Shareholders' Equity, Capital Ratios and Other Regulatory Matters

12 Months Ended

Dec. 31, 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, 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 $100.0 million in aggregate liquidation preference.

The following table presents a summary of the Company's non-cumulative perpetual preferred stock at December 31:

							2019		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

Dividends will accrue and be payable on the Series B Preferred Stock, if declared by the Company's Board of Directors, and will be paid semi-annually, in arrears, at an annual rate equal to 6.625% for each period from the issuance date up to and including August 1, 2025 and will be paid quarterly, in arrears, at an annual rate equal to three-month LIBOR plus 4.262% for each period after August 1, 2025. The Company may redeem the Series B 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 August 5, 2015.

Dividends will accrue and be payable on the Series C Preferred Stock, if declared by the Company's Board of Directors, and will be paid quarterly, in arrears, at an annual rate equal to (i) 6.600% for each period from the issuance date to May 1, 2026 and (ii) three-month LIBOR plus 4.920% for each period on or after May 1, 2026. The Company may redeem the Series C 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 May 9, 2016.

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, 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 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.

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 shares available under this plan were repurchased during 2019. During 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.

During 2019, the Company repurchased 2,700,000 common shares for approximately $204.7 million at a weighted average price of $75.83 per common share. During 2018, the Company repurchased 1,972,500 common shares for approximately $148.9 million, at a weighted average price of $75.46 per common share. The Company did not repurchase any common shares during 2017.

At December 31, 2019, there were approximately 1,165,000 remaining shares that may be repurchased under the current Board-approved plan. No further common stock repurchases are expected due to the pending merger with First Horizon.

Regulatory Capital

The Company and its subsidiary bank, 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, specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices must be met. The capital amounts and classification are also subject to qualitative judgments by the regulators about capital components, asset risk weightings and other factors.

Management believes that, as of December 31, 2019, the Company and IBERIABANK met all capital adequacy requirements to which they were subject. As of December 31, 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 December 31 are presented in the following table.

(in thousands)	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

	2018
	Minimum				Well-Capitalized			Actual
(in thousands)	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 December 31, 2019, the required minimum capital conservation buffer was 2.50%, At December 31, 2019, the capital conservation buffers of the Company and IBERIABANK were 4.43% and 3.76%, respectively.

Restrictions on Dividends, Loans and Advances

IBERIABANK is restricted under applicable laws in the payment of dividends to an amount equal to current year earnings plus undistributed earnings for the immediately preceding year, unless prior permission is received from the Commissioner of Financial Institutions for the State of Louisiana. Dividends payable by IBERIABANK in 2020 without permission are limited to 2020 earnings plus an additional $199.6 million.

Funds available for loans or advances by IBERIABANK to the Parent amounted to $311.3 million. In addition, any dividends that may be paid by IBERIABANK to the Parent would be restricted if IBERIABANK did not comply with the above-described capital conservation buffer requirements and would be prohibited if the effect thereof would cause IBERIABANK’s capital to be reduced below applicable minimum capital requirements.

During any deferral period under the Company’s junior subordinated debt, the Company would be prohibited from declaring and paying dividends to preferred and common shareholders. See Note 13 to the Consolidated Financial Statements for additional information.

In addition, so long as any shares of Series B Preferred Stock, Series C Preferred Stock, or Series D Preferred Stock remain outstanding, the Company is prohibited from paying dividends on common stock if the required payments on the Preferred Stock have not been made.