Cadence Bank Announces Third Quarter 2023 Financial Results
HOUSTON and TUPELO, Miss., Oct. 23, 2023 /PRNewswire/ — Cadence Bank (NYSE: CADE) (the Company), today announced financial results for the quarter ended September 30, 2023.
Highlights for the third quarter of 2023 included:
Achieved quarterly net income available to common shareholders of $90.2 million, or $0.49 per diluted common share, and adjusted net income available to common shareholders,(1) which excludes non-routine income and expenses,(2) of $103.9 million, or $0.56 per diluted common share.Net interest margin was relatively stable at 2.98%, reflecting a slower pace of deposit mix shift from noninterest to interest bearing products and a decrease in brokered funds.Total loans were flat at $32.5 billion compared to the second quarter of 2023. On a year-to-date basis, loans have grown 9.6% annualized.Deposit balances remained relatively stable, declining $356.8 million compared to the second quarter of 2023. Excluding reduction in brokered deposits, total deposits increased $255.5 million, or 2.6% annualized. On a year-to-date basis, total deposits have declined 2.1% annualized.Continued to maintain strong balance sheet liquidity, with a loan-to-deposit ratio of 84.8% at September 30, 2023.
“Our third quarter results are highlighted by stability in our balance sheet and net interest margin,” remarked Dan Rollins, Chairman and Chief Executive Officer of the Company. “While loan balances were flat for the quarter, we saw customer deposit growth of over $255 million excluding an intentional reduction in brokered deposits, and a reduction in pace of deposit mix shift from noninterest bearing to interest bearing products. We also continue our focus on improving expenses. Our total employee FTE count has declined by over 400 thus far in 2023 and is expected to decline by an additional 80 FTEs through year end. Similarly, our branch count has declined from 407 at merger to approximately 360 today, including the closure or consolidation of 35 locations in the third quarter.”
Earnings Summary
For the third quarter of 2023, the Company reported net income available to common shareholders of $90.2 million, or $0.49 per diluted common share, compared with $121.0 million, or $0.66 per diluted common share, for the third quarter of 2022 and $111.7 million, or $0.61 per diluted common share, for the second quarter of 2023. Adjusted net income available to common shareholders(1) was $103.9 million, or $0.56 per diluted common share, for the third quarter of 2023, compared with $143.7 million, or $0.78 per diluted common share, for the third quarter of 2022 and $116.9 million, or $0.64 per diluted common share, for the second quarter of 2023. Additionally, the Company reported adjusted pre-tax pre-provision net revenue (PPNR)(1) of $153.6 million, or 1.25% of average assets on an annualized basis, for the third quarter of 2023 compared to $189.8 million, or 1.58% of average assets on an annualized basis, for the third quarter of 2022 and $168.8 million, or 1.38% of average assets on an annualized basis, for the second quarter of 2023.
Net Interest Revenue
Net interest revenue was $329.0 million for the third quarter of 2023, compared to $355.4 million for the third quarter of 2022 and $333.6 million for the second quarter of 2023. The net interest margin (fully taxable equivalent) was 2.98% for the third quarter of 2023, compared with 3.28% for the third quarter of 2022 and 3.03% for the second quarter of 2023.
Net interest revenue declined $4.5 million, or 1.4%, compared to the linked quarter as funding costs slightly outpaced improving yields on earning assets. Loan yield improvement was tempered by the slower loan originations in the third quarter of 2023. Accretion revenue was $6.6 million and $5.2 million for the third quarter of 2023 and the second quarter of 2023, respectively, adding approximately 7 basis points to the net interest margin for the third quarter of 2023 and 4 basis points for the second quarter of 2023.
Yield on net loans, loans held for sale, and leases excluding accretion, was 6.31% for the third quarter of 2023, up 13 basis points from 6.18% for the second quarter of 2023, while yield on total interest earning assets was 5.38% for the third quarter of 2023, up 17 basis points from 5.21% for the second quarter of 2023. Earning asset yields benefited from the immediate impact of the July Fed action on floating rate loans as well as other fixed and variable rate credits continuing to reprice at higher yields. Approximately 29% of our total loans are floating (reprice within 30 days), and another 19% reprice within 12 months. Our total loan beta, excluding accretion, is 44% cycle-to-date.
The average cost of total deposits increased to 2.14% for the third quarter of 2023, up 27 basis points during the quarter. The third quarter increase in total deposit costs slowed considerably, as the increase was nearly half the pace of the first and second quarters of 2023 cost increases of 52 and 59 basis point increases, respectively. Total interest-bearing liabilities cost increased to 3.17% from 2.92% during the third quarter of 2023. Our total deposit beta is 38% cycle-to-date.
Balance Sheet Activity
Loans and leases, net of unearned income, were $32.5 billion at September 30, 2023, essentially flat compared to $32.6 billion at the end of the second quarter of 2023. Total investment securities of $9.6 billion at September 30, 2023 decreased $611.3 million during the third quarter as routine portfolio cash flows each quarter continue to be used to fund loan growth and reduce higher cost funding, including brokered deposits.
Total deposits declined $356.8 million to $38.3 billion as of September 30, 2023. Total brokered deposits declined $612.3 million from $1.8 billion at the end of the second quarter of 2023 to $1.2 billion at September 30, 2023, or 3.2% of total deposits. Excluding this proactive decline in brokered deposits, total deposits actually increased $255.5 million, or 2.6% annualized, during the third quarter of 2023. The results reflect growth in both the Corporate and Community core deposit base, partially offset by seasonal declines in public fund deposits of approximately $250 million. The September 30, 2023 loan to deposit ratio was 84.8% and securities to total assets was 19.9%, reflecting continued strong liquidity. Noninterest bearing deposits represented 25.2% of total deposits at the end of the third quarter of 2023, declining slightly from 26.4% at June 30, 2023, reflective of the moderated deposit mix shift in the third quarter of 2023. The Company’s deposit base continues to be very granular, with average transaction account balances of approximately $22,000 for consumer accounts and $131,000 for commercial accounts at September 30, 2023. Additionally, approximately 98% of the Company’s deposit accounts have balances less than $250,000, and approximately 75% of our deposit balances were FDIC insured or collateralized at quarter-end.
Short-term borrowings were stable at $3.5 billion at September 30, 2023 while cash, due from balances and deposits at the Federal Reserve increased $267.1 million to $2.0 billion at September 30, 2023.
Credit Results, Provision for Credit Losses and Allowance for Credit Losses
Total non-performing assets as a percent of total assets were stable at 0.33% at September 30, 2023 compared to 0.27% at September 30, 2022 and 0.34% at June 30, 2023. Total non-performing loans and leases as a percent of loans and leases, net were 0.49% at September 30, 2023, compared to 0.40% at September 30, 2022 and 0.50% at June 30, 2023. Other real estate owned and other repossessed assets was $2.9 million at September 30, 2023 compared to the September 30, 2022 balance of $8.4 million and the June 30, 2023 balance of $2.9 million. For the third quarter of 2023, criticized loans declined by $10 million to $882 million or 2.71% of loans, down from 2.74% at June 30, 2023 while classified loans increased $65 million to $682 million or 2.10% compared to 1.90% at June 30, 2023 reflective of certain grade migration primarily in non-real estate C&I.
Net charge-offs for the third quarter of 2023 were $34.2 million, or 0.42% of average net loans and leases on an annualized basis, compared with net charge-offs of $6.7 million for the third quarter of 2022 and net charge-offs of $12.7 million for the second quarter of 2023. The increase in net charge-offs during the third quarter of 2023 was driven primarily by two C&I credits that were previously identified as impaired and reserved for in prior quarters. The provision for credit losses for the third quarter of 2023 was $17.0 million, compared with no recorded provision for third quarter of 2022 and $15.0 million for the second quarter of 2023. The allowance for credit losses of $446.9 million at September 30, 2023 represented 1.37% as a percent of total loans and leases, down slightly compared to the June 30, 2023 coverage of 1.43%.
Noninterest Revenue
Noninterest revenue was $119.0 million for the third quarter of 2023, compared with $124.5 million for the third quarter of 2022 and $132.3 million for the second quarter of 2023. Adjusted noninterest revenue(1) for the third quarter of 2023 was $125.6 million, compared with $124.6 million for the third quarter of 2022 and $132.2 million for the second quarter of 2023. Adjusted noninterest revenue(1) for the third quarter of 2023 excludes $6.7 million of facility and signage write-downs associated with the 35 branch closures effected in the third quarter of 2023. The linked quarter decline in adjusted noninterest revenue(1) was driven by lower mortgage production and servicing revenue, a negative mortgage servicing rights adjustment, as well as lower other noninterest income.
Insurance commission revenue continued to remain strong at $45.0 million for the third quarter of 2023, compared with $39.9 million for the third quarter of 2022 and $45.6 million for the second quarter of 2023. The year-over-year quarterly insurance revenue was up $5.1 million or 12.8% reflecting a continued firm pricing market and strong customer growth and retention.
Credit card, debit card and merchant fee revenue was $12.4 million for the third quarter of 2023, compared with $14.5 million for the third quarter of 2022 and $12.6 million for the second quarter of 2023. Deposit service charge revenue was $16.9 million for the third quarter of 2023 compared with $19.1 million for the third quarter of 2022 and $17.2 million for the second quarter of 2023. The declines include increases in earnings credit rate on corporate accounts. Other noninterest revenue was $17.9 million for the third quarter of 2023, compared with $22.7 million for the third quarter of 2022 and $26.7 million for the second quarter of 2023. The decline compared to the second quarter of 2023 is driven primarily by $6.7 million of facility and signage write-downs associated with the 35 branch closures effected in the third quarter of 2023. The remainder of this decline was driven by lower credit related fees, SBA income, and other investment income.
