CADE
$14.63
Cadence Bancorp Cl A
Earnings Details
3rd Quarter September 2020
Wednesday, October 21, 2020 6:26:00 AM
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Summary

Cadence Bancorp Cl A (CADE) Recent Earnings

Cadence Bancorp Cl A (CADE) reported 3rd Quarter September 2020 earnings of $0.40 per share on revenue of $203.1 million. The consensus earnings estimate was $0.24 per share on revenue of $186.2 million. Revenue fell 18.0% compared to the same quarter a year ago.

Results
Reported Earnings
$0.40
Earnings Whisper
-
Consensus Estimate
$0.24
Reported Revenue
$203.1 Mil
Revenue Estimate
$186.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Cadence Bancorporation Reports Third Quarter 2020 Financial Results

HOUSTON--(BUSINESS WIRE)--Cadence Bancorporation (NYSE: CADE) (“Cadence”) today announced net income for the quarter ended September 30, 2020 of $49.3 million or $0.39 per share, compared to net income of $44.0 million or $0.34 per share for the quarter ended September 30, 2019, and a net loss of ($56.1) million or ($0.45) per share for the quarter ended June 30, 2020. Adjusted net income (loss)(1), excluding non-routine income and expenses(2), was $51.4 million or $0.40 per share for the quarter ended September 30, 2020, compared to $44.2 million or $0.34 per share for the quarter ended September 30, 2019 and compared to ($56.9) million or ($0.45) per share for the quarter ended June 30, 2020.

“We are pleased to report that our company’s core fundamental performance continues to be resilient. For the third quarter, adjusted pre-tax pre-provision net revenue (“PPNR”) was $94.6 million, 2.06% of average assets. Our net interest margin (“NIM”) and efficiency ratio have been consistently attractive and favorable to peers. Credit pressure still exists in today’s economy, but charge-offs are down linked quarter, nonperforming assets are lower and loan deferrals declined significantly to 1.5% currently. Our attractive capital ratios further improved linked quarter with Common Equity Tier 1 capital increasing to 12.0%. Based on these factors, we are taking a step forward by increasing our fourth quarter dividend to $0.075 cents per share. While there remains considerable uncertainty about how this credit environment will play out, I am proud of the way our experienced senior leadership and each of our employees continue to serve our customers and enhance our bank. As the economy improves, we will be well positioned for growth in some of the most attractive markets in America,” stated Paul B. Murphy, Jr., Chairman and Chief Executive Officer of Cadence Bancorporation.

Third Quarter 2020 Highlights:

Third quarter 2020 highlights (compared to the linked quarter where applicable) are as follows:

  • Adjusted pre-tax pre-provision net revenue(1) for the third quarter of 2020 remained strong at $94.6 million, compared to $94.9 million for the second quarter of 2020. As a percent of average assets, adjusted PPNR was 2.06%, consistent with the prior quarter.
  • The provision for credit losses for the third quarter of 2020 was $33.0 million compared to $158.8 million in the linked quarter reflecting current economic forecasts and continued COVID-19 driven stress. As of September 30, 2020, our allowance for credit losses (“ACL”) increased to 2.86% of total loans, up from 2.71% at June 30, 2020. Excluding Paycheck Protection Program (“PPP”) loans, our ACL ratio to loans was 3.11% at September 30, 2020, up from 2.93% at June 30, 2020. Our ratio of ACL to total nonperforming loans increased to 204% from 165%.
  • Our tax equivalent net interest margin (“NIM”) remained stable at 3.49%, down only 2 basis points from prior quarter, and excluding the PPP program impact, NIM was 3.64%, up 3 basis points from the linked quarter. The core NIM improvement was supported by continued management of our funding costs as well as our hedging gains, with total deposit costs declining 14 basis points in the quarter to 0.32%.
  • Adjusted efficiency ratio(1) remained strong at 49.5%, reflecting ongoing expense management efforts.
  • Common Equity Tier 1 capital ratio increased to 12.0% and total risk weighted capital increased to 14.7%, providing a robust capital base well-positioned for the current environment.
  • Annualized returns on average assets and tangible common equity for the third quarter of 2020 were 1.08% and 11.08%, respectively, compared to (1.22%) and (10.56%), respectively, for the second quarter of 2020.
  • Adjusted annualized returns on average assets(1) and adjusted tangible common equity(1) for the third quarter of 2020 were 1.12% and 11.52%, respectively, compared to (1.24%) and (10.73%), respectively, for the second quarter of 2020.
  • At quarter end, we had $1.1 billion of loans outstanding under the PPP.

Balance Sheet:

Total assets were $18.4 billion as of September 30, 2020, an increase of $548.2 million or 3.1% from September 30, 2019, and a decrease of $453.6 million or 2.4% from June 30, 2020. The linked quarter decline was driven by decreases in cash and loans, partially offset by an increase in investment securities.

Cash and Cash Equivalents at September 30, 2020 totaled $1.2 billion as compared to $1.1 billion at September 30, 2019 and compared to $1.9 billion at June 30, 2020. The $652.2 million decrease in the third quarter of 2020 resulted from an increase of $427.3 million in investment securities as well as net declines in deposits during the quarter.

Loans at September 30, 2020 totaled $13.5 billion as compared to $13.6 billion at September 30, 2019, a decrease of $171.5 million or 1.3%. Loans decreased $233.5 million or 1.7% from $13.7 billion at June 30, 2020. The decline was driven by reductions in the C&I segment representing net paydowns, soft loan origination and strategic declines in certain portfolios. Notable linked quarter decreases included Energy, down $59 million, and Restaurant, down $56 million. These declines were partially offset by an increase in CRE balances largely due to construction draws in the industrial and multifamily categories.

Investment Securities at September 30, 2020 totaled $3.1 billion as compared to $1.7 billion at September 30, 2019 and $2.7 billion at June 30, 2020. Securities as a percent of earning assets was 17.4%, 10.5%, and 14.6% at September 30, 2020, September 30, 2019 and June 30, 2020, respectively. The increase in securities from both the prior year and linked quarter is a result of increased balance sheet liquidity resulting from growth in deposits and lower loan originations. Securities acquired during the third quarter include primarily agency pass-through mortgage-backed securities along with some municipal securities.

Goodwill at September 30, 2020 totaled $43.1 million, down from $486.0 million at September 30, 2019 and unchanged from June 30, 2020. As previously reported, the Company recorded a $443.7 million ($412.9 million, after-tax), non-cash goodwill impairment charge in the first quarter of 2020. The remaining goodwill at September 30, 2020 relates to our registered investment advisory subsidiary and trust division.

Total Deposits at September 30, 2020 were $15.8 billion, an increase of $1.0 billion or 6.7% from the September 30, 2019 level and down $283.1 million or 1.8% from the June 30, 2020 level. Third quarter 2020 core deposits decreased as a result of PPP funds being deployed by customers, balance movement between non-interest bearing and interest bearing accounts, strategic lowering of certain higher cost deposit balances and net time deposit runoff. Non-interest bearing deposits were $5.0 billion or 31.9% of total deposits at September 30, 2020, up from $3.6 billion or 24.4% at September 30, 2019 and down from $5.2 billion or 32.5% of total deposits at June 30, 2020. Total cost of deposits declined to 0.32% for the third quarter 2020, meaningfully lower than both the third quarter 2019 cost of 1.32% and the second quarter 2020 cost of 0.46%.

Shareholders’ equity was $2.1 billion at September 30, 2020, a decrease of $404.5 million or 16.3% from September 30, 2019, and an increase of $26.0 million or 1.3% from June 30, 2020. The linked quarter increase included quarterly net income of $49.3 million, $6.3 million in cash dividends, and a decrease of $18.8 million in other comprehensive income driven by the $18.4 million amortization of our interest rate collar gain into interest income. The year over year decrease was impacted by the goodwill impairment in the first quarter of 2020.

Tangible common shareholders’ equity(1) was $1.9 billion at September 30, 2020, an increase of $61.0 million or 3.2% from September 30, 2019 and an increase of $31.3 million or 1.6% from June 30, 2020. The linked quarter increase resulted from the same factors noted above.

  • Total shareholders’ equity to total assets and tangible equity to tangible assets were 11.3% and 10.6%, respectively, at September 30, 2020 compared to 13.9% and 10.9% at September 30, 2019, and 10.8% and 10.2% at June 30, 2020, respectively.
  • Tangible book value per share(1) was $15.40 as of September 30, 2020, an increase of $0.74 or 5.0% from $14.66 as of September 30, 2019 and an increase of $0.25 or 1.7% from $15.15 as of June 30, 2020.
  • Total outstanding shares at September 30, 2020 were 125.9 million.

