Cadence Bank Announces First Quarter 2022 Financial Results

TUPELO, Miss. and HOUSTON, April 25, 2022 /PRNewswire/ -- Cadence Bank (NYSE: CADE) (the Company), today announced financial results for the quarter ended March 31, 2022. Given the legacy Cadence merger closed on October 29, 2021, the first quarter of 2022 represents the first full quarter of combined earnings.

Highlights for the first quarter of 2022 included:

  • Achieved quarterly net income available to common shareholders of $112.6 million, or $0.60 per diluted common share, and adjusted net income available to common shareholders of $121.6 million, or $0.65 per diluted common share.
  • Reported $160.4 million in adjusted pre-tax pre-provision net revenue (PPNR), or 1.36 percent of average assets on an annualized basis.
  • Generated net organic loan growth of approximately $307 million for the quarter, or 4.6 percent on an annualized basis compared to linked quarter and total deposit and customer repo growth of approximately $767 million, or 7.7 percent on an annualized basis compared to linked quarter.
  • Continued stability in credit quality metrics including net recoveries of $0.4 million and a 22.4 percent decline in total non-performing loans and leases; no provision for credit losses for the quarter.
  • Repurchased 5.1 million shares of outstanding Company common stock resulting in 183.5 million shares outstanding as of March 31, 2022.
  • Increased the Company's quarterly common share dividend to $0.22 per common share, representing the 10th continuous year of increased dividends.

"Our first quarter results reflect another highly successful quarter for core operating performance with an adjusted earnings per share of $0.65 per diluted common share," remarked Dan Rollins, Chairman and Chief Executive Officer of the Company.  "We continue to be pleased with our business development efforts, especially so soon after legal merger last fall.  Our results for the quarter reflect successes on both sides of the balance sheet within our community and commercial banks as well as many of our other lines of business, including mortgage, insurance and wealth management.  Our results also reflect a stable net interest margin positioned for improvement, and continued strong credit quality."      

Rollins continued, "Additional first quarter highlights include the repurchase of 5.1 million shares of Company common stock under our share repurchase program.  Our board also increased the Company common stock dividend during the first quarter to $0.22 per share.  While taking these capital actions, we maintained strong capital metrics relative to both regulatory and internal capital targets."

Paul Murphy, Executive Vice Chairman, added "As we look more closely at our front-line successes, we reported organic loan growth for the quarter of more than $300 million while organic deposit growth totaled over $750 million. We feel positive about our growth trajectory.  Our loan growth for the quarter was primarily in our commercial and industrial portfolio.  From a deposit growth standpoint, first quarter is historically a seasonally high quarter."

Earnings Summary

The Company reported net income available to common shareholders of $112.6 million, or $0.60 per diluted common share, for the first quarter of 2022, compared with net income available to common shareholders of $79.2 million, or $0.77 per diluted common share, for the first quarter of 2021 and a net loss available to common shareholders of $37.0 million, or $0.22 per diluted common share, for the fourth quarter of 2021.  The Company reported adjusted net income available to common shareholders of $121.6 million, or $0.65 per diluted common share, for the first quarter of 2022, compared with $80.4 million, or $0.78 per diluted common share, for the first quarter of 2021 and $104.1 million, or $0.63 per diluted common share, for the fourth quarter of 2021. 

The Company reported adjusted PPNR of $160.4 million, or 1.36 percent of average assets on an annualized basis, for the first quarter of 2022 compared to $106.5 million, or 1.76 percent of average assets on an annualized basis, for the first quarter of 2021 and $136.4 million, or 1.32 percent of average assets on an annualized basis, for the fourth quarter of 2021.

Net Interest Revenue

Net interest revenue was $311.8 million for the first quarter of 2022, compared to $172.8 million for the first quarter of 2021 and $271.2 million for the fourth quarter of 2021. The fully taxable equivalent net interest margin was 2.92 percent for the first quarter of 2022, compared with 3.15 percent for the first quarter of 2021 and 2.90 percent for the fourth quarter of 2021.

The increase in net interest revenue in the first quarter of 2022 compared to the linked quarter reflected the full quarter's impact of the legacy Cadence merger, as well as the impact of fourth quarter deployment of cash into loans and securities, and a slight increase in accretion.  The first quarter's increase in net interest margin reflected the deployment of cash into securities and lower deposit costs, partially offset by loan growth coming on at lower yields.  The balance sheet remains asset sensitive, with approximately 28 percent of loans floating and another 41 percent of loans variable as of March 31, 2022.

Yields on net loans, loans held for sale, and leases excluding accretion, were 3.96 percent for the first quarter of 2022, compared with 4.06 percent for the fourth quarter of 2021, while yields on total interest earning assets were 3.10 percent for the first quarter of 2022, compared with 3.11 percent for the fourth quarter of 2021. The average cost of deposits declined to 0.15 percent for the first quarter of 2022, compared with 0.17 percent for the fourth quarter of 2021. 

Net interest income for the first quarter of 2022 included $17.7 million in accretion income related to acquired loans and leases, adding approximately 17 basis points to the net interest margin.  This compares to net accretion income of $16.4 million for the fourth quarter of 2021, which added approximately 17 basis points to the fourth quarter 2021 net interest margin. Excluding the impact of accretion, the linked quarter net interest margin increased by 3 basis points.

Balance Sheet Activity

Loans and leases, net of unearned income, continued to reflect solid growth, increasing $306.7 million, or 4.6 percent annualized, to $27.2 billion during the first quarter of 2022 while deposits and customer repos increased $766.8 million, or 7.7 percent annualized, to $41.3 billion.  Loan growth for the quarter was primarily within the commercial and industrial portfolio while deposit growth was largely attributable to increases in noninterest bearing demand deposit accounts.  The first quarter has been a strong deposit growth quarter historically as a result of seasonality in municipal deposit account balances.  The first quarter of 2022 ended with a loan to deposit ratio of 67.0 percent and securities to total assets of 30.4 percent, reflecting continued strong balance sheet liquidity.  Noninterest bearing deposits represented 35.6 percent of total deposits at the end of the first quarter of 2022, representing an increase from 34.2 percent at December 31, 2021.

Provision for Credit Losses and Allowance for Credit Losses

Credit metrics for the first quarter of 2022 continued to reflect improvement compared to the linked quarter including net recoveries and a meaningful decrease in non-performing loans.

Total non-performing loans and leases were $119.3 million at March 31, 2022, or 0.44 percent of total net loans and leases, representing a decline of $34.5 million or 22.4 percent, from the December 31, 2021 balance of $153.8 million or 0.57 percent of total net loans and leases. Other real estate owned and other repossessed assets also declined to $28.4 million at March 31, 2022, a decrease of $2.2 million or 14.0 percent, from the December 31, 2021 balance of $33.0 million.

Net recoveries for the first quarter of 2022 were $0.4 million, or 0.01 percent of net loans and leases on an annualized basis, compared with net charge-offs of $3.3 million for the first quarter of 2021 and net recoveries of $4.8 million for the fourth quarter of 2021.   Earnings for the first quarter of 2022 reflected no recorded provision for credit losses, compared with no recorded provision for the first quarter of 2021 and a provision for credit losses of $133.6 million for the fourth quarter of 2021. The provision for the fourth quarter of 2021 includes $132.1 million associated with day one accounting provision required for loans and unfunded commitments acquired during the quarter from the legacy Cadence merger. The allowance for credit losses remains robust at $438.7 million, or 1.61 percent of net loans and leases at March 31, 2022, compared with $446.4 million, or 1.66 percent of net loans and leases at December 31, 2021. 

Noninterest Revenue

Noninterest revenue was $128.4 million for the first quarter of 2022, compared with $87.9 million for the first quarter of 2021 and $103.9 million for the fourth quarter of 2021. The linked quarter increase was driven by a full quarter of legacy Cadence results as well as an increase in mortgage revenue as a result of increased mortgage servicing rights valuation. 

