Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nasdaq  >  IBERIABANK Corporation    IBKC

IBERIABANK CORPORATION

(IBKC)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

IBERIABANK : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

share with twitter share with LinkedIn share with facebook
share via e-mail
11/08/2019 | 04:17pm EST
The following discussion and analysis is intended to assist readers in
understanding the consolidated financial condition and results of operations of
IBERIABANK Corporation and its wholly-owned subsidiaries (collectively, the
"Company") as of and for the period ended September 30, 2019, and updates the
Annual Report on Form 10-K for the year ended December 31, 2018. This discussion
should be read in conjunction with the unaudited consolidated financial
statements, accompanying footnotes and supplemental financial data included
herein. The emphasis of this discussion will be amounts as of September 30, 2019
compared to December 31, 2018 for the balance sheets and the three and nine
months ended September 30, 2019 compared to September 30, 2018 for the
statements of comprehensive income. Certain amounts in prior year presentations
have been reclassified to conform to the current year presentation.
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 Defined Terms at
the end of this Report for terms used throughout this Report.
                    CAUTION ABOUT FORWARD-LOOKING STATEMENTS
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. The Company's actual
strategies and results in future periods may differ materially from those
currently expected due to various risks and uncertainties.
Forward-looking statements represent management's beliefs, based upon
information available at the time the statements are made, with regard to the
matters addressed; they are not guarantees of future performance.
Forward-looking statements are subject to numerous assumptions, risks and
uncertainties that change over time and could cause actual results or financial
condition to differ materially from those expressed in or implied by such
statements. Factors that could cause or contribute to such differences include,
but are not limited to: the level of market volatility, our ability to execute
our growth strategy, including the availability of future bank acquisition
opportunities, our ability to execute on our revenue and efficiency improvement
initiatives, unanticipated delays, losses, business disruptions and diversion of
management time related to the completion and integration of mergers and
acquisitions, 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, effects of low energy and commodity prices, effects of residential
real estate prices and levels of home sales, our ability to satisfy capital and
liquidity standards, sufficiency of our allowance for credit losses, changes in
interest rates, access to funding sources, reliance on the services of executive
management, competition for loans, deposits and investment dollars, competition
from competitors with greater financial resources than the Company, threats of
fintech innovation, reputational risks and social factors, changes in government
regulations and legislation, increases in FDIC insurance assessments, geographic
concentration of our markets, economic or business conditions in our markets or
nationally, rapid changes in the financial services industry, significant
litigation, cyber-security risks including dependence on our operational,
technological, and organizational systems and infrastructure and those of third
party providers of those services, hurricanes and other adverse weather events,
and valuation of intangible assets.

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, www.sec.gov, and the Company's website,
www.iberiabank.com, under the heading "Investor Relations" and then "Financial
Information." All information is as of the date of this Report unless otherwise
noted. Except to the extent required by applicable law or regulation, the
Company undertakes no obligation to revise or update publicly any
forward-looking statement for any reason.


                                       55
--------------------------------------------------------------------------------


EXECUTIVE SUMMARY
Corporate Profile
IBERIABANK Corporation is a financial holding company based in Lafayette,
Louisiana. Through its subsidiaries, the Company provides a full range of
commercial and consumer banking services, including private banking, small
business, wealth and trust management, retail brokerage, mortgage, commercial
leasing and equipment financing, and title insurance services through locations
in Louisiana, Arkansas, Tennessee, Alabama, Texas, Florida, Georgia, South
Carolina, North Carolina, Mississippi, Missouri, and New York.
Quarterly Financial Performance Summary:
•      Net income available to common shareholders for the quarter ended

September 30, 2019 totaled $96.3 million, or $1.82 diluted EPS, compared

to $97.9 million, or $1.73 diluted EPS, for the same period of 2018.

Non-GAAP core EPS, which excludes merger-related costs and other items

disclosed in Table 17 - Non-GAAP measures, was $1.82 for the third quarter

of 2019 compared to $1.74 for the same period of 2018.

• Net interest income was $249.3 million for the third quarter of 2019, a

$9.9 million, or 4%, decrease compared to the same quarter of 2018. Net

interest margin on a tax-equivalent basis decreased 30 basis points to

3.44% from 3.74%, primarily attributable to higher funding costs when

comparing the periods.

• The Company recorded a provision for credit losses of $9.0 million for the

       quarter ended September 30, 2019, a $2.4 million decrease from the
       provision recorded for the same period of 2018, primarily driven by an
       overall improvement in asset quality and lower net charge-offs in the
       third quarter of 2019 compared to the corresponding 2018 period.

• Non-interest income increased $10.6 million, or 20%, to $63.7 million for

the quarter ended September 30, 2019. This increase was primarily driven

by higher mortgage income when comparing the periods and a $3.2 million

gain on non-mortgage loan sales.

• Non-interest expense for the third quarter of 2019 increased $3.6 million,

or 2%, to $172.7 million compared to the same period of 2018, primarily

       from an increase in occupancy and equipment expense from a write-off on
       certain long-lived assets.

Year-to-Date Financial Performance Summary: • Net income available to common shareholders for the nine months ended

September 30, 2019 was $293.4 million, or $5.43 diluted EPS, compared to

$232.1 million, or $4.14 diluted EPS, for the same period of 2018.

Non-GAAP core EPS, which excludes merger-related costs and other items

disclosed in Table 17 - Non-GAAP measures, was $5.41 for the year-to-date

period of 2019 compared to $4.83 for the same period of 2018.

• Net interest income was $755.2 million for the nine months ended September

30, 2019, a $6.9 million, or 1%, increase compared to the same period of

2018. Net interest margin on a tax-equivalent basis decreased 18 basis

points to 3.54% from 3.72%, primarily attributable to higher funding costs

in 2019.

• The Company recorded a provision for credit losses of $33.5 million for

the nine months ended September 30, 2019, a $6.2 million increase from the

       provision recorded for the same period of 2018, primarily driven by loan
       growth when comparing the periods.

• Non-interest income increased $23.4 million, or 15%, to $175.0 million

during the nine months ended September 30, 2019 compared to the same

period of 2018, primarily driven by higher mortgage income and customer

       swap commissions.


•      Non-interest expense for the nine months ended September 30, 2019,
       decreased $52.9 million, or 10%, to $501.0 million compared to the same
       period of 2018. This decrease was partially attributable to branch
       consolidation and closure expenses that were incurred in 2018.
       Additionally, salaries and employee benefits expense was lower due to
       merger-related costs incurred in 2018.






                                       56
--------------------------------------------------------------------------------

Financial Condition Summary: • Total assets at September 30, 2019 were $31.7 billion, up $901.6 million,

or 3%, from December 31, 2018.

• Loans and leases increased $1.2 billion, or 5%, from December 31, 2018,

driven by strong growth in the Energy and Corporate Asset Finance Groups

and the Birmingham, Dallas, and New Orleans markets.

• Total deposits increased $1.2 billion, or 5%, from December 31, 2018.

• Credit quality remained strong and stable. Non-performing assets to total

assets were 0.58% at September 30, 2019 compared to 0.55% at December 31,

2018. Net charge-offs to average loans and leases, on an annualized basis,

decreased two basis points to 0.14% for the nine months ended September

30, 2019 compared to 0.16% for the comparable 2018 period.

• Shareholders' equity increased $227.0 million, or 6%, primarily driven by

       undistributed income and proceeds from the Preferred Stock Series D
       issuance, offset by common stock repurchases during the period.




                                       57
--------------------------------------------------------------------------------


FINANCIAL OVERVIEW
The following table sets forth selected financial ratios and other relevant data
used by management to analyze the Company's performance.
             TABLE 1-SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
                                                       As of and For the Three Months Ended
                                                                  September 30,
                                                           2019                   2018
Key Ratios (1)
Return on average assets                                     1.26 %                 1.34 %
Core return on average assets (Non-GAAP) (2)                 1.26           

1.35

Return on average common equity                              9.46           

10.21

Core return on average tangible common equity
(Non-GAAP) (2) (3)                                          14.48           

16.34

Equity to assets at end of period                           13.50           

13.09

Earning assets to interest-bearing liabilities at
end of period                                              142.73           

143.56

Interest rate spread (4)                                     2.95           

3.37

Net interest margin (TE) (4) (5)                             3.44           

3.74

Non-interest expense to average assets (annualized) 2.17

2.23

Efficiency ratio (6)                                         55.2           

54.1

Core tangible efficiency ratio (TE) (Non-GAAP) (2) (3) (5) (6)

                                                  53.4           

51.9

Common stock dividend payout ratio                           24.4           

21.8

Asset Quality Data
Non-performing assets to total assets at end of
period (7)                                                   0.58 %         

0.63 % Allowance for credit losses to non-performing loans at end of period (7)

                                       102.83           

97.20

Allowance for credit losses to total loans at end of
period                                                       0.69                   0.68
Consolidated Capital Ratios
Tier 1 leverage ratio                                        9.78 %                 9.65 %
Common equity tier 1 (CET1)                                 10.41                  10.79
Tier 1 risk-based capital ratio                             11.28           

11.33

Total risk-based capital ratio                              12.34           

12.42

(1) With the exception of end-of-period ratios, all ratios are based on average

     daily balances during the respective periods.


