IberiaBank Corp. (NASDAQ: IBKC) is a small regional bank which we have hardly ever covered. But we wanted to take a chance to outline the community bank. This was not among the community banks that outright refused to take the TARP. But the company is sending the money back to the government, something no other bank has done.
Last night, the Lafayette, Louisiana bank told Treasury that it will redeem all of the 90,000 outstanding shares of its Fixed Rate Cumulative Perpetual Preferred Stock. The total redemption price is $90,575,000.00. This is the redemption and liquidation price plus a final pro rata accrued dividend of $575,000. The company says it has sufficient cash funds at the holding company level to complete the redemption payment.
Daryl G. Byrd, President and CEO, said “We believe recent actions, interpretations, and commentary regarding various aspects of the program places our Company at an unacceptable competitive disadvantage. Our Board of Directors has determined that continued participation in this program is no longer in the best interest of our Company and its shareholders.”
The company showed what its ratios look like after the redemption as of December 31, 2008. Its pro forma regulatory capital ratios would have been tier 1 leverage ratio of 9.51%, tier 1 risked based capital ratio of 11.87%, total risk based capital ratio of 13.29%, and its ratio of tangible equity to tangible assets would have been 7.24% at December 31, 2008. Between the period it received the TARP funds and February 25, 2009, its loan portfolio increased by 2% or approximately $68 million. The loan growth included total loan originations net of scheduled principal payments, loan payoffs, and other factors.
This stock closed up over 5% at $43.20 on about double its normal average volume. Its 52-week trading range is $35.78 to $70.66 and it has a market cap of about $687 million.
It seems like other banks should take heed here and follow suit…. assuming they can.
Jon C. Ogg
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