Cadence Bancorporation (NYSE:CADE) (“Cadence”) today announced
net income for the quarter ended September 30, 2019 of $44.0
million, or $0.34 per diluted common share (“per share”), compared
to $47.1 million or $0.56 per share for the quarter ended September
30, 2018, and $48.3 million or $0.37 per share for the quarter
ended June 30, 2019. Annualized returns on average assets and
tangible common equity for the third quarter of 2019 were 0.99% and
10.43%, respectively, compared to 1.61% and 17.50%, respectively,
for the third quarter of 2018 and 1.10% and 12.23%, respectively,
for the second quarter of 2019.
“We have a great franchise in attractive markets with
experienced bankers and a solid strategy. Pre-tax, pre-loan
provision net earnings were up meaningfully on a linked quarter
basis. However, for the second quarter in a row, we incurred
elevated charge-offs and higher provisions, primarily driven by a
small number of existing nonperforming credits that experienced
further deterioration. More broadly, the underlying fundamentals
for our borrowers and our business remain strong, and we remain
confident in our strategy and ability to generate sustainable
attractive long-term returns,” stated Paul B. Murphy, Jr., Chairman
and Chief Executive Officer of Cadence Bancorporation.
Adjusted Performance Metrics
(1):
- Adjusted net income(1), excluding non-routine income and
expenses(2), was $44.2 million for the third quarter of 2019, a
decrease of $5.1 million or 10.4% compared to the third quarter of
2018 and a decrease of $7.3 million or 14.2% compared to the second
quarter of 2019, primarily due to the higher provision for credit
losses in the current quarter.
- Adjusted pre-tax pre-provision net earnings(1) increased in the
third quarter of 2019 to $100.8 million, an increase of $37.7
million or 59.9% compared to the third quarter of 2018 and an
increase of $4.7 million, or 4.9% compared to the second quarter of
2019.
- Adjusted EPS(1) for the third quarter of 2019 of $0.34
decreased from the prior year quarter of $0.58 and from the linked
quarter of $0.40.
- Adjusted annualized returns on average assets(1) and adjusted
tangible common equity(1) for the third quarter of 2019 were 0.99%
and 10.47%, respectively, compared to 1.69% and 18.30%,
respectively, for the third quarter of 2018 and 1.17% and 12.96%,
respectively, for the second quarter of 2019.
Highlights:
Cadence’s fundamental operating performance during the third
quarter of 2019 continued to reflect the strengths of the business
model, partially offset by the elevated credit costs in the current
quarter. Third quarter of 2019 compared to the linked 2019
quarter:
- Adjusted pre-tax pre-loan provision net earnings(1) were $100.8
million, an increase of $4.7 million or 4.9%.
- Core deposits were $14.3 billion, reflecting a meaningful
increase of $657.6 million or 4.8%, including an increase in
non-interest bearing deposits of $306.2 million, or 9.3%.
- Total loans were $13.6 billion, a slight increase of $9.1
million or 0.1%.
- Net interest margin (“NIM”) was 3.94%, a decline of 3 basis
points or 0.8%.
- Total costs of funds of 1.41% and total cost of deposits of
1.32%, declines of 9 and 7 basis points, respectively.
- Adjusted noninterest expenses(1) of $93.3 million declined $2.7
million or 2.8%.
- Adjusted efficiency ratio(1) also improved 190 basis points to
48.1%.
- Provision for credit losses of $43.8 million, an increase of
$14.8 million.
- Net charge-offs of $31.3 million, an increase of $12.7
million.
Balance Sheet:
Total assets increased to $17.9 billion as of September 30,
2019, an increase of $6.1 billion or 51.8%, from September 30,
2018, and an increase of $351.9 million or 2.0%, from June 30,
2019. The year-over-year increases throughout this release are
impacted by the acquisition of State Bank which added $4.8 billion
in total assets on January 1, 2019.
Loans. Period-end loan balances for the third quarter of
2019 reflected moderated organic growth, offset by net paydowns in
the General C&I, Restaurant and Healthcare portfolios.
Loans at September 30, 2019 totaled $13.6 billion as compared to
$9.4 billion and $13.6 billion at September 30, 2018 and June 30,
2019, respectively. Loans increased $875.3 million or 9.3% since
September 30, 2018, excluding the impact of the loans acquired from
State Bank, and increased $9.1 million or 0.1% from June 30, 2019.
On a year-to-date basis, loans grew $265.2 million or 2.6%,
excluding the State Bank loans, as compared to 14.4% year-to-date
for 2018, with the 2019 growth reflecting management’s efforts to
moderate loan growth combined with higher payoff activity compared
to 2018.
Securities. Investment securities for the third quarter
of 2019 increased $20.5 million to $1.7 billion, comprising 9.6% of
total assets at September 30, 2019 as compared to $1.2 billion, or
10.3% of total assets at September 30, 2018 and $1.7 billion, or
9.6% of total assets at June 30, 2019.
Funding. Our funding activities reflected continued
strong performance this quarter, with meaningful core deposit
growth, improved deposit mix, and further decline in period-end
brokered deposits and wholesale funds.
Deposits at September 30, 2019 totaled $14.8
billion as compared to $9.6 billion and $14.5 billion at September
30, 2018 and June 30, 2019, respectively. Excluding the impact of
deposits assumed from State Bank, deposits increased by $1.1
billion or 11.9% from September 30, 2018. The year-over-year
deposit increase was driven by growth in core customer deposits
(total deposits excluding brokered deposits) of $1.3 billion or
15.3% from September 30, 2018. The linked quarter change included
an increase of $657.6 million, or 4.8% in core deposits, while
brokered deposits declined by $355.7 million to $512.3 million or
3.5% of total deposits at September 30, 2019.
Total borrowings were $371.9 million at
September 30, 2019, down from $662.7 million at September 30, 2018
and $376.2 million at June 30, 2019. The year-over-year decline was
largely due to lower FHLB borrowings as a result of increased core
deposits, as well as a decline of approximately $50 million in
long-term debt in the second quarter of 2019.
Shareholders’ equity reflected a 2.1% growth during the
third quarter of 2019 driven by increases in the value of our
interest rate collar based on lower interest rate expectations, as
well as net earnings for the quarter. Shareholders’ equity was $2.5
billion at September 30, 2019, an increase of $1.1 billion from
September 30, 2018, and an increase of $49.9 million from June 30,
2019.
- Tangible common shareholders’ equity(1) was $1.9 billion at
September 30, 2019, an increase of $778.6 million from September
30, 2018, and an increase of $48.0 million from June 30, 2019. The
year-over-year increase resulted primarily from common stock issued
of $826.1 million related to the merger with State Bank Financial
Corporation. The linked quarter increase resulted from net income
of $44.0 million and an increase of $37.3 million in other
comprehensive income due to increased fair values of derivatives
and securities. These items were partially offset by dividends of
$22.4 million and an increase of $10.1 million in treasury
stock.