(2)  See Table 17 for GAAP to Non-GAAP reconciliations.


(3)  Tangible calculations eliminate the effect of goodwill and

acquisition-related intangible assets and the corresponding amortization

expense on a tax-effected basis where applicable.

(4) 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 earning assets.

(5) Fully taxable equivalent ("TE") calculations include the tax benefit

associated with related income sources that are tax-exempt using a rate of

21%.

(6) 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.

(7) Non-performing loans consist of non-accruing loans and accruing loans 90

days or more past due. Non-performing assets consist of non-performing loans

     and other real estate owned, including repossessed assets.



                                       58
--------------------------------------------------------------------------------


ANALYSIS OF RESULTS OF OPERATIONS
Net Interest Income/Net Interest margin
Net interest income is the difference between interest realized on earning
assets and interest accrued on interest-bearing liabilities and is also the
largest driver of 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
2.95% and 3.37%, during the three months ended September 30, 2019 and 2018,
respectively, and 3.07% and 3.40% for the nine months ended September 30, 2019
and 2018, respectively. The Company's net interest margin on a taxable
equivalent basis, which is net interest income as a percentage of average
earning assets, was 3.44% and 3.74%, respectively, for the three months ended
September 30, 2019 and 2018, and 3.54% and 3.72%, respectively, for the nine
months ended September 30, 2019 and 2018.

                                       59
--------------------------------------------------------------------------------


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 2-QUARTERLY AVERAGE BALANCES, NET INTEREST INCOME AND INTEREST YIELDS /
                                     RATES
                                                                    Three Months Ended September 30,
                                                    2019                                                        2018
                             Average              Interest            Yield/ Rate        Average              Interest            Yield/ Rate
(in thousands)               Balance         Income/Expense (1)         (TE)(2)          Balance         Income/Expense (1)         (TE)(2)
Earning Assets:
Loans and leases:
Commercial loans and
leases                    $ 16,155,962     $            205,350           5.06 %      $ 14,825,572     $            191,014           5.13 %
Residential mortgage
loans                        4,588,549                   50,939           4.44 %         4,230,471                   48,145           4.55 %
Consumer and other loans     2,778,381                   40,501           5.78 %         3,106,330                   43,966           5.62 %
Total loans and leases      23,522,892                  296,790           5.03 %        22,162,373                  283,125           5.09 %
Mortgage loans held for
sale                           209,778                    1,936           3.69 %            87,823                    1,037           4.72 %
Investment securities(3)     4,493,789                   29,932           2.71 %         5,016,163                   29,793           2.43 %
Other earning assets           733,305                    4,520           2.44 %           456,120                    3,112           2.71 %
Total earning assets        28,959,764                  333,178           4.59 %        27,722,479                  317,067           4.57 %
Allowance for loan and
lease losses                  (148,203 )                                                  (139,075 )
Non-earning assets           2,742,730                                                   2,462,827
Total assets              $ 31,554,291$ 30,046,231
Interest-bearing
liabilities
Deposits:
NOW accounts              $  4,451,579     $             11,305           1.01 %      $  4,296,392     $              8,841           0.82 %
Savings and money market
accounts                     9,188,186                   32,959           1.42 %         9,237,614                   23,076           0.99 %
Time deposits                4,523,555                   26,489           2.32 %         3,023,180                   12,484           1.64 %
Total interest-bearing
deposits (4)                18,163,320                   70,753           1.55 %        16,557,186                   44,401           1.06 %
Short-term borrowings          794,044                    3,880           1.94 %         1,196,165                    4,727           1.57 %
Long-term debt               1,360,492                    9,212           2.69 %         1,381,010                    8,714           2.50 %
Total interest-bearing
liabilities                 20,317,856                   83,845           1.64 %        19,134,361                   57,842           1.20 %
Non-interest-bearing
deposits                     6,425,026                                                   6,684,343
Non-interest-bearing
liabilities                    545,838                                                     292,445
Total liabilities           27,288,720                                                  26,111,149
Shareholders' equity         4,265,571                                                   3,935,082
Total liabilities and
shareholders' equity      $ 31,554,291$ 30,046,231
Net earning assets        $  8,641,908$  8,588,118
Net interest income/ Net
interest spread                            $            249,333           2.95 %                       $            259,225           3.37 %
Net interest income (TE)
/
Net interest margin (TE)
(1)                                        $            250,653           3.44 %                       $            260,686           3.74 %


(1) Interest income includes loan fees of $0.9 million for the three-month

periods ended September 30, 2019 and 2018.

(2) Fully taxable equivalent (TE) calculations include the tax benefit

associated with related income sources that are tax-exempt using a rate of

21%.

(3) Balances exclude unrealized gains or losses on securities available for sale

and the impact of trade date accounting.

(4) Total deposit costs for the three months ended September 30, 2019 and 2018

     were 1.14% and 0.76%, respectively.



                                       60
--------------------------------------------------------------------------------

TABLE 3-YEAR-TO-DATE AVERAGE BALANCES, NET INTEREST INCOME AND INTEREST YIELDS /

                                     RATES

Nine Months Ended September 30,

                                                      2019                                                            2018
                                                      Interest            Yield/ Rate                                 Interest            Yield/ Rate
(in thousands)             Average Balance       Income/Expense (1)         (TE)(2)        Average Balance       Income/Expense (1)         (TE)(2)
Earning Assets:
Loans and leases:
Commercial loans and
leases                    $     15,728,652     $            604,953           5.16 %      $     14,517,767     $            534,504           4.94 %
Residential mortgage
loans                            4,486,188                  148,156           4.40 %             3,811,786                  129,854           4.54 %
Consumer and other loans         2,869,631                  125,246           5.84 %             3,069,198                  127,312           5.55 %
Total loans and leases          23,084,471                  878,355           5.10 %            21,398,751                  791,670           4.96 %
Mortgage loans held for
sale                               155,517                    4,578           3.93 %                89,845                    3,027           4.49 %
Investment securities(3)         4,798,142                   99,860           2.82 %             4,940,093                   87,212           2.41 %
Other earning assets               636,158                   12,436           2.61 %               571,346                    9,524           2.23 %
Total earning assets            28,674,288                  995,229           4.66 %            27,000,035                  891,433           4.43 %
Allowance for loan and
lease losses                      (145,017 )                                                      (142,960 )
Non-earning assets               2,693,240                                                       2,466,370
Total assets              $     31,222,511$     29,323,445

Interest-bearing

liabilities

Deposits:

NOW accounts              $      4,466,275     $             34,325           1.03 %      $      4,384,425     $             24,542           0.75 %
Savings and money market
accounts                         9,097,732                   92,565           1.36 %             9,018,101                   56,089           0.83 %
Time deposits                    4,182,394                   69,964           2.24 %             2,740,119                   28,173           1.37 %
Total interest-bearing
deposits (4)                    17,746,401                  196,854           1.48 %            16,142,645                  108,804           0.90 %
Short-term borrowings              979,315                   14,793           2.02 %             1,073,296                   10,578           1.32 %
Long-term debt                   1,429,634                   28,426           2.66 %             1,380,000                   23,824           2.31 %
Total interest-bearing
liabilities                     20,155,350                  240,073           1.59 %            18,595,941                  143,206           1.03 %

Non-interest-bearing

deposits                         6,380,082                                                       6,587,729

Non-interest-bearing

liabilities                        481,794                                                         283,438
Total liabilities               27,017,226                                                      25,467,108
Shareholders' equity             4,205,285                                                       3,856,337
Total liabilities and
shareholders' equity      $     31,222,511$     29,323,445
Net earning assets        $      8,518,938$      8,404,094
Net interest income/ Net
interest spread                                $            755,156           3.07 %                           $            748,227           3.40 %
Net interest income (TE)
/
Net interest margin (TE)
(1)                                            $            759,150           3.54 %                           $            752,584           3.72 %


(1) Interest income includes loan fees of $2.7 million and $2.5 million for the

nine-month periods ended September 30, 2019 and 2018, respectively.

(2) Fully taxable equivalent (TE) calculations include the tax benefit

associated with related income sources that are tax-exempt using a rate of

21%.

(3) Balances exclude unrealized gains or losses on securities available for sale

and the impact of trade date accounting.

(4) Total deposit costs for the nine months ended September 30, 2019 and 2018

     were 1.09% and 0.64%, respectively.





