Cadence Bancorporation (NYSE: CADE) (“Cadence”) today announced
net income for the quarter ended September 30, 2020 of $49.3
million or $0.39 per share, compared to net income of $44.0 million
or $0.34 per share for the quarter ended September 30, 2019, and a
net loss of ($56.1) million or ($0.45) per share for the quarter
ended June 30, 2020. Adjusted net income (loss)(1), excluding
non-routine income and expenses(2), was $51.4 million or $0.40 per
share for the quarter ended September 30, 2020, compared to $44.2
million or $0.34 per share for the quarter ended September 30, 2019
and compared to ($56.9) million or ($0.45) per share for the
quarter ended June 30, 2020.
“We are pleased to report that our company’s core fundamental
performance continues to be resilient. For the third quarter,
adjusted pre-tax pre-provision net revenue (“PPNR”) was $94.6
million, 2.06% of average assets. Our net interest margin (“NIM”)
and efficiency ratio have been consistently attractive and
favorable to peers. Credit pressure still exists in today’s
economy, but charge-offs are down linked quarter, nonperforming
assets are lower and loan deferrals declined significantly to 1.5%
currently. Our attractive capital ratios further improved linked
quarter with Common Equity Tier 1 capital increasing to 12.0%.
Based on these factors, we are taking a step forward by increasing
our fourth quarter dividend to $0.075 cents per share. While there
remains considerable uncertainty about how this credit environment
will play out, I am proud of the way our experienced senior
leadership and each of our employees continue to serve our
customers and enhance our bank. As the economy improves, we will be
well positioned for growth in some of the most attractive markets
in America,” stated Paul B. Murphy, Jr., Chairman and Chief
Executive Officer of Cadence Bancorporation.
Third Quarter 2020
Highlights:
Third quarter 2020 highlights (compared to the linked quarter
where applicable) are as follows:
- Adjusted pre-tax pre-provision net revenue(1) for the third
quarter of 2020 remained strong at $94.6 million, compared to $94.9
million for the second quarter of 2020. As a percent of average
assets, adjusted PPNR was 2.06%, consistent with the prior
quarter.
- The provision for credit losses for the third quarter of 2020
was $33.0 million compared to $158.8 million in the linked quarter
reflecting current economic forecasts and continued COVID-19 driven
stress. As of September 30, 2020, our allowance for credit losses
(“ACL”) increased to 2.86% of total loans, up from 2.71% at June
30, 2020. Excluding Paycheck Protection Program (“PPP”) loans, our
ACL ratio to loans was 3.11% at September 30, 2020, up from 2.93%
at June 30, 2020. Our ratio of ACL to total nonperforming loans
increased to 204% from 165%.
- Our tax equivalent net interest margin (“NIM”) remained stable
at 3.49%, down only 2 basis points from prior quarter, and
excluding the PPP program impact, NIM was 3.64%, up 3 basis points
from the linked quarter. The core NIM improvement was supported by
continued management of our funding costs as well as our hedging
gains, with total deposit costs declining 14 basis points in the
quarter to 0.32%.
- Adjusted efficiency ratio(1) remained strong at 49.5%,
reflecting ongoing expense management efforts.
- Common Equity Tier 1 capital ratio increased to 12.0% and total
risk weighted capital increased to 14.7%, providing a robust
capital base well-positioned for the current environment.
- Annualized returns on average assets and tangible common equity
for the third quarter of 2020 were 1.08% and 11.08%, respectively,
compared to (1.22%) and (10.56%), respectively, for the second
quarter of 2020.
- Adjusted annualized returns on average assets(1) and adjusted
tangible common equity(1) for the third quarter of 2020 were 1.12%
and 11.52%, respectively, compared to (1.24%) and (10.73%),
respectively, for the second quarter of 2020.
- At quarter end, we had $1.1 billion of loans outstanding under
the PPP.
Balance Sheet:
Total assets were $18.4 billion as of September 30, 2020, an
increase of $548.2 million or 3.1% from September 30, 2019, and a
decrease of $453.6 million or 2.4% from June 30, 2020. The linked
quarter decline was driven by decreases in cash and loans,
partially offset by an increase in investment securities.
Cash and Cash Equivalents at September 30, 2020 totaled
$1.2 billion as compared to $1.1 billion at September 30, 2019 and
compared to $1.9 billion at June 30, 2020. The $652.2 million
decrease in the third quarter of 2020 resulted from an increase of
$427.3 million in investment securities as well as net declines in
deposits during the quarter.
Loans at September 30, 2020 totaled $13.5 billion as
compared to $13.6 billion at September 30, 2019, a decrease of
$171.5 million or 1.3%. Loans decreased $233.5 million or 1.7% from
$13.7 billion at June 30, 2020. The decline was driven by
reductions in the C&I segment representing net paydowns, soft
loan origination and strategic declines in certain portfolios.
Notable linked quarter decreases included Energy, down $59 million,
and Restaurant, down $56 million. These declines were partially
offset by an increase in CRE balances largely due to construction
draws in the industrial and multifamily categories.
Investment Securities at September 30, 2020 totaled $3.1
billion as compared to $1.7 billion at September 30, 2019 and $2.7
billion at June 30, 2020. Securities as a percent of earning assets
was 17.4%, 10.5%, and 14.6% at September 30, 2020, September 30,
2019 and June 30, 2020, respectively. The increase in securities
from both the prior year and linked quarter is a result of
increased balance sheet liquidity resulting from growth in deposits
and lower loan originations. Securities acquired during the third
quarter include primarily agency pass-through mortgage-backed
securities along with some municipal securities.
Goodwill at September 30, 2020 totaled $43.1 million,
down from $486.0 million at September 30, 2019 and unchanged from
June 30, 2020. As previously reported, the Company recorded a
$443.7 million ($412.9 million, after-tax), non-cash goodwill
impairment charge in the first quarter of 2020. The remaining
goodwill at September 30, 2020 relates to our registered investment
advisory subsidiary and trust division.
