects where repayment is derived from cash flows resulting from business operations. The Company
originates commercial business loans on a secured and, to a lesser extent, unsecured basis. The Company’s commercial
business loans may be term loans or revolving lines of credit. Term loans are generally structured with terms of no more than
three to five years, with amortization schedules of generally no more than seven years. Commercial business term loans are
generally secured by equipment, machinery or other corporate assets. The Company also provides for revolving lines of credit
generally structured as advances upon perfected security interests in accounts receivable and inventory. Revolving lines of
credit generally have annual maturities. The Company obtains personal guarantees of the principals as additional security for
most commercial business loans. As of December 31, 2015, commercial loans not secured by real estate totaled $4.1 billion, or
29% of the total loan portfolio. This represents a $673.0 million, or 19%, increase from December 31, 2014.
50
The following table details the Company’s commercial loans by state.
TABLE 14—COMMERCIAL LOANS BY STATE
(Dollars in
thousands)
December 31, 2015
Legacy
Acquired
Total
December 31, 2014
Legacy
Acquired
Total
Louisiana
Florida
Alabama
Texas
Arkansas Georgia
Tennessee
Other
Total
$ 3,081,494 $ 947,812 $ 1,059,604 $ 1,812,055 $ 569,384 $ 125,493 $ 486,703 $ 50,796 $ 8,133,341
2,065,514
$ 3,353,274 $ 2,026,812 $ 1,087,749 $ 1,852,909 $ 569,384 $ 693,776 $ 507,122 $ 107,829 $ 10,198,855
271,780 1,079,000
— 568,283
28,145
40,854
20,419
57,033
$ 3,015,447 $ 342,246 $ 901,705 $ 1,633,162 $ 676,691 $
351,148
348,968
33,845
52,438
—
$ 3,366,595 $ 691,214 $ 935,550 $ 1,685,600 $ 676,691 $
— $ 423,621 $ 9,326 $ 7,002,198
—
811,884
— $ 449,106 $ 9,326 $ 7,814,082
25,485
—
Energy-related Loans
The Company’s loan portfolio included energy-related loans of $680.8 million at December 31, 2015, or 4.8% of total loans,
compared to $880.6 million at December 31, 2014, a decrease of $199.8 million, or 23%. At December 31, 2015, exploration
and production (“E&P”) loans accounted for 46% of energy-related loans and 56% of energy-related commitments. Midstream
companies accounted for 17% of energy-related loans and 16% of energy loan commitments, while service company loans
totaled 37% of energy-related loans and 28% of energy commitments.
The rapid and sustained decline in energy commodity prices has unsettled the financial condition of businesses and
communities tied to the oil and gas industries. While the vast majority of the Company's loan portolio continues to have no
exposure to these concerns, we remain vigilant in our actions to mitigate the risks in the current environment.
Generally, service companies are the most affected by fluctuations in commodity prices, while midstream companies are the
least affected. Based on the composition of its portfolio at December 31, 2015, the Company believes most of its exposure is in
areas of lower credit risk. The Company's historical focus on sound client selection, conservative credit underwriting, and
proactive portfolio management, and market and business diversification continue to serve the Company well. The strategic
51
decision to expand into larger markets across the southeast allows the Company to drive growth and profitability to offset
declining positions in impacted energy segments of business.
Mortgage Loans
Residential mortgage loans consist of loans to consumers to finance a primary residence. The vast majority of the residential
mortgage loan portfolio is comprised of non-conforming 1-4 family mortgage loans secured by properties located in the
Company's market areas and originated under terms and documentation that permit their sale in the secondary market. Larger
mortgage loans of current and prospective private banking clients are generally retained to enhance relationships, but also tend
to be more profitable due to the expected shorter durations and relatively lower servicing costs associated with loans of this
size. The Company does not originate or hold high loan-to-value, negative amortization, option ARM, or other exotic mortgage
loans in its portfolio. In the third quarter of 2012, the Company began to invest in loans that would be considered sub-prime
(e.g., loans with a FICO score of less than 620) in order to facilitate compliance with relevant Community Reinvestment Act
regulations. The Company expects to continue to invest in these types of CRA compliant subprime loans through additional
secondary market purchases, as well as direct originations in 2016, albeit up to a limited amount. The Company did not make a
significant investment in subprime loans in 2015.
The Company continues to sell the majority of conforming mortgage loan originations in the secondary market rather than
assume the interest rate risk associated with these longer term assets. Upon the sale, the Company retains servicing on a limited
portion of these loans. Total residential mortgage loans increased $115.0 million, or 11%, compared to December 31, 2014, the
result of private banking originations and acquired mortgage loans. Offsetting these purchases and originations were net
decreases in the Company’s acquired mortgage loan portfolio of $51.3 million as existing loans were paid down.
Consumer and Other Loans
The Company offers consumer loans in order to provide a full range of retail financial services to its customers. The Company
originates substantially all of its consumer loans in its primary market areas. At December 31, 2015, $2.9 billion, or 21%, of the
total loan portfolio was comprised of consumer loans, compared to $2.5 billion, or 22%, at the end of 2014. Total consumer
loans at December 31, 2015, increased $386.6 million from December 31, 2014, of which $224.3 million, or 58%, was a result
of legacy consumer loan growth. Home equity loans and lines of credit made up a majority of the total consumer loan growth
offset by a decrease in indirect automobile loans.
Consistent with 2014, home equity loans comprised the largest component of the consumer loan portfolio at December 31,
2015. Home equity lending allows customers to borrow against the equity in their home and is secured by a first or second
mortgage on the borrower’s residence. Real estate market values at the time the loan is secured affect the amount of credit
extended. Changes in these values may impact the extent of potential losses. The balance of home equity loans increased
$465.1 million during the year to $2.1 billion at December 31, 2015. The Company’s sales and marketing efforts in 2015 have
also contributed to the growth in legacy home equity loans since December 31, 2014. Unfunded commitments related to home
equity loans and lines were $730.9 million at December 31, 2015, an increase of $162.9 million versus the prior year. The
Company has approximately $771.6 million of loans with junior liens where the Company does not hold or service the
respective loan holding senior lien. The Company believes it has addressed the risks associated with these loans in its
allowance for credit losses.
In January 2015, the Company announced it would exit the indirect automobile lending business. The Company concluded
compliance risk associated with these loans had become unbalanced relative to potential returns generated by the business on a
risk-adjusted basis. At December 31, 2015, indirect automobile loans totaled $246.3 million or 1.7% of the total loan portfolio,
compared to $397.2 million, or 3.5% of the total loan portfolio at December 31, 2014.
The remainder of the consumer loan portfolio at December 31, 2015 consisted of credit card loans, direct automobile loans and
other personal loans, and comprised 4.3% of the total loan portfolio.
Overall, the composition of the Company's loan portfolio as of December 31, 2015 is consistent with the composition as of
December 31, 2014.
In order to assess the risk characteristics of the loan portfolio, the Company considers the current U.S. economic environment
and that of its primary market areas. See Note 6, Allowance for Credit Losses, to the notes to the consolidated financial
statements for credit quality factors by loan portfolio segment.
52
Additional information on the Company’s consumer loan portfolio is presented in the following tables. For the purposes of
Table 16, unscoreable consumer loans have been included with loans with FICO scores below 660. FICO scores reflect the
most recent information available as of the dates indicated.
TABLE 15—CONSUMER LOANS BY STATE
(Dollars in
thousands)
December 31, 2015
Legacy
Louisiana Florida Alabama Texas
Arkansas Georgia Tennessee Other
Total
$ 1,023,828 $ 286,539 $ 246,837 $ 113,773 $ 252,289 $ 32,562 $
Acquired
155,980 233,886
36,977
42,420
—
86,083
51,182 $ 356,146 $ 2,363,156
570,098
14,742
10
Total consumer
loans
$ 1,179,808
$ 520,425
$ 283,814
$ 156,193
$ 252,289
$ 118,645
$
65,924
$ 356,156
$ 2,933,254
December 31, 2014
Legacy
$ 924,255 $ 146,979 $ 229,290 $ 84,087 $ 224,605 $
Acquired
186,147 121,579
6,056
75,473
—
— $
—
33,214 $ 496,392 $ 2,138,822
407,843
299
18,289
Total consumer
loans
$ 1,110,402
$ 268,558
$ 235,346
$ 159,560
$ 224,605
$
—
$
51,503
$ 496,691
$ 2,546,665
(Dollars in thousands)
December 31, 2015
Legacy
Acquired
Total consumer loans
December 31, 2014
Legacy
Acquired
Total consumer loans
Loan Maturities
TABLE 16—CONSUMER LOANS BY FICO SCORE
Below 660
660-720
Above 720
Discount
Total
$ 427,938 $ 604,751 $ 1,330,467 $
144,665
$ 550,557 $ 749,416 $ 1,664,490 $
122,619
334,023
$ 405,243 $ 538,361 $ 1,195,218 $
94,168
$ 504,005 $ 632,529 $ 1,443,696 $
248,478
98,762
— $ 2,363,156
570,098
(31,209 )
(31,209 ) $ 2,933,254
— $ 2,138,822
407,843
(33,565 )
(33,565 ) $ 2,546,665
The following table sets forth the scheduled contractual maturities of the Company’s total loan portfolio at December 31, 2015,
unadjusted for scheduled principal reductions, prepayments or repricing opportunities. Demand loans, loans having no stated
schedule of repayments and no stated maturity, and overdraft loans are reported as due in one year or less. The average life of a
loan may be substantially less than the contractual terms because of prepayments. As a result, scheduled contractual
amortization of loans is not reflective of the expected term of the Company’s loan portfolio. Of the loans with maturities greater
than one year, approximately 80% of the balance of these loans bears a fixed rate of interest.
TABLE 17—LOAN MATURITIES BY LOAN TYPE
One Year
or Less
2,708,383 $
2,133,646
113,125
205,345
6,352
1,653,395
6,820,246 $
$
$
One Through
Five Years
After
Five Years
2,288,789 $
833,406
559,493
197,187
17,200
559,620
4,455,695 $
1,129,527 $
484,426
8,148
739,309
59,485
751,448
3,172,343 $
(Dollars in thousands)
Commercial real estate
Commercial and industrial
Energy-related
Mortgage - Residential 1-4 family
Mortgage - Construction
Consumer and other
Total
Mortgage Loans Held for Sale
Discount
(53,188 ) $
Total
6,073,511
3,444,578
(6,900 )
—
680,766
1,112,282
(29,559 )
—
83,037
2,933,254
(31,209 )
(120,856 ) $ 14,327,428
Loans held for sale increased $26.2 million, or 19%, to $166.2 million at December 31, 2015 compared to year-end 2014. In
2015, the Company originated $2.5 billion in mortgage loans compared to $1.7 billion of originations during 2014.
53
Loans held for sale have primarily been conforming fixed-rate single-family residential mortgage loans under contracts to be
sold in the secondary market. In most cases, loans in this category are sold within thirty days of closing. Buyers generally have
recourse to return a purchased loan to the Company under limited circumstances. See Note 1 to the consolidated financial
statements for further discussion.
Asset Quality
The Company’s transition over time to a commercial bank brings the potential for increased risks in the form of potentially
higher levels of charge-offs and non-performing assets, as well as increased rewards in the form of potentially increased levels
of shareholder returns. As a result of management’s enhancements to underwriting loan risk/return dynamics, the credit quality
of the loan portfolio has remained favorable when compared to peers. Management believes that it has demonstrated
proficiency in managing credit risk through timely identification of significant problem loans, prompt corrective action, and
transparent disclosure. Consistent with prior years, the assets and liabilities purchased and assumed through the Company’s six
failed bank acquisitions continue to have a disproportionate impact, as expected, on overall asset quality. The Company
continues to closely monitor the risk-adjusted level of return within the loan portfolio.
Written underwriting standards established by management and approved by the Board of Directors govern the lending
activities of the Company. The commercial credit department, in conjunction with senior lending personnel, underwrites all
commercial business and commercial real estate loans. The Company provides centralized underwriting of substantially all
residential mortgage, construction and consumer loans. Established loan origination procedures require appropriate
documentation, including financial data and credit reports. For loans secured by real property, the Company generally requires
property appraisals, title insurance or a title opinion, hazard insurance, and flood insurance, where appropriate.
Loan payment performance is monitored and late charges are generally assessed on past due accounts. A centralized department
administers delinquent loans. Every effort is made to minimize any potential loss, including instituting legal proceedings as
necessary. Commercial loans are periodically reviewed through a loan review process to provide an independent assessment of
a loan’s risks. All other loans are also subject to loan reviews through a periodic sampling process. The Company exercises
significant judgment in determining the risk classification of its commercial loans.
The Company utilizes an asset risk classification system in accordance with guidelines established by the FRB as part of its
efforts to monitor commercial asset quality. In connection with their examinations of insured institutions, both federal and state
examiners also have the authority to identify problem assets and, if appropriate, reclassify them. There are three classifications
for problem assets: “substandard,” “doubtful” and “loss”, all of which are considered adverse classifications. Substandard
assets have one or more defined weaknesses and are characterized by the distinct possibility that the Company will sustain
some loss if the weaknesses are not corrected. Doubtful assets have the weaknesses of substandard assets with the additional
characteristic that the weaknesses make collection or liquidation in full questionable, and there is a high probability of loss
based on currently existing facts, conditions and values. An asset classified as loss is considered not collectible and of such
little value that continuance as an asset of the Company is not warranted. Commercial loans with adverse classifications are
reviewed by the Board Risk Committee of the Board of Directors periodically. Loans are placed on non-accrual status when
they are 90 days or more past due unless, in the judgment of management, the probability of timely collection of principal and
interest is deemed to be sufficient to warrant further accrual. When a loan is placed on non-accrual status, the accrual of interest
income ceases and accrued but unpaid interest attributable to the current year is reversed against interest income. Accrued
interest receivable attributable to the prior year is recorded as a charge-off to the allowance for credit losses.
Real estate acquired by the Company through foreclosure or by deed-in-lieu of foreclosure is classified as OREO, and is
recorded at the lesser of the related loan balance (the pro-rata carrying value for acquired loans) or estimated fair value less
costs to sell. Closed bank branches are also classified as OREO and recorded at the lower of cost or market value.
Under GAAP, certain loan modifications or restructurings are designated as TDRs. In general, the modification or restructuring
of a debt constitutes a TDR if the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants
a concession to the borrower that the Company would not otherwise consider under current market conditions.
Non-performing Assets
The Company defines non-performing assets as non-accrual loans, accruing loans more than 90 days past due, OREO, and
foreclosed property. Management continually monitors loans and transfers loans to non-accrual status when warranted.
Covered loans represent loans acquired through failed bank acquisitions and continue to be covered by loss sharing agreements
with the FDIC, whereby the FDIC reimburses the Company for the majority of the losses incurred during the loss share claim
period. In addition to covered loans, the Company also accounts for loans formerly covered by loss sharing agreements with the
FDIC, other loans acquired with deteriorated credit quality, as well as all loans acquired with significant discounts that did not
54
exhibit deteriorated credit quality at acquisition, in accordance with ASC Topic 310-30. Collectively, all loans accounted for
under ASC 310-30 are referred to as "purchased impaired loans". Application of ASC Topic 310-30 results in significant
accounting differences, compared to loans originated or acquired by the Company that are not accounted for under ASC 310-
30. See Note 1, Summary of Significant Accounting Policies, to the Notes to the consolidated financial statements for further
details. Purchased impaired loans were considered to be performing as of the acquisition date regardless of their past due status
based on their contractual terms. However, in accordance with regulatory reporting guidelines, purchased impaired loans that
are contractually past due are reported as past due and accruing based on the number of days past due.
Due to the significant difference in accounting for covered loans and the related FDIC loss sharing agreements, as well as non-
covered acquired loans accounted for as purchased impaired loans, and given the significant amount of acquired impaired loans
that are past due but still accruing, the Company believes inclusion of these loans in certain asset quality ratios that reflect non-
performing assets in the numerator or denominator (or both) results in significant distortion to these ratios. In addition, because
loan level charge-offs related to purchased impaired loans are not recognized in the financial statements until the cumulative
amounts exceed the original loss projections on a pool basis, the net charge-off ratio for acquired loans is not consistent with
the net charge-off ratio for other loan portfolios. The inclusion of these loans in certain asset quality ratios could result in a lack
of comparability across quarters or years, and could impact comparability with other portfolios that were not impacted by
purchased impaired loan accounting. The Company believes that the presentation of certain asset quality measures excluding
either covered loans or all purchased impaired loans, as indicated below, and related amounts from both the numerator and
denominator provides better perspective into underlying trends related to the quality of its loan portfolio. Accordingly, the asset
quality measures in the tables below present asset quality information excluding either covered loans or all purchased impaired
loans, as indicated within each table, and related amounts.
Legacy non-performing assets increased $11.1 million, or 19%, compared to December 31, 2014, as non-accrual loans
increased $16.0 million, offset by decreases in OREO of $4.8 million and accruing loans 90 days or more past due of $130,000.
Including TDRs that are in compliance with their modified terms, total non-performing assets and TDRs increased $48.1
million over the past twelve months.
The following table sets forth the composition of the Company’s legacy non-performing assets, including accruing loans past
due 90 or more days and TDRs, as of December 31.
TABLE 18—NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS
(LEGACY)
(Dollars in thousands)
Non-accrual loans:
Commercial
Energy-related
Mortgage
Consumer and credit card
Total non-accrual loans
Accruing loans 90 days or more past due
Total non-performing loans (1)
OREO and foreclosed property (2)
Total non-performing assets (1)
Performing troubled debt restructurings (3)
Total non-performing assets and
troubled debt restructurings (1)
Non-performing loans to total loans (1) (4)
Non-performing assets to total assets (1) (4)
Non-performing assets and troubled debt
restructurings to total assets (1) (4)
Allowance for credit losses to non-performing
loans (4) (5)
2015
2014
2013
2012
2011
2015 vs. 2014
$ Change % Change
$ 22,201
7,081
13,674
7,972
50,928
624
51,552
16,491
68,043
38,441
$ 9,953
27
14,362
10,628
34,970
754
35,724
21,243
56,967
1,430
$ 24,471
—
10,237
8,979
43,687
1,075
44,762
28,272
73,034
1,376
$ 32,313
—
8,367
7,237
47,917
1,371
49,288
26,380
75,668
2,354
$ 42,655
—
4,910
6,889
54,454
1,841
56,295
21,382
77,677
55
12,248
7,054
(688 )
(2,656 )
15,958
(130 )
15,828
(4,752 )
11,076
37,011
123
N/M
(5)
(25)
46
(17)
44
(22)
19
N/M
$ 106,484
$ 58,397
$ 74,410
$ 78,022
$ 77,732
48,087
82
0.46 %
0.42 %
0.37 %
0.41 %
0.54%
0.61%
0.73 %
0.69 %
1.05 %
0.86 %
0.65 %
0.42 %
0.62%
0.71 %
0.86 %
209.41 % 246.26 % 175.35% 150.57 % 132.98 %
Allowance for credit losses to total loans (4) (5)
0.96 %
0.91 %
0.95%
1.10 %
1.40 %
55
(1) Non-performing loans and assets include accruing loans 90 days or more past due.
(2) OREO and foreclosed property at December 31, 2015, 2014, 2013, 2012, and 2011 include $8.1 million, $11.6 million,
$9.2 million, $9.2 million, and $5.7 million, respectively, of former bank properties held for development or resale.
(3) Performing troubled debt restructurings for December 31, 2015, 2014, 2013, 2012 and 2011 exclude $23.4 million, $2.2
million, $18.5 million, $15.4 million, $23.9 million, respectively, in troubled debt restructurings that meet non-performing
asset criteria.
(4) Total loans, total non-performing loans, and total assets exclude acquired loans and assets discussed below.
(5) The allowance for credit losses excludes the portion of the allowance related to acquired loans discussed below.
Non-performing legacy loans were 0.46% of total legacy loans at December 31, 2015, nine basis points higher than at
December 31, 2014. The increase in legacy non-performing loans was due primarily to two legacy relationships totaling $21.5
million that moved to non-accrual status during 2015. If acquired loans that meet non-performing criteria are included, non-
performing loans were 1.09% of total loans at December 31, 2015 and 1.50% at December 31, 2014. The allowance for loan
losses as a percentage of total loans, including acquired loans, was 0.97% at December 31, 2015 and 1.14% at December 31,
2014.
Non-performing assets as a percentage of total assets have remained at relatively low levels. Legacy non-performing assets
were 0.42% of total legacy assets at December 31, 2015, one basis point above December 31, 2014. The allowance for credit
losses as a percentage of non-performing legacy loans was 209.41% at December 31, 2015 and 246.26% at December 31,
2014. The Company’s reserve for credit losses as a percentage of legacy loans increased five basis points from 2014 to 0.96%
at December 31, 2015.
The Company had gross charge-offs on legacy loans of $15.8 million during the year ended December 31, 2015. Offsetting
these charge-offs were recoveries of $5.7 million. As a result, net charge-offs on legacy loans during 2015 were $10.1 million,
or 0.10% of average loans, as compared to net charge-offs of $5.4 million, or 0.06%, for 2014.
At December 31, 2015, excluding acquired loans, the Company had $132.6 million of legacy assets classified as substandard,
$11.5 million of assets classified as doubtful, and no assets classified as loss. Accordingly, the aggregate of the Company’s
legacy classified assets was 0.74% of total assets, 1.01% of total loans, and 1.29% of legacy loans. At December 31, 2014,
classified assets totaled $53.3 million, or 0.34% of total assets, 0.47% of total loans, and 0.55% of legacy loans. As with non-
classified assets, a reserve for credit losses has been recorded for substandard loans at December 31, 2015 in accordance with
the Company’s allowance for credit losses policy.
In addition to the problem loans described above, there were $104.8 million of legacy loans classified as special mention at
December 31, 2015, which in management’s opinion were subject to potential future rating downgrades. Special mention loans
are defined as loans where known information about possible credit problems of the borrowers causes management to have
some doubt as to the ability of these borrowers to comply with the present loan repayment terms, which may result in future
disclosure of these loans as non-performing. Special mention loans at December 31, 2015 increased $47.4 million, or 83%,
from December 31, 2014. The increase was attributable to both loan growth and a movement of loans from substandard to
special mention.
As noted above, the asset quality of the Company’s energy-related loan portfolio may be impacted by a sustained decline in
commodity prices. At December 31, 2015, however, only $15,000 in energy-related loans were past due greater than 30 days.
Non-accrual energy-related loans total $7.1 million of legacy loans and $1.4 million of acquired loans at year-end 2015,
compared to $27,000 and $11,000, respectively, at year-end 2014. To date, the Company has experienced no energy-related
charge-offs.
Past Due Loans
Past due status is based on the contractual terms of loans. At December 31, 2015, total acquired loans past due were 3.84% of
total loans, a decrease of 503 basis points from December 31, 2014. Total legacy past due loans (including non-accrual loans)
were 0.65% of total loans at December 31, 2015 compared to 0.67% at December 31, 2014. Additional information on past due
loans is presented in the following table.
56
(Dollars in thousands)
Accruing loans:
30-59 days past due
60-89 days past due
90-119 days past due
120 days past due or more
Non-accrual loans (1)
(Dollars in thousands)
Accruing loans:
30-59 days past due
60-89 days past due
90-119 days past due
120 days past due or more
Non-accrual loans (1)
TABLE 19—PAST DUE LOAN SEGREGATION
Legacy
December 31, 2015
Acquired
Total
Amount
% of
Outstanding
Balance
Amount
% of
Outstanding
Balance
Amount
% of
Outstanding
Balance
$
$
$
$
13,839
6,270
461
163
20,733
50,928
71,661
0.12 % $
0.07
—
—
0.19
0.46
0.65 % $
9,039
6,431
1,290
56
16,816
103,497
120,313
0.29 % $
0.21
0.04
—
0.54
3.30
3.84 % $
22,878
12,701
1,751
219
37,549
154,425
191,974
0.16 %
0.09
0.01
—
0.26
1.08
1.34 %
Legacy
December 31, 2014
Acquired
Total
Amount
% of
Outstanding
Balance
Amount
% of
Outstanding
Balance
Amount
% of
Outstanding
Balance
23,365
6,202
738
16
30,321
34,970
65,291
0.24 % $
0.06
0.01
—
0.31
0.36
0.67 % $
14,814
6,760
935
19
22,528
134,716
157,244
0.84 % $
0.38
0.05
—
1.27
7.60
8.87 % $
38,179
12,962
1,673
35
52,849
169,686
222,535
0.33 %
0.11
0.02
—
0.46
1.48
1.94 %
(1) The acquired loans balance represents the outstanding balance of loans that would otherwise meet the Company’s
definition of non-accrual loans.
Total past due loans decreased $30.6 million from December 31, 2014 to $192.0 million at December 31, 2015. The change
was due to decreases of $15.3 million in non-accrual loans and $15.6 million of loans 30-89 days past due, offset by increases
in accruing loans more than 90 days past due of $0.3 million.
Total legacy loans past due increased $6.4 million, or 10%, from December 31, 2014 to $71.7 million at December 31, 2015.
The change was due to an increase of $16.0 million in non-accrual loans, offset by decreases of $9.5 million of loans 30-89
days past due and $0.1 million of accruing loans more than 90 days past due.
Total acquired past due loans decreased $36.9 million, or 23%, from December 31, 2014 to $120.3 million at December 31,
2015. The change was primarily attributable to a decrease of $31.2 million in non-accrual loans and a decrease of $6.1 million
in loans 30-89 days past due, offset by an increase of $0.4 million in accruing loans more than 90 days past due.
Allowance for Credit Losses
The allowance for credit losses represents management’s best estimate of probable credit losses inherent at the balance sheet
date. Determination of the allowance for credit losses involves a high degree of complexity and requires significant judgment.
Several factors are taken into consideration in the determination of the overall allowance for credit losses. Based on facts and
circumstances available, management of the Company believes that the allowance for credit losses was appropriate at
December 31, 2015 to cover probable losses in the Company’s loan portfolio. However, future adjustments to the allowance
may be necessary, and the results of operations could be adversely affected, if circumstances differ substantially from the
assumptions used by management in determining the allowance for credit losses. See the “Application of Critical Accounting
Policies and Estimates” and Note 1, Summary of Significant Accounting Policies, to the Notes to the consolidated financial
statements for more information.
57
Legacy Loans
Legacy loans represent loans accounted for under ASC 310-20. The Company’s legacy loans include loans originated by the
Company. See Note 1, Summary of Significant Accounting Policies, to the Notes to the consolidated financial statements for
more information.
Acquired Loans
Acquired loans, which include covered loans and certain non-covered loans, represent loans acquired by the Company that are
accounted for in accordance with ASC 310-20 or ASC 310-30. See Note 1, Summary of Significant Accounting Policies, for
more information.
Loans acquired in business combinations were recorded at their acquisition date fair values, which were based on expected cash
flows and included estimates of expected future credit losses. If the Company determines that losses arose after the acquisition
date, the additional losses will be reflected as a provision for credit losses.
At December 31, 2015, the Company had an allowance for credit losses of $44.6 million to reserve for probable or expected
losses currently in the acquired loan portfolio that have arisen after the losses estimated at the respective acquisition dates.
The following tables set forth the activity in the Company’s allowance for credit losses.
TABLE 20—SUMMARY OF ACTIVITY IN THE ALLOWANCE FOR CREDIT LOSSES
(Dollars in thousands)
Allowance for loan losses at beginning of period
2015
$ 130,131
2014
2013
2012
2011
$ 143,074
$ 251,603
$ 193,761
Transfer of balance to OREO
(1,221 )
(7,323 )
(28,126 )
(27,169 )
$ 136,100
(17,143 )
Transfer of balance to the reserve for unfunded
commitments
Provision charged to operations
(Reversal of) provision recorded through the FDIC loss
share receivable
—
30,908
—
19,060
(9,828 )
5,145
—
20,671
—
25,867
(1,360 )
(4,260 )
(56,085 )
84,085
57,121
Charge-offs:
Commercial
Residential Mortgage
Consumer and other
Recoveries:
Commercial
Residential Mortgage
Consumer and other
Net charge-offs
Allowance for loan losses at end of period
Reserve for unfunded lending commitments at beginning of
period
Transfer of balance from the allowance for loan losses
Provision for unfunded lending commitments
Reserve for unfunded lending commitments at end of
period
Allowance for credit losses at end of period
Allowance for loan losses to non-performing assets (1) (2)
Allowance for loan losses to total loans at end of period (2)
Net charge-offs to average loans (3)
(11,719 )
(16,215 )
(19,220 )
(16,747 )
(9,200 )
(291 )
(811 )
(518 )
(2,376 )
(244 )
(14,505 )
(9,829 )
(6,743 )
(5,937 )
(6,715 )
(26,515 )
(26,855 )
(26,481 )
(25,060 )
(16,159 )
2,831
74
3,530
6,435
(20,080 )
138,378
3,107
248
3,080
6,435
(20,420 )
130,131
3,745
765
2,336
6,846
(19,635 )
143,074
3,293
38
1,984
5,315
(19,745 )
251,603
5,516
170
2,289
7,975
(8,184 )
193,761
11,801
—
2,344
11,147
—
654
—
9,828
1,319
—
—
—
—
—
—
14,145
$ 152,523
11,801
$ 141,932
11,147
$ 154,221
—
$ 251,603
—
$ 193,761
149.96 %
0.87
0.08
129.39 %
0.78
0.07
87.54 %
0.82
0.05
88.30 %
1.12
0.07
96.40 %
1.24
0.13
58
(1) Non-performing assets include accruing loans 90 days or more past due.
(2) The allowance for loan losses in the calculation does not include either the allowance attributable to covered assets or
covered loans.
(3) Net charge-offs exclude charge-offs and recoveries on covered loans and average loans exclude covered loans.
TABLE 21—ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES
Commercial
Mortgage
Consumer and other
Total allowance for credit losses
2015
2014
2013
2012
2011
Reserve
%
73 %
8 %
% of
Loans
71 %
8 %
Reserve
%
70 %
% of
Loans
69 %
Reserve
%
69 %
% of
Loans
72 %
Reserve
%
71 %
% of
Loans
73 %
Reserve
%
73 %
% of
Loans
73 %
7 %
9 %
10 %
6 %
10 %
5 %
11 %
7 %
19 %
21 %
100 % 100 %
23 %
22 %
100 % 100%
21 %
22 %
100 % 100 %
19 %
22 %
100 % 100%
16 %
20 %
100 % 100 %
The allowance for credit losses was $152.5 million at December 31, 2015, or 1.06% of total loans, $10.6 million higher than at
December 31, 2014. The allowance for credit losses as a percentage of loans was 1.24% at December 31, 2014.
The allowance for credit losses on the legacy portfolio increased $20.0 million, or 23%, since December 31, 2014, primarily a
result of $1.5 billion, or 16%, legacy loan growth in 2015. The acquired allowance for credit losses includes a reserve of $44.6
million for losses probable in the portfolio at December 31, 2015 above estimated expected credit losses at acquisition, a
decrease of $9.4 million, or 17%, from December 31, 2014.
At December 31, 2015 and 2014, the allowance for loan losses covered non-performing legacy loans 1.8 times and 2.1 times,
respectively. Including acquired loans, the allowance for loan losses covered 72% of total past due and non-accrual loans at
December 31, 2015 and 58% at 2014.
FDIC Loss Share Receivable
As part of the FDIC-assisted acquisitions in 2009 and 2010, the Company recorded a receivable from the FDIC, which
represented the fair value of the expected reimbursable losses covered by the loss share agreements as of the acquisition dates.
The FDIC loss share receivable decreased $29.7 million, or 43%, during 2015 due to amortization of $23.5 million, submission
of reimbursable losses to the FDIC of $2.4 million, OREO cash flow improvements of $2.4 million, and the reversal of the loan
loss provision due to changes in the timing of estimated cash flows on covered loans of $1.4 million. See Note 7, Loss Sharing
Agreements and FDIC Loss Share Receivable, to the consolidated financial statements for discussion of the reimbursable loss
periods of the loss share agreements.
In 2014, based on improving economic trends, their impact on the amount and timing of expected future cash flows, and delays
in the foreclosure process, the Company concluded that certain expected losses were probable of not being collected from the
FDIC or the customer because such projected losses were anticipated to occur beyond the reimbursable periods of the loss
share agreements. Therefore, the Company recognized a valuation allowance against the indemnification assets in the amount
of $5.1 million in 2014 through a charge to net income. No such impairment charge was deemed necessary in 2015.
Of the FDIC loss share receivables balance of $39.9 million at December 31, 2015, approximately $7.5 million is expected to
be collected from the FDIC, $30.7 million, which represents improvements in cash flows expected to be collected from
customers, is expected to be amortized over time, and $1.7 million is expected to be collected in conjunction with OREO
transactions.
Cash and cash equivalents
Cash and cash equivalents totaled $510.3 million at December 31, 2015, a decrease of $37.9 million, or 7%, from year-end
2014. Cash and due from banks decreased $10.3 million to $241.7 million at December 31, 2015. Short-term investments result
from excess funds invested overnight in interest-bearing deposit accounts at the FRB and the FHLB of Dallas. These balances
fluctuate daily depending on the funding needs of the Company and earn interest at the current FHLB and FRB discount rates.
The balance in interest-bearing deposits at other institutions of $268.6 million at December 31, 2015 decreased $27.5 million,
or 9%, from December 31, 2014. The primary cause was the Company’s use of available cash to purchase higher-yielding
investment securities, fund loan growth, and pay down its long-term debt, all in an attempt to improve its net interest margin.
The Company’s cash activity is further discussed in the “Liquidity and Other Off-Balance Sheet Activities” section below.
59
Other Assets
The following table details other asset balances as of December 31:
(Dollars in thousands)
Other Earning Assets
FHLB and FRB stock
Fed funds sold and financing
transactions
Other interest-earning assets (1)
Total other earning assets
Non-Earning Assets
Bank-owned life insurance
Core deposit intangibles
Title plant and other intangible
assets
Accrued interest receivable
Other real estate owned
Derivative market value
Investment in tax credit entities
Other non-earning assets
Total non-earning assets
Total other assets
TABLE 22—OTHER ASSETS COMPOSITION
2015
2014
2013
2012
2011
$ Change
% Change
2015 vs. 2014
$
66,008 $
74,130 $
53,773 $
46,216 $
60,155
(8,122 )
(11)
—
5,660
71,668
—
5,412
79,542
—
3,412
57,185
4,875
3,412
54,503
—
3,412
63,567
—
248
(7,874 )
131,575
30,044
122,573
19,595
104,203
14,622
100,556
19,122
96,876
24,021
9,002
10,449
7,224
47,863
34,131
30,486
141,951
155,965
579,239
7,911
36,006
125,046
33,026
120,247
85,412
528,545
$ 650,907 $ 588,699 $ 554,167 $ 565,719 $ 592,112
7,439
32,143
99,173
30,076
132,487
76,839
496,982
7,660
32,183
121,536
42,119
137,508
50,532
511,216
7,511
37,696
53,947
32,903
139,326
95,606
509,157
(287 )
10,167
(19,816 )
(2,417 )
2,625
60,359
70,082
62,208
—
5
(10)
7
53
(4)
27
(37)
(7)
2
63
14
11
(1) Other interest-earning assets are composed primarily of trust preferred common securities.
The $8.1 million decrease in FHLB and FRB stock was the result of $30.1 million in stock sales, $16.4 million in stock
purchases, $5.5 million in acquired stock, and less than $1.0 million in dividends received during 2015.
