Cadence Bank Announces Fourth Quarter 2021 and Annual Financial Results; Announces Increase in Quarterly Common Dividend

Rhea-AI Summary

Cadence Bank (NYSE: CADE) announced its financial results for the year and quarter ended December 31, 2021. The annual net income available to common shareholders was $185.7 million ($1.54 per diluted share), with adjusted net income of $340.9 million ($2.83 per diluted share). Following its merger with Cadence Bancorporation, the bank reported a fourth-quarter net loss of $37 million ($0.22 per diluted share) due to merger-related expenses and credit loss provisions. The bank's net organic loan growth for Q4 was approximately $400 million, demonstrating continued operational performance despite elevated merger expenses.

Positive

• Achieved annual adjusted net income of $340.9 million, up from $237.3 million in 2020.
• Reported record annual adjusted pre-tax pre-provision net revenue (PPNR) of $442.8 million, a 10.6% increase from 2020.
• Successful merger with Cadence Bancorporation expanded total assets to approximately $48 billion.
• Completed share repurchase of 6 million shares in 2021, with an additional 10 million shares authorized for 2022.

Negative

• Reported a quarterly net loss of $37 million in Q4 2021, primarily due to a $132.1 million provision for credit losses.
• Net interest margin declined to 2.90% in Q4 2021, down from 3.29% in Q4 2020.
• Incurred merger-related expenses of approximately $49.5 million during the fourth quarter.

TUPELO, Miss. and HOUSTON, Jan. 25, 2022 /PRNewswire/ -- Cadence Bank (NYSE: CADE) (the Company), formerly known as BancorpSouth Bank, today announced financial results for the quarter and year ended December 31, 2021.

Annual highlights for 2021 included:

• Achieved net income available to common shareholders of $185.7 million, or $1.54 per diluted common share, and adjusted net income available to common shareholders – excluding mortgage servicing rights ("MSR") – of $340.9 million, or $2.83 per diluted common share.
• Completed merger with legacy Cadence Bancorporation, the parent company of Cadence Bank N.A., which closed effective October 29, 2021, and created an approximately $48 billion institution that is the 6^th largest bank headquartered in the Company's nine-state footprint.
• Changed name from "BancorpSouth Bank" to "Cadence Bank" and changed stock ticker symbol from "BXS" to "CADE" effective October 29, 2021, in conjunction with the Cadence merger.
• Completed two mergers with National United Bancshares, Inc., the parent company of National United, and FNS Bancshares, Inc., the parent company of FNB Bank, each effective May 1, 2021, which added approximately $1.6 billion in total assets to the Company.
• Continued strong credit quality metrics; reported net recoveries for the year of $5.3 million, or 0.03 percent of average loans and leases, while total non-performing loan and leases declined to 0.57 percent of net loans and leases.
• Reported record annual adjusted pre-tax pre-provision net revenue ("PPNR") of $442.8 million, or 1.48 percent of average assets; represents an increase of 10.6 percent from $400.5 million, or 1.76 percent of average assets, for 2020.
• Repurchased 6,000,000 shares of outstanding common stock at a weighted average price of $30.09 per share.

Highlights for the fourth quarter of 2021 included:

• Reported quarterly net loss available to common shareholders of $37.0 million, or $0.22 per diluted common share, and adjusted net income available to common shareholders – excluding MSR – of $102.1 million, or $0.62 per diluted common share.
• Generated $133.8 million in adjusted PPNR, or 1.29 percent of average assets on an annualized basis.
• Combined company generated net organic loan growth of approximately $400 million for the quarter, or 6 percent on an annualized basis.
• Recorded initial provisional purchase accounting adjustments related to the legacy Cadence merger including goodwill of $451.7 million and day one provision for credit losses of $132.1 million; reported merger and incremental merger-related expenses of approximately $49.5 million for the fourth quarter.
• Repurchased 4,257,526 shares of outstanding common stock at a weighted average price of $30.66 per share.

"The closing of our merger with legacy Cadence Bancorporation certainly highlights the completion of another successful year for our Company," remarked Dan Rollins, Chairman and Chief Executive Officer of the Company.  "We are very pleased to have been able to complete this transaction prior to the end of the year, particularly in light of the current regulatory environment.  Our operational integration teams are working diligently toward our core system conversion later in 2022.  While elevated merger expenses and other purchase accounting related items negatively impacted our earnings, we continue to be pleased with our core operating performance.  Credit quality is certainly a positive story.  We reported a meaningful decline in our non performing asset levels relative to the size of the balance sheet and also had net recoveries of $5.3 million for the year." 

Rollins continued, "From a capital management perspective, we completed the repurchase of the full 6 million shares authorized under the 2021 share repurchase program and our board recently approved an additional 10 million common stock share repurchase authorization for 2022.  We also completed our provisional purchase accounting marks during the fourth quarter of 2021.  The improvement in the loan mark relative to our initial estimate at announcement further validates the economic stability as well as the legacy Cadence team's efforts in working through any potential problem credits."

Paul Murphy, Executive Vice Chairman, added "As we look specifically at our fourth quarter performance, the ability of our relationship managers to produce approximately $400 million in net organic loan growth in the same quarter as the merger closing is a noteworthy accomplishment.   This success is a testament to the efforts of both our front-line teammates as well as our credit administration and other support functions, and is also reflective of the positive economic momentum across our footprint."

At its regular quarterly meeting today, the Board of Directors of the Company declared quarterly cash dividends of $0.22 per common share of stock and $0.34375 per share of Series A Preferred Stock.  The common stock dividend represents an increase of $0.02, or 10.0 percent, per share compared to the previous quarterly dividend of $0.20 per common share and is payable on April 1, 2022 to shareholders of record at the close of business on March 15, 2022.  The preferred stock dividend is payable on February 22, 2022 to shareholders of record at the close of business on February 4, 2022.

Earnings Summary

The Company reported net income available to common shareholders of $185.7 million, or $1.54 per diluted common share, for the year ended December 31, 2021 compared with $218.6 million, or $2.12 per diluted common share, for the year ended December 31, 2020.  The Company reported adjusted net income available to common shareholders – excluding MSR – of $340.9 million, or $2.83 per diluted common share, for the year ended December 31, 2021 compared with $237.3 million, or $2.30 per diluted common share, for the year ended December 31, 2020.  Given the merger date of October 29, 2021, the fourth quarter results do not represent a full quarter of comparable combined earnings.  Additionally, the increases in the balance sheet and income statement during the quarter are largely attributable to the merger.

Additionally, due to the acquired portfolio day one loan provision of $132.1 million upon merger, the Company reported a net loss available to common shareholders of $37.0 million, or $0.22 per diluted common share, for the fourth quarter of 2021, compared with net income available to common shareholders of $66.4 million, or $0.65 per diluted common share, for the fourth quarter of 2020 and net income available to common shareholders of $70.4 million, or $0.65 per diluted common share, for the third quarter of 2021.  The Company reported adjusted net income available to common shareholders – excluding MSR – of $102.1 million, or $0.62 per diluted common share, for the fourth quarter of 2021, compared with $70.8 million, or $0.69 per diluted common share, for the fourth quarter of 2020 and $73.3 million, or $0.68 per diluted common share, for the third quarter of 2021.

The Company reported adjusted PPNR of $442.8 million, or 1.48 percent of average assets, for the year ended December 31, 2021 compared with $400.5 million, or 1.76 percent of average assets, for the year ended December 31, 2020.  Additionally, the Company reported adjusted PPNR of $133.8 million, or 1.29 percent of average assets on an annualized basis, for the fourth quarter of 2021 compared to $94.4 million, or 1.59 percent of average assets on an annualized basis, for the fourth quarter of 2020 and $90.1 million, or 1.29 percent of average assets on an annualized basis, for the third quarter of 2021.

Net Interest Revenue

Net interest revenue was $271.2 million for the fourth quarter of 2021, compared to $176.9 million for the fourth quarter of 2020 and $181.5 million for the third quarter of 2021.  The fully taxable equivalent net interest margin was 2.90 percent for the fourth quarter of 2021, compared with 3.29 percent for the fourth quarter of 2020 and 2.86 percent for the third quarter of 2021.  Yields on net loans, loans held for sale, and leases were 4.34 percent for the fourth quarter of 2021, compared with 4.55 percent for the fourth quarter of 2020 and 4.46 percent for the third quarter of 2021, while yields on total interest earning assets were 3.11 percent for the fourth quarter of 2021, compared with 3.70 percent for the fourth quarter of 2020 and 3.15 percent for the third quarter of 2021.  The average cost of deposits was 0.17 percent for the fourth quarter of 2021, compared with 0.38 percent for the fourth quarter of 2020 and 0.24 percent for the third quarter of 2021. 

Net interest income for the fourth quarter of 2021 included $16.4 million in accretion income related to acquired loans and leases.  This accretion income added approximately 19 basis points to the net interest margin and 28 basis points to the yield on loans and leases for the fourth quarter of 2021.  This compares to net accretion income of $2.3 million for the fourth quarter of 2020 and net accretion income of $3.2 million for the third quarter of 2021.

Balance Sheet Activity

Loans and leases, net of unearned income, increased $11.9 billion to $26.9 billion during the fourth quarter of 2021 while deposits and customer repos increased $16.3 billion to $40.5 billion.  Legacy Cadence loans and leases, net of unearned income, totaled $11.5 billion at October 29, 2021 while deposits and customer repos totaled $16.4 billion.  On December 3, 2021, the company completed the previously announced divestiture of seven bank branches with approximately $40 million in loans and approximately $417 million in deposits.  Excluding the impact of acquired and divested balances, net organic loan growth for the combined company for the fourth quarter totaled approximately $400 million, or 6 percent annualized, while deposit and customer repo balances declined approximately $470 million on an organic basis.  The decline in deposit account balances in the fourth quarter was driven primarily by routine volatility in large municipal deposit accounts. 