                                       61
--------------------------------------------------------------------------------


Net interest income decreased $9.9 million to $249.3 million in the third
quarter of 2019 when compared to the same quarter of 2018. Net interest margin
on a tax-equivalent basis decreased 30 basis points to 3.44% from 3.74% when
comparing the periods. On a year-to-date basis, net interest income increased
$6.9 million, or 1%, to $755.2 million when compared to the same period of 2018.
Net interest margin on a tax-equivalent basis decreased 18 basis points to 3.54%
from 3.72% when comparing the year-to-date periods.
Average earning assets were $29.0 billion for the third quarter of 2019, an
increase of $1.2 billion, or 4%, compared to the same period of 2018. Average
loans and leases increased $1.4 billion, or 6%, when comparing the quarterly
periods, driven by organic loan growth throughout the Company's footprint, most
notably from the Energy and Corporate Asset Finance Groups, as well as the New
Orleans, Dallas, and Birmingham markets. Average investment securities were $4.5
billion for the third quarter of 2019 compared to $5.0 billion for the third
quarter of 2018.
For the nine months ended September 30, 2019, average earning assets were $28.7
billion, an increase of $1.7 billion, or 6%, compared to the same period of
2018. Average loans and leases increased $1.7 billion, or 8%, when comparing the
periods. Average investment securities were $4.8 billion for the year-to-date
period of 2019, compared to $4.9 billion for the same period of 2018.
Average interest-bearing liabilities were $20.3 billion for the third quarter of
2019, an increase of $1.2 billion, or 6%, compared to the same period of 2018.
The Company realized growth of $1.6 billion in the average balance of
interest-bearing deposits when comparing the quarters, primarily due to brokered
deposit issuances and market growth, especially in the Miami-Dade, Acadiana,
Palm Beach/Broward and Atlanta markets.
For the nine months ended September 30, 2019, average interest-bearing
liabilities were $20.2 billion, an increase of $1.6 billion, or 8%, compared to
the same period of 2018. Average interest-bearing deposits were $17.7 billion,
an increase of $1.6 billion when comparing the year-to-date periods, primarily
due to brokered deposit issuances and market growth.
For the third quarter of 2019, the yield on average earning assets was 4.59%
compared to 4.57% for the third quarter of 2018. Average loan yields decreased 6
basis points when comparing the quarters, primarily driven by lower purchase
accounting accretion and recoveries on certain acquired loans. The yield on
average investment securities increased 28 basis points due to a portfolio
restructuring in the fourth quarter of 2018.
For the nine months ended September 30, 2019, the yield on average interest
earning assets rose 23 basis points to 4.66% from 4.43% for the same period of
2018. Average loan yields increased 14 basis points when comparing the
year-to-date periods, primarily driven by the repricing of variable rate loans
and higher purchase accounting accretion. In addition, the yield on average
investment securities increased 41 basis points due to the portfolio
restructuring in the fourth quarter of 2018.
The average rate paid on interest-bearing liabilities was 1.64% for the third
quarter of 2019, an increase of 44 basis points compared to the third quarter of
2018. For the nine months ended September 30, 2019, the average rate paid on
interest-bearing liabilities was 1.59%, an increase of 56 basis points compared
to the same period of 2018. Total deposit costs increased 38 basis points when
comparing the quarters and 45 basis points when comparing the year-to-date
periods. Deposit costs were driven upward by the repricing of deposits,
higher-cost brokered deposit issuances, and higher rates paid on promotional
deposit offerings as a result of market competition.



                                       62
--------------------------------------------------------------------------------


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 4 - SUMMARY OF CHANGES IN NET INTEREST INCOME
                                  Three months ended September 30, 2019 compared to         Nine months ended September 30, 2019 compared to
                                                  September 30, 2018                                       September 30, 2018
                                      Change Attributable To                                   Change Attributable To
                                                                        Net Increase                                             Net Increase
(in thousands)                      Volume              Rate             (Decrease)          Volume              Rate             (Decrease)
Earning assets:
Loans and leases:
Commercial loans and leases     $   16,292$    (1,956 )$      14,336$   41,372$    29,077$      70,449
Residential mortgage loans           3,998              (1,204 )               2,794         22,376              (4,074 )              18,302
Consumer and other loans            (4,679 )             1,214                (3,465 )       (8,256 )             6,190                (2,066 )
Mortgage loans held for sale         1,168                (269 )                 899          1,974                (423 )               1,551
Investment securities               (3,250 )             3,389                   139         (2,610 )            15,258                12,648
Other earning assets                 1,723                (315 )               1,408          1,196               1,716                 2,912
Net change in income on earning
assets                              15,252                 859                16,111         56,052              47,744               103,796
Interest-bearing liabilities:
Deposits:
NOW accounts                           328               2,136                 2,464            465               9,318                 9,783
Savings and money market
accounts                               124               9,759                 9,883            837              35,639                36,476
Time deposits                        7,603               6,402                14,005         19,073              22,718                41,791
Borrowings                          (1,564 )             1,215                  (349 )        1,851               6,966                 8,817
Net change in expense on
interest-bearing liabilities         6,491              19,512                26,003         22,226              74,641                96,867
Change in net interest income   $    8,761$   (18,653 )$      (9,892 )$   33,826$   (26,897 )$       6,929



Provision for Credit Losses
The provision for credit losses represents the expense necessary to maintain the
ACL at a level that in management's judgment is appropriate to absorb probable
losses inherent in the portfolio at the balance sheet date.
The provision for credit losses totaled $9.0 million for the third quarter of
2019, a $2.4 million, or 21%, decrease compared to the same period in 2018,
attributable to an improvement in asset quality and lower net charge-offs. For
the nine months ended September 30 2019, the provision for credit losses of
$33.5 million was a $6.2 million increase from the comparable 2018 period. The
increase in the provision for credit losses during the year-to-date period was
largely due to organic loan growth.
The Company's provision for loan and lease losses covered 135% of net
charge-offs in the first nine months of 2019 compared to 107% coverage for the
same period of 2018.
Refer to the "Asset Quality" section for further discussion on past due loans,
non-performing assets, troubled debt restructurings and the allowance for credit
losses.

                                       63
--------------------------------------------------------------------------------


Non-interest Income
Non-interest income was $63.7 million for the three months ended September 30,
2019 compared to $53.1 million for the same period of 2018, a $10.6 million, or
20%, increase. The increase was primarily attributable to a $4.7 million
increase in mortgage income, primarily driven by higher sales volume during the
third quarter of 2019 and a $3.2 million gain on non-mortgage loan sales. In
addition, commission income increased $1.5 million due to higher customer swap
commissions.
On a year-to-date basis, non-interest income was $175.0 million compared to
$151.6 million for the same period of 2018, a $23.4 million, or 15%, increase.
The increase was driven by a $11.7 million increase in mortgage income, the
result of an increase in sales volume, higher margins on the sale of mortgage
loans, and favorable fair value adjustments. Additionally, commission income
increased $5.6 million due to higher customer swap commissions. The Company also
realized a $3.2 million gain on non-mortgage loan sales.

Non-interest Expense
Non-interest expense was $172.7 million for the third quarter of 2019, an
increase of $3.6 million, or 2%, when compared to the same period of 2018.
Salaries and employee benefits, the largest category of non-interest expense,
increased $2.1 million for the third quarter of 2019 when compared to the same
period of 2018. An additional business day during the quarter, off-cycle pay
increases, and higher share-based compensation expenses from current period
grants contributed to a $2.5 million increase in compensation expense. Benefit
expenses increased $1.6 million due to lower medical insurance expense in 2018.
These increases were partially offset by a $1.6 million decrease in severance,
retention, and other merger-related compensation expenses when comparing the
periods.
Occupancy and equipment expense increased $2.4 million primarily from a
write-off on certain long-lived assets.
Other non-interest expense increased $2.1 million primarily from a $1.8 million
credit valuation adjustment on customer swaps.
These increases in non-interest expense were partially offset by a $1.7 million
decrease in insurance expense, driven by the elimination of the FDIC large bank
surcharge and a lower assessment rate in 2019.
Non-interest expense was $501.0 million for the nine months ended September 30,
2019, a decrease of $52.9 million, or 10%, compared to the same period of 2018.
Salaries and employee benefits decreased $8.3 million for the year-to-date
period of 2019 compared to the same period of 2018 as severance, retention, and
other merger-related compensation expenses decreased $12.1 million. These
decreases were partially offset by a $2.8 million increase in share-based
compensation expense.
Impairment of long-lived assets and other (gains) losses decreased $23.7 million
due to branch consolidation and closure expenses incurred in 2018.
Insurance expense decreased $7.3 million, driven by the elimination of the FDIC
large bank surcharge and a lower assessment rate in 2019. Professional services
expense decreased $3.1 million and computer services expense decreased $2.6
million, as a result of system conversion and other merger-related expenses
incurred in 2018.


                                       64
--------------------------------------------------------------------------------


Income Taxes
The Company recorded income tax expense of $31.5 million for the three months
ended September 30, 2019 and $30.4 million for the three months ended September
30, 2018, which resulted in an effective income tax rate of 24.0% and 23.1%,
respectively. For the nine months ended September 30, 2019, the Company recorded
income tax expense of $94.0 million and $78.4 million for the same period of
2018, which resulted in an effective income tax rate of 23.8% and 24.6%,
respectively.

