Please replace the release with the following corrected version
due to multiple numerical changes in the first table under
"Highlights" and Table 8.
The corrected release reads:
CADENCE BANCORPORATION REPORTS RECORD SECOND
QUARTER 2018 RESULTS AND INCREASE IN QUARTERLY DIVIDEND
Cadence Bancorporation (NYSE:CADE) (“Cadence”) today announced
net income for the quarter ended June 30, 2018 of $48.0 million, or
$0.57 per diluted common share (“per share”), compared to $38.8
million, or $0.46 per share, in the first quarter of 2018, and
$29.0 million, or $0.35 per share, in the second quarter of 2017.
Tangible book value per share(1) increased $0.53, or 4.3%, to
$12.85 per share for the second quarter of 2018, compared to $12.32
per share as of March 31, 2018. On July 20, 2018, the Board of
Directors of Cadence declared a 20% increase in the quarterly cash
dividend to $0.15 per share of common stock, representing an
annualized dividend of $0.60 per share.
“We are very pleased to report to you another consecutive
quarter of strong organic growth and record earnings for second
quarter of 2018,” stated Paul B. Murphy, Jr., Chairman and Chief
Executive Officer of Cadence Bancorporation. “Our performance for
the first half of the year has exceeded expectations with
annualized, double digit growth in the balance sheet and earnings
trending favorably. We have been fortunate to operate in attractive
markets with extraordinary bankers, focused on doing a great job
for clients and driving our financial results. We were excited to
announce our merger with State Bank in May and are well underway in
the integration planning to ensure a successful combination. I
believe this strategically compelling deal, combining two great
companies, will add to our attractive story in the future.”
(1) Considered a non-GAAP financial measure. See Table 7
“Reconciliation of Non-GAAP Financial Measures” for a
reconciliation of our non-GAAP measures to the most directly
comparable GAAP financial measure.
Highlights:
- Second quarter of 2018 net income was
$48.0 million, representing an increase of $9.1 million, or 23.6%,
compared to the first quarter of 2018 and an increase of $19.0
million, or 65.6%, compared to second quarter of 2017.
- On a per-share basis, net income was
$0.57 per share for the second quarter of 2018, compared to $0.46
per share for the first quarter of 2018, and $0.35 per share for
the second quarter of 2017.
- Annualized returns on average assets,
common equity and tangible common equity(1) for the second quarter
of 2018 were 1.72%, 14.16% and 18.58%, respectively, compared to
1.44%, 11.73% and 15.52%, respectively, for the first quarter of
2018, and 1.19%, 9.29% and 12.63%, respectively, for the second
quarter of 2017.
- A summary of non-routine items in the
second quarter of 2018 are included in the table below. See Table 8
– Non-Routine Income/Expense for more information related to
non-routine items and comparative period information.
After-tax Increase(Decrease) in
(In thousands, except per share
data)
Income/Expense
EPS
ROA
ROTCE
Noninterest income (non-routine) $ 3,058 $ 0.03 0.08
% 0.91 % Noninterest expense (non-routine) (3,066 )
(0.03 ) (0.08 ) (0.91 ) Tax expense - Timing of legacy loan bad
debt deduction for tax 5,991
0.07
0.21
2.32
Total $ 5,983 $
0.07
0.21
%
2.32
%
- Loans were $9.0 billion as of June 30,
2018, an increase of $328.8 million, or 3.8%, as compared to $8.6
billion at March 31, 2018, and an increase of $1.3 billion, or
16.3%, as compared to $7.7 billion at June 30, 2017.
- Core deposits (total deposits excluding
brokered) were $8.7 billion as of June 30, 2018, up $451.1 million,
or 5.5%, from March 31, 2018, and up $1.5 billion, or 20.8%, from
June 30, 2017.
- Total revenue for the second quarter of
2018 was $120.1 million, up 3.4% from the linked quarter and up
13.9% from the same period in 2017 driven by strong loan, core
deposit, and spread income growth due to a favorably positioned,
asset-sensitive balance sheet benefiting from rising short-term
rates.
- Our fully tax-equivalent net interest
margin (“NIM”) for the second quarter of 2018 was 3.66%, an
increase from 3.64% for the first quarter of 2018 and a decrease
from 3.71% for the second quarter of 2017, reflecting our asset
sensitivity. Our NIM excluding recovery accretion for
acquired-impaired loans was 3.64% for the second quarter of 2018,
up 2 bp from 3.62% in the first quarter of 2018 and up 13 bp from
3.51% in the second quarter of 2017.
- The efficiency ratio(1) for the second
quarter of 2018 was 52.0%, an improvement from both linked and
prior quarter efficiency ratios of 53.4% and 53.3%, respectively.
The improvement in the efficiency ratio reflects ongoing focus on
managing expenses and expanding revenue. Second quarter 2018
revenues increased $4.0 million over first quarter 2018 and $14.7
million over second quarter 2017. The second quarter of 2018
included non-routine revenues and expenses, including a $4.9
million pre-tax gain on the sale of the assets of our insurance
company, $1.8 million net loss on sales of securities, $1.2 million
of secondary offering expenses, $0.8 million of acquisition related
costs and $1.1 million of expenses related to the sale of the
assets of our insurance company. Excluding these non-routine
revenues and expenses, the adjusted efficiency ratio(1) was 50.7%
for the second quarter of 2018. This compares to an adjusted
efficiency ratio of 50.2% and 53.1% for the first quarter of 2018
and second quarter of 2017, respectively. See Table 8 – Non-Routine
Income/Expense for more information related to non-routine
items.
- Total nonperforming assets declined
21.9% during the second quarter 2018, a decrease of $15.9 million
to $56.8 million, or 0.6% of total loans, OREO and other NPAs.