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the fourth quarter of 2021 reflected a provision for credit losses of $133.6 million, compared with $5.8 million for the fourth quarter of 2020 and a negative provision for credit losses of $7.0 million for the third quarter of 2021.  The provision for the fourth quarter of 2021 includes $132.1 million associated with day one accounting provision required for loans and unfunded commitments acquired during the quarter from the Cadence merger.  Net recoveries for the fourth quarter of 2021 were $4.8 million, or 0.08 percent of net loans and leases on an annualized basis, compared with net charge-offs of $11.2 million for the fourth quarter of 2020 and net recoveries of $2.1 million for the third quarter of 2021.  The allowance for credit losses was $446.4 million, or 1.66 percent of net loans and leases, at December 31, 2021, compared with $244.4 million, or 1.63 percent of net loans and leases, at December 31, 2020, and $260.3 million, or 1.74 percent of net loans and leases, at September 30, 2021. 

Total non-performing assets were $186.8 million, or 0.39 percent of total assets, at December 31, 2021, compared with $132.6 million, or 0.55 percent of total assets, at December 31, 2020, and $100.3 million, or 0.36 percent of total assets, at September 30, 2021.  Other real estate owned and other repossessed assets was $33.0 million at December 31, 2021, compared with $11.4 million at December 31, 2020 and $16.5 million at September 30, 2021.

Noninterest Revenue

Noninterest revenue was $103.9 million for the fourth quarter of 2021, compared with $78.8 million for the fourth quarter of 2020 and $84.4 million for the third quarter of 2021.  These results include a positive mortgage servicing rights (MSR) valuation adjustment of $2.6 million for the fourth quarter of 2021, compared with a positive MSR valuation adjustment of $0.2 million for the fourth quarter of 2020 and a positive MSR valuation adjustment of $2.0 million for the third quarter of 2021.  Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.

Insurance commission revenue was $32.6 million for the fourth quarter of 2021, compared with $29.8 million for the fourth quarter of 2020 and $35.8 million for the third quarter of 2021.  While fourth quarter commission revenue is adversely impacted by policy renewal seasonality, commission revenue continues to benefit from a firm premium rate market.   Mortgage production and servicing revenue was $8.0 million for the fourth quarter of 2021, compared with $19.9 million for the fourth quarter of 2020 and $11.0 million for the third quarter of 2021.  Mortgage origination volume for the fourth quarter of 2021 was $817.7 million, compared with $845.9 million for the fourth quarter of 2020 and $788.9 million for the third quarter of 2021.  Mortgage revenue for the fourth quarter of 2021 was adversely impacted by seasonality in the mortgage pipeline as well as declines in refinance activity associated with rising interest rates.  Wealth management revenue was $16.4 million for the fourth quarter of 2021, compared with $6.8 million for the fourth quarter of 2020 and $7.1 million for the third quarter of 2021.  Wealth management revenue for the fourth quarter of 2021 includes additional revenue associated with legacy Cadence trust services and Linscomb & Williams.    

Credit card, debit card and merchant fee revenue was $12.8 million for the fourth quarter of 2021, compared with $10.1 million for the fourth quarter of 2020 and $11.4 million for the third quarter of 2021.  Deposit service charge revenue was $16.3 million for the fourth quarter of 2021, compared with $9.7 million for the fourth quarter of 2020 and $10.3 million for the third quarter of 2021.  Other noninterest revenue was $15.5 million for the fourth quarter of 2021, compared with $2.3 million for the fourth quarter of 2020 and $6.9 million for the third quarter of 2021.

Noninterest Expense

Noninterest expense for the fourth quarter of 2021 was $289.2 million, compared with $167.1 million for the fourth quarter of 2020 and $179.9 million for the third quarter of 2021.  Salaries and employee benefits expense was $149.6 million for the fourth quarter of 2021, compared with $97.2 million for the fourth quarter of 2020 and $113.0 million for the third quarter of 2021.  Occupancy and equipment expense was $26.9 million for the fourth quarter of 2021, compared with $17.8 million for the fourth quarter of 2020 and $19.0 million for the third quarter of 2021.  Data processing and software expense was $24.8 million for the fourth quarter of 2021, compared with $15.3 million for the fourth quarter of 2020 and $16.8 million for the third quarter of 2021.  Other noninterest expense was $39.1 million for the fourth quarter of 2021, compared with $29.1 million for the fourth quarter of 2020 and $23.0 million for the third quarter of 2021. 

Adjusted noninterest expense for the fourth quarter of 2021 was $239.1 million, compared with $161.1 million for the fourth quarter of 2020 and $174.0 million for the third quarter of 2021.  Adjusted noninterest expense excludes merger expense included as a separate line item on the income statement as well as incremental merger related expenses that are included in the respective expense categories.  Merger expenses represent costs to complete the merger with no future benefit, while incremental merger related expenses represent costs to complete the merger for which the entity receives a future benefit.  Merger expense was $44.8 million for the fourth quarter of 2021, compared with $0.2 million for the fourth quarter of 2020 and $3.4 million for the third quarter of 2021.  Merger expense for the fourth quarter of 2021 was comprised primarily of advisor fees, legal fees, and compensation related items.  Incremental merger related expenses for the fourth quarter of 2021 totaled $4.6 million that included primarily employee retention expense.  Adjusted noninterest expense for the fourth quarter of 2021 also excluded a charge of $0.7 million in accordance with ASC 715 "Compensation – Retirement Benefits" to reflect the settlement accounting impact of elevated lump sum retirement pension payouts in 2021.  Similar charges were recorded for the fourth quarter of 2020 and third quarter of 2021 of $5.8 million and $2.4 million, respectively. 

Capital Management

The Company's ratio of shareholders' equity to assets was 11.01 percent at December 31, 2021, compared with 11.72 percent at December 31, 2020 and 10.77 percent at September 30, 2021.  The ratio of tangible common shareholders' equity to tangible assets was 7.54 percent at December 31, 2021, compared with 7.54 percent at December 31, 2020 and 6.82 percent at September 30, 2021. 

During the fourth quarter of 2021, the Company repurchased 4,257,526 shares of its common stock at a weighted average price of $30.66 pursuant to its share repurchase program, which completed the repurchase of the full 6 million shares authorized under the program for 2021.   On December 8, 2021, the Company announced a new share repurchase program, pursuant to which the Board of Directors has authorized the repurchase of up to an aggregate of 10 million shares of Company common stock, which commenced January 3, 2022 and will expire December 30, 2022.

Estimated regulatory capital ratios at December 31, 2021 included Common Equity Tier 1 capital of 10.81 percent, Tier 1 capital of 11.29 percent, Total risk-based capital of 13.44 percent, and Tier 1 leverage capital of 9.90 percent. 

Summary

Rollins added, "As we move into the New Year, excitement and optimism among our teammates is at an all-time high. Today's public unveiling of our new logo is a significant milestone on our journey of creating the new Cadence Bank.  Our new visual identity mirrors the strategic union of our companies and reflects how we are working together to best serve our customers and communities, delivering a comprehensive and balanced set of financial solutions.  This new logo is the first component of our new brand, and we'll be unveiling other parts of our entire brand identity in the coming months.  For now, we can look to this new logo as another way for us to unite together in our shared commitment to the new Cadence Bank." 

Rollins concluded, "Our bankers are calling on customers and winning new business, which is clearly reflected in our fourth quarter organic growth totals.  Our insurance team had a record year in 2021 as they continue to capitalize on a firm insurance premium market.  Other teams, including mortgage, wealth management, and treasury management, are working diligently to grow revenue and take advantage of cross selling opportunities created by a much larger combined customer base.  Our back office and operational support teams continue to focus on the integration process as well as helping identify and realize the cost savings associated with the transaction.  Our board and management team are excited about the future of the new Cadence Bank and committed to continuing to drive improved operating performance and shareholder value."

MERGER TRANSACTIONS

Cadence Bancorporation (NYSE: CADE)

On October 29, 2021, the Company completed the merger with Cadence Bancorporation, the parent company of Cadence Bank N.A., (collectively referred to as legacy Cadence), pursuant to which legacy Cadence was merged with and into the Company (the Cadence Merger).  Legacy Cadence operated 99 full-service banking offices in the southeast.  As of October 29, 2021, legacy Cadence reported total assets of $18.8 billion, total loans of $11.6 billion and total deposits of $16.3 billion.  Under the terms of the definitive merger agreement, each legacy Cadence shareholder received 0.70 shares of the Company's common stock in exchange for each share of Cadence common stock they held.  In addition, legacy Cadence paid a one-time special dividend of $1.25 per share on October 28, 2021.  In connection with the closing, the Company changed its name from "BancorpSouth Bank" to "Cadence Bank" and also changed its NYSE ticker symbol from "BXS" to "CADE".  For more information regarding the Cadence Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (FDIC) on October 29, 2021.  The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

FNS Bancshares, Inc.

On May 1, 2021, the Company completed the merger with FNS Bancshares, Inc., the parent company of FNB Bank, (collectively referred to as FNS), pursuant to which FNS was merged with and into the Company.  FNS operated 17 full-service banking offices in Alabama, Georgia and Tennessee.  The merger expanded the Company's presence in Jackson, DeKalb and Marshall counties in Alabama and the Chattanooga, Tennessee-Georgia and Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical areas.  As of May 1, 2021, FNS reported total assets of $826.6 million, total loans of $464.7 million and total deposits of $720.7 million.  Under the terms of the definitive merger agreement, the Company issued approximately 2,975,000 shares of the Company's common stock plus $18.0 million in cash for all outstanding shares of FNS.  For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3, 2021.  The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

National United Bancshares, Inc.

On May 1, 2021, the Company completed the merger with National United Bancshares, Inc., the parent company of National United, (collectively referred to as National United), pursuant to which National United was merged with and into the Company.  National United operated 6 full-service banking offices in the Killeen-Temple, Texas; Waco, Texas; and Austin-Round Rock-Georgetown, Texas metropolitan statistical areas.  As of May 1, 2021, National United reported total assets of $817.3 million, total loans of $434.6 million and total deposits of $742.9 million.  Under the terms of the definitive merger agreement, the Company issued approximately 3,110,000 shares of the Company's common stock plus $33.25 million in cash for all outstanding shares of National United.  For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3, 2021.  The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

Non-GAAP Measures and Ratios

This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP).  A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions"  beginning on page 25 of this news release.