Bank-owned life insurance increased $9.0 million as a result of increases in the carrying values of policies held and $3.9
million in acquired policies from Old Florida.
Core deposit intangibles increased $10.4 million during the current year, the result of an additional $18.1 million in core
deposit intangibles recorded as part of the Florida Bank Group, Old Florida and Georgia Commerce acquisitions, which was
partially offset by amortization expense recorded during 2015.
Other real estate includes all real estate, other than bank premises used in bank operations, which is owned or controlled by the
Company, including real estate acquired in settlement of loans and former bank premises no longer used. The $19.8 million
decrease in OREO from December 31, 2014 was a result of the sale of OREO properties.
The $60.4 million increase in other non-earning assets since December 31, 2014 was primarily the result of a $53.9 million
increase in the Company’s deferred tax asset accounts arising from acquisitions, as well as adjustments recorded related to
amended tax returns from prior years.
FUNDING SOURCES
Deposits obtained from clients in its primary market areas are the Company’s principal source of funds for use in lending and
other business purposes. The Company attracts local deposit accounts by offering a wide variety of products, competitive
interest rates and convenient branch office locations and service hours. Increasing core deposits through acquisitions and the
development of client relationships is a continuing focus of the Company. Short-term and long-term borrowings have become
an important funding source as the Company has grown. Other funding sources include subordinated debt and shareholders’
equity. Refer to the “Liquidity and Other Off-Balance Sheet Activities” section below for further discussion of the Company’s
sources and uses of funding. The following discussion highlights the major changes in the mix of deposits and other funding
sources during 2015.
60
Deposits
The Company’s ability to attract and retain customer deposits is critical to the Company’s continued success. During 2015, total
deposits increased $3.7 billion, or 29%, totaling $16.2 billion at December 31, 2015. Total non-interest-bearing deposits
increased $1.2 billion, or 36%, and interest-bearing deposits increased $2.5 billion, or 27%, from December 31, 2014. Acquired
deposits of $2.7 billion from Florida Bank Group, Old Florida, and Georgia Commerce accounted for the majority of the
increase from year-end, while $1.0 billion, or 26% of the total growth from December 31, 2014, was a result of organic deposit
growth.
The following table and chart set forth the composition of the Company’s deposits as of December 31:
TABLE 23—DEPOSIT COMPOSITION BY PRODUCT
(Dollars in thousands)
2015
2014
2013
2012
2011
2015 vs. 2014
$ Change % Change
Non-interest-bearing
deposits
NOW accounts
Money market accounts
Savings accounts
Certificates of deposit and
other time deposits
Total deposits
$ 4,352,229
2,974,176
6,010,882
716,838
27 % $ 3,195,430
2,462,841
19
4,168,504
37
577,513
4
26 % $ 2,575,939
2,283,491
20
3,779,581
33
387,397
4
24 % $ 1,967,662
2,523,252
22
3,738,480
35
364,703
3
18 % $ 1,485,058
1,876,797
24
3,049,151
35
332,351
3
16 % $ 1,156,799
511,335
20
1,842,378
33
139,325
3
2,124,623
16
8,386
$ 16,178,748 100 % $ 12,520,525 100 % $ 10,737,000 100 % $ 10,748,277 100 % $ 9,289,013 100 % $ 3,658,223
2,154,180
1,710,592
2,545,656
2,116,237
17
13
20
28
36 %
21 %
44 %
24 %
— %
29%
From a market perspective, total deposit growth (excluding acquired deposits) was seen primarily in the Houston, Dallas, New
Orleans, and Naples markets. Houston’s customer deposits increased $276.5 million, or 26%, during 2015, while total deposits
in the Dallas market increased $131.6 million, or 42%, since the end of 2014. New Orleans had year-to-date customer deposit
growth of $121.5 million, or 8% and Naples experienced growth of $102.4 million, or 13%.
Deposits by market for the years ending December 31, 2015 and 2014 are shown in the following charts.
61
The following table details large-denomination certificates of deposit by remaining maturity dates at December 31.
TABLE 24—REMAINING MATURITIES OF CDS $100,000 AND OVER
(Dollars in thousands)
3 months or less
3 – 12 months
12 – 36 months
More than 36 months
Total CDs $100,000 and over
Short-term Borrowings
2015
$ 228,336
631,634
390,820
135,950
2013
19 % $ 256,931
452,005
51
157,430
25
39,976
5
$ 1,386,740 100 % $ 1,080,799 100 % $ 906,342 100 % $ 1,146,515 100 % $ 1,377,631 100 %
2012
28 % $ 265,558
572,734
50
227,072
17
81,151
5
2014
16 % $ 204,041
547,876
46
274,038
28
54,844
10
2011
23 % $ 316,771
731,996
50
213,865
20
114,999
7
23 %
53
16
8
The Company may obtain advances from the FHLB of Dallas based upon its ownership of FHLB stock and certain pledges of
its real estate loans and investment securities, provided certain standards related to the Company’s creditworthiness have been
met. These advances are made pursuant to several credit programs, each of which has its own interest rate and range of
maturities. The level of short-term borrowings can fluctuate significantly on a daily basis depending on funding needs and the
source of funds chosen to satisfy those needs.
The Company also enters into repurchase agreements to facilitate customer transactions that are accounted for as secured
borrowings. These transactions typically involve the receipt of deposits from customers that the Company collateralizes with its
investment portfolio and have rates ranging from 0.09% to 0.65%. The following table details the average and ending balances
of repurchase transactions as of and for the years ending December 31:
TABLE 25—REPURCHASE TRANSACTIONS
(Dollars in thousands)
Average balance
Ending balance
$
2015
236,206 $
216,617
2014
282,596
242,742
Total short-term borrowings decreased $519.1 million, or 61%, from December 31, 2014, to $326.6 million at the end of 2015,
a result of a net decrease of $493.0 million in FHLB advances outstanding and $26.1 million decrease in repurchase
agreements. On an average basis, short-term borrowings decreased $356.0 million, or 46%, from 2014, due to repayment of
FHLB advances during 2015.
Total short-term borrowings were 2% of total liabilities and 49% of total borrowings at December 31, 2015 compared to 6%
and 68%, respectively, at December 31, 2014. On an average basis, short-term borrowings were 3% of total liabilities and 52%
of total borrowings in 2015, compared to 6% and 70%, respectively, during 2014.
The weighted average rate paid on short-term borrowings was 0.18% during 2015, up one basis point compared to 0.17% in
2014. For additional information on the Company’s short-term borrowings, see Note 13, Short-Term Borrowings, to the Notes
to the consolidated financial statements.
Long-term Debt
Long-term debt decreased $62.8 million, or 16%, to $340.4 million from $403.3 million at December 31, 2014, due to FHLB
borrowing paydowns of approximately $201.3 million as part of a deleveraging strategy, partially offset by borrowings
acquired from acquisitions during the period. The Company incurred approximately $1.3 million of loss on early
extinguishment of debt during 2015. On a period-end basis, long-term debt was 2% and 3% of total liabilities at December 31,
2015 and 2014, respectively. On average, long-term debt increased to $388.2 million in 2015, $53.0 million, or 16%, higher
than 2014. Average long-term debt was 2% of total liabilities during the current year, compared to 3% during 2014.
Long-term debt at December 31, 2015 included $136.6 million in fixed-rate advances from the FHLB of Dallas that cannot be
prepaid without incurring substantial penalties. The remaining debt consisted of $120.1 million of the Company’s junior
subordinated debt, and $83.7 million in notes payable on investments in new market tax credit entities. The trust preferred
securities are issued to statutory trusts that were funded by the issuance of floating rate capital securities of the trusts. Interest
on the junior subordinated debt is payable quarterly and may be deferred at any time at the election of the Company for up to
20 consecutive quarterly periods. During any deferral period, the Company is subject to certain restrictions, including being
prohibited from declaring dividends to its common shareholders. The junior subordinated debt is redeemable by the Company
in whole or in part. For additional information, see Note 14, Long-Term Debt, to the Notes to the consolidated financial
statements.
62
CAPITAL RESOURCES
Federal regulations impose minimum regulatory capital requirements on all institutions with deposits insured by the FDIC. The
FRB imposes similar capital regulations on bank holding companies. Compliance with bank and bank holding company
regulatory capital requirements, which include leverage and risk-based capital guidelines, are monitored by the Company on an
ongoing basis. Under the risk-based capital method, a risk weight is assigned to balance sheet and off-balance sheet items based
on regulatory guidelines.
In July 2013, the U.S. banking regulatory agencies, including the FRB, approved a final rule to implement the revised capital
adequacy standards of the BCBS or Basel III, and to address relevant provisions of the Dodd-Frank Act. The Company and
IBERIABANK became subject to the new rules on January 1, 2015. Certain provisions of the new rules will be phased in from
that date to January 1, 2019.
The final rules:
• Require that non-qualifying capital instruments, including trust preferred securities and cumulative perpetual preferred
stock, must be fully phased out of Tier 1 capital by January 1, 2016,
• Establish new qualifying criteria for regulatory capital, including new limitations on the inclusion of deferred tax assets
and mortgage servicing rights,
Increase the minimum Tier 1 capital to risk-weighted assets ratio requirements from 4% to 6%,
• Require a minimum ratio of common equity Tier 1, or "CET1", capital to risk-weighted assets of 4.5%,
•
• Retain the minimum total capital to risk-weighted assets ratio requirement of 8%,
• Establish a minimum leverage ratio requirement of 4%,
• Retain the existing regulatory capital framework for 1-4 family residential mortgage exposures,
•
Implement a new capital conservation buffer requirement for a banking organization to maintain a buffer composed of
CET1 capital in an amount greater than 2.5% above the minimum CET1 capital, Tier 1 capital and total risk-based capital
ratios in order to avoid limitations on capital distributions, including dividend payments, and certain discretionary bonus
payments to executive officers. The capital conservation buffer requirement will be phased in beginning on January 1,
2016 at 0.625%, and will be fully phased in at 2.50% by January 1, 2019. A banking organization with a buffer of less
than the required amount would be subject to increasingly stringent limitations on such distributions and payments as the
buffer approaches zero. The new rule also generally prohibits a banking organization from making such distributions or
payments (subject to the above phase-in period) during any quarter if its eligible retained income is negative and its
capital conservation buffer ratio was 2.5% or less at the end of the previous quarter. The eligible retained income of a
banking organization is defined as its net income for the four calendar quarters preceding the current calendar quarter,
based on the organization’s quarterly regulatory reports, net of any distributions and associated tax effects not already
reflected in net income,
•
Increase capital requirements for past-due loans, high volatility commercial real estate exposures, and certain short-term
commitments and securitization exposures,
• Expand the recognition of collateral and guarantors in determining risk-weighted assets, and
• Remove references to credit ratings consistent with the Dodd-Frank Act and establish due diligence requirements for
securitization exposures.
63
At December 31, 2015 and 2014, the Company exceeded all required regulatory capital ratios, and the regulatory capital ratios
of IBERIABANK were in excess of the levels established for “well-capitalized” institutions, as shown in the following table
and chart.
TABLE 26—REGULATORY CAPITAL RATIOS
Ratio
Tier 1 Leverage
Common Equity Tier 1 (CET1)
Tier 1 risk-based capital
Total risk-based capital
Entity
IBERIABANK Corporation
IBERIABANK
IBERIABANK Corporation
IBERIABANK
IBERIABANK Corporation
IBERIABANK
IBERIABANK Corporation
IBERIABANK
2015 Well-
Capitalized
Minimums
December 31, 2015
Actual
December 31, 2014
Actual
N/A
5.00
N/A
6.50
N/A
8.00
N/A
10.00
9.52 %
9.03
10.07
10.14
10.70
10.14
12.14
11.05
9.35 %
8.44
N/A
N/A
11.17
10.08
12.30
11.21
At December 31, 2015 and 2014, $29.1 million and $108.5 million, respectively, of the Company’s junior subordinated debt
was included as Tier 1 capital in the Company’s risk-based capital ratios above. Effective January 1, 2015, 75% of the
Company’s junior subordinated debt was excluded from Tier 1 capital. Beginning January 1, 2016, the remaining 25% of junior
subordinated debt included in the Company's Tier 1 capital ratio at year-end 2015 was phased into Tier 2 capital for future
periods. The resulting impact on Tier 1 capital ratios is estimated to be a reduction of approximately 17 basis points. No impact
on the Company's total risk-based capital ratio is associated with this change.
64
The decrease in IBERIABANK Corporation's Tier 1 risk-based capital ratio from December 31, 2014 was primarily the result
of the implementation of the Basel III standards and its effect on risk-weighted assets, as well as the phase-out of the trust
preferred securities from Tier 1 capital in 2015. The decrease in IBERIABANK Corporation’s total risk-based capital ratio from
December 31, 2014 was also primarily the result of the implementation of the BASEL III standards in 2015, most notably as it
relates to the risk-weighting of high volatility commercial real estate and past due loans. Also affecting capital ratios at
December 31, 2015 was a decrease in assets covered under loss-sharing agreements with the FDIC, which typically are
assigned a lower risk rating. During 2015, the Company’s loss-share protection on certain acquired non-single family loans
associated with its FDIC-assisted transactions expired, increasing the risk weighting associated with these assets, from a
weighting of 20% to 100%.
On August 5, 2015, the Company issued an aggregate of 3.2 million depositary shares (the “Depositary Shares”), each
representing a 1/400th ownership interest in a share of the Company’s 6.625% Fixed-to-Floating Non-Cumulative Perpetual
Preferred Stock, Series B, par value $1.00 per share, (“Series B Preferred Stock”), with a liquidation preference of $10,000 per
share of Series B Preferred Stock (equivalent to $25 per depositary share), which represents $80,000,000 in aggregate
liquidation preference. On January 4, 2016, the Company declared a semi-annual cash dividend of $0.805 per depositary share,
which was paid on February 1, 2016.
Management believes that at December 31, 2015, the Company and IBERIABANK would have met all capital adequacy
requirements on a fully phased-in basis if such requirements were then effective. There can be no assurances that the Basel III
capital rules will not be revised before the expiration of the phase-in periods.
LIQUIDITY AND OTHER OFF-BALANCE SHEET ACTIVITIES
Liquidity refers to the Company’s ability to generate sufficient cash flows to support its operations and to meet its obligations,
including the withdrawal of deposits by customers, commitments to originate loans, and its ability to repay its borrowings and
other liabilities. Liquidity risk is the risk to earnings or capital resulting from the Company’s inability to fulfill its obligations as
they become due. Liquidity risk also develops from the Company’s failure to timely recognize or address changes in market
conditions that affect the ability to liquidate assets in a timely manner or to obtain adequate funding to continue to operate on a
profitable basis.
The primary sources of funds for the Company are deposits and borrowings. Other sources of funds include repayments and
maturities of loans and investment securities, securities sold under agreements to repurchase, and, to a lesser extent, off-balance
sheet borrowing availability. Certificates of deposit scheduled to mature in one year or less at December 31, 2015 totaled $1.4
billion. Based on past experience, management believes that a significant portion of maturing deposits will remain with the
Company. Additionally, the majority of the investment securities portfolio is classified as available-for-sale, which provides the
ability to liquidate unencumbered securities as needed. Of the $2.9 billion in the investment securities portfolio, $1.5 billion is
unencumbered and $1.4 billion has been pledged to support repurchase transactions, public funds deposits and certain long-
term borrowings. Due to the relatively short implied duration of the investment securities portfolio, the Company has
historically experienced significant cash inflows on a regular basis. Securities cash flows are highly dependent on prepayment
speeds and could change materially as economic or market conditions change. See Note 12, Deposits, Note 13, Short-Term
Borrowings, and Note 14, Long-Term Debt, to the consolidated financial statements for additional discussion related to the
Company’s funding requirements.
Scheduled cash flows from the amortization and maturities of loans and securities are relatively predictable sources of funds.
Conversely, deposit flows, prepayments of loan and investment securities, and draws on customer letters and lines of credit are
greatly influenced by general interest rates, economic conditions, competition, and customer demand. The FHLB of Dallas
provides an additional source of liquidity to make funds available for general requirements and also to assist with the variability
of less predictable funding sources. At December 31, 2015, the Company had $246.6 million of outstanding FHLB advances,
$110.0 million of which was short-term and $136.6 million was long-term. Additional FHLB borrowing capacity available at
December 31, 2015 amounted to $4.6 billion. At December 31, 2015, the Company also has various funding arrangements with
commercial banks providing up to $180.0 million in the form of federal funds and other lines of credit. At December 31, 2015,
there were no balances outstanding on these lines and all of the funding was available to the Company.
Liquidity management is both a daily and long-term function of business management. The Company manages its liquidity
with the objective of maintaining sufficient funds to respond to the predicted needs of depositors and borrowers and to take
advantage of investments in earning assets and other earnings enhancement opportunities. Excess liquidity is generally invested
in short-term investments such as overnight deposits. On a longer-term basis, the Company maintains a strategy of investing in
various lending and investment security products. The Company uses its sources of funds primarily to fund loan commitments
and meet its ongoing commitments associated with its operations. Based on its available cash at December 31, 2015 and current
deposit modeling, the Company believes it has adequate liquidity to fund ongoing operations. The Company has adequate
65
availability of funds from deposits, borrowings, repayments and maturities of loans and investment securities to provide the
Company additional working capital if needed.
In the normal course of business, the Company is a party to a number of activities that contain credit, market and operational
risk that are not reflected in whole or in part in the Company’s consolidated financial statements. Such activities include
traditional off-balance sheet credit-related financial instruments, commitments under operating leases, and long-term debt. The
Company provides customers with off-balance sheet credit support through loan commitments, lines of credit, and standby
letters of credit. Many of the commitments are expected to expire unused or be only partially used; therefore, the total amount
of commitments does not necessarily represent future cash requirements. Based on its available liquidity and available
borrowing capacity, the Company anticipates it will continue to have sufficient funds to meet its current commitments. At
December 31, 2015, the Company’s unfunded loan commitments outstanding totaled $61.2 million. At the same date, unused
lines of credit, including credit card lines, amounted to $4.6 billion, as shown in the following table.
TABLE 27—COMMITMENT EXPIRATION PER PERIOD
(Dollars in thousands)
Unused lines of credit
Unfunded loan commitments
Standby letters of credit
Less than 1
year
1—3 Years
Over 5 Years
3—5 Years
$ 2,039,892 $ 1,465,776 $ 678,109 $ 434,025 $ 4,617,802
61,240
150,281
$ 2,230,424 $ 1,482,628 $ 682,246 $ 434,025 $ 4,829,323
61,240
129,292
—
16,852
—
4,137
—
—
Total
The Company has entered into a number of long-term arrangements to support the ongoing activities of the Company. The
required payments under such leasing and other debt commitments at December 31, 2015 are shown in the following table.
TABLE 28—CONTRACTUAL OBLIGATIONS AND OTHER DEBT COMMITMENTS
(Dollars in thousands)
Operating leases
Certificates of deposit
Short-term borrowings
Long-term debt
$
2016
16,957 $
2017
14,751 $
423,866
—
61,899
$ 1,759,018 $ 500,516 $ 147,463 $
2018
13,491 $
112,915
—
21,057
1,380,655
326,617
34,789
Total
2021 and
After
2019
41,054 $ 108,940
11,952 $
2,124,623
61,599
64,170
326,617
—
—
340,447
198,529
7,865
83,987 $ 108,461 $ 301,182 $ 2,900,627
2020
10,735 $
81,418
—
16,308
ASSET/LIABILITY MANAGEMENT, MARKET RISK AND COUNTERPARTY CREDIT RISK
The principal objective of the Company’s asset and liability management function is to evaluate the interest rate risk included
in certain balance sheet accounts, determine the appropriate level of risk given the Company’s business focus, operating
environment, capital and liquidity requirements, and performance objectives, establish prudent asset concentration guidelines
and manage the risk consistent with Board approved guidelines. Through such management, the Company seeks to reduce the
vulnerability of its operations to changes in interest rates. The Company’s actions in this regard are taken under the guidance of
the Asset and Liability Committee. The Asset and Liability Committee normally meets monthly to review, among other things,
the sensitivity of the Company’s assets and liabilities to interest rate changes, local and national market conditions, and interest
rates. In connection therewith, the Asset and Liability Committee generally reviews the Company’s liquidity, cash flow needs,
composition of investments, deposits, borrowings, and capital position.
The objective of interest rate risk management is to control the effects that interest rate fluctuations have on net interest income
and on the net present value of the Company’s earning assets and interest-bearing liabilities. Management and the Board are
responsible for managing interest rate risk and employing risk management policies that monitor and limit this exposure.
Interest rate risk is measured using net interest income simulation and asset/liability net present value sensitivity analyses. The
Company uses financial modeling to measure the impact of changes in interest rates on the net interest margin and to predict
market risk. Estimates are based upon numerous assumptions including the nature and timing of interest rate levels including
yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits,
reinvestment/replacement of asset and liability cash flows, and others. These analyses provide a range of potential impacts on
net interest income and portfolio equity caused by interest rate movements.
66
Included in the modeling are instantaneous parallel rate shift scenarios, which are utilized to establish exposure limits. These
scenarios are known as “rate shocks” because all rates are modeled to change instantaneously by the indicated shock amount,
rather than a gradual rate shift over a period of time that has traditionally been more realistic.
The Company’s interest rate risk model indicates that the Company is asset sensitive in terms of interest rate sensitivity. Based
on the Company’s interest rate risk model at December 31, 2015, the table below illustrates the impact of an immediate and
sustained 100 and 200 basis point increase or decrease in interest rates on net interest income.
TABLE 29—INTEREST RATE SENSITIVITY
Shift in Interest Rates
(in bps)
+200
+100
-100
-200
% Change in Projected
Net Interest Income
9.9%
4.9%
(4.5)%
(8.6)%
The influence of using the forward curve as of December 31, 2015 as a basis for projecting the interest rate environment would
approximate a 1.7% increase in net interest income over the next 12 months. The computations of interest rate risk shown
above are performed on a flat balance sheet and do not necessarily include certain actions that management may undertake to
manage this risk in response to unanticipated changes in interest rates and other factors to include shifts in deposit behavior.
The short-term interest rate environment is primarily a function of the monetary policy of the FRB. The principal tools of the
FRB for implementing monetary policy are open market operations, or the purchases and sales of U.S. Treasury and Federal
agency securities, as well as the establishment of a short-term target rate. The FRB’s objective for open market operations has
varied over the years, but the focus has gradually shifted toward attaining a specified level of the Federal funds rate to achieve
the long-run goals of price stability and sustainable economic growth. The Federal funds rate is the basis for overnight funding
and drives the short end of the yield curve. Longer maturities are influenced by the market’s expectations for economic growth
and inflation, but can also be influenced by FRB purchases and sales and expectations of monetary policy going forward.
The Federal Open Market Committee (“FOMC”) of the FRB, in an attempt to stimulate the overall economy, has, among other
things, kept interest rates low through its targeted Federal funds rate. On December 17, 2015, the FOMC voted to raise the
target Federal funds rate by 0.25%, the first increase since 2006. The FOMC expects that economic conditions will evolve in a
manner that will warrant only gradual increases in the Federal funds rate over the next several years. As the FOMC increases
the Federal funds rate, it is possible that overall interest rates could rise, which may negatively impact the housing markets and
the U.S. economic recovery. In addition, deflationary pressures, while possibly lowering our operating costs, could have a
significant negative effect on our borrowers, especially our commercial borrowers, and the values of collateral securing loans,
which could negatively affect our financial performance.
The Company’s commercial loan portfolio is also impacted by fluctuations in the level of the LIBOR, as a large portion of this
portfolio reprices based on this index. Our net interest income may be reduced if more interest-earning assets than interest-
bearing liabilities reprice or mature during a period when interest rates are declining, or more interest-bearing liabilities than
interest-earning assets reprice or mature during a period when interest rates are rising.
The table below presents the Company’s anticipated repricing of loans and investment securities over the next four quarters.
TABLE 30—REPRICING OF CERTAIN EARNING ASSETS (1)
(Dollars in thousands)
Investment securities
Fixed rate loans
Variable rate loans
Total loans
$
1Q 2016
270,563 $
609,537
6,765,133
7,374,670
$ 7,645,233 $
2Q 2016
3Q 2016
90,925 $
560,292
125,357
685,649
776,574 $
98,888 $
479,342
71,945
551,287
650,175 $
4Q 2016
Total less
than one year
556,120
95,744 $
2,113,019
463,848
7,024,582
62,147
525,995
9,137,601
621,739 $ 9,693,721
(1) Amounts include expected maturities, scheduled paydowns, expected prepayments, and loans subject to floors and exclude
the repricing of assets from prior periods, as well as non-accrual loans and market value adjustments.
67
As part of its asset/liability management strategy, the Company has emphasized the origination of loans with adjustable or
variable rates of interest as well as commercial and consumer loans, which typically have shorter terms than residential
mortgage loans. The majority of fixed-rate, long-term residential loans are sold in the secondary market to avoid assumption of
the interest rate risk associated with longer duration assets in the current low rate environment. As of December 31, 2015, $7.5
billion, or 52%, of the Company’s total loan portfolio had adjustable interest rates. The Company had no significant
concentration to any single borrower or industry segment at December 31, 2015.
The Company’s strategy with respect to liabilities in recent periods has been to emphasize transaction accounts, particularly
non-interest or low interest-bearing transaction accounts, which are significantly less sensitive to changes in interest rates. At
December 31, 2015, 87% of the Company’s deposits were in transaction and limited-transaction accounts, compared to 83% at
December 31, 2014. Non-interest-bearing transaction accounts were 27% of total deposits at December 31, 2015, compared to
26% of total deposits at December 31, 2014.
Much of the liquidity increase experienced in the past several years has been due to a significant increase in non-interest-
bearing demand deposits. The behavior of non-interest-bearing deposits and other types of demand deposits is one of the most
important assumptions used in determining the interest rate and liquidity risk positions. A loss of these deposits in the future
would reduce the asset sensitivity of the Company’s balance sheet as interest-bearing funds would most likely be increased to
offset the loss of this favorable funding source.
The table below presents the Company’s anticipated repricing of liabilities over the next four quarters.
TABLE 31—REPRICING OF LIABILITIES (1)
(Dollars in thousands)
Time deposits
Short-term borrowings
Long-term debt
$
1Q 2016
744,290 $
326,617
129,799
$ 1,200,706 $
2Q 2016
447,543 $
3Q 2016
309,167 $
—
11,756
459,299 $
—
1,707
310,874 $
Total less
4Q 2016
than one year
224,718 $ 1,725,718
326,617
—
15,497
158,759
240,215 $ 2,211,094
(1) Amounts exclude the repricing of liabilities from prior periods.
As part of an overall interest rate risk management strategy, derivative instruments may also be used as an efficient way to
modify the repricing or maturity characteristics of on-balance sheet assets and liabilities. Management may from time to time
engage in interest rate swaps to effectively manage interest rate risk. The interest rate swaps of the Company would modify net
interest sensitivity to levels deemed appropriate.
IMPACT OF INFLATION OR DEFLATION AND CHANGING PRICES
The consolidated financial statements and related financial data presented herein have been prepared in accordance with GAAP,
which generally require the measurement of financial position and operating results in terms of historical dollars, without
considering changes in relative purchasing power over time due to inflation. Unlike most industrial companies, the majority of
the Company’s assets and liabilities are monetary in nature. As a result, interest rates generally have a more significant impact
on the Company’s performance than does the effect of inflation. Although fluctuations in interest rates are neither completely
predictable nor controllable, the Company regularly monitors its interest rate position and oversees its financial risk
management by establishing policies and operating limits. Interest rates do not necessarily move in the same direction or in the
same magnitude as the prices of goods and services, since such prices are affected by inflation to a larger extent than interest
rates. Although not as critical to the banking industry as to other industries, inflationary factors may have some impact on the
Company’s growth, earnings, total assets and capital levels. Management does not expect inflation to be a significant factor in
2016.
Conversely, a period of deflation could affect our business, as well as all financial institutions and other industries. Deflation
could lead to lower profits, higher unemployment, lower production and deterioration in overall economic conditions. In
addition, deflation could depress economic activity, including loan demand and the ability of borrowers to repay loans, and
consequently impair earnings through increasing the value of debt while decreasing the value of collateral for loans.
Management believes the most significant potential impact of deflation on financial results relates to the Company's ability to
maintain a sufficient amount of capital to cushion against future losses. However, the Company would employ certain risk
management tools to maintain its balance sheet strength in the event a deflationary scenario were to develop.
68
Non-GAAP Measures
The discussion and analysis included herein contains financial information determined by methods other than in accordance
with GAAP. The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s
performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of
intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to
common shareholders for certain significant activities or transactions that, in management’s opinion can distort period-to-
period comparisons of the Company’s performance. Since the presentation of these GAAP performance measures and their
impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful
supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses.
These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP,
nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Reconciliations of GAAP to non-GAAP disclosures are included in the table below.
TABLE 32—RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
2015
2014
2013
(Dollars in thousands, except
per share amounts)
Net income (GAAP)
Non-interest income
adjustments:
(Gain) loss on sale of
investments, net
Other non-interest
income
Total non-operating
income
Non-interest and other
expense adjustments:
Merger-related
expenses
Severance expenses
Impairment of long-
lived assets, net of
(gain) loss on sale
Debt prepayment
Other non-operating
non-interest expense
Total non-operating
expenses
Income tax benefits
Operating earnings (non-
GAAP)
Provision for loan
losses
Pre-provision operating
earnings (non-GAAP)
Pre-tax
After-tax (2)
Per
share (1) Pre-tax
After-tax (2)
Per
share (1) Pre-tax
$ 206,938 $ 142,844 $ 3.68 $ 141,065 $ 105,382 $ 3.30 $ 81,261 $
After-tax (2)
Per
share (1)
65,128 $ 2.20
(1,579)
(1,026 )
(0.03 )
(773)
(502 )
(0.01 )
(2,334)
(1,517 )
(0.05 )
(2,454)
(1,595 )
(0.04 )
(1,984)
(1,817 )
(0.06 )
—
—
—
(4,033)
(2,621 )
(0.07 )
(2,757)
(2,319 )
(0.07 )
(2,334)
(1,517 )
(0.05 )
24,074
2,593
15,861
1,686
0.41
0.04
15,093
6,951
10,104
4,518
0.32
0.14
783
2,538
509
1,649
0.02
0.05
7,259
1,262
4,717
820
0.12
0.02
7,073
—
4,597
—
0.14
—
37,183
2,307
24,169
1,500
0.81
0.05
1,272
827
0.02
(597)
(388 )
(0.01 )
1,731
1,125
0.03
36,460
—
23,911
0.62
(2,041 )
(0.05 )
28,520
—
18,831
0.59
(2,959 )
(0.09 )
44,542
—
28,952
—
0.97
—
239,365
162,093
4.18
166,828
118,935
3.72
123,469
92,563
3.12
30,908
20,090
0.52
19,060
12,389
0.39
5,145
3,345
0.11
$ 270,273
$ 182,183
$ 4.70
$ 185,888
$ 131,324
$ 4.12
$ 128,614
$
95,908
$ 3.23
(1) Diluted per share amounts may not appear to foot due to rounding.
(2) After-tax amounts computed using a marginal tax rate of 35%.
69
(Dollars in thousands)
Net interest income (GAAP)
Add: Effect of tax benefit on interest income
Net interest income (TE) (Non-GAAP)
Non-interest income (GAAP)
Add: Effect of tax benefit on non-interest income
Non-interest income (TE) (Non-GAAP)
Non-interest expense (GAAP)
Less: Intangible amortization expense
Tangible non-interest expense (Non-GAAP)
Net income (GAAP)
Add: Effect of intangible amortization, net of tax
Cash earnings (Non-GAAP)
Total assets (GAAP)
Less: Intangible assets, net
Total tangible assets (Non-GAAP)
Average assets (Non-GAAP)
Less: Average intangible assets, net
Total average tangible assets (Non-GAAP)
Total shareholders’ equity (GAAP)
Less: intangible assets, net
Total tangible shareholders’ equity (Non-GAAP)
Average shareholders’ equity (Non-GAAP)
Less: Average intangible assets, net
Average tangible shareholders’ equity (Non-GAAP)
Return on average assets
Effect of non-operating revenues and expenses
Operating return on average assets
Return on average common equity (GAAP)
Add: Effect of intangibles
Return on average tangible common equity (Non-GAAP)
Efficiency ratio (GAAP)
Effect of tax benefit related to tax-exempt income
Efficiency ratio (TE) (Non-GAAP)
Effect of amortization of intangibles
Effect of non-operating items
$
$
$
$
$
$
$
2015
587,758
8,604
596,362
220,393
2,346
222,739
570,305
7,811
562,494
142,844
5,077
147,921
$
$ 19,504,068
765,655
$ 18,738,413
$ 18,402,706
700,020
$ 17,702,686
2,498,835
$
765,655
1,733,180
2,261,034
700,020
1,561,014
$
$
$
$
$
$
$
$
$
$
2014
460,111
8,609
468,720
173,628
2,947
176,575
473,614
5,807
467,807
105,382
3,775
109,157
$
$ 15,757,904
548,130
$ 15,209,774
$ 14,631,994
501,770
$ 14,130,224
$ 1,852,148
548,130
$ 1,304,018
$ 1,707,359
501,770
$ 1,205,589
$
$
$
$
$
$
$
2013
390,244
9,452
399,696
168,958
1,964
170,922
472,796
4,720
468,076
65,128
3,068
68,196
$
$ 13,365,550
425,442
$ 12,940,108
$ 13,003,988
427,485
$ 12,576,503
$ 1,530,346
425,442
$ 1,104,904
$ 1,527,193
427,485
$ 1,099,708
0.78 %
0.1
0.88 %
6.41 %
3.24
9.65 %
70.6 %
(1.0 )
69.6 %
(1.0 )
(4.1 )
0.72 %
0.09
0.81 %
6.17 %
2.87
9.04 %
74.7 %
(1.3 )%
73.4 %
(0.9 )
(4.1 )
0.50 %
0.21
0.71 %
4.26 %
1.91
6.17 %
84.5 %
(1.6 )
82.9 %
(0.9 )
(7.5 )
74.5 %
Tangible operating efficiency ratio (TE) (Non-GAAP)
64.5 %
68.4 %
Cash Yield:
Earning assets average balance (GAAP)
Add: Adjustments
Earning assets average balance, as adjusted (Non-GAAP)
Net interest income (GAAP)
Add: Adjustments
Net interest income, as adjusted (Non-GAAP)
Yield, as reported
Add: Adjustments
Yield, as adjusted (Non-GAAP)
70
$ 16,652,051
82,641
$ 16,734,692
587,758
$
(36,248 )
551,510
$
$ 13,235,541
36,620
$ 13,272,161
460,111
$
(12,371 )
447,740
$
$ 11,735,392
(51,008 )
$ 11,684,384
390,244
$
(11,092 )
379,152
$
3.55 %
(0.24 )
3.31 %
3.51 %
(0.10 )
3.41 %
3.38 %
(0.08 )
3.30 %
TABLE 33 – QUARTERLY RESULTS OF OPERATIONS AND SELECTED CASH FLOW DATA
(Dollars in thousands, except per share data)
Total interest and dividend income
Total interest expense
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
Gain on sale of available-for-sale securities
Other non-interest income
Non-interest expense
Income before income taxes
Income tax expense
Net income
2015
Fourth Quarter Third Quarter Second Quarter First Quarter
138,585
$
12,781
125,804
5,345
120,459
386
48,513
133,153
36,205
11,079
25,126
160,545 $
14,868
145,677
8,790
136,887
903
60,610
153,209
45,191
14,355
30,836 $
171,077 $
15,960
155,117
5,062
150,055
280
57,198
144,968
62,565
20,090
42,475 $
176,651 $
15,491
161,160
11,711
149,449
6
52,497
138,975
62,977
18,570
44,407 $
$
Income available to common shareholders
Earnings allocated to unvested restricted stock
Earnings allocated to common shareholders
Earnings per share - basic
Earnings per share - diluted
Cash dividends declared per common share
$
$
$
44,407 $
(505)
43,902 $
1.08 $
1.08
0.34
42,475 $
(492)
41,983 $
1.04 $
1.03
0.34
30,836 $
(355)
30,481 $
0.79 $
0.79
0.34
25,126
(344)
24,782
0.75
0.75
0.34
Total interest and dividend income
Total interest expense
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
Gain on sale of available-for-sale securities
Other non-interest income
Non-interest expense
Income before income taxes
Income tax expense
Net income
Income available to common shareholders
Earnings allocated to unvested restricted stock
Earnings allocated to common shareholders
Earnings per share - basic
Earnings per share - diluted
Cash dividends declared per common share
2014
Fourth Quarter Third Quarter Second Quarter First Quarter
114,232
$
9,825
104,407
2,103
102,304
19
35,664
107,235
30,752
8,416
22,336
133,793 $
12,042
121,751
5,714
116,037
582
46,530
120,112
43,037
12,144
30,893 $
119,514 $
10,241
109,273
4,748
104,525
8
43,753
127,132
21,154
4,937
16,217 $
137,276 $
12,596
124,680
6,495
118,185
162
46,910
119,135
46,122
10,186
35,936 $
$
35,936 $
(523)
35,413 $
1.08 $
1.07
0.34
30,893 $
(462)
30,431 $
0.93 $
0.92
0.34
16,217 $
(250)
15,967 $
0.53 $
0.53
0.34
22,336
(402)
21,934
0.75
0.75
0.34
$
$
$
71
Glossary of Defined Terms
Term
ACL
Definition
Allowance for credit losses
Acquired loans
Loans acquired in a business combination
AFS
ALL
AOCI
ASC
ASU
Basel III
BCBS
Cameron
CDE
CFPB
CSB
Securities available-for-sale
Allowance for loan and lease losses
Accumulated other comprehensive income (loss)
Accounting Standards Codification
Accounting Standards Update
Global regulatory standards on bank capital adequacy and liquidity published by the BCBS
Basel Committee on Banking Supervision
Cameron Bancshares, Inc.