Tangible common equity to tangible assets was 10.6% at September 30, 2020, and quarter end capital ratios remained robust and increased during the quarter as follows:

 

 

9/30/2020

 

6/30/2020

 

9/30/2019

Common equity Tier 1 capital

 

12.0%

 

11.7%

 

11.0%

Tier 1 leverage capital

 

9.9%

 

9.5%

 

10.3%

Tier 1 risk-based capital

 

12.0%

 

11.7%

 

11.0%

Total risk-based capital

 

14.7%

 

14.3%

 

13.1%

Asset Quality:

Credit quality metrics during the third quarter of 2020 reflected some notable improvements including lower net-charge offs, declines in nonperforming loan balances and dramatically lower loan deferrals, but continued to reflect ongoing COVID-driven stress, especially in the Hospitality and Restaurant categories, indicated by the increases in the ACL and criticized loan balances during the quarter.

  • Net charge-offs for the third quarter of 2020 were $19.9 million or 0.58% annualized of average loans compared to $31.3 million or 0.91% annualized and $32.6 million or 0.94% annualized for the quarters ended September 30, 2019 and June 30, 2020, respectively. The current quarter charge-offs included $14.7 million in Restaurant, $2.9 million in CRE-Office, $1.9 million in Energy, and $0.6 million in General C&I.
  • Provision for credit losses for the third quarter of 2020 was $33.0 million as compared to $43.8 million for the third quarter of 2019 and $158.8 million for the second quarter of 2020. The current quarter’s provision was driven by both net credit migration as well as economic and environmental considerations. The third quarter 2020 loan provision was concentrated in the Commercial Real Estate segment provision of $33.3 million, driven by increased reserves on hospitality loans.
  • The ACL was $385.4 million or 2.86% of total loans as of September 30, 2020, as compared to $127.8 million or 0.94% of total loans as of September 30, 2019, and $370.9 million or 2.71% of total loans as of June 30, 2020. Excluding PPP loans, the ACL was 3.11% of total loans at September 30, 2020, increased from 2.93% at June 30, 2020.
  • The increase in the ACL as a percent of total loans in the third quarter 2020 was driven by increased coverage in our portfolios most impacted by COVID related stress. The ACL for our $311.0 million Hospitality portfolio increased to 13.6% of total loans at September 30, 2020 as compared 7.5% at June 30, 2020. The ACL for our $1.1 billion Restaurant portfolio increased to 5.66% of total loans at September 30, 2020 as compared to 5.52% at June 30, 2020.
  • Total nonperforming loans (“NPL”) as a percent of total loans were 1.40% at September 30, 2020, compared to 0.79% at September 30, 2019 and 1.64% at June 30, 2020. NPL totaled $189.1 million, $108.1 million and $224.4 million as of September 30, 2020, September 30, 2019 and June 30, 2020, respectively. The linked quarter decline was due primarily to payoffs and net charge-offs.
  • The ACL to NPL increased to 203.8% as of September 30, 2020, as compared to 118.2% as of September 30, 2019, and 165.3% as of June 30, 2020.
  • Total criticized loans at September 30, 2020 were $1.1 billion or 8.05% of total loans as compared to $571.9 million or 4.19% at September 30, 2019 and $1.0 billion or 7.37% at June 30, 2020. The linked quarter increase was primarily in Hospitality, Energy and General C&I credits.
  • COVID related loan payment deferrals totaled $376 million at September 30, 2020, down significantly from $1.4 billion at June 30, 2020. As of October 16, 2020, loan deferrals were down further to $181 million or 1.5% of total loans excluding PPP loans.
  • Loans 30-89 days past due were 0.15% of total loans at September 30, 2020, compared to 0.15% at September 30, 2019 and 0.19% at June 30, 2020.

Total Revenue:

Total operating revenue(1) for the third quarter of 2020 was $186.6 million, down $8.2 million or 4.2% from the same period in 2019 and up $2.0 million or 1.1% from the linked quarter.

Net interest income Net interest income for the third quarter of 2020 was $154.0 million, a decrease of $6.1 million or 3.8% from the same period in 2019 and a slight decrease of $0.7 million or 0.4% from the second quarter of 2020. Compared to the linked quarter, loan interest income, excluding accretion, declined $6.8 million due to the trailing impact of the second quarter rate declines as well as lower average balances. Additionally, accretion declined $1.2 million. These declines were partially offset by $6.0 million in lower funding costs driven by lower rates, $2.0 million in additional hedge income and $1.4 million in increased investment income due to higher balances.

  • We continued to aggressively lower our interest rates on deposits resulting in a 31% reduction in costs of total deposits to 0.32% for the quarter compared to 0.46% for the linked quarter. Noninterest-bearing deposits as a percent of total deposits decreased slightly to 31.9% from 32.5% in the linked quarter. Total interest-bearing liability costs declined by 19 basis points or 24% to 0.59% from 0.78% in the linked quarter. Average interest-bearing liabilities declined $451 million or 3.9% from the prior quarter to $11.1 billion.
  • Yield on loans excluding accretion and hedge income was 3.75% in the third quarter of 2020, down 24 basis points from 3.99% in the second quarter of 2020. Excluding the impact of PPP loans, this yield was 3.87% and 4.07%, for the third and second quarters of 2020, respectively. Average loans declined $231.8 million or 1.7% from the prior quarter to $13.7 billion.
  • Hedge income and collar gain recognition for the third quarter of 2020 was $19.7 million as compared to $17.7 million for the second quarter of 2020.
  • Accretion on acquired loans totaled $6.4 million for the third quarter of 2020 as compared to $7.6 million for the second quarter of 2020.
  • Yield on investment securities declined to 2.06% in the third quarter of 2020 compared to 2.29% in linked quarter, with the lower yield reflecting the impact of securities purchased in the third quarter. Average investment securities increased $472.9 million or 19.0% from the prior quarter to $3.0 billion. Fed funds sold and short-term investments likewise declined by $400.8 million or 29.9% from the prior quarter as excess funds were deployed into investment securities during the third quarter.
  • Total earning asset yields declined to 3.86% in the third quarter of 2020 compared to 4.01% in the linked quarter, with average balances declining by $159.8 million or 0.9% to $17.6 billion.
  • Our NIM for the third quarter of 2020 was 3.49% as compared to 3.94% for the third quarter of 2019 and 3.51% for the second quarter of 2020.

PPP loans averaged $1.0 billion in the third quarter at a yield of 2.27%, and along with cash in deposits associated with these loans, negatively impacted our third quarter NIM by 15 basis points as illustrated in the table below. Excluding the impact of the PPP program, the third quarter 2020 NIM improved 3 basis points to 3.64% from 3.61% in the linked quarter, as lower deposit costs, deployment of cash into securities, and increased hedge income more than offset the impact of lower rates on our loan portfolio. Specifically, the NIM change during the quarter included:

Quarterly Change

$ MM

NIM

2Q 2020 Net Interest Income

$155.1

 

3.51

%

2Q 2020 Net Interest Income before PPP loans and associated cash

$151.1

 

3.61

%

Loans (ex PPP & accretion)

(10.9

)

(0.18

%)

Deposits

5.6

 

0.13

%

Hedge Income

2.0

 

0.06

%

Accretion

(1.2

)

(0.02

%)

Securities

1.3

 

0.04

%

Borrowings

0.4

 

0.01

%

NIM before PPP loans & cash*

$148.4

 

3.64

%

PPP Loans & associated cash

6.1

 

(0.15

%)

3Q 2020 Net Interest Margin

$154.5

 

3.49

%

*Calculated by removing the quarterly average balance of PPP loans and income, as well as the quarterly average balance of cash associated with unused PPP funds.

Noninterest income for the third quarter of 2020 was $32.6 million, a decrease of $2.1 million or 5.9% from the same period of 2019 and an increase of $2.6 million or 8.8% from the linked quarter. Adjusted noninterest income(1) for the third quarter of 2020 was $33.0 million, a decrease of $0.8 million or 2.4% from the third quarter of 2019, and an increase of $5.4 million or 19.5% from the linked quarter.

  • The linked quarter included increases of $1.7 million and $1.5 million in SBA and mortgage banking income, respectively, due primarily to gains on loan sales from increased production volumes (excluding PPP loans). Service charges increased $1.0 million driven by higher account analysis revenue and loan fees were up $0.6 million. The quarter also reflected increases in trust and investment advisory revenue, partially enhanced by improved equity markets.
  • Noninterest income as a percent of total revenue for the third quarter of 2020 was 17.5% as compared to 17.8% for the third quarter of 2019 and 16.2% for the linked quarter.

