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Cadence Bancorporation Reports First Quarter 2021 Financial Results

Cadence Bancorporation (NYSE: CADE) (“Cadence”) today announced net income for the quarter ended March 31, 2021, of $106.4 million or $0.84 per share, compared to net income of $200.6 million or $1.57 per share for the quarter ended December 31, 2020, and a net loss of ($399.3) million or ($3.15) per share for the quarter ended March 31, 2020. Adjusted net income(1), excluding non-routine income and expenses(2), was $104.7 million or $0.83 per share for the quarter ended March 31, 2021, compared to $199.7 million or $1.57 per share for the quarter ended December 31, 2020, and compared to $12.5 million or $0.10 per share for the quarter ended March 31, 2020. The fourth quarter of 2020 net income included accelerated hedge revenue of $129.5 million ($169.2 million pretax), and the first quarter of 2020 net loss included goodwill impairment of $412.9 million ($443.7 million pretax).

Chairman and Chief Executive Officer of Cadence Bancorporation, Paul B. Murphy, Jr. commented, “We are excited to report a strong start to 2021 at Cadence. The bank extended our trend of excellent operating results with pre-tax, pre-provision revenue (PPNR) as a percent of assets at 1.86%. As announced last week, we are very excited about the pending merger with BancorpSouth and it has been well received with our bankers, clients, and communities.”

First Quarter 2021 Highlights:

First quarter 2021 highlights are as follows:

  • Adjusted pre-tax pre-provision net revenue(1) (“PPNR”) remained strong at $86.4 million or 1.86% of average assets, compared to fourth quarter 2020 PPNR of $260.0 million (or $90.8 million excluding the fourth quarter accelerated hedge revenue).
  • The allowance for credit losses (“ACL”) incorporated a ($48.3) million provision release compared to a $2.8 million provision in the linked quarter reflecting meaningful improvement in current economic forecasts resulting from a decrease in COVID-19 driven stress. The ACL remained robust at 2.49% of total loans, down from 2.89% at December 31, 2020. Excluding Paycheck Protection Program (“PPP”) loans, our ACL to loans ratio was 2.67% at March 31, 2021, down from 3.12% at December 31, 2020. Our ratio of ACL to total nonperforming loans decreased slightly to 250% from 266% at December 31, 2020.
  • Our tax equivalent net interest margin (“NIM”) was 3.22%, down 32 basis points from prior quarter. The NIM decline was driven by increased excess liquidity due to net declines in average loan balances combined with lower hedge income accretion. The decline was partially mitigated by a continued decline in total deposit costs, which decreased 5 basis points in the quarter to 0.20%.
  • Our adjusted efficiency ratio(1) remained stable at 53.1%.
  • Our capital ratios remained strong, with the Common Equity Tier 1 ratio increasing to 14.2% and total risk weighted capital remaining at 14.7%.
  • Annualized returns on average assets and tangible common equity were 2.29% and 22.8%, respectively.
  • Adjusted annualized returns on average assets(1) and adjusted tangible common equity(1) were 2.25% and 22.44%, respectively.
  • We purchased approximately 1.6 million shares of our common stock during the quarter at a cost of $30.0 million. Given the previously announced pending merger with BancorpSouth, the stock buyback activity has been placed on hold.

Balance Sheet:

Total assets were $18.8 billion as of March 31, 2021, an increase of $87.8 million or 0.5% from December 31, 2020, and an increase of $1.6 billion or 9.1% from March 31, 2020. The linked quarter increase was driven by an increase in investment securities, partially offset by decreases in loans.

Cash and Cash Equivalents at March 31, 2021, totaled $1.9 billion as compared to $2.1 billion at December 31, 2020 and compared to $0.6 billion at March 31, 2020. The $165.4 million decrease in the first quarter of 2021 was driven by investment in securities.

Loans at March 31, 2021 totaled $12.4 billion as compared to $12.7 billion at December 31, 2020, a decrease of $353.8 million or 2.8%. Loans decreased $1.0 billion or 7.7% from $13.4 billion at March 31, 2020. PPP loans declined by $131.0 million in the first quarter, with the remaining non-PPP loan decline of $222.8 million being driven by net paydowns and payoffs partially offset by approximately $1.0 billion in loan fundings in the quarter. Notable linked quarter decreases, excluding PPP loans, included General C&I, down $138 million; Energy & Production, down $23 million, and Restaurant, down $33 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 March 31, 2021 totaled $3.9 billion as compared to $3.3 billion at December 31, 2020 and $2.5 billion at March 31, 2020. Securities as a percent of earning assets was 19.1%, 18.6% and 14.7% at March 31, 2021, December 31, 2020, and March 31, 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 decreases in net loans. Securities acquired during the first quarter include primarily U.S. government agency and agency pass-through residential mortgage-backed securities.

Total Deposits at March 31, 2021 were $16.1 billion, an increase of $77.0 million or 0.5% from December 31, 2020 and up $1.6 billion or 11.3% from March 31, 2020. Non-interest bearing deposits were $5.6 billion or 34.4% of total deposits at March 31, 2021, up from $5.0 billion or 31.4% of total deposits at December 31, 2020 and $4.0 billion or 27.3% at March 31, 2020. Total cost of deposits declined to 0.20% for the first quarter 2021, meaningfully lower than both the fourth quarter 2020 cost of 0.25% and the first quarter 2020 cost of 0.96%.

Total Borrowings at March 31, 2021 were $333.0 million, a decrease of $39.7 million from $372.7 million at December 31, 2020 and $372.4 million at March 31, 2020 due to repayment of $40 million in callable sub-debt at an annual rate of 4.91%.

Shareholders’ equity was $2.1 billion at March 31, 2021, a decrease of $28.6 million or 1.3% from December 31, 2020 and a decrease of $21.0 million or 1.0% from March 31, 2020. The linked quarter decrease included a decline of $86.9 million in other comprehensive income including a $68.8 million decrease in unrealized gains on investment securities available-for-sale, $18.9 million in cash dividends and $30.0 million in common stock buybacks, partially offset by quarterly net income of $106.4 million.

Tangible common shareholders’ equity(1) was $2.0 billion at March 31, 2021, down $23.6 million or 1.2% from December 31, 2020 and virtually unchanged from March 31, 2020. The linked quarter decrease resulted from the same factors noted above.

  • Total shareholders’ equity to total assets and tangible equity to tangible assets were 11.1% and 10.6%, respectively, at March 31, 2021 compared to 11.3% and 10.7% at December 31, 2020 and 12.3% and 11.5%, respectively, at March 31, 2020.
  • Tangible book value per share(1) was $15.80 as of March 31, 2021, a slight decrease of $0.03 or 0.2% from $15.83 as of December 31, 2020, and an increase of $0.15 or 1.0% from $15.65 as of March 31, 2020.
  • Total shares outstanding at March 31, 2021 were 124.7 million.

Quarter end regulatory capital ratios remained robust and increased during the quarter as follows:

 

 

3/31/2021

 

12/31/2020

 

3/31/2020

Common equity Tier 1 capital

 

14.2%

 

14.0%

 

11.4%

Tier 1 leverage capital

 

10.9%

 

10.9%

 

10.1%

Tier 1 risk-based capital

 

14.2%

 

14.0%

 

11.4%

Total risk-based capital

 

16.7%

 

16.7%

 

13.8%

Asset Quality:

Credit quality metrics during the first quarter of 2021 reflected some notable improvements including lower net-charge offs and declines in nonperforming and criticized loan balances.