Mortgage production and servicing revenue totaled $5.8 million for the third quarter of 2023, compared with $4.7 million for the third quarter of 2022 and $6.8 million for the second quarter of 2023. The net mortgage servicing rights valuation adjustment was a negative $0.2 million for the third quarter of 2023, compared with a positive $4.3 million for the third quarter of 2022 and a positive $1.6 million for the second quarter of 2023 with the variances due to continued changes in the interest rate environment. Mortgage origination volume for the third quarter of 2023 was $615.2 million, compared with $769.9 million for the third quarter of 2022 and $848.9 million for the second quarter of 2023. The decline compared to the second quarter of 2023 reflects routine selling seasonality while the year-over-year decline was impacted by a decline in refinance activity due to the rate environment.
Noninterest Expense
Noninterest expense for the third quarter of 2023 was $312.3 million, compared with $319.7 million for the third quarter of 2022 and $303.9 million for the second quarter of 2023. Adjusted noninterest expense(1) for the third quarter of 2023 was $301.0 million, compared with $290.2 million for the third quarter of 2022 and $297.0 million for the second quarter of 2023. Adjusted noninterest expense(1) for the third quarter of 2023 excludes $10.6 million in restructuring charges related to efficiency initiatives including compensation matters as well as legal and advisory costs. The adjusted efficiency ratio(1) was 66.1% for the third quarter of 2023 compared to 63.6% for the second quarter of 2023.
The $4.0 million, or 1.4%, increase in adjusted noninterest expense(1) compared to the linked quarter was driven primarily by a $2.7 million increase in deposit insurance assessment expense resulting from an increase in insured deposits, higher second quarter loan balances and certain changes in credit quality metrics that impact the assessment. Salaries and employee benefits increased $4.0 million in the third quarter of 2023, reflecting an increase of $2.6 million in restructuring costs and the impact of our annual merit cycle effective July 1, partially offset by branch closures and reduced headcount during the third quarter of 2023. Employee headcount declined by 319 FTE during the third quarter of 2023, and over the last 12 months has declined by 469 FTE or 7%.
Capital Management
Total shareholders’ equity was $4.4 billion at September 30, 2023 compared with $4.2 billion at September 30, 2022 and $4.5 billion at June 30, 2023. Estimated regulatory capital ratios at September 30, 2023 included Common Equity Tier 1 capital of 10.3%, Tier 1 capital of 10.8%, Total risk-based capital of 12.9%, and Tier 1 leverage capital of 8.6%. During the third quarter of 2023, the Company did not repurchase any shares of its common stock pursuant to its 10 million share repurchase authorization for 2023. Outstanding common shares were 182.6 million as of September 30, 2023.
Summary
Rollins concluded, “We are excited about the opportunities ahead of us. Our funding and margin dynamics have stabilized, credit quality remains well-managed and within risk tolerances, and our efficiency initiatives continue and should be more evident in our financial results as we move forward, particularly into 2024. Our bankers remain focused on both sides of the balance sheet – producing quality loan growth as well as protecting and growing core deposit relationships.”
Conference Call and Webcast
The Company will conduct a conference call to discuss its third quarter 2023 financial results on October 24, 2023, at 10:00 a.m. (Central Time). This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing http://ir.cadencebank.com/events. The webcast will also be available in archived format at the same address.
(1) Considered a non-GAAP financial measure. A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears in Table 14 “Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions” beginning on page 22 of this news release.
(2) See Table 14 for detail on non-routine income and expenses.
About Cadence Bank
Cadence Bank (NYSE: CADE) is a leading regional banking franchise with approximately $50 billion in assets and more than 350 branch locations across the South and Texas. Cadence provides consumers, businesses and corporations with a full range of innovative banking and financial solutions. Services and products include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized lending, asset-based lending, commercial real estate, equipment financing, correspondent banking, SBA lending, foreign exchange, wealth management, investment and trust services, financial planning, retirement plan management, and personal and business insurance. Cadence is committed to a culture of respect, diversity and inclusion in both its workplace and communities. Cadence Bank, Member FDIC. Equal Housing Lender.
Forward-Looking Statements
Certain statements made in this news release constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the safe harbor under the Private Securities Litigation Reform Act of 1995 as well as the “bespeaks caution” doctrine. These statements are often, but not exclusively, made through the use of words or phrases like “assume,” “believe,” “budget,” “contemplate,” “continue,” “could,” “foresee,” “indicate,” “may,” “might,” “outlook,” “prospect,” “potential,” “roadmap,” “should,” “target,” “will,” “would,” the negative versions of such words, or comparable words of a future or forward-looking nature. These forward-looking statements may include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, or any of the Company’s comments related to topics in its risk disclosures or results of operations. Forward-looking statements are based upon management’s expectations as well as certain assumptions and estimates made by, and information available to, the Company’s management at the time such statements were made. Forward-looking statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company’s control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements.
Risks, uncertainties and other factors the Company may face include, without limitation: general economic, unemployment, credit market and real estate market conditions, including inflation, and the effect of such conditions on customers, potential customers, assets, investments and liquidity; risks arising from market and consumer reactions to the general banking environment, or to conditions or situations at specific banks; risks arising from media coverage of the banking industry; risks arising from perceived instability in the banking sector; the risks of changes in interest rates and their effects on the level, cost, and composition of, and competition for, deposits, loan demand and timing of payments, the values of loan collateral, securities, and interest sensitive assets and liabilities; the ability to attract new or retain existing deposits, to retain or grow loans or additional interest and fee income, or to control noninterest expense; the effect of pricing pressures on the Company’s net interest margin; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, or uncertainties surrounding the debt ceiling and the federal budget; uncertainties surrounding the functionality of the federal government; potential delays or other problems in implementing and executing the Company’s growth, expansion, acquisition, or divestment strategies, including delays in obtaining regulatory or other necessary approvals, or the failure to realize any anticipated benefits or synergies from any acquisitions, growth, or divestment strategies; the ability to pay dividends or coupons on the Company’s 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029; possible downgrades in the Company’s credit ratings or outlook which could increase the costs or availability of funding from capital markets; the potential impact of the phase-out of the London Interbank Offered Rate (“LIBOR”) or other changes involving LIBOR; changes in legal, financial, accounting, and/or regulatory requirements; the costs and expenses to comply with such changes; the enforcement efforts of federal and state bank regulators; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity and the impact of generative artificial intelligence; increased competition in the financial services industry, particularly from regional and national institutions; the impact of a failure in, or breach of, the Company’s operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company’s customers. The Company also faces risks from natural disasters or acts of war or terrorism; international or political instability, including the impacts related to or resulting from Russia’s military action in Ukraine and additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments.
The Company also faces risks from: possible adverse rulings, judgments, settlements or other outcomes of pending, ongoing and future litigation, as well as governmental, administrative and investigatory matters; the impairment of the Company’s goodwill or other intangible assets; losses of key employees and personnel; the diversion of management’s attention from ongoing business operations and opportunities; and the company’s success in executing its business plans and strategies, and managing the risks involved in all of the foregoing.
The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company’s periodic and current reports filed with the FDIC, including those factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, particularly those under the heading “Item 1A. Risk Factors,” in the Company’s Quarterly Reports on Form 10-Q under the heading “Part II-Item 1A. Risk Factors,” and in the Company’s Current Reports on Form 8-K.
Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, except as required by applicable law. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.
