HOUSTON and TUPELO,
Miss., April 24, 2023 /PRNewswire/ -- Cadence
Bank (NYSE: CADE) (the Company), today announced financial results
for the quarter ended March 31, 2023.
Highlights for the first quarter of 2023 included:
- Achieved quarterly net income available to common shareholders
of $74.3 million, or $0.40 per diluted common share, and adjusted net
income available to common shareholders of $124.4 million, or $0.68 per diluted common share.
- Continued to maintain strong balance sheet liquidity, with
total deposit growth of $449.8
million, or 4.7% on an annualized basis, and a
loan-to-deposit ratio of 79.4%.
- Generated net organic loan growth of $933.3 million for the first quarter of 2023, or
12.5% on an annualized basis.
- Maintained stability in the net interest margin at 3.29%, down
4 basis points from the prior quarter.
- Experienced low levels of net charge-offs, which totaled 0.02%
of average loans and leases on an annualized basis for the quarter;
results for the quarter included a provision for credit losses of
$10.0 million and an ending allowance
for credit losses to total loans of 1.45%, which was stable
compared to December 31, 2022.
- The Company executed or announced the following as part of an
ongoing effort to enhance its operating efficiency and
profitability:
-
- Executed a balance sheet optimization transaction whereby the
Company sold $1.5 billion in
low-yielding available-for-sale securities during February, with
financial earn-back expected by early in the fourth quarter of
2023. The first quarter results include an after-tax realized loss
of approximately $39.5 million
related to this transaction and it is estimated to add an
incremental $10.5 million to pre-tax
earnings in 2023.
- In April 2023, announced the
closure or consolidation of 35 branches to occur in mid-2023 as
part of in-process initiatives projected to reduce noninterest
expense by approximately $15 -
$20 million annually.
"Our first quarter results reflect continued strength in our
balance sheet, as we continued to add quality loan growth while
maintaining strong liquidity and capital, even in the midst of a
unique quarter for the banking industry," remarked Dan Rollins, Chairman and Chief Executive
Officer of the Company. "Additionally, our strong capital and
earnings allowed us the flexibility to capitalize on the rate
environment by executing a balance sheet optimization transaction
that, while creating an upfront loss on the sale, will result in
incremental 2023 earnings for the Company. Given the late-quarter
industry volatility, we proactively added on-balance sheet
liquidity in addition to our significant off-balance sheet
liquidity availability. Notably, however, our core deposit base
showed little change during this period, a testament to the
granularity of our deposits, the diversity of our customer base by
both business mix and geography, and the strength of our bankers
and their continuous focus on our customers."
Earnings Summary
For the first quarter of 2023, the Company reported net income
available to common shareholders of $74.3
million, or $0.40 per diluted
common share, compared with $112.6
million, or $0.60 per diluted
common share, for the first quarter of 2022 and $95.6 million, or $0.52 per diluted common share, for the fourth
quarter of 2022. Adjusted net income available to common
shareholders was $124.4 million, or
$0.68 per diluted common share, for
the first quarter of 2023, compared with $121.6 million, or $0.65 per diluted common share, for the first
quarter of 2022 and $142.9 million,
or $0.78 per diluted common share,
for the fourth quarter of 2022. Additionally, the Company
reported adjusted pre-provision net revenue (PPNR) of $174.6 million, or 1.46% of average assets on an
annualized basis, for the first quarter of 2023 compared to
$160.4 million, or 1.36% of average
assets on an annualized basis, for the first quarter of 2022 and
$195.5 million, or 1.62% of average
assets on an annualized basis, for the fourth quarter of 2022.
The decline in adjusted earnings and PPNR metrics for the first
quarter was driven by a decline in net interest revenue, an
increase in the provision for credit losses, and an increase in
core operating expenses related to several factors including
seasonality in compensation expense as well as increasing deposit
insurance assessment expense and pension expense. The decline
in net interest revenue is a result of day count for the quarter as
well as the addition of on-balance sheet liquidity in response to
recent volatility in the banking industry.
Net Interest Revenue
Net interest revenue was $354.3
million for the first quarter of 2023, compared to
$311.8 million for the first quarter
of 2022 and $359.4 million for the
fourth quarter of 2022, a decrease of $5.1 million or 1.42% from the linked quarter.
The fully taxable equivalent (FTE) net interest margin was 3.29%
for the first quarter of 2023, compared with 2.92% for the first
quarter of 2022 and 3.33% for the fourth quarter of 2022.
Net interest revenue included accretion revenue related to
acquired loans and leases of $10.0
million and $9.2 million for
the first quarter of 2023 and the fourth quarter of 2022,
respectively, adding approximately 9 basis points to the net
interest margin in both quarters.
The decline in net interest revenue in the first quarter of 2023
of $5.1 million compared to the
linked quarter was the result of a $7.9
million decline due to the lower first quarter day
count, partially offset by the increase in net interest revenue due
to loan growth and the balance sheet optimization transaction
resulting from the sale of low-yielding securities in the
quarter.
Yields on net loans, loans held for sale, and leases excluding
accretion, were 5.87% for the first quarter of 2023, up 46 basis
points from 5.41% for the fourth quarter of 2022, while yields on
total interest earning assets were 4.88% for the first quarter of
2023, up 50 basis points from 4.38% for the fourth quarter of
2022. The increase in earning asset yields was driven by both
the impact of rising interest rates on loan portfolio repricing and
new loan production, as well as a mix shift as we deployed cash
flow from lower yielding securities into higher yielding loans and
securities. Approximately 21% 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 1.28% for the
first quarter of 2023, compared with 0.76% for the fourth quarter
of 2022, reflecting continued rising rates as well as a mix shift
from noninterest bearing to interest bearing products during the
quarter. Our total deposit beta was 59% for the first
quarter of 2023 and currently stands at 25% cycle-to-date.
Total interest-bearing liabilities costs increased to 2.23% from
1.54% during the quarter, reflecting the increase in short-term
borrowings in the quarter as a result of both loan growth and a
proactive increase in on-balance sheet liquidity late in the
quarter in response to industry volatility.
Balance Sheet Activity
Loans and leases, net of unearned income, increased $933.3 million during the first quarter, or 12.5%
annualized, to $31.3 billion.
The loan growth for the quarter reflected growth primarily in the
corporate banking group, including commercial real estate and
renewable energy verticals, as well as in mortgage.
During the quarter, the Company initiated a balance sheet
optimization transaction related to a portion of its investment
securities portfolio. The Company sold $1.5
billion of available-for-sale U.S. Treasury debt securities
yielding approximately 0.70% for an after-tax realized loss of
approximately $39.5 million. The
proceeds have been used to reinvest in higher-yielding debt
securities, fund loan growth, and pay off borrowings. The
Company estimates that the loss will be recouped within
approximately 7.5 months, resulting in incremental 2023 pre-tax
income of approximately $10.5 million. Total investment
securities of $10.9 billion at
March 31, 2023 decreased $1.1 billion during the first quarter as a net
result of the sale and routine portfolio cash flows, partially
offset by re-investments in the securities portfolio.
Consistent with prior quarters, all of the Company's investment
securities portfolio is classified as available for sale on the
balance sheet, with no investments categorized as held to
maturity.
Total deposits increased $449.8
million, or 4.7% on an annualized basis, to $39.4 billion as of March
31, 2023. The quarterly increase in deposits included
approximately $1.6 billion in
brokered deposits that were proactively added to the balance sheet
to further enhance on-balance sheet liquidity, and a decline of
approximately $0.7 billion in public
funds as a result of routine seasonal activity. Excluding the
impact of brokered deposits and public funds, total deposits
declined approximately $400 million,
or 1% of total deposits, during the quarter with a modest increase
in community bank deposits partially offsetting a decline in the
corporate banking group.
The March 31, 2023 loan to deposit
ratio was 79.4% and securities to total assets was 21.0%,
reflecting continued strong balance sheet liquidity. Noninterest
bearing deposits represented 29.2% of total deposits at the end of
the first quarter of 2023, declining from 32.7% at December 31, 2022, reflecting migration from
noninterest bearing products to interest bearing products. The
Company's deposit base continues to be very granular, with average
transaction account balances of approximately $20,000 for consumer accounts and $135,000 for commercial accounts at March 31, 2023. Additionally, approximately 98%
of the Company's deposit accounts have balances less than
$250,000, and nearly 70% of our
deposit balances were FDIC insured or collateralized at
quarter-end.
Short-term borrowings increased $2.4
billion to $5.7 billion at
March 31, 2023, primarily reflecting
an increase in on-balance sheet liquidity late in the
quarter. Cash, due from balances and deposits at the Federal
Reserve accordingly increased $3.1
billion to $5.1 billion at
March 31, 2023.
Credit Results, Provision for Credit Losses and Allowance for
Credit Losses
Credit quality metrics for the first quarter of 2023 reflect
continued low levels of net charge-offs, an increase in the
provision for credit losses, and an increase in non-performing and
classified assets. While non-performing and classified asset
levels did increase during the quarter, these metrics have been at
historically low levels and continue to compare favorably to longer
term normalized levels.
Total non-performing assets as a percent of total assets were
0.33% at March 31, 2023 up from 0.31%
at March 31, 2022 and 0.24% at
December 31, 2022. Total
non-performing loans and leases as a percent of loans were 0.53% at
March 31, 2023, compared to 0.44% at
March 31, 2022 and 0.36% at
December 31, 2022. Other real estate owned and other
repossessed assets declined to $5.3
million at March 31, 2023 from the March 31, 2022 balance of $28.4 million and the December 31, 2022
balance of $6.7 million.
Classified loans were 2.28% of total net loans and leases at
March 31, 2023, up from 1.75% at
March 31, 2022 and 1.76% at
December 31, 2022.