Total Deposits at September 30, 2020 were $15.8 billion,
an increase of $1.0 billion or 6.7% from the September 30, 2019
level and down $283.1 million or 1.8% from the June 30, 2020 level.
Third quarter 2020 core deposits decreased as a result of PPP funds
being deployed by customers, balance movement between non-interest
bearing and interest bearing accounts, strategic lowering of
certain higher cost deposit balances and net time deposit runoff.
Non-interest bearing deposits were $5.0 billion or 31.9% of total
deposits at September 30, 2020, up from $3.6 billion or 24.4% at
September 30, 2019 and down from $5.2 billion or 32.5% of total
deposits at June 30, 2020. Total cost of deposits declined to 0.32%
for the third quarter 2020, meaningfully lower than both the third
quarter 2019 cost of 1.32% and the second quarter 2020 cost of
0.46%.
Shareholders’ equity was $2.1 billion at September 30,
2020, a decrease of $404.5 million or 16.3% from September 30,
2019, and an increase of $26.0 million or 1.3% from June 30, 2020.
The linked quarter increase included quarterly net income of $49.3
million, $6.3 million in cash dividends, and a decrease of $18.8
million in other comprehensive income driven by the $18.4 million
amortization of our interest rate collar gain into interest income.
The year over year decrease was impacted by the goodwill impairment
in the first quarter of 2020.
Tangible common shareholders’ equity(1) was $1.9 billion at
September 30, 2020, an increase of $61.0 million or 3.2% from
September 30, 2019 and an increase of $31.3 million or 1.6% from
June 30, 2020. The linked quarter increase resulted from the same
factors noted above.
- Total shareholders’ equity to total assets and tangible equity
to tangible assets were 11.3% and 10.6%, respectively, at September
30, 2020 compared to 13.9% and 10.9% at September 30, 2019, and
10.8% and 10.2% at June 30, 2020, respectively.
- Tangible book value per share(1) was $15.40 as of September 30,
2020, an increase of $0.74 or 5.0% from $14.66 as of September 30,
2019 and an increase of $0.25 or 1.7% from $15.15 as of June 30,
2020.
- Total outstanding shares at September 30, 2020 were 125.9
million.
Tangible common equity to tangible assets was 10.6% at September
30, 2020, and quarter end capital ratios remained robust and
increased during the quarter as follows:
9/30/2020
6/30/2020
9/30/2019
Common equity Tier 1 capital
12.0%
11.7%
11.0%
Tier 1 leverage capital
9.9%
9.5%
10.3%
Tier 1 risk-based capital
12.0%
11.7%
11.0%
Total risk-based capital
14.7%
14.3%
13.1%
Asset Quality:
Credit quality metrics during the third quarter of 2020
reflected some notable improvements including lower net-charge
offs, declines in nonperforming loan balances and dramatically
lower loan deferrals, but continued to reflect ongoing COVID-driven
stress, especially in the Hospitality and Restaurant categories,
indicated by the increases in the ACL and criticized loan balances
during the quarter.
- Net charge-offs for the third quarter of 2020 were $19.9
million or 0.58% annualized of average loans compared to $31.3
million or 0.91% annualized and $32.6 million or 0.94% annualized
for the quarters ended September 30, 2019 and June 30, 2020,
respectively. The current quarter charge-offs included $14.7
million in Restaurant, $2.9 million in CRE-Office, $1.9 million in
Energy, and $0.6 million in General C&I.
- Provision for credit losses for the third quarter of 2020 was
$33.0 million as compared to $43.8 million for the third quarter of
2019 and $158.8 million for the second quarter of 2020. The current
quarter’s provision was driven by both net credit migration as well
as economic and environmental considerations. The third quarter
2020 loan provision was concentrated in the Commercial Real Estate
segment provision of $33.3 million, driven by increased reserves on
hospitality loans.
- The ACL was $385.4 million or 2.86% of total loans as of
September 30, 2020, as compared to $127.8 million or 0.94% of total
loans as of September 30, 2019, and $370.9 million or 2.71% of
total loans as of June 30, 2020. Excluding PPP loans, the ACL was
3.11% of total loans at September 30, 2020, increased from 2.93% at
June 30, 2020.
- The increase in the ACL as a percent of total loans in the
third quarter 2020 was driven by increased coverage in our
portfolios most impacted by COVID related stress. The ACL for our
$311.0 million Hospitality portfolio increased to 13.6% of total
loans at September 30, 2020 as compared 7.5% at June 30, 2020. The
ACL for our $1.1 billion Restaurant portfolio increased to 5.66% of
total loans at September 30, 2020 as compared to 5.52% at June 30,
2020.
- Total nonperforming loans (“NPL”) as a percent of total loans
were 1.40% at September 30, 2020, compared to 0.79% at September
30, 2019 and 1.64% at June 30, 2020. NPL totaled $189.1 million,
$108.1 million and $224.4 million as of September 30, 2020,
September 30, 2019 and June 30, 2020, respectively. The linked
quarter decline was due primarily to payoffs and net
charge-offs.
- The ACL to NPL increased to 203.8% as of September 30, 2020, as
compared to 118.2% as of September 30, 2019, and 165.3% as of June
30, 2020.
- Total criticized loans at September 30, 2020 were $1.1 billion
or 8.05% of total loans as compared to $571.9 million or 4.19% at
September 30, 2019 and $1.0 billion or 7.37% at June 30, 2020. The
linked quarter increase was primarily in Hospitality, Energy and
General C&I credits.
- COVID related loan payment deferrals totaled $376 million at
September 30, 2020, down significantly from $1.4 billion at June
30, 2020. As of October 16, 2020, loan deferrals were down further
to $181 million or 1.5% of total loans excluding PPP loans.
- Loans 30-89 days past due were 0.15% of total loans at
September 30, 2020, compared to 0.15% at September 30, 2019 and
0.19% at June 30, 2020.
