-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JDL5h+Vui9LtUbhsfrgh9iqkJYkFsWBM419eq/Xoruik0wgydUiDRVyw6X7Ja83/ TxBxaOz/wwpUkbv4OTqfDg== 0001025537-00-000075.txt : 20000516 0001025537-00-000075.hdr.sgml : 20000516 ACCESSION NUMBER: 0001025537-00-000075 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ISB FINANCIAL CORP/LA CENTRAL INDEX KEY: 0000933141 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 721280718 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25756 FILM NUMBER: 632323 BUSINESS ADDRESS: STREET 1: 1101 E ADMIRAL DOYLE DR CITY: NEW IBERIA STATE: LA ZIP: 70560 BUSINESS PHONE: 3183652361 MAIL ADDRESS: STREET 1: 1101 EAST ADMIRAL DOYLE DR CITY: NEW IBERIA STATE: LA ZIP: 70560 10-Q 1 FORM 10Q FOR IBERIABANK CORPORATION (ISB FIN.) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 Commission File Number 0-25756 IBERIABANK Corporation (formerly ISB Financial Corporation) - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Louisiana 72-1280718 - ------------------------------------------------- ----------------------------- (State or other jurisdiction of incorporation or (I.R.S. Employer organization) Identification Number) 1101 East Admiral Doyle Drive New Iberia, Louisiana 70560 - ---------------------------------------- ------------------------ (Address of principal executive office) (Zip Code) (337) 365-2361 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____ -------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of May 9, 2000, 6,536,737 shares of the Registrants' common stock were issued and outstanding. Of that total, 568,907 shares are held by the Registrant's Employee Stock Ownership Plan, of which 249,978 shares were not committed to be released. ISB FINANCIAL CORPORATION AND SUBSIDIARY TABLE OF CONTENTS PART 1. FINANCIAL INFORMATION PAGE - ------- --------------------- ---- Item 1. Financial Statements Consolidated Balance Sheets 3 (As of March 31, 2000 and December 31, 1999) Consolidated Statements of Income (For the three 4 months ended March 31, 2000 and 1999) Consolidated Statements of Shareholders' Equity (For the 5 three months ended March 31, 2000 and 1999) Consolidated Statements of Cash Flows (For the three 6 months ended March 31, 2000 and 1999) Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk 15 PART 2. OTHER INFORMATION Item 1. Legal Proceedings 16 Item 2. Changes in Securities 16 Item 3. Defaults Upon Senior Securities 16 Item 4. Submission of Matters to a Vote of Security Holders 16 Item 5. Other Information 16 Item 6. Exhibits and Reports on Form 8-K 16 SIGNATURES 17 2 ISB FINANCIAL CORPORATION AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands, except share data)
ASSETS ------ March 31, December 31, 2000 1999 --------------- ----------------- Cash and due from banks $ 30,405 $ 39,443 Interest-bearing deposits in banks 11,683 8,270 --------------- ----------------- Total cash and cash equivalents 42,088 47,713 Investment securities: Available for sale, at fair value 287,002 299,388 Held to maturity (fair value of $79,410 and $82,884, respectively) 83,307 85,493 Federal home loan bank stock, at cost 6,925 6,821 Loans held for sale 920 4,771 Loans, net of unearned income, less allowance for loan losses of $8,951 and $8,749, respectively 869,283 834,333 Accrued interest receivable 7,236 8,017 Premises and equipment, net 25,499 25,957 Goodwill and acquisition intangibles 41,235 42,063 Other assets 9,920 9,022 --------------- ----------------- TOTAL ASSETS $1,373,415 $1,363,578 =============== ================= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ LIABILITIES: Deposits: Noninterest-bearing $ 123,815 $ 116,493 Interest-bearing 1,014,736 983,521 --------------- ----------------- Total deposits 1,138,551 1,100,014 Short-term borrowings 56,200 83,000 Accrued interest payable 3,172 5,385 Long-term debt 49,750 52,053 Other liabilities 8,484 5,937 --------------- ----------------- TOTAL LIABILITIES 1,256,157 1,246,389 --------------- ----------------- SHAREHOLDERS' EQUITY: Preferred stock of $1 par value; 5,000,000 shares authorized; -0- shares issued - - Common stock of $1 par value; 25,000,000 shares authorized; 7,380,671 shares issued 7,381 7,381 Additional paid-in capital 68,958 68,749 Retained earnings 71,013 69,065 Unearned common stock held by ESOP (2,500) (2,649) Unearned common stock held by RRP trust (3,012) (3,024) Accumulated other comprehensive income (9,076) (7,124) Treasury stock, at cost, 843,934 and 821,934 shares (15,506) (15,209) --------------- ----------------- TOTAL SHAREHOLDERS' EQUITY 117,258 117,189 --------------- ----------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,373,415 $1,363,578 =============== =================