Net charge-offs for the first quarter of 2023 were $1.9 million, or 0.02% of average net loans and
leases on an annualized basis, compared with net recoveries of
$0.4 million for the first quarter of
2022 and net recoveries of $5.0
million for the fourth quarter of 2022. The provision for
credit losses for the first quarter of 2023 was $10.0 million, compared with no recorded
provision for credit losses for first quarter of 2022 and a
provision for credit losses of $6.0
million for the fourth quarter of 2022. The first
quarter of 2023 provision expense included a $15.0 million provision charge for funded loans
and a $5.0 million provision reversal
for unfunded commitments. The allowance for credit losses of
$453.7 million at March 31, 2023 represented 1.45% as a percent of
total loans and leases, which is unchanged from the December 31, 2022 coverage.
Noninterest Revenue
Noninterest revenue was $74.1
million for the first quarter of 2023, compared with
$128.4 million for the first quarter
of 2022 and $114.9 million for the
fourth quarter of 2022. The linked quarter decline was primarily
due to a $51.3 million loss on the
sale of securities. Before the loss on securities,
noninterest revenue of $125.4 million
was up $9.9 million from the fourth
quarter of 2022 revenue driven by solid increases in
insurance commission and mortgage banking revenue, partially offset
by lower card revenues.
Insurance commission revenue was strong at $39.6 million for the first quarter of 2023,
compared with $35.7 million for
the first quarter of 2022 and $34.7
million for the fourth quarter of 2022. The linked quarter
increase of $4.9 million is
attributable to lower annual fourth quarter renewals as a result of
seasonality in the scheduled renewal cycle while the increase from
the first quarter of 2022 of 10.9% is a result of continued high
customer retention rates and a firm pricing market.
Credit card, debit card and merchant fee revenue was
$11.9 million for the first quarter
of 2023, compared with $11.3 million
for the first quarter of 2022 and $15.8 million for the fourth quarter of
2022. The linked quarter decline in card fee revenue
reflected both typical seasonal declines in the first quarter as
well as the impact of a fourth quarter 2022 positive vendor
incentive revenue accrual adjustment of approximately $2.5 million. Deposit service charge revenue was
$16.5 million for the first quarter
of 2023 compared with $19.2 million
for the first quarter of 2022 and $16.9
million for the fourth quarter of 2022, with the declines
including increases in earnings credit rate due to the increasing
rate environment. Other noninterest revenue was $29.8 million for the first quarter of 2023,
compared with $19.8 million for the
first quarter of 2022 and $26.4
million for the fourth quarter of 2022. The increase
in other noninterest revenue compared to the fourth quarter of 2022
includes an increase in FHLB dividends, SBA revenue and credit
related fees while the increase compared to the first quarter of
2022 is primarily driven by an increase in earnings from FHLB stock
and other equity investments.
Mortgage production and servicing revenue totaled $8.4 million for the first quarter of 2023,
compared with $7.7 million for the
first quarter of 2022 and $5.4
million for the fourth quarter of 2022. The net mortgage
servicing rights valuation adjustment was negative $2.3 million for the first quarter of 2023,
compared with a positive $14.0
million for the first quarter of 2022 and a negative
$2.8 million for the fourth quarter
of 2022 with the variances due to continued changes in the interest
rate environment. Mortgage origination volume for the first quarter
of 2023 was $454.2 million, compared
with $803.9 million for the first
quarter of 2022 and $554.5 million
for the fourth quarter of 2022.
Noninterest Expense
Noninterest expense for the first quarter of 2023 was
$319.3 million, compared with
$291.7 million for the first quarter
of 2022 and $340.7 million for the
fourth quarter of 2022. Adjusted noninterest expense for the first
quarter of 2023 was $305.0 million,
compared with $281.0 million for the
first quarter of 2022 and $279.3
million for the fourth quarter of 2022. The adjusted
efficiency ratio was 63.46% for the first quarter of 2023 compared
to 58.69% for the fourth quarter of 2022. The increase in adjusted
noninterest expense compared to the linked quarter was driven
primarily by an increase in salaries and employee benefits expense.
Salaries and benefits expense increased $11.8 million compared to the fourth quarter of
2022 due to both the impact of fourth quarter of 2022 year-end
employee benefit expense reductions of approximately $7.3 million combined with first quarter of 2023
seasonal factors that elevated expense including an increase of
$5.0 million in payroll tax expense
resulting primarily from FICA resets. Deposit insurance assessment
expense increased $2.4 million due
primarily to the 2 basis point assessment increase effective in the
first quarter 2023. Additionally, excluding the impact of
merger related items, other non-interest expense increased
approximately $7.6 million compared
to the fourth quarter of 2022. This increase includes an
increase in fraud losses of $2.4
million, which is in the process of collection over the
coming quarters, a $1.7 million
increase in pension costs resulting from an increase in the
Company's pension discount rate and an increase in certain other
volume driven costs. Additionally, other noninterest expense
for the fourth quarter of 2022 included a benefit of approximately
$1.6 million related to year-end
franchise tax accruals.
Adjusted noninterest expense for the first quarter of 2023
excludes $14.0 million in total
merger related expenses, which includes one-time merger expense
shown as a separate line item on the income statement as well as
incremental merger related expenses (expenses for which the entity
receives future benefit) that are included in the respective
expense categories. Merger expense was $5.1
million for the first quarter of 2023, compared with
$4.0 million for the first quarter of
2022 and $20.3 million for the fourth
quarter of 2022. Merger expense for the first quarter of 2023 was
comprised primarily of system and technology related expenses.
Incremental merger related expenses for the first quarter of 2023
totaled $9.0 million and primarily
included employment agreement and related compensation related
expenses. These expenses declined compared to $32.7 million in the prior quarter.
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
during mid 2023. This strategy, including other in-process
initiatives, is estimated to result in annualized cost savings of
approximately $15-20 million.
These branch closures and consolidations are in addition to the 17
executed in the fourth quarter of 2022.
Capital Management
Total shareholders' equity was $4.5
billion at March 31, 2023
compared with $4.6 billion at
March 31, 2022 and $4.3 billion at December
31, 2022. The increase in the current quarter was comprised
of net income and an improvement in accumulated other comprehensive
income (loss) ("AOCI") due to improved valuation in the
available-for-sale securities portfolio, partially offset by
quarterly dividends. The year-over-year decline is due to a decline
in AOCI resulting from an increase in unrealized losses in the
available-for-sale securities portfolio due to the interest rate
environment.
Estimated regulatory capital ratios at March 31, 2023
included Common Equity Tier 1 capital of 10.1%, Tier 1 capital of
10.6%, Total risk-based capital of 12.8%, and Tier 1 leverage
capital of 8.4%. During the first quarter of 2023, the
Company did not repurchase shares of its common stock pursuant to
its 10 million share repurchase authorization for 2023.
Outstanding common shares were 182.7 million as of March 31, 2023.
Summary
Rollins concluded, "We are pleased with how we are beginning the
2023 year. Despite the recent industry liquidity concerns, an
uncertain rate environment, and questions around the broader
economy and credit impact, I continue to be optimistic given the
strength in our earnings, our balance sheet and our capital, as
well as the differentiating stability resulting from our business,
customer and geographical diversification. This diversification,
combined with our great team of bankers, provides the resilient
foundation we are proud of at Cadence Bank."
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 21 of this news release.
Conference Call and Webcast
The Company will conduct a conference call to discuss its first
quarter 2023 financial results on April 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.