Conference Call and Webcast

The Company will conduct a conference call to discuss its fourth quarter 2021 financial results on January 26, 2022, at 10:00 a.m. (Central Time).  This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing http://ir.cadencebank.com/events. The webcast will also be available in archived format at the same address.

About Cadence Bank

Cadence Bank (NYSE: CADE) is a leading regional banking franchise with approximately $48 billion in assets and more than 400 branch locations across the South, Midwest 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 are not statements of historical fact and 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 created thereby under the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "aspire," "assume," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "forecast," "foresee," "goal," "hope," "indicate," "intend," "may," "might," "outlook," "plan," "project," "projection," "predict," "prospect," "potential," "roadmap," "seek," "should," "target," "will," and "would," or the negative versions of those words or other 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, including the economic impact of the COVID-19 pandemic (including any variant of the COVID-19 virus) on the Company's business; the Company's assets; business; cash flows; financial condition; liquidity; prospects; results of operations; deposit and customer repo growth; interest and fee-based revenue; capital resources; capital metrics; efficiency ratio; valuation of mortgage servicing rights; net income; net interest revenue; non-interest revenue; net interest margin; interest expense; non-interest expense; earnings per share; interest rate sensitivity; interest rate risk; balance sheet and liquidity management; off-balance sheet arrangements; fair value determinations; asset quality; credit quality; credit losses; provision and allowance for credit losses, impairments, charge-offs, recoveries and changes in loan volumes; investment securities portfolio yields and values; ability to manage the impact of pandemics, natural disasters and other force majeure events; adoption and use of critical accounting policies; adoption and implementation of new accounting standards and their effect on the Company's financial results and the Company's financial reporting; utilization of non-GAAP financial metrics; declaration and payment of dividends; 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; mortgage origination volume; mortgage servicing and production revenue; insurance commission revenue; implementation and execution of cost savings initiatives; ability to successfully litigate, resolve or otherwise dispense with threatened, pending, ongoing and future litigation and governmental, administrative and investigatory matters; ability to successfully complete pending or future acquisitions, dispositions and other strategic growth opportunities and initiatives; ability to successfully obtain regulatory approval for acquisitions and other growth initiatives; ability to successfully integrate and manage acquisitions; opportunities and efforts to grow market share; reputation; ability to compete with other financial institutions; ability to recruit and retain key employees and personnel; access to capital markets; availability of capital; investments in the securities of other financial institutions; and ability to operate the Company's regulatory compliance programs in accordance with applicable law.

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 historical facts, 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. These risks, uncertainties and other factors include, without limitation, potential delays or other problems in implementing and executing the Company's growth, expansion and acquisition strategies, including delays in obtaining regulatory or other necessary approvals or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies; the risks of changes in interest rates and their effects on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; the impact of inflation on consumers; 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; the availability of and access to capital; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans; the ability to grow additional interest and fee income or to control noninterest expense; the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Company's net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those actions in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "Economic Aid Act") and any related rules and regulations; changes in U.S. Government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the enforcement efforts of federal and state bank regulators; possible adverse rulings, judgments, settlements and other outcomes of pending, ongoing and future litigation and governmental, administrative and investigatory matters (including litigation or actions arising from the Company's participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan programs authorized by the CARES Act and the Economic Aid Act); the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of 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; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the magnitude and duration of the pandemic, and the effect of actions taken to mitigate the impact of the COVID-19 pandemic on the Company, the Company's employees, the Company's customers, the global economy and the financial markets; international or political instability; impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; adoption of new accounting standards, or changes in existing standards; the outcome of any legal proceedings that may be instituted against the Company or Cadence in respect of the Cadence Merger; the ability of the Company and Cadence to meet expectations regarding the timing, completion and accounting and tax treatments of the Cadence Merger; the risk that any announcements relating to the Cadence Merger could have adverse effects on the market price of the capital stock of the combined company; the possibility that the anticipated benefits of the Cadence Merger will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the combined company does business; the possibility that the Cadence Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the Cadence Merger within the expected timeframes or at all and to successfully integrate Cadence's operations and those of the Company; such integration may be more difficult, time consuming or costly than expected; revenues following the Cadence Merger may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Cadence Merger; the combined company's success in executing its business plans and strategies and managing the risks involved in the foregoing; the dilution caused by the Company's issuance of additional shares of its capital stock in connection with the Cadence Merger and other factors as detailed from time to time in the Company's press and news releases, periodic and current reports and other filings the Company files with the FDIC.

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, 2020 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, whether as a result of new information, future developments or otherwise, except as required by applicable law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company.  All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.

 

Cadence Bank
Selected Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
	Quarter Ended					Year Ended
	Dec-21	Sep-21	Jun-21	Mar-21	Dec-20	Dec-21	Dec-20
Earnings Summary:
Interest revenue	$      290,626	$      199,511	$      199,129	$      192,783	$      199,287	$      882,049	$      799,493
Interest expense	19,414	17,967	18,947	19,994	22,351	76,322	108,526
Net interest revenue	271,212	181,544	180,182	172,789	176,936	805,727	690,967
Provision (release) for credit losses	133,562	(7,000)	11,500	-	5,794	138,062	89,044
Net interest revenue, after provision
for credit losses	137,650	188,544	168,682	172,789	171,142	667,665	601,923
Noninterest revenue	103,854	84,420	101,943	87,936	78,826	378,153	336,504
Noninterest expense	289,194	179,889	173,984	155,823	167,117	798,890	650,882
(Loss) Income before income taxes	(47,690)	93,075	96,641	104,902	82,851	246,928	287,545
Income tax expense (benefit)	(13,033)	20,350	21,102	23,347	14,046	51,766	59,494
Net (loss)  income	$      (34,657)	$        72,725	$        75,539	$        81,555	$        68,805	$      195,162	$      228,051
Less: Preferred dividends	2,372	2,372	2,372	2,372	2,372	9,488	9,488
Net (loss) income available to common shareholders	$      (37,029)	$        70,353	$        73,167	$        79,183	$        66,433	$      185,674	$      218,563
Balance Sheet - Period End Balances
Total assets	$ 47,684,751	$ 28,060,496	$ 27,612,365	$ 25,802,497	$ 24,081,194	$ 47,684,751	$ 24,081,194
Total earning assets	43,503,089	25,572,354	25,129,873	23,542,657	21,792,725	43,503,089	21,792,725
Total securities	15,606,470	10,053,372	9,084,111	7,640,268	6,231,006	15,606,470	6,231,006
Loans and leases, net of unearned income	26,882,988	14,991,245	15,004,039	15,038,808	15,022,479	26,882,988	15,022,479
Allowance for credit losses	446,415	260,276	265,720	241,117	244,422	446,415	244,422
Net book value of acquired loans (included in
loans and leases above)	11,968,278	1,426,266	1,646,031	1,023,252	1,160,267	11,968,278	1,160,267
Paycheck protection program (PPP) loans
(included in loans and leases above)	50,008	32,771	167,144	1,146,000	975,421	50,008	975,421
Remaining loan mark on acquired loans	77,711	9,863	13,037	10,069	13,886	77,711	13,886
Total deposits	39,817,673	23,538,711	22,838,486	21,173,186	19,846,441	39,817,673	19,846,441
Total deposits and securities sold under
agreement to repurchase	40,504,861	24,243,834	23,521,621	21,833,671	20,484,156	40,504,861	20,484,156
Long-term debt	3,742	4,082	4,189	4,295	4,402	3,742	4,402
Subordinated debt securities	493,669	307,776	307,601	297,425	297,250	493,669	297,250
Total shareholders' equity	5,247,987	3,023,257	3,069,574	2,825,198	2,822,477	5,247,987	2,822,477
Common shareholders' equity	5,080,994	2,856,264	2,902,581	2,658,205	2,655,484	5,080,994	2,655,484
Balance Sheet - Average Balances
Total assets	$ 40,995,513	$ 27,616,585	$ 26,666,296	$ 24,545,560	$ 23,660,503	$ 29,994,648	$ 22,723,386
Total earning assets	37,210,403	25,220,602	24,211,759	22,346,075	21,497,938	27,282,382	20,616,184
Total securities	12,954,547	9,539,814	8,067,109	6,606,027	5,820,425	9,309,947	5,010,378
Loans and leases, net of unearned income	22,745,093	14,915,728	15,470,539	15,029,076	15,219,402	17,055,429	14,984,356
PPP loans (included in loans and leases above)	48,206	73,783	973,036	1,062,423	1,139,959	535,308	830,467
Total deposits	34,759,687	23,162,450	22,385,883	20,472,080	19,600,863	25,228,601	18,559,655
Total deposits and securities sold under
agreement to repurchase	35,479,807	23,914,986	23,092,969	21,123,774	20,272,881	25,936,769	19,194,697
Long-term debt	3,844	4,168	4,714	4,378	4,488	4,274	4,644
Subordinated debt securities	437,321	307,671	304,056	297,318	297,145	336,896	296,882
Total shareholders' equity	4,508,594	3,058,307	2,954,834	2,813,001	2,774,589	3,337,575	2,725,545
Common shareholders' equity	4,341,601	2,891,314	2,787,841	2,646,008	2,607,596	3,170,582	2,558,545
Nonperforming Assets:
Non-accrual loans and leases	$      122,104	$        59,622	$        61,664	$        73,142	$        96,378	$      122,104	$        96,378
Loans and leases 90+ days past due,
still accruing	24,784	17,012	15,386	21,208	14,320	24,784	14,320
Restructured loans and leases, still accruing	6,903	7,165	7,368	6,971	10,475	6,903	10,475
Non-performing loans (NPLs)	153,791	83,799	84,418	101,321	121,173	153,791	121,173
Other real estate owned and other repossessed
assets	33,021	16,515	17,333	9,351	11,395	33,021	11,395
Non-performing assets (NPAs)	$      186,812	$      100,314	$      101,751	$      110,672	$      132,568	$      186,812	$      132,568

 