Noninterest expense for the third quarter of 2020 was $94.9 million, an increase of $0.6 million or 0.6% from the same period in 2019 and an increase of $6.2 million or 7.0% from the linked quarter. Adjusted noninterest expense(1), which excludes the impact of non-routine items(2), was $92.5 million, down $0.8 million or 0.8% from the third quarter of 2019 and up $5.1 million or 5.8% from the second quarter of 2020. The linked quarter increase in noninterest expenses resulted from:

  • An increase of $4.6 million in personnel costs driven by lower loan cost deferrals as a result of the second quarter PPP loan volumes and an increase in incentive accruals due to improved corporate performance;
  • An increase of $2.1 million in merger related expenses due to a revised estimate of a legacy State Bank post-retirement benefit; and
  • A partially offsetting decrease of $1.4 million in FDIC insurance assessment due to additional second quarter accruals to reflect the impact of lower earnings on the assessment.

Adjusted efficiency ratio(1) for the third quarter of 2020 was 49.4%, compared to the linked quarter ratio of 47.9% and the prior year’s third quarter ratio of 48.1%. The linked quarter increase was driven by a modest increase in expenses and the impact of lower average loans in the quarter.

_____________________

(1)

Considered a non-GAAP financial measure. See Table 10 “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure.

(2)

See Table 10 for a detail of non-routine income and expenses.

Taxes:

The effective tax rate for the third quarter of 2020 was 16.1% compared to 10.6% for the linked quarter and 22.5% for the third quarter of 2019.

Dividend:

As of October 21, 2020, the board of directors of Cadence Bancorporation declared a quarterly cash dividend in the amount of $0.075 per share of outstanding common stock, representing an annualized dividend of $0.30 per share. The dividend will be paid on November 16, 2020 to holders of record of Cadence’s Class A common stock on November 2, 2020.

Supplementary Financial Tables (Unaudited):

Supplementary financial tables (unaudited) are included in this release following the customary disclosure information.

Third Quarter 2020 Earnings Conference Call:

Cadence Bancorporation executive management will host a conference call to discuss third quarter 2020 results on Wednesday, October 21, 2020, at 7:30 a.m. CT / 8:30 a.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 “Presentations”.

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:

2975522

For those unable to participate in the live presentation, a replay will be available through November 4, 2020. 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:

10148281

Webcast Access:

The call and corresponding presentation slides will be webcast live on the home page of the Company’s website: www.cadencebancorporation.com.

About Cadence Bancorporation:

Cadence Bancorporation (NYSE: CADE), headquartered in Houston, Texas, is a regional financial holding company with $18.4 billion in total assets as of September 30, 2020. Its wholly owned subsidiary, Cadence Bank, N.A., operates 99 branch locations in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas, 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, asset-based lending, commercial real estate, SBA lending, foreign exchange, wealth management, investment and trust services, financial planning, retirement plan management, payroll and insurance services, 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 more than 55,000 ATMs. The Cadence team of 1,800 associates is committed to exceeding customer expectations and helping their clients succeed financially.

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 (the “SEC”) on May 21, 2018, and our Registration Statement on Form S-4 filed with the SEC on July 20, 2018, 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; 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 identity 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; the amount of nonperforming and classified assets we hold; the extent of the impact of the COVID-19 pandemic on us and our customers, counterparties, employees, and third-party service providers, and the impacts to our business, financial position, results of operations, and prospects; the impact on our financial condition, results of operations, financial disclosures, and future business strategies related to the implementation of FASB Accounting Standards Update 2016-13, Financial Instruments – Credit Losses, commonly referred to as CECL. 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”, “adjusted return on average tangible common equity”, “adjusted return on average assets”, “adjusted diluted earnings per share”, and “pre-tax, pre-provision net revenue” 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 10).

Table 1 – Selected Financial Data

 

 

 

As of and for the Three Months Ended

 

(In thousands, except share and per share data)

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

 

December 31,

2019

 

 

September 30,

2019

 

Statement of Operations Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

170,497

 

 

$

177,175

 

 

$

192,754

 

 

$

207,620

 

 

$

213,149

 

Interest expense

 

 

16,455

 

 

 

22,461

 

 

 

39,286

 

 

 

46,709

 

 

 

52,962

 

Net interest income

 

 

154,042

 

 

 

154,714

 

 

 

153,468

 

 

 

160,911

 

 

 

160,187

 

Provision for credit losses

 

 

32,973

 

 

 

158,811

 

 

 

83,429

 

 

 

27,126

 

 

 

43,764

 

Net interest income after provision

 

 

121,069

 

 

 

(4,097

)

 

 

70,039

 

 

 

133,785

 

 

 

116,423

 

Noninterest income

 

 

32,591

 

 

 

29,950

 

 

 

35,069

 

 

 

33,898

 

 

 

34,642

 

Noninterest expense (1)

 

 

94,859

 

 

 

88,620

 

 

 

537,653

 

 

 

100,519

 

 

 

94,283

 

Income (loss) before income taxes

 

 

58,801

 

 

 

(62,767

)

 

 

(432,545

)

 

 

67,164

 

 

 

56,782

 

Income tax expense (benefit)

 

 

9,486

 

 

 

(6,653

)

 

 

(33,234

)

 

 

15,738

 

 

 

12,796

 

Net income (loss)

 

$

49,315

 

 

$

(56,114

)

 

$

(399,311

)

 

$

51,426

 

 

$

43,986

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

125,956,714

 

 

 

125,924,652

 

 

 

126,630,446

 

 

 

127,953,742

 

 

 

128,457,491

 

Diluted

 

 

126,094,868

 

 

 

125,924,652

 

 

 

126,630,446

 

 

 

128,003,089

 

 

 

128,515,274

 

Earnings (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.39

 

 

$

(0.45

)

 

$

(3.15

)

 

$

0.40

 

 

$

0.34

 

Diluted

 

 

0.39

 

 

 

(0.45

)

 

 

(3.15

)

 

 

0.40

 

 

 

0.34

 

Period-End Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,247,172

 

 

$

1,899,369

 

 

$

609,351

 

 

$

988,764

 

 

$

1,061,102

 

Investment securities

 

 

3,088,699

 

 

 

2,661,433

 

 

 

2,461,644

 

 

 

2,368,592

 

 

 

1,705,325

 

Total loans, net of unearned income

 

 

13,465,556

 

 

 

13,699,097

 

 

 

13,392,191

 

 

 

12,983,655

 

 

 

13,637,042

 

Allowance for credit losses

 

 

385,412

 

 

 

370,901

 

 

 

245,246

 

 

 

119,643

 

 

 

127,773

 

Total assets

 

 

18,404,195

 

 

 

18,857,753

 

 

 

17,237,918

 

 

 

17,800,229

 

 

 

17,855,946

 

Total deposits

 

 

15,786,221

 

 

 

16,069,282

 

 

 

14,489,505

 

 

 

14,742,794

 

 

 

14,789,712

 

Noninterest-bearing deposits

 

 

5,033,338

 

 

 

5,220,109

 

 

 

3,959,721

 

 

 

3,833,704

 

 

 

3,602,861

 

Interest-bearing deposits

 

 

10,752,883

 

 

 

10,849,173

 

 

 

10,529,784

 

 

 

10,909,090

 

 

 

11,186,851

 

Borrowings and subordinated debentures

 

 

372,446

 

 

 

372,222

 

 

 

372,440

 

 

 

372,173

 

 

 

371,892

 

Total shareholders’ equity

 

 

2,071,472

 

 

 

2,045,480

 

 

 

2,113,543

 

 

 

2,460,846

 

 

 

2,475,944

 

Average Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

$

2,960,357

 

 

$

2,487,467

 

 

$

2,397,275

 

 

$

2,003,339

 

 

$

1,650,902

 

Total loans, net of unearned income

 

 

13,652,395

 

 

 

13,884,220

 

 

 

13,161,371

 

 

 

13,423,435

 

 

 

13,719,286

 

Allowance for credit losses

 

 

389,243

 

 

 

267,464

 

 

 

201,785

 

 

 

132,975

 

 

 

119,873

 

Total assets

 

 

18,248,014

 

 

 

18,500,600

 

 

 

17,694,018

 

 

 

17,843,383

 

 

 

17,621,163

 

Total deposits

 

 

15,628,314

 

 

 

15,774,787

 

 

 

14,574,614

 

 

 

14,749,327

 

 

 

14,539,420

 

Noninterest-bearing deposits

 

 

4,892,079

 

 

 

4,587,673

 

 

 

3,658,612

 

 

 

3,648,874

 

 

 

3,456,807

 

Interest-bearing deposits

 

 

10,736,235

 

 

 

11,187,115

 

 

 

10,916,002

 

 

 

11,100,454

 

 

 

11,082,613

 

Borrowings and subordinated debentures

 

 

372,304

 

 

 

372,547

 

 

 

439,698

 

 

 

374,179

 

 

 

381,257

 

Total shareholders’ equity

 

 

2,052,079

 

 

 

2,118,796

 

 

 

2,446,810

 

 

 

2,471,398

 

 

 

2,447,189

 

(1)

For the quarter ended March 31, 2020, includes the non-cash goodwill impairment charge of $443.7 million, $412.9 million after-tax.