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; 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 combined 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
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
Earnings
Summary:
|
|
|
|
|
|
Interest
revenue
|
$
526,132
|
$
473,548
|
$
405,559
|
$
349,555
|
$
331,930
|
Interest
expense
|
171,862
|
114,188
|
50,205
|
24,789
|
20,108
|
Net interest
revenue
|
354,270
|
359,360
|
355,354
|
324,766
|
311,822
|
Provision for credit
losses
|
10,000
|
6,000
|
—
|
1,000
|
—
|
Net interest revenue,
after provision for credit losses
|
344,270
|
353,360
|
355,354
|
323,766
|
311,822
|
Noninterest
revenue
|
74,071
|
114,873
|
124,491
|
125,234
|
128,435
|
Noninterest
expense
|
319,279
|
340,671
|
319,734
|
285,888
|
291,667
|
Income before income
taxes
|
99,062
|
127,562
|
160,111
|
163,112
|
148,590
|
Income tax
expense
|
22,433
|
29,628
|
36,713
|
36,154
|
33,643
|
Net income
|
76,629
|
97,934
|
123,398
|
126,958
|
114,947
|
Less: Preferred
dividends
|
2,372
|
2,372
|
2,372
|
2,372
|
2,372
|
Net income available to
common shareholders
|
$
74,257
|
$
95,562
|
$
121,026
|
$
124,586
|
$
112,575
|
|
|
|
|
|
|
Balance Sheet -
Period End Balances
|
|
|
|
|
Total assets
|
$
51,693,096
|
$
48,653,414
|
$
47,699,660
|
$
47,747,708
|
$
47,204,061
|
Total earning
assets
|
46,808,611
|
43,722,544
|
42,832,355
|
43,093,974
|
42,744,225
|
Available-for-sale
securities
|
10,877,879
|
11,944,096
|
12,441,894
|
13,450,621
|
14,371,606
|
Loans and leases, net
of unearned income
|
31,282,594
|
30,349,277
|
29,296,450
|
28,360,485
|
27,189,666
|
Allowance for credit
losses (ACL)
|
453,727
|
440,347
|
433,363
|
440,112
|
438,738
|
Net book value of
acquired loans
|
7,942,980
|
8,754,526
|
8,841,588
|
9,721,672
|
11,020,251
|
Unamortized net
discount on acquired loans
|
41,748
|
58,162
|
58,887
|
65,350
|
72,620
|
Total
deposits
|
39,406,454
|
38,956,614
|
39,003,946
|
40,189,083
|
40,568,055
|
Total deposits and
repurchase agreements
|
40,177,789
|
39,665,350
|
39,682,280
|
40,838,260
|
41,271,615
|
Federal funds purchased
and short-term FHLB advances
|
5,700,228
|
3,300,231
|
2,495,000
|
1,200,000
|
—
|
Subordinated and
long-term debt
|
462,144
|
462,554
|
463,291
|
465,073
|
465,695
|
Total shareholders'
equity
|
4,490,417
|
4,311,374
|
4,166,925
|
4,437,925
|
4,643,757
|
Total shareholders'
equity, excluding AOCI (1)
|
5,572,303
|
5,533,912
|
5,464,737
|
5,374,270
|
5,307,757
|
Common shareholders'
equity
|
4,323,424
|
4,144,381
|
3,999,932
|
4,270,932
|
4,476,764
|
Common shareholders'
equity, excluding AOCI (1)
|
$
5,405,310
|
$
5,366,919
|
$
5,297,744
|
$
5,207,277
|
$
5,140,764
|
|
|
|
|
|
|
Balance Sheet -
Average Balances
|
|
|
|
|
Total assets
|
$
48,652,201
|
$
47,790,494
|
$
47,595,557
|
$
47,064,829
|
$
47,679,850
|
Total earning
assets
|
43,819,715
|
42,976,050
|
43,079,481
|
42,688,497
|
43,515,166
|
Available-for-sale
securities
|
11,354,457
|
12,156,803
|
13,252,828
|
13,941,127
|
15,070,524
|
Loans and leases, net
of unearned income
|
30,891,640
|
29,812,924
|
28,872,156
|
27,848,097
|
27,106,733
|
Total
deposits
|
38,904,048
|
38,372,354
|
39,600,886
|
39,396,028
|
40,565,103
|
Total deposits and
repurchase agreements
|
39,632,023
|
39,033,328
|
40,256,109
|
40,062,095
|
41,259,136
|
Subordinated and
long-term debt
|
462,385
|
462,927
|
464,843
|
465,447
|
466,842
|
Total shareholders'
equity
|
4,396,461
|
4,215,585
|
4,506,655
|
4,523,189
|
5,062,231
|
Common shareholders'
equity
|
$
4,229,468
|
$
4,048,592
|
$
4,339,662
|
$
4,356,196
|
$
4,895,238
|
|
|
|
|
|
|
Nonperforming
Assets:
|
|
|
|
|
|
Nonaccrual loans and
leases
|
$
160,615
|
$
98,745
|
$
89,931
|
$
89,368
|
$
91,031
|
Loans and leases 90+
days past due, still accruing
|
5,164
|
2,068
|
11,984
|
19,682
|
20,957
|
Accruing TDR
(2)
|
—
|
8,598
|
16,200
|
7,385
|
7,292
|
Non-performing loans
and leases (NPL)
|
165,779
|
109,411
|
118,115
|
116,435
|
119,280
|
Other real estate owned
and other assets
|
5,327
|
6,725
|
8,376
|
14,399
|
28,401
|
Non-performing assets
(NPA)
|
$
171,106
|
$
116,136
|
$
126,491
|
$
130,834
|
$
147,681
|
|
|
(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
|
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
Financial Ratios and
Other Data:
|
|
|
|
|
|
Return on average
assets (2)
|
0.64 %
|
0.81 %
|
1.03 %
|
1.08 %
|
0.98 %
|
Adjusted return on
average assets (1)(2))
|
1.06
|
1.21
|
1.22
|
1.16
|
1.05
|
Return on average
common shareholders' equity (2)
|
7.12
|
9.36
|
11.06
|
11.47
|
9.33
|
Adjusted return on
average common shareholders' equity (1)(2)
|
11.93
|
14.00
|
13.13
|
12.36
|
10.07
|
Return on average
tangible common equity (1)(2)
|
11.40
|
15.42
|
17.40
|
18.11
|
13.87
|
Adjusted return on
average tangible common equity (1)(2)
|
19.10
|
23.04
|
20.66
|
19.50
|
14.98
|
Pre-tax pre-provision
net revenue to total average assets (1)(2)
|
0.91
|
1.11
|
1.33
|
1.40
|
1.26
|
Adjusted pre-tax
pre-provision net revenue to total average assets
(1)(2)
|
1.46
|
1.62
|
1.58
|
1.51
|
1.36
|
Net interest
margin-fully taxable equivalent
|
3.29
|
3.33
|
3.28
|
3.06
|
2.92
|
Net interest rate
spread-fully taxable equivalent
|
2.65
|
2.84
|
3.05
|
2.94
|
2.81
|
Efficiency ratio fully
tax equivalent (1)
|
74.36
|
71.67
|
66.49
|
63.38
|
66.10
|
Adjusted efficiency
ratio fully tax equivalent (1)
|
63.46
|
58.69
|
60.33
|
60.46
|
63.52
|
Loan/deposit
ratio
|
79.38 %
|
77.91 %
|
75.11 %
|
70.57 %
|
67.02 %
|
Full time equivalent
employees
|
6,567
|
6,572
|
6,629
|
6,659
|
6,568
|
|
|
|
|
|
|
Credit Quality
Ratios:
|
|
|
|
|
|
Net charge-offs
(recoveries) to average loans and leases (2)
|
0.02 %
|
(0.07) %
|
0.09 %
|
(0.02) %
|
(0.01) %
|
Provision for credit
losses to average loans and leases (2)
|
0.13
|
0.08
|
—
|
0.01
|
—
|
ACL to loans and
leases, net
|
1.45
|
1.45
|
1.48
|
1.55
|
1.61
|
ACL to NPL
|
273.69
|
402.47
|
366.90
|
377.99
|
367.82
|
NPL to loans and
leases, net
|
0.53
|
0.36
|
0.40
|
0.41
|
0.44
|
NPA to total
assets
|
0.33
|
0.24
|
0.27
|
0.27
|
0.31
|
|
|
|
|
|
|
Equity
Ratios:
|
|
|
|
|
|
Total shareholders'
equity to total assets
|
8.69 %
|
8.86 %
|
8.74 %
|
9.29 %
|
9.84 %
|
Total common
shareholders' equity to total assets
|
8.36
|
8.52
|
8.39
|
8.94
|
9.48
|
Tangible common
shareholders' equity to tangible assets (1)
|
5.46
|
5.42
|
5.24
|
5.82
|
6.31
|
Tangible common
shareholders' equity to tangible assets, excluding AOCI
(1)
|
7.46
|
7.82
|
7.84
|
7.70
|
7.65
|
|
|
|
|
|
|
Capital Adequacy
(3):
|
|
|
|
|
|
Common Equity Tier 1
capital
|
10.1 %
|
10.2 %
|
10.3 %
|
10.3 %
|
10.6 %
|
Tier 1
capital
|
10.6
|
10.7
|
10.7
|
10.8
|
11.1
|
Total
capital
|
12.8
|
12.8
|
12.8
|
13.0
|
13.3
|
Tier 1 leverage
capital
|
8.4
|
8.4
|
8.4
|
8.4
|
8.2
|
|
|
(1)
|
Denotes non-GAAP
financial measure. Refer to related disclosure and reconciliation
on pages 21 - 24.
|
(2)
|
Quarterly ratios are
annualized.
|
(3)
|
Current quarter
regulatory capital ratios are estimated.