  • Net charge-offs for the first quarter of 2021 were $12.1 million or 0.39% annualized of average loans compared to $21.2 million or 0.64% annualized and $32.5 million or 0.99% annualized for the quarters ended December 31, 2020 and March 31, 2020, respectively. The current quarter charge-offs included $10.7 million in General C&I and $2.1 million in Energy.
  • Provision for credit losses was a release of ($48.3) million for the first quarter of 2021 as compared to $2.8 million for the fourth quarter of 2020 and $83.4 million for the first quarter of 2020. The current quarter’s release was driven by improved economic conditions and forecasts, as well as continued improvements in nonperforming and criticized loans. The first quarter 2021 provision release included $29.5 million release in the CRE segment (including releases of $11.1 million in the Hospitality category), $9.6 million release in the C&I segment (including releases of $9.5 million in the Restaurant category) and $7.9 million release in the Consumer segment.
  • The ACL was $308.0 million or 2.49% of total loans as of March 31, 2021, as compared to $367.2 million or 2.89% of total loans as of December 31, 2020 and $245.2 million or 1.83% of total loans as of March 31, 2020. Excluding PPP loans, the ACL was 2.67% of total loans at March 31, 2021, down from 3.12% at December 31, 2020.
  • The ACL for our $261.4 million Hospitality-CRE portfolio decreased to 14.8% of total loans at March 31, 2021 compared 19.5% at December 31, 2020. The ACL for our $804.7 million Restaurant portfolio (excluding PPP loans) decreased to 5.3% of total loans at March 31, 2021 as compared to 6.3% at December 31, 2020.
  • Total nonperforming loans (“NPL”) as a percent of total loans were 1.00% at March 31, 2021, compared to 1.08% at December 31, 2020 and 1.19% at March 31, 2020. NPL totaled $123.4 million, $138.0 million and $159.7 million as of March 31, 2021, December 31, 2020 and March 31, 2020, respectively. The linked quarter decline was due primarily to payoffs, upgrades, and net charge-offs.
  • The ACL to NPL was 249.7% as of March 31, 2021, as compared to 266.1% as of December 31, 2020 and 153.6% as of March 31, 2020.
  • Total criticized loans at March 31, 2021 were $816.3 million or 6.6% of total loans as compared to $871.7 million or 6.9% at December 31, 2020 and $665.7 million or 5.0% at March 31, 2020. The linked quarter decrease was primarily in Restaurant, Energy, Healthcare, and Hospitality-CRE.
  • COVID related loan payment deferrals totaled $97 million at March 31, 2021, down from $179 million at December 31, 2020.
  • Loans 30-89 days past due were 0.40% of total loans at March 31, 2021, compared to 0.36% at December 31, 2020 and 0.19% at March 31, 2020.

Total Revenue:

Total operating revenue(1) for the first quarter of 2021 was $186.4 million, down $180.0 million or 49.1% from the fourth quarter of 2020 and down $2.1 million or 1.1% from the first quarter of 2020. The fourth quarter of 2020 included $169.2 million in accelerated hedge revenue.

Net interest income for the first quarter of 2021 was $142.7 million, a decrease of $14.0 million or 8.9% from the fourth quarter of 2020 and a decrease of $10.7 million or 7.0% from the first quarter of 2020. Compared to the linked quarter, the net interest income decline included $5.8 million in lower hedge income, $3.0 million due to fewer days in the quarter, $4.0 million due primarily to lower average loan balances and other balance sheet mix shifts, $1.0 million in lower non-PPP loan fees and $0.8 million in lower PPP loan income, partially offset by $2.0 million in lower funding costs driven by lower rates on deposits.

Our NIM for the first quarter of 2021 was 3.22% as compared to 3.54% for the linked quarter and 3.80% for the first quarter of 2020. Excluding the impact of PPP loans, the first quarter 2021 NIM decreased by 34 basis points to 3.24% from 3.58% in the linked quarter, with lower average loan balances, lower hedge income and lower loan fees attributing 20, 14 and 3 basis points of the decline, respectively, partially offset by 5 basis points of improvement from lower deposit costs.

  • Our total funding costs continued to decline in the quarter, down $2.0 million to 0.29% compared to 0.35% in the prior quarter. Total deposit costs declined by 5 basis points to 0.20% for the current quarter compared to 0.25% for the linked quarter, and total interest-bearing liability costs declined by 8 basis points to 0.43% from 0.51% in the linked quarter. Average interest-bearing liabilities increased by $343.2 million or 3.2% from the prior quarter to $11.2 billion, and average noninterest-bearing deposits increased by $110.6 million or 2.1% from the prior quarter to $5.4 billion.
  • Yield on loans excluding accretion and hedge income was 3.84% in the current quarter, down 5 basis points from 3.89% in the linked quarter. Excluding the impact of PPP loans, this yield was 3.91% in the current quarter, down from 3.98% for the linked quarter, with approximately 4 basis points of the 7 basis point decline due to lower fee recognition as a result of fewer loan payoffs in the first quarter. Average loans declined $586.9 million or 4.4% from the prior quarter to $12.7 billion.
  • PPP loans averaged $877.6 million in the first quarter at a yield of 2.95%, down from $1,023.1 million in the linked quarter.
  • Hedge income and collar gain recognition for the first quarter of 2021 was $14.1 million as compared to $19.9 million for the prior quarter.
  • Accretion on acquired loans totaled $5.8 million for the first quarter of 2021 as compared to $5.9 million for the prior quarter.
  • Yield on investment securities declined to 1.69% in the current quarter compared to 1.87% in linked quarter, with the lower yield reflecting the impact of securities purchased in the current and prior quarter. Average investment securities increased $244.4 million or 7.6% from the prior quarter to $3.4 billion.
  • Average federal funds sold and short-term investments increased by $668.5 million or 53.2% from the prior quarter as a result of increased balance sheet liquidity, with yields falling to 0.15% compared to 0.18% linked quarter.
  • Total earning asset yields declined to 3.49% in the current quarter compared to 3.85% in the linked quarter, with average balances increasing by $326.1 million or 1.8% to $18.0 billion.
  • Excess liquidity in the first quarter negatively impacted the NIM by an estimated 24 basis points compared to 14 basis points in the linked quarter.

Noninterest income for the first quarter of 2021 was $43.7 million, a decrease of $166.0 million or 79.2% from the linked quarter, and an increase of $8.6 million or 24.6% from the same period of 2020 and. Adjusted noninterest income(1) for the first quarter of 2021 was $41.4 million, a decrease of $167.0 million or 80.1% from the linked quarter, and an increase of $9.4 million or 29.2% from the first quarter of 2020.

  • The linked quarter decrease was driven by the hedge revenue of $169.2 million that occurred in the fourth quarter of 2020. The first quarter of 2021 also included increases of $1.3 million, $1.1 million, and $0.9 million in earnings from limited partnerships, SBA income and securities gains, respectively. These items were partially offset by decreases of $0.9 million in both mortgage banking income and in credit related fees related to volumes.
  • Noninterest income as a percent of total revenue for the first quarter of 2021 was 23.4% as compared to 57.2% for the linked quarter and 18.6% for the first quarter of 2020.

Noninterest expense for the first quarter of 2021 was $97.8 million, compared to $105.3 million for the linked quarter and compared to $537.7 million for the same period of 2020. The first quarter of 2020 included a non-cash goodwill impairment charge of $443.7 million. Adjusted noninterest expense(1), which excludes the impact of non-routine items(2), was $97.8 million, down $7.3 million or 6.9% from the linked quarter and up $5.3 million or 5.7% from the first quarter of 2020. The linked quarter decrease in noninterest expenses resulted from:

  • A decrease of $2.8 million in personnel costs driven by a decrease of $7.4 million in equity compensation and annual incentive compensation as the prior quarter included accrual adjustments resulting from improved company performance. This decrease was partially mitigated by a seasonal increase of $4.2 million in payroll taxes and employee benefits.
  • A decrease of $1.5 million in FDIC insurance assessment due to decreased nonperforming and criticized assets as well as quarterly net earnings trends.
  • A decrease of $1.2 million in other noninterest expenses due to decreased expenses related to foreclosed real estate.

Adjusted efficiency ratio(1) for the first quarter of 2021 was 53.1%, compared to the linked quarter ratio of 28.8% and the prior year’s first quarter ratio of 49.9%. The linked quarter adjusted ratio included the hedge non-interest income of $169.2 million which did not recur in first quarter 2021.

____________________

(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 first quarter of 2021 was 22.3% compared to 22.4% for the linked quarter and 7.7% for the first quarter of 2020.

