IBERIABANK Corp. – Value Analysis (NASDAQ:IBKC) : May 19, 2017

Capitalcube gives IBERIABANK Corp. a score of 54.

Our analysis is based on comparing IBERIABANK Corp. with the following peers – Regions Financial Corporation, Home BancShares, Inc., Hancock Holding Company, BancorpSouth, Inc., Bank of the Ozarks, Inc., BOK Financial Corporation, Southwest Bancorp, Inc., BB&T Corporation, Simmons First National Corporation Class A and Trustmark Corporation (RF-US, HOMB-US, HBHC-US, BXS-US, OZRK-US, BOKF-US, OKSB-US, BBT-US, SFNC-US and TRMK-US).

Fundamental Overview

IBERIABANK Corp. has a fundamental score of 54 and has a relative valuation of NEUTRAL.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.14 is about median in its peer group.
  • The market expects IBKC-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • IBKC-US employs relatively high amounts of capital while generating median profit margins.
  • Compared with its chosen peers, changes in the company’s annual earnings are better than the changes in its revenue, implying better than median cost control and/or some economies of scale.
  • IBKC-US‘s return on equity has improved from below median to about median among its peers over the last five years.
  • While IBKC-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company is likely overinvesting in a business with only median returns.

Drivers of Margin

  • Margins do not suggest any relative benefit from a pricing or an operating cost advantage.
  • The company’s net interest income (net interest income/total revenues) of 75.51% is around peer median suggesting that IBKC-US‘s lending operations does not benefit from any differentiating pricing advantage. In addition, IBKC-US‘s pre-tax margin of 31.45% is also around the peer median suggesting no operating cost advantage relative to peers.
  • The company’s comparatively low proportion of fee based income (i.e. non interest income/total revenues) of 24.49% versus peer median of 32.86% — suggests that IBKC-US‘s operating margins are likely to be more volatile. In addition, IBKC-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 61.23x is around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

IBERIABANK Corp. operates as a financial holding company for Iberiabank, which engages in the provision of commercial, consumer, mortgage, and private banking products and services, cash management, deposit and annuity products and investment brokerage services. It operates through the following segments: IBERIABANK, IMC, and LTC. The IBERIABANK segment provides commercial and retail banking functions including its lending, investment, and deposit services. The IMC segment offers funding and subsequent sale of one-to-four family residential mortgage loans. The LTC segment provides title insurance and loan closing services. The company was founded on November 21, 1994 and is headquartered in Lafayette, LA.