IberiaBank Corporation, Q1 2008 Earnings Call Transcript

Apr.23.08 | About: IBERIABANK Corporation (IBKC)

IberiaBank Corporation (NASDAQ:IBKC)

Q1 2008 Earnings Call

April 23, 2008 9:00 am

Executives

Daryl G. Byrd – President and Chief Executive Officer

John R. Davis – Senior Executive Vice President, Director of Financial Strategy, Mortgage, & Title Insurance Companies

Michael J. Brown – Senior Executive Vice President, Regional Market President

Anthony J. Restel – Senior Executive Vice President, Chief Financial Officer and Chief Credit Officer

Analysts

Christopher Marinac – Fig Partners, LLC

[Charlie Ernst – Sandler and Leo]

Dave Bishop – Stifel Nicolaus & Company, Inc.

Barry McCarver – Stephens Inc.

Peyton Green – FTN Midwest Research

Operator

Ladies and gentleman, thank you for standing by. Welcome to the IberiaBank Corporation 1st quarter earnings call. (Operator Instructions) I would now like to turn the conference over to Mr. John Davis, Senior Executive Vice President. Please go ahead sir.

John R. Davis

Good morning and welcome. Thanks for joining us for the call today. My name is John Davis and joining me today is Daryl Byrd, our President and CEO; Michael J. Brown, President of our Markets; and Anthony Restel, our Chief Financial Officer and Chief Credit Officer. I hope everyone has had an opportunity to obtain a copy of our press release we issued late yesterday. Given the significant level of financial data and trends we have prepared a PowerPoint presentation that we may occasionally refer to during this morning’s discussion. If you have not already obtained a copy of the press release you may access that document from our website at www.iberiabank.com under Investor Relations and then Press Releases. The link to the PowerPoint presentation is also available on our website in the IR section under Investor Presentations. A replay of this call will be available until midnight on April 30th by dialing 1-800-475-6701 with the same confirmation code as this current call namely 915216.

Our discussion this morning deals with both historical and forward-looking information and as a result I will recite our safe harbor disclaimer. To the extent that statements in this report relate to the plans, objectives, or future performance of IberiaBank Corporation these statements are deemed to be forward-looking statements within the meaning of the private securities litigation reform act of 1995. Such statements are based on management’s current expectations and the current economic environment. IberiaBank Corporation’s actually strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties. A discussion of factors affecting IberiaBank Corporation’s business and prospects is contained in the company’s periodic filings with the SEC. In fairness to everyone listening to the call this morning we ask that you push the mute button on your telephone to limit any background noise that may occur during the call. I will now turn it over to Daryl for some introductory comments. Daryl.

Daryl G. Byrd

John, thanks. And good morning everyone. Today we will discuss our results for the quarter. We earned a $1.05 per share on our reported fully diluted basis which included the previously disclosed gain on the sale of credit card receivables but also an elevated loan loss provision. We made great progress across a variety of fronts during the quarter. As always, I want to take this opportunity to thank my associates for their dedication and hard work. I believe we are very near a positive inflection point for the organization. Unfortunately, I do not think the same can be said for the industry as a whole.

To add a little entertainment to our discussion this morning, I will take the unusual step of providing you some of my personal goals for the year and then give you commentary on eight areas of progress during the quarter. To digress for just a moment I want to remind you of our strategic goals. Our strategic goals are double digit annual EPS growth, internal tangible equity between 23 and 25%, achieving a tangible efficiency ratio below 50% at our banking operations which excludes the impact of our title and residential mortgage business which tend to operate with high efficiency ratios. And finally, and possibly the most important in today’s environment top quartile asset quality performance.

With those strategic goals as a backdrop my personal goals are as follows. My first priority is to clean up of the construction or builder portfolio I inherited in the Arkansas acquisitions which we have discussed ad nauseam. My second priority is core positive growth and the further improvement of our consumer business engine. The third goal is the development of our commercial franchise in Arkansas. By the way, I could not be happier with our progress there. Fourth, we plan to recruit a quality commercial banking team in Memphis. As we have commented consistently, we believe Memphis represents huge potential for our company. And finally I will support the growth and development of our title insurance agency, residential mortgage and investment businesses. These are important, non-interest income vehicles for us. I want to make sure they get my attention and support. While there are always many things we want to accomplish each year these five areas are at the top of my list.

Now turning to the first quarter of 2008, I will provide commentary on eight areas of significance during the quarter beginning with credit. After taking our medicine last quarter we have made good progress this quarter. The Arkansas builder portfolio was reduced by approximately 8.5 million or 14% and is now down to 53 million. We took another fairly meaningful provision this quarter increasing our loan loss reserves to 39 million. Our MPAs are down for the quarter, not a lot, but down. Like the mighty Mississippi that runs through three of our banking markets, we hope MPAs have crested. We are taking some charges and conservatively taking some provisions which again we think is appropriate medicine to get these reasonably limited issues behind us. We are not deferring the issue but working to get paid back. Fortunately, to date, we have been successful getting out many of these credits around par. As evidence of this we just recently received a $250,000 recovery on a loan charged off in the fourth quarter. By the way this was received after quarter end. I am amazed at how many banks are using interest reserves and capitalizing interest with their builders but for us, this is very good since it allows us the opportunity to continue to sell property at decent values while other people stick their heads in the sand.

Second, transparency. Today we continue to provide what we believe is a high level of transparency. This includes more detail rollups with our builder portfolio, new information regarding our owner occupied commercial real estate portfolio and some new consumer loan information.

Third, capital. We recognize the importance of being well cap less so that we have the flexibility and strength in this challenging operating environment. We have taken a number of steps to further improve our capital position with a tier one leverage ratio of 7.46% and a 10.63% total risk based capital ratio, we believe we are well capitalized.

Fourth, deposits. I mentioned last summer this would be a focus and we just completed our second and most aggressive deposit campaign. Through yesterday we raised 442 million in deposits under this program. Michael will provide additional commentary on this topic. I want to say that I am very proud of the extraordinary results and achieved. In particular I am pleased with our consumer group for the favorable cross-sales accomplished which will create new relationships for many years to come.

Fifth, growth. Significant beneficiaries of the deposit campaign were our new branches. During the quarter, the 14 new branches grew 75 million or 80%. While these branches continue to be in a near term head win on earnings we expect that if rates play out as expected the profitability of these branches will improve considerably given the new clients and new money tapped. The credit card receivables sale and normal seasonal pay downs and the traditional first quarter Mardi Gras affect stunted our loan growth for the quarter. We do have a very strong loan pipeline and expect a strong showing of balance for the year.

