Cadence Bank Announces First Quarter 2023 Financial Results
Cadence Bank (NYSE: CADE) reported its financial performance for the first quarter of 2023, achieving a net income of $74.3 million ($0.40 per diluted share) compared to $112.6 million ($0.60) in Q1 2022. Adjusted net income increased slightly to $124.4 million ($0.68 per diluted share). The bank witnessed deposit growth of $449.8 million (4.7% annualized) and organic loan growth of $933.3 million (12.5% annualized). However, net interest revenue declined to $354.3 million, down 1.42% from the last quarter. Noninterest revenue dropped to $74.1 million, primarily due to a $51.3 million loss on securities sales. The bank announced plans to consolidate 35 branches, projecting annual cost savings of $15-20 million.
- Quarterly net income of $74.3 million, or $0.40 per diluted share.
- Adjusted net income of $124.4 million, or $0.68 per diluted share, up from $121.6 million in Q1 2022.
- Deposits increased by $449.8 million, or 4.7% annualized.
- Generated net organic loan growth of $933.3 million, or 12.5% annualized.
- Total shareholder equity rose to $4.5 billion from $4.3 billion in Q4 2022.
- Projected annual cost savings of $15-$20 million from branch consolidations.
- Net interest revenue declined to $354.3 million, down 1.42% from last quarter.
- Noninterest revenue dropped significantly by $51.3 million due to securities sales loss.
- Net charge-offs increased to $1.9 million, compared to net recoveries in previous quarters.
Highlights for the first quarter of 2023 included:
- Achieved quarterly net income available to common shareholders of
, or$74.3 million per diluted common share, and adjusted net income available to common shareholders of$0.40 , or$124.4 million per diluted common share.$0.68 - Continued to maintain strong balance sheet liquidity, with total deposit growth of
, or$449.8 million 4.7% on an annualized basis, and a loan-to-deposit ratio of79.4% . - Generated net organic loan growth of
for the first quarter of 2023, or$933.3 million 12.5% on an annualized basis. - Maintained stability in the net interest margin at
3.29% , down 4 basis points from the prior quarter. - Experienced low levels of net charge-offs, which totaled
0.02% of average loans and leases on an annualized basis for the quarter; results for the quarter included a provision for credit losses of and an ending allowance for credit losses to total loans of$10.0 million 1.45% , which was stable compared toDecember 31, 2022 . - The Company executed or announced the following as part of an ongoing effort to enhance its operating efficiency and profitability:
- Executed a balance sheet optimization transaction whereby the Company sold
in low-yielding available-for-sale securities during February, with financial earn-back expected by early in the fourth quarter of 2023. The first quarter results include an after-tax realized loss of approximately$1.5 billion related to this transaction and it is estimated to add an incremental$39.5 million to pre-tax earnings in 2023.$10.5 million - In
April 2023 , announced the closure or consolidation of 35 branches to occur in mid-2023 as part of in-process initiatives projected to reduce noninterest expense by approximately -$15 annually.$20 million
"Our first quarter results reflect continued strength in our balance sheet, as we continued to add quality loan growth while maintaining strong liquidity and capital, even in the midst of a unique quarter for the banking industry," remarked
Earnings Summary
For the first quarter of 2023, the Company reported net income available to common shareholders of
The decline in adjusted earnings and PPNR metrics for the first quarter was driven by a decline in net interest revenue, an increase in the provision for credit losses, and an increase in core operating expenses related to several factors including seasonality in compensation expense as well as increasing deposit insurance assessment expense and pension expense. The decline in net interest revenue is a result of day count for the quarter as well as the addition of on-balance sheet liquidity in response to recent volatility in the banking industry.
Net Interest Revenue
Net interest revenue was
Net interest revenue included accretion revenue related to acquired loans and leases of
The decline in net interest revenue in the first quarter of 2023 of
Yields on net loans, loans held for sale, and leases excluding accretion, were
The average cost of total deposits increased to
Total interest-bearing liabilities costs increased to
Balance Sheet Activity
Loans and leases, net of unearned income, increased
During the quarter, the Company initiated a balance sheet optimization transaction related to a portion of its investment securities portfolio. The Company sold
Total deposits increased
The
Short-term borrowings increased
Credit Results, Provision for Credit Losses and Allowance for Credit Losses
Credit quality metrics for the first quarter of 2023 reflect continued low levels of net charge-offs, an increase in the provision for credit losses, and an increase in non-performing and classified assets. While non-performing and classified asset levels did increase during the quarter, these metrics have been at historically low levels and continue to compare favorably to longer term normalized levels.
Total non-performing assets as a percent of total assets were
Net charge-offs for the first quarter of 2023 were
Noninterest Revenue
Noninterest revenue was
Insurance commission revenue was strong at
Credit card, debit card and merchant fee revenue was
Mortgage production and servicing revenue totaled
Noninterest Expense
Noninterest expense for the first quarter of 2023 was
Adjusted noninterest expense for the first quarter of 2023 excludes
The Company continues to identify strategic opportunities to improve operating efficiency, including branch optimization. In
Capital Management
Total shareholders' equity was
Estimated regulatory capital ratios at
Summary
Rollins concluded, "We are pleased with how we are beginning the 2023 year. Despite the recent industry liquidity concerns, an uncertain rate environment, and questions around the broader economy and credit impact, I continue to be optimistic given the strength in our earnings, our balance sheet and our capital, as well as the differentiating stability resulting from our business, customer and geographical diversification. This diversification, combined with our great team of bankers, provides the resilient foundation we are proud of at
Non-GAAP Measures and Ratios
This news release presents certain financial measures and ratios that are not calculated in accordance with
Conference Call and Webcast
The Company will conduct a conference call to discuss its first quarter 2023 financial results on
About
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
The Company also faces risks from: possible adverse rulings, judgments, settlements or other outcomes of pending, ongoing and future litigation, as well as governmental, administrative and investigatory matters; the impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; the diversion of management's attention from ongoing business operations and opportunities; and the combined company's success in executing its business plans and strategies, and managing the risks involved in all of the foregoing.
The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company's periodic and current reports filed with the
Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, except as required by applicable law. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.