- Tangible book value per share(1) was $14.66 as of September 30,
2019, an increase of $1.51 from $13.15 as of September 30, 2018,
and an increase of $0.45 from $14.21 as of June 30, 2019.
- Total outstanding shares at September 30, 2019 were 128.2
million. Cadence repurchased $10.3 million of treasury stock at an
average price per share of $15.51 during the quarter.
- Total shareholders’ equity to total assets and tangible equity
to tangible assets were 13.9% and 10.9%, respectively, at September
30, 2019.
Asset Quality:
Credit quality. Credit costs were elevated during the
third quarter of 2019 as we experienced deterioration in certain
credits resulting in increased charge-offs and loan provisions.
- Net charge-offs were $31.3 million or 0.91% of average loans
compared to $3.1 million or 0.13% and $18.6 million or 0.54% for
the quarters ended September 30, 2018 and June 30, 2019,
respectively. On a year-to-date basis, 2019 charge offs are 0.49%
of average loans as compared to 0.06% for the full year 2018 and
0.40% for the trailing four quarters. The current quarter
charge-offs included $15.0 million related to one General C&I
non-SNC credit that also incurred a $5.0 million charge-off in the
second quarter of 2019, representing 48% of the third quarter 2019
net charge-offs and 40% of the YTD 2019 net charge-offs. This
credit was made to a company that experienced negative results
caused by an expansion strategy that failed. The company quickly
ran out of liquidity and entered into a costly restructuring
process that ultimately ended with a highly distressed sale. The
sale of the company was completed in October with no further
provision for loan losses. In addition to this one sizable
charge-off, the third quarter also included charge-offs on a $3.0
million non-SNC C&I credit, a $5.3 million Energy SNC, and a
$4.4 million Restaurant SNC. All of these credits were previously
identified as nonperforming, and are in the late stages of
resolution.
- Provision for credit losses for the third quarter of 2019 was
$43.8 million driven by higher charge-offs and specific reserves,
as well as credit migration of certain credits primarily in the
General C&I and Restaurant portfolios. Specifically, 51% of the
quarter’s provisioning related to loans incurring a charge-off this
quarter. In light of these specific loans with partial charge-offs
being in the late stages of the resolution process, we do not
anticipate any incremental provision for loan losses associated
with these credits.
- The allowance for credit losses (“ACL”) increased to $127.8
million or 0.94% of total loans as of September 30, 2019, as
compared to $86.2 million or 0.91% of total loans as of September
30, 2018, and $115.3 million or 0.85% of total loans as of June 30,
2019.
- The ACL to total nonperforming loans was 118.2% as of September
30, 2019, as compared to 182.5% as of September 30, 2018, and
106.1% as of June 30, 2019.
- Loans 30-89 days past due were 0.15% of total loans at
September 30, 2019, compared to 0.10% at September 30, 2018 and
0.15% at June 30, 2019.
- Nonperforming loans (“NPLs”) as a percent of total loans were
0.79% at September 30, 2019, compared to 0.50% at September 30,
2018 and 0.80% at June 30, 2019. NPLs totaled $108.1 million, $47.2
million and $108.7 million as of September 30, 2019, September 30,
2018 and June 30, 2019, respectively.
- Total criticized loans (see Table 6) at September 30, 2019 were
$571.9 million or 4.19% as a percent of total loans as compared to
$275.7 million or 2.92% at September 30, 2018 and $408.5 million or
3.00% at June 30, 2019. The linked quarter increases included
migration of certain credits in General C&I and Energy.
Total Revenue:
This quarter’s total operating revenue reflected stable
underlying revenue driven by flat earning assets that, as compared
to the linked quarter, was positively impacted by lower funding
costs and hedge income. Total operating revenue(1) for the third
quarter of 2019 was $194.8 million, up 59.6% from the same period
in 2018 and up 1.2% from the linked quarter. On a year-to-date
basis, operating revenue for 2019 was $587.3 million, up 63.9% from
the same period in 2018. The year over year revenue increase
reflects loan growth during the period as well as the impact of the
State Bank acquisition.
Net interest income for the third quarter of 2019 was
$160.2 million, an increase of $62.1 million or 63.3%, from the
same period in 2018, and a decrease of $0.6 million or 0.4% from
the second quarter of 2019.
- Our fully tax-equivalent net interest margin (“NIM”) in the
third quarter of 2019 was 3.94% as compared to 3.58% for the third
quarter of 2018 and 3.97% for the second quarter of 2019.
- On a year-to-date basis, the NIM for 2019 increased to 4.04%
compared to 3.63% for 2018.
The year-over-year increase in NIM reflects the merger with
State Bank and the related positive impact on our funding costs,
loan yields and accretion income. The third quarter 2019 NIM as
compared to the linked quarter change was driven primarily by:
- -12 bp NIM impact in total loan yields including:
- -22 bp impact on our loan yields due to declining LIBOR and
prime rates in the current quarter;
- +12 bp impact on income from our hedge positions;
- -6 bp impact of the sale of $130 million of acquired non-credit
impaired loans late in the second quarter 2019; and
- +4 bp impact from higher accretion income.
- + 9bp NIM impact from lower funding costs including:
- +6 bp impact from lower deposit costs due to improved mix,
including increased non-interest bearing deposits and lower
brokered deposits, and targeted reductions of deposit rate costs in
step with index rate cuts; and
- +3 bp impact from lower borrowing costs due to a reduction in
average FHLB borrowings and lower long-term debt levels due to the
late second quarter senior debt refinancing that reduced debt
levels approximately $50 million.
Average earning assets for the third quarter of 2019 were $16.2
billion, an increase of $5.3 billion from the prior year’s quarter
from both organic and acquired growth, and a decline of $0.1
billion from the linked quarter due to overall flat loan
growth.
Originated Loans and Hedge Income:
- Average originated loans increased $146.2 million linked
quarter, with year-over-year growth of $1.5 billion, reflecting
moderated growth in 2019.
- Yield on originated loans was 5.31% for the third quarter of
2019, as compared to 5.11% and 5.43% for the third quarter of 2018
and the second quarter of 2019, respectively. The third quarter
2019 originated loan yield was negatively impacted by declines in
LIBOR, however that impact on net interest income was partially
offset by the positive impact of our hedges linked quarter in
addition to the growth in average originated loans.
- $4 billion notional LIBOR collar: Hedge income (loss) for the
collar for the third quarter of 2019 was $2.7 million as compared
to ($1.7) million for the second quarter of 2019. The collar income
year-to-date for 2019 was $2.7 million. The collar contract expires
February 2024.