Dividend:

On April 22, 2021, the board of directors of Cadence Bancorporation declared a quarterly cash dividend in the amount of $0.15 per share of outstanding common stock, representing an annualized dividend of $0.60 per share. The dividend will be paid on May 14, 2021 to holders of record of Cadence’s Class A common stock on May 7, 2021.

Supplementary Financial Tables (Unaudited):

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

First Quarter 2021 Earnings Conference Call:

Cadence Bancorporation executive management will host a conference call to discuss first quarter 2021 results on Thursday, April 22, 2021, 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:

9653528

For those unable to participate in the live presentation, a replay will be available through May 6, 2021. 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:

10153918

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 $18.8 billion in total assets as of March 31, 2021. Its wholly owned subsidiary, Cadence Bank, N.A., operates 98 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 approximately 1,800 associates is committed to exceeding customer expectations and helping their clients succeed financially.

Cautionary Statement Regarding Forward-Looking Information

Certain statements in this communication may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended with respect to BancorpSouth Bank’s and Cadence Bancorporation’s and Cadence Bank’s (together, “Cadence”) beliefs, plans, goals, expectations, and estimates. Forward-looking statements are not a representation of historical information but instead pertain to future operations, strategies, financial results or other developments. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “could,” “continue,” “seek,” “intend,” “estimate,” “expect,” “foresee,” “hope,” “intend,” “may,” “might,” “plan,” “should,” “predict,” “project,” “goal,” “outlook,” “potential,” “will,” “will result,” “will likely result,” or “would” or future or conditional verb tenses and variations or negatives of such terms. These forward-looking statements include, without limitation, those relating to the terms, timing and closing of the proposed transaction.

Cadence cautions readers not to place undue reliance on the forward-looking statements contained in this communication, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, many of which are beyond the control of BancorpSouth Bank and Cadence. The factors that could cause actual results to differ materially include the following: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between BancorpSouth Bank and Cadence; the outcome of any legal proceedings that may be instituted against BancorpSouth Bank or Cadence; the possibility that the proposed transaction will not close when expected or at all because required regulatory, shareholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the ability of BancorpSouth Bank and Cadence to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of either or both parties to the proposed transaction; the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where BancorpSouth Bank and Cadence do business; certain restrictions during the pendency of the proposed transaction that may impact the parties’ ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management’s attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all and to successfully integrate Cadence’s operations and those of BancorpSouth Bank; such integration may be more difficult, time consuming or costly than expected; revenues following the proposed transaction may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; BancorpSouth Bank and Cadence’s success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by BancorpSouth Bank’s issuance of additional shares of its capital stock in connection with the proposed transaction; 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; and other factors that may affect future results of BancorpSouth Bank and Cadence; and the other factors discussed in “Risk Factors” in BancorpSouth Bank’s Annual Report on Form 10-K for the year ended December 31, 2020 and BancorpSouth Bank’s other filings with the Federal Deposit Insurance Corporation (the “FDIC”), which are available at https://www.fdic.gov/ and in the “Investor Relations” section of BancorpSouth Bank’s website, https://www.bancorpsouth.com/, under the heading “Public Filings,” and in Cadence’s Annual Report on Form 10-K for the year ended December 31, 2020 and in Cadence’s other filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available at http://www.sec.gov and in the “Investor Relations” section of Cadence’s website, https://cadencebancorporation.com/, under the heading “SEC Filings.” BancorpSouth Bank and Cadence assume no obligation to update the information in this communication, except as otherwise required by law.

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect of the proposed transaction by BancorpSouth Bank and Cadence. In connection with the proposed acquisition, BancorpSouth Bank and Cadence intend to file relevant materials with the FDIC and SEC, respectively, including the parties’ joint proxy statement on Schedule 14A, which shall include an offering circular with respect to the common stock of BancorpSouth Bank. STOCKHOLDERS OF BANCORPSOUTH BANK AND CADENCE ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE FDIC AND SEC WHEN THEY BECOME AVAILABLE, INCLUDING THE JOINT PROXY STATEMENT/OFFERING CIRCULAR, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents free of charge at the FDIC’s website, https://www.fdic.gov/, and the SEC’s website, http://www.sec.gov, and the Cadence stockholders will receive information at an appropriate time on how to obtain transaction-related documents free of charge from Cadence. Such documents are not currently available.

Participants in Solicitation

BancorpSouth Bank and its directors and executive officers, and Cadence and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders of BancorpSouth Bank common stock and the holders of Cadence common stock in respect of the proposed transaction. Information about the directors and executive officers of BancorpSouth Bank is set forth in the proxy statement for BancorpSouth Bank’s 2021 Annual Meeting of Stockholders, which was filed with the FDIC on March 12, 2021. Information about the directors and executive officers of Cadence is set forth in the proxy statement for Cadence’s 2021 Annual Meeting of Stockholders, which was filed with the SEC on March 26, 2021. Investors may obtain additional information regarding the interest of such participants by reading the joint proxy statement/offering circular regarding the proposed transaction when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.

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)

 

1Q 2021

 

 

4Q 2020

 

 

3Q 2020

 

 

2Q 2020

 

 

1Q 2020

 

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

154,701

 

 

$

170,739

 

 

$

170,497

 

 

$

177,175

 

 

$

192,754

 

 

Interest expense

 

 

11,953

 

 

 

13,998

 

 

 

16,455

 

 

 

22,461

 

 

 

39,286

 

 

Net interest income

 

 

142,748

 

 

 

156,741

 

 

 

154,042

 

 

 

154,714

 

 

 

153,468

 

 

Provision (release) for credit losses

 

 

(48,262

)

 

 

2,835

 

 

 

32,973

 

 

 

158,811

 

 

 

83,429

 

 

Net interest income after provision (release)

 

 

191,010

 

 

 

153,906

 

 

 

121,069

 

 

 

(4,097

)

 

 

70,039

 

 

Noninterest income (1)

 

 

43,696

 

 

 

209,745

 

 

 

32,591

 

 

 

29,950

 

 

 

35,069

 

 

Noninterest expense (2)

 

 

97,822

 

 

 

105,331

 

 

 

94,859

 

 

 

88,620

 

 

 

537,653

 

 

Income (loss) before income taxes

 

 

136,884

 

 

 

258,320

 

 

 

58,801

 

 

 

(62,767

)

 

 

(432,545

)

 

Income tax expense (benefit)

 

 

30,459

 

 

 

57,737

 

 

 

9,486

 

 

 

(6,653

)

 

 

(33,234

)

 

Net income (loss)

 

$

106,425

 

 

$

200,583

 

 

$

49,315

 

 

$

(56,114

)

 

$

(399,311

)

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

125,079,250

 

 

 

125,973,736

 

 

 

125,956,714

 

 

 

125,924,652

 

 

 

126,630,446

 

 

Diluted

 

 

125,621,508

 

 

 

126,408,959

 

 

 

126,094,868

 

 

 

125,924,652

 

 

 

126,630,446

 

 

Earnings (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.85

 

 

$

1.58

 

 

$

0.39

 

 

$

(0.45

)

 

$

(3.15

)

 

Diluted

 

 

0.84

 

 

 

1.57

 

 

 

0.39

 

 

 

(0.45

)

 

 

(3.15

)

 

Period-End Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,888,518

 

 

$

2,053,946

 

 

$

1,247,172

 

 

$

1,899,369

 

 

$

609,351

 

 

Investment securities

 

 

3,918,666

 

 

 

3,332,168

 

 

 

3,088,699

 

 

 

2,661,433

 

 

 

2,461,644

 

 

Total loans, net of unearned income

 

 

12,365,334

 

 

 

12,719,129

 

 

 

13,465,556

 

 

 

13,699,097

 

 

 

13,392,191

 

 

Allowance for credit losses

 

 

308,037

 

 

 

367,160

 

 

 

385,412

 

 

 

370,901

 

 

 

245,246

 

 

Total assets

 

 

18,800,350

 

 

 

18,712,567

 

 

 

18,404,195

 

 

 

18,857,753

 