Cadence Bank
Selected Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
	Quarter Ended					Year Ended
	Dec-21	Sep-21	Jun-21	Mar-21	Dec-20	Dec-21	Dec-20
Financial Ratios and Other Data:
Return on average assets	(0.34%)	1.04%	1.14%	1.35%	1.16%	0.65%	1.00%
Adjusted return on average assets-excluding MSR*	1.01	1.09	1.40	1.28	1.23	1.17	1.09
Return on average common shareholders' equity	(3.38)	9.65	10.53	12.14	10.14	5.86	8.54
Adjusted return on average common shareholders'
equity-excluding MSR*	9.33	10.06	13.04	11.47	10.80	10.75	9.27
Return on average tangible common equity*	(4.71)	14.85	16.08	18.46	15.54	8.66	13.22
Adjusted return on average tangible common equity-
excluding MSR*	12.99	15.48	19.92	17.44	16.56	15.90	14.35
Pre-tax pre-provision net revenue to total average assets*	0.83	1.24	1.63	1.73	1.49	1.28	1.66
Adjusted pre-tax pre-provision net revenue to total
average assets*	1.29	1.29	1.80	1.64	1.59	1.48	1.76
Net interest margin-fully taxable equivalent	2.90	2.86	2.99	3.15	3.29	2.96	3.36
Net interest rate spread	2.78	2.72	2.83	2.97	3.07	2.82	3.11
Efficiency ratio (tax equivalent)*	76.94	67.52	61.55	59.64	65.16	67.34	63.18
Adjusted efficiency ratio-excluding MSR (tax equivalent)*	63.98	65.79	57.66	60.74	62.87	62.16	61.33
Loan/deposit ratio	67.52%	63.69%	65.70%	71.03%	75.69%	67.52%	75.69%
Employee FTE	6,595	4,770	4,835	4,546	4,596	6,595	4,596
Credit Quality Ratios:
Net (recoveries) charge-offs to average loans and leases (1)	(0.08%)	(0.05%)	(0.05%)	0.09%	0.29%	(0.03%)	0.18%
Provision for credit losses to average loans and leases (1)	2.33	(0.19)	0.30	0.00	0.15	0.81	0.59
ACL to net loans and leases	1.66	1.74	1.77	1.60	1.63	1.66	1.63
ACL to non-performing loans and leases	290.27	310.60	314.77	237.97	201.71	290.27	201.71
ACL to non-performing assets	238.96	259.46	261.15	217.87	184.37	238.96	184.37
Non-performing loans and leases to net loans and leases	0.57	0.56	0.56	0.67	0.81	0.57	0.81
Non-performing assets to total assets	0.39	0.36	0.37	0.43	0.55	0.39	0.55
Equity Ratios:
Total shareholders' equity to total assets	11.01%	10.77%	11.12%	10.95%	11.72%	11.01%	11.72%
Total common shareholders' equity to total assets	10.66	10.18	10.51	10.30	11.03	10.66	11.03
Tangible common shareholders' equity to tangible assets*	7.54	6.82	7.11	7.04	7.54	7.54	7.54
Capital Adequacy:
Common  Equity Tier 1 capital (2)	10.81%	10.73%	10.89%	10.97%	10.74%	10.81%	10.74%
Tier 1 capital (2)	11.29	11.63	11.80	11.95	11.74	11.29	11.74
Total capital (2)	13.44	14.27	14.50	14.65	14.48	13.44	14.48
Tier 1 leverage capital (2)	9.90	8.13	8.25	8.59	8.67	9.90	8.67
*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 25, 26, and 27.
(1) Annualized
(2) Estimated for current quarter

 

 

Cadence Bank
Selected Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
	Quarter Ended					Year Ended
	Dec-21	Sep-21	Jun-21	Mar-21	Dec-20	Dec-21	Dec-20
Common Share Data:
Diluted (loss) earnings per share	$          (0.22)	$            0.65	$            0.69	$            0.77	$            0.65	$            1.54	$            2.12
Adjusted earnings per share*	0.63	0.69	0.84	0.78	0.69	2.89	2.20
Adjusted earnings per share- excluding MSR*	0.62	0.68	0.86	0.73	0.69	2.83	2.30
Cash dividends per share	0.200	0.200	0.190	0.190	0.190	0.780	0.745
Book value per share	26.98	26.73	26.72	25.90	25.89	26.98	25.89
Tangible book value per share*	18.45	17.27	17.41	17.08	17.04	18.45	17.04
Market value per share (last)	29.79	29.78	28.33	32.48	27.44	29.79	27.44
Market value per share (high)	32.12	30.55	33.18	35.59	28.54	35.59	31.61
Market value per share (low)	27.25	24.87	27.59	26.95	18.77	24.87	17.21
Market value per share (avg)	30.20	27.89	30.33	30.85	25.26	29.80	23.55
Dividend payout ratio	NM	30.71%	27.43%	24.62%	29.34%	50.65%	35.12%
Adjusted dividend payout ratio - excluding MSR*	32.26%	29.41%	22.09%	26.03%	27.54%	27.56%	32.39%
Total shares outstanding	188,337,658	106,853,316	108,614,595	102,624,818	102,561,480	188,337,658	102,561,480
Average shares outstanding - diluted	164,720,656	108,250,102	105,838,056	102,711,584	102,817,409	120,668,695	103,304,570
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases	4.34%	4.46%	4.43%	4.53%	4.55%	4.43%	4.66%
Loans, loans held for sale, and leases excluding net
accretion on acquired loans and leases	4.06	4.38	4.35	4.43	4.49	4.28	4.59
Available-for-sale securities:
Taxable	1.17	1.20	1.21	1.32	1.53	1.21	1.75
Tax-exempt	2.54	2.88	2.77	3.52	3.40	2.78	3.85
Short-term, FHLB and other equity investments	0.25	0.20	0.16	0.11	0.13	0.21	0.43
Total interest earning assets and revenue	3.11	3.15	3.31	3.51	3.70	3.24	3.89
Deposits	0.17	0.24	0.27	0.33	0.38	0.24	0.49
Demand - interest bearing	0.21	0.31	0.34	0.40	0.47	0.30	0.61
Savings	0.14	0.09	0.09	0.11	0.15	0.11	0.19
Other time	0.58	0.91	1.00	1.14	1.28	0.88	1.47
Total interest bearing deposits	0.26	0.36	0.41	0.48	0.57	0.36	0.71
Short-term borrowings	0.11	0.10	0.12	0.13	0.16	0.12	0.54
Total interest bearing deposits and short-term
borrowings	0.25	0.35	0.40	0.46	0.55	0.35	0.70
Subordinated debt securities	3.95	4.47	4.47	4.46	4.05	4.29	4.40
Long-term debt	3.79	4.81	4.46	4.88	4.84	3.93	4.87
Total interest bearing liabilities and expense	0.32	0.43	0.47	0.54	0.63	0.43	0.78
Interest bearing liabilities to interest earning assets	64.18%	66.04%	66.24%	66.87%	65.99%	65.61%	67.17%
Net interest income tax equivalent adjustment	$             824	$             446	$             550	$             569	$             709	$          2,388	$          2,766
*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 25, 26, and 27.
NM = Not meaningful

 

Cadence Bank
Consolidated Balance Sheets
(Unaudited)
	Dec-21	Sep-21	Jun-21	Mar-21	Dec-20
	(Dollars in thousands)
Assets
Cash and due from banks	$      656,132	$      301,246	$      331,873	$      263,289	$      284,095
Interest bearing deposits with other banks
and Federal funds sold	638,547	150,778	629,390	336,253	133,273
Available-for-sale securities, at fair value	15,606,470	10,053,372	9,084,111	7,640,268	6,231,006
Loans and leases, net of unearned income	26,882,988	14,991,245	15,004,039	15,038,808	15,022,479
Allowance for credit losses	446,415	260,276	265,720	241,117	244,422
Net loans and leases	26,436,573	14,730,969	14,738,319	14,797,691	14,778,057
Loans held for sale	340,175	342,871	403,046	518,352	397,076
Premises and equipment, net	786,426	533,999	533,276	508,508	508,147
Goodwill	1,407,948	958,304	957,474	851,612	851,612
Other identifiable intangibles	198,271	52,235	54,659	53,581	55,899
Bank owned life insurance	597,953	359,740	355,660	335,707	333,264
Other assets	1,016,256	576,982	524,557	497,236	508,765
Total Assets	$  47,684,751	$  28,060,496	$  27,612,365	$  25,802,497	$  24,081,194
Liabilities
Deposits:
Demand:  Noninterest bearing	$  13,634,505	$   7,700,216	$   7,619,308	$   6,990,880	$   6,341,457
Interest bearing	18,727,588	10,285,371	9,671,662	9,067,373	8,524,010
Savings	3,556,079	3,054,756	2,939,958	2,678,276	2,452,059
Time deposits	3,899,501	2,498,368	2,607,558	2,436,657	2,528,915
Total deposits	39,817,673	23,538,711	22,838,486	21,173,186	19,846,441
Securities sold under agreement to repurchase	687,188	705,123	683,135	660,485	637,715
Federal funds purchased
and other short-term borrowings	595,000	-	-	-	-
Subordinated debt securities	493,669	307,776	307,601	297,425	297,250
Long-term debt	3,742	4,082	4,189	4,295	4,402
Other liabilities	839,492	481,547	709,380	841,908	472,909
Total Liabilities	42,436,764	25,037,239	24,542,791	22,977,299	21,258,717
Shareholders' Equity
Preferred stock	166,993	166,993	166,993	166,993	166,993
Common stock	470,844	267,133	271,536	256,562	256,404
Capital surplus	2,841,998	688,637	730,294	563,481	565,187
Accumulated other comprehensive (loss) income	(139,369)	(82,627)	(34,575)	(43,459)	11,923
Retained earnings	1,907,521	1,983,121	1,935,326	1,881,621	1,821,970
Total Shareholders' Equity	5,247,987	3,023,257	3,069,574	2,825,198	2,822,477
Total Liabilities & Shareholders' Equity	$  47,684,751	$  28,060,496	$  27,612,365	$  25,802,497	$  24,081,194

 