|
Table
3
Selected Financial
Information
|
|
Quarter
Ended
|
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
Common Share
Data:
|
|
|
|
|
|
Diluted earnings per
share
|
$
0.40
|
$
0.52
|
$
0.66
|
$
0.68
|
$
0.60
|
Adjusted earnings per
share (1)
|
0.68
|
0.78
|
0.78
|
0.73
|
0.65
|
Cash dividends per
share
|
0.235
|
0.22
|
0.22
|
0.22
|
0.22
|
Book value per
share
|
23.67
|
22.72
|
21.92
|
23.41
|
24.40
|
Tangible book value per
share (1)
|
14.99
|
13.99
|
13.25
|
14.73
|
15.67
|
Market value per share
(last)
|
20.76
|
24.66
|
25.41
|
23.48
|
29.26
|
Market value per share
(high)
|
28.18
|
29.41
|
28.54
|
29.75
|
34.24
|
Market value per share
(low)
|
19.24
|
22.43
|
22.04
|
22.82
|
27.95
|
Market value per share
(avg)
|
24.88
|
26.84
|
25.68
|
25.74
|
31.20
|
Dividend payout
ratio
|
58.75 %
|
42.31 %
|
33.33 %
|
32.44 %
|
36.60 %
|
Adjusted dividend
payout ratio (1)
|
34.56 %
|
28.21 %
|
28.21 %
|
30.14 %
|
33.85 %
|
Total shares
outstanding
|
182,684,578
|
182,437,265
|
182,438,780
|
182,461,786
|
183,488,844
|
Average shares
outstanding - diluted
|
183,908,798
|
183,762,008
|
183,313,831
|
183,711,402
|
187,264,335
|
|
|
|
|
|
|
Yield/Rate:
|
|
|
|
|
|
(Taxable equivalent
basis)
|
|
|
|
|
|
Loans, loans held for
sale, and leases
|
6.00 %
|
5.54 %
|
4.82 %
|
4.29 %
|
4.23 %
|
Loans, loans held for
sale, and leases excluding net accretion on
acquired loans and
leases
|
5.87
|
5.41
|
4.70
|
4.12
|
3.96
|
Available-for-sale
securities:
|
|
|
|
|
|
Taxable
|
1.80
|
1.54
|
1.44
|
1.37
|
1.26
|
Tax-exempt
|
3.21
|
3.28
|
3.05
|
2.95
|
2.57
|
Other
investments
|
4.64
|
3.69
|
2.32
|
1.03
|
0.24
|
Total interest earning
assets and revenue
|
4.88
|
4.38
|
3.74
|
3.29
|
3.10
|
Deposits
|
1.28
|
0.76
|
0.35
|
0.17
|
0.15
|
Interest bearing demand
and money market
|
2.03
|
1.34
|
0.60
|
0.26
|
0.20
|
Savings
|
0.36
|
0.31
|
0.17
|
0.06
|
0.06
|
Time
|
2.24
|
1.17
|
0.56
|
0.47
|
0.52
|
Total interest bearing
deposits
|
1.86
|
1.17
|
0.53
|
0.26
|
0.23
|
Fed funds purchased,
securities sold under agreement to repurchase and other
|
3.73
|
3.04
|
1.65
|
0.43
|
0.11
|
Short-term FHLB
borrowings
|
4.66
|
3.84
|
2.05
|
0.98
|
0.14
|
Total interest bearing
deposits and short-term borrowings
|
2.20
|
1.50
|
0.64
|
0.29
|
0.22
|
Long-term
debt
|
4.27
|
4.15
|
4.16
|
4.14
|
4.18
|
Total interest bearing
liabilities
|
2.23
|
1.54
|
0.70
|
0.36
|
0.29
|
Interest bearing
liabilities to interest earning assets
|
71.24 %
|
68.42 %
|
66.19 %
|
65.25 %
|
64.46 %
|
Net interest income tax
equivalent adjustment
|
$ 1,051
|
$ 1,071
|
$ 1,052
|
$ 1,063
|
$ 1,027
|
|
|
(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)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
ASSETS
|
|
|
|
|
|
Cash and due from
banks
|
$
660,431
|
$
756,906
|
$
693,999
|
$
770,293
|
$
781,310
|
Interest bearing
deposits with other banks and Federal funds sold
|
4,452,029
|
1,241,246
|
895,630
|
1,069,410
|
880,742
|
Available-for-sale
securities, at fair value
|
10,877,879
|
11,944,096
|
12,441,894
|
13,450,621
|
14,371,606
|
Loans and leases, net
of unearned income
|
31,282,594
|
30,349,277
|
29,296,450
|
28,360,485
|
27,189,666
|
Allowance for credit
losses
|
453,727
|
440,347
|
433,363
|
440,112
|
438,738
|
Net loans and
leases
|
30,828,867
|
29,908,930
|
28,863,087
|
27,920,373
|
26,750,928
|
Loans held for sale, at
fair value
|
196,110
|
187,925
|
198,381
|
213,458
|
302,211
|
Premises and equipment,
net
|
826,439
|
817,430
|
802,382
|
782,728
|
781,209
|
Goodwill
|
1,459,302
|
1,458,795
|
1,449,511
|
1,444,209
|
1,409,038
|
Other intangible
assets, net
|
125,724
|
132,764
|
132,953
|
138,370
|
191,642
|
Bank-owned life
insurance
|
631,174
|
630,046
|
624,696
|
601,601
|
599,346
|
Other assets
|
1,635,141
|
1,575,276
|
1,597,127
|
1,356,645
|
1,136,029
|
Total
Assets
|
$
51,693,096
|
$
48,653,414
|
$
47,699,660
|
$
47,747,708
|
$
47,204,061
|
LIABILITIES
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
Demand: Noninterest
bearing
|
$
11,517,037
|
$
12,731,065
|
$
13,839,649
|
$
14,012,529
|
$
14,458,563
|
Interest
bearing
|
18,146,678
|
19,040,131
|
18,033,648
|
19,032,983
|
18,854,543
|
Savings
|
3,226,685
|
3,473,746
|
3,676,340
|
3,735,925
|
3,713,629
|
Time
deposits
|
6,516,054
|
3,711,672
|
3,454,309
|
3,407,646
|
3,541,320
|
Total
deposits
|
39,406,454
|
38,956,614
|
39,003,946
|
40,189,083
|
40,568,055
|
Securities sold under
agreement to repurchase
|
771,335
|
708,736
|
678,334
|
649,177
|
703,560
|
Federal funds purchased
and short-term FHLB borrowings
|
5,700,228
|
3,300,231
|
2,495,000
|
1,200,000
|
—
|
Subordinated and
long-term debt
|
462,144
|
462,554
|
463,291
|
465,073
|
465,695
|
Other
liabilities
|
862,518
|
913,905
|
892,164
|
806,450
|
822,994
|
Total
Liabilities
|
47,202,679
|
44,342,040
|
43,532,735
|
43,309,783
|
42,560,304
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Preferred
stock
|
166,993
|
166,993
|
166,993
|
166,993
|
166,993
|
Common stock
|
456,711
|
456,093
|
456,097
|
456,154
|
458,722
|
Capital
surplus
|
2,715,981
|
2,709,391
|
2,695,646
|
2,686,031
|
2,701,371
|
Accumulated other
comprehensive loss
|
(1,081,886)
|
(1,222,538)
|
(1,297,812)
|
(936,345)
|
(664,000)
|
Retained
earnings
|
2,232,618
|
2,201,435
|
2,146,001
|
2,065,092
|
1,980,671
|
Total Shareholders'
Equity
|
4,490,417
|
4,311,374
|
4,166,925
|
4,437,925
|
4,643,757
|
Total Liabilities
& Shareholders' Equity
|
$
51,693,096
|
$
48,653,414
|
$
47,699,660
|
$
47,747,708
|
$
47,204,061
|
Table
5
Consolidated
Quarterly Average Balance Sheets
(Unaudited)
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
ASSETS
|
|
|
|
|
|
Cash and due from
banks
|
$
695,263
|
$
617,634
|
$
654,589
|
$
640,672
|
$
656,630
|
Interest bearing
deposits with other banks and Federal funds sold
|
1,526,755
|
943,806
|
851,185
|
751,972
|
1,161,262
|
Available-for-sale
securities, at fair value
|
11,354,457
|
12,156,803
|
13,252,828
|
13,941,127
|
15,070,524
|
Loans and leases, net
of unearned income
|
30,891,640
|
29,812,924
|
28,872,156
|
27,848,097
|
27,106,733
|
Allowance for credit
losses
|
442,486
|
434,785
|
441,042
|
438,752
|
444,294
|
Net loans and
leases
|
30,449,154
|
29,378,139
|
28,431,114
|
27,409,345
|
26,662,439
|
Loans held for sale, at
fair value
|
46,863
|
62,517
|
103,312
|
147,301
|
176,647
|
Premises and equipment,
net
|
824,190
|
802,771
|
809,799
|
784,247
|
785,005
|
Goodwill
|
1,459,127
|
1,457,120
|
1,444,331
|
1,407,452
|
1,407,973
|
Other intangible
assets, net
|
128,957
|
132,091
|
136,149
|
188,897
|
195,606
|
Bank-owned life
insurance
|
630,601
|
625,938
|
613,973
|
599,912
|
598,822
|
Other assets
|
1,536,834
|
1,613,675
|
1,298,277
|
1,193,904
|
964,942
|
Total
Assets
|
$
48,652,201
|
$
47,790,494
|
$
47,595,557
|
$
47,064,829
|
$
47,679,850
|
LIABILITIES
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
