Cadence Bank Announces Second Quarter 2023 Financial Results

News provided by

Cadence Bank

Jul 24, 2023, 16:30 ET

HOUSTON and TUPELO, Miss., July 24, 2023 /PRNewswire/ -- Cadence Bank (NYSE: CADE) (the Company), today announced financial results for the quarter ended June 30, 2023.

Highlights for the second quarter of 2023 included:

  • Achieved quarterly net income available to common shareholders of $111.7 million, or $0.61 per diluted common share, and adjusted net income available to common shareholders,(1) which excludes non-routine income and expenses,(2) of $116.9 million, or $0.64 per diluted common share.
  • Generated net organic loan growth of $1.3 billion for the second quarter of 2023, or 16.3% annualized. On a year-to-date basis, loans have grown $2.2 billion, or 14.7% annualized.
  • Reflected a decline in total deposits of $704.8 million during the quarter. On a year-to-date basis, total deposits have declined $254.9 million, or 1.3% annualized.
  • Continued to maintain strong balance sheet liquidity, with a loan-to-deposit ratio of 84.1% at June 30, 2023.
  • Reported total revenue of $465.8 million, down 2.9% compared to the prior quarter (excluding securities gains and losses) as net interest revenue was negatively impacted by higher funding costs, partially offset by meaningful growth in several noninterest revenue sources spotlighted by record quarterly insurance commission revenue of $45.6 million.
  • Decreased adjusted noninterest expenses(1) to $297.0 million, down $8 million, or 2.6% from the prior quarter as we continue to refine our operating leverage.
  • Announced the closure or consolidation of 35 branches and other strategic initiatives including early retirements and other personnel efficiencies to occur primarily during the third quarter of 2023. These initiatives are now projected to collectively reduce noninterest expense by approximately $35 - $40 million annually, an increase from our previous estimate of $15 - $20 million.

"Our second quarter results reflect several key successes, particularly from a business development standpoint," remarked Dan Rollins, Chairman and Chief Executive Officer of the Company. "While higher than anticipated deposit costs negatively impacted our net interest margin, we had another very solid quarter from a loan growth perspective and our bankers continue to successfully protect our core deposit relationships. From a liquidity and capital perspective, our balance sheet remains in a strong position. We also reported meaningful revenue growth in several of our noninterest revenue businesses, highlighted by record quarterly revenue from our insurance team. Finally, we remain encouraged with our credit quality.  Net charge-offs for the quarter remain at low levels, and our total non-performing asset levels declined."

Earnings Summary

For the second quarter of 2023, the Company reported net income available to common shareholders of $111.7 million, or $0.61 per diluted common share, compared with $124.6 million, or $0.68 per diluted common share, for the second quarter of 2022 and $74.3 million, or $0.40 per diluted common share, for the first quarter of 2023. Adjusted net income available to common shareholders(1) was $116.9 million, or $0.64 per diluted common share, for the second quarter of 2023, compared with $134.2 million, or $0.73 per diluted common share, for the second quarter of 2022 and $124.4 million, or $0.68 per diluted common share, for the first quarter of 2023. Additionally, the Company reported adjusted pre-tax pre-provision net revenue (PPNR)(1) of $168.8 million, or 1.38% of average assets on an annualized basis, for the second quarter of 2023 compared to $176.7 million, or 1.51% of average assets on an annualized basis, for the second quarter of 2022 and $174.6 million, or 1.46% of average assets on an annualized basis, for the first quarter of 2023.

The declines in adjusted earnings(1) and PPNR(1) metrics for the second quarter of 2023 were driven by a decline in net interest revenue and an increase in the provision for credit losses, which were partially offset by growth in several noninterest revenue categories and improvement in operating expenses.

Net Interest Revenue

Net interest revenue was $333.6 million for the second quarter of 2023, compared to $324.8 million for the second quarter of 2022 and $354.3 million for the first quarter of 2023. The net interest margin was 3.03% for the second quarter of 2023, compared with 3.06% for the second quarter of 2022 and 3.29% for the first quarter of 2023.

The decline in net interest revenue in the second quarter of 2023 of $20.7 million, or 5.9%, compared to the linked quarter was primarily driven by net interest margin pressure resulting from an increase in funding costs, including the impact of mix shift out of noninterest bearing into interest bearing deposits. The decline also included $4.8 million in lower accretion revenue related to acquired loans and leases.  Accretion revenue was $5.2 million and $10.0 million for the second quarter of 2023 and the first quarter of 2023, respectively, adding approximately 4 basis points to the net interest margin for the second quarter of 2023 and 9 basis points for the first quarter of 2023.

Yield on net loans, loans held for sale, and leases excluding accretion, was 6.18% for the second quarter of 2023, up 31 basis points from 5.87% for the first quarter of 2023, while yield on total interest earning assets was 5.21% for the second quarter of 2023, up 33 basis points from 4.88% for the first quarter of 2023. The increase in earning asset yields continues to be driven by both the impact of rising interest rates on loan portfolio repricing and new loan production, as well as a change in mix as cash flows from lower yielding securities are deployed primarily into higher yielding loans. Approximately 20% of our total loans are floating (reprice within 30 days), and another 28% reprice within 12 months. 

The average cost of total deposits increased to 1.87% for the second quarter of 2023, compared with 1.28% for the first quarter of 2023, reflecting continued competitive pressure on rates as well as a continued mix shift from noninterest bearing to interest bearing products during the second quarter of 2023. Our total deposit beta is 33% cycle-to-date. Total interest-bearing liabilities costs increased to 2.92% from 2.23% during the second quarter of 2023. 

Balance Sheet Activity

Loans and leases, net of unearned income, increased $1.3 billion during the second quarter of 2023, or 16.3% annualized, to $32.6 billion. Consistent with prior quarters, the loan growth continues to be diverse from both a loan category and geographic standpoint, including approximately $556.6 million in Commercial and Industrial, $268.4 million in Commercial Real Estate and $453.6 million in Residential Mortgage due to increased seasonal mortgage loan production. Total investment securities of $10.3 billion at June 30, 2023 decreased $623.3 million during the second quarter as routine portfolio cash flows continue to be redeployed into loan growth. 

Total deposits decreased $704.8 million to $38.7 billion as of June 30, 2023 with the decline primarily in corporate account activity. Our community bank deposits reflected net deposit outflows of $129.6 million in the second quarter, however on a year-to-date basis, they increased $346.7 million, demonstrating the strength of our community franchise deposit base. Total brokered deposits were $1.8 billion at June 30, 2023, down slightly from $1.9 billion at the end of the first quarter of 2023. The June 30, 2023 loan to deposit ratio was 84.1% and securities to total assets was 21.0%, reflecting continued strong liquidity. Noninterest bearing deposits represented 26.4% of total deposits at the end of the second quarter of 2023, declining from 29.2% at March 31, 2023, as we saw further migration from noninterest bearing products into interest bearing products. The Company's deposit base continues to be very granular, with average transaction account balances of approximately $22,000 for consumer accounts and $132,000 for commercial accounts at June 30, 2023. Additionally, approximately 98% of the Company's deposit accounts have balances less than $250,000, and approximately 75% of our deposit balances were FDIC insured or collateralized at quarter-end.

Short-term borrowings declined $2.2 billion during the quarter to $3.5 billion at June 30, 2023 while cash, due from balances and deposits at the Federal Reserve declined $3.4 billion to $1.7 billion at June 30, 2023. These balances returned to more normalized levels after excess on-balance sheet liquidity was proactively added late in the first quarter of 2023 in response to industry-wide disruption.  

Credit Results, Provision for Credit Losses and Allowance for Credit Losses

Total non-performing assets as a percent of total assets were 0.34% at June 30, 2023 compared to 0.27% at June 30, 2022 and 0.33% at March 31, 2023. Total non-performing loans and leases as a percent of loans and leases, net were 0.50% at June 30, 2023, compared to 0.41% at June 30, 2022 and 0.53% at March 31, 2023. Other real estate owned and other repossessed assets declined meaningfully during the second quarter to $2.9 million at June 30, 2023 compared to the June 30, 2022 balance of $14.4 million and the March 31, 2023 balance of $5.3 million.   

Net charge-offs for the second quarter of 2023 were $12.7 million, or 0.16% of average net loans and leases on an annualized basis, compared with net recoveries of $1.4 million for the second quarter of 2022 and net charge-offs of $1.9 million for the first quarter of 2023. The increase in net charge-offs during the second quarter of 2023 was driven primarily by the charge down of one C&I credit that was previously identified as impaired. The provision for credit losses for the second quarter of 2023 was $15.0 million, compared with $1.0 million for second quarter of 2022 and $10.0 million for the first quarter of 2023. The second quarter of 2023 provision expense included a $25.0 million provision charge for funded loans and a $10.0 million provision reversal for unfunded commitments. The allowance for credit losses of $466.0 million at June 30, 2023 represented 1.43% as a percent of total loans and leases, stable compared to the March 31, 2023 coverage of 1.45%.

Noninterest Revenue

Noninterest revenue was $132.3 million for the second quarter of 2023, compared with $125.2 million for the second quarter of 2022 and $74.1 million for the first quarter of 2023. First quarter 2023 noninterest revenue included a $51.3 million non-routine loss on the sale of securities. Excluding the securities loss, noninterest revenue increased $6.9 million from the first quarter of 2023 revenue driven by increases in insurance commission, card, and mortgage banking revenue, partially offset by lower other noninterest revenue.

Insurance commission revenue continues to be strong at $45.6 million for the second quarter of 2023, compared with $40.0 million for the second quarter of 2022 and $39.6 million for the first quarter of 2023. The year-over-year quarterly revenue was up $5.6 million or 14.0% reflecting continued strong performance. The linked quarter increase of $6.0 million or 15.1% was primarily in property and casualty commissions and was driven by successful client acquisition efforts as well as continued upward pressure on policy rates.   