 

 

17,237,918

 

 

Total deposits

 

 

16,129,199

 

 

 

16,052,245

 

 

 

15,786,221

 

 

 

16,069,282

 

 

 

14,489,505

 

 

Noninterest-bearing deposits

 

 

5,556,217

 

 

 

5,033,748

 

 

 

5,033,338

 

 

 

5,220,109

 

 

 

3,959,721

 

 

Interest-bearing deposits

 

 

10,572,982

 

 

 

11,018,497

 

 

 

10,752,883

 

 

 

10,849,173

 

 

 

10,529,784

 

 

Borrowings and subordinated debentures

 

 

332,984

 

 

 

372,669

 

 

 

372,446

 

 

 

372,222

 

 

 

372,440

 

 

Total shareholders’ equity

 

 

2,092,536

 

 

 

2,121,102

 

 

 

2,071,472

 

 

 

2,045,480

 

 

 

2,113,543

 

 

Average Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

$

3,446,172

 

 

$

3,201,722

 

 

$

2,960,357

 

 

$

2,487,467

 

 

$

2,397,275

 

 

Total loans, net of unearned income

 

 

12,651,585

 

 

 

13,238,440

 

 

 

13,652,395

 

 

 

13,884,220

 

 

 

13,161,371

 

 

Allowance for credit losses

 

 

370,736

 

 

 

393,306

 

 

 

389,243

 

 

 

267,464

 

 

 

201,785

 

 

Total assets

 

 

18,837,133

 

 

 

18,354,046

 

 

 

18,248,014

 

 

 

18,500,600

 

 

 

17,694,018

 

 

Total deposits

 

 

16,200,631

 

 

 

15,736,884

 

 

 

15,628,314

 

 

 

15,774,787

 

 

 

14,574,614

 

 

Noninterest-bearing deposits

 

 

5,356,120

 

 

 

5,245,478

 

 

 

4,892,079

 

 

 

4,587,673

 

 

 

3,658,612

 

 

Interest-bearing deposits

 

 

10,844,511

 

 

 

10,491,406

 

 

 

10,736,235

 

 

 

11,187,115

 

 

 

10,916,002

 

 

Borrowings and subordinated debentures

 

 

363,046

 

 

 

372,920

 

 

 

372,304

 

 

 

372,547

 

 

 

439,698

 

 

Total shareholders’ equity

 

 

2,085,712

 

 

 

2,072,030

 

 

 

2,052,079

 

 

 

2,118,796

 

 

 

2,446,810

 

 

(1)

For 4Q 2020, includes hedge revenue of $169.2 million, $129.5 million after tax

(2)

For 1Q 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)

 

1Q 2021

 

 

4Q 2020

 

 

3Q 2020

 

 

2Q 2020

 

 

1Q 2020

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value

 

$

16.78

 

 

$

16.84

 

 

$

16.45

 

 

$

16.24

 

 

$

16.79

 

Tangible book value (1)

 

 

15.80

 

 

 

15.83

 

 

 

15.40

 

 

 

15.15

 

 

 

15.65

 

Cash dividends declared

 

 

0.150

 

 

 

0.075

 

 

 

0.050

 

 

 

0.050

 

 

 

0.175

 

Dividend payout ratio

 

 

17.65

%

 

 

4.75

%

 

 

12.82

%

 

 

(11.11

)%

 

 

(5.56

)%

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average common equity (2)

 

 

20.69

%

 

 

38.51

%

 

 

9.56

%

 

 

(10.65

)%

 

 

(65.64

)%

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

 

 

22.80

 

 

 

41.90

 

 

 

11.08

 

 

 

(10.56

)

 

 

3.86

 

Return on average assets (2)

 

 

2.29

 

 

 

4.35

 

 

 

1.08

 

 

 

(1.22

)

 

 

(9.08

)

Net interest margin (2)

 

 

3.22

 

 

 

3.54

 

 

 

3.49

 

 

 

3.51

 

 

 

3.80

 

Efficiency ratio (1)

 

 

52.47

 

 

 

28.74

 

 

 

50.83

 

 

 

47.99

 

 

 

285.17

 

Adjusted efficiency ratio (1)

 

 

53.11

 

 

 

28.79

 

 

 

49.45

 

 

 

47.93

 

 

 

49.88

 

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total NPA to total loans, OREO, and other NPA

 

 

1.15

%

 

 

1.24

%

 

 

1.55

%

 

 

1.74

%

 

 

1.31

%

Total nonperforming loans ("NPL") to total loans

 

 

1.00

 

 

 

1.08

 

 

 

1.40

 

 

 

1.64

 

 

 

1.19

 

Total ACL to total loans

 

 

2.49

 

 

 

2.89

 

 

 

2.86

 

 

 

2.71

 

 

 

1.83

 

ACL to total NPL

 

 

249.70

 

 

 

266.05

 

 

 

203.82

 

 

 

165.30

 

 

 

153.61

 

Net charge-offs to average loans (2)

 

 

0.39

 

 

 

0.64

 

 

 

0.58

 

 

 

0.94

 

 

 

0.99

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity to assets

 

 

11.1

%

 

 

11.3

%

 

 

11.3

%

 

 

10.8

%

 

 

12.3

%

Tangible common equity to tangible assets (1)

 

 

10.6

 

 

 

10.7

 

 

 

10.6

 

 

 

10.2

 

 

 

11.5

 

Common equity Tier 1 capital (3)

 

 

14.2

 

 

 

14.0

 

 

 

12.0

 

 

 

11.7

 

 

 

11.4

 

Tier 1 leverage capital (3)

 

 

10.9

 

 

 

10.9

 

 

 

9.9

 

 

 

9.5

 

 

 

10.1

 

Tier 1 risk-based capital (3)

 

 

14.2

 

 

 

14.0

 

 

 

12.0

 

 

 

11.7

 

 

 

11.4

 

Total risk-based capital (3)

 

 

16.7

 

 

 

16.7

 

 

 

14.7

 

 

 

14.3

 

 

 

13.8

 

(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 March 31,

 

 

 

2021

 

 

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

 

$

10,611,240

 

 

$

113,735

 

 

 

4.35

%

 

$

10,213,846

 

 

$

129,402

 

 

 

5.10

%

ANCI portfolio

 

 

1,879,832

 

 

 

22,710

 

 

 

4.90

 

 

 

2,731,240

 

 

 

40,650

 

 

 

5.99

 

PCD portfolio

 

 

160,513

 

 

 

3,378

 

 

 

8.54

 

 

 

216,285

 

 

 

5,082

 

 

 

9.45

 

Total loans

 

 

12,651,585

 

 

 

139,824

 

 

 

4.48

 

 

 

13,161,371

 

 

 

175,134

 

 

 

5.35

 

Investment securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

3,117,348

 

 

 

11,821

 

 

 

1.54

 

 

 

2,198,528

 

 

 

14,015

 

 

 

2.56

 

Tax-exempt (2)

 

 

328,824

 

 

 

2,576

 

 

 

3.18

 

 

 

198,747

 

 

 

1,807

 

 

 

3.66

 

Total investment securities

 

 

3,446,172

 

 

 

14,397

 

 

 

1.69

 

 

 

2,397,275

 

 

 

15,822

 

 

 

2.65

 

Federal funds sold and short-term investments

 

 

1,848,748

 

 

 

684

 

 

 

0.15

 

 

 

628,885

 

 

 

1,783

 

 

 

1.14

 

Other investments

 

 

75,621

 

 

 

337

 

 

 

1.81

 

 

 

80,173

 

 

 

394

 

 

 

1.98

 

Total interest-earning assets

 

 

18,022,126

 

 

 

155,242

 

 

 

3.49

 

 

 

16,267,704

 

 

 

193,133

 

 

 

4.77

 

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

346,289

 

 

 

 

 

 

 

 

 

 

 

250,804

 

 

 

 

 

 

 

 

 

Premises and equipment

 

 

124,351

 

 

 

 

 

 

 

 

 

 

 

127,812

 

 

 

 

 

 

 

 

 

