ABiz was able to confirm last week that Lafayette’s branches are safe. “No branches in Lafayette will be impacted,” Beth Ardoin, IberiaBank senior executive vice president, writes in an emailed response.
It remains to be seen which of the bank’s 181 existing branches will be among the nine closures, though an announcement is expected soon, according to Ardoin.
One major factor responsible for the closures, according to bank officials, centers on the bank’s acquisition of four failed financial institutions from the Federal Deposit Insurance Corp., and the fact that customers unexpectedly began making mortgage payments on time. As a result, the bank was hit with after-tax charges totaling 70 cents per share.
IberiaBank's arrangement with the FDIC allowed it to collect money quickly on troubled loans. But because customers are now making timely payments on the mortgages, IberiaBank's profit will take longer to hit the books.
Likewise, IberiaBank’s first quarter earnings also dropped significantly when compared to the same period last year, going from $19.4 million, or 66 cents per share, to $717,000, or 2 cents per share. Stock analysts surveyed by Thomson Reuters were way off the mark in predicting the Lafayette-based bank would earn 79 cents per share in the first quarter of this year.
“It is always disappointing to take these actions because of the impact it has on employees, but clearly at times it is necessary,” IberiaBank Chief Operating Officer Michael Brown said during the April 26 conference call. “We’ve taken small bites of this before, but again considering circumstances a larger bite is necessary. As we’ve taken these actions, we’ve left the loan parts of our business that are performing at or above expectations. The good news is this is the vast majority of our company. In fact, we will continue to invest in businesses and markets as we see defined and we need to get opportunity to add value.”