HOUSTON and TUPELO, Miss., Jan. 29, 2024 /PRNewswire/ — Cadence Bank (NYSE: CADE) (the Company), today announced financial results for the quarter and year ended December 31, 2023. Given the sale of Cadence Insurance, Inc. (“Cadence Insurance”) in the fourth quarter of 2023, the financial results presented consist of both continuing operations and discontinued operations. The discontinued operations include the financial results of Cadence Insurance prior to the sale, as well as the associated gain on sale in the fourth quarter of 2023. The discontinued operations results are presented as a single line item below income from continuing operations in the accompanying tables for all periods presented. All adjusted financial results discussed herein are adjusted results from continuing operations.
During December 2023, the Company executed a securities portfolio restructuring whereby available-for-sale securities totaling approximately $3.1 billion in par value were sold for an after-tax loss of $294.1 million, which is included in results from continuing operations. In aggregate, these securities had a book yield of approximately 1.26% and an estimated duration of just over 4 years. Of the sales proceeds, $1.0 billion has been reinvested in securities as of December 31, 2023. These securities have an aggregate book yield of approximately 5.57% and an estimated duration of approximately 2 years. Additionally, $645 million has been used to pay down brokered deposits at a rate of 5.47% and the remainder was held in cash earning 5.40% at December 31, 2023 pending reinvestment.
Earnings Summary
For the year ended December 31, 2023, the Company reported net income available to common shareholders of $532.8 million, or $2.92 per diluted common share, compared with $453.7 million, or $2.46 per diluted common share, for the year ended December 31, 2022. The Company reported adjusted net income from continuing operations available to common shareholders(1) of $401.2 million, or $2.20 per diluted common share, for the year ended December 31, 2023 compared with $526.1 million, or $2.85 per diluted common share, for the year ended December 31, 2022. Additionally, the Company reported adjusted PPNR from continuing operations(1) of $612.3 million, or 1.26% of average assets, for the year ended December 31, 2023 compared with $699.6 million, or 1.47% of average assets, for the year ended December 31, 2022.
For the fourth quarter of 2023, the Company reported net income available to common shareholders of $256.7 million, or $1.41 per diluted common share, compared with $95.6 million, or $0.52 per diluted common share, for the fourth quarter of 2022 and $90.2 million, or $0.49 per diluted common share, for the third quarter of 2023. Adjusted net income available to common shareholders from continuing operations(1) was $72.7 million, or $0.40 per diluted common share, for the fourth quarter of 2023, compared with $141.4 million, or $0.77 per diluted common share, for the fourth quarter of 2022 and $97.6 million, or $0.53 per diluted common share, for the third quarter of 2023. Additionally, the Company reported adjusted PPNR from continuing operations(1) of $137.9 million, or 1.13% of average assets on an annualized basis, for the fourth quarter of 2023 compared to $192.5 million, or 1.60% of average assets on an annualized basis, for the fourth quarter of 2022 and $145.3 million, or 1.18% of average assets on an annualized basis, for the third quarter of 2023.
Net Interest Revenue
Net interest revenue was $334.6 million for the fourth quarter of 2023, compared to $359.4 million for the fourth quarter of 2022 and $329.0 million for the third quarter of 2023. The net interest margin (fully taxable equivalent) was 3.04% for the fourth quarter of 2023, compared with 3.33% for the fourth quarter of 2022 and 2.98% for the third quarter of 2023.
Net interest revenue increased $5.6 million, or 1.7%, compared to the third quarter of 2023 as earning asset yields continue to increase, partially as a result of the securities portfolio repositioning, lower brokered deposits and the slower pace of deposit cost increases. Purchase accounting accretion revenue was $4.1 million and $6.6 million for the fourth quarter of 2023 and the third quarter of 2023, respectively, adding approximately 4 basis points to the net interest margin for the fourth quarter of 2023 and 6 basis points for the third quarter of 2023.
Yield on net loans, loans held for sale, and leases excluding accretion, was 6.43% for the fourth quarter of 2023, up 12 basis points from 6.31% for the third quarter of 2023, while yield on total interest earning assets was 5.59% for the fourth quarter of 2023, up 21 basis points from 5.38% for the third quarter of 2023. Earning asset yields continue to benefit from fixed and variable rate credits as well as securities cash flows repricing at higher yields. Approximately 28% of our total loans are floating (reprice within 30 days), and another 20% reprice within 12 months. Our total loan beta, excluding accretion, is 46% cycle-to-date.
The average cost of total deposits increased to 2.32% for the fourth quarter of 2023, up 18 basis points during the quarter. The fourth quarter increase in total deposit costs continued to slow compared to the third quarter increase of 27 basis points and over 50 basis points for each of the first two quarters of 2023. Total interest-bearing liabilities cost increased to 3.34% from 3.17% during the fourth quarter of 2023. Our total deposit beta is 41% cycle-to-date.
Balance Sheet Activity
Loans and leases, net of unearned income, were $32.5 billion at December 31, 2023, which is flat compared to September 30, 2023. Total investment securities of $8.1 billion at December 31, 2023 decreased $1.6 billion during the fourth quarter as a portion of the proceeds from the securities portfolio restructuring was temporarily held in cash at December 31, 2023 as the Company continues to reinvest the proceeds.
Total deposits increased $161.3 million to $38.5 billion as of December 31, 2023. Total brokered deposits declined $463.0 million from $1.2 billion at the end of the third quarter of 2023 to $0.7 billion at December 31, 2023, or 1.9% of total deposits. Excluding the decline in brokered deposits, total deposits increased $624.3 million, or 6.5% annualized, during the fourth quarter of 2023. Approximately half of this growth represents seasonal public funds increases while the other half represents core customer deposit growth, primarily in our community bank.
The December 31, 2023 loan to deposit ratio was 84.4% and securities to total assets was 16.5%, reflecting continued strong liquidity. Noninterest bearing deposits represented 24.0% of total deposits at the end of the fourth quarter of 2023, declining from 25.2% at September 30, 2023, reflective of a slower mix shift than during the early part of year. The Company’s deposit base continues to be very granular, with average transaction account balances of approximately $23,000 for consumer accounts and $135,000 for commercial accounts at December 31, 2023. Additionally, approximately 98% of the Company’s deposit accounts have balances less than $250,000, and approximately 71% of our deposit balances were FDIC insured or collateralized at quarter-end.
Short-term borrowings were stable at $3.5 billion at December 31, 2023 while cash, due from balances and deposits at the Federal Reserve increased $2.2 billion to $4.2 billion at December 31, 2023, primarily as a result of cash held from the securities portfolio repositioning pending reinvestment. Additionally, the Company has refinanced the $3.5 billion bank term funding program borrowing, lowering the cost from 5.15% to 4.84% at year-end.
Credit Results, Provision for Credit Losses and Allowance for Credit Losses
Total non-performing assets as a percent of total assets increased to 0.45% at December 31, 2023 compared to 0.23% at December 31, 2022 and 0.32% at September 30, 2023. Total non-performing loans and leases as a percent of loans and leases, net were 0.67% at December 31, 2023, compared to 0.35% at December 31, 2022 and 0.46% at September 30, 2023. The increase in nonaccrual loans was primarily due to the negative migration of previously identified criticized loans in the Commercial & Industrial non-real estate segment of the portfolio. While these credits drove the increase in nonaccrual loans, over 50% of nonaccrual loans (by balance) at December 31, 2023 are granular, secured residential mortgages and SBA guaranteed loans. Other real estate owned and other repossessed assets was $6.2 million at December 31, 2023 compared to the December 31, 2022 balance of $6.7 million and the September 30, 2023 balance of $2.9 million. For the fourth quarter of 2023, criticized loans declined by $37.7 million to $844.7 million or 2.60% of loans, down from 2.71% at September 30, 2023, while classified loans were stable at 2.09% compared to 2.10% at September 30, 2023.
Net charge-offs for the fourth quarter of 2023 were $23.8 million, or 0.29% of average net loans and leases on an annualized basis, compared with net recoveries of $5.0 million for the fourth quarter of 2022 and net charge-offs of $34.2 million for the third quarter of 2023. Net charge-offs in the fourth quarter of 2023, while lower than the prior quarter, were driven primarily by a select few credits across different industries and geographies that were identified as criticized in prior quarters. The provision for credit losses for the fourth quarter of 2023 was $38.0 million, compared with $6.0 million for the fourth quarter of 2022 and $17.0 million for the third quarter of 2023. The allowance for credit losses of $468.0 million at December 31, 2023 represented 1.44% as a percent of total loans and leases, increased from the September 30, 2023 coverage of 1.37%. The increase in the quarter’s provision includes incremental impairments on previously identified criticized credits.
Noninterest Revenue
Noninterest revenue was negative $311.5 million for the fourth quarter of 2023, or $73.1 million excluding the loss on securities sales from our repositioning transaction. This revenue is compared with $80.2 million for the fourth quarter of 2022 and $74.0 million for the third quarter of 2023. Adjusted noninterest revenue(1) for the fourth quarter of 2023 was $73.1 million, compared with $80.8 million for the fourth quarter of 2022 and $80.6 million for the third quarter of 2023. Adjusted noninterest revenue(1) for the fourth quarter of 2023 excludes the securities portfolio restructuring loss of $384.5 million while third quarter 2023 adjusted noninterest revenue(1) excludes $6.7 million of facility and signage write-downs associated with the 35 branch closures effected in the third quarter of 2023. The fourth quarter of 2023 decline in adjusted noninterest revenue was impacted by an $8 million adjustment to deposit service charges, representing $0.03 per diluted share, and a $4.9 million negative variance in the mortgage servicing rights valuation, representing $0.02 per diluted share, partially offset by increases in several other revenue items including card fees, wealth management income, bank-owned life insurance, and other miscellaneous income.
Credit card, debit card and merchant fee revenue was $12.9 million for the fourth quarter of 2023, compared with $15.8 million for the fourth quarter of 2022 and $12.4 million for the third quarter of 2023. Deposit service charge revenue was $11.2 million for the fourth quarter of 2023 compared with $16.9 million for the fourth quarter of 2022 and $16.9 million for the third quarter of 2023. The decline in deposit service charge revenue during the fourth quarter was the result of an adjustment of approximately $8 million, resulting from deposit service charge changes. These changes are expected to result in a reduction in revenue of approximately $3 million per year going forward.