Accrued interest and other assets

 

 

715,103

 

 

 

 

 

 

 

 

 

 

 

1,249,483

 

 

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(370,736

)

 

 

 

 

 

 

 

 

 

 

(201,785

)

 

 

 

 

 

 

 

 

Total assets

 

$

18,837,133

 

 

 

 

 

 

 

 

 

 

$

17,694,018

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

$

8,275,895

 

 

$

3,596

 

 

 

0.18

%

 

$

8,121,641

 

 

$

21,667

 

 

 

1.07

%

Savings deposits

 

 

353,826

 

 

 

108

 

 

 

0.12

 

 

 

272,444

 

 

 

317

 

 

 

0.47

 

Time deposits

 

 

2,214,790

 

 

 

4,277

 

 

 

0.78

 

 

 

2,521,917

 

 

 

12,744

 

 

 

2.03

 

Total interest-bearing deposits

 

 

10,844,511

 

 

 

7,981

 

 

 

0.30

 

 

 

10,916,002

 

 

 

34,728

 

 

 

1.28

 

Other borrowings

 

 

149,989

 

 

 

927

 

 

 

2.51

 

 

 

217,363

 

 

 

1,108

 

 

 

2.05

 

Subordinated debentures

 

 

213,057

 

 

 

3,045

 

 

 

5.80

 

 

 

222,335

 

 

 

3,450

 

 

 

6.24

 

Total interest-bearing liabilities

 

 

11,207,557

 

 

 

11,953

 

 

 

0.43

 

 

 

11,355,700

 

 

 

39,286

 

 

 

1.39

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

5,356,120

 

 

 

 

 

 

 

 

 

 

 

3,658,612

 

 

 

 

 

 

 

 

 

Accrued interest and other liabilities

 

 

187,744

 

 

 

 

 

 

 

 

 

 

 

232,896

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

16,751,421

 

 

 

 

 

 

 

 

 

 

 

15,247,208

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

2,085,712

 

 

 

 

 

 

 

 

 

 

 

2,446,810

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

18,837,133

 

 

 

 

 

 

 

 

 

 

$

17,694,018

 

 

 

 

 

 

 

 

 

Net interest income/net interest spread

 

 

 

 

 

 

143,289

 

 

 

3.06

%

 

 

 

 

 

 

153,847

 

 

 

3.38

%

Net yield on earning assets/net interest margin

 

 

 

 

 

 

 

 

 

 

3.22

%

 

 

 

 

 

 

 

 

 

 

3.80

%

Taxable equivalent adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

 

 

 

 

 

(541

)

 

 

 

 

 

 

 

 

 

 

(379

)

 

 

 

 

Net interest income

 

 

 

 

 

$

142,748

 

 

 

 

 

 

 

 

 

 

$

153,468

 

 

 

 

 

(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 federal income tax rate of 21%.

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

 

 

 

For the Three Months Ended

 

 

 

March 31, 2021

 

 

December 31, 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

 

$

10,611,240

 

 

$

113,735

 

 

 

4.35

%

 

$

10,939,304

 

 

$

125,535

 

 

 

4.57

%

ANCI portfolio

 

 

1,879,832

 

 

 

22,710

 

 

 

4.90

 

 

 

2,126,553

 

 

 

25,943

 

 

 

4.85

 

PCD portfolio

 

 

160,513

 

 

 

3,378

 

 

 

8.54

 

 

 

172,583

 

 

 

3,820

 

 

 

8.81

 

Total loans

 

 

12,651,585

 

 

 

139,824

 

 

 

4.48

 

 

 

13,238,440

 

 

 

155,298

 

 

 

4.67

 

Investment securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

3,117,348

 

 

 

11,821

 

 

 

1.54

 

 

 

2,895,541

 

 

 

12,597

 

 

 

1.73

 

Tax-exempt (2)

 

 

328,824

 

 

 

2,576

 

 

 

3.18

 

 

 

306,181

 

 

 

2,427

 

 

 

3.15

 

Total investment securities

 

 

3,446,172

 

 

 

14,397

 

 

 

1.69

 

 

 

3,201,722

 

 

 

15,024

 

 

 

1.87

 

Federal funds sold and short-term investments

 

 

1,848,748

 

 

 

684

 

 

 

0.15

 

 

 

1,178,973

 

 

 

548

 

 

 

0.18

 

Other investments

 

 

75,621

 

 

 

337

 

 

 

1.81

 

 

 

76,878

 

 

 

380

 

 

 

1.97

 

Total interest-earning assets

 

 

18,022,126

 

 

 

155,242

 

 

 

3.49

 

 

 

17,696,013

 

 

 

171,250

 

 

 

3.85

 

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

346,289

 

 

 

 

 

 

 

 

 

 

 

216,116

 

 

 

 

 

 

 

 

 

Premises and equipment

 

 

124,351

 

 

 

 

 

 

 

 

 

 

 

125,955

 

 

 

 

 

 

 

 

 

Accrued interest and other assets

 

 

715,103

 

 

 

 

 

 

 

 

 

 

 

709,268

 

 

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(370,736

)

 

 

 

 

 

 

 

 

 

 

(393,306

)

 

 

 

 

 

 

 

 

Total assets

 

$

18,837,133

 

 

 

 

 

 

 

 

 

 

$

18,354,046

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

$

8,275,895

 

 

$

3,596

 

 

 

0.18

%

 

$

7,881,093

 

 

$

4,145

 

 

 

0.21

%

Savings deposits

 

 

353,826

 

 

 

108

 

 

 

0.12

 

 

 

336,304

 

 

 

127

 

 

 

0.15

 

Time deposits

 

 

2,214,790

 

 

 

4,277

 

 

 

0.78

 

 

 

2,274,009

 

 

 

5,711

 

 

 

1.00

 

Total interest-bearing deposits

 

 

10,844,511

 

 

 

7,981

 

 

 

0.30

 

 

 

10,491,406

 

 

 

9,983

 

 

 

0.38

 

Other borrowings

 

 

149,989

 

 

 

927

 

 

 

2.51

 

 

 

149,981

 

 

 

931

 

 

 

2.47

 

Subordinated debentures

 

 

213,057

 

 

 

3,045

 

 

 

5.80

 

 

 

222,939

 

 

 

3,085

 

 

 

5.51

 

Total interest-bearing liabilities

 

 

11,207,557

 

 

 

11,953

 

 

 

0.43

 

 

 

10,864,326

 

 

 

13,999

 

 

 

0.51

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

5,356,120

 

 

 

 

 

 

 

 

 

 

 

5,245,478

 

 

 

 

 

 

 

 

 

Accrued interest and other liabilities

 

 

187,744

 

 

 

 

 

 

 

 

 

 

 

172,212

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

16,751,421

 

 

 

 

 

 

 

 

 

 

 

16,282,016

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

2,085,712

 

 

 

 

 

 

 

 

 

 

 

2,072,030

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

18,837,133

 

 

 

 

 

 

 

 

 

 

$

18,354,046

 

 

 

 

 

 

 

 

 

Net interest income/net interest spread

 

 

 

 

 

 

143,289

 

 

 

3.06

%

 

 

 

 

 

 

157,251

 

 

 

3.34

%

Net yield on earning assets/net interest margin

 

 

 

 

 

 

 

 

 

 

3.22

%

 

 

 

 

 

 

 

 

 

 

3.54

%

Taxable equivalent adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

 

 

 

 

 

(541

)

 

 

 

 

 

 

 

 

 

 

(510

)

 

 

 

 

Net interest income

 

 

 

 

 

$

142,748

 

 

 

 

 

 

 

 

 

 

$

156,741

 

 

 

 

 

_____________________

(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 federal income tax rate of 21%.