Table 1 (Continued) – Selected Financial Data

 

 

 

As of and for the Three Months Ended

 

(In thousands, except share and per share data)

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

 

December 31,

2019

 

 

September 30,

2019

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value

 

$

16.45

 

 

$

16.24

 

 

$

16.79

 

 

$

19.29

 

 

$

19.32

 

Tangible book value (1)

 

 

15.40

 

 

 

15.15

 

 

 

15.65

 

 

 

14.65

 

 

 

14.66

 

Cash dividends declared

 

 

0.050

 

 

 

0.050

 

 

 

0.175

 

 

 

0.175

 

 

 

0.175

 

Dividend payout ratio

 

 

12.82

%

 

 

(11.11

)%

 

 

(5.56

)%

 

 

43.75

%

 

 

51.47

%

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average common equity (2)

 

 

9.56

%

 

 

(10.65

)%

 

 

(65.64

)%

 

 

8.26

%

 

 

7.13

%

Return on average tangible common equity (1) (2)

 

 

11.08

 

 

 

(10.56

)

 

 

3.86

 

 

 

11.82

 

 

 

10.43

 

Return on average assets (2)

 

 

1.08

 

 

 

(1.22

)

 

 

(9.08

)

 

 

1.14

 

 

 

0.99

 

Net interest margin (2)

 

 

3.49

 

 

 

3.51

 

 

 

3.80

 

 

 

3.89

 

 

 

3.94

 

Efficiency ratio (1)

 

 

50.83

 

 

 

47.99

 

 

 

285.17

 

 

 

51.60

 

 

 

48.39

 

Adjusted efficiency ratio (1)

 

 

49.45

 

 

 

47.93

 

 

 

49.88

 

 

 

50.91

 

 

 

48.07

 

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total NPA to total loans, OREO, and other NPA

 

 

1.55

%

 

 

1.74

%

 

 

1.31

%

 

 

0.97

%

 

 

0.84

%

Total nonperforming loans ("NPL") to total loans

 

 

1.40

 

 

 

1.64

 

 

 

1.19

 

 

 

0.92

 

 

 

0.79

 

Total ACL to total loans

 

 

2.86

 

 

 

2.71

 

 

 

1.83

 

 

 

0.92

 

 

 

0.94

 

ACL to total NPL

 

 

203.82

 

 

 

165.30

 

 

 

153.61

 

 

 

100.07

 

 

 

118.17

 

Net charge-offs to average loans (2)

 

 

0.58

 

 

 

0.94

 

 

 

0.99

 

 

 

1.04

 

 

 

0.91

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity to assets

 

 

11.3

%

 

 

10.8

%

 

 

12.3

%

 

 

13.8

%

 

 

13.9

%

Tangible common equity to tangible assets (1)

 

 

10.6

 

 

 

10.2

 

 

 

11.5

 

 

 

10.9

 

 

 

10.9

 

Common equity Tier 1 capital (3)

 

 

12.0

 

 

 

11.7

 

 

 

11.4

 

 

 

11.5

 

 

 

11.0

 

Tier 1 leverage capital (3)

 

 

9.9

 

 

 

9.5

 

 

 

10.1

 

 

 

10.3

 

 

 

10.3

 

Tier 1 risk-based capital (3)

 

 

12.0

 

 

 

11.7

 

 

 

11.4

 

 

 

11.5

 

 

 

11.0

 

Total risk-based capital (3)

 

 

14.7

 

 

 

14.3

 

 

 

13.8

 

 

 

13.7

 

 

 

13.1

 

_____________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Considered a non-GAAP financial measure. See Table 10 "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)

Current quarter regulatory capital ratios are estimates.

Table 2 – Average Balances/Yield/Rates

 

 

 

For the Three Months Ended September 30,

 

 

 

 

2020

 

 

 

2019

 

 

 

 

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 loans

 

$

11,168,913

 

 

$

123,177

 

 

 

4.39

 

%

 

$

10,191,066

 

 

$

136,332

 

 

 

5.31

 

%

ANCI portfolio

 

 

2,295,097

 

 

 

28,214

 

 

 

4.89

 

 

 

 

3,269,846

 

 

 

54,084

 

 

 

6.56

 

 

PCD portfolio (3)

 

 

188,385

 

 

 

3,460

 

 

 

7.31

 

 

 

 

258,375

 

 

 

7,554

 

 

 

11.60

 

 

Total loans

 

 

13,652,395

 

 

 

154,851

 

 

 

4.51

 

 

 

 

13,719,286

 

 

 

197,970

 

 

 

5.72

 

 

Investment securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

2,694,012

 

 

 

13,164

 

 

 

1.94

 

 

 

 

1,447,448

 

 

 

9,657

 

 

 

2.65

 

 

Tax-exempt (2)

 

 

266,345

 

 

 

2,150

 

 

 

3.21

 

 

 

 

203,454

 

 

 

1,892

 

 

 

3.69

 

 

Total investment securities

 

 

2,960,357

 

 

 

15,314

 

 

 

2.06

 

 

 

 

1,650,902

 

 

 

11,549

 

 

 

2.78

 

 

Federal funds sold and short-term investments

 

 

942,017

 

 

 

432

 

 

 

0.18

 

 

 

 

741,955

 

 

 

3,421

 

 

 

1.83

 

 

Other investments

 

 

77,262

 

 

 

350

 

 

 

1.80

 

 

 

 

77,605

 

 

 

606

 

 

 

3.10

 

 

Total interest-earning assets

 

 

17,632,031

 

 

 

170,947

 

 

 

3.86

 

 

 

 

16,189,748

 

 

 

213,546

 

 

 

5.23

 

 

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

170,241

 

 

 

 

 

 

 

 

 

 

 

 

123,758

 

 

 

 

 

 

 

 

 

 

Premises and equipment

 

 

127,432

 

 

 

 

 

 

 

 

 

 

 

 

128,286

 

 

 

 

 

 

 

 

 

 

Accrued interest and other assets

 

 

707,553

 

 

 

 

 

 

 

 

 

 

 

 

1,299,244

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(389,243

)

 

 

 

 

 

 

 

 

 

 

 

(119,873

)

 

 

 

 

 

 

 

 

 

Total assets

 

$

18,248,014

 

 

 

 

 

 

 

 

 

 

 

$

17,621,163

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

$

8,037,801

 

 

$

4,681

 

 

 

0.23

 

%

 

$

7,991,804

 

 

$

31,064

 

 

 

1.54

 

%

Savings deposits

 

 

319,004

 

 

 

140

 

 

 

0.17

 

 

 

 

250,003

 

 

 

274

 

 

 

0.43

 

 

Time deposits

 

 

2,379,430

 

 

 

7,741

 

 

 

1.29

 

 

 

 

2,840,806

 

 

 

17,083

 

 

 

2.39

 

 

Total interest-bearing deposits

 

 

10,736,235

 

 

 

12,562

 

 

 

0.47

 

 

 

 

11,082,613

 

 

 

48,421

 

 

 

1.73

 

 

Other borrowings

 

 

149,973

 

 

 

931

 

 

 

2.47

 

 

 

 

160,066

 

 

 

1,005

 

 

 

2.49

 

 

Subordinated debentures

 

 

222,331

 

 

 

2,961

 

 

 

5.30

 

 

 

 

221,191

 

 

 

3,536

 

 

 

6.34

 

 

Total interest-bearing liabilities

 

 

11,108,539

 

 

 

16,454

 

 

 

0.59

 

 

 

 

11,463,870

 

 

 

52,962

 

 

 

1.83

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

4,892,079

 

 

 

 

 

 

 

 

 

 

 

 

3,456,807

 

 

 

 

 

 

 

 

 

 

Accrued interest and other liabilities

 

 

195,317

 

 

 

 

 

 

 

 

 

 

 

 

253,297

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

16,195,935

 

 

 

 

 

 

 

 

 

 

 

 

15,173,974

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

2,052,079

 

 

 

 

 

 

 

 

 

 

 

 

2,447,189

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

18,248,014

 

 

 

 

 

 

 

 

 

 

 

$

17,621,163

 

 

 

 

 

 

 

 

 

 

Net interest income/net interest spread

 

 

 

 

 

 

154,493

 

 

 

3.27

 

%

 

 

 

 

 

 

160,584

 

 

 

3.40

 

%

Net yield on earning assets/net interest margin

 

 

 

 

 

 

 

 

 

 

3.49

 

%

 

 

 

 

 

 

 

 

 

 

3.94

 

%

Taxable equivalent adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

 

 

 

 

 

(451

)

 

 

 

 

 

 

 

 

 

 

 

(397

)

 

 

 

 

 

Net interest income

 

 

 

 

 

$

154,042

 

 

 

 

 

 

 

 

 

 

 

$

160,187

 

 

 

 

 

 

_____________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 an income tax rate of 21%.

(3)

Prior to the adoption of CECL on January 1, 2020, these loans were referred to as ACI loans, but with the adoption of CECL they are referred to as PCD loans.