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3 ISB FINANCIAL CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands, except per share data)
For the Three Months Ended March 31, ------------------------------ 2000 1999 ------------- ------------- INTEREST AND DIVIDEND INCOME: Loans, including fees $ 18,358 $ 16,566 Investment securities: Taxable interest and dividends 6,220 5,990 Tax-exempt interest 22 35 Interest-bearing demand deposits 55 843 ------------- ------------- Total interest and dividend Income 24,655 23,434 ------------- ------------- INTEREST EXPENSE: Deposits 10,628 10,270 Short-term borrowings 814 0 Long-term debt 842 735 ------------- ------------- Total interest expense 12,284 11,005 ------------- ------------- Net interest income 12,371 12,429 Provision for loan losses 481 370 ------------- ------------- Net interest income after provision for loan losses 11,890 12,059 ------------- ------------- NONINTEREST INCOME: Service charges on deposit accounts 1,974 1,880 ATM fee income 301 207 Gain on sale of loans, net 9 302 Gain on sale of property 0 0 Gain on sale of investments, net 0 0 Other income 875 711 ------------- ------------- Total noninterest income 3,159 3,100 ------------- ------------- NONINTEREST EXPENSE: Salaries and employee benefits 5,027 5,134 Occupancy and equipment 1,364 1,375 Amortization of acquisition intangibles 828 853 Franchise and shares tax 347 263 Communication and delivery 706 662 Marketing and business development 324 270 Data processing 316 205 Printing, stationery and supplies 167 220 Other expenses 1,263 1,563 ------------- ------------- Total noninterest expense 10,342 10,545 ------------- ------------- Income before income tax expense 4,707 4,614 Income tax expense 1,752 1,755 ------------- ------------- NET INCOME $ 2,955 $ 2,859 ============= ============= EARNINGS PER SHARE - BASIC $ 0.48 $ 0.45 ============= ============= EARNINGS PER SHARE - DILUTED $ 0.48 $ 0.44 ============= =============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4 ISB FINANCIAL CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) (Dollars in thousands)
Unearned Unearned Common Accumulated Total Additional Common Stock Other Share- Common Paid In Retained Stock Held Held By Comprehensive Treasury holders' Stock Capital Earnings By ESOP RRP Trust Income Stock Equity ---------- --------- ---------- ----------- ---------- ----------- --------- ---------- BALANCE, DECEMBER 31, 1998 $ 7,381 $68,021 $63,527 $ (3,267) $(3,683) $ 349 $ (8,361) $ 123,967 Comprehensive income: Net income 2,859 2,859 Change in unrealized gain (loss) on securities available for sale, net of deferred taxes (1,137) (1,137) ---------- Total comprehensive income 1,722 Cash dividends declared (974) (974) Common stock released by ESOP trust 174 158 332 Common stock earned by participants of recognition and retention plan trust, including tax benefit 12 105 117 Treasury stock acquired at cost, 68,000 shares (1,389) (1,389) Stock options exercised 1 15 16 ---------- ---------- ---------- ----------- ---------- --------- ---------- ---------- BALANCE, MARCH 31, 1999 $ 7,381 $68,208 $65,412 $ (3,109) $(3,578) $ (788) $ (9,735) $ 123,791 ========== ========== ========== =========== ========== ========= ========== ========== BALANCE, DECEMBER 31, 1999 $ 7,381 $68,749 $69,065 $ (2,649) $(3,024) $ (7,124) $ (15,209) $ 117,189 Comprehensive income: Net income 2,955 2,955 Change in unrealized gain (loss) on securities available for sale, net of deferred taxes (1,952) (1,952) ---------- Total comprehensive income 1,003 Cash dividends declared (1,007) (1,007) Common stock released by ESOP trust 51 149 200 Common stock earned by participants of recognition and retention plan trust, including tax benefit 13 140 153 Common stock acquired by RRP trust 128 (128) 0 Compensation expense on stock option plans 17 17 Treasury stock acquired at cost, 22,000 shares (297) (297) Stock options exercised 0 0 ---------- ---------- ---------- ----------- ---------- --------- ---------- ---------- BALANCE, MARCH 31, 2000 $ 7,381 $68,958 $71,013 $ (2,500) $(3,012) $ (9,076) $ (15,506) $ 117,258 ========== ========== ========== =========== ========== ========= ========== ==========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5 ISB FINANCIAL CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three