Other noninterest revenue was $27.6 million for the fourth quarter of 2023, compared with $26.4 million for the fourth quarter of 2022 and $17.9 million for the third quarter of 2023. Other noninterest revenue for the third quarter of 2023 included $6.7 million of facility and signage write-downs associated with the 35 branch closures effected in the third quarter of 2023.
Mortgage production and servicing revenue totaled $3.9 million for the fourth quarter of 2023, compared with $5.4 million for the fourth quarter of 2022 and $5.8 million for the third quarter of 2023. The net mortgage servicing rights valuation adjustment was a negative $5.1 million for the fourth quarter of 2023, compared with a negative $2.8 million for the fourth quarter of 2022 and a negative $0.2 million for the third quarter of 2023 with the variances due to continued movement in interest rates. Mortgage origination volume for the fourth quarter of 2023 was $434.7 million, compared with $554.5 million for the fourth quarter of 2022 and $615.2 million for the third quarter of 2023. The decline compared to the third quarter of 2023 reflects routine selling seasonality while the year-over-year decline was primarily the result of a shift from on-balance sheet production.
Noninterest Expense
Noninterest expense for the fourth quarter of 2023 was $329.4 million, compared with $308.6 million for the fourth quarter of 2022 and $274.4 million for the third quarter of 2023. Adjusted noninterest expense(1) for the fourth quarter of 2023 was $269.8 million, compared with $247.6 million for the fourth quarter of 2022 and $264.2 million for the third quarter of 2023. Adjusted noninterest expense(1) for the fourth quarter of 2023 excludes a charge of $36.2 million related to the FDIC special assessment, a charge of $11.2 million to reflect the pension settlement accounting impact of early retirements during 2023, incremental merger related expense of $7.5 million, and a $5.0 million contribution to the Company’s foundation. The Company utilized a portion of the proceeds of the insurance transaction to fund this contribution, which will be utilized to positively impact the communities we serve while also reducing future expenses of the Company. The adjusted efficiency ratio(1) was 66.0% for the fourth quarter of 2023 compared to 64.4% for the third quarter of 2023.
The $5.5 million, or 2.1%, increase in adjusted noninterest expense(1) compared to the linked quarter was driven primarily by increases in public relations, legal, and data processing and software expense, which offset improvement in salaries and employee benefits expense. Salaries and employee benefits expense declined $5.7 million on an adjusted basis. Excluding the impact of the Cadence Insurance sale, employee count declined by 125 FTE during the fourth quarter of 2023, and over the last 12 months has declined by 537 FTE. Excluding the foundation contribution, public relations expense increased $1.9 million in the fourth quarter partially from seasonality as well as $0.9 million in tax credit investments with an equal reduction of tax expense. Legal expense increased $2.6 million on an adjusted basis in the fourth quarter, primarily as a result of an accrual for the settlement of certain legal matters. Finally, data processing and software expense increased $3.8 million related to certain expansion and development efforts, vendor increases, ongoing technology infrastructure support, and timing.
Capital Management
Total shareholders’ equity was $5.2 billion at December 31, 2023 compared with $4.3 billion at December 31, 2022 and $4.4 billion at September 30, 2023. Estimated regulatory capital ratios at December 31, 2023 included Common Equity Tier 1 capital of 11.6%, Tier 1 capital of 12.1%, Total risk-based capital of 14.3%, and Tier 1 leverage capital of 9.3%. During the fourth quarter of 2023, the Company did not repurchase any shares of its common stock. During December 2023, the board approved a share repurchase authorization for 10 million shares of Company common stock for the 2024 year. Outstanding common shares were 182.9 million as of December 31, 2023.
Summary
Rollins concluded, “I’m extremely proud of the accomplishments of our team during 2023. The opportunity to grow our loan portfolio combined with our bankers’ success in protecting our core deposit relationships has positioned our balance sheet favorably as we enter 2024. Additionally, we have made significant progress in our efforts to improve efficiency, notably through our branch consolidation efforts and workforce reduction initiatives. Finally, we expect the insurance transaction, along with our securities portfolio restructuring, will accelerate our path to improved operating performance. We look forward to seeing the fruits of all these efforts in the new year and beyond.”
Conference Call and Webcast
The Company will conduct a conference call to discuss its fourth quarter and annual 2023 financial results on January 30, 2024, at 10:00 a.m. (Central Time). This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing http://ir.cadencebank.com/events. The webcast will also be available in archived format at the same address.
(1)
Considered a non-GAAP financial measure. A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears in Table 14 “Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions” beginning on page 23 of this news release.
(2)
See Table 14 for detail on non-routine income and expenses.
About Cadence Bank
Cadence Bank (NYSE: CADE) is a leading regional banking franchise with approximately $50 billion in assets and more than 350 branch locations across the South and Texas. Cadence provides consumers, businesses and corporations with a full range of innovative banking and financial solutions. Services and products include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized lending, asset-based lending, commercial real estate, equipment financing, correspondent banking, SBA lending, foreign exchange, wealth management, investment and trust services, financial planning, and retirement plan management. Cadence is committed to a culture of respect, diversity and inclusion in both its workplace and communities. Cadence Bank, Member FDIC. Equal Housing Lender.
Forward-Looking Statements
Certain statements made in this news release constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the safe harbor under the Private Securities Litigation Reform Act of 1995 as well as the “bespeaks caution” doctrine. These statements are often, but not exclusively, made through the use of words or phrases like “assume,” “believe,” “budget,” “contemplate,” “continue,” “could,” “foresee,” “indicate,” “may,” “might,” “outlook,” “prospect,” “potential,” “roadmap,” “should,” “target,” “will,” “would,” the negative versions of such words, or comparable words of a future or forward-looking nature. These forward-looking statements may include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, or any of the Company’s comments related to topics in its risk disclosures or results of operations as well as the impact of the Cadence Insurance sale (the “Cadence Insurance Transaction”) on the Company’s financial condition and future net income and earnings per share, the amount of net after-tax proceeds expected to be received by the Company from the Cadence Insurance Transaction, and the Company’s ability to deploy capital into strategic and growth initiatives. Forward-looking statements are based upon management’s expectations as well as certain assumptions and estimates made by, and information available to, the Company’s management at the time such statements were made. Forward-looking statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company’s control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements.
Risks, uncertainties and other factors the Company may face include, without limitation: general economic, unemployment, credit market and real estate market conditions, including inflation, and the effect of such conditions on customers, potential customers, assets, investments and liquidity; risks arising from market and consumer reactions to the general banking environment, or to conditions or situations at specific banks; risks arising from media coverage of the banking industry; risks arising from perceived instability in the banking sector; the risks of changes in interest rates and their effects on the level, cost, and composition of, and competition for, deposits, loan demand and timing of payments, the values of loan collateral, securities, and interest sensitive assets and liabilities; the ability to attract new or retain existing deposits, to retain or grow loans or additional interest and fee income, or to control noninterest expense; the effect of pricing pressures on the Company’s net interest margin; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, or uncertainties surrounding the debt ceiling and the federal budget; uncertainties surrounding the functionality of the federal government; potential delays or other problems in implementing and executing the Company’s growth, expansion, acquisition, or divestment strategies (including the Cadence Insurance Transaction), including delays in obtaining regulatory or other necessary approvals, or the failure to realize any anticipated benefits or synergies from any acquisitions, growth, or divestment strategies; the ability to pay dividends or coupons on the Company’s 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029; possible downgrades in the Company’s credit ratings or outlook which could increase the costs or availability of funding from capital markets; changes in legal, financial, accounting, and/or regulatory requirements; the costs and expenses to comply with such changes; the enforcement efforts of federal and state bank regulators; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity and the impact of generative artificial intelligence; increased competition in the financial services industry, particularly from regional and national institutions; the impact of a failure in, or breach of, the Company’s operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company’s customers. The Company also faces risks from natural disasters or acts of war or terrorism; international or political instability, including the impacts related to or resulting from Russia’s military action in Ukraine, the escalating conflicts in the Middle East, and additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments.
The Company also faces risks from: possible adverse rulings, judgments, settlements or other outcomes of pending, ongoing and future litigation, as well as governmental, administrative and investigatory matters; the impairment of the Company’s goodwill or other intangible assets; losses of key employees and personnel; the diversion of management’s attention from ongoing business operations and opportunities; and the company’s success in executing its business plans and strategies, and managing the risks involved in all of the foregoing.
In addition, the Company faces risks from the failure to achieve the expected impact on the Company’s financial condition; and risks associated with unexpected costs, liabilities or delays relating to the Cadence Insurance Transaction.
The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company’s periodic and current reports filed with the FDIC, including those factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, particularly those under the heading “Item 1A. Risk Factors,” in the Company’s Quarterly Reports on Form 10-Q under the heading “Part II-Item 1A. Risk Factors,” and in the Company’s Current Reports on Form 8-K.
Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, except as required by applicable law. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.