- $650 million rate swaps: Hedge income (loss) for the swaps for
the third quarter of 2019 was ($1.2) million as compared to ($1.6)
million for the third quarter of 2018 and ($1.5) million for the
second quarter of 2019. Swap income year-to-date for 2019 was
($4.2) million as compared to ($3.1) million for 2018. One swap
contract for $300 million expires on December 31, 2019, with the
remaining $350 million contracts expiring February 27, 2026.
- Yield on the underlying originated loans (excluding hedge
impact) was 5.25% for the third quarter of 2019, as compared to
5.18% and 5.56% for the third quarter of 2018 and second quarter of
2019, respectively.
- Approximately 68% of the total loan portfolio is floating at
September 30, 2019.
Acquired Loans:
- Acquired loan average balances declined $348.8 million during
the third quarter of 2019 due to the sale of approximately $130
million in ANCI loans near the end of the second quarter and
routine payoff activity, with the increase year-over-year due to
the State Bank acquisition.
- Acquired loan yields during the third quarter of 2019 were
impacted by the $130 million loan sale in second quarter yielding
8.9% on average, as well as various State Bank purchase accounting
adjustments applied in the third quarter incorporating impact from
January 1, 2019 (“Day 1”).
- Year-to-date 2019 yields are 10.32% on the ACI portfolio,
excluding recovery accretion, and 6.59% on the ANCI portfolio. We
currently believe that the year-to-date yields of the acquired
portfolios, excluding recovery accretion, materially represent
those portfolio’s effective yields for the remainder of 2019, under
current market conditions and payoff expectations.
Cost of Funds:
- We experienced declines in funding costs this quarter with
total cost of funds for the third quarter of 2019 of 1.41%compared
to 1.33% for the third quarter of 2018 and 1.50% in the linked
quarter. Total cost of deposits for the third quarter of 2019 was
1.32% compared to 1.15% for the third quarter of 2018, and 1.39%
for the linked quarter.
- The decrease in costs during the linked quarter related
primarily to declines in brokered deposit balances as a result of
core deposit growth, a decrease in borrowing costs due to lower
total borrowings resulting from the June subordinated debt issuance
and senior debt repayment, and an increase in noninterest-bearing
deposits to 23.8% of total deposits compared to 22.4% at June 30,
2019.
Noninterest income for the third quarter of 2019 was
$34.6 million, an increase of $10.7 million or 44.5% from the same
period of 2018, and an increase of $2.9 million or 9.2% over the
linked quarter.
- Total service fees and revenue for the third quarter of 2019
were $30.6 million, an increase of $10.2 million or 49.6% from the
same period of 2018, and an increase of $2.8 million or 9.9% from
the second quarter of 2019. The year-over-year increase in fees was
due to across the board business growth and the merger. The linked
quarter results included business volume driven increases in
investment advisory, service charges on deposits, credit-related
fees, and SBA income, which were offset by modest declines in
bankcard fees, trust services revenue, and other service fees.
- Other noninterest income was $4.0 million and increased by $0.5
million from the third quarter of 2018 and by $0.2 million from the
linked quarter. The year over year variance included an increase of
$0.8 million in gains on sales of securities. The linked quarter
increase primarily resulted from $1.3 million in increased earnings
from limited partnerships plus the second quarter 2019 was reduced
by the $2.0 million earnout receivable revaluation. These items
were partially offset by a $1.5 million decline in gain on sale of
loans related to the second quarter 2019 sale of $130 million of
ANCI loans.
- Noninterest income as a percent of total revenues was 17.8% for
the third quarter of 2019 compared to 19.6% and 16.5% for the third
quarter of 2018 and second quarter of 2019, respectively.
Noninterest expense for the third quarter of 2019 was
$94.3 million, an increase of $33.1 million or 54.0% from $61.2
million for the same period in 2018, and a decrease of $6.2 million
or 6.2% from $100.5 million for the second quarter of 2019. The
year over year increase was related to the State Bank acquisition.
The linked quarter decrease resulted from:
- Decrease of $3.6 million in merger related costs;
- Decrease of $1.5 million in personnel costs related to lower
management incentive accruals;
- Decrease of $1.3 million in FDIC insurance assessment related
to credits received for assessments paid prior to reaching $10
billion in total assets; and
- Decrease of $2.7 million in loan related expenses primarily
associated with cost deferral on certain mortgage loans.
Adjusted noninterest expenses(1), which exclude the impact of
non-routine items(2), were $93.3 million for the third quarter of
2019, up $34.2 million or 58.0% from $59.0 million for the third
quarter of 2018 and down $2.7 million or 2.8% from $96.0 million
for the second quarter of 2019. Non-routine expenses included
merger related expenses of $1.0 million, $0.2 million and $4.6
million, for the third quarter of 2019, third quarter of 2018 and
second quarter of 2019, respectively.
Our efficiency ratio(1) improvement for the third quarter
of 2019 reflects increases in operating revenue combined with
decreases in quarterly operating expenses. The third quarter of
2019 adjusted efficiency ratio(2) was 48.1% compared to 48.4% for
the third quarter of 2018 and 50.0% for the second quarter of
2019.
(1)
Considered a non-GAAP financial measure. See Table 10
“Reconciliation of Non-GAAP Financial Measures” for a
reconciliation of our non-GAAP measures to the most directly
comparable GAAP financial measure.
(2)
See Table 10 for a detail of non-routine income and
expenses.
Taxes:
The effective tax rate for the quarter ended September 30, 2019
was 22.5% compared to 23.3% for the quarter ended June 30, 2019,
and 24.2% for the quarter ended September 30, 2018. The full year
2019 effective tax rate is currently estimated as 22.9%.
Supplementary Financial Tables
(Unaudited):
Supplementary financial tables (unaudited) are included in this
release following the customary disclosure information.
Third Quarter 2019 Earnings Conference
Call:
Cadence Bancorporation executive management will host a
conference call to discuss third quarter 2019 results on Wednesday,
October 23, 2019, at 7:30 a.m. CT / 8:30 a.m. ET. Slides to be
presented by management on the conference call can be viewed by
visiting www.cadencebancorporation.com and selecting “Events &
Presentations” then “Presentations”.
Conference Call Access:
To access the conference call, please dial one of the following
numbers approximately 10-15 minutes prior to the start time to
allow time for registration and use the Elite Entry Number provided
below.
Dial in (toll free):
1-888-317-6003
International dial in:
1-412-317-6061
Canada (toll free):
1-866-284-3684
Participant Elite Entry Number:
3972074
For those unable to participate in the live presentation, a
replay will be available through November 6, 2019. To access the
replay, please use the following numbers:
US Toll Free:
1-877-344-7529
International Toll:
1-412-317-0088
Canada Toll Free:
1-855-669-9658
Replay Access Code:
10135639
End Date:
November 6, 2019
Webcast Access:
The call and corresponding presentation slides will be webcast
live on the home page of the Company’s website:
www.cadencebancorporation.com.