Table 2 (Continued) – Average Balances/Yield/Rates

 

 

 

For the Three Months Ended

September 30, 2020

 

 

 

For the Three Months Ended

June 30, 2020

 

 

 

 

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 loans

 

$

11,168,913

 

 

$

123,177

 

 

 

4.39

 

%

 

$

11,173,408

 

 

$

125,922

 

 

 

4.53

 

%

ANCI portfolio

 

 

2,295,097

 

 

 

28,214

 

 

 

4.89

 

 

 

 

2,512,163

 

 

 

32,967

 

 

 

5.28

 

 

PCD portfolio (3)

 

 

188,385

 

 

 

3,460

 

 

 

7.31

 

 

 

 

198,649

 

 

 

3,965

 

 

 

8.03

 

 

Total loans

 

 

13,652,395

 

 

 

154,851

 

 

 

4.51

 

 

 

 

13,884,220

 

 

 

162,854

 

 

 

4.72

 

 

Investment securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

2,694,012

 

 

 

13,164

 

 

 

1.94

 

 

 

 

2,269,017

 

 

 

12,207

 

 

 

2.16

 

 

Tax-exempt (2)

 

 

266,345

 

 

 

2,150

 

 

 

3.21

 

 

 

 

218,450

 

 

 

1,948

 

 

 

3.59

 

 

Total investment securities

 

 

2,960,357

 

 

 

15,314

 

 

 

2.06

 

 

 

 

2,487,467

 

 

 

14,155

 

 

 

2.29

 

 

Federal funds sold and short-term investments

 

 

942,017

 

 

 

432

 

 

 

0.18

 

 

 

 

1,342,779

 

 

 

328

 

 

 

0.10

 

 

Other investments

 

 

77,262

 

 

 

350

 

 

 

1.80

 

 

 

 

77,337

 

 

 

247

 

 

 

1.28

 

 

Total interest-earning assets

 

 

17,632,031

 

 

 

170,947

 

 

 

3.86

 

 

 

 

17,791,803

 

 

 

177,584

 

 

 

4.01

 

 

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

170,241

 

 

 

 

 

 

 

 

 

 

 

 

176,716

 

 

 

 

 

 

 

 

 

 

Premises and equipment

 

 

127,432

 

 

 

 

 

 

 

 

 

 

 

 

127,413

 

 

 

 

 

 

 

 

 

 

Accrued interest and other assets

 

 

707,553

 

 

 

 

 

 

 

 

 

 

 

 

672,132

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(389,243

)

 

 

 

 

 

 

 

 

 

 

 

(267,464

)

 

 

 

 

 

 

 

 

 

Total assets

 

$

18,248,014

 

 

 

 

 

 

 

 

 

 

 

$

18,500,600

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

$

8,037,801

 

 

$

4,681

 

 

 

0.23

 

%

 

$

8,368,151

 

 

$

7,511

 

 

 

0.36

 

%

Savings deposits

 

 

319,004

 

 

 

140

 

 

 

0.17

 

 

 

 

291,874

 

 

 

179

 

 

 

0.25

 

 

Time deposits

 

 

2,379,430

 

 

 

7,741

 

 

 

1.29

 

 

 

 

2,527,090

 

 

 

10,451

 

 

 

1.66

 

 

Total interest-bearing deposits

 

 

10,736,235

 

 

 

12,562

 

 

 

0.47

 

 

 

 

11,187,115

 

 

 

18,141

 

 

 

0.65

 

 

Other borrowings

 

 

149,973

 

 

 

931

 

 

 

2.47

 

 

 

 

149,973

 

 

 

937

 

 

 

2.51

 

 

Subordinated debentures

 

 

222,331

 

 

 

2,961

 

 

 

5.30

 

 

 

 

222,574

 

 

 

3,383

 

 

 

6.11

 

 

Total interest-bearing liabilities

 

 

11,108,539

 

 

 

16,454

 

 

 

0.59

 

 

 

 

11,559,662

 

 

 

22,461

 

 

 

0.78

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

4,892,079

 

 

 

 

 

 

 

 

 

 

 

 

4,587,673

 

 

 

 

 

 

 

 

 

 

Accrued interest and other liabilities

 

 

195,317

 

 

 

 

 

 

 

 

 

 

 

 

234,469

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

16,195,935

 

 

 

 

 

 

 

 

 

 

 

 

16,381,804

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

2,052,079

 

 

 

 

 

 

 

 

 

 

 

 

2,118,796

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

18,248,014

 

 

 

 

 

 

 

 

 

 

 

$

18,500,600

 

 

 

 

 

 

 

 

 

 

Net interest income/net interest spread

 

 

 

 

 

 

154,493

 

 

 

3.27

 

%

 

 

 

 

 

 

155,123

 

 

 

3.23

 

%

Net yield on earning assets/net interest margin

 

 

 

 

 

 

 

 

 

 

3.49

 

%

 

 

 

 

 

 

 

 

 

 

3.51

 

%

Taxable equivalent adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

 

 

 

 

 

(451

)

 

 

 

 

 

 

 

 

 

 

 

(409

)

 

 

 

 

 

Net interest income

 

 

 

 

 

$

154,042

 

 

 

 

 

 

 

 

 

 

 

$

154,714

 

 

 

 

 

 

_____________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 an income tax rate of 21%.

(3)

Prior to the adoption of CECL on January 1, 2020, these loans were referred to as ACI loans, but with the adoption of CECL they are referred to as PCD loans.

Table 3 – Loan Interest Income Detail

 

 

 

Year-To-Date

 

 

For the Three Months Ended

(In thousands)

 

September 30,

2020

 

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

 

December 31,

2019

 

 

September 30,

2019

 

 

Interest Income Detail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated loans

 

$

378,501

 

 

$

123,177

 

 

$

125,922

 

 

$

129,402

 

 

$

134,450

 

 

$

136,333

 

 

ANCI loans: interest income

 

 

82,055

 

 

 

22,850

 

 

 

26,264

 

 

 

32,940

 

 

 

37,637

 

 

 

43,133

 

 

ANCI loans: accretion

 

 

19,777

 

 

 

5,364

 

 

 

6,703

 

 

 

7,710

 

 

 

8,610

 

 

 

10,951

 

 

PCD loans: interest income (1)

 

 

8,571

 

 

 

2,421

 

 

 

3,111

 

 

 

3,039

 

 

 

3,839

 

 

 

3,406

 

 

PCD loans: accretion (1)

 

 

3,936

 

 

 

1,039

 

 

 

854

 

 

 

2,043

 

 

 

6,018

 

 

 

4,147

 

 

Total loan interest income

 

$

492,840

 

 

$

154,851

 

 

$

162,854

 

 

$

175,134

 

 

$

190,554

 

 

$

197,970

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yields

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated loans

 

 

4.66

 

%

 

4.39

 

%

 

4.53

 

%

 

5.10

 

%

 

5.25

 

%

 

5.31

 

%

ANCI loans without discount accretion

 

 

4.36

 

 

 

3.96

 

 

 

4.20

 

 

 

4.85

 

 

 

4.95

 

 

 

5.23

 

 

ANCI loans discount accretion

 

 

1.05

 

 

 

0.93

 

 

 

1.08

 

 

 

1.14

 

 

 

1.13

 

 

 

1.33

 

 

PCD loans without discount accretion

 

 

5.69

 

 

 

5.11

 

 

 

6.30

 

 

 

5.65

 

 

 

6.20

 

 

 

5.23

 

 

PCD loans discount accretion

 

 

2.62

 

 

 

2.20

 

 

 

1.73

 

 

 

3.80

 

 

 

9.73

 

 

 

6.37

 

 

Total loan yield

 

 

4.85

 

%

 

4.51

 

%

 

4.72

 

%

 

5.35

 

%

 

5.63

 

%

 

5.72

 

%

(1)

Prior year quarter PCD amounts have been revised to be comparable to the current year presentation. Interest income for PCD loans represents contractual interest.