Table 1 Selected Financial Data (Unaudited) | |||||
Quarter Ended | |||||
(In thousands) | |||||
Earnings Summary: | |||||
Interest revenue | $ 526,132 | $ 473,548 | $ 405,559 | $ 349,555 | $ 331,930 |
Interest expense | 171,862 | 114,188 | 50,205 | 24,789 | 20,108 |
Net interest revenue | 354,270 | 359,360 | 355,354 | 324,766 | 311,822 |
Provision for credit losses | 10,000 | 6,000 | — | 1,000 | — |
Net interest revenue, after provision for credit losses | 344,270 | 353,360 | 355,354 | 323,766 | 311,822 |
Noninterest revenue | 74,071 | 114,873 | 124,491 | 125,234 | 128,435 |
Noninterest expense | 319,279 | 340,671 | 319,734 | 285,888 | 291,667 |
Income before income taxes | 99,062 | 127,562 | 160,111 | 163,112 | 148,590 |
Income tax expense | 22,433 | 29,628 | 36,713 | 36,154 | 33,643 |
Net income | 76,629 | 97,934 | 123,398 | 126,958 | 114,947 |
Less: Preferred dividends | 2,372 | 2,372 | 2,372 | 2,372 | 2,372 |
Net income available to common shareholders | $ 74,257 | $ 95,562 | $ 121,026 | $ 124,586 | $ 112,575 |
Balance Sheet - Period End Balances | |||||
Total assets | $ 51,693,096 | $ 48,653,414 | $ 47,699,660 | $ 47,747,708 | $ 47,204,061 |
Total earning assets | 46,808,611 | 43,722,544 | 42,832,355 | 43,093,974 | 42,744,225 |
Available-for-sale securities | 10,877,879 | 11,944,096 | 12,441,894 | 13,450,621 | 14,371,606 |
Loans and leases, net of unearned income | 31,282,594 | 30,349,277 | 29,296,450 | 28,360,485 | 27,189,666 |
Allowance for credit losses (ACL) | 453,727 | 440,347 | 433,363 | 440,112 | 438,738 |
Net book value of acquired loans | 7,942,980 | 8,754,526 | 8,841,588 | 9,721,672 | 11,020,251 |
Unamortized net discount on acquired loans | 41,748 | 58,162 | 58,887 | 65,350 | 72,620 |
Total deposits | 39,406,454 | 38,956,614 | 39,003,946 | 40,189,083 | 40,568,055 |
Total deposits and repurchase agreements | 40,177,789 | 39,665,350 | 39,682,280 | 40,838,260 | 41,271,615 |
Federal funds purchased and short-term FHLB advances | 5,700,228 | 3,300,231 | 2,495,000 | 1,200,000 | — |
Subordinated and long-term debt | 462,144 | 462,554 | 463,291 | 465,073 | 465,695 |
Total shareholders' equity | 4,490,417 | 4,311,374 | 4,166,925 | 4,437,925 | 4,643,757 |
Total shareholders' equity, excluding AOCI (1) | 5,572,303 | 5,533,912 | 5,464,737 | 5,374,270 | 5,307,757 |
Common shareholders' equity | 4,323,424 | 4,144,381 | 3,999,932 | 4,270,932 | 4,476,764 |
Common shareholders' equity, excluding AOCI (1) | $ 5,405,310 | $ 5,366,919 | $ 5,297,744 | $ 5,207,277 | $ 5,140,764 |
Balance Sheet - Average Balances | |||||
Total assets | $ 48,652,201 | $ 47,790,494 | $ 47,595,557 | $ 47,064,829 | $ 47,679,850 |
Total earning assets | 43,819,715 | 42,976,050 | 43,079,481 | 42,688,497 | 43,515,166 |
Available-for-sale securities | 11,354,457 | 12,156,803 | 13,252,828 | 13,941,127 | 15,070,524 |
Loans and leases, net of unearned income | 30,891,640 | 29,812,924 | 28,872,156 | 27,848,097 | 27,106,733 |
Total deposits | 38,904,048 | 38,372,354 | 39,600,886 | 39,396,028 | 40,565,103 |
Total deposits and repurchase agreements | 39,632,023 | 39,033,328 | 40,256,109 | 40,062,095 | 41,259,136 |
Subordinated and long-term debt | 462,385 | 462,927 | 464,843 | 465,447 | 466,842 |
Total shareholders' equity | 4,396,461 | 4,215,585 | 4,506,655 | 4,523,189 | 5,062,231 |
Common shareholders' equity | $ 4,229,468 | $ 4,048,592 | $ 4,339,662 | $ 4,356,196 | $ 4,895,238 |
Nonperforming Assets: | |||||
Nonaccrual loans and leases | $ 160,615 | $ 98,745 | $ 89,931 | $ 89,368 | $ 91,031 |
Loans and leases 90+ days past due, still accruing | 5,164 | 2,068 | 11,984 | 19,682 | 20,957 |
Accruing TDR (2) | — | 8,598 | 16,200 | 7,385 | 7,292 |
Non-performing loans and leases (NPL) | 165,779 | 109,411 | 118,115 | 116,435 | 119,280 |
Other real estate owned and other assets | 5,327 | 6,725 | 8,376 | 14,399 | 28,401 |
Non-performing assets (NPA) | $ 171,106 | $ 116,136 | $ 126,491 | $ 130,834 | $ 147,681 |
(1) | Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 21 - 24. |
(2) | Cadence elected to adopt the new accounting guidance effective |
Table 2 Selected Financial Ratios
| |||||
Quarter Ended | |||||
Financial Ratios and Other Data: | |||||
Return on average assets (2) | 0.64 % | 0.81 % | 1.03 % | 1.08 % | 0.98 % |
Adjusted return on average assets (1)(2)) | 1.06 | 1.21 | 1.22 | 1.16 | 1.05 |
Return on average common shareholders' equity (2) | 7.12 | 9.36 | 11.06 | 11.47 | 9.33 |
Adjusted return on average common shareholders' equity (1)(2) | 11.93 | 14.00 | 13.13 | 12.36 | 10.07 |
Return on average tangible common equity (1)(2) | 11.40 | 15.42 | 17.40 | 18.11 | 13.87 |
Adjusted return on average tangible common equity (1)(2) | 19.10 | 23.04 | 20.66 | 19.50 | 14.98 |
Pre-tax pre-provision net revenue to total average assets (1)(2) | 0.91 | 1.11 | 1.33 | 1.40 | 1.26 |
Adjusted pre-tax pre-provision net revenue to total average assets (1)(2) | 1.46 | 1.62 | 1.58 | 1.51 | 1.36 |
Net interest margin-fully taxable equivalent | 3.29 | 3.33 | 3.28 | 3.06 | 2.92 |
Net interest rate spread-fully taxable equivalent | 2.65 | 2.84 | 3.05 | 2.94 | 2.81 |
Efficiency ratio fully tax equivalent (1) | 74.36 | 71.67 | 66.49 | 63.38 | 66.10 |
Adjusted efficiency ratio fully tax equivalent (1) | 63.46 | 58.69 | 60.33 | 60.46 | 63.52 |
Loan/deposit ratio | 79.38 % | 77.91 % | 75.11 % | 70.57 % | 67.02 % |
Full time equivalent employees | 6,567 | 6,572 | 6,629 | 6,659 | 6,568 |
Credit Quality Ratios: | |||||
Net charge-offs (recoveries) to average loans and leases (2) | 0.02 % | (0.07) % | 0.09 % | (0.02) % | (0.01) % |
Provision for credit losses to average loans and leases (2) | 0.13 | 0.08 | — | 0.01 | — |
ACL to loans and leases, net | 1.45 | 1.45 | 1.48 | 1.55 | 1.61 |
ACL to NPL | 273.69 | 402.47 | 366.90 | 377.99 | 367.82 |
NPL to loans and leases, net | 0.53 | 0.36 | 0.40 | 0.41 | 0.44 |
NPA to total assets | 0.33 | 0.24 | 0.27 | 0.27 | 0.31 |
Equity Ratios: | |||||
Total shareholders' equity to total assets | 8.69 % | 8.86 % | 8.74 % | 9.29 % | 9.84 % |
Total common shareholders' equity to total assets | 8.36 | 8.52 | 8.39 | 8.94 | 9.48 |
Tangible common shareholders' equity to tangible assets (1) | 5.46 | 5.42 | 5.24 | 5.82 | 6.31 |
Tangible common shareholders' equity to tangible assets, excluding AOCI (1) | 7.46 | 7.82 | 7.84 | 7.70 | 7.65 |
Capital Adequacy (3): | |||||
Common Equity Tier 1 capital | 10.1 % | 10.2 % | 10.3 % | 10.3 % | 10.6 % |
Tier 1 capital | 10.6 | 10.7 | 10.7 | 10.8 | 11.1 |
Total capital | 12.8 | 12.8 | 12.8 | 13.0 | 13.3 |
Tier 1 leverage capital | 8.4 | 8.4 | 8.4 | 8.4 | 8.2 |
(1) | Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 21 - 24. |
(2) | Quarterly ratios are annualized. |
(3) | Current quarter regulatory capital ratios are estimated. |
Table 3 Selected Financial Information
| |||||
Quarter Ended | |||||
Common Share Data: | |||||
Diluted earnings per share | $ 0.40 | $ 0.52 | $ 0.66 | $ 0.68 | $ 0.60 |