Credit card, debit card and merchant fee revenue was $12.6 million for the second quarter of 2023, compared with $16.6 million for the second quarter of 2022 and $11.9 million for the first quarter of 2023.  The second quarter of 2022 included vendor incentive revenue that was elevated compared to other periods. Deposit service charge revenue was $17.2 million for the second quarter of 2023 compared with $18.3 million for the second quarter of 2022 and $16.5 million for the first quarter of 2023. The decline compared to the second quarter of 2022 includes increases in earnings credit rate due to the increasing rate environment.  Other noninterest revenue was $26.7 million for the second quarter of 2023, compared with $17.3 million for the second quarter of 2022 and $29.8 million for the first quarter of 2023. The decline compared to the first quarter of 2023 is related primarily to a decline in revenue on SBA loan sales, while the increase from the second quarter of 2022 was in multiple areas including partnership income, credit fees, FX income and other revenue streams. 

Mortgage production and servicing revenue totaled $6.8 million for the second quarter of 2023, compared with $6.8 million for the second quarter of 2022 and $8.4 million for the first quarter of 2023. The net mortgage servicing rights valuation adjustment was a positive $1.6 million for the second quarter of 2023, compared with a positive $4.7 million for the second quarter of 2022 and a negative $2.3 million for the first quarter of 2023 with the variances due to continued changes in the interest rate environment. Mortgage origination volume for the second quarter of 2023 was $848.9 million, compared with $913.0 million for the second quarter of 2022 and $454.2 million for the first quarter of 2023. Compared to the same quarter in 2022, mortgage origination volume was down 7.0%, and was up 86.9% compared to the prior quarter reflecting seasonality. 

Noninterest Expense

Noninterest expense for the second quarter of 2023 was $303.9 million, compared with $285.9 million for the second quarter of 2022 and $319.3 million for the first quarter of 2023. Adjusted noninterest expense(1) for the second quarter of 2023 was $297.0 million, compared with $271.8 million for the second quarter of 2022 and $305.0 million for the first quarter of 2023. Adjusted noninterest expense(1) for the second quarter of 2023 excludes $1.8 million in total merger related expenses, $6.2 million in branch closure and other restructuring charges, and a $1.1 million debt extinguishment gain. The adjusted efficiency ratio(1) was 63.6% for the second quarter of 2023 compared to 63.5% for the first quarter of 2023, as the decline in the second quarter's revenue offset the impact of lower expenses.

The $8.0 million, or 2.6%, decline in adjusted noninterest expense(1) compared to the linked quarter was driven primarily by a decline in salaries and employee benefits expense as well as data processing and software expense, partially offset by an increase in amortization of intangibles. Salaries and benefits expense declined $4.8 million compared to the first quarter of 2023 due to a number of factors including lower payroll tax expense and retirement plan expense. Data processing and software expense declined $3.8 million compared to the first quarter of 2023 related to cost savings associated with vendor service terminations and vendor contracts. 

The Company continues to identify strategic opportunities to improve operating efficiency, including branch optimization.  In April 2023, the Company announced 35 additional branch locations that will be closed or consolidated early in the third quarter of 2023. These branch closures and consolidations are in addition to the 17 executed in the fourth quarter of 2022. The Company also continues to execute on other initiatives designed to improve efficiency, including personnel-related initiatives. These branch optimization and other efficiency initiatives are now collectively expected to result in annual cost savings of $35 - 40 million, an increase from our previous estimate of $15 - $20 million. One-time costs associated with the initiatives included $6.2 million in the second quarter of 2023 and are expected to include $10 - $12 million over the remainder of 2023 with the majority in the third quarter.

Capital Management

Total shareholders' equity was $4.5 billion at June 30, 2023 compared with $4.4 billion at June 30, 2022 and $4.5 billion at March 31, 2023. Estimated regulatory capital ratios at June 30, 2023 included Common Equity Tier 1 capital of 10.1%, Tier 1 capital of 10.5%, Total risk-based capital of 12.7%, and Tier 1 leverage capital of 8.5%. During the second quarter of 2023, the Company did not repurchase any shares of its common stock pursuant to its 10 million share repurchase authorization for 2023. Outstanding common shares were 182.6 million as of June 30, 2023.

Summary

Rollins concluded, "While deposit competition and pricing are impacting financial performance across the industry, we are proud of our second quarter accomplishments and we remain optimistic on our business opportunities as we look forward. We have continued to grow loans in a steady and prudent manner, protect core deposit relationships and maintain stable credit quality. Additionally, we continue to execute on strategic initiatives designed to improve our operating efficiency. As we move into the second half of 2023, these key strategies will continue to be our focus."

Conference Call and Webcast

The Company will conduct a conference call to discuss its second quarter 2023 financial results on July 25, 2023, at 10:00 a.m. (Central Time). This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing http://ir.cadencebank.com/events. The webcast will also be available in archived format at the same address.

(1) Considered a non-GAAP financial measure. A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears in Table 14 "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions" beginning on page 21 of this news release.

(2) See Table 14 for detail on non-routine income and expenses.

About Cadence Bank

Cadence Bank (NYSE: CADE) is a leading regional banking franchise with approximately $50 billion in assets and more than 350 branch locations across the South and Texas. Cadence provides consumers, businesses and corporations with a full range of innovative banking and financial solutions. Services and products include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized lending, asset-based lending, commercial real estate, equipment financing, correspondent banking, SBA lending, foreign exchange, wealth management, investment and trust services, financial planning, retirement plan management, and personal and business insurance. Cadence is committed to a culture of respect, diversity and inclusion in both its workplace and communities. Cadence Bank, Member FDIC. Equal Housing Lender.

Forward-Looking Statements

Certain statements made in this news release constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are subject to the safe harbor under the Private Securities Litigation Reform Act of 1995 as well as the "bespeaks caution" doctrine. These statements are often, but not exclusively, made through the use of words or phrases like "assume," "believe," "budget," "contemplate," "continue," "could," "foresee," "indicate," "may," "might," "outlook," "prospect," "potential," "roadmap," "should," "target," "will," "would," the negative versions of such words, or comparable words of a future or forward-looking nature. These forward-looking statements may include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, or any of the Company's comments related to topics in its risk disclosures or results of operations. Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, the Company's management at the time such statements were made. Forward-looking statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company's control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements.

Risks, uncertainties and other factors the Company may face include, without limitation: general economic, unemployment, credit market and real estate market conditions, including inflation, and the effect of such conditions on customers, potential customers, assets, investments and liquidity; risks arising from market and consumer reactions to the general banking environment, or to conditions or situations at specific banks; risks arising from media coverage of the banking industry; risks arising from perceived instability in the banking sector; the risks of changes in interest rates and their effects on the level, cost, and composition of, and competition for, deposits, loan demand and timing of payments, the values of loan collateral, securities, and interest sensitive assets and liabilities; the ability to attract new or retain existing deposits, to retain or grow loans or additional interest and fee income, or to control noninterest expense; the effect of pricing pressures on the Company's net interest margin; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S.government may take to avoid exceeding the debt ceiling, or uncertainties surrounding the debt ceiling and the federal budget; potential delays or other problems in implementing and executing the Company's growth, expansion and acquisition strategies, including delays in obtaining regulatory or other necessary approvals, or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies; the ability to pay dividends or coupons on the Company's 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; the potential impact of the phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; changes in legal, financial, accounting, and/or regulatory requirements; the costs and expenses to comply with such changes; the enforcement efforts of federal and state bank regulators; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity and the impact of generative artificial intelligence; increased competition in the financial services industry, particularly from regional and national institutions; the impact of a failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers. The Company also faces risks from natural disasters or acts of war or terrorism; international or political instability, including the impacts related to or resulting from Russia's military action in Ukraine and additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments.

The Company also faces risks from: possible adverse rulings, judgments, settlements or other outcomes of pending, ongoing and future litigation, as well as governmental, administrative and investigatory matters; the impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; the diversion of management's attention from ongoing business operations and opportunities; and the company's success in executing its business plans and strategies, and managing the risks involved in all of the foregoing.

The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company's periodic and current reports filed with the FDIC, including those factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, particularly those under the heading "Item 1A. Risk Factors," in the Company's Quarterly Reports on Form 10-Q under the heading "Part II-Item 1A. Risk Factors," and in the Company's Current Reports on Form 8-K.

Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, except as required by applicable law. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.

Table 1

Selected Financial Data

(Unaudited)


Quarter Ended

Year-to-date

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

Earnings Summary:







Interest revenue

$       573,419

$       526,132

$       473,548

$       405,559

$       349,555

$    1,099,551

$          681,485

Interest expense

239,868

171,862

114,188

50,205

24,789

411,730

44,897

Net interest revenue

333,551

354,270

359,360

355,354

324,766

687,821

636,588

Provision for credit losses

15,000

10,000

6,000

—

1,000

25,000

1,000

Net interest revenue, after provision for credit losses

318,551

344,270

353,360

355,354

323,766

662,821

635,588

Noninterest revenue

132,290

74,071

114,873

124,491

125,234

206,361

253,669

Noninterest expense

303,878

319,279

340,671

319,734

285,888

623,157

577,555

Income before income taxes

146,963

99,062

127,562

160,111

163,112

246,025

311,702

Income tax expense

32,935

22,433

29,628

36,713

36,154

55,368

69,797

Net income

114,028

76,629

97,934

123,398

126,958

190,657

241,905

Less: Preferred dividends

2,372

2,372

2,372

2,372

2,372

4,744

4,744

Net income available to common shareholders

$       111,656

$         74,257

$         95,562

$       121,026

$       124,586

$       185,913

$          237,161









Balance Sheet - Period End Balances






Total assets

$  48,838,660

$  51,693,096

$  48,653,414

$  47,699,660

$  47,747,708

$  48,838,660

$      47,747,708

Total earning assets

44,012,570

46,808,612

43,722,544

42,832,355

43,093,974

44,012,570

43,093,974

Available-for-sale securities

10,254,580

10,877,879

11,944,096

12,441,894

13,450,621

10,254,580

13,450,621

Loans and leases, net of unearned income

32,556,708

31,282,594

30,349,277

29,296,450

28,360,485

32,556,708

28,360,485

Allowance for credit losses (ACL)