The net return from mortgage servicing rights was $14.0 million for the first quarter of 2022, compared with $7.4 million for the first quarter of 2021 and $2.6 million for the fourth quarter of 2021. Mortgage production and servicing revenue was impacted by both seasonality and rising rates, totaling $7.7 million for the first quarter of 2022, compared with $17.9 million for the first quarter of 2021 and $8.0 million for the fourth quarter of 2021. Mortgage origination volume for the first quarter of 2022 was $803.9 million, compared with $789.8 million for the first quarter of 2021 and $817.7 million for the fourth quarter of 2021. 

Insurance commission revenue reflected strong seasonal performance at $35.7 million for the first quarter of 2022, compared with $30.7 million for the first quarter of 2021 and $32.6 million for the fourth quarter of 2021. The first quarter of the year has historically been strong due to timing of annual renewals.

The full quarter's impact of the legacy Cadence merger drove the linked quarter increases in wealth management revenue, deposit service fees and other noninterest revenue.  Wealth management revenue was $21.7 million for the first quarter of 2022, compared with $16.4 million for the fourth quarter of 2021, deposit service charge revenue was $19.9 million for the first quarter of 2022 compared with $17.7 million for the fourth quarter of 2021, and other noninterest revenue was $18.3 million for the first quarter of 2022, compared with $14.1 million for the fourth quarter of 2021.  Credit card, debit card and merchant fee revenue was $12.1 million for the first quarter of 2022,  compared with $12.8 million for the fourth quarter of  2021 reflecting seasonally soft first quarter fees.

Noninterest Expense

Noninterest expense for the first quarter of 2022 was $291.7 million, compared with $155.8 million for the first quarter of 2021 and $289.2 million for the fourth quarter of 2021.  Adjusted noninterest expense for the first quarter of 2022 was $281.0 million, compared with $154.2 million for the first quarter of 2021 and $239.1 million for the fourth quarter of 2021.  The adjusted efficiency ratio was 63.5 percent for the first quarter of 2022, stable as compared to the fourth quarter of 2021.  

The increase in adjusted noninterest expense compared to the linked quarter was due to a full quarter of the legacy Cadence merger as well as seasonally higher compensation costs including payroll taxes and 401k match, partially offset by initial efficiencies associated with the legacy Cadence merger. 

Adjusted noninterest expense excludes merger expense included as a separate line item on the income statement as well as incremental merger related expenses that are included in the respective expense categories.  Merger expenses represent costs to complete the merger with no future benefit, while incremental merger related expenses represent costs to complete the merger for which the entity receives a future benefit.  Merger expense was $4.0 million for the first quarter of 2022, compared with $1.7 million for the first quarter of 2021 and $44.8 million for the fourth quarter of 2021.  Merger expense for the first quarter of 2022 was comprised primarily of contract and conversion related expenses as well as compensation related items.  Incremental merger related expenses for the first quarter of 2022 totaled $6.6 million that included primarily employee retention and marketing related expenses.

Capital Management

Total shareholder's equity was $4.64 billion at March 31, 2021 compared with $2.83 billion at March 31, 2021 and $5.25 billion at December 31, 2021.  The decline in the linked quarter is largely due to a decline in Other Comprehensive Income ("OCI") due to increased unrealized losses in the available-for-sale securities portfolio driven by changes in valuation due to the significant changes in interest rates in the quarter.  In addition to the OCI change, shareholder's equity was impacted by dividends and share repurchases, partially offset by earnings.

The Company's ratio of shareholders' equity to assets was 9.84 percent at March 31, 2022, compared with 10.95 percent at March 31, 2021 and 11.01 percent at December 31, 2021.  The ratio of tangible common shareholders' equity to tangible assets was 6.31 percent at March 31, 2022, compared with 7.04 percent at March 31, 2021 and 7.54 percent at December 31, 2021. 

During the first quarter of 2022, the Company repurchased 5.1 million shares of its common stock pursuant to its share repurchase program.  The company has 4.9 million shares remaining on its current share repurchase authorization which will expire December 30, 2022.

Additionally during the first quarter of 2022, the Company increased its quarterly common share dividend to $0.22 per common share, representing the 10th continuous year of increased dividends.

Estimated regulatory capital ratios at March 31, 2022 included Common Equity Tier 1 capital of 10.57 percent, Tier 1 capital of 11.05 percent, Total risk-based capital of 13.27 percent, and Tier 1 leverage capital of 8.24 percent. 

Summary

Rollins concluded, "Our first quarter results, which mark the first full quarter of combined financial results for the new Cadence Bank, highlight the strengths and the value that each respective board and management team saw in this transaction.  We are pleased with our performance thus far and look forward to continued success together as we complete our integration efforts."

RECENT MERGER TRANSACTIONS

Cadence Bancorporation (NYSE: CADE)

On October 29, 2021, the Company completed the merger with Cadence Bancorporation, the parent company of Cadence Bank N.A., (collectively referred to as legacy Cadence), pursuant to which legacy Cadence was merged with and into the Company (the Cadence Merger).  Legacy Cadence operated 99 full-service banking offices in the southeast.  As of October 29, 2021, legacy Cadence reported total assets of $18.8 billion, total loans of $11.6 billion and total deposits of $16.3 billion.  Under the terms of the definitive merger agreement, each legacy Cadence shareholder received 0.70 shares of the Company's common stock in exchange for each share of Cadence common stock they held.  In addition, legacy Cadence paid a one-time special dividend of $1.25 per share on October 28, 2021.  In connection with the closing of the Cadence merger, the Company changed its name from "BancorpSouth Bank" to "Cadence Bank" and also changed its NYSE ticker symbol from "BXS" to "CADE".  For more information regarding the Cadence Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (FDIC) on October 29, 2021 and the 2021 Annual Report Form 10-K filed with the FDIC.  Due to the Company's evaluation of post-merger activity and the extensive information gathering and management review processes required to properly record acquired assets and liabilities, the Company considers its valuations of legacy Cadence's assets and liabilities to be provisional estimates as management continues to identify and assess information regarding the nature of these assets and liabilities for the associated valuation assumptions and methodologies used.

FNS Bancshares, Inc.

On May 1, 2021, the Company completed the merger with FNS Bancshares, Inc., the parent company of FNB Bank, (collectively referred to as FNS), pursuant to which FNS was merged with and into the Company.  FNS operated 17 full-service banking offices in Alabama, Georgia and Tennessee.  The merger expanded the Company's presence in Jackson, DeKalb and Marshall counties in Alabama and the Chattanooga, Tennessee-Georgia and Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical areas.  As of May 1, 2021, FNS reported total assets of $826.6 million, total loans of $464.7 million and total deposits of $720.7 million.  Under the terms of the definitive merger agreement, the Company issued approximately 2,975,000 shares of the Company's common stock plus $18.0 million in cash for all outstanding shares of FNS.  For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3, 2021.

National United Bancshares, Inc.

On May 1, 2021, the Company completed the merger with National United Bancshares, Inc., the parent company of National United, (collectively referred to as National United), pursuant to which National United was merged with and into the Company.  National United operated 6 full-service banking offices in the Killeen-Temple, Texas; Waco, Texas; and Austin-Round Rock-Georgetown, Texas metropolitan statistical areas.  As of May 1, 2021, National United reported total assets of $817.3 million, total loans of $434.6 million and total deposits of $742.9 million.  Under the terms of the definitive merger agreement, the Company issued approximately 3,110,000 shares of the Company's common stock plus $33.25 million in cash for all outstanding shares of National United.  For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3, 2021. 

Non-GAAP Measures and Ratios

This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP).  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 under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions"  beginning on page 22 of this news release.

Conference Call and Webcast

The Company will conduct a conference call to discuss its first quarter 2022 financial results on April 26, 2022, 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.