Table 1
Selected Financial Data
(Unaudited)
Quarter Ended
Year-to-date
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
Earnings Summary:
Interest revenue
$ 595,518
$ 573,419
$ 526,132
$ 473,548
$ 405,559
$ 1,695,069
$ 1,087,044
Interest expense
266,499
239,868
171,862
114,188
50,205
678,229
95,102
Net interest revenue
329,019
333,551
354,270
359,360
355,354
1,016,840
991,942
Provision for credit losses
17,000
15,000
10,000
6,000
—
42,000
1,000
Net interest revenue, after provision for credit losses
312,019
318,551
344,270
353,360
355,354
974,840
990,942
Noninterest revenue
118,997
132,290
74,071
114,873
124,491
325,358
378,160
Noninterest expense
312,267
303,878
319,279
340,671
319,734
935,424
897,289
Income before income taxes
118,749
146,963
99,062
127,562
160,111
364,774
471,813
Income tax expense
26,166
32,935
22,433
29,628
36,713
81,534
106,510
Net income
92,583
114,028
76,629
97,934
123,398
283,240
365,303
Less: Preferred dividends
2,372
2,372
2,372
2,372
2,372
7,116
7,116
Net income available to common shareholders
$ 90,211
$ 111,656
$ 74,257
$ 95,562
$ 121,026
$ 276,124
$ 358,187
Balance Sheet – Period End Balances
Total assets
$ 48,523,010
$ 48,838,660
$ 51,693,096
$ 48,653,414
$ 47,699,660
$ 48,523,010
$ 47,699,660
Total earning assets
43,729,220
44,012,570
46,808,612
43,722,544
42,832,355
43,729,220
42,832,355
Available-for-sale securities
9,643,231
10,254,580
10,877,879
11,944,096
12,441,894
9,643,231
12,441,894
Loans and leases, net of unearned income
32,520,593
32,556,708
31,282,594
30,349,277
29,296,450
32,520,593
29,296,450
Allowance for credit losses (ACL)
446,859
466,013
453,727
440,347
433,363
446,859
433,363
Net book value of acquired loans
6,895,487
7,357,174
7,942,980
8,754,526
8,841,588
6,895,487
8,841,588
Unamortized net discount on acquired loans
30,761
37,000
41,748
58,162
58,887
30,761
58,887
Total deposits
38,344,885
38,701,669
39,406,454
38,956,614
39,003,946
38,344,885
39,003,946
Total deposits and repurchase agreements
39,207,474
39,492,427
40,177,789
39,665,350
39,682,280
39,207,474
39,682,280
Other short-term borrowings
3,500,223
3,500,226
5,700,228
3,300,231
2,495,000
3,500,223
2,495,000
Subordinated and long-term debt
449,323
449,733
462,144
462,554
463,291
449,323
463,291
Total shareholders’ equity
4,395,257
4,485,850
4,490,417
4,311,374
4,166,925
4,395,257
4,166,925
Total shareholders’ equity, excluding AOCI (1)
5,705,178
5,648,925
5,572,303
5,533,912
5,464,737
5,705,178
5,464,737
Common shareholders’ equity
4,228,264
4,318,857
4,323,424
4,144,381
3,999,932
4,228,264
3,999,932
Common shareholders’ equity, excluding AOCI (1)
$ 5,538,185
$ 5,481,932
$ 5,405,310
$ 5,366,919
$ 5,297,744
$ 5,538,185
$ 5,297,744
Balance Sheet – Average Balances
Total assets
$ 48,655,138
$ 49,067,121
$ 48,652,201
$ 47,790,494
$ 47,595,557
$ 48,791,497
$ 47,446,436
Total earning assets
44,005,800
44,231,755
43,819,715
42,976,050
43,079,481
44,019,772
43,092,786
Available-for-sale securities
10,004,441
10,655,791
11,354,457
12,156,803
13,252,828
10,666,618
14,081,502
Loans and leases, net of unearned income
32,311,572
31,901,096
30,891,640
29,812,924
28,872,156
31,706,637
27,948,795
Total deposits
38,468,912
38,934,793
38,904,048
38,372,354
39,600,886
38,767,657
39,850,473
Total deposits and repurchase agreements
39,295,967
39,708,963
39,632,023
39,033,328
40,256,109
39,544,419
40,522,105
Other short-term borrowings
3,510,942
3,541,985
3,326,196
3,251,947
1,608,587
3,460,386
1,017,106
Subordinated and long-term debt
449,568
455,617
462,385
462,927
464,843
455,810
465,704
Total shareholders’ equity
4,505,162
4,539,353
4,396,461
4,215,585
4,506,655
4,480,723
4,695,324
Common shareholders’ equity
$ 4,338,169
$ 4,372,360
$ 4,229,468
$ 4,048,592
$ 4,339,662
$ 4,313,730
$ 4,528,331
Nonperforming Assets:
Nonaccrual loans and leases
$ 150,038
$ 157,243
$ 160,615
$ 98,745
$ 89,931
$ 150,038
$ 89,931
Loans and leases 90+ days past due, still accruing
9,152
4,412
5,164
2,068
11,984
9,152
11,984
Accruing TDR (2)
—
—
—
8,598
16,200
—
16,200
Non-performing loans and leases (NPL)
159,190
161,655
165,779
109,411
118,115
159,190
118,115
Other real estate owned and other assets
2,927
2,857
5,327
6,725
8,376
2,927
8,376
Non-performing assets (NPA)
$ 162,117
$ 164,512
$ 171,106
$ 116,136
$ 126,491
$ 162,117
$ 126,491
(1)
Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 22 – 26.
(2)
Cadence elected to adopt the new accounting guidance effective January 1, 2023, which eliminates the TDR recognition and measurement guidance via the modified retrospective transition method (ASU 2022-02). As such, there is no TDR reporting effective January 1, 2023.
Table 2
Selected Financial Ratios
Quarter Ended
Year-to-date
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
Financial Ratios and Other Data:
Return on average assets (2)
0.75 %
0.93 %
0.64 %
0.81 %
1.03 %
0.78 %
1.03 %
Adjusted return on average assets (1)(2)
0.87
0.97
1.06
1.21
1.22
0.97
1.15
Return on average common shareholders’ equity (2)
8.25
10.24
7.12
9.36
11.06
8.56
10.58
Adjusted return on average common shareholders’ equity (1)(2)
9.50
10.72
11.93
14.00
13.13
10.70
11.79
Return on average tangible common equity (1)(2)
12.96
16.05
11.40
15.42
17.40
13.52
16.32
Adjusted return on average tangible common equity (1)(2)
14.92
16.80
19.10
23.04
20.66
16.89
18.19
Pre-tax pre-provision net revenue to total average assets (1)(2)
1.11
1.32
0.91
1.11
1.33
1.11
1.33
Adjusted pre-tax pre-provision net revenue to total average assets (1)(2)
1.25
1.38
1.46
1.62
1.58
1.36
1.48
Net interest margin-fully taxable equivalent
2.98
3.03
3.29
3.33
3.28
3.10
3.09
Net interest rate spread-fully taxable equivalent
2.21
2.29
2.65
2.84
3.05
2.37
2.93
Efficiency ratio fully tax equivalent (1)
69.53
65.08
74.36
71.67
66.49
69.53
65.34
Adjusted efficiency ratio fully tax equivalent (1)
66.06
63.62
63.46
58.69
60.33
64.36
61.40
Loan/deposit ratio
84.81 %
84.12 %
79.38 %
77.91 %
75.11 %
84.81 %
75.11 %
Full time equivalent employees
6,160
6,479
6,567
6,572
6,629
6,160
6,629
Credit Quality Ratios:
Net charge-offs (recoveries) to average loans and leases (2)
0.42 %
0.16 %
0.02 %
(0.07) %
0.09 %
0.20 %
0.02 %
Provision for credit losses to average loans and leases (2)
0.21
0.19
0.13
0.08
—
0.18
—
ACL to loans and leases, net
1.37
1.43
1.45
1.45
1.48
1.37
1.48
ACL to NPL
280.71
288.28
273.69
402.47
366.90
280.71
366.90
NPL to loans and leases, net
0.49
0.50
0.53
0.36
0.40
0.49
0.40
NPA to total assets
0.33
0.34
0.33
0.24
0.27
0.33
0.27
Equity Ratios:
Total shareholders’ equity to total assets
9.06 %
9.19 %
8.69 %
8.86 %
8.74 %
9.06 %
8.74 %
Total common shareholders’ equity to total assets
8.71
8.84
8.36
8.52
8.39
8.71
8.39
Tangible common shareholders’ equity to tangible assets (1)
5.65
5.80
5.46
5.42
5.24
5.65
5.24
Tangible common shareholders’ equity to tangible assets, excluding AOCI (1)
8.22
8.06
7.46
7.82
7.84
8.22
7.84
Capital Adequacy (3):
Common Equity Tier 1 capital
10.3 %
10.1 %
10.1 %
10.2 %
10.3 %
10.3
10.3 %
Tier 1 capital
10.8
10.5
10.6
10.7
10.7
10.8
10.7
Total capital
12.9
12.7
12.8
12.8
12.8
12.9
12.8
Tier 1 leverage capital
8.6
8.5
8.4
8.4
8.4
8.6
8.4
(1)
Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 22 – 26.
(2)
Annualized.
(3)
Current quarter regulatory capital ratios are estimated.
Table 3
Selected Financial Information
Quarter Ended
Year-to-date
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
Common Share Data:
Diluted earnings per share
$ 0.49
$ 0.61
$ 0.40
$ 0.52
$ 0.66
$ 1.50
$ 1.94
Adjusted earnings per share (1)
0.56
0.64
0.68
0.78
0.78
1.87
2.16
Cash dividends per share
0.235
0.235
0.235
0.22
0.22
0.705
0.66
Book value per share
23.15
23.65
23.67
22.72
21.92
23.15
21.92
Tangible book value per share (1)
14.54
15.01
14.99
13.99
13.25
14.54
13.25
Market value per share (last)
21.22
19.88
20.76
24.66
25.41
21.22
25.41
Market value per share (high)
25.87
21.73
28.18
29.41
28.54
28.18
34.24
Market value per share (low)
19.00
16.95
19.24
22.43
22.04
16.95
22.04
Market value per share (average)
22.56
19.73
24.88
26.84
25.68
22.41
27.52
Dividend payout ratio
47.96 %
38.52 %
58.75 %
42.31 %
33.33 %
47.00 %
34.02 %
Adjusted dividend payout ratio (1)
41.96 %
36.72 %
34.56 %
28.21 %
28.21 %
37.70 %
30.56 %
Total shares outstanding
182,611,075
182,626,229
182,684,578
182,437,265
182,438,780
182,611,075
182,438,780
Average shares outstanding – diluted
184,645,004
183,631,570
183,908,798
183,762,008
183,313,831
184,062,368
184,747,880
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases
6.39 %
6.24 %
6.00 %
5.54 %
4.82 %
6.22 %
4.45 %
Loans, loans held for sale, and leases
excluding net accretion on acquired loans and
leases
6.31
6.18
5.87
5.41
4.70
6.12
4.27
Available-for-sale securities:
Taxable
2.07
2.09
1.80
1.54
1.44
1.98
1.35
Tax-exempt
3.23
3.21
3.21
3.28
3.05
3.22
2.85
Other investments
5.36
5.05
4.64
3.69
2.32
5.02
1.10
Total interest earning assets and revenue
5.38
5.21
4.88
4.38
3.74
5.16
3.38
Deposits
2.14
1.87
1.28
0.76
0.35
1.76
0.22
Interest bearing demand and money market
2.79
2.49
2.03
1.34
0.60
2.43
0.35
Savings
0.56
0.51
0.36
0.31
0.17
0.47
0.10
Time
3.98
3.69
2.24
1.17
0.56
3.48
0.52
Total interest bearing deposits
2.88
2.58
1.86
1.17
0.53
2.46
0.34
Fed funds purchased, securities sold under
agreement to repurchase and other
4.27
3.97
3.73
3.04
1.65
3.99
0.78
Short-term FHLB borrowings
3.54
5.24
4.66
3.84
2.05
4.91
1.56
Short-term BTFP borrowings
5.15
5.15
—
—
—
5.15
—
Total interest bearing deposits and short-term
borrowings
3.16
2.90
2.20
1.50
0.64
2.77
0.39
Long-term debt
4.22
4.23
4.27
4.15
4.16
4.24
4.16
Total interest bearing liabilities
3.17
2.92
2.23
1.54
0.70
2.79
0.45
Interest bearing liabilities to interest earning
assets
75.74 %
74.57 %
71.24 %
68.42 %
66.19 %
73.87 %
65.30 %
Net interest income tax equivalent adjustment
(in thousands)
$ 1,081
$ 1,063
$ 1,051
$ 1,071
$ 1,052
$ 3,197
$ 3,141
(1)
Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 22 – 26.