Total Revenue:
Total operating revenue(1) for the third quarter of 2020 was
$186.6 million, down $8.2 million or 4.2% from the same period in
2019 and up $2.0 million or 1.1% from the linked quarter.
Net interest income Net interest income for the third
quarter of 2020 was $154.0 million, a decrease of $6.1 million or
3.8% from the same period in 2019 and a slight decrease of $0.7
million or 0.4% from the second quarter of 2020. Compared to the
linked quarter, loan interest income, excluding accretion, declined
$6.8 million due to the trailing impact of the second quarter rate
declines as well as lower average balances. Additionally, accretion
declined $1.2 million. These declines were partially offset by $6.0
million in lower funding costs driven by lower rates, $2.0 million
in additional hedge income and $1.4 million in increased investment
income due to higher balances.
- We continued to aggressively lower our interest rates on
deposits resulting in a 31% reduction in costs of total deposits to
0.32% for the quarter compared to 0.46% for the linked quarter.
Noninterest-bearing deposits as a percent of total deposits
decreased slightly to 31.9% from 32.5% in the linked quarter. Total
interest-bearing liability costs declined by 19 basis points or 24%
to 0.59% from 0.78% in the linked quarter. Average interest-bearing
liabilities declined $451 million or 3.9% from the prior quarter to
$11.1 billion.
- Yield on loans excluding accretion and hedge income was 3.75%
in the third quarter of 2020, down 24 basis points from 3.99% in
the second quarter of 2020. Excluding the impact of PPP loans, this
yield was 3.87% and 4.07%, for the third and second quarters of
2020, respectively. Average loans declined $231.8 million or 1.7%
from the prior quarter to $13.7 billion.
- Hedge income and collar gain recognition for the third quarter
of 2020 was $19.7 million as compared to $17.7 million for the
second quarter of 2020.
- Accretion on acquired loans totaled $6.4 million for the third
quarter of 2020 as compared to $7.6 million for the second quarter
of 2020.
- Yield on investment securities declined to 2.06% in the third
quarter of 2020 compared to 2.29% in linked quarter, with the lower
yield reflecting the impact of securities purchased in the third
quarter. Average investment securities increased $472.9 million or
19.0% from the prior quarter to $3.0 billion. Fed funds sold and
short-term investments likewise declined by $400.8 million or 29.9%
from the prior quarter as excess funds were deployed into
investment securities during the third quarter.
- Total earning asset yields declined to 3.86% in the third
quarter of 2020 compared to 4.01% in the linked quarter, with
average balances declining by $159.8 million or 0.9% to $17.6
billion.
- Our NIM for the third quarter of 2020 was 3.49% as compared to
3.94% for the third quarter of 2019 and 3.51% for the second
quarter of 2020.
PPP loans averaged $1.0 billion in the third quarter at a yield
of 2.27%, and along with cash in deposits associated with these
loans, negatively impacted our third quarter NIM by 15 basis points
as illustrated in the table below. Excluding the impact of the PPP
program, the third quarter 2020 NIM improved 3 basis points to
3.64% from 3.61% in the linked quarter, as lower deposit costs,
deployment of cash into securities, and increased hedge income more
than offset the impact of lower rates on our loan portfolio.
Specifically, the NIM change during the quarter included:
Quarterly Change
$ MM
NIM
2Q 2020 Net Interest Income
$155.1
3.51
%
2Q 2020 Net Interest Income before PPP
loans and associated cash
$151.1
3.61
%
Loans (ex PPP & accretion)
(10.9
)
(0.18
%)
Deposits
5.6
0.13
%
Hedge Income
2.0
0.06
%
Accretion
(1.2
)
(0.02
%)
Securities
1.3
0.04
%
Borrowings
0.4
0.01
%
NIM before PPP loans &
cash*
$148.4
3.64
%
PPP Loans & associated cash
6.1
(0.15
%)
3Q 2020 Net Interest Margin
$154.5
3.49
%
*Calculated by removing the quarterly
average balance of PPP loans and income, as well as the quarterly
average balance of cash associated with unused PPP funds.
Noninterest income for the third quarter of 2020 was
$32.6 million, a decrease of $2.1 million or 5.9% from the same
period of 2019 and an increase of $2.6 million or 8.8% from the
linked quarter. Adjusted noninterest income(1) for the third
quarter of 2020 was $33.0 million, a decrease of $0.8 million or
2.4% from the third quarter of 2019, and an increase of $5.4
million or 19.5% from the linked quarter.
- The linked quarter included increases of $1.7 million and $1.5
million in SBA and mortgage banking income, respectively, due
primarily to gains on loan sales from increased production volumes
(excluding PPP loans). Service charges increased $1.0 million
driven by higher account analysis revenue and loan fees were up
$0.6 million. The quarter also reflected increases in trust and
investment advisory revenue, partially enhanced by improved equity
markets.
- Noninterest income as a percent of total revenue for the third
quarter of 2020 was 17.5% as compared to 17.8% for the third
quarter of 2019 and 16.2% for the linked quarter.
Noninterest expense for the third quarter of 2020 was
$94.9 million, an increase of $0.6 million or 0.6% from the same
period in 2019 and an increase of $6.2 million or 7.0% from the
linked quarter. Adjusted noninterest expense(1), which excludes the
impact of non-routine items(2), was $92.5 million, down $0.8
million or 0.8% from the third quarter of 2019 and up $5.1 million
or 5.8% from the second quarter of 2020. The linked quarter
increase in noninterest expenses resulted from:
- An increase of $4.6 million in personnel costs driven by lower
loan cost deferrals as a result of the second quarter PPP loan
volumes and an increase in incentive accruals due to improved
corporate performance;
- An increase of $2.1 million in merger related expenses due to a
revised estimate of a legacy State Bank post-retirement benefit;
and
- A partially offsetting decrease of $1.4 million in FDIC
insurance assessment due to additional second quarter accruals to
reflect the impact of lower earnings on the assessment.