About Cadence Bank

Cadence Bank (NYSE: CADE) is a leading regional banking franchise with approximately $47 billion in assets and more than 400 branch locations across the South, Midwest 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 are not statements of historical fact and 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 created thereby under the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "aspire," "assume," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "forecast," "foresee," "goal," "hope," "indicate," "intend," "may," "might," "outlook," "plan," "project," "projection," "predict," "prospect," "potential," "roadmap," "seek," "should," "target," "will," and "would," or the negative versions of those words or other 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, including the economic impact of the COVID-19 pandemic (including any variant of the COVID-19 virus) on the Company's business; the Company's assets; business; cash flows; financial condition; liquidity; prospects; results of operations; deposit and customer repo growth; interest and fee-based revenue; capital resources; capital metrics; efficiency ratio; valuation of mortgage servicing rights; net income; net interest revenue; non-interest revenue; net interest margin; interest expense; non-interest expense; earnings per share; interest rate sensitivity; interest rate risk; balance sheet and liquidity management; off-balance sheet arrangements; fair value determinations; asset quality; credit quality; credit losses; provision and allowance for credit losses, impairments, charge-offs, recoveries and changes in loan volumes; investment securities portfolio yields and values; ability to manage the impact of pandemics, natural disasters and other force majeure events; adoption and use of critical accounting policies; adoption and implementation of new accounting standards and their effect on the Company's financial results and the Company's financial reporting; utilization of non-GAAP financial metrics; declaration and payment of dividends; 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; mortgage origination volume; mortgage servicing and production revenue; insurance commission revenue; implementation and execution of cost savings initiatives; ability to successfully litigate, resolve or otherwise dispense with threatened, pending, ongoing and future litigation and governmental, administrative and investigatory matters; ability to successfully complete pending or future acquisitions, dispositions and other strategic growth opportunities and initiatives; ability to successfully obtain regulatory approval for acquisitions and other growth initiatives; ability to successfully integrate and manage acquisitions; opportunities and efforts to grow market share; reputation; ability to compete with other financial institutions; ability to recruit and retain key employees and personnel; access to capital markets; availability of capital; investments in the securities of other financial institutions; and ability to operate the Company's regulatory compliance programs in accordance with applicable law.

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 historical facts, 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. These risks, uncertainties and other factors include, without limitation, 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 risks of changes in interest rates and their effects on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; the impact of inflation on consumers; 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; the availability of and access to capital; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans; the ability to grow additional interest and fee income or to control noninterest expense; the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Company's net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions; the enforcement efforts of federal and state bank regulators; possible adverse rulings, judgments, settlements and other outcomes of pending, ongoing and future litigation and governmental, administrative and investigatory matters; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of 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; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the magnitude and duration of the pandemic, and the effect of actions taken to mitigate the impact of the COVID-19 pandemic on the Company, the Company's employees, the Company's customers, the global economy and the financial markets; international or political instability including the impacts related to or resulting from Russia's military inaction in Ukraine, including the imposition of additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments; impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; adoption of new accounting standards, or changes in existing standards; the outcome of any legal proceedings that may be instituted against the Company or Cadence in respect of the Cadence Merger; the ability of the Company and Cadence to meet expectations regarding the timing, completion and accounting and tax treatments of the Cadence Merger; the risk that any announcements relating to the Cadence Merger could have adverse effects on the market price of the capital stock of the combined company; the possibility that the anticipated benefits of the Cadence Merger will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the combined company does business; the possibility that the Cadence Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the Cadence Merger within the expected timeframes or at all and to successfully integrate Cadence's operations and those of the Company; such integration may be more difficult, time consuming or costly than expected; revenues following the Cadence Merger may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Cadence Merger; the combined company's success in executing its business plans and strategies and managing the risks involved in the foregoing; the dilution caused by the Company's issuance of additional shares of its capital stock in connection with the Cadence Merger and other factors as detailed from time to time in the Company's press and news releases, periodic and current reports and other filings the Company files with the FDIC.

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, 2021 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, whether as a result of new information, future developments or otherwise, except as required by applicable law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company.  All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.

 

Cadence Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)



Quarter Ended


Mar-22

Dec-21

Sep-21

Jun-21

Mar-21

Earnings Summary:






Interest revenue

$        331,930

$        290,626

$        199,511

$        199,129

$        192,783

Interest expense

20,108

19,414

17,967

18,947

19,994

Net interest revenue

311,822

271,212

181,544

180,182

172,789

Provision (release) for credit losses

-

133,562

(7,000)

11,500

-

Net interest revenue, after provision






   for credit losses

311,822

137,650

188,544

168,682

172,789

Noninterest revenue

128,435

103,854

84,420

101,943

87,936

Noninterest expense

291,667

289,194

179,889

173,984

155,823

Income (loss) before income taxes

148,590

(47,690)

93,075

96,641

104,902

Income tax expense (benefit)

33,643

(13,033)

20,350

21,102

23,347

Net income (loss)

$        114,947

$        (34,657)

$          72,725

$          75,539

$          81,555

Less: Preferred dividends

2,372

2,372

2,372

2,372

2,372

Net income (loss) available to common shareholders

$        112,575

$        (37,029)

$          70,353

$          73,167

$          79,183







Balance Sheet - Period End Balances






Total assets

$   47,204,061

$   47,669,751

$   28,060,496

$   27,612,365

$   25,802,497

Total earning assets

42,744,225

43,503,089

25,572,354

25,129,873

23,542,657

Total securities

14,371,606

15,606,470

10,053,372

9,084,111

7,640,268

Loans and leases, net of unearned income

27,189,666

26,882,988

14,991,245

15,004,039

15,038,808

Allowance for credit losses (ACL)

438,738

446,415

260,276

265,720

241,117

Net book value of acquired loans (included in






loans and leases above)

11,020,251

11,968,278

1,426,266

1,646,031

1,023,252

Paycheck protection program (PPP) loans 






(included in loans and leases above)

27,013

50,008

32,771

167,144

1,146,000

Unamortized net discount on acquired loans

72,620

77,711

9,863

13,037

10,069

Total deposits

40,568,055

39,817,673

23,538,711

22,838,486

21,173,186

Total deposits and securities sold under 






agreement to repurchase

41,271,615

40,504,861

24,243,834

23,521,621

21,833,671

Long-term debt

2,514

3,742

4,082

4,189

4,295

Subordinated debt

463,181

478,669

307,776

307,601

297,425

Total shareholders' equity

4,643,757

5,247,987

3,023,257

3,069,574

2,825,198

Common shareholders' equity

4,476,764

5,080,994

2,856,264

2,902,581

2,658,205







Balance Sheet - Average Balances






Total assets

$   47,679,850

$   40,990,459

$   27,616,585

$   26,666,296

$   24,545,560

Total earning assets

43,515,166

37,210,403

25,220,602

24,211,759

22,346,075

Total securities

15,070,524

12,954,547

9,539,814

8,067,109

6,606,027

Loans and leases, net of unearned income

27,106,733

22,745,093

14,915,728

15,470,539

15,029,076

PPP loans (included in loans and leases above)

36,621

48,206

73,783

973,036

1,062,423

Total deposits

40,565,103

34,759,687

23,162,450

22,385,883

20,472,080

Total deposits and securities sold under 






agreement to repurchase

41,259,136

35,479,807

23,914,986

23,092,969

21,123,774

Long-term debt

3,361

3,844

4,168

4,714

4,378

Subordinated debt

463,481

432,267

307,671

304,056

297,318

Total shareholders' equity

5,062,231

4,508,594

3,058,307

2,954,834

2,813,001

Common shareholders' equity

4,895,238

4,341,601

2,891,314

2,787,841

2,646,008







Nonperforming Assets:






Nonaccrual loans and leases

$          91,031

$        122,104

$          59,622

$          61,664

$          73,142

Loans and leases 90+ days past due, 






still accruing

20,957

24,784

17,012

15,386

21,208

Restructured loans and leases, still accruing

7,292

6,903

7,165

7,368

6,971

Non-performing loans (NPLs)

119,280

153,791

83,799

84,418

101,321

Other real estate owned and other repossessed






assets

28,401

33,021

16,515

17,333

9,351

Non-performing assets (NPAs)

$        147,681

$        186,812

$        100,314

$        101,751

$        110,672







 

Cadence Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)









Quarter Ended


Mar-22

Dec-21

Sep-21

Jun-21

Mar-21

Financial Ratios and Other Data:






Return on average assets

0.98%

(0.34%)

1.04%

1.14%

1.35%

Adjusted return on average assets*

1.05

1.03

1.11

1.38

1.37

Return on average common shareholders' equity

9.33

(3.38)