About Cadence Bancorporation
Cadence Bancorporation (NYSE: CADE), headquartered in Houston,
Texas, is a regional financial holding company with $17.9 billion
in assets as of September 30, 2019. Cadence operates 98 branch
locations in Alabama, Florida, Georgia, Mississippi, Tennessee and
Texas, and provides corporations, middle-market companies, small
businesses and consumers with a full range of innovative banking
and financial solutions. Services and products include commercial
and business banking, treasury management, specialized lending,
asset-based lending, commercial real estate, SBA lending, foreign
exchange, wealth management, investment and trust services,
financial planning, retirement plan management, payroll and
insurance services, consumer banking, consumer loans, mortgages,
home equity lines and loans, and credit cards. Clients have access
to leading-edge online and mobile solutions, interactive teller
machines, and more than 55,000 ATMs. The Cadence team of 1,800
associates is committed to exceeding customer expectations and
helping their clients succeed financially.
Cautionary Statement Regarding Forward-Looking
Information
This communication contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements reflect our current views
with respect to, among other things, future events and our results
of operations, financial condition and financial performance. These
statements are often, but not always, made through the use of words
or phrases such as “may,” “should,” “could,” “predict,”
“potential,” “believe,” “will likely result,” “expect,” “continue,”
“will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,”
“projection,” “would” and “outlook,” or the negative version of
those words or other comparable words of a future or
forward-looking nature. These forward-looking statements are not
historical facts, and are based on current expectations, estimates
and projections about our industry, management’s beliefs and
certain assumptions made by management, many of which, by their
nature, are inherently uncertain and beyond our control.
Accordingly, we caution you that any such forward-looking
statements are not guarantees of future performance and are subject
to risks, assumptions and uncertainties that are difficult to
predict.
Although we believe that the expectations reflected in these
forward-looking statements are reasonable as of the date made,
actual results may prove to be materially different from the
results expressed or implied by the forward-looking statements.
Such factors include, without limitation, the “Risk Factors”
referenced in our Registration Statement on Form S-3 filed with the
Securities and Exchange Commission (the “SEC”) on May 21, 2018, and
our Registration Statement on Form S-4 filed with the SEC on July
20, 2018, other risks and uncertainties listed from time to time in
our reports and documents filed with the SEC, including our Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q, and the
following factors: business and economic conditions generally and
in the financial services industry, nationally and within our
current and future geographic market areas; economic, market,
operational, liquidity, credit and interest rate risks associated
with our business; deteriorating asset quality and higher loan
charge-offs; the laws and regulations applicable to our business;
our ability to achieve organic loan and deposit growth and the
composition of such growth; increased competition in the financial
services industry, nationally, regionally or locally; our ability
to maintain our historical earnings trends; our ability to raise
additional capital to implement our business plan; material
weaknesses in our internal control over financial reporting;
systems failures or interruptions involving our information
technology and telecommunications systems or third-party servicers;
the composition of our management team and our ability to attract
and retain key personnel; the fiscal position of the U.S. federal
government and the soundness of other financial institutions; the
composition of our loan portfolio, including the identity of our
borrowers and the concentration of loans in energy-related
industries and in our specialized industries; the portion of our
loan portfolio that is comprised of participations and shared
national credits; the amount of nonperforming and classified assets
we hold; the possibility that the anticipated benefits of the
merger with State Bank are not 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 Cadence
and State Bank do business; the impact on our financial condition,
results of operations, financial disclosures, and future business
strategies related to the upcoming implementation of FASB
Accounting Standards Update 2016-13, Financial Instruments – Credit
Losses, commonly referred to as CECL. Cadence can give no assurance
that any goal or plan or expectation set forth in forward-looking
statements can be achieved and readers are cautioned not to place
undue reliance on such statements. The forward-looking statements
are made as of the date of this communication, and Cadence does not
intend, and assumes no obligation, to update any forward-looking
statement to reflect events or circumstances after the date on
which the statement is made or to reflect the occurrence of
unanticipated events or circumstances, except as required by
applicable law.
About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present,
including “efficiency ratio,” “adjusted efficiency ratio,”
“adjusted noninterest expenses,” “adjusted operating revenue,”
“tangible common equity ratio,” “tangible book value per share” and
“return on average tangible common equity”, “adjusted return on
average tangible common equity”. “adjusted return on average
assets”, “adjusted diluted earnings per share” and “pre-tax,
pre-provision net earnings,” are supplemental measures that are not
required by, or are not presented in accordance with, U.S.
generally accepted accounting principles (GAAP). We refer to these
financial measures and ratios as “non-GAAP financial measures.” We
consider the use of select non-GAAP financial measures and ratios
to be useful for financial and operational decision making and
useful in evaluating period-to-period comparisons. We believe that
these non-GAAP financial measures provide meaningful supplemental
information regarding our performance by excluding certain
expenditures or assets that we believe are not indicative of our
primary business operating results or by presenting certain metrics
on a fully taxable equivalent basis. We believe that management and
investors benefit from referring to these non-GAAP financial
measures in assessing our performance and when planning,
forecasting, analyzing and comparing past, present and future
periods.
These non-GAAP financial measures should not be considered a
substitute for financial information presented in accordance with
GAAP and you should not rely on non-GAAP financial measures alone
as measures of our performance. The non-GAAP financial measures we
present may differ from non-GAAP financial measures used by our
peers or other companies. We compensate for these limitations by
providing the equivalent GAAP measures whenever we present the
non-GAAP financial measures and by including a reconciliation of
the impact of the components adjusted for in the non-GAAP financial
measure so that both measures and the individual components may be
considered when analyzing our performance. A reconciliation of
non-GAAP financial measures to the comparable GAAP financial
measures is included at the end of the financial statement tables
(Table 10).