Table 1
Selected Financial Data
(Unaudited)
Quarter Ended
Year-to-date
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
Earnings Summary:
Interest revenue
$ 615,187
$ 595,459
$ 573,395
$ 526,126
$ 473,546
$ 2,310,167
$ 1,560,581
Interest expense
280,582
266,499
239,868
171,862
114,188
958,811
209,290
Net interest revenue
334,605
328,960
333,527
354,264
359,358
1,351,356
1,351,291
Provision for credit losses
38,000
17,000
15,000
10,000
6,000
80,000
7,000
Net interest revenue, after provision for credit losses
296,605
311,960
318,527
344,264
353,358
1,271,356
1,344,291
Noninterest revenue
(311,460)
73,989
86,664
34,463
80,196
(116,343)
342,485
Noninterest expense
329,367
274,442
267,466
284,647
308,638
1,155,923
1,109,754
(Loss) income from continuing operations before income taxes
(344,222)
111,507
137,725
94,080
124,916
(910)
577,022
Income tax (benefit) expense
(80,485)
24,355
30,463
21,073
28,196
(4,594)
129,705
(Loss) income from continuing operations
(263,737)
87,152
107,262
73,007
96,720
3,684
447,317
Income from discontinued operations, net of taxes
522,801
5,431
6,766
3,622
1,214
538,620
15,920
Net income
259,064
92,583
114,028
76,629
97,934
542,304
463,237
Less: Preferred dividends
2,372
2,372
2,372
2,372
2,372
9,488
9,488
Net income available to common shareholders
$ 256,692
$ 90,211
$ 111,656
$ 74,257
$ 95,562
$ 532,816
$ 453,749
Balance Sheet – Period End Balances
Total assets
$ 48,934,510
$ 48,523,010
$ 48,838,660
$ 51,693,096
$ 48,653,414
$ 48,934,510
$ 48,653,414
Total earning assets
44,192,887
43,727,058
44,010,411
46,806,214
43,720,151
44,192,887
43,720,151
Available-for-sale securities
8,075,476
9,643,231
10,254,580
10,877,879
11,944,096
8,075,476
11,944,096
Loans and leases, net of unearned income
32,497,022
32,520,593
32,556,708
31,282,594
30,349,277
32,497,022
30,349,277
Allowance for credit losses (ACL)
468,034
446,859
466,013
453,727
440,347
468,034
440,347
Net book value of acquired loans
6,353,344
6,895,487
7,357,174
7,942,980
8,754,526
6,353,344
8,754,526
Unamortized net discount on acquired loans
26,928
30,761
37,000
41,748
58,162
26,928
58,162
Total deposits
38,497,137
38,335,878
38,701,669
39,406,454
38,956,614
38,497,137
38,956,614
Total deposits and repurchase agreements
38,948,653
39,198,467
39,492,427
40,177,789
39,665,350
38,948,653
39,665,350
Other short-term borrowings
3,500,000
3,500,223
3,500,226
5,700,228
3,300,231
3,500,000
3,300,231
Subordinated and long-term debt
438,460
449,323
449,733
462,144
462,554
438,460
462,554
Total shareholders’ equity
5,167,843
4,395,257
4,485,850
4,490,417
4,311,374
5,167,843
4,311,374
Total shareholders’ equity, excluding AOCI (1)
5,929,672
5,705,178
5,648,925
5,572,303
5,533,912
5,929,672
5,533,912
Common shareholders’ equity
5,000,850
4,228,264
4,318,857
4,323,424
4,144,381
5,000,850
4,144,381
Common shareholders’ equity, excluding AOCI (1)
$ 5,762,679
$ 5,538,185
$ 5,481,932
$ 5,405,310
$ 5,366,919
$ 5,762,679
$ 5,366,919
Balance Sheet – Average Balances
Total assets
$ 48,444,176
$ 48,655,138
$ 49,067,121
$ 48,652,201
$ 47,790,494
$ 48,703,953
$ 47,533,157
Total earning assets
43,754,664
44,003,639
44,229,519
43,817,318
42,973,660
43,951,257
43,060,970
Available-for-sale securities
9,300,714
10,004,441
10,655,791
11,354,457
12,156,803
10,322,335
13,596,372
Loans and leases, net of unearned income
32,529,030
32,311,572
31,901,096
30,891,640
29,812,924
31,913,925
28,418,658
Total deposits
38,215,379
38,465,975
38,934,793
38,904,048
38,372,354
38,628,453
39,477,906
Total deposits and repurchase agreements
38,968,397
39,293,030
39,708,963
39,632,023
39,033,328
39,399,230
40,146,852
Other short-term borrowings
3,503,320
3,510,942
3,541,985
3,326,196
3,251,947
3,471,207
1,580,409
Subordinated and long-term debt
443,251
449,568
455,617
462,385
462,927
452,645
465,004
Total shareholders’ equity
4,507,343
4,505,162
4,539,353
4,396,461
4,215,585
4,487,433
4,574,403
Common shareholders’ equity
$ 4,340,350
$ 4,338,169
$ 4,372,360
$ 4,229,468
$ 4,048,592
$ 4,320,440
$ 4,407,410
Nonperforming Assets:
Nonaccrual loans and leases
$ 216,141
$ 150,038
$ 157,243
$ 160,615
$ 98,745
$ 216,141
$ 98,745
Restructured loans and leases, still accruing (2)
—
—
—
—
8,598
—
8,598
Non-performing loans and leases (NPL) (3)
216,141
150,038
157,243
160,615
107,343
216,141
107,343
Other real estate owned and other assets
6,246
2,927
2,857
5,327
6,725
6,246
6,725
Non-performing assets (NPA)
$ 222,387
$ 152,965
$ 160,100
$ 165,942
$ 114,068
$ 222,387
$ 114,068
(1)
Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 24 – 28.
(2)
Cadence elected to adopt the new accounting guidance effective January 1, 2023, which eliminates the TDR recognition and measurement guidance via the modified retrospective transition method (ASU 2022-02). As such, there is no TDR reporting effective January 1, 2023.
(3)
At December 31, 2023, $49.6 million of NPL is covered by government guarantees from the SBA, FHA, VA or USDA.
Table 2
Selected Financial Ratios
Quarter Ended
Year-to-date
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
Financial Ratios and Other Data:
Return on average assets from continuing operations (2)
(2.16) %
0.71 %
0.88 %
0.61 %
0.80 %
0.01 %
0.94 %
Return on average assets (2)
2.12 %
0.75 %
0.93 %
0.64 %
0.81 %
1.11 %
0.97 %
Adjusted return on average assets from continuing operations (1)(2)
0.62
0.82
0.92
1.03
1.19
0.84
1.13
Return on average common shareholders’ equity from continuing operations (2)
(24.32)
7.75
9.62
6.77
9.25
(0.13)
9.93
Return on average common shareholders’ equity (2)
23.46
8.25
10.24
7.12
9.36
12.33
10.30
Adjusted return on average common shareholders’ equity from continuing operations (1)(2)
6.65
8.93
10.10
11.58
13.85
9.29
11.94
Return on average tangible common equity from continuing operations (1)(2)
(36.79)
11.75
14.55
10.44
14.64
(0.20)
15.05
Return on average tangible common equity (1)(2)
35.49
12.50
15.49
10.97
14.83
18.74
15.59
Adjusted return on average tangible common equity from continuing operations (1)(2)
10.06
13.53
15.27
17.84
21.94
14.11
18.08
Pre-tax pre-provision net revenue from continuing operation to total average assets (1)(2)
(2.51)
1.05
1.25
0.87
1.09
0.16
1.23
Adjusted pre-tax pre-provision net revenue from continuing operations to total average assets (1)(2)
1.13
1.18
1.30
1.41
1.60
1.26
1.47
Net interest margin-fully taxable equivalent
3.04
2.98
3.03
3.29
3.33
3.08
3.15
Net interest rate spread-fully taxable equivalent
2.25
2.21
2.29
2.65
2.84
2.33
2.90
Efficiency ratio fully tax equivalent (1)
NM
67.93
63.49
73.03
70.05
93.28
66.97
Adjusted efficiency ratio fully tax equivalent (1)
66.01
64.35
61.87
61.31
56.13
63.34
58.56
Loan/deposit ratio
84.41 %
84.83 %
84.12 %
79.38 %
77.91 %
84.41 %
77.91 %
Full time equivalent employees
5,333
6,160
6,479
6,567
6,572
5,333
6,572
Credit Quality Ratios:
Net charge-offs (recoveries) to average loans and leases (2)
0.29 %
0.42 %
0.16 %
0.02 %
(0.07) %
0.22 %
— %
Provision for credit losses to average loans and leases (2)
0.46
0.21
0.19
0.13
0.08
0.25
0.02
ACL to loans and leases, net
1.44
1.37
1.43
1.45
1.45
1.44
1.45
ACL to NPL
216.54
297.83
296.36
282.49
410.22
216.54
410.22
NPL to loans and leases, net
0.67
0.46
0.48
0.51
0.35
0.67
0.35
NPA to total assets
0.45
0.32
0.33
0.32
0.23
0.45
0.23
Equity Ratios:
Total shareholders’ equity to total assets
10.56 %
9.06 %
9.19 %
8.69 %
8.86 %
10.56 %
8.86 %
Total common shareholders’ equity to total assets
10.22
8.71
8.84
8.36
8.52
10.22
8.52
Tangible common shareholders’ equity to tangible assets (1)
7.44
5.86
6.00
5.66
5.63
7.44
5.63
Tangible common shareholders’ equity, excluding AOCI, to tangible assets, excluding AOCI (1)
8.90
8.41
8.25
7.65
8.02
8.90
8.02
Capital Adequacy (3):
Common Equity Tier 1 capital
11.6 %
10.3 %
10.1 %
10.1 %
10.2 %
11.6 %
10.2 %
Tier 1 capital
12.1
10.8
10.5
10.6
10.7
12.1
10.7
Total capital
14.3
12.9
12.7
12.8
12.8
14.3
12.8
Tier 1 leverage capital
9.3
8.6
8.5
8.4
8.4
9.3
8.4
(1)
Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 24 – 28.
(2)
Annualized.
(3)
Current quarter regulatory capital ratios are estimated.