Six, people. Joe Zanco, our Controller and before that our Chief Internal Auditor, has announced that he will be leaving us to accept a position as CFO of another Acadiana organization in the process of going IPO. We appreciate Joe’s performance and hard work here at IberiaBank and wish him the very best. On another front, we recently lost a small group including our Market President up in Monroe. Fortunately, our knowledge of the Monroe market runs deep in our organization. We expect to announce the new leadership team in that market shortly. Also, I want to add that we have an exceptional retail organization in Monroe with strong leadership. We expect that this group will continue to perform at a high level and be largely unaffected by this transition. Finally we had an exceptional fourth quarter recruiting talent. As Michael will describe in a few minutes we added significant relationship management depth in Baton Rouge.

Seven, expenses. I want to thank all of my associates for their attention and management of expenses over the last year. We have reduced our annualized expense run rate by almost 8 million a year or 2 million a quarter from the peak following the Arkansas merger last year. We have become a more productive company and we have done a great job watching each expense line item across the organization. This is a significant accomplishment for the organization. I want to congratulate our associates for that effort.

And finally margin. The tremendous involved [ph 08:51] moves and short-term market rates and spreads since August were almost unprecedented in our lifetime. These moves in combination with our changing balance sheet structure and key initiatives such as our deposit campaign, trust preferred issuance and the Pulaski builder portfolio cleanup caused near term pressure on our margin. So some margin pressure was market driven and some was driven by conscience initiative on our part. We believe we are well-positioned as we approach, what we believe, may be the trough in interest rates. John will provide more detail on margin in a minute. Overall, I believe we accomplished a lot in the quarter and have set the foundation for the balance of the year. At this point I will turn the discussion over to John.

John R. Davis

Thanks Daryl. I will start with a brief summary of our financial results for the first quarter of 2008 with particular focus regarding interest rate risk and the margin. For those of you who may have an interest, my discussion will occasionally refer to the supplemental PowerPoint presentation beginning on slide 20. Let us start with balance sheet changes.

Most noticeable balance sheet change was associated with the deposit campaign which helped drive our 326 million dollar or 9% deposit increase since year end 2007. A portion of that growth was used to either fund loans, parked in investment securities, or placed in very short term investments. I will briefly touch on each of these items, Michael will provide some details regarding the deposit campaign.

During the quarter, period end loans declined $6 million tempered by the $30 million credit card receivable sales. Which was completed on January 4th, as a result period end loan balances were more effected by the sales than average loan balances. The total loan yield declined 35 basis points on a link quarter basis. The commercial loan yield fell 58 basis points in the first quarter compared to the fourth quarter of 2007. While mortgage and consumer yields were essentially unchanged.

Compared to year end 2007, the investment portfolio increased $50 million or 6%, primarily due to excess funds received not for pledging purposes or engaging in an organized carry trade.

The investment portfolios' percentage of total assets edged up from 16% of total assets at December 31, to 17% at March 31. The portfolios modified duration shortened from 3.1 years to 2.9 years, we project $326 million in cash flows over the next 21 months or about 39% of the portfolio.

The unrealized gain in the portfolio continued to improve with the rally in the bond market, going from a $13 million unrealized loss last June 30, to a $9 million unrealized gain at the end of the year and now a $14 million unrealized gain on March 31st. We hold in our portfolio some pretty plain vanilla securities, mainly agency paper, CMOs, and municipals. As we have stated previously we do not hold equities, corporates, trust preferred, CDOs, COOs, SIVs, hedge fund investments, toxic subprime, all day or second lien elements in our portfolio.

We have also been asked if we have auction rate securities, whole loans or private label mortgages; we have none of these items as well. After essentially paying off our short term borrowing the excess cash generated from the deposit campaign was placed in short term investments until the funds were used to fund loan growth. This balance increased $130 million since year end. The instruments purchased were discount notes for period of 90 days and in.

These excess funds negatively impacted our margin during the quarter by about eight basis points. Given our continuous loan growth we expect this excess cash will be funding loan growth shortly. On the liability side of the equation, we under took some recent actions that took advantage of relatively low cost, long term funding. Which lengthened our liability structure and placed some pressure on the margin. These were conscious strategic decisions that we believe are opportunist in nature.

First we lengthened the portion of our federal loan bank advances during the quarter to lock in some relatively favorable long term funding. Second we completed two trust preferred security issuances recently, in November we issued 25 million and in March we issued 7 million. The cost of the trust preferred securities at 264 and 350 basis points spreads over libor [ph 13:20] respectively, negatively impacted our margin by two basis points in the first quarter. Third we experienced a $10 million decline in non-interest bearing deposits, which as best we can tell, they were primarily tax related seasonal declines.

The reduction in non interest bearing deposits reduced the margin by one basis point for the quarter. Our modeling through 207 indicated we were slightly liability sensitive, as shown on slide 21. Our modeling using March 31, 2008 data and assumptions indicate that we are now slightly asset sensitive. The down 100 basis points scenario would harm our 12 month net interest income by two percent. While an increase of the same magnitude in interest rates would benefit our net interest income by two percent. Using the forward curve appears to have little impact on those projections.

Please keep in mind four important things. First the degree of assets or liability sensitivity is also kingly impacted by reaction of competitors in our markets regarding deposit pricing, which is difficult to predict with certainty. Second, as rates consider to fall we naturally become more assets sensitive. Simply by the fact that we are hitting what may be considered deposit rate wars.

Third and this may require some explanation, the timing of and magnitude of the recent rate moves is having a an impact on our market in the near term we have approximately $437 million in loans tied to prime. And 406 in libor base loans that we price monthly, we also have 437 million in deposits tied to the three month T bill rate. 118 million in repo's and almost no overnight funding.

As indicated on slide 22 many of these rates have declined significantly since August, but not in tandem.. Even when they move in tandem the timing of the impact on us is off kilter. For example, a funding tied to set funds moves immediately, but public fund deposits tied to index off of the 90 day T bill tend to reset at months end. Fourth, while we quote the impact on net interest income over a 12 month period swings in the impact on net interest income can occur within that 12 month period. I would suspect the multiple and swift dramatic moves in rates the last few month have caused a repeated piling up of downward pressure on asset rates. While the liability side has not had a sufficient opportunity to catch up.

A greater amount of asset that repriced more often than liabilities in combination with the potential that the assets may have repriced by a greater magnitude on the liability side. As s result the margin in the near term may have been under pressure even though our modeling indicates we were slightly liability sensitive throughout the period.