Adjusted earnings per share (1) | 0.68 | 0.78 | 0.78 | 0.73 | 0.65 |
Cash dividends per share | 0.235 | 0.22 | 0.22 | 0.22 | 0.22 |
Book value per share | 23.67 | 22.72 | 21.92 | 23.41 | 24.40 |
Tangible book value per share (1) | 14.99 | 13.99 | 13.25 | 14.73 | 15.67 |
Market value per share (last) | 20.76 | 24.66 | 25.41 | 23.48 | 29.26 |
Market value per share (high) | 28.18 | 29.41 | 28.54 | 29.75 | 34.24 |
Market value per share (low) | 19.24 | 22.43 | 22.04 | 22.82 | 27.95 |
Market value per share (avg) | 24.88 | 26.84 | 25.68 | 25.74 | 31.20 |
Dividend payout ratio | 58.75 % | 42.31 % | 33.33 % | 32.44 % | 36.60 % |
Adjusted dividend payout ratio (1) | 34.56 % | 28.21 % | 28.21 % | 30.14 % | 33.85 % |
Total shares outstanding | 182,684,578 | 182,437,265 | 182,438,780 | 182,461,786 | 183,488,844 |
Average shares outstanding - diluted | 183,908,798 | 183,762,008 | 183,313,831 | 183,711,402 | 187,264,335 |
Yield/Rate: | |||||
(Taxable equivalent basis) | |||||
Loans, loans held for sale, and leases | 6.00 % | 5.54 % | 4.82 % | 4.29 % | 4.23 % |
Loans, loans held for sale, and leases excluding net accretion on acquired loans and leases | 5.87 | 5.41 | 4.70 | 4.12 | 3.96 |
Available-for-sale securities: | |||||
Taxable | 1.80 | 1.54 | 1.44 | 1.37 | 1.26 |
Tax-exempt | 3.21 | 3.28 | 3.05 | 2.95 | 2.57 |
Other investments | 4.64 | 3.69 | 2.32 | 1.03 | 0.24 |
Total interest earning assets and revenue | 4.88 | 4.38 | 3.74 | 3.29 | 3.10 |
Deposits | 1.28 | 0.76 | 0.35 | 0.17 | 0.15 |
Interest bearing demand and money market | 2.03 | 1.34 | 0.60 | 0.26 | 0.20 |
Savings | 0.36 | 0.31 | 0.17 | 0.06 | 0.06 |
Time | 2.24 | 1.17 | 0.56 | 0.47 | 0.52 |
Total interest bearing deposits | 1.86 | 1.17 | 0.53 | 0.26 | 0.23 |
Fed funds purchased, securities sold under agreement to repurchase and other | 3.73 | 3.04 | 1.65 | 0.43 | 0.11 |
Short-term FHLB borrowings | 4.66 | 3.84 | 2.05 | 0.98 | 0.14 |
Total interest bearing deposits and short-term borrowings | 2.20 | 1.50 | 0.64 | 0.29 | 0.22 |
Long-term debt | 4.27 | 4.15 | 4.16 | 4.14 | 4.18 |
Total interest bearing liabilities | 2.23 | 1.54 | 0.70 | 0.36 | 0.29 |
Interest bearing liabilities to interest earning assets | 71.24 % | 68.42 % | 66.19 % | 65.25 % | 64.46 % |
Net interest income tax equivalent adjustment | $ 1,051 | $ 1,071 | $ 1,052 | $ 1,063 | $ 1,027 |
(1) | Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 21 - 24. |
Table 4 Consolidated Balance Sheets (Unaudited)
| |||||
As of | |||||
(In thousands) | |||||
ASSETS | |||||
Cash and due from banks | $ 660,431 | $ 756,906 | $ 693,999 | $ 770,293 | $ 781,310 |
Interest bearing deposits with other banks and Federal funds sold | 4,452,029 | 1,241,246 | 895,630 | 1,069,410 | 880,742 |
Available-for-sale securities, at fair value | 10,877,879 | 11,944,096 | 12,441,894 | 13,450,621 | 14,371,606 |
Loans and leases, net of unearned income | 31,282,594 | 30,349,277 | 29,296,450 | 28,360,485 | 27,189,666 |
Allowance for credit losses | 453,727 | 440,347 | 433,363 | 440,112 | 438,738 |
Net loans and leases | 30,828,867 | 29,908,930 | 28,863,087 | 27,920,373 | 26,750,928 |
Loans held for sale, at fair value | 196,110 | 187,925 | 198,381 | 213,458 | 302,211 |
Premises and equipment, net | 826,439 | 817,430 | 802,382 | 782,728 | 781,209 |
1,459,302 | 1,458,795 | 1,449,511 | 1,444,209 | 1,409,038 | |
Other intangible assets, net | 125,724 | 132,764 | 132,953 | 138,370 | 191,642 |
Bank-owned life insurance | 631,174 | 630,046 | 624,696 | 601,601 | 599,346 |
Other assets | 1,635,141 | 1,575,276 | 1,597,127 | 1,356,645 | 1,136,029 |
Total Assets | $ 51,693,096 | $ 48,653,414 | $ 47,699,660 | $ 47,747,708 | $ 47,204,061 |
LIABILITIES | |||||
Deposits: | |||||
Demand: Noninterest bearing | $ 11,517,037 | $ 12,731,065 | $ 13,839,649 | $ 14,012,529 | $ 14,458,563 |
Interest bearing | 18,146,678 | 19,040,131 | 18,033,648 | 19,032,983 | 18,854,543 |
Savings | 3,226,685 | 3,473,746 | 3,676,340 | 3,735,925 | 3,713,629 |
Time deposits | 6,516,054 | 3,711,672 | 3,454,309 | 3,407,646 | 3,541,320 |
Total deposits | 39,406,454 | 38,956,614 | 39,003,946 | 40,189,083 | 40,568,055 |
Securities sold under agreement to repurchase | 771,335 | 708,736 | 678,334 | 649,177 | 703,560 |
Federal funds purchased and short-term FHLB borrowings | 5,700,228 | 3,300,231 | 2,495,000 | 1,200,000 | — |
Subordinated and long-term debt | 462,144 | 462,554 | 463,291 | 465,073 | 465,695 |
Other liabilities | 862,518 | 913,905 | 892,164 | 806,450 | 822,994 |
Total Liabilities | 47,202,679 | 44,342,040 | 43,532,735 | 43,309,783 | 42,560,304 |
SHAREHOLDERS' EQUITY | |||||
Preferred stock | 166,993 | 166,993 | 166,993 | 166,993 | 166,993 |
Common stock | 456,711 | 456,093 | 456,097 | 456,154 | 458,722 |
Capital surplus | 2,715,981 | 2,709,391 | 2,695,646 | 2,686,031 | 2,701,371 |
Accumulated other comprehensive loss | (1,081,886) | (1,222,538) | (1,297,812) | (936,345) | (664,000) |
Retained earnings | 2,232,618 | 2,201,435 | 2,146,001 | 2,065,092 | 1,980,671 |
Total Shareholders' Equity | 4,490,417 | 4,311,374 | 4,166,925 | 4,437,925 | 4,643,757 |
Total Liabilities & Shareholders' Equity | $ 51,693,096 | $ 48,653,414 | $ 47,699,660 | $ 47,747,708 | $ 47,204,061 |
Table 5 Consolidated Quarterly Average Balance Sheets (Unaudited)
| |||||
(In thousands) | |||||
ASSETS | |||||
Cash and due from banks | $ 695,263 | $ 617,634 | $ 654,589 | $ 640,672 | $ 656,630 |
Interest bearing deposits with other banks and Federal funds sold | 1,526,755 | 943,806 | 851,185 | 751,972 | 1,161,262 |
Available-for-sale securities, at fair value | 11,354,457 | 12,156,803 | 13,252,828 | 13,941,127 | 15,070,524 |
Loans and leases, net of unearned income | 30,891,640 | 29,812,924 | 28,872,156 | 27,848,097 | 27,106,733 |
Allowance for credit losses | 442,486 | 434,785 | 441,042 | 438,752 | 444,294 |
Net loans and leases | 30,449,154 | 29,378,139 | 28,431,114 | 27,409,345 | 26,662,439 |
Loans held for sale, at fair value | 46,863 | 62,517 | 103,312 | 147,301 | 176,647 |
Premises and equipment, net | 824,190 | 802,771 | 809,799 | 784,247 | 785,005 |
1,459,127 | 1,457,120 | 1,444,331 | 1,407,452 | 1,407,973 | |
Other intangible assets, net | 128,957 | 132,091 | 136,149 | 188,897 | 195,606 |
Bank-owned life insurance | 630,601 | 625,938 | 613,973 | 599,912 | 598,822 |
Other assets | 1,536,834 | 1,613,675 | 1,298,277 | 1,193,904 | 964,942 |
Total Assets | $ 48,652,201 | $ 47,790,494 | $ 47,595,557 | $ 47,064,829 | $ 47,679,850 |
LIABILITIES | |||||
Deposits: | |||||
Demand: Noninterest bearing | $ 12,203,079 | $ 13,344,152 | $ 13,816,796 | $ 13,970,163 | $ 13,806,591 |
Interest bearing | 19,009,345 | 17,866,198 | 18,675,214 | 18,238,571 | 19,401,019 |
Savings | 3,363,236 | 3,555,911 | 3,720,218 | 3,723,193 | 3,631,699 |
Time deposits | 4,328,388 | 3,606,093 | 3,388,658 | 3,464,101 | 3,725,794 |