Months Ended March 31, 2000 and 1999 (Dollars in thousands) 2000 1999 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,955 $ 2,859 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,675 1,655 Provision for loan losses 481 370 Compensation expense recognized on RRP and stock options 170 117 Gain on sales of assets (61) (7) Amortization of premium/discount on investments 18 32 Current provision for deferred income taxes 0 (4) FHLB stock dividends (104) (139) Net change in loans held for sale 3,851 9,996 ESOP compensation 152 332 Other, net 588 4,405 --------- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 9,725 19,616 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Activity in available for sale securities: Maturities, prepayments and calls 9,575 9,500 Purchases 0 (24,837) Activity in held to maturity securities: Maturities, prepayments and calls 2,069 17,365 Purchases 0 (9,699) Increase in loans receivable, net (35,691) (4,103) Proceeds from sale of premises and equipment 113 87 Purchases of premises and equipment (280) (1,324) Proceeds from disposition of real estate owned & property 385 206 --------- --------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (23,829) (12,805) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: (Decrease) increase in deposits 38,838 (41,359) Net change in short term borrowings (26,800) 0 Repayments of long term debt (2,303) (283) Dividends paid to shareholders (959) (984) Proceeds from sale of treasury stock for stock options exercised 0 16 Payments to repurchase common stock (297) (1,389) --------- --------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES 8,479 (43,999) --------- --------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (5,625) (37,188) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 47,713 145,871 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 42,088 $ 108,683 ========= ========= SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITIES: Acquisition of real estate in settlement of loans $ 256 $ 225 ========= ========= SUPPLEMENTAL DISCLOSURES: Cash paid (received) for: Interest on deposits and borrowings $ 14,497 $ 11,433 ========= ========= Income taxes $ 30 $ 450 ========= ========= Income tax refunds $ -- $ -- ========= ========= SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6 ISB FINANCIAL CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying consolidated financial statements were prepared in accordance with the instructions to Form 10-Q, and therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. All normal, recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial statements, have been included. These interim financial statements should be read in conjunction with the audited financial statements and note disclosures for ISB Financial Corporation (the "Company") previously filed with the Securities and Exchange Commission in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. BUSINESS The Company's principal business is conducted through its wholly owned subsidiary, IBERIABANK (the "Bank"), which conducts business from its main office located in New Iberia, Louisiana. IBERIABANK operates 42 full service offices in its market areas located in south central Louisiana, northeast Louisiana and the greater New Orleans area. The Bank provides a variety of financial services to individuals and businesses throughout its service area. Primary deposit products are checking, savings and certificate of deposit accounts and primary lending products are consumer, mortgage and commercial loans. The Bank also offers discount brokerage services through it's wholly owned subsidiary, Iberia Financial Services, LLC. The Bank is subject to examination and regulation by the Office of Financial Institutions of the State of Louisiana, which is the Bank's chartering authority and primary regulator. The Bank is also subject to regulation by the FDIC and to certain reserve requirements established by the Federal Reserve Board ("FRB"). As a Louisiana chartered commercial bank, deposits are insured by the Federal Deposit Insurance Corporation ("FDIC") to the maximum extent permitted by law. The Bank is a member of the Federal Home Loan Bank of Dallas ("FHLB"). PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Company, the Bank and the Bank's wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 7 2. LOANS RECEIVABLE Loans receivable (in thousands) at March 31, 2000 and December 31, 1999 consists of the following: March 31, December 