Total nonperforming assets have dropped $84.6 million, or 59.8%,
from $141.4 million, or 1.8% of total loans, OREO and other NPAs,
as of June 30, 2017.
(1) Considered a non-GAAP financial measure. See Table 7
“Reconciliation of Non-GAAP Financial Measures” for a
reconciliation of our non-GAAP measures to the most directly
comparable GAAP financial measure.
Balance Sheet:
Cadence continued its solid growth during the quarter with total
assets reaching $11.3 billion as of June 30, 2018, an increase of
$306.1 million, or 2.8%, from March 31, 2018, and an increase of
$1.5 billion, or 15.2%, from June 30, 2017.
Loans at June 30, 2018 were $9.0 billion, an increase of
$328.8 million, or 3.8%, from March 31, 2018, and an increase of
$1.3 billion, or 16.3%, from June 30, 2017. Average loans for the
second quarter of 2018 were $8.8 billion, an increase of $404.9
million, or 4.8%, from first quarter of 2018, and an increase of
$1.2 billion, or 15.7%, from second quarter of 2017. Increases in
loans reflect continued demand primarily in our specialized and
general C&I portfolios compared to linked quarter and in our
specialized, general C&I and residential portfolios compared to
prior year.
Total deposits at June 30, 2018 were $9.3 billion, an
increase of $282.1 million, or 3.1%, from March 31, 2018, and an
increase of $1.4 billion, or 17.7%, from June 30, 2017. Average
total deposits for the second quarter of 2018 were $9.1 billion, an
increase of $123.0 million, or 1.4%, from first quarter of 2018,
and an increase of $1.2 billion, or 15.0%, from second quarter of
2017.
- Deposit increases reflect growth in
core deposits, specifically with success in expanding commercial
deposit relationships and treasury management services.
- Noninterest bearing deposits as a
percent of total deposits were 22.9%, compared to 22.6% at March
31, 2018 and 23.4% at June 30, 2017.
- The year-over-year core deposit growth
supported a $93.8 million reduction in brokered deposits since June
30, 2017. As of June 30, 2018, brokered deposits totaled $649.3
million, or 7.0% of total deposits, down from 9.0% of total
deposits at March 31, 2018 and down from 9.4% of total deposits at
June 30, 2017, respectively.
Shareholders’ equity was $1.4 billion at June 30, 2018,
an increase of $32.9 million from March 31, 2018, and an increase
of $85.9 million from June 30, 2017.
- Tangible common shareholder’s equity(1)
was $1.1 billion at June 30, 2018, an increase of $44.5 million
from March 31, 2018, and an increase of $100.5 million from June
30, 2017. Tangible book value per share(1) increased $0.53, or
4.3%, to $12.85 per share for the second quarter of 2018, compared
to $12.32 per share as of March 31, 2018, driven by strong earnings
growth and goodwill recovery due to the sale of the assets of our
insurance company.
- In June 2018, Cadence paid a $0.125 per
common share dividend totaling $10.5 million.
- In November 2017, February 2018 and May
2018, Cadence completed secondary offerings whereby its controlling
stockholder, Cadence Bancorp LLC, sold 10,925,000, 9,200,000 and
20,700,000 of Cadence Bancorporation shares, respectively, reducing
its ownership in Cadence to 76.6%, 65.6% and 40.9%, respectively.
All proceeds from these transactions were received by Cadence
Bancorp LLC and did not impact Cadence Bancorporation’s equity or
outstanding shares.
(1) Considered a non-GAAP financial measure. See Table 7
“Reconciliation of Non-GAAP Financial Measures” for a
reconciliation of our non-GAAP measures to the most directly
comparable GAAP financial measure.
Asset Quality:
Credit quality metrics reflected continued improvement in
the energy portfolio and general credit stability in the second
quarter of 2018.
- Net-charge offs for the quarter ended
June 30, 2018 were $2.2 million, compared to $0.4 million for the
three months ended March 31, 2018 and $1.8 million for the three
months ended June 30, 2017. Annualized net-charge offs as a percent
of average loans for the quarter ended June 30, 2018 were 0.10%,
compared to 0.06%, for the full year of 2017. Total second quarter
2018 charge-offs of $3.7 million and recoveries of $1.5 million
were primarily due to two seasoned energy credits that have been in
active resolution.
- NPAs totaled $56.8 million, or 0.6%, of
total loans, OREO and other NPAs as of June 30, 2018, compared to
$72.7 million, or 0.8%, as of March 31, 2018, and down from $141.4
million, or 1.8%, as of June 30, 2017.
- The allowance for credit losses (“ACL”)
was $90.6 million, or 1.01% of total loans, as of June 30, 2018, as
compared to $91.5 million, or 1.06% of total loans, as of March 31,
2018 and $93.2 million, or 1.21% of total loans, as of June 30,
2017. The year-over-year decline in the ACL as a percentage of
total loans resulted primarily from the reduction in non-performing
loans and related valuation reserves (largely from the energy
portfolio) and improved environmental factors in the energy sector
over the past year.
Total Revenue:
Total revenue for the second quarter of 2018 was $120.1 million,
up 3.4% from the linked quarter and up 13.9% from the same period
in 2017. The revenue increases were primarily a result of both
strong loan growth during the period and meaningful increases in
net interest margins.
Net interest income for the second quarter of 2018 was
$95.4 million, an increase of $4.3 million, or 4.7%, from the first
quarter of 2018 and an increase of $13.0 million, or 15.8%, from
the same period in 2017, reflecting strong growth in our earning
assets combined with increases in net interest margin.
- Our fully tax-equivalent net interest
margin (“NIM”) for the second quarter of 2018 was 3.66% as compared
to 3.64% for the first quarter of 2018 and 3.71% for the second
quarter of 2017. The linked quarter increase in NIM is primarily a
result of our asset sensitive balance sheet and earning asset
yields increasing more significantly than our funding costs in the
recent rising rate environment. Our NIM excluding recovery
accretion for acquired-impaired loans was 3.64%, 3.62% and 3.51%
for the second quarter of 2018, first quarter of 2018 and second
quarter of 2017 respectively.
