Shareholders' Equity, Capital Ratios and Other Regulatory Matters

9 Months Ended

Sep. 30, 2019

Banking and Thrift [Abstract]

Shareholders' Equity, Capital Ratios and Other Regulatory Matters

SHAREHOLDERS' EQUITY, CAPITAL RATIOS AND OTHER REGULATORY MATTERS

Preferred Stock

On April 4, 2019, the Company issued and sold an aggregate of 4,000,000 depositary shares (the “Series D Depositary Shares”), each representing a 1/400th ownership interest in a share of the Company’s 6.100% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series D, par value $1.00 per share, (“Series D Preferred Stock”), with a liquidation preference of $10,000 per share of Series D Preferred Stock (equivalent to $25 per depositary share), which represents $100 million in aggregate liquidation preference.

Dividends will accrue and be payable on the Series D Preferred Stock, if declared by the Company's Board of Directors, and (i) will be paid semi-annually on May 1 and November 1, in arrears, at an annual rate equal to 6.100% for each period from the issuance date to May 1, 2024 and (ii) will be paid quarterly on February 1, May 1, August 1, and November 1 at an annual rate equal to three-month LIBOR plus 3.859% for each period on or after August 1, 2024. The Company may redeem the Series D Preferred Stock at its option, subject to regulatory approval, as described in the Company’s Registration Statement on Form 8-A, filed with the Securities and Exchange Commission on April 4, 2019.

The following table presents a summary of the Company's non-cumulative perpetual preferred stock:

							September 30, 2019		December 31, 2018
	Issuance Date	Earliest Redemption Date	Annual Dividend Rate		Liquidation Amount		Carrying Amount		Carrying Amount
(in thousands)
Series B Preferred Stock	8/5/2015	8/1/2025	6.625	%	$	80,000	$	76,812	$	76,812
Series C Preferred Stock	5/9/2016	5/1/2026	6.600	%	57,500		55,285		55,285
Series D Preferred Stock	4/4/2019	5/1/2024	6.100	%	100,000		96,388		—
					$	237,500	$	228,485	$	132,097

Common Stock

In 2018, the Company's Board of Directors authorized the repurchase of up to 2,765,000 shares of IBERIABANK Corporation's outstanding common stock. The remaining 117,230 shares available under this plan were repurchased during the third quarter of 2019. Also during the third quarter of 2019, the Company announced a new Board-approved share repurchase program for up to 1,600,000 shares, or approximately 3% of total common shares outstanding at the time of the announcement. Stock repurchases under this program will be made from time to time, on the open market or in privately negotiated transactions. The timing of these repurchases will depend on market conditions and other requirements. The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares, and expires during the third quarter of 2021. The program may be extended, modified, suspended, or discontinued at any time.

During the third quarter of 2019, the Company repurchased 552,230 common shares for approximately $40.0 million at a weighted average cost of $72.46 per share. During the third quarter of 2018, the Company repurchased 363,210 common shares for approximately $30.4 million at a weighted average cost of $83.63. During the nine months ended September 30, 2019, the Company repurchased 2,700,000 common shares for approximately $204.7 million at a weighted average cost of $75.83 per share. During the nine months ended September 30, 2018, the Company repurchased 763,210 common shares for approximately $61.0 million at a weighted average cost of $79.99 per share.

At September 30, 2019, the remaining number of common shares that could be repurchased under the new plan was 1,165,000 shares.

Regulatory Capital

The Company and IBERIABANK are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy regulations and the regulatory framework for prompt corrective action, the Company and IBERIABANK, as applicable, must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

As of September 30, 2019, the Company and IBERIABANK met all capital adequacy requirements to which they are subject.

As of September 30, 2019, the most recent notification from the FRB categorized IBERIABANK as well-capitalized under the regulatory framework for prompt corrective action (the prompt corrective action requirements are not applicable to the Company). To be categorized as well-capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, Common Equity Tier 1, and Tier 1 leverage ratios as set forth in the following table. There are no conditions or events since the notification that management believes have changed that categorization.

The Company’s and IBERIABANK’s actual capital amounts and ratios as of September 30, 2019 and December 31, 2018 are presented in the following tables:

(in thousands)	September 30, 2019
	Minimum				Well-Capitalized		Actual
	Amount		Ratio		Amount	Ratio	Amount		Ratio
Tier 1 Leverage
Consolidated	$	1,208,894	4.00	%	N/A	N/A	$	2,955,775	9.78	%
IBERIABANK	1,206,257		4.00		1,507,821	5.00	2,861,883		9.49
Common Equity Tier 1 (CET1)
Consolidated	$	1,179,356	4.50	%	N/A	N/A	$	2,727,290	10.41	%
IBERIABANK	1,175,984		4.50		1,698,643	6.50	2,861,883		10.95
Tier 1 Risk-Based Capital
Consolidated	$	1,572,475	6.00	%	N/A	N/A	$	2,955,775	11.28	%
IBERIABANK	1,567,978		6.00		2,090,638	8.00	2,861,883		10.95
Total Risk-Based Capital
Consolidated	$	2,096,633	8.00	%	N/A	N/A	$	3,234,654	12.34	%
IBERIABANK	2,090,638		8.00		2,613,297	10.00	3,024,262		11.57

(in thousands)	December 31, 2018
	Minimum				Well-Capitalized		Actual
	Amount		Ratio		Amount	Ratio	Amount		Ratio
Tier 1 Leverage
Consolidated	$	1,168,343	4.00	%	N/A	N/A	$	2,812,863	9.63	%
IBERIABANK	1,165,537		4.00		1,456,921	5.00	2,733,099		9.38
Common Equity Tier 1 (CET1)
Consolidated	$	1,125,405	4.50	%	N/A	N/A	$	2,680,766	10.72	%
IBERIABANK	1,122,712		4.50		1,621,695	6.50	2,733,099		10.95
Tier 1 Risk-Based Capital
Consolidated	$	1,500,540	6.00	%	N/A	N/A	$	2,812,863	11.25	%
IBERIABANK	1,496,949		6.00		1,995,932	8.00	2,733,099		10.95
Total Risk-Based Capital
Consolidated	$	2,000,720	8.00	%	N/A	N/A	$	3,084,764	12.33	%
IBERIABANK	1,995,932		8.00		2,494,915	10.00	2,888,500		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.