466,013

453,727

440,347

433,363

440,112

466,013

440,112

Net book value of acquired loans

7,357,174

7,942,980

8,754,526

8,841,588

9,721,672

7,357,174

9,721,672

Unamortized net discount on acquired loans

37,000

41,748

58,162

58,887

65,350

37,000

65,350

Total deposits

38,701,669

39,406,454

38,956,614

39,003,946

40,189,083

38,701,669

40,189,083

Total deposits and repurchase agreements

39,492,427

40,177,789

39,665,350

39,682,280

40,838,260

39,492,427

40,838,260

Other short-term borrowings

3,500,226

5,700,228

3,300,231

2,495,000

1,200,000

3,500,226

1,200,000

Subordinated and long-term debt

449,733

462,144

462,554

463,291

465,073

449,733

465,073

Total shareholders' equity

4,485,850

4,490,417

4,311,374

4,166,925

4,437,925

4,485,850

4,437,925

Total shareholders' equity, excluding AOCI (1)

5,648,925

5,572,303

5,533,912

5,464,737

5,374,270

5,648,925

5,374,270

Common shareholders' equity

4,318,857

4,323,424

4,144,381

3,999,932

4,270,932

4,318,857

4,270,932

Common shareholders' equity, excluding AOCI (1)

$    5,481,932

$    5,405,310

$    5,366,919

$    5,297,744

$    5,207,277

$    5,481,932

$        5,207,277









Balance Sheet - Average Balances






Total assets

$  49,067,121

$  48,652,201

$  47,790,494

$  47,595,557

$  47,064,829

$  48,860,807

$      47,370,639

Total earning assets

44,231,755

43,819,715

42,976,050

43,079,481

42,688,497

44,026,874

43,099,548

Available-for-sale securities

10,655,791

11,354,457

12,156,803

13,252,828

13,941,127

11,003,194

14,502,705

Loans and leases, net of unearned income

31,901,096

30,891,640

29,812,924

28,872,156

27,848,097

31,399,156

27,479,463

Total deposits

38,934,793

38,904,048

38,372,354

39,600,886

39,396,028

38,919,505

39,977,335

Total deposits and repurchase agreements

39,708,963

39,632,023

39,033,328

40,256,109

40,062,095

39,670,703

40,657,308

Other short-term borrowings

3,541,985

3,326,196

3,251,947

1,608,587

1,294,946

3,434,688

716,464

Subordinated and long-term debt

455,617

462,385

462,927

464,843

465,447

458,982

466,141

Total shareholders' equity

4,539,353

4,396,461

4,215,585

4,506,655

4,523,189

4,468,302

4,791,221

Common shareholders' equity

$    4,372,360

$    4,229,468

$    4,048,592

$    4,339,662

$    4,356,196

$    4,301,309

$        4,624,228









Nonperforming Assets:







Nonaccrual loans and leases

$       157,243

$       160,615

$         98,745

$         89,931

$         89,368

$       157,243

$            89,368

Loans and leases 90+ days past due, still accruing

4,412

5,164

2,068

11,984

19,682

4,412

19,682

Accruing TDR (2)

—

—

8,598

16,200

7,385

—

7,385

Non-performing loans and leases (NPL)

161,655

165,779

109,411

118,115

116,435

161,655

116,435

Other real estate owned and other assets

2,857

5,327

6,725

8,376

14,399

2,857

14,399

Non-performing assets (NPA)

$       164,512

$       171,106

$       116,136

$       126,491

$       130,834

$       164,512

$          130,834


(1)

Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 21 - 24.

(2)

Cadence elected to adopt the new accounting guidance effective January 1, 2023, which eliminates the TDR recognition and measurement guidance via the modified retrospective transition method (ASU 2022-02). As such, there is no TDR reporting effective January 1, 2023.

Table 2

Selected Financial Ratios


Quarter Ended

Year-to-date

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

Financial Ratios and Other Data:







Return on average assets (2)

0.93 %

0.64 %

0.81 %

1.03 %

1.08 %

0.79 %

1.03 %

Adjusted return on average assets (1)(2)

0.97

1.06

1.21

1.22

1.16

1.02

1.11

Return on average common shareholders' equity (2)

10.24

7.12

9.36

11.06

11.47

8.72

10.34

Adjusted return on average common shareholders' equity (1)(2)

10.72

11.93

14.00

13.13

12.36

11.31

11.15

Return on average tangible common equity (1)(2)

16.05

11.40

15.42

17.40

18.11

13.80

15.81

Adjusted return on average tangible common equity (1)(2)

16.80

19.10

23.04

20.66

19.50

17.91

17.05

Pre-tax pre-provision net revenue to total average assets (1)(2)

1.32

0.91

1.11

1.33

1.40

1.12

1.33

Adjusted pre-tax pre-provision net revenue to total average assets (1)(2)

1.38

1.46

1.62

1.58

1.51

1.42

1.43

Net interest margin-fully taxable equivalent

3.03

3.29

3.33

3.28

3.06

3.16

2.99

Net interest rate spread-fully taxable equivalent

2.29

2.65

2.84

3.05

2.94

2.46

2.87

Efficiency ratio fully tax equivalent (1)

65.08

74.36

71.67

66.49

63.38

69.53

64.72

Adjusted efficiency ratio fully tax equivalent (1)

63.62

63.46

58.69

60.33

60.46

63.54

61.98

Loan/deposit ratio

84.12 %

79.38 %

77.91 %

75.11 %

70.57 %

84.12 %

70.57 %

Full time equivalent employees

6,479

6,567

6,572

6,629

6,659

6,479

6,659









Credit Quality Ratios:







Net charge-offs (recoveries) to average loans and leases (2)

0.16 %

0.02 %

(0.07) %

0.09 %

(0.02) %

0.09 %

(0.01) %

Provision for credit losses to average loans and leases (2)

0.19

0.13

0.08

—

0.01

0.16

0.01

ACL to loans and leases, net

1.43

1.45

1.45

1.48

1.55

1.43

1.55

ACL to NPL

288.28

273.69

402.47

366.90

377.99

288.28

377.99

NPL to loans and leases, net

0.50

0.53

0.36

0.40

0.41

0.50

0.41

NPA to total assets

0.34

0.33

0.24

0.27

0.27

0.34

0.27









Equity Ratios:







Total shareholders' equity to total assets

9.19 %

8.69 %

8.86 %

8.74 %

9.29 %

9.19 %

9.29 %

Total common shareholders' equity to total assets

8.84

8.36

8.52

8.39

8.94

8.84

8.94

Tangible common shareholders' equity to tangible assets (1)

5.80

5.46

5.42

5.24

5.82

5.80

5.82

Tangible common shareholders' equity to tangible assets, excluding
AOCI (1)

8.06

7.46

7.82

7.84

7.70

8.06

7.70









Capital Adequacy (3):







Common Equity Tier 1 capital

10.1 %

10.1 %

10.2 %

10.3 %

10.3 %

10.1

10.3 %

Tier 1 capital

10.5

10.6

10.7

10.7

10.8

10.5

10.8

Total capital

12.7

12.8

12.8

12.8

13.0

12.7

13.0

Tier 1 leverage capital

8.5

8.4

8.4

8.4

8.4

8.5

8.4


(1)

Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 21 - 24.

(2)

Annualized.

(3)

Current quarter regulatory capital ratios are estimated.

Table 3

Selected Financial Information


Quarter Ended

Year-to-date

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

Common Share Data:







Diluted earnings per share

$         0.61

$         0.40

$         0.52

$         0.66

$         0.68

$      1.01

$      1.28

Adjusted earnings per share (1)

0.64

0.68

0.78

0.78

0.73

1.31

1.38

Cash dividends per share

0.235

0.235

0.22

0.22

0.22

0.470

0.44

Book value per share

23.65

23.67

22.72

21.92

23.41

23.65

23.41

Tangible book value per share (1)

15.01

14.99

13.99

13.25

14.73

15.01

14.73

Market value per share (last)

19.88

20.76

24.66

25.41

23.48

19.88

23.48

Market value per share (high)

21.73

28.18

29.41

28.54

29.75

28.18

34.24

Market value per share (low)

16.95

19.24

22.43

22.04

22.82

16.95

22.82

Market value per share (avg)

19.73

24.88

26.84

25.68

25.74

22.32

28.47

Dividend payout ratio

38.52 %

58.75 %

42.31 %

33.33 %

32.44 %

46.53 %

34.38 %

Adjusted dividend payout ratio (1)

36.72 %

34.56 %

28.21 %

28.21 %

30.14 %

35.88 %

31.88 %

Total shares outstanding

182,626,229

182,684,578

182,437,265

182,438,780

182,461,786

182,626,229

182,461,786

Average shares outstanding - diluted

183,631,570

183,908,798

183,762,008

183,313,831

183,711,402

183,770,759

185,476,720









Yield/Rate:







(Taxable equivalent basis)







Loans, loans held for sale, and leases

6.24 %

6.00 %

5.54 %

4.82 %

4.29 %

6.13 %

4.25 %

Loans, loans held for sale, and leases
excluding net accretion on acquired loans and
leases

6.18

5.87

5.41

4.70

4.12

6.03

4.04

Available-for-sale securities:







Taxable

2.09

1.80

1.54

1.44

1.37

1.94

1.31

Tax-exempt

3.21

3.21

3.28

3.05

2.95

3.21

2.75

Other investments

5.05

4.64

3.69

2.32

1.03

4.85

0.55

Total interest earning assets and revenue

5.21

4.88

4.38

3.74

3.29

5.05

3.20

Deposits

1.87

1.28

0.76

0.35

0.17

1.57

0.16

Interest bearing demand and money market

2.49

2.03

1.34

0.60

0.26

2.26

0.23

Savings

0.51

0.36

0.31

0.17

0.06

0.43

0.06

Time

3.69

2.24

1.17

0.56

0.47

3.15

0.49

Total interest bearing deposits

2.58

1.86

1.17

0.53

0.26

2.23

0.24

Fed funds purchased, securities sold under
agreement to repurchase and other

3.97

3.73

3.04

1.65

0.43

3.85

0.27

Short-term FHLB borrowings

5.24

4.66

3.84

2.05

0.98

4.91

0.97

Short-term BTFP borrowings

5.15

—

—

—

—

5.15

—

Total interest bearing deposits and short-term
borrowings

2.90

2.20

1.50

0.64

0.29

2.56

0.26

Long-term debt

4.23

4.27

4.15

4.16

4.14

4.25

4.16

Total interest bearing liabilities

2.92

2.23

1.54

0.70

0.36

2.59

0.32

Interest bearing liabilities to interest earning
assets

74.57 %

71.24 %

68.42 %

66.19 %

65.25 %

72.92 %

64.86 %

Net interest income tax equivalent adjustment
(in thousands)

$       1,063

$       1,051

$       1,071

$       1,052

$       1,063

$     2,114

$     2,090


(1)

Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 21 - 24.