Cadence Bank
Consolidated Average Balance Sheets
(Unaudited)
	Dec-21	Sep-21	Jun-21	Mar-21	Dec-20
	(Dollars in thousands)
Assets
Cash and due from banks	$     792,315	$     288,199	$     365,647	$     261,519	$     247,799
Interest bearing deposits with other banks
and Federal funds sold	1,253,722	495,982	302,845	412,313	171,650
Available-for-sale securities, at fair value	12,954,547	9,539,814	8,067,109	6,606,027	5,820,425
Loans and leases, net of unearned income	22,745,093	14,915,728	15,470,539	15,029,076	15,219,402
Allowance for credit losses	404,578	264,067	245,095	242,935	247,049
Net loans and leases	22,340,515	14,651,661	15,225,444	14,786,141	14,972,353
Loans held for sale	220,766	242,422	361,999	289,755	277,600
Premises and equipment, net	690,031	534,071	526,960	508,551	508,053
Goodwill	1,115,502	957,899	910,448	851,612	852,472
Other identifiable intangibles	106,559	53,567	52,564	54,876	54,858
Bank owned life insurance	517,511	357,429	348,378	333,837	332,543
Other assets	1,004,045	495,541	504,902	440,929	422,750
Total Assets	$40,995,513	$27,616,585	$26,666,296	$24,545,560	$23,660,503
Liabilities
Deposits:
Demand:  Noninterest bearing	$12,047,637	$  7,579,513	$  7,367,832	$  6,484,703	$  6,391,006
Interest bearing	15,811,268	10,027,346	9,598,550	8,956,420	8,268,528
Savings	3,374,243	3,001,406	2,851,113	2,550,095	2,386,034
Time deposits	3,526,539	2,554,185	2,568,388	2,480,862	2,555,295
Total deposits	34,759,687	23,162,450	22,385,883	20,472,080	19,600,863
Securities sold under agreement to repurchase	720,120	752,536	707,086	651,694	672,018
Federal funds purchased
and other short-term borrowings	7,554	8,706	3,901	1,500	3,893
Subordinated debt securities	437,321	307,671	304,056	297,318	297,145
Long-term debt	3,844	4,168	4,714	4,378	4,488
Other liabilities	558,393	322,747	305,822	305,589	307,507
Total Liabilities	36,486,919	24,558,278	23,711,462	21,732,559	20,885,914
Shareholders' Equity
Preferred stock	166,993	166,993	166,993	166,993	166,993
Common stock	404,522	270,098	266,676	256,536	256,422
Capital surplus	2,139,357	717,022	674,949	563,529	568,343
Accumulated other comprehensive (loss) income	(103,554)	(35,408)	(30,614)	(5,090)	12,432
Retained earnings	1,901,276	1,939,602	1,876,830	1,831,033	1,770,399
Total Shareholders' Equity	4,508,594	3,058,307	2,954,834	2,813,001	2,774,589
Total Liabilities & Shareholders' Equity	$40,995,513	$27,616,585	$26,666,296	$24,545,560	$23,660,503

 

Cadence Bank
Consolidated Condensed Statements of Income (Loss)
(Dollars in thousands, except per share data)
(Unaudited)
	Quarter Ended										Year to Date
	Dec-21		Sep-21		Jun-21		Mar-21		Dec-20		Dec-21		Dec-20
INTEREST REVENUE:
Loans and leases	$ 249,614		$ 168,066		$ 171,305		$ 169,195		$   174,072		$   758,180		$   700,065
Available-for-sale securities:
Taxable	37,258		28,617		23,983		21,192		21,895		111,050		85,466
Tax-exempt	1,608		490		676		687		760		3,461		3,984
Loans held for sale	1,324		2,076		3,040		1,595		2,504		8,035		8,357
Other	822		262		125		114		56		1,323		1,621
Total interest revenue	290,626		199,511		199,129		192,783		199,287		882,049		799,493
INTEREST EXPENSE:
Interest bearing demand	8,485		7,723		8,247		8,796		9,766		33,251		47,692
Savings	1,203		672		626		700		872		3,201		4,117
Other time	5,139		5,861		6,428		6,966		8,189		24,394		38,940
Federal funds purchased and securities sold
under agreement to repurchase	200		204		206		203		276		813		2,282
Short-term and long-term debt	37		42		44		45		47		168		2,430
Subordinated debt	4,351		3,463		3,387		3,269		3,201		14,470		13,063
Other	(1)		2		9		15		-		25		2
Total interest expense	19,414		17,967		18,947		19,994		22,351		76,322		108,526
Net interest revenue	271,212		181,544		180,182		172,789		176,936		805,727		690,967
Provision (release) for credit losses	133,562		(7,000)		11,500		-		5,794		138,062		89,044
Net interest revenue, after provision for
credit losses	137,650		188,544		168,682		172,789		171,142		667,665		601,923
NONINTEREST REVENUE:
Mortgage banking	10,580		13,058		9,105		25,310		20,129		58,053		86,253
Credit card, debit card and merchant fees	12,843		11,428		11,589		9,659		10,053		45,519		38,247
Deposit service charges	16,336		10,324		8,849		8,477		9,708		43,986		37,929
Security (losses) gains, net	(378)		(195)		96		82		63		(395)		58
Insurance commissions	32,637		35,773		36,106		30,667		29,815		135,183		125,286
Wealth management	16,352		7,147		7,543		8,465		6,751		39,507		26,213
Gain on sale of PPP loans	-		-		21,572		-		-		21,572		-
Other	15,484		6,885		7,083		5,276		2,307		34,728		22,518
Total noninterest revenue	103,854		84,420		101,943		87,936		78,826		378,153		336,504
NONINTEREST EXPENSE:
Salaries and employee benefits	149,599		112,968		108,188		101,060		97,215		471,815		417,809
Occupancy and equipment	26,885		18,977		18,154		17,378		17,760		81,394		70,341
Data processing and software	24,838		16,799		15,911		15,537		15,281		73,085		58,170
Merger expense	44,843		3,442		9,962		1,649		212		59,896		5,345
Deposit insurance assessments	3,278		2,330		1,638		1,455		1,696		8,701		6,726
Pension settlement expense	651		2,400		-		-		5,846		3,051		5,846
Other	39,100		22,973		20,131		18,744		29,107		100,948		86,645
Total noninterest expense	289,194		179,889		173,984		155,823		167,117		798,890		650,882
(Loss) Income before income taxes	(47,690)		93,075		96,641		104,902		82,851		246,928		287,545
Income tax (benefit) expense	(13,033)		20,350		21,102		23,347		14,046		51,766		59,494
Net (loss) income	$ (34,657)		$   72,725		$   75,539		$   81,555		$     68,805		$   195,162		$   228,051
Less: Preferred dividends	2,372		2,372		2,372		2,372		2,372		9,488		9,488
Net (loss) income available to common
shareholders	$ (37,029)		$   70,353		$   73,167		$   79,183		$     66,433		$   185,674		$   218,563
Net (loss) income  per common share: Diluted	$     (0.22)		$       0.65		$       0.69		$       0.77		$         0.65		$         1.54		$         2.12

 

Cadence Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
	Quarter Ended
	Dec-21		Sep-21		Jun-21		Mar-21		Dec-20
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate	$  7,847,473		$  2,210,287		$  2,271,370		$  3,102,082		$   2,918,192
Owner occupied	3,567,746		2,611,777		2,623,500		2,598,166		2,599,121
Total commercial and industrial	11,415,219		4,822,064		4,894,870		5,700,248		5,517,313
Commercial real estate
Construction, acquisition and development	2,924,343		1,797,559		1,926,421		1,707,800		1,728,682
Income producing	4,924,369		3,443,967		3,323,883		3,127,510		3,211,434
Total commercial real estate	7,848,712		5,241,526		5,250,304		4,835,310		4,940,116
Consumer
Residential mortgages	7,311,306		4,698,328		4,617,155		4,309,000		4,356,338
Other consumer	307,751		229,327		241,710		194,250		208,712
Total consumer	7,619,057		4,927,655		4,858,865		4,503,250		4,565,050
Total loans and leases, net of unearned	$26,882,988		$14,991,245		$15,004,039		$15,038,808		$ 15,022,479
NON-PERFORMING ASSETS
NON-PERFORMING LOANS AND LEASES:
Nonaccrual Loans and Leases
Commercial and industrial
Non-real estate	$       33,690		$       13,170		$       10,941		$        9,724		$       13,071
Owner occupied	22,058		13,738		13,156		17,312		20,796
Total commercial and industrial	55,748		26,908		24,097		27,036		33,867
Commercial real estate
Construction, acquisition and development	5,568		3,292		2,582		8,494		9,738
Income producing	16,086		8,403		13,483		12,838		16,249
Total commercial real estate	21,654		11,695		16,065		21,332		25,987
Consumer
Residential mortgages	44,180		20,821		21,218		24,382		35,608
Other consumer	522		198		284		392		916
Total consumer	44,702		21,019		21,502		24,774		36,524
Total nonaccrual loans and leases	$     122,104		$       59,622		$       61,664		$       73,142		$       96,378
Loans and Leases 90+ Days Past Due, Still
Accruing:	24,784		17,012		15,386		21,208		14,320
Restructured Loans and Leases, Still Accruing	6,903		7,165		7,368		6,971		10,475
Total non-performing loans and leases	$     153,791		$       83,799		$       84,418		$     101,321		$     121,173
OTHER REAL ESTATE OWNED AND
OTHER REPOSSESSED ASSETS	33,021		16,515		17,333		9,351		11,395
Total Non-performing Assets	$     186,812		$     100,314		$     101,751		$     110,672		$     132,568
Additions to Nonaccrual Loans and Leases
During the Quarter (excluding acquisitions)	$       22,158		$       19,858		$       16,005		$       10,029		$       11,087

 

