Shareholders' Equity, Capital Ratios and Other Regulatory Matters

3 Months Ended

Mar. 31, 2020

Banking and Thrift [Abstract]

Shareholders' Equity, Capital Ratios and Other Regulatory Matters

SHAREHOLDERS' EQUITY, CAPITAL RATIOS AND OTHER REGULATORY MATTERS

Preferred Stock

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

							March 31, 2020		December 31, 2019
(in thousands)	Issuance Date	Earliest Redemption Date	Annual Dividend Rate		Liquidation Amount		Carrying Amount		Carrying Amount
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		96,388
					$	237,500	$	228,485	$	228,485

Common Stock

In 2019, the Company announced a 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. The Company did not repurchase any common shares during the three months ended March 31, 2020. At March 31, 2020, there were 1,165,000 remaining shares that could be repurchased under the current plan. No further common stock repurchases are expected due to the pending merger with First Horizon. During the three months ended March 31, 2019, the Company repurchased 387,921 common shares for approximately $29.9 million at a weighted average cost of $77.19 per share.

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 March 31, 2020, the Company and IBERIABANK met all capital adequacy requirements to which they are subject. As of March 31, 2020, 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.

In response to the COVID-19 pandemic, during the first quarter of 2020, the joint federal bank regulatory agencies issued an interim final rule that allows financial institutions to mitigate the effects of the adoption of CECL on regulatory capital. Because the Company adopted CECL as of January 1, 2020, it has elected to mitigate the estimated cumulative effects of adoption on regulatory capital for two years, after which the effects of adoption will be phased-in over a three-year period from January 1, 2022 through December 31, 2024. Under the interim final rule, the adjustments to regulatory capital that are deferred until the phase-in period include both the initial impact of the adoption of CECL at January 1, 2020 on retained earnings, as well as 25% of the subsequent change in the Company's total allowance for expected credit losses during each three-month period of the two-year period ending December 31, 2021. Capital amounts and ratios at March 31, 2020 in the table below reflect the adoption of the CECL regulatory capital adjustment.

The Company’s and IBERIABANK’s actual capital amounts and ratios as of March 31, 2020 and December 31, 2019 are presented in the following tables:

(in thousands)	March 31, 2020
	Minimum				Well-Capitalized		Actual
	Amount		Ratio		Amount	Ratio	Amount		Ratio
Tier 1 Leverage
Consolidated	$	1,228,618	4.00	%	N/A	N/A	$	3,051,243	9.93	%
IBERIABANK	1,225,516		4.00		1,531,895	5.00	3,008,038		9.82
Common Equity Tier 1 (CET1)
Consolidated	$	1,216,954	4.50	%	N/A	N/A	$	2,822,758	10.44	%
IBERIABANK	1,212,501		4.50		1,751,390	6.50	3,008,038		11.16
Tier 1 Risk-Based Capital
Consolidated	$	1,622,605	6.00	%	N/A	N/A	$	3,051,243	11.28	%
IBERIABANK	1,616,668		6.00		2,155,557	8.00	3,008,038		11.16
Total Risk-Based Capital
Consolidated	$	2,163,474	8.00	%	N/A	N/A	$	3,375,550	12.48	%
IBERIABANK	2,155,557		8.00		2,694,446	10.00	3,215,845		11.94

(in thousands)	December 31, 2019
	Minimum				Well-Capitalized		Actual
	Amount		Ratio		Amount	Ratio	Amount		Ratio
Tier 1 Leverage
Consolidated	$	1,220,289	4.00	%	N/A	N/A	$	3,021,004	9.90	%
IBERIABANK	1,217,638		4.00		1,522,048	5.00	2,949,533		9.69
Common Equity Tier 1 (CET1)
Consolidated	$	1,194,765	4.50	%	N/A	N/A	$	2,792,520	10.52	%
IBERIABANK	1,191,062		4.50		1,720,423	6.50	2,949,533		11.14
Tier 1 Risk-Based Capital
Consolidated	$	1,593,020	6.00	%	N/A	N/A	$	3,021,004	11.38	%
IBERIABANK	1,588,083		6.00		2,117,444	8.00	2,949,533		11.14
Total Risk-Based Capital
Consolidated	$	2,124,026	8.00	%	N/A	N/A	$	3,300,730	12.43	%
IBERIABANK	2,117,444		8.00		2,648,805	10.00	3,112,758		11.76

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 March 31, 2020, the required minimum capital conservation buffer was 2.50%. At March 31, 2020, the capital conservation buffers of the Company and IBERIABANK were 4.48% and 3.94%, respectively.