Table 4
Consolidated Balance Sheets
(Unaudited)
As of
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
ASSETS
Cash and due from banks
$ 594,787
$ 722,625
$ 660,431
$ 756,906
$ 693,999
Interest bearing deposits with other banks and Federal funds sold
1,403,020
1,008,048
4,452,029
1,241,246
895,630
Available-for-sale securities, at fair value
9,643,231
10,254,580
10,877,879
11,944,096
12,441,894
Loans and leases, net of unearned income
32,520,593
32,556,708
31,282,594
30,349,277
29,296,450
Allowance for credit losses
446,859
466,013
453,727
440,347
433,363
Net loans and leases
32,073,734
32,090,695
30,828,867
29,908,930
28,863,087
Loans held for sale, at fair value
162,376
193,234
196,110
187,925
198,381
Premises and equipment, net
818,006
830,184
826,439
817,430
802,382
Goodwill
1,459,302
1,459,302
1,459,302
1,458,795
1,449,511
Other intangible assets, net
114,127
119,098
125,724
132,764
132,953
Bank-owned life insurance
639,073
634,985
631,174
630,046
624,696
Other assets
1,615,354
1,525,909
1,635,141
1,575,276
1,597,127
Total Assets
$ 48,523,010
$ 48,838,660
$ 51,693,096
$ 48,653,414
$ 47,699,660
LIABILITIES
Deposits:
Demand: Noninterest bearing
$ 9,657,198
$ 10,223,508
$ 11,517,037
$ 12,731,065
$ 13,839,649
Interest bearing
18,334,551
18,088,711
18,146,678
19,040,131
18,033,648
Savings
2,837,348
2,983,709
3,226,685
3,473,746
3,676,340
Time deposits
7,515,788
7,405,741
6,516,054
3,711,672
3,454,309
Total deposits
38,344,885
38,701,669
39,406,454
38,956,614
39,003,946
Securities sold under agreement to repurchase
862,589
790,758
771,335
708,736
678,334
Other short-term borrowings
3,500,223
3,500,226
5,700,228
3,300,231
2,495,000
Subordinated and long-term debt
449,323
449,733
462,144
462,554
463,291
Other liabilities
970,733
910,424
862,518
913,905
892,164
Total Liabilities
44,127,753
44,352,810
47,202,679
44,342,040
43,532,735
SHAREHOLDERS’ EQUITY
Preferred stock
166,993
166,993
166,993
166,993
166,993
Common stock
456,528
456,566
456,711
456,093
456,097
Capital surplus
2,733,003
2,724,021
2,715,981
2,709,391
2,695,646
Accumulated other comprehensive loss
(1,309,921)
(1,163,075)
(1,081,886)
(1,222,538)
(1,297,812)
Retained earnings
2,348,654
2,301,345
2,232,618
2,201,435
2,146,001
Total Shareholders’ Equity
4,395,257
4,485,850
4,490,417
4,311,374
4,166,925
Total Liabilities & Shareholders’ Equity
$ 48,523,010
$ 48,838,660
$ 51,693,096
$ 48,653,414
$ 47,699,660
Table 5
Consolidated Quarterly Average Balance Sheets
(Unaudited)
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
ASSETS
Cash and due from banks
$ 587,040
$ 610,948
$ 695,263
$ 617,634
$ 654,589
Interest bearing deposits with other banks and Federal funds sold
1,574,134
1,607,830
1,526,755
943,806
851,185
Available-for-sale securities, at fair value
10,004,441
10,655,791
11,354,457
12,156,803
13,252,828
Loans and leases, net of unearned income
32,311,572
31,901,096
30,891,640
29,812,924
28,872,156
Allowance for credit losses
459,698
457,027
442,486
434,785
441,042
Net loans and leases
31,851,874
31,444,069
30,449,154
29,378,139
28,431,114
Loans held for sale, at fair value
115,653
67,038
46,863
62,517
103,312
Premises and equipment, net
837,516
829,938
824,190
802,771
809,799
Goodwill
1,459,302
1,459,302
1,459,127
1,457,120
1,444,331
Other intangible assets, net
116,715
123,313
128,957
132,091
136,149
Bank-owned life insurance
636,335
632,489
630,601
625,938
613,973
Other assets
1,472,128
1,636,403
1,536,834
1,613,675
1,298,277
Total Assets
$ 48,655,138
$ 49,067,121
$ 48,652,201
$ 47,790,494
$ 47,595,557
LIABILITIES
Deposits:
Demand: Noninterest bearing
$ 9,924,554
$ 10,725,108
$ 12,203,079
$ 13,344,152
$ 13,816,796
Interest bearing
17,970,463
17,997,618
19,009,345
17,866,198
18,675,214
Savings
2,913,027
3,088,174
3,363,236
3,555,911
3,720,218
Time deposits
7,660,868
7,123,893
4,328,388
3,606,093
3,388,658
Total deposits
38,468,912
38,934,793
38,904,048
38,372,354
39,600,886
Securities sold under agreement to repurchase
827,055
774,170
727,975
660,974
655,223
Other short-term borrowings
3,510,942
3,541,985
3,326,196
3,251,947
1,608,587
Subordinated and long-term debt
449,568
455,617
462,385
462,927
464,843
Other liabilities
893,499
821,203
835,136
826,707
759,363
Total Liabilities
44,149,976
44,527,768
44,255,740
43,574,909
43,088,902
SHAREHOLDERS’ EQUITY
Preferred stock
166,993
166,993
166,993
166,993
166,993
Common stock
456,557
456,755
456,354
456,095
456,130
Capital surplus
2,726,686
2,717,866
2,710,501
2,701,121
2,689,340
Accumulated other comprehensive loss
(1,175,077)
(1,087,389)
(1,174,723)
(1,302,388)
(922,673)
Retained earnings
2,330,003
2,285,128
2,237,336
2,193,764
2,116,865
Total Shareholders’ Equity
4,505,162
4,539,353
4,396,461
4,215,585
4,506,655
Total Liabilities & Shareholders’ Equity
$ 48,655,138
$ 49,067,121
$ 48,652,201
$ 47,790,494
$ 47,595,557
Table 6
Consolidated Statements of Income
(Unaudited)
Quarter Ended
Year-to-date
(Dollars in thousands, except per share data)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
INTEREST REVENUE:
Loans and leases
$ 520,126
$ 496,262
$ 457,084
$ 414,623
$ 349,093
$ 1,473,472
$ 928,039
Available-for-sale securities:
Taxable
50,277
53,531
48,515
45,807
46,701
152,323
138,110
Tax-exempt
2,375
2,427
2,477
2,547
2,548
7,279
7,533
Loans held for sale
1,468
961
603
1,788
2,241
3,033
5,766
Short-term investments
21,272
20,238
17,453
8,783
4,976
58,962
7,596
Total interest revenue
595,518
573,419
526,132
473,548
405,559
1,695,069
1,087,044
INTEREST EXPENSE:
Interest bearing demand deposits and money market accounts
126,296
111,938
95,344
60,253
28,175
333,578
49,636
Savings
4,108
3,915
3,014
2,769
1,597
11,037
2,753
Time deposits
76,867
65,517
23,950
10,651
4,797
166,333
13,602
Federal funds purchased and securities sold under agreement to
repurchase
9,004
7,656
7,667
8,365
3,944
24,327
5,067
Short-term debt
45,438
46,036
37,015
27,302
6,822
128,490
9,562
Subordinated and long-term debt
4,786
4,806
4,872
4,848
4,870
14,464
14,482
Total interest expense
266,499
239,868
171,862
114,188
50,205
678,229
95,102
Net interest revenue
329,019
333,551
354,270
359,360
355,354
1,016,840
991,942
Provision for credit losses
17,000
15,000
10,000
6,000
—
42,000
1,000
Net interest revenue, after provision for credit losses
312,019
318,551
344,270
353,360
355,354
974,840
990,942
NONINTEREST REVENUE:
Mortgage banking
5,684
8,356
6,076
2,571
9,080
20,115
42,289
Credit card, debit card and merchant fees
12,413
12,617
11,851
15,750
14,497
36,882
42,410
Deposit service charges
16,867
17,208
16,482
16,863
19,134
50,557
56,615
Security gains (losses), net
64
69
(51,261)
(595)
(139)
(51,127)
211
Insurance commissions
44,989
45,603
39,606
34,679
39,876
130,198
115,596
Wealth management
21,079
21,741
21,532
19,199
19,335
64,351
61,286
Other noninterest income