- Earning asset yields for the second
quarter of 2018 were 4.75%, up 24 basis points from 4.51% in the
first quarter of 2018, and up 30 basis points from 4.45% in the
second quarter of 2017, driven by increases in loan yields.
- Over 71% of our loan portfolio is
floating rate and has benefited from the short-term rate increases
during the periods.
- Yield on loans, excluding
acquired-impaired loans, increased meaningfully to 5.04% for the
second quarter of 2018, as compared to 4.81% and 4.36% for the
first quarter of 2018 and second quarter of 2017,
respectively.
- Total accretion for acquired-impaired
loans was $5.6 million in the second quarter of 2018, essentially
flat from the first quarter of 2018 and down $4.9 million from the
second quarter of 2017. The year-over-year decline in accretion was
due to recovery timing. Recovery accretion was $0.6 million, $0.4
million and $4.5 million for the second quarter of 2018, first
quarter of 2018 and second quarter of 2017, respectively.
- Total loan yields increased to 5.16%
for the second quarter of 2018 versus 4.94% for the first quarter
of 2018 and 4.74% for the second quarter of 2017.
- Total cost of funds for the second
quarter of 2018 was 118 basis points versus 94 basis points in the
linked quarter and 81 basis points in the second quarter of 2017.
- Total cost of deposits for the second
quarter of 2018 was 98 basis points versus 75 basis points in the
linked quarter and 59 basis points in the second quarter of 2017,
due primarily to rising interest rates as well as approximately
$1.2 billion in our “Up CD” product that reset on April 1, 2018
based on the semi-annual reset schedule with the index rate
increasing 50 basis points from the first quarter of 2018. This
increase in Up CD rates accounted for 8 basis points of the
quarterly increase in cost of deposits. Over $600 million of the Up
CDs are scheduled to mature by year end 2018.
Noninterest income for the second quarter of 2018 was
$24.7 million, a decrease of $0.3 million, or 1.2%, from the first
quarter of 2018, and an increase of $1.7 million, or 7.3%, from the
same period of 2017.
- Total service fees and revenue for the
second quarter of 2018 were $21.4 million, a decrease of $2.5
million, or 10.5%, from the first quarter of 2018, and a decrease
of $0.7 million, or 3.4%, from the same period of 2017. The second
quarter of 2018 decrease compared to the linked quarter was driven
by the decrease in insurance revenue due to the sale of the assets
of our insurance company. Compared to the prior year’s quarter,
decreases in trust services revenue, insurance revenue and mortgage
banking revenue were partially offset by increases in
credit-related fees and investment advisory revenue.
- Total other noninterest income for the
second quarter of 2018 was $3.3 million, an increase of $2.2
million from the first quarter of 2018, and an increase of $2.4
million from the same period of 2017. The increase from linked
quarter was largely a result of the $4.9 million pre-tax gain on
sale of the assets of our insurance company, offset by a $1.8
million loss from the sale of certain securities within tax-exempt
investment securities portfolio. See Table 8 – Non-Routine
Income/Expense for more information related to non-routine
items.
Noninterest expense for the second quarter of 2018 was
$62.4 million, an increase of $0.5 million, or 0.8%, from $61.9
million for the first quarter of 2018, and an increase of $6.3
million, or 11.2%, from $56.1 million during the same period in
2017. The linked quarter included an increase of $0.9 million in
salaries and benefits, offset by decreases in consulting and
professional fees and legal expenses. The increase in expenses from
the prior year’s quarter was due to a $3.6 million growth in
salaries and benefits driven by business growth and related
incentives, $1.2 million in consulting and professional fees and
other expenses related to the May 2018 secondary offering, $1.1
million in expenses related to the sale of the assets of our
insurance company and $0.8 million in other expenses specific to
acquisition related costs. Adjusted noninterest expenses(1) of
$59.3 million for the second quarter of 2018 was up slightly from
$58.3 million in the first quarter of 2018 and up 5.8% from the
second quarter of 2017 total of $56.1 million. See Table 8 –
Non-Routine Income/Expense for information related to non-routine
items.
Our efficiency ratio(1) for the second quarter of 2018
was 52.0%, as compared to the first quarter of 2018 and second
quarter of 2017 ratios of 53.4% and 53.3%, respectively. The
improvement in the efficiency ratio reflects ongoing focus on
managing expenses and expanding revenue. The second quarter of 2018
included non-routine revenues and expenses. Excluding these
non-routine revenues and expenses, the adjusted efficiency ratio(1)
was 50.7% for the second quarter of 2018. This compares to an
adjusted efficiency ratio of 50.2% and 53.1% for the first quarter
of 2018 and second quarter of 2017, respectively. See Table 8 –
Non-Routine Income/Expense for more information related to
non-routine items.
(1) Considered a non-GAAP financial measure. See Table 7
“Reconciliation of Non-GAAP Financial Measures” for a
reconciliation of our non-GAAP measures to the most directly
comparable GAAP financial measure.
Taxes:
The effective tax rate for the quarter ended June 30, 2018 was
14.9% as compared to 22.0% in the first quarter of 2018 and 31.9%
in the second quarter of 2017. The decreased rate in the second
quarter of 2018 was due primarily to a one-time bad debt deduction
related to the legacy loan portfolio. Our annualized effective tax
rate for 2018 is currently expected to be approximately 21.1%.
Quarterly Dividend:
On July 20, 2018, the Board of Directors of Cadence declared a
20% increase in the quarterly cash dividend to the amount of $0.15
per share of common stock, representing an annualized dividend of
$0.60 per share. The dividend will be paid on September 17, 2018 to
holders of record of the Class A common stock on September 4,
2018.