Table 4

Consolidated Balance Sheets

(Unaudited)


As of

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

ASSETS




Cash and due from banks

$         722,625

$         660,431

$         756,906

$         693,999

$         770,293

Interest bearing deposits with other banks and Federal
funds sold

1,008,048

4,452,029

1,241,246

895,630

1,069,410

Available-for-sale securities, at fair value

10,254,580

10,877,879

11,944,096

12,441,894

13,450,621

Loans and leases, net of unearned income

32,556,708

31,282,594

30,349,277

29,296,450

28,360,485

Allowance for credit losses

466,013

453,727

440,347

433,363

440,112

Net loans and leases

32,090,695

30,828,867

29,908,930

28,863,087

27,920,373

Loans held for sale, at fair value

193,234

196,110

187,925

198,381

213,458

Premises and equipment, net

830,184

826,439

817,430

802,382

782,728

Goodwill

1,459,302

1,459,302

1,458,795

1,449,511

1,444,209

Other intangible assets, net

119,098

125,724

132,764

132,953

138,370

Bank-owned life insurance

634,985

631,174

630,046

624,696

601,601

Other assets

1,525,909

1,635,141

1,575,276

1,597,127

1,356,645

Total Assets

$    48,838,660

$    51,693,096

$    48,653,414

$    47,699,660

$    47,747,708

LIABILITIES




Deposits:




Demand: Noninterest bearing

$    10,223,508

$    11,517,037

$    12,731,065

$    13,839,649

$    14,012,529

Interest bearing

18,088,711

18,146,678

19,040,131

18,033,648

19,032,983

 Savings

2,983,709

3,226,685

3,473,746

3,676,340

3,735,925

 Time deposits

7,405,741

6,516,054

3,711,672

3,454,309

3,407,646

Total deposits

38,701,669

39,406,454

38,956,614

39,003,946

40,189,083

Securities sold under agreement to repurchase

790,758

771,335

708,736

678,334

649,177

Other short-term borrowings

3,500,226

5,700,228

3,300,231

2,495,000

1,200,000

Subordinated and long-term debt

449,733

462,144

462,554

463,291

465,073

Other liabilities

910,424

862,518

913,905

892,164

806,450

Total Liabilities

44,352,810

47,202,679

44,342,040

43,532,735

43,309,783

SHAREHOLDERS' EQUITY




Preferred stock

166,993

166,993

166,993

166,993

166,993

Common stock

456,566

456,711

456,093

456,097

456,154

Capital surplus

2,724,021

2,715,981

2,709,391

2,695,646

2,686,031

Accumulated other comprehensive loss

(1,163,075)

(1,081,886)

(1,222,538)

(1,297,812)

(936,345)

Retained earnings

2,301,345

2,232,618

2,201,435

2,146,001

2,065,092

Total Shareholders' Equity

4,485,850

4,490,417

4,311,374

4,166,925

4,437,925

Total Liabilities & Shareholders' Equity

$    48,838,660

$    51,693,096

$    48,653,414

$    47,699,660

$    47,747,708

Table 5

Consolidated Quarterly Average Balance Sheets

(Unaudited)

 

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

ASSETS




Cash and due from banks

$         610,948

$         695,263

$         617,634

$         654,589

$         640,672

Interest bearing deposits with other banks and Federal
funds sold

1,607,830

1,526,755

943,806

851,185

751,972

Available-for-sale securities, at fair value

10,655,791

11,354,457

12,156,803

13,252,828

13,941,127

Loans and leases, net of unearned income

31,901,096

30,891,640

29,812,924

28,872,156

27,848,097

Allowance for credit losses

457,027

442,486

434,785

441,042

438,752

Net loans and leases

31,444,069

30,449,154

29,378,139

28,431,114

27,409,345

Loans held for sale, at fair value

67,038

46,863

62,517

103,312

147,301

Premises and equipment, net

829,938

824,190

802,771

809,799

784,247

Goodwill

1,459,302

1,459,127

1,457,120

1,444,331

1,407,452

Other intangible assets, net

123,313

128,957

132,091

136,149

188,897

Bank-owned life insurance

632,489

630,601

625,938

613,973

599,912

Other assets

1,636,403

1,536,834

1,613,675

1,298,277

1,193,904

Total Assets

$    49,067,121

$    48,652,201

$    47,790,494

$    47,595,557

$    47,064,829

LIABILITIES




Deposits:




Demand: Noninterest bearing

$    10,725,108

$    12,203,079

$    13,344,152

$    13,816,796

$    13,970,163

Interest bearing

17,997,618

19,009,345

17,866,198

18,675,214

18,238,571

 Savings

3,088,174

3,363,236

3,555,911

3,720,218

3,723,193

 Time deposits

7,123,893

4,328,388

3,606,093

3,388,658

3,464,101

Total deposits

38,934,793

38,904,048

38,372,354

39,600,886

39,396,028

Securities sold under agreement to repurchase

774,170

727,975

660,974

655,223

666,067

Other short-term borrowings

3,541,985

3,326,196

3,251,947

1,608,587

1,294,946

Subordinated and long-term debt

455,617

462,385

462,927

464,843

465,447

Other liabilities

821,203

835,136

826,707

759,363

719,152

Total Liabilities

44,527,768

44,255,740

43,574,909

43,088,902

42,541,640

SHAREHOLDERS' EQUITY




Preferred stock

166,993

166,993

166,993

166,993

166,993

Common stock

456,755

456,354

456,095

456,130

457,713

Capital surplus

2,717,866

2,710,501

2,701,121

2,689,340

2,694,546

Accumulated other comprehensive loss

(1,087,389)

(1,174,723)

(1,302,388)

(922,673)

(821,034)

Retained earnings

2,285,128

2,237,336

2,193,764

2,116,865

2,024,971

Total Shareholders' Equity

4,539,353

4,396,461

4,215,585

4,506,655

4,523,189

Total Liabilities & Shareholders' Equity

$    49,067,121

$    48,652,201

$    47,790,494

$    47,595,557

$    47,064,829

Table 6

Consolidated Statements of Income

(Unaudited)


Quarter Ended

Year-to-date

(Dollars in thousands, except per share data)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

INTEREST REVENUE:







Loans and leases

$     496,262

$     457,084

$     414,623

$     349,093

$     296,680

$     953,346

$     578,946

Available-for-sale securities:







Taxable

53,531

48,515

45,807

46,701

46,254

102,046

91,409

Tax-exempt

2,427

2,477

2,547

2,548

2,571

4,904

4,985

Loans held for sale

961

603

1,788

2,241

2,118

1,564

3,525

Short-term investments

20,238

17,453

8,783

4,976

1,932

37,691

2,620

Total interest revenue

573,419

526,132

473,548

405,559

349,555

1,099,551

681,485

INTEREST EXPENSE:







Interest bearing demand deposits and money market accounts

111,938

95,344

60,253

28,175

11,717

207,282

21,459

Savings

3,915

3,014

2,769

1,597

590

6,929

1,158

Time deposits

65,517

23,950

10,651

4,797

4,041

89,467

8,805

Federal funds purchased and securities sold under agreement to
repurchase

7,656

7,667

8,365

3,944

906

15,323

1,122

Short-term debt

46,036

37,015

27,302

6,821

2,734

83,051

2,741

Subordinated and long-term debt

4,806

4,872

4,848

4,871

4,801

9,678

9,612

Total interest expense

239,868

171,862

114,188

50,205

24,789

411,730

44,897

Net interest revenue

333,551

354,270

359,360

355,354

324,766

687,821

636,588

Provision for credit losses

15,000

10,000

6,000

—

1,000

25,000

1,000

Net interest revenue, after provision for credit losses

318,551

344,270

353,360

355,354

323,766

662,821

635,588









NONINTEREST REVENUE:







Mortgage banking

8,356

6,076

2,571

9,080

11,446

14,432

33,209

Credit card, debit card and merchant fees

12,617

11,851

15,750

14,497

16,593

24,469

27,914

Deposit service charges

17,208

16,482

16,863

19,134

18,291

33,690

37,480

Security gains (losses), net

69

(51,261)

(595)

(139)

1,446

(51,192)

349

Insurance commissions

45,603

39,606

34,679

39,876

39,994

85,210

75,721

Wealth management

21,741

21,532

19,199

19,335

20,213

43,272

41,950

Other noninterest income

26,696

29,785

26,406

22,708

17,251

56,480

37,046

Total noninterest revenue

132,290

74,071

114,873

124,491

125,234

206,361

253,669









NONINTEREST EXPENSE:







Salaries and employee benefits

190,854

195,702

183,918

191,193

182,094

386,557

369,913

Occupancy and equipment

29,590

29,113

30,539

30,610

30,129

58,703

58,399

Data processing and software

28,073

31,869

29,289

28,079

29,081

59,942

56,564

Merger expense

137

5,075

20,276

19,690

7,274

5,212

11,248

Amortization of intangibles

6,626

5,005

5,251

5,417

3,042

11,631

9,822

Deposit insurance assessments

7,705

8,361

5,931

4,499

4,945

16,066

8,281

Pension settlement expense

—

—

6,127

2,896

—

—

—

Other noninterest expense

40,893

44,154

59,340

37,350

29,323

85,046

63,328

Total noninterest expense

303,878

319,279

340,671

319,734

285,888

623,157

577,555

Income before income taxes

146,963

99,062

127,562

160,111

163,112

246,025

311,702

Income tax expense

32,935

22,433

29,628

36,713

36,154

55,368

69,797

Net income

114,028

76,629

97,934

123,398

126,958

190,657

241,905

Less: Preferred dividends

2,372

2,372

2,372

2,372

2,372

4,744

4,744

Net income available to common shareholders

$     111,656

$       74,257

$       95,562

$     121,026

$     124,586

$     185,913

$     237,161

Net income per common share: Diluted

$          0.61

$          0.40

$          0.52

$          0.66

$          0.68

$          1.01

$          1.28

Table 7

Selected Loan Portfolio Data

(Unaudited)


Quarter Ended

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

LOAN AND LEASE PORTFOLIO:




Commercial and industrial




Non-real estate

$      9,636,481

$      9,159,387

$      8,985,547

$      8,803,381

$      8,526,481

Owner occupied

4,358,000

4,278,468

4,068,659

3,943,442

3,851,336

Total commercial and industrial

13,994,481

13,437,855

13,054,206

12,746,823

12,377,817

Commercial real estate




Construction, acquisition and development

3,744,114

3,703,137

3,547,986

3,244,425

2,982,119

Income producing

5,596,134

5,368,676

5,150,680

5,098,470

5,054,232

Total commercial real estate

9,340,248

9,071,813

8,698,666

8,342,895

8,036,351

Consumer




Residential mortgages

8,989,614

8,536,032

8,319,242

7,924,378

7,662,621

Other consumer

232,365

236,894

277,163

282,354

283,696

Total consumer

9,221,979

8,772,926

8,596,405

8,206,732

7,946,317

Total loans and leases, net of unearned income

$    32,556,708

$    31,282,594

$    30,349,277

$    29,296,450

$    28,360,485






NON-PERFORMING ASSETS




Non-performing Loans and Leases




Nonaccrual Loans and Leases




Commercial and industrial




Non-real estate

$           72,592

$           65,783

$           23,907

$           23,916

$           34,233

Owner occupied

7,541

9,089

7,944

8,327

9,567

Total commercial and industrial

80,133

74,872

31,851

32,243

43,800

Commercial real estate




Construction, acquisition and development

4,496

1,850

2,974

1,823

2,125

Income producing

19,205

20,616

7,331

8,580

8,750

Total commercial real estate

23,701

22,466

10,305

10,403

10,875

Consumer




Residential mortgages

53,171

62,748

55,892

46,671

34,172

Other consumer

238

529

697

614

521

Total consumer

53,409

63,277

56,589

47,285

34,693

Total nonaccrual loans and leases

$         157,243

$         160,615

$           98,745

$           89,931

$           89,368






Loans and leases 90+ days past due, still accruing

4,412

5,164

2,068

11,984

19,682

Restructured loans and leases, still accruing

—

—

8,598

16,200

7,385

Total non-performing loans and leases

$         161,655

$         165,779

$         109,411

$         118,115

$         116,435






Other real estate owned and repossessed assets

2,857

5,327

6,725

8,376

14,399

Total non-performing assets

$         164,512

$         171,106

$         116,136

$         126,491

$         130,834






Additions to nonaccrual loans and leases during the
quarter (excluding acquisitions)

$           57,764

$           89,779

$           38,945

$           34,432

$           21,312

Table 8

Allowance for Credit Losses

(Unaudited)


Quarter Ended

(Dollars in thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

ALLOWANCE FOR CREDIT LOSSES:




Balance, beginning of period

$      453,727

$      440,347

$      433,363

$      440,112

$      438,738

Charge-offs:




Commercial and industrial

(13,598)

(2,853)

(2,295)

(11,551)

(2,170)

Commercial real estate

(126)

(1,988)

(426)

(1,116)

(275)

Consumer

(1,916)

(2,189)

(2,650)

(2,653)

(1,941)

Total loans charged-off

(15,640)

(7,030)

(5,371)

(15,320)

(4,386)

Recoveries:




Commercial and industrial

1,360

3,399

6,405

3,657

3,217

Commercial real estate

618

779

2,851

3,509

1,076

Consumer

948

977

1,099

1,405

1,467

Total recoveries

2,926

5,155

10,355

8,571

5,760

Net (charge-offs) recoveries

(12,714)

(1,875)

4,984

(6,749)

1,374

Adoption of new ASU related to modified loans (3)

—

255

—

—

—

Provision for credit losses related to loans and leases

25,000

15,000

2,000

—

—

Total provision for loans and leases

25,000

15,000

2,000

—

—

Balance, end of period

$      466,013

$      453,727

$      440,347

$      433,363

$      440,112






Average loans and leases, net of unearned income,
for period

$ 31,901,096

$ 30,891,640

$ 29,812,924

$ 28,872,156

$ 27,848,097

Ratio: Net charge-offs (recoveries) to average loans
and leases (2)

0.16 %

0.02 %

(0.07) %

0.09 %

(0.02) %






RESERVE FOR UNFUNDED COMMITMENTS (1)




Balance, beginning of period

$        23,551

$        28,551

$        24,551

$        24,551

$        23,551

(Reversal) provision for credit losses for unfunded
commitments

(10,000)

(5,000)

4,000

—

1,000

Balance, end of period

$        13,551

$        23,551

$        28,551

$        24,551

$        24,551


(1)

The Reserve for Unfunded Commitments is classified in other liabilities on the consolidated balance sheets.

(2)

Annualized.

(3)

Cadence elected to adopt the new accounting guidance effective January 1, 2023, which eliminates the TDR recognition and measurement guidance via the modified retrospective transition method (ASU 2022-02). As such, there is no TDR reporting effective January 1, 2023.

Table 9

Loan Portfolio by Grades

(Unaudited)


June 30, 2023

(In thousands)

Pass

Special
Mention

Substandard

Doubtful

Impaired

Purchased
Credit
Deteriorated
(Loss)

Total

LOAN AND LEASE PORTFOLIO:






Commercial and industrial






Non-real estate

$  9,126,727

$     160,652

$     311,119

$              —

$       34,027

$         3,956

$  9,636,481

Owner occupied

4,276,518

29,991

48,068

—

1,762

1,661

4,358,000

Total commercial and industrial

13,403,245

190,643

359,187

—

35,789

5,617

13,994,481

Commercial real estate






Construction, acquisition and development

3,711,414

20,339

12,158

203

—

—

3,744,114

Income producing

5,390,435

63,323

113,021

—

10,760

18,595

5,596,134

Total commercial real estate

9,101,849

83,662

125,179

203

10,760

18,595

9,340,248

Consumer (1)






Residential mortgages

8,927,494

—

59,267

—

1,279

1,574

8,989,614

Other consumer

231,978

—

387

—

—

—

232,365

Total consumer

9,159,472

—

59,654

—

1,279

1,574

9,221,979

Total loans and leases, net of unearned
income

$  31,664,566

$     274,305

$     544,020

$            203

$       47,828

$       25,786

$  32,556,708


(1)

During the second quarter of 2023, the Company began determining the risk rating classification of its Consumer portfolio based on nonaccrual and delinquency status in accordance with the Uniform Retail Credit Classification guidance and industry norms, which contributed to a lower number of criticized and classified loans compared to previous periods. As a result of the modification, current period results are not directly comparable to prior periods.

March 31, 2023

(In thousands)

Pass

Special
Mention

Substandard

Impaired

Purchased
Credit
Deteriorated
(Loss)

Total

LOAN AND LEASE PORTFOLIO:





Commercial and industrial





Non-real estate

$    8,744,629

$       107,218

$       280,192

$         23,316

$           4,032

$    9,159,387

Owner occupied

4,201,364

11,928

59,764

3,739

1,673

4,278,468

Total commercial and industrial

12,945,993

119,146

339,956

27,055

5,705

13,437,855

Commercial real estate





Construction, acquisition and development

3,656,934

27,041

19,162

—

—

3,703,137

Income producing

5,191,260

36,598

116,784

5,476

18,558

5,368,676

Total commercial real estate

8,848,194

63,639

135,946

5,476

18,558

9,071,813

Consumer





Residential mortgages

8,361,116

—

173,342

—

1,574

8,536,032

Other consumer

232,637

—

4,257

—

—

236,894

Total consumer

8,593,753

—

177,599

—

1,574

8,772,926

Total loans and leases, net of unearned income

$  30,387,940

$       182,785

$       653,501

$         32,531

$         25,837

$  31,282,594

Table 10

Geographical Loan Information

(Unaudited)


June 30, 2023

(Dollars in thousands)

Alabama

Arkansas

Florida

Georgia

Louisiana

Mississippi

Missouri

Tennessee

Texas

Other

Total

LOAN AND LEASE PORTFOLIO:










Commercial and industrial










Non-real estate

$  377,605

$  153,433

$  535,035

$  553,110

$  324,964

$  508,159

$    80,894

$  348,478

$ 3,961,249

$  2,793,554

$  9,636,481

Owner occupied

358,089

244,598

304,871

315,771

281,270

596,732

91,474

169,620

1,634,523

361,052

4,358,000

Total commercial and industrial

735,694

398,031

839,906

868,881

606,234

1,104,891

172,368

518,098

5,595,772

3,154,606

13,994,481

Commercial real estate










Construction, acquisition and development

200,551

81,766

261,666

404,301

48,211

199,099

44,273

146,479

1,874,670

483,098

3,744,114

Income producing

454,443

279,541

371,717

595,999

211,076

436,653

190,959

335,009

1,995,521

725,216

5,596,134

Total commercial real estate

654,994

361,307

633,383

1,000,300

259,287

635,752

235,232

481,488

3,870,191

1,208,314

9,340,248

Consumer










Residential mortgages

1,180,606

382,172

622,179

398,080

457,968

1,127,557

168,403

715,992

3,677,451

259,206

8,989,614

Other consumer

30,950

17,757

5,344

6,915

11,364

85,071

1,556

16,206

51,358

5,844

232,365

Total consumer

1,211,556

399,929

627,523

404,995

469,332

1,212,628

169,959

732,198

3,728,809

265,050

9,221,979

Total loans and leases, net of
unearned income

$  2,602,244

$  1,159,267

$  2,100,812

$  2,274,176

$  1,334,853

$  2,953,271

$  577,559

$  1,731,784

$  13,194,772

$  4,627,970

$  32,556,708












Loan growth, excluding loans acquired
during the quarter ($)

$    19,370

$    14,264

$  149,998

$      8,562

$      8,919

$    52,151

$    17,488

$    57,345

$  397,089

$  548,928

$  1,274,114

Loan growth, excluding loans acquired
during the quarter (%) (annualized)

3.01 %

5.00 %

30.84 %

1.52 %

2.70 %

7.21 %

12.52 %

13.74 %

12.45 %

53.98 %

16.34 %

March 31, 2023

(Dollars in thousands)

Alabama

Arkansas

Florida

Georgia

Louisiana

Mississippi

Missouri

Tennessee

Texas

Other

Total

LOAN AND LEASE PORTFOLIO:










Commercial and industrial










Non-real estate

$      370,464

$      148,872

$      471,198

$      537,753

$      329,353

$      530,064

$        74,408

$      331,891

$   3,958,744

$   2,406,640

$   9,159,387

Owner occupied

384,004

247,806

291,558

319,831

284,527

578,141

92,030

173,729

1,597,745

309,097

4,278,468

Total commercial and industrial

754,468

396,678

762,756

857,584

613,880

1,108,205

166,438

505,620

5,556,489

2,715,737

13,437,855

Commercial real estate










Construction, acquisition and development

202,210

80,681

223,119

409,773

45,899

213,740

40,319

139,995

1,836,582

510,819

3,703,137

Income producing

432,113

273,397

377,826

616,799

214,952

424,004

193,518

340,114

1,907,173

588,780

5,368,676

Total commercial real estate

634,323

354,078

600,945

1,026,572

260,851

637,744

233,837

480,109

3,743,755

1,099,599

9,071,813

Consumer










Residential mortgages

1,163,319

377,180

580,893

374,343

439,998

1,070,648

158,404

672,393

3,441,995

256,859

8,536,032

Other consumer

30,764

17,067

6,220

7,115

11,205

84,523

1,392

16,317

55,444

6,847

236,894

Total consumer

1,194,083

394,247

587,113

381,458

451,203

1,155,171

159,796

688,710

3,497,439

263,706

8,772,926

Total loans and leases, net of
unearned income

$   2,582,874

$   1,145,003

$   1,950,814

$   2,265,614

$   1,325,934

$   2,901,120

$      560,071

$   1,674,439

$ 12,797,683

$   4,079,042

$ 31,282,594

Table 11

Noninterest Revenue and Expense

(Unaudited)


Quarter Ended

Year-to-date

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

NONINTEREST REVENUE:







Mortgage banking excl. MSR and MSR
hedge market value adjustment

$        6,774

$        8,379

$        5,408

$        4,746

$        6,754

$      15,153

$      14,487

MSR and MSR hedge market value
adjustment

1,582

(2,303)

(2,837)

4,334

4,692

(721)

18,722

Credit card, debit card and merchant fees

12,617

11,851

15,750

14,497

16,593

24,469

27,914

Deposit service charges

17,208

16,482

16,863

19,134

18,291

33,690

37,480

Security gains (losses), net

69

(51,261)

(595)

(139)

1,446

(51,192)

349

Insurance commissions

45,603

39,606

34,679

39,876

39,994

85,210

75,721

Trust income

10,084

10,553

9,113

9,011

9,129

20,637

19,190

Annuity fees

1,702

2,192

951

600

753

3,893

1,357

Brokerage commissions and fees

9,955

8,787

9,135

9,724

10,331

18,742

21,403

Bank-owned life insurance

3,811

3,647

5,436

3,537

3,285

7,458

6,621

Other miscellaneous income

22,885

26,138

20,970

19,171

13,966

49,022

30,425

Total noninterest revenue

$    132,290

$      74,071

$    114,873

$    124,491

$    125,234

$    206,361

$    253,669









NONINTEREST EXPENSE:







Salaries and employee benefits

$    190,854

$    195,702

$    183,918

$    191,193

$    182,094

$    386,557

$    369,913

Occupancy and equipment

29,590

29,113

30,539

30,610

30,129

58,703

58,399

Deposit insurance assessments

7,705

8,361

5,931

4,499

4,945

16,066

8,281

Pension settlement expense

—

—

6,127

2,896

—

—

—

Advertising and public relations

5,708

4,331

28,659

4,085

4,417

10,039

9,010

Foreclosed property expense (income)

323

980

400

1,093

(1,104)

1,303

(664)

Telecommunications

1,541

1,717

1,714

1,882

1,984

3,258

3,817

Travel and entertainment

3,898

3,508

5,310

4,149

3,412

7,406

6,223

Data processing and software

28,073

31,869

29,289

28,079

29,081

59,942

56,564

Professional, consulting and outsourcing

5,519

4,417

3,598

2,724

3,769

9,936

7,507

Amortization of intangibles

6,626

5,005

5,251

5,417

3,042

11,631

9,822

Legal

1,908

1,491

758

2,054

1,463

3,399

3,256

Merger expense

137

5,075

20,276

19,690

7,274

5,212

11,248

Postage and shipping

2,070

2,452

1,925

2,098

2,022

4,522

4,056

Other miscellaneous expense

19,926

25,258

16,976

19,265

13,360

45,183

30,123

Total noninterest expense

$    303,878

$    319,279

$    340,671

$    319,734

$    285,888

$    623,157

$    577,555









INSURANCE COMMISSIONS:







Property and casualty commissions

$      34,273

$      28,202

$      24,682

$      30,021

$      29,220

$      62,475

$      55,072

Life and health commissions

7,847

8,024

7,151

7,254

7,935

15,872

15,078

Risk management income

703

657

887

654

674

1,360

1,431

Other

2,780

2,723

1,959

1,947

2,165

5,503

4,140

Total insurance commissions

$      45,603

$      39,606

$      34,679

$      39,876

$      39,994

$      85,210

$      75,721

Table 12

Average Balance and Yields

(Unaudited)


Quarter Ended

June 30, 2023

March 31, 2023

June 30, 2022

(Dollars in thousands)

Average

Balance

Income/
Expense

Yield/

Rate

Average

Balance

Income/
Expense

Yield/

Rate

Average

Balance

Income/
Expense

Yield/

Rate

ASSETS










Interest-earning assets:










Loans and leases, excluding
accretion

$ 31,901,096

$   491,473

6.17 %

$  30,891,640

$   447,449

5.87 %

$ 27,848,097

$   285,345

4.11 %

Accretion income on acquired
loans

5,207

0.07

10,028

0.13

11,714

0.17

Loans held for sale

67,038

961

5.75

46,863

603

5.22

147,301

2,118

5.77

Investment securities












Taxable

10,272,425

53,531

2.09

10,957,786

48,515

1.80

13,499,222

46,254

1.37

Tax-exempt

383,366

3,072

3.21

396,671

3,135

3.21

441,905

3,255

2.95

Total investment securities

10,655,791

56,603

2.13

11,354,457

51,650

1.84

13,941,127

49,509

1.42

Other investments

1,607,830

20,238

5.05

1,526,755

17,453

4.64

751,972

1,932

1.03

Total interest-earning assets

44,231,755

574,482

5.21 %

43,819,715

527,183

4.88 %

42,688,497

350,618

3.29 %

Other assets

5,292,393


5,274,972


4,815,084

Allowance for credit losses

457,027


442,486


438,752

Total assets

$ 49,067,121


$  48,652,201


$ 47,064,829













LIABILITIES AND
SHAREHOLDERS' EQUITY










Interest-bearing liabilities:










Interest bearing demand and
money market

$ 17,997,618

$   111,938

2.49 %

$  19,009,345

$     95,344

2.03 %

$ 18,238,571

11,717

0.26 %

Savings deposits

3,088,174

3,915

0.51

3,363,236

3,014

0.36

3,723,193

590

0.06

Time deposits

7,123,893

65,517

3.69

4,328,388

23,950

2.24

3,464,101

4,041

0.47

Total interest-bearing
deposits

28,209,685

181,370

2.58

26,700,969

122,308

1.86

25,425,865

16,348

0.26

Fed funds purchased, securities
sold under agreement to
repurchase and other

$     774,170

$       7,658

3.97

$   832,831

$       7,669

3.73

$     843,705

907

0.43

Short-term FHLB borrowings

2,388,139

31,219

5.24

3,221,340

37,013

4.66

1,117,308

2,733

0.98

  Short-term BTFP borrowings

1,153,846

14,815

5.15

—

—

—

—

—

—

Long-term borrowings

455,617

4,806

4.23

462,385

4,872

4.27

465,447

4,801

4.14

Total interest-bearing
liabilities

32,981,457

239,868

2.92 %

31,217,525

171,862

2.23 %

27,852,325

24,789

0.36 %

Noninterest-bearing liabilities:










Demand deposits

10,725,108


12,203,079


13,970,163

Other liabilities

821,203


835,136


719,152

Total liabilities

44,527,768


44,255,740


42,541,640

Shareholders' equity

4,539,353


4,396,461


4,523,189

Total liabilities and
shareholders' equity

$ 49,067,121


$  48,652,201


$ 47,064,829

Net interest income/net interest
spread

334,614

2.29 %

355,321

2.65 %

325,829

2.94 %

Net yield on earning assets/net
interest margin

3.03 %


3.29 %


3.06 %

Taxable equivalent adjustment:










Loans and investment securities

(1,063)


(1,051)


(1,063)

Net interest revenue

$   333,551


$   354,270


$   324,766

Table 12

Average Balance and Yields Cont.


