UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 28, 2019

 

Cadence Bancorporation

(Exact name of registrant as specified in its charter)

 

 

(713) 871-4000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

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On January 28, 2019, Cadence Bancorporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended December 31, 2018. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The Company is conducting an earnings conference call and webcast on January 28, 2019 at 12:00 p.m. CT / 1:00 p.m. ET to discuss its fourth quarter 2018 financial results. The press release contains information about how to access the webcast. A copy of the presentation slides to be used during the earnings conference call, which contain supplemental information relating to the Company, is furnished as Exhibit 99.2 to this Current Report on Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

(d) Exhibits

 

 

 

EXHIBIT INDEX

 

 

 

 

 

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

Exhibit 99.1

                                                                                                                      

 

Cadence Bancorporation reports RESULTS FOR 2018

driven by record revenue and

continued balance sheet growth

 

HOUSTON, TEXAS (January 28, 2019) – Cadence Bancorporation (NYSE: CADE) (“Cadence”) today announced net income for the year ended December 31, 2018 of $166.3 million, or $1.97 per diluted common share (“per share”), compared to $102.4 million, or $1.25 per share for the year ended December 31, 2017.   Net income for the quarter ended December 31, 2018 was $32.3 million, or $0.39 per diluted common share (“per share”), compared to $14.7 million, or $0.17 per share, in the fourth quarter of 2017, and $47.1 million, or $0.56 per share, in the third quarter of 2018. Tangible book value per share⁽¹⁾ was $13.62 in the fourth quarter of 2018, an increase of $1.29 from $12.33 per share as of December 31, 2017 and an increase of $0.47 from $13.15 for the third quarter 2018.  

“We are very pleased to report to you another quarter of strong organic growth and operating performance as we conclude what has been a transformational year for Cadence,” stated Paul B. Murphy, Jr., Chairman and Chief Executive Officer of Cadence Bancorporation. “During 2018, our client acquisition and expansion efforts, combined with our quality markets and bankers, resulted in meaningful growth in assets and earnings as the balance sheet grew 16.3% to $12.7 billion, adjusted net income increased 42% to $174.8 million, net interest margin expanded four basis points, and the adjusted efficiency ratio improved from 54.1% for 2017 to 49.6% for 2018.   Importantly, we attained these results while maintaining strong credit results, with net charge-offs of only six basis points for the second year in a row and NPA’s declining as a percent of total loans and OREO during the year.   Our execution remains highly customer-focused while producing excellent returns for our shareholders, most notably this year’s adjusted ROAA of 1.52%⁽¹⁾ and adjusted ROTCE of 16.54%⁽¹⁾.   During the year, our strong performance allowed us to successfully execute on multiple secondary offerings resulting in our stock now being 100% publicly held, a meaningful milestone for our shareholders.

“While we are very proud of 2018, we are excited as we look toward 2019 having closed the State Bank merger on January 1, 2019.  The closing of our fourth and most significant merger is another meaningful step for our organization. We enthusiastically welcome the State Bank customers and associates and look forward to serving our customers, bankers, and communities with the same passion and responsiveness they are accustomed to as we bring together two great institutions.”

At December 31, 2018, State Bank had total assets of $4.9 billion, total loans of $3.4 billion, and total deposits of $4.1 billion.

Highlights:

 

 

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Balance Sheet:

Total assets were $12.7 billion as of December 31, 2018, an increase of $1.8 billion, or 16.3%, from December 31, 2017, and an increase of $970 million, or 8.3%, from September 30, 2018.  

 

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Loans at December 31, 2018 were $10.1 billion, an increase of $1.8 billion, or 21.8%, from December 31, 2017, and an increase of $610.1 million, or 6.5%, from September 30, 2018.  Average loans for the fourth quarter of 2018 were $9.9 billion, an increase of $1.7 billion, or 20.2%, from fourth quarter of 2017, and an increase of $624.7 million, or 6.7%, from the third quarter of 2018.  

Increases in loans reflect continued organic demand primarily in our energy, general C&I and residential portfolios compared to prior year, and our energy sector, CRE and residential portfolios compared to linked quarter.  Growth during 2018 also included acquired mortgage loans totaling approximately $214 million as a complement to our CRA lending.