Supplementary Financial Tables
(Unaudited):
Supplementary Financial Tables (Unaudited) are included in this
release following the customary disclosure information.
Second Quarter 2018 Earnings Conference
Call:
Cadence Bancorporation executive management will host a
conference call to discuss second quarter 2018 results on Monday,
July 23, 2018, at 12:00 p.m. CT / 1:00 p.m. ET. Slides to be
presented by management on the conference call can be viewed by
visiting www.cadencebancorporation.com and selecting “Events &
Presentations” then “Event Calendar”.
Conference Call Access:
To access the conference call, please dial one of the following
numbers approximately 10-15 minutes prior to the start time to
allow time for registration, and use the Elite Entry Number
provided below.
Dial in (toll free): 1-888-317-6003
International dial in: 1-412-317-6061 Canada (toll free):
1-866-284-3684 Participant Elite Entry Number: 3865570
For those unable to participate in the live presentation, a
replay will be available through August 6, 2018. To access the
replay, please use the following numbers:
US Toll Free: 1-877-344-7529
International Toll: 1-412-317-0088 Canada Toll Free: 1-855-669-9658
Replay Access Code: 10121734 End Date: August 6, 2018
Webcast Access:
A webcast of the conference call as well as the slides to be
presented by management can be viewed by visiting
www.cadencebancorporation.com and selecting “Events &
Presentations” then “Event Calendar”.
About Cadence Bancorporation
Cadence Bancorporation (NYSE:CADE) is an $11.3 billion in assets
regional bank holding company headquartered in Houston, Texas.
Through its affiliates, Cadence operates 65 locations in Alabama,
Florida, Texas, Mississippi and Tennessee, and provides
corporations, middle-market companies, small businesses and
consumers with a full range of innovative banking and financial
solutions. Services and products include commercial and business
banking, treasury management, specialized lending, commercial real
estate, foreign exchange, wealth management, investment and trust
services, financial planning, retirement plan management, business
and personal insurance, consumer banking, consumer loans,
mortgages, home equity lines and loans, and credit cards. Clients
have access to leading-edge online and mobile solutions,
interactive teller machines, and 56,000 ATMs. The Cadence team of
1,200 associates is committed to exceeding customer expectations
and helping their clients succeed financially. Cadence Bank, N.A.,
and Linscomb & Williams are subsidiaries of Cadence
Bancorporation.
Cautionary Statement Regarding Forward-Looking
Information
This communication contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements reflect our current views
with respect to, among other things, future events and our results
of operations, financial condition and financial performance. These
statements are often, but not always, made through the use of words
or phrases such as “may,” “should,” “could,” “predict,”
“potential,” “believe,” “will likely result,” “expect,” “continue,”
“will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,”
“projection,” “would” and “outlook,” or the negative version of
those words or other comparable words of a future or
forward-looking nature. These forward-looking statements are not
historical facts, and are based on current expectations, estimates
and projections about our industry, management’s beliefs and
certain assumptions made by management, many of which, by their
nature, are inherently uncertain and beyond our control.
Accordingly, we caution you that any such forward-looking
statements are not guarantees of future performance and are subject
to risks, assumptions and uncertainties that are difficult to
predict. Although we believe that the expectations reflected in
these forward-looking statements are reasonable as of the date
made, actual results may prove to be materially different from the
results expressed or implied by the forward-looking statements.
Such factors include, without limitation, the “Risk Factors”
referenced in our Registration Statement on Form S-3 filed with the
Securities and Exchange Commission (SEC), other risks and
uncertainties listed from time to time in our reports and documents
filed with the SEC, including our Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, and the following factors: business
and economic conditions generally and in the financial services
industry, nationally and within our current and future geographic
market areas; economic, market, operational, liquidity, credit and
interest rate risks associated with our business; lack of seasoning
in our loan portfolio; deteriorating asset quality and higher loan
charge-offs; the laws and regulations applicable to our business;
our ability to achieve organic loan and deposit growth and the
composition of such growth; increased competition in the financial
services industry, nationally, regionally or locally; our ability
to maintain our historical earnings trends; our ability to raise
additional capital to implement our business plan; material
weaknesses in our internal control over financial reporting;
systems failures or interruptions involving our information
technology and telecommunications systems or third-party servicers;
the composition of our management team and our ability to attract
and retain key personnel; the fiscal position of the U.S. federal
government and the soundness of other financial institutions; the
composition of our loan portfolio, including the identify of our
borrowers and the concentration of loans in energy-related
industries and in our specialized industries; the portion of our
loan portfolio that is comprised of participations and shared
national credits; and the amount of nonperforming and classified
assets we hold. Cadence can give no assurance that any goal or plan
or expectation set forth in forward-looking statements can be
achieved and readers are cautioned not to place undue reliance on
such statements. The forward-looking statements are made as of the
date of this communication, and Cadence does not intend, and
assumes no obligation, to update any forward-looking statement to
reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated
events or circumstances, except as required by applicable law.
About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present,
including “efficiency ratio,” “adjusted efficiency ratio,”
“adjusted noninterest expenses,” “adjusted operating revenue,”
“tangible common equity ratio,” “tangible book value per share” and
“return on average tangible common equity” and “pre-tax,
pre-provision net earnings,” are supplemental measures that are not
required by, or are not presented in accordance with, U.S.
generally accepted accounting principles (GAAP). We refer to these
financial measures and ratios as “non-GAAP financial measures.” We
consider the use of select non-GAAP financial measures and ratios
to be useful for financial and operational decision making and
useful in evaluating period-to-period comparisons. We believe that
these non-GAAP financial measures provide meaningful supplemental
information regarding our performance by excluding certain
expenditures or assets that we believe are not indicative of our
primary business operating results or by presenting certain metrics
on a fully taxable equivalent basis. We believe that management and
investors benefit from referring to these non-GAAP financial
measures in assessing our performance and when planning,
forecasting, analyzing and comparing past, present and future
periods.