The difference between the Company's effective tax rate and the U.S. statutory
tax rates of 21% primarily relates to tax-exempt income, non-deductible
expenses, state income taxes (net of federal income tax benefit), and the
recognition of tax credits. The effective tax rate may vary significantly due to
fluctuations in the amount and source of pretax income, changes in amounts of
non-deductible expenses, and timing of the recognition of tax credits.

The Company is currently under audit by the Internal Revenue Service for the years 2014 to 2017.


ANALYSIS OF FINANCIAL CONDITION
Loans and Leases
The Company had total loans and leases of $23.7 billion at September 30, 2019,
an increase of $1.2 billion, or 5%, from December 31, 2018. The increase was a
result of legacy loan growth of $2.3 billion, or 13%, offset by pay-downs and
pay-offs on loans, primarily from prior period acquisitions.
Loans and leases outstanding at September 30, 2019 and December 31, 2018 are
presented in the following table.
                            TABLE 5-SUMMARY OF LOANS
                                      September 30, 2019          December 31, 2018        $ Change      % Change
(in thousands)                         Balance         Mix         Balance        Mix
Commercial loans and leases:

Real estate- construction $ 1,330,014 6 % $ 1,196,366 5 % 133,648

           11
  Real estate- owner-occupied           2,468,061       10         2,395,822       11        72,239            3

Real estate- non-owner occupied 6,011,681 25 5,796,117 26 215,564

            4

Commercial and industrial (1) 6,490,125 27 5,737,017 25 753,108

           13

Total commercial loans and leases 16,299,881 68 15,125,322 67 1,174,559

            8

Residential mortgage loans              4,649,745       20         4,359,156       19       290,589            7

Consumer and other loans:

  Home equity                           2,053,588        9         

2,304,694 10 (251,106 ) (11 )

  Other                                   673,323        3           

730,643 4 (57,320 ) (8 ) Total consumer and other loans 2,726,911 12 3,035,337 14 (308,426 ) (10 )

Total loans and leases $ 23,676,537 100 % $ 22,519,815 100 % 1,156,722

            5


(1) Includes equipment financing leases



Loan Portfolio Segments
The Company believes its loan portfolio is diversified by product and geography
throughout its footprint. Loan growth thus far in 2019 was strongest in the the
Energy Group (primarily reserve-based and midstream lending), Corporate Asset
Finance Group (equipment financing and leasing business), and the Birmingham,
Dallas and New Orleans markets. Loans in the Energy Group increased $429.9
million, or 47% since December 31, 2018. The Corporate Asset Finance Group grew
loans and leases $268.4 million, or 53%, thus far in 2019. In the first nine
months of 2019, the Birmingham market grew loans $118.1 million, or 12%. The
Dallas market grew loans $109.0 million, or 16%, and the New Orleans market grew
loans $106.0 million, or 5%.
The Company's loan to deposit ratio was 95% at both September 30, 2019 and
December 31, 2018. The percentage of fixed-rate loans to total loans was
approximately 39% at September 30, 2019 compared to 39% at the end of 2018.

                                       65
--------------------------------------------------------------------------------


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 5, Allowance for Credit Losses, to the unaudited consolidated
financial statements for credit quality factors by loan portfolio segment.
Commercial Loans and Leases
Total commercial loans and leases increased $1.2 billion, or 8%, from December
31, 2018. Commercial loans and leases increased to 68% of the total portfolio at
September 30, 2019 compared to 67% at December 31, 2018. Unfunded commitments on
commercial loans including approved loan commitments not yet funded were $6.6
billion at September 30, 2019, an increase of $543.6 million, or 9%, when
compared to the end of the prior year.

Commercial real estate loans include loans to commercial customers for
medium-term financing of land and buildings or for land development or
construction of a building. These loans are repaid from revenues through
operations of the businesses, rents of properties, sales of properties and
refinances. The Company's underwriting standards generally provide for loan
terms of three to seven years, with amortization schedules of generally no more
than twenty-five years. Low loan-to-value ratios are generally maintained and
usually limited to no more than 80% at the time of origination. The commercial
real estate portfolio is comprised of approximately 14% construction loans, 25%
owner-occupied loans, and 61% non-owner-occupied loans as of September 30, 2019,
relatively consistent with 13%, 25%, and 62%, respectively, at December 31,
2018. Commercial real estate loans increased $421.5 million, or 4%, during the
first nine months of 2019, from loan growth across multiple markets, primarily
in the Atlanta, Dallas, Naples, New Orleans, and South Florida markets.
Commercial and industrial loans and leases represent loans to commercial
customers to finance general working capital needs, equipment purchases and
leases and other projects where repayment is derived from cash flows resulting
from business operations. The Company originates C&I loans and leases on a
secured and, to a lesser extent, unsecured basis. C&I loans may be term loans or
revolving lines of credit. Term loans are generally structured with terms of no
more than three to seven years, with amortization schedules of generally no more
than fifteen years. C&I term loans and leases are generally secured by
equipment, machinery, or other corporate assets. Revolving lines of credit are
generally structured as advances upon perfected security interests in accounts
receivable and inventory and generally have annual maturities.
As of September 30, 2019, commercial and industrial loans and leases totaled
$6.5 billion, a $753.1 million, or 13%, increase from December 31, 2018,
primarily driven by growth in the Company's Energy and Corporate Assets Finance
Groups. Commercial and industrial loans and leases comprised 27% of the total
portfolio at September 30, 2019 and 25% at December 31, 2018.
The following table details the Company's commercial loans and leases by state.
          TABLE 6-COMMERCIAL LOANS AND LEASES BY STATE OF ORIGINATION
(in thousands)               September 30, 2019       December 31, 2018      $ Change       % Change
Louisiana                  $          3,601,291     $         3,521,596        79,695            2
Florida                               4,779,476               4,756,957        22,519            -
Alabama                               1,427,892               1,289,146       138,746           11
Texas (1)                             2,773,770               2,310,642       463,128           20
Georgia                               1,121,622               1,078,983        42,639            4
Arkansas                                753,634                 711,484        42,150            6
Tennessee                               555,281                 584,119       (28,838 )         (5 )
New York                                 66,072                  44,026        22,046           50
South Carolina and North
Carolina                                155,064                  92,800        62,264           67
Other (2)                             1,065,779                 735,569       330,210           45
  Total                    $         16,299,881     $        15,125,322     1,174,559            8


(1) Texas loans include $1.3 billion and $911.5 million in Energy Group loans at

     September 30, 2019 and December 31, 2018, respectively.


(2)  Other loans include primarily equipment financing and corporate asset
     financing leases, which the Company does not classify by state.




                                       66
--------------------------------------------------------------------------------


Residential Mortgage Loans
Residential mortgage loans consist of loans to consumers to finance a primary
residence. 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. The residential mortgage loan portfolio is originated
under terms and documentation that permit their sale in a secondary market. The
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
negative amortization, option ARM, or other exotic mortgage loans in its
portfolio. The Company makes insignificant investments in loans that would be
considered sub-prime (e.g., loans with a credit score of less than 620) in order
to facilitate compliance with relevant Community Reinvestment Act regulations.
Total residential mortgage loans increased $290.6 million, or 7%, compared to
December 31, 2018, primarily the result of growth in the Houston, Atlanta, New
Orleans, Dallas and Tampa markets.
Consumer and Other Loans
The Company offers consumer loans in order to provide a full range of retail
financial services to customers in the communities in which it operates. The
Company originates substantially all of its consumer loans in its primary market
areas. At September 30, 2019, $2.7 billion, or 12%, of the total portfolio was
comprised of consumer loans, compared to $3.0 billion, or 14%, at the end of
2018.
The majority of the consumer loan portfolio is comprised of home equity loans,
which allow customers to borrow against the equity in their home and are secured
by a first or second mortgage on the borrower's residence. Home equity loans
were $2.1 billion at September 30, 2019, a decrease of $251.1 million from
December 31, 2018. Unfunded commitments related to home equity loans and lines
were $1.1 billion at September 30, 2019, an increase of $49.4 million, or 5%,
from the end of 2018.
All other consumer loans, which consist of credit card loans, automobile loans
and other personal loans, decreased $57.3 million, or 8%, from December 31,
2018, primarily from decreases in other personal loans and indirect automobile
loans, a product that is no longer offered.
Additional information on the Company's consumer loan portfolio is presented in
the following tables. For the purposes of Table 8, unscoreable consumer loans
have been included with loans with credit scores below 660. Credit scores
reflect the most recent information available as of the dates indicated.
                 TABLE 7-CONSUMER LOANS BY STATE OF ORIGINATION
(in thousands)                September 30, 2019       December 31, 2018      $ Change     % Change
Louisiana                   $          1,005,490     $         1,072,628      (67,138 )         (6 )
Florida                                  831,748                 956,159     (124,411 )        (13 )
Alabama                                  239,903                 268,998      (29,095 )        (11 )
Texas                                    109,010                 126,562      (17,552 )        (14 )
Georgia                                  124,584                 142,067      (17,483 )        (12 )
Arkansas                                 195,697                 216,817      (21,120 )        (10 )
Tennessee                                 65,077                  78,013      (12,936 )        (17 )
New York                                  38,738                  46,146       (7,408 )        (16 )
South Carolina and North
Carolina                                   3,378                     214        3,164           NM
Other (1)                                113,286                 127,733      (14,447 )        (11 )
Total                       $          2,726,911     $         3,035,337     (308,426 )        (10 )

(1) Other loans include primarily credit card and indirect consumer loans, which

the Company does not classify by state.