Table 3 – Loan Interest Income Detail

 

 

For the Quarters,

 

(In thousands)

1Q 2021

 

 

4Q 2020

 

 

3Q 2020

 

 

2Q 2020

 

 

1Q 2020

 

Interest Income Detail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated loans

$

113,735

 

 

$

125,535

 

 

$

123,177

 

 

$

125,922

 

 

$

129,402

 

ANCI loans: interest income

 

17,832

 

 

 

20,507

 

 

 

22,850

 

 

 

26,264

 

 

 

32,940

 

ANCI loans: accretion

 

4,879

 

 

 

5,436

 

 

 

5,364

 

 

 

6,703

 

 

 

7,710

 

PCD loans: interest income

 

2,433

 

 

 

3,355

 

 

 

2,421

 

 

 

3,111

 

 

 

3,039

 

PCD loans: accretion

 

945

 

 

 

465

 

 

 

1,039

 

 

 

854

 

 

 

2,043

 

Total loan interest income

$

139,824

 

 

$

155,298

 

 

$

154,851

 

 

$

162,854

 

 

$

175,134

 

Yields

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated loans

 

4.35

%

 

 

4.57

%

 

 

4.39

%

 

 

4.53

%

 

 

5.10

%

ANCI loans without discount accretion

 

3.85

 

 

 

3.84

 

 

 

3.96

 

 

 

4.20

 

 

 

4.85

 

ANCI loans discount accretion

 

1.05

 

 

 

1.01

 

 

 

0.93

 

 

 

1.08

 

 

 

1.14

 

PCD loans without discount accretion

 

6.15

 

 

 

7.73

 

 

 

5.11

 

 

 

6.30

 

 

 

5.65

 

PCD loans discount accretion

 

2.39

 

 

 

1.08

 

 

 

2.20

 

 

 

1.73

 

 

 

3.80

 

Total loan yield

 

4.48

%

 

 

4.67

%

 

 

4.51

%

 

 

4.72

%

 

 

5.35

%

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

 

 

 

For the Three Months Ended

 

(In thousands)

 

1Q 2021

 

 

4Q 2020

 

 

3Q 2020

 

 

2Q 2020

 

 

1Q 2020

 

Balance at beginning of period

 

$

367,160

 

 

$

385,412

 

 

$

370,901

 

 

$

245,246

 

 

$

119,643

 

Cumulative effect of the adoption of CECL (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

75,850

 

Charge-offs

 

 

(14,671

)

 

 

(23,956

)

 

 

(21,830

)

 

 

(33,452

)

 

 

(33,098

)

Recoveries

 

 

2,563

 

 

 

2,770

 

 

 

1,936

 

 

 

901

 

 

 

613

 

Net charge-offs

 

 

(12,108

)

 

 

(21,186

)

 

 

(19,894

)

 

 

(32,551

)

 

 

(32,485

)

Provision (release) for loan losses

 

 

(47,015

)

 

 

2,934

 

 

 

34,405

 

 

 

158,206

 

 

 

82,238

 

Balance at end of period

 

$

308,037

 

 

$

367,160

 

 

$

385,412

 

 

$

370,901

 

 

$

245,246

 

(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 March 31, 2021

 

(In thousands)

 

Commercial

and

Industrial

 

 

Commercial

Real Estate

 

 

Consumer

 

 

Total

Allowance for

Credit Losses

 

 

Reserve for

Unfunded

Commitments (1)

 

 

Total

 

As of December 31, 2020

 

$

187,365

 

 

$

141,187

 

 

$

38,608

 

 

$

367,160

 

 

$

2,296

 

 

$

369,456

 

Provision (release) for credit losses

 

 

(9,594

)

 

 

(29,481

)

 

 

(7,940

)

 

 

(47,015

)

 

 

(1,247

)

 

 

(48,262

)

Charge-offs

 

 

(14,124

)

 

 

(401

)

 

 

(146

)

 

 

(14,671

)

 

 

 

 

 

(14,671

)

Recoveries

 

 

1,724

 

 

 

105

 

 

 

734

 

 

 

2,563

 

 

 

 

 

 

2,563

 

As of March 31, 2021

 

$

165,371

 

 

$

111,410

 

 

$

31,256

 

 

$

308,037

 

 

$

1,049

 

 

$

309,086

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended December 31, 2020

 

(In thousands)

 

Commercial

and

Industrial

 

 

Commercial

Real Estate

 

 

Consumer

 

 

Total

Allowance for

Credit Losses

 

 

Reserve for

Unfunded

Commitments (1)

 

 

Total

 

As of September 30, 2020

 

$

202,197

 

 

$

143,008

 

 

$

40,207

 

 

$

385,412

 

 

$

2,395

 

 

$

387,807

 

Provision (release) for credit losses

 

 

(2,990

)

 

 

7,372

 

 

 

(1,448

)

 

 

2,934

 

 

 

(99

)

 

 

2,835

 

Charge-offs

 

 

(12,870

)

 

 

(10,500

)

 

 

(586

)

 

 

(23,956

)

 

 

 

 

 

(23,956

)

Recoveries

 

 

1,028

 

 

 

1,307

 

 

 

435

 

 

 

2,770

 

 

 

 

 

 

2,770

 

As of December 31, 2020

 

$

187,365

 

 

$

141,187

 

 

$

38,608

 

 

$

367,160

 

 

$

2,296

 

 

$

369,456

 

(1)

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

Table 6 – Criticized Loans by Segment

 

 

 

As of March 31, 2021 (2)

 

(Amortized cost in thousands)

 

Special Mention

 

 

Substandard

 

 

Doubtful

 

 

Total Criticized

 

Commercial and industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General C&I

 

$

40,518

 

 

$

117,658

 

 

$

4,334

 

 

$

162,510

 

Energy

 

 

73,333

 

 

 

148,099

 

 

 

16,717

 

 

 

238,149

 

Restaurant

 

 

50,619

 

 

 

126,536

 

 

 

4,778

 

 

 

181,933

 

Healthcare

 

 

1,953

 

 

 

15,258

 

 

 

 

 

 

17,211

 

Total commercial and industrial

 

 

166,423

 

 

 

407,551

 

 

 

25,829

 

 

 

599,803

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial, retail, and other

 

 

25,206

 

 

 

39,503

 

 

 

 

 

 

64,709

 

Hospitality (1)

 

 

31,097

 

 

 

85,395

 

 

 

 

 

 

116,492

 

Multifamily

 

 

90

 

 

 

1,425

 

 

 

 

 

 

1,515

 

Office

 

 

5,699

 

 

 

13,774

 

 

 

 

 

 

19,473

 

Total commercial real estate

 

 

62,092

 

 

 

140,097

 

 

 

 

 

 

202,189

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

14,286

 

 

 

 

 

 

14,286

 

Other

 

 

 

 

 

37

 

 

 

 

 

 

37

 

Total consumer

 

 

 

 

 

14,323

 

 

 

 

 

 

14,323

 

Total

 

$

228,515

 

 

$

561,971

 

 

$

25,829

 

 

$

816,315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Hospitality balances have historically been included in Industrial, retail, and other.

 

(2) Criticized loans do not include loans held for sale of $3.6 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2020 (2)

 

(Amortized cost in thousands)

 

Special Mention

 

 

Substandard

 

 

Doubtful

 

 

Total Criticized

 

Commercial and industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General C&I

 

$

61,910

 

 

$

90,896

 

 

$

12,583

 

 

$

165,389

 

Energy

 

 

93,708

 

 

 

150,810

 

 

 

8,115

 

 

 

252,633

 

Restaurant

 

 

55,141

 

 

 

133,709

 

 

 

6,987

 

 

 

195,837

 

Healthcare

 

 

761

 

 

 

29,614

 

 

 

 

 

 

30,375

 

Total commercial and industrial

 

 

211,520

 

 

 

405,029

 

 

 

27,685

 

 

 

644,234

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial, retail, and other

 

 

35,992

 

 

 

26,540

 

 

 

 

 

 

62,532

 

Hospitality (1)

 

 

54,449

 

 

 

83,460

 

 

 

 

 

 

137,909

 

Multifamily

 

 

90

 

 

 

198

 

 

 

 

 

 

288

 

Office

 

 

4,863

 

 

 

7,843

 

 

 

 

 

 

12,706

 

Total commercial real estate

 

 

95,394

 

 

 

118,041

 

 

 

 

 

 

213,435

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

14,023

 

 

 

 

 

 

14,023

 

Other

 

 

 

 

 

4

 

 

 

 

 

 

4

 

Total consumer

 

 

 

 

 

14,027

 

 

 

 

 

 

14,027

 

Total

 

$

306,914

 

 

$

537,097

 

 

$

27,685

 

 

$

871,696

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Hospitality balances were previously reported in Industrial, retail, and other but have been reclassified to match current period presentation.