9.65

10.53

12.14

Adjusted return on average common shareholders' equity*

10.07

9.51

10.28

12.83

12.32

Return on average tangible common equity*

13.87

(4.71)

14.85

16.08

18.46

Adjusted return on average tangible common equity*

14.98

13.24

15.80

19.61

18.74

Pre-tax pre-provision net revenue to total average assets*

1.26

0.83

1.24

1.63

1.73

Adjusted pre-tax pre-provision net revenue to total 






average assets*

1.36

1.32

1.32

1.77

1.76

Net interest margin-fully taxable equivalent

2.92

2.90

2.86

2.99

3.15

Net interest rate spread-fully taxable equivalent

2.81

2.78

2.72

2.83

2.97

Efficiency ratio*

66.10

76.94

67.52

61.55

59.64

Adjusted efficiency ratio*

63.52

63.54

65.28

58.04

59.02

Loan/deposit ratio

67.02%

67.52%

63.69%

65.70%

71.03%

Employee FTE

6,568

6,595

4,770

4,835

4,546







Credit Quality Ratios:






Net (recoveries) charge-offs to average loans and leases (1)

(0.01%)

(0.08%)

(0.05%)

(0.05%)

0.09%

Provision for credit losses to average loans and leases (1)

0.00

2.33

(0.19)

0.30

0.00

ACL to net loans and leases

1.61

1.66

1.74

1.77

1.60

ACL to non-performing loans and leases

367.82

290.27

310.60

314.77

237.97

ACL to non-performing assets

297.08

238.96

259.46

261.15

217.87

Non-performing loans and leases to net loans and leases

0.44

0.57

0.56

0.56

0.67

Non-performing assets to total assets

0.31

0.39

0.36

0.37

0.43













Equity Ratios:






Total shareholders' equity to total assets

9.84%

11.01%

10.77%

11.12%

10.95%

Total common shareholders' equity to total assets

9.48

10.66

10.18

10.51

10.30

Tangible common shareholders' equity to tangible assets*

6.31

7.54

6.82

7.11

7.04







Capital Adequacy:






Common  Equity Tier 1 capital (2)

10.57%

11.11%

10.73%

10.89%

10.97%

Tier 1 capital (2)

11.05

11.61

11.63

11.80

11.95

Total capital (2)

13.27

13.86

14.27

14.50

14.65

Tier 1 leverage capital (2)

8.24

9.90

8.13

8.25

8.59













*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 22, 23, and 24.

(1) Annualized






(2) Current quarter regulatory capital ratios are estimated.












 

Cadence Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)



Quarter Ended


Mar-22

Dec-21

Sep-21

Jun-21

Mar-21

Common Share Data:






Diluted earnings (loss) per share

$             0.60

$           (0.22)

$             0.65

$             0.69

$             0.77

Adjusted earnings per share*

0.65

0.63

0.69

0.84

0.78

Cash dividends per share

0.22

0.20

0.20

0.19

0.19

Book value per share

24.40

26.98

26.73

26.72

25.90

Tangible book value per share*

15.67

18.45

17.27

17.41

17.08

Market value per share (last)

29.26

29.79

29.78

28.33

32.48

Market value per share (high)

34.24

32.12

30.55

33.18

35.59

Market value per share (low)

27.95

27.25

24.87

27.59

26.95

Market value per share (avg)

31.20

30.20

27.89

30.33

30.85

Dividend payout ratio

36.60%

NM

30.71%

27.43%

24.62%

Adjusted dividend payout ratio*

33.85%

31.75%

28.99%

22.62%

24.36%

Total shares outstanding

183,488,844

188,337,658

106,853,316

108,614,595

102,624,818

Average shares outstanding - diluted

187,264,335

164,720,656

108,250,102

105,838,056

102,711,584













Yield/Rate:






(Taxable equivalent basis)






Loans, loans held for sale, and leases

4.23%

4.34%

4.46%

4.43%

4.53%

Loans, loans held for sale, and leases excluding net






accretion on acquired loans and leases

3.96

4.06

4.38

4.35

4.43

Available-for-sale securities:






  Taxable

1.26

1.17

1.20

1.21

1.32

  Tax-exempt

2.57

2.54

2.88

2.77

3.52

Short-term, FHLB and other equity investments

0.24

0.25

0.20

0.16

0.11

  Total interest earning assets and revenue

3.10

3.11

3.15

3.31

3.51

Deposits

0.15

0.17

0.24

0.27

0.33

  Demand - interest bearing

0.20

0.21

0.31

0.34

0.40

  Savings

0.06

0.14

0.09

0.09

0.11

  Time

0.52

0.58

0.91

1.00

1.14

  Total interest bearing deposits

0.23

0.26

0.36

0.41

0.48

Short-term borrowings

0.11

0.11

0.10

0.12

0.13

Total interest bearing deposits and short-term 






borrowings

0.22

0.25

0.35

0.40

0.46

Subordinated debt

4.17

3.95

4.47

4.47

4.46

Long-term debt

5.76

3.79

4.81

4.46

4.88

  Total interest bearing liabilities and expense

0.29

0.32

0.43

0.47

0.54

Interest bearing liabilities to interest earning assets

64.46%

64.18%

66.04%

66.24%

66.87%

Net interest income tax equivalent adjustment

$           1,027

$              824

$              446

$              550

$              569







*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 22, 23, and 24.


NM = Not meaningful












 

Cadence Bank

Consolidated Balance Sheets

(Unaudited)








Mar-22

Dec-21

Sep-21

Jun-21

Mar-21


(Dollars in thousands)

Assets






Cash and due from banks

$      781,310

$      656,132

$      301,246

$      331,873

$      263,289

Interest bearing deposits with other banks






and Federal funds sold

880,742

638,547

150,778

629,390

336,253

Available-for-sale securities, at fair value

14,371,606

15,606,470

10,053,372

9,084,111

7,640,268

Loans and leases, net of unearned income

27,189,666

26,882,988

14,991,245

15,004,039

15,038,808

             Allowance for credit losses

438,738

446,415

260,276

265,720

241,117

Net loans and leases

26,750,928

26,436,573

14,730,969

14,738,319

14,797,691

Loans held for sale

302,211

340,175

342,871

403,046

518,352

Premises and equipment, net

781,209

786,426

533,999

533,276

508,508

Goodwill

1,409,038

1,407,948

958,304

957,474

851,612

Other identifiable intangibles

191,642

198,271

52,235

54,659

53,581

Bank owned life insurance

599,346

597,953

359,740

355,660

335,707

Other assets

1,136,029

1,001,256

576,982

524,557

497,236

Total Assets

$ 47,204,061

$ 47,669,751

$ 28,060,496

$ 27,612,365

$ 25,802,497

Liabilities






Deposits:






  Demand:  Noninterest bearing

$ 14,458,563

$ 13,634,505

$   7,700,216

$   7,619,308

$   6,990,880

                  Interest bearing

18,854,543

18,727,588

10,285,371

9,671,662

9,067,373

  Savings

3,713,629

3,556,079

3,054,756

2,939,958

2,678,276

  Time deposits

3,541,320

3,899,501

2,498,368

2,607,558

2,436,657

Total deposits

40,568,055

39,817,673

23,538,711

22,838,486

21,173,186

Securities sold under agreement to repurchase

703,560

687,188

705,123

683,135

660,485

Federal funds purchased






   and other short-term borrowings

-

595,000

-

-

-

Subordinated debt

463,181

478,669

307,776

307,601

297,425

Long-term debt

2,514

3,742

4,082

4,189

4,295

Other liabilities

822,994

839,492

481,547

709,380

841,908

Total Liabilities

42,560,304

42,421,764

25,037,239

24,542,791

22,977,299

Shareholders' Equity






Preferred stock

166,993

166,993

166,993

166,993

166,993

Common stock

458,722

470,844

267,133

271,536

256,562

Capital surplus

2,701,371

2,841,998

688,637

730,294

563,481

Accumulated other comprehensive loss

(664,000)

(139,369)

(82,627)

(34,575)

(43,459)