Once these rapid rate declines diminish we believe the liability side of the equation will have an opportunity to catch up, separating the sink from the balance sheet structure was the accumulated impact of various actions we recently undertook. Such as the margin pressure from the excess cash from the deposit campaign, the trust preferred cost and other factors we just discussed. These figures are provided in slide 23.

So in summary we believe the unique characteristics of the unprecedented rapid decline in rates may have caused some timing issues as to the impact of falling rates on our margin and our net interest income. In addition the margin campaign and other actions when layered on top of the rate change impact further depressed the margin.

We believe both the catch up in liability pricing and the deployment of the excess cash will provide relief in the other direction over time. Turning to the mortgage business as shown on slide 24 mortgage rates spiked in the summer of 2007 and have rallied significantly since that time, but with extreme volatility.

We have seen a substantial pick up in ReFi activity in the third quarter ReFis accounted for 21% of originations in the fourth it increased to 27% and in the first quarter it was 34% originations, but at times spiked north of 40%.

Our mortgage production during the quarter was up 18% on the link quarter basis while loans sold were up nine percent and gains on sale were up four percent. While volumes were up spreads were off a little due to the extremely volatile mortgage market pricing during the quarter. We provide some historical quarterly trending in the mortgage revenues on slide 25.

Originations have been brisk the last few months and the locked mortgage pipeline remains extremely strong at 95 million last Friday. The mortgage business is doing quite well. Income from the title business was up three percent on a link quarter basis as commercial title activity is holding up well. While residential title has been a little soft.

For your information we provided historical quarterly title revenue trends on slide 26. We expect the mortgage and title businesses to provide there traditional seasonal lift in the second and third quarters of the year. Brokerage income and service charge income were off on the link quarter basis.

Total non interest expenses increased about 800,00 or two percent on a link quarter basis. Compensation costs increased about 1.1 million driven by seasonally higher mortgage commission payments, higher FICA and bonus accruals.

FDIC insurance premiums climbed about $200,000 or about 238% as a result of the FDIC new premium assessments. All other expenses remained very well contained. From a bottom line perspective we reported $1.05 fully diluted EPS in the first quarter 2008, compared with $0.79 in the fourth quarter. The first call reported estimate for the first quarter 2008 was $0.82, which I assume is on an operating basis, not reported basis.

Our regulatory capital position improved to 7.46% on a tier one leverage basis and we had a 10.63% risk base capital ratio. Average share holders equity climbed two million or five percent, we exceeded both the five million dollar milestone in assets and the five hundred million dollar mark on shareholders equity. Resulting in an equity asset ratio of 9.97% on a period end basis.

We purchased no shares of our stock during the quarter, we have about 149,000 shares remaining to be purchased under the 300,000 share we purchase program. Yesterday our stock priced closed at 45.40 per share, down three percent since year end 2007, but off 17% from one year ago. This closing price equated to 1.14 times our March 31st book value per share of $39.76 which climbed 77 cents per share or 2% during the quarter and was up 8% within the last year. Our price to tangible book was 2.32 times tangible book value per share of $19.58 which was up 52 cents or 3% during the quarter and up 15% within the last year.

On March 17, 2008 our board declared a quarterly cash dividend of 34 cents per share, up 6% compared to one year ago. We have raised our quarterly cash dividend every year since we went public and as of yesterday the dividend yield was 3%.

In summary, we believe the bond portfolio is well positioned to whether the prevailing storms. The loan portfolio exclusive of the Pulaski builder portfolio is doing very well. We continue to aggressively address the Pulaski builder portfolio which is down to 53 million out of a $3.4 billion dollar loan portfolio. The deposit campaign and trust preferred issuance has fortified our well capitalized balance sheet. We have significant excess cash that we are ready to use to fund future loan growth.

We have shifted our balance sheet to be well positioned as short-term rates hit a bottom, which we believe we maybe approaching the bottom. Our exposure to construction and land development lending is an extremely small 5.3% of total loans. And we operate in exceptional banking markets. Evidence of this is the fact that the Lafayette market where we’re headquartered has the third lowest unemployment rate of all 369 MSAs in the country. Also Baton Rouge is number 29, New Orleans is number 19, and Homa is number one, the lowest in the country. Generational lows in interest rates and generational highs in energy prices are serving our markets very well.

I’ll now turn it over to Anthony for his market commentary, Anthony.

Anthony J. Restel

Thanks, John. I’ll begin with a quick review of the consolidated credit quality at quarter end, provide an update on the status of the Pulaski residential construction portfolio, and review our commercial real estate exposure. All of the numbers that I will review have been provided in the quarterly earnings release as well as the supplemental PowerPoint presentation.

From a consolidated standpoint, credit quality has largely unchanged from year end. A couple of points worth mentioning are non performing assets declined by half a million dollars versus year end to $47.7 million. NPAs represented 93 basis points of total assets or 1.39% of total loans plus OREO at quarter end. The decline in NPAs is the result of a reduction in non accrual loans, $2 million, offset by an increase in OREO of $300,000 and an accruing loans 90 days plus past dues of 1.2 million.

Thirty days and over past dues were flat with year end, although some shifting has occurred within the commercial and business banking past dues. Increasing in our consumer related past dues declining. The increase in our past dues in the business banking portfolio is a result of reclassification of several loans from our commercial portfolio to the business banking portfolio during the quarter.

Our credit card past dues are up as a percentage due to the sale of half of the portfolio in January. During the quarter the provision was 2.7 million. The provision covered net charge offs of 1.8 million and asset quality changes during the quarter. The company had no loan growth during the quarter due to the credit card sale thus no provision was required for loan growth during the quarter.

Loan loss reserves as a percentage of total loans was 1.14% at quarter end, up to basis points from year end. Net charge offs during the quarter were 1.8 million or at an annualized rate of 21 basis points. The net charge off level is a result of further pruning within the Pulaski portfolio and a slightly elevated rate at the legacy IberiaBank franchise. The net charge off were split with 700,000 at IberiaBank and 1.1 million at Pulaski Bank and Trust.

IberiaBank’s charge off of 700,00 equated to an annualized charge off level of 10 basis points and was concentrated in the indirect commercial and consumer portfolios. The majority of the charge offs at Pulaski Bank were in the commercial portfolio with a slightly elevated number in the credit card portfolio.

The Pulaski residential construction portfolio continued to decline during the quarter as expected. Our current exposure in the portfolio was 53.3 million, and $8.5 million decline from December 31st. The portfolio represents 1.6% of our consolidated loan portfolio. The exposure is split with 18 million in Memphis, 16 million of property in Little Rock, 11 million in Northwest Arkansas, 5 million in North Mississippi, and 3 million in Northeast Arkansas.