 

(2) Criticized loans do not include loans held for sale of $0.4 million.

 

Table 7 – Nonperforming Assets

 

 

 

As of

 

(In thousands)

 

1Q 2021 (1)

 

 

4Q 2020 (1)

 

 

3Q 2020

 

 

2Q 2020

 

 

1Q 2020

 

Nonperforming loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

94,153

 

 

$

109,410

 

 

$

145,991

 

 

$

183,441

 

 

$

137,301

 

Commercial real estate

 

 

14,846

 

 

 

14,559

 

 

 

26,742

 

 

 

24,659

 

 

 

7,544

 

Consumer

 

 

14,364

 

 

 

14,033

 

 

 

16,364

 

 

 

16,284

 

 

 

14,808

 

Total nonperforming loans ("NPL")

 

 

123,363

 

 

 

138,002

 

 

 

189,097

 

 

 

224,384

 

 

 

159,653

 

Foreclosed OREO and other NPA

 

 

19,125

 

 

 

19,788

 

 

 

20,344

 

 

 

13,949

 

 

 

15,679

 

Total nonperforming assets

 

$

142,488

 

 

$

157,790

 

 

$

209,441

 

 

$

238,333

 

 

$

175,332

 

NPL as a percentage of total loans

 

 

1.00

%

 

 

1.08

%

 

 

1.40

%

 

 

1.64

%

 

 

1.19

%

NPA as a percentage of loans plus OREO/other

 

 

1.15

%

 

 

1.24

%

 

 

1.55

%

 

 

1.74

%

 

 

1.31

%

NPA as a percentage of total assets

 

 

0.76

%

 

 

0.84

%

 

 

1.14

%

 

 

1.26

%

 

 

0.99

%

Total accruing loans 90 days or more past due

 

$

1,399

 

 

$

13,880

 

 

$

7,260

 

 

$

3,123

 

 

$

1,999

 

(1)

Nonperforming loans do not include nonperforming loans held for sale of $3.4 million and $0.2 million at March 31, 2021 and December 31, 2020, respectively.

Table 8 – Noninterest Income

 

 

 

For the Three Months Ended

 

(In thousands)

 

1Q 2021

 

 

4Q 2020

 

 

3Q 2020

 

 

2Q 2020

 

 

1Q 2020

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hedge revenue

 

$

 

 

$

169,248

 

 

$

 

 

$

 

 

$

 

Investment advisory revenue

 

 

7,609

 

 

 

7,457

 

 

 

6,797

 

 

 

6,505

 

 

 

5,605

 

Trust services revenue

 

 

5,509

 

 

 

4,885

 

 

 

4,556

 

 

 

4,092

 

 

 

4,815

 

Service charges on deposit accounts

 

 

6,404

 

 

 

6,028

 

 

 

5,847

 

 

 

4,852

 

 

 

6,416

 

Mortgage banking income

 

 

2,115

 

 

 

3,062

 

 

 

3,535

 

 

 

2,020

 

 

 

1,111

 

Credit-related fees

 

 

3,849

 

 

 

4,766

 

 

 

4,202

 

 

 

4,401

 

 

 

5,983

 

Bankcard fees

 

 

1,753

 

 

 

1,775

 

 

 

1,745

 

 

 

1,716

 

 

 

1,958

 

Payroll processing revenue

 

 

1,490

 

 

 

1,309

 

 

 

1,255

 

 

 

1,143

 

 

 

1,367

 

SBA income

 

 

3,967

 

 

 

2,889

 

 

 

3,037

 

 

 

1,335

 

 

 

1,908

 

Other service fees

 

 

2,209

 

 

 

1,751

 

 

 

1,450

 

 

 

1,528

 

 

 

1,912

 

Securities gains, net

 

 

2,259

 

 

 

1,353

 

 

 

79

 

 

 

2,286

 

 

 

2,994

 

Other

 

 

6,532

 

 

 

5,222

 

 

 

88

 

 

 

72

 

 

 

1,000

 

Total noninterest income

 

$

43,696

 

 

$

209,745

 

 

$

32,591

 

 

$

29,950

 

 

$

35,069

 

Table 9 – Noninterest Expenses

 

 

 

For the Three Months Ended

 

(In thousands)

 

1Q 2021

 

 

4Q 2020

 

 

3Q 2020

 

 

2Q 2020

 

 

1Q 2020

 

Noninterest Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

57,070

 

 

$

59,833

 

 

$

51,734

 

 

$

47,158

 

 

$

48,807

 

Premises and equipment

 

 

10,374

 

 

 

11,036

 

 

 

10,716

 

 

 

10,634

 

 

 

10,808

 

Merger related expenses

 

 

 

 

 

 

 

 

2,105

 

 

 

 

 

 

1,282

 

Intangible asset amortization

 

 

4,986

 

 

 

5,164

 

 

 

5,299

 

 

 

5,472

 

 

 

5,592

 

Data processing

 

 

3,259

 

 

 

3,047

 

 

 

3,024

 

 

 

3,084

 

 

 

3,352

 

Software amortization

 

 

4,507

 

 

 

4,480

 

 

 

4,432

 

 

 

4,036

 

 

 

3,547

 

Consulting and professional fees

 

 

3,233

 

 

 

3,450

 

 

 

3,320

 

 

 

3,009

 

 

 

2,707

 

Loan related expenses

 

 

796

 

 

 

631

 

 

 

953

 

 

 

735

 

 

 

760

 

FDIC insurance

 

 

1,465

 

 

 

3,007

 

 

 

2,528

 

 

 

3,939

 

 

 

2,436

 

Communications

 

 

1,243

 

 

 

1,175

 

 

 

1,119

 

 

 

1,002

 

 

 

1,156

 

Advertising and public relations

 

 

927

 

 

 

956

 

 

 

716

 

 

 

920

 

 

 

1,464

 

Legal expenses

 

 

925

 

 

 

726

 

 

 

681

 

 

 

579

 

 

 

411

 

Other

 

 

9,037

 

 

 

11,826

 

 

 

8,232

 

 

 

8,052

 

 

 

11,636

 

Noninterest expenses excluding goodwill impairment charge

 

 

97,822

 

 

 

105,331

 

 

 

94,859

 

 

 

88,620

 

 

 

93,958

 

Goodwill impairment charge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

443,695

 

Total noninterest expenses

 

$

97,822

 

 

$

105,331

 

 

$

94,859

 

 

$

88,620

 

 

$

537,653

 

Table 10 – Reconciliation of Non-GAAP Financial Measures

 

 

As of and for the Three Months Ended

 

(In thousands, except share and per share data)

1Q 2021

 

4Q 2020

 

3Q 2020

 

2Q 2020

 

1Q 2020

 

Efficiency ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses (numerator)

$

97,822

 

$

105,331

 

$

94,859

 

$

88,620

 

$

537,653

 

Net interest income

$

142,748

 

$

156,741

 

$

154,042

 

$

154,714

 

$

153,468

 

Noninterest income

 

43,696

 

 

209,745

 

 

32,591

 

 

29,950

 

 

35,069

 

Operating revenue (denominator)

$

186,444

 

$

366,486

 

$

186,633

 

$

184,664

 

$

188,537

 

Efficiency ratio

 

52.47

%

 

28.74

%

 

50.83

%

 

47.99

%

 

285.17

%

Adjusted efficiency ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses

$

97,822

 

$

105,331

 

$

94,859

 

$

88,620

 

$

537,653

 

Less: non-cash goodwill impairment charge

 

 

 

 

 

 

 

 

 

443,695

 

Less: merger related expenses

 