IBERIA CDE, LLC
Consumer Financial Protection Bureau
CapitalSouth Bank
Company
IBERIABANK Corporation and Subsidiaries
Covered Loans
Acquired loans with loss protection provided by the FDIC
Dodd-Frank Act
Dodd-Frank Wall Street Reform and Consumer Protection Act
EPS
FASB
FDIC
Earnings per common share
Financial Accounting Standards Board
Federal Deposit Insurance Corporation
First Private
First Private Holdings, Inc
FHLB
Federal Home Loan Bank
Florida Bank Group
Florida Bank Group, Inc
Florida Gulf
Florida Gulf Bancorp, Inc.
FRB
GAAP
Board of Governors of the Federal Reserve System
Accounting principles generally accepted in the United States of America
Georgia Commerce
Georgia Commerce Bancshares, Inc.
GSE
HTM
IAM
ICP
IMC
Government-sponsored enterprises
Securities held-to-maturity
IBERIA Asset Management, Inc.
IBERIA Capital Partners, LLC
IBERIABANK Mortgage Company
Legacy loans
Loans that were originated directly by the Company
LIBOR
LIHTC
LTC
MSA
London Interbank Borrowing Offered Rate
Low-income housing tax credit
Lenders Title Company
Metropolitan statistical area
Old Florida
Old Florida Bancshares, Inc.
OMNI
OCI
OREO
OTTI
Parent
RRP
RULC
OMNI BANCSHARES, Inc.
Other Comprehensive Income
Other real estate owned
Other than temporary impairment
IBERIABANK Corporation
Recognition and Retention Plan
Reserve for unfunded lending commitments
72
SEC
TE
Teche
TDR
Securities and Exchange Commission
Fully taxable equivalent
Teche Holding Company
Troubled debt restructuring
Trust One-Memphis
Trust One Bank (Memphis Operations)
U.S.
United States of America
73
MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Board of Directors of
IBERIABANK Corporation
The management of IBERIABANK Corporation (the “Company”) is responsible for establishing and maintaining effective
internal control over financial reporting. The Company’s internal control system was designed to provide reasonable assurance
to the Company’s management and Board of Directors regarding the preparation and fair presentation of the Company’s
financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control
over financial reporting includes self-monitoring mechanisms, and actions are taken to correct deficiencies as they are
identified.
All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect
misstatements in the Company’s financial statements, including the possibility of circumvention or overriding of controls.
Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of a change in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2015. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 Framework). Based on its assessment,
management believes that, as of December 31, 2015, the Company’s internal control over financial reporting is effective based
on those criteria.
The Company’s independent registered public accounting firm has also issued an attestation report on the effectiveness of the
Company’s internal control over financial reporting as of December 31, 2015.
Daryl G. Byrd
President and Chief Executive Officer
Anthony J. Restel
Senior Executive Vice President and Chief Financial Officer
74
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
IBERIABANK Corporation and subsidiaries
We have audited IBERIABANK Corporation and subsidiaries’ internal control over financial reporting as of December 31,
2015, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). IBERIABANK Corporation and
subsidiaries' management is responsible for maintaining effective internal control over financial reporting, and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management Report
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, IBERIABANK Corporation and subsidiaries maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2015, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
the consolidated balance sheets of IBERIABANK Corporation and subsidiaries as of December 31, 2015 and 2014, and the
related consolidated statements of comprehensive income, shareholders’ equity, and cash flows for each of the three years in the
period ended December 31, 2015 and our report dated February 29, 2016, expressed an unqualified opinion thereon.
New Orleans, Louisiana
February 29, 2016
75
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
IBERIABANK Corporation and subsidiaries
We have audited the accompanying consolidated balance sheets of IBERIABANK Corporation and subsidiaries as of
December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, shareholders’ equity, and cash
flows for each of the three years in the period ended December 31, 2015. These financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial
position of IBERIABANK Corporation and subsidiaries at December 31, 2015 and 2014, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended December 31, 2015 in conformity with U.S.
generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
IBERIABANK Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2015, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) and our report dated February 29, 2016, expressed an unqualified opinion thereon.
New Orleans, Louisiana
February 29, 2016
76
IBERIABANK CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands, except share data)
Assets
Cash and due from banks
Interest-bearing deposits in banks
Total cash and cash equivalents
Securities available for sale, at fair value
Securities held to maturity (fair values of $100,961 and $119,481, respectively)
Mortgage loans held for sale ($166,247 and $139,950 recorded at fair value, respectively)
Loans covered by loss share agreements
Non-covered loans, net of unearned income
Total loans, net of unearned income
Allowance for loan losses
Loans, net
FDIC loss share receivables
Premises and equipment, net
Goodwill
Other assets
Total Assets
Liabilities
Deposits:
Non-interest-bearing
Interest-bearing
Total deposits
Short-term borrowings
Long-term debt
Other liabilities
Total Liabilities
Shareholders’ Equity
Preferred stock, $1 par value - 5,000,000 shares authorized
Non-cumulative perpetual, liquidation preference $10,000 per share; 8,000 shares and 0
shares issued and outstanding, respectively, including related surplus
Common stock, $1 par value - 100,000,000 and 50,000,000 shares authorized, respectively;
41,139,537 issued and outstanding and 35,262,901 shares issued, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Treasury stock at cost - 0 and 1,809,497 shares, respectively
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
December 31,
2015
2014
$
241,650 $
268,617
510,267
2,800,286
98,928
166,247
229,217
14,098,211
14,327,428
(138,378)
14,189,050
39,878
323,902
724,603
650,907
251,994
296,101
548,095
2,158,853
116,960
140,072
444,544
10,996,500
11,441,044
(130,131)
11,310,913
69,627
307,159
517,526
588,699
$ 19,504,068 $ 15,757,904
$
4,352,229 $
11,826,519
16,178,748
326,617
340,447
159,421
17,005,233
3,195,430
9,325,095
12,520,525
845,742
403,254
136,235
13,905,756
76,812
—
41,140
1,797,982
584,486
(1,585)
—
2,498,835
35,263
1,398,633
496,573
7,525
(85,846)
1,852,148
$ 19,504,068 $ 15,757,904
The accompanying Notes are an integral part of these Consolidated Financial Statements.
77
IBERIABANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
Year Ended December 31,
2014
2013
2015
$
606,966 $
6,164
526,706 $
5,153
488,936
5,108
(Dollars in thousands, except per share data)
Interest and Dividend Income
Loans, including fees
Mortgage loans held for sale, including fees
Investment securities:
Taxable interest
Tax-exempt interest
Amortization of FDIC loss share receivable
Other
Total interest and dividend income
Interest Expense
Deposits:
NOW and MMDA
Savings
Time deposits
Short-term borrowings
Long-term debt
Total interest expense
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
Non-interest Income
Mortgage income
Service charges on deposit accounts
Title revenue
Broker commissions
ATM/debit card fee income
Income from bank owned life insurance
Gain on sale of available for sale securities
Other non-interest income
Total non-interest income
Non-interest Expense
Salaries and employee benefits
Net occupancy and equipment
Impairment of FDIC loss share receivables and other long-lived assets
Communication and delivery
Marketing and business development
Data processing
Amortization of acquisition intangibles
Professional services
Costs of OREO property, net
Credit and other loan related expense
Insurance
Travel and entertainment
Other non-interest expense
Total non-interest expense
Income before income tax expense
Income tax expense
Net Income
Income Available to Common Shareholders - Basic
Earnings Allocated to Unvested Restricted Stock
Earnings Allocated to Common Shareholders
Earnings per common share - Basic
Earnings per common share - Diluted
Cash dividends declared per common share
$
$
$
$
78
47,380
5,785
(23,500)
4,063
646,858
27,226
740
19,137
797
11,200
59,100
587,758
30,908
556,850
81,122
42,197
22,837
17,592
13,989
4,356
1,575
36,725
220,393
322,586
68,541
6,954
13,506
13,176
34,424
7,811
22,368
748
16,653
16,670
9,525
37,343
570,305
206,938
64,094
142,844 $
142,844 $
(1,680)
141,164 $
3.69 $
3.68
1.36
38,815
5,862
(74,617)
2,896
504,815
18,483
325
14,282
1,364
10,250
44,704
460,111
19,060
441,051
51,797
35,573
20,492
18,783
12,023
5,473
771
28,716
173,628
259,086
59,571
6,437
12,029
11,707
27,249
5,807
18,975
2,748
13,692
14,359
9,033
32,921
473,614
141,065
35,683
105,382 $
105,382 $
(1,651)
103,731 $
3.31 $
3.30
1.36
31,562
6,668
(97,849)
2,772
437,197
18,933
309
16,604
490
10,617
46,953
390,244
5,145
385,099
64,197
28,871
20,526
16,333
9,510
3,647
2,277
23,597
168,958
244,984
58,037
37,893
12,024
10,143
17,853
4,720
18,217
1,943
15,853
11,272
8,126
31,731
472,796
81,261
16,133
65,128
65,128
(1,205)
63,923
2.20
2.20
1.36
Comprehensive Income
Net Income
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period (net of tax
effects of $4,374, $13,202, and $21,733, respectively)
Reclassification adjustment for gains included in net income (net of
tax effects of $551, $270 and $797, respectively)
Unrealized gains (losses) on securities, net of tax
Fair value of derivative instruments designated as cash flow hedges:
Change in fair value of derivative instruments designated as cash
flow hedges during the period (net of tax effects of $20, $0 and $334,
respectively)
Reclassification adjustment for losses included in net income (net of
tax effects of $0, $0 and $136, respectively)
Fair value of derivative instruments designated as cash flow hedges, net
of tax
Other comprehensive income (loss), net of tax
Comprehensive income
$
142,844 $
105,382 $
65,128
(8,124)
24,517
(40,362)
(1,024)
(9,148)
(501)
24,016
(1,480)
(41,842)
38
—
38
(9,110)
133,734 $
$
—
—
—
24,016
129,398 $
619
255
874
(40,968)
24,160
The accompanying Notes are an integral part of these Consolidated Financial Statements.
79
IBERIABANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Shareholders’ Equity
Preferred Stock
Common Stock
(Dollars in thousands,
except share and per share data) Shares Amount
Shares
Amount
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock at
Cost
Total
$
—
—
—
—
—
—
31,917,385
—
—
$ 31,917
—
—
$ 1,176,180
—
—
$ 410,814
65,128
—
$
—
—
—
—
—
(40,434 )
—
—
—
— $
—
—
—
—
—
—
—
—
(607 )
(7,992 )
—
—
—
—
10,703
—
— 31,917,385 $ 31,917 $ 1,178,284 $ 435,508 $
—
—
—
—
105,382
—
—
—
—
—
—
—
—
—
—
—
(44,317 )
—
—
—
—
— $
—
—
—
—
—
—
—
—
—
3,242
3,345,516
3,346
211,319
—
—
(6,197 )
—
—
—
—
—
11,985
—
— 35,262,901 $ 35,263 $ 1,398,633 $ 496,573 $
—
—
—
—
142,844
—
—
—
—
—
—
—
—
—
—
(54,931 )
—
(1,809,497 )
(1,809 )
(84,037 )
—
Balance, December 31, 2012
Net income
Other comprehensive loss
Cash dividends declared, $1.36 per
share
Reissuance of treasury stock under
incentive plans, net of shares
surrendered in payment, including
tax benefit
Treasury stock issued for
recognition and retention plans
Share-based compensation cost
Balance, December 31, 2013
Net income
Other comprehensive income
Cash dividends declared, $1.36 per
share
Reissuance of treasury stock under
incentive plans, net of shares
surrendered in payment, including
tax benefit
Common stock issued for
acquisitions
Treasury stock issued for
recognition and retention plans
Share-based compensation cost
Balance, December 31, 2014
Net income
Other comprehensive loss
Cash dividends declared, $1.36 per
share
Reclassification of treasury stock
under the LBCA (1)
Common stock issued under
incentive plans, net of shares
surrendered in payment, including
tax benefit
Common stock issued for
acquisitions
Preferred stock issued
24,477
—
(40,968)
$ (114,178 ) $ 1,529,210
—
65,128
—
(40,968 )
—
—
—
—
(16,491 ) $
—
24,016
—
(40,434 )
7,314
6,707
7,992
—
—
10,703
(98,872 ) $ 1,530,346
105,382
24,016
—
—
—
—
—
—
—
(44,317 )
6,829
10,071
—
214,665
6,197
—
—
7,525 $
—
(9,110)
—
—
—
—
—
—
—
11,985
(85,846 ) $ 1,852,148
142,844
(9,110 )
—
—
—
(54,931 )
85,846
—
—
—
—
2,413
474,753
76,812
—
13,906
— $ 2,498,835
—
—
211,729
212
2,201
—
8,000
—
76,812
7,474,404
—
7,474
—
467,279
—
—
—
—
—
Share-based compensation cost
—
—
—
—
13,906
Balance, December 31, 2015
8,000 $ 76,812 41,139,537 $ 41,140 $ 1,797,982 $ 584,486 $
(1,585 ) $
(1) Effective January 1, 2015, companies incorporated in Louisiana became subject to the Louisiana Business Corporation
Act (“LBCA”), which eliminates the concept of treasury stock and provides that shares reacquired by a company are to
be treated as authorized but unissued. Refer to Note 1 for further discussion.
The accompanying Notes are an integral part of these Consolidated Financial Statements.
80
IBERIABANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation, amortization, and accretion
Provision for loan losses
Share-based compensation cost
Gain on sale of assets, net
Gain on sale of securities available for sale
Gain on sale of OREO, net
Impairment of FDIC loss share receivables and other long-lived assets
Amortization of premium/discount on securities, net
Expense (benefit) for deferred income taxes
Originations of mortgage loans held for sale
Proceeds from sales of mortgage loans held for sale
Gain on sale of mortgage loans held for sale, net
Tax benefit associated with share-based payment arrangements
Change in other assets, net of other assets acquired
Other operating activities, net
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities
Proceeds from sales of securities available for sale
Proceeds from maturities, prepayments and calls of securities available
for sale
Purchases of securities available for sale
Proceeds from maturities, prepayments and calls of securities held to
maturity
Purchases of securities held to maturity
Reimbursement of recoverable covered asset losses (to) from the FDIC
Increase in loans, net of loans acquired
Proceeds from sale of premises and equipment
Purchases of premises and equipment, net of premises and equipment
acquired
Proceeds from disposition of OREO
Cash paid for additional investment in tax credit entities
Cash received in excess of cash paid for acquisitions
Other investing activities, net
Net Cash Used in Investing Activities
Cash Flows from Financing Activities
Increase (decrease) in deposits, net of deposits acquired
Net change in short-term borrowings, net of borrowings acquired
Proceeds from long-term debt
Repayments of long-term debt
Cash dividends paid on common stock
Proceeds from common stock transactions
Payments to repurchase common stock
Net proceeds from issuance of preferred stock
81
Year Ended December 31,
2015
2014
2013
$
142,844 $
105,382 $
65,128
(6,178)
30,908
13,906
(2,539)
(1,575)
(5,552)
6,954
18,195
4,551
(2,464,588)
2,516,110
(83,131)
(580)
13,925
12,873
196,123
23,327
19,060
11,985
(14)
(771)
(4,221)
6,437
13,793
(25,027)
(1,675,538)
1,716,565
(59,156)
(2,105)
11,770
(22,124)
119,363
19,423
5,145
10,703
(251)
(2,277)
(6,022)
37,893
18,953
(35,930)
(2,116,460)
2,320,885
(65,393)
(886)
(17,559)
76,431
309,783
228,604
61,702
44,677
473,142
(1,063,460)
488,699
(703,179)
709,977
(1,026,290)
22,939
(5,833)
(932)
(703,946)
13,309
(19,502)
55,025
(9,671)
425,581
13,772
(570,972)
968,746
(520,653)
63,198
(201,259)
(52,318)
5,535
(3,620)
76,812
36,182
—
5,734
(824,437)
5,129
(29,841)
84,429
(13,191)
188,803
(12,785)
(712,755)
641,026
110,298
54,637
(22,871)
(43,070)
11,693
(3,727)
—
55,706
(5,901)
68,233
(1,030,545)
8,714
(16,941)
116,612
(2,213)
—
(2,636)
(1,080,607)
(10,689)
377,299
2,867
(144,609)
(40,332)
8,101
(2,280)
—
Tax benefit associated with share-based payment arrangements
Net Cash Provided by Financing Activities
Net (Decrease) Increase In Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period
Supplemental Schedule of Non-cash Activities
Acquisition of real estate in settlement of loans
Common stock issued in acquisitions
Supplemental Disclosures
Cash paid for:
Interest on deposits and borrowings
Income taxes, net
580
337,021
(37,828)
548,095
510,267 $
2,105
750,091
156,699
391,396
548,095 $
886
191,243
(579,581)
970,977
391,396
21,690 $
474,753 $
27,050 $
214,665 $
93,040
—
58,556 $
53,476 $
43,210 $
52,094 $
47,466
29,063
$
$
$
$
$
The accompanying Notes are an integral part of these Consolidated Financial Statements.
82
IBERIABANK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The accompanying consolidated financial statements have been prepared in accordance with GAAP and practices generally
accepted in the banking industry. The consolidated financial statements include the accounts of the Company and its
subsidiaries.
When we refer to the “Company,” “we,” “our,” or “us” in this Report, we mean IBERIABANK Corporation and subsidiaries
(consolidated). When we refer to the “Parent,” we mean IBERIABANK Corporation. See the Glossary of Acronyms at the end
of this Report for terms used throughout this Report.
Reclassification
Certain amounts reported in prior periods have been reclassified to conform to the current period presentation. These
reclassifications did not have a material effect on previously reported consolidated financial statements.
PRINCIPLES OF CONSOLIDATION
The Company’s consolidated financial statements include all entities in which the Company has a controlling financial interest
under either the voting interest or variable interest model. The assessment of whether or not the Company has a controlling
interest (i.e., the primary beneficiary) in a VIE is performed on an on-going basis. All equity investments in non-consolidated
VIEs are included in "other assets" in the Company’s consolidated balance sheets. The Company’s maximum exposure to loss
as a result of its involvement with non-consolidated VIEs was approximately $160 million and $151 million at December 31,
2015 and 2014, respectively. The Company's maximum exposure to loss was equivalent to the carrying value of its investments
and any related outstanding loans to the non-consolidated VIEs.
Investments in entities that are not consolidated are accounted for under either the equity, cost, or proportional amortization
method of accounting. Investments for which the Company has the ability to exercise significant influence over the operating
and financing decisions of the entity are accounted for under the equity method. Investments for which the Company does not
hold such ability are accounted for under the cost method. Investments in qualified affordable housing projects, which meet
certain criteria, are accounted for under the proportional amortization method.
The consolidated financial statements include the accounts of the Company and its subsidiaries, IBERIABANK; Lenders Title
Company; IBERIA Capital Partners, LLC; 1887 Leasing, LLC; IBERIA Asset Management, Inc.; 840 Denning, LLC; and
IBERIA CDE, LLC. All significant intercompany balances and transactions have been eliminated in consolidation. All normal,
recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the financial statements
have been included.
NATURE OF OPERATIONS
The Company offers commercial and retail banking products and services to customers throughout locations in seven states
through IBERIABANK. The Company also operates mortgage production offices in 10 states through IMC and offers a full
line of title insurance and closing services throughout Arkansas and Louisiana through LTC and its subsidiaries. ICP provides
equity research, institutional sales and trading, and corporate finance services throughout the energy industry. 1887 Leasing,
LLC owns an aircraft used by management of the Company. IAM provides wealth management and trust services for
commercial and private banking clients. CDE is engaged in the purchase of tax credits.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ
from those estimates. Material estimates that are susceptible to significant change in the near term are the allowance for credit
losses, valuation of and accounting for acquired loans, goodwill and other intangibles, and income taxes.
CONCENTRATION OF CREDIT RISKS
Most of the Company’s business activity is with customers located within the states of Louisiana, Florida, Arkansas, Alabama,
Texas, Georgia, and Tennessee. The Company’s lending activity is concentrated in its market areas in those states. The
Company has emphasized originations of commercial loans and private banking loans, defined as loans to larger consumer
83
clients. Repayments on loans are expected to come from cash flows of the borrower and/or guarantor. Losses on secured loans
are limited by the value of the collateral upon default of the borrowers and guarantor support. The Company does not have any
significant concentrations to any one industry or customer.
BUSINESS COMBINATIONS
Assets and liabilities acquired in business combinations are recorded at their acquisition date fair values. In accordance with
ASC Topic 805, Business Combinations, the Company generally records provisional amounts at the time of acquisition based
on the information available to the Company. The provisional estimates of fair values may be adjusted for a period of up to one
year (“measurement period”) from the date of acquisition if new information obtained about facts and circumstances that
existed as of the acquisition date, if known, would have affected the measurement of the amounts recognized as of that date.
Subsequent to the Company's early adoption of ASU No. 2015-16 during the third quarter of 2015, adjustments recorded during
the measurement period are recognized in the current reporting period.
Loans generally represent a significant portion of the assets acquired in the Company’s business acquisitions. If the Company
discovers that it has materially underestimated the credit losses expected in the loan portfolio based on information available at
the acquisition date within the measurement period, it will reduce or eliminate the gain and/or increase goodwill recorded on
the acquisition in the period the adjustment is recorded. If the Company determines that losses arose subsequent to acquisition
date, such losses are reflected as a provision for credit losses.
CASH AND CASH EQUIVALENTS
For purposes of presentation in the consolidated statements of cash flows, cash and cash equivalents are defined as cash,
interest-bearing deposits, and non-interest-bearing demand deposits at other financial institutions with original maturities less
than three months. IBERIABANK may be required to maintain average balances on hand or with the Federal Reserve Bank to
meet regulatory reserve and clearing requirements. At December 31, 2015 and 2014, IBERIABANK had sufficient cash
deposited with the Federal Reserve Bank to cover the required reserve balance.
INVESTMENT SECURITIES
Management determines the appropriate accounting classification of debt and equity securities at the time of acquisition and re-
evaluates such designations at least quarterly. Debt securities that management has the ability and intent to hold to maturity are
classified as HTM and carried at cost, adjusted for amortization of premiums and accretion of discounts using methods
approximating the interest method. Securities acquired with the intention of recognizing short-term profits or which are actively
bought and sold are classified as trading securities and reported at fair value, with unrealized gains and losses recognized in
earnings. Securities not classified as HTM or trading, including equity securities with readily determinable fair values, are
classified as AFS and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in AOCI.
Credit-related declines in the fair value of debt and marketable equity securities that are considered OTTI are recorded in
earnings.
The Company evaluates its investment securities portfolio on a quarterly basis for indicators of OTTI. Declines in the fair value
of individual HTM and AFS securities below their amortized cost basis are reviewed to determine whether the declines are
other than temporary. In estimating OTTI losses, management considers 1) the length of time and the extent to which the fair
value has been less than the amortized cost basis, 2) the financial condition and near-term prospects of the issuer, 3) its intent to
sell and whether it is more likely than not that the Company would be required to sell those securities before the anticipated
recovery of the amortized cost basis, and 4) for debt securities, the recovery of contractual principal and interest.
For securities that the Company does not expect to sell, or it is not more likely than not it will be required to sell prior to
recovery of its amortized cost basis, the credit component of an OTTI is recognized in earnings and the non-credit component
is recognized in AOCI. For securities that the Company does expect to sell, or it is more likely than not that it will be required
to sell prior to recovery of its amortized cost basis, both the credit and non-credit component of an OTTI are recognized in
earnings. Subsequent to recognition of OTTI, an increase in expected cash flows is recognized as a yield adjustment over the
remaining expected life of the security based on an evaluation of the nature of the increase.
Nonmarketable equity securities include stock acquired for regulatory purposes, such as Federal Home Loan Bank stock and
Federal Reserve Bank stock. These securities are accounted for at amortized cost, evaluated for impairment at least quarterly,
and included in "other assets".
Gains or losses on securities sold are recorded on the trade date, using the specific identification method.
84
LOANS HELD FOR SALE
Loans and loan commitments which the Company does not have the intent and ability to hold for the foreseeable future or until
maturity or payoff are classified as loans held for sale at the time of origination or acquisition. Subsequent to origination or
acquisition, if the Company no longer has the intent or ability to hold a loan for the foreseeable future, generally a decision has
been made to sell the loan, and it is classified within loans held for sale. Unless the fair value option has been elected at
origination or acquisition, loans classified as held for sale are carried at the lower of cost or fair value. Amortization/accretion
of remaining unamortized net deferred loan fees or costs and discounts or premiums (if applicable) ceases when a loan is
classified as held for sale.
Loans held for sale primarily consist of fixed rate single-family residential mortgage loans originated and under contract to be
sold in the secondary market. Mortgage loans originated and held for sale are recorded at fair value under the fair value option,
unless otherwise noted. For mortgage loans for which the Company has elected the fair value option, gains and losses are
included in mortgage income. For any other loans held for sale, net unrealized losses, if any, are recognized through a valuation
allowance that is recorded as a charge to non-interest income. See Note 20 for further discussion of the determination of fair
value for loans held for sale. In most cases, loans in this category are sold within thirty days and are generally sold with the
mortgage servicing rights released. Buyers generally have recourse to return a purchased loan or request reimbursement for the
loan premium or servicing rights under limited circumstances. Recourse conditions may include prepayment, payment default,
breach of representations or warranties, and documentation deficiencies. During 2015 and 2014, an insignificant number of
loans were returned to the Company. At December 31, 2015 and 2014, the recorded repurchase liability associated with
transferred loans was immaterial.
LOANS
Legacy (Loans originated by the Company)
The Company originates mortgage, commercial, and consumer loans for customers. Loans that management has the intent and
ability to hold for the foreseeable future or until maturity or payoff are reported at the unpaid principal balances, less the ALL,
charge-offs, and unamortized net loan origination fees and direct costs, except for loans which are carried at fair value. Interest
income is accrued as earned over the term of the loans based on the principal balance outstanding. Loan origination fees, net of
certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield.
Acquired (Loans acquired through Business Combinations)
Acquired loans are recorded at fair value on the acquisition date in accordance with ASC Topic 820, Fair Value Measurement,
consistent with the exit price concept on the date of acquisition. Credit risk assumptions and any resulting credit discounts are
included in the determination of fair value. Therefore, an ACL is not recorded at the acquisition date. The determination of fair
value includes estimates related to discount rates, expected prepayments, and the amount and timing of undiscounted expected
principal, interest, and other cash flows.
Acquired loans are evaluated at acquisition and classified as purchased impaired (“acquired impaired”) or purchased non-
impaired (“acquired non-impaired”). Purchased impaired loans reflect credit deterioration since origination to the extent that it
is probable at the time of acquisition that the Company will be unable to collect all contractually required payments. At the time
of acquisition, purchased impaired loans are accounted for individually or aggregated into loan pools with similar
characteristics, which include:
• whether the loan is performing according to contractual terms at the time of acquisition,
•
•
•
•
the loan type based on regulatory reporting guidelines, namely whether the loan was a mortgage, consumer, or
commercial loan,
the nature of collateral,
the interest rate type, whether fixed or variable rate, and
the loan payment type, primarily whether the loan is amortizing or interest-only.
From these pools, the Company uses certain loan information, including outstanding principal balance, estimated expected
losses, weighted average maturity, weighted average term to re-price (if a variable rate loan), weighted average margin, and
weighted average interest rate to estimate the expected cash flow for each loan pool.
85
For purchased impaired loans, expected cash flows at the acquisition date in excess of the fair value of loans are recorded as
interest income over the life of the loans using a level yield method if the timing and amount of future cash flows is reasonably
estimable. For purchased non-impaired loans, the difference between the fair value and unpaid principal balance of the loan at
acquisition, referred to as a purchase premium or discount, is amortized or accreted to income over the estimated life of the
loans as an adjustment to yield.
Subsequent to acquisition, the Company performs cash flow re-estimations at least quarterly for each purchased impaired loan
and/or loan pool. Increases in estimated cash flows above those expected at acquisition are recognized on a prospective basis as
interest income over the remaining life of the loan and/or pool. Decreases in expected cash flows subsequent to acquisition
generally result in recognition of a provision for credit loss. The measurement of cash flows involves several assumptions and
judgments (i.e., prepayments, default rates, loss severity, etc.). All of these factors are inherently subjective and significant
changes in the cash flow estimations can result over the life of the loan.
Classification
The Company’s loan portfolio is disaggregated into portfolio segments for purposes of determining the ACL. The Company’s
portfolio segments include commercial, residential mortgage, and consumer and other loans, bifurcated between legacy and
acquired. The Company further disaggregates each commercial, residential mortgage, and consumer and other loans portfolio
segment into classes for purposes of monitoring and assessing credit quality based on certain risk characteristics. Classes within
the commercial loan portfolio segment include commercial real estate-construction, commercial real estate-other, commercial
and industrial, and energy-related. Classes within the consumer and other loans portfolio segment include home equity, indirect
automobile, credit card, and consumer-other.
Troubled Debt Restructurings
The Company periodically grants concessions to its customers in an attempt to protect as much of its investment as possible
and minimize risk of loss. These concessions may include restructuring the terms of a loan to alleviate the burden of the
customer’s near-term cash requirements. In order to be classified a TDR, the Company must conclude that the restructuring
constitutes a concession and the customer is experiencing financial difficulties. The Company defines a concession to the
customer as a modification of existing terms for economic or legal reasons that it would otherwise not consider. The concession
is either granted through an agreement with the customer or is imposed by a court or law. Concessions include modifying
original loan terms to reduce or defer cash payments required as part of the loan agreement, including but not limited to:
•
•
•
•
a reduction of the stated interest rate for the remaining original life of the loan,
extension of the maturity date or dates at a stated interest rate lower than the current market rate for new loans with
similar risk characteristics,
reduction of the face amount or maturity amount of the loan as stated in the agreement, or
reduction of accrued interest receivable on the loan.
In its determination of whether the customer is experiencing financial difficulties, the Company considers numerous indicators,
including, but not limited to:
• whether the customer is currently in default on its existing loan(s), or is in an economic position where it is probable the
customer will be in default on its loan(s) in the foreseeable future without a modification,
• whether the customer has declared or is in the process of declaring bankruptcy,
• whether there is substantial doubt about the customer’s ability to continue as a going concern,
• whether, based on its projections of the customer’s current capabilities, the Company believes the customer’s future cash
flows will be insufficient to service the loan, including interest, in accordance with the contractual terms of the existing
agreement for the foreseeable future, and
• whether, without modification, the customer cannot obtain sufficient funds from other sources at an effective interest rate
equal to the current market rate for a similar loan for a non-troubled debtor.
If the Company concludes that both a concession has been granted and the customer is experiencing financial difficulties, the
Company identifies the loan as a TDR. All TDRs are considered impaired loans.
86
NON-ACCRUAL AND PAST DUE LOANS (INCLUDING LOAN CHARGE-OFFS)
Loans are considered past due when contractual payments of principal and interest have not been received within 30 days from
the contractual due date.
All legacy and purchased non-impaired loans are placed on non-accrual status when collection of principal or interest is in
doubt. Purchased impaired loans are placed on non-accrual status when the Company cannot reasonably estimate cash flows on
a loan or loan pool. Legacy and purchased non-impaired loans are evaluated for potential charge-off in accordance with the
parameters discussed in the following paragraph or when the loan is placed on non-accrual status, whichever is earlier.
Loans within the commercial portfolio (except for purchased impaired) are generally evaluated for charge-off at 90 days past
due, unless both well-secured and in the process of collection. Closed and open-end residential mortgage and consumer loans
(except for purchased impaired) are evaluated for charge-off no later than 120 days past due. Any outstanding loan balance in
excess of the fair value of the collateral less costs to sell is charged-off no later than 120 days past due for loans secured by real
estate. For non-real estate secured loans, in lieu of charging off the entire loan balance, loans may be written down to the fair
value of the collateral less costs to sell if repossession of collateral is assured and in process.
The accrual of interest, as well as the amortization/accretion of any remaining unamortized net deferred fees or costs and
discount or premium, is discontinued at the time the loan is placed on non-accrual status. All accrued but uncollected interest
for loans that are placed on non-accrual status is reversed, with current year accruals charged to interest income and prior year
amounts charged-off as a credit loss. Cash receipts received on non-accrual loans are generally applied against principal until
the loan has been collected in full, after which time any additional cash receipts are recognized as interest income (i.e., cost
recovery method). However, interest may be accounted for under the cash-basis method as long as the remaining recorded
investment in the loan is deemed fully collectible.
Loans are returned to accrual status when the borrower has demonstrated a capacity to continue payment of the debt and
collection of contractually required principal and interest associated with the debt is reasonably assured. At such time, the
accrual of interest and amortization/accretion of any remaining unamortized net deferred fees or costs and discount or premium
shall resume. Any interest income which was applied to the principal balance shall not be reversed and subsequently will be
recognized as an adjustment to yield over the remaining life of the loan.