The majority of our exposure was concentrated in new home construction with limited exposure to subdivision development, 4.7 million, and lots, 9 million. The 8.4 million dollar decline in outstandings during the quarter occurred through the normal sale of 5.4 million of properties in the market as well as approximately $3 million being moved to OREO due to foreclosure. The bank realized net charge offs were approximately $350,000 on the $3 million of loans transferred to OREO during the quarter. These numbers are included in the commercial charge off numbers at Pulaski during the quarter.

We continue to see softness within the remaining portfolio as evidence by the past dues climbing over the prior quarter. We have adjusted our risk ratings and reserved needs to address the change in credit quality of the portfolio. Additional reserves in the amount of 400,000 were provided for this portfolio during the quarter. This represents the third consecutive quarter in which reserves were added against this portfolio. The good news is that we continue to see the portfolio shrink. The portfolio is now down 34.4 million or 39% since the acquisition, and today we have not experienced significant loss as the disposition of the property occurs. The same can be said for the properties that have been foreclosed upon and then fold out of OREO.

We recognize that further deterioration may occur and could warrant additional reserves. That deterioration could come in many forms including declining value of the underlying real estate, continued strain on the liquidity of our borrowers, and the general unfavorable economic conditions that may have a trickle impact on this portfolio. We are constantly evaluating this portfolio and we will make adjustments if necessary.

Our reserves and discounts set aside for this portfolio are 3.9 million or 7.23% of the outstanding balance remaining in the portfolio at quarter end. Approximately 17.4 million or 32.7% of the portfolio remains on not a full status. My expectations for this portfolio during the second quarter is that the bank will see a decline in the outstandings similar to the decline we experienced this quarter.

We have been asked numerous times over the last few months about our commercial real estate exposure. I will spend a few minutes providing some summary credit numbers as well as the composition within our CRE portfolio. The consolidated banks CRE portfolio at quarter end was 1.33 billion, approximately 2.06% or 27.4 million of the CRE portfolio is on non accrual status. As a reminder, 17.4 million of that 27.4 million and non accrual loans are from the Pulaski residential construction portfolio.

Exclusive of the Pulaski residential construction portfolio non accruals are at 10 million or 74 basis points of the total CRE portfolio. Total past dues are at 12.1 million. The Pulaski residential construction portfolio represents 56% of the past dues within that portfolio. Within the 1.3 billion CRE portfolio, 870 million or 65% is owner occupied. On slide 17 of the supplemental PowerPoint presentation we have provided an industry breakdown of the 870 million.

One note of importance is that all income producing properties is considered real estate regardless of whether or not an affiliated company provides the rent income. To state it differently, a private company that established a separate LLC for its real estate from its operating entity and then leases the property to the operating entity will be reflected as rental property or real estate in the sub grouping. There is not a look through the underlying industry.

We believe our exposure within the owner occupied category and within the overall commercial real estate portfolio remains very granular with no significant concentration to any particular industry. The remaining 460 million of the CRE portfolio is non owner occupied. The non owner occupied includes our residential construction loans, multi-family residential properties such as apartment complexes, and other non farm, non residential properties.

The 460 million of non owner occupied CREs is split with 265 million in Louisiana, 174 million in Arkansas, and 21 million in Memphis. Our non owner occupied CRE portfolio represent 118% of the risk based capital, well below the 300% supervised rebright line limit established late last year.

One final item, we have not experience any significant issues in our loan portfolio from the flooding and other sever weather issues that impacted Arkansas during the first quarter. I’ll now turn the call over to Michael.

Michael J. Brown

Thanks Anthony. Now I’m going to provide a general update on the market performance during the quarter and then cover some specific developments. I will note within the supplemental materials there are a number of slides detailing the economic activity occurring in our markets. As you review this material I want to emphasize that economic activity remains a positive for us, particularly in Louisiana where we continue to see very good benefits form high commodity prices and the Katrina rebuild.

This [inaudible 30:01] of economic news is reflected in the housing and employment data presented in the supplemental materials which remain superior to statistics in most of the U.S. Relative to Arkansas despite recent housing issues, which we have discussed today and previously, overall economic statistics remain positive compared to other states in the economy as a whole. And we do not expect to see the significant volatility that other states are experiencing.

From a market perspective, I want to remind you that the first quarter tends to reflect slower growth than the rest of the year. This year’s first quarter was no different. On an overall basis loan growth during the quarter it was a negative $6 million. Growth of $24 million in our retail and commercial businesses was totally offset by the $30 million credit card receivables sale. Total loans grew $22 million at the legacy IberiaBank with growth in commercial and consumer offsetting a decline in mortgage loans. From an individual market perspective the strongest growth was from Lafayette.

At Pulaski net loan growth without consideration of the sale of credit card receivables was very modest at $2 million. However, I will note that Pulaski Bank had seen good loan growth since the acquisition of the two banks, and we expect this to continue. Loans at Pulaski have increased by $27 million since acquisition date after the sale of the credit card receivables. Adjusting for the credit card sales, the 57 million in loan growth constituted 8% growth since the acquisition day. I will note that 57 million in growth is net of $34 million in run off in the construction portfolio making that level of growth all the more impressive.

We feel that this positive growth in loans combined with good growth in deposits and retention of key clients and employees reinforces that the acquisitions are making good progress. Overall the good news is that we finished the quarter with a strong loan pipeline reflecting that pipeline in the traditional second quarter pick up in activities worth noting that through the first 20 days of April loans have increased almost $70 million with the combined franchise. Again, it is not unusual for the second quarter to reflect the meaningful increase in loan growth versus the first.

From a deposit perspective, first quarter growth was significant. The bank chose to run a company wide deposit campaign in the first quarter, that’s been discussed, to increase the level of deposits, based funding, and increase the number of perspective customers frequently our branch system. We feel that the results support the success of this program. Good deposit growth was evident in all of our markets particularly in the new branches added post Katrina. This type of injection of energy and new customers will be very beneficial to our retail business going forward. Although the campaign, obviously, impacted margins in the first quarter, we felt the positives offset this negative and for that reason I’m going to go through the positives one by one.

The first, although the campaign began towards the end of February by the end of March we had raised $360 million in deposits. Second, deposits were split evenly between money market accounts and cds. Three, 70% of the deposits raised were new dollars to the bank. Four, we added 6,000 new deposit accounts and over 1,600 new clients. Next in the deposit account opening process we sold additional retail products to most of the clients. We have additional steps planned in the sales process to contact these new clients and sell additional products to them in the future. This will obviously be reflected in earnings going forward.