Cadence Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
	Quarter Ended
	Dec-21		Sep-21		Jun-21		Mar-21		Dec-20
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period	$    260,276		$    265,720		$    241,117		$    244,422		$     250,624
Loans and leases charged-off:
Commercial and industrial	(2,712)		(1,488)		(1,882)		(3,043)		(5,666)
Commercial real estate	(586)		(131)		(623)		(1,285)		(4,907)
Consumer	(2,342)		(1,694)		(1,357)		(1,578)		(2,459)
Total loans charged-off	(5,640)		(3,313)		(3,862)		(5,906)		(13,032)
Recoveries:
Commercial and industrial	7,835		3,787		3,061		1,211		842
Commercial real estate	1,047		646		1,291		109		118
Consumer	1,521		936		1,310		1,281		870
Total recoveries	10,403	-	5,369	-	5,662	-	2,601		1,830
Net recoveries (charge-offs)	4,763		2,056		1,800		(3,305)		(11,202)
Initial allowance on loans purchased with
credit deterioration	62,321		-		12,803		-		-
Provision:
Loans and leases acquired during the quarter	119,055		-		11,500		-		-
Provision (release) for credit losses related to loans
and leases	-		(7,500)		(1,500)		-		5,000
Total provision for loans and leases	119,055		(7,500)		10,000		-		5,000
Balance, end of period	$    446,415		$    260,276		$    265,720		$    241,117		$     244,422
Average loans and leases, net of unearned, for period	$ 22,745,093		$ 14,915,728		$ 15,470,539		$ 15,029,076		$ 15,219,402
Ratio: Net (recoveries) charge-offs to average loans
and leases (annualized)	(0.08%)		(0.05%)		(0.05%)		0.09%		0.29%
RESERVE FOR UNFUNDED COMMITMENTS**
Balance, beginning of period	$        9,044		$        8,544		$        7,044		$        7,044		$        6,250
Provision for unfunded commitments for loans
acquired during the quarter	13,007		-		-		-		-
Provision for credit losses for unfunded commitments	1,500		500		1,500		-		794
Balance, end of period	$      23,551		$        9,044		$        8,544		$        7,044		$        7,044
**The Reserve for Unfunded Commitments is classified in other liabilities on the balance sheet.

 

Cadence Bank
Selected Loan Data
(Dollars in thousands)
(Unaudited)
	December 31, 2021
						Purchased
						Credit
		Special				Deteriorated
	Pass	Mention	Substandard	Doubtful	Impaired	(Loss)	Total
LOAN PORTFOLIO BY
INTERNALLY ASSIGNED GRADE:
Commercial and industrial
Non-real estate	$  7,655,502	$ 43,009	$   103,134	$     153	$  5,350	$     40,325	$  7,847,473
Owner occupied	3,484,116	3,440	55,247	-	11,229	13,714	3,567,746
Total commercial and industrial	11,139,618	46,449	158,381	153	16,579	54,039	11,415,219
Commercial real estate
Construction, acquisition and
development	2,884,673	441	31,263	-	3,765	4,201	2,924,343
Income producing	4,686,699	28,964	174,936	-	3,810	29,960	4,924,369
Total commercial real estate	7,571,372	29,405	206,199	-	7,575	34,161	7,848,712
Consumer
Residential mortgages	7,196,106	990	110,429	2,560	1,047	174	7,311,306
Other consumer	300,175	-	7,381	137	-	58	307,751
Total consumer	7,496,281	990	117,810	2,697	1,047	232	7,619,057
Total loans and leases, net of unearned	$ 26,207,271	$ 76,844	$   482,390	$  2,850	$ 25,201	$     88,432	$ 26,882,988
	September 30, 2021
						Purchased
						Credit
		Special				Deteriorated
	Pass	Mention	Substandard	Doubtful	Impaired	(Loss)	Total
LOAN PORTFOLIO BY
INTERNALLY ASSIGNED GRADE:
Commercial and industrial
Non-real estate	$  2,163,197	$  1,691	$     32,847	$     161	$  5,150	$       7,241	$  2,210,287
Owner occupied	2,541,433	-	55,874	-	9,582	4,888	2,611,777
Total commercial and industrial	4,704,630	1,691	88,721	161	14,732	12,129	4,822,064
Commercial real estate
Construction, acquisition and
development	1,752,717	-	36,992	-	1,209	6,641	1,797,559
Income producing	3,280,770	-	154,459	-	4,934	3,804	3,443,967
Total commercial real estate	5,033,487	-	191,451	-	6,143	10,445	5,241,526
Consumer
Residential mortgages	4,627,217	-	69,113	-	1,817	181	4,698,328
Other consumer	221,621	-	7,644	-	-	62	229,327
Total consumer	4,848,838	-	76,757	-	1,817	243	4,927,655
Total loans	$ 14,586,955	$  1,691	$   356,929	$     161	$ 22,692	$     22,817	$ 14,991,245

 

Cadence Bank
Geographical Information
(Dollars in thousands)
(Unaudited)
	December 31, 2021
	Alabama					Tennessee
	and					and
	Florida	Arkansas	Louisiana	Mississippi	Missouri	Georgia	Texas	Other	Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate	$   750,919	$   155,279	$   294,943	$   505,212	$  69,959	$   724,290	$  3,627,559	$ 1,719,312	$   7,847,473
Owner occupied	539,409	220,571	233,726	675,010	78,587	427,493	1,286,591	106,359	3,567,746
Total commercial and industrial	1,290,328	375,850	528,669	1,180,222	148,546	1,151,783	4,914,150	1,825,671	11,415,219
Commercial real estate
Construction, acquisition and
development	295,534	67,950	51,240	214,688	30,515	482,721	1,570,378	211,317	2,924,343
Income producing	719,156	289,039	218,860	670,656	209,986	984,992	1,686,124	145,556	4,924,369
Total commercial real estate	1,014,690	356,989	270,100	885,344	240,501	1,467,713	3,256,502	356,873	7,848,712
Consumer
Residential mortgages	1,495,780	363,519	417,813	1,039,206	148,182	838,440	2,897,122	111,244	7,311,306
Other consumer	40,395	11,475	9,383	58,629	905	23,116	79,076	84,772	307,751
Total consumer	1,536,175	374,994	427,196	1,097,835	149,087	861,556	2,976,198	196,016	7,619,057
Total loans and leases, net of unearned	$3,841,193	$1,107,833	$1,225,965	$3,163,401	$538,134	$3,481,052	$11,146,850	$ 2,378,560	$ 26,882,988
Loan growth, excluding loans acquired
during the quarter (annualized)	(5.11%)	(9.13%)	(12.84%)	(1.94%)	11.12%	8.92%	18.63%	(11.22%)	5.83%

 

Cadence Bank
Noninterest Revenue and Expense
(Dollars in thousands)
(Unaudited)
	Quarter Ended										Year Ended
	Dec-21		Sep-21		Jun-21		Mar-21		Dec-20		Dec-21		Dec-20
NONINTEREST REVENUE:
Mortgage banking excl. MSR and MSR Hedge
market value adjustment	$    7,963		$  11,009		$  11,013		$  17,929		$   19,917		$   47,914		$   99,067
MSR and MSR Hedge market value adjustment	2,617		2,049		(1,908)		7,381		212		10,139		(12,814)
Credit card, debit card and merchant fees	12,843		11,428		11,589		9,659		10,053		45,519		38,247
Deposit service charges	16,336		10,324		8,849		8,477		9,708		43,986		37,929
Securities (losses) gains, net	(378)		(195)		96		82		63		(395)		58
Insurance commissions	32,637		35,773		36,106		30,667		29,815		135,183		125,286
Trust income	7,892		4,735		4,434		5,129		4,046		22,190		16,025
Annuity fees	435		50		50		51		53		586		215
Brokerage commissions and fees	8,025		2,362		3,059		3,285		2,652		16,731		9,973
Gain on sale of PPP loans	-		-		21,572		-		-		21,572		-
Bank-owned life insurance	3,098		4,217		1,845		2,020		2,425		11,180		8,181
Other miscellaneous income	12,386		2,668		5,238		3,256		(118)		23,548		14,337
Total noninterest revenue	$103,854		$  84,420		$101,943		$  87,936		$   78,826		$ 378,153		$ 336,504
NONINTEREST EXPENSE:
Salaries and employee benefits	$149,599		$112,968		$108,188		$101,060		$   97,215		$ 471,815		$ 417,809
Occupancy, net of rental income	19,477		13,443		13,187		12,814		13,004		58,921		51,655
Equipment	7,408		5,534		4,967		4,564		4,756		22,473		18,686
Deposit insurance assessments	3,278		2,330		1,638		1,455		1,696		8,701		6,726
Pension settlement expense	651		2,400		-		-		5,846		3,051		5,846
Advertising	2,721		988		783		1,004		899		5,496		3,742
Foreclosed property expense	689		2,189		649		1,021		2,122		4,548		4,074
Telecommunications	1,725		1,600		1,517		1,398		1,448		6,240		5,883
Public relations	2,365		1,166		1,012		741		897		5,284		3,166
Data processing	15,606		11,297		11,024		10,424		9,980		48,351		38,796
Computer software	9,232		5,502		4,887		5,113		5,301		24,734		19,374
Amortization of intangibles	5,473		2,424		2,401		2,318		2,499		12,616		9,605
Legal	1,282		814		774		1,166		1,474		4,036		3,431
Merger expense	44,843		3,442		9,962		1,649		212		59,896		5,345
Postage and shipping	1,772		1,414		1,317		1,547		1,418		6,050		5,256
Other miscellaneous expense	23,073		12,378		11,678		9,549		18,350		56,678		51,488
Total noninterest expense	$289,194		$179,889		$173,984		$155,823		$ 167,117		$ 798,890		$ 650,882
INSURANCE COMMISSIONS:
Property and casualty commissions	$  23,640		$  26,413		$  26,040		$  21,949		$   21,304		$   98,042		$   90,254
Life and health commissions	6,459		6,543		7,130		6,494		5,915		26,626		24,933
Risk management income	699		676		611		613		829		2,599		2,510
Other	1,839		2,141		2,325		1,611		1,767		7,916		7,589
Total insurance commissions	$  32,637		$  35,773		$  36,106		$  30,667		$   29,815		$ 135,183		$ 125,286

 