17,901
26,696
29,785
26,406
22,708
74,382
59,753
Total noninterest revenue
118,997
132,290
74,071
114,873
124,491
325,358
378,160
NONINTEREST EXPENSE:
Salaries and employee benefits
194,812
190,854
195,702
183,918
191,193
581,368
561,106
Occupancy and equipment
28,343
29,590
29,113
30,539
30,610
87,046
89,008
Data processing and software
29,933
28,073
31,869
29,289
28,079
89,875
84,644
Merger expense
—
137
5,075
20,276
19,690
5,212
30,938
Amortization of intangibles
4,971
6,626
5,005
5,251
5,417
16,601
15,240
Deposit insurance assessments
10,425
7,705
8,361
5,931
4,499
26,491
12,781
Pension settlement expense
600
—
—
6,127
2,896
600
2,896
Other noninterest expense
43,183
40,893
44,154
59,340
37,350
128,231
100,676
Total noninterest expense
312,267
303,878
319,279
340,671
319,734
935,424
897,289
Income before income taxes
118,749
146,963
99,062
127,562
160,111
364,774
471,813
Income tax expense
26,166
32,935
22,433
29,628
36,713
81,534
106,510
Net income
92,583
114,028
76,629
97,934
123,398
283,240
365,303
Less: Preferred dividends
2,372
2,372
2,372
2,372
2,372
7,116
7,116
Net income available to common shareholders
$ 90,211
$ 111,656
$ 74,257
$ 95,562
$ 121,026
$ 276,124
$ 358,187
Net income per common share: Diluted
$ 0.49
$ 0.61
$ 0.40
$ 0.52
$ 0.66
$ 1.50
$ 1.94
Table 7
Selected Loan Portfolio Data
(Unaudited)
Quarter Ended
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate
$ 9,199,024
$ 9,636,481
$ 9,159,387
$ 8,985,547
$ 8,803,381
Owner occupied
4,361,530
4,358,000
4,278,468
4,068,659
3,943,442
Total commercial and industrial
13,560,554
13,994,481
13,437,855
13,054,206
12,746,823
Commercial real estate
Construction, acquisition and development
3,819,307
3,744,114
3,703,137
3,547,986
3,244,425
Income producing
5,720,606
5,596,134
5,368,676
5,150,680
5,098,470
Total commercial real estate
9,539,913
9,340,248
9,071,813
8,698,666
8,342,895
Consumer
Residential mortgages
9,186,179
8,989,614
8,536,032
8,319,242
7,924,378
Other consumer
233,947
232,365
236,894
277,163
282,354
Total consumer
9,420,126
9,221,979
8,772,926
8,596,405
8,206,732
Total loans and leases, net of unearned income
$ 32,520,593
$ 32,556,708
$ 31,282,594
$ 30,349,277
$ 29,296,450
NON-PERFORMING ASSETS
Non-performing Loans and Leases
Nonaccrual Loans and Leases
Commercial and industrial
Non-real estate
$ 67,962
$ 72,592
$ 65,783
$ 23,907
$ 23,916
Owner occupied
6,486
7,541
9,089
7,944
8,327
Total commercial and industrial
74,448
80,133
74,872
31,851
32,243
Commercial real estate
Construction, acquisition and development
4,608
4,496
1,850
2,974
1,823
Income producing
12,251
19,205
20,616
7,331
8,580
Total commercial real estate
16,859
23,701
22,466
10,305
10,403
Consumer
Residential mortgages
58,488
53,171
62,748
55,892
46,671
Other consumer
243
238
529
697
614
Total consumer
58,731
53,409
63,277
56,589
47,285
Total nonaccrual loans and leases
$ 150,038
$ 157,243
$ 160,615
$ 98,745
$ 89,931
Loans and leases 90+ days past due, still accruing
9,152
4,412
5,164
2,068
11,984
Restructured loans and leases, still accruing
—
—
—
8,598
16,200
Total non-performing loans and leases
$ 159,190
$ 161,655
$ 165,779
$ 109,411
$ 118,115
Other real estate owned and repossessed assets
2,927
2,857
5,327
6,725
8,376
Total non-performing assets
$ 162,117
$ 164,512
$ 171,106
$ 116,136
$ 126,491
Additions to nonaccrual loans and leases during the quarter
(excluding acquisitions)
$ 41,773
$ 57,764
$ 89,779
$ 38,945
$ 34,432
Table 8
Allowance for Credit Losses
(Unaudited)
Quarter Ended
(Dollars in thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period
$ 466,013
$ 453,727
$ 440,347
$ 433,363
$ 440,112
Charge-offs:
Commercial and industrial
(34,959)
(13,598)
(2,853)
(2,295)
(11,551)
Commercial real estate
(931)
(126)
(1,988)
(426)
(1,116)
Consumer
(1,608)
(1,916)
(2,189)
(2,650)
(2,653)
Total loans charged-off
(37,498)
(15,640)
(7,030)
(5,371)
(15,320)
Recoveries:
Commercial and industrial
2,240
1,360
3,399
6,405
3,657
Commercial real estate
201
618
779
2,851
3,509
Consumer
903
948
977
1,099
1,405
Total recoveries
3,344
2,926
5,155
10,355
8,571
Net (charge-offs) recoveries
(34,154)
(12,714)
(1,875)
4,984
(6,749)
Adoption of new ASU related to modified loans (3)
—
—
255
—
—
Provision for credit losses related to loans and leases
15,000
25,000
15,000
2,000
—
Total provision for loans and leases
15,000
25,000
15,000
2,000
—
Balance, end of period
$ 446,859
$ 466,013
$ 453,727
$ 440,347
$ 433,363
Average loans and leases, net of unearned income, for period
$ 32,311,572
$ 31,901,096
$ 30,891,640
$ 29,812,924
$ 28,872,156
Ratio: Net charge-offs (recoveries) to average loans and leases (2)
0.42 %
0.16 %
0.02 %
(0.07) %
0.09 %
RESERVE FOR UNFUNDED COMMITMENTS (1)
Balance, beginning of period
$ 13,551
$ 23,551
$ 28,551
$ 24,551
$ 24,551
Provision (reversal) for credit losses for unfunded commitments
2,000
(10,000)
(5,000)
4,000
—
Balance, end of period
$ 15,551
$ 13,551
$ 23,551
$ 28,551
$ 24,551
(1)
The Reserve for Unfunded Commitments is classified in other liabilities on the consolidated balance sheets.
(2)
Annualized.
(3)
Cadence elected to adopt the new accounting guidance effective January 1, 2023, which eliminates the TDR recognition and measurement guidance via the modified retrospective transition method (ASU 2022-02). As such, there is no TDR reporting effective January 1, 2023.
Table 9
Loan Portfolio by Grades
(Unaudited)
September 30, 2023
(In thousands)
Pass
Special
Mention
Substandard
Impaired
Purchased
Credit
Deteriorated
(Loss)
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate
$ 8,690,172
$ 100,118
$ 388,741
$ 15,337
$ 4,656
$ 9,199,024
Owner occupied
4,281,916
30,414
46,803
1,275
1,122
4,361,530
Total commercial and industrial
12,972,088
130,532
435,544
16,612
5,778
13,560,554
Commercial real estate
Construction, acquisition and development
3,798,695
2,975
17,637
—
—
3,819,307
Income producing
5,519,028
65,473
124,731
11,374
—
5,720,606
Total commercial real estate
9,317,723
68,448
142,368
11,374
—
9,539,913
Consumer (1)
Residential mortgages
9,114,880
1,366
68,359
—
1,574
9,186,179
Other consumer
233,505
—
442
—
—
233,947
Total consumer
9,348,385
1,366
68,801
—
1,574
9,420,126
Total loans and leases, net of unearned income
$ 31,638,196
$ 200,346
$ 646,713
$ 27,986
$ 7,352
$ 32,520,593
(1)
During the second quarter of 2023, the Company began determining the risk rating classification of its Consumer portfolio based on nonaccrual and
delinquency status in accordance with the Uniform Retail Credit Classification guidance and industry norms, which contributed to a lower number of
criticized and classified loans compared to periods prior to the second quarter of 2023. As a result of the modification, current period results are not
directly comparable to periods prior to the second quarter of 2023.