NM - not meaningful

                                       67
--------------------------------------------------------------------------------

                     TABLE 8-CONSUMER LOANS BY CREDIT SCORE
(in thousands)          September 30, 2019      December 31, 2018
Above 720              $          1,593,693    $         1,708,417
660-720                             547,779                666,132
Below 660                           585,439                660,788
  Total consumer loans $          2,726,911    $         3,035,337



Mortgage Loans Held for Sale
Mortgage loans held for sale totaled $255.3 million at September 30, 2019, an
increase of $147.5 million, or 137%, from $107.7 million at year-end 2018, as
originations have outpaced sales activity during the first three quarters of
2019. The Company sells 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. Loans held for sale are primarily 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, Summary of Significant Accounting Policies, in the Annual Report on
Form 10-K for the year ended December 31, 2018, for further discussion.
Investment Securities
Investment securities decreased $567.9 million, or 11%, since December 31, 2018
to $4.4 billion at September 30, 2019, primarily due to sales of
available-for-sale securities, partially offset by increases in unrealized gains
on the AFS portfolio. Approximately 96% of the Company's investment portfolio is
in available-for-sale securities, which experience unrealized gains when
interest rates fall. Investment securities approximated 14% and 16% of total
assets at September 30, 2019 and December 31, 2018, respectively.
All of the Company's mortgage-backed securities were issued by
government-sponsored enterprises at September 30, 2019 and December 31, 2018.
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. At September 30, 2019 and
December 31, 2018, the Company's investment portfolio did not contain any
securities that are directly backed by subprime or Alt-A mortgages.
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.
Asset Quality
The lending activities of the Company are governed by underwriting policies
established by management and approved by the Board Risk Committee of the Board
of Directors. For additional information on loan underwriting, loan origination,
monitoring of loan payment performance, loan review, and the determination of
past due and non-accrual status, as well as the Company's policies for recording
payments received, placing loans and leases on non-accrual status, and the
resumption of interest accrual on non-accruing loans and leases, see Note 1,
Summary of Significant Accounting Policies, and the "Asset Quality" section of
MD&A in the Annual Report on Form 10-K for the year ended December 31, 2018.
For commercial loans and leases, the Company utilizes regulatory classification
ratings to monitor credit quality. For further discussion of regulatory
classification ratings, see Note 5, Allowance for Credit Losses, to the
unaudited consolidated financial statements. For residential mortgage loans and
consumer loans, the Company primarily uses the loan's payment and delinquency
status to monitor credit quality. These credit quality indicators are
continually updated and monitored.
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.

                                       68
--------------------------------------------------------------------------------


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. See Note 1, Summary of
Significant Accounting Policies, in the 2018 10-K for further details.
Non-performing Assets and Troubled Debt Restructurings
The Company defines non-performing assets as non-accrual loans, accruing loans
more than 90 days past due, OREO, and foreclosed property. Management
continuously monitors and transfers loans to non-accrual status when warranted.
The Company accounts for loans acquired with deteriorated credit quality, as
well as all loans acquired with significant discounts that did not 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
"acquired 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, in the 2018 10-K for further details.
Due to the significant difference in accounting for acquired impaired loans, 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, as the inclusion of these loans could
result in a lack of comparability across quarters or years, and could impact
comparability with other portfolios that were not impacted by acquired impaired
loan accounting. The Company believes that the presentation of certain asset
quality measures excluding acquired 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 acquired impaired loans, as indicated within each
table.
The following table sets forth the composition of the Company's non-performing
assets and TDRs for the periods indicated.

TABLE 9-NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS (in thousands)

                        September 30, 2019     December 31, 2018    $ Change    % Change
Non-accrual loans and leases:
Commercial                           $          82,234      $          85,112      (2,878 )       (3 )
Mortgage                                        50,439                 30,396      20,043         66
Consumer and other                              20,440                 21,676      (1,236 )       (6 )
Total non-accrual loans and leases             153,113                137,184      15,929         12
Accruing loans and leases 90 days or
more past due                                    4,790                  2,128       2,662        125
Total non-performing loans and
leases (2) (3)                                 157,903                139,312      18,591         13
OREO and foreclosed property (1)                27,075                 30,394      (3,319 )      (11 )
Total non-performing assets                    184,978                169,706      15,272          9
Performing troubled debt
restructurings                                  73,518                 80,807      (7,289 )       (9 )
Total non-performing assets and
performing troubled debt
restructurings                       $         258,496      $         250,513       7,983          3
Non-performing loans and leases to
total loans and leases (3)                        0.67 %                 0.62 %
Non-performing assets to total
assets                                            0.58 %                 0.55 %
Non-performing assets and performing
troubled debt restructurings to
total assets (1)                                  0.81 %                 0.81 %
Allowance for credit losses to
non-performing loans and leases                 102.83 %               111.55 %
Allowance for credit losses to total
loans and leases                                  0.69 %                 0.69 %


(1) OREO and foreclosed property at September 30, 2019 and December 31, 2018

include $3.1 million and $9.0 million, respectively, of former bank

properties held for development or resale.

(2) Total non-performing loans and leases for September 30, 2019 and December

     31, 2018 include $65.6 million and $61.5 million, respectively, of
     non-performing troubled debt restructurings.

(3) Non-performing loans exclude acquired impaired loans, even if contractually

past due or if the Company does not expect to receive payment in full, as

the Company is currently accreting interest income over the expected life of

     the loans.



                                       69
--------------------------------------------------------------------------------


Total non-performing assets increased $15.3 million, or 9%, compared to December
31, 2018, as non-performing loans and leases increased $18.6 million and OREO
and foreclosed property decreased $3.3 million. Non-performing loans and leases
increased 13% primarily attributable to an increase in non-accrual mortgage
loans, as a small number of mortgage loans moved to non-accrual in 2019.
In addition to the problem loans described above, there were $158.3 million of
commercial loans classified as special mention at September 30, 2019, which in
management's opinion were subject to potential future rating downgrades. Special
mention loans have potential weaknesses that, if left uncorrected, may result in
deterioration of the Company's credit position at some future date. Special
mention loans increased $1.1 million, or 1%, from year-end 2018, and were 0.97%
of total commercial loans at September 30, 2019 and 1.04% at December 31, 2018.
Past Due and Non-accrual Loans
Past due status is based on the contractual terms of loans. Total past due and
non-accrual loans were 0.90% of total loans and leases at September 30, 2019
compared to 0.87% at December 31, 2018. Additional information on past due loans
and leases is presented in the following table.
            TABLE 10-PAST DUE AND NON-ACCRUAL LOAN SEGREGATION (1)
                               September 30, 2019                   December 31, 2018
                                                 % of                              % of
                                              Outstanding                       Outstanding
(in thousands)               Amount             Balance          Amount           Balance       $ Change     % Change
Accruing loans and
leases
30-59 days past due    $      26,391                0.11     $      38,579            0.17      (12,188 )        (32 )
60-89 days past due           28,227                0.12            18,753            0.08        9,474           51
90-119 days past due           4,645                0.02             2,128            0.01        2,517          118
120 days past due or
more                             145                   -                 -               -          145          100
                              59,408                0.25            59,460            0.26          (52 )          -
Non-accrual loans and
leases                       153,113                0.65           137,184            0.61       15,929           12
Total past due and
non-accrual loans and
leases                 $     212,521                0.90     $     196,644            0.87       15,877            8


(1) Past due and non-accrual loan amounts exclude acquired impaired loans, even

if contractually past due or if the Company does not expect to receive

payment in full, as the Company is currently accreting interest income over

the expected life of the loans.



Total past due and non-accrual loans and leases increased $15.9 million from
December 31, 2018 to $212.5 million at September 30, 2019, primarily as a result
of an increase in non-accrual loans. Of the total accruing past due loans, 44%
were past due less than 60 days compared to 65% at year-end 2018, and 92% were
past due less than 90 days compared to 96% at year-end 2018.
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 September 30, 2019 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 "Application of Critical
Accounting Policies and Estimates" included in MD&A and Note 1, Summary of
Significant Accounting Policies, in the Annual Report on Form 10-K for the year
ended December 31, 2018 for more information.

                                       70
--------------------------------------------------------------------------------

The following table sets forth the activity in the Company's allowance for credit losses for the nine-month periods ended September 30, 2019 and 2018.