These non-GAAP financial measures should not be considered a
substitute for financial information presented in accordance with
GAAP and you should not rely on non-GAAP financial measures alone
as measures of our performance. The non-GAAP financial measures we
present may differ from non-GAAP financial measures used by our
peers or other companies. We compensate for these limitations by
providing the equivalent GAAP measures whenever we present the
non-GAAP financial measures and by including a reconciliation of
the impact of the components adjusted for in the non-GAAP financial
measure so that both measures and the individual components may be
considered when analyzing our performance. A reconciliation of
non-GAAP financial measures to the comparable GAAP financial
measures is included at the end of the financial statement tables
(Table 7).
Table 1 - Selected Financial
Data
As of and for the Three Months Ended (In
thousands, except share and per share data)
June 30,2018
March 31,2018
December 31,2017
September 30,2017
June 30,2017
Statement of Income Data:
Interest income $ 123,963 $ 113,093 $ 108,370 $ 99,503 $ 99,375
Interest expense 28,579 21,982 20,459
18,340 16,991 Net interest income 95,384 91,111 87,911
81,163 82,384 Provision for credit losses 1,263 4,380
(4,475 ) 1,723 6,701 Net interest income after
provision 94,121 86,731 92,386 79,440 75,683 Noninterest income -
service fees and revenue 21,395 23,904 22,405 23,014 22,144 - other
noninterest income 3,277 1,079 3,251 4,110 845 Noninterest expense
62,435 61,939 66,371 56,530
56,134 Income before income taxes 56,358 49,775 51,671 50,034
42,538 Income tax expense 8,384 10,950 36,980
17,457 13,570 Net income $ 47,974 $ 38,825 $ 14,691 $
32,577 $ 28,968
Period-End Balance Sheet Data:
Investment securities $ 1,049,710 $ 1,251,834 $ 1,262,948 $
1,198,032 $ 1,079,935 Total loans, net of unearned income 8,975,755
8,646,987 8,253,427 8,028,938 7,716,621 Allowance for credit losses
90,620 91,537 87,576 94,765 93,215 Total assets 11,305,528
10,999,382 10,948,926 10,502,261 9,811,557 Total deposits 9,331,055
9,048,971 9,011,515 8,501,102 7,930,383 Noninterest-bearing
deposits 2,137,407 2,040,977 2,242,765 2,071,594 1,857,809
Interest-bearing deposits 7,193,648 7,007,994 6,768,750 6,429,508
6,072,574 Borrowings and subordinated debentures 471,453 471,335
470,814 572,683 499,266 Total shareholders’ equity 1,389,956
1,357,103 1,359,056 1,340,848 1,304,054
Average Balance Sheet Data:
Investment securities $ 1,183,055 $ 1,234,226 $ 1,228,330 $
1,169,182 $ 1,099,307 Total loans, net of unearned income 8,848,820
8,443,951 8,226,294 7,867,794 7,650,048 Allowance for credit losses
93,365 89,097 94,968 94,706 90,366 Total assets 11,218,432
10,922,274 10,586,245 10,024,871 9,786,355 Total deposits 9,135,359
9,012,390 8,635,473 8,139,969 7,940,421 Noninterest-bearing
deposits 2,058,255 2,128,595 2,170,758 1,982,784 1,845,447
Interest-bearing deposits 7,077,104 6,883,795 6,464,715 6,157,185
6,094,974 Borrowings and subordinated debentures 595,087 444,557
502,428 484,798 510,373 Total shareholders’ equity 1,358,770
1,342,445 1,348,867 1,320,884 1,251,217
Table 1 (Continued) - Selected
Financial Data
As of and for the Three Months Ended (In
thousands, except share and per share data)
June 30,2018
March 31,2018
December 31,2017
September 30,2017
June 30,2017
Per Share Data:(3) Earnings Basic $ 0.57 $ 0.46 $
0.18 $ 0.39 $ 0.35 Diluted 0.57 0.46 0.17 0.39 0.35 Book value per
common share 16.62 16.23 16.25 16.03 15.59 Tangible book value (1)
12.85 12.32 12.33 12.10 11.64 Weighted average common shares
outstanding Basic 83,625,000 83,625,000 83,625,000 83,625,000
81,918,956 Diluted 84,792,657 84,674,807 84,717,005 83,955,685
81,951,795 Cash dividends declared $ 0.125 $ 0.125 $ — $ — $ —
Dividend payout ratio 21.93 % 27.17 % — % — % — %
Performance
Ratios: Return on average common equity (2) 14.16 % 11.73 %
4.32 % 9.78 % 9.29 % Return on average tangible common equity (1)
(2) 18.58 15.52 5.71 13.04 12.63 Return on average assets (2) 1.72
1.44 0.55 1.29 1.19 Net interest margin (2) 3.66 3.64 3.59 3.52
3.71 Efficiency ratio (1) 52.00 53.35 58.44 52.20 53.27 Adjusted
efficiency ratio (1) 50.74 50.22 55.57 52.74 53.15
Asset Quality
Ratios: Total nonperforming assets ("NPAs") to total loans and
OREO and other NPAs 0.63 % 0.84 % 0.85 % 1.51 % 1.82 % Total
nonperforming loans to total loans 0.44 0.60 0.58 0.96 1.36 Total
ACL to total loans 1.01 1.06 1.06 1.18 1.21 ACL to total
nonperforming loans ("NPLs") 230.60 175.30 183.62 122.66 88.81 Net
charge-offs to average loans (2) 0.10 0.02 0.13 0.01 0.09
Capital Ratios: Total shareholders’ equity to assets 12.29 %
12.34 % 12.41 % 12.77 % 13.29 % Tangible common equity to tangible
assets (1) 9.78 9.65 9.71 9.95 10.27 Common equity tier 1 (CET1)
10.56 10.42 10.57 10.79 10.92 Tier 1 leverage capital 10.74 10.57
10.68 11.12 11.00 Tier 1 risk-based capital 10.93 10.79 10.94 11.17
11.31 Total risk-based capital 12.71 12.63 12.81 13.18 13.41
_____________________
(1) Considered a non-GAAP financial
measure. See Table 7 "Reconciliation of Non-GAAP Financial
Measures" for a reconciliation of our non-GAAP measures to the most
directly comparable GAAP financial measure.