Table 4 – Allowance for Credit Losses (“ACL”) (1)

 

 

 

For the Three Months Ended

 

(In thousands)

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

 

December 31,

2019

 

 

September 30,

2019

 

Balance at beginning of period

 

$

370,901

 

 

$

245,246

 

 

$

119,643

 

 

$

127,773

 

 

$

115,345

 

Cumulative effect of the adoption of CECL (2)

 

 

 

 

 

 

 

 

75,850

 

 

 

 

 

 

 

Charge-offs

 

 

(21,830

)

 

 

(33,452

)

 

 

(33,098

)

 

 

(35,432

)

 

 

(31,650

)

Recoveries

 

 

1,936

 

 

 

901

 

 

 

613

 

 

 

176

 

 

 

314

 

Net charge-offs

 

 

(19,894

)

 

 

(32,551

)

 

 

(32,485

)

 

 

(35,256

)

 

 

(31,336

)

Provision for loan losses

 

 

34,405

 

 

 

158,206

 

 

 

82,238

 

 

 

27,126

 

 

 

43,764

 

Balance at end of period

 

$

385,412

 

 

$

370,901

 

 

$

245,246

 

 

$

119,643

 

 

$

127,773

 

(1)

This table represents the activity in the ACL for funded loans.

(2)

The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (“CECL”), on January 1, 2020 and recorded this cumulative effect adjustment as a result of accounting change.

Table 5 – ACL Activity by Segment

 

 

 

For the Three Months Ended September 30, 2020

 

(In thousands)

 

Commercial and Industrial

 

 

Commercial Real Estate

 

 

Consumer

 

 

Total Allowance for Credit Losses

 

 

Reserve for Unfunded Commitments (1)

 

 

Total

 

As of June 30, 2020

 

$

217,796

 

 

$

112,480

 

 

$

40,625

 

 

$

370,901

 

 

$

3,827

 

 

$

374,728

 

Provision for credit losses

 

 

1,562

 

 

 

33,262

 

 

 

(419

)

 

 

34,405

 

 

 

(1,432

)

 

 

32,973

 

Charge-offs

 

 

(18,604

)

 

 

(2,978

)

 

 

(248

)

 

 

(21,830

)

 

 

 

 

 

(21,830

)

Recoveries

 

 

1,443

 

 

 

244

 

 

 

249

 

 

 

1,936

 

 

 

 

 

 

1,936

 

As of September 30, 2020

 

$

202,197

 

 

$

143,008

 

 

$

40,207

 

 

$

385,412

 

 

$

2,395

 

 

$

387,807

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2020

 

(In thousands)

 

Commercial and Industrial

 

 

Commercial Real Estate

 

 

Consumer

 

 

Total Allowance for Credit Losses

 

 

Reserve for Unfunded Commitments (1)

 

 

Total

 

As of December 31, 2019

 

$

89,796

 

 

$

15,319

 

 

$

14,528

 

 

$

119,643

 

 

$

1,699

 

 

$

121,342

 

Cumulative effect of the adoption of CECL

 

 

32,951

 

 

 

20,599

 

 

 

22,300

 

 

 

75,850

 

 

 

332

 

 

 

76,182

 

As of January 1, 2020

 

 

122,747

 

 

 

35,918

 

 

 

36,828

 

 

 

195,493

 

 

 

2,031

 

 

 

197,524

 

Provision for credit losses

 

 

160,570

 

 

 

110,420

 

 

 

3,859

 

 

 

274,849

 

 

 

364

 

 

 

275,213

 

Charge-offs

 

 

(83,406

)

 

 

(3,784

)

 

 

(1,190

)

 

 

(88,380

)

 

 

 

 

 

(88,380

)

Recoveries

 

 

2,286

 

 

 

454

 

 

 

710

 

 

 

3,450

 

 

 

 

 

 

3,450

 

As of September 30, 2020

 

$

202,197

 

 

$

143,008

 

 

$

40,207

 

 

$

385,412

 

 

$

2,395

 

 

$

387,807

 

(1)

The reserve for unfunded commitments is recorded in other liabilities in the consolidated balance sheets.

Table 6 – Criticized Loans by Segment

 

 

 

As of September 30, 2020

 

(Amortized cost in thousands)

 

Special Mention

 

 

Substandard

 

 

Doubtful

 

 

Total Criticized

 

Commercial and industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General C&I

 

$

71,384

 

 

$

156,323

 

 

$

9,270

 

 

$

236,977

 

Energy

 

 

146,772

 

 

 

165,277

 

 

 

7,816

 

 

 

319,865

 

Restaurant

 

 

97,315

 

 

 

169,899

 

 

 

7,624

 

 

 

274,838

 

Healthcare

 

 

722

 

 

 

58,802

 

 

 

 

 

 

59,524

 

Total commercial and industrial

 

 

316,193

 

 

 

550,301

 

 

 

24,710

 

 

 

891,204

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial, retail, and other

 

 

93,897

 

 

 

58,321

 

 

 

 

 

 

152,218

 

Multifamily

 

 

91

 

 

 

200

 

 

 

 

 

 

291

 

Office

 

 

346

 

 

 

13,250

 

 

 

3,029

 

 

 

16,625

 

Total commercial real estate

 

 

94,334

 

 

 

71,771

 

 

 

3,029

 

 

 

169,134

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

22,770

 

 

 

 

 

 

22,770

 

Other

 

 

 

 

 

358

 

 

 

 

 

 

358

 

Total consumer

 

 

 

 

 

23,128

 

 

 

 

 

 

23,128

 

Total

 

$

410,527

 

 

$

645,200

 

 

$

27,739

 

 

$

1,083,466

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2020

 

(Amortized cost in thousands)

 

Special Mention

 

 

Substandard

 

 

Doubtful

 

 

Total Criticized

 

Commercial and industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General C&I

 

$

45,512

 

 

$

146,333

 

 

$

10,237

 

 

$

202,082

 

Energy sector

 

 

155,735

 

 

 

114,080

 

 

 

10,747

 

 

 

280,562

 

Restaurant industry

 

 

171,722

 

 

 

158,596

 

 

 

7,596

 

 

 

337,914

 

Healthcare

 

 

18,250

 

 

 

47,398

 

 

 

 

 

 

65,648

 

Total commercial and industrial

 

 

391,219

 

 

 

466,407

 

 

 

28,580

 

 

 

886,206

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial, retail, and other

 

 

60,819

 

 

 

40,351

 

 

 

534

 

 

 

101,704

 

Multifamily

 

 

91

 

 

 

714

 

 

 

 

 

 

805

 

Office

 

 

346

 

 

 

1,005

 

 

 

 

 

 

1,351

 

Total commercial real estate

 

 

61,256

 

 

 

42,070

 

 

 

534

 

 

 

103,860

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

 

 

 

19,172

 

 

 

 

 

 

19,172

 

Other

 

 

 

 

 

39

 

 

 

 

 

 

39

 

Total consumer

 

 

 

 

 

19,211

 

 

 

 

 

 

19,211

 

Total

 

$

452,475

 

 

$

527,688

 

 

$

29,114

 

 

$

1,009,277

 

Table 7 – Nonperforming Assets

 

 

 

As of

 

(In thousands)

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

 

December 31,

2019

 

 

September 30,

2019

 

Nonperforming loans (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

145,570

 

 

$

182,839

 

 

$

136,712

 

 

$

106,803

 

 

$

92,643

 

Commercial real estate

 

 

27,163

 

 

 

25,261

 

 

 

8,133

 

 

 

1,127

 

 

 

6,855

 

Consumer

 

 

16,364

 

 

 

16,284

 

 

 

14,808

 

 

 

7,289

 

 

 

5,294

 

Small business (2)

 

 

 

 

 

 

 

 

 

 

 

4,337

 

 

 

3,334

 

Total nonperforming loans ("NPL")

 

 

189,097

 

 

 

224,384

 

 

 

159,653

 

 

 

119,556

 