I’ll note significant deposit growth was evident in our new branches as a results of the campaign, for example we added 1,000 new accounts and almost $50 million in deposits in our three north shore branch locations. Although this temporarily increased the carry cost of the new branches, we feel that the campaign will ultimately accelerate the profitability effort for these branches. Final positive, most importantly, past experience with these types of campaigns reinforces that we will retain the majority of deposits and clients even as rates decline. That will obviously create value long-term.

And now I want to transition to review a couple of recent developments in Monroe and Baton Rouge. As Darrel mentioned, in Monroe we lost our Market President last week to a competing institution. It is important to not that this does not impact the bank’s retail business in Monroe which survives with its management team totally intact and is by far the largest component of our deposit base in that market. We have already identified some permanent replacements and plan on executing on a rapid hiring plan. I will also note that we are getting good support from our advisory board members in the hiring and client retention process which we truly appreciate.

Offsetting any down side risk in Monroe, be sure the Market President in Baton Rouge recently completed an effort to expand the Baton Rouge Commercial team. Keith did a great job adding four experienced relationship managers over the last 90 days. These bankers are coming to IberiaBank from two competitors in Baton Rouge. In their previous positions these individuals managed relationships with over $300 million in loans and almost $100 million in deposits. This effort creates significant upside growth in the market in which we’ve already seen very, good growth.

Obviously, we’re disappointed in the outcome in Monroe, but feel strongly that he positive developments in other markets, including Baton Rouge, more than offset the downside risk. We also have several other recruiting efforts underway that we feel will create further opportunity of substance to our company. You will hear about those opportunities shortly.

In summary, despite the slow start to the year and the personnel changes in Monroe, our remaining sight out 2008, we are well positioned as a company and as detailed in the supplemental slides the economies in which we compete are continuing to perform comparatively well, particularly in South Louisiana despite the national slow down. We feel this bodes well for the rest of 2008. Darrell.

Daryl G. Byrd

Mike, thanks. Again, I want to close today by thanking our associates to what I believe was a very successful quarter. In particular, I want to single out our Credit Team for the shareholder value they create and the difficult work that they do. Also want to, again, focus your attention on our positive campaign. While the campaign certainly impacted our margin, we strongly believe that the timing was appropriate. As John mentioned, we view the rate cycle is approaching the bottom. We certainly will not pick the absolute top or bottom of any cycle, but if we think we are approaching the bottom then it seems reasonable that it would be a good time to raise deposits.

Also, historically when running this type of campaign we have been very successful retaining both the clients and the balances. I’d also remind you that our commercial pipeline is an excessive of about $200 million. And over the last several years we have experienced excellent loan growth. And our South Louisiana markets are very strong. Finally, we expect our residential mortgage and title businesses to begin seeing the seasonal influences of the spring buying season.

At this point I’ll open the call for questions. John, our Operator.

Question-and-Answer Session

Operator

Very good. (Operator instructions). Our first question comes from the line of Barry McCarver with Stephens, Inc. Please go ahead.

Barry McCarver – Stephens, Inc.

Good morning guys.

Daryl G. Byrd

Good morning, Barry.

Michael J. Brown

Good morning, Barry.

Anthony J. Restel

Good morning, Barry.

Barry McCarver – Stephens, Inc.

First question I guess, a lot of moving parts to the margin there, but I wanted to hit a couple of questions on both sides of the balance sheet. But I guess first off, if I understand what you are telling us in terms of the drivers behind that, it sounds like there is a pretty good reason, you know, excess funding into loans for the margin to rebound a little bit in the second quarter even though there may be overall some pressure on it beyond that. Is that – am I correct in thinking?

Daryl G. Byrd

Barry, obviously, we are trying to get across what is a fairly complicated picture on the margin with a lot of moving parts given the, you know, kind of the rate changes in the quarter. But, you know, I think you are on point. We have a very strong loan pipeline and I think you have seen us historically over the last several years, quite a few years now, produce very strong loan growth. First quarter for us, you know, again I kind of kid and call it the Mardi Gras effect, but we seem to have our traditional first quarter.

Now that is – we probably had a better first quarter than it seems, because, you know, the credit card sale, you know, had a significant influence in the quarter. But we do have a very strong, you know, loan pipeline. And I think historically we have proven we will be successful with that. Also from a recruiting perspective, you heard Michael talk about what we have got going on in Baton Rouge, and you also heard me mention Memphis. And we feel pretty strong about we can accomplish in both those markets, and again, in our traditional South Louisiana markets that are very strong.

You know, you have mentioned the deposit campaign and what I though we would do is maybe step back and I might ask Anthony to comment a little bit on the margin and our thought process around that a little bit. You know, Anthony.

Anthony J. Restel

Yes, Barry, I can talk a little bit about kind of what we did and why we did it, I guess, so maybe the best way to go. If you look at kind of what we did, I’ll start there, I mean, we went out and decided we wanted to raise some deposits. We focused on two different product types, obviously, on money market and CDs, like Michael mentioned. The split was fairly even between the two.

Money market, you know, we went out with a rate that was slightly over the Fed funds target at the time. That is a teaser rate that we have the ability to reprice within 120 days. So we have the ability to kind of manage that rate down at our discretion, kind of, once we get beyond 120 days.

Daryl G. Byrd

And, Barry, we have done this before so we have got some experience doing this.

Barry McCarver – Stephens, Inc.

Okay.

Anthony J. Restel

So the CD side what we did is we went out and really started with kind of broker funds as kind of the bench mark for pricing, which is somewhat similar to FHL being longer term. Each of these components for a different reason made sense. Money market, if you look at it, Barry, if you look at where rates are and where rates are going we think it is the right time to drive clients into the bank and get deposits. And if we cannot control the pricing over the longer term it is going to work our really well for us. And as Darrell mentioned, we have done this a few times before.

From a CD perspective, you know, what we tried to do was try to get some extension in the CD portfolio as we went through our - as rates were rising, you know, the 17 – 25 basis point rate cuts. What we found is that on the retail side of the shop customers got them into the constant belief that it is always going to get better, and I am going to go short to benefit from rising rates. Well we are going to get the benefit from our CD repricing. I think we have talked to you about it at year end. We had something like 80% of the CD portfolio matured within a year.

Daryl G. Byrd

Anthony, I think in the press release we said we have…

Anthony J. Restel

I know it is down a little bit more.