TABLE 11-SUMMARY OF ACTIVITY IN THE ALLOWANCE FOR CREDIT LOSSES (in thousands)

                                      September 30, 2019     September 30, 2018
Allowance for loan and lease losses at beginning
of period                                          $         140,571      $ 

140,891

Provision for loan and lease losses                           32,190        

26,678

Transfer of balance to OREO and other                         (2,696 )               (5,709 )
Charge-offs                                                  (29,971 )              (34,740 )
Recoveries                                                     6,141                  9,830
Allowance for loan and lease losses at end of
period                                             $         146,235      $ 

136,950


Reserve for unfunded commitments at beginning of
period                                                        14,830        

13,208

Balance created in acquisition accounting                          -                    900
Provision for unfunded lending commitments                     1,314                    613

Reserve for unfunded lending commitments at end of period

                                                        16,144        

14,721

Allowance for credit losses at end of period $ 162,379 $

151,671



The allowance for credit losses totaled $162.4 million at September 30, 2019
compared to $155.4 million at December 31, 2018. The allowance for credit losses
was 0.69% of total loans and leases at both September 30, 2019 and at December
31, 2018. The increase in the allowance for credit losses was primarily the
result of organic loan growth during the current period.
Net charge-offs during the nine months ended September 30, 2019 were $23.8
million, a decrease of $1.1 million from the comparable 2018 period. Net
charge-offs were 0.14% of average loans and leases on an annualized basis for
the nine months ended September 30, 2019 compared to 0.16% for the comparable
2018 period. The provision for loan and lease losses covered 135% and 107% of
net charge-offs for the first nine months of 2019 and 2018, respectively.
At September 30, 2019 and December 31, 2018, the ALLL covered 93% and 101% of
total non-performing loans and leases, respectively.
FUNDING SOURCES
Deposits, both those obtained from clients in its primary market areas and those
acquired, 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, as well as on-line banking services at
www.iberiabank.com and www.virtualbank.com. Increasing core deposits is a
continuing focus of the Company and has been accomplished through the
development of client relationships and acquisitions. Short-term and long-term
borrowings are also important funding sources for the Company. 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 the first nine months of 2019.
Deposits
Total deposits increased $1.2 billion, or 5%, to $25.0 billion at September 30,
2019, from $23.8 billion at December 31, 2018, primarily driven by a $559.1
million increase in brokered and reciprocal deposits and a $302.2 million
increase in jumbo time deposits. Deposit growth during the year thus far was
strongest in the Miami-Dade and Southwest Louisiana markets.

                                       71
--------------------------------------------------------------------------------

The following table sets forth the composition of the Company's deposits as of the dates indicated.

                    TABLE 12-DEPOSIT COMPOSITION BY PRODUCT
                            September 30, 2019December 31, 

2018

(in thousands) Ending Balance Mix Ending Balance

   Mix        $ Change      % Change
Non-interest-bearing
deposits              $     6,518,783           26 %   $      6,542,490           28 %     (23,707 )         NM
NOW accounts                4,503,353           18            4,514,113           19       (10,760 )         NM
Money market accounts       8,654,605           35            8,237,291           35       417,314            5
Savings accounts              671,156            3              828,914            3      (157,758 )        (19 )
Time deposits               4,629,388           18            3,640,623           15       988,765           27
Total deposits        $    24,977,285          100 %   $     23,763,431          100 %   1,213,854            5

NM - not meaningful


Short-term Borrowings
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 had an average rate of 42.4
basis points as of September 30, 2019.
Total short-term borrowings decreased $984.8 million, or 66%, from December 31,
2018, to $498.0 million at September 30, 2019, primarily due to net advance
repayments on short-term FHLB advances. On a period-end basis, short-term
borrowings were 2% of total liabilities and 26% of total borrowings at September
30, 2019 compared to 6% and 56%, respectively, at December 31, 2018.
On a quarter-to-date average basis, short-term borrowings decreased $402.1
million, or 34%, from the third quarter of 2018 and were 3% of total liabilities
and 37% of total borrowings in the third quarter of 2019, compared to 5% and
46%, respectively, during the same period of 2018.
Long-term Debt
Long-term debt increased $228.1 million, or 20%, from December 31, 2018, to $1.4
billion at September 30, 2019, primarily due to additional long-term FHLB
advances made in 2019. On a period-end basis, long-term debt was 5% and 4% of
total liabilities at September 30, 2019 and December 31, 2018, respectively.
On a quarter-to-date average basis, long-term debt decreased to $1.4 billion in
the third quarter of 2019, $20.5 million, or 1%, lower than the third quarter of
2018, mainly due to lower levels of long-term FHLB advances held by the Company
in the third quarter of 2019.
Long-term debt at September 30, 2019 included $1.2 billion 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 $35.0 million in notes payable on
investments in new market tax credit entities.

                                       72
--------------------------------------------------------------------------------

CAPITAL RESOURCES

Shareholders' Equity

Shareholders' equity increased $227.0 million, or 6%, during the first nine
months of 2019. The increase in shareholders' equity during the period was
driven by undistributed income of $223.7 million. In addition, the Company
issued and sold Non-Cumulative Perpetual Preferred Stock, Series D, for $96.4
million in net proceeds. See Note 9, Shareholders' Equity, Capital Ratios, and
Other Regulatory Matters, to the unaudited consolidated financial statements for
more information. Shareholders' equity also increased during the period from an
increase in accumulated other comprehensive income of $96.7 million, primarily
resulting from unrealized gains on the Company's available-for-sale securities
portfolio.
These increases in shareholders' equity were partially offset by common stock
repurchases. During the first nine months of 2019, the Company repurchased
2,700,000 common shares for $204.7 million at a weighted average cost of $75.83
per share. At September 30, 2019, the remaining common shares that could be
repurchased under the current Board-approved plan was 1,165,000 shares. Refer to
Note 9, Shareholders' Equity, Capital Ratios, and Other Regulatory Matters, to
the unaudited consolidated financial statements for further detail on the
Company's common stock repurchase plan.
The Company's quarterly dividend to common shareholders was $0.45 per common
share in the third quarter of 2019 compared to $0.39 in the third quarter of
2018. For the nine months ended September 30, 2019, the Company's dividend of
$1.31 per common share was an increase of $0.16 compared to $1.15 for the
comparable nine-month period of 2018, which equated to a dividend payout ratio
of 23.8% for the current year, down from 27.7% in 2018.
Regulatory Capital

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.
At September 30, 2019 and December 31, 2018, 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.
                       TABLE 13-REGULATORY CAPITAL RATIOS

                                                            Well-         

September 30, 2019December 31, 2018

                                                         Capitalized
Ratio                                 Entity               Minimums             Actual                Actual
Tier 1 Leverage               IBERIABANK Corporation          N/A                    9.78 %                9.63 %
                              IBERIABANK                     5.00 %                  9.49                  9.38
Common Equity Tier 1 (CET1)   IBERIABANK Corporation          N/A                   10.41                 10.72
                              IBERIABANK                     6.50 %                 10.95                 10.95
Tier 1 Risk-Based Capital     IBERIABANK Corporation          N/A                   11.28                 11.25
                              IBERIABANK                     8.00 %                 10.95                 10.95
Total Risk-Based Capital      IBERIABANK Corporation          N/A                   12.34                 12.33
                              IBERIABANK                    10.00 %                 11.57                 11.58


Minimum capital ratios are subject to a capital conservation buffer. In order to
avoid limitations on distributions, including dividend payments, and certain
discretionary bonus payments to executive officers, an institution must hold a
capital conservation buffer above its minimum risk-based capital requirements.
This capital conservation buffer is calculated as the lowest of the differences
between the actual CET1 ratio, Tier 1 Risk-Based Capital Ratio, and Total
Risk-Based Capital ratio and the corresponding minimum ratios. At September 30,
2019, the required minimum capital conservation buffer was 2.50%. At September
30, 2019, the capital conservation buffers of the Company and IBERIABANK were
4.34% and 3.57%, respectively.

                                       73
--------------------------------------------------------------------------------


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. Time deposits scheduled to
mature in one year or less at September 30, 2019 totaled $4.2 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 $4.4
billion in the investment securities portfolio, $2.3 billion is unencumbered and
$2.1 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 consistent 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.
Scheduled cash flows from the amortization and maturities of loans and
securities are relatively predictable sources of funds. Conversely, deposit
flows, prepayments of loans and 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
September 30, 2019, the Company had $1.5 billion in outstanding FHLB advances,
$275.0 million of which was short-term and $1.2 billion that was
long-term. Additional FHLB borrowing capacity available at September 30, 2019
amounted to $8.4 billion. At September 30, 2019, the Company also had various
funding arrangements with the Federal Reserve discount window and commercial
banks providing up to $334.0 million in the form of federal funds and other
lines of credit. At September 30, 2019, 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 September 30, 2019 and current deposit modeling,
the Company believes it has adequate liquidity to fund ongoing operations. The
Company has adequate 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. 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.