 

 

108,126

 

Foreclosed OREO and other NPA

 

 

20,344

 

 

 

13,949

 

 

 

15,679

 

 

 

5,958

 

 

 

6,731

 

Total nonperforming assets

 

$

209,441

 

 

$

238,333

 

 

$

175,332

 

 

$

125,514

 

 

$

114,857

 

NPL as a percentage of total loans

 

 

1.40

%

 

 

1.64

%

 

 

1.19

%

 

 

0.92

%

 

 

0.79

%

NPA as a percentage of loans plus OREO/other

 

 

1.55

%

 

 

1.74

%

 

 

1.31

%

 

 

0.97

%

 

 

0.84

%

NPA as a percentage of total assets

 

 

1.14

%

 

 

1.26

%

 

 

0.99

%

 

 

0.71

%

 

 

0.64

%

Total accruing loans 90 days or more past due

 

$

7,260

 

 

$

3,123

 

 

$

1,999

 

 

$

23,364

 

 

$

24,487

 

(1)

Amounts are not comparable due to our adoption of CECL on January 1, 2020. Prior to this date, pools of individual ACI loans were excluded because they continued to earn interest income from the accretable yield at the pool level. With the adoption of CECL, the pools were discontinued, and performance is based on contractual terms for individual loans. Additionally, prior to January 1, 2020, we used recorded investment in this table. With the adoption of CECL, we now use amortized cost.

(2)

Upon the adoption of CECL, small business loans are included in commercial and industrial and commercial real estate loans.

Table 8 – Noninterest Income

 

 

 

For the Three Months Ended

 

(In thousands)

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

 

December 30,

2019

 

 

September 30,

2019

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory revenue

 

$

6,797

 

 

$

6,505

 

 

$

5,605

 

 

$

6,920

 

 

$

6,532

 

Trust services revenue

 

 

4,556

 

 

 

4,092

 

 

 

4,815

 

 

 

4,713

 

 

 

4,440

 

Service charges on deposit accounts

 

 

5,847

 

 

 

4,852

 

 

 

6,416

 

 

 

5,181

 

 

 

5,462

 

Credit-related fees

 

 

4,202

 

 

 

4,401

 

 

 

5,983

 

 

 

5,094

 

 

 

5,960

 

Bankcard fees

 

 

1,745

 

 

 

1,716

 

 

 

1,958

 

 

 

1,933

 

 

 

2,061

 

Payroll processing revenue

 

 

1,255

 

 

 

1,143

 

 

 

1,367

 

 

 

1,373

 

 

 

1,196

 

SBA income

 

 

3,037

 

 

 

1,335

 

 

 

1,908

 

 

 

2,153

 

 

 

2,216

 

Other service fees

 

 

1,450

 

 

 

1,528

 

 

 

1,912

 

 

 

1,701

 

 

 

1,700

 

Securities gains, net

 

 

79

 

 

 

2,286

 

 

 

2,994

 

 

 

317

 

 

 

775

 

Other

 

 

3,623

 

 

 

2,092

 

 

 

2,111

 

 

 

4,513

 

 

 

4,300

 

Total noninterest income

 

$

32,591

 

 

$

29,950

 

 

$

35,069

 

 

$

33,898

 

 

$

34,642

 

Table 9 – Noninterest Expenses

 

 

 

For the Three Months Ended

 

(In thousands)

 

September 30,

2020

 

 

June 30,

2020

 

 

September 30,

2019

 

 

December 30,

2019

 

 

September 30,

2019

 

Noninterest Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

51,734

 

 

$

47,158

 

 

$

48,807

 

 

$

54,840

 

 

$

51,904

 

Premises and equipment

 

 

10,716

 

 

 

10,634

 

 

 

10,808

 

 

 

11,618

 

 

 

10,913

 

Merger related expenses

 

 

2,105

 

 

 

 

 

 

1,282

 

 

 

925

 

 

 

1,010

 

Intangible asset amortization

 

 

5,299

 

 

 

5,472

 

 

 

5,592

 

 

 

5,876

 

 

 

6,025

 

Data processing

 

 

3,024

 

 

 

3,084

 

 

 

3,352

 

 

 

3,343

 

 

 

3,641

 

Software amortization

 

 

4,432

 

 

 

4,036

 

 

 

3,547

 

 

 

3,427

 

 

 

3,406

 

Consulting and professional fees

 

 

3,320

 

 

 

3,009

 

 

 

2,707

 

 

 

3,552

 

 

 

2,621

 

Loan related expenses

 

 

953

 

 

 

735

 

 

 

760

 

 

 

654

 

 

 

(921

)

FDIC insurance

 

 

2,528

 

 

 

3,939

 

 

 

2,436

 

 

 

1,245

 

 

 

527

 

Communications

 

 

1,119

 

 

 

1,002

 

 

 

1,156

 

 

 

1,236

 

 

 

1,425

 

Advertising and public relations

 

 

716

 

 

 

920

 

 

 

1,464

 

 

 

1,764

 

 

 

1,368

 

Legal expenses

 

 

681

 

 

 

579

 

 

 

411

 

 

 

306

 

 

 

500

 

Other

 

 

8,232

 

 

 

8,052

 

 

 

11,636

 

 

 

11,732

 

 

 

11,864

 

Noninterest expenses excluding goodwill impairment charge

 

 

94,859

 

 

 

88,620

 

 

 

93,958

 

 

 

100,519

 

 

 

94,283

 

Goodwill impairment charge

 

 

 

 

 

 

 

 

443,695

 

 

 

 

 

 

 

Total noninterest expenses

 

$

94,859

 

 

$

88,620

 

 

$

537,653

 

 

$

100,519

 

 

$

94,283

 

Table 10 – Reconciliation of Non-GAAP Financial Measures

 

 

 

As of and for the

Three Months Ended

 

(In thousands, except share and per share data)

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

 

December 31,

2019

 

 

September 30,

2019

 

Efficiency ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses (numerator)

 

$

94,859

 

 

$

88,620

 

 

$

537,653

 

 

$

100,519

 

 

$

94,283

 

Net interest income

 

$

154,042

 

 

$

154,714

 

 

$

153,468

 

 

$

160,911

 

 

$

160,187

 

Noninterest income

 

 

32,591

 

 

 

29,950

 

 

 

35,069

 

 

 

33,898

 

 

 

34,642

 

Operating revenue (denominator)

 

$

186,633

 

 

$

184,664

 

 

$

188,537

 

 

$

194,809

 

 

$

194,829

 

Efficiency ratio

 

 

50.83

%

 

 

47.99

%

 

 

285.17

%

 

 

51.60

%

 

 

48.39

%

Adjusted efficiency ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses

 

$

94,859

 

 

$

88,620

 

 

$

537,653

 

 

$

100,519

 

 

$

94,283

 

Less: non-cash goodwill impairment charge

 

 

 

 

 

 

 

 

443,695

 

 

 

 

 

 

 

Less: merger related expenses

 

 

2,105

 

 

 

 

 

 

1,282

 

 

 

925

 

 

 

1,010

 

Less: pension plan termination expense

 

 

 

 

 

 

 

 

 

 

 

1,225

 

 

 

 

Less: expenses related to COVID-19 pandemic

 

 

235

 

 

 

1,205

 

 

 

122

 

 

 

 

 

 

 

Adjusted noninterest expenses (numerator)

 

$

92,519

 

 

$

87,415

 

 

$

92,554

 

 

$

98,369

 

 

$

93,273

 

Net interest income

 

$

154,042

 

 

$

154,714

 

 

$

153,468

 

 

$

160,911

 

 

$

160,187

 

Noninterest income

 

 

32,591

 

 

 

29,950

 

 

 

35,069

 

 

 

33,898

 

 

 

34,642

 

Plus: impairment charge on branch building

 

 

538

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: gain on sale of acquired loans

 

 

 

 

 

 

 

 

 

 

 

1,263

 

 

 

 

Less: securities gains, net

 

 

79

 

 

 

2,286

 

 

 

2,994

 

 

 

317

 

 

 

775

 

Adjusted noninterest income

 

 

33,050

 

 

 

27,664

 

 

 

32,075

 

 

 

32,318

 

 

 

33,867

 

Adjusted operating revenue (denominator)

 

$

187,092

 

 

$

182,378

 

 

$

185,543

 

 

$

193,229

 

 

$

194,054

 

Adjusted efficiency ratio

 

 

49.45

%

 

 

47.93

%

 

 

49.88

%

 

 

50.91

%

 

 

48.07

%

Tangible common equity ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

$

2,071,472

 

