IBERIABANK Corporation (Nasdaq: IBKC), the holding company of the 121-year-old IBERIABANK and Pulaski Bank and Trust Company, announced earnings of $13.4 million for the quarter ended March 31, 2008, up 46% compared to the same period in 2007 and up 33% compared to the fourth quarter of 2007.
In the first quarter of 2008, the Company reported fully diluted earnings per share of $1.05, up 38% compared to $0.76 in the same quarter of 2007, and up 33% on a linked quarter basis. The first quarter 2008 results included two significant items. First, the results included the previously disclosed pre-tax gain of $6.9 million, or $0.34 EPS, on the sale of approximately $30 million in credit card receivables (a 23% premium) at Pulaski Bank and Trust Company. Second, Pulaski recorded an elevated provision for loan losses associated with the residential builder construction portfolio. The consensus analyst EPS estimate for the first quarter of 2008 for the Company was $0.82 as reported by First Call.
Highlights For The Quarter Ended March 31, 2008 -- Loans. Average loans increased $48 million, or 1%, on a linked quarter basis. On a period-end basis, total loans were $3.4 billion, a decrease of $6 million between December 31, 2007 and March 31, 2008. Loan growth was tempered during the first quarter due to traditional seasonal loan pay downs and the sale of credit card receivables on January 4, 2008.
-- Deposits. Average deposits increased $107 million, or 3%, on a linked quarter basis. Period-end deposits were $3.8 billion, a substantial $326 million increase, or 9%, between December 31, 2007 and March 31, 2008. The Company initiated a significant deposit campaign during the first quarter of 2008 in selected markets.
-- Net Interest Income. Significant deposit inflows and $90 million in additional long-term borrowings reduced average short-term borrowings by $60 million and funded $48 million in average loan growth and $90 million in liquid investments. Average earning assets climbed $143 million, or 3%, on a linked quarter basis. The tax equivalent net interest margin ("margin") declined 14 basis points on a linked quarter basis, to 3.04%. Approximately eight basis points of the decline were due to the increase in excess cash emanating from the deposit campaign, five basis points were due to changes in interest rates, and two basis points were due to the full quarter impact of the issuance and sale of $32 million in trust preferred securities.
-- Capital Strength. The Company completed a $25 million sale of trust preferred securities on November 9, 2007 at a rate equal to three-month LIBOR plus 2.64%. On March 28, 2008, the Company sold an additional $7 million trust preferred securities at a rate of three-month LIBOR plus 3.50%. At March 31, 2008, the Company reported a tier 1 leverage ratio of 7.46%, up from 7.42% at December 31, 2007.
-- Branches. Total loan balances at the 14 branches opened since August 2005 under the Company's branch expansion initiative were $89 million at March 31, 2008, up 13% compared to December 31, 2007. Aggregate deposit balances in these branches totaled $169 million at March 31, 2008, up 80% compared to December 31, 2007.
-- Nonperforming Assets ("NPAs"). NPAs were $48 million at March 31, 2008, down 1% compared to December 31, 2007. The ratio of NPAs to total assets declined from 0.98% at year-end 2007 to 0.93% at March 31, 2008. The Company recorded a loan loss provision of $2.7 million in the first quarter of 2008, down 25% on a linked quarter basis.
Balance Sheet And Yields
Since December 31, 2007, total assets climbed $215 million, or 4%, to $5.1 billion at March 31, 2008. During this period, shareholders' equity increased $14 million, or 3%, to $512 million at March 31, 2008. Excess liquidity generated from deposit growth funded investment securities, short-term investments, and loans.
The investment portfolio volume increased $49 million, or 6%, to $854 million at March 31, 2008 compared to year-end 2007. The investment portfolio equated to 17% of total assets at March 31, 2008, compared to 16% at December 31, 2007. The Company's investment portfolio duration shortened slightly during the quarter. At March 31, 2008, the portfolio had a modified duration of 2.9 years, compared to 3.1 years at December 31, 2007. The Company's investment portfolio has very limited extension risk. Based on current projected speeds and other assumptions, the portfolio is expected to generate approximately $326 million in cash flows, or about 39% of the portfolio, over the next 21 months. The portfolio had an unrealized gain of approximately $14 million at March 31, 2008, compared to $9 million at December 31, 2007. The average yield on investment securities decreased 11 basis points on a linked quarter basis, to 5.18% in the first quarter of 2008. The Company holds in its investment portfolio primarily agency and municipal securities. The Company holds no equity securities, corporate bonds, trust preferred securities, collateralized debt obligations ("CDOs"), collateralized loan obligations ("CLOs"), hedge fund investments, structured investment vehicles ("SIVs"), or auction rate securities in its investment portfolio. -- IBERIABANK Corporation
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