(2) Annualized.
(3) As of the completion of a secondary
offering on May 22, 2018, 34,175,000 of our outstanding shares are
owned by our parent-holding company Cadence Bancorp, LLC.
Table 2 - Average
Balances/Yield/Rates
For the Three Months Ended June 30, 2018
2017 Average Income/
Yield/ Average Income/
Yield/ (In thousands) Balance Expense
Rate Balance Expense Rate
ASSETS
Interest-earning assets: Loans, net of
unearned income(1) Originated and ANCI loans $ 8,606,253 $ 108,130
5.04 % $ 7,348,932 $ 79,904 4.36 % ACI portfolio 242,567
5,610 9.28 301,116 10,525 14.02 Total loans
8,848,820 113,740 5.16 7,650,048 90,429 4.74 Investment securities
Taxable 838,842 5,518 2.64 688,464 4,178 2.43 Tax-exempt(2)
344,213 3,547 4.13 410,843 5,208 5.08
Total investment securities 1,183,055 9,065 3.07 1,099,307 9,386
3.42 Federal funds sold and short-term investments 452,074 1,269
1.13 312,287 688 0.88 Other investments 55,909
634 4.55 50,064 695 5.57 Total interest-earning
assets 10,539,858 124,708 4.75 9,111,706 101,198 4.45
Noninterest-earning assets: Cash and due from banks 80,000
59,220 Premises and equipment 62,711 65,392 Accrued interest and
other assets 629,228 640,403 Allowance for credit losses
(93,365 ) (90,366 ) Total assets $ 11,218,432 $ 9,786,355
LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing
liabilities: Demand deposits $ 4,712,302 $ 11,700 1.00 % $
4,232,497 $ 6,354 0.60 % Savings deposits 189,567 133 0.28 186,307
119 0.26 Time deposits 2,175,235 10,497 1.94
1,676,170 5,298 1.27 Total interest-bearing deposits
7,077,104 22,330 1.27 6,094,974 11,771 0.77 Other borrowings
459,678 3,785 3.30 375,681 2,896 3.09 Subordinated debentures
135,409 2,464 7.30 134,692 2,324 6.92
Total interest-bearing liabilities 7,672,191 28,579 1.49 6,605,347
16,991 1.03
Noninterest-bearing liabilities: Demand deposits
2,058,255 1,845,447 Accrued interest and other liabilities
129,216 84,344 Total liabilities 9,859,662 8,535,138
Stockholders' equity 1,358,770 1,251,217 Total
liabilities and stockholders' equity $ 11,218,432 $ 9,786,355 Net
interest income/net interest spread 96,129 3.26 % 84,207
3.42 % Net yield on earning assets/net interest margin
3.66 % 3.71 %
Taxable equivalent adjustment:
Investment securities (745 ) (1,823 ) Net interest
income $ 95,384 $ 82,384 _____________________
(1) Nonaccrual loans are included in
loans, net of unearned income. No adjustment has been made for
these loans in the calculation of yields.
(2) Interest income and yields are
presented on a fully taxable equivalent basis using a tax rate of
21% for the three months ended June 30, 2018, and a tax rate of 35%
for the three months ended June 30, 2017.
For the Three Months EndedJune
30, 2018
For the Three Months EndedMarch
31, 2018
Average Income/ Yield/
Average Income/ Yield/ (In
thousands) Balance Expense Rate
Balance Expense Rate ASSETS
Interest-earning assets: Loans, net of unearned
income(1) Originated and ANCI loans $ 8,606,253 $ 108,130 5.04 % $
8,189,448 $ 97,168 4.81 % ACI portfolio 242,567 5,610
9.28 254,503 5,623 8.96 Total loans 8,848,820 113,740
5.16 8,443,951 102,791 4.94 Investment securities Taxable 838,842
5,518 2.64 827,227 5,118 2.51 Tax-exempt(2) 344,213
3,547 4.13 406,999 4,134 4.12 Total investment
securities 1,183,055 9,065 3.07 1,234,226 9,252 3.04 Federal funds
sold and short-term investments 452,074 1,269 1.13 515,017 1,529
1.20 Other investments 55,909 634 4.55 48,986
389 3.22 Total interest-earning assets 10,539,858 124,708
4.75 10,242,180 113,961 4.51
Noninterest-earning assets:
Cash and due from banks 80,000 92,878 Premises and equipment 62,711
62,973 Accrued interest and other assets 629,228 613,341 Allowance
for credit losses (93,365 ) (89,097 ) Total assets $
11,218,432 $ 10,922,275
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities: Demand deposits $ 4,712,302 $
11,700 1.00 % $ 4,795,114 $ 9,025 0.76 % Savings deposits 189,567
133 0.28 179,662 114 0.26 Time deposits 2,175,235
10,497 1.94 1,909,019 7,491 1.59 Total
interest-bearing deposits 7,077,104 22,330 1.27 6,883,795 16,630
0.98 Other borrowings 459,678 3,785 3.30 309,323 2,956 3.88
Subordinated debentures 135,409 2,464 7.30
135,233 2,396 7.19 Total interest-bearing liabilities
7,672,191 28,579 1.49 7,328,351 21,982 1.22
Noninterest-bearing
liabilities: Demand deposits 2,058,255 2,128,595 Accrued
interest and other liabilities 129,216 122,884 Total
liabilities 9,859,662 9,579,830
Stockholders' equity
1,358,770 1,342,445 Total liabilities and stockholders'
equity $ 11,218,432 $ 10,922,275 Net interest income/net interest
spread 96,129 3.26 % 91,979 3.29 % Net yield on
earning assets/net interest margin 3.66 % 3.64 %
Taxable equivalent adjustment: Investment securities
(745 ) (868 ) Net interest income $ 95,384 $ 91,111
_____________________
(1) Nonaccrual loans are included in
loans, net of unearned income. No adjustment has been made for
these loans in the calculation of yields.