 

$

2,045,480

 

 

$

2,113,543

 

 

$

2,460,846

 

 

$

2,475,944

 

Less: goodwill and other intangible assets, net

 

 

(132,005

)

 

 

(137,318

)

 

 

(142,782

)

 

 

(590,949

)

 

 

(597,488

)

Tangible common shareholders’ equity

 

 

1,939,467

 

 

 

1,908,162

 

 

 

1,970,761

 

 

 

1,869,897

 

 

 

1,878,456

 

Total assets

 

 

18,404,195

 

 

 

18,857,753

 

 

 

17,237,918

 

 

 

17,800,229

 

 

 

17,855,946

 

Less: goodwill and other intangible assets, net

 

 

(132,005

)

 

 

(137,318

)

 

 

(142,782

)

 

 

(590,949

)

 

 

(597,488

)

Tangible assets

 

$

18,272,190

 

 

$

18,720,435

 

 

$

17,095,136

 

 

$

17,209,280

 

 

$

17,258,458

 

Tangible common equity ratio

 

 

10.61

%

 

 

10.19

%

 

 

11.53

%

 

 

10.87

%

 

 

10.88

%

Tangible book value per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

$

2,071,472

 

 

$

2,045,480

 

 

$

2,113,543

 

 

$

2,460,846

 

 

$

2,475,944

 

Less: goodwill and other intangible assets, net

 

 

(132,005

)

 

 

(137,318

)

 

 

(142,782

)

 

 

(590,949

)

 

 

(597,488

)

Tangible common shareholders’ equity

 

$

1,939,467

 

 

$

1,908,162

 

 

$

1,970,761

 

 

$

1,869,897

 

 

$

1,878,456

 

Common shares outstanding

 

 

125,946,793

 

 

 

125,930,741

 

 

 

125,897,827

 

 

 

127,597,569

 

 

 

128,173,765

 

Tangible book value per share

 

$

15.40

 

 

$

15.15

 

 

$

15.65

 

 

$

14.65

 

 

$

14.66

 

Table 10 (Continued) – Reconciliation of Non-GAAP Measures

 

 

 

As of and for the

Three Months Ended

 

(In thousands, except share and per share data)

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

 

December 31,

2019

 

 

September 30,

2019

 

Return on average tangible common equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common equity

 

$

2,052,079

 

 

$

2,118,796

 

 

$

2,446,810

 

 

$

2,471,398

 

 

$

2,447,189

 

Less: average intangible assets

 

 

(135,491

)

 

 

(140,847

)

 

 

(584,513

)

 

 

(595,439

)

 

 

(598,602

)

Average tangible common shareholders’ equity

 

$

1,916,588

 

 

$

1,977,949

 

 

$

1,862,297

 

 

$

1,875,959

 

 

$

1,848,587

 

Net income (loss)

 

$

49,315

 

 

$

(56,114

)

 

$

(399,311

)

 

$

51,426

 

 

$

43,986

 

Plus: non-cash goodwill impairment charge, net of tax

 

 

 

 

 

 

 

 

412,918

 

 

 

 

 

 

 

Plus: intangible asset amortization, net of tax

 

 

4,042

 

 

 

4,174

 

 

 

4,261

 

 

 

4,477

 

 

 

4,620

 

Tangible net income (loss)

 

$

53,357

 

 

$

(51,940

)

 

$

17,868

 

 

$

55,903

 

 

$

48,606

 

Return on average tangible common equity(1)

 

 

11.08

%

 

 

(10.56

)%

 

 

3.86

%

 

 

11.82

%

 

 

10.43

%

Adjusted return on average tangible common equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average tangible common shareholders’ equity

 

$

1,916,588

 

 

$

1,977,949

 

 

$

1,862,297

 

 

$

1,875,959

 

 

$

1,848,587

 

Tangible net income (loss)

 

$

53,357

 

 

$

(51,940

)

 

$

17,868

 

 

$

55,903

 

 

$

48,606

 

Non-routine items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus: merger related expenses

 

 

2,105

 

 

 

 

 

 

1,282

 

 

 

925

 

 

 

1,010

 

Plus: pension plan termination expense

 

 

 

 

 

 

 

 

 

 

 

1,225

 

 

 

 

Plus: expenses related to COVID-19 pandemic

 

 

235

 

 

 

1,205

 

 

 

122

 

 

 

 

 

 

 

Plus: impairment loss on branch building

 

 

538

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: gain on sale of acquired loans

 

 

 

 

 

 

 

 

 

 

 

1,263

 

 

 

 

Less: securities gains (losses), net

 

 

79

 

 

 

2,286

 

 

 

2,994

 

 

 

317

 

 

 

775

 

Less: income tax effect of tax deductible non-routine items

 

 

664

 

 

 

(256

)

 

 

(464

)

 

 

48

 

 

 

55

 

Total non-routine items, after tax

 

 

2,135

 

 

 

(825

)

 

 

(1,126

)

 

 

522

 

 

 

180

 

Adjusted tangible net income (loss)

 

$

55,492

 

 

$

(52,765

)

 

$

16,742

 

 

$

56,425

 

 

$

48,786

 

Adjusted return on average tangible common equity(1)

 

 

11.52

%

 

 

(10.73

)%

 

 

3.62

%

 

 

11.93

%

 

 

10.47

%

Adjusted return on average assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets

 

$

18,248,014

 

 

$

18,500,600

 

 

$

17,694,018

 

 

$

17,843,383

 

 

$

17,621,163

 

Net income (loss)

 

$

49,315

 

 

$

(56,114

)

 

$

(399,311

)

 

$

51,426

 

 

$

43,986

 

Return on average assets

 

 

1.08

%

 

 

(1.22

)%

 

 

(9.08

)%

 

 

1.14

%

 

 

0.99

%

Net income (loss)

 

$

49,315

 

 

$

(56,114

)

 

$

(399,311

)

 

$

51,426

 

 

$

43,986

 

Plus: non-cash goodwill impairment charge, net of tax

 

 

 

 

 

 

 

 

412,918

 

 

 

 

 

 

 

Total non-routine items, after tax

 

 

2,135

 

 

 

(825

)

 

 

(1,126

)

 

 

522

 

 

 

180

 

Adjusted net income (loss)

 

$

51,450

 

 

$

(56,939

)

 

$

12,481

 

 

$

51,948

 

 

$

44,166

 

Adjusted return on average assets(1)

 

 

1.12

%

 

 

(1.24

)%

 

 

0.28

%

 

 

1.16

%

 

 

0.99

%

Adjusted diluted earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding

 

 

126,094,868

 

 

 

125,924,652

 

 

 

126,630,446

 

 

 

128,003,089

 

 

 

128,515,274

 

Net income allocated to common stock

 

$

48,884

 

 

$

(56,114

)

 

$

(399,311

)

 

$

51,248

 

 

$

43,849

 

Plus: non-cash goodwill impairment, net of tax

 

 

 

 

 

 

 

 

412,918

 

 

 

 

 

 

 

Total non-routine items, after tax

 

 

2,135

 

 

 

(825

)

 

 

(1,126

)

 

 

522

 

 

 

180

 

Adjusted net income allocated to common stock

 

$

51,019

 

 

$

(56,939

)

 

$

12,481

 

 

$

51,770

 

 

$

44,029

 

Adjusted diluted earnings (loss) per share

 

$

0.40

 

 

$

(0.45

)

 

$

0.10

 

 

$

0.40

 

 

$

0.34

 

Adjusted pre-tax, pre-provision net revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes

 

$

58,801

 

 

$

(62,767

)

 

$

(432,545

)

 

$

67,164

 

 

$

56,782

 

Plus: Provision for credit losses

 

 

32,973

 

 

 

158,811

 

 

 

83,429

 

 

 

27,126

 

 

 

43,764

 

Plus: non-cash goodwill impairment

 

 

 

 

 

 

 

 

443,695

 

 

 

 

 

 

 

Plus: Total non-routine items before taxes

 

 

2,799

 

 

 

(1,081

)

 

 

(1,590

)

 

 

570

 

 

 

235

 

Adjusted pre-tax, pre-provision net revenue

 

$

94,573

 

 

$

94,963

 

 

$

92,989

 

 

$

94,860

 

 

$

100,781

 

(1)

Annualized.

 

Cadence Bancorporation

Media contact:
Danielle Kernell
713-871-4051
danielle.kernell@cadencebank.com

Investor relations contact:
Valerie Toalson
713-871-4103 or 800-698-7878
vtoalson@cadencebancorporation.com

Source: Cadence Bancorporation