Daryl G. Byrd

Yes. 6.5% of the loan portfolio was fixed and 75 – and this was at March 31, 79% of the time deposits repriced within a year.

Anthony J. Restel

So, you know, Barry what we did is we went out – if you look inside of – for instance, we picked up 50 million of the CD monies out at 2.5 years. Again, it is attractive rates for longer term money, but really what we are trying to do is provide some extension to the portfolio. If you take a step back and you look at where we are interest rate risk wise everybody is all excited over the fact that liability sensitive is the way to go here. But from a banking perspective and from the long-term what’s the best interest of our shareholders? We need to be proactive and we need to think through kind of where we are interest rate wise and where we think we are headed.

We think we are getting fairly close to the bottom, so for us it makes sense to start taking some chips off the table and start putting them on the other pile. So what we have done is, you know, we were able to get rid of some of the over [inaudible 41:50] by raising some deposits, and again, shift it from a market driven interest rates which we cannot have an impact on and we just have to kind of deal with two items that we can control money market accounts.

We can price those as we need to. And if you think about it, when those money markets reprice, you know, what is the alternative for people? Where are they going to go? I mean, fed funds will be at one and a quarter or one-seventy five. We are going to get to reprice that stuff down 100 plus basis points if we choose to. We may or may not dependent on what the competition is for rates, but we will be able to reprice downward. And it is more of a shifting from being liability sensitive as we think we will get towards the bottom, so just starting to move some chips into the other pile which is trying to insulate as long-term from long-term rates.

I will point out one thing about it. It is kind of intuitive from what everybody is thinking about rates are following and we need to be careful. You go back, and this is just kind of my history here at IberiaBank, there was a point in time, you know, four or five years ago, we had the opportunity to layer out long-term money, and when I mean long-term money, you know, 10 year money at rates sub 3%.

Now I can tell you that as we have went into, as rates rose, and we got into the 17 – 25 basis point incremental bumps that we kind of experienced, which really hurt us margin wise, I really wish I would have taken more chips off the table by taking down some of that money. So basically what we are doing is we are calling it a little bit of a learning experience, making some adjustments as we position ourselves to be better prepared for rising interest rates which we think, although not going to be here near term, we do see kind of not that far out down the road. So, you know, it does cause some pain near term, but we think it is the right thing for the shareholders, right thing for the company. And, yes, as we take those deposits put them out a little bit as we get our loan growth kind of coming up through the middle of the year we will put them out, we will earn margin, and we do have the ability to reprice those deposits.

Barry McCarver – Stephens, Inc.

Okay

Daryl G. Byrd

Barry, that may have been more than you asked for, but I think.

Barry McCarver – Stephens, Inc.

Yes, you answered about four more of my questions all at once. That was great. So I gather then that you are probably going to be out the second quarter again with some of those – maybe some of those teaser rates, but not to the same extent as 1Q.

Anthony J. Restel

You know, Barry, we have adjusted our teaser rate, obviously, as the Feds moved, I mean—

Daryl G. Byrd

Barry, that might not be an appropriate assumption.

Barry McCarver – Stephens, Inc.

Okay.

Daryl G. Byrd

Yes, we are not saying what we are going to do, but I would be careful with that.

Barry McCarver – Stephens, Inc.

Okay. So I guess my other question then, back to your comments on the strong loan pipeline. Any one particular product that you are seeing in demand out there or is it going to be across the board again?

Daryl G. Byrd

You know, Barry, it is going to be across the board. We have had very good success on the commercial side. We actually are doing, you know, in my opening comments I mentioned that we continue to focus on our consumer business engine, and we are doing great there. But you should expect us to see pretty strong commercial pipeline develop and perform for the balance of the year. Michael, any thoughts?

Michael J. Brown

Yes, I mean, Barry, I think the genesis word is very simply the economy that we are seeing in, you know, the major markets that we compete in. They are remaining strong because of the underlying drivers. And as a result, the client base that we have always focused on is very active right now. They are seeing some pretty meaningful opportunities and we are going along with them just as we have in the past, and that is obviously helping us from a revenue growth perspective as well as from a credit perspective. Our credit quality in the base franchise is extraordinarily strong.

Barry McCarver – Stephens, Inc.

And I guess energy is probably still the big driver there in Louisiana for that.

Daryl G. Byrd

Well energy is certainly a big life in all of our markets, Barry. Again, we have been very careful in terms of concentrations, frankly, in any industry. I think our oil and gas exposure is probably still in the 5% or 6% of that portfolio, so I mean, we are pretty careful. But you have got some interesting influences. I mean, obviously, South Louisiana is doing extremely well. And then you have got some situations, obviously, you know the Fayetteville, shale up in Arkansas, but you now have got to play up in Shreveport that is a very significant shale play as well. So, you know, we are seeing some pretty interesting times.

Michael J. Brown

And, Barry, an add on, something that I want to emphasize that is back to Arkansas is the two banks we acquired were not really in the commercial business which we view is a strength of ours. And, obviously, we have limit the chair up there with the clients that we normally pursue. We are able to grow those books of business pretty meaningfully as we sort of gain access to that client base which is what we are doing.

From a competitive perspective, the level of competition we see from a true commercial perspective in Arkansas is less than what we have seen in Louisiana. So we remain very bullish about the outlook for Pulaski.

Barry McCarver – Stephens, Inc.

Alright guys, I have taken a lot of time, let me step aside. Thanks a lot.

Daryl G. Byrd

Alright, Barry, thank you.

Operator

And next we have the line of [Charlie Ernst with Sandler and Leo] [ph 47:03]. Please go ahead.

Charlie Ernst – Sandler and Leo

Good morning.

Daryl G. Byrd

Good morning, Charlie.

Charlie Ernst – Sandler and Leo

You guys talked a little bit about the pipeline heading into second quarter on the mortgage business. You know, historically speaking, you have a big fall off in the first quarter and that did not really happen in the revenues, and mortgage, and title. Is there anything that you can do to give us an idea as to kind of how you see that rolling into the second and third quarters, those revenue lines?

Daryl G. Byrd

Yes, John.

John Davis

I was going to say, Charlie, you know, we do provide some information in the PowerPoint presentation which gives you a sense of the, you know, for the last few years what that seasonality looks like. So you see some of it there and that’s deed[phonetic 47:42] on sale information.

Charlie Ernst – Sandler and Leo

Given that the first quarter was so strong this year, I mean, do you expect the same type of seasonality? It just seems like that is probably a little aggressive.