(2) Interest income and yields are
presented on a fully taxable equivalent basis using a tax rate of
21%.
Table 3 – Loan Interest Income
Detail
For the Three Months Ended, (In
thousands)
June 30,2018
March 31,2018
December 31,2017
September 30,2017
June 30,2017
Loan Interest Income Detail Interest income on loans,
excluding ACI loans $ 108,130 $ 97,168 $ 89,762 $ 84,321 $ 79,904
Scheduled accretion for the period 5,016 5,192 5,348 5,550 6,075
Recovery income for the period 594 431 2,797
290 4,450 Accretion on acquired credit impaired (ACI)
loans 5,610 5,623 8,145 5,840
10,525 Loan interest income $ 113,740 $ 102,791 $ 97,907 $ 90,161 $
90,429 Loan yield, excluding ACI loans 5.04 % 4.81 % 4.47 %
4.41 % 4.36 % ACI loan yield 9.28 8.96 12.21
8.27 14.02 Total loan yield 5.16 % 4.94
% 4.72 % 4.55 % 4.74 %
Table 4 - Allowance for Credit
Losses
For the Three Months Ended (In
thousands)
June 30,2018
March 31,2018
December 31,2017
September 30,2017
June 30,2017
Balance at beginning of period $ 91,537 $ 87,576 $ 94,765 $
93,215 $ 88,304 Charge-offs (3,650 ) (812 ) (2,860 ) (581 ) (2,879
) Recoveries 1,470 393 146 408
1,089
Net (charge-offs) recoveries (2,180 )
(419 ) (2,714 ) (173 ) (1,790 ) Provision for
(reversal of) credit losses 1,263 4,380 (4,475
) 1,723 6,701
Balance at end of period $
90,620 $ 91,537 $ 87,576 $ 94,765 $ 93,215
Table 5 -Noninterest Income
For the Three Months Ended (In
thousands)
June 30,2018
March 31,2018
December 31,2017
September 30,2017
June 30,2017
Noninterest Income Investment advisory
revenue $ 5,343 $ 5,299 $ 5,257 $ 5,283 $ 5,061 Trust services
revenue 4,114 5,015 4,836 4,613 4,584 Service charges on deposit
accounts 3,803 3,960 3,753 3,920 3,784 Credit-related fees 3,807
3,577 3,372 3,306 2,741 Insurance revenue 417 2,259 1,470 1,950
1,828 Bankcard fees 1,915 1,884 1,833 1,803 1,862 Mortgage banking
revenue 650 577 687 965 1,213 Other service fees earned
1,346 1,333 1,197 1,174 1,071
Total
service fees and revenue 21,395 23,904
22,405 23,014 22,144 Securities (losses) gains, net
(1,813 ) 12 16 1 (244 ) Other 5,090 1,067
3,235 4,109 1,089
Total other noninterest
income 3,277 1,079 3,251 4,110
845
Total noninterest income $ 24,672 $ 24,983 $
25,656 $ 27,124 $ 22,989
Table 6 -Noninterest Expense
For the Three Months Ended (In
thousands)
June 30,2018
March 31,2018
December 31,2017
September 30,2017
June 30,2017
Noninterest Expenses Salaries and
employee benefits $ 38,268 $ 37,353 $ 35,162 $ 35,007 $ 34,682
Premises and equipment 7,131 7,591 7,629 7,419 7,180 Intangible
asset amortization 715 792 1,085 1,136 1,190 Net cost of operation
of other real estate owned 112 (52 ) 1,075 453 427 Data processing
2,304 2,365 2,504 1,688 1,702 Consulting and professional fees
2,545 2,934 4,380 2,069 1,502 Loan related expenses 645 255 810 532
757 FDIC insurance 1,223 955 939 889 954 Communications 703 704 857
650 675 Advertising and public relations 575 341 683 521 499 Legal
expenses 468 2,627 2,626 612 508 Other 7,746 6,074
8,621 5,554 6,058
Total noninterest
expenses $ 62,435 $ 61,939 $ 66,371 $ 56,530 $ 56,134
Table 7 - Reconciliation of Non-GAAP
Financial Measures
As of and for the Three Months Ended (In
thousands)
June 30,2018
March 31,2018
December 31,2017
September 30,2017
June 30,2017
Efficiency ratio Noninterest expenses
(numerator) $ 62,435 $ 61,939 $ 66,371 $ 56,530 $ 56,134 Net
interest income $ 95,384 $ 91,111 $ 87,911 $ 81,163 $ 82,384
Noninterest income 24,672 24,983 25,656
27,124 22,989 Operating revenue (denominator) $ 120,056 $
116,094 $ 113,567 $ 108,287 $ 105,373 Efficiency ratio 52.00
% 53.35 % 58.44 % 52.20 % 53.27 %
Adjusted efficiency ratio Noninterest expenses $ 62,435 $
61,939 $ 66,371 $ 56,530 $ 56,134 Less: Merger related expenses 756
— — — — Less: Secondary offerings expenses 1,165 1,365 1,302 — —
Less: Other non-routine expenses(1) 1,145 2,278
1,964 — — Adjusted noninterest expenses
(numerator) $ 59,369 $ 58,296 $ 63,105 $ 56,530 $ 56,134 Net
interest income $ 95,384 $ 91,111 $ 87,911 $ 81,163 $ 82,384