Adjusted efficiency ratio(1) for the third quarter of
2020 was 49.4%, compared to the linked quarter ratio of 47.9% and
the prior year’s third quarter ratio of 48.1%. The linked quarter
increase was driven by a modest increase in expenses and the impact
of lower average loans in the quarter.
_____________________
(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 third quarter of 2020 was 16.1%
compared to 10.6% for the linked quarter and 22.5% for the third
quarter of 2019.
Dividend:
As of October 21, 2020, the board of directors of Cadence
Bancorporation declared a quarterly cash dividend in the amount of
$0.075 per share of outstanding common stock, representing an
annualized dividend of $0.30 per share. The dividend will be paid
on November 16, 2020 to holders of record of Cadence’s Class A
common stock on November 2, 2020.
Supplementary Financial Tables
(Unaudited):
Supplementary financial tables (unaudited) are included in this
release following the customary disclosure information.
Third Quarter 2020 Earnings Conference
Call:
Cadence Bancorporation executive management will host a
conference call to discuss third quarter 2020 results on Wednesday,
October 21, 2020, 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:
2975522
For those unable to participate in the live presentation, a
replay will be available through November 4, 2020. 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:
10148281
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 $18.4 billion
in total assets as of September 30, 2020. Its wholly owned
subsidiary, Cadence Bank, N.A., operates 99 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 extent of the impact of the COVID-19 pandemic on us
and our customers, counterparties, employees, and third-party
service providers, and the impacts to our business, financial
position, results of operations, and prospects; the impact on our
financial condition, results of operations, financial disclosures,
and future business strategies related to the 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 revenue” 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,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Statement of Operations Data
Interest income
$
170,497
$
177,175
$
192,754
$
207,620
$
213,149
Interest expense
16,455
22,461
39,286
46,709
52,962
Net interest income
154,042
154,714
153,468
160,911
160,187
Provision for credit losses
32,973
158,811
83,429
27,126
43,764
Net interest income after provision
121,069
(4,097
)
70,039
133,785
116,423
Noninterest income
32,591
29,950
35,069
33,898
34,642
Noninterest expense (1)
94,859
88,620
537,653
100,519
94,283
Income (loss) before income taxes
58,801
(62,767
)
(432,545
)
67,164
56,782
Income tax expense (benefit)
9,486
(6,653
)
(33,234
)
15,738
12,796
Net income (loss)
$
49,315
$
(56,114
)
$
(399,311
)
$
51,426
$
43,986
Weighted average common shares
outstanding
Basic
125,956,714
125,924,652
126,630,446
127,953,742
128,457,491
Diluted
126,094,868
125,924,652
126,630,446
128,003,089
128,515,274
Earnings (loss) per share
Basic
$
0.39
$
(0.45
)
$
(3.15
)
$
0.40
$
0.34
Diluted
0.39
(0.45
)
(3.15
)
0.40
0.34
Period-End Balance Sheet Data
Cash and cash equivalents
$
1,247,172
$
1,899,369
$
609,351
$
988,764
$
1,061,102
Investment securities
3,088,699
2,661,433
2,461,644
2,368,592
1,705,325
Total loans, net of unearned income
13,465,556
13,699,097
13,392,191
12,983,655
13,637,042
Allowance for credit losses
385,412
370,901
245,246
119,643
127,773
Total assets
18,404,195
18,857,753
17,237,918
17,800,229
17,855,946
Total deposits
15,786,221
16,069,282
14,489,505
14,742,794
14,789,712
Noninterest-bearing deposits
5,033,338
5,220,109
3,959,721
3,833,704
3,602,861
Interest-bearing deposits
10,752,883
10,849,173
10,529,784
10,909,090
11,186,851
Borrowings and subordinated debentures
372,446
372,222
372,440
372,173
371,892
Total shareholders’ equity
2,071,472
2,045,480
2,113,543
2,460,846
2,475,944
Average Balance Sheet Data
Investment securities
$
2,960,357
$
2,487,467
$
2,397,275
$
2,003,339
$
1,650,902
Total loans, net of unearned income
13,652,395
13,884,220
13,161,371
13,423,435
13,719,286
Allowance for credit losses
389,243
267,464
201,785
132,975
119,873
Total assets
18,248,014
18,500,600
17,694,018
17,843,383
17,621,163
Total deposits
15,628,314
15,774,787
14,574,614
14,749,327
14,539,420
Noninterest-bearing deposits
4,892,079
4,587,673
3,658,612
3,648,874
3,456,807
Interest-bearing deposits
10,736,235
11,187,115
10,916,002
11,100,454
11,082,613
Borrowings and subordinated debentures
372,304
372,547
439,698
374,179
381,257
Total shareholders’ equity
2,052,079
2,118,796
2,446,810
2,471,398
2,447,189
(1)
For the quarter ended March 31, 2020,
includes the non-cash goodwill impairment charge of $443.7 million,
$412.9 million after-tax.