Retained earnings

1,980,671

1,907,521

1,983,121

1,935,326

1,881,621

Total Shareholders' Equity

4,643,757

5,247,987

3,023,257

3,069,574

2,825,198

Total Liabilities & Shareholders' Equity

$ 47,204,061

$ 47,669,751

$ 28,060,496

$ 27,612,365

$ 25,802,497







 

Cadence Bank

Consolidated Average Balance Sheets

(Unaudited)








Mar-22

Dec-21

Sep-21

Jun-21

Mar-21


(Dollars in thousands)

Assets






Cash and due from banks

$      656,630

$      792,315

$      288,199

$      365,647

$      261,519

Interest bearing deposits with other banks






and Federal funds sold

1,161,262

1,253,722

495,982

302,845

412,313

Available-for-sale securities, at fair value

15,070,524

12,954,547

9,539,814

8,067,109

6,606,027

Loans and leases, net of unearned income

27,106,733

22,745,093

14,915,728

15,470,539

15,029,076

             Allowance for credit losses

444,294

404,578

264,067

245,095

242,935

Net loans and leases

26,662,439

22,340,515

14,651,661

15,225,444

14,786,141

Loans held for sale

176,647

220,766

242,422

361,999

289,755

Premises and equipment, net

785,005

690,031

534,071

526,960

508,551

Goodwill

1,407,973

1,115,502

957,899

910,448

851,612

Other identifiable intangibles

195,606

106,559

53,567

52,564

54,876

Bank owned life insurance

598,822

517,511

357,429

348,378

333,837

Other assets

964,942

998,991

495,541

504,902

440,929

Total Assets

$ 47,679,850

$ 40,990,459

$ 27,616,585

$ 26,666,296

$ 24,545,560

Liabilities






Deposits:






  Demand:  Noninterest bearing

$ 13,806,591

$ 12,047,637

$   7,579,513

$   7,367,832

$   6,484,703

                  Interest bearing

19,401,019

15,811,268

10,027,346

9,598,550

8,956,420

  Savings

3,631,699

3,374,243

3,001,406

2,851,113

2,550,095

  Time deposits

3,725,794

3,526,539

2,554,185

2,568,388

2,480,862

Total deposits

40,565,103

34,759,687

23,162,450

22,385,883

20,472,080

Securities sold under agreement to repurchase

694,033

720,120

752,536

707,086

651,694

Federal funds purchased






   and other short-term borrowings

131,556

7,554

8,706

3,901

1,500

Subordinated debt

463,481

432,267

307,671

304,056

297,318

Long-term debt

3,361

3,844

4,168

4,714

4,378

Other liabilities

760,085

558,393

322,747

305,822

305,589

Total Liabilities

42,617,619

36,481,865

24,558,278

23,711,462

21,732,559

Shareholders' Equity






Preferred stock

166,993

166,993

166,993

166,993

166,993

Common stock

465,458

404,522

270,098

266,676

256,536

Capital surplus

2,779,746

2,139,357

717,022

674,949

563,529

Accumulated other comprehensive loss

(283,417)

(103,554)

(35,408)

(30,614)

(5,090)

Retained earnings

1,933,451

1,901,276

1,939,602

1,876,830

1,831,033

Total Shareholders' Equity

5,062,231

4,508,594

3,058,307

2,954,834

2,813,001

Total Liabilities & Shareholders' Equity

$ 47,679,850

$ 40,990,459

$ 27,616,585

$ 26,666,296

$ 24,545,560







 

Cadence Bank

Consolidated Condensed Statements of Income (Loss)

(Dollars in thousands, except per share data)

(Unaudited)












Quarter Ended


Mar-22


Dec-21


Sep-21


Jun-21


Mar-21

INTEREST REVENUE:










Loans and leases

$    282,266


$    249,614


$    168,066


$    171,305


$    169,195

Available-for-sale securities:










    Taxable

45,155


37,258


28,617


23,983


21,192

    Tax-exempt

2,414


1,608


490


676


687

Loans held for sale

1,407


1,324


2,076


3,040


1,595

Other

688


822


262


125


114

        Total interest revenue

331,930


290,626


199,511


199,129


192,783











INTEREST EXPENSE:










Interest bearing demand and money










   market accounts

9,742


8,485


7,723


8,247


8,796

Savings

568


1,203


672


626


700

Time

4,764


5,139


5,861


6,428


6,966

Federal funds purchased and securities sold










   under agreement to repurchase

216


200


204


206


203

Short-term and long-term debt

54


37


42


44


45

Subordinated debt

4,764


4,350


3,463


3,387


3,269

Other

-


-


2


9


15

        Total interest expense

20,108


19,414


17,967


18,947


19,994











        Net interest revenue

311,822


271,212


181,544


180,182


172,789

  Provision (release) for credit losses

-


133,562


(7,000)


11,500


-

        Net interest revenue, after provision for










          credit losses

311,822


137,650


188,544


168,682


172,789











NONINTEREST REVENUE:










Mortgage banking

21,763


10,580


13,058


9,105


25,310

Credit card, debit card and merchant fees

11,321


12,016


10,692


10,874


9,053

Deposit service charges

19,898


17,680


11,580


10,069


9,586

Security (losses) gains, net

(1,097)


(378)


(195)


96


82

Insurance commissions

35,727


32,637


35,773


36,106


30,667

Wealth management

21,737


16,352


7,147


7,543


8,465

Gain on sale of PPP loans

-


-


-


21,572


-

Other

19,086


14,967


6,365


6,578


4,773

        Total noninterest revenue

128,435


103,854


84,420


101,943


87,936











NONINTEREST EXPENSE:










Salaries and employee benefits

187,819


149,599


112,968


108,188


101,060

Occupancy and equipment

28,270


26,885


18,977


18,154


17,378

Data processing and software

27,483


24,838


16,799


15,911


15,537

Merger expense

3,974


44,843


3,442


9,962


1,649

Deposit insurance assessments

3,336


3,278


2,330


1,638


1,455

Pension settlement expense

-


651


2,400


-


-

Other

40,785


39,100


22,973


20,131


18,744

        Total noninterest expense

291,667


289,194


179,889


173,984


155,823

        Income (loss) before income taxes

148,590


(47,690)


93,075


96,641


104,902

Income tax expense (benefit)

33,643


(13,033)


20,350


21,102


23,347

        Net income (loss)

$    114,947


$     (34,657)


$      72,725


$      75,539


$      81,555

Less: Preferred dividends

2,372


2,372


2,372


2,372


2,372

        Net income (loss) available to common 










shareholders

$    112,575


$     (37,029)


$      70,353


$      73,167


$      79,183











Net income (loss)  per common share: Diluted

$          0.60


$         (0.22)


$          0.65


$          0.69


$          0.77











 

Cadence Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Mar-22


Dec-21


Sep-21


Jun-21


Mar-21

LOAN AND LEASE PORTFOLIO:










Commercial and industrial










Non-real estate

$    8,017,958


$  7,847,473


$  2,210,287


$  2,271,370


$  3,102,082

Owner occupied

3,703,914


3,567,746


2,611,777


2,623,500


2,598,166

      Total commercial and industrial

11,721,872


11,415,219


4,822,064


4,894,870


5,700,248

Commercial real estate










Construction, acquisition and development

3,028,514


2,924,343


1,797,559


1,926,421


1,707,800

Income producing

4,795,486


4,924,369


3,443,967


3,323,883


3,127,510

      Total commercial real estate

7,824,000


7,848,712


5,241,526


5,250,304


4,835,310

Consumer










Residential mortgages

7,355,995


7,311,306


4,698,328


4,617,155


4,309,000

Other consumer

287,799


307,751


229,327


241,710


194,250

      Total consumer

7,643,794


7,619,057


4,927,655


4,858,865


4,503,250

Total loans and leases, net of unearned

$  27,189,666


$ 26,882,988


$ 14,991,245


$ 15,004,039


$ 15,038,808











NON-PERFORMING ASSETS










NON-PERFORMING LOANS AND LEASES:










  Nonaccrual Loans and Leases










Commercial and industrial










Non-real estate

$        33,086


$       33,690


$       13,170


$       10,941


$        9,724

Owner occupied

11,787


22,058


13,738


13,156


17,312

         Total commercial and industrial

44,873


55,748


26,908


24,097


27,036

    Commercial real estate










Construction, acquisition and development

1,618


5,568


3,292


2,582


8,494

Income producing

9,688


16,086


8,403


13,483


12,838

         Total commercial real estate

11,306


21,654


11,695


16,065


21,332

    Consumer










Residential mortgages

34,278


44,180


20,821


21,218


24,382

Other consumer

574


522


198


284


392

         Total consumer

34,852


44,702


21,019


21,502


24,774

Total nonaccrual loans and leases

$        91,031


$     122,104


$       59,622


$       61,664


$       73,142











Loans and Leases 90+ Days Past Due, Still 










Accruing:

20,957


24,784


17,012


15,386


21,208

Restructured Loans and Leases, Still Accruing

7,292


6,903


7,165


7,368


6,971

Total non-performing loans and leases

$      119,280


$     153,791


$       83,799


$       84,418


$     101,321











OTHER REAL ESTATE OWNED AND










OTHER REPOSSESSED ASSETS

28,401


33,021


16,515


17,333


9,351











Total Non-performing Assets

$      147,681


$     186,812


$     100,314


$     101,751


$     110,672











Additions to Nonaccrual Loans and Leases 










During the Quarter (excluding acquisitions)

$        16,374


$       22,158


$       19,858


$       16,005


$       10,029











 

Cadence Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Mar-22


Dec-21


Sep-21


Jun-21


Mar-21

ALLOWANCE FOR CREDIT LOSSES:










Balance, beginning of period

$    446,415


$    260,276


$    265,720


$    241,117


$    244,422











Loans and leases charged-off:










Commercial and industrial

(2,682)


(2,712)


(1,488)


(1,882)


(3,043)

Commercial real estate

(313)


(586)


(131)


(623)


(1,285)

Consumer

(1,792)


(2,342)


(1,694)


(1,357)


(1,578)

     Total loans charged-off

(4,787)


(5,640)


(3,313)


(3,862)


(5,906)











Recoveries:










Commercial and industrial

3,178


7,835


3,787


3,061


1,211

Commercial real estate

437


1,047


646


1,291


109

Consumer

1,612


1,521


936


1,310


1,281

     Total recoveries

5,227


10,403


5,369


5,662


2,601











Net recoveries (charge-offs)

440


4,763


2,056


1,800


(3,305)











Initial allowance on loans purchased with










credit deterioration

(8,117)


62,321


-


12,803


-

Provision:










Loans and leases acquired during the quarter

-


119,055


-


11,500


-

   Provision (release) for credit losses related to loans 










and leases

-


-


(7,500)


(1,500)


-

     Total provision for loans and leases

-


119,055


(7,500)


10,000


-











Balance, end of period

$    438,738


$    446,415


$    260,276


$    265,720


$    241,117











Average loans and leases, net of unearned, for period

$ 27,106,733


$ 22,745,093


$ 14,915,728


$ 15,470,539


$ 15,029,076











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










and leases (annualized)

(0.01%)


(0.08%)


(0.05%)


(0.05%)


0.09%











RESERVE FOR UNFUNDED COMMITMENTS**










Balance, beginning of period

$      23,551


$        9,044


$        8,544


$        7,044


$        7,044

Provision for unfunded commitments for loans 










acquired during the quarter

-


13,007


-


-


-

Provision for credit losses for unfunded commitments

-


1,500


500


1,500


-

Balance, end of period

$      23,551


$      23,551


$        9,044


$        8,544


$        7,044











**The Reserve for Unfunded Commitments is classified in other liabilities on the balance sheet.















 

Cadence Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)










March 31, 2022







Purchased








Credit




Special




Deteriorated



Pass

Mention

Substandard

Doubtful

Impaired

(Loss)

Total

LOAN PORTFOLIO BY 








INTERNALLY ASSIGNED GRADE:








Commercial and industrial








Non-real estate

$   7,854,480

$ 39,116

$     98,308

$        -

$    4,771

$     21,283

$   8,017,958

Owner occupied

3,647,785

3,304

43,866

-

4,064

4,895

3,703,914

     Total commercial and industrial

11,502,265

42,420

142,174

-

8,835

26,178

11,721,872

Commercial real estate








Construction, acquisition and 








development

2,995,751

245

27,980

-

-

4,538

3,028,514

Income producing

4,642,592

11,416

114,805

-

703

25,970

4,795,486

     Total commercial real estate

7,638,343

11,661

142,785

-

703

30,508

7,824,000

Consumer








Residential mortgages 

7,237,022

703

116,098

-

598

1,574

7,355,995

Other consumer

281,580

-

6,219

-

-

-

287,799

     Total consumer

7,518,602

703

122,317

-

598

1,574

7,643,794

     Total loans and leases, net of unearned

$ 26,659,210

$ 54,784

$   407,276

$        -

$  10,136

$     58,260

$ 27,189,666










December 31, 2021







Purchased








Credit




Special




Deteriorated



Pass

Mention

Substandard

Doubtful

Impaired

(Loss)

Total

LOAN PORTFOLIO BY 








INTERNALLY ASSIGNED GRADE:








Commercial and industrial








Non-real estate

$   7,655,502

$ 43,009

$   103,134

$    153

$    5,350

$     40,325

$   7,847,473

Owner occupied

3,484,116

3,440

55,247

-

11,229

13,714

3,567,746

     Total commercial and industrial

11,139,618

46,449

158,381

153

16,579

54,039

11,415,219

Commercial real estate








Construction, acquisition and 








development

2,884,673

441

31,263

-

3,765

4,201

2,924,343

Income producing

4,686,699

28,964

174,936

-

3,810

29,960

4,924,369

     Total commercial real estate

7,571,372

29,405

206,199

-

7,575

34,161

7,848,712

Consumer








Residential mortgages 

7,196,106

990

110,429

2,560

1,047

174

7,311,306

Other consumer

300,175

-

7,381

137

-

58

307,751

     Total consumer

7,496,281

990

117,810

2,697

1,047

232

7,619,057

     Total loans

$ 26,207,271

$ 76,844

$   482,390

$ 2,850

$  25,201

$     88,432

$ 26,882,988









 

Cadence Bank

Geographical Information

(Dollars in thousands)

(Unaudited)












March 31, 2022


Alabama





Tennessee





and





and





Florida

Arkansas

Louisiana

Mississippi

Missouri

Georgia

Texas

Other

Total

LOAN AND LEASE PORTFOLIO:










Commercial and industrial










Non-real estate

$   784,707

$   146,113

$   306,171

$   508,051

$  83,869

$   762,174

$  3,612,010

$ 1,814,863

$  8,017,958

Owner occupied

557,251

239,155

248,063

694,639

85,746

410,240

1,348,883

119,937

3,703,914

     Total commercial and industrial

1,341,958

385,268

554,234

1,202,690

169,615

1,172,414

4,960,893

1,934,800

11,721,872

Commercial real estate










Construction, acquisition and 










development

403,428

61,095

47,905

228,402

63,309

468,720

1,457,754

297,901

3,028,514

Income producing

655,970

287,787

211,561

654,923

197,854

829,164

1,685,775

272,452

4,795,486

     Total commercial real estate

1,059,398

348,882

259,466

883,325

261,163

1,297,884

3,143,529

570,353

7,824,000

Consumer










Residential mortgages 

1,487,109

357,669

427,427

1,028,318

151,496

870,539

2,934,062

99,375

7,355,995

Other consumer

38,788

10,959

8,474

56,854

829

22,557

65,159

84,179

287,799

     Total consumer

1,525,897

368,628

435,901

1,085,172

152,325

893,096

2,999,221

183,554

7,643,794

     Total loans and leases, net of unearned

$ 3,927,253

$ 1,102,778

$ 1,249,601

$ 3,171,187

$ 583,103

$ 3,363,394

$ 11,103,643

$ 2,688,707

$ 27,189,666











Loan growth, excluding loans acquired










   during the quarter (annualized)