Total deposits | 38,904,048 | 38,372,354 | 39,600,886 | 39,396,028 | 40,565,103 |
Securities sold under agreement to repurchase | 727,975 | 660,974 | 655,223 | 666,067 | 694,033 |
Federal funds purchased, short-term FHLB borrowings and other | 3,326,196 | 3,251,947 | 1,608,587 | 1,294,946 | 131,556 |
Subordinated and long-term debt | 462,385 | 462,927 | 464,843 | 465,447 | 466,842 |
Other liabilities | 835,136 | 826,707 | 759,363 | 719,152 | 760,085 |
Total Liabilities | 44,255,740 | 43,574,909 | 43,088,902 | 42,541,640 | 42,617,619 |
SHAREHOLDERS' EQUITY | |||||
Preferred stock | 166,993 | 166,993 | 166,993 | 166,993 | 166,993 |
Common stock | 456,354 | 456,095 | 456,130 | 457,713 | 465,458 |
Capital surplus | 2,710,501 | 2,701,121 | 2,689,340 | 2,694,546 | 2,779,746 |
Accumulated other comprehensive loss | (1,174,723) | (1,302,388) | (922,673) | (821,034) | (283,417) |
Retained earnings | 2,237,336 | 2,193,764 | 2,116,865 | 2,024,971 | 1,933,451 |
Total Shareholders' Equity | 4,396,461 | 4,215,585 | 4,506,655 | 4,523,189 | 5,062,231 |
Total Liabilities & Shareholders' Equity | $ 48,652,201 | $ 47,790,494 | $ 47,595,557 | $ 47,064,829 | $ 47,679,850 |
Table 6 Consolidated Statements of Income (Unaudited)
| |||||
Quarter Ended | |||||
(Dollars in thousands, except per share data) | |||||
INTEREST REVENUE: | |||||
Loans and leases | $ 457,084 | $ 414,623 | $ 349,093 | $ 296,680 | $ 282,266 |
Available-for-sale securities: | |||||
Taxable | 48,515 | 45,807 | 46,701 | 46,254 | 45,155 |
Tax-exempt | 2,477 | 2,547 | 2,548 | 2,571 | 2,414 |
Loans held for sale | 603 | 1,788 | 2,241 | 2,118 | 1,407 |
Other interest revenue | 17,453 | 8,783 | 4,976 | 1,932 | 688 |
Total interest revenue | 526,132 | 473,548 | 405,559 | 349,555 | 331,930 |
INTEREST EXPENSE: | |||||
Interest bearing demand deposits and money market accounts | 95,344 | 60,253 | 28,175 | 11,717 | 9,742 |
Savings | 3,014 | 2,769 | 1,597 | 590 | 568 |
Time deposits | 23,950 | 10,651 | 4,797 | 4,041 | 4,764 |
Federal funds purchased and securities sold under agreement to repurchase | 7,667 | 8,365 | 3,944 | 906 | 216 |
Short-term debt | 37,015 | 27,302 | 6,821 | 2,734 | 5 |
Subordinated and long-term debt | 4,872 | 4,848 | 4,871 | 4,801 | 4,813 |
Total interest expense | 171,862 | 114,188 | 50,205 | 24,789 | 20,108 |
Net interest revenue | 354,270 | 359,360 | 355,354 | 324,766 | 311,822 |
Provision for credit losses | 10,000 | 6,000 | — | 1,000 | — |
Net interest revenue, after provision for credit losses | 344,270 | 353,360 | 355,354 | 323,766 | 311,822 |
NONINTEREST REVENUE: | |||||
Mortgage banking | 6,076 | 2,571 | 9,080 | 11,446 | 21,763 |
Credit card, debit card and merchant fees | 11,851 | 15,750 | 14,497 | 16,593 | 11,321 |
Deposit service charges | 16,482 | 16,863 | 19,134 | 18,291 | 19,189 |
Security (losses) gains, net | (51,261) | (595) | (139) | 1,446 | (1,097) |
Insurance commissions | 39,606 | 34,679 | 39,876 | 39,994 | 35,727 |
Wealth management | 21,532 | 19,199 | 19,335 | 20,213 | 21,737 |
Other noninterest income | 29,785 | 26,406 | 22,708 | 17,251 | 19,795 |
Total noninterest revenue | 74,071 | 114,873 | 124,491 | 125,234 | 128,435 |
NONINTEREST EXPENSE: | |||||
Salaries and employee benefits | 195,702 | 183,918 | 191,193 | 182,094 | 187,819 |
Occupancy and equipment | 29,113 | 30,539 | 30,610 | 30,129 | 28,270 |
Data processing and software | 31,869 | 29,289 | 28,079 | 29,081 | 27,483 |
Merger expense | 5,075 | 20,276 | 19,690 | 7,274 | 3,974 |
Amortization of intangibles | 5,005 | 5,251 | 5,417 | 3,042 | 6,780 |
Deposit insurance assessments | 8,361 | 5,931 | 4,499 | 4,945 | 3,336 |
Pension settlement expense | — | 6,127 | 2,896 | — | — |
Other noninterest expense | 44,154 | 59,340 | 37,350 | 29,323 | 34,005 |
Total noninterest expense | 319,279 | 340,671 | 319,734 | 285,888 | 291,667 |
Income before income taxes | 99,062 | 127,562 | 160,111 | 163,112 | 148,590 |
Income tax expense | 22,433 | 29,628 | 36,713 | 36,154 | 33,643 |
Net income | 76,629 | 97,934 | 123,398 | 126,958 | 114,947 |
Less: Preferred dividends | 2,372 | 2,372 | 2,372 | 2,372 | 2,372 |
Net income available to common shareholders | $ 74,257 | $ 95,562 | $ 121,026 | $ 124,586 | $ 112,575 |
Net income per common share: Diluted | $ 0.40 | $ 0.52 | $ 0.66 | $ 0.68 | $ 0.60 |
Table 7 Selected Loan Portfolio Data (Unaudited)
| |||||
Quarter Ended | |||||
(In thousands) | |||||
LOAN AND LEASE PORTFOLIO: | |||||
Commercial and industrial | |||||
Non-real estate | $ 9,159,387 | $ 8,985,547 | $ 8,803,381 | $ 8,526,481 | $ 8,017,958 |
Owner occupied | 4,278,468 | 4,068,659 | 3,943,442 | 3,851,336 | 3,703,914 |
Total commercial and industrial | 13,437,855 | 13,054,206 | 12,746,823 | 12,377,817 | 11,721,872 |
Commercial real estate | |||||
Construction, acquisition and development | 3,703,137 | 3,547,986 | 3,244,425 | 2,982,119 | 3,028,514 |
Income producing | 5,368,676 | 5,150,680 | 5,098,470 | 5,054,232 | 4,795,486 |
Total commercial real estate | 9,071,813 | 8,698,666 | 8,342,895 | 8,036,351 | 7,824,000 |
Consumer | |||||
Residential mortgages | 8,536,032 | 8,319,242 | 7,924,378 | 7,662,621 | 7,355,995 |
Other consumer | 236,894 | 277,163 | 282,354 | 283,696 | 287,799 |
Total consumer | 8,772,926 | 8,596,405 | 8,206,732 | 7,946,317 | 7,643,794 |
Total loans and leases, net of unearned income | $ 31,282,594 | $ 30,349,277 | $ 29,296,450 | $ 28,360,485 | $ 27,189,666 |
NON-PERFORMING ASSETS | |||||
Non-performing Loans and Leases | |||||
Nonaccrual Loans and Leases | |||||
Commercial and industrial | |||||
Non-real estate | $ 65,783 | $ 23,907 | $ 23,916 | $ 34,233 | $ 33,086 |
Owner occupied | 9,089 | 7,944 | 8,327 | 9,567 | 11,787 |
Total commercial and industrial | 74,872 | 31,851 | 32,243 | 43,800 | 44,873 |
Commercial real estate | |||||
Construction, acquisition and development | 1,850 | 2,974 | 1,823 | 2,125 | 1,618 |
Income producing | 20,616 | 7,331 | 8,580 | 8,750 | 9,688 |
Total commercial real estate | 22,466 | 10,305 | 10,403 | 10,875 | 11,306 |
Consumer | |||||
Residential mortgages | 62,748 | 55,892 | 46,671 | 34,172 | 34,278 |
Other consumer | 529 | 697 | 614 | 521 | 574 |
Total consumer | 63,277 | 56,589 | 47,285 | 34,693 | 34,852 |
Total nonaccrual loans and leases | $ 160,615 | $ 98,745 | $ 89,931 | $ 89,368 | $ 91,031 |
Loans and Leases 90+ Days Past Due, Still Accruing | 5,164 | 2,068 | 11,984 | 19,682 | 20,957 |
Restructured Loans and Leases, Still Accruing | — | 8,598 | 16,200 | 7,385 | 7,292 |
Total non-performing loans and leases | $ 165,779 | $ 109,411 | $ 118,115 | $ 116,435 | $ 119,280 |
Other Real Estate Owned and Other Repossessed Assets | 5,327 | 6,725 | 8,376 | 14,399 | 28,401 |
Total Non-performing Assets | $ 171,106 | $ 116,136 | $ 126,491 | $ 130,834 | $ 147,681 |
Additions to nonaccrual loans and leases during the quarter (excluding acquisitions) | $ 89,779 | $ 38,945 | $ 34,432 | $ 21,312 | $ 16,374 |