Table 1 (Continued) –
Selected Financial Data
As of and for the Three Months
Ended
(In thousands, except share and per
share data)
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Per Share Data:
Book value
$
16.45
$
16.24
$
16.79
$
19.29
$
19.32
Tangible book value (1)
15.40
15.15
15.65
14.65
14.66
Cash dividends declared
0.050
0.050
0.175
0.175
0.175
Dividend payout ratio
12.82
%
(11.11
)%
(5.56
)%
43.75
%
51.47
%
Performance Ratios:
Return on average common equity (2)
9.56
%
(10.65
)%
(65.64
)%
8.26
%
7.13
%
Return on average tangible common equity
(1) (2)
11.08
(10.56
)
3.86
11.82
10.43
Return on average assets (2)
1.08
(1.22
)
(9.08
)
1.14
0.99
Net interest margin (2)
3.49
3.51
3.80
3.89
3.94
Efficiency ratio (1)
50.83
47.99
285.17
51.60
48.39
Adjusted efficiency ratio (1)
49.45
47.93
49.88
50.91
48.07
Asset Quality Ratios:
Total NPA to total loans, OREO, and other
NPA
1.55
%
1.74
%
1.31
%
0.97
%
0.84
%
Total nonperforming loans ("NPL") to total
loans
1.40
1.64
1.19
0.92
0.79
Total ACL to total loans
2.86
2.71
1.83
0.92
0.94
ACL to total NPL
203.82
165.30
153.61
100.07
118.17
Net charge-offs to average loans (2)
0.58
0.94
0.99
1.04
0.91
Capital Ratios:
Total shareholders’ equity to assets
11.3
%
10.8
%
12.3
%
13.8
%
13.9
%
Tangible common equity to tangible assets
(1)
10.6
10.2
11.5
10.9
10.9
Common equity Tier 1 capital (3)
12.0
11.7
11.4
11.5
11.0
Tier 1 leverage capital (3)
9.9
9.5
10.1
10.3
10.3
Tier 1 risk-based capital (3)
12.0
11.7
11.4
11.5
11.0
Total risk-based capital (3)
14.7
14.3
13.8
13.7
13.1
_____________________
(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,
2020
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
$
11,168,913
$
123,177
4.39
%
$
10,191,066
$
136,332
5.31
%
ANCI portfolio
2,295,097
28,214
4.89
3,269,846
54,084
6.56
PCD portfolio (3)
188,385
3,460
7.31
258,375
7,554
11.60
Total loans
13,652,395
154,851
4.51
13,719,286
197,970
5.72
Investment securities
Taxable
2,694,012
13,164
1.94
1,447,448
9,657
2.65
Tax-exempt (2)
266,345
2,150
3.21
203,454
1,892
3.69
Total investment securities
2,960,357
15,314
2.06
1,650,902
11,549
2.78
Federal funds sold and short-term
investments
942,017
432
0.18
741,955
3,421
1.83
Other investments
77,262
350
1.80
77,605
606
3.10
Total interest-earning assets
17,632,031
170,947
3.86
16,189,748
213,546
5.23
Noninterest-earning assets:
Cash and due from banks
170,241
123,758
Premises and equipment
127,432
128,286
Accrued interest and other assets
707,553
1,299,244
Allowance for credit losses
(389,243
)
(119,873
)
Total assets
$
18,248,014
$
17,621,163
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing liabilities:
Demand deposits
$
8,037,801
$
4,681
0.23
%
$
7,991,804
$
31,064
1.54
%
Savings deposits
319,004
140
0.17
250,003
274
0.43
Time deposits
2,379,430
7,741
1.29
2,840,806
17,083
2.39
Total interest-bearing deposits
10,736,235
12,562
0.47
11,082,613
48,421
1.73
Other borrowings
149,973
931
2.47
160,066
1,005
2.49
Subordinated debentures
222,331
2,961
5.30
221,191
3,536
6.34
Total interest-bearing liabilities
11,108,539
16,454
0.59
11,463,870
52,962
1.83
Noninterest-bearing
liabilities:
Demand deposits
4,892,079
3,456,807
Accrued interest and other liabilities
195,317
253,297
Total liabilities
16,195,935
15,173,974
Shareholders' equity
2,052,079
2,447,189
Total liabilities and shareholders'
equity
$
18,248,014
$
17,621,163
Net interest income/net interest
spread
154,493
3.27
%
160,584
3.40
%
Net yield on earning assets/net interest
margin
3.49
%
3.94
%
Taxable equivalent adjustment:
Investment securities
(451
)
(397
)
Net interest income
$
154,042
$
160,187
_____________________
(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%.
(3)
Prior to the adoption of CECL on January
1, 2020, these loans were referred to as ACI loans, but with the
adoption of CECL they are referred to as PCD loans.
Table 2 (Continued) –
Average Balances/Yield/Rates
For the Three Months
Ended
September 30, 2020
For the Three Months
Ended
June 30, 2020
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
$
11,168,913
$
123,177
4.39
%
$
11,173,408
$
125,922
4.53
%
ANCI portfolio
2,295,097
28,214
4.89
2,512,163
32,967
5.28
PCD portfolio (3)
188,385
3,460
7.31
198,649
3,965
8.03
Total loans
13,652,395
154,851
4.51
13,884,220
162,854
4.72
Investment securities
Taxable
2,694,012
13,164
1.94
2,269,017
12,207
2.16
Tax-exempt (2)
266,345
2,150
3.21
218,450
1,948
3.59
Total investment securities
2,960,357
15,314
2.06
2,487,467
14,155
2.29
Federal funds sold and short-term
investments
942,017
432
0.18
1,342,779
328
0.10
Other investments
77,262
350
1.80
77,337
247
1.28
Total interest-earning assets
17,632,031
170,947
3.86
17,791,803
177,584
4.01
Noninterest-earning assets:
Cash and due from banks
170,241
176,716
Premises and equipment
127,432
127,413
Accrued interest and other assets
707,553
672,132
Allowance for credit losses
(389,243
)
(267,464
)
Total assets
$
18,248,014
$
18,500,600
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest-bearing liabilities:
Demand deposits
$
8,037,801
$
4,681
0.23
%
$
8,368,151
$
7,511
0.36
%
Savings deposits
319,004
140
0.17
291,874
179
0.25
Time deposits
2,379,430
7,741
1.29
2,527,090
10,451
1.66
Total interest-bearing deposits
10,736,235
12,562
0.47
11,187,115
18,141
0.65
Other borrowings
149,973
931
2.47
149,973
937
2.51
Subordinated debentures
222,331
2,961
5.30
222,574
3,383
6.11
Total interest-bearing liabilities
11,108,539
16,454
0.59
11,559,662
22,461
0.78
Noninterest-bearing
liabilities:
Demand deposits
4,892,079
4,587,673
Accrued interest and other liabilities
195,317
234,469
Total liabilities
16,195,935
16,381,804
Stockholders' equity
2,052,079
2,118,796
Total liabilities and stockholders'
equity
$
18,248,014
$
18,500,600
Net interest income/net interest
spread
154,493
3.27
%
155,123
3.23
%
Net yield on earning assets/net interest
margin
3.49
%
3.51
%
Taxable equivalent adjustment:
Investment securities
(451
)
(409
)
Net interest income
$
154,042
$
154,714
_____________________
(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%.