                                       74
--------------------------------------------------------------------------------


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 Company's 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 reviews, 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.
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.
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 September 30, 2019, the table below illustrates the impact of
an immediate and sustained 100 and 200 basis points parallel increase or
decrease in interest rates on net interest income over the next twelve months.
                       TABLE 14-INTEREST RATE SENSITIVITY
Shift in Interest Rates   % Change in Projected
       (in bps)            Net Interest Income
         +200                     +3.8%
         +100                     +2.3%
         -100                     -6.1%
         -200                    -12.6%


The influence of using the forward curve as of September 30, 2019 as a basis for
projecting the interest rate environment would approximate a 0.6% decrease in
net interest income over the next 12 months. The computations of interest rate
risk shown above are performed on a static 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.




                                       75
--------------------------------------------------------------------------------


The 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.
While the FOMC continues to observe sustained economic activity, strong labor
market conditions, and stable inflation, it has signaled a pause in its recent
efforts to increase the federal funds rate and made recent cuts of 25 basis
points each in July and September of 2019. Additionally, recent FOMC rhetoric
has pointed to continuing to lower the federal funds rate given low inflation
measures and overall global economic headwinds. Decreases in the federal funds
rate could cause overall interest rates to fall, which may negatively impact
financial performance from greater borrower refinancing incentives. Increases in
the federal funds rate and the unwinding of its balance sheet could cause
overall interest rates to rise, which may negatively impact the U.S. real estate
markets and affect deposit growth and pricing. In addition, deflationary
pressures, while possibly lowering our operating costs, could have a significant
negative effect on our borrowers, especially our business 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 one-month LIBOR, as a large portion of this portfolio reprices based on
this index, and to a lesser extent Prime. 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 if more interest-bearing
liabilities than interest-earning assets reprice or mature during a period when
interest rates are rising.

In July 2017, the Financial Conduct Authority (the authority that regulates
LIBOR) announced it intends to stop compelling banks to submit rates for the
calculation of LIBOR after 2021. ARRC has proposed that SOFR is the rate that
represents best practice as the alternative to LIBOR for use in derivatives and
other financial contracts that are currently indexed to LIBOR. ARRC has proposed
a paced market transition plan to SOFR from LIBOR and organizations are
currently working on industry-wide and company-specific transition plans as it
relates to derivatives and cash markets exposed to LIBOR. The Company has
material contracts that are indexed to LIBOR and is monitoring this activity and
evaluating the related risks.

The table below presents the Company's anticipated repricing of loans and investment securities over the next four quarters.

               TABLE 15-REPRICING OF CERTAIN EARNING ASSETS (1)
                                                                                                  Total less than
(in thousands)                      4Q 2019          1Q 2020         2Q 2020         3Q 2020          one year
Investment securities            $    490,876$   315,018$   316,487$   309,927$    1,432,308
   Fixed rate loans                   737,365         699,072         675,137         624,427          2,736,001
   Variable rate loans             11,275,883         422,065         369,346         339,291         12,406,585
     Total fixed and variable
rate loans                         12,013,248       1,121,137       1,044,483         963,718         15,142,586
                                 $ 12,504,124$ 1,436,155$ 1,360,970$ 1,273,645$   16,574,894

(1) Amounts include expected maturities, scheduled paydowns, expected prepayments, and loans subject to caps and floors and exclude the repricing of assets from prior periods, as well as non-accrual loans and market value adjustments.


As part of its asset/liability management strategy, the Company has seen greater
levels of loan originations with adjustable or variable rates of interest in
commercial and consumer loan products, which typically have shorter terms than
residential mortgage loans. The majority of fixed-rate, long-term,
agency-conforming residential loans are sold in the secondary market to avoid
bearing the interest rate risk associated with longer duration assets in the
current rate environment. However, the Sabadell and Gibraltar acquisitions
brought a considerable amount of jumbo, non-agency-conforming residential
mortgage loan exposure onto the balance sheet, both fixed rate and variable rate
in nature, which increased the overall duration of the portfolio. Considering
all of this, as of September 30, 2019, $14.4 billion, or 61%, of the Company's
total loan portfolio had variable interest rates, of which $2.8 billion, or 19%,
had an expected repricing date beyond the next four quarters. The Company had no
significant concentration to any single borrower or industry segment at
September 30, 2019.
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 September 30, 2019, 81% of the Company's deposits
were in transaction and limited-transaction accounts, compared to 85% at
December 31, 2018. Non-interest-bearing transaction accounts were 26% of total
deposits at September 30, 2019 compared to 28% at December 31, 2018.
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.

                                       76
--------------------------------------------------------------------------------

The table below presents the Company's anticipated repricing of liabilities over the next four quarters.

                     TABLE 16-REPRICING OF LIABILITIES (1)
                                                                                               Total less than
(in thousands)                      4Q 2019         1Q 2020         2Q 2020        3Q 2020        one year
Time deposits                    $ 1,004,626$ 1,307,516$ 1,136,649$ 713,883$   4,162,674
Short-term borrowings                498,049               -               -             -           498,049
Long-term debt                       420,747          55,643         120,415       150,376           747,181
                                 $ 1,923,422$ 1,363,159$ 1,257,064$ 864,259$   5,407,904


(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 such derivative instruments to effectively
manage interest rate risk. These derivative instruments of the Company would
modify net interest sensitivity to levels deemed appropriate.
IMPACT OF INFLATION OR DEFLATION AND CHANGING PRICES
The unaudited 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 2019.
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 could
employ certain risk management tools to maintain its balance sheet strength in
the event a deflationary scenario were to develop.


                                       77
--------------------------------------------------------------------------------


Non-GAAP Measures
This discussion and analysis 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.
Non-GAAP measures include, but are not limited to, descriptions such as core,
tangible, and pre-tax pre-provision. 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. Transactions
that are typically excluded from non-GAAP performance measures include realized
and unrealized gains/losses on former bank owned real estate, realized
gains/losses on securities, income tax gains/losses, merger related charges and
recoveries, litigation charges and recoveries, and debt repayment penalties.
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 presented in Table 17, with
the exception of forward-looking information. The Company is unable to estimate
GAAP EPS guidance without unreasonable efforts due to the nature of one-time or
unusual items that cannot be predicted, and therefore has not provided this
information under Regulation S-K Item 10(e)(1)(i)(B).
            TABLE 17-RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
                                                              Three Months Ended
                                       September 30, 2019                              September 30, 2018
(in thousands, except
per share amounts)        Pre-tax       After-tax        Per share (2)       Pre-tax      After-tax     Per share (2)
Net income              $ 131,359$     99,850     $          1.89     $ 131,866$ 101,465$        1.79
Less: Preferred stock
dividends                       -            3,599                0.07             -         3,599              0.06
Income available to
common shareholders
(GAAP)                  $ 131,359$     96,251     $          1.82     $ 131,866$  97,866$        1.73

Non-interest income
adjustments (1):
(Gain) loss on sale of
investments                     -                -                   -            (1 )          (1 )               -

Non-interest expense
adjustments (1):
Merger-related expense          -                -                   -           973           743              0.01
Compensation-related
expense                         -                -                   -         1,104           839              0.01
Impairment of
long-lived assets, net
of (gain) loss on sale          -                -                   -         3,286         2,497              0.05
Gain on early
termination of loss
share agreements                -                -                   -        (2,708 )      (2,058 )           (0.04 )
Other non-core
non-interest expense            -                -                   -        (1,955 )      (1,486 )           (0.02 )
Total non-interest
expense adjustments             -                -                   -           700           535              0.01
Core earnings
(Non-GAAP)                131,359           96,251                1.82       132,565        98,400              1.74
Provision for credit
losses (1)                  8,986            6,829                            11,384         8,652
Pre-provision earnings,
as adjusted (Non-GAAP)  $ 140,345$    103,080

$ 143,949$ 107,052

(1) Excluding preferred stock dividends and merger-related expense, after-tax

     amounts are calculated using a tax rate of 24%, which approximates the
     marginal tax rate.


(2)  Diluted per share amounts may not appear to foot due to rounding.