Table 8 Allowance for Credit Losses (Unaudited)
| |||||
Quarter Ended | |||||
(Dollars in thousands) | |||||
ALLOWANCE FOR CREDIT LOSSES: | |||||
Balance, beginning of period | $ 440,347 | $ 433,363 | $ 440,112 | $ 438,738 | $ 446,415 |
Charge-offs: | |||||
Commercial and industrial | (2,853) | (2,295) | (11,551) | (2,170) | (2,682) |
Commercial real estate | (1,988) | (426) | (1,116) | (275) | (313) |
Consumer | (2,189) | (2,650) | (2,653) | (1,941) | (1,792) |
Total loans charged-off | (7,030) | (5,371) | (15,320) | (4,386) | (4,787) |
Recoveries: | |||||
Commercial and industrial | 3,399 | 6,405 | 3,657 | 3,217 | 3,178 |
Commercial real estate | 779 | 2,851 | 3,509 | 1,076 | 437 |
Consumer | 977 | 1,099 | 1,405 | 1,467 | 1,612 |
Total recoveries | 5,155 | 10,355 | 8,571 | 5,760 | 5,227 |
Net (charge-offs) recoveries | (1,875) | 4,984 | (6,749) | 1,374 | 440 |
Adoption of new ASU related to modified loans (3) | 255 | — | — | — | — |
Initial allowance on loans purchased with credit deterioration | — | — | — | — | (8,117) |
Provision for credit losses related to loans and leases | 15,000 | 2,000 | — | — | — |
Total provision for loans and leases | 15,000 | 2,000 | — | — | — |
Balance, end of period | $ 453,727 | $ 440,347 | $ 433,363 | $ 440,112 | $ 438,738 |
Average loans and leases, net of unearned income, for period | |||||
Ratio: Net charge-offs (recoveries) to average loans and leases (2) | 0.02 % | (0.07) % | 0.09 % | (0.02) % | (0.01) % |
RESERVE FOR UNFUNDED COMMITMENTS (1) | |||||
Balance, beginning of period | $ 28,551 | $ 24,551 | $ 24,551 | $ 23,551 | $ 23,551 |
(Reversal) provision for credit losses for unfunded commitments | (5,000) | 4,000 | — | 1,000 | — |
Balance, end of period | $ 23,551 | $ 28,551 | $ 24,551 | $ 24,551 | $ 23,551 |
(1) | The Reserve for Unfunded Commitments is classified in other liabilities on the consolidated balance sheets. |
(2) | Annualized. |
(3) | Cadence elected to adopt the new accounting guidance effective |
Table 9 Loan Portfolio by Grades (Unaudited)
| ||||||
(In thousands) | Pass | Special Mention | Substandard | Impaired | Purchased Credit Deteriorated (Loss) | Total |
LOAN AND LEASE PORTFOLIO: | ||||||
Commercial and industrial | ||||||
Non-real estate | $ 8,744,629 | $ 107,218 | $ 280,192 | $ 23,316 | $ 4,032 | $ 9,159,387 |
Owner occupied | 4,201,364 | 11,928 | 59,764 | 3,739 | 1,673 | 4,278,468 |
Total commercial and industrial | 12,945,993 | 119,146 | 339,956 | 27,055 | 5,705 | 13,437,855 |
Commercial real estate | ||||||
Construction, acquisition and development | 3,656,934 | 27,041 | 19,162 | — | — | 3,703,137 |
Income producing | 5,191,260 | 36,598 | 116,784 | 5,476 | 18,558 | 5,368,676 |
Total commercial real estate | 8,848,194 | 63,639 | 135,946 | 5,476 | 18,558 | 9,071,813 |
Consumer | ||||||
Residential mortgages | 8,361,116 | — | 173,342 | — | 1,574 | 8,536,032 |
Other consumer | 232,637 | — | 4,257 | — | — | 236,894 |
Total consumer | 8,593,753 | — | 177,599 | — | 1,574 | 8,772,926 |
Total loans and leases, net of unearned income | $ 182,785 | $ 653,501 | $ 32,531 | $ 25,837 |
(In thousands) | Pass | Special Mention | Substandard | Impaired | Purchased Credit Deteriorated (Loss) | Total |
LOAN AND LEASE PORTFOLIO: | ||||||
Commercial and industrial | ||||||
Non-real estate | $ 8,735,337 | $ 37,389 | $ 205,246 | $ 3,375 | $ 4,200 | $ 8,985,547 |
Owner occupied | 4,024,179 | 6,062 | 32,912 | 3,824 | 1,682 | 4,068,659 |
Total commercial and industrial | 12,759,516 | 43,451 | 238,158 | 7,199 | 5,882 | 13,054,206 |
Commercial real estate | ||||||
Construction, acquisition and development | 3,498,990 | 18,667 | 23,073 | — | 7,256 | 3,547,986 |
Income producing | 5,035,880 | 27,330 | 68,948 | — | 18,522 | 5,150,680 |
Total commercial real estate | 8,534,870 | 45,997 | 92,021 | — | 25,778 | 8,698,666 |
Consumer | ||||||
Residential mortgages | 8,159,904 | 232 | 157,532 | — | 1,574 | 8,319,242 |
Other consumer | 272,182 | — | 4,981 | — | — | 277,163 |
Total consumer | 8,432,086 | 232 | 162,513 | — | 1,574 | 8,596,405 |
Total loans and leases, net of unearned income | $ 29,726,472 | $ 89,680 | $ 492,692 | $ 7,199 | $ 33,234 | $ 30,349,277 |
Table 10 Geographical Loan Information (Unaudited)
| |||||||||||
(Dollars in thousands) | Other | Total | |||||||||
LOAN AND LEASE PORTFOLIO: | |||||||||||
Commercial and industrial | |||||||||||
Non-real estate | $ 370,464 | $ 148,872 | $ 471,198 | $ 537,753 | $ 329,353 | $ 530,064 | $ 74,408 | $ 331,891 | $ 3,958,744 | $ 2,406,640 | $ 9,159,387 |
Owner occupied | 384,004 | 247,806 | 291,558 | 319,831 | 284,527 | 578,141 | 92,030 | 173,729 | 1,597,745 | 309,097 | 4,278,468 |
Total commercial and industrial | 754,468 | 396,678 | 762,756 | 857,584 | 613,880 | 1,108,205 | 166,438 | 505,620 | 5,556,489 | 2,715,737 | 13,437,855 |
Commercial real estate | |||||||||||
Construction, acquisition and development | 202,210 | 80,681 | 223,119 | 409,773 | 45,899 | 213,740 | 40,319 | 139,995 | 1,836,582 | 510,819 | 3,703,137 |
Income producing | 432,113 | 273,397 | 377,826 | 616,799 | 214,952 | 424,004 | 193,518 | 340,114 | 1,907,173 | 588,780 | 5,368,676 |
Total commercial real estate | 634,323 | 354,078 | 600,945 | 1,026,572 | 260,851 | 637,744 | 233,837 | 480,109 | 3,743,755 | 1,099,599 | 9,071,813 |
Consumer | |||||||||||
Residential mortgages | 1,163,319 | 377,180 | 580,893 | 374,343 | 439,998 | 1,070,648 | 158,404 | 672,393 | 3,441,995 | 256,859 | 8,536,032 |
Other consumer | 30,764 | 17,067 | 6,220 | 7,115 | 11,205 | 84,523 | 1,392 | 16,317 | 55,444 | 6,847 | 236,894 |
Total consumer | 1,194,083 | 394,247 | 587,113 | 381,458 | 451,203 | 1,155,171 | 159,796 | 688,710 | 3,497,439 | 263,706 | 8,772,926 |
Total loans and leases, net of unearned income | $ 2,582,874 | $ 1,145,003 | $ 1,950,814 | $ 2,265,614 | $ 1,325,934 | $ 2,901,120 | $ 560,071 | $ 1,674,439 | $ 12,797,683 | $ 4,079,042 | $ 31,282,594 |
Loan growth, excluding loans acquired during the quarter ($) | $ 6,215 | $ 5,070 | $ 78,734 | $ 54,397 | $ (5,146) | $ 50,709 | $ 19,336 | $ 51,814 | $ 363,463 | $ 308,725 | $ 933,317 |
Loan growth, excluding loans acquired during the quarter (%) (annualized) | 0.98 % | 1.80 % | 17.06 % | 9.98 % | (1.57) % | 7.21 % | 14.50 % | 12.95 % | 11.85 % | 33.21 % | 12.47 % |
(Dollars in thousands) | Other | Total | |||||||||
LOAN AND LEASE PORTFOLIO: | |||||||||||
Commercial and industrial | |||||||||||
Non-real estate | $ 367,656 | $ 156,600 | $ 446,454 | $ 543,854 | $ 317,127 | $ 515,897 | $ 67,208 | $ 315,410 | $ 3,948,846 | $ 2,306,495 | $ 8,985,547 |
Owner occupied | 370,125 | 248,015 | 296,159 | 304,096 | 287,915 | 553,376 | 96,500 | 177,315 | 1,481,888 | 253,270 | 4,068,659 |
Total commercial and industrial | 737,781 | 404,615 | 742,613 | 847,950 | 605,042 | 1,069,273 | 163,708 | 492,725 | 5,430,734 | 2,559,765 | 13,054,206 |
Commercial real estate | |||||||||||