9.09%

(1.85%)

7.82%

1.00%

33.89%

(13.71%)

(1.57%)

52.94%

4.63%











 

Cadence Bank

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)













Quarter Ended



Mar-22


Dec-21


Sep-21


Jun-21


Mar-21


NONINTEREST REVENUE:











Mortgage banking excl. MSR and MSR Hedge 











market value adjustment

$    7,733


$    7,963


$  11,009


$  11,013


$  17,929


MSR and MSR Hedge market value adjustment

14,030


2,617


2,049


(1,908)


7,381


Credit card, debit card and merchant fees

11,321


12,016


10,692


10,874


9,053


Deposit service charges

19,898


17,680


11,580


10,069


9,586


Securities (losses) gains, net

(1,097)


(378)


(195)


96


82


Insurance commissions

35,727


32,637


35,773


36,106


30,667


Trust income

10,061


7,892


4,735


4,434


5,129


Annuity fees

604


435


50


50


51


Brokerage commissions and fees

11,072


8,025


2,362


3,059


3,285


Gain on sale of PPP loans

-


-


-


21,572


-


Bank-owned life insurance

3,336


3,098


4,217


1,845


2,020


Other miscellaneous income

15,750


11,869


2,148


4,733


2,753


     Total noninterest revenue

$ 128,435


$ 103,854


$  84,420


$ 101,943


$  87,936













NONINTEREST EXPENSE:











Salaries and employee benefits

$ 187,819


$ 149,599


$ 112,968


$ 108,188


$ 101,060


Occupancy, net of rental income

20,346


19,477


13,443


13,187


12,814


Equipment

7,924


7,408


5,534


4,967


4,564


Deposit insurance assessments

3,336


3,278


2,330


1,638


1,455


Pension settlement expense

-


651


2,400


-


-


Advertising

2,716


2,721


988


783


1,004


Foreclosed property expense

440


689


2,189


649


1,021


Telecommunications

1,833


1,725


1,600


1,517


1,398


Public relations

1,877


2,365


1,166


1,012


741


Data processing

16,824


15,606


11,297


11,024


10,424


Computer software

10,659


9,232


5,502


4,887


5,113


Amortization of intangibles

6,780


5,473


2,424


2,401


2,318


Legal

1,793


1,282


814


774


1,166


Merger expense

3,974


44,843


3,442


9,962


1,649


Postage and shipping

2,034


1,772


1,414


1,317


1,547


Other miscellaneous expense

23,312


23,073


12,378


11,678


9,549


     Total noninterest expense

$ 291,667


$ 289,194


$ 179,889


$ 173,984


$ 155,823













INSURANCE COMMISSIONS:











Property and casualty commissions

$  25,852


$  23,640


$  26,413


$  26,040


$  21,949


Life and health commissions

7,143


6,459


6,543


7,130


6,494


Risk management income

757


699


676


611


613


Other

1,975


1,839


2,141


2,325


1,611


     Total insurance commissions

$  35,727


$  32,637


$  35,773


$  36,106


$  30,667













 

Cadence Bank

Average Balances and Yields

(Dollars in thousands)

(Unaudited)






















For the Three Months Ended



March 31, 2022


December 31, 2021


March 31, 2021



Average


Income/


Yield/


Average


Income/


Yield/


Average


Income/


Yield/

(Dollars in thousands)


Balance


Expense


Rate


Balance


Expense


Rate


Balance


Expense


Rate




















ASSETS



















Interest-earning assets:



















Loans and leases, excluding accretion


$    27,106,733


$264,910


3.96%


$22,745,093


$233,585


4.07%


$15,029,076


$165,802


4.47%

Accretion income on acquired loans




17,741


0.27




16,426


0.29




3,779


0.10

Loans held for sale


176,647


1,407


3.23


220,766


1,324


2.38


289,755


1,595


2.23

Investment securities 



















Taxable


14,588,090


45,155


1.26


12,636,302


37,258


1.17


6,505,915


21,192


1.32

Tax-exempt


482,434


3,056


2.57


318,245


2,035


2.54


100,112


870


3.52

Total investment securities


15,070,524


48,211


1.30


12,954,547


39,293


1.20


6,606,027


22,062


1.35

Other investments


1,161,262


688


0.24


1,289,997


822


0.25


421,217


114


0.11

Total interest-earning assets


43,515,166


332,957


3.10


37,210,403


291,450


3.11


22,346,075


193,352


3.51

Other assets


4,608,978






4,189,688






2,442,420





Allowance for credit losses


(444,294)






(404,578)






(242,935)





Total assets


$    47,679,850






$40,995,513






$24,545,560
























LIABILITIES AND SHAREHOLDERS' EQUITY



















Interest-bearing liabilities:



















Demand deposits


$    19,401,019


$    9,742


0.20%


$15,811,268


$    8,485


0.21%


$  8,956,420


$    8,796


0.40%

Savings deposits


3,631,699


568


0.06


3,374,243


1,203


0.14


2,550,095


700


0.11

Time deposits


3,725,794


4,764


0.52


3,526,539


5,139


0.58


2,480,862


6,966


1.14

Total interest-bearing deposits


26,758,512


15,074


0.23


22,712,050


14,827


0.26


13,987,377


16,462


0.48

Short-term borrowings


825,589


216


0.11


727,674


200


0.11


653,194


203


0.13

Long-term borrowings


466,842


4,818


4.19


441,165


4,387


3.95


301,696


3,329


4.48

Total interest-bearing liabilities


28,050,943


20,108


0.29


23,880,889


19,414


0.32


14,942,267


19,994


0.54

Noninterest-bearing liabilities:



















Demand deposits


13,806,591






12,047,637






6,484,703





Other liabilities


760,085






558,393






305,589





Total liabilities


42,617,619






36,486,919






21,732,559





Shareholders' equity


5,062,231






4,508,594






2,813,001





Total liabilities and shareholders' equity


$    47,679,850






$40,995,513






$24,545,560





Net interest income/net interest spread




312,849


2.81%




272,036


2.78%




173,358


2.97%

Net yield on earning assets/net interest margin






2.92%






2.90%






3.15%

Taxable equivalent adjustment:



















Loans and investment securities




(1,027)






(824)






(569)



Net interest revenue




$311,822






$271,212






$172,789




























































 

Cadence Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)








Quarter Ended


Mar-22

Dec-21

Sep-21

Jun-21

Mar-21

MORTGAGE SERVICING RIGHTS (MSR):






Fair value, beginning of period

$       69,552

$       64,684

$       60,615

$     60,332

$     47,571

Additions to mortgage servicing rights:






   Originations of servicing assets

5,155

5,709

5,798

6,833

5,588

Changes in fair value:






   Due to payoffs/paydowns

(3,147)

(3,823)

(3,919)

(2,946)

(3,273)

   Due to update in valuation assumptions

21,299

2,982

2,190

(3,604)

10,446

Fair value, end of period

$       92,859

$       69,552

$       64,684

$     60,615

$     60,332







MORTGAGE BANKING REVENUE:






   Origination

$        5,118

$        5,970

$         9,284

$       8,646

$     15,955

   Servicing

5,762

5,816

5,644

5,313

5,247

   Payoffs/Paydowns

(3,147)

(3,823)

(3,919)

(2,946)

(3,273)

     Total mortgage banking revenue excluding MSR

7,733

7,963

11,009

11,013

17,929

Market value adjustment on MSR

21,299

2,982

2,190

(3,604)

10,446

Market value adjustment on MSR Hedge

(7,269)

(365)

(141)

1,696

(3,065)

Total mortgage banking revenue

$       21,763

$       10,580

$       13,058

$       9,105

$     25,310







Mortgage loans serviced

$  7,629,119

$  7,553,917

$   7,455,113

$ 7,407,690

$ 7,259,808

MSR/mortgage loans serviced

1.22%

0.92%

0.87%

0.82%

0.83%







AVAILABLE-FOR-SALE SECURITIES, at fair value






U.S. Treasury securities

$  1,459,845

$  1,496,465

$             -

$           -

$           -

Obligations of U.S. government agencies

2,350,810

2,638,442

2,575,564

2,758,412

2,642,646

Mortgage-backed securities issued or guaranteed by






   U.S. agencies (MBS):