IMPAIRED LOANS
For all classes within the commercial portfolio, all loans with an outstanding commitment balance above a specific threshold
are evaluated on a quarterly basis for potential impairment. Generally, mortgage and consumer loans within any class are not
individually evaluated on a regular basis for impairment. All TDRs, regardless of the outstanding balance amount or portfolio
classification, and all purchased impaired loans are considered to be impaired.
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to
collect the scheduled payments of principal and/or interest when due, according to the contractual terms of the loan agreement.
Factors considered by management in determining impairment include payment status, collateral value, and the probability of
collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and
payment shortfalls generally are not classified as impaired. Impairment losses are measured on a loan-by-loan basis for
commercial and certain mortgage or consumer loans, based on either the present value of expected future cash flows discounted
at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral
dependent. This measurement requires significant judgment and use of estimates, and the actual loss ultimately recognized by
the Company may differ significantly from the estimates.
ALLOWANCE FOR CREDIT LOSSES
The Company maintains the ACL at a level that management believes appropriate to absorb estimated probable credit losses
incurred in the loan portfolios (including unfunded commitments) as of the consolidated balance sheet date. The ACL consists
of the allowance for loan losses (contra asset) and the reserve for unfunded commitments (liability). The manner in which the
ACL is determined is based on 1) the accounting method applied to the underlying loans and 2) whether the loan is required to
be measured for impairment in accordance with ASC Topic 450-20, Contingencies - Loss Contingencies or ASC Topic 310-10-
35, Receivables - Overall. The Company delineates between loans accounted for under the contractual yield method, legacy
and purchased non-impaired loans, and purchased impaired loans (loans accounted for in accordance with ASC Topic 310-30,
Receivables - Loans and Debt Securities Acquired with Deteriorated Credit Quality). Further, for legacy and acquired non-
impaired loans, the Company attributes portions of the ACL to loans and loan commitments that it measures individually (ASC
Topic 310-10-35, Receivables - Overall), impaired credit, and groups of homogeneous loans and loan commitments that it
measures collectively (ASC Topic 450-20, Contingencies - Loss Contingencies).
87
Determination of the appropriate ACL involves a high degree of complexity and requires significant judgment regarding the
credit quality of the loan portfolio. Several factors are taken into consideration in the determination of the overall ACL,
including a qualitative component. These factors include, but are not limited to, the overall risk profiles of the loan portfolios,
net charge-off experience, the extent of impaired loans, the level of non-accrual loans, the level of 90 days past due loans, the
value of collateral, the ability to monetize guarantor support, and the overall percentage level of the allowance relative to the
loan portfolio, amongst other factors. The Company also considers overall asset quality trends, changes in lending practices and
procedures, trends in the nature and volume of the loan portfolio, including the existence and effect of any portfolio
concentrations, changes in experience and depth of lending staff, the Company’s legal, regulatory and competitive
environment, national and regional economic trends, data availability and applicability that might impact the portfolio or the
manner in which it estimates losses, and risk rating accuracy and risk identification.
The allowance for loan losses for all impaired loans (excluding purchased impaired) is determined on an individual loan basis,
considering the facts and circumstances specific to each borrower. The allowance is based on the difference between the
recorded investment in the loan and generally either the estimated net present value of projected cash flows or the estimated
value of the collateral associated with the loan, if the loan is deemed collateral-dependent. For non-impaired loans (excluding
purchased impaired), the allowance for loan losses is calculated based on pools of loans with similar characteristics. The pool
level allowance is calculated through the application of a PD (i.e., probability of default) and LGD (i.e., loss given default)
factor for each individual loan. PDs and LGDs are determined based on historical default and loss information for similar loans.
For purposes of establishing estimated loss percentages for pools of loans that share common risk characteristics, the
Company’s loan portfolio is segmented by various loan characteristics including loan type, risk rating (commercial), Vantage or
FICO score (mortgage and consumer), past due status (mortgage and consumer) and call report code. The default and loss
information is measured over an appropriate period for each loan pool and adjusted as deemed appropriate. Qualitative
adjustments are incorporated into the pool level analysis to accommodate for the imprecision of certain assumptions and
uncertainties inherent in the calculation. See the "Loans" section of this Footnote for discussion of the determination of the
ACL for purchased impaired loans.
Certain inherent, but unconfirmed losses are probable within the loan portfolio. The Company’s current methodology for
determining the level of losses is based on historical loss rates, current credit grades, specific allocation, and other qualitative
adjustments. In a stable or deteriorating credit environment, heavy reliance on historical loss rates and the credit grade rating
process results in model-derived required reserves that tend to slightly lag behind portfolio deterioration. Similar lags can occur
in an improving credit environment whereby required reserves can lag slightly behind portfolio improvement. Given these
model limitations, qualitative adjustment factors may be incremental or decremental to the quantitative model results. In
periods prior to 2015, the Company estimated incurred losses on its Exploration and Production and its Oil Field Services
portfolios as an aggregate portfolio. Beginning in 2015, as the performance of these two portfolios began to diverge, the
Company disaggregated the analysis of incurred losses within these portfolios, which included modifying its LGD estimates for
the E&P portfolio to more closely align with published industry data. Absent this change, the Company would have recorded an
additional $10.0 million, or 17 cents per share, in provision expense for the year ended December 31, 2015.
The reserve for unfunded commitments is determined using similar methodologies described above for non-impaired loans.
The loss factors used in the reserve for unfunded commitments are equivalent to the loss factors used in the allowance for loan
losses, while also considering utilization of unused commitments.
FDIC LOSS SHARE RECEIVABLE
The Company entered into arrangements with the FDIC which obligate the FDIC to reimburse the Company for losses on
certain loans associated with FDIC-assisted transactions. The indemnification assets were recorded at fair value as of the
acquisition dates. The initial values of the indemnification assets were based on estimated cash flows to be received over the
expected life of the acquired assets, not to exceed the term of the indemnification agreements. The reimbursable loss periods,
excluding single family residential assets, ended in 2014 for three acquisitions, ended during 2015 for one acquisition, and will
end during 2016 for two acquisitions. The reimbursable loss periods for single family residential assets will end in 2019 for
three acquisitions, in 2020 for one acquisition, and in 2021 for two acquisitions. Assets are covered through expiration of the
loss share term, at which point such assets are considered non-covered.
Because the indemnification assets are measured on the same basis as the indemnified (covered) loans, subject to contractual
and collectibility limitations, the indemnification assets are impacted by changes in expected cash flows on covered assets.
Increases in credit losses expected to occur within the loss share term are generally recorded as current period increases to the
ACL and increase the amount collectible from the FDIC by the applicable loss share percentage. Decreases in credit losses
expected to occur within the loss share term reduce the amount collectible from the FDIC and increase the amount collectible
from customers in the form of prospective accretion on loans. Increases in the portion of indemnification asset collectible from
customers are amortized to income. Periodic amortization represents the amount that is expected to result in symmetrical
88
recognition of pool-level accretion and amortization over the shorter of 1) the life of the loan or 2) the life of the shared loss
agreement.
The Company assesses the indemnification assets for collectibility at the acquisition level based on three sources: 1) the FDIC,
2) OREO transactions, and 3) customers. Amounts collectible from the FDIC through loss reimbursements are comprised of
losses currently expected within the loss share term. A current period impairment would be recorded to the extent that events or
circumstances indicate that losses previously expected to occur within the loss share term are expected to occur subsequent to
loss share termination. Amounts collectible through expected gains on the sale of OREO are written-up or impaired each period
based on the best available information.
Loss assumptions used to measure the basis of the indemnified loans are consistent with the loss assumptions used to measure
the indemnification assets.
PREMISES AND EQUIPMENT
Land is carried at cost. Buildings, furniture, fixtures, and equipment are carried at cost, less accumulated depreciation
computed on a straight-line basis over the estimated useful lives of 10 to 40 years for buildings and 3 to 15 years for furniture,
fixtures, and equipment. Leasehold improvements are amortized over the lease term, including any renewal periods that are
reasonably assured, or the asset’s useful life, whichever is shorter. Premises and equipment are evaluated for impairment
whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
SOFTWARE
Software is amortized on a straight-line basis over its estimated useful life. The estimated useful life of software is generally
three years, but can vary depending on the specific facts and circumstances. Software is evaluated for impairment whenever
events or changes in circumstances indicate that the carrying amount of the software may not be recoverable. Software is
recorded within "other assets" on the Company’s consolidated balance sheets with carrying amounts at December 31, 2015 and
2014 of $6.2 million and $7.9 million, respectively.
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Goodwill represents the excess of the consideration paid in a business combination over the fair value of the identifiable net
assets acquired. Goodwill is not amortized, but is assessed for potential impairment at a reporting unit level on an annual basis,
as of October 1st, or whenever events or changes in circumstances indicate that it is more likely than not the fair value of a
reporting unit is less than its respective carrying amount. As part of its testing, the Company may elect to first assess qualitative
factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If
the results of the qualitative assessment indicate that more likely than not a reporting unit’s fair value is less than its carrying
amount, the Company determines the fair value of the respective reporting unit (through the application of various quantitative
valuation methodologies) relative to its carrying amount to determine whether quantitative indicators of potential impairment
are present (i.e., Step 1). The Company may also elect to bypass the qualitative assessment and begin with Step 1. If the results
of Step 1 indicate that the fair value of the reporting unit may be below its carrying amount, the Company determines the fair
value of the reporting unit’s assets and liabilities, considering deferred taxes, and then measures impairment loss by comparing
the implied fair value of goodwill with the carrying amount of that goodwill (i.e., Step 2).
Title Plant
Costs incurred to construct a title plant, including the costs incurred to obtain, organize, and summarize historical information,
are capitalized until the title plant can be used to perform title searches. A purchased title plant, including a purchased
undivided interest in a title plant, is recorded at cost at the date of acquisition. For a title plant acquired separately or as part of a
company acquisition, cost is measured as the fair value of the consideration given. Capitalized costs of a title plant are not
depreciated or charged to income unless circumstances indicate that the carrying amount of the title plant has been impaired.
Impairment indicators include a change in legal requirements or statutory practices, identification of obsolescence, or
abandonment of the title plant, among other indicators.
Capitalized storage and retrieval costs (e.g., costs to convert from one storage retrieval system to another or to modernize the
storage and retrieval systems) incurred after a title plant is operational are charged to expense in a systematic and rational
manner. Title plant is recorded within "other assets" on the Company’s consolidated balance sheets.
89
Intangible assets subject to amortization
The Company’s acquired intangible assets that are subject to amortization include (amongst other ancillary intangibles
described in Note 10) core deposit intangibles, amortized on a straight-line or accelerated basis, and a customer relationship
intangible asset, amortized on an accelerated basis, over average lives not to exceed 10 years. The Company reviews intangible
assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be
recoverable. Impairment is identified if the sum of the undiscounted estimated future cash flows is less than the carrying value
of the asset. Intangible assets are recorded within "other assets" on the Company’s consolidated balance sheets.
OTHER REAL ESTATE OWNED
Other real estate owned includes all real estate, other than bank premises used in bank operations, owned or controlled by the
Company, including real estate acquired in settlement of loans. Properties are initially recognized at the recorded investment of
the loan (which is the pro-rata carrying value of loans accounted for in accordance with ASC Topic 310-30, Receivables -
Loans and Debt Securities Acquired with Deteriorated Credit Quality) or at estimated fair value less costs to sell, whichever is
less, generally when the Company has received physical possession (legal title is not required for non-consumer residential
property). The amount by which the recorded investment of the loan exceeds the fair value less costs to sell of the property is
charged to the ALL. Subsequent to foreclosure, the assets are carried at the lower of cost or fair value less costs to sell. Former
bank properties transferred to OREO are recorded at the lower of cost or market. Subsequent declines in the fair value of other
real estate are recorded as adjustments to the carrying amount through a valuation allowance. Revenue and expenses from
operations, gain or loss on sale, and changes in the valuation allowance are included in net expenses from foreclosed assets.
The Company included property write-downs of $4.0 million and $3.8 million in earnings for the years ended December 31,
2015 and 2014, respectively. OREO is recorded within "other assets" on the Company’s consolidated balance sheets.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company enters into various derivative financial instruments to manage interest rate risk, asset sensitivity, and other
exposures such as liquidity and credit risk, as well as to facilitate customer transactions. The primary types of derivatives
utilized by the Company include interest rate swap agreements, interest rate lock commitments, forward sales commitments,
and written and purchased options. All derivative instruments are recognized on the consolidated balance sheets as "other
assets" or "other liabilities" at fair value, regardless of whether a right of offset exists. Changes in the fair value (i.e., gains or
losses) of a derivative instrument are recorded based on whether it has been designated and qualifies as part of a hedging
relationship.
To facilitate customer transactions that are entered outside of the Company's risk management strategies, the Company enters
into derivative instruments to allow its commercial customers to manage their exposure to interest rate fluctuations or to
facilitate business transactions. These derivative instruments, including interest rate swap agreements and foreign exchange
contracts, are not designated for hedge accounting (i.e., economic hedges). To mitigate the market risk associated with these
customer contracts, the Company enters into offsetting derivative contract positions. The Company manages its credit risk, or
potential risk of default, by its commercial customers through credit limit approval and monitoring procedures.
Derivatives Designated in Hedging Relationships
For cash flow hedges, the effective portion of the gain or loss related to the derivative instrument is initially reported as a
component of OCI and subsequently reclassified into earnings when the forecasted transaction affects earnings or when the
hedge is terminated. The ineffective portion of the gain or loss, if any, is reported in earnings immediately, in either "other
income" or "other expense", respectively. In applying hedge accounting for derivatives (ASC Topic 815-30 Derivatives and
Hedging - Cash Flow Hedges), the Company establishes and documents a method for assessing the effectiveness of the
hedging derivative and a measurement approach for determining the ineffective aspect of the hedge upon the inception of the
hedge.
Derivatives Not Designated in Hedging Relationships
For derivative instruments that are not designated as hedging instruments, changes in the fair value of the derivatives are
recognized in earnings immediately.
Common Types of Derivatives
Interest rate swap agreements
Interest rate swaps are agreements to exchange interest payments based upon notional amounts. The exchange of payments
typically involves paying a fixed rate and receiving a variable rate or vice versa.
90
As part of its activities to manage interest rate risk (i.e., the exposure to the variability of future cash flows or other forecasted
transactions due to fluctuating market rates), the Company enters into interest rate contracts, which typically include interest
rate swap agreements. The Company primarily utilizes these instruments, which the Company designates as cash flow hedges,
to convert a portion of its variable-rate loans or debt to a fixed rate.
Interest rate lock commitments
The Company enters into commitments to originate mortgage loans intended for sale whereby the interest rate on the
prospective loan is determined prior to funding (“rate lock”). A rate lock is provided to a borrower, subject to conditional
performance obligations, for a specified period of time that typically does not exceed 60 days. Rate lock commitments on
mortgage loans that are intended to be sold are recognized as derivatives. Accordingly, such commitments are recorded at fair
value as derivative assets or liabilities, with changes in fair value recorded in mortgage income on the consolidated statements
of comprehensive income.
Forward sales commitments
The Company uses forward sales commitments to protect the value of its rate locks and mortgage loans held for sale from
changes in interest rates and pricing between the origination of the rate lock and sale of these loans, as changes in interest rates
have the potential to cause a decline in value of rate locks and mortgage loans included in the held for sale portfolio. These
commitments are recognized as derivatives and recorded at fair value as derivative assets or liabilities, with changes in fair
value recorded in mortgage income on the consolidated statements of comprehensive income.
Equity-indexed certificates of deposit
IBERIABANK offers its customers a certificate of deposit that provides the purchaser a guaranteed return of principal at
maturity plus a potential return, which allows IBERIABANK to identify a known cost of funds. The rate of return is based on
the performance of a group of publicly traded stocks that represent a variety of industry segments. Because it is based on an
equity index, the rate of return represents an embedded derivative that is not clearly and closely related to the host instrument
and is to be accounted for separately. Accordingly, the certificate of deposit is separated into two components: a zero coupon
certificate of deposit (the host instrument) and a written option purchased by the depositor (an embedded derivative). The
discount on the zero coupon deposit is amortized over the life of the deposit, and the written option is carried at fair value on
the Company’s consolidated balance sheets, with changes in fair value recorded through earnings. IBERIABANK offsets the
risks of the written option by purchasing an option with terms that mirror the written option, which is also carried at fair value
on the Company’s consolidated balance sheets.
OFF-BALANCE SHEET CREDIT-RELATED FINANCIAL INSTRUMENTS
In the ordinary course of business, the Company executes various commitments to extend credit, including commitments under
commercial construction arrangements, commercial and home equity lines of credit, credit card arrangements, commercial
letters of credit, and standby letters of credit. Such financial instruments are recorded on the funding date.
TRANSFERS OF FINANCIAL ASSETS
Transfers of financial assets, or portions thereof which meet the definition of a participating interest, are accounted for as sales
when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when 1) the
assets have been legally isolated from the Company, 2) the transferee obtains the right, free of conditions that constrain it from
taking advantage of that right and provide the Company with more than a trivial benefit, to pledge or exchange the transferred
assets, and 3) the Company does not maintain effective control over the transferred assets. Should the transfer not satisfy all
three criteria, the transaction is recorded as a secured financing.
If the transfer is accounted for as a sale, the transferred assets are derecognized from the Company’s balance sheet and a gain or
loss on sale is recognized. If the transfer is accounted for as a secured borrowing, the transferred assets remain on the
Company’s balance sheet and the proceeds from the transaction are recognized as a liability.
Mortgage Servicing Rights
The Company recognizes the rights to service mortgage loans as separate assets, which are recorded in "other assets" in the
consolidated balance sheets, when purchased or when servicing is contractually separated from the underlying mortgage loans
by sale with servicing rights retained.
For loan sales with servicing retained, a servicing right (generally an asset) is recorded at fair value for the right to service the
loans sold. All servicing rights are identified by class and subsequently accounted for under the amortization method.
91
INCOME TAXES
The Company and all subsidiaries file a consolidated Federal income tax return on a calendar year basis. The Company files
income tax returns in the U.S. Federal jurisdiction and various state and local jurisdictions through IBERIABANK Corporation
(Parent), IBERIABANK, IMC, LTC, and their subsidiaries. In lieu of Louisiana state income tax, IBERIABANK is subject to
the Louisiana bank shares tax, portions of which are included in both "non-interest expense" and "income tax expense" in the
Company’s consolidated statements of comprehensive income. With few exceptions, the Company is no longer subject to U.S.
federal, state or local income tax examinations for years before 2011.
Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the
net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax
bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. The
measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence,
are not expected to be realized.
The Company recognizes interest and penalties accrued related to unrecognized tax benefits, if applicable, in "non-interest
expense".
SHARE-BASED COMPENSATION PLANS
The Company issues stock options, restricted stock awards, restricted share units, performance units, and phantom awards
under various plans to directors, officers, and other key employees. Compensation cost for all awards is recognized on a
straight-line basis over the requisite service period, which is generally the vesting period, taking into account retirement
eligibility. For service awards with graded vesting, the Company recognizes compensation cost on a straight-line basis. The
majority of the Company's share-based awards qualify for equity accounting and contain service conditions. Under equity
accounting, the fair value of the award is measured at the grant date and not subsequently remeasured.
In accordance with ASC 718 Compensation - Stock Compensation, for awards that contain a market condition, the Company
includes the market condition in the determination of the grant date fair value of the award. Compensation cost for an award
with a market condition is recognized regardless of whether the market condition is satisfied, assuming the requisite service is
met. The Company does not include performance conditions in the determination of the grant date fair value of the award.
Compensation cost for an award with a performance condition is not recognized if the performance condition is not satisfied.
Phantom awards and performance units, accounted for as liability awards, are remeasured at each reporting period based on
their fair value until the date of settlement. Compensation cost for each reporting period until settlement is based on the change
(or a portion of the change, depending on the percentage of the requisite service that has been rendered at the reporting date) in
the fair value of the phantom award and performance unit for each reporting period.
Compensation expense relating to share-based awards is recognized in net income as part of “salaries and employee benefits”
on the consolidated statements of comprehensive income for employees and “professional services” for non-employee
directors. The exercise price for the options granted by the Company is not less than the fair market value of the underlying
stock at the grant date.
EARNINGS PER COMMON SHARE
Basic earnings per share represents income available to common shareholders divided by the weighted average number of
common shares outstanding during the period. Diluted earnings per share reflects additional common shares that would have
been outstanding if dilutive potential common shares, in the form of stock options or restricted stock units, had been issued, as
well as any adjustment to income that would result from the assumed issuance. Participating common shares issued by the
Company relate to unvested outstanding restricted stock awards, the earnings allocated to which are used in determining
income available to common shareholders under the two-class method. The two-class method allocates earnings for the period
between common shareholders and other participating securities holders. The participating awards receiving dividends are
allocated the same percentage of income as if they were outstanding shares.
SHARE REPURCHASES
Repurchases of the Company’s common stock are recorded at cost.
Effective January 1, 2015, companies incorporated in Louisiana became subject to the Louisiana Business Corporation Act
(which replaced the Louisiana Business Corporation Law). Provisions of the Louisiana Business Corporation Act eliminated
the concept of treasury stock and provide that shares reacquired by a company are to be treated as authorized but unissued
shares. As a result of this change in law, for the consolidated financial statements beginning with the quarterly period ended
92
March 31, 2015, the Company classifies shares previously classified as treasury stock as a reduction to issued shares of
common stock, and accordingly, adjusts the stated value of common stock and paid-in-capital.
COMPREHENSIVE INCOME
Accounting principles generally require that recognized revenue, expenses, gains, and losses be included in net income.
Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities and cash
flow hedges, are reported as a separate component of the shareholders’ equity section of the consolidated balance sheets, such
items, along with net income, are components of comprehensive income.
FAIR VALUE MEASUREMENTS
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement
date. The Company estimates fair value based on the assumptions market participants would use when selling an asset or
transferring a liability and characterizes such measurements within the fair value hierarchy based on the inputs used to develop
those assumptions and measure fair value. The hierarchy requires the Company to maximize the use of observable inputs and
minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
• Level 1 - Quoted prices in active markets for identical assets or liabilities.
• Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and
liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or
other inputs that are observable or can be corroborated by observable market data.
• Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of
the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques
that use significant unobservable inputs.
A description of the valuation methodologies used for instruments measured at fair value follows, as well as the classification
of such instruments within the valuation hierarchy. The descriptions below are exclusive of assets or liabilities acquired in
business combinations, as all such instruments are required to initially be measured at fair value.
Cash and cash equivalents
The carrying amounts of cash and cash equivalents approximate their fair value.
Investment securities
Securities are classified within Level 1 where quoted market prices are available in an active market. Inputs include securities
that have quoted prices in active markets for identical assets. If quoted market prices are unavailable, fair value is estimated
using quoted prices of securities with similar characteristics, at which point the securities are classified within Level 2 of the
hierarchy.
Mortgage loans held for sale
Mortgage loans originated and held for sale are recorded at fair value under the fair value option, unless otherwise noted. When
determining the fair value of loans held for sale, the Company obtains quotes or bids on these loans directly from the
purchasing financial institutions (Level 2).
Loans
The fair values of non-covered mortgage loans are estimated based on present values using entry-value rates (the interest rate
that would be charged for a similar loan to a borrower with similar risk at the indicated balance sheet date) at December 31,
2015 and 2014, weighted for varying maturity dates. Other non-covered loans are valued based on present values using entry-
value interest rates at December 31, 2015 and 2014 applicable to each category of loans, which are classified within Level 3 of
the hierarchy. Covered loans are measured using projections of expected cash flows, exclusive of the loss sharing agreements
with the FDIC. Fair value of the covered loans reflects the current fair value of these loans, which is based on an updated
estimate of the projected cash flow as of the dates indicated. The fair value associated with the loans includes estimates related
to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows, which
also are classified within Level 3 of the hierarchy.
93
Impaired loans
Loans are measured for impairment using the methods permitted by ASC Topic 310, Receivables. Fair value measurements are
used in determining impairment using either the loan’s observable market price (Level 1), if available, or the fair value of the
collateral, if the loan is collateral dependent (Level 2). Measuring the impairment of loans using the present value of expected
future cash flows, discounted at the loan’s effective interest rate, is not considered a fair value measurement. Fair value of the
collateral is determined by appraisals or independent valuation.
FDIC Loss Share Receivables
The fair value of FDIC loss share receivables are determined using projected cash flows from loss sharing agreements based on
expected reimbursements for losses at the applicable loss sharing percentages based on the terms of the loss share agreements.
Cash flows are discounted to reflect the timing and receipt of the loss sharing reimbursements from the FDIC. The fair value of
the Company’s FDIC loss share receivables are categorized within Level 3 of the hierarchy.
Other real estate owned
Fair values of OREO are determined by sales agreement or appraisal and costs to sell are based on estimation per the terms and
conditions of the sales agreement or amounts commonly used in real estate transactions. Inputs include appraisal values on the
properties or recent sales activity for similar assets in the property’s market, and thus OREO measured at fair value is classified
within Level 2 of the hierarchy.
Derivative financial instruments
Fair values of interest rate swaps, interest rate locks, forward sales commitments, and written and purchased options are
estimated using prices of financial instruments with similar characteristics and thus are classified within Level 2 of the fair
value hierarchy.
Deposits
The fair values of NOW accounts, money market deposits and savings accounts are the amounts payable on demand at the
reporting date. Certificates of deposit are valued using a discounted cash flow model based on the weighted-average rate at
December 31, 2015 and 2014 for deposits with similar remaining maturities. The fair value of the Company’s deposits are
categorized within Level 3 of the fair value hierarchy.
Short-term borrowings
The carrying amounts of short-term borrowings maturing within ninety days approximate their fair values.
Long-term debt
The fair values of long-term debt are estimated using discounted cash flow analyses based on the Company’s current
incremental borrowing rates for similar types of borrowing arrangements. The fair value of the Company’s long-term debt is
categorized within Level 3 of the fair value hierarchy.
Off-balance sheet items
The Company has outstanding commitments to extend credit and standby letters of credit. These off-balance sheet financial
instruments are generally exercisable at the market rate prevailing at the date the underlying transaction will be completed. At
December 31, 2015 and 2014, the fair value of guarantees under commercial and standby letters of credit was immaterial.
NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS
ASU No. 2014-01
In January 2014, the FASB issued ASU No. 2014-01, Investments - Equity Method and Joint Ventures (Topic 323): Accounting
for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force). The ASU
allows for use of the proportional amortization method for investments in qualified affordable housing projects, if certain
conditions are met. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to
the tax credits and other tax benefits received and the net investment performance is recognized in the consolidated statements
of comprehensive income as a component of income tax expense. The ASU provides for a practical expedient, which allows for
amortization of the investment in proportion to only the tax credits if it produces a measurement that is substantially similar to
the measurement that would result from using both tax credits and other tax benefits.
94
The ASU was effective for fiscal years and interim periods beginning after December 15, 2014. The Company adopted this
guidance effective January 1, 2015, utilizing the practical expedient method. Amortization expense related to qualified
affordable housing investments has been presented net of the income tax credits in "income tax expense" in the consolidated
statements of comprehensive income. The standard was required to be applied retrospectively; therefore, prior periods have
been restated in accordance with GAAP. The impact of the adoption of ASU 2014-01 was not material to the consolidated
financial statements in current or prior periods.
ASU No. 2014-09 and 2015-14
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which implements a common
revenue standard and clarifies the principles used for recognizing revenue. The amendments in the ASU clarify that an entity
should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. As part of that principle, the
entity should identify the contract(s) with the customer, identify the performance obligation(s) of the contract, determine the
transaction price, allocate that transaction price to the performance obligation(s) of the contract, and then recognize revenue
when or as the entity satisfies the performance obligation(s).
In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date,
which deferred the original effective date declared in ASU No. 2014-09 by one year. Accordingly, the amendments in ASU No.
2014-09 will be effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods
within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15,
2016, including interim reporting periods within that annual reporting period. The amendments will be applied through the
election of one of two retrospective methods. The Company is currently assessing the effect, but does not expect the adoption
will have a significant impact on the Company’s consolidated financial statements.
ASU No. 2015-02
In February 2015, the FASB issued ASU No. 2015-02, Consolidation - Amendments to the Consolidation Analysis, which
changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal
entities. The amendments in the guidance: 1) modify the evaluation of whether limited partnerships and similar legal entities
are variable interest entities or voting interest entities, 2) eliminate the presumption that a general partner should consolidate a
limited partnership, 3) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that
have fee arrangements and related party relationships, and 4) provide a scope exception from consolidation guidance for certain
investment funds.
ASU No. 2015-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15,
2015. The guidance may be applied using a modified retrospective approach by recording a cumulative effect adjustment to
equity as of the beginning of the fiscal year of adoption. The amendments may also be applied retrospectively. The Company
does not believe the adoption of the ASU will have a significant impact on the Company’s consolidated financial statements.
ASU No. 2015-03
In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt
Issuance Costs, in an effort to comply with its simplification initiative to reduce complexity in accounting standards. ASU No.
2015-03 requires debt issuance costs related to a debt liability be presented in the balance sheet as a direct deduction from the
carrying amount of the debt liability. ASU No. 2015-03 does not affect recognition and measurement guidance for debt
issuance costs.
ASU No. 2015-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15,
2015. The amendment will be applied retrospectively. The adoption of this ASU will not have a significant impact on the
Company's consolidated financial statements.
ASU No. 2015-05
In April 2015, the FASB issued ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):
Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides guidance to customers about
whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software
license, then the customer should account for the software license element of the arrangement consistent with the acquisition of
other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for
the arrangement as a service contract. The determination of whether an arrangement contains a software license may impact the
classification of the costs associated with the arrangement and the reporting period in which the costs are recognized as
expense.
95
The amendments will be effective for annual periods, including interim periods within those annual periods, beginning after
December 15, 2015. The Company has determined it will elect to adopt the amendments prospectively to all arrangements
entered into or materially modified beginning January 1, 2016. The amendments will be applied prospectively on an individual
arrangement basis and the impact to the Company’s consolidated financial statements will vary depending on the terms and
conditions of the individual arrangement.
ASU No. 2015-16
In September 2015, the FASB issued ASU No. 2015-16, Business Combinations: Simplifying the Accounting for Measurement-
Period Adjustments. ASU No. 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are
identified during the measurement period in the reporting period in which the adjustment amounts are determined and present
separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current period
earnings by line item that would have been have been recorded in previous reporting periods if the adjustment had been
recognized as of the acquisition date.
ASU No. 2015-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15,
2015. The guidance must be applied prospectively for adjustments to provisional amounts that occur after the effective date of
this update with earlier application permitted for financial statements that have not been issued. The Company adopted this
guidance effective September 30, 2015. The adoption of this ASU did not have a material impact on the Company’s
consolidated financial statements.
ASU No. 2016-01
In January 2016, the FASB issued ASU No. 2016-01, Financial Statements - Overall (Subtopic 825-10): Recognition and
Measurement of Financial Assets and Financial Liabilities. The amendments will not change the guidance for classifying and
measuring investments in debt securities or loans; however, the significant amendments will include changes related to how
entities measure certain equity investments, recognize changes in the fair value of financial liabilities measured under the fair
value option that are attributable to instrument-specific credit risk, and disclose and present financial assets and liabilities on
the Company’s consolidated financial statements.
Specifically, the aforementioned amendments will require measurement of equity investments at fair value, with changes
recognized in net income, unless the investments qualify for the new practicability exception, the equity method of accounting,
or consolidation. For financial liabilities measured using the fair value option, any change in fair value caused by a change in
an entity’s own credit risk will be recognized separately in OCI, as opposed to earnings. The amendments will also require
entities to present financial assets and financial liabilities separately, grouped by measurement category and form of financial
asset in the statement of financial position or in the accompanying notes to the financial statements. Entities will also no longer
have to disclose the methods and significant assumptions for financial instruments measured at amortized cost, but will be
required to measure such instruments under the “exit price” notion for disclosure purposes.
ASU No. 2016-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15,
2017. An entity will record a cumulative-effect adjustment to beginning retained earnings as of the beginning of the first
reporting period in which the guidance is adopted, with two exceptions. The amendments related to equity investments without
readily determinable fair values (including disclosure requirements) will be effective prospectively. The requirement to use the
exit price notion to measure the fair value of financial instruments for disclosure purposes will also be applied prospectively.
The Company is currently evaluating the impact of the ASU on the Company’s consolidated financial statements.
NOTE 3 –ACQUISITION ACTIVITY
2015 Acquisitions
Acquisition of Florida Bank Group, Inc.
On February 28, 2015, the Company acquired Florida Bank Group, Inc. ("Florida Bank Group"), the holding company of
Florida Bank, a Tampa, Florida-based commercial bank servicing Tampa, Tallahassee and Jacksonville, Florida. Under the
terms of the agreement, Florida Bank Group shareholders received a combination of cash and shares of the Company’s
common stock. Florida Bank Group shareholders received cash equal to $7.81 per share of then outstanding Florida Bank
Group common stock, including shares of preferred stock that converted to common shares in the acquisition. Each Florida
Bank Group common share was exchanged for 0.149 of a share of the Company’s common stock, as well as a cash payment for
any fractional share. All unexercised Florida Bank Group stock options at the closing date were settled for cash at fair value
based on the closing price.
96
The Company acquired all of the outstanding common stock of the former Florida Bank Group shareholders for total
consideration of $90.5 million, which resulted in goodwill of $15.7 million, as shown in the table below. With this acquisition,
IBERIABANK entered the Tampa, Tallahassee and Jacksonville areas of Florida through the addition of 12 bank offices and an
experienced in-market team that enhances IBERIABANK's ability to compete in those markets. The Company projects cost
savings will be recognized in future periods through the elimination of redundant operations. The following summarizes
consideration paid and a preliminary allocation of purchase price to net assets acquired.
Number of
Shares
Amount
752,493 $
Fair value of net assets assumed including identifiable intangible assets
Goodwill
$
Acquisition of Old Florida Bancshares, Inc.
On March 31, 2015, the Company acquired Old Florida Bancshares, Inc. (“Old Florida”), the holding company of Old Florida
Bank and New Traditions Bank, which were Orlando, Florida-based commercial banks. Under the terms of the agreement, for
each share of Old Florida common stock outstanding, Old Florida shareholders received 0.34 of a share of the Company’s
common stock, as well as a cash payment for any fractional share.
The Company acquired all of the outstanding common stock of the former Old Florida shareholders for total consideration of
$253.2 million, which resulted in goodwill of $99.6 million, as shown in the table below. With this acquisition, IBERIABANK
entered into the Orlando, Florida MSA through the addition of 14 bank offices and an experienced in-market team. The
Company projects cost savings will be recognized in future periods through the elimination of redundant operations. The
following summarizes consideration paid and a preliminary allocation of purchase price to net assets acquired.
Number of
Shares
Amount
3,839,554 $
(Dollars in thousands)
Equity consideration
Common stock issued
Total equity consideration
Non-Equity consideration
Cash
Total consideration paid
(Dollars in thousands)
Equity consideration
Common stock issued
Total equity consideration
Non-Equity consideration
Cash
Total consideration paid
47,497
47,497
42,988
90,485
74,781
15,704
242,007
242,007
11,145
253,152
153,514
99,638
Fair value of net assets assumed including identifiable intangible assets
Goodwill
$
Acquisition of Georgia Commerce Bancshares, Inc.