NM – Not meaningful
Table 3
Selected Financial Information
Quarter Ended
Year-to-date
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
Common Share Data:
Diluted (losses) earnings per share from continuing operations
$ (1.46)
$ 0.46
$ 0.57
$ 0.38
$ 0.51
$ (0.03)
$ 2.37
Adjusted earnings per share from continuing operations (1)
0.40
0.53
0.60
0.66
0.77
2.20
2.85
Diluted earnings per share
1.41
0.49
0.61
0.40
0.52
2.92
2.46
Cash dividends per share
0.235
0.235
0.235
0.235
0.22
0.940
0.88
Book value per share
27.35
23.15
23.65
23.67
22.72
27.35
22.72
Tangible book value per share (1)
19.32
15.09
15.56
15.55
14.56
19.32
14.56
Market value per share (last)
29.59
21.22
19.88
20.76
24.66
29.59
24.66
Market value per share (high)
31.45
25.87
21.73
28.18
29.41
31.45
34.24
Market value per share (low)
19.67
19.00
16.95
19.24
22.43
16.95
22.04
Market value per share (average)
24.40
22.56
19.73
24.88
26.84
22.90
27.35
Dividend payout ratio from continuing operations
(16.13) %
51.09 %
41.23 %
61.84 %
43.14 %
NM
37.08 %
Adjusted dividend payout ratio from continuing operations (1)
58.75 %
44.34 %
39.17 %
35.61 %
28.57 %
42.73 %
30.88 %
Total shares outstanding
182,871,775
182,611,075
182,626,229
182,684,578
182,437,265
182,871,775
182,437,265
Average shares outstanding – diluted
182,688,190
184,645,004
183,631,570
183,908,798
183,762,008
182,608,713
184,498,472
Yield/Rate:
(Taxable equivalent basis)
Loans, loans held for sale, and leases
6.48 %
6.39 %
6.24 %
6.00 %
5.54 %
6.28 %
4.74 %
Loans, loans held for sale, and leases excluding net accretion on acquired loans and leases
6.43
6.31
6.18
5.87
5.41
6.20
4.57
Available-for-sale securities:
Taxable
2.45
2.07
2.09
1.80
1.54
2.09
1.40
Tax-exempt
3.78
3.23
3.21
3.21
3.28
3.32
2.95
Other investments
5.41
5.36
5.05
4.64
3.69
5.13
1.77
Total interest earning assets and revenue
5.59
5.38
5.21
4.88
4.38
5.27
3.63
Deposits
2.32
2.14
1.87
1.28
0.76
1.90
0.35
Interest bearing demand and money market
3.02
2.79
2.49
2.03
1.34
2.58
0.59
Savings
0.56
0.56
0.51
0.36
0.31
0.49
0.15
Time
4.22
3.98
3.69
2.24
1.17
3.69
0.68
Total interest bearing deposits
3.10
2.88
2.58
1.86
1.17
2.62
0.54
Fed funds purchased, securities sold under agreement to repurchase and other
4.33
4.27
3.97
3.73
3.04
4.07
1.45
Short-term FHLB borrowings
—
3.54
5.24
4.66
3.84
4.91
2.78
Short-term BTFP borrowings
5.04
5.15
5.15
—
—
5.10
—
Total interest bearing deposits and short-term borrowings
3.33
3.16
2.90
2.20
1.50
2.91
0.68
Long-term debt
4.18
4.22
4.23
4.27
4.15
4.23
4.16
Total interest bearing liabilities
3.34
3.17
2.92
2.23
1.54
2.93
0.74
Interest bearing liabilities to interest earning assets
76.08 %
75.74 %
74.57 %
71.24 %
68.42 %
74.43 %
66.09 %
Net interest income tax equivalent adjustment (in thousands)
$ 987
$ 1,081
$ 1,063
$ 1,051
$ 1,071
$ 4,184
$ 4,212
(1)
Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 24 – 28.
NM – Not meaningful
Table 4
Consolidated Balance Sheets
(Unaudited)
As of
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
ASSETS
Cash and due from banks
$ 798,177
$ 594,787
$ 722,625
$ 660,431
$ 756,906
Interest bearing deposits with other banks and Federal funds sold
3,434,088
1,400,858
1,005,889
4,449,631
1,238,853
Available-for-sale securities, at fair value
8,075,476
9,643,231
10,254,580
10,877,879
11,944,096
Loans and leases, net of unearned income
32,497,022
32,520,593
32,556,708
31,282,594
30,349,277
Allowance for credit losses
468,034
446,859
466,013
453,727
440,347
Net loans and leases
32,028,988
32,073,734
32,090,695
30,828,867
29,908,930
Loans held for sale, at fair value
186,301
162,376
193,234
196,110
187,925
Premises and equipment, net
802,133
789,698
804,732
801,463
792,232
Goodwill
1,367,785
1,367,785
1,367,785
1,367,785
1,367,785
Other intangible assets, net
100,191
104,596
109,033
115,113
119,579
Bank-owned life insurance
642,840
639,073
634,985
631,174
630,046
Other assets
1,498,531
1,590,769
1,486,070
1,609,232
1,540,239
Assets of discontinued operations
—
156,103
169,032
155,411
166,823
Total Assets
$ 48,934,510
$ 48,523,010
$ 48,838,660
$ 51,693,096
$ 48,653,414
LIABILITIES
Deposits:
Demand: Noninterest bearing
$ 9,232,068
$ 9,648,191
$ 10,223,508
$ 11,517,037
$ 12,731,065
Interest bearing
19,276,596
18,334,551
18,088,711
18,146,678
19,040,131
Savings
2,720,913
2,837,348
2,983,709
3,226,685
3,473,746
Time deposits
7,267,560
7,515,788
7,405,741
6,516,054
3,711,672
Total deposits
38,497,137
38,335,878
38,701,669
39,406,454
38,956,614
Securities sold under agreement to repurchase
451,516
862,589
790,758
771,335
708,736
Other short-term borrowings
3,500,000
3,500,223
3,500,226
5,700,228
3,300,231
Subordinated and long-term debt
438,460
449,323
449,733
462,144
462,554
Other liabilities
879,554
876,195
806,305
763,912
815,703
Liabilities of discontinued operations
—
103,545
104,119
98,606
98,202
Total Liabilities
43,766,667
44,127,753
44,352,810
47,202,679
44,342,040
SHAREHOLDERS’ EQUITY
Preferred stock
166,993
166,993
166,993
166,993
166,993
Common stock
457,179
456,528
456,566
456,711
456,093
Capital surplus
2,743,066
2,733,003
2,724,021
2,715,981
2,709,391
Accumulated other comprehensive loss
(761,829)
(1,309,921)
(1,163,075)
(1,081,886)
(1,222,538)
Retained earnings
2,562,434
2,348,654
2,301,345
2,232,618
2,201,435
Total Shareholders’ Equity
5,167,843
4,395,257
4,485,850
4,490,417
4,311,374
Total Liabilities & Shareholders’ Equity
$ 48,934,510
$ 48,523,010
$ 48,838,660
$ 51,693,096
$ 48,653,414
Table 5
Consolidated Quarterly Average Balance Sheets
(Unaudited)
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
ASSETS
Cash and due from banks
$ 443,504
$ 362,479
$ 402,744
$ 500,507
$ 428,575
Interest bearing deposits with other banks and Federal funds sold
1,811,686
1,571,973
1,605,594
1,524,358
941,416
Available-for-sale securities, at fair value
9,300,714
10,004,441
10,655,791
11,354,457
12,156,803
Loans and leases, net of unearned income
32,529,030
32,311,572
31,901,096
30,891,640
29,812,924
Allowance for credit losses
447,879
459,698
457,027
442,486
434,785
Net loans and leases
32,081,151
31,851,874
31,444,069
30,449,154
29,378,139
Loans held for sale, at fair value
113,234
115,653
67,038
46,863
62,517
Premises and equipment, net
795,164
811,095
804,526
799,077
777,717
Goodwill
1,367,916
1,367,785
1,367,785
1,367,784
1,370,106
Other intangible assets, net
102,765
107,032
113,094
117,518
122,093
Bank-owned life insurance
640,439
636,335
632,489
630,601
625,938
Other assets
1,787,603
1,826,471
1,973,991
1,861,882
1,927,190
Total Assets
$ 48,444,176
$ 48,655,138
$ 49,067,121
$ 48,652,201
$ 47,790,494
LIABILITIES
Deposits:
Demand: Noninterest bearing
$ 9,625,912
$ 9,921,617
$ 10,725,108
$ 12,203,079
$ 13,344,152
Interest bearing
18,292,826
17,970,463
17,997,618
19,009,345
17,866,198
Savings
2,758,977
2,913,027
3,088,174
3,363,236
3,555,911
Time deposits
7,537,664
7,660,868
7,123,893
4,328,388
3,606,093
Total deposits
38,215,379
38,465,975
38,934,793
38,904,048
38,372,354
Securities sold under agreement to repurchase
753,018
827,055
774,170
727,975
660,974
Other short-term borrowings
3,503,320
3,510,942
3,541,985
3,326,196
3,251,947
Subordinated and long-term debt
443,251
449,568
455,617
462,385
462,927
Other liabilities
1,021,865
896,436
821,203
835,136
826,707
Total Liabilities
43,936,833
44,149,976
44,527,768
44,255,740
43,574,909
SHAREHOLDERS’ EQUITY
Preferred stock
166,993
166,993
166,993
166,993
166,993
Common stock
456,636
456,557
456,755
456,354
456,095
Capital surplus
2,733,985
2,726,686
2,717,866
2,710,501
2,701,121
Accumulated other comprehensive loss
(1,279,235)
(1,175,077)
(1,087,389)
(1,174,723)
(1,302,388)
Retained earnings
2,428,964
2,330,003
2,285,128
2,237,336
2,193,764
Total Shareholders’ Equity
4,507,343
4,505,162
4,539,353
4,396,461
4,215,585
Total Liabilities & Shareholders’ Equity
$ 48,444,176
$ 48,655,138
$ 49,067,121
$ 48,652,201
$ 47,790,494
Table 6
Consolidated Statements of Income
(Unaudited)
Quarter Ended
Year-to-date
(Dollars in thousands, except per share data)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
INTEREST REVENUE:
Loans and leases
$ 531,340
$ 520,126
$ 496,262
$ 457,084
$ 414,623
$ 2,004,812
$ 1,342,662
Available-for-sale securities:
Taxable
55,801
50,277
53,531
48,512
45,807
208,122
183,915
Tax-exempt
1,927
2,375
2,427
2,477
2,547
9,206
10,079
Loans held for sale
1,418
1,468
961
603
1,788
4,450
7,554
Short-term investments
24,701
21,213
20,214
17,450
8,781
83,577
16,371
Total interest revenue
615,187
595,459
573,395
526,126
473,546
2,310,167
1,560,581
INTEREST EXPENSE:
Interest bearing demand deposits and money market accounts
139,144
126,296
111,938
95,344
60,253
472,723
109,893
Savings
3,918
4,108
3,915
3,014
2,769
14,955
5,519
Time deposits
80,143
76,867
65,517
23,950
10,651
246,476
24,253