(3)
Prior to the adoption of CECL on January
1, 2020, these loans were referred to as ACI loans, but with the
adoption of CECL they are referred to as PCD loans.
Table 3 – Loan Interest Income
Detail
Year-To-Date
For the Three Months
Ended
(In thousands)
September 30,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Interest Income Detail
Originated loans
$
378,501
$
123,177
$
125,922
$
129,402
$
134,450
$
136,333
ANCI loans: interest income
82,055
22,850
26,264
32,940
37,637
43,133
ANCI loans: accretion
19,777
5,364
6,703
7,710
8,610
10,951
PCD loans: interest income (1)
8,571
2,421
3,111
3,039
3,839
3,406
PCD loans: accretion (1)
3,936
1,039
854
2,043
6,018
4,147
Total loan interest income
$
492,840
$
154,851
$
162,854
$
175,134
$
190,554
$
197,970
Yields
Originated loans
4.66
%
4.39
%
4.53
%
5.10
%
5.25
%
5.31
%
ANCI loans without discount accretion
4.36
3.96
4.20
4.85
4.95
5.23
ANCI loans discount accretion
1.05
0.93
1.08
1.14
1.13
1.33
PCD loans without discount accretion
5.69
5.11
6.30
5.65
6.20
5.23
PCD loans discount accretion
2.62
2.20
1.73
3.80
9.73
6.37
Total loan yield
4.85
%
4.51
%
4.72
%
5.35
%
5.63
%
5.72
%
(1)
Prior year quarter PCD amounts have been
revised to be comparable to the current year presentation. Interest
income for PCD loans represents contractual interest.
Table 4 – Allowance for Credit
Losses (“ACL”) (1)
For the Three Months
Ended
(In thousands)
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Balance at beginning of period
$
370,901
$
245,246
$
119,643
$
127,773
$
115,345
Cumulative effect of the adoption of CECL
(2)
—
—
75,850
—
—
Charge-offs
(21,830
)
(33,452
)
(33,098
)
(35,432
)
(31,650
)
Recoveries
1,936
901
613
176
314
Net charge-offs
(19,894
)
(32,551
)
(32,485
)
(35,256
)
(31,336
)
Provision for loan losses
34,405
158,206
82,238
27,126
43,764
Balance at end of period
$
385,412
$
370,901
$
245,246
$
119,643
$
127,773
(1)
This table represents the activity in the
ACL for funded loans.
(2)
The Company adopted ASU 2016-13, Financial
Instruments – Credit Losses (“CECL”), on January 1, 2020 and
recorded this cumulative effect adjustment as a result of
accounting change.
Table 5 – ACL Activity by
Segment
For the Three Months Ended
September 30, 2020
(In thousands)
Commercial and
Industrial
Commercial Real Estate
Consumer
Total Allowance for Credit
Losses
Reserve for Unfunded
Commitments (1)
Total
As of June 30, 2020
$
217,796
$
112,480
$
40,625
$
370,901
$
3,827
$
374,728
Provision for credit losses
1,562
33,262
(419
)
34,405
(1,432
)
32,973
Charge-offs
(18,604
)
(2,978
)
(248
)
(21,830
)
—
(21,830
)
Recoveries
1,443
244
249
1,936
—
1,936
As of September 30, 2020
$
202,197
$
143,008
$
40,207
$
385,412
$
2,395
$
387,807
For the Nine Months Ended
September 30, 2020
(In thousands)
Commercial and
Industrial
Commercial Real Estate
Consumer
Total Allowance for Credit
Losses
Reserve for Unfunded
Commitments (1)
Total
As of December 31, 2019
$
89,796
$
15,319
$
14,528
$
119,643
$
1,699
$
121,342
Cumulative effect of the adoption of
CECL
32,951
20,599
22,300
75,850
332
76,182
As of January 1, 2020
122,747
35,918
36,828
195,493
2,031
197,524
Provision for credit losses
160,570
110,420
3,859
274,849
364
275,213
Charge-offs
(83,406
)
(3,784
)
(1,190
)
(88,380
)
—
(88,380
)
Recoveries
2,286
454
710
3,450
—
3,450
As of September 30, 2020
$
202,197
$
143,008
$
40,207
$
385,412
$
2,395
$
387,807
(1)
The reserve for unfunded commitments is
recorded in other liabilities in the consolidated balance
sheets.