   Residential pass-through:






      Guaranteed by GNMA

105,900

113,427

52,625

56,009

56,778

      Issued by FNMA and FHLMC

7,604,829

8,129,191

5,773,462

4,653,531

3,381,468

   Other residential mortgage-back securities

212,216

243,357

-

-

-

   Commercial mortgage-backed securities

1,951,367

2,061,133

1,518,556

1,478,058

1,414,345

      Total MBS

9,874,312

10,547,108

7,344,643

6,187,598

4,852,591

Obligations of states and political subdivisions

530,241

565,520

112,152

117,248

126,589

Other domestic debt securities

103,117

63,645

21,013

20,853

18,442

Foreign debt securities

53,281

295,290

-

-

-

Total available-for-sale securities

$ 14,371,606

$ 15,606,470

$ 10,053,372

$ 9,084,111

$ 7,640,268







 

Cadence Bank

Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions

(Dollars in thousands, except per share amounts)

(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 expense, tangible common shareholders' equity to tangible assets, 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, adjusted pre-tax pre-provision net revenue to total average assets, average tangible book value per common share, adjusted earnings per common share, efficiency ratio (tax equivalent) and adjusted efficiency ratio (tax equivalent), 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.














Reconciliation of Net Income to Adjusted Net Income and Adjusted Net income to Adjusted Net Income Available to Common Shareholders:




Quarter Ended




Mar-22


Dec-21


Sep-21


Jun-21


Mar-21













Net income (loss)


$    114,947


$ (34,657)


$  72,725


$  75,539


$  81,555

Plus:

Merger expense


3,974


44,843


3,442


9,962


1,649


Incremental merger related expense


6,571


4,633


-


-


-


Initial provision for acquired loans


-


132,062


-


11,500


-


Branch closing expense


128


-


-


-


-


Pension settlement expense


-


651


2,400


-


-

Less:

Security (losses) gains


(1,097)


(378)


(195)


96


82


Tax adjustment


2,786


41,453


1,506


5,331


391

Adjusted net income


$    123,931


$ 106,457


$  77,256


$  91,574


$  82,731

Less:

Preferred dividends


2,372


2,372


2,372


2,372


2,372

Adjusted net income available to











common shareholders


$    121,559


$ 104,085


$  74,884


$  89,202


$  80,359













 

Cadence Bank

Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions

(Dollars in thousands, except per share amounts)

(Unaudited)














Reconciliation of Net Income to Pre-Tax Pre-Provision Net Revenue
























Quarter Ended





Mar-22


Dec-21


Sep-21


Jun-21


Mar-21















Net income (loss)


$    114,947


$ (34,657)


$  72,725


$  75,539


$  81,555


Plus:

Provision (release) for credit losses


-


133,562


(7,000)


11,500


-



Income tax expense (benefit)


33,643


(13,033)


20,350


21,102


23,347


Pre-tax pre-provision net revenue


$    148,590


$  85,872


$  86,075


$ 108,141


$ 104,902















Reconciliation of Net Income to Adjusted Pre-Tax Pre-Provision Net Revenue



















Net income (loss)


$    114,947


$ (34,657)


$  72,725


$  75,539


$  81,555


Plus:

Provision (release) for credit losses


-


133,562


(7,000)


11,500


-



Merger expense


3,974


44,843


3,442


9,962


1,649



Incremental merger related expense


6,571


4,633


-


-


-



Branch closing expense


128


-


-


-


-



Pension settlement expense


-


651


2,400


-


-



Income tax expense (benefit)


33,643


(13,033)


20,350


21,102


23,347


Less:

Security (losses) gains


(1,097)


(378)


(195)


96


82


Adjusted pre-tax pre-provision net revenue


$    160,360


$ 136,377


$  92,112


$ 118,007


$ 106,469















Reconciliation of Total Noninterest Expense: to Adjusted Total Noninterest Expense

















Total noninterest expense


$    291,667


$ 289,194


$ 179,889


$ 173,984


$ 155,823


Less:

Merger expense


3,974


44,843


3,442


9,962


1,649



Incremental merger related expense


6,571


4,633


-


-


-



Branch closing expense


128


-


-


-


-



Pension settlement expense


-


651


2,400


-


-


Total adjusted expense


$    280,994


$ 239,067


$ 174,047


$ 164,022


$ 154,174















 

Cadence Bank

Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions

(Dollars in thousands, except per share amounts)

(Unaudited)



























Reconciliation of Total Assets to Total Tangible Assets and Tangible 












Shareholders' Equity to Tangible Common Shareholders' Equity:




























Quarter Ended





Mar-22


Dec-21


Sep-21


Jun-21


Mar-21


Tangible assets












Total assets


$   47,204,061


$  47,669,751


$  28,060,496


$  27,612,365


$  25,802,497


Less:  

Goodwill


1,409,038


1,407,948


958,304


957,474


851,612



Other identifiable intangible assets


191,642


198,271


52,235


54,659


53,581


Total tangible assets


$   45,603,381


$  46,063,532


$  27,049,957


$  26,600,232


$  24,897,304















PERIOD END BALANCES:












Tangible shareholders' equity












Total shareholders' equity


$     4,643,757


$    5,247,987


$    3,023,257


$    3,069,574


$    2,825,198


Less:

Goodwill


1,409,038


1,407,948


958,304


957,474


851,612



Other identifiable intangible assets


191,642


198,271


52,235


54,659


53,581



Preferred stock


166,993


166,993


166,993


166,993


166,993


Total tangible common shareholders' equity


$     2,876,084


$    3,474,775


$    1,845,725


$    1,890,448


$    1,753,012















AVERAGE BALANCES:












Tangible shareholders' equity












Total shareholders' equity


$     5,062,231


$    4,508,594


$    3,058,307


$    2,954,834


$    2,813,001


Less:

Goodwill


1,407,973


1,115,502


957,899


910,448


851,612



Other identifiable intangible assets


195,606


106,559


53,567


52,564


54,876



Preferred stock


166,993


166,993


166,993


166,993


166,993


Total tangible common shareholders' equity


$     3,291,659


$    3,119,540


$    1,879,848


$    1,824,829


$    1,739,520















Total average assets


$   47,679,850


$  40,990,459


$  27,616,585


$  26,666,296


$  24,545,560


Total shares of common stock outstanding


183,488,844


188,337,658


106,853,316


108,614,595


102,624,818


Average shares outstanding-diluted


187,264,335


164,720,656


108,250,102


105,838,056


102,711,584















Tangible common shareholders' equity to tangible assets (1)


6.31%


7.54%


6.82%


7.11%


7.04%


Return on average tangible common equity (2)


13.87


(4.71)


14.85


16.08


18.46


Adjusted return on average tangible common equity (3)


14.98


13.24


15.80


19.61


18.74


Adjusted return on average assets (4)


1.05


1.03


1.11


1.38


1.37


Adjusted return on average common shareholders' equity (5)


10.07


9.51


10.28


12.83


12.32


Pre-tax pre-provision net revenue to total average assets (6)


1.26


0.83


1.24


1.63


1.73


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


1.36


1.32


1.32


1.77


1.76


Tangible book value per common share (8)


$            15.67


$           18.45


$           17.27


$           17.41


$           17.08


Adjusted earnings per common share (9)


$              0.65


$             0.63


$             0.69


$             0.84


$             0.78


Adjusted dividend payout ratio (10)


33.85%


31.75%


28.99%


22.62%


24.36%















 

(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)

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.

(3)

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.

(4)

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

(5)

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.

(6)

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.

(7)

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.

(8)

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

(9)

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.

(10)

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






















Efficiency Ratio and Adjusted Efficiency Ratio 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 expense  items otherwise disclosed as non-operating from total noninterest expense.

 

SOURCE Cadence Bank

For further information: Valerie C. Toalson, Senior Executive Vice President and Chief Financial Officer, 713/871-3903, or Will Fisackerly, Executive Vice President and Director of Corporate Finance, 662/680-2475