Federal funds purchased and securities sold under agreement to repurchase
8,254
9,004
7,656
7,667
8,365
32,581
13,432
Short-term debt
44,451
45,438
46,036
37,015
27,302
172,940
36,863
Subordinated and long-term debt
4,672
4,786
4,806
4,872
4,848
19,136
19,330
Total interest expense
280,582
266,499
239,868
171,862
114,188
958,811
209,290
Net interest revenue
334,605
328,960
333,527
354,264
359,358
1,351,356
1,351,291
Provision for credit losses
38,000
17,000
15,000
10,000
6,000
80,000
7,000
Net interest revenue, after provision for credit losses
296,605
311,960
318,527
344,264
353,358
1,271,356
1,344,291
NONINTEREST REVENUE:
Mortgage banking
(1,137)
5,684
8,356
6,076
2,571
18,978
44,860
Credit card, debit card and merchant fees
12,902
12,413
12,617
11,851
15,750
49,784
58,160
Deposit service charges
11,161
16,867
17,208
16,482
16,863
61,718
73,478
Security (losses) gains, net
(384,524)
64
69
(51,261)
(595)
(435,652)
(384)
Wealth management
22,576
21,079
21,741
21,532
19,199
86,928
80,486
Other noninterest income
27,562
17,882
26,673
29,783
26,408
101,901
85,885
Total noninterest revenue
(311,460)
73,989
86,664
34,463
80,196
(116,343)
342,485
NONINTEREST EXPENSE:
Salaries and employee benefits
148,081
161,627
159,276
165,738
156,868
634,722
634,843
Occupancy and equipment
28,009
27,069
28,106
27,787
29,221
110,972
114,460
Data processing and software
32,922
29,127
27,289
31,105
28,510
120,443
111,107
Merger expense
—
—
122
5,070
19,916
5,192
50,845
Amortization of intangibles
4,405
4,436
6,081
4,466
4,695
19,388
18,432
Deposit insurance assessments
45,733
10,425
7,705
8,361
5,931
72,224
18,712
Pension settlement expense
11,226
600
—
—
6,127
11,826
9,023
Other noninterest expense
58,991
41,158
38,887
42,120
57,370
181,156
152,332
Total noninterest expense
329,367
274,442
267,466
284,647
308,638
1,155,923
1,109,754
(Loss) income from continuing operations before taxes
(344,222)
111,507
137,725
94,080
124,916
(910)
577,022
Income tax (benefit) expense
(80,485)
24,355
30,463
21,073
28,196
(4,594)
129,705
(Loss) income from continuing operations
(263,737)
87,152
107,262
73,007
96,720
3,684
447,317
Income from discontinued operations
706,129
7,242
9,238
4,982
2,646
727,591
22,353
Income tax expense from discontinued operations
183,328
1,811
2,472
1,360
1,432
188,971
6,433
Income from discontinued operations, net of taxes
522,801
5,431
6,766
3,622
1,214
538,620
15,920
Net income
259,064
92,583
114,028
76,629
97,934
542,304
463,237
Less: Preferred dividends
2,372
2,372
2,372
2,372
2,372
9,488
9,488
Net income available to common shareholders
$ 256,692
$ 90,211
$ 111,656
$ 74,257
$ 95,562
$ 532,816
$ 453,749
Diluted (losses) earnings per common share from continuing operations
$ (1.46)
$ 0.46
$ 0.57
$ 0.38
$ 0.51
$ (0.03)
$ 2.37
Diluted earnings per common share
$ 1.41
$ 0.49
$ 0.61
$ 0.40
$ 0.52
$ 2.92
$ 2.46
Table 7
Selected Loan Portfolio Data
(Unaudited)
Quarter Ended
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate
$ 8,935,598
$ 9,199,024
$ 9,636,481
$ 9,159,387
$ 8,985,547
Owner occupied
4,349,060
4,361,530
4,358,000
4,278,468
4,068,659
Total commercial and industrial
13,284,658
13,560,554
13,994,481
13,437,855
13,054,206
Commercial real estate
Construction, acquisition and development
3,910,962
3,819,307
3,744,114
3,703,137
3,547,986
Income producing
5,736,871
5,720,606
5,596,134
5,368,676
5,150,680
Total commercial real estate
9,647,833
9,539,913
9,340,248
9,071,813
8,698,666
Consumer
Residential mortgages
9,329,692
9,186,179
8,989,614
8,536,032
8,319,242
Other consumer
234,839
233,947
232,365
236,894
277,163
Total consumer
9,564,531
9,420,126
9,221,979
8,772,926
8,596,405
Total loans and leases, net of unearned income
$ 32,497,022
$ 32,520,593
$ 32,556,708
$ 31,282,594
$ 30,349,277
NON-PERFORMING ASSETS
Non-performing Loans and Leases
Nonaccrual Loans and Leases
Commercial and industrial
Non-real estate
$ 131,559
$ 67,962
$ 72,592
$ 65,783
$ 23,907
Owner occupied
7,097
6,486
7,541
9,089
7,944
Total commercial and industrial
138,656
74,448
80,133
74,872
31,851
Commercial real estate
Construction, acquisition and development
1,859
4,608
4,496
1,850
2,974
Income producing
17,485
12,251
19,205
20,616
7,331
Total commercial real estate
19,344
16,859
23,701
22,466
10,305
Consumer
Residential mortgages
57,881
58,488
53,171
62,748
55,892
Other consumer
260
243
238
529
697
Total consumer
58,141
58,731
53,409
63,277
56,589
Total nonaccrual loans and leases
$ 216,141
$ 150,038
$ 157,243
$ 160,615
$ 98,745
Restructured loans and leases, still accruing (1)
—
—
—
—
8,598
Total non-performing loans and leases (2)
$ 216,141
$ 150,038
$ 157,243
$ 160,615
$ 107,343
Other real estate owned and repossessed assets
6,246
2,927
2,857
5,327
6,725
Total non-performing assets
$ 222,387
$ 152,965
$ 160,100
$ 165,942
$ 114,068
Government guaranteed portion of nonaccrual loans and leases covered by the SBA, FHA, VA or USDA
$ 49,551
$ 42,046
$ 35,322
$ 30,218
$ 20,830
Loans and leases 90+ days past due, still accruing
$ 22,466
$ 9,152
$ 4,412
$ 5,164
$ 2,068
Additions to nonaccrual loans and leases during the quarter (excluding acquisitions)
$ 131,136
$ 69,154
$ 57,764
$ 89,779
$ 38,945
(1)
Cadence elected to adopt the new accounting guidance effective January 1, 2023, which eliminates the TDR recognition and measurement guidance via the modified retrospective transition method (ASU 2022-02). As such, there is no TDR reporting effective January 1, 2023.
Table 8
Allowance for Credit Losses
(Unaudited)
Quarter Ended
(Dollars in thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
ALLOWANCE FOR CREDIT LOSSES:
Balance, beginning of period
$ 446,859
$ 466,013
$ 453,727
$ 440,347
$ 433,363
Charge-offs:
Commercial and industrial
(21,385)
(34,959)
(13,598)
(2,853)
(2,295)
Commercial real estate
(2,290)
(931)
(126)
(1,988)
(426)
Consumer
(3,229)
(1,608)
(1,916)
(2,189)
(2,650)
Total loans charged-off
(26,904)
(37,498)
(15,640)
(7,030)
(5,371)
Recoveries:
Commercial and industrial
2,117
2,240
1,360
3,406
6,405
Commercial real estate
95
201
618
779
2,851
Consumer
867
903
948
970
1,099
Total recoveries
3,079
3,344
2,926
5,155
10,355
Net (charge-offs) recoveries
(23,825)
(34,154)
(12,714)
(1,875)
4,984
Adoption of new ASU related to modified loans (3)
—
—
—
255
—
Provision for credit losses related to loans and leases
45,000
15,000
25,000
15,000
2,000
Balance, end of period
$ 468,034
$ 446,859
$ 466,013
$ 453,727
$ 440,347
Average loans and leases, net of unearned income, for period
$ 32,529,030
$ 32,311,572
$ 31,901,096
$ 30,891,640
$ 29,812,924
Ratio: Net charge-offs (recoveries) to average loans and leases (2)
0.29 %
0.42 %
0.16 %
0.02 %
(0.07) %
RESERVE FOR UNFUNDED COMMITMENTS (1)
Balance, beginning of period
$ 15,551
$ 13,551
$ 23,551
$ 28,551
$ 24,551
(Reversal) provision for credit losses for unfunded commitments
(7,000)
2,000
(10,000)
(5,000)
4,000
Balance, end of period
$ 8,551
$ 15,551
$ 13,551
$ 23,551
$ 28,551
(1)
The Reserve for Unfunded Commitments is classified in other liabilities on the consolidated balance sheets.
(2)
Annualized.
(3)
Cadence elected to adopt the new accounting guidance effective January 1, 2023, which eliminates the TDR recognition and measurement guidance via the modified retrospective transition method (ASU 2022-02). As such, there is no TDR reporting effective January 1, 2023.
Table 9
Loan Portfolio by Grades
(Unaudited)
December 31, 2023
(In thousands)
Pass
Special Mention
Substandard
Loss
Impaired
Purchased Credit Deteriorated (Loss)
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate
$ 8,450,809
$ 101,607
$ 294,895
$ 13
$ 84,457
$ 3,817
$ 8,935,598
Owner occupied
4,287,190
32,409
27,070
—
1,275
1,116
4,349,060
Total commercial and industrial
12,737,999
134,016
321,965
13
85,732
4,933
13,284,658
Commercial real estate
Construction, acquisition and development
3,894,551
3,364
13,047
—
—
—
3,910,962
Income producing
5,527,388
23,727
170,217
—
15,539
—
5,736,871
Total commercial real estate
9,421,939
27,091
183,264
—
15,539
—
9,647,833
Consumer (1)
Residential mortgages
9,258,002
4,066
66,050
—
—
1,574
9,329,692
Other consumer
234,367
—
472
—
—
—
234,839
Total consumer
9,492,369
4,066
66,522
—
—
1,574
9,564,531
Total loans and leases, net of unearned income
$ 31,652,307
$ 165,173
$ 571,751
$ 13
$ 101,271
$ 6,507
$ 32,497,022
(1)
During the second quarter of 2023, the Company began determining the risk rating classification of its Consumer portfolio based on nonaccrual and delinquency status in accordance with the Uniform Retail Credit Classification guidance and industry norms, which contributed to a lower number of criticized and classified loans compared to periods prior to the second quarter of 2023. As a result of the modification, current period results are not directly comparable to periods prior to the second quarter of 2023.