 

 

 

 

2,105

 

 

 

 

1,282

 

Less: expenses related to COVID-19 pandemic

 

 

 

215

 

 

235

 

 

1,205

 

 

122

 

Adjusted noninterest expenses (numerator)

$

97,822

 

$

105,116

 

$

92,519

 

$

87,415

 

$

92,554

 

Net interest income

$

142,748

 

$

156,741

 

$

154,042

 

$

154,714

 

$

153,468

 

Noninterest income

 

43,696

 

 

209,745

 

 

32,591

 

 

29,950

 

 

35,069

 

Plus: impairment charge on branch building

 

 

 

 

 

538

 

 

 

 

 

Less: securities gains, net

 

2,259

 

 

1,353

 

 

79

 

 

2,286

 

 

2,994

 

Adjusted noninterest income

 

41,437

 

 

208,392

 

 

33,050

 

 

27,664

 

 

32,075

 

Adjusted operating revenue (denominator)

$

184,185

 

$

365,133

 

$

187,092

 

$

182,378

 

$

185,543

 

Adjusted efficiency ratio

 

53.11

%

 

28.79

%

 

49.45

%

 

47.93

%

 

49.88

%

Tangible common equity ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

$

2,092,536

 

$

2,121,102

 

$

2,071,472

 

$

2,045,480

 

$

2,113,543

 

Less: goodwill and other intangible assets, net

 

(121,856

)

 

(126,841

)

 

(132,005

)

 

(137,318

)

 

(142,782

)

Tangible common shareholders’ equity

 

1,970,680

 

 

1,994,261

 

 

1,939,467

 

 

1,908,162

 

 

1,970,761

 

Total assets

 

18,800,350

 

 

18,712,567

 

 

18,404,195

 

 

18,857,753

 

 

17,237,918

 

Less: goodwill and other intangible assets, net

 

(121,856

)

 

(126,841

)

 

(132,005

)

 

(137,318

)

 

(142,782

)

Tangible assets

$

18,678,494

 

$

18,585,726

 

$

18,272,190

 

$

18,720,435

 

$

17,095,136

 

Tangible common equity ratio

 

10.55

%

 

10.73

%

 

10.61

%

 

10.19

%

 

11.53

%

Tangible book value per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

$

2,092,536

 

$

2,121,102

 

$

2,071,472

 

$

2,045,480

 

$

2,113,543

 

Less: goodwill and other intangible assets, net

 

(121,856

)

 

(126,841

)

 

(132,005

)

 

(137,318

)

 

(142,782

)

Tangible common shareholders’ equity

$

1,970,680

 

$

1,994,261

 

$

1,939,467

 

$

1,908,162

 

$

1,970,761

 

Common shares outstanding

 

124,698,518

 

 

125,978,561

 

 

125,946,793

 

 

125,930,741

 

 

125,897,827

 

Tangible book value per share

$

15.80

 

$

15.83

 

$

15.40

 

$

15.15

 

$

15.65

 

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

 

 

As of and for the Three Months Ended

 

(In thousands, except share and per share data)

1Q 2021

 

4Q 2020

 

3Q 2020

 

2Q 2020

 

1Q 2020

 

Return on average tangible common equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common equity

$

2,085,712

 

$

2,072,030

 

$

2,052,079

 

$

2,118,796

 

$

2,446,810

 

Less: average intangible assets

 

(125,042

)

 

(130,146

)

 

(135,491

)

 

(140,847

)

 

(584,513

)

Average tangible common shareholders’ equity

$

1,960,670

 

$

1,941,884

 

$

1,916,588

 

$

1,977,949

 

$

1,862,297

 

Net income (loss)

$

106,425

 

$

200,583

 

$

49,315

 

$

(56,114

)

$

(399,311

)

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

 

 

 

 

 

 

 

 

 

412,918

 

Plus: intangible asset amortization, net of tax

 

3,809

 

 

3,939

 

 

4,042

 

 

4,174

 

 

4,261

 

Tangible net income (loss)

$

110,234

 

$

204,522

 

$

53,357

 

$

(51,940

)

$

17,868

 

Return on average tangible common equity(1)

 

22.80

%

 

41.90

%

 

11.08

%

 

(10.56

)%

 

3.86

%

Adjusted return on average tangible common equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average tangible common shareholders’ equity

$

1,960,670

 

$

1,941,884

 

$

1,916,588

 

$

1,977,949

 

$

1,862,297

 

Tangible net income (loss)

$

110,234

 

$

204,522

 

$

53,357

 

$

(51,940

)

$

17,868

 

Non-routine items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus: merger related expenses

 

 

 

 

 

2,105

 

 

 

 

1,282

 

Plus: expenses related to COVID-19 pandemic

 

 

 

215

 

 

235

 

 

1,205

 

 

122

 

Plus: impairment loss on branch building

 

 

 

 

 

538

 

 

 

 

 

Less: securities gains, net

 

2,259

 

 

1,353

 

 

79

 

 

2,286

 

 

2,994

 

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

 

(533

)

 

(270

)

 

664

 

 

(256

)

 

(464

)

Total non-routine items, after tax

 

(1,726

)

 

(868

)

 

2,135

 

 

(825

)

 

(1,126

)

Adjusted tangible net income (loss)

$

108,508

 

$

203,654

 

$

55,492

 

$

(52,765

)

$

16,742

 

Adjusted return on average tangible common equity(1)

 

22.44

%

 

41.72

%

 

11.52

%

 

(10.73

)%

 

3.62

%

Adjusted return on average assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets

$

18,837,133

 

$

18,354,046

 

$

18,248,014

 

$

18,500,600

 

$

17,694,018

 

Net income (loss)

$

106,425

 

$

200,583

 

$

49,315

 

$

(56,114

)

$

(399,311

)

Return on average assets

 

2.29

%

 

4.35

%

 

1.08

%

 

(1.22

)%

 

(9.08

)%

Net income (loss)

$

106,425

 

$

200,583

 

$

49,315

 

$

(56,114

)

$

(399,311

)

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

 

 

 

 

 

 

 

 

 

412,918

 

Total non-routine items, after tax

 

(1,726

)

 

(868

)

 

2,135

 

 

(825

)

 

(1,126

)

Adjusted net income (loss)

$

104,699

 

$

199,715

 

$

51,450

 

$

(56,939

)

$

12,481

 

Adjusted return on average assets(1)

 

2.25

%

 

4.33

%

 

1.12

%

 

(1.24

)%

 

0.28

%

Adjusted diluted earnings (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding

 

125,621,508

 

 

126,408,959

 

 

126,094,868

 

 

125,924,652

 

 

126,630,446

 

Net income (loss) allocated to common stock

$

105,829

 

$

198,765

 

$

48,884

 

$

(56,114

)

$

(399,311

)

Plus: non-cash goodwill impairment, net of tax

 

 

 

 

 

 

 

 

 

412,918

 

Total non-routine items, after tax

 

(1,726

)

 

(868

)

 

2,135

 

 

(825

)

 

(1,126

)

Adjusted net income (loss) allocated to common stock

$

104,103

 

$

197,897

 

$

51,019

 

$

(56,939

)

$

12,481

 

Adjusted diluted earnings (loss) per share

$

0.83

 

$

1.57

 

$

0.40

 

$

(0.45

)

$

0.10

 

Adjusted pre-tax, pre-provision net revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes

$

136,884

 

$

258,320

 

$

58,801

 

$

(62,767

)

$

(432,545

)

Plus: provision (reversal) for credit losses

 

(48,262

)

 

2,835

 

 

32,973

 

 

158,811

 

 

83,429

 

Plus: non-cash goodwill impairment

 

 

 

 

 

 

 

 

 

443,695

 

Plus: Total non-routine items before taxes

 

(2,259

)

 

(1,138

)

 

2,799

 

 

(1,081

)

 

(1,590

)

Adjusted pre-tax, pre-provision net revenue

$

86,363

 

$

260,017

 

$

94,573

 

$

94,963

 

$

92,989

 

(1)

Annualized.

 

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