Demand: Noninterest
bearing
|
$
12,203,079
|
$
13,344,152
|
$
13,816,796
|
$
13,970,163
|
$
13,806,591
|
Interest
bearing
|
19,009,345
|
17,866,198
|
18,675,214
|
18,238,571
|
19,401,019
|
Savings
|
3,363,236
|
3,555,911
|
3,720,218
|
3,723,193
|
3,631,699
|
Time
deposits
|
4,328,388
|
3,606,093
|
3,388,658
|
3,464,101
|
3,725,794
|
Total
deposits
|
38,904,048
|
38,372,354
|
39,600,886
|
39,396,028
|
40,565,103
|
Securities sold under
agreement to repurchase
|
727,975
|
660,974
|
655,223
|
666,067
|
694,033
|
Federal funds
purchased, short-term FHLB borrowings and other
|
3,326,196
|
3,251,947
|
1,608,587
|
1,294,946
|
131,556
|
Subordinated and
long-term debt
|
462,385
|
462,927
|
464,843
|
465,447
|
466,842
|
Other
liabilities
|
835,136
|
826,707
|
759,363
|
719,152
|
760,085
|
Total
Liabilities
|
44,255,740
|
43,574,909
|
43,088,902
|
42,541,640
|
42,617,619
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Preferred
stock
|
166,993
|
166,993
|
166,993
|
166,993
|
166,993
|
Common stock
|
456,354
|
456,095
|
456,130
|
457,713
|
465,458
|
Capital
surplus
|
2,710,501
|
2,701,121
|
2,689,340
|
2,694,546
|
2,779,746
|
Accumulated other
comprehensive loss
|
(1,174,723)
|
(1,302,388)
|
(922,673)
|
(821,034)
|
(283,417)
|
Retained
earnings
|
2,237,336
|
2,193,764
|
2,116,865
|
2,024,971
|
1,933,451
|
Total Shareholders'
Equity
|
4,396,461
|
4,215,585
|
4,506,655
|
4,523,189
|
5,062,231
|
Total Liabilities &
Shareholders' Equity
|
$
48,652,201
|
$
47,790,494
|
$
47,595,557
|
$
47,064,829
|
$
47,679,850
|
Table
6
Consolidated
Statements of Income
(Unaudited)
|
|
Quarter
Ended
|
(Dollars in thousands,
except per share data)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
INTEREST
REVENUE:
|
|
|
|
|
|
Loans and
leases
|
$
457,084
|
$
414,623
|
$
349,093
|
$
296,680
|
$
282,266
|
Available-for-sale
securities:
|
|
|
|
|
|
Taxable
|
48,515
|
45,807
|
46,701
|
46,254
|
45,155
|
Tax-exempt
|
2,477
|
2,547
|
2,548
|
2,571
|
2,414
|
Loans held for
sale
|
603
|
1,788
|
2,241
|
2,118
|
1,407
|
Other interest
revenue
|
17,453
|
8,783
|
4,976
|
1,932
|
688
|
Total interest
revenue
|
526,132
|
473,548
|
405,559
|
349,555
|
331,930
|
INTEREST
EXPENSE:
|
|
|
|
|
|
Interest bearing demand
deposits and money
market
accounts
|
95,344
|
60,253
|
28,175
|
11,717
|
9,742
|
Savings
|
3,014
|
2,769
|
1,597
|
590
|
568
|
Time
deposits
|
23,950
|
10,651
|
4,797
|
4,041
|
4,764
|
Federal funds purchased
and securities sold under
agreement to
repurchase
|
7,667
|
8,365
|
3,944
|
906
|
216
|
Short-term
debt
|
37,015
|
27,302
|
6,821
|
2,734
|
5
|
Subordinated and
long-term debt
|
4,872
|
4,848
|
4,871
|
4,801
|
4,813
|
Total interest
expense
|
171,862
|
114,188
|
50,205
|
24,789
|
20,108
|
Net interest
revenue
|
354,270
|
359,360
|
355,354
|
324,766
|
311,822
|
Provision for credit
losses
|
10,000
|
6,000
|
—
|
1,000
|
—
|
Net interest revenue,
after provision for credit losses
|
344,270
|
353,360
|
355,354
|
323,766
|
311,822
|
|
|
|
|
|
|
NONINTEREST
REVENUE:
|
|
|
|
|
|
Mortgage
banking
|
6,076
|
2,571
|
9,080
|
11,446
|
21,763
|
Credit card, debit card
and merchant fees
|
11,851
|
15,750
|
14,497
|
16,593
|
11,321
|
Deposit service
charges
|
16,482
|
16,863
|
19,134
|
18,291
|
19,189
|
Security (losses)
gains, net
|
(51,261)
|
(595)
|
(139)
|
1,446
|
(1,097)
|
Insurance
commissions
|
39,606
|
34,679
|
39,876
|
39,994
|
35,727
|
Wealth
management
|
21,532
|
19,199
|
19,335
|
20,213
|
21,737
|
Other noninterest
income
|
29,785
|
26,406
|
22,708
|
17,251
|
19,795
|
Total noninterest
revenue
|
74,071
|
114,873
|
124,491
|
125,234
|
128,435
|
|
|
|
|
|
|
NONINTEREST
EXPENSE:
|
|
|
|
|
|
Salaries and employee
benefits
|
195,702
|
183,918
|
191,193
|
182,094
|
187,819
|
Occupancy and
equipment
|
29,113
|
30,539
|
30,610
|
30,129
|
28,270
|
Data processing and
software
|
31,869
|
29,289
|
28,079
|
29,081
|
27,483
|
Merger
expense
|
5,075
|
20,276
|
19,690
|
7,274
|
3,974
|
Amortization of
intangibles
|
5,005
|
5,251
|
5,417
|
3,042
|
6,780
|
Deposit insurance
assessments
|
8,361
|
5,931
|
4,499
|
4,945
|
3,336
|
Pension settlement
expense
|
—
|
6,127
|
2,896
|
—
|
—
|
Other noninterest
expense
|
44,154
|
59,340
|
37,350
|
29,323
|
34,005
|
Total noninterest
expense
|
319,279
|
340,671
|
319,734
|
285,888
|
291,667
|
Income before income
taxes
|
99,062
|
127,562
|
160,111
|
163,112
|
148,590
|
Income tax
expense
|
22,433
|
29,628
|
36,713
|
36,154
|
33,643
|
Net income
|
76,629
|
97,934
|
123,398
|
126,958
|
114,947
|
Less: Preferred
dividends
|
2,372
|
2,372
|
2,372
|
2,372
|
2,372
|
Net income available to
common shareholders
|
$
74,257
|
$
95,562
|
$
121,026
|
$
124,586
|
$
112,575
|
Net income per common
share: Diluted
|
$
0.40
|
$
0.52
|
$
0.66
|
$
0.68
|
$
0.60
|
Table
7
Selected Loan
Portfolio Data
(Unaudited)
|
|
Quarter
Ended
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
LOAN AND LEASE
PORTFOLIO:
|
|
|
|
|
|
Commercial and
industrial
|
|
|
|
|
|
Non-real
estate
|
$ 9,159,387
|
$ 8,985,547
|
$ 8,803,381
|
$ 8,526,481
|
$ 8,017,958
|
Owner
occupied
|
4,278,468
|
4,068,659
|
3,943,442
|
3,851,336
|
3,703,914
|
Total commercial and
industrial
|
13,437,855
|
13,054,206
|
12,746,823
|
12,377,817
|
11,721,872
|
Commercial real
estate
|
|
|
|
|
|
Construction,
acquisition and development
|
3,703,137
|
3,547,986
|
3,244,425
|
2,982,119
|
3,028,514
|
Income
producing
|
5,368,676
|
5,150,680
|
5,098,470
|
5,054,232
|
4,795,486
|
Total commercial real
estate
|
9,071,813
|
8,698,666
|
8,342,895
|
8,036,351
|
7,824,000
|
Consumer
|
|
|
|
|
|
Residential
mortgages
|
8,536,032
|
8,319,242
|
7,924,378
|
7,662,621
|
7,355,995
|
Other
consumer
|
236,894
|
277,163
|
282,354
|
283,696
|
287,799
|
Total
consumer
|
8,772,926
|
8,596,405
|
8,206,732
|
7,946,317
|
7,643,794
|
Total loans and
leases, net of unearned income
|
$
31,282,594
|
$
30,349,277
|
$
29,296,450
|
$
28,360,485
|
$
27,189,666
|
|
|
|
|
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
Non-performing Loans
and Leases
|
|
|
|
|
|
Nonaccrual Loans and
Leases
|
|
|
|
|
|
Commercial and
industrial
|
|
|
|
|
|
Non-real
estate
|
$
65,783
|
$
23,907
|
$
23,916
|
$
34,233
|
$
33,086
|
Owner
occupied
|
9,089
|
7,944
|
8,327
|
9,567
|
11,787
|
Total commercial and
industrial
|
74,872
|
31,851
|
32,243
|
43,800
|
44,873
|
Commercial real
estate
|
|
|
|
|
|
Construction,
acquisition and development
|
1,850
|
2,974
|
1,823
|
2,125
|
1,618
|
Income
producing
|
20,616
|
7,331
|
8,580
|
8,750
|
9,688
|
Total commercial real
estate
|
22,466
|
10,305
|
10,403
|
10,875
|
11,306
|
Consumer
|
|
|
|
|
|
Residential
mortgages
|
62,748
|
55,892
|
46,671
|
34,172
|
34,278
|
Other
consumer
|
529
|
697
|
614
|
521
|
574
|
Total
consumer
|
63,277
|
56,589
|
47,285
|
34,693
|
34,852
|
Total nonaccrual loans
and leases
|
$
160,615
|
$
98,745