September 30, 2023
(In thousands)
Pass
Special Mention
Substandard
Impaired
Purchased Credit Deteriorated (Loss)
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate
$ 8,690,172
$ 100,118
$ 388,741
$ 15,337
$ 4,656
$ 9,199,024
Owner occupied
4,281,916
30,414
46,803
1,275
1,122
4,361,530
Total commercial and industrial
12,972,088
130,532
435,544
16,612
5,778
13,560,554
Commercial real estate
Construction, acquisition and development
3,798,695
2,975
17,637
—
—
3,819,307
Income producing
5,519,028
65,473
124,731
11,374
—
5,720,606
Total commercial real estate
9,317,723
68,448
142,368
11,374
—
9,539,913
Consumer
Residential mortgages
9,114,880
1,366
68,359
—
1,574
9,186,179
Other consumer
233,505
—
442
—
—
233,947
Total consumer
9,348,385
1,366
68,801
—
1,574
9,420,126
Total loans and leases, net of unearned income
$ 31,638,196
$ 200,346
$ 646,713
$ 27,986
$ 7,352
$ 32,520,593
Table 10
Geographical Loan Information
(Unaudited)
December 31, 2023
(Dollars in thousands)
Alabama
Arkansas
Florida
Georgia
Louisiana
Mississippi
Missouri
Tennessee
Texas
Other
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate
$ 417,687
$ 158,759
$ 503,957
$ 528,205
$ 346,840
$ 532,593
$ 62,507
$ 373,991
$ 3,718,233
$ 2,292,826
$ 8,935,598
Owner occupied
345,679
247,584
281,750
313,532
292,347
591,611
90,227
167,464
1,676,272
342,594
4,349,060
Total commercial and industrial
763,366
406,343
785,707
841,737
639,187
1,124,204
152,734
541,455
5,394,505
2,635,420
13,284,658
Commercial real estate
Construction, acquisition and development
202,977
79,365
363,597
472,953
54,985
194,535
46,014
182,393
1,799,697
514,446
3,910,962
Income producing
446,290
273,000
369,897
605,160
212,148
435,089
208,216
296,918
2,080,393
809,760
5,736,871
Total commercial real estate
649,267
352,365
733,494
1,078,113
267,133
629,624
254,230
479,311
3,880,090
1,324,206
9,647,833
Consumer
Residential mortgages
1,216,942
388,396
647,117
408,459
462,264
1,147,388
179,119
716,384
3,898,525
265,098
9,329,692
Other consumer
31,155
18,488
5,563
6,431
11,587
87,229
1,780
17,892
49,397
5,317
234,839
Total consumer
1,248,097
406,884
652,680
414,890
473,851
1,234,617
180,899
734,276
3,947,922
270,415
9,564,531
Total loans and leases, net of unearned income
$ 2,660,730
$ 1,165,592
$ 2,171,881
$ 2,334,740
$ 1,380,171
$ 2,988,445
$ 587,863
$ 1,755,042
$ 13,222,517
$ 4,230,041
$ 32,497,022
Loan growth, excluding loans acquired during the quarter ($)
$ 73,088
$ (5,835)
$ 74,573
$ 30,978
$ 13,006
$ 28,114
$ 9,403
$ 19,131
$ (105,613)
$ (160,416)
$ (23,571)
Loan growth, excluding loans acquired during the quarter (%) (annualized)
11.21 %
(1.98) %
14.11 %
5.33 %
3.77 %
3.77 %
6.45 %
4.37 %
(3.14) %
(14.50) %
(0.29) %
September 30, 2023
(Dollars in thousands)
Alabama
Arkansas
Florida
Georgia
Louisiana
Mississippi
Missouri
Tennessee
Texas
Other
Total
LOAN AND LEASE PORTFOLIO:
Commercial and industrial
Non-real estate
$ 360,970
$ 162,650
$ 491,854
$ 514,031
$ 330,072
$ 516,449
$ 65,475
$ 341,777
$ 3,884,907
$ 2,530,839
$ 9,199,024
Owner occupied
351,835
252,880
284,886
319,982
288,640
594,127
92,167
164,564
1,660,831
351,618
4,361,530
Total commercial and industrial
712,805
415,530
776,740
834,013
618,712
1,110,576
157,642
506,341
5,545,738
2,882,457
13,560,554
Commercial real estate
Construction, acquisition and development
210,809
73,567
306,869
422,605
59,957
201,138
49,584
163,621
1,885,210
445,947
3,819,307
Income producing
427,591
275,663
374,452
634,494
217,475
423,473
193,555
328,808
2,047,954
797,141
5,720,606
Total commercial real estate
638,400
349,230
681,321
1,057,099
277,432
624,611
243,139
492,429
3,933,164
1,243,088
9,539,913
Consumer
Residential mortgages
1,204,991
388,592
634,059
405,382
459,661
1,138,245
175,973
720,227
3,799,189
259,860
9,186,179
Other consumer
31,446
18,075
5,188
7,268
11,360
86,899
1,706
16,914
50,039
5,052
233,947
Total consumer
1,236,437
406,667
639,247
412,650
471,021
1,225,144
177,679
737,141
3,849,228
264,912
9,420,126
Total loans and leases, net of unearned income
$ 2,587,642
$ 1,171,427
$ 2,097,308
$ 2,303,762
$ 1,367,165
$ 2,960,331
$ 578,460
$ 1,735,911
$ 13,328,130
$ 4,390,457
$ 32,520,593
Table 11
Noninterest Revenue and Expense
(Unaudited)
Quarter Ended
Year-to-date
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
NONINTEREST REVENUE:
Mortgage banking excl. MSR and MSR hedge market value adjustment
$ 3,931
$ 5,842
$ 6,774
$ 8,379
$ 5,408
$ 24,926
$ 24,642
MSR and MSR hedge market value adjustment
(5,068)
(158)
1,582
(2,303)
(2,837)
(5,948)
20,218
Credit card, debit card and merchant fees
12,902
12,413
12,617
11,851
15,750
49,784
58,160
Deposit service charges
11,161
16,867
17,208
16,482
16,863
61,718
73,478
Security gains (losses), net
(384,524)
64
69
(51,261)
(595)
(435,652)
(384)
Trust income
11,301
10,574
10,084
10,553
9,113
42,513
37,314
Annuity fees
1,839
1,882
1,702
2,192
951
7,614
2,908
Brokerage commissions and fees
9,436
8,623
9,955
8,787
9,135
36,801
40,264
Bank-owned life insurance
4,728
4,108
3,811
3,647
5,436
16,294
15,594
Other miscellaneous income
22,834
13,774
22,862
26,136
20,972
85,607
70,291
Total noninterest revenue
$ (311,460)
$ 73,989
$ 86,664
$ 34,463
$ 80,196
$ (116,343)
$ 342,485
NONINTEREST EXPENSE:
Salaries and employee benefits
$ 148,081
$ 161,627
$ 159,276
$ 165,738
$ 156,868
$ 634,722
$ 634,843
Occupancy and equipment
28,009
27,069
28,106
27,787
29,221
110,972
114,460
Deposit insurance assessments
45,733
10,425
7,705
8,361
5,931
72,224
18,712
Pension settlement expense
11,226
600
—
—
6,127
11,826
9,023
Advertising and public relations
12,632
5,671
5,618
4,241
28,419
28,162
41,055
Foreclosed property expense
915
270
323
980
400
2,488
832
Telecommunications
1,356
1,520
1,365
1,534
1,524
5,775
6,617
Travel and entertainment
3,146
2,442
2,850
2,565
3,980
11,004
11,407
Data processing and software
32,922
29,127
27,289
31,105
28,510
120,443
111,107
Professional, consulting and outsourcing
5,194
5,017
5,371
4,311
3,464
19,892
13,424
Amortization of intangibles
4,405
4,436
6,081
4,466
4,695
19,388
18,432
Legal
13,724
3,316
1,765
1,288
725
20,093
5,350
Merger expense
—
—
122
5,070
19,916
5,192
50,845
Postage and shipping
1,907
2,292
1,941
2,303
1,864
8,443
7,868
Other miscellaneous expense
20,117
20,630
19,654
24,898
16,994
85,299
65,779
Total noninterest expense
$ 329,367
$ 274,442
$ 267,466
$ 284,647
$ 308,638
$ 1,155,923
$ 1,109,754
Table 12
Average Balance and Yields
(Unaudited)
Quarter Ended
December 31, 2023
September 30, 2023
December 31, 2022
(Dollars in thousands)
Average
Balance
Income/ Expense
Yield/
Rate
Average
Balance
Income/ Expense
Yield/
Rate
Average
Balance
Income/ Expense
Yield/
Rate
ASSETS
Interest-earning assets:
Loans and leases, excluding accretion
$ 32,529,030
$ 527,688
6.44 %
$ 32,311,572
$ 513,989
6.31 %
$ 29,812,924
$ 405,827
5.40 %
Accretion income on acquired loans
4,127
0.05
6,587
0.08
9,190
0.12
Loans held for sale
113,234
1,418
4.97
115,653
1,468
5.04
62,517
1,788
11.35
Investment securities
Taxable
9,044,724
55,801
2.45
9,635,084
50,277
2.07
11,767,062
45,807
1.54
Tax-exempt
255,990
2,439
3.78
369,357
3,006
3.23
389,741
3,224
3.28
Total investment securities
9,300,714
58,240
2.48
10,004,441
53,283
2.11
12,156,803
49,031
1.60
Other investments
1,811,686
24,701
5.41
1,571,973
21,213
5.35
941,416
8,781
3.70
Total interest-earning assets
43,754,664
616,174
5.59 %
44,003,639
596,540
5.38 %
42,973,660
474,617
4.38 %
Other assets
5,137,391
5,111,197
5,251,619
Allowance for credit losses
447,879
459,698
434,785
Total assets
$ 48,444,176
$ 48,655,138
$ 47,790,494
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest bearing demand and money market
$ 18,292,826
$ 139,144
3.02 %
$ 17,970,463
$ 126,296
2.79 %
$ 17,866,198
60,253
1.34 %
Savings deposits
2,758,977
3,918
0.56
2,913,027
4,108
0.56
3,555,911
2,769
0.31
Time deposits
7,537,664
80,143
4.22
7,660,868
76,867
3.98
3,606,093
10,651
1.17
Total interest-bearing deposits
28,589,467
223,205
3.10
28,544,358
207,271
2.88
25,028,202
73,673
1.17
Fed funds purchased, securities sold under agreement to repurchase and other
756,336
8,257
4.33
837,773
9,007
4.27
1,091,029
8,365
3.04
Short-term FHLB borrowings
2
—
—
224
2
3.54
2,821,892
27,302
3.84
Short-term BTFP borrowings
3,500,000
44,448
5.04
3,500,000
45,433
5.15
—
—
—
Long-term borrowings
443,251
4,672
4.18
449,568
4,786
4.22
462,927
4,848
4.15
Total interest-bearing liabilities
33,289,056
280,582
3.34 %
33,331,923
266,499
3.17 %
29,404,050
114,188
1.54 %
Noninterest-bearing liabilities:
Demand deposits
9,625,912
9,921,617
13,344,152
Other liabilities
1,021,865
896,436
826,707
Total liabilities
43,936,833
44,149,976
43,574,909
Shareholders’ equity
4,507,343
4,505,162
4,215,585
Total liabilities and shareholders’ equity
$ 48,444,176
$ 48,655,138
$ 47,790,494
Net interest income/net interest spread
335,592
2.25 %
330,041
2.21 %
360,429
2.84 %
Net yield on earning assets/net interest margin
3.04 %
2.98 %
3.33 %
Taxable equivalent adjustment:
Loans and investment securities
(987)
(1,081)
(1,071)
Net interest revenue
$ 334,605
$ 328,960
$ 359,358
Table 12
Average Balance and Yields Cont.