On May 31, 2015, the Company acquired Georgia Commerce Bancshares, Inc. (“Georgia Commerce”), the holding company of
Georgia Commerce Bank. Under the terms of the agreement, Georgia Commerce shareholders received 0.6134 of a share of the
Company's common stock for each of the Georgia Commerce common stock shares outstanding, as well as a cash payment for
any fractional share. All unexercised Georgia Commerce stock options on the closing date were settled for cash at fair value
based on the closing price.
The Company acquired all of the outstanding common stock of the former Georgia Commerce shareholders for total
consideration of $190.3 million, which resulted in goodwill of $87.3 million, as shown in the table below. With this acquisition,
IBERIABANK entered into the Atlanta, Georgia MSA through the addition of nine bank offices and an experienced in-market
team. The Company projects cost savings will be recognized in future periods through elimination of redundant operations.
The following summarizes consideration paid and a preliminary allocation of purchase price to net assets acquired.
97
(Dollars in thousands)
Equity consideration
Common stock issued
Total equity consideration
Non-Equity consideration
Cash
Total consideration paid
Number of
Shares
Amount
2,882,357 $
185,249
185,249
5,015
190,264
102,945
87,319
Fair value of net assets assumed including identifiable intangible assets
Goodwill
$
The Company accounted for the aforementioned business combinations under the acquisition method in accordance with ASC
Topic 805, Business Combinations. Accordingly, for each transaction the purchase price is allocated to the fair value of the
assets acquired and liabilities assumed as of the date of acquisition. The following purchase price allocations on these
acquisitions are preliminary and will be finalized upon the receipt of final valuations on certain assets and liabilities. In
conjunction with the adoption of ASU 2015-16 as of September 30, 2015, upon receipt of final fair value estimates during the
measurement period, which must be within one year of the acquisition dates, the Company will record any adjustments to the
preliminary fair value estimates in the reporting period in which the adjustments are determined. Information regarding the
Company's loan discounts and related deferred tax assets, core deposit intangible assets and related deferred tax liabilities, as
well as income taxes payable and the related deferred tax balances, among other assets and liabilities recorded in the
acquisitions, may be adjusted as the Company refines its estimates. Determining the fair value of assets and liabilities,
particularly illiquid assets and liabilities, is a complicated process involving significant judgment. Fair value adjustments based
on updated estimates could materially affect the goodwill recorded on the acquisitions. The Company may incur losses on the
acquired loans that are materially different from losses the Company originally projected and included in the fair value
estimates of loans.
The acquired assets and liabilities, as well as the preliminary adjustments to record those assets and liabilities at their estimated
fair values, are presented in the following tables.
Florida Bank Group
(Dollars in thousands)
Assets
Cash and cash equivalents
Investment securities
Loans
Other real estate owned
Core deposit intangible
Deferred tax asset, net
Other assets
Total Assets
Liabilities
Interest-bearing deposits
Non-interest-bearing deposits
Borrowings
Other liabilities
Total Liabilities
As Acquired
Preliminary
Fair Value
Adjustments
As recorded by
the Company
$
$
$
$
72,982 $
107,236
312,902
498
—
19,889
29,817
543,324 $
282,417 $
109,548
60,000
1,898
453,863 $
— $
136 (1)
(5,371 ) (2)
(75 ) (3)
4,489 (4)
8,569 (5)
(8,949 ) (6)
(1,201 ) $
263 (7) $
—
8,598 (8)
4,618 (9)
13,479 $
72,982
107,372
307,531
423
4,489
28,458
20,868
542,123
282,680
109,548
68,598
6,516
467,342
98
Explanation of certain fair value adjustments:
(1) The amount represents the adjustment of the book value of Florida Bank Group’s investments to their estimated fair
values on the date of acquisition.
(2) The amount represents the adjustment of the book value of Florida Bank Group's loans to their estimated fair values
based on current interest rates and expected cash flows, which includes estimates of expected credit losses inherent in
the portfolio.
(3) The adjustment represents the adjustment of Florida Bank Group's OREO to its estimated fair value less costs to sell on
the date of acquisition.
(4) The amount represents the fair value of the core deposit intangible asset created in the acquisition.
(5) The amount represents the net deferred tax asset recognized on the fair value adjustments of Florida Bank Group
acquired assets and assumed liabilities.
(6) The amount represents the adjustment of the book value of Florida Bank Group’s property, equipment, and other assets
to their estimated fair values at the acquisition date based on their appraised value.
(7) The amount represents the adjustment of the book value of Florida Bank Group's time deposits to their estimated fair
values at the date of acquisition.
(8) The amount represents the adjustment of the book value of Florida Bank Group’s borrowings to their estimated fair
value based on current interest rates and the credit characteristics inherent in the liability.
(9) The amount is necessary to record Florida Bank Group's rent liability at fair value.
Old Florida
(Dollars in thousands)
Assets
Cash and cash equivalents
Investment securities
Loans held for sale
Loans
Other real estate owned
Core deposit intangible
Deferred tax asset, net
Other assets
Total Assets
Liabilities
Interest-bearing deposits
Non-interest-bearing deposits
Borrowings
Other liabilities
Total Liabilities
As Acquired
Preliminary
Fair Value
Adjustments
As recorded by
the Company
$
$
$
$
360,688 $
67,209
5,952
1,073,773
4,515
—
10,629
30,549
1,553,315 $
1,048,765 $
340,869
1,528
3,038
1,394,200 $
— $
—
—
(10,822 ) (1)
1,449 (2)
6,821 (3)
4,388 (4)
(7,238 ) (5)
(5,402 ) $
123 (6) $
—
—
76 (7)
199 $
360,688
67,209
5,952
1,062,951
5,964
6,821
15,017
23,311
1,547,913
1,048,888
340,869
1,528
3,114
1,394,399
99
Explanation of certain fair value adjustments:
(1) The amount represents the adjustment of the book value of Old Florida's loans to their estimated fair values based on
current interest rates and expected cash flows, which includes estimates of expected credit losses inherent in the
portfolio.
(2) The adjustment represents the adjustment of Old Florida's OREO to its estimated fair value less costs to sell on the date
of acquisition.
(3) The amount represents the fair value of the core deposit intangible asset created in the acquisition.
(4) The amount represents the net deferred tax asset recognized on the fair value adjustments of Old Florida acquired assets
and assumed liabilities.
(5) The amount represents the adjustment of the book value of Old Florida’s property, equipment, and other assets to their
estimated fair values at the acquisition date based on their appraised value.
(6) The amount represents the adjustment of the book value of Old Florida's time deposits to their estimated fair values on
the date of acquisition.
(7) The adjustment is necessary to record Old Florida's rent liability at fair value.
Georgia Commerce
(Dollars in thousands)
Assets
Cash and cash equivalents
Investment securities
Loans held for sale
Loans
Other real estate owned
Core deposit intangible
Deferred tax asset, net
Other assets
Total Assets
Liabilities
Interest-bearing deposits
Non-interest-bearing deposits
Borrowings
Other liabilities
Total Liabilities
As Acquired
Preliminary
Fair Value
Adjustments
As recorded by
the Company
$
$
$
$
51,059 $
135,710
1,249
807,726
9,795
—
5,031
28,952
1,039,522 $
658,133 $
249,739
13,203
6,221
927,296 $
— $
(806 ) (1)
—
(15,606 ) (2)
(4,207 ) (3)
6,720 (4)
5,451 (5)
(657 ) (6)
(9,105 ) $
176 (7) $
—
—
—
176 $
51,059
134,904
1,249
792,120
5,588
6,720
10,482
28,295
1,030,417
658,309
249,739
13,203
6,221
927,472
Explanation of certain fair value adjustments:
(1) The amount represents the adjustment of the book value of Georgia Commerce’s investments to their estimated fair
values on the date of acquisition.
(2) The amount represents the adjustment of the book value of Georgia Commerce's loans to their estimated fair values
based on current interest rates and expected cash flows, which includes estimates of expected credit losses inherent in
the portfolio.
(3) The adjustment represents the adjustment of Georgia Commerce's OREO to its estimated fair value less costs to sell on
the date of acquisition.
(4) The amount represents the fair value of the core deposit intangible asset created in the acquisition.
(5) The amount represents the net deferred tax asset recognized on the fair value adjustments of Georgia Commerce
acquired assets and assumed liabilities.
(6) The amount represents the adjustment of the book value of Georgia Commerce’s property, equipment, and other assets
to their estimated fair value at the acquisition date based on their appraised value.
(7) The amount represents the adjustment of the book value of Georgia Commerce's time deposits to their estimated fair
values at the date of acquisition.
100
Supplemental unaudited pro forma information
The following unaudited pro forma information for the years ended December 31, 2014 and 2013 reflect the Company’s
estimated consolidated results of operations as if the acquisitions of Florida Bank Group, Old Florida, and Georgia Commerce
occurred at January 1, 2014, unadjusted for potential cost savings and preliminary purchase price adjustments.
(Dollars in thousands, except per share data)
Interest and non-interest income
Net income
Earnings per share - basic
Earnings per share - diluted
$
2014
803,722 $
172,554
4.39
4.38
2013
699,308
69,625
1.88
1.88
The Company’s consolidated financial statements as of and for the year ended December 31, 2015 include the operating results
of the acquired assets and assumed liabilities for the days subsequent to the respective acquisition dates. Due to the system
conversions of the acquired entities throughout the current year and subsequent streamlining and integration of the operating
activities into those of the Company, historical reporting for the former Florida Bank Group, Old Florida, and Georgia
Commerce branches is impracticable and thus disclosure of the revenue from the assets acquired and income before income
taxes is impracticable for the period subsequent to acquisition.
2014 Acquisitions
During 2014, the Company completed the acquisitions of Trust-One Memphis, Teche and First Private. The following table
summarizes consideration paid, net assets acquired and goodwill recognized.
(Dollars in thousands)
Trust One Bank - Memphis Operations
Teche Holding Company
First Private Holdings, Inc.
Consideration
Paid
Net Assets
Acquired
Goodwill
Recognized
$
— $
156,740
58,640
(8,596) $
76,311
32,387
8,596
80,429
26,253
In addition, during 2014, the Company's subsidiary, LTC, acquired certain assets from The Title Company, LLC, a title office in
Baton Rouge, Louisiana, and Louisiana Abstract and Title, LLC, a title office in Shreveport, Louisiana. These two acquisitions
were immaterial and the assets recognized were primarily from goodwill and additional intangible assets.
101
NOTE 4 – INVESTMENT SECURITIES
The amortized cost and fair values of investment securities, with gross unrealized gains and losses, consist of the following:
(Dollars in thousands)
Securities available for sale:
U.S. Government-sponsored enterprise obligations
Obligations of state and political subdivisions
Mortgage-backed securities
Other securities
Total securities available for sale
Securities held to maturity:
Obligations of state and political subdivisions
Mortgage-backed securities
Total securities held to maturity
(Dollars in thousands)
Securities available for sale:
U.S. Government-sponsored enterprise obligations
Obligations of state and political subdivisions
Mortgage-backed securities
Other securities
Total securities available for sale
Securities held to maturity:
U.S. Government-sponsored enterprise obligations
Obligations of state and political subdivisions
Mortgage-backed securities
Total securities held to maturity
December 31, 2015
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
252,514 $
182,541
2,272,879
95,496
2,803,430 $
69,979 $
28,949
98,928 $
1,161 $
5,429
8,457
430
15,477 $
2,803 $
107
2,910 $
(1,592) $
(9)
(16,523)
(497)
(18,621) $
(101) $
(776)
(877) $
252,083
187,961
2,264,813
95,429
2,800,286
72,681
28,280
100,961
December 31, 2014
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
317,386 $
86,513
1,741,917
1,460
2,147,276 $
10,000 $
77,597
29,363
116,960 $
1,700 $
3,679
16,882
35
22,296 $
88 $
3,153
151
3,392 $
(3,533 ) $
(2 )
(7,184 )
—
(10,719 ) $
— $
(145 )
(726 )
(871 ) $
315,553
90,190
1,751,615
1,495
2,158,853
10,088
80,605
28,788
119,481
$
$
$
$
$
$
$
$
Securities with carrying values of $1.4 billion were pledged to secure public deposits and other borrowings at both
December 31, 2015 and 2014.
102
Information pertaining to securities with gross unrealized losses, aggregated by investment category and length of time that
individual securities have been in a continuous loss position, is as follows:
December 31, 2015
Less Than Twelve Months
Over Twelve Months
Total
Gross
Unrealized
Losses
Estimated
Fair Value
Gross
Unrealized
Losses
Estimated
Fair Value
Gross
Unrealized
Losses
Estimated
Fair Value
$
(1,214 ) $ 177,839
$
(378 ) $ 28,116
$
(1,592 ) $ 205,955
(Dollars in thousands)
Securities available for sale:
U.S. Government-sponsored enterprise
obligations
Obligations of state and political
subdivisions
Mortgage-backed securities
Other securities
(9 )
(11,737 )
(488 )
5,765
1,279,914
51,975
Total securities available for sale
$ (13,448 ) $ 1,515,493 $
Securities held to maturity:
Obligations of state and political
subdivisions
Mortgage-backed securities
Total securities held to maturity
$
$
(9 ) $
(45 )
(54 ) $
$
1,999
3,530
5,529 $
—
(9)
(4,786)
—
185,215
499
5,765
(16,523) 1,465,129
52,474
(5,173 ) $ 213,830 $ (18,621 ) $ 1,729,323
(497)
(9)
(92 ) $
$
4,162
17,573
(731)
(823 ) $ 21,735 $
(101 ) $
(776)
(877 ) $
6,161
21,103
27,264
(Dollars in thousands)
Securities available for sale:
U.S. Government-sponsored enterprise
obligations
Obligations of state and political
subdivisions
Mortgage-backed securities
Total securities available for sale
Securities held to maturity:
Obligations of state and political
subdivisions
Mortgage-backed securities
Total securities held to maturity
December 31, 2014
Less Than Twelve Months
Over Twelve Months
Total
Gross
Unrealized
Losses
Estimated
Fair Value
Gross
Unrealized
Losses
Estimated
Fair Value
Gross
Unrealized
Losses
Estimated
Fair Value
$
—
$
—
$
(3,533 ) $ 240,498
$
(3,533 ) $ 240,498
(2)
185
304,686
(1,189)
(1,191 ) $ 304,871 $
—
—
294,549
185
599,235
(5,995 )
(9,528 ) $ 535,047 $ (10,719 ) $ 839,918
(7,184 )
(2 )
(9 ) $
—
(9 ) $
$
2,287
—
2,287 $
(136 ) $
$
8,590
20,812
(726 )
(862 ) $ 29,402 $
(145 ) $
(726 )
(871 ) $
10,877
20,812
31,689
$
$
$
The Company assessed the nature of the unrealized losses in its portfolio as of December 31, 2015 and 2014 to determine if
there are losses that should be deemed other-than-temporary. In its analysis of these securities, management considered
numerous factors to determine whether there were instances where the amortized cost basis of the debt securities would not be
fully recoverable, including, but not limited to:
• The length of time and extent to which the estimated fair value of the securities was less than their amortized cost,
• Whether adverse conditions were present in the operations, geographic area, or industry of the issuer,
• The payment structure of the security, including scheduled interest and principal payments, including the issuer’s failures
to make scheduled payments, if any, and the likelihood of failure to make scheduled payments in the future,
• Changes to the rating of the security by a rating agency, and
• Subsequent recoveries or additional declines in fair value after the balance sheet date.
103
Management believes it has considered these factors, as well as all relevant information available, when determining the
expected future cash flows of the securities in question. In each instance, management has determined the cost basis of the
securities would be fully recoverable. Management also has the intent to hold debt securities until their maturity or anticipated
recovery if the security is classified as available for sale. In addition, management does not believe the Company will be
required to sell debt securities before the anticipated recovery of the amortized cost basis of the security. As a result of the
Company's analysis, no declines in the estimated fair value of the Company's investment securities were deemed to be other-
than-temporary at December 31, 2015 or 2014.
At December 31, 2015, 252 debt securities had unrealized losses of 1.10% of the securities’ amortized cost basis. At
December 31, 2014, 112 debt securities had unrealized losses of 1.31% of the securities’ amortized cost basis. The unrealized
losses for each of the securities related to market interest rate changes and not credit concerns of the issuers. Additional
information on securities that have been in a continuous loss position for over twelve months at December 31 is presented in
the following table.
(Dollars in thousands)
Number of securities
Issued by Fannie Mae, Freddie Mac, or Ginnie Mae
Issued by political subdivisions
Other
Amortized Cost Basis
Issued by Fannie Mae, Freddie Mac, or Ginnie Mae
Issued by political subdivisions
Other
Unrealized Loss
Issued by Fannie Mae, Freddie Mac, or Ginnie Mae
Issued by political subdivisions
Other
2015
2014
40
2
1
43
236,800 $
4,253
508
241,561 $
5,895 $
92
9
5,996 $
66
5
—
71
566,113
8,727
—
574,840
10,254
136
—
10,390
$
$
$
$
The Fannie Mae, Freddie Mac, and Ginnie Mae securities are rated AA+ by S&P and Aaa by Moodys. Two of the securities in
a continuous loss position for over twelve months were issued by political subdivisions. The securities issued by political
subdivisions have S&P credit ratings ranging from AA to AAA and Moody's credit ratings ranging from Aa2 to Aaa.
The amortized cost and estimated fair value of investment securities by maturity at December 31, 2015 are presented in the
following table. Securities are classified according to their contractual maturities without consideration of principal
amortization, potential prepayments or call options. Accordingly, actual maturities may differ from contractual maturities.
Weighted average yields are calculated on the basis of the yield to maturity based on the amortized cost of each security.
Securities Available for Sale
Securities Held to Maturity
(Dollars in thousands)
Within one year or less
One through five years
After five through ten years
Over ten years
Weighted
Average
Yield
Estimated
Fair
Value
14,373
2.02 % $
318,718
1.72
506,856
2.31
2.14
1,960,339
2.12 % $ 2,803,430 $ 2,800,286
Amortized
Cost
14,360 $
318,423
501,217
1,969,430
Weighted
Average
Yield
Amortized
Cost
Estimated
Fair
Value
3.83 % $
3.06
2.89
2.91
2.93% $
75 $
13,627
16,278
68,948
98,928 $
75
13,989
16,914
69,983
100,961
104
The following is a summary of realized gains and losses from the sale of securities classified as available for sale. Gains or
losses on securities sold are recorded on the trade date, using the specific identification method.
(Dollars in thousands)
Realized gains
Realized losses
Year Ended December 31
2015
2014
2013
$
$
1,834 $
(259)
1,575 $
863 $
(92)
771 $
2,387
(110)
2,277
In addition to the gains above, the Company realized certain immaterial gains on calls of securities held to maturity.
Other Equity Securities
The Company accounts for the following securities at amortized cost, which approximates fair value, in “other assets” on the
consolidated balance sheets at December 31:
(Dollars in thousands)
Federal Home Loan Bank (FHLB) stock
Federal Reserve Bank (FRB) stock
Other investments
2015
2014
16,265 $
48,584
1,159
66,008 $
38,476
34,348
1,306
74,130
$
$
105
NOTE 5 – LOANS
Loans consist of the following, segregated into legacy and acquired loans, for the periods indicated:
(Dollars in thousands)
Commercial loans:
Real estate
Commercial and industrial
Energy-related
Residential mortgage loans:
Residential 1-4 family
Construction / Owner Occupied
Consumer and other loans:
Home equity
Indirect automobile
Other
Total
(Dollars in thousands)
Commercial loans:
Real estate
Commercial and industrial
Energy-related
Residential mortgage loans:
Residential 1-4 family
Construction / Owner Occupied
Consumer and other loans:
Home equity
Indirect automobile
Other
Total
Legacy Loans
December 31, 2015
Acquired Loans
Total
$
4,504,062 $
2,952,102
677,177
8,133,341
1,569,449 $
492,476
3,589
2,065,514
6,073,511
3,444,578
680,766
10,198,855
610,986
83,037
694,023
1,575,643
246,214
541,299
2,363,156
$ 11,190,520 $
501,296
—
501,296
1,112,282
83,037
1,195,319
490,524
84
79,490
570,098
2,066,167
246,298
620,789
2,933,254
3,136,908 $ 14,327,428
Legacy Loans
December 31, 2014
Acquired Loans
$
3,676,811 $
2,452,521
872,866
7,002,198
495,638
32,056
527,694
684,968 $
119,174
7,742
811,884
552,603
—
552,603
Total
4,361,779
2,571,695
880,608
7,814,082
1,048,241
32,056
1,080,297
1,290,976
396,766
451,080
2,138,822
9,668,714 $
310,129
392
97,322
407,843
1,601,105
397,158
548,402
2,546,665
1,772,330 $ 11,441,044
$
Since 2009, the Company has acquired certain assets and liabilities of six failed banks. Substantially all of the loans and
foreclosed real estate that were acquired through these transactions were covered by loss share agreements between the FDIC
and IBERIABANK, which afforded IBERIABANK loss protection. Covered loans, which are included in acquired loans in the
tables above, were $229.2 million and $444.5 million at December 31, 2015 and 2014, respectively, of which $191.7 million
and $220.5 million, respectively, were residential mortgage and home equity loans. Refer to Note 7 for additional information
regarding the Company’s loss sharing agreements.
Net deferred loan origination fees were $18.7 million and $11.2 million at December 31, 2015 and 2014, respectively. In
addition to loans issued in the normal course of business, the Company considers overdrafts on customer deposit accounts to be
loans and reclassifies these overdrafts as loans in its consolidated balance sheets. At December 31, 2015 and 2014, overdrafts
of $5.1 million and $5.6 million, respectively, have been reclassified to loans.
106
Loans with carrying values of $3.9 billion and $3.1 billion were pledged as collateral for borrowings at December 31, 2015 and
2014, respectively.
Aging Analysis
The following tables provide an analysis of the aging of loans as of December 31, 2015 and 2014. Due to the difference in
accounting for acquired loans, the tables below further segregate the Company’s loans between loans originated by the
Company ("legacy loans") and acquired loans.
December 31, 2015
Legacy loans
Past Due (1)
Total Legacy
Loans, Net of
Unearned
Income
636,481 $
Recorded
Investment >
90 days and
Accruing
(Dollars in thousands)
Commercial real estate - Construction
Commercial real estate - Other
$
Commercial and industrial
Energy-related
Residential mortgage
Consumer - Home equity
Consumer - Indirect automobile
Consumer - Credit card
Consumer - Other
Total
30-59
days
60-89
days
801 $ — $
> 90 days Total
120 $
921 $
Current
635,560 $
2,687
1,208
15
1,075
3,549
2,187
394
1,923
793
739
—
2,485
870
518
113
752
15,517
6,746
7,081
14,116
5,628
1,181
394
769
18,997
8,693
7,096
17,676
10,047
3,886
901
3,444
3,848,584
2,943,409
670,081
676,347
1,565,596
242,328
76,360
460,594
3,867,581
2,952,102
677,177
694,023
1,575,643
246,214
77,261
464,038
$ 13,839 $ 6,270 $ 51,552 $ 71,661 $ 11,118,859 $ 11,190,520 $
December 31, 2014
Legacy loans
Past Due (1)
Total Legacy
Loans, Net of
Unearned
Income
484,239 $
Recorded
Investment >
90 days and
Accruing
(Dollars in thousands)
Commercial real estate - Construction
Commercial real estate - Other
$
Commercial and industrial
Energy-related
Residential mortgage
Consumer - Home equity
Consumer - Indirect automobile
Consumer - Credit card
Consumer - Other
Total
30-59
days
60-89
days
507 $ — $
> 90 days Total
69 $
576 $
Current
483,663 $
11,799
1,589
—
1,389
4,096
2,447
253
1,285
148
1,860
—
2,616
595
396
163
424
6,859
3,225
27
14,900
7,420
1,419
1,032
773
18,806
6,674
27
18,905
12,111
4,262
1,448
2,482
3,173,766
2,445,847
872,839
508,789
1,278,865
392,504
71,297
375,853
3,192,572
2,452,521
872,866
527,694
1,290,976
396,766
72,745
378,335
$ 23,365 $ 6,202 $ 35,724 $ 65,291 $ 9,603,423 $ 9,668,714 $
(1) Past due loans greater than 90 days include all loans on non-accrual status, regardless of past due status, as of the period
indicated. Non-accrual loans are presented separately in the “Non-accrual Loans” section below.
107
—
95
87
—
442
—
—
—
—
624
—
—
200
—
538
16
—
—
—
754
(Dollars in thousands)
Commercial real estate -
Construction
Commercial real estate -
Other
Commercial and industrial
Energy-related
Residential mortgage
Consumer - Home equity
Consumer - Indirect
automobile
Consumer - Credit Card
Consumer - Other
December 31, 2015
Acquired loans
Past Due (1)
30-59
days
60-89
days
> 90 days
Total
Current
Discount/
Premium
Total
Acquired
Loans, Net of
Unearned
Income
Recorded
Investment >
90 days and
Accruing
$
216
$ 117
$
6,994
$
7,327
$
120,467
$
(2,368 ) $
125,426
$
6,994
4,295
2,024
1,016 1,276
—
—
73 1,806
997
2,859
—
—
580
—
—
211
53,558
6,829
1,368
22,873
12,525
12
17
667
59,877
9,121
1,368
24,752
16,381
12
17
1,458
1,434,966
490,255
2,221
506,103
503,635
(50,820 )
(6,900 )
—
(29,559 )
(29,492 )
1,444,023
492,476
3,589
501,296
490,524
72
565
79,167
—
—
(1,717 )
84
582
78,908
52,067
5,674
1,198
21,765
11,234
12
17
461
99,422
Total
$ 9,039 $ 6,431 $ 104,843 $ 120,313 $ 3,137,451 $ (120,856 ) $ 3,136,908 $
December 31, 2014
Acquired loans
Past Due (1)
30-59
days
60-89
days
> 90 days
Total
Current
Discount/
Premium
Total
Acquired
Loans, Net of
Unearned
Income
Recorded
Investment >
90 days and
Accruing
$ 2,740
$
57
$
8,225
$ 11,022
$
64,393
$
(4,482 ) $
70,933
$
8,225
3,330
4,986
70
2,118
—
—
324 2,788
385
3,165
67,302
4,528
11
30,804
22,800
75,618
6,716
11
33,916
26,350
588,947
119,472
7,731
559,180
315,788
(50,530 )
(7,014 )
—
(40,493 )
(32,009 )
614,035
119,174
7,742
552,603
310,129
67,198
4,528
11
29,553
22,409
13
10
1,458
9
24
1,847
$ 14,814 $ 6,760 $ 135,670 $ 157,244 $ 1,751,170 $ (136,084 ) $ 1,772,330 $ 133,804
392
648
96,674
393
614
94,652
(40 )
—
(1,516 )
9
24
1,967
39
34
3,538
17
—
113
(Dollars in thousands)
Commercial real estate -
Construction
Commercial real estate -
Other
Commercial and industrial
Energy-related
Residential mortgage
Consumer - Home equity
Consumer - Indirect
automobile
Consumer - Credit Card
Consumer - Other
Total
(1) Past due information presents acquired loans at the gross loan balance, prior to application of discounts.
108
Non-accrual Loans
The following table provides the unpaid principal balance of legacy loans on non-accrual status at December 31, 2015 and
2014.
(Dollars in thousands)
Commercial real estate - Construction
Commercial real estate - Other
Commercial and industrial
Energy-related
Residential mortgage
Consumer - Home equity
Consumer - Indirect automobile
Consumer - Credit card
Consumer - Other
Total
2015
2014
120 $
15,422
6,659
7,081
13,674
5,628
1,181
394
769
50,928 $
69
6,859
3,025
27
14,362
7,404
1,419
1,032
773
34,970
$
$
The amount of interest income that would have been recorded in 2015, 2014 and 2013 if total non-accrual loans had been
current in accordance with their contractual terms was approximately $2.1 million, $1.8 million and $2.9 million, respectively.
Loans Acquired
As discussed in Note 3, during 2015, the Company acquired loans with fair values of $0.3 billion from Florida Bank Group,
$1.1 billion from Old Florida, and $0.8 billion from Georgia Commerce. Of the total $2.2 billion of loans acquired during 2015,
$2.1 billion were determined to have no evidence of deteriorated credit quality and are accounted for under ASC Topics 310-10
and 310-20. The remaining $57.8 million were determined to exhibit deteriorated credit quality since origination under ASC
310-30. The tables below show the balances acquired during 2015 for these two subsections of the acquired portfolio as of the
acquisition date. These amounts are subject to change due to the finalization of purchase accounting adjustments.
(Dollars in thousands)
Contractually required principal and interest at acquisition
Expected losses and foregone interest
Cash flows expected to be collected at acquisition
Fair value of acquired loans at acquisition
$
$
2,384,114
(15,539)
2,368,575
2,105,466
$
Acquired
Impaired Loans
76,445
(11,867)
64,578
(6,823)
57,755
$
(Dollars in thousands)
Contractually required principal and interest at acquisition
Non-accretable difference (expected losses and foregone interest)
Cash flows expected to be collected at acquisition
Accretable yield
Basis in acquired loans at acquisition
109
The following is a summary of changes in the accretable difference for loans accounted for under ASC 310-30 during the years
ended December 31:
(Dollars in thousands)
Balance at beginning of period
Additions
Transfers from non-accretable difference to accretable yield
Accretion
Changes in expected cash flows not affecting non-accretable differences (1)
Balance at end of period
2015
2014
$ 287,651 $ 354,892 $
6,823
9,916
(80,479 )
3,591
13,848
25,844
(103,233 )
(3,700 )
$ 227,502 $ 287,651 $
2013
356,393
—
50,743
(179,456 )
127,212
354,892
(1)
Includes changes in cash flows expected to be collected due to the impact of changes in actual or expected timing of
liquidation events, modifications, changes in interest rates and changes in prepayment assumptions.
Troubled Debt Restructurings
Information about the Company’s troubled debt restructurings ("TDRs") at December 31, 2015 and 2014 is presented in the
following tables. Modifications of loans that are accounted for within a pool under ASC Topic 310-30, which include covered
loans, as well as certain other acquired loans are excluded as TDRs. Accordingly, such modifications do not result in the
removal of those loans from the pool, even if the modification of those loans would otherwise be considered a TDR. As a
result, all covered and certain acquired loans that would otherwise meet the criteria for classification as a TDR are excluded
from the tables below.
TDRs totaling $57.0 million occurred during the current year. There were no material TDRs that occurred during 2014. The
following table provides information on how the TDRs were modified during the year ended December 31:
(Dollars in thousands)
Extended maturities
Interest rate adjustment
Maturity and interest rate adjustment
Movement to or extension of interest-rate only payments
Forbearance
Other concession(s) (1)
Total
2015
15,594
—
23,374
241
122
17,710
57,041
$
$
(1) Other concessions may include covenant waivers, forgiveness of principal or interest associated with a customer
bankruptcy, or a combination of any of the above concessions.
Of the $57.0 million TDRs occurring during the twelve months ended December 31, 2015, $34.5 million are on accrual status
and $22.5 million are on non-accrual status.
110
The following table presents the end of period balance for loans modified in a TDR during the year ended December 31, 2015.
The Company had no material TDRs that were added during the year ended December 31, 2014.
(In thousands, except number of loans)
Commercial real estate
Commercial and industrial
Energy-related
Residential mortgage
Consumer - Home equity
Consumer - Indirect
Consumer - Other
Total
December 31, 2015
Pre-modification
Outstanding
Recorded
Investment
Post-modification
Outstanding
Recorded
Investment (1)
Number
of Loans
11 $
26
2
1
50
6
17
113 $
26,764 $
21,233
9,797
70
4,440
79
248
62,631 $
25,250
18,114
9,484
68
3,865
79
181
57,041
(1) Recorded investment includes any allowance for credit losses recorded on the TDRs at December 31, 2015.
Information detailing TDRs that defaulted during the years ended December 31, 2015 and 2014 and were modified in the
previous twelve months (i.e., the twelve months prior to the default) is presented in the following table. The Company has
defined a default as any loan with a loan payment that is currently past due greater than 30 days, or was past due greater than
30 days at any point during the previous twelve months, or since the date of modification, whichever is shorter.