Table 1 - Selected Financial
Data
As of and for the Three Months
Ended
(In thousands, except share and per
share data)
September 30,
2019
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
Statement of Income Data:
Interest income
$
213,149
$
217,124
$
222,185
$
143,857
$
131,753
Interest expense
52,962
56,337
52,896
40,711
33,653
Net interest income
160,187
160,787
169,289
103,146
98,100
Provision for credit losses
43,764
28,927
11,210
8,422
(1,365
)
Net interest income after provision
116,423
131,860
158,079
94,724
99,465
Noninterest income - service fees and
revenue
30,646
27,882
27,741
21,217
20,490
Noninterest income - other noninterest
income
3,996
3,840
2,923
(210
)
3,486
Noninterest expense
94,283
100,529
113,440
72,697
61,231
Income before income taxes
56,782
63,053
75,303
43,034
62,210
Income tax expense
12,796
14,707
17,102
10,709
15,074
Net income
$
43,986
$
48,346
$
58,201
$
32,325
$
47,136
Weighted average common shares
outstanding
Basic
128,457,491
128,791,933
130,485,521
83,375,485
83,625,000
Diluted
128,515,274
129,035,553
130,549,319
83,375,485
84,660,256
Earnings per share
Basic
$
0.34
$
0.37
$
0.44
$
0.39
$
0.56
Diluted
0.34
0.37
0.44
0.39
0.56
Period-End Balance Sheet Data:
Investment securities
$
1,705,325
$
1,684,847
$
1,754,839
$
1,187,252
$
1,206,387
Total loans, net of unearned income
13,637,042
13,627,934
13,624,954
10,053,923
9,443,819
Allowance for credit losses
127,773
115,345
105,038
94,378
86,151
Total assets
17,855,946
17,504,005
17,452,911
12,730,285
11,759,837
Total deposits
14,789,712
14,487,821
14,199,223
10,708,689
9,558,276
Noninterest-bearing deposits
3,602,861
3,296,652
3,210,321
2,454,016
2,094,856
Interest-bearing deposits
11,186,851
11,191,169
10,988,902
8,254,673
7,463,420
Borrowings and subordinated debentures
371,892
376,240
717,278
471,770
662,658
Total shareholders’ equity
2,475,944
2,426,072
2,302,823
1,438,274
1,414,826
Average Balance Sheet Data:
Investment securities
$
1,650,902
$
1,716,550
$
1,748,714
$
1,187,947
$
1,141,704
Total loans, net of unearned income
13,719,286
13,921,873
13,798,386
9,890,419
9,265,754
Allowance for credit losses
119,873
106,656
97,065
87,996
92,783
Total assets
17,621,163
17,653,511
17,634,267
12,249,819
11,585,969
Total deposits
14,539,419
14,645,109
14,579,771
10,038,180
9,489,268
Noninterest-bearing deposits
3,456,807
3,281,383
3,334,399
2,210,793
2,153,097
Interest-bearing deposits
11,082,613
11,363,727
11,245,372
7,827,387
7,336,171
Borrowings and subordinated debentures
381,257
441,619
554,281
652,813
567,864
Total shareholders’ equity
2,447,189
2,331,855
2,241,652
1,412,643
1,395,061
Table 1 (Continued) - Selected
Financial Data
As of and for the Three Months
Ended
(In thousands, except share and per
share data)
September 30,
2019
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
Per Share Data:
Book value
$
19.32
$
18.84
$
17.88
$
17.43
$
16.92
Tangible book value (1)
14.66
14.21
13.23
13.62
13.15
Cash dividends declared
0.175
0.175
0.175
0.150
0.150
Dividend payout ratio
51.47
%
47.30
%
39.77
%
38.46
%
26.79
%
Performance Ratios:
Return on average common equity (2)
7.13
%
8.32
%
10.53
%
9.08
%
13.40
%
Return on average tangible common equity
(1) (2)
10.43
12.23
15.54
11.85
17.50
Return on average assets (2)
0.99
1.10
1.34
1.05
1.61
Net interest margin (2)
3.94
3.97
4.21
3.55
3.58
Efficiency ratio (1)
48.39
52.22
56.73
58.55
50.16
Adjusted efficiency ratio (1)
48.07
49.97
45.73
48.99
48.36
Asset Quality Ratios:
Total nonperforming assets ("NPAs") to
total loans and OREO and other NPAs
0.84
%
0.85
%
0.63
%
0.82
%
0.66
%
Total nonperforming loans to total
loans
0.79
0.80
0.57
0.74
0.50
Total ACL to total loans
0.94
0.85
0.77
0.94
0.91
ACL to total nonperforming loans
("NPLs")
118.17
106.08
135.01
127.12
182.52
Net charge-offs to average loans (2)
0.91
0.54
0.02
0.01
0.13
Capital Ratios:
Total shareholders’ equity to assets
13.9
%
13.9
%
13.2
%
11.3
%
12.0
%
Tangible common equity to tangible assets
(1)
10.9
10.8
10.1
9.1
9.6
Common equity tier 1 (3)
11.0
10.9
10.4
9.8
10.4
Tier 1 leverage capital (3)
10.3
10.3
10.0
10.1
10.7
Tier 1 risk-based capital (3)
11.0
10.9
10.4
10.1
10.7
Total risk-based capital (3)
13.2
12.9
11.9
11.8
12.4
_____________________
(1)
Considered a non-GAAP financial measure. See Table 10
"Reconciliation of Non-GAAP Financial Measures" for a
reconciliation of our non-GAAP measures to the most directly
comparable GAAP financial measure.
(2)
Annualized.
(3)
Current quarter regulatory capital ratios are estimates.
Table 2 - Average
Balances/Yield/Rates
For the Three Months Ended
September 30,
2019
2018
Average
Income/
Yield/
Average
Income/
Yield/
(In thousands)
Balance
Expense
Rate
Balance
Expense
Rate
ASSETS
Interest-earning assets:
Loans, net of unearned income (1)
Originated loans
$
10,191,066
$
136,332
5.31
%
$
8,734,337
$
112,419
5.11
%
ANCI portfolio
3,269,846
54,084
6.56
302,229
3,395
4.46
ACI portfolio
258,375
7,554
11.60
229,188
5,243
9.08
Total loans
13,719,286
197,970
5.72
9,265,754
121,057
5.18
Investment securities
Taxable
1,447,448
9,657
2.65
928,275
6,248
2.67
Tax-exempt (2)
203,454
1,892
3.69
213,429
2,195
4.08
Total investment securities
1,650,902
11,549
2.78
1,141,704
8,443
2.93
Federal funds sold and short-term
investments
741,955
3,421
1.83
458,491
2,039
1.76
Other investments
77,605
606
3.10
54,762
675
4.89
Total interest-earning assets
16,189,748
213,546
5.23
10,920,711
132,214
4.80
Noninterest-earning assets:
Cash and due from banks
123,758
71,777
Premises and equipment
128,286
62,422
Accrued interest and other assets
1,299,244
623,842
Allowance for credit losses
(119,873
)
(92,783
)
Total assets
$
17,621,163
$
11,585,969
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing liabilities:
Demand deposits
$
7,991,804
$
31,063
1.54
%
$
5,175,915
$
17,046
1.31
%
Savings deposits
250,003
274
0.43
181,449
149
0.33
Time deposits
2,840,806
17,083
2.39
1,978,807
10,312
2.07
Total interest-bearing deposits
11,082,613
48,420
1.73
7,336,171
27,507
1.49
Other borrowings
160,066
1,005
2.49
432,279
3,673
3.37
Subordinated debentures
221,191
3,536
6.35
135,585
2,473
7.25
Total interest-bearing liabilities
11,463,870
52,961
1.83
7,904,035
33,653
1.69
Noninterest-bearing
liabilities:
Demand deposits
3,456,807
2,153,097
Accrued interest and other liabilities
253,297
133,776
Total liabilities
15,173,974
10,190,908
Shareholders' equity
2,447,189
1,395,061
Total liabilities and shareholders'
equity
$
17,621,163
$
11,585,969
Net interest income/net interest
spread
160,585
3.40
%
98,561
3.11
%
Net yield on earning assets/net interest
margin
3.94
%
3.58
%
Taxable equivalent adjustment:
Investment securities
(397
)
(461
)
Net interest income
$
160,188
$
98,100
_____________________
(1)
Nonaccrual loans are included in loans,
net of unearned income. No adjustment has been made for these loans
in the calculation of yields.