For the Six Months Ended

June 30, 2023

June 30, 2022

(Dollars in thousands)

Average

Balance

Income/
Expense

Yield/

Rate

Average

Balance

Income/
Expense

Yield/

Rate

ASSETS






Interest-earning assets:






Loans and leases, excluding accretion

$   31,399,156

$      938,922

6.03 %

$   27,479,463

$      550,254

4.04 %

Accretion income on acquired loans

15,235

0.10

29,455

0.22

Loans held for sale

57,007

1,564

5.53 %

161,893

3,525

4.39 %

Investment securities






Taxable

10,613,212

102,046

1.94 %

14,040,648

91,409

1.31 %

Tax-exempt

389,982

6,207

3.21

462,057

6,312

2.75

Total investment securities

11,003,194

108,253

1.98

14,502,705

97,721

1.36

Other investments

1,567,517

37,691

4.85

955,487

2,620

0.55

Total interest-earning assets

44,026,874

1,101,665

5.05 %

43,099,548

683,575

3.20

Other assets

5,283,730


4,712,599

Allowance for credit losses

449,797


441,508

Total assets

$   48,860,807


$   47,370,639









LIABILITIES AND SHAREHOLDERS'
EQUITY






Interest-bearing liabilities:






Interest bearing demand and money market

$   18,500,687

207,282

2.26 %

$   18,816,584

$        21,459

0.23 %

Savings deposits

3,224,945

6,929

0.43

3,677,698

1,158

0.06

Time deposits

5,733,863

89,467

3.15

3,594,225

8,805

0.49

Total interest-bearing deposits

27,459,495

303,678

2.23

26,088,507

31,422

0.24

 Fed funds purchased, securities sold under
agreement to repurchase and other

803,338

15,327

3.85 %

828,970

1,125

0.27 %

Short-term FHLB borrowings

2,802,438

68,232

4.91

568,785

2,738

0.97

  Short-term BTFP borrowings

580,111

14,815

5.15 %

—

—

—

Long-term borrowings

458,982

9,678

4.25

466,141

9,612

4.16

Total interest-bearing liabilities

32,104,364

411,730

2.59 %

27,952,403

44,897

0.32 %

Noninterest-bearing liabilities:






Demand deposits

11,460,010


13,888,828

Other liabilities

828,131


738,187

Total liabilities

44,392,505


42,579,418

Shareholders' equity

4,468,302


4,791,221

Total liabilities and shareholders' equity

$   48,860,807


$   47,370,639

Net interest income/net interest spread

689,935

2.46 %

638,678

2.87 %

Net yield on earning assets/net interest margin

3.16 %


2.99 %

Taxable equivalent adjustment:






Loans and investment securities

(2,114)


(2,090)

Net interest revenue

$      687,821


$      636,588

Table 13

Selected Additional Data

(Unaudited)


Quarter Ended

(Dollars in thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

MORTGAGE SERVICING RIGHTS ("MSR"):




Fair value, beginning of period

$      106,942

$      109,744

$      112,767

$      102,021

$        92,859

Originations of servicing assets

1,990

1,385

2,283

3,890

4,962

Changes in fair value:




Due to payoffs/paydowns

(2,621)

(1,078)

(2,308)

(3,085)

(3,253)

Due to update in valuation assumptions

5,106

(3,109)

(2,998)

9,941

7,453

Fair value, end of period

$      111,417

$      106,942

$      109,744

$      112,767

$      102,021






MORTGAGE BANKING REVENUE:




Origination

$          3,495

$          3,344

$          1,793

$          1,916

$          4,042

Servicing

5,900

6,113

5,923

5,915

5,965

Payoffs/Paydowns

(2,621)

(1,078)

(2,308)

(3,085)

(3,253)

Total mortgage banking revenue excluding MSR

6,774

8,379

5,408

4,746

6,754

Market value adjustment on MSR

5,106

(3,109)

(2,998)

9,941

7,453

Market value adjustment on MSR Hedge

(3,524)

806

161

(5,607)

(2,761)

Total mortgage banking revenue

$          8,356

$          6,076

$          2,571

$          9,080

$        11,446






Mortgage loans serviced

$   7,550,676

$   7,633,236

$   7,692,744

$   7,723,605

$   7,685,994

MSR/mortgage loans serviced

1.48 %

1.40 %

1.43 %

1.46 %

1.33 %

Quarter Ended

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

AVAILABLE-FOR-SALE SECURITIES, at fair value




U.S. Treasury securities

$             8,959

$           15,849

$      1,458,513

$      1,451,461

$      1,466,313

Obligations of U.S. government agencies

1,112,326

1,358,350

1,477,127

1,820,913

2,133,561

Mortgage-backed securities issued or guaranteed by U.S.
agencies ("MBS"):




Residential pass-through:




Guaranteed by GNMA

79,261

83,649

84,368

87,063

95,955

Issued by FNMA and FHLMC

5,895,704

6,164,294

6,274,970

6,427,152

7,014,715

Other residential mortgage-back securities

157,294

166,449

168,452

181,317

201,440

Commercial mortgage-backed securities

2,357,047

2,427,808

1,881,853

1,880,949

1,899,785

Total MBS

8,489,306

8,842,200

8,409,643

8,576,481

9,211,895

Obligations of states and political subdivisions

433,316

447,731

466,002

444,953

485,400

Other domestic debt securities

71,356

73,557

82,718

98,615

101,313

Foreign debt securities

139,317

140,192

50,093

49,471

52,139

Total available-for-sale securities

$    10,254,580

$    10,877,879

$    11,944,096

$    12,441,894

$    13,450,621

 

Table 14
Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions
(Unaudited)

Management evaluates the Company's capital position and adjusted performance by utilizing certain financial measures not calculated in accordance with GAAP, including adjusted net income, adjusted net income available to common shareholders, pre-tax pre-provision net revenue, adjusted pre-tax pre-provision net revenue, total adjusted noninterest expense, tangible common shareholders' equity to tangible assets, total shareholders' equity (excluding AOCI), common shareholders' equity (excluding AOCI), tangible common shareholders' equity to tangible assets (excluding AOCI), return on average tangible common equity, adjusted return on average tangible common equity, adjusted return on average assets, adjusted return on average common shareholders' equity, pre-tax pre-provision net revenue to total average assets, adjusted pre-tax pre-provision net revenue to total average assets, adjusted earnings per common share, tangible book value per common share, tangible book value per common share, excluding AOCI, efficiency ratio (tax equivalent), adjusted efficiency ratio (tax equivalent), and adjusted dividend payout ratio. The Company has included these non-GAAP financial measures in this release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures: (i) provides important supplemental information that contributes to a proper understanding of the Company's capital position and adjusted performance, (ii) enables a more complete understanding of factors and trends affecting the Company's business and (iii) allows investors to evaluate the Company's performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this news release with other companies' non-GAAP financial measures having the same or similar names.

Quarter Ended

Year-to-date

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

Adjusted net income available to common
shareholders







Net income

$    114,028

$        76,629

$        97,934

$      123,398

$      126,958

$      190,657

$      241,905

Plus: Merger expense

137

5,075

20,276

19,690

7,274

5,212

11,248

Incremental merger related expense

1,671

8,960

32,704

6,912

6,060

10,631

12,631

Gain on extinguishment of debt

(1,140)

—

—

—

—

(1,140)

—

Branch closure and other restructuring
charges

6,219

212

2,254

6

705

6,431

833

Pension settlement expense

—

—

6,127

2,896

—

—

—

Less: Security gains (losses), net

69

(51,261)

(595)

(139)

1,446

(51,192)

349

Tax adjustment

1,602

15,394

14,665

7,016

2,981

16,997

5,767

Adjusted net income

119,244

126,743

145,225

146,025

136,570

245,986

260,501

Less: Preferred dividends

2,372

2,372

2,372

2,372

2,372

4,744

4,744

Adjusted net income available to common
shareholders

$    116,872

$      124,371

$      142,853

$      143,653

$      134,198

$      241,242

$      255,757

Quarter Ended

Year-to-date

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

Pre-tax pre-provision net revenue







Net income

$    114,028

$        76,629

$        97,934

$      123,398

$      126,958

$      190,657

$      241,905

Plus:   Provision for credit losses

15,000

10,000

6,000

—

1,000

25,000

1,000

Income tax expense

32,935

22,433

29,628

36,713

36,154

55,368

69,797

Pre-tax pre-provision net revenue

$    161,963

$      109,062

$      133,562

$      160,111

$      164,112

$      271,025

$      312,702

Quarter Ended

Year-to-date

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

Adjusted pre-tax pre-provision net revenue







Net income

$    114,028

$        76,629

$        97,934

$      123,398

$      126,958

$      190,657

$      241,905

Plus:   Provision for credit losses

15,000

10,000

6,000

—

1,000

25,000

1,000

Merger expense

137

5,075

20,276

19,690

7,274

5,212

11,248

Incremental merger related expense

1,671

8,960

32,704

6,912

6,060

10,631

12,631

Gain on extinguishment of debt

(1,140)