Table 6 – Criticized Loans by
Segment
As of September 30,
2020
(Amortized cost in thousands)
Special Mention
Substandard
Doubtful
Total Criticized
Commercial and industrial
General C&I
$
71,384
$
156,323
$
9,270
$
236,977
Energy
146,772
165,277
7,816
319,865
Restaurant
97,315
169,899
7,624
274,838
Healthcare
722
58,802
—
59,524
Total commercial and industrial
316,193
550,301
24,710
891,204
Commercial real estate
Industrial, retail, and other
93,897
58,321
—
152,218
Multifamily
91
200
—
291
Office
346
13,250
3,029
16,625
Total commercial real estate
94,334
71,771
3,029
169,134
Consumer
Residential
—
22,770
—
22,770
Other
—
358
—
358
Total consumer
—
23,128
—
23,128
Total
$
410,527
$
645,200
$
27,739
$
1,083,466
As of June 30, 2020
(Amortized cost in thousands)
Special Mention
Substandard
Doubtful
Total Criticized
Commercial and industrial
General C&I
$
45,512
$
146,333
$
10,237
$
202,082
Energy sector
155,735
114,080
10,747
280,562
Restaurant industry
171,722
158,596
7,596
337,914
Healthcare
18,250
47,398
—
65,648
Total commercial and industrial
391,219
466,407
28,580
886,206
Commercial real estate
Industrial, retail, and other
60,819
40,351
534
101,704
Multifamily
91
714
—
805
Office
346
1,005
—
1,351
Total commercial real estate
61,256
42,070
534
103,860
Consumer
Residential real estate
—
19,172
—
19,172
Other
—
39
—
39
Total consumer
—
19,211
—
19,211
Total
$
452,475
$
527,688
$
29,114
$
1,009,277
Table 7 – Nonperforming
Assets
As of
(In thousands)
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Nonperforming loans (1)
Commercial and industrial
$
145,570
$
182,839
$
136,712
$
106,803
$
92,643
Commercial real estate
27,163
25,261
8,133
1,127
6,855
Consumer
16,364
16,284
14,808
7,289
5,294
Small business (2)
—
—
—
4,337
3,334
Total nonperforming loans ("NPL")
189,097
224,384
159,653
119,556
108,126
Foreclosed OREO and other NPA
20,344
13,949
15,679
5,958
6,731
Total nonperforming assets
$
209,441
$
238,333
$
175,332
$
125,514
$
114,857
NPL as a percentage of total loans
1.40
%
1.64
%
1.19
%
0.92
%
0.79
%
NPA as a percentage of loans plus
OREO/other
1.55
%
1.74
%
1.31
%
0.97
%
0.84
%
NPA as a percentage of total assets
1.14
%
1.26
%
0.99
%
0.71
%
0.64
%
Total accruing loans 90 days or more past
due
$
7,260
$
3,123
$
1,999
$
23,364
$
24,487
(1)
Amounts are not comparable due to our
adoption of CECL on January 1, 2020. Prior to this date, pools of
individual ACI loans were excluded because they continued to earn
interest income from the accretable yield at the pool level. With
the adoption of CECL, the pools were discontinued, and performance
is based on contractual terms for individual loans. Additionally,
prior to January 1, 2020, we used recorded investment in this
table. With the adoption of CECL, we now use amortized cost.
(2)
Upon the adoption of CECL, small business
loans are included in commercial and industrial and commercial real
estate loans.
Table 8 – Noninterest
Income
For the Three Months
Ended
(In thousands)
September 30,
2020
June 30,
2020
March 31,
2020
December 30,
2019
September 30,
2019
Noninterest Income
Investment advisory revenue
$
6,797
$
6,505
$
5,605
$
6,920
$
6,532
Trust services revenue
4,556
4,092
4,815
4,713
4,440
Service charges on deposit accounts
5,847
4,852
6,416
5,181
5,462
Credit-related fees
4,202
4,401
5,983
5,094
5,960
Bankcard fees
1,745
1,716
1,958
1,933
2,061
Payroll processing revenue
1,255
1,143
1,367
1,373
1,196
SBA income
3,037
1,335
1,908
2,153
2,216
Other service fees
1,450
1,528
1,912
1,701
1,700
Securities gains, net
79
2,286
2,994
317
775
Other
3,623
2,092
2,111
4,513
4,300
Total noninterest income
$
32,591
$
29,950
$
35,069
$
33,898
$
34,642
Table 9 – Noninterest
Expenses
For the Three Months
Ended
(In thousands)
September 30,
2020
June 30,
2020
September 30,
2019
December 30,
2019
September 30,
2019
Noninterest Expenses
Salaries and employee benefits
$
51,734
$
47,158
$
48,807
$
54,840
$
51,904
Premises and equipment
10,716
10,634
10,808
11,618
10,913
Merger related expenses
2,105
—
1,282
925
1,010
Intangible asset amortization
5,299
5,472
5,592
5,876
6,025
Data processing
3,024
3,084
3,352
3,343
3,641
Software amortization
4,432
4,036
3,547
3,427
3,406
Consulting and professional fees
3,320
3,009
2,707
3,552
2,621
Loan related expenses
953
735
760
654
(921
)
FDIC insurance
2,528
3,939
2,436
1,245
527
Communications
1,119
1,002
1,156
1,236
1,425
Advertising and public relations
716
920
1,464
1,764
1,368
Legal expenses
681
579
411
306
500
Other
8,232
8,052
11,636
11,732
11,864
Noninterest expenses excluding goodwill
impairment charge
94,859
88,620
93,958
100,519
94,283
Goodwill impairment charge
—
—
443,695
—
—
Total noninterest expenses
$
94,859
$
88,620
$
537,653
$
100,519
$
94,283
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,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Efficiency ratio
Noninterest expenses (numerator)
$
94,859
$
88,620
$
537,653
$
100,519
$
94,283
Net interest income
$
154,042
$
154,714
$
153,468
$
160,911
$
160,187
Noninterest income
32,591
29,950
35,069
33,898
34,642
Operating revenue (denominator)
$
186,633
$
184,664
$
188,537
$
194,809
$
194,829
Efficiency ratio
50.83
%
47.99
%
285.17
%
51.60
%
48.39
%
Adjusted efficiency ratio
Noninterest expenses
$
94,859
$
88,620
$
537,653
$
100,519
$
94,283
Less: non-cash goodwill impairment