(2)
Interest income and yields are presented
on a fully taxable equivalent basis using an income tax rate of
21%.
Table 2 (Continued) - Average
Balances/Yield/Rates
For the Three Months
Ended
September 30, 2019
For the Three Months
Ended
June 30, 2019
Average
Income/
Yield/
Average
Income/
Yield/
(In thousands)
Balance
Expense
Rate
Balance
Expense
Rate
ASSETS
Interest-earning assets:
Loans, net of unearned income (1)
Originated loans
$
10,191,066
$
136,332
5.31
%
$
10,044,825
$
135,946
5.43
%
ANCI portfolio
3,269,846
54,084
6.56
3,586,344
55,266
6.18
ACI portfolio
258,375
7,554
11.60
290,704
10,799
14.90
Total loans
13,719,286
197,970
5.72
13,921,873
202,011
5.82
Investment securities
Taxable
1,447,448
9,657
2.65
1,500,971
10,298
2.75
Tax-exempt (2)
203,454
1,892
3.69
215,579
2,061
3.83
Total investment securities
1,650,902
11,549
2.78
1,716,550
12,359
2.89
Federal funds sold and short-term
investments
741,955
3,421
1.83
597,988
2,667
1.79
Other investments
77,605
606
3.10
67,124
520
3.11
Total interest-earning assets
16,189,748
213,546
5.23
16,303,535
217,557
5.35
Noninterest-earning assets:
Cash and due from banks
123,758
111,337
Premises and equipment
128,286
128,067
Accrued interest and other assets
1,299,244
1,217,228
Allowance for credit losses
(119,873
)
(106,656
)
Total assets
$
17,621,163
$
17,653,511
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest-bearing liabilities:
Demand deposits
$
7,991,804
$
31,063
1.54
%
$
7,732,568
$
30,195
1.57
%
Savings deposits
250,003
274
0.43
251,270
245
0.39
Time deposits
2,840,806
17,083
2.39
3,379,889
20,298
2.41
Total interest-bearing deposits
11,082,613
48,420
1.73
11,363,727
50,738
1.79
Other borrowings
160,066
1,005
2.49
300,897
3,051
4.07
Subordinated debentures
221,191
3,536
6.35
140,722
2,548
7.26
Total interest-bearing liabilities
11,463,870
52,961
1.83
11,805,346
56,337
1.91
Noninterest-bearing
liabilities:
Demand deposits
3,456,807
3,281,383
Accrued interest and other liabilities
253,297
234,927
Total liabilities
15,173,974
15,321,656
Stockholders' equity
2,447,189
2,331,855
Total liabilities and stockholders'
equity
$
17,621,163
$
17,653,511
Net interest income/net interest
spread
160,585
3.40
%
161,220
3.45
%
Net yield on earning assets/net interest
margin
3.94
%
3.97
%
Taxable equivalent adjustment:
Investment securities
(397
)
(433
)
Net interest income
$
160,188
$
160,787
_____________________
(1)
Nonaccrual loans are included in loans,
net of unearned income. No adjustment has been made for these loans
in the calculation of yields.
(2)
Interest income and yields are presented
on a fully taxable equivalent basis using an income tax rate of
21%.
Table 3 – Loan Interest Income
Detail
Year-To-Date
For the Three Months
Ended
(In thousands)
September 30,
2019
September 30,
2019
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2019
Loan Interest Income Detail
Interest income on originated loans
$
408,093
$
136,333
$
135,946
$
135,815
$
122,674
$
112,419
ANCI loans: interest income
143,337
43,133
49,095
51,109
4,571
3,219
ANCI loans: accretion
29,599
10,951
6,171
12,478
(273
)
176
ACI loans: scheduled accretion
21,882
6,996
8,989
5,896
4,724
4,881
ACI loans: recovery income
2,821
557
1,810
453
860
362
Loan interest income
$
605,732
$
197,970
$
202,011
$
205,751
$
132,556
$
121,057
Originated loan yield
5.45
%
5.31
%
5.43
%
5.61
%
5.20
%
5.11
%
ANCI loan yield without discount
accretion
5.46
5.23
5.49
5.63
5.55
4.23
ANCI loan yield on discount accretion
1.13
1.33
0.69
1.37
(0.33
)
0.23
ACI loan yield without recovery income
10.32
10.74
12.40
7.93
9.81
8.65
ACI loan yield on recovery income
1.33
0.86
2.50
0.61
0.86
0.42
Total loan yield
5.86
%
5.72
%
5.82
%
6.05
%
5.32
%
5.18
%
Table 4 - Allowance for Credit
Losses (“ACL”)
For the Three Months
Ended
(In thousands)
September 30,
2019
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
Balance at beginning of period
$
115,345
$
105,038
$
94,378
$
86,151
$
90,620
Charge-offs
(31,650
)
(18,981
)
(938
)
(318
)
(3,265
)
Recoveries
314
361
388
123
161
Net charge-offs
(31,336
)
(18,620
)
(550
)
(195
)
(3,104
)
Provision for (reversal of) credit
losses
43,764
28,927
11,210
8,422
(1,365
)
Balance at end of period
$
127,773
$
115,345
$
105,038
$
94,378
$
86,151
(In thousands)
Allocation of Ending ACL
Originated loans
$
114,441
$
105,368
$
96,387
$
85,402
$
77,137
Acquired non-credit impaired loans
1,650
1,091
1,117
1,052
817
Acquired credit impaired loans
11,682
8,886
7,534
7,924
8,197
$
127,773
$
115,345
$
105,038
$
94,378
$
86,151
Table 5 – ACL Activity by
Segment
For the Three Months Ended
September 30, 2019
(In thousands)
Commercial and
Industrial
Commercial Real Estate
Consumer
Small Business
Total
As of June 30, 2019
$
82,446
$
13,417
$
14,464
$
5,018
$
115,345
Provision for loan losses
36,660
4,590
1,256
1,258
43,764
Charge-offs
(29,632
)
(542
)
(555
)
(921
)
(31,650
)
Recoveries
183
42
79
10
314
As of September 30, 2019
$
89,657
$
17,507
$
15,244
$
5,365
$
127,773
For the Nine Months Ended
September 30, 2019
(In thousands)
Commercial and
Industrial
Commercial Real Estate
Consumer
Small Business
Total
As of December 31, 2018
$
66,316
$
10,452
$
13,703
$
3,907
$
94,378
Provision for loan losses
70,611
7,893
2,702
2,695
83,901
Charge-offs
(48,093
)
(880
)
(1,323
)
(1,272
)
(51,568
)
Recoveries
823
42
162
35
1,062
As of September 30, 2019
$
89,657
$
17,507