31, 2000 1999 ---- ---- Residential mortgage loans: Residential 1-4 family $ 273,745 $ 266,365 Construction 6,685 6,381 --------- --------- Total residential mortgage loans 280,430 272,746 Commercial loans: Business 81,185 82,485 Real estate 168,116 157,248 --------- --------- Total commercial loans 249,301 239,733 Consumer loans: Home equity 94,917 91,531 Automobile 24,288 23,432 Indirect automobile 194,012 179,350 Credit card loans 6,388 6,436 Other 28,898 29,854 --------- --------- Total consumer loans 348,503 330,603 --------- --------- Total loans receivable 878,234 843,082 Allowance for loan losses (8,951) (8,749) --------- --------- Loans receivable, net $ 869,283 $ 834,333 ========= ========= 3. EARNINGS PER SHARE Basic earnings per share were based on 6,095,475 weighted average shares outstanding during the three month period ended March 31, 2000. Diluted earnings per share were based on 6,095,846 weighted average shares outstanding during the three month period ended March 31, 2000. For the three months ended March 31, 2000, the weighted average number of common shares outstanding excludes (a) the weighted average unreleased shares owned by the Employee Stock Ownership Plan ("ESOP") of 257,409; (b) the weighted average shares owned by the Management Recognition Plan and Trust of 202,512 and (c) the weighted average shares purchased in Treasury Stock of 825,274. 4. SUBSEQUENT EVENTS On May 5, 2000, the shareholders of ISB Financial Corporation approved changing the Company's name to IBERIABANK Corporation. The name change will take place immediately. Effective May 15, 2000, the Company's stock symbol on the NASDAQ National Market will change to "IBKC". 8 This Form 10-Q may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of the Company that are subject to various factors which would cause actual results to differ materially from the estimates. These factors include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory, and technological factors affecting the Company's operations, pricing, products and services. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CHANGES IN FINANCIAL CONDITION - ------------------------------ At March 31, 2000, the consolidated assets of the Company totaled $1.37 billion, an increase of $9.8 million, or .72%, from December 31, 1999. Loans, net of unearned income, less allowance for loan losses, increased by $35.0 million, or 4.2%, to $869.3 million at March 31, 2000 compared to $834.3 million at December 31, 1999. Such increase was primarily the result of a $17.9 million, or 5.4% increase in consumer loans, reflecting growth of $14.6 million in indirect automobile loans, $3.4 million in home equity loans and a net decrease in remaining consumer loans of $1 million. Other loan increases consisted of growth in commercial loans of $9.6 million, or 4.0% and mortgage loans of $7.7 million, or 2.8%. The Company's loan to deposit ratio at March 31, 2000 was 76.3% compared to 75.8% at December 31, 1999. For additional information on loans, see Note 2 to the Consolidated Financial Statements. Loans held for sale decreased $3.9 million, or 80.7%, to $920,000 compared to $4.8 million at December 31, 1999. Loans held for sale are single-family residential mortgage loans to be sold in the secondary market. Interest-bearing deposits at other institutions increased $3.4 million, or 41.3%, to $11.7 million at March 31, 2000, compared to $8.3 million at December 31, 1999. The Company's investment securities available for sale decreased $12.4 million, or 4.1%, to $287.0 million at March 31, 2000, compared to $299.4 million at December 31, 1999. Such decrease was primarily the result of $9.4 million of repayments in mortgage-backed securities or the maturity of investment securities available for sale, and a $3.0 million additional decrease in the market value of such securities. The Company's investment securities held to maturity decreased $2.2 million, or 2.6%, to $83.3 million at March 31, 2000, compared to $85.5 million at December 31, 1999. Such decrease was primarily the result of repayments of mortgage-backed securities or the maturity of investment securities held to maturity. 