December 31, 2015
December 31, 2014
Number of
Loans
Recorded
Investment
Number of
Loans
(In thousands, except number of loans)
Commercial real estate
Commercial and industrial
Energy-related
Residential mortgage
Consumer - Home Equity
Consumer - Indirect automobile
Consumer - Other
Total
Recorded
Investment
—
1,600
—
—
—
—
—
1,600
30 $
9
—
—
—
—
1
40 $
6 $
20
1
—
20
6
9
62 $
22,075
8,970
3,120
—
1,547
79
2
35,793
111
NOTE 6 – ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY
Allowance for Credit Losses Activity
A summary of changes in the allowance for credit losses for the years ended December 31 is as follows:
2015
Legacy Loans Acquired Loans
Total
$
76,174 $
53,957 $
130,131
27,711
—
27,711
—
—
(15,778 )
5,701
93,808 $
11,801 $
2,344
14,145 $
107,953 $
$
$
$
$
1,837
1,360
3,197
(1,360 )
(1,221 )
(10,737 )
734
44,570 $
— $
—
— $
44,570 $
29,548
1,360
30,908
(1,360 )
(1,221 )
(26,515 )
6,435
138,378
11,801
2,344
14,145
152,523
2014
Legacy Loans Acquired Loans
Total
$
67,342 $
75,732 $
143,074
14,274
—
14,274
—
—
(11,312 )
5,870
76,174 $
11,147 $
654
11,801 $
87,975 $
526
4,260
4,786
(4,260 )
(7,323 )
(15,543 )
565
53,957 $
— $
—
— $
53,957 $
14,800
4,260
19,060
(4,260 )
(7,323 )
(26,855 )
6,435
130,131
11,147
654
11,801
141,932
(Dollars in thousands)
Allowance for credit losses
Allowance for loan losses at beginning of period
Provision for loan losses before adjustment attributable to
FDIC loss share agreements
Adjustment attributable to FDIC loss share arrangements
Net provision for loan losses
Adjustment attributable to FDIC loss share arrangements
Transfer of balance to OREO
Loans charged-off
Recoveries
Allowance for loan losses at end of period
Reserve for unfunded commitments at beginning of period
Provision for unfunded lending commitments
Reserve for unfunded commitments at end of period
Allowance for credit losses at end of period
Allowance for credit losses
Allowance for loan losses at beginning of period
Provision for loan losses before adjustment attributable to
FDIC loss share agreements
Adjustment attributable to FDIC loss share arrangements
Net provision for loan losses
Adjustment attributable to FDIC loss share arrangements
Transfer of balance to OREO
Loans charged-off
Recoveries
Allowance for loan losses at end of period
Reserve for unfunded commitments at beginning of period
Provision for unfunded lending commitments
Reserve for unfunded commitments at end of period
Allowance for credit losses at end of period
$
$
$
$
112
Allowance for credit losses
Allowance for loan losses at beginning of period
Provision for (Reversal of) loan losses before adjustment
attributable to FDIC loss share agreements
Adjustment attributable to FDIC loss share arrangements
Net provision for (reversal of) loan losses
Adjustment attributable to FDIC loss share arrangements
Transfer of balance to OREO
Transfer of balance to the RULC
Loans charged-off
Recoveries
Allowance for loan losses at end of period
Reserve for unfunded commitments at beginning of period
Transfer of balance from the allowance for loan losses
Provision for unfunded lending commitments
Reserve for unfunded commitments at end of period
Allowance for credit losses at end of period
2013
Legacy Loans Acquired Loans
Total
$
74,211 $
177,392 $
251,603
6,828
—
6,828
—
—
(9,828 )
(10,686 )
6,817
67,342 $
— $
9,828
1,319
11,147 $
78,489 $
(57,768 )
56,085
(1,683 )
(56,085 )
(28,126 )
—
(15,795 )
29
75,732 $
— $
—
—
— $
75,732 $
(50,940 )
56,085
5,145
(56,085 )
(28,126 )
(9,828 )
(26,481 )
6,846
143,074
—
9,828
1,319
11,147
154,221
$
$
$
$
A summary of changes in the allowance for credit losses for legacy loans, by loan portfolio type, for the years ended
December 31 is as follows:
(Dollars in thousands)
Allowance for loan losses at beginning of
period
(Reversal of) Provision for loan losses
Loans charged off
Recoveries
Allowance for loan losses at end of period $
Reserve for unfunded commitments at
beginning of period
Provision for (Reversal of) unfunded
commitments
Reserve for unfunded commitments at end
of period
Allowance on loans individually evaluated
for impairment
Allowance on loans collectively evaluated
for impairment
$
$
Commercial
Real Estate
Commercial
and Industrial
Energy-
related
Residential
Mortgage
Consumer
Total
2015
$
26,752
$
24,455
$
(1,466)
(2,525)
1,897
24,658 $
(103)
(1,276)
207
23,283 $
$
5,949
17,917
(3 )
—
23,863 $
$
2,678
1,493
(291 )
67
3,947 $
$
16,340
9,870
(11,683 )
3,530
18,057 $
76,174
27,711
(15,778)
5,701
93,808
$
3,370
$
3,733
$
1,596
$
168
$
2,934
$
11,801
790
(285)
1,069
662
108
2,344
4,160
$
3,448
$
2,665
$
830
$
3,042
$
14,145
1,246
$
272
$
2,122
$
1
$
352
$
3,993
23,412
23,011
21,741
3,946
17,705
89,815
Loans, net of unearned income:
Balance at end of period
Balance at end of period individually
evaluated for impairment
Balance at end of period collectively
evaluated for impairment
$ 4,504,062 $ 2,952,102 $ 677,177 $ 694,023 $ 2,363,156 $ 11,190,520
28,857
20,086
13,020
70
4,608
66,641
4,475,205
2,932,016
$ 664,157
693,953
2,358,548
11,123,879
113
(Dollars in thousands)
Allowance for loan losses at beginning of
period
Provision for (Reversal of) loan losses
Loans charged off
Recoveries
$
Allowance for loan losses at end of period $
Reserve for unfunded commitments at
beginning of period
Provision for (Reversal of) unfunded
commitments
Reserve for unfunded commitments at end
of period
Allowance on loans individually evaluated
for impairment
Allowance on loans collectively evaluated
for impairment
$
$
Commercial
Real Estate
Commercial
and Industrial
Energy-
related
Residential
Mortgage
Consumer
Total
2014
$
22,872
2,171
(1,164 )
2,873
26,752 $
$
20,839
4,971
(1,400 )
45
24,455 $
6,878
$
(929 )
—
—
5,949 $
$
2,546
566
(578 )
144
2,678 $
$
14,207
7,495
(8,170 )
2,808
16,340 $
67,342
14,274
(11,312 )
5,870
76,174
$
3,071
$
1,814
$
3,043
$
72
$
3,147
$
11,147
299
1,919
(1,447 )
96
(213 )
654
3,370
$
3,733
$
1,596
$
168
$
2,934
$
11,801
20
$
407
$
—
$
—
$
3
$
430
26,732
24,048
5,949
2,678
16,337
75,744
Loans, net of unearned income:
Balance at end of period
Balance at end of period individually
evaluated for impairment
Balance at end of period collectively
evaluated for impairment
$ 3,676,811 $ 2,452,521 $ 872,866 $ 527,694 $ 2,138,822 $ 9,668,714
7,013
3,988
—
—
699
11,700
3,669,798
2,448,533
872,866
527,694
2,138,123
9,657,014
114
(Dollars in thousands)
Allowance for loan losses at beginning of
period
(Reversal of) Provision for loan losses
Transfer of balance to the RULC
Loans charged off
Recoveries
Allowance for loan losses at end of period $
Reserve for unfunded commitments at
beginning of period
Transfer of balance from the allowance
for loan losses
Provision for unfunded lending
commitments
Reserve for unfunded commitments at end
of period
Allowance on loans individually evaluated
for impairment
Allowance on loans collectively evaluated
for impairment
$
$
Commercial
Real Estate
Commercial
and Industrial
Energy-
related
Residential
Mortgage
Consumer
Total
2013
$
31,298
$
(5,919 )
(2,939 )
(2,908 )
3,340
22,872 $
$
20,605
3,870
(3,497 )
(516 )
377
20,839 $
$
6,812
66
—
—
—
6,878 $
$
1,583
758
(40 )
(519 )
764
2,546 $
$
13,913
8,053
(3,352 )
(6,743 )
2,336
14,207 $
74,211
6,828
(9,828)
(10,686)
6,817
67,342
$
—
$
—
$
—
$
—
$
—
$
—
2,939
3,497
—
132
(1,683 )
3,043
40
32
3,352
9,828
(205 )
1,319
3,071
$
1,814
$
3,043
$
72
$
3,147
$
11,147
8
$
841
$
—
$
180
$
—
$
1,029
22,864
19,998
6,878
2,366
14,207
66,313
Loans, net of unearned income:
Balance at end of period
Balance at end of period individually
evaluated for impairment
Balance at end of period collectively
evaluated for impairment
$ 3,054,100 $ 2,234,173 $ 752,682 $ 414,372 $ 1,832,994 $ 8,288,321
8,705
15,812
—
1,407
258
26,182
3,045,395
2,218,361
752,682
412,965
1,832,736
8,262,139
115
A summary of changes in the allowance for loan losses for acquired loans, by loan portfolio type, for the years ended
December 31 is as follows:
(Dollars in thousands)
Allowance for loan losses at beginning of
period
Provision for (Reversal of) loan losses
Increase (Decrease) in FDIC loss share
receivable
Transfer of balance to OREO
Loans charged off
Recoveries
Allowance for loan losses at end of period $
Allowance on loans individually evaluated
for impairment
Allowance on loans collectively evaluated
for impairment
$
Commercial
Real Estate
Commercial
and
Industrial
Energy-
related
Residential
Mortgage
Consumer
Total
2015
$
$
29,949
2,182
757
174
(7,810 )
727
25,979 $
3,265
$
(122)
(49)
(170)
(105)
—
2,819 $
$
51
74
—
—
—
—
125 $
6,484
2,126
$ 14,208
$
(1,063 )
(235)
(1,833 )
(541)
—
7
7,841 $
(684 )
(2,822 )
—
7,806 $
53,957
3,197
(1,360)
(1,221)
(10,737)
734
44,570
—
$
41
$ —
$
—
$
45
$
86
25,979
2,778
125
7,841
7,761
44,484
Loans, net of unearned income:
Balance at end of period
Balance at end of period individually
evaluated for impairment
Balance at end of period collectively
evaluated for impairment
Balance at end of period acquired with
deteriorated credit quality
$ 1,569,449 $ 492,476 $ 3,589 $ 501,296 $ 570,098 $ 3,136,908
720
164
—
—
458
1,342
1,149,315
450,652
3,589
360,252
447,048
2,410,856
419,414
41,660
—
141,044
122,592
724,710
(Dollars in thousands)
Allowance for loan losses at
beginning of period
Provision for loan losses
Increase (Decrease) in FDIC loss
share receivable
Transfer of balance to OREO
Loans charged off
Recoveries
Allowance for loan losses at end of
period
Allowance on loans individually
evaluated for impairment
Allowance on loans collectively
evaluated for impairment
Loans, net of unearned income:
Balance at end of period
Commercial
Real Estate
Commercial
and
Industrial
Energy-
related
Residential
Mortgage
Consumer
Total
2014
$
$
42,026
665
$
6,641
536
—
51
$ 10,889
1,296
$
$
16,176
2,238
75,732
4,786
227
(1,897 )
(11,201 )
129
509
(2,030 )
(2,451 )
60
—
—
—
—
(3,854 )
(1,719 )
(232 )
104
(1,142 )
(1,677 )
(1,659 )
272
(4,260)
(7,323)
(15,543)
565
$
$
29,949
$
3,265
$
51
$
6,484
$
14,208
$
53,957
—
$
—
$
—
$
—
$
—
$
—
29,949
3,265
51
6,484
14,208
53,957
$ 684,968 $ 119,174 $
7,742 $ 552,603 $ 407,843 $ 1,772,330
Balance at end of period individually
evaluated for impairment
Balance at end of period collectively
evaluated for impairment
Balance at end of period acquired with
deteriorated credit quality
—
—
—
—
—
—
169,338
60,584
7,742
402,347
265,168
905,179
515,630
58,590
—
150,256
142,675
867,151
116
(Dollars in thousands)
Allowance for loan losses at beginning of
period
(Reversal of) Provision for loan losses
(Decrease) Increase in FDIC loss share
receivable
Transfer of balance to OREO
Loans charged off
Recoveries
Allowance for loan losses at end of period
Allowance on loans individually evaluated for
impairment
Allowance on loans collectively evaluated for
impairment
$
$
Commercial
Real Estate
Commercial
and Industrial
Residential
Mortgage
Consumer
Total
2013
$
107,269
$
13,246
$
(1,286 )
(1,146 )
$
23,108
390
$
33,769
359
177,392
(1,683 )
(28,238 )
(19,953 )
(15,795 )
29
42,026 $
(5,032 )
(4,896 )
(17,919 )
(427 )
—
—
6,641 $
(7,713 )
—
—
10,889 $
(33 )
—
—
16,176 $
(56,085 )
(28,126 )
(15,795 )
29
75,732
—
$
—
$
—
$
—
$
—
42,026
6,641
10,889
16,176
75,732
Loans, net of unearned income:
Balance at end of period
Balance at end of period individually evaluated
for impairment
Balance at end of period collectively evaluated
for impairment
Balance at end of period acquired with
deteriorated credit quality
Portfolio Segment Risk Factors
$
732,401 $
90,062 $
172,160 $
209,075 $ 1,203,698
—
—
—
—
—
393,487
37,430
162,248
157,744
750,909
338,914
52,632
9,912
51,331
452,789
Commercial real estate loans include loans to commercial customers for long-term financing of land and buildings or for land
development or construction of a building. These loans are repaid through revenues from operations of the businesses, rents of
properties, sales of properties and refinances. Commercial and industrial loans represent loans to commercial customers to
finance general working capital needs, equipment purchases and other projects where repayment is derived from cash flows
resulting from business operations. The Company originates commercial business loans on a secured and, to a lesser extent,
unsecured basis.
Residential mortgage loans consist of loans to consumers to finance a primary residence. The vast majority of the residential
mortgage loan portfolio is comprised of 1-4 family mortgage loans secured by properties located in the Company's market
areas and originated under terms and documentation that permit their sale in the secondary market.
Consumer loans are offered by the Company in order to provide a full range of retail financial services to its customers and
include home equity, indirect automobile, credit card and other direct consumer installment loans. The Company originates
substantially all of its consumer loans in its primary market areas. Loans in the consumer segment are sensitive to
unemployment and other key consumer economic measures.
Credit Quality
The Company utilizes an asset risk classification system in accordance with guidelines established by the Federal Reserve
Board as part of its efforts to monitor commercial asset quality. “Special mention” loans are defined as loans where known
information about possible credit problems of the borrower cause management to have some doubt as to the ability of these
borrowers to comply with the present loan repayment terms and which may result in future disclosure of these loans as non-
performing. For assets with identified credit issues, the Company has two primary classifications for problem assets:
“substandard” and “doubtful.”
Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the Company will
sustain some loss if the deficiencies are not corrected. Doubtful assets have the weaknesses of substandard assets with the
additional characteristic that the weaknesses make collection or liquidation in full satisfaction of the loan balance outstanding
questionable, which makes probability of loss based on currently existing facts, conditions, and values higher. Loans classified
as “Pass” do not meet the criteria set forth for special mention, substandard, or doubtful classification and are not considered
criticized. Asset risk classifications are determined at origination or acquisition and reviewed on an ongoing basis. Risk
117
classifications are changed if, in the opinion of management, the risk profile of the customer has changed since the last review
of the loan relationship.
The Company’s investment in loans by credit quality indicator is presented in the following tables. The tables below further
segregate the Company’s loans between loans that were originated by the Company (legacy loans) and acquired loans. Loan
premiums/discounts in the tables below represent the adjustment of non-covered acquired loans to fair value at the acquisition
date, as adjusted for income accretion and changes in cash flow estimates in subsequent periods. Asset risk classifications for
commercial loans reflect the classification as of December 31, 2015 and 2014, respectively. Credit quality information in the
tables below includes loans acquired at the gross loan balance, prior to the application of premiums/discounts, at December 31,
2015 and 2014.
Loan delinquency is the primary credit quality indicator that the Company utilizes to monitor consumer asset quality.
(Dollars in thousands)
Pass
Special
Mention
Sub-
standard
Doubtful
Total
Pass
Special
Mention
Sub-
standard Doubtful
Total
December 31, 2015
December 31, 2014
Legacy loans
Commercial real estate -
Construction
Commercial real estate - Other
Commercial and industrial
Energy-related
Total
$ 634,889
$
160
$
1,432
$ —
$ 636,481
$ 483,930
$
240
$
69
$ —
$ 484,239
3,806,528
2,911,396
531,657
3,192,572
2,452,521
872,866
$ 7,884,470 $ 104,800 $ 132,593 $ 11,478 $ 8,133,341 $ 6,891,435 $ 57,417 $ 51,251 $ 2,095 $ 7,002,198
3,867,581
2,952,102
677,177
3,120,370
2,414,293
872,842
49,847
7,330
—
22,193
28,965
24
21,877
14,826
67,937
37,001
19,888
74,272
2,175
5,992
3,311
162
1,933
—
(Dollars in thousands)
Residential mortgage
Consumer - Home equity
Consumer - Indirect automobile
Consumer - Credit card
Consumer - Other
Total
Legacy loans
December 31, 2015
December 31, 2014
Current
$ 676,347 $
1,565,596
242,328
76,360
460,594
$ 3,021,225 $
30+ Days
Past Due
Total
Current
30+ Days
Past Due
Total
17,676 $ 694,023 $ 508,789 $
10,047 1,575,643 1,278,865
392,504
246,214
3,886
71,297
77,261
901
3,444
375,853
464,038
35,954 $ 3,057,179 $ 2,627,308 $
18,905 $ 527,694
12,111 1,290,976
396,766
4,262
72,745
1,448
2,482
378,335
39,208 $ 2,666,516
December 31, 2015
December 31, 2014
Acquired loans
(Dollars in
thousands)
Pass
Special
Mention
Sub-
standard Doubtful Loss Discount
Total
Pass
Special
Mention
Sub-
standard Doubtful Discount
Total
Commercial real
estate -
Construction
Commercial real
estate - Other
Commercial and
industrial
Energy-related
Total
$ 116,539
$
1,681
$
8,803
$
771
$ —
$
(2,368) $ 125,426
$ 58,849
$
3,934
$
12,632
$
—
$
(4,482 ) $ 70,933
1,383,409
26,080
79,119
6,124
111
473,241
2,166
8,376
55
16,510
170
1,206
43
1,198 —
(50,820)
(6,900)
—
1,444,023
530,958
33,216
100,391
—
(50,530 )
614,035
492,476
3,589
109,593
7,731
2,256
—
14,082
11
257
—
(7,014 )
—
119,174
7,742
$ 1,975,355
$ 36,192
$ 104,602
$
9,299
$ 154
$ (60,088) $ 2,065,514
$ 707,131
$ 39,406
$ 127,116
$
257
$ (62,026 ) $ 811,884
118
December 31, 2015
30+ Days
Past Due
Premium
(discount)
Current
December 31, 2014
Total
Current
30+ Days
Past Due
Premium
(discount)
Total
Acquired loans
$ 506,103 $ 24,752 $ (29,559 ) $ 501,296 $ 559,180 $ 33,916 $ (40,493 ) $ 552,603
310,129
392
97,322
$ 1,089,542 $ 42,620 $ (60,768 ) $ 1,071,394 $ 970,627 $ 63,877 $ (74,058 ) $ 960,446
490,524 315,788
393
95,266
503,635
72
79,732
(29,492 )
—
(1,717 )
26,350
39
3,572
16,381
12
1,475
84
79,490
(32,009 )
(1,516 )
(40 )
(Dollars in thousands)
Residential mortgage
Consumer - Home equity
Consumer - Indirect automobile
Consumer - Other
Total
Legacy Impaired Loans
Information on the Company’s investment in legacy impaired loans, which include all TDRs and all other non-accrual loans, is
presented in the following tables as of and for the periods indicated. Legacy non-accrual mortgage and consumer loans, and
commercial loans below the Company’s specific threshold, are included for purposes of this disclosure although such loans are
not evaluated or measured individually for impairment for purposes of determining the allowance for loan losses.
(Dollars in thousands)
With no related allowance recorded:
Commercial real estate
Commercial and industrial
Energy-related
Consumer - Home equity
Consumer - Other
With an allowance recorded:
Commercial real estate
Commercial and industrial
Energy-related
Residential mortgage
Consumer - Home equity
Consumer - Indirect automobile
Consumer - Credit card
Consumer - Other
Total
Total commercial loans
Total mortgage loans
Total consumer loans
December 31, 2015
Recorded
Investment
Unpaid
Principal
Balance
Related
Allowance
Average
Recorded
Investment
Interest
Income
Recognized
$
$
$
16,145 $
14,340
—
730
66
12,500
5,985
11,319
13,679
8,196
1,171
386
876
85,393 $
60,289 $
13,679
11,425
16,145 $
14,340
—
730
66
13,753
6,262
13,444
13,743
8,559
1,181
394
899
89,516 $
63,944 $
13,743
11,829
— $
—
—
—
—
(1,253)
(277)
(2,125)
(64)
(363)
(10)
(8)
(23)
(4,123) $
(3,655) $
(64)
(404)
15,864 $
18,839
—
533
66
14,055
7,352
14,339
14,086
7,554
1,613
881
1,039
96,221 $
70,449 $
14,086
11,686
315
1,148
—
22
5
554
331
471
82
129
44
—
44
3,145
2,819
87
244
119
(Dollars in thousands)
With no related allowance recorded:
Commercial real estate
Commercial and industrial
Consumer - Home equity
With an allowance recorded:
Commercial real estate
Commercial and industrial
Energy-related
Residential mortgage
Consumer - Home equity
Consumer - Indirect automobile
Consumer - Credit card
Consumer - Other
Total
Total commercial loans
Total mortgage loans
Total consumer loans
(Dollars in thousands)
With no related allowance recorded:
Commercial real estate
Commercial and industrial
Consumer - Home equity
With an allowance recorded:
Commercial real estate
Commercial and industrial
Residential mortgage
Consumer - Home equity
Consumer - Indirect automobile
Consumer - Credit card
Consumer - Other
Total
Total commercial loans
Total mortgage loans
Total consumer loans
December 31, 2014
Recorded
Investment
Unpaid
Principal
Balance
Related
Allowance
Average
Recorded
Investment
Interest
Income
Recognized
$
6,680 $
2,483
682
6,680 $
2,483
682
— $
—
—
6,703 $
2,873
696
1,044
1,209
27
14,111
7,121
1,410
1,012
781
36,560 $
11,443 $
14,111
11,006
1,069
1,617
27
14,363
7,165
1,419
1,032
790
37,327 $
11,876 $
14,363
11,088
$
$
(25)
(408)
—
(252)
(44)
(9)
(20)
(9)
(767) $
(433) $
(252)
(82)
1,134
2,113
28
14,263
7,544
2,016
797
1,009
39,176 $
12,851 $
14,263
12,062
132
57
19
38
23
1
110
43
51
—
39
513
251
110
152
December 31, 2013
Recorded
Investment
Unpaid
Principal
Balance
Related
Allowance
Average
Recorded
Investment
Interest
Income
Recognized
$
8,567 $
13,256
258
8,567 $
13,256
258
— $
—
—
10,443 $
11,074
281
1,268
1,927
11,408
6,506
1,267
404
481
45,342 $
25,018 $
11,408
8,916
1,284
2,770
11,645
6,550
1,275
411
485
46,501 $
25,877 $
11,645
8,979
(16 )
(843 )
(237 )
(44 )
(8 )
(7 )
(4 )
(1,159 ) $
(859 ) $
(237 )
(63 )
4,414
2,892
9,675
7,593
2,090
418
765
49,645 $
28,823 $
9,675
11,147
$
$
43
170
1
8
100
98
93
55
—
19
587
321
98
168
As of December 31, 2015 and 2014, the Company was not committed to lend a material amount of additional funds to any
customer whose loan was classified as impaired or as a troubled debt restructuring.
120
NOTE 7 – LOSS SHARING AGREEMENTS AND FDIC LOSS SHARE RECEIVABLE
Loss Sharing Agreements
Since 2009, the Company has acquired certain assets and liabilities of six failed banks. Substantially all of the loans and
foreclosed real estate acquired through these transactions were covered by loss share agreements between the FDIC and
IBERIABANK, which afforded IBERIABANK loss protection.
During the reimbursable loss periods, the FDIC will cover 80% of covered loan and foreclosed real estate losses up to certain
thresholds for the six acquisitions, and 95% of losses that exceed contractual thresholds for three acquisitions. The
reimbursable loss periods, excluding single family residential assets, ended in 2014 for three acquisitions, ended during 2015
for one acquisition and will end during 2016 for two acquisitions. The reimbursable loss periods for single family residential
assets will end in 2019 for three acquisitions, in 2020 for one acquisition, and in 2021 for two acquisitions. To the extent that
loss share coverage ends prior to triggering events on covered assets that would enable the Company to collect these amounts
from the FDIC, future impairments may be required.
In addition, all covered assets, excluding single family residential assets, have a three year recovery period, which begins upon
expiration of the reimbursable loss period. During the recovery periods, the Company must reimburse the FDIC for its share of
any recovered losses, net of certain expenses, consistent with the covered loss reimbursement rates in effect during the recovery
periods.
FDIC loss share receivables
The Company recorded indemnification assets in the form of FDIC loss share receivables as of the acquisition date of each of
the six banks covered by loss share agreements. At acquisition, the indemnification assets represented the fair value of the
expected cash flows to be received from the FDIC under the loss share agreements. Subsequent to acquisition, the FDIC loss
share receivables are updated to reflect changes in actual and expected amounts collectible adjusted for amortization.
The following is a summary of FDIC loss share receivables year-to-date activity:
(Dollars in thousands)
Balance at beginning of period
Change due to (reversal of) loan loss provision recorded on FDIC covered loans
Amortization
(Submission of reimbursable losses) recoveries payable to the FDIC
Impairment
Changes due to a change in cash flow assumptions on OREO and other changes
Balance at end of period
December 31
2015
69,627 $
(1,360)
(23,500)
(2,444)
—
(2,445)
39,878 $
2014
162,312
(4,260)
(74,617)
3,282
(5,121)
(11,969)
69,627
$
$
FDIC loss share receivables collectibility assessment
The Company assesses the FDIC loss share receivables for collectibility on a quarterly basis. Based on the collectibility
analysis completed for the year ended December 31, 2015, the Company concluded that the $39.9 million FDIC loss share
receivable is fully collectible as of December 31, 2015.
2014 and 2013 Impairments of FDIC loss share receivables
Based on improving economic trends, their impact on the amount and timing of expected future cash flows, and delays in the
foreclosure process, during the loss share receivable collectibility assessment completed for the years ended December 31,
2014 and 2013, the Company concluded that certain expected losses were probable of not being collected from either the FDIC
or the customer because such projected losses were no longer expected to occur or were expected to occur beyond the
reimbursable loss periods specified within the loss share agreements. Management deemed an impairment charge necessary for
the year ended December 31, 2014 in the amount of $5.1 million attributable to losses on OREO transactions that moved
beyond the loss share term.
On April 10, 2013, management concluded that an impairment charge of $31.8 million was required and was recognized in the
Company's consolidated financial statements during the three-month period ended March 31, 2013.
121
NOTE 8 –TRANSFERS AND SERVICING OF FINANCIAL ASSETS (INCLUDING MORTGAGE BANKING
ACTIVITY)
Commercial Banking Activity
The unpaid principal balances of loans serviced for others were $888.4 million and $533.8 million at December 31, 2015 and
2014, respectively. Custodial escrow balances maintained in connection with the foregoing portfolio of loans serviced for
others, and included in demand deposits, were immaterial at December 31, 2015 and 2014.
Mortgage Banking Activity
IBERIABANK through its subsidiary, IMC, originates mortgage loans for sale into the secondary market. The loans originated
primarily consist of residential first mortgages that conform to standards established by the GSEs, but can also consist of junior
lien loans secured by residential property. These sales are primarily to private companies that are unaffiliated with the GSEs on
a servicing-released basis. Changes to the carrying amount of mortgage loans held for sale at December 31 are presented in the
following table.
(Dollars in thousands)
Balance at beginning of period
Originations and purchases
Sales, net of gains
Other
Balance at end of period
2015
140,072 $
2014
128,442 $
2,464,588
(2,432,979)
1,675,538
(1,657,409)
(5,434)
166,247 $
(6,499)
140,072 $
2013
267,475
2,116,460
(2,255,493)
—
128,442
$
$
The following table details the components of mortgage income for the years ended December 31:
(Dollars in thousands)
Fair value changes of derivatives and mortgage loans held for sale:
Mortgage loans held for sale and derivatives
Derivative settlements, net
Gains on sales
Servicing and other income, net
Mortgage Servicing Rights
2015
2014
2013
$
$
2,216 $
(5,017)
83,131
792
81,122 $
631 $
(8,743)
59,156
753
51,797 $
(4,822)
3,100
65,393
526
64,197
Mortgage servicing rights are recorded at the lower of cost or market value in “other assets” on the Company's consolidated
balance sheets and amortized over the remaining servicing life of the loans, with consideration given to prepayment
assumptions. Mortgage servicing rights had the following carrying values as of the periods indicated:
(Dollars in thousands)
Mortgage servicing rights $
Gross
Carrying Amount
December 31, 2015
Accumulated
Amortization
Net
Carrying Amount
Gross
Carrying Amount
December 31, 2014
Accumulated
Amortization
6,104 $
(2,320 ) $
3,784 $
4,751 $
(1,253 ) $
Net
Carrying Amount
3,498
NOTE 9 – PREMISES AND EQUIPMENT
Premises and equipment consisted of the following at December 31:
(Dollars in thousands)
Land
Buildings
Furniture, fixtures and equipment
Total premises and equipment
Accumulated depreciation
Total premises and equipment, net
122
2015
84,438 $
245,934
140,031
470,403
(146,501)
323,902 $
2014
75,916
232,727
128,388
437,031
(129,872)
307,159
$
$
Depreciation expense was $22.2 million, $19.4 million, and $19.6 million, for the years ended December 31, 2015, 2014, and
2013, respectively.
The Company actively engages in leasing office space available in buildings it owns. Leases have different terms ranging from
monthly rental to six years. For the year ended December 31, 2015, income from these leases averaged $0.2 million per month.
Total lease income for the years ended December 31, 2015, 2014, and 2013 was $2.4 million, $1.6 million, and $1.5 million,
respectively. Income from leases is reported as a reduction in occupancy and equipment expense. The total allocated cost of the
portion of the buildings held for lease at December 31, 2015 and 2014 was $8.2 million and $7.6 million, respectively, with
related accumulated depreciation of $2.6 million and $2.4 million, respectively.
The Company leases certain branch and corporate offices, land and ATM facilities through non-cancelable operating leases
with terms that range from one to 50 years, some of which contain renewal options and escalation clauses under various terms.
Rent expense for the years ended December 31, 2015, 2014, and 2013 totaled $15.4 million, $10.9 million, and $11.4 million,
respectively.
Minimum future annual rent commitments under lease agreements for the periods indicated are as follows:
(Dollars in thousands)
2016
2017
2018
2019
2020
2021 and thereafter
$
$
16,957
14,751
13,491
11,952
10,735
41,054
108,940
NOTE 10 – GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS
Goodwill
Changes to the carrying amount of goodwill by reportable segment for the years ended December 31, 2015 and 2014 are
provided in the following table.
(Dollars in thousands)
Balance, December 31, 2013
Goodwill acquired during the year
Balance, December 31, 2014
Goodwill acquired during the year
Balance, December 31, 2015
IBERIABANK
IMC
LTC
$
$
$
373,905 $
115,278
489,183 $
207,077
696,260 $
23,178 $
—
23,178 $
—
23,178 $
4,789 $
376
5,165 $
—
5,165 $
Total
401,872
115,654
517,526
207,077
724,603
The goodwill acquired in 2015 was a result of the Florida Bank, Old Florida, and Georgia Commerce acquisitions. The
goodwill acquired in 2014 was a result of the Trust One-Memphis, Teche, First Private, The Title Company, LLC and Louisiana
Abstract and Title, LLC acquisitions. See Note 3 for further information.
The Company performed the required annual goodwill impairment test as of October 1, 2015. The Company’s annual
impairment test did not indicate impairment in any of the Company’s reporting units as of the testing date. Subsequent to the
testing date, management has evaluated the events and changes that could indicate that goodwill might be impaired and
concluded that a subsequent test is not required.
Title Plant
The Company held title plant assets recorded in “other assets” on the consolidated balance sheets totaling $6.7 million at both
December 31, 2015 and 2014. No events or changes in circumstances occurred during 2015 or 2014 to suggest the carrying
value of the title plant was not recoverable.
123
Intangible assets subject to amortization
Definite-lived intangible assets had the following carrying values included in “other assets” on the Company’s consolidated
balance sheets as of December 31:
(Dollars in thousands)
Core deposit intangibles
Customer relationship intangible
asset
Non-compete agreement
Other intangible assets
Total
$
2015
2014
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
$
74,001 $
(43,957 ) $
30,044 $
55,949 $
(36,354 ) $
19,595
1,348
100
205
75,654 $
(984 )
(79 )
(114 )
(45,134 ) $
364
21
91
30,520 $
1,348
163
205
57,665 $
(822 )
(82 )
(46 )
(37,304 ) $
526
81
159
20,361
The related amortization expense of intangible assets is as follows:
(Dollars in thousands)
Aggregate amortization expense for the years ended December 31:
2013
2014
2015
(Dollars in thousands)
Estimated amortization expense for the years ended December 31:
2016
2017
2018
2019
2020
2021 and thereafter
$
$
Amount
4,720
5,807
7,811
8,338
6,775
5,786
5,066
3,613
942
NOTE 11 –DERIVATIVE INSTRUMENTS AND OTHER HEDGING ACTIVITIES
The Company enters into derivative financial instruments to manage interest rate risk and other exposures such as liquidity and
credit risk, as well as to facilitate customer transactions. The primary types of derivatives used by the Company include interest
rate swap agreements, foreign exchange contracts, interest rate lock commitments, forward sales commitments, and written and
purchased options. All derivative instruments are recognized on the consolidated balance sheets as other assets or other
liabilities at fair value, as required by ASC Topic 815, Derivatives and Hedging.
For cash flow hedges, the effective portion of the gain or loss related to the derivative instrument is initially reported as a
component of other comprehensive income and subsequently reclassified into earnings when the forecasted transaction affects
earnings or when the hedge is terminated. The ineffective portion of the gain or loss is reported in earnings immediately. In
applying hedge accounting for derivatives, the Company establishes and documents a method for assessing the effectiveness of
the hedging derivative and a measurement approach for determining the ineffective aspect of the hedge upon the inception of
the hedge. The Company has designated interest rate swaps in a cash flow hedge to convert forecasted variable interest
payments to a fixed rate on its junior subordinated debt and has concluded that the forecasted transactions are probable of
occurring.
For derivative instruments that are not designated as hedging instruments, changes in the fair value of the derivatives are
recognized in earnings immediately.
124
Information pertaining to outstanding derivative instruments is as follows:
(Dollars in thousands)
Derivatives designated as hedging
instruments under ASC Topic
815:
Interest rate contracts
Total derivatives designated as
hedging instruments under ASC
Topic 815
Derivatives not designated as
hedging instruments under ASC
Topic 815:
Interest rate contracts
Foreign exchange contracts
Forward sales contracts
Written and purchased options
Total derivatives not designated as
hedging instruments under ASC
Topic 815
Total
(Dollars in thousands)
Derivatives designated as hedging
instruments under ASC Topic
815:
Interest rate contracts
Total derivatives designated as
hedging instruments under ASC
Topic 815
Derivatives not designated as
hedging instruments under ASC
Topic 815:
Interest rate contracts
Foreign exchange contracts
Forward sales contracts
Written and purchased options
Total derivatives not designated as
hedging instruments under ASC
Topic 815
Total
Balance
Sheet
Location
Asset Derivatives Fair Value
December 31,
2015
December 31,
2014
Balance
Sheet
Location
Liability Derivatives Fair Value
December 31,
2015
December 31,
2014
Other
assets
$
$
58
$
—
Other
liabilities $
—
$
58
$
—
$
—
$
—
—
Other
assets
Other
assets
Other
assets
Other
assets
$
18,077
$
15,434
156
1,588
—
25
10,607
17,444
Other
liabilities $
Other
liabilities
Other
liabilities
Other
liabilities
18,077
$
15,434
134
474
—
2,556
6,254
13,364
$
$
30,428
$
30,486 $
32,903
32,903
$
$
24,939
$
24,939 $
31,354
31,354
Asset Derivatives Notional Amount
Liability Derivatives Notional Amount
December 31,
2015
December 31,
2014
December 31,
2015
December 31,
2014
$
108,500 $
—
$
108,500
$
—
$
590,334 $
4,392
223,841
328,210
444,703
—
15,897
362,580
$
$
$
— $
—
$
—
—
590,334 $
4,392
173,430
181,949
444,703
—
391,992
225,741
$
$
$
1,146,777
1,255,277 $
823,180
823,180
$
$
$
950,105
950,105 $
1,062,436
1,062,436
125
The Company is party to collateral agreements with certain derivative counterparties. Such agreements require that the
Company maintain collateral based on the fair values of individual derivative transactions. In the event of default by the
Company, the counterparty would be entitled to the collateral.
At December 31, 2015 and 2014, the Company was required to post $21.8 million and $11.5 million, respectively, in cash as
collateral for its derivative transactions, which are included in "interest-bearing deposits in banks" on the Company’s
consolidated balance sheets. The Company does not anticipate additional assets will be required to be posted as collateral, nor
does it believe additional assets would be required to settle its derivative instruments immediately if contingent features were
triggered at December 31, 2015. The Company’s master netting agreements represent written, legally enforceable bilateral
agreements that (1) create a single legal obligation for all individual transactions covered by the master agreement and (2) in
the event of default, provide the non-defaulting counterparty the right to accelerate, terminate, and close-out on a net basis all
transactions under the agreement and to promptly liquidate or set-off collateral posted by the defaulting counterparty. As
permitted by U.S. GAAP, the Company does not offset fair value amounts recognized for the right to reclaim cash collateral or
the obligation to return cash collateral against recognized fair value amounts of derivatives executed with the same
counterparty under a master netting agreement. The following table reconciles the gross amounts presented in the consolidated
balance sheets to the net amounts that would result in the event of offset.