$
15,244
$
5,365
$
127,773
Table 6 – Criticized Loans by
Segment
As of September 30,
2019
(Recorded Investment in
thousands)
Special Mention
Substandard
Doubtful
Total Criticized
Commercial and Industrial
General C&I
$
68,749
$
168,054
$
4,045
$
240,848
Energy sector
59,504
34,645
4,988
99,137
Restaurant industry
58,406
46,707
6,676
111,789
Healthcare
29,154
4,051
—
33,205
Total commercial and industrial
215,813
253,457
15,709
484,979
Commercial Real Estate
Income producing
29,737
15,881
—
45,618
Land and development
5,906
2,362
—
8,268
Total commercial real estate
35,643
18,243
—
53,886
Consumer
Residential real estate
115
10,158
—
10,273
Other
—
16
—
16
Total consumer
115
10,174
—
10,289
Small Business Lending
5,984
16,753
—
22,737
Total
$
257,555
$
298,627
$
15,709
$
571,891
Table 6 (Continued) –
Criticized Loans by Segment
As of June 30, 2019
(Recorded Investment in
thousands)
Special Mention
Substandard
Doubtful
Total Criticized
Commercial and Industrial
General C&I
$
68,091
$
64,505
$
42,514
$
175,110
Energy sector
—
17,464
6,485
23,949
Restaurant industry
76,552
46,614
2,142
125,308
Healthcare
5,250
4,260
—
9,510
Total commercial and industrial
149,893
132,843
51,141
333,877
Commercial Real Estate
Income producing
15,113
19,352
—
34,465
Land and development
4,978
1,853
—
6,831
Total commercial real estate
20,091
21,205
—
41,296
Consumer
Residential real estate
118
8,110
—
8,228
Other
—
301
—
301
Total consumer
118
8,411
—
8,529
Small Business Lending
5,884
18,941
—
24,825
Total
$
175,986
$
181,400
$
51,141
$
408,527
Table 7 – Nonperforming
Assets
As of September 30,
2019
(Recorded Investment in
thousands)
Originated
ANCI
ACI
Total
Nonperforming loans ("NPLs"):
Commercial and industrial
$
86,123
$
6,520
$
—
$
92,643
Commercial real estate
—
1,215
5,640
6,855
Consumer
1,969
3,325
—
5,294
Small business
665
2,669
—
3,334
Total NPLs
88,757
13,729
5,640
108,126
Foreclosed OREO and other NPAs
5,195
—
1,536
6,731
Total nonperforming assets ("NPAs")
$
93,952
$
13,729
$
7,176
$
114,857
NPLs as a percentage of total loans
0.65
%
0.10
%
0.04
%
0.79
%
NPAs as a percentage of loans plus
OREO/other NPAs
0.69
%
0.10
%
0.05
%
0.84
%
NPAs as a percentage of total assets
0.53
%
0.08
%
0.04
%
0.64
%
Total accruing loans 90 days or more past
due
$
70
$
565
$
23,852
$
24,487
Table 7 (Continued) –
Nonperforming Assets
As of June 30, 2019
(Recorded Investment in
thousands)
Originated
ANCI
ACI
Total
Nonperforming loans ("NPLs"):
Commercial and industrial
$
103,379
$
—
$
—
$
103,379
Commercial real estate
—
—
—
—
Consumer
589
2,353
—
2,942
Small business
599
1,835
—
2,434
Total NPLs
104,567
4,188
—
108,755
Foreclosed OREO and other NPAs
5,448
9
2,255
7,712
Total nonperforming assets ("NPAs")
$
110,015
$
4,197
$
2,255
$
116,467
NPLs as a percentage of total loans
0.77
%
0.03
%
0.00
%
0.80
%
NPAs as a percentage of loans plus
OREO/other NPAs
0.81
%
0.03
%
0.02
%
0.85
%
NPAs as a percentage of total assets
0.63
%
0.02
%
0.01
%
0.66
%
Accruing 90 days or more past due
$
501
$
1,065
$
29,808
$
31,374
Table 8 -Noninterest
Income
For the Three Months
Ended
(In thousands)
September 30,
2019
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
Noninterest Income
Investment advisory revenue
$
6,532
$
5,797
$
5,642
$
5,170
$
5,535
Trust services revenue
4,440
4,578
4,335
4,182
4,449
Service charges on deposit accounts
5,462
4,730
5,130
3,856
3,813
Credit-related fees
5,960
5,341
4,870
5,191
3,549
Payroll processing revenue
1,196
1,161
1,419
-
-
Bankcard fees
2,061
2,279
2,213
1,073
1,078
SBA income
2,216
1,415
1,449
-
-
Mortgage banking revenue
1,079
674
579
398
747
Other service fees
1,700
1,907
2,104
1,347
1,319
Total service fees and revenue
30,646
27,882
27,741
21,217
20,490
Securities gains (losses), net
775
938
(12
)
(54
)
2
Other
3,221
2,902
2,935
(156
)
3,484
Total other noninterest income
3,996
3,840
2,923
(210
)
3,486
Total noninterest income
$
34,642
$
31,722
$
30,664
$
21,007
$
23,976
Table 9 -Noninterest
Expenses
For the Three Months
Ended
(In thousands)
September 30,
2019
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
Noninterest Expenses
Salaries and employee benefits
$
51,904
$
53,660
$
53,471
$
43,495
$
35,790
Premises and equipment
10,913
11,148
10,958
8,212
7,544
Merger related expenses
1,010
4,562
22,000
2,049
178
Intangible asset amortization
6,025
5,888
6,073
598
650
Data processing
3,641
3,435
2,594
2,117
1,989
Consulting and professional fees
2,621
1,899
2,229
3,675
4,266
Loan related expenses
(921
)
1,740
910
1,424
821
FDIC insurance
527
1,870
1,752
1,230
1,237
Communications
1,425
1,457
998
684
682
Advertising and public relations
1,368
1,104
781
928
679
Legal expenses
500
645
158
395
242
Other
15,270
13,122
11,516
7,889
7,153
Total noninterest expenses
$
94,283
$
100,529
$
113,440
$
72,697
$
61,231
Table 10 - Reconciliation of
Non-GAAP Financial Measures
As of and for the Three Months
Ended
(In thousands, except share and per
share data)
September 30,
2019
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
Efficiency ratio
Noninterest expenses (numerator)
$
94,283
$
100,529
$
113,440
$
72,697
$
61,231
Net interest income
$
160,187
$
160,787
$
169,289
$
103,146
$
98,100
Noninterest income
34,642
31,722
30,664
21,007
23,976
Operating revenue (denominator)
$
194,829
$
192,509
$
199,953
$
124,153
$
122,076
Efficiency ratio
48.39
%
52.22
%
56.73
%
58.55