June 30, 2023
(In thousands)
Pass
Special
Mention
Substandard
Doubtful
Impaired
Purchased
Credit
Deteriorated
(Loss)
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate
$ 9,126,727
$ 160,652
$ 311,119
$ —
$ 34,027
$ 3,956
$ 9,636,481
Owner occupied
4,276,518
29,991
48,068
—
1,762
1,661
4,358,000
Total commercial and industrial
13,403,245
190,643
359,187
—
35,789
5,617
13,994,481
Commercial real estate
Construction, acquisition and development
3,711,414
20,339
12,158
203
—
—
3,744,114
Income producing
5,390,435
63,323
113,021
—
10,760
18,595
5,596,134
Total commercial real estate
9,101,849
83,662
125,179
203
10,760
18,595
9,340,248
Consumer
Residential mortgages
8,927,494
—
59,267
—
1,279
1,574
8,989,614
Other consumer
231,978
—
387
—
—
—
232,365
Total consumer
9,159,472
—
59,654
—
1,279
1,574
9,221,979
Total loans and leases, net of unearned income
$ 31,664,566
$ 274,305
$ 544,020
$ 203
$ 47,828
$ 25,786
$ 32,556,708
Table 10
Geographical Loan Information
(Unaudited)
September 30, 2023
(Dollars in thousands)
Alabama
Arkansas
Florida
Georgia
Louisiana
Mississippi
Missouri
Tennessee
Texas
Other
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate
$ 360,970
$ 162,650
$ 491,854
$ 514,031
$ 330,072
$ 516,449
$ 65,475
$ 341,777
$ 3,884,907
$ 2,530,839
$ 9,199,024
Owner occupied
351,835
252,880
284,886
319,982
288,640
594,127
92,167
164,564
1,660,831
351,618
4,361,530
Total commercial and industrial
712,805
415,530
776,740
834,013
618,712
1,110,576
157,642
506,341
5,545,738
2,882,457
13,560,554
Commercial real estate
Construction, acquisition and development
210,809
73,567
306,869
422,605
59,957
201,138
49,584
163,621
1,885,210
445,947
3,819,307
Income producing
427,591
275,663
374,452
634,494
217,475
423,473
193,555
328,808
2,047,954
797,141
5,720,606
Total commercial real estate
638,400
349,230
681,321
1,057,099
277,432
624,611
243,139
492,429
3,933,164
1,243,088
9,539,913
Consumer
Residential mortgages
1,204,991
388,592
634,059
405,382
459,661
1,138,245
175,973
720,227
3,799,189
259,860
9,186,179
Other consumer
31,446
18,075
5,188
7,268
11,360
86,899
1,706
16,914
50,039
5,052
233,947
Total consumer
1,236,437
406,667
639,247
412,650
471,021
1,225,144
177,679
737,141
3,849,228
264,912
9,420,126
Total loans and leases, net of
unearned income
$ 2,587,642
$ 1,171,427
$ 2,097,308
$ 2,303,762
$ 1,367,165
$ 2,960,331
$ 578,460
$ 1,735,911
$ 13,328,130
$ 4,390,457
$ 32,520,593
Loan growth, excluding loans acquired
during the quarter ($)
$ (14,602)
$ 12,160
$ (3,504)
$ 29,586
$ 32,312
$ 7,060
$ 901
$ 4,127
$ 133,358
$ (237,513)
$ (36,115)
Loan growth, excluding loans acquired
during the quarter (%) (annualized)
(2.23) %
4.16 %
(0.66) %
5.16 %
9.60 %
0.95 %
0.62 %
0.95 %
4.01 %
(20.36) %
(0.44) %
June 30, 2023
(Dollars in thousands)
Alabama
Arkansas
Florida
Georgia
Louisiana
Mississippi
Missouri
Tennessee
Texas
Other
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate
$ 377,605
$ 153,433
$ 535,035
$ 553,110
$ 324,964
$ 508,159
$ 80,894
$ 348,478
$ 3,961,249
$ 2,793,554
$ 9,636,481
Owner occupied
358,089
244,598
304,871
315,771
281,270
596,732
91,474
169,620
1,634,523
361,052
4,358,000
Total commercial and industrial
735,694
398,031
839,906
868,881
606,234
1,104,891
172,368
518,098
5,595,772
3,154,606
13,994,481
Commercial real estate
Construction, acquisition and development
200,551
81,766
261,666
404,301
48,211
199,099
44,273
146,479
1,874,670
483,098
3,744,114
Income producing
454,443
279,541
371,717
595,999
211,076
436,653
190,959
335,009
1,995,521
725,216
5,596,134
Total commercial real estate
654,994
361,307
633,383
1,000,300
259,287
635,752
235,232
481,488
3,870,191
1,208,314
9,340,248
Consumer
Residential mortgages
1,180,606
382,172
622,179
398,080
457,968
1,127,557
168,403
715,992
3,677,451
259,206
8,989,614
Other consumer
30,950
17,757
5,344
6,915
11,364
85,071
1,556
16,206
51,358
5,844
232,365
Total consumer
1,211,556
399,929
627,523
404,995
469,332
1,212,628
169,959
732,198
3,728,809
265,050
9,221,979
Total loans and leases, net of
unearned income
$ 2,602,244
$ 1,159,267
$ 2,100,812
$ 2,274,176
$ 1,334,853
$ 2,953,271
$ 577,559
$ 1,731,784
$ 13,194,772
$ 4,627,970
$ 32,556,708
Table 11
Noninterest Revenue and Expense
(Unaudited)
Quarter Ended
Year-to-date
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
NONINTEREST REVENUE:
Mortgage banking excl. MSR and MSR hedge market value adjustment
$ 5,842
$ 6,774
$ 8,379
$ 5,408
$ 4,746
$ 20,995
$ 19,234
MSR and MSR hedge market value adjustment
(158)
1,582
(2,303)
(2,837)
4,334
(880)
23,055
Credit card, debit card and merchant fees
12,413
12,617
11,851
15,750
14,497
36,882
42,410
Deposit service charges
16,867
17,208
16,482
16,863
19,134
50,557
56,615
Security gains (losses), net
64
69
(51,261)
(595)
(139)
(51,127)
211
Insurance commissions
44,989
45,603
39,606
34,679
39,876
130,198
115,596
Trust income
10,574
10,084
10,553
9,113
9,011
31,211
28,201
Annuity fees
1,882
1,702
2,192
951
600
5,775
1,957
Brokerage commissions and fees
8,623
9,955
8,787
9,135
9,724
27,365
31,128
Bank-owned life insurance
4,108
3,811
3,647
5,436
3,537
11,566
10,158
Other miscellaneous income
13,793
22,885
26,138
20,970
19,171
62,816
49,595
Total noninterest revenue
$ 118,997
$ 132,290
$ 74,071
$ 114,873
$ 124,491
$ 325,358
$ 378,160
NONINTEREST EXPENSE:
Salaries and employee benefits
$ 194,812
$ 190,854
$ 195,702
$ 183,918
$ 191,193
$ 581,368
$ 561,106
Occupancy and equipment
28,343
29,590
29,113
30,539
30,610
87,046
89,008
Deposit insurance assessments
10,425
7,705
8,361
5,931
4,499
26,491
12,781
Pension settlement expense
600
—
—
6,127
2,896
600
2,896
Advertising and public relations
5,738
5,708
4,331
28,659
4,085
15,777
13,095
Foreclosed property expense
270
323
980
400
1,093
1,573
430
Telecommunications
1,702
1,541
1,717
1,714
1,882
4,960
5,699
Travel and entertainment
3,287
3,898
3,508
5,310
4,149
10,693
10,372
Data processing and software
29,933
28,073
31,869
29,289
28,079
89,875
84,644
Professional, consulting and outsourcing
5,163
5,519
4,417
3,598
2,724
15,099
10,231
Amortization of intangibles
4,971
6,626
5,005
5,251
5,417
16,601
15,240
Legal
3,592
1,908
1,491
758
2,054
6,991
5,310
Merger expense
—
137
5,075
20,276
19,690
5,212
30,938
Postage and shipping
2,421
2,070
2,452
1,925
2,098
6,943
6,154
Other miscellaneous expense
21,010
19,926
25,258
16,976
19,265
66,195
49,385
Total noninterest expense
$ 312,267
$ 303,878
$ 319,279
$ 340,671
$ 319,734
$ 935,424
$ 897,289
INSURANCE COMMISSIONS:
Property and casualty commissions
$ 35,016
$ 34,273
$ 28,202
$ 24,682
$ 30,021
$ 97,491
$ 85,093
Life and health commissions
7,172
7,847
8,024
7,151
7,254
23,043
22,332
Risk management income
659
703
657
887
654
2,018
2,085
Other
2,142
2,780
2,723
1,959
1,947
7,646
6,086
Total insurance commissions
$ 44,989
$ 45,603
$ 39,606
$ 34,679
$ 39,876
$ 130,198
$ 115,596
Table 12
Average Balance and Yields
(Unaudited)
Quarter Ended
September 30, 2023
June 30, 2023
September 30, 2022
(Dollars in thousands)
Average
Balance
Income/
Expense
Yield/
Rate
Average
Balance
Income/
Expense
Yield/
Rate
Average
Balance
Income/
Expense
Yield/
Rate
ASSETS
Interest-earning assets:
Loans and leases, excluding accretion
$ 32,311,572
$ 513,989
6.31 %
$ 31,901,096
$ 491,473
6.17 %
$ 28,872,156
$ 341,334
4.69 %
Accretion income on acquired loans
6,587
0.08
5,207
0.07
8,134
0.11
Loans held for sale
115,653
1,468
5.04
67,038
961
5.75
103,312
2,241
8.61
Investment securities
Taxable
9,635,084
50,277
2.07
10,272,425
53,531
2.09
12,833,857
46,701
1.44
Tax-exempt
369,357
3,006
3.23
383,366
3,072
3.21
418,971
3,225
3.05
Total investment securities
10,004,441
53,283
2.11
10,655,791
56,603
2.13
13,252,828
49,926
1.49
Other investments
1,574,134
21,272
5.36
1,607,830
20,238
5.05
851,185
4,976
2.32
Total interest-earning assets
44,005,800
596,599
5.38 %
44,231,755
574,482
5.21 %
43,079,481
406,611
3.74 %
Other assets
5,109,036
5,292,393
4,957,118
Allowance for credit losses
459,698
457,027
441,042
Total assets
$ 48,655,138
$ 49,067,121
$ 47,595,557
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest bearing demand and money market
$ 17,970,463
$ 126,296
2.79 %
$ 17,997,618
$ 111,938
2.49 %
$ 18,675,214
28,175
0.60 %
Savings deposits
2,913,027
4,108
0.56
3,088,174
3,915
0.51
3,720,218
1,597
0.17
Time deposits
7,660,868
76,867
3.98
7,123,893
65,517
3.69
3,388,658
4,797
0.56
Total interest-bearing deposits
28,544,358
207,271
2.88
28,209,685
181,370
2.58
25,784,090
34,569
0.53
Fed funds purchased, securities
sold under agreement to
repurchase and other
$ 837,773
$ 9,007
4.27
$ 774,170
$ 7,658
3.97
$ 946,419
3,944
1.65
Short-term FHLB borrowings
224
2
3.54
2,388,139
31,219
5.24
1,317,391
6,822
2.05
Short-term BTFP borrowings
3,500,000
45,433
5.15
1,153,846
14,815
5.15
—
—
—
Long-term borrowings
449,568
4,786
4.22
455,617
4,806
4.23
464,843
4,870
4.16
Total interest-bearing liabilities
33,331,923
266,499
3.17 %
32,981,457
239,868
2.92 %
28,512,743
50,205
0.70 %
Noninterest-bearing liabilities:
Demand deposits
9,924,554
10,725,108
13,816,796
Other liabilities
893,499
821,203
759,363
Total liabilities
44,149,976
44,527,768
43,088,902
Shareholders’ equity
4,505,162
4,539,353
4,506,655
Total liabilities and shareholders’ equity
$ 48,655,138
$ 49,067,121
$ 47,595,557
Net interest income/net interest spread
330,100
2.21 %
334,614
2.29 %
356,406
3.05 %
Net yield on earning assets/net interest margin
2.98 %
3.03 %
3.28 %
Taxable equivalent adjustment:
Loans and investment securities
(1,081)
(1,063)
(1,052)
Net interest revenue
$ 329,019
$ 333,551
$ 355,354
Table 12
Average Balance and Yields Cont.