Construction, acquisition and development | 226,990 | 82,356 | 180,017 | 396,250 | 54,945 | 246,402 | 35,861 | 162,977 | 1,738,098 | 424,090 | 3,547,986 |
Income producing | 425,617 | 260,602 | 369,848 | 580,819 | 216,519 | 403,491 | 188,775 | 302,252 | 1,900,831 | 501,926 | 5,150,680 |
Total commercial real estate | 652,607 | 342,958 | 549,865 | 977,069 | 271,464 | 649,893 | 224,636 | 465,229 | 3,638,929 | 926,016 | 8,698,666 |
Consumer | |||||||||||
Residential mortgages | 1,155,001 | 374,544 | 574,308 | 373,371 | 442,087 | 1,044,746 | 150,952 | 647,556 | 3,301,528 | 255,149 | 8,319,242 |
Other consumer | 31,270 | 17,816 | 5,294 | 12,827 | 12,487 | 86,499 | 1,439 | 17,115 | 63,029 | 29,387 | 277,163 |
Total consumer | 1,186,271 | 392,360 | 579,602 | 386,198 | 454,574 | 1,131,245 | 152,391 | 664,671 | 3,364,557 | 284,536 | 8,596,405 |
Total loans and leases, net of unearned income | $ 2,576,659 | $ 1,139,933 | $ 1,872,080 | $ 2,211,217 | $ 1,331,080 | $ 2,850,411 | $ 540,735 | $ 1,622,625 | $ 3,770,317 |
Table 11 Noninterest Revenue and Expense (Unaudited)
| |||||
Quarter Ended | |||||
(In thousands) | |||||
NONINTEREST REVENUE: | |||||
Mortgage banking excl. MSR and MSR hedge market value adjustment | $ 8,379 | $ 5,408 | $ 4,746 | $ 6,754 | $ 7,733 |
MSR and MSR hedge market value adjustment | (2,303) | (2,837) | 4,334 | 4,692 | 14,030 |
Credit card, debit card and merchant fees | 11,851 | 15,750 | 14,497 | 16,593 | 11,321 |
Deposit service charges | 16,482 | 16,863 | 19,134 | 18,291 | 19,189 |
Security (losses) gains, net | (51,261) | (595) | (139) | 1,446 | (1,097) |
Insurance commissions | 39,606 | 34,679 | 39,876 | 39,994 | 35,727 |
Trust income | 10,553 | 9,113 | 9,011 | 9,129 | 10,061 |
Annuity fees | 2,192 | 951 | 600 | 753 | 604 |
Brokerage commissions and fees | 8,787 | 9,135 | 9,724 | 10,331 | 11,072 |
Bank-owned life insurance | 3,647 | 5,436 | 3,537 | 3,285 | 3,336 |
Other miscellaneous income | 26,138 | 20,970 | 19,171 | 13,966 | 16,459 |
Total noninterest revenue | $ 74,071 | $ 114,873 | $ 124,491 | $ 125,234 | $ 128,435 |
NONINTEREST EXPENSE: | |||||
Salaries and employee benefits | $ 195,702 | $ 183,918 | $ 191,193 | $ 182,094 | $ 187,819 |
Occupancy and equipment | 29,113 | 30,539 | 30,610 | 30,129 | 28,270 |
Deposit insurance assessments | 8,361 | 5,931 | 4,499 | 4,945 | 3,336 |
Pension settlement expense | — | 6,127 | 2,896 | — | — |
Advertising and public relations | 4,331 | 28,659 | 4,085 | 4,417 | 4,593 |
Foreclosed property expense | 980 | 400 | 1,093 | (1,104) | 440 |
Telecommunications | 1,717 | 1,714 | 1,882 | 1,984 | 1,833 |
Travel and entertainment | 3,508 | 5,310 | 4,149 | 3,412 | 2,811 |
Data processing and software | 31,869 | 29,289 | 28,079 | 29,081 | 27,483 |
Professional, consulting and outsourcing | 4,417 | 3,598 | 2,724 | 3,769 | 3,737 |
Amortization of intangibles | 5,005 | 5,251 | 5,417 | 3,042 | 6,780 |
Legal | 1,491 | 758 | 2,054 | 1,463 | 1,793 |
Merger expense | 5,075 | 20,276 | 19,690 | 7,274 | 3,974 |
Postage and shipping | 2,452 | 1,925 | 2,098 | 2,022 | 2,034 |
Other miscellaneous expense | 25,258 | 16,976 | 19,265 | 13,360 | 16,764 |
Total noninterest expense | $ 319,279 | $ 340,671 | $ 319,734 | $ 285,888 | $ 291,667 |
INSURANCE COMMISSIONS: | |||||
Property and casualty commissions | $ 28,202 | $ 24,682 | $ 30,021 | $ 29,220 | $ 25,852 |
Life and health commissions | 8,024 | 7,151 | 7,254 | 7,935 | 7,143 |
Risk management income | 657 | 887 | 654 | 674 | 757 |
Other | 2,723 | 1,959 | 1,947 | 2,165 | 1,975 |
Total insurance commissions | $ 39,606 | $ 34,679 | $ 39,876 | $ 39,994 | $ 35,727 |
Table 12 Average Balance and Yields (Unaudited)
| |||||||||||
Quarter Ended | |||||||||||
(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 | $ 447,449 | 5.87 % | $ 29,812,924 | $ 405,827 | 5.40 % | $ 264,910 | 3.96 % | ||||
Accretion income on acquired loans | 10,028 | 0.13 | 9,190 | 0.12 | 17,741 | 0.27 | |||||
Loans held for sale | 46,863 | 603 | 5.22 | 62,517 | 1,788 | 11.35 | 176,647 | 1,407 | 3.23 | ||
Investment securities | |||||||||||
Taxable | 10,957,786 | 48,515 | 1.80 | 11,767,062 | 45,807 | 1.54 | 14,588,090 | 45,155 | 1.26 | ||
Tax-exempt | 396,671 | 3,135 | 3.21 | 389,741 | 3,224 | 3.28 | 482,434 | 3,056 | 2.57 | ||
Total investment securities | 11,354,457 | 51,650 | 1.84 | 12,156,803 | 49,031 | 1.60 | 15,070,524 | 48,211 | 1.30 | ||
Other investments | 1,526,755 | 17,453 | 4.64 | 943,806 | 8,783 | 3.69 | 1,161,262 | 688 | 0.24 | ||
Total interest-earning assets | 43,819,715 | 527,183 | 4.88 % | 42,976,050 | 474,619 | 4.38 % | 43,515,166 | 332,957 | 3.10 % | ||
Other assets | 5,274,972 | 5,249,229 | 4,608,978 | ||||||||
Allowance for credit losses | 442,486 | 434,785 | 444,294 | ||||||||
Total assets | $ 47,790,494 | ||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Interest-bearing liabilities: | |||||||||||
Interest bearing demand and money market | $ 95,344 | 2.03 % | $ 17,866,198 | $ 60,253 | 1.34 % | 9,742 | 0.20 % | ||||
Savings deposits | 3,363,236 | 3,014 | 0.36 | 3,555,911 | 2,769 | 0.31 | 3,631,699 | 568 | 0.06 | ||
Time deposits | 4,328,388 | 23,950 | 2.24 | 3,606,093 | 10,651 | 1.17 | 3,725,794 | 4,764 | 0.52 | ||
Total interest-bearing deposits | 26,700,969 | 122,308 | 1.86 | 25,028,202 | 73,673 | 1.17 | 26,758,512 | 15,074 | 0.23 | ||
Fed funds purchased, securities sold under agreement to repurchase and other | $ 832,831 | $ 7,669 | 3.73 | $ 8,365 | 3.04 | $ 811,422 | 216 | 0.11 | |||
Short-term FHLB borrowings | 3,221,340 | 37,013 | 4.66 | 2,821,892 | 27,302 | 3.84 | 14,167 | 5 | 0.14 | ||
Long-term borrowings | 462,385 | 4,872 | 4.27 | 462,927 | 4,848 | 4.15 | 466,842 | 4,813 | 4.18 | ||
Total interest-bearing liabilities | 31,217,525 | 171,862 | 2.23 % | 29,404,050 | 114,188 | 1.54 % | 28,050,943 | 20,108 | 0.29 % | ||
Noninterest-bearing liabilities: | |||||||||||
Demand deposits | 12,203,079 | 13,344,152 | 13,806,591 | ||||||||
Other liabilities | 835,136 | 826,707 | 760,085 | ||||||||
Total liabilities | 44,255,740 | 43,574,909 | 42,617,619 | ||||||||
Shareholders' equity | 4,396,461 | 4,215,585 | 5,062,231 | ||||||||
Total liabilities and shareholders' equity | $ 47,790,494 | ||||||||||
Net interest income/net interest spread | 355,321 | 2.65 % | 360,431 | 2.84 % | 312,849 | 2.81 % | |||||
Net yield on earning assets/net interest margin | 3.29 % | 3.33 % | 2.92 % | ||||||||
Taxable equivalent adjustment: | |||||||||||
Loans and investment securities | (1,051) | (1,071) | (1,027) | ||||||||
Net interest revenue | $ 354,270 | $ 359,360 | $ 311,822 |
Table 13 Selected Additional Data (Unaudited)
| |||||
Quarter Ended | |||||
(Dollars in thousands) | |||||
MORTGAGE SERVICING RIGHTS ("MSR"): | |||||
Fair value, beginning of period | $ 109,744 | $ 112,767 | $ 102,021 | $ 92,859 | $ 69,552 |
Originations of servicing assets | 1,385 | 2,283 | 3,890 | 4,962 | 5,155 |
Changes in fair value: | |||||
Due to payoffs/paydowns | (1,078) | (2,308) | (3,085) | (3,253) | (3,147) |