|
$
89,931
|
$
89,368
|
$
91,031
|
|
|
|
|
|
|
Loans and Leases 90+
Days Past Due, Still Accruing
|
5,164
|
2,068
|
11,984
|
19,682
|
20,957
|
Restructured Loans and
Leases, Still Accruing
|
—
|
8,598
|
16,200
|
7,385
|
7,292
|
Total non-performing
loans and leases
|
$
165,779
|
$
109,411
|
$
118,115
|
$
116,435
|
$
119,280
|
|
|
|
|
|
|
Other Real Estate Owned
and Other Repossessed Assets
|
5,327
|
6,725
|
8,376
|
14,399
|
28,401
|
Total Non-performing
Assets
|
$
171,106
|
$
116,136
|
$
126,491
|
$
130,834
|
$
147,681
|
|
|
|
|
|
|
Additions to nonaccrual
loans and leases during the
quarter (excluding
acquisitions)
|
$
89,779
|
$
38,945
|
$
34,432
|
$
21,312
|
$
16,374
|
Table
8
Allowance for Credit
Losses
(Unaudited)
|
|
Quarter
Ended
|
(Dollars in
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
ALLOWANCE FOR CREDIT
LOSSES:
|
|
|
|
|
|
Balance, beginning of
period
|
$ 440,347
|
$ 433,363
|
$ 440,112
|
$ 438,738
|
$ 446,415
|
Charge-offs:
|
|
|
|
|
|
Commercial and
industrial
|
(2,853)
|
(2,295)
|
(11,551)
|
(2,170)
|
(2,682)
|
Commercial real
estate
|
(1,988)
|
(426)
|
(1,116)
|
(275)
|
(313)
|
Consumer
|
(2,189)
|
(2,650)
|
(2,653)
|
(1,941)
|
(1,792)
|
Total loans
charged-off
|
(7,030)
|
(5,371)
|
(15,320)
|
(4,386)
|
(4,787)
|
Recoveries:
|
|
|
|
|
|
Commercial and
industrial
|
3,399
|
6,405
|
3,657
|
3,217
|
3,178
|
Commercial real
estate
|
779
|
2,851
|
3,509
|
1,076
|
437
|
Consumer
|
977
|
1,099
|
1,405
|
1,467
|
1,612
|
Total
recoveries
|
5,155
|
10,355
|
8,571
|
5,760
|
5,227
|
Net (charge-offs)
recoveries
|
(1,875)
|
4,984
|
(6,749)
|
1,374
|
440
|
Adoption of new ASU
related to modified loans (3)
|
255
|
—
|
—
|
—
|
—
|
Initial allowance on
loans purchased with credit deterioration
|
—
|
—
|
—
|
—
|
(8,117)
|
Provision for credit
losses related to loans and leases
|
15,000
|
2,000
|
—
|
—
|
—
|
Total provision for
loans and leases
|
15,000
|
2,000
|
—
|
—
|
—
|
Balance, end of
period
|
$ 453,727
|
$ 440,347
|
$ 433,363
|
$ 440,112
|
$ 438,738
|
|
|
|
|
|
|
Average loans and
leases, net of unearned income, for period
|
$ 30,891,640
|
$ 29,812,924
|
$ 28,872,156
|
$ 27,848,097
|
$ 27,106,733
|
Ratio: Net charge-offs
(recoveries) to average loans and leases (2)
|
0.02 %
|
(0.07) %
|
0.09 %
|
(0.02) %
|
(0.01) %
|
|
|
|
|
|
|
RESERVE FOR UNFUNDED
COMMITMENTS (1)
|
|
|
|
|
|
Balance, beginning of
period
|
$
28,551
|
$
24,551
|
$
24,551
|
$
23,551
|
$
23,551
|
(Reversal) provision
for credit losses for unfunded commitments
|
(5,000)
|
4,000
|
—
|
1,000
|
—
|
Balance, end of
period
|
$
23,551
|
$
28,551
|
$
24,551
|
$
24,551
|
$
23,551
|
|
|
(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)
|
|
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
|
|
December 31,
2022
|
(In
thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Impaired
|
Purchased
Credit
Deteriorated
(Loss)
|
Total
|
LOAN AND LEASE
PORTFOLIO:
|
|
|
|
|
|
|
Commercial and
industrial
|
|
|
|
|
|
|
Non-real
estate
|
$
8,735,337
|
$
37,389
|
$
205,246
|
$
3,375
|
$
4,200
|
$
8,985,547
|
Owner
occupied
|
4,024,179
|
6,062
|
32,912
|
3,824
|
1,682
|
4,068,659
|
Total commercial and
industrial
|
12,759,516
|
43,451
|
238,158
|
7,199
|
5,882
|
13,054,206
|
Commercial real
estate
|
|
|
|
|
|
|
Construction,
acquisition and development
|
3,498,990
|
18,667
|
23,073
|
—
|
7,256
|
3,547,986
|
Income
producing
|
5,035,880
|
27,330
|
68,948
|
—
|
18,522
|
5,150,680
|
Total commercial real
estate
|
8,534,870
|
45,997
|
92,021
|
—
|
25,778
|
8,698,666
|
Consumer
|
|
|
|
|
|
|
Residential
mortgages
|
8,159,904
|
232
|
157,532
|
—
|
1,574
|
8,319,242
|
Other
consumer
|
272,182
|
—
|
4,981
|
—
|
—
|
277,163
|
Total
consumer
|
8,432,086
|
232
|
162,513
|
—
|
1,574
|
8,596,405
|
Total loans and leases,
net of unearned income
|
$
29,726,472
|
$
89,680
|
$
492,692
|
$
7,199
|
$
33,234
|
$
30,349,277
|
Table
10
Geographical Loan
Information
(Unaudited)
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan growth, excluding
loans acquired during the quarter ($)
|
$ 6,215
|
$ 5,070
|
$
78,734
|
$
54,397
|
$
(5,146)
|
$
50,709
|
$
19,336
|
$
51,814
|
$
363,463
|
$
308,725
|
$
933,317
|
Loan growth, excluding
loans acquired during the quarter (%) (annualized)
|
0.98 %
|
1.80 %
|
17.06 %
|
9.98 %
|
(1.57) %
|
7.21 %
|
14.50 %
|
12.95 %
|
11.85 %
|
33.21 %
|
12.47 %
|
|
|
|
December 31,
2022
|
(Dollars in
thousands)
|
Alabama
|
Arkansas
|
Florida
|
Georgia
|
Louisiana
|
Mississippi
|
Missouri
|
Tennessee
|
Texas
|
Other
|
Total
|
LOAN AND LEASE
PORTFOLIO:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
|
|
|
|
|
|
|
|
|
|
|
Non-real
estate
|
$ 367,656
|
$ 156,600
|
$ 446,454
|
$ 543,854
|
$ 317,127
|
$ 515,897
|
$
67,208
|
$ 315,410
|
$
3,948,846
|
$
2,306,495
|
$
8,985,547
|
Owner
occupied
|
370,125
|
248,015
|
296,159
|
304,096
|
287,915
|
553,376
|
96,500
|
177,315
|
1,481,888
|
253,270
|
4,068,659
|
Total commercial and
industrial
|
737,781
|
404,615
|
742,613
|
847,950
|
605,042
|
1,069,273
|
163,708
|
492,725
|
5,430,734
|
2,559,765
|
13,054,206
|
Commercial real
estate
|
|
|
|
|
|
|
|
|
|
|
|
Construction,
acquisition and development
|
226,990
|
82,356
|
180,017
|
396,250
|
54,945
|
246,402
|
35,861
|
162,977
|
1,738,098
|
424,090
|
3,547,986
|
Income
producing
|
425,617
|
260,602
|
369,848
|
580,819
|
216,519
|
403,491
|
188,775
|
302,252
|
1,900,831
|
501,926
|
5,150,680
|
Total commercial real
estate
|
652,607
|
342,958
|
549,865
|
977,069
|
271,464
|
649,893
|
224,636
|
465,229
|
3,638,929
|
926,016
|
8,698,666
|
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
1,155,001
|
374,544
|
574,308
|
373,371
|
442,087
|
1,044,746
|
150,952
|
647,556
|
3,301,528
|
255,149
|
8,319,242
|
Other
consumer
|
31,270
|
17,816
|
5,294
|
12,827
|
12,487
|
86,499
|
1,439
|
17,115
|
63,029
|
29,387
|
277,163
|
Total
consumer
|
1,186,271
|
392,360
|
579,602
|
386,198
|
454,574
|
1,131,245
|
152,391
|
664,671
|
3,364,557
|
284,536
|
8,596,405
|
Total loans and
leases, net of unearned income
|
$
2,576,659
|
$
1,139,933
|
$
1,872,080
|
$
2,211,217
|
$
1,331,080
|
$
2,850,411
|
$ 540,735
|
$
1,622,625
|
$ 12,434,220
|
$
3,770,317
|
$ 30,349,277
|
Table
11
Noninterest Revenue
and Expense
(Unaudited)
|
|
Quarter
Ended
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
NONINTEREST
REVENUE:
|
|
|
|
|
|
Mortgage banking excl.
MSR and MSR hedge
market value
adjustment
|
$
8,379
|
$
5,408
|
$
4,746
|
$
6,754
|
$
7,733
|
MSR and MSR hedge
market value adjustment
|
(2,303)
|
(2,837)
|
4,334
|
4,692
|
14,030
|
Credit card, debit card
and merchant fees
|
11,851
|
15,750
|
14,497
|
16,593
|
11,321
|
Deposit service
charges
|
16,482
|
16,863
|
19,134
|
18,291
|
19,189
|
Security (losses)
gains, net
|
(51,261)
|
(595)
|
(139)
|
1,446
|
(1,097)
|
Insurance
commissions
|
39,606
|
34,679
|
39,876
|
39,994
|
35,727
|
Trust income