Cadence Bank
Average Balances and Yields
(Dollars in thousands)
(Unaudited)
		For the Three Months Ended
		December 31, 2021						September 30, 2021						December 31, 2020
		Average		Income/		Yield/		Average		Income/		Yield/		Average		Income/		Yield/
(Dollars in thousands)		Balance		Expense		Rate		Balance		Expense		Rate		Balance		Expense		Rate
ASSETS
Interest-earning assets:
Loans and leases, excluding accretion		$22,745,093		$233,585		4.07%		$ 14,915,728		$ 165,207		4.39%		$ 15,219,402		$ 172,279		4.50%
Accretion income on acquired loans				16,426		0.29				3,175		0.08				2,300		0.06
Loans held for sale		220,766		1,324		2.38		242,422		2,076		3.40		277,600		2,504		3.59
Investment securities
Taxable		12,636,302		37,258		1.17		9,454,514		28,617		1.20		5,708,017		21,895		1.53
Tax-exempt		318,245		2,035		2.54		85,300		620		2.88		112,408		961		3.40
Total investment securities		12,954,547		39,293		1.20		9,539,814		29,237		1.22		5,820,425		22,856		1.56
Other investments		1,289,997		822		0.25		522,638		262		0.20		180,511		57		0.13
Total interest-earning assets		37,210,403		291,450		3.11		25,220,603		199,957		3.15		21,497,938		199,996		3.70
Other assets		4,189,688						2,660,050						2,409,614
Allowance for credit losses		(404,578)						(264,067)						(247,049)
Total assets		$40,995,513						$ 27,616,585						$ 23,660,503
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits		$15,811,268		$    8,485		0.21%		$ 10,027,346		$    7,723		0.31%		$   8,268,528		$    9,766		0.47%
Savings deposits		3,374,243		1,203		0.14		3,001,406		672		0.09		2,386,034		872		0.15
Time deposits		3,526,539		5,139		0.58		2,554,185		5,861		0.91		2,555,295		8,189		1.28
Total interest-bearing deposits		22,712,050		14,827		0.26		15,582,937		14,256		0.36		13,209,857		18,827		0.57
Short-term borrowings		727,674		200		0.11		761,242		196		0.10		675,911		269		0.16
Long-term borrowings		441,165		4,387		3.95		311,839		3,515		4.47		301,633		3,255		4.29
Total interest-bearing liabilities		23,880,889		19,414		0.32		16,656,018		17,967		0.43		14,187,401		22,351		0.63
Noninterest-bearing liabilities:
Demand deposits		12,047,637						7,579,513						6,391,006
Other liabilities		558,393						322,747						307,507
Total liabilities		36,486,919						24,558,278						20,885,914
Shareholders' equity		4,508,594						3,058,307						2,774,589
Total liabilities and shareholders' equity		$40,995,513						$ 27,616,585						$ 23,660,503
Net interest income/net interest spread				272,036		2.78%				181,990		2.72%				177,645		3.07%
Net yield on earning assets/net interest margin						2.90%						2.86%						3.29%
Taxable equivalent adjustment:
Loans and investment securities				(824)						(446)						(709)
Net interest revenue				$271,212						$ 181,544						$ 176,936

 

Cadence Bank
Average Balances and Yields
(Dollars in thousands)
(Unaudited)
		For the Years Ended
		December 31, 2021						December 31, 2020
		Average		Income/		Yield/		Average		Income/		Yield/
(Dollars in thousands)		Balance		Expense		Rate		Balance		Expense		Rate
ASSETS
Interest-earning assets:
Loans and leases, excluding accretion		$17,055,429		$733,448		4.30%		$  14,984,356		$  690,473		4.61%
Accretion income on acquired loans				26,200		0.15				11,299		0.08
Loans held for sale		278,447		8,035		2.89		246,007		8,357		3.40
Investment securities
Taxable		9,152,620		111,050		1.21		4,879,279		85,466		1.75
Tax-exempt		157,327		4,381		2.78		131,099		5,043		3.85
Total investment securities		9,309,947		115,431		1.24		5,010,378		90,509		1.81
Other investments		638,559		1,323		0.21		375,443		1,621		0.43
Total interest-earning assets		27,282,382		884,437		3.24		20,616,184		802,259		3.89
Other assets		3,001,809						2,331,024
Allowance for credit losses		(289,543)						(223,821)
Total assets		$29,994,648						$  22,723,386
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits		$11,114,242		$  33,251		0.30%		$    7,859,680		$    47,692		0.61%
Savings deposits		2,946,629		3,201		0.11		2,199,405		4,117		0.19
Time deposits		2,784,733		24,394		0.88		2,649,809		38,940		1.47
Total interest-bearing deposits		16,845,604		60,846		0.36		12,708,894		90,749		0.71
Short-term borrowings		713,788		838		0.12		837,036		4,488		0.54
Long-term borrowings		341,170		14,638		4.29		301,526		13,289		4.41
Total interest-bearing liabilities		17,900,562		76,322		0.43		13,847,456		108,526		0.78
Noninterest-bearing liabilities:
Demand deposits		8,382,997						5,850,761
Other liabilities		373,514						299,624
Total liabilities		26,657,073						19,997,841
Shareholders' equity		3,337,575						2,725,545
Total liabilities and shareholders' equity		$29,994,648						$  22,723,386
Net interest income/net interest spread				808,115		2.82%				693,733		3.11%
Net yield on earning assets/net interest margin						2.96%						3.36%
Taxable equivalent adjustment:
Investment securities				(2,388)						(2,766)
Net interest revenue				$805,727						$  690,967

 

Cadence Bank
Selected Additional Information
(Dollars in thousands)
(Unaudited)
	Quarter Ended
	Dec-21		Sep-21		Jun-21		Mar-21	Dec-20
MORTGAGE SERVICING RIGHTS:
Fair value, beginning of period	$       64,684		$       60,615		$     60,332		$     47,571	$     44,944
Additions to mortgage servicing rights:
Originations of servicing assets	5,709		5,798		6,833		5,588	6,608
Changes in fair value:
Due to payoffs/paydowns	(3,823)		(3,919)		(2,946)		(3,273)	(3,898)
Due to change in valuation inputs or
assumptions used in the valuation model	2,982		2,190		(3,604)		10,446	(83)
Other changes in fair value	-		-		-		-	-
Fair value, end of period	$       69,552		$       64,684		$     60,615		$     60,332	$     47,571
MORTGAGE BANKING REVENUE:
Origination	$        5,970		$        9,284		$       8,646		$     15,955	$     18,561
Servicing	5,816		5,644		5,313		5,247	5,254
Payoffs/Paydowns	(3,823)	-	(3,919)	-	(2,946)	-	(3,273)	(3,898)
Total mortgage banking revenue excluding MSR	7,963		11,009		11,013		17,929	19,917
Market value adjustment on MSR	2,982		2,190		(3,604)		10,446	(83)
Market value adjustment on MSR Hedge	(365)		(141)		1,696		(3,065)	295
Total mortgage banking revenue	$       10,580		$       13,058		$       9,105		$     25,310	$     20,129
Mortgage loans serviced	$  7,553,917		$  7,455,113		$7,407,690		$7,259,808	$ 7,330,293
MSR/mortgage loans serviced	0.92%		0.87%		0.82%		0.83%	0.65%
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Treasury notes	$  1,496,465		$             -		$            -		$            -	$            -
U.S. Government agencies	2,536,580		2,575,564		2,758,412		2,642,646	2,871,408
U.S. Government agency issued residential
mortgage-back securities	8,621,601		5,826,087		4,709,540		3,438,246	2,421,409
U.S. Government agency issued commercial
mortgage-back securities	1,829,444		1,518,556		1,478,058		1,414,345	806,206
U.S. Small Business Administration loan-
backed securities	195,875		-		-		-	-
Obligations of states and political subdivisions	567,570		112,152		117,248		126,589	113,953
Corporate bonds	208,159		21,013		20,853		18,442	18,030
Foreign debt securities	150,776		-		-		-	-
Total available-for-sale securities	$15,606,470	$-	$10,053,372	$-	$9,084,111	$-	$7,640,268	$ 6,231,006

 

Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions
(Dollars in thousands, except per share amounts)
(Unaudited)
Management evaluates the Company's capital position and adjusted performance by utilizing certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including adjusted net income, adjusted net income available to common shareholders, adjusted net income-excluding MSR, adjusted net income available to common shareholders-excluding MSR, pre-tax pre-provision net revenue, adjusted pre-tax pre-provision net revenue, total adjusted expense, tangible common shareholders' equity to tangible assets, return on average tangible common equity, adjusted return on average tangible common equity-excluding MSR,  adjusted return on average assets-excluding MSR, adjusted return on average common shareholders' equity-excluding MSR, adjusted pre-tax pre-provision net revenue to total average assets, average tangible book value per common share, adjusted earnings per common share, adjusted earnings per common share-excluding MSR, efficiency ratio (tax equivalent) and adjusted efficiency ratio-excluding MSR (tax equivalent), adjusted dividend payout ratio - excluding MSR.  The Company has included these non-GAAP financial measures in this news 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.
Reconciliation of Adjusted Net Income, Adjusted Net Income Available to Common Shareholders, Adjusted Net Income-Excluding MSR, and Adjusted Net Income Available to Common Shareholders-excluding MSR to Net Income:
			Quarter Ended										Year Ended
			Dec-21		Sep-21		Jun-21		Mar-21		Dec-20		Dec-21		Dec-20
Net (loss) income			$      (34,657)		$   72,725		$   75,539		$   81,555		$   68,805		$ 195,162		$ 228,051
Plus:	Merger expense		44,843		3,442		9,962		1,649		212		59,896		5,345
	Incremental merger related expense		4,633		-		-		-		-		4,633		-
	Initial provision for acquired loans		132,062		-		11,500		-		-		143,562		1,000
	Pension settlement expense		651		2,400		-		-		5,846		3,051		5,846
Less:	Security (losses) gains		(378)		(195)		96		82		63		(395)		58
	Tax adjustment		41,453		1,506		5,331		391		1,496		48,681		3,027
Adjusted net income			$     106,457		$   77,256		$   91,574		$   82,731		$   73,304		$ 358,018		$ 237,157
Less:	Preferred dividends		2,372		2,372		2,372		2,372		2,372		9,488		9,488
Adjusted net income available to
common shareholders			$     104,085		$   74,884		$   89,202		$   80,359		$   70,932		$ 348,530		$ 227,669
Adjusted net income			$     106,457		$   77,256		$   91,574		$   82,731		$   73,304		$ 358,018		$ 237,157
Less:	MSR market value adjustment, net of tax		1,964		1,538		(1,432)		5,539		159		7,609		(9,617)
Adjusted net income-excluding MSR			$     104,493		$   75,718		$   93,006		$   77,192		$   73,145		$ 350,409		$ 246,774
Less:	Preferred dividends		2,372		2,372		2,372		2,372		2,372		9,488		9,488
Adjusted net income available to common
shareholders-excluding MSR			$     102,121		$   73,346		$   90,634		$   74,820		$   70,773		$ 340,921		$ 237,286