(Dollars in thousands)
Derivatives subject to master netting arrangements
Derivative assets
Interest rate contracts designated as hedging
instruments
Interest rate contracts not designated as hedging
instruments
Written and purchased options
Total derivative assets subject to master netting
arrangements
Derivative liabilities
Interest rate contracts not designated as hedging
instruments
Total derivative liabilities subject to master netting
arrangements
Gross Amounts
Presented in
the Balance
Sheet
December 31, 2015
Gross Amounts Not Offset in the
Balance Sheet
Derivatives
Collateral (1)
Net
$
58
$
—
$
(45 ) $
13
18,058
6,277
—
—
—
—
18,058
6,277
$
24,393
$
—
$
(45 ) $
24,348
18,058
—
(9,428 )
8,630
$
18,058
$
—
$
(9,428 ) $
8,630
(1) Consists of cash collateral recorded at cost, which approximates fair value, and investment securities.
(Dollars in thousands)
Gross Amounts
Presented in
the Balance
Sheet
December 31, 2014
Gross Amounts Not Offset in the
Balance Sheet
Derivatives
Collateral (1)
Net
Derivatives subject to master netting arrangements
Derivative assets
Interest rate contracts designated as hedging instruments
$
Interest rate contracts not designated as hedging instruments
Written and purchased options
— $
15,411
13,387
Total derivative assets subject to master netting
arrangements
$
28,798
$
— $
—
—
—
$
— $
—
—
—
15,411
13,387
—
$
28,798
Derivative liabilities
Interest rate contracts not designated as hedging instruments
15,411
—
(3,735 )
11,676
Total derivative liabilities subject to master netting
arrangements
$
15,411
$
—
$
(3,735 ) $
11,676
(1) Consists of cash collateral recorded at cost, which approximates fair value, and investment securities.
126
During the years ended December 31, 2015 and 2014, the Company has not reclassified into earnings any gain or loss as a
result of the discontinuance of cash flow hedges, because it was probable the original forecasted transaction would not occur by
the end of the originally specified term.
At December 31, 2015, the Company does not expect to reclassify any amount from accumulated other comprehensive income
into interest income over the next twelve months for derivatives that will be settled.
At December 31, 2015, 2014, and 2013, and for the years then ended, information pertaining to the effect of the hedging
instruments on the consolidated financial statements is as follows:
Amount of Gain
(Loss) Recognized in
OCI net of taxes
(Effective Portion)
Location of
Gain (Loss)
Reclassified
from
Accumulated
OCI into
Income
(Effective
Portion)
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income (Effective
Portion)
For the Years Ended December 31
Location of
Gain (Loss)
Recognized
in Income on
Derivative
(Ineffective
Portion and
Amount
Excluded
from
Effectiveness
Testing)
Amount of Gain (Loss)
Recognized in Income
on Derivative
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing)
2015 2014
2013
2015 2014 2013
2015
2014
2013
(Dollars in
thousands)
Derivatives in ASC
Topic 815 Cash Flow
Hedging
Relationships
Interest
rate
contracts
$
$
Total
$ —
38
38 $ — $ 619
$ 619
Other income
(expense)
$ —
$ —
$ — $ — $ (391 )
$ (391 )
Other income
(expense)
$ —
$
$ — $
(1 ) $
(1 ) $
1
1
Information pertaining to the effect of derivatives not designated as hedging instruments on the consolidated financial
statements as of December 31, is as follows:
(Dollars in thousands)
Interest rate contracts
Foreign exchange contracts
Forward sales contracts
Written and purchased options
Total
Location of Gain
(Loss) Recognized in
Income on Derivatives
Other income
$
Other income
Mortgage Income
Mortgage Income
$
Amount of Gain (Loss) Recognized in Income
on Derivatives
2015
2014
2013
4,143 $
22
(2,947 )
274
1,492 $
2,513 $
—
(3,225 )
(5,739 )
(6,451 ) $
2,991
—
(1,716)
(3,032)
(1,757 )
At December 31, additional information pertaining to outstanding interest rate swap agreements not designated as hedging
instruments is as follows:
(Dollars in thousands)
Weighted average pay rate
Weighted average receive rate
Weighted average maturity in years
Unrealized gain (loss) relating to interest rate swaps
2015
2014
2013
3.2%
0.9%
2.9 %
0.4 %
3.0%
0.2%
7.5 years
—
$
7.7 years
—
$
7.6 years
—
$
127
NOTE 12 – DEPOSITS
Deposits at December 31 are summarized as follows:
(Dollars in thousands)
Non-interest-bearing deposits
Negotiable order of withdrawal (NOW)
Money market deposits accounts (MMDA)
Savings deposits
Certificates of deposit and other time deposits
$
2015
4,352,229 $
2,974,176
6,010,882
716,838
2,124,623
2014
3,195,430
2,462,841
4,168,504
577,513
2,116,237
$ 16,178,748 $ 12,520,525
Total time deposits summarized by denomination at December 31 are as follows:
(Dollars in thousands)
Time deposits less than $250,000
Time deposits greater than $250,000
2015
1,456,804 $
667,819
2,124,623 $
2014
1,767,448
348,789
2,116,237
$
$
A schedule of maturities of all time deposits as of December 31, 2015 is as follows:
(Dollars in thousands)
Years ending December 31
2016
2017
2018
2019
2020
2021 and thereafter
NOTE 13 – SHORT-TERM BORROWINGS
Short-term borrowings at December 31 are summarized as follows:
(Dollars in thousands)
Federal Home Loan Bank advances
Securities sold under agreements to repurchase
$
$
1,380,655
423,866
112,915
64,170
81,418
61,599
2,124,623
2015
110,000 $
216,617
326,617 $
2014
603,000
242,742
845,742
$
$
Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature daily and are
reflected at the amount of cash received in connection with the transaction. The Company may be required to provide
additional collateral based on the fair value of the underlying securities.
Additional information on the Company’s short-term borrowings for the years indicated is as follows:
(Dollars in thousands)
Outstanding at December 31
Maximum month-end outstanding balance
Average daily outstanding balance
Average rate during the year
Average rate at year end
$
$
2015
326,617
798,933
426,011
$
2014
845,742
1,034,741
782,033
0.18 %
0.20 %
0.17 %
0.18 %
2013
680,344
680,344
303,352
0.16 %
0.15 %
128
The Company has various funding arrangements with commercial banks providing up to $180.0 million in the form of Federal
funds and other lines of credit. At December 31, 2015, there were no balances outstanding on these lines and all of the funding
was available to the Company.
NOTE 14 – LONG-TERM DEBT
Long-term debt at December 31 is summarized as follows:
(Dollars in thousands)
IBERIABANK:
Federal Home Loan Bank notes, 0.903% to 7.040%
Notes payable - Investment fund contribution, 7 to 40 year term, 0.50% to 5.00% fixed
IBERIABANK Corporation (junior subordinated debt):
Statutory Trust I, 3 month LIBOR (1), plus 3.25%, issued November 2002
Statutory Trust II, 3 month LIBOR (1), plus 3.15%, issued June 2003
Statutory Trust III, 3 month LIBOR (1), plus 2.00%, issued September 2004
Statutory Trust IV, 3 month LIBOR (1), plus 1.60%, issued October 2006
American Horizons Statutory Trust I, 3 month LIBOR (1), plus 3.15%, assumed January
2005
Statutory Trust V, 3 month LIBOR (1), plus 1.435%, issued June 2007
Statutory Trust VI, 3 month LIBOR (1), plus 2.75%, issued November 2007
Statutory Trust VII, 3 month LIBOR (1), plus 2.54%, issued November 2007
Statutory Trust VIII, 3 month LIBOR (1), plus 3.50%, issued March 2008
OMNI Trust I, 3 month LIBOR (1), plus 3.30%, assumed May 2011
OMNI Trust II, 3 month LIBOR (1), plus 2.79%, assumed May 2011
GA Commerce Trust II, 3 month LIBOR (1), plus 1.64%, assumed May 2015
2015
2014
$
136,628 $
83,709
220,337
10,310
10,310
10,310
15,464
6,186
10,310
12,372
13,403
7,217
8,248
7,732
8,248
120,110
340,447 $
$
210,549
80,843
291,392
10,310
10,310
10,310
15,464
6,186
10,310
12,372
13,403
7,217
8,248
7,732
—
111,862
403,254
(1) The interest rate on the Company’s long-term debt indexed to LIBOR is based on the 3-month LIBOR rate. The 3-month
LIBOR rate was 0.61% and 0.26% at December 31, 2015 and 2014, respectively.
Outstanding FHLB advances are a mix of bullet and amortizing structures. Amortizing FHLB advances are amortized over
periods ranging from 2.5 to 20 years, and have a balloon feature at maturity. Advances are collateralized by a blanket pledge of
eligible loans, subject to contractual adjustments which reduce the borrowing base, as well as a secondary pledge of FHLB
stock and FHLB demand deposits, the amount of which can exceed the amounts borrowed based on contractually required
adjustments. Total additional advances available from the FHLB at December 31, 2015 were $4.6 billion under the blanket
floating lien including $1.2 billion from pledges of investment securities. The weighted average advance rate was 3.79% and
3.24% at December 31, 2015 and 2014, respectively.
Junior subordinated debt consists of a total of $120.1 million in Junior Subordinated Deferrable Interest Debentures of the
Company issued to statutory trusts that were funded by the issuance of floating rate capital securities of the trusts. The terms of
the junior subordinated debt are 30 years, and they are callable at par by the Company any time after 5 years. Interest is payable
quarterly and may be deferred at any time at the election of the Company for up to 20 consecutive quarterly periods. During a
deferral period, the Company is subject to certain restrictions, including being prohibited from declaring and paying dividends
to its common shareholders.
Effective January 1, 2015, 75% of the Company's junior subordinated debt was excluded from Tier 1 capital for regulatory
purposes. The remaining 25% will be excluded effective January 1, 2016.
129
Advances and long-term debt at December 31, 2015 have maturities or call dates in future years as follows:
(Dollars in thousands)
2016
2017
2018
2019
2020
2021 and thereafter
$
$
34,789
61,899
21,057
7,865
16,308
198,529
340,447
NOTE 15 – INCOME TAXES
The provision for income tax expense consists of the following for the years ended December 31:
(Dollars in thousands)
Current expense
Deferred expense (benefit)
Tax credits
ASU 2014-01 Amortization on Low Income Housing Tax Credits
Tax benefits attributable to items charged to equity and goodwill
2015
2014
2013
67,025 $
4,551
(11,268)
2,023
1,763
64,094 $
69,612 $
(25,027)
(12,012)
1,005
2,105
35,683 $
62,468
(35,930)
(11,690)
251
1,034
16,133
$
$
There was a balance receivable of $13 million and $2 million for federal and state income taxes at December 31, 2015 and
2014, respectively. The provision for federal income taxes differs from the amount computed by applying the federal income
tax statutory rate of 35 percent on income before income tax expense as indicated in the following analysis for the years ended
December 31:
(Dollars in thousands)
Federal tax based on statutory rate
Increase (decrease) resulting from:
Effect of tax-exempt income
Interest and other nondeductible expenses
State taxes, net of federal benefit
Tax credits
ASU 2014-01 Amortization on Low Income Housing Tax Credits
Other
Effective tax rate
2015
72,428
$
2014
49,373
$
2013
28,441
$
(6,919 )
5,899
3,955
(11,268 )
2,023
(2,024 )
64,094
$
31.0 %
(7,064 )
2,642
2,531
(12,012 )
1,005
(792 )
35,683
$
25.3 %
(7,282 )
2,007
3,237
(11,690 )
251
1,169
16,133
19.9 %
$
The composition of other items resulting in a net tax benefit of $2.0 million for the year ending December 31, 2015 arose
principally from a decrease of $1.3 million related to effects of prior year amended returns and by $0.6 million for other
discrete items, including prior year provision-to-return adjustments.
130
The net deferred tax asset at December 31 is as follows:
(Dollars in thousands)
Deferred tax asset:
NOL carryforward
Allowance for credit losses
Deferred compensation
Basis difference in acquired assets
Unrealized loss on securities available for sale
OREO
Other
Deferred tax liability:
Basis difference in acquired assets
Gain on acquisition
FHLB stock
Premises and equipment
Acquisition intangibles
Deferred loan costs
Unrealized gain on securities available for sale
Investments acquired
Swap gain
Other
Net deferred tax asset
2015
2014
$
17,258 $
56,446
7,528
48,256
854
6,210
10,438
146,990
(31,975)
(212)
(122)
(1,658)
(7,648)
(4,610)
—
(167)
—
(16,694)
(63,086)
83,904 $
$
978
59,267
6,631
53,202
—
9,845
13,530
143,453
(53,940)
(2,426)
(85)
(9,652)
(12,151)
(3,771)
(4,052)
(570)
(75)
(12,908)
(99,630)
43,823
Net operating loss carryforwards arising from acquisitions during 2015 expire over a 20-year period and will be utilized subject
to annual Internal Revenue Code Section 382 limitations. No benefit was recognized at acquisition for net operating losses that
will expire unused due to the IRS limitations.
The Company determined that the net deferred tax asset is more likely than not to be realized based on an assessment of all
available positive and negative evidence and therefore no valuation allowance has been recorded as of December 31, 2015 or
2014.
Retained earnings at December 31, 2015 and 2014 included approximately $21.9 million accumulated prior to January 1, 1987
for which no provision for federal income taxes has been made. If this portion of retained earnings is used in the future for any
purpose other than to absorb bad debts, it will be added to future taxable income.
The Company does not believe it has any unrecognized tax benefits included in its consolidated financial statements. The
Company has not had any settlements in the current period with taxing authorities, nor has it recognized tax benefits as a result
of a lapse of the applicable statute of limitations.
During the years ended December 31, 2015, 2014, and 2013, the Company did not recognize any interest or penalties in its
consolidated financial statements, nor has it recorded a liability for interest or penalty payments.
131
NOTE 16 – SHAREHOLDERS' EQUITY, CAPITAL RATIOS AND OTHER REGULATORY MATTERS
During the third quarter of 2015, the Company issued an aggregate of 3,200,000 depositary shares (the “Depositary Shares”),
each representing a 1/400th ownership interest in a share of the Company’s 6.625% Fixed-to-Floating Non-Cumulative
Perpetual Preferred Stock, Series B, par value $1.00 per share, (“Series B Preferred Stock”), with a liquidation preference of
$10,000 per share of Series B Preferred Stock (equivalent to $25 per depositary share) which represents $80,000,000 in
aggregate liquidation preference.
Dividends will accrue and be payable on the Series B preferred stock, subject to declaration by the Company’s board of
directors, from the date of issuance to, but excluding August 1, 2025, at a rate of 6.625% per annum, payable semi-annually, in
arrears, and from and including August 1, 2025, dividends will accrue and be payable at a floating rate equal to three-month
LIBOR plus a spread of 426.2 basis points, payable quarterly, in arrears. The Company may redeem the Series B preferred
stock at its option, subject to regulatory approval, as described in the Prospectus. On January 4, 2016, the Company declared a
semi-annual cash dividend of $0.805 per depositary share , which was paid on February 1, 2016.
The Company and IBERIABANK are subject to various regulatory capital requirements administered by the federal and state
banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated
financial statements. Under capital adequacy regulations and the regulatory framework for prompt corrective action, the
Company and IBERIABANK, as applicable, must meet specific capital guidelines that involve quantitative measures of their
assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts
and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other
factors.
On January 1, 2015, the Company and IBERIABANK became subject to revised capital adequacy standards as implemented by
new final rules approved by the U.S. banking regulatory agencies, including the FRB, to implement the revised standards of the
BCBS and to address relevant provisions of the Dodd-Frank Act. Certain provisions of the new rules will be phased in from
that date to January 1, 2019.
The final rules:
• Require that non-qualifying capital instruments, including trust preferred securities and cumulative perpetual preferred
stock, must be fully phased out of Tier 1 capital by January 1, 2016,
• Establish new qualifying criteria for regulatory capital, including new limitations on the inclusion of deferred tax
assets and mortgage servicing rights,
• Require a minimum ratio of common equity Tier 1 capital (“CET1”) to risk-weighted assets of 4.5%,
•
Increase the minimum Tier 1 capital to risk-weighted assets ratio requirements from 4% to 6%,
•
Implement a new capital conservation buffer requirement for a banking organization to maintain a buffer composed of
CET1 capital in an amount greater than 2.5% above the minimum CET1 capital, Tier 1 capital and total risk-based
capital ratios in order to avoid limitations on capital distributions, including dividend payments, and certain
discretionary bonus payments to executive officers, with the buffer to be phased in beginning on January 1, 2016 at
0.625% and increasing annually until fully phased in at 2.5% by January 1, 2019. A banking organization with a buffer
of less than the required amount would be subject to increasingly stringent limitations on certain distributions and
payments as the buffer approaches zero, and
Increase capital requirements for past-due loans, high volatility commercial real estate exposures, and certain short-
term commitments and securitization exposures.
•
Management believes that, as of December 31, 2015, the Company and IBERIABANK met all capital adequacy requirements
to which they are subject.
As of December 31, 2015, the most recent notification from the FRB categorized IBERIABANK as well-capitalized under the
regulatory framework for prompt corrective action (the prompt corrective action requirements are not applicable to the
Company). To be categorized as well-capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based and
Tier 1 leverage ratios as set forth in the following table. There are no conditions or events since the notification that
management believes have changed that categorization. The Company’s and IBERIABANK’s actual capital amounts and ratios
as of December 31 are presented in the following table.
132
(Dollars in thousands)
Tier 1 Leverage
Consolidated
IBERIABANK
Common Equity Tier 1 (CET1) (1)
Consolidated
IBERIABANK
Tier 1 risk-based capital
Consolidated
IBERIABANK
Total risk-based capital
Consolidated
IBERIABANK
Tier 1 Leverage
Consolidated
IBERIABANK
Tier 1 risk-based capital
Consolidated
IBERIABANK
Total risk-based capital
Consolidated
IBERIABANK
Minimum
Well-Capitalized
Actual
Amount
Ratio
Amount
Ratio
Amount
Ratio
2015
$ 751,798
749,226
4.00 %
4.00
N/A
936,532
N/A $ 1,790,034
1,691,022
5.00
9.52 %
9.03
$ 752,610
750,660
4.50 %
4.50
N/A
1,084,287
N/A $ 1,684,097
1,691,022
6.50
10.07 %
10.14
$ 1,003,479
1,000,880
6.00 %
6.00
N/A
1,334,507
N/A $ 1,790,034
1,691,022
8.00
$ 1,337,973
1,334,507
8.00 %
8.00
N/A
1,668,133
N/A $ 2,029,932
1,843,545
10.00
10.70 %
10.14
12.14 %
11.05
Minimum
Well-Capitalized
Actual
Amount
Ratio
Amount
Ratio
Amount
Ratio
2014
$ 602,359
600,121
$ 504,086
502,421
4.00 %
4.00
N/A
750,151
N/A $ 1,408,141
1,265,540
5.00
4.00 %
4.00
N/A
753,631
N/A $ 1,408,141
1,265,540
6.00
$ 1,008,171
1,004,841
8.00 %
8.00
N/A
1,256,052
N/A $ 1,550,088
1,407,487
10.00
9.35%
8.44
11.17%
10.08
12.30%
11.21
(1) Beginning January 1, 2016, minimum capital ratios will be subject to a capital conservation buffer of 0.625%. This capital
conservation buffer will increase in subsequent years by 0.625% until it is fully phased in on January 1, 2019 at 2.50%.
Restrictions on Dividends, Loans and Advances
IBERIABANK is restricted under applicable laws in the payment of dividends to an amount equal to current year earnings plus
undistributed earnings for the immediately preceding year, unless prior permission is received from the Commissioner of
Financial Institutions for the State of Louisiana. Dividends payable by IBERIABANK in 2016 without permission will be
limited to 2016 earnings plus an additional $148.7 million.
Funds available for loans or advances by IBERIABANK to the Parent amounted to $184.4 million. In addition, any dividends
that may be paid by IBERIABANK to the Parent would be restricted if IBERIABANK did not comply with the above-
described capital conservation buffer requirements and would be prohibited if the effect thereof would cause IBERIABANK’s
capital to be reduced below applicable minimum capital requirements.
During any deferral period under the Company’s junior subordinated debt, the Company would be prohibited from declaring
and paying dividends to preferred and common shareholders. In addition, so long as any shares of Series B Preferred Stock
remain outstanding, we are prohibited from paying dividends on any of our common stock if the required payments on our
Series B Preferred Stock have not been made. See Note 14 to the consolidated financial statements for additional information.
133
NOTE 17 –EARNINGS PER SHARE
Share-based payment awards that entitle holders to receive non-forfeitable dividends before vesting are considered
participating securities that are included in the calculation of earnings per share using the two-class method. The two-class
method is an earnings allocation formula under which earnings per share is calculated for common stock and participating
securities according to dividends declared and participating rights in undistributed earnings. Under this method, all earnings,
distributed and undistributed, are allocated to common shares and participating securities based on their respective rights to
receive dividends.
The following table presents the calculation of basic and diluted earnings per share for the periods indicated.
(In thousands, except per share data)
Earnings per common share - basic
Net income
For the Years Ended December 31,
2015
2014
2013
$
142,844 $
105,382 $
65,128
Dividends and undistributed earnings allocated to unvested restricted shares
Net income allocated to common shareholders - basic
$
Weighted average common shares outstanding
Earnings per common share - basic
Earnings per common share - diluted
(1,680)
141,164 $
38,214
3.69
(1,651)
103,731 $
31,307
3.31
(1,205)
63,923
29,052
2.20
Net income allocated to common shareholders - basic
Dividends and undistributed earnings allocated to unvested restricted shares
$
141,164 $
103,731 $
63,923
Net income allocated to common shareholders - diluted
Weighted average common shares outstanding
Dilutive potential common shares
Weighted average common shares outstanding - diluted
Earnings per common share outstanding - diluted
(48)
141,116 $
38,214
96
38,310
3.68 $
(34)
103,697 $
31,307
126
31,433
3.30 $
$
$
(4)
63,919
29,052
53
29,105
2.20
For the years ended December 31, 2015, 2014, and 2013, the calculations for basic shares outstanding exclude the weighted
average shares owned by the Recognition and Retention Plan (“RRP”) of 607,608; 625,555; and 642,008, respectively.
The effects from the assumed exercises of 159,236; 13,101; and 483,696 stock options were not included in the computation of
diluted earnings per share for the years ended December 31, 2015, 2014, and 2013, respectively, because such amounts would
have had an antidilutive effect on earnings per common share.
NOTE 18 – SHARE-BASED COMPENSATION
The Company has various types of share-based compensation plans that permit the granting of awards in the form of stock
options, restricted stock, restricted share units, phantom stock and performance units. These plans are administered by the
Compensation Committee of the Board of Directors, which selects persons eligible to receive awards and determines the terms,
conditions and other provisions of the awards. At December 31, 2015, awards of 784,254 shares could be made under approved
incentive compensation plans. The Company issues shares to fulfill stock option exercises and restricted share units and
restricted stock awards vesting from available authorized common shares. At December 31, 2015, the Company believes there
are adequate authorized shares to satisfy anticipated stock option exercises and restricted share unit and restricted stock award
vesting.
Stock option awards
The Company issues stock options under various plans to directors, officers and other key employees. The option exercise price
cannot be less than the fair value of the underlying common stock as of the date of the option grant and the maximum option
term cannot exceed ten years.
134
The following table represents the activity related to stock options during the periods indicated:
Outstanding options, December 31, 2012
Granted
Exercised
Forfeited or expired
Outstanding options, December 31, 2013
Granted
Exercised
Forfeited or expired
Outstanding options, December 31, 2014
Granted
Exercised
Forfeited or expired
Outstanding options, December 31, 2015
Exercisable options, December 31, 2013
Exercisable options, December 31, 2014
Exercisable options, December 31, 2015
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value
(Dollars in
thousands)
Weighted
Average
Remaining
Contract Life
(in years)
51.48
52.36
40.35 $
55.87
53.47
65.31
48.57
60.38
55.92
62.50
51.71
66.52
56.99 $
53.54
55.92
56.54 $
2,740
4,612
1,516
1,061
5.1
665
3.9
Number of
Shares
1,236,075 $
75,722
(200,748 )
(38,220 )
1,072,829 $
77,434
(267,421 )
(15,160 )
867,682 $
82,001
(119,917 )
(15,989 )
813,777 $
707,934
562,752
546,842 $
The following table represents weighted average remaining life as of December 31, 2015 for options outstanding within the
stated exercise prices:
Options Outstanding
Options Exercisable
Exercise Price Range Per Share
$36.48 to $51.69
$51.70 to $52.88
$52.89 to $56.26
$56.27 to $59.04
$59.05 to $62.39
$62.40 to $111.71
Total options
Weighted Average
Exercise Price
Weighted Average
Remaining Life
Weighted Average
Exercise Price
Number of
Options
108,856 $
170,627
133,884
121,591
119,583
159,236
813,777 $
50.05
52.34
54.94
57.53
59.92
65.83
56.99
5.4 years
Number of
Options
70,437 $
86,365
6.5 years
4.3 years 124,397
1.2 years 119,855
3.4 years 116,867
28,921
8.2 years
5.1 years 546,842 $
49.69
52.34
54.89
57.52
59.87
75.41
56.54
The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards. The following
weighted-average assumptions were used for option awards issued during the years ended December 31:
2015
2014
2013
Expected dividends
Expected volatility
Risk-free interest rate
Expected term (in years)
2.2 %
35.6 %
2.0 %
7.5
2.1 %
35.8 %
2.3 %
7.5
Weighted-average grant-date fair value
$
19.57
$
21.26
$
2.6 %
34.8 %
1.7 %
8.6
15.37
The assumptions above are based on multiple factors, including historical stock option exercise patterns and post-vesting
employment termination behaviors, expected future exercise patterns and the expected volatility of the Company’s stock price.
135
The following table represents the compensation expense that is included in non-interest expense and related income tax
benefits in the accompanying consolidated statements of comprehensive income related to stock options for the years ended
December 31:
(Dollars in thousands)
Compensation expense related to stock options
Income tax benefit related to stock options
2015
2014
2013
$
1,861 $
317
2,053 $
375
2,110
379
At December 31, 2015, there was $2.7 million of unrecognized compensation cost related to stock options that is expected to be
recognized over a weighted-average period of 5.1 years.
Restricted stock awards
The Company issues restricted stock under various plans for certain officers and directors. The restricted stock awards may not
be sold or otherwise transferred until certain restrictions have lapsed. The holders of the restricted stock receive dividends and
have the right to vote the shares. The compensation expense for these awards is determined based on the market price of the
Company's common stock at the date of grant applied to the total number of shares granted and is recognized over the vesting
period (generally three to seven years). As of December 31, 2015 and 2014, unrecognized share-based compensation associated
with these awards totaled $19.5 million and $19.8 million, respectively. The unrecognized compensation cost related to
restricted stock awards at December 31, 2015 is expected to be recognized over a weighted-average period of 2.7 years.
Restricted share units
In 2015 and 2014, the Company issued restricted share units to certain of its executive officers. Restricted share units vest after
the end of a three years performance period, based on satisfaction of the market and performance conditions set forth in the
restricted share unit agreement. Recipients do not possess voting or investment power over the common stock underlying such
units until vesting. The grant date fair value of these restricted share units is the same as the value of the corresponding number
of shares of common stock, adjusted for assumptions surrounding the market-based conditions contained in the respective
agreements. See Note 1 for further discussion of restricted share units with market or performance conditions.
The following table represents the compensation expense that was included in non-interest expense and related income tax
benefits in the accompanying consolidated statements of comprehensive income related to restricted stock awards and restricted
share units for the years ended December 31:
(Dollars in thousands)
Compensation expense related to restricted stock awards and restricted
share units
Income tax benefit related to restricted stock awards and restricted share
units
2015
2014
2013
$
12,045
$
9,932
$
8,593
4,215
3,476
3,008
The following table represents unvested restricted stock award and restricted share unit activity for the years ended
December 31:
Balance at beginning of period
Granted
Forfeited
Earned and issued
Balance at end of period
2015
506,289
207,575
(26,970)
(179,764)
507,130
2014
523,756
168,254
(18,171)
(167,550)
506,289
2013
538,202
167,095
(28,713)
(152,828)
523,756
The weighted average grant date fair value of restricted stock awards and restricted share units granted was $63.16, $65.11, and
$51.98 for the years ended December 31, 2015, 2014, and 2013, respectively. The total fair value of restricted stock awards
and restricted share units vested during the years ended December 31, 2015, 2014, and 2013 was $11.3 million, $10.9 million,
and $7.8 million, respectively.
Phantom stock awards
The Company issues phantom stock awards to certain key officers and employees. The award is subject to a vesting period of
five to seven years and is paid out in cash upon vesting. The amount paid per vesting period is calculated as the number of
136
vested “share equivalents” multiplied by the closing market price of a share of the Company’s common stock on the vesting
date. Share equivalents are calculated on the date of grant as the total award’s dollar value divided by the closing market price
of a share of the Company’s common stock on the grant date. Award recipients are also entitled to a “dividend equivalent” on
each unvested share equivalent held by the award recipient. A dividend equivalent is a dollar amount equal to the cash
dividends that the participant would have been entitled to receive if the participant’s share equivalents were issued in shares of
common stock. Dividend equivalents are reinvested as share equivalents that will vest and be paid out on the same date as the
underlying share equivalents on which the dividend equivalents were paid. The number of share equivalents acquired with a
dividend equivalent is determined by dividing the aggregate of dividend equivalents paid on the unvested share equivalents by
the closing price of a share of the Company’s common stock on the dividend payment date.
Performance units
In 2015 and 2014, the Company issued performance units to certain of its executive officers. Performance units are tied to the
value of shares of the Company's common stock, are payable in cash, and vest in increments of one-third per year after
attainment of one or more performance measures. The value of performance units is the same as the value of the corresponding
number of shares of common stock.
The following table indicates compensation expense recorded for phantom stock and performance units based on the number of
share equivalents vested at December 31 of the years indicated and the current market price of the Company’s stock at that
time:
(Dollars in thousands)
Compensation expense related to phantom stock and performance units
2015
2014
2013
$
12,109 $
5,496 $
4,855
The following table represents phantom stock award and performance unit activity during the periods indicated.
(Dollars in thousands)
Balance, December 31, 2012
Granted
Forfeited share equivalents
Vested share equivalents
Balance, December 31, 2013
Granted
Forfeited share equivalents
Vested share equivalents
Balance, December 31, 2014
Granted
Forfeited share equivalents
Vested share equivalents
Balance, December 31, 2015
Number of share
equivalents (1)
328,273 $
179,041
(18,744)
(54,686)
433,884 $
146,166
(22,800)
(81,903)
475,347 $
167,573
(34,681)
(145,809)
462,430 $
Value of share
equivalents (2)
16,125
11,253
1,178
2,937
27,270
9,479
1,479
5,512
30,826
9,228
1,910
9,288
25,466
(1) Number of share equivalents includes all reinvested dividend equivalents for the years indicated.
(2) Except for share equivalents at the beginning of each period, which are based on the value at that time, and vested share
payments, which are based on the cash paid at the time of vesting, the value of share equivalents is calculated based on
the market price of the Company’s stock at the end of the respective periods. The market price of the Company’s stock
was $55.07, $64.85 and $62.85 on December 31, 2015, 2014 and 2013, respectively.
401(k) defined contribution plan
The Company has a 401(k) Profit Sharing Plan covering substantially all of its employees. Annual employer contributions to
the Plan are set by the Board of Directors. The Company made contributions of $1.7 million, $1.5 million, and 1.3 million for
the years ended December 31, 2015, 2014, and 2013, respectively. The Plan provides, among other things, that participants in
the Plan be able to direct the investment of their account balances within the Profit Sharing Plan into alternative investment
funds. Participant deferrals under the salary reduction election may be matched by the employer based on a percentage to be
determined annually by the employer.
137
NOTE 19 – COMMITMENTS AND CONTINGENCIES
Off-balance sheet commitments
In the normal course of business, to meet the financing needs of its customers, the Company is a party to credit related financial
instruments, with risk not reflected in the consolidated financial statements. These financial instruments include commitments
to extend credit, standby letters of credit, and commercial letters of credit. Such commitments involve, to varying degrees,
elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The credit
policies used for these commitments are consistent with those used for on-balance sheet instruments. The Company’s exposure
to credit loss in the event of non-performance by its customers under such commitments or letters of credit represents the
contractual amount of the financial instruments as indicated in the table below. At December 31, 2015 and 2014, the fair value
of guarantees under commercial and standby letters of credit was $1.5 million and $1.3 million, respectively. This fair value
amount represents the unamortized fees associated with these guarantees and is included in “other liabilities” on the Company's
consolidated balance sheets. This fair value will decrease as the existing commercial and standby letters of credit approach their
expiration dates.
At December 31, the Company had the following financial instruments outstanding and related reserves, whose contract
amounts represent credit risk:
(Dollars in thousands)
Commitments to grant loans
Unfunded commitments under lines of credit
Commercial and standby letters of credit
Reserve for unfunded lending commitments
2015
$
61,240 $
4,617,802
150,281
14,145
2014
161,350
4,007,954
134,882
11,801
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established
in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a
fee. Since many of the commitments are expected to be drawn upon, the total commitment amounts generally represent future
cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral,
if any, is based on management’s credit evaluation of the customer.
Unfunded commitments under commercial lines of credit, revolving credit lines, and overdraft protection agreements are
commitments for possible future extensions of credit to existing customers. Many of these types of commitments do not contain
a specified maturity date and may not be drawn upon to the total extent to which the Company is committed. See Note 6 for
additional discussion related to the Company’s unfunded lending commitments.
Commercial and standby letters of credit are conditional commitments issued by the Company to guarantee the performance of
a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements,
including commercial paper issuance, bond financing, and similar transactions. The credit risk involved in issuing letters of
credit is essentially the same as that involved in extending loan facilities to customers. When necessary they are collateralized,
generally in the form of marketable securities and cash equivalents.
Legal proceedings
The nature of the business of the Company’s banking and other subsidiaries ordinarily results in a certain amount of claims,
litigation, investigations, and legal and administrative cases and proceedings, all of which are considered incidental to the
normal conduct of business. Some of these claims are against entities or assets of which the Company is a successor or
acquired in business acquisitions and certain of these claims will be covered by loss sharing agreements with the FDIC. The
Company has asserted defenses to these litigations and, with respect to such legal proceedings, intends to continue to defend
itself vigorously, litigating or settling cases according to management’s judgment as to what is in the best interest of the
Company and its shareholders.
The Company assesses its liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest
information available. Where it is probable that the Company will incur a loss and the amount of the loss can be reasonably
estimated, the Company records a liability in its consolidated financial statements. These legal reserves may be increased or
decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of loss is not
estimable, the Company does not accrue legal reserves. While the outcome of legal proceedings is inherently uncertain, based
on information currently available, advice of counsel, and available insurance coverage, the Company’s management believes
138
that it has established appropriate legal reserves. Any liabilities arising from pending legal proceedings are not expected to have
a material adverse effect on the Company’s consolidated financial position, consolidated results of operations, or consolidated
cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of these matters,
if unfavorable, may be material to the Company’s consolidated financial position, consolidated results of operations, or
consolidated cash flows.
As of the date of this filing, the Company believes the amount of losses associated with legal proceedings that it is reasonably
possible to incur above amounts already accrued is immaterial.
