CEO Daryl Byrd blames drop in profit on customers making loan payments on time.

Loan charges take wind out of Iberiabank first quarter profit

IberiaBank Corp. first quarter earnings managed to stay in the black even though the bank absorbed a massive pre-tax hit tied to loans the bank acquired when it took over failed institutions.

The Lafayette-based company reported first quarter diluted earnings of $697,000, or 2 cents per diluted share, compared with $19 million, or 66 cents per share, during the same quarter a year ago. That’s a 96 percent drop year-over-year.

The bank warned investors earlier this month of a $32 million loss related to loans on the books from its Federal Deposit Insurance Corp.-assisted acquisitions in 2009 and 2010. The bank inherited $1.9 billion in loans through its 2009 acquisitions of Century Bank and Orion Bank, both in Florida, CapitalSouth Bank in Alabama as well as a 2010 deal for Sterling Bank in Florida.

The FDIC typically pays for a substantial portion of loan losses through loss-sharing agreements in such deals.  CEO Daryl Byrd traced part of the problem to the fact that the failed banks’ customers have started making loan payments on time, resulting in lower-than-expected FDIC payments. Byrd made the comments during an April 22 conference call with investors.  The money a bank makes on fees and other service charges, jumped 19 percent to $44.5 million.