MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The following discussion and analysis is intended to assist readers in understanding the financial condition and results of operations of IBERIABANK Corporation (the “Company”) and its subsidiaries as of December 31, 2001 and 2002 and for the years ended December 31, 2000 through 2002. This review should be read in conjunction with the audited consolidated financial statements, accompanying footnotes and supplemental financial data included herein. The Company’s net income for 2002 totaled $18.4 million, or $3.02 per share on a diluted basis. This is a 28% increase over the $2.36 per share, or $14.5 million earned for 2001. In accordance with new accounting standards issued in 2001, the amortization of goodwill ceased completely beginning in 2002. Excluding this benefit, net income increased $1.9 million, or 13% over last year. Earnings performance for 2002 was influenced by many factors, the key components of which are summarized below.  • Net interest income increased by $5.2 million, or 10%. The corresponding net interest margin on a tax-equivalent basis improved to 4.49% from 4.11%. Improvement in the mix of both earning assets and deposits coupled with the management of interest rates in the low rate environment were the major factors contributing to the increases. • Improvement in noninterest income of $2.7 million was reflected in 2002 as compared to the prior year. Increased service charge revenues on deposit accounts and the full year impact of revenues associated with bank-owned life insurance were the contributing factors to the growth. • Noninterest expense increased by $2.3 million from 2001 to 2002. Compensation expense was $1.9 million higher from year to year. This was due in part to the rising cost of the Employee Stock Ownership Plan (“ESOP”) as it relates to the value of Company stock, strategic hires as opportunities were presented and the increased competitiveness of salaries as well as enhanced incentive compensation. Additionally, Other Real Estate Owned (“OREO”) related charges increased by $1.3 million compared to last year, largely the result of writedowns on OREO properties. These increases were offset by the impact of $2.8 million from the discontinuance of goodwill amortization in 2002. • The Company provided $6.2 million for possible loan losses for 2002 as compared to $5.0 million for 2001 to bring the allowance for loan losses as a percent of total loans to 1.25% at the end of the year, as compared to 1.16% at the end of 2001. Net charge-offs for 2002 were $4.2 million, or 0.43% of average loans compared to $4.2 million, or 0.44% a year earlier. Nonperforming assets decreased $6.4 million since the end of 2001. FINANCIAL CONDITION Earning Assets Earning assets are composed of any interest or dividend-bearing asset, including loans, securities, short-term investments and loans held for sale. Interest income associated with earning assets is the Company’s primary source of income. Total average earning assets increased $28 million, or 2%, in 2002 as compared to 2001. The changing mix of earning assets shown in the following charts reflects the Company’s continuing progression from an earning asset base more closely associated with a savings institution to that of a commercial bank with resulting higher yielding assets on a relative basis. Investment Securities & Stock 25.8% Mortgage Loans 15.4% Other Earning Assets 2.5% 2002 Year-End Earning Assets Consumer Loans 27.9% Commercial Loans 28.4% 18