%
50.16
%
Adjusted efficiency ratio
Noninterest expenses
$
94,283
$
100,529
$
113,440
$
72,697
$
61,231
Less: Merger related expenses
1,010
4,562
22,000
2,049
178
Less: Secondary offerings expenses
—
—
—
—
2,022
Plus: Specially designated bonuses
—
—
—
9,795
—
Adjusted noninterest expenses
(numerator)
$
93,273
$
95,967
$
91,440
$
60,853
$
59,031
Net interest income
$
160,187
$
160,787
$
169,289
$
103,146
$
98,100
Noninterest income
34,642
31,722
30,664
21,007
23,976
Plus: revaluation of receivable from sale
of insurance assets
—
2,000
—
—
—
Less: gain on sale of acquired commercial
loans
—
1,514
—
—
—
Less: securities gains (losses), net
775
938
(12
)
(54
)
2
Adjusted noninterest income
33,867
31,270
30,676
21,061
23,974
Adjusted operating revenue
(denominator)
$
194,054
$
192,057
$
199,965
$
124,207
$
122,074
Adjusted efficiency ratio
48.07
%
49.97
%
45.73
%
48.99
%
48.36
%
Tangible common equity ratio
Shareholders’ equity
$
2,475,944
$
2,426,072
$
2,302,823
$
1,438,274
$
1,414,826
Less: goodwill and other intangible
assets, net
(597,488
)
(595,605
)
(598,674
)
(314,400
)
(314,998
)
Tangible common shareholders’ equity
1,878,456
1,830,467
1,704,149
1,123,874
1,099,828
Total assets
17,855,946
17,504,005
17,452,911
12,730,285
11,759,837
Less: goodwill and other intangible
assets, net
(597,488
)
(595,605
)
(598,674
)
(314,400
)
(314,998
)
Tangible assets
$
17,258,458
$
16,908,400
$
16,854,237
$
12,415,885
$
11,444,839
Tangible common equity ratio
10.88
%
10.83
%
10.11
%
9.05
%
9.61
%
Tangible book value per share
Shareholders’ equity
$
2,475,944
$
2,426,072
$
2,302,823
$
1,438,274
$
1,414,826
Less: goodwill and other intangible
assets, net
(597,488
)
(595,605
)
(598,674
)
(314,400
)
(314,998
)
Tangible common shareholders’ equity
$
1,878,456
$
1,830,467
$
1,704,149
$
1,123,874
$
1,099,828
Common shares outstanding
128,173,765
128,798,549
128,762,201
82,497,009
83,625,000
Tangible book value per share
$
14.66
$
14.21
$
13.23
$
13.62
$
13.15
Table 10 (Continued) –
Reconciliation of Non-GAAP Measures
As of and for the Three Months
Ended
(In thousands, except share and per
share data)
September 30,
2019
June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
Return on average tangible common
equity
Average common equity
$
2,447,189
$
2,331,855
$
2,241,652
$
1,412,643
$
1,395,061
Less: average intangible assets
(598,602
)
(597,772
)
(602,446
)
(314,759
)
(315,382
)
Average tangible common shareholders’
equity
$
1,848,587
$
1,734,083
$
1,639,206
$
1,097,884
$
1,079,679
Net income
$
43,986
$
48,346
$
58,201
$
32,325
$
47,136
Plus: intangible asset amortization
4,620
4,515
4,628
459
498
Tangible net income
$
48,606
$
52,861
$
62,829
$
32,784
$
47,634
Return on average tangible common
equity(1)
10.43
%
12.23
%
15.54
%
11.85
%
17.50
%
Adjusted return on average tangible
common equity
Average tangible common shareholders’
equity
$
1,848,587
$
1,734,083
$
1,639,206
$
1,097,884
$
1,079,679
Tangible net income
$
48,606
$
52,861
$
62,829
$
32,784
$
47,634
Non-routine items:
Plus: merger related expenses
1,010
4,562
22,000
2,049
178
Plus: secondary offerings expenses
—
—
—
—
2,022
Plus: specially designated bonuses
—
—
—
9,795
—
Plus: revaluation of receivable from sale
of insurance assets
—
2,000
—
—
—
Less: gain on sale of acquired commercial
loans
—
1,514
—
—
—
Less: securities gains (losses), net
775
938
(12
)
(54
)
2
Tax expense:
Less: income tax effect of tax deductible
non-routine items
55
958
4,694
2,648
34
Total non-routine items, after tax
180
3,152
17,318
9,250
2,164
Adjusted tangible net income available to
common shareholders
$
48,786
$
56,012
$
80,146
$
42,034
$
49,798
Adjusted return on average tangible common
equity(1)
10.47
%
12.96
%
19.83
%
15.19
%
18.30
%
Adjusted return on average
assets
Average assets
$
17,621,163
$
17,653,511
$
17,634,267
$
12,249,819
$
11,585,969
Net income
$
43,986
$
48,346
$
58,201
$
32,325
$
47,136
Return on average assets
0.99
%
1.10
%
1.34
%
1.05
%
1.61
%
Net income
$
43,986
$
48,346
$
58,201
$
32,325
$
47,136
Total non-routine items, after tax
180
3,152
17,318
9,250
2,164
Adjusted net income
$
44,166
$
51,497
$
75,519
$
41,575
$
49,300
Adjusted return on average assets(1)
0.99
%
1.17
%
1.74
%
1.35
%
1.69
%
Adjusted diluted earnings per
share
Diluted weighted average common shares
outstanding
128,515,274
129,035,553
130,549,319
83,375,485
84,660,256
Net income allocated to common stock
$
43,849
$
48,176
$
58,028
$
32,293
$
47,080
Total non-routine items, after tax
180
3,152
17,318
9,250
2,164
Adjusted net income allocated to common
stock
$
44,029
$
51,328
$
75,346
$
41,543
$
49,244
Adjusted diluted earnings per share
$
0.34
$
0.40
$
0.58
$
0.50
$
0.58
Adjusted pre-tax, pre-provision net
earnings
Income before taxes
$
56,782
$
63,053
$
75,303
$
43,034
$
62,210
Plus: Provision for credit losses
43,764
28,927
11,210
8,422
(1,365
)
Plus: Total non-routine items before
taxes
235
4,110
22,012
11,898
2,198
Adjusted pre-tax, pre-provision net
earnings
$
100,780
$
96,090
$
108,525
$
63,354
$
63,043
(1)
Annualized
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191023005370/en/
Cadence Bancorporation
Media contact: Danielle Kernell 713-871-4051
danielle.kernell@cadencebank.com
Investor relations contact: Valerie Toalson 713-871-4103
or 800-698-7878 vtoalson@cadencebancorporation.com
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