9 Deposits increased $38.5 million, or 3.5%, to $1,138.6 million at March 31, 2000, compared to $1,100.0 million at December 31, 1999. The increase in deposits was primarily the result of a $55.9 million increase in savings account balances as a result of promotional pricing, which was partially offset by a $19.4 million decrease in time deposits due primarily to lower pricing of non-relationship accounts. Federal Home Loan Bank short-term borrowings decreased $26.8 million, or 32.3%, to $56.2 million at March 31, 2000, compared to $83.0 million at December 31, 1999. The net decrease in advances was in short term advances with a duration of 8 days or less. The decrease in advances was primarily the result of net deposit increases, which was partially offset by the funding of loan originations. Long-term debt decreased $2.3 million, or 4.4%, to $49.7 million at March 31, 2000, compared to $52.1 million at December 31, 1999. The decrease in long-term debt was due primarily to principal repayments made on long-term borrowings. No new long-term borrowings were made in the first quarter 2000. Total shareholders' equity increased $69,000, or 0.06%, to $117.3 million at March 31, 2000. The increase was the result of the Company's net income of $3.0 million, $200,000 of common stock released by the ESOP, $153,000 of common stock earned by participants of the Recognition and Retention Plan and $17,000 of compensation expense recognized on stock option plans, which was partially offset by $297,000 of treasury stock acquired, $1.0 million of cash dividends declared on common stock and a $2.0 million, after taxes, decrease in accumulated other comprehensive income. RESULTS OF OPERATIONS - --------------------- The Company reported net income of $3.0 million for the three months ended March 31, 2000, compared to $2.9 million earned during the three months ended March 31, 1999. The Company's net interest income decreased $58,000 and total noninterest income increased $59,000 during the three months ended March 31, 2000 compared to the first quarter of 1999. Noninterest expense decreased $203,000 and income tax expense decreased $3,000 during the three months ended March 31, 2000 compared to the first quarter of 1999. 10 AVERAGE BALANCES, NET INTEREST INCOME AND INTEREST YIELDS / RATES The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest income of the Bank from earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rate; (iii) net interest income; (iv) net interest spread; and (v) net interest margin. Information is based on average daily balances during the indicated periods.
Three Months Ended March 31, ---------------------------------------------------------------------------- 2000 1999 -------------------------------------- ----------------------------------- Average Average Average Yield/ Average Yield/ (Dollars in thousands) Balance Interest Rate(1) Balance Interest Rate(1) - -------------------------------------------------------------------------------------------- ----------------------------------- Loans receivable: Mortgage loans $ 274,706 $ 5,439 7.92% $ 314,405 $ 6,428 8.18% Commercial loans 240,651 5,507 9.05 199,797 4,450 8.91 Consumer and other loans 334,378 7,412 8.92 262,132 5,688 8.80 ---------- -------- ---------- -------- Total Loans 849,735 18,358 8.63 776,334 16,566 8.58 ---------- -------- ---------- -------- Investment securities 398,006 6,242 6.27 386,329 6,025 6.24 Other earning assets 4,662 55 4.74 80,037 843 4.27 ---------- -------- ---------- -------- Total earning assets 1,252,403 24,655 7.87 1,242,700 23,434 7.57 -------- -------- Nonearning assets 102,185 120,656 ---------- ---------- Total assets $1,354,588 $1,363,356 ========== ========== Interest-bearing liabilities: Deposits: Demand deposits $ 251,113 1,426 2.28 $ 292,971 1,553 2.15 Savings deposits 178,039 1,591 3.59 129,653 581 1.82 Certificates of deposits 577,336 7,611 5.30 643,001 8,136 5.13 ---------- -------- ---------- -------- Total deposits 1,006,488 10,628 4.25 1,065,625 10,270 3.91 Borrowings 105,670 1,656 6.20 45,538 735 6.46 ---------- -------- ---------- -------- Total interest-bearing liabilities 1,112,158 12,284 4.43 1,111,163 11,005 4.01 --------- -------- Noninterest - bearing demand deposits 116,002 116,676 Noninterest - bearing liabilities 10,548 11,090 ---------- ---------- Total liabilities 1,238,708 1,238,929 Shareholders' Equity 115,880 124,427 ---------- ---------- Total liabilities and shareholders' equity $1,354,588 $1,363,356 ========== ========== Net earning assets $ 140,245 $ 131,537 ========== ========== Net interest spread $ 12,371 3.44% $ 12,429 3.56% ======== ==== ======== ==== Net interest margin 3.93% 3.98% ==== ==== Ratio of average earning assets to average interest-bearing liabilities 112.61% 111.84% ====== ====== - -------------------------------- (1) Annualized.