Due to update in valuation assumptions | (3,109) | (2,998) | 9,941 | 7,453 | 21,299 |
Fair value, end of period | $ 106,942 | $ 109,744 | $ 112,767 | $ 102,021 | $ 92,859 |
MORTGAGE BANKING REVENUE: | |||||
Origination | $ 3,344 | $ 1,793 | $ 1,916 | $ 4,042 | $ 5,118 |
Servicing | 6,113 | 5,923 | 5,915 | 5,965 | 5,762 |
Payoffs/Paydowns | (1,078) | (2,308) | (3,085) | (3,253) | (3,147) |
Total mortgage banking revenue excluding MSR | 8,379 | 5,408 | 4,746 | 6,754 | 7,733 |
Market value adjustment on MSR | (3,109) | (2,998) | 9,941 | 7,453 | 21,299 |
Market value adjustment on MSR Hedge | 806 | 161 | (5,607) | (2,761) | (7,269) |
Total mortgage banking revenue | $ 6,076 | $ 2,571 | $ 9,080 | $ 11,446 | $ 21,763 |
Mortgage loans serviced | $ 7,633,236 | $ 7,692,744 | $ 7,723,605 | $ 7,685,994 | $ 7,629,119 |
MSR/mortgage loans serviced | 1.40 % | 1.43 % | 1.46 % | 1.33 % | 1.22 % |
Quarter Ended | |||||
(In thousands) | |||||
AVAILABLE-FOR-SALE SECURITIES, at fair value | |||||
$ 15,849 | $ 1,458,513 | $ 1,451,461 | $ 1,466,313 | $ 1,459,845 | |
Obligations of | 1,358,350 | 1,477,127 | 1,820,913 | 2,133,561 | 2,350,810 |
Mortgage-backed securities issued or guaranteed by | |||||
Residential pass-through: | |||||
Guaranteed by GNMA | 83,649 | 84,368 | 87,063 | 95,955 | 105,900 |
Issued by | 6,164,294 | 6,274,970 | 6,427,152 | 7,014,715 | 7,604,829 |
Other residential mortgage-back securities | 166,449 | 168,452 | 181,317 | 201,440 | 212,216 |
Commercial mortgage-backed securities | 2,427,808 | 1,881,853 | 1,880,949 | 1,899,785 | 1,951,367 |
Total MBS | 8,842,200 | 8,409,643 | 8,576,481 | 9,211,895 | 9,874,312 |
Obligations of states and political subdivisions | 447,731 | 466,002 | 444,953 | 485,400 | 530,241 |
Other domestic debt securities | 73,557 | 82,718 | 98,615 | 101,313 | 103,117 |
Foreign debt securities | 140,192 | 50,093 | 49,471 | 52,139 | 53,281 |
Total available-for-sale securities | $ 10,877,879 | $ 11,944,096 | $ 12,441,894 | $ 13,450,621 | $ 14,371,606 |
Table 14
Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions
(Unaudited)
Management evaluates the Company's capital position and adjusted performance by utilizing certain financial measures not calculated in accordance with GAAP, including adjusted net income, adjusted net income available to common shareholders, pre-tax pre-provision net revenue, adjusted pre-tax pre-provision net revenue, total adjusted noninterest expense, tangible common shareholders' equity to tangible assets, total shareholders' equity (excluding AOCI), common shareholders' equity (excluding AOCI), tangible common shareholders' equity to tangible assets (excluding AOCI), return on average tangible common equity, adjusted return on average tangible common equity, adjusted return on average assets, adjusted return on average common shareholders' equity, pre-tax pre-provision net revenue to total average assets, adjusted pre-tax pre-provision net revenue to total average assets, adjusted earnings per common share, tangible book value per common share, tangible book value per common share, excluding AOCI, efficiency ratio (tax equivalent), adjusted efficiency ratio (tax equivalent), and adjusted dividend payout ratio. The Company has included these non-GAAP financial measures in this release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures: (i) provides important supplemental information that contributes to a proper understanding of the Company's capital position and adjusted performance, (ii) enables a more complete understanding of factors and trends affecting the Company's business and (iii) allows investors to evaluate the Company's performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this news release with other companies' non-GAAP financial measures having the same or similar names.
Quarter Ended | |||||
(In thousands) | |||||
Adjusted net income available to common shareholders | |||||
Net income | $ 76,629 | $ 97,934 | $ 123,398 | $ 126,958 | $ 114,947 |
Plus: Merger expense | 5,075 | 20,276 | 19,690 | 7,274 | 3,974 |
Incremental merger related expense | 8,960 | 32,704 | 6,912 | 6,060 | 6,571 |
Branch closure and other restructuring charges | 212 | 2,254 | 6 | 705 | 128 |
Pension settlement expense | — | 6,127 | 2,896 | — | — |
Less: Security (losses) gains, net | (51,261) | (595) | (139) | 1,446 | (1,097) |
Tax adjustment | 15,394 | 14,665 | 7,016 | 2,981 | 2,786 |
Adjusted net income | 126,743 | 145,225 | 146,025 | 136,570 | 123,931 |
Less: Preferred dividends | 2,372 | 2,372 | 2,372 | 2,372 | 2,372 |
Adjusted net income available to common shareholders | $ 124,371 | $ 142,853 | $ 143,653 | $ 134,198 | $ 121,559 |
Quarter Ended | |||||
(In thousands) | |||||
Pre-tax pre-provision net revenue | |||||
Net income | $ 76,629 | $ 97,934 | $ 123,398 | $ 126,958 | $ 114,947 |
Plus: Provision for credit losses | 10,000 | 6,000 | — | 1,000 | — |
Income tax expense | 22,433 | 29,628 | 36,713 | 36,154 | 33,643 |
Pre-tax pre-provision net revenue | $ 109,062 | $ 133,562 | $ 160,111 | $ 164,112 | $ 148,590 |
Quarter Ended | |||||
(In thousands) | |||||
Adjusted pre-tax pre-provision net revenue | |||||
Net income | $ 76,629 | $ 97,934 | $ 123,398 | $ 126,958 | $ 114,947 |
Plus: Provision for credit losses | 10,000 | 6,000 | — | 1,000 | — |
Merger expense | 5,075 | 20,276 | 19,690 | 7,274 | 3,974 |
Incremental merger related expense | 8,960 | 32,704 | 6,912 | 6,060 | 6,571 |
Branch closure and other restructuring charges | 212 | 2,254 | 6 | 705 | 128 |
Pension settlement expense | — | 6,127 | 2,896 | — | — |
Income tax expense | 22,433 | 29,628 | 36,713 | 36,154 | 33,643 |
Less: Security (losses) gains, net | (51,261) | (595) | (139) | 1,446 | (1,097) |
Adjusted pre-tax pre-provision net revenue | $ 174,570 | $ 195,518 | $ 189,754 | $ 176,705 | $ 160,360 |
Quarter Ended | |||||
(In thousands) | |||||
Total adjusted noninterest expense | |||||
Total noninterest expense | $ 319,279 | $ 340,671 | $ 319,734 | $ 285,888 | $ 291,667 |
Less: Merger expense | 5,075 | 20,276 | 19,690 | 7,274 | 3,974 |
Incremental merger related expense | 8,960 | 32,704 | 6,912 | 6,060 | 6,571 |
Branch closure and other restructuring charges | 212 | 2,254 | 6 | 705 | 128 |
Pension settlement expense | — | 6,127 | 2,896 | — | — |
Total adjusted noninterest expense | $ 305,032 | $ 279,310 | $ 290,230 | $ 271,849 | $ 280,994 |
Quarter Ended | |||||
(In thousands) | |||||
Total tangible assets, excluding AOCI | |||||
Total assets | $ 51,693,096 | $ 48,653,414 | $ 47,699,660 | $ 47,747,708 | $ 47,204,061 |
Less: | 1,459,302 | 1,458,795 | 1,449,511 | 1,444,209 | 1,409,038 |
Other identifiable intangible assets | 125,724 | 132,764 | 132,953 | 138,370 | 191,642 |
Total tangible assets | 50,108,070 | 47,061,855 | 46,117,196 | 46,165,129 | 45,603,381 |
Less: AOCI | (1,081,886) | (1,222,538) | (1,297,812) | (936,345) | (664,000) |