John Davis

Yes, well, you have got to keep in mind that you have got a layering in of kind of a ReFi activity, which is going to be driven more by what happens on interests rates which seems to be a day to day issue for us. We have probably seen more volatility in the first quarter – intra-quarter, within the quarter, than we have seen in years. It was extremely volatile, which makes it difficult, not from an origination perspective, but actually selling the product to investors and the pricing you get on that product. So it is just a challenge from time to time and we saw a little bit of compression in our sales spreads. I would not say it is dramatic, but it was enough to make a difference in the income. So again, very strong volumes, but probably less income than we may have otherwise expected given the volatility.

Going into the second quarter, you know, at this stage I would say that you are kind of looking day to day at what is happening. The volatility, I think, is tempered a little bit which certainly helps. I think I have given you some information regarding the pipeline running at 95 million. And by comparison at the end of the year it was 55 million. So it is almost twice of what it was at the end of the year.

Charlie Ernst – Sandler and Leo

And is that pipe – do you know kind of what it would of averaged during the first quarter?

John Davis

I could not tell you, Charlie. I don’t have that. I will say, you know, we have spiked north of 100 million from time to time.

Charlie Ernst – Sandler and Leo

And then with regards to the efficiency ratio, I mean, given what the margin did this quarter and given where the efficiency ratio currently is. It seems like within any, you know, reasonable period of time that it is unlikely that we see any big improvements in the efficiency ration without sort of a material shift up in the margin which does not sound likely or, you know, a proactive expense campaign on your part.

John Davis

I would be careful about the efficiency ratio, because you are going to see some swings in the efficiency ratio as those seasonal businesses kick into gear which tend to have more fixed cost structure. And as the revenues rise you are going to have to see improving efficiency ratio from a seasonal influence.

Charlie Ernst – Sandler and Leo

Right, but that said, I mean, you guys are trying to do like a 50% at the bank and I think those season businesses where they had like 4% or 5%. So you are a long ways away from anywhere near the 50% right now.

John Davis

Well again, I think it is for us to work through. I think we have been able to maintain our expense structure pretty sound and, you know, going forward you will probably see more operating leverage on that expense base. And again, keep in mind you have got some margin compression of sorts that is driven by what is happening on that deposit campaign, and you have revenue pick-up once those funds are fully deployed.

Charlie Ernst – Sandler and Leo

Okay. And then back on the margin. Can you offer any more specifics? I mean, if we, you know, see another 25 or 50 [inaudible 50:39] in cuts, I mean, it feels like the amount of CD repricing that you have we should start to see, you know, sort of a natural drift up in the margin to some extent. Is that true or how are you guys thinking about it?

John Davis

You know, Charlie, what I will tell you is, not to shy away from the question again, if there was a perfect world where I knew what everybody was going to do I would say yes, that is maybe an okay assumption. I do think we can manage small incremental cuts and can offset those in a reasonable amount of time. Keep in mind that what the competition does will have an impact in terms of what we can do or cannot do. I would tell you though that small cuts we should be able to offset, you know, within a reasonable amount of time, not overnight, because we have got too much on the asset side that moves day one. It takes a little bit of time to catch up.

Charlie Ernst – Sandler and Leo

And can you give any indication as to the CD repricing, whether it is weighted towards one part of the year or another?

John Davis

We have got a large disproportionate amount inside of six months.

Charlie Ernst – Sandler and Leo

Okay. And then the branches, can you say how much of a drag that was in the quarter? And also what the deposit and loan levels were?

John Davis

You know, Charlie, I don’t have the number on the branch thing right in front of me. I know it was up every so slightly from the prior quarter, I believe.

Charlie Ernst – Sandler and Leo

The drag or the deposits and the loan numbers?

John Davis

No, the drag, and that is just a function of the premium pricing until we can reprice the deposits. In terms of the deposit branch and volumes, what they are up, I believe…

Anthony J. Restel

Yes, Charlie, sounds like [inaudible 52:30] of our presentation. Loans were 89 million that is up 131% versus a year ago. And deposits were up – were 169 million, that is up 183% from a year ago.

Michael J. Brown

Charlie, it is Michael. I want to emphasize a point that it might get lost in the margin discussion on the deposit campaign. The new branches will benefit a tremendous amount from the influx of new clients coming into them. I gave you a sampling of the three, the north shore in terms of 1,000 new accounts and $50 million in new deposits. I mean, with that becomes tremendous opportunity to cross sell to those clients. And we feel that that will be very, very beneficial to the profitability ultimately to those locations. And that is something that we have not done up until this point in terms of any sot of meaningful campaign to support them, so it is something that will be very beneficial.

Charlie Ernst – Sandler and Leo

And can you just comment on, you know, how you feel about the branching campaign now. I mean, I think we are on a weighted average basis we are probably getting into about the 20th month or so, and, you know, we are still seeing a pretty material drag on earnings. Can you give any update on that?

Daryl G. Byrd

Charlie, I’ll comment. I think what we have just done is going to be a very significant help to those branches. Now you are going to have to give it a little bit of time, I do not think a lot. And that is going to be very meaningful. We are pretty happy with the branches. We probably have one or two that we questioned the location and we plan on dealing with. And frankly Charlie, over our history we have added branches, but we have also, you know, closed a number of branches. So, you know, we are going to do what we need to do. We tried to give these the appropriate amount of time and support, and I think we are at a very good point for, you know, in terms of if we need to prune or two of the branches, we probably got the information at this point to know what we need to do. But on balance, I am very happy with the branches.

Charlie Ernst – Sandler and Leo

Okay great. Thanks a lot.

Operator

And next we have the line of Christopher Marinac with Fig Partners. Please go ahead.

Christopher Marinac –Fig Partners

Thanks good morning guys. I just wanted to ask about the criticized asset slide that you had in here. And I was curious if there was a corresponding figure for Arkansas or any ballpark estimate?

Daryl G. Byrd

Anthony, have we got something on that?

Anthony J. Restel

I don’t have a number right in front of me, Darrell. Chris, let me see if I can dig that up while we are still talking.

Christopher Marinac –Fig Partners

That is fine. And then my next question has to do with kind of a capital fund that your regulatory perspective. I know it is very strong. Just sort of curious on sort of how Tier 1 looks at the end of the quarter if you have that or just any thoughts in terms of how you want to manage that and the big picture, you know, the next several quarters and the years ahead.

Daryl G. Byrd

John.

John Davis

Well the Tier 1 leverage ration is 746, which is really on the, I would say, the upper end of what we have operated with historically for the last few years. But again, you know we have had - we try to take capital from a balance perspective where we have had a balance sheet growth where many other people have not. We have had dividends, we have buy back program, we have done a number of things over the last few years that we just think it is important to balance that capital over time.