   

 

Cadence Bank
Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions
(Dollars in thousands, except per share amounts)
(Unaudited)
Reconciliation of Net Income to Pre-Tax Pre-Provision Net Revenue
			Quarter Ended										Year Ended
			Dec-21		Sep-21		Jun-21		Mar-21		Dec-20		Dec-21		Dec-20
Net (loss) income			$      (34,657)		$   72,725		$   75,539		$   81,555		$   68,805		$ 195,162		$ 228,051
Plus:	Provision (release) for credit losses		133,562		(7,000)		11,500		-		5,794		138,062		89,044
	Income tax (benefit) expense		(13,033)		20,350		21,102		23,347		14,046		51,766		59,494
Pre-tax pre-provision net revenue			$       85,872		$   86,075		$ 108,141		$ 104,902		$   88,645		$ 384,990		$ 376,589
Reconciliation of Net Income to Adjusted Pre-Tax Pre-Provision Net Revenue
Net (loss) income			$      (34,657)		$   72,725		$   75,539		$   81,555		$   68,805		$ 195,162		$ 228,051
Plus:	Provision (release) for credit losses		133,562		(7,000)		11,500		-		5,794		138,062		89,044
	Merger expense		44,843		3,442		9,962		1,649		212		59,896		5,345
	Incremental merger related expense		4,633		-		-		-		-		4,633		-
	Pension settlement expense		651		2,400		-		-		5,846		3,051		5,846
	Income tax (benefit) expense		(13,033)		20,350		21,102		23,347		14,046		51,766		59,494
Less:	Security (losses) gains		(378)		(195)		96		82		63		(395)		58
	MSR market value adjustment		2,617		2,049		(1,908)		7,381		212		10,139		(12,814)
Adjusted pre-tax pre-provision net revenue			$     133,760		$   90,063		$ 119,915		$   99,088		$   94,428		$ 442,826		$ 400,536
Reconciliation of Total Adjusted Expense to Total Noninterest Expense:
Total noninterest expense			$     289,194		$ 179,889		$ 173,984		$ 155,823		$ 167,117		$ 798,890		$ 650,882
Less:	Merger expense		44,843		3,442		9,962		1,649		212		59,896		5,345
	Incremental merger related expense		4,633		-		-		-		-		4,633		-
	Pension settlement expense		651		2,400		-		-		5,846		3,051		5,846
Total adjusted expense			$     239,067		$ 174,047		$ 164,022		$ 154,174		$ 161,059		$ 731,310		$ 639,691

 

Cadence Bank
Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions
(Dollars in thousands, except per share amounts)
(Unaudited)
Reconciliation of Tangible Assets and Tangible Shareholders' Equity to
Total Assets and Total Shareholders' Equity:
			Quarter Ended										Year Ended
			Dec-21		Sep-21		Jun-21		Mar-21		Dec-20		Dec-21		Dec-20
Tangible assets
Total assets			$ 47,684,751		$ 28,060,496		$ 27,612,365		$ 25,802,497		$ 24,081,194		$ 47,684,751		$ 24,081,194
Less:	Goodwill		1,407,948		958,304		957,474		851,612		851,612		1,407,948		851,612
	Other identifiable intangible assets		198,271		52,235		54,659		53,581		55,899		198,271		55,899
Total tangible assets			$ 46,078,532		$ 27,049,957		$ 26,600,232		$ 24,897,304		$ 23,173,683		$ 46,078,532		$ 23,173,683
PERIOD END BALANCES:
Tangible shareholders' equity
Total shareholders' equity			$   5,247,987		$   3,023,257		$   3,069,574		$   2,825,198		$   2,822,477		$   5,247,987		$   2,822,477
Less:	Goodwill		1,407,948		958,304		957,474		851,612		851,612		1,407,948		851,612
	Other identifiable intangible assets		198,271		52,235		54,659		53,581		55,899		198,271		55,899
	Preferred stock		166,993		166,993		166,993		166,993		166,993		166,993		166,993
Total tangible common shareholders' equity			$   3,474,775		$   1,845,725		$   1,890,448		$   1,753,012		$   1,747,973		$   3,474,775		$   1,747,973
AVERAGE BALANCES:
Tangible shareholders' equity
Total shareholders' equity			$   4,508,594		$   3,058,307		$   2,954,834		$   2,813,001		$   2,774,589		$   3,337,575		$   2,725,545
Less:	Goodwill		1,115,502		957,899		910,448		851,612		852,472		959,586		848,263
	Other identifiable intangible assets		106,559		53,567		52,564		54,876		54,858		66,996		56,988
	Preferred stock		166,993		166,993		166,993		166,993		166,993		166,993		167,000
Total tangible common shareholders' equity			$   3,119,540		$   1,879,848		$   1,824,829		$   1,739,520		$   1,700,266		$   2,144,000		$   1,653,294
Total average assets			$ 40,995,513		$ 27,616,585		$ 26,666,296		$ 24,545,560		$ 23,660,503		$ 29,994,648		$ 22,723,386
Total shares of common stock outstanding			188,337,658		106,853,316		108,614,595		102,624,818		102,561,480		188,337,658		102,561,480
Average shares outstanding-diluted			164,720,656		108,250,102		105,838,056		102,711,584		102,817,409		120,668,695		103,304,570
Tangible common shareholders' equity to tangible assets (1)			7.54%		6.82%		7.11%		7.04%		7.54%		7.54%		7.54%
Return on average tangible common equity (2)			(4.71)		14.85		16.08		18.46		15.54		8.66		13.22
Adjusted return on average tangible common equity-excluding MSR (3)			12.99		15.48		19.92		17.44		16.56		15.90		14.35
Adjusted return on average assets-excluding MSR (4)			1.01		1.09		1.40		1.28		1.23		1.17		1.09
Adjusted return on average common shareholders' equity-excluding MSR (5)			9.33		10.06		13.04		11.47		10.80		10.75		9.27
Pre-tax pre-provision net revenue to total average assets (6)			0.83		1.24		1.63		1.73		1.49		1.28		1.66
Adjusted pre-tax pre-provision net revenue to total average assets (7)			1.29		1.29		1.80		1.64		1.59		1.48		1.76
Tangible book value per common share (8)			$          18.45		$          17.27		$          17.41		$          17.08		$          17.04		$          18.45		$          17.04
Adjusted earnings per common share (9)			$            0.63		$            0.69		$            0.84		$            0.78		$            0.69		$            2.89		$            2.20
Adjusted earnings per common share-excluding MSR (10)			$            0.62		$            0.68		$            0.86		$            0.73		$            0.69		$            2.83		$            2.30
Adjusted dividend payout ratio - excluding MSR (11)			32.26%		29.41%		22.09%		26.03%		27.54%		27.56%		32.39%

(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)	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.
(3)	Adjusted return on average tangible common equity-excluding MSR is defined by the Company as annualized net adjusted income available to common shareholders-excluding MSR divided by average tangible common shareholders' equity.
(4)	Adjusted return on average assets-excluding MSR is defined by the Company as annualized net adjusted income-excluding MSR divided by total average assets.
(5)	Adjusted return on average common shareholders' equity-excluding MSR is defined by the Company as annualized net adjusted income available to common shareholders-excluding MSR divided by average common shareholders' equity.
(6)	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.
(7)	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-excluding MSR.
(8)	Tangible book value per common share is defined by the Company as tangible common shareholders' equity divided by total shares of common stock outstanding.
(9)	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.
(10)	Adjusted earnings per common share-excluding MSR is defined by the Company as net adjusted income available to common shareholders-excluding MSR divided by average common shares outstanding-diluted.
(11)	Adjusted dividend payout ratio-excluding MSR is defined by the Company as common share dividends divided by net adjusted income available to common shareholders-excluding MSR.
Efficiency Ratio (tax equivalent) and Adjusted Efficiency Ratio-excluding MSR (tax equivalent) Definitions
The efficiency ratio (tax equivalent) and the adjusted efficiency ratio-excluding MSR (tax equivalent) 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 (tax equivalent) 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-excluding MSR (tax equivalent) excludes expense  items otherwise disclosed as non-operating from total noninterest expense.  In addition, the MSR valuation adjustment as well as securities gains and losses are excluded from total revenue.

 

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SOURCE Cadence Bank

FAQ

What were Cadence Bank's earnings for Q4 2021?

Cadence Bank reported a net loss of $37 million, or $0.22 per diluted share, for Q4 2021.

How did the merger with Cadence Bancorporation impact Cadence Bank's financials?

The merger added significant assets and liabilities, but also led to a provision for credit losses of $132.1 million and elevated expenses.

What is the adjusted net income for Cadence Bank for the year ended December 31, 2021?

For the year 2021, the adjusted net income available to common shareholders was $340.9 million, or $2.83 per diluted share.

What is Cadence Bank's outlook following the recent financial results?

Despite merger-related challenges, the bank showed strong organic loan growth and positive credit quality metrics, indicating a favorable operational outlook.

How much did Cadence Bank repurchase in shares during 2021?

Cadence Bank repurchased a total of 6 million shares in 2021 and has authorized an additional 10 million shares for 2022.