Buyer of ANB deposits takes hit
Posted on Wednesday, July 23, 2008
Iberiabank Corp. took a $ 1. 1 million pretax hit in the second quarter in connection with its purchase of $ 213 million in deposits from ANB Financial Bank of Rogers, the Lafayette, La., firm said Tuesday in its quarterly earnings report.
For the quarter that ended June 30, Iberiabank earned $ 9. 5 million, down 5 percent from the corresponding period last year.
Iberiabank acquired the deposits in May after ANB Financial failed and was taken over by the Federal Deposit Insurance Corp. Iberiabank’s subsidiary, Pulaski Bank & Trust Co. of Little Rock, began operations out of eight former ANB offices in Northwest Arkansas, which Iberiabank took when it purchased ANB’s deposits.
Iberiabank retained only $ 133 million of ANB’s $ 213 million in insured, nonbrokered deposits by the end of June, 51 days after the purchase, Iberiabank said. Brokered deposits are obtained through large investment houses by offering its clients very high interest rates on products such as certificates of deposit.
“Our deposit level has settled close to the level we had initially modeled,” said Daryl Byrd, Iberiabank’s chief executive officer, said of the ANB decline in deposits. Iberiabank said the deposit runoff has stabilized.
Michael Brown, president of Iberiabank’s markets, said the bank has lost fewer customers and deposits than it had expected.
Meanwhile, documents from the Federal Insurance Deposit Corp. obtained by the Arkansas Democrat-Gazette through an open-records request indicate that Summit Bank of Arkadelphia missed by about $ 45, 000 winning the bid to acquire the deposits at ANB Financial.
Summit Bank was one of three banks that bid on ANB’s deposits before the Office of the Comptroller of the Currency closed ANB on May 9. The FDIC became the receiver of ANB’s assets after the bank closed. Summit Bank bid 0. 99 percent, or about $ 2. 11 million, for $ 213 million of ANB’s insured, nonbrokered deposits. Iberiabank won the bid with an offer of 1. 011 percent or about $ 2. 15 million.
Great Southern Bank of Springfield, Mo., which was forced to write off $ 35 million in loans it made to ANB, was the third bidder for the deposits. Iberiabank’s Byrd said the bank is pleased with the team of employees it inherited from ANB. By the end of July, Byrd said he expects to be finished converting ANB to the Iberiabank operating systems. Byrd said he expects the Northwest Arkansas market to primarily be a consumer franchise. “The market continues to be significantly overbuilt and a source of financial distraction for some of the other financial institutions operating in the market,” Byrd said.
Iberiabank had the option when it acquired ANB’s deposits to keep all of ANB’s branches in Northwest Arkansas. Byrd said Tuesday that eight of the branches will remain Pulaski Bank branches but Iberiabank will not keep ANB’s large headquarters office in Rogers.
The Louisiana bank made $ 3 million in loans in Northwest Arkansas through the end of June.
Pulaski Bank has about 40 branches in Arkansas.
Iberiabank closed at $ 50. 51 on Tuesday, up $ 2. 20, in trading on the Nasdaq exchange.
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