charge
—
—
443,695
—
—
Less: merger related expenses
2,105
—
1,282
925
1,010
Less: pension plan termination expense
—
—
—
1,225
—
Less: expenses related to COVID-19
pandemic
235
1,205
122
—
—
Adjusted noninterest expenses
(numerator)
$
92,519
$
87,415
$
92,554
$
98,369
$
93,273
Net interest income
$
154,042
$
154,714
$
153,468
$
160,911
$
160,187
Noninterest income
32,591
29,950
35,069
33,898
34,642
Plus: impairment charge on branch
building
538
—
—
—
—
Less: gain on sale of acquired loans
—
—
—
1,263
—
Less: securities gains, net
79
2,286
2,994
317
775
Adjusted noninterest income
33,050
27,664
32,075
32,318
33,867
Adjusted operating revenue
(denominator)
$
187,092
$
182,378
$
185,543
$
193,229
$
194,054
Adjusted efficiency ratio
49.45
%
47.93
%
49.88
%
50.91
%
48.07
%
Tangible common equity ratio
Shareholders’ equity
$
2,071,472
$
2,045,480
$
2,113,543
$
2,460,846
$
2,475,944
Less: goodwill and other intangible
assets, net
(132,005
)
(137,318
)
(142,782
)
(590,949
)
(597,488
)
Tangible common shareholders’ equity
1,939,467
1,908,162
1,970,761
1,869,897
1,878,456
Total assets
18,404,195
18,857,753
17,237,918
17,800,229
17,855,946
Less: goodwill and other intangible
assets, net
(132,005
)
(137,318
)
(142,782
)
(590,949
)
(597,488
)
Tangible assets
$
18,272,190
$
18,720,435
$
17,095,136
$
17,209,280
$
17,258,458
Tangible common equity ratio
10.61
%
10.19
%
11.53
%
10.87
%
10.88
%
Tangible book value per share
Shareholders’ equity
$
2,071,472
$
2,045,480
$
2,113,543
$
2,460,846
$
2,475,944
Less: goodwill and other intangible
assets, net
(132,005
)
(137,318
)
(142,782
)
(590,949
)
(597,488
)
Tangible common shareholders’ equity
$
1,939,467
$
1,908,162
$
1,970,761
$
1,869,897
$
1,878,456
Common shares outstanding
125,946,793
125,930,741
125,897,827
127,597,569
128,173,765
Tangible book value per share
$
15.40
$
15.15
$
15.65
$
14.65
$
14.66
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,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Return on average tangible common
equity
Average common equity
$
2,052,079
$
2,118,796
$
2,446,810
$
2,471,398
$
2,447,189
Less: average intangible assets
(135,491
)
(140,847
)
(584,513
)
(595,439
)
(598,602
)
Average tangible common shareholders’
equity
$
1,916,588
$
1,977,949
$
1,862,297
$
1,875,959
$
1,848,587
Net income (loss)
$
49,315
$
(56,114
)
$
(399,311
)
$
51,426
$
43,986
Plus: non-cash goodwill impairment charge,
net of tax
—
—
412,918
—
—
Plus: intangible asset amortization, net
of tax
4,042
4,174
4,261
4,477
4,620
Tangible net income (loss)
$
53,357
$
(51,940
)
$
17,868
$
55,903
$
48,606
Return on average tangible common
equity(1)
11.08
%
(10.56
)%
3.86
%
11.82
%
10.43
%
Adjusted return on average tangible
common equity
Average tangible common shareholders’
equity
$
1,916,588
$
1,977,949
$
1,862,297
$
1,875,959
$
1,848,587
Tangible net income (loss)
$
53,357
$
(51,940
)
$
17,868
$
55,903
$
48,606
Non-routine items:
Plus: merger related expenses
2,105
—
1,282
925
1,010
Plus: pension plan termination expense
—
—
—
1,225
—
Plus: expenses related to COVID-19
pandemic
235
1,205
122
—
—
Plus: impairment loss on branch
building
538
—
—
—
—
Less: gain on sale of acquired loans
—
—
—
1,263
—
Less: securities gains (losses), net
79
2,286
2,994
317
775
Less: income tax effect of tax deductible
non-routine items
664
(256
)
(464
)
48
55
Total non-routine items, after tax
2,135
(825
)
(1,126
)
522
180
Adjusted tangible net income (loss)
$
55,492
$
(52,765
)
$
16,742
$
56,425
$
48,786
Adjusted return on average tangible common
equity(1)
11.52
%
(10.73
)%
3.62
%
11.93
%
10.47
%
Adjusted return on average
assets
Average assets
$
18,248,014
$
18,500,600
$
17,694,018
$
17,843,383
$
17,621,163
Net income (loss)
$
49,315
$
(56,114
)
$
(399,311
)
$
51,426
$
43,986
Return on average assets
1.08
%
(1.22
)%
(9.08
)%
1.14
%
0.99
%
Net income (loss)
$
49,315
$
(56,114
)
$
(399,311
)
$
51,426
$
43,986
Plus: non-cash goodwill impairment charge,
net of tax
—
—
412,918
—
—
Total non-routine items, after tax
2,135
(825
)
(1,126
)
522
180
Adjusted net income (loss)
$
51,450
$
(56,939
)
$
12,481
$
51,948
$
44,166
Adjusted return on average assets(1)
1.12
%
(1.24
)%
0.28
%
1.16
%
0.99
%
Adjusted diluted earnings per
share
Diluted weighted average common shares
outstanding
126,094,868
125,924,652
126,630,446
128,003,089
128,515,274
Net income allocated to common stock
$
48,884
$
(56,114
)
$
(399,311
)
$
51,248
$
43,849
Plus: non-cash goodwill impairment, net of
tax
—
—
412,918
—
—
Total non-routine items, after tax
2,135
(825
)
(1,126
)
522
180
Adjusted net income allocated to common
stock
$
51,019
$
(56,939
)
$
12,481
$
51,770
$
44,029
Adjusted diluted earnings (loss) per
share
$
0.40
$
(0.45
)
$
0.10
$
0.40
$
0.34
Adjusted pre-tax, pre-provision net
revenue
Income (loss) before taxes
$
58,801
$
(62,767
)
$
(432,545
)
$
67,164
$
56,782
Plus: Provision for credit losses
32,973
158,811
83,429
27,126
43,764
Plus: non-cash goodwill impairment
—
—
443,695
—
—
Plus: Total non-routine items before
taxes
2,799
(1,081
)
(1,590
)
570
235
Adjusted pre-tax, pre-provision net
revenue
$
94,573
$
94,963
$
92,989
$
94,860
$
100,781
(1)
Annualized.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201021005428/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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