Christopher Marinac –Fig Partners

Okay, and then, John, the decision to not buy back shares this quarter was that more just related to prudence or timing, or any other color there?

John Davis

There are times when we are in and times when we are out Chris. You know, beyond that it is kind of decisions we make on almost a daily basis of where we are with that. We just decided during this quarter not to buy any shares.

Anthony J. Restel

Hey, Chris, going back to your criticized loan number, we have got total corporation of about 67 million of criticized loans of which 60 million are in the Pulaski.

Christopher Marinac –Fig Partners

Okay.

Anthony J. Restel

Is that what you were looking for?

Christopher Marinac –Fig Partners

Yes, that is great. Thank you very much. And then, Darrell, just one of the big picture question. Since you have purchased Pulaski and Pocahontas have you – has anything changed in terms of Oklahoma, in terms of where it is on the radar screen and what is emphasized there?

Daryl G. Byrd

Say that again, Chris

Christopher Marinac –Fig Partners

Since the Arkansas acquisitions there was the small operation in Oklahoma and I was curious what has changed with that if anything since the?

Daryl G. Byrd

Chris, we closed the Tulsa operation and frankly the bank office a good while ago. Now we still have mortgage operations in Oklahoma.

Christopher Marinac –Fig Partners

Okay, so beyond mortgage then there is no plans for that?

Daryl G. Byrd

No, not at this point.

Christopher Marinac –Fig Partners

Okay, I just want to clarify. That’s great. Thank you guys.

Daryl G. Byrd

Thank you, Chris.

Operator

And next we have a question from the line of Dave Bishop with Stifel Nicolaus & Company, Inc. Please go ahead.

Dave Bishop – Stifel Nicolaus & Company, Inc.

As we think through the second half of the year in terms of loan production and growth, any sort of stated targets you guys are sort of expecting here in terms of total loan growth for the year?

Daryl G. Byrd

No, Dave, we have had good solid double-digit loan growth every year, John, for five, six now. Dave, we think we are going to have a very strong year from the loan growth perspective.

Dave Bishop – Stifel Nicolaus & Company, Inc.

Do you think it is going to come in at double digit rein again?

Daryl G. Byrd

Yes.

Dave Bishop – Stifel Nicolaus & Company, Inc.

And in terms of the lift out from Baton Rouge this quarter, you said, I’m sorry, the loan book was somewhere around 300 million or so?

Daryl G. Byrd

That is correct.

Dave Bishop – Stifel Nicolaus & Company, Inc.

Okay. Were they in the numbers the whole quarter, in terms of their compensation costs or was there any sort of expenses associated with that team hitting it?

Anthony J. Restel

Yes, the expenses of the team hit partial quarter. They did not all come at once. We hired them during the quarter with one coming on towards the beginning. And then the others I think, joined in February. Obviously, the expense would be, there the revenues would not be. It takes a little while to build up the pipeline.

Dave Bishop – Stifel Nicolaus & Company, Inc.

And then same question in terms, I guess, in terms of the deposit campaign there. Is that flown through the other expense line advertising marketing?

Anthony J. Restel

Yes, we have some additional expense tied to advertising marketing as well, associated with the campaign.

Dave Bishop – Stifel Nicolaus & Company, Inc.

Thanks.

Operator

And our next question comes from the line of Peyton Green with FTN Midwest Research. Please go ahead.

Peyton Green – FTN Midwest Research

Good morning. I was just wondering, with respect to the deposit repricing that you expect to get over the course of the year. Maybe I misunderstood this. You could have been talking about the margin pricing of marginal Fed cuts from here. But shouldn’t there be kind of a gap down in your CD costs given the past rate reductions by the FOMC?

Anthony J. Restel

Yes.

Peyton Green – FTN Midwest Research

Okay, good. I just wanted to make sure I got that. And then, to what degree do you feel like you could get your deposit costs down to where they were say in ’03, ’04, 05 when a similar level of interest rates existed certainly on the funding side. I mean, do you think it is possible to get back to those levels again or do you think this interest rate cycle is going to play out differently?

Anthony Russell

You know what I’ll tell you, Peyton, it is going to depend on a couple things. The biggest thing it is going to depend on , it is going to be where does the Fed end up coming and then really – and that is part of the equation. The real question is how long do they hand out there? So if the Fed goes to 1% again and they hang out an extended period of time it gives us the ability to reprice a whole lot of stuff, because there is not alternatives for anywhere for anybody to go. But keep in mind, you know, I do not know that from a competition standpoint you have got a lot of people hungry, you know, in the different markets for deposits. We saw that through ’05, 06. I would think you will see people be particularly aggressive in trying to maintain their deposit bases. So I cannot guarantee you, I think it is a function of a couple items that are outside of our control.

Peyton Green – FTN Midwest Research

Okay.

John Davis

And, Peyton, just one thing to add there, keep in mind, I think as we all recognize, you know, the longer end of the curve is going to be driven by expectations. And once the expectations change and inflation numbers in particular start driving some of those expectations you could see a dramatic shifting and I think there is at least an impression amongst our folks here that we are just not sure that [inaudible 1:01:03] would not move more quickly and kind of snapping back on rates, so again, it is just an expectation we think we are nearing the bottom.

Peyton Green – FTN Midwest Research

And then maybe to ask it a different way, I mean, your overall CD mix was about 42% or 43% of your deposit base back then, and that is about what it is now. Is there a structural pricing problem in Arkansas versus Louisiana on what you can do with CD prices?

Daryl G. Byrd

No, Peyton, I do not think so.

Peyton Green – FTN Midwest Research

Okay, so you think you could get them down to the same levels that you operate with in Louisiana?

Daryl G. Byrd

Yes.

Peyton Green – FTN Midwest Research

Okay. Alright, good enough. Thank you.

Daryl G. Byrd

Thank you, Peyton

Operator

(Operator instructions) Please go ahead with any closing remarks.

Daryl G. Byrd

Before we close I want to remind everybody our annual meeting is next Tuesday April 29th at 4:00 p.m. The meeting will be held at the [inaudible 1:02:04] Hotel in New Orleans. I certainly invite you to attend. Thanks for your participation in today’s call and your continued support of IberiaBank Corporation. Everybody have a great day. Thank you.

Operator

And Ladies and Gentlemen, that does conclude your conference for today. Thank you for your participation and thank you for using AT&T Executive Teleconference Service. You may now disconnect.

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