NOTE 20 – FAIR VALUE MEASUREMENTS
Recurring fair value measurements
The Company has segregated all financial assets and liabilities that are measured at fair value on a recurring basis into the most
appropriate level within the fair value hierarchy based on the inputs used to estimate the fair value at the measurement date in
the tables below. See Note 1, Summary of Significant Accounting Policies, for a description of how fair value measurements
are determined.
(Dollars in thousands)
Assets
Securities available for sale
Mortgage loans held for sale
Derivative instruments
Total
Liabilities
Derivative instruments
Total
Assets
Securities available for sale
Mortgage loans held for sale
Derivative instruments
Total
Liabilities
Derivative instruments
Total
Level 1
Level 2
Level 3
Total
December 31, 2015
— $
—
—
— $
— $
— $
2,800,286 $
166,247
30,486
2,997,019 $
24,939 $
24,939 $
— $
—
—
— $
— $
— $
2,800,286
166,247
30,486
2,997,019
24,939
24,939
Level 1
Level 2
Level3
Total
December 31, 2014
— $
—
—
— $
— $
— $
2,158,853 $
139,950
32,903
2,331,706 $
31,354 $
31,354 $
— $
—
—
— $
— $
— $
2,158,853
139,950
32,903
2,331,706
31,354
31,354
$
$
$
$
$
$
$
$
During 2015, there were no transfers between the Level 1 and Level 2 fair value categories. During 2014, available for sale
securities with a market value of $14.4 million were transferred from the Level 1 to Level 2 fair value category in the table
above. The security was issued by Freddie Mac and was included in the Level 1 category at December 31, 2013 based on a
recent trade price in the open market.
Gains and losses (realized and unrealized) included in earnings (or accumulated other comprehensive income) during 2015
related to assets and liabilities measured at fair value on a recurring basis are reported in non-interest income or other
comprehensive income as follows:
(Dollars in thousands)
Total gains (losses) included in earnings
Change in unrealized gains (losses) relating to assets still held at December 31, 2015
Non-interest
income
Other
comprehensive
income
$
2,939 $
—
—
(9,110)
139
Non-recurring fair value measurements
The Company has segregated all financial assets and liabilities that are measured at fair value on a non-recurring basis into the
most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement
date in the tables below.
(Dollars in thousands)
Assets
OREO, net
Total
(Dollars in thousands)
Assets
OREO, net
Total
Level 1
Level 2
Level 3
Total
December 31, 2015
— $
— $
1,106 $
1,106 $
— $
— $
1,106
1,106
Level 1
Level 2
Level 3
Total
December 31, 2014
— $
— $
1,483 $
1,483 $
— $
— $
1,483
1,483
$
$
$
$
The tables above exclude the initial measurement of assets and liabilities that were acquired as part of the acquisitions
completed in 2014 and 2015. These assets and liabilities were recorded at their fair value upon acquisition in accordance with
U.S. GAAP and were not re-measured during the periods presented unless specifically required by U.S. GAAP. Acquisition
date fair values represent either Level 2 fair value measurements (investment securities, OREO, property, equipment, and debt)
or Level 3 fair value measurements (loans, deposits, and core deposit intangible asset).
The Company did not record any liabilities at fair value for which measurement of the fair value was made on a non-recurring
basis during the years ended December 31, 2015, 2014 and 2013.
Fair value option
The Company has elected the fair value option for certain originated residential mortgage loans held for sale, which allows for
a more effective offset of the changes in fair values of the loans and the derivative instruments used to hedge them without the
burden of complying with the requirements for hedge accounting.
The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for
mortgage loans held for sale measured at fair value:
December 31, 2015
December 31, 2014
(Dollars in thousands)
Mortgage loans held for sale, at fair value $ 166,247 $ 161,083 $
Aggregate
Fair Value
Aggregate
Unpaid
Principal
Aggregate
Fair Value
Less Unpaid
Principal
Aggregate
Fair Value
Aggregate
Unpaid
Principal
Aggregate
Fair Value
Less Unpaid
Principal
5,164 $ 139,950 $ 134,639 $
5,311
Interest income on mortgage loans held for sale is recognized based on contractual rates and is reflected in interest income on
loans held for sale in the consolidated statements of comprehensive income. Changes in fair value of these loans that were
recorded in mortgage income in the consolidated statements of comprehensive income resulted in net losses of $1.0 million and
$3.5 million for the years ended December 31, 2015 and 2014, respectively. Net gains resulting from the change in fair value of
these loans were $0.4 million for the year ended December 31, 2013. The changes in fair value are mostly offset by economic
hedging activities, with an immaterial portion of these changes attributable to changes in instrument-specific credit risk.
140
NOTE 21 – FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair value of a financial instrument is the current amount that would be exchanged between willing parties, other
than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there
are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not
available, fair values are based on estimates using present value or other valuation techniques. Those techniques are
significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the
fair value estimates may not be realized in an immediate settlement of the instrument. ASC Topic 825, Financial Instruments,
excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Consequently, the
aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.
The carrying amount and estimated fair values, as well as the level within the fair value hierarchy, of the Company’s financial
instruments are included in the tables below. See Note 1, Summary of Significant Accounting Policies, for a description of how
fair value measurements are determined.
(Dollars in thousands)
Financial Assets
Cash and cash equivalents
Investment securities
Loans and loans held for sale, net of
unearned income and allowance for loan
losses
FDIC loss share receivables
Derivative instruments
Financial Liabilities
Deposits
Short-term borrowings
Long-term debt
Derivative instruments
(Dollars in thousands)
Financial Assets
Cash and cash equivalents
Investment securities
December 31, 2015
Carrying
Amount
Fair Value
Level 1
Level 2
Level 3
$
510,267 $
2,899,214
510,267 $
2,901,247
510,267 $
— $
— 2,901,247
—
—
14,355,297
14,674,749
39,878
30,486
9,163
30,486
—
—
—
166,247
—
30,486
14,508,502
9,163
—
$ 16,178,748 $ 15,696,245 $
326,617
309,847
24,939
326,617
340,447
24,939
— $
326,617
—
—
— $ 15,696,245
—
—
309,847
—
24,939
—
Carrying
Amount
Fair Value
Level 1
Level 2
Level 3
December 31, 2014
$
548,095 $
2,275,813
548,095 $
2,278,334
548,095 $
— $
— 2,278,334
—
—
Loans and loans held for sale, net of
unearned income and allowance for loan
losses
FDIC loss share receivables
Derivative instruments
11,450,985
11,475,315
69,627
32,903
19,606
32,903
—
—
—
139,950
—
32,903
11,335,365
19,606
—
Financial Liabilities
Deposits
Short-term borrowings
Long-term debt
Derivative instruments
$ 12,520,525 $ 12,298,017 $
845,742
376,139
31,354
845,742
403,254
31,354
— $
845,742
—
—
— $ 12,298,017
—
—
376,139
—
31,354
—
The fair value estimates presented herein are based upon pertinent information available to management as of December 31,
2015 and 2014. Although management is not aware of any factors that would significantly affect the estimated fair value
amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and,
therefore, current estimates of fair value may differ significantly from the amounts presented herein.
141
NOTE 22 – RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Company may execute transactions with various related parties. These transactions are
consummated at terms equivalent to the prevailing market rates and terms at the time. Examples of such transactions may
include lending or deposit arrangements, transfers of financial assets, services for administrative support, and other
miscellaneous items.
The Company has granted loans to executive officers and directors and their affiliates. These loans, including the related
principal additions, principal payments, and unfunded commitments are immaterial to the consolidated financial statements at
December 31, 2015 and 2014. None of the related party loans were classified as non-accrual, past due, troubled debt
restructurings, or potential problem loans at December 31, 2015 and 2014.
Deposits from related parties held by the Company were also immaterial at December 31, 2015 and 2014.
NOTE 23 – BUSINESS SEGMENTS
Each of the Company’s reportable operating segments serves the specific needs of the Company’s customers based on the
products and services it offers. The reportable segments are based upon those revenue-producing components for which
separate financial information is produced internally and primarily reflect the manner in which resources are allocated and
performance is assessed. Further, the reportable operating segments are also determined based on the quantitative thresholds
prescribed within ASC Topic 280, Segment Reporting, and consideration of the usefulness of the information to the users of the
consolidated financial statements.
The Company reports the results of its operations through three reportable segments: IBERIABANK, IMC, and LTC. The
IBERIABANK segment represents the Company’s commercial and retail banking functions, including its lending, investment,
and deposit activities. IBERIABANK also includes the Company’s wealth management, capital markets, and other corporate
functions. The IMC segment represents the Company’s origination, funding, and subsequent sale of one-to-four family
residential mortgage loans. The LTC segment represents the Company’s title insurance and loan closing services.
Certain expenses not directly attributable to a specific reportable segment are allocated to segments based on pre-determined
methods that reflect utilization. Also within IBERIABANK are certain reconciling items that translate reportable segment
results into consolidated results. The following tables present certain information regarding our operations by reportable
segment, including a reconciliation of segment results to reported consolidated results for the periods presented. Reconciling
items between segment results and reported results include:
• Elimination of interest income and interest expense representing interest earned by IBERIABANK on interest-bearing
checking accounts held by related companies, as well as the elimination of the related deposit balances at the
IBERIABANK segment;
• Elimination of investment in subsidiary balances on certain operating segments included in total and average segment
assets; and
• Elimination of intercompany due to and due from balances on certain operating segments that are included in total and
average segment assets.
142
(Dollars in thousands)
Interest and dividend income
Interest expense
Net interest income
Provision for loan losses
Mortgage income
Title revenue
Other non-interest income
Allocated expenses
Non-interest expense
Income before income tax expense
Income tax expense
Net income
Total loans and loans held for sale, net of unearned
income
Total assets
Total deposits
Average assets
(Dollars in thousands)
Interest and dividend income
Interest expense
Net interest income
Provision for loan losses
Mortgage income
Title revenue
Other non-interest income
Allocated expenses
Non-interest expense
Income before income tax expense
Income tax expense
Net income
Total loans and loans held for sale, net of unearned
income
Total assets
Total deposits
Average assets
Year Ended December 31, 2015
IBERIABANK
IMC
LTC
Consolidated
$
$
639,793 $
56,222
583,571
30,908
1,426
—
116,443
(16,253)
495,158
191,627
58,006
133,621 $
7,062 $
2,878
4,184
—
79,696
—
(2)
12,036
57,784
14,058
5,581
8,477 $
3 $
—
3
—
—
22,837
(7)
4,217
17,363
1,253
507
746 $
646,858
59,100
587,758
30,908
81,122
22,837
116,434
—
570,305
206,938
64,094
142,844
$
$ 14,305,663
19,220,085
16,173,831
18,146,216
$
188,012
256,888
4,917
230,819
—
27,095
—
25,671
$ 14,493,675
19,504,068
16,178,748
18,402,706
Year Ended December 31, 2014
IBERIABANK
IMC
LTC
Consolidated
$
$
498,820 $
42,983
455,837
18,966
71
—
101,401
(11,602 )
412,165
137,780
34,352
103,428 $
5,992 $
1,721
4,271
94
51,726
—
(61 )
8,203
44,761
2,878
1,148
1,730 $
3 $
—
3
—
—
20,492
(1 )
3,399
16,688
407
183
224 $
504,815
44,704
460,111
19,060
51,797
20,492
101,339
—
473,614
141,065
35,683
105,382
$
$ 11,415,973
15,537,731
12,515,329
14,430,768
$
165,143
194,156
5,196
176,003
—
26,017
—
25,223
$ 11,581,116
15,757,904
12,520,525
14,631,994
143
(Dollars in thousands)
Interest and dividend income
Interest expense
Net interest income
Provision for loan losses
Mortgage income
Title revenue
Other non-interest income
Allocated expenses
Non-interest expense
Income before income tax expense
Income tax expense
Net income
Total loans and loans held for sale, net of unearned
income
Total assets
Total deposits
Average assets
Year Ended December 31, 2013
IBERIABANK
IMC
LTC
Consolidated
$
$
$
431,418 $
45,150
386,268
5,123
2
—
84,243
(7,453)
406,380
66,463
10,299
56,164 $
5,747 $
1,803
3,944
22
64,195
—
(10)
5,417
49,723
12,967
5,093
7,874 $
32 $
—
32
—
—
20,526
2
2,036
16,693
1,831
741
1,090 $
437,197
46,953
390,244
5,145
64,197
20,526
84,235
—
472,796
81,261
16,133
65,128
$
9,472,908
13,167,162
10,734,030
12,794,997
$
147,553
173,131
2,970
183,513
$
—
25,257
—
25,478
9,620,461
13,365,550
10,737,000
13,003,988
NOTE 24 – CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS
Condensed financial statements of the Parent are shown below. The Parent has no significant operating activities.
Condensed Balance Sheets
(Dollars in thousands)
Assets
Cash in bank
Investments in subsidiaries
Other assets
Liabilities and Shareholders’ Equity
Liabilities
Shareholders’ equity
December 31
2015
2014
$
$
$
$
154,298 $
2,449,325
54,454
2,658,077 $
36,064
1,841,420
119,493
1,996,977
159,242 $
2,498,835
2,658,077 $
144,829
1,852,148
1,996,977
144
Condensed Statements of Income
(Dollars in thousands)
Operating income
Dividends from bank subsidiary
Dividends from non-bank subsidiaries
Reimbursement of management expenses
Other income
Total operating income
Operating expenses
Interest expense
Salaries and employee benefits expense
Other expenses
Total operating expenses
Income (loss) before income tax benefit and increase in equity in
undistributed earnings of subsidiaries
Income tax expense (benefit)
Income (loss) before equity in undistributed earnings of subsidiaries
Equity in undistributed earnings of subsidiaries
Net income
Year Ended December 31
2015
2014
2013
$
$
— $
—
59,255
(329)
58,926
3,393
41,689
17,492
62,574
(3,648)
800
(4,448)
147,292
142,844 $
— $
—
46,433
437
46,870
3,224
31,981
14,576
49,781
(2,911)
(518)
(2,393)
107,775
105,382 $
49,000
1,511
34,474
869
85,854
3,232
29,159
13,651
46,042
39,812
(2,808)
42,620
22,508
65,128
145
Condensed Statements of Cash Flows
(Dollars in thousands)
2015
2014
2013
Year Ended December 31
Cash Flow from Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating
activities:
$
142,844 $
105,382 $
65,128
Depreciation and amortization
Net income of subsidiaries
Share-based compensation cost
Gain on sale of assets
Tax benefit associated with share-based payment arrangements
Other, net
Net Cash Provided by (Used in) Operating Activities
Cash Flow from Investing Activities
Cash paid in excess of cash received for acquisitions
Proceeds from sale of premises and equipment
Purchases of premises and equipment
Return of capital from (Capital contributed to) subsidiary
Dividends received from subsidiaries
Net Cash (Used in) Provided by Investing Activities
Cash Flow from Financing Activities
Cash dividends paid on common stock
Proceeds from common stock transactions
Payments to repurchase common stock
Net proceeds from issuance of preferred stock
Tax benefit associated with share-based payment arrangements
Net Cash Provided by (Used In) Financing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period
$
416
(147,292)
13,906
(110)
(580)
82,105
91,289
(5,054)
12
(2)
5,000
—
(44)
595
(107,775)
11,985
—
(2,105)
(27,274)
(19,192)
4,783
—
(36)
(14,600)
—
(9,853)
(52,318)
5,535
(3,620)
76,812
580
26,989
118,234
36,064
154,298 $
(43,070)
11,693
(3,727)
—
2,105
(32,999)
(62,044)
98,108
36,064 $
2,035
(73,044)
10,703
—
(886)
7,575
11,511
—
11,751
(5,247)
—
50,511
57,015
(40,332)
8,101
(2,280)
—
886
(33,625)
34,901
63,207
98,108
146
COR PORATE I NF ORM AT IO N
147
DIRECTO RS A ND EX ECU TIVE O F FI C ERS
B OARD OF DIRECTORS
William H. Fenstermaker
Chairman of the Board, IBERIABANK Corporation;
(cid:36)(cid:73)(cid:66)(cid:74)(cid:83)(cid:78)(cid:66)(cid:79)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:36)(cid:73)(cid:74)(cid:70)(cid:71)(cid:1)(cid:1)(cid:38)(cid:89)(cid:70)(cid:68)(cid:86)(cid:85)(cid:74)(cid:87)(cid:70)(cid:1)(cid:48)(cid:71)(cid:670)(cid:68)(cid:70)(cid:83)(cid:13)
C.H. Fenstermaker and Associates, Inc.
E. Stewart Shea III
Vice Chairman of the Board, IBERIABANK Corporation;
Private Investor
Elaine D. Abell
Attorney-at-Law;
President, Fountain Memorial Funeral Home and Cemetery
E XE CUT IVE OFFICERS
Daryl G. Byrd
President (cid:66)(cid:79)(cid:69)(cid:1)(cid:36)(cid:73)(cid:74)(cid:70)(cid:71)(cid:1)(cid:38)(cid:89)(cid:70)(cid:68)(cid:86)(cid:85)(cid:74)(cid:87)(cid:70)(cid:1)(cid:48)(cid:71)(cid:670)(cid:68)(cid:70)(cid:83)
Michael J. Brown
Vice Chairman,
Chief (cid:48)(cid:81)(cid:70)(cid:83)(cid:66)(cid:85)(cid:74)(cid:79)(cid:72)(cid:1)(cid:48)(cid:71)(cid:670)(cid:68)(cid:70)(cid:83)
Jefferson G. Parker
Vice Chairman,
Managing Director of Brokerage,
Trust, and Wealth Management
Harry V. Barton, Jr.
(cid:36)(cid:70)(cid:83)(cid:85)(cid:74)(cid:670)(cid:70)(cid:69)(cid:1)Public Accountant
Ernest P. Breaux, Jr.
Retired, Iberia Investment Group, L.L.C.,
Ernest P. Breaux Electrical, Inc.,
Equipment Tool Rental & Supply
Daryl G. Byrd
President (cid:66)(cid:79)(cid:69)(cid:1)(cid:36)(cid:73)(cid:74)(cid:70)(cid:71)(cid:1)(cid:38)(cid:89)(cid:70)(cid:68)(cid:86)(cid:85)(cid:74)(cid:87)(cid:70)(cid:1)(cid:48)(cid:71)(cid:670)(cid:68)(cid:70)(cid:83)(cid:13)
IBERIABANK Corporation and IBERIABANK
John N. Casbon
Executive Vice President,
First American Title Insurance Company
Angus R. Cooper II
Chairman (cid:66)(cid:79)(cid:69)(cid:1)(cid:36)(cid:73)(cid:74)(cid:70)(cid:71)(cid:1)(cid:38)(cid:89)(cid:70)(cid:68)(cid:86)(cid:85)(cid:74)(cid:87)(cid:70)(cid:1)(cid:48)(cid:71)(cid:670)(cid:68)(cid:70)(cid:83)(cid:13)
Cooper/T. Smith Corporation
John E. Koerner III
Managing Member,
Koerner Capital, L.L.C.
O. Miles Pollard, Jr.
Private Investor
David H. Welch, Ph.D.
Chairman, (cid:49)(cid:83)(cid:70)(cid:84)(cid:74)(cid:69)(cid:70)(cid:79)(cid:85)(cid:13)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:36)(cid:73)(cid:74)(cid:70)(cid:71)(cid:1)(cid:38)(cid:89)(cid:70)(cid:68)(cid:86)(cid:85)(cid:74)(cid:87)(cid:70)(cid:1)(cid:48)(cid:71)(cid:670)(cid:68)(cid:70)(cid:83),
Stone Energy Corporation
Elizabeth A. Ardoin
Senior Executive Vice President,
Director of Communications, Corporate Real Estate,
and Human Resources
John R. Davis
Senior Executive Vice President,
Director of Financial Strategy
Anthony J. Restel
Senior Executive Vice President,
Chief (cid:39)(cid:74)(cid:79)(cid:66)(cid:79)(cid:68)(cid:74)(cid:66)(cid:77)(cid:1)(cid:48)(cid:71)(cid:670)(cid:68)(cid:70)(cid:83)
J. Randolph Bryan
Executive Vice President,
(cid:36)(cid:73)(cid:74)(cid:70)(cid:71)(cid:1)(cid:51)(cid:74)(cid:84)(cid:76)(cid:1)(cid:48)(cid:71)(cid:670)(cid:68)(cid:70)(cid:83)
Robert “Bob” M. Kottler
Executive Vice President,
Director of Retail, Small Business, and Mortgage
H. Spurgeon Mackie, Jr.
Executive Vice President,
(cid:36)(cid:73)(cid:74)(cid:70)(cid:71)(cid:1)(cid:36)(cid:83)(cid:70)(cid:69)(cid:74)(cid:85)(cid:1)(cid:48)(cid:71)(cid:670)(cid:68)(cid:70)(cid:83)
Robert B. Worley, Jr.
Executive Vice President,
Corporate Secretary and General Counsel
148 / Annual Report 2015
presidents
state presidents
marke t pres ident s
Karl E. Hoefer
State of Louisiana
Gregory A. King
State of Alabama
Susan A. Martinez
State of Florida
Kevin P. Rafferty
State of Texas
Greg K. Smithers
State of Tennessee
Mark W. Tipton
State of Georgia
Pete M. Yuan
State of Arkansas
Jennifer Brancaccio
Southeast Florida and Florida Keys
Greg E. Kahmann
Northeast Louisiana
Ken R. Brown
Mobile, Alabama
Philip C. Earhart
Southwest Louisiana
David C. Gordley
Southwest Florida
Rodney L. Hall
Atlanta, Georgia
Abel Harding
North Florida
Hunter G. Hill
New Orleans, Louisiana
Paul E. Hutcheson, Jr.
Northeast Arkansas
James Phillip Jett, Jr.
Central Arkansas
Carmen A. Jordan
Houston, Texas
Gregory A. King
Birmingham, Alabama
Daryl S. Kirkham
Dallas, Texas
Ben Marmande
Baton Rouge, Louisiana
Carlton Murray
Shreveport, Louisiana
Rick Pullum
Central Florida
Michael J. Roth
Tampa Bay, Florida
Eric E. Sanders
Huntsville, Alabama
Greg K. Smithers
Memphis, Tennessee
N. Jerome Vascocu, Jr.
Acadiana Region, Louisiana
i B eri ABA n K MortgAge CoMpA ny
William R. Edwards
President and Chief Executive Officer
Le nders titLe CoMpAny
Beau J. Fast
President and Chief Executive Officer
i B eri A CA pitAL pArtners
Jefferson G. Parker
Managing Director of Brokerage, Trust, and Wealth Management
149
ADVISORY BOA RD M EMBERS
Jack N. Harrington
Kaneaster Hodges, Jr.
Jennifer H. James
John M. Minor
Louise Runyan
Jeffrey Steven Rutledge
Brad F. Snider
FLORIDA
Susan A. Martinez
Florida President
Central Florida
Rick Pullum
Market President
Randy O. Burden, Chairman
James L. Bolen, M.D.
Dennis L. Buhring
John O. Burden, Sr.
James P. Caruso
Sidney “Sid” G. Cash
Michael C. Crisante, Jr.
James W. Ferrell
Tracy S. Forrest
Stanley T. Pietkiewicz
Craig T. Ustler
Southwest Florida
David C. Gordley
Market President
James “Jim” W. Moore, Chairman
William “Bill” P. Valenti
Jay A. Brett
Kevin M. Burns
Amy B. Gravina
R. Ernest “Ernie” Hendry, D.D.S.
Lynn A. Kirby
Wayne R. Kirkwood
Stephen Machiz, M.D.
Howard E. Palen
F. John Reingardt
Trudi K. Williams
Tampa Bay
Michael J. Roth
Market President
N. Troy Fowler
Thomas E. Gibbs
Lewis S. Lee, Jr.
Robert Rothman
Lisa Smithson
Charles B. Tomm
G EO RG IA
Mark W. Tipton
Regional President
Atlanta
Rodney L. Hall
Market President
Mark B. Chandler
Harald R. Hansen
H. C. “Buddy” Henry, Jr.
Richard “Rich” S. Novack
Gregory “Greg” S. Pope
Donal Ratigan
Mark C. West
Anthony “Lee” L. Wood, Jr.
LO UIS IANA
Karl E. Hoefer
Louisiana President
Acadiana Region
N. Jerome Vascocu, Jr.
Market President
Lafayette
Elaine D. Abell, Chairperson
Bennett Boyd Anderson, Jr.
Charles Theodore “Ted” Beaullieu, Sr.
Edward F. Breaux, M.D.
James A. Caillier, Ed.D.
Richard D. Chappuis, Jr.
Todd G. Citron
Thomas J. Cox
Blake R. David
James “Jim” M. Doyle
Charles T. Goodson
W. J. “Tony” Gordon III
Edward J. Krampe III
Leonard “Lenny” K. Lemoine
Frank X. Neuner, Jr.
Dwight “Bo” S. Ramsay
Gail S. Romero
Robert L. Wolfe, Jr.
New Iberia
Cecil C. Broussard, Co-Chairman
E. Stewart Shea, III, Co-Chairman
Taylor Barras
John L. Beyt III, D.D.S.
Caroline C. Boudreaux
Martha B. Brown
Donelson “Don” T. Caffery, Jr.
J. L. Chauvin
George B. Cousin, M.D.
David D. Daly
J. David Duplantis
Henry L. Friedman
AL ABAMA
Gregory A. King
Alabama President
Birmingham
Gregory A. King
Market President
W. Charles Mayer III, Chairman
Thomas “Randy” R. Averett
George W. Bradford
Richard A. Brooks
Carey P. Gilbert II
Carl D. Hess
Hewes Hull
J. Michael “Mike” Kemp, Sr.
Sandra “Sandy” R. Killion
Tricia Kirk
Steven “Steve” K. Mote
Michael A. Mouron
Margaret Ann Pyburn
Ed D. Robinson
William “Chip” L. Welch, Jr.
Mobile
Ken R. Brown
Market President
M. Warren Butler
Scott Hall Cooper
Robert T. Cunningham III
Brooks C. DeLaney
Charles Hamilton “Ham” McGuire
S. Wesley Pipes V
Paige B. Plash
Haymes S. Snedeker
ARKANSAS
Pete M. Yuan
Arkansas President
Central Arkansas
James Phillip Jett, Jr.
Market President
Albert B. Braunfisch
Byron M. Eiseman, Jr.
Robert M. Head
Daniel “Dan” W. Rahn, M.D.
David E. Snowden, Jr.
Mark V. Williamson
Northeast Arkansas
Paul E. Hutcheson, Jr.
Market President
Ralph P. Baltz
N. Ray Campbell
150 / Annual Report 2015
Ernest Freyou
Cecil A. Hymel II
Thomas “Tom” F. Kramer, M.D.
Edward P. Landry
Thomas R. Leblanc
Patrick O. Little
John Jeffrey “Jeff” Simon
Baton Rouge
Ben Marmande
Market President
John H. Bateman
Beau J. Box
Teri G. Fontenot
John Paul Funes
Rhaoul Guillaume, Sr.
John C. Hamilton
G. Michael Hollingsworth
Robert B. McCall III
C. Brent McCoy
Julio A. Melara
Matthew L. Mullins
Eugene H. Owen
Stanley E. Peters, Jr., M.D.
O. Miles Pollard, Jr.
Michael A. Polito
Matthew C. Saurage
William S. Slaughter III
J. Shawn Usher
New Orleans
Hunter G. Hill
Market President
John N. Casbon, Co-Chairman
John E. Koerner III, Co-Chairman
Coleman E. Adler II
W. Thomas Allen
John D’Arcy Becker
Darryl D. Berger
Scott M. Bohn
Christian T. Brown
John D. Charbonnet
David T. Darragh
Cindy Brennan Davis
James P. Favrot
Paul H. Flower
Ruth “Ruthie” J. Frierson
Howard Gaines
John D. Georges
William F. Grace, Jr.
Gordon H. Kolb
John “Jack” P. Laborde
William H. Langenstein III
Patricia “Pat” S. LeBlanc
E. Archie Manning III
Frank Maselli
William M. Metcalf, Jr.
Jefferson G. Parker
R. Hunter Pierson, Jr.
Patrick J. Quinlan, M.D.
J. C. Rathborne
Anthony Recasner, M.D.
James J. Reiss, Jr.
William Henry Shane
J. Benton Smallpage, Jr.
Robert M. Steeg
John “Jack” F. Stumpf, Jr.
Stephen F. Stumpf
Carroll W. Suggs
Phyllis M. Taylor
Ben Tiller
Steven W. Usdin
Northeast Louisiana
Greg E. Kahmann
Market President
Malcolm E. Maddox, Chairman
Mary C. Biggs
Danny R. Graham
W. Bruce Hanks
Linda Singler Holyfield
Tex R. Kilpatrick
Charles Marsala, Jr.
Joe E. Mitcham, Jr.
Virgil Orr, Ph.D.
Cindy J. Rogers
Jerry W. Thomas
Shreveport
Carlton Murray
Market President
Harry L. Avant
Chris Campbell
Michael O. Fleming, M.D.
Frank Hood Goldsberry
Raymond J. Lasseigne
Kevin O’Brien Long
C. Scott Massey
Robert M. Mills
Roland B. Ricou
W. Harrison Smith
Southwest Louisiana
Philip C. Earhart
Market President
Kay C. Barnett
William “Billy” D. Blake
Kendall “Ken” Broussard
Keith F. DeSonier, M.D.
Mary Shaddock Jones
Jonathan “Jon” P. Manns
Benjamin “Ben” E. Marriner
Michael “Mike” J. McNulty III
William “Bill” B. Monk
Oliver “Rick” G. Richard III
Thomas “Tom” B. Shearman III
Marshall J. Simien, Jr.
William Gray Stream
Philip C. Williams, Ph.D.
T ENN ES SEE
Memphis
Greg K. Smithers
Tenessee President
J. Scott Fountain
James W. Gibson II
Sally Jones Heinz
Joel Kimbrough
R. Michael Kiser
McNeal McDonnell
Philip H. Trenary
T E xa S
Kevin P. Rafferty
Texas President
Dallas
Daryl S. Kirkham
Market President
Daniel H. Chapman, Chairman
Stephen S. Eppig
James R. Erwin
Terry Kelley
John W. Peavy III, Ph.D.
Ana L. Rodriguez
Houston
Carmen A. Jordan
Market President
Bethany Haley Andell
Margaret Barradas
A. J. Brass
Dan Braun
David L. Ducote
Michael R. Dumas
Joseph Edmonds, M.D.
Stuart Goldman
Russell “Rusty” Hardin
Kennard McGuire
H. Benjamin “Ben” Samuels
Scott Sanders
Fredrick “Rick” Smith
Todd P. Sullivan
Jerold “Jerry” Winograd
Ken Yang
Segev Zadok
151
COR PO RATE IN FORM ATI ON
Corporate Headquarters
IBERIABANK Corporation
200 West Congress Street
Lafayette, LA 70501
337.521.4012
Corporate Mailing Address
P.O. Box 52747
Lafayette, LA 70505-2747
Annual Meeting
IBERIABANK Corporation Annual Meeting of Shareholders
will be held on Wednesday, May 4, 2016 at 4:00 p.m., local
time, at the Windsor Court Hotel, located at 300 Gravier
Street, New Orleans, Louisiana.
Dividend Reinvestment Plan
IBERIABANK Corporation shareholders may take advantage
of our Dividend Reinvestment Plan. This program provides
a convenient, economical way for shareholders to increase
their holdings of the Company’s common stock. The
shareholder pays no brokerage commissions or service
charges while participating in the plan. A nominal fee
is charged at the time that an individual terminates plan
participation. This plan does not currently offer participants
the ability to purchase additional shares with optional cash
payments.
Internet Addresses
www.iberiabank.com
www.iberiabankmortgage.com
www.iberiacapitalpartners.com
www.lenderstitlegroup.com
www.utla.com
Shareholder Assistance
Shareholders requesting a change of address, records, or
information about the Dividend Reinvestment Plan or lost
certificates should contact:
Computershare
P.O. Box 30170
College Station, TX 77842-3170
800.368.5948
www.computershare.com/investor
in
the
To enroll
IBERIABANK Corporation Dividend
Reinvestment Plan, shareholders must complete an
enrollment form. A summary of the plan and enrollment
forms are available from Computershare at the address
provided under Shareholder Assistance.
FOR I NFORM ATIO N
Copies of the Company’s Annual Report on Form 10-K, including financial statements and financial statement
schedules, will be furnished to Shareholders without cost by sending a written request to Robert B. Worley, Jr., Secretary,
IBERIABANK Corporation, 601 Poydras Street, 21st Floor, New Orleans, Louisiana 70130. This and other information
regarding IBERIABANK Corporation and its subsidiaries may be accessed from our websites.
In addition, shareholders may contact:
Daryl G. Byrd, President and CEO
337.521.4001
John R. Davis, Senior Executive Vice President
337.521.4005
STOCK I NF ORMATION
As of February 19, 2016, IBERIABANK Corporation had approximately 2,927 shareholders of record. This total does not reflect
shares held in nominee or “street name” accounts through various firms. The table below is a summary of regular quarterly cash
dividends and market prices for the Company’s common stock in the last two years. These market prices do not reflect retail markups,
markdowns, or commissions.
2015
Dividends
High Low Closing Declared
Market Price
20 14
Dividends
High Low Closing Declared
Market Price
First Quarter
$65.45 $54.34 $63.03 $0.34
Second Quarter
Third Quarter
Fourth Quarter
$71.21 $61.13 $68.23 $0.34
$69.99 $56.63 $58.21 $0.34
$65.38 $52.27 $55.07 $0.34
First Quarter
$72.41 $60.96 $70.15 $0.34
Second Quarter
Third Quarter
Fourth Quarter
$71.94 $59.20 $69.19 $0.34
$70.58 $62.40 $62.51 $0.34
$70.00 $60.53 $64.85 $0.34
Securities Listing
IBERIABANK Corporation’s common stock trades on the NASDAQ Global Select Market under the symbol “IBKC.” In local and
national newspapers, the Company is listed under “IBERIABANK.”
Dividend Restrictions
The majority of the Company’s revenue is from dividends declared and paid to the Company by its subsidiary, IBERIABANK, which
is subject to laws and regulations that limit the amount of dividends and other distributions it can pay. In addition, the Company
and IBERIABANK are required to maintain capital at or above regulatory minimums and to remain “well-capitalized” under prompt
corrective action regulations. The declaration and payment of dividends on the Company’s capital stock also is subject to contractual
restrictions. While the Company has Series B preferred stock outstanding, the Company may not declare and pay a dividend on its
common stock unless dividends on all such outstanding preferred stock have been declared and paid in full or declared and a sum
sufficient for the payment of those dividends has been set aside. Long-Term Debt (see Note 14), Shareholders’ Equity, Capital Ratios
and Other Regulatory Matters (see Note 16) to the Consolidated Financial Statements and Management’s Discussion and Analysis
of Financial Condition and Results of Operations – Funding Sources – Long-term Debt.
TOTAL RETURN PERF ORMA NCE
Stock Performance Graph
IBERIABANK Corporation shareholders may
take advantage of our Dividend Reinvestment
Plan. This program provides a convenient,
economical way for shareholders to increase
their holdings of the Company’s common
stock. The shareholder pays no brokerage
commissions or
charges while
service
participating in the plan. A nominal fee
is charged at the time that an individual
terminates plan participation. This plan does
not currently offer participants the ability to
purchase additional shares with optional cash
payments.
Source : SNL Financial LC, Charlottesville, VA © 2015 www.snl.com
200 West Congress Street
Lafayette, Louisiana 70501
337.521.4012
www.iberiabank.com