                                       78
--------------------------------------------------------------------------------

                                                           Nine Months Ended
                                   September 30, 2019                            September 30, 2018
(in thousands, except
per share amounts)       Pre-tax      After-tax     Per share (2)      Pre-tax      After-tax     Per share (2)
Net income             $ 395,627$ 301,579$        5.58$ 318,620$ 240,210$        4.29
Less: Preferred stock
dividends                      -         8,146              0.15             -         8,146              0.15
Income available to
common shareholders
(GAAP)                 $ 395,627$ 293,433$        5.43     $
318,620     $ 232,064$        4.14

Non-interest income
adjustments (1):
Loss (gain) on sale of
investments                1,012           769              0.01            55            41                 -

Non-interest expense
adjustments (1):
Merger-related expense      (344 )        (261 )               -        31,533        24,272              0.44
Compensation-related
expense                       (9 )          (7 )               -         4,106         3,121              0.06
Impairment of
long-lived assets, net
of (gain) loss on sale       964           732              0.01        10,773         8,187              0.15
Gain on early
termination of loss
share agreements               -             -                 -        (2,708 )      (2,058 )           (0.04 )
Other non-core
non-interest expense      (3,022 )      (2,297 )           (0.04 )      (2,733 )      (2,078 )           (0.04 )
Total non-interest
expense adjustments       (2,411 )      (1,833 )           (0.03 )      40,971        31,444              0.57
Income tax expense -
impact of TCJA                 -             -                 -             -         6,572              0.12
Income tax expense -
other                          -             -                 -             -           173                 -
Core earnings
(Non-GAAP)               394,228       292,369              5.41       359,646       270,294              4.83
Provision for loan
losses                    33,504        25,463                          27,290        20,740
Pre-provision
earnings, as adjusted
(Non-GAAP)             $ 427,732$ 317,832                       $ 

386,936 $ 291,034

(1) Excluding preferred stock dividends and merger-related expense, after-tax

     amounts are calculated using a tax rate of 24%, which approximates the
     marginal tax rate.


(2)  Diluted per share amounts may not appear to foot due to rounding.





























                                       79
--------------------------------------------------------------------------------

                                                       As of and For the Three Months Ended
                                                                  September 30,
(in thousands)                                              2019                   2018
Net interest income (GAAP)                          $       249,333$       259,225
Taxable equivalent benefit                                    1,320                   1,461
Net interest income (TE) (Non-GAAP) (1)             $       250,653$       260,686

Non-interest income (GAAP)                          $        63,674$        53,087
Taxable equivalent benefit                                      468                     463
Non-interest income (TE) (Non-GAAP) (1)                      64,142         

53,550

Taxable equivalent revenues (Non-GAAP) (1)                  314,795         

314,236

Securities (gains) losses and other non-interest
income                                                            -                      (1 )

Core taxable equivalent revenues (Non-GAAP) (1) $ 314,795$ 314,235


Total non-interest expense (GAAP)                   $       172,662$       169,062
Less: Intangible amortization expense                         4,410         

5,382

Tangible non-interest expense (Non-GAAP) (2)                168,252         

163,680

Less: Merger-related expense                                      -                     973
     Compensation-related expense                                 -        

1,104

Impairment of long-lived assets, net of (gain) loss on sale

                                                      -         

3,286

    Gain on early termination of loss share
agreements                                                        -         

(2,708 )

     Other non-core non-interest expense                          -        

(1,955 ) Core tangible non-interest expense (Non-GAAP)(2) $ 168,252$ 162,980


Average assets (GAAP)                               $    31,554,291$    30,046,231
Less: Average intangible assets, net                      1,303,636         

1,309,962

Total average tangible assets (Non-GAAP) (2) $ 30,250,655$ 28,736,269


Total shareholders' equity (GAAP)                   $     4,283,300$     3,942,361
Less: Goodwill and other intangibles                      1,301,348         

1,305,915

Preferred stock                                             228,485         

132,097

Tangible common equity (Non-GAAP) (2)               $     2,753,467

$ 2,504,349


Average shareholders' equity (GAAP)                 $     4,265,571$     3,935,082
Less: Average preferred equity                              228,485         

132,097

Average common equity                                     4,037,086         

3,802,985

Less: Average intangible assets, net                      1,303,636         

1,309,962

Average tangible common shareholders' equity
(Non-GAAP) (2)                                      $     2,733,450

$ 2,493,023


Return on average assets (GAAP)                                1.26  %                 1.34  %
Effect of non-core revenues and expenses                          -                    0.01
Core return on average assets (Non-GAAP)                       1.26  %                 1.35  %

Return on average common equity (GAAP)                         9.46  %                10.21  %
Effect of non-core revenues and expenses                          -                    0.06
Core return on average common equity (Non-GAAP)                9.46  %                10.27  %
Effect of intangibles (2)                                      5.02                    6.07
Core return on average tangible common equity
(Non-GAAP) (2)                                                14.48  %                16.34  %

Efficiency ratio (GAAP)                                        55.2  %                 54.1  %
Effect of tax benefit related to tax-exempt income             (0.3 )                  (0.3 )
Efficiency ratio (TE) (Non-GAAP) (1)                           54.9  %                 53.8  %
Effect of amortization of intangibles                          (1.5 )                  (1.7 )



                                       80
--------------------------------------------------------------------------------


Effect of non-core items                                            -                (0.2 )
Core tangible efficiency ratio (TE) (Non-GAAP) (1) (2)           53.4  %    

51.9 %


Total assets (GAAP)                                    $   31,734,598$   30,118,387
Less: Goodwill and other intangibles                        1,301,348       

1,305,915

Tangible assets (Non-GAAP) (2)                         $   30,433,250$   28,812,472
Tangible common equity ratio (Non-GAAP) (2)                      9.05  %    

8.69 %


Cash Yield:
Earning assets average balance (GAAP)                  $   28,959,764$   27,722,479
Add: Adjustments                                              111,075       

143,665

Earning assets average balance, as adjusted (Non-GAAP) $   29,070,839$   27,866,144

Net interest income (GAAP)                             $      249,333$      259,225
Add: Adjustments                                              (13,715 )           (17,566 )
Net interest income, as adjusted (Non-GAAP)            $      235,618$      241,659

Yield, as reported                                               3.44  %             3.74  %
Add: Adjustments                                                (0.20 )             (0.27 )
Yield, as adjusted (Non-GAAP)                                    3.24  %             3.47  %


(1) Fully taxable-equivalent (TE) calculations include the tax benefit
associated with related income sources that are tax-exempt using a rate of 21%.
(2) Tangible calculations eliminate the effect of goodwill and
acquisition-related intangibles and the corresponding amortization expense on a
tax-effected basis where applicable.


                                       81
--------------------------------------------------------------------------------

                           Glossary of Defined Terms
Term             Definition
2018 10-K        Annual Report on Form 10-K for the year ended December 31, 2018
ACL              Allowance for credit losses
Acquired loans   Loans acquired in a business combination
AFS              Securities available for sale
ALLL             Allowance for loan and lease losses
AOCI             Accumulated other comprehensive income (loss)
ARRC             Alternative Reference Rates Committee
ASC              Accounting Standards Codification
ASU              Accounting Standards Update
C&I              Commercial and Industrial loans
CEO              Chief Executive Officer
CET1             Common Equity Tier 1 Capital defined by Basel III capital rules
CFO              Chief Financial Officer
CRA              Community Reinvestment Act
Company          IBERIABANK Corporation and Subsidiaries
DOJ              Department of Justice
ECL              Expected credit losses
EPS              Earnings per common share
Exchange Act     Securities Exchange Act of 1934
FASB             Financial Accounting Standards BoardFDICFederal Deposit Insurance Corporation
FHA              Federal Housing Administration
FHLB             Federal Home Loan BankFOMCFederal Open Market Committee
FRB              Board of Governors of the Federal Reserve System
GAAP             Accounting principles generally accepted in the United States
                 of AmericaGibraltarGibraltar Private Bank & Trust Co.
HUD              U.S. Department of Housing and Urban DevelopmentIBERIABANK       Banking subsidiary of IBERIABANK Corporation
Legacy loans     Loans that were originated directly or otherwise underwritten
                 by the Company
LIBOR            London Interbank Borrowing Offered Rate
LTC              Lenders Title Company
Non-GAAP         Financial measures determined by methods other than in
                 accordance with GAAP
OCI              Other comprehensive income
OREO             Other real estate owned
OTTI             Other than temporary impairment
Parent           IBERIABANK Corporation
ROU              Right-of-Use
RRP              Recognition and Retention Plan
Sabadell United  Sabadell United Bank, N.A.SECSecurities and Exchange CommissionSIFMASecurities Industry and Financial Markets Association
SOFR             Secured Overnight Financing Rate
SolomonParks     SolomonParks Title & Escrow, LLC
TE               Fully taxable equivalent
TDR              Troubled debt restructuring
U.S.United States of America
UST              United States Treasury



                                       82

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses

share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on IBERIABANK CORPORATION
01/30WALL STREET STOCK EXCHANGE : Microsoft and Tesla deliver, Facebook takes a hit
01/28IBERIABANK CORPORATION : Announces 4% Increase to Cash Dividend on Common Stock
PR
01/24IBERIABANK : 4Q Earnings Snapshot
AQ
01/24IBERIABANK CORP : Regulation FD Disclosure (form 8-K)
AQ
01/21IBERIABANK CORPORATION : annual earnings release
01/09IBERIABANK CORPORATION : to Announce Fourth Quarter 2019 Financial Results on Ja..
PR
2019IBERIABANK CORPORATION : Ex-dividend day for
FA
2019IBERIABANK CORPORATION : Declares Cash Dividend on Common Stock
PR
2019Fed voters a less-hawkish bunch in 2020, lowering bar for U.S. rate cut
RE
2019IBERIABANK : INVESTOR ALERT - Kuznicki Law PLLC Investigates Adequacy of Price a..
BU
More news