For the Nine Months Ended
September 30, 2023
September 30, 2022
(Dollars in thousands)
Average
Balance
Income/
Expense
Yield/
Rate
Average
Balance
Income/
Expense
Yield/
Rate
ASSETS
Interest-earning assets:
Loans and leases, excluding accretion
$ 31,706,637
$ 1,452,912
6.13 %
$ 27,948,795
$ 891,585
4.27 %
Accretion income on acquired loans
21,822
0.09
37,592
0.18
Loans held for sale
76,770
3,033
5.28
142,152
5,766
5.42
Investment securities
Taxable
10,283,587
152,323
1.98
13,633,964
138,110
1.35
Tax-exempt
383,031
9,214
3.22
447,538
9,536
2.85
Total investment securities
10,666,618
161,537
2.02
14,081,502
147,646
1.40
Other investments
1,569,747
58,962
5.02
920,337
7,596
1.10
Total interest-earning assets
44,019,772
1,698,266
5.16 %
43,092,786
1,090,185
3.38 %
Other assets
5,224,858
4,795,001
Allowance for credit losses
453,133
441,351
Total assets
$ 48,791,497
$ 47,446,436
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest bearing demand and money market
$ 18,322,003
333,578
2.43 %
$ 18,768,943
$ 49,636
0.35 %
Savings deposits
3,119,830
11,037
0.47
3,692,027
2,753
0.10
Time deposits
6,383,257
166,333
3.48
3,524,949
13,602
0.52
Total interest-bearing deposits
27,825,090
510,948
2.46
25,985,919
65,991
0.34
Fed funds purchased, securities sold under agreement to repurchase and other
814,943
24,334
3.99
867,676
5,069
0.78
Short-term FHLB borrowings
1,858,102
68,235
4.91
821,062
9,560
1.56
Short-term BTFP borrowings
1,564,103
60,248
5.15
—
—
—
Long-term borrowings
455,810
14,464
4.24
465,704
14,482
4.16
Total interest-bearing liabilities
32,518,048
678,229
2.79 %
28,140,361
95,102
0.45 %
Noninterest-bearing liabilities:
Demand deposits
10,942,567
13,864,554
Other liabilities
850,159
746,197
Total liabilities
44,310,774
42,751,112
Shareholders’ equity
4,480,723
4,695,324
Total liabilities and shareholders’ equity
$ 48,791,497
$ 47,446,436
Net interest income/net interest spread
1,020,037
2.37 %
995,083
2.93 %
Net yield on earning assets/net interest margin
3.10 %
3.09 %
Taxable equivalent adjustment:
Loans and investment securities
(3,197)
(3,141)
Net interest revenue
$ 1,016,840
$ 991,942
Table 13
Selected Additional Data
(Unaudited)
Quarter Ended
(Dollars in thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
MORTGAGE SERVICING RIGHTS (“MSR”):
Fair value, beginning of period
$ 111,417
$ 106,942
$ 109,744
$ 112,767
$ 102,021
Originations of servicing assets
4,065
1,990
1,385
2,283
3,890
Changes in fair value:
Due to payoffs/paydowns
(2,104)
(2,621)
(1,078)
(2,308)
(3,085)
Due to update in valuation assumptions
2,888
5,106
(3,109)
(2,998)
9,941
Fair value, end of period
$ 116,266
$ 111,417
$ 106,942
$ 109,744
$ 112,767
MORTGAGE BANKING REVENUE:
Origination
$ 2,031
$ 3,495
$ 3,344
$ 1,793
$ 1,916
Servicing
5,915
5,900
6,113
5,923
5,915
Payoffs/Paydowns
(2,104)
(2,621)
(1,078)
(2,308)
(3,085)
Total mortgage banking revenue excluding MSR
5,842
6,774
8,379
5,408
4,746
Market value adjustment on MSR
2,888
5,106
(3,109)
(2,998)
9,941
Market value adjustment on MSR Hedge
(3,046)
(3,524)
806
161
(5,607)
Total mortgage banking revenue
$ 5,684
$ 8,356
$ 6,076
$ 2,571
$ 9,080
Mortgage loans serviced
$ 7,643,885
$ 7,550,676
$ 7,633,236
$ 7,692,744
$ 7,723,605
MSR/mortgage loans serviced
1.52 %
1.48 %
1.40 %
1.43 %
1.46 %
Quarter Ended
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Treasury securities
$ 1,996
$ 8,959
$ 15,849
$ 1,458,513
$ 1,451,461
Obligations of U.S. government agencies
1,004,374
1,112,326
1,358,350
1,477,127
1,820,913
Mortgage-backed securities issued or guaranteed by U.S. agencies (“MBS”):
Residential pass-through:
Guaranteed by GNMA
73,649
79,261
83,649
84,368
87,063
Issued by FNMA and FHLMC
5,541,895
5,895,704
6,164,294
6,274,970
6,427,152
Other residential mortgage-back securities
146,063
157,294
166,449
168,452
181,317
Commercial mortgage-backed securities
2,271,680
2,357,047
2,427,808
1,881,853
1,880,949
Total MBS
8,033,287
8,489,306
8,842,200
8,409,643
8,576,481
Obligations of states and political subdivisions
392,252
433,316
447,731
466,002
444,953
Other domestic debt securities
71,741
71,356
73,557
82,718
98,615
Foreign debt securities
139,581
139,317
140,192
50,093
49,471
Total available-for-sale securities
$ 9,643,231
$ 10,254,580
$ 10,877,879
$ 11,944,096
$ 12,441,894
Table 14
Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions
(Unaudited)
Management evaluates the Company’s capital position and adjusted performance by utilizing certain financial measures not calculated in accordance with GAAP, including adjusted net income, adjusted net income available to common shareholders, pre-tax pre-provision net revenue, adjusted pre-tax pre-provision net revenue, total adjusted noninterest expense, tangible common shareholders’ equity to tangible assets, total shareholders’ equity (excluding AOCI), common shareholders’ equity (excluding AOCI), tangible common shareholders’ equity to tangible assets (excluding AOCI), return on average tangible common equity, adjusted return on average tangible common equity, adjusted return on average assets, adjusted return on average common shareholders’ equity, pre-tax pre-provision net revenue to total average assets, adjusted pre-tax pre-provision net revenue to total average assets, adjusted earnings per common share, tangible book value per common share, tangible book value per common share, excluding AOCI, efficiency ratio (tax equivalent), adjusted efficiency ratio (tax equivalent), and adjusted dividend payout ratio. The Company has included these non-GAAP financial measures in this release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures: (i) provides important supplemental information that contributes to a proper understanding of the Company’s capital position and adjusted performance, (ii) enables a more complete understanding of factors and trends affecting the Company’s business and (iii) allows investors to evaluate the Company’s performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this news release with other companies’ non-GAAP financial measures having the same or similar names.
Quarter Ended
Year-to-date
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
Adjusted net income available to common shareholders
Net income
$ 92,583
$ 114,028
$ 76,629
$ 97,934
$ 123,398
$ 283,240
$ 365,303
Plus: Merger expense
—
137
5,075
20,276
19,690
5,212
30,938
Incremental merger related expense
—
1,671
8,960
32,704
6,912
10,631
19,543
Gain on extinguishment of debt
—
(1,140)
—
—
—
(1,140)
—
Restructuring and other nonroutine expenses
10,649
6,219
212
2,254
6
17,080
839
Pension settlement expense
600
—
—
6,127
2,896
600
2,896
Less: Security gains (losses), net
64
69
(51,261)
(595)
(139)
(51,127)
211
Nonroutine gains (losses), net
(6,653)
—
—
—
—
(6,653)
—
Tax adjustment
4,190
1,602
15,394
14,665
7,016
21,186
12,783
Adjusted net income
106,231
119,244
126,743
145,225
146,025
352,217
406,525
Less: Preferred dividends
2,372
2,372
2,372
2,372
2,372
7,116
7,116
Adjusted net income available to common shareholders
$ 103,859
$ 116,872
$ 124,371
$ 142,853
$ 143,653
$ 345,101
$ 399,409
Quarter Ended
Year-to-date
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
Pre-tax pre-provision net revenue
Net income
$ 92,583
$ 114,028
$ 76,629
$ 97,934
$ 123,398
$ 283,240
$ 365,303
Plus: Provision for credit losses
17,000
15,000
10,000
6,000
—
42,000
1,000
Income tax expense
26,166
32,935
22,433
29,628
36,713
81,534
106,510
Pre-tax pre-provision net revenue
$ 135,749
$ 161,963
$ 109,062
$ 133,562
$ 160,111
$ 406,774
$ 472,813
Quarter Ended
Year-to-date
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
Adjusted pre-tax pre-provision net revenue
Net income
$ 92,583
$ 114,028
$ 76,629
$ 97,934
$ 123,398
$ 283,240
$ 365,303
Plus: Provision for credit losses
17,000
15,000
10,000
6,000
—
42,000
1,000
Merger expense
—
137
5,075
20,276
19,690
5,212
30,938
Incremental merger related expense
—
1,671
8,960
32,704
6,912
10,631
19,543
Gain on extinguishment of debt
—
(1,140)
—
—
—
(1,140)
—
Restructuring and other nonroutine expenses
10,649
6,219
212
2,254
6
17,080
839
Pension settlement expense
600
—
—
6,127
2,896
600
2,896
Income tax expense
26,166
32,935
22,433
29,628
36,713
81,534
106,510
Less: Security gains (losses), net
64
69
(51,261)
(595)
(139)
(51,127)
211
Nonroutine gains (losses), net
$ (6,653)
$ —
$ —
$ —
$ —
(6,653)
—
Adjusted pre-tax pre-provision net revenue
$ 153,587
$ 168,781
$ 174,570
$ 195,518
$ 189,754
$ 496,937
$ 526,818
Quarter Ended
Year-to-date
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
Total adjusted noninterest revenue
Total noninterest revenue
$ 118,997
$ 132,290
$ 74,071
$ 114,873
$ 124,491
$ 325,358
$ 378,160
Less: Security gains (losses), net
64
69
(51,261)