|
10,553
|
9,113
|
9,011
|
9,129
|
10,061
|
Annuity fees
|
2,192
|
951
|
600
|
753
|
604
|
Brokerage commissions
and fees
|
8,787
|
9,135
|
9,724
|
10,331
|
11,072
|
Bank-owned life
insurance
|
3,647
|
5,436
|
3,537
|
3,285
|
3,336
|
Other miscellaneous
income
|
26,138
|
20,970
|
19,171
|
13,966
|
16,459
|
Total noninterest
revenue
|
$
74,071
|
$
114,873
|
$
124,491
|
$
125,234
|
$
128,435
|
|
|
|
|
|
|
NONINTEREST
EXPENSE:
|
|
|
|
|
|
Salaries and employee
benefits
|
$
195,702
|
$
183,918
|
$
191,193
|
$
182,094
|
$
187,819
|
Occupancy and
equipment
|
29,113
|
30,539
|
30,610
|
30,129
|
28,270
|
Deposit insurance
assessments
|
8,361
|
5,931
|
4,499
|
4,945
|
3,336
|
Pension settlement
expense
|
—
|
6,127
|
2,896
|
—
|
—
|
Advertising and public
relations
|
4,331
|
28,659
|
4,085
|
4,417
|
4,593
|
Foreclosed property
expense
|
980
|
400
|
1,093
|
(1,104)
|
440
|
Telecommunications
|
1,717
|
1,714
|
1,882
|
1,984
|
1,833
|
Travel and
entertainment
|
3,508
|
5,310
|
4,149
|
3,412
|
2,811
|
Data processing and
software
|
31,869
|
29,289
|
28,079
|
29,081
|
27,483
|
Professional,
consulting and outsourcing
|
4,417
|
3,598
|
2,724
|
3,769
|
3,737
|
Amortization of
intangibles
|
5,005
|
5,251
|
5,417
|
3,042
|
6,780
|
Legal
|
1,491
|
758
|
2,054
|
1,463
|
1,793
|
Merger
expense
|
5,075
|
20,276
|
19,690
|
7,274
|
3,974
|
Postage and
shipping
|
2,452
|
1,925
|
2,098
|
2,022
|
2,034
|
Other miscellaneous
expense
|
25,258
|
16,976
|
19,265
|
13,360
|
16,764
|
Total noninterest
expense
|
$
319,279
|
$
340,671
|
$
319,734
|
$
285,888
|
$
291,667
|
|
|
|
|
|
|
INSURANCE
COMMISSIONS:
|
|
|
|
|
|
Property and casualty
commissions
|
$
28,202
|
$
24,682
|
$
30,021
|
$
29,220
|
$
25,852
|
Life and health
commissions
|
8,024
|
7,151
|
7,254
|
7,935
|
7,143
|
Risk management
income
|
657
|
887
|
654
|
674
|
757
|
Other
|
2,723
|
1,959
|
1,947
|
2,165
|
1,975
|
Total insurance
commissions
|
$
39,606
|
$
34,679
|
$
39,876
|
$
39,994
|
$
35,727
|
Table
12
Average Balance and
Yields
(Unaudited)
|
|
Quarter
Ended
|
|
March 31,
2023
|
|
December 31,
2022
|
|
March 31,
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
|
$ 30,891,640
|
$
447,449
|
5.87 %
|
|
$
29,812,924
|
$
405,827
|
5.40 %
|
|
$ 27,106,733
|
$
264,910
|
3.96 %
|
Accretion income on
acquired loans
|
|
10,028
|
0.13
|
|
|
9,190
|
0.12
|
|
|
17,741
|
0.27
|
Loans held for
sale
|
46,863
|
603
|
5.22
|
|
62,517
|
1,788
|
11.35
|
|
176,647
|
1,407
|
3.23
|
Investment
securities
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
10,957,786
|
48,515
|
1.80
|
|
11,767,062
|
45,807
|
1.54
|
|
14,588,090
|
45,155
|
1.26
|
Tax-exempt
|
396,671
|
3,135
|
3.21
|
|
389,741
|
3,224
|
3.28
|
|
482,434
|
3,056
|
2.57
|
Total investment
securities
|
11,354,457
|
51,650
|
1.84
|
|
12,156,803
|
49,031
|
1.60
|
|
15,070,524
|
48,211
|
1.30
|
Other
investments
|
1,526,755
|
17,453
|
4.64
|
|
943,806
|
8,783
|
3.69
|
|
1,161,262
|
688
|
0.24
|
Total interest-earning
assets
|
43,819,715
|
527,183
|
4.88 %
|
|
42,976,050
|
474,619
|
4.38 %
|
|
43,515,166
|
332,957
|
3.10 %
|
Other assets
|
5,274,972
|
|
|
|
5,249,229
|
|
|
|
4,608,978
|
|
|
Allowance for credit
losses
|
442,486
|
|
|
|
434,785
|
|
|
|
444,294
|
|
|
Total
assets
|
$ 48,652,201
|
|
|
|
$
47,790,494
|
|
|
|
$ 47,679,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing demand
and money market
|
$ 19,009,345
|
$ 95,344
|
2.03 %
|
|
$
17,866,198
|
$ 60,253
|
1.34 %
|
|
$ 19,401,019
|
9,742
|
0.20 %
|
Savings
deposits
|
3,363,236
|
3,014
|
0.36
|
|
3,555,911
|
2,769
|
0.31
|
|
3,631,699
|
568
|
0.06
|
Time
deposits
|
4,328,388
|
23,950
|
2.24
|
|
3,606,093
|
10,651
|
1.17
|
|
3,725,794
|
4,764
|
0.52
|
Total interest-bearing
deposits
|
26,700,969
|
122,308
|
1.86
|
|
25,028,202
|
73,673
|
1.17
|
|
26,758,512
|
15,074
|
0.23
|
Fed funds purchased,
securities sold under
agreement to repurchase
and other
|
$ 832,831
|
$
7,669
|
3.73
|
|
$ 1,091,029
|
$
8,365
|
3.04
|
|
$ 811,422
|
216
|
0.11
|
Short-term FHLB
borrowings
|
3,221,340
|
37,013
|
4.66
|
|
2,821,892
|
27,302
|
3.84
|
|
14,167
|
5
|
0.14
|
Long-term
borrowings
|
462,385
|
4,872
|
4.27
|
|
462,927
|
4,848
|
4.15
|
|
466,842
|
4,813
|
4.18
|
Total interest-bearing
liabilities
|
31,217,525
|
171,862
|
2.23 %
|
|
29,404,050
|
114,188
|
1.54 %
|
|
28,050,943
|
20,108
|
0.29 %
|
Noninterest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
12,203,079
|
|
|
|
13,344,152
|
|
|
|
13,806,591
|
|
|
Other
liabilities
|
835,136
|
|
|
|
826,707
|
|
|
|
760,085
|
|
|
Total
liabilities
|
44,255,740
|
|
|
|
43,574,909
|
|
|
|
42,617,619
|
|
|
Shareholders'
equity
|
4,396,461
|
|
|
|
4,215,585
|
|
|
|
5,062,231
|
|
|
Total liabilities and
shareholders' equity
|
$ 48,652,201
|
|
|
|
$
47,790,494
|
|
|
|
$ 47,679,850
|
|
|
Net interest income/net
interest spread
|
|
355,321
|
2.65 %
|
|
|
360,431
|
2.84 %
|
|
|
312,849
|
2.81 %
|
Net yield on earning
assets/net interest margin
|
|
|
3.29 %
|
|
|
|
3.33 %
|
|
|
|
2.92 %
|
Taxable equivalent
adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
Loans and investment
securities
|
|
(1,051)
|
|
|
|
(1,071)
|
|
|
|
(1,027)
|
|
Net interest
revenue
|
|
$
354,270
|
|
|
|
$
359,360
|
|
|
|
$
311,822
|
|
Table
13
Selected Additional
Data
(Unaudited)
|
|
Quarter
Ended
|
(Dollars in
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
MORTGAGE SERVICING
RIGHTS ("MSR"):
|
|
|
|
|
|
Fair value, beginning
of period
|
$ 109,744
|
$ 112,767
|
$ 102,021
|
$
92,859
|
$
69,552
|
Originations of
servicing assets
|
1,385
|
2,283
|
3,890
|
4,962
|
5,155
|
Changes in fair
value:
|
|
|
|
|
|
Due to
payoffs/paydowns
|
(1,078)
|
(2,308)
|
(3,085)
|
(3,253)
|
(3,147)
|
Due to update in
valuation assumptions
|
(3,109)
|
(2,998)
|
9,941
|
7,453
|
21,299
|
Fair value, end of
period
|
$ 106,942
|
$ 109,744
|
$ 112,767
|
$ 102,021
|
$
92,859
|
|
|
|
|
|
|
MORTGAGE BANKING
REVENUE:
|
|
|
|
|
|
Origination
|
$
3,344
|
$
1,793
|
$
1,916
|
$
4,042
|
$
5,118
|
Servicing
|
6,113
|
5,923
|
5,915
|
5,965
|
5,762
|
Payoffs/Paydowns
|
(1,078)
|
(2,308)
|
(3,085)
|
(3,253)
|
(3,147)
|
Total mortgage banking
revenue excluding MSR
|
8,379
|
5,408
|
4,746
|
6,754
|
7,733
|
Market value adjustment
on MSR
|
(3,109)
|
(2,998)
|
9,941
|
7,453
|
21,299
|
Market value adjustment
on MSR Hedge
|
806
|
161
|
(5,607)
|
(2,761)
|
(7,269)
|
Total mortgage banking
revenue
|
$
6,076
|
$
2,571
|
$
9,080
|
$
11,446
|
$
21,763
|
|
|
|
|
|
|
Mortgage loans
serviced
|
$
7,633,236
|
$
7,692,744
|
$
7,723,605
|
$
7,685,994
|
$
7,629,119
|
MSR/mortgage loans
serviced
|
1.40 %
|
1.43 %
|
1.46 %
|
1.33 %
|
1.22 %
|
|
Quarter
Ended
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
AVAILABLE-FOR-SALE
SECURITIES, at fair value
|
|
|
|
|
|
U.S. Treasury
securities
|
$
15,849
|
$ 1,458,513
|
$ 1,451,461
|
$ 1,466,313
|
$ 1,459,845
|
Obligations of U.S.
