Iberiabank in Lafayette, La., announced its second acquisition of the year with an agreement to buy Gibraltar Private Bank & Trust in Coral Gables, Fla., for $223 million in stock.
The deal, priced at 156% of tangible book value as of June 30, would give the $28 billion-asset Iberia seven additional locations in Florida and one in New York. It is expected to be less than 1% dilutive to tangible book value per share on a pro forma basis at closing, the companies said in a press release Thursday. The dilution should be earned back in roughly two years.
“We believe Gibraltar will complement our recent activities in Southeast Florida, enhancing our capabilities to serve clients in private banking, residential lending and wealth management,” Iberiabank President and CEO Daryl Byrd said in a press release Thursday.
Under the agreement, each common share of the $1.6 billion-asset Gibraltar will be exchanged for 1.9749 shares of Iberiabank common stock, according to the press release.
Iberiabank anticipates that it will be able to cut more than 60% of Gibraltar’s expenses within six months of closing the deal. Acquisition and conversion costs are expected to total $34.2 million pre-tax.
The deal should close in the first quarter.
Iberiabank added 28 locations, primarily in the Miami metro market, with its $1 billion deal to buy Sabadell United Bank. That deal closed July 31.
Iberiabank released its third-quarter results late Thursday. Several one-time charges to resolve outstanding issues cut into its profits. It earned $26 million, down more than 41% from a year earlier.
The company had warned earlier in October that it would post nearly $48 million in expenses tied to Hurricanes Irma and Harvey, its acquisition of Sabadell and a lawsuit related to its mortgage business. It also recorded $17 million in chargeoffs for energy loans.
“These one-off expenses do not overshadow our excitement about the growth prospects, synergies and diversifications that we expect from the Sabadell United merger, in addition to our solid legacy business where we saw annualized legacy loan growth of 10% during the quarter,” Byrd said in a news release.
Total revenues were roughly $270 million, up almost 21% year over year. Net interest income climbed more than 32%, to $217 million, while total loans rose almost 33%, to $19.8 billion. The net interest margin was 3.64%, up 8 basis points from a year earlier.
Noninterest income fell about 11%, to $53.1 million, as mortgage income decreased more than 26% and broker commissions declined 40%. Noninterest expense surged roughly 47%, to $203 million.
Iberiabank added $4 billion in loans and $4.4 billion in deposits from the acquisition of Sabadell. The company recorded roughly $33.2 million in pretax acquisition and conversion-related expenses.
Besides the conversion costs, Iberiabank recorded $5.7 million tied to settling a previously disclosed case with the Department of Housing and Urban Development over its practices for loans insured by the Federal Housing Administration. It also accrued $8.5 million in provision for credit losses related to Harvey and Irma.
Several of the bank's energy borrowers successfully negotiated prepackaged bankruptcies and as a result, it recorded $17 million in chargeoffs.