Year-To-Date
December 31, 2023
December 31, 2022
(Dollars in thousands)
Average
Balance
Income/ Expense
Yield/
Rate
Average
Balance
Income/ Expense
Yield/
Rate
ASSETS
Interest-earning assets:
Loans and leases, excluding accretion
$ 31,913,925
$ 1,980,600
6.21 %
$ 28,418,658
$ 1,297,384
4.57 %
Accretion income on acquired loans
25,949
0.08
46,811
0.16
Loans held for sale
85,961
4,450
5.18
122,079
7,554
6.19
Investment securities
Taxable
9,971,325
208,122
2.09
13,163,403
183,915
1.40
Tax-exempt
351,010
11,653
3.32
432,969
12,758
2.95
Total investment securities
10,322,335
219,775
2.13
13,596,372
196,673
1.45
Other investments
1,629,036
83,577
5.13
923,861
16,371
1.77
Total interest-earning assets
43,951,257
2,314,351
5.27 %
43,060,970
1,564,793
3.63 %
Other assets
5,204,505
4,911,883
Allowance for credit losses
451,809
439,696
Total assets
$ 48,703,953
$ 47,533,157
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest bearing demand and money market
$ 18,314,649
472,723
2.58 %
$ 18,541,402
$ 109,893
0.59 %
Savings deposits
3,028,875
14,955
0.49
3,657,718
5,519
0.15
Time deposits
6,674,231
246,476
3.69
3,545,402
24,253
0.68
Total interest-bearing deposits
28,017,755
734,154
2.62
25,744,522
139,665
0.54
Fed funds purchased, securities sold under agreement to repurchase and other
800,170
32,590
4.07
923,973
13,432
1.45
Short-term FHLB borrowings
1,389,759
68,235
4.91
1,325,381
36,863
2.78
Short-term BTFP borrowings
2,052,055
104,696
5.10
—
—
—
Long-term borrowings
452,645
19,136
4.23
465,004
19,330
4.16
Total interest-bearing liabilities
32,712,384
958,811
2.93 %
28,458,880
209,290
0.74 %
Noninterest-bearing liabilities:
Demand deposits
10,610,698
13,733,384
Other liabilities
893,438
766,490
Total liabilities
44,216,520
42,958,754
Shareholders’ equity
4,487,433
4,574,403
Total liabilities and shareholders’ equity
$ 48,703,953
$ 47,533,157
Net interest income/net interest spread
1,355,540
2.33 %
1,355,503
2.90 %
Net yield on earning assets/net interest margin
3.08 %
3.15 %
Taxable equivalent adjustment:
Loans and investment securities
(4,184)
(4,212)
Net interest revenue
$ 1,351,356
$ 1,351,291
Table 13
Selected Additional Data
(Unaudited)
Quarter Ended
(Dollars in thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
MORTGAGE SERVICING RIGHTS (“MSR”):
Fair value, beginning of period
$ 116,266
$ 111,417
$ 106,942
$ 109,744
$ 112,767
Originations of servicing assets
2,636
4,065
1,990
1,385
2,283
Changes in fair value:
Due to payoffs/paydowns
(3,035)
(2,104)
(2,621)
(1,078)
(2,308)
Due to update in valuation assumptions
(9,043)
2,888
5,106
(3,109)
(2,998)
Fair value, end of period
$ 106,824
$ 116,266
$ 111,417
$ 106,942
$ 109,744
MORTGAGE BANKING REVENUE:
Origination
$ 1,040
$ 2,031
$ 3,495
$ 3,344
$ 1,793
Servicing
5,926
5,915
5,900
6,113
5,923
Payoffs/Paydowns
(3,035)
(2,104)
(2,621)
(1,078)
(2,308)
Total mortgage banking revenue excluding MSR
3,931
5,842
6,774
8,379
5,408
Market value adjustment on MSR
(9,043)
2,888
5,106
(3,109)
(2,998)
Market value adjustment on MSR Hedge
3,975
(3,046)
(3,524)
806
161
Total mortgage banking revenue
$ (1,137)
$ 5,684
$ 8,356
$ 6,076
$ 2,571
Mortgage loans serviced
$ 7,702,592
$ 7,643,885
$ 7,550,676
$ 7,633,236
$ 7,692,744
MSR/mortgage loans serviced
1.39 %
1.52 %
1.48 %
1.40 %
1.43 %
Quarter Ended
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
AVAILABLE-FOR-SALE SECURITIES, at fair value
U.S. Treasury securities
$ 465,018
$ 1,996
$ 8,959
$ 15,849
$ 1,458,513
Obligations of U.S. government agencies
332,011
1,004,374
1,112,326
1,358,350
1,477,127
Mortgage-backed securities issued or guaranteed by U.S. agencies (“MBS”):
Residential pass-through:
Guaranteed by GNMA
75,662
73,649
79,261
83,649
84,368
Issued by FNMA and FHLMC
4,387,101
5,541,895
5,895,704
6,164,294
6,274,970
Other residential mortgage-back securities
727,434
146,063
157,294
166,449
168,452
Commercial mortgage-backed securities
1,742,837
2,271,680
2,357,047
2,427,808
1,881,853
Total MBS
6,933,034
8,033,287
8,489,306
8,842,200
8,409,643
Obligations of states and political subdivisions
137,624
392,252
433,316
447,731
466,002
Other domestic debt securities
67,197
71,741
71,356
73,557
82,718
Foreign debt securities
140,592
139,581
139,317
140,192
50,093
Total available-for-sale securities
$ 8,075,476
$ 9,643,231
$ 10,254,580
$ 10,877,879
$ 11,944,096
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 income from continuing operations, adjusted income from continuing operations available to common shareholders, pre-tax pre-provision net revenue from continuing operations, adjusted pre-tax pre-provision net revenue from continuing operations, total adjusted noninterest 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 from continuing operations, return on average tangible common equity, adjusted return on average tangible common equity from continuing operations, adjusted return on average tangible common equity, adjusted return on average assets from continuing operations, adjusted return on average assets, adjusted return on average common shareholders’ equity from continuing operations, adjusted return on average common shareholders’ equity, pre-tax pre-provision net revenue to total average assets, adjusted pre-tax pre-provision net revenue to total average assets, adjusted earnings per common share, tangible book value per common share, tangible book value per common share, excluding AOCI, efficiency ratio (tax equivalent), adjusted efficiency ratio (tax equivalent), and adjusted dividend payout ratio. The Company has included these non-GAAP financial measures in this release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures: (i) provides important supplemental information that contributes to a proper understanding of the Company’s capital position and adjusted performance, (ii) enables a more complete understanding of factors and trends affecting the Company’s business and (iii) allows investors to evaluate the Company’s performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this news release with other companies’ non-GAAP financial measures having the same or similar names.