government agencies
|
1,358,350
|
1,477,127
|
1,820,913
|
2,133,561
|
2,350,810
|
Mortgage-backed
securities issued or guaranteed by U.S. agencies
("MBS"):
|
|
|
|
|
|
Residential
pass-through:
|
|
|
|
|
|
Guaranteed by
GNMA
|
83,649
|
84,368
|
87,063
|
95,955
|
105,900
|
Issued by FNMA and
FHLMC
|
6,164,294
|
6,274,970
|
6,427,152
|
7,014,715
|
7,604,829
|
Other residential
mortgage-back securities
|
166,449
|
168,452
|
181,317
|
201,440
|
212,216
|
Commercial
mortgage-backed securities
|
2,427,808
|
1,881,853
|
1,880,949
|
1,899,785
|
1,951,367
|
Total MBS
|
8,842,200
|
8,409,643
|
8,576,481
|
9,211,895
|
9,874,312
|
Obligations of states
and political subdivisions
|
447,731
|
466,002
|
444,953
|
485,400
|
530,241
|
Other domestic debt
securities
|
73,557
|
82,718
|
98,615
|
101,313
|
103,117
|
Foreign debt
securities
|
140,192
|
50,093
|
49,471
|
52,139
|
53,281
|
Total
available-for-sale securities
|
$
10,877,879
|
$
11,944,096
|
$
12,441,894
|
$
13,450,621
|
$
14,371,606
|
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
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
Adjusted net income
available to common shareholders
|
|
|
|
|
|
Net income
|
$
76,629
|
$
97,934
|
$
123,398
|
$
126,958
|
$
114,947
|
Plus: Merger
expense
|
5,075
|
20,276
|
19,690
|
7,274
|
3,974
|
Incremental merger
related expense
|
8,960
|
32,704
|
6,912
|
6,060
|
6,571
|
Branch closure and
other restructuring charges
|
212
|
2,254
|
6
|
705
|
128
|
Pension settlement
expense
|
—
|
6,127
|
2,896
|
—
|
—
|
Less: Security (losses)
gains, net
|
(51,261)
|
(595)
|
(139)
|
1,446
|
(1,097)
|
Tax
adjustment
|
15,394
|
14,665
|
7,016
|
2,981
|
2,786
|
Adjusted net
income
|
126,743
|
145,225
|
146,025
|
136,570
|
123,931
|
Less: Preferred
dividends
|
2,372
|
2,372
|
2,372
|
2,372
|
2,372
|
Adjusted net income
available to common shareholders
|
$
124,371
|
$
142,853
|
$
143,653
|
$
134,198
|
$
121,559
|
|
Quarter
Ended
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
Pre-tax pre-provision
net revenue
|
|
|
|
|
|
Net income
|
$
76,629
|
$
97,934
|
$
123,398
|
$
126,958
|
$
114,947
|
Plus:
Provision for credit losses
|
10,000
|
6,000
|
—
|
1,000
|
—
|
Income tax
expense
|
22,433
|
29,628
|
36,713
|
36,154
|
33,643
|
Pre-tax pre-provision
net revenue
|
$
109,062
|
$
133,562
|
$
160,111
|
$
164,112
|
$
148,590
|
|
Quarter
Ended
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
Adjusted pre-tax
pre-provision net revenue
|
|
|
|
|
|
Net income
|
$
76,629
|
$
97,934
|
$
123,398
|
$
126,958
|
$
114,947
|
Plus:
Provision for credit losses
|
10,000
|
6,000
|
—
|
1,000
|
—
|
Merger
expense
|
5,075
|
20,276
|
19,690
|
7,274
|
3,974
|
Incremental merger
related expense
|
8,960
|
32,704
|
6,912
|
6,060
|
6,571
|
Branch closure and
other restructuring charges
|
212
|
2,254
|
6
|
705
|
128
|
Pension settlement
expense
|
—
|
6,127
|
2,896
|
—
|
—
|
Income tax
expense
|
22,433
|
29,628
|
36,713
|
36,154
|
33,643
|
Less: Security (losses)
gains, net
|
(51,261)
|
(595)
|
(139)
|
1,446
|
(1,097)
|
Adjusted pre-tax
pre-provision net revenue
|
$
174,570
|
$
195,518
|
$
189,754
|
$
176,705
|
$
160,360
|
|
Quarter
Ended
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
Total adjusted
noninterest expense
|
|
|
|
|
|
Total noninterest
expense
|
$
319,279
|
$
340,671
|
$
319,734
|
$
285,888
|
$
291,667
|
Less:
Merger expense
|
5,075
|
20,276
|
19,690
|
7,274
|
3,974
|
Incremental merger
related expense
|
8,960
|
32,704
|
6,912
|
6,060
|
6,571
|
Branch closure and
other restructuring charges
|
212
|
2,254
|
6
|
705
|
128
|
Pension settlement
expense
|
—
|
6,127
|
2,896
|
—
|
—
|
Total adjusted
noninterest expense
|
$
305,032
|
$
279,310
|
$
290,230
|
$
271,849
|
$
280,994
|
|
Quarter
Ended
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
Total tangible assets,
excluding AOCI
|
|
|
|
|
|
Total assets
|
$
51,693,096
|
$
48,653,414
|
$
47,699,660
|
$
47,747,708
|
$
47,204,061
|
Less:
Goodwill
|
1,459,302
|
1,458,795
|
1,449,511
|
1,444,209
|
1,409,038
|
Other identifiable
intangible assets
|
125,724
|
132,764
|
132,953
|
138,370
|
191,642
|
Total tangible
assets
|
50,108,070
|
47,061,855
|
46,117,196
|
46,165,129
|
45,603,381
|
Less: AOCI
|
(1,081,886)
|
(1,222,538)
|
(1,297,812)
|
(936,345)
|
(664,000)
|
Total tangible assets,
excluding AOCI
|
$
51,189,956
|
$
48,284,393
|
$
47,415,008
|
$
47,101,474
|
$
46,267,381
|
|
Quarter
Ended
|
(In
thousands)
|
Mar 2023
|
Dec 2022
|
Sep 2022
|
Jun 2022
|
Mar 2022
|
PERIOD END
BALANCES:
|
|
|
|
|
|
Total shareholders'
equity, excluding AOCI
|
|
|
|
|
|
Total shareholders'
equity
|
$
4,490,417
|
$
4,311,374
|
$
4,166,925
|
$
4,437,925
|
$
4,643,757
|
Less: AOCI
|
(1,081,886)
|
(1,222,538)
|
(1,297,812)
|
(936,345)
|
(664,000)
|
Total shareholders'
equity, excluding AOCI
|
$
5,572,303
|
$
5,533,912
|
$
5,464,737
|
$
5,374,270
|
$
5,307,757
|
|
|
|
|
|
|
Common shareholders'
equity, excluding AOCI
|
|
|
|
|
|
Total shareholders'
equity
|
$
4,490,417
|
$
4,311,374
|
$
4,166,925
|
$
4,437,925
|
$
4,643,757
|
Less: preferred
stock
|
166,993
|
166,993
|
166,993
|
166,993
|
166,993
|
Common shareholders'
equity
|
4,323,424
|
4,144,381
|
3,999,932
|
4,270,932
|
4,476,764
|
Less: AOCI
|
(1,081,886)
|
(1,222,538)
|
(1,297,812)
|
(936,345)
|
(664,000)
|
Common shareholders'
equity, excluding AOCI
|
$
5,405,310
|
$
5,366,919
|
$
5,297,744
|
$
5,207,277
|
$
5,140,764
|
|
|
|
|
|
|
Total tangible common
shareholders' equity, excluding AOCI
|
|
|
|
|
|
Total shareholders'
equity
|
$
4,490,417
|
$
4,311,374
|
$
4,166,925
|
$
4,437,925
|
$
4,643,757
|
Less:
Goodwill
|
1,459,302
|
1,458,795
|
1,449,511
|
1,444,209
|
1,409,038
|
Other identifiable
intangible assets
|
125,724
|
132,764
|
132,953
|
138,370
|
191,642
|
Preferred
stock
|
166,993
|
166,993
|
166,993
|
166,993
|
166,993
|
Total tangible common
shareholders' equity
|
2,738,398
|
2,552,822
|
2,417,468
|
2,688,353
|
2,876,084
|
Less: AOCI
|
(1,081,886)
|
(1,222,538)
|
(1,297,812)
|
(936,345)
|
(664,000)
|
Total tangible common
shareholders' equity, excluding AOCI
|
$
3,820,284
|
$
3,775,360
|
$
3,715,280
|
$
3,624,698
|
$
3,540,084
|
|
|
|
|
|
|
AVERAGE
BALANCES:
|
|
|
|
|
|
Total tangible common
shareholders' equity
|
|
|
|
|
|
Total shareholders'
equity
|
$
4,396,461
|
$
4,215,585
|
$
4,506,655
|
$
4,523,189
|
$
5,062,231
|
Less:
Goodwill
|
1,459,127
|
1,457,120
|
1,444,331
|
1,407,452
|
1,407,973
|
Other identifiable
intangible assets
|
128,957
|
132,091
|
136,149
|
188,897
|
195,606
|
Preferred
stock
|
166,993
|
166,993
|
166,993
|
166,993
|
166,993
|
Total tangible common
shareholders' equity
|
$
2,641,384
|
$
2,459,381
|
$
2,759,182
|
$
2,759,847
|
$
3,291,659
|
|
|
|
|
|
|
Total average
assets
|
$ 48,652,201
|
$ 47,790,494
|
$ 47,595,557
|
$ 47,064,829
|
$ 47,679,850
|
Total shares of common
stock outstanding
|
182,684,578
|
182,437,265
|
182,438,780
|
182,461,786
|
183,488,844
|
Average shares
outstanding-diluted
|
183,908,798
|
183,762,008
|
183,313,831
|
183,711,402
|
187,264,335
|
|
|
|
|
|
|
Tangible common
shareholders' equity to tangible assets (1)
|
5.46 %
|
5.42 %
|
5.24 %
|
5.82 %
|
6.31 %
|
Tangible common
shareholders' equity to tangible assets, excluding AOCI
(2)
|
7.46
|
7.82
|
7.84
|
7.70
|
7.65
|
Return on average
tangible common equity (3)
|
11.40
|
15.42
|
17.40
|
18.11
|
13.87
|
Adjusted return on
average tangible common equity (4)
|
19.10
|
23.04
|
20.66
|
19.50
|
14.98
|
Adjusted return on
average assets (5)
|
1.06
|
1.21
|
1.22
|
1.16
|
1.05
|
Adjusted return on
average common shareholders' equity (6)
|
11.93
|
14.00
|
13.13
|
12.36
|
10.07
|
Pre-tax pre-provision
net revenue to total average assets (7)
|
0.91
|
1.11
|
1.33
|
1.40
|
1.26
|
Adjusted pre-tax
pre-provision net revenue to total average assets
(8)
|
1.46
|
1.62
|
1.58
|
1.51
|
1.36
|
Tangible book value per
common share (9)
|
$
14.99
|
$
13.99
|
$
13.25
|
$
14.73
|
$
15.67
|
Tangible book value per
common share, excluding AOCI (10)
|
20.91
|
20.69
|
20.36
|
19.87
|
19.29
|
Adjusted earnings per
common share (11)
|
$
0.68
|
$
0.78
|
$
0.78
|
$
0.73
|
$
0.65
|
Adjusted dividend
payout ratio (12)
|
34.56 %
|
28.21 %
|
28.21 %
|
30.14 %
|
33.85 %
|
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.
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SOURCE Cadence Bank