Total tangible assets, excluding AOCI | $ 51,189,956 | $ 48,284,393 | $ 47,415,008 | $ 47,101,474 | $ 46,267,381 |
Quarter Ended | |||||
(In thousands) | |||||
PERIOD END BALANCES: | |||||
Total shareholders' equity, excluding AOCI | |||||
Total shareholders' equity | $ 4,490,417 | $ 4,311,374 | $ 4,166,925 | $ 4,437,925 | $ 4,643,757 |
Less: AOCI | (1,081,886) | (1,222,538) | (1,297,812) | (936,345) | (664,000) |
Total shareholders' equity, excluding AOCI | $ 5,572,303 | $ 5,533,912 | $ 5,464,737 | $ 5,374,270 | $ 5,307,757 |
Common shareholders' equity, excluding AOCI | |||||
Total shareholders' equity | $ 4,490,417 | $ 4,311,374 | $ 4,166,925 | $ 4,437,925 | $ 4,643,757 |
Less: preferred stock | 166,993 | 166,993 | 166,993 | 166,993 | 166,993 |
Common shareholders' equity | 4,323,424 | 4,144,381 | 3,999,932 | 4,270,932 | 4,476,764 |
Less: AOCI | (1,081,886) | (1,222,538) | (1,297,812) | (936,345) | (664,000) |
Common shareholders' equity, excluding AOCI | $ 5,405,310 | $ 5,366,919 | $ 5,297,744 | $ 5,207,277 | $ 5,140,764 |
Total tangible common shareholders' equity, excluding AOCI | |||||
Total shareholders' equity | $ 4,490,417 | $ 4,311,374 | $ 4,166,925 | $ 4,437,925 | $ 4,643,757 |
Less: | 1,459,302 | 1,458,795 | 1,449,511 | 1,444,209 | 1,409,038 |
Other identifiable intangible assets | 125,724 | 132,764 | 132,953 | 138,370 | 191,642 |
Preferred stock | 166,993 | 166,993 | 166,993 | 166,993 | 166,993 |
Total tangible common shareholders' equity | 2,738,398 | 2,552,822 | 2,417,468 | 2,688,353 | 2,876,084 |
Less: AOCI | (1,081,886) | (1,222,538) | (1,297,812) | (936,345) | (664,000) |
Total tangible common shareholders' equity, excluding AOCI | $ 3,820,284 | $ 3,775,360 | $ 3,715,280 | $ 3,624,698 | $ 3,540,084 |
AVERAGE BALANCES: | |||||
Total tangible common shareholders' equity | |||||
Total shareholders' equity | $ 4,396,461 | $ 4,215,585 | $ 4,506,655 | $ 4,523,189 | $ 5,062,231 |
Less: | 1,459,127 | 1,457,120 | 1,444,331 | 1,407,452 | 1,407,973 |
Other identifiable intangible assets | 128,957 | 132,091 | 136,149 | 188,897 | 195,606 |
Preferred stock | 166,993 | 166,993 | 166,993 | 166,993 | 166,993 |
Total tangible common shareholders' equity | $ 2,641,384 | $ 2,459,381 | $ 2,759,182 | $ 2,759,847 | $ 3,291,659 |
Total average assets | |||||
Total shares of common stock outstanding | 182,684,578 | 182,437,265 | 182,438,780 | 182,461,786 | 183,488,844 |
Average shares outstanding-diluted | 183,908,798 | 183,762,008 | 183,313,831 | 183,711,402 | 187,264,335 |
Tangible common shareholders' equity to tangible assets (1) | 5.46 % | 5.42 % | 5.24 % | 5.82 % | 6.31 % |
Tangible common shareholders' equity to tangible assets, excluding AOCI (2) | 7.46 | 7.82 | 7.84 | 7.70 | 7.65 |
Return on average tangible common equity (3) | 11.40 | 15.42 | 17.40 | 18.11 | 13.87 |
Adjusted return on average tangible common equity (4) | 19.10 | 23.04 | 20.66 | 19.50 | 14.98 |
Adjusted return on average assets (5) | 1.06 | 1.21 | 1.22 | 1.16 | 1.05 |
Adjusted return on average common shareholders' equity (6) | 11.93 | 14.00 | 13.13 | 12.36 | 10.07 |
Pre-tax pre-provision net revenue to total average assets (7) | 0.91 | 1.11 | 1.33 | 1.40 | 1.26 |
Adjusted pre-tax pre-provision net revenue to total average assets (8) | 1.46 | 1.62 | 1.58 | 1.51 | 1.36 |
Tangible book value per common share (9) | $ 14.99 | $ 13.99 | $ 13.25 | $ 14.73 | $ 15.67 |
Tangible book value per common share, excluding AOCI (10) | 20.91 | 20.69 | 20.36 | 19.87 | 19.29 |
Adjusted earnings per common share (11) | $ 0.68 | $ 0.78 | $ 0.78 | $ 0.73 | $ 0.65 |
Adjusted dividend payout ratio (12) | 34.56 % | 28.21 % | 28.21 % | 30.14 % | 33.85 % |
Definitions of Non-GAAP Measures: | |
(1) | Tangible common shareholders' equity to tangible assets is defined by the Company as total shareholders' equity less preferred stock, goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets. |
(2) | Tangible common shareholders' equity to tangible assets, excluding AOCI, is defined by the Company as total shareholders' equity less preferred stock, goodwill, other identifiable intangible assets and accumulated other comprehensive loss, divided by the difference of total assets less goodwill, accumulated other comprehensive loss, and other identifiable intangible assets. |
(3) | Return on average tangible common equity is defined by the Company as annualized net income available to common shareholders divided by average tangible common shareholders equity. |
(4) | Adjusted return on average tangible common equity is defined by the Company as annualized net adjusted income available to common shareholders divided by average tangible common shareholders' equity. |
(5) | Adjusted return on average assets is defined by the Company as annualized net adjusted income divided by total average assets. |
(6) | Adjusted return on average common shareholders' equity is defined by the Company as annualized net adjusted income available to common shareholders divided by average common shareholders' equity. |
(7) | Pre-tax pre-provision net revenue to total average assets is defined by the Company as annualized pre-tax pre-provision net revenue divided by total average assets. |
(8) | Adjusted pre-tax pre-provision net revenue to total average assets is defined by the Company as annualized adjusted pre-tax pre-provision net revenue divided by total average assets adjusted for items included in the definition and calculation of net adjusted income. |
(9) | Tangible book value per common share is defined by the Company as tangible common shareholders' equity divided by total shares of common stock outstanding. |
(10) | Tangible book value per common share, excluding AOCI is defined by the Company as tangible common shareholders' equity less accumulated other comprehensive loss divided by total shares of common stock outstanding. |
(11) | Adjusted earnings per common share is defined by the Company as net adjusted income available to common shareholders divided by average common shares outstanding-diluted. |
(12) | Adjusted dividend payout ratio is defined by the Company as common share dividends divided by net adjusted income available to common shareholders. |
Efficiency Ratio-Fully Taxable Equivalent and Adjusted Efficiency Ratio-Fully Taxable Equivalent Definitions
The efficiency ratio and the adjusted efficiency ratio are supplemental financial measures utilized in management's internal evaluation of the Company's use of resources and are not defined under GAAP. The efficiency ratio is calculated by dividing total noninterest expense by total revenue, which includes net interest income plus noninterest income plus the tax equivalent adjustment. The adjusted efficiency ratio excludes income and expense items otherwise disclosed as non-routine from total noninterest expense.
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