(595)
(139)
(51,127)
211
Nonroutine gains (losses), net
(6,653)
—
—
—
—
(6,653)
—
Total adjusted noninterest revenue
$ 125,586
$ 132,221
$ 125,332
$ 115,468
$ 124,630
$ 383,138
$ 377,949
Quarter Ended
Year-to-date
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
Total adjusted noninterest expense
Total noninterest expense
$ 312,267
$ 303,878
$ 319,279
$ 340,671
$ 319,734
$ 935,424
$ 897,289
Less: Merger expense
—
137
5,075
20,276
19,690
5,212
30,938
Incremental merger related expense
—
1,671
8,960
32,704
6,912
10,631
19,543
Gain on extinguishment of debt
—
(1,140)
—
—
—
(1,140)
—
Restructuring and other nonroutine expenses
10,649
6,219
212
2,254
6
17,080
839
Pension settlement expense
600
—
—
6,127
2,896
600
2,896
Total adjusted noninterest expense
$ 301,018
$ 296,991
$ 305,032
$ 279,310
$ 290,230
$ 903,041
$ 843,073
Quarter Ended
Year-to-date
(In thousands)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
Total tangible assets, excluding AOCI
Total assets
$ 48,523,010
$ 48,838,660
$ 51,693,096
$ 48,653,414
$ 47,699,660
$ 48,523,010
$ 47,699,660
Less: Goodwill
1,459,302
1,459,302
1,459,302
1,458,795
1,449,511
1,459,302
1,449,511
Other identifiable intangible assets
114,127
119,098
125,724
132,764
132,953
114,127
132,953
Total tangible assets
46,949,581
47,260,260
50,108,070
47,061,855
46,117,196
46,949,581
46,117,196
Less: AOCI
(1,309,921)
(1,163,075)
(1,081,886)
(1,222,538)
(1,297,812)
(1,309,921)
(1,297,812)
Total tangible assets, excluding AOCI
$ 48,259,502
$ 48,423,335
$ 51,189,956
$ 48,284,393
$ 47,415,008
$ 48,259,502
$ 47,415,008
Quarter Ended
Year-to-date
(Dollars in thousands, except per share data)
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Sep 2022
Sep 2023
Sep 2022
PERIOD END BALANCES:
Total shareholders’ equity, excluding AOCI
Total shareholders’ equity
$ 4,395,257
$ 4,485,850
$ 4,490,417
$ 4,311,374
$ 4,166,925
$ 4,395,257
$ 4,166,925
Less: AOCI
(1,309,921)
(1,163,075)
(1,081,886)
(1,222,538)
(1,297,812)
(1,309,921)
(1,297,812)
Total shareholders’ equity, excluding AOCI
$5,705,178
$ 5,648,925
$ 5,572,303
$ 5,533,912
$ 5,464,737
$ 5,705,178
$ 5,464,737
Common shareholders’ equity, excluding AOCI
Total shareholders’ equity
$ 4,395,257
$ 4,485,850
$ 4,490,417
$ 4,311,374
$ 4,166,925
$ 4,395,257
$ 4,166,925
Less: preferred stock
166,993
166,993
166,993
166,993
166,993
166,993
166,993
Common shareholders’ equity
4,228,264
4,318,857
4,323,424
4,144,381
3,999,932
4,228,264
3,999,932
Less: AOCI
(1,309,921)
(1,163,075)
(1,081,886)
(1,222,538)
(1,297,812)
(1,309,921)
(1,297,812)
Common shareholders’ equity, excluding AOCI
$ 5,538,185
$ 5,481,932
$ 5,405,310
$ 5,366,919
$ 5,297,744
$ 5,538,185
$ 5,297,744
Total tangible common shareholders’ equity, excluding AOCI
Total shareholders’ equity
$ 4,395,257
$ 4,485,850
$ 4,490,417
$ 4,311,374
$ 4,166,925
$ 4,395,257
$ 4,166,925
Less: Goodwill
1,459,302
1,459,302
1,459,302
1,458,795
1,449,511
1,459,302
1,449,511
Other identifiable intangible assets
114,127
119,098
125,724
132,764
132,953
114,127
132,953
Preferred stock
166,993
166,993
166,993
166,993
166,993
166,993
166,993
Total tangible common shareholders’ equity
2,654,835
2,740,457
2,738,398
2,552,822
2,417,468
2,654,835
2,417,468
Less: AOCI
(1,309,921)
(1,163,075)
(1,081,886)
(1,222,538)
(1,297,812)
(1,309,921)
(1,297,812)
Total tangible common shareholders’ equity, excluding AOCI
$ 3,964,756
$ 3,903,532
$ 3,820,284
$ 3,775,360
$ 3,715,280
$ 3,964,756
$ 3,715,280
AVERAGE BALANCES:
Total tangible common shareholders’ equity
Total shareholders’ equity
$4,505,162
$4,539,353
$4,396,461
$4,215,585
$4,506,655
$4,480,723
$4,695,324
Less: Goodwill
1,459,302
1,459,302
1,459,127
1,457,120
1,444,331
1,459,244
1,420,052
Other identifiable intangible assets
116,715
123,313
128,957
132,091
136,149
122,950
173,333
Preferred stock
166,993
166,993
166,993
166,993
166,993
166,993
166,993
Total tangible common shareholders’ equity
$2,762,152
$2,789,745
$2,641,384
$2,459,381
$2,759,182
$2,731,536
$2,934,946
Total average assets
$48,655,138
$49,067,121
$48,652,201
$47,790,494
$47,595,557
$48,791,497
$47,446,436
Total shares of common stock outstanding
182,611,075
182,626,229
182,684,578
182,437,265
182,438,780
182,611,075
182,438,780
Average shares outstanding-diluted
184,645,004
183,631,570
183,908,798
183,762,008
183,313,831
184,062,368
184,747,880
Tangible common shareholders’ equity to tangible assets (1)
5.65 %
5.80 %
5.46 %
5.42 %
5.24 %
5.65 %
5.24 %
Tangible common shareholders’ equity to tangible assets,
excluding AOCI (2)
8.22
8.06
7.46
7.82
7.84
8.22
7.84
Return on average tangible common equity (3)
12.96
16.05
11.40
15.42
17.40
13.52
16.32
Adjusted return on average tangible common equity (4)
14.92
16.80
19.10
23.04
20.66
16.89
18.19
Adjusted return on average assets (5)
0.87
0.97
1.06
1.21
1.22
0.97
1.15
Adjusted return on average common shareholders’ equity (6)
9.50
10.72
11.93
14.00
13.13
10.70
11.79
Pre-tax pre-provision net revenue to total average assets (7)
1.11
1.32
0.91
1.11
1.33
1.11
1.33
Adjusted pre-tax pre-provision net revenue to total average assets (8)
1.25
1.38
1.46
1.62
1.58
1.36
1.48
Tangible book value per common share (9)
$ 14.54
$ 15.01
$ 14.99
$ 13.99
$ 13.25
$ 14.54
$ 13.25
Tangible book value per common share, excluding AOCI (10)
21.71
21.37
20.91
20.69
20.36
21.71
20.36
Adjusted earnings per common share (11)
$ 0.56
$ 0.64
$ 0.68
$ 0.78
$ 0.78
$ 1.87
$ 2.16
Adjusted dividend payout ratio (12)
41.96 %
36.72 %
34.56 %
28.21 %
28.21 %
37.70 %
30.56 %
Definitions of Non-GAAP Measures:
(1)
Tangible common shareholders’ equity to tangible assets is defined by the Company as total shareholders’ equity less preferred stock, goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets.
(2)
Tangible common shareholders’ equity to tangible assets, excluding AOCI, is defined by the Company as total shareholders’ equity less preferred stock, goodwill, other identifiable intangible assets and accumulated other comprehensive loss, divided by the difference of total assets less goodwill, accumulated other comprehensive loss, and other identifiable intangible assets.
(3)
Return on average tangible common equity is defined by the Company as annualized net income available to common shareholders divided by average tangible common shareholders equity.
(4)
Adjusted return on average tangible common equity is defined by the Company as annualized net adjusted income available to common shareholders divided by average tangible common shareholders’ equity.
(5)
Adjusted return on average assets is defined by the Company as annualized net adjusted income divided by total average assets.
(6)
Adjusted return on average common shareholders’ equity is defined by the Company as annualized net adjusted income available to common shareholders divided by average common shareholders’ equity.
(7)
Pre-tax pre-provision net revenue to total average assets is defined by the Company as annualized pre-tax pre-provision net revenue divided by total average assets.
(8)
Adjusted pre-tax pre-provision net revenue to total average assets is defined by the Company as annualized adjusted pre-tax pre-provision net revenue divided by total average assets adjusted for items included in the definition and calculation of net adjusted income.
(9)
Tangible book value per common share is defined by the Company as tangible common shareholders’ equity divided by total shares of common stock outstanding.
(10)
Tangible book value per common share, excluding AOCI is defined by the Company as tangible common shareholders’ equity less accumulated other comprehensive loss divided by total shares of common stock outstanding.
(11)
Adjusted earnings per common share is defined by the Company as net adjusted income available to common shareholders divided by average common shares outstanding-diluted.
(12)
Adjusted dividend payout ratio is defined by the Company as common share dividends divided by net adjusted income available to common shareholders.
Efficiency Ratio-Fully Taxable Equivalent and Adjusted Efficiency Ratio-Fully Taxable Equivalent Definitions
The efficiency ratio and the adjusted efficiency ratio are supplemental financial measures utilized in management’s internal evaluation of the Company’s use of resources and are not defined under GAAP. The efficiency ratio is calculated by dividing total noninterest expense by total revenue, which includes net interest income plus noninterest income plus the tax equivalent adjustment. The adjusted efficiency ratio excludes income and expense items otherwise disclosed as non-routine from total noninterest expense.
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SOURCE Cadence Bank
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