Noninterest income 24,672 24,983 25,656 27,124 22,989 Less: Gain on
sale of insurance assets 4,871 — — 1,093 — Less: Securities
(losses) gains, net (1,813 ) 12 16 1
(244 ) Adjusted noninterest income 21,614
24,971 25,640 26,030 23,233 Adjusted operating
revenue (denominator) $ 116,998 $ 116,082 $ 113,551 $ 107,193 $
105,617 Adjusted efficiency ratio 50.74 % 50.22 %
55.57 % 52.74 % 53.15 %
Tangible common
equity ratio Shareholders’ equity $ 1,389,956 $ 1,357,103 $
1,359,056 $ 1,340,848 $ 1,304,054 Less: Goodwill and other
intangible assets, net (315,648 ) (327,247 )
(328,040 ) (329,124 ) (330,261 ) Tangible common
shareholders’ equity 1,074,308 1,029,856
1,031,016 1,011,724 973,793 Total assets 11,305,528
10,999,382 10,948,926 10,502,261 9,811,557 Less: Goodwill and other
intangible assets, net (315,648 ) (327,247 )
(328,040 ) (329,124 ) (330,261 ) Tangible assets $
10,989,880 $ 10,672,135 $ 10,620,886 $ 10,173,137 $ 9,481,296
Tangible common equity ratio 9.78 % 9.65 %
9.71 % 9.95 % 10.27 %
Tangible book value per
share Shareholders’ equity $ 1,389,956 $ 1,357,103 $ 1,359,056
$ 1,340,848 $ 1,304,054 Less: Goodwill and other intangible assets,
net (315,648 ) (327,247 ) (328,040 )
(329,124 ) (330,261 ) Tangible common shareholders’ equity $
1,074,308 $ 1,029,856 $ 1,031,016 $ 1,011,724 $ 973,793 Common
shares issued 83,625,000 83,625,000 83,625,000
83,625,000 83,625,000 Tangible book value per share $
12.85 $ 12.32 $ 12.33 $ 12.10 $ 11.64
Return on average tangible
common equity Average common equity $ 1,358,770 $ 1,342,445 $
1,348,867 $ 1,320,884 $ 1,251,217 Less: Average intangible assets
(323,255 ) (327,727 ) (328,697 )
(329,816 ) (330,977 ) Average tangible common shareholders’
equity $ 1,035,515 $ 1,014,718 $ 1,020,170 $ 991,068 $ 920,240 Net
income $ 47,974 $ 38,825 $ 14,691 $ 32,577 $ 28,968 Return on
average tangible common equity 18.58 % 15.52 %
5.71 % 13.04 % 12.63 %
Pre-tax, pre-provision net
earnings Income before taxes $ 56,358 $ 49,775 $ 51,671 $
50,034 $ 42,538 Plus: Provision for credit losses 1,263
4,380 (4,475 ) 1,723 6,701 Pre-tax,
pre-provision net earnings $ 57,621 $ 54,155 $ 47,196 $ 51,757 $
49,239 _____________________
(1) Other non-routine expenses for
the second quarter 2018 were $1.1 million and included expenses
related to the sale of the assets of our insurance company. This
compares to $2.3 million and $2.0 million for the first quarter of
2018 and fourth quarter of 2017, respectively, each representing
legal costs associated with litigation related to a pre-acquisition
matter of a legacy acquired bank that has been resolved.
Table 8 – Non-Routine
Income/Expense
For the Three Months Ended
June 30, 2018 March 31, 2018 June
30, 2017
After-tax
Increase(Decrease) in
After-tax
Increase(Decrease) in
After-tax
Increase(Decrease) in
(In thousands, except per share data) Income/
Expense
EPS ROA ROTCE
Income/
Expense
EPS ROA ROTCE
Income/
Expense
EPS ROA ROTCE
Noninterest income (non-routine)
Gain on
sale of assets of insurance subsidiary $ 4,871 $ — $ — Securities
(losses) gains, net (1,813 ) 12 (244 ) Total
3,058 $ 0.03 0.08 % 0.91 % 12 $ — — % — % (244 ) $ — (0.01 )% (0.07
)%
Noninterest expense (non-routine) Expenses related to
sale of assets of insurance company (1,145 ) — — Secondary offering
expenses (1,165 ) (1,365 ) — Merger related costs (756 ) — — Legacy
litigation — (2,278 ) — Total (3,066 ) (0.03 )
(0.08 ) (0.91 ) (3,643 ) (0.03 ) (0.10 ) (1.10 ) — — — —
Tax
expense Timing of legacy loan bad debt deduction for tax
5,991 0.07 0.21 2.32 — —
— — — — — —
Total $ 5,983
$ 0.07 0.21 % 2.32 % $ (3,631 ) $ (0.03 )
(0.10 )% (1.10 )% $ (244 ) $ — (0.01 )% (0.07
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180723005194/en/
Cadence BancorporationMedia:Danielle Kernell,
713-871-4051danielle.kernell@cadencebank.comorInvestor
relations:Valerie Toalson, 713-871-4103 or
800-698-7878vtoalson@cadencebancorporation.com
Cadence Bank (NYSE:CADE)
Historical Stock Chart
Von Mär 2024 bis Apr 2024
Cadence Bank (NYSE:CADE)
Historical Stock Chart
Von Apr 2023 bis Apr 2024