11 NET INTEREST INCOME Net interest income decreased $58,000, or 0.47%, to $12.4 million for the three months ended March 31, 2000, compared to $12.4 million for the three months ended March 31, 1999. The decrease was due to a $1.3 million, or 11.6%, increase in interest expense, which was partially offset by a $1.2 million, or 5.2% increase in interest income. The increase in interest income was the result of a $9.7 million, or 0.78%, increase in the average balance of earning assets, together with a 30 basis point increase in the yield earned on earning assets. The increase in interest expense was the result of a $995,000, or 0.09%, increase in the average balance of interest-bearing liabilities, together with a 42 basis point increase in the cost thereof. The Company's interest rate spread and net interest margin amounted to 3.44% and 3.93%, respectively, during the three months ended March 31, 2000, compared to 3.56% and 3.98%, respectively, for the comparable period in 1999. INTEREST INCOME The Company's total interest income was $24.7 million for the three months ended March 31, 2000, compared to $23.4 million for the three months ended March 31, 1999. The reason for the $1.2 million, or 5.2%, increase in interest income was a $1.8 million, or 10.8%, increase in interest income from loans, a $217,000, or 3.6%, increase in interest and dividends on investment securities, which was partially offset by a $788,000, or 93.4%, decrease in interest on deposits held at other institutions. The increase in interest income from loans was the result of a $73.4 million, or 9.5%, increase in the average balance of loans, together with a 5 basis point increase in the yield earned thereon. The increase in interest income from investment securities was the result of a $11.7 million, or 3.0%, increase in the average balance of investment securities, together with a 3 basis point increase in the yield earned thereon. The decrease in interest from deposits at other institutions was the result of a $75.4 million, or 94.2%, decrease in the average balance of deposits at other institutions, which was partially offset by a 47 basis point increase in the yield earned thereon. INTEREST EXPENSE The Company's total interest expense was $12.3 million during the three months ended March 31, 2000, compared to $11.0 million for the three months ended March 31, 1999. The reasons for the $1.3 million, or 11.6%, increase in total interest expense was a $921,000, or 125.3%, increase in interest expense on borrowings due to a $60.1 million, or 132.0%, increase in the average balance of borrowings, which was partially offset by a 26 basis point decrease in the cost of such borrowings and a $358,000, or 3.5%, increase in interest expense on deposits due to a $59.1 million, or 5.5%, decrease in the average balance of interest-bearing deposits, which was partially offset by a 34 basis point increase in the cost of such deposits. PROVISION FOR LOAN LOSSES The provision for loan losses was $481,000 for the three months ended March 31, 2000 as compared to $370,000 for the same period in 1999. The Company had $3.8 million of non performing assets, or .28% of total assets, at March 31, 2000, compared to $3.3 million, or .24% of total assets, at December 31, 1999. As of March 31, 2000, the ratio of the Company's allowance for loan losses to non performing loans was 237.2%, compared to 279.3% at December 31, 1999. 12 NONINTEREST INCOME Noninterest income increased $59,000, or 1.9%, for the three months ended March 31, 2000 to $3.2 million, compared to $3.1 million for the three months ended March 31, 1999. Such increase was due primarily to a $94,000, or 5.0%, increase in service charges on deposit accounts, a $94,000, or 45.4%, increase in ATM fee income and a $164,000, or 23.1%, increase in other income, all of which were partially offset by a $293,000, or 97.0% decrease in gains on the sale of mortgage loans in the secondary market. The increase in other income is attributable to an increase in commission income, gain on the sale of fixed assets and other sources of income. NONINTEREST EXPENSE Noninterest expense decreased $203,000, or 1.9%, for the three months ended March 31, 2000, to $10.3 million, compared to $10.5 million for the three months ended March 31, 1999. Such decrease was due in part to a $142,000 decrease in the ESOP retirement contribution expense caused by the decrease in the average fair market value of Company stock. Reclassification of deposits according to use for reserve purposes later in 1999 resulted in quarterly savings of FDIC insurance of $64,000. The carrying cost associated with other real estate owned, net of gains on sale of property, declined by $45,000. Additional decreases of $75,000 in employee development, $53,000 in stationery and supplies, and $182,000 in miscellaneous other expenses reflects Management's emphasis on controlling discretionary expenses. These decreases were offset in part by increases of $106,000 in professional fees, $111,000 in the cost of computer related expenses and $84,000 in the share tax assessment. INCOME TAX EXPENSE Income tax expense remained basically flat due to equivalent levels of taxable income. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Company's liquidity, represented by cash and cash equivalents, is a product of its operating, investing and financing activities. The Company's primary sources of funds are deposits, amortization, prepayments and maturities of outstanding loans, investment securities and other short-term investments and funds provided from operations. While scheduled payments from the amortization of loans, maturing investment securities, and short-term investments are relatively predictable sources of funds, deposit flows and loan and investment security prepayments are greatly influenced by general interest rates, economic conditions and competition. In addition, the Company obtains additional funds through borrowings, which provide liquidity to meet lending requirements. The Bank has been able to generate sufficient cash through its deposits as well as borrowings. At March 31, 2000, the Company had $100.4 million in outstanding advances from the FHLB of Dallas and $5.6 million in outstanding debt from Union Planters Bank, N.A. 13 Liquidity management is both a daily and long-term function of business management. Excess liquidity is generally invested in short-term investments such as over night deposits. On a longer-term basis, the Company maintains a strategy of investing in various lending products. The Company uses its sources of funds primarily to meet its ongoing commitments and fund loan commitments. At March 31, 2000, the total approved loan commitments outstanding amounted to $39.3 million. At the same time, commitments under unused lines of credit, including credit card lines, amounted to $114.0 million. Certificates of deposit scheduled to mature in twelve months or less at March 31, 2000 totaled $397.0 million. Based on past experience management believes that a significant portion of maturing deposits will remain with the Company. The Company anticipates it will continue to have sufficient funds to meet its liquidity requirements. At March 31, 2000, the Company and its subsidiary had regulatory capital, which was in excess of regulatory requirements. The current requirements and the Company's actual levels as of March 31, 2000 are detailed below (dollars in thousands): Required Capital Actual Capital ------------------ ------------------ Amount Percent Amount Percent ------ ------- ------ ------- Tier 1 Leverage $52,533 4.00% $85,022 6.47% Tier 1 Risk-Based $34,484 4.00% $85,022 9.86% Total Risk-Based $68,968 8.00% $93,973 10.90% 14 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Quantitative and qualitative disclosures about market risk are presented at December 31, 1999 in Item 7A of the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 31, 2000. Management believes there have been no material changes in the Company's market risk since December 31, 1999. 15 PART II - OTHER INFORMATION Item 1. Legal Proceedings ----------------- Not Applicable Item 2. Changes in Securities --------------------- Not Applicable Item 3. Defaults Upon Senior Securities ------------------------------- Not Applicable Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- Not Applicable Item 5. Other Information ----------------- On May 5, 2000, the shareholders of ISB Financial Corporation approved changing the Company's name to IBERIABANK Corporation. The name change will take place immediately. Effective May 15, 2000, the Company's stock symbol on the NASDAQ National Market will change to "IBKC". Item 6. Exhibits and Reports on Form 8-K -------------------------------- Exhibit 27 - Financial Data Schedule 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. IBERIABANK CORPORATION Date: May 12, 2000 By: /s/ Daryl G. Byrd -------------- ------------------------------- Daryl G. Byrd President Date: May 12, 2000 By: /s/ Marilyn Burch -------------- ------------------------------ Marilyn Burch Senior Vice President and Controller 17 EX-27 2 FDS -- IBERIABANK CORPORATION (FORMERLY ISB)
9 1,000 U.S. DOLLARS 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 1 30,405 11,683 0 0 287,002 83,307 79,410 878,234 8,951 1,373,415 1,138,551 56,200 11,656 49,750 0 0 7,381 109,877 1,373,415 18,358 6,242 55 24,655 10,628 12,284 12,371 481 0 10,342 4,707 2,955 0 0 2,955 .48 .48 7.87 2,384 1,389 0 0 8,749 444 165 8,951 0 0 8,951
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