—

—

—

—

(1,140)

—

Branch closure and other restructuring
charges

6,219

212

2,254

6

705

6,431

833

Pension settlement expense

—

—

6,127

2,896

—

—

—

Income tax expense

32,935

22,433

29,628

36,713

36,154

55,368

69,797

Less: Security gains (losses), net

69

(51,261)

(595)

(139)

1,446

(51,192)

349

Adjusted pre-tax pre-provision net revenue

$    168,781

$      174,570

$      195,518

$      189,754

$      176,705

$      343,351

$      337,065

Quarter Ended

Year-to-date

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

Total adjusted noninterest expense







Total noninterest expense

$    303,878

$      319,279

$      340,671

$      319,734

$      285,888

$      623,157

$      577,555

Less:   Merger expense

137

5,075

20,276

19,690

7,274

5,212

11,248

Incremental merger related expense

1,671

8,960

32,704

6,912

6,060

10,631

12,631

Gain on extinguishment of debt

(1,140)

—

—

—

—

(1,140)

—

Branch closure and other restructuring
charges

6,219

212

2,254

6

705

6,431

833

Pension settlement expense

—

—

6,127

2,896

—

—

—

Total adjusted noninterest expense

$    296,991

$      305,032

$      279,310

$      290,230

$      271,849

$      602,023

$      552,843

Quarter Ended

Year-to-date

(In thousands)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

Total tangible assets, excluding AOCI







Total assets

$  48,838,660

$ 51,693,096

$ 48,653,414

$ 47,699,660

$ 47,747,708

$ 48,838,660

$ 47,747,708

Less:  Goodwill

1,459,302

1,459,302

1,458,795

1,449,511

1,444,209

1,459,302

1,444,209

Other identifiable intangible assets

119,098

125,724

132,764

132,953

138,370

119,098

138,370

Total tangible assets

47,260,260

50,108,070

47,061,855

46,117,196

46,165,129

47,260,260

46,165,129

Less: AOCI

(1,163,075)

(1,081,886)

(1,222,538)

(1,297,812)

(936,345)

(1,163,075)

(936,345)

Total tangible assets, excluding AOCI

$  48,423,335

$ 51,189,956

$ 48,284,393

$ 47,415,008

$ 47,101,474

$ 48,423,335

$ 47,101,474

Quarter Ended

Year-to-date

(Dollars in thousands, except per share data)

Jun 2023

Mar 2023

Dec 2022

Sep 2022

Jun 2022

Jun 2023

Jun 2022

PERIOD END BALANCES:







Total shareholders' equity, excluding AOCI







Total shareholders' equity

$4,485,850

$4,490,417

$4,311,374

$4,166,925

$4,437,925

$4,485,850

$4,437,925

Less: AOCI

(1,163,075)

(1,081,886)

(1,222,538)

(1,297,812)

(936,345)

(1,163,075)

(936,345)

Total shareholders' equity, excluding AOCI

$5,648,925

$5,572,303

$5,533,912

$5,464,737

$5,374,270

$5,648,925

$5,374,270









Common shareholders' equity, excluding AOCI







Total shareholders' equity

$4,485,850

$4,490,417

$4,311,374

$4,166,925

$4,437,925

$4,485,850

$4,437,925

Less: preferred stock

166,993

166,993

166,993

166,993

166,993

166,993

166,993

Common shareholders' equity

4,318,857

4,323,424

4,144,381

3,999,932

4,270,932

4,318,857

4,270,932

Less: AOCI

(1,163,075)

(1,081,886)

(1,222,538)

(1,297,812)

(936,345)

(1,163,075)

(936,345)

Common shareholders' equity, excluding AOCI

$5,481,932

$5,405,310

$5,366,919

$5,297,744

$5,207,277

$5,481,932

$5,207,277









Total tangible common shareholders' equity,
excluding AOCI







Total shareholders' equity

$4,485,850

$4,490,417

$4,311,374

$4,166,925

$4,437,925

$4,485,850

$4,437,925

Less:  Goodwill

1,459,302

1,459,302

1,458,795

1,449,511

1,444,209

1,459,302

1,444,209

Other identifiable intangible assets

119,098

125,724

132,764

132,953

138,370

119,098

138,370

Preferred stock

166,993

166,993

166,993

166,993

166,993

166,993

166,993

Total tangible common shareholders' equity

2,740,457

2,738,398

2,552,822

2,417,468

2,688,353

2,740,457

2,688,353

Less: AOCI

(1,163,075)

(1,081,886)

(1,222,538)

(1,297,812)

(936,345)

(1,163,075)

(936,345)

Total tangible common shareholders' equity,
excluding AOCI

$3,903,532

$3,820,284

$3,775,360

$3,715,280

$3,624,698

$3,903,532

$3,624,698









AVERAGE BALANCES:







Total tangible common shareholders' equity







Total shareholders' equity

$4,539,353

$4,396,461

$4,215,585

$4,506,655

$4,523,189

$4,468,302

$4,791,221

Less:   Goodwill

1,459,302

1,459,127

1,457,120

1,444,331

1,407,452

1,459,215

1,407,711

Other identifiable intangible assets

123,313

128,957

132,091

136,149

188,897

126,119

192,233

Preferred stock

166,993

166,993

166,993

166,993

166,993

166,993

166,993

Total tangible common shareholders' equity

$2,789,745

$2,641,384

$2,459,381

$2,759,182

$2,759,847

$2,715,975

$3,024,284









Total average assets

$49,067,121

$48,652,201

$47,790,494

$47,595,557

$47,064,829

$48,860,807

$47,370,639

Total shares of common stock outstanding

182,626,229

182,684,578

182,437,265

182,438,780

182,461,786

182,626,229

182,461,786

Average shares outstanding-diluted

183,631,570

183,908,798

183,762,008

183,313,831

183,711,402

183,770,759

185,476,720









Tangible common shareholders' equity to tangible
assets (1)

5.80 %

5.46 %

5.42 %

5.24 %

5.82 %

5.80 %

5.82 %

Tangible common shareholders' equity to tangible
assets, excluding AOCI (2)

8.06

7.46

7.82

7.84

7.70

8.06

7.70

Return on average tangible common equity (3)

16.05

11.40

15.42

17.40

18.11

13.80

15.81

Adjusted return on average tangible common
equity (4)

16.80

19.10

23.04

20.66

19.50

17.91

17.05

Adjusted return on average assets (5)

0.97

1.06

1.21

1.22

1.16

1.02

1.11

Adjusted return on average common shareholders'
equity (6)

10.72

11.93

14.00

13.13

12.36

11.31

11.15

Pre-tax pre-provision net revenue to total average
assets (7)

1.32

0.91

1.11

1.33

1.40

1.12

1.33

Adjusted pre-tax pre-provision net revenue to
total average assets (8)

1.38

1.46

1.62

1.58

1.51

1.42

1.43

Tangible book value per common share (9)

$      15.01

$      14.99

$      13.99

$      13.25

$      14.73

$      15.01

$       14.73

Tangible book value per common share, excluding
AOCI (10)

21.37

20.91

20.69

20.36

19.87

21.37

19.87

Adjusted earnings per common share (11)

$        0.64

$        0.68

$        0.78

$        0.78

$        0.73

$        1.31

$        1.38

Adjusted dividend payout ratio (12)

36.72 %

34.56 %

28.21 %

28.21 %

30.14 %

35.88 %

31.88 %

Definitions of Non-GAAP Measures:

(1)

Tangible common shareholders' equity to tangible assets is defined by the Company as total shareholders' equity less preferred stock, goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets.

(2)

Tangible common shareholders' equity to tangible assets, excluding AOCI, is defined by the Company as total shareholders' equity less preferred stock, goodwill, other identifiable intangible assets and accumulated other comprehensive loss, divided by the difference of total assets less goodwill, accumulated other comprehensive loss, and other identifiable intangible assets.

(3)

Return on average tangible common equity is defined by the Company as annualized net income available to common shareholders divided by average tangible common shareholders equity.

(4)

Adjusted return on average tangible common equity is defined by the Company as annualized net adjusted income available to common shareholders divided by average tangible common shareholders' equity.

(5)

Adjusted return on average assets is defined by the Company as annualized net adjusted income divided by total average assets.

(6)

Adjusted return on average common shareholders' equity is defined by the Company as annualized net adjusted income available to common shareholders divided by average common shareholders' equity.

(7)

Pre-tax pre-provision net revenue to total average assets is defined by the Company as annualized pre-tax pre-provision net revenue divided by total average assets.

(8)

Adjusted pre-tax pre-provision net revenue to total average assets is defined by the Company as annualized adjusted pre-tax pre-provision net revenue divided by total average assets adjusted for items included in the definition and calculation of net adjusted income.

(9)

Tangible book value per common share is defined by the Company as tangible common shareholders' equity divided by total shares of common stock outstanding.

(10)

Tangible book value per common share, excluding AOCI is defined by the Company as tangible common shareholders' equity less accumulated other comprehensive loss divided by total shares of common stock outstanding.

(11)

Adjusted earnings per common share is defined by the Company as net adjusted income available to common shareholders divided by average common shares outstanding-diluted.

(12)

Adjusted dividend payout ratio is defined by the Company as common share dividends divided by net adjusted income available to common shareholders.

Efficiency Ratio-Fully Taxable Equivalent and Adjusted Efficiency Ratio-Fully Taxable Equivalent Definitions

The efficiency ratio and the adjusted efficiency ratio are supplemental financial measures utilized in management's internal evaluation of the Company's use of resources and are not defined under GAAP. The efficiency ratio is calculated by dividing total noninterest expense by total revenue, which includes net interest income plus noninterest income plus the tax equivalent adjustment. The adjusted efficiency ratio excludes income and expense items otherwise disclosed as non-routine from total noninterest expense.

SOURCE Cadence Bank

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