Quarter Ended
Year-to-date
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
Adjusted Income from Continuing Operations Available to Common Shareholders
(Loss) income from continuing operations
$ (263,737)
$ 87,152
$ 107,262
$ 73,007
$ 96,720
$ 3,684
$ 447,317
Plus: Merger expense
—
—
122
5,070
19,916
5,192
50,845
Incremental merger related expense
7,500
—
1,671
8,960
32,704
18,131
52,247
Gain on extinguishment of debt
(652)
—
(1,140)
—
—
(1,792)
—
Restructuring and other nonroutine expenses
41,522
9,596
6,219
212
2,254
57,548
3,094
Pension settlement expense
11,226
600
—
—
6,127
11,826
9,023
Less: Security (losses) gains, net
(384,524)
64
69
(51,261)
(595)
(435,652)
(384)
Nonroutine (losses) gains, net
—
(6,653)
—
—
—
(6,653)
—
Tax adjustment
105,275
3,944
1,599
15,393
14,580
126,211
27,361
Adjusted income from continuing operations
75,108
99,992
112,466
123,117
143,736
410,683
535,549
Less: Preferred dividends
2,372
2,372
2,372
2,372
2,372
9,488
9,488
Adjusted income from continuing operations available to common shareholders
$ 72,736
$ 97,620
$ 110,094
$ 120,745
$ 141,364
$ 401,195
$ 526,061
Quarter Ended
Year-to-date
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
Pre-Tax Pre-Provision Net Revenue from Continuing Operations
(Loss) income from continuing operations
$ (263,737)
$ 87,152
$ 107,262
$ 73,007
$ 96,720
$ 3,684
$ 447,317
Plus: Provision for credit losses
38,000
17,000
15,000
10,000
6,000
80,000
7,000
Income tax (benefit) expense
(80,485)
24,355
30,463
21,073
28,196
(4,594)
129,705
Pre-tax pre-provision net revenue from continuing operations
$ (306,222)
$ 128,507
$ 152,725
$ 104,080
$ 130,916
$ 79,090
$ 584,022
Quarter Ended
Year-to-date
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
Adjusted Pre-Tax Pre-Provision Net Revenue from Continuing Operations
(Loss) income from continuing operations
$ (263,737)
$ 87,152
$ 107,262
$ 73,007
$ 96,720
$ 3,684
$ 447,317
Plus: Provision for credit losses
38,000
17,000
15,000
10,000
6,000
80,000
7,000
Merger expense
—
—
122
5,070
19,916
5,192
50,845
Incremental merger related expense
7,500
—
1,671
8,960
32,704
18,131
52,247
Gain on extinguishment of debt
(652)
—
(1,140)
—
—
(1,792)
—
Restructuring and other nonroutine expenses
41,522
9,596
6,219
212
2,254
57,548
3,094
Pension settlement expense
11,226
600
—
—
6,127
11,826
9,023
Income tax (benefit) expense
(80,485)
24,355
30,463
21,073
28,196
(4,594)
129,705
Less: Security (losses) gains, net
(384,524)
64
69
(51,261)
(595)
(435,652)
(384)
Nonroutine (losses) gains, net
$ —
$ (6,653)
$ —
$ —
$ —
(6,653)
—
Adjusted pre-tax pre-provision net revenue from continuing operations
$ 137,898
$ 145,292
$ 159,528
$ 169,583
$ 192,512
$ 612,300
$ 699,615
Quarter Ended
Year-to-date
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
Total Adjusted Noninterest Revenue
Total noninterest revenue
$ (311,460)
$ 73,989
$ 86,664
$ 34,463
$ 80,196
$ (116,343)
$ 342,485
Less: Security gains (losses), net
(384,524)
64
69
(51,261)
(595)
(435,652)
(384)
Nonroutine gains (losses), net
—
(6,653)
—
—
—
(6,653)
—
Total adjusted noninterest revenue
$ 73,064
$ 80,578
$ 86,595
$ 85,724
$ 80,791
$ 325,962
$ 342,869
Quarter Ended
Year-to-date
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
Total Adjusted Noninterest Expense
Total noninterest expense
$ 329,367
$ 274,442
$ 267,466
$ 284,647
$ 308,638
$ 1,155,923
$ 1,109,754
Less: Merger expense
—
—
122
5,070
19,916
5,192
50,845
Incremental merger related expense
7,500
—
1,671
8,960
32,704
18,131
52,247
Gain on extinguishment of debt
(652)
—
(1,140)
—
—
(1,792)
—
Restructuring and other nonroutine expenses
41,522
9,596
6,219
212
2,254
57,548
3,094
Pension settlement expense
11,226
600
—
—
6,127
11,826
9,023
Total adjusted noninterest expense
$ 269,771
$ 264,246
$ 260,594
$ 270,405
$ 247,637
$ 1,065,018
$ 994,545
Quarter Ended
Year-to-date
(In thousands)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
Total Tangible Assets, Excluding AOCI
Total assets
$ 48,934,510
$ 48,523,010
$ 48,838,660
$ 51,693,096
$ 48,653,414
$ 48,934,510
$ 48,653,414
Less: Goodwill
1,367,785
1,367,785
1,367,785
1,367,785
1,367,785
1,367,785
1,367,785
Other identifiable intangible assets
100,191
104,596
109,033
115,113
119,579
100,191
119,579
Total tangible assets
47,466,534
47,050,629
47,361,842
50,210,198
47,166,050
47,466,534
47,166,050
Less: AOCI
(761,829)
(1,309,921)
(1,163,075)
(1,081,886)
(1,222,538)
(761,829)
(1,222,538)
Total tangible assets, excluding AOCI
$ 48,228,363
$ 48,360,550
$ 48,524,917
$ 51,292,084
$ 48,388,588
$ 48,228,363
$ 48,388,588
Quarter Ended
Year-to-date
(Dollars in thousands, except per share data)
Dec 2023
Sep 2023
Jun 2023
Mar 2023
Dec 2022
Dec 2023
Dec 2022
PERIOD END BALANCES:
Total Shareholders’ Equity, Excluding AOCI
Total shareholders’ equity
$5,167,843
$4,395,257
$4,485,850
$4,490,417
$4,311,374
$5,167,843
$4,311,374
Less: AOCI
(761,829)
(1,309,921)
(1,163,075)
(1,081,886)
(1,222,538)
(761,829)
(1,222,538)
Total shareholders’ equity, excluding AOCI
$5,929,672
$5,705,178
$5,648,925
$5,572,303
$5,533,912
$5,929,672
$5,533,912
Common Shareholders’ Equity, Excluding AOCI
Total shareholders’ equity
$5,167,843
$4,395,257
$4,485,850
$4,490,417
$4,311,374
$5,167,843
$4,311,374
Less: preferred stock
166,993
166,993
166,993
166,993
166,993
166,993
166,993
Common shareholders’ equity
5,000,850
4,228,264
4,318,857
4,323,424
4,144,381
5,000,850
4,144,381
Less: AOCI
(761,829)
(1,309,921)
(1,163,075)
(1,081,886)
(1,222,538)
(761,829)
(1,222,538)
Common shareholders’ equity, excluding AOCI
$5,762,679
$5,538,185
$5,481,932
$5,405,310
$5,366,919
$5,762,679
$5,366,919
Total Tangible Common Shareholders’ Equity, Excluding AOCI
Total shareholders’ equity
$5,167,843
$4,395,257
$4,485,850
$4,490,417
$4,311,374
$5,167,843
$4,311,374
Less: Goodwill
1,367,785
1,367,785
1,367,785
1,367,785
1,367,785
1,367,785
1,367,785
Other identifiable intangible assets
100,191
104,596
109,033
115,113
119,579
100,191
119,579
Preferred stock
166,993
166,993
166,993
166,993
166,993
166,993
166,993
Total tangible common shareholders’ equity
3,532,874
2,755,883
2,842,039
2,840,526
2,657,017
3,532,874
2,657,017
Less: AOCI
(761,829)
(1,309,921)
(1,163,075)
(1,081,886)
(1,222,538)
(761,829)
(1,222,538)
Total tangible common shareholders’ equity, excluding AOCI
$4,294,703
$4,065,804
$4,005,114
$3,922,412
$3,879,555
$4,294,703
$3,879,555
AVERAGE BALANCES:
Total Tangible Common Shareholders’ Equity
Total shareholders’ equity
$4,507,343
$4,505,162
$4,539,353
$4,396,461
$4,215,585
$4,487,433
$4,574,403
Less: Goodwill
1,367,916
1,367,785
1,367,785
1,367,784
1,370,106
1,367,818
1,343,590
Other identifiable intangible assets
102,765
107,032
113,094
117,518
122,093
110,053
154,170
Preferred stock
166,993
166,993
166,993
166,993
166,993
166,993
166,993
Total tangible common shareholders’ equity
$2,869,669
$2,863,352
$2,891,481
$2,744,166
$2,556,393
$2,842,569
$2,909,650
Total average assets
$48,444,176
$48,655,138
$49,067,121
$48,652,201
$47,790,494
$48,703,953
$47,533,157
Total shares of common stock outstanding
182,871,775
182,611,075
182,626,229
182,684,578
182,437,265
182,871,775
182,437,265
Average shares outstanding-diluted
182,688,190
184,645,004
183,631,570
183,908,798
183,762,008
182,608,713
184,498,472
Tangible common shareholders’ equity to tangible assets (1)
7.44 %
5.86 %
6.00 %
5.66 %
5.63 %
7.44 %
5.63 %
Tangible common shareholders’ equity, excluding AOCI, to tangible assets, excluding AOCI (2)
8.90
8.41
8.25
7.65
8.02
8.90
8.02
Return on average tangible common equity from continuing operations (3)
(36.79)
11.75
14.55
10.44
14.64
(0.20)
15.05
Return on average tangible common equity (3)
35.49
12.50
15.49
10.97
14.83
18.74
15.59
Adjusted return on average tangible common equity from continuing operations (4)
10.06
13.53
15.27
17.84
21.94
14.11
18.08
Adjusted return on average assets from continuing operations (5)
0.62
0.82
0.92
1.03
1.19
0.84
1.13
Adjusted return on average common shareholders’ equity from continuing operations (6)
6.65
8.93
10.10
11.58
13.85
9.29
11.94
Pre-tax pre-provision net revenue from continuing operations to total average assets (7)
(2.51)
1.05
1.25
0.87
1.09
0.16
1.23
Adjusted pre-tax pre-provision net revenue from continuing operations to total average assets (8)
1.13
1.18
1.30
1.41
1.60
1.26
1.47
Tangible book value per common share (9)
$ 19.32
$ 15.09
$ 15.56
$ 15.55
$ 14.56
$ 19.32
$ 14.56
Tangible book value per common share, excluding AOCI (10)
23.48
22.26
21.93
21.47
21.27
23.48
21.27
Adjusted earnings from continuing operations per common share (11)
$ 0.40
$ 0.53
$ 0.60
$ 0.66
$ 0.77
$ 2.20
$ 2.85
Adjusted dividend payout ratio from continuing operations (12)
58.75 %
44.34 %
39.17 %
35.61 %
28.57 %
42.73 %
30.88 %
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, excluding AOCI, 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 from continuing operations is defined by the Company as annualized income available to common shareholders from continuing operation divided by average tangible common shareholders equity.
(4)
Adjusted return on average tangible common equity from continuing operations is defined by the Company as annualized adjusted income available to common shareholders from continuing operations divided by average tangible common shareholders’ equity.
(5)
Adjusted return on average assets from continuing operations is defined by the Company as annualized adjusted income from continuing operations divided by total average assets.
(6)
Adjusted return on average common shareholders’ equity from continuing operations is defined by the Company as annualized adjusted income available to common shareholders from continuing operations divided by average common shareholders’ equity.
(7)
Pre-tax pre-provision net revenue from continuing operations to total average assets is defined by the Company as annualized pre-tax pre-provision net revenue from continuing operations divided by total average assets.
(8)
Adjusted pre-tax pre-provision net revenue from continuing operations to total average assets is defined by the Company as annualized adjusted pre-tax pre-provision net revenue from continuing operations divided by total average assets adjusted for items included in the definition and calculation of 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 from continuing operations per common share is defined by the Company as adjusted income available to common shareholders from continuing operations divided by average common shares outstanding-diluted.
(12)
Adjusted dividend payout ratio from continuing operations is defined by the Company as common share dividends divided by adjusted income available to common shareholders from continuing operations.
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 from continuing operations. The adjusted efficiency ratio excludes income and expense items otherwise disclosed as non-routine from total noninterest expense from continuing operations.
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