Lafayette, La.-based IBERIABANK Corp. has agreed to pay $11.7 million to resolve a lawsuit brought by two former IBERIABANK Mortgage Co. associates.
The case was filed in a U.S. District Court in Arkansas. The settlement is still subject to approval by the Department of Justice.
IBERIABANK had previously accrued $6 million for the possible legal loss; the remaining $5.7 million will be accrued in the third quarter. The company expects resolution by the end of October and will pursue insurance coverage for the losses.
IBERIABANK also expects to accrue in the third quarter an $8.5 million incremental provision for credit losses, in connection with hurricanes Harvey and Irma. The company operates eight branches in the Harvey-hit greater Houston area, with $2.6 billion in total loan commitments and $1.7 billion in loans outstanding. In Irma-impacted Florida, IBERIABANK has $9.1 billion in total loan commitments with $7.7 billion in loans outstanding.
The company further disclosed that several energy companies with nonaccrual loans outstanding have negotiated prepackaged bankruptcies. It therefore expects to record $17.0 million in third-quarter energy-related loan net charge-offs.