Total deposits at December 31, 2018 were $10.7 billion, an increase of $1.7 billion, or 18.8%, from December 31, 2017, and an increase of $1.2 million, or 12.0%, from September 30, 2018. Average total deposits for the fourth quarter of 2018 were $10.0 billion, an increase of $1.4 billion, or 16.2%, from fourth quarter of 2017, and an increase of $548.9 million, or 5.8%, from third quarter of 2018.

Deposit increases were driven by growth in core customer deposits, with core deposits (total deposits excluding brokered deposits) at $9.7 billion as of December 31, 2018, up $1.5 billion, or 18.1%, from December 31, 2017, and up $839.3 million, or 9.5%, from September 30, 2018. The core deposit growth reflected across the board customer expansion as well as seasonal fourth quarter growth.  Core noninterest-bearing (“NIB”) deposits grew $211.3 million, or 9.4% since December 31, 2017, and $359.2 million, or 17.1% from the third quarter 2018.  Core interest-bearing (“IB”) deposits grew $1.3 billion, or 21.4% since December 31, 2017, and grew $505.1 million, or 7.5% from the prior quarter. State Bank funds on deposit with Cadence amounted to $311 million at December 31, 2018, and $96 million at September 30, 2018, allowing us to benefit partially from State Bank’s strong liquidity position in the fourth quarter of 2018 in advance of the merger.

 

Shareholders’ equity was $1.4 billion at December 31, 2018, an increase of $79.2 million from December 31, 2017, and an increase of $23.4 million from September 30, 2018.

 

Asset Quality:

Credit quality reflected continued overall credit stability in the loan portfolio, with net charge-offs as a percent of average loans remaining very low during the year at 0.06% for both 2018 and 2017.

 

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Total Revenue:

Total operating revenue⁽¹⁾ grew for the twelfth consecutive quarter, with the fourth quarter of 2018 at $124.2 million, up 9.3% from the same period in 2017 and up 1.7% from the linked quarter.  The revenue increases were primarily a result of strong loan and deposit growth during the period combined with relatively stable margins. For 2018, total operating revenue was $482.4 million compared to $426.1 million for 2017.

Net interest income reflected the continued growth in our overall business lines.  Net interest income for 2018 was $387.7 million, up 19% from $326.2 million in 2017.  Net interest income for the fourth quarter of 2018 was $103.1 million, an increase of $15.2 million, or 17.3%, from the same period in 2017, and an increase of $5.0 million, or 5.1%, from the third quarter of 2018.  Our fully tax-equivalent NIM was relatively stable throughout 2018, and down slightly in the fourth quarter of 2018 to 3.55% as compared to 3.59% for the fourth quarter of 2017 and 3.58% for the third quarter of 2018.  

Earning asset yields for the fourth quarter of 2018 were 4.95%, up 54 basis points from 4.41% in the fourth quarter of 2017, and up 15 basis points from 4.80% in the third quarter of 2018.

 

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Noninterest income for 2018 was $94.6 million for 2018 resulting in a decrease of 5.2% from $99.9 million for 2017 due to the sale of the insurance company assets and decrease in interchange fees due to commencement of the Durbin Amendment impact in 2018. Noninterest income for the fourth quarter of 2018 was $21.0 million, a decrease of $4.6 million, or 18.1%, from the same period of 2017 due to the insurance sale and Durbin impact, and a decrease of $3.0 million, or 12.4%, from the third quarter of 2018 due to variables in non-fee income revenues and valuations.  

 

Noninterest expense for 2018 was $258.3 million for 2018 compared to $233.4 million for 2017 resulting in an increase of 10.7%. Noninterest expense for the fourth quarter of 2018 was $72.7 million, an increase of $6.3 million, or 9.5%, from $66.4 million during the same period in 2017, and an increase of $11.5 million, or 18.7%, from $61.2 million for the third quarter of 2018.  Adjusted noninterest expenses⁽⁴⁾, which has been adjusted to reflect the impact of non-routine items⁽²⁾, was $237.5 million for 2018 compared to $230.1 million for 2017, or an increase of 3.2%. Adjusted noninterest expenses were $60.9 million for the fourth quarter of 2018, down 3.6% from $63.1 million for the fourth quarter of 2017 and up slightly from $59.0 million in the third quarter of 2018.  The changes in adjusted noninterest expenses during the periods are largely a result of lower intangible asset amortization and OREO costs during 2018, offset by modest increases in operating costs due to business and balance sheet growth.  

Non-routine expenses in the fourth quarter of 2018 totaled $11.8 million and included $2.0 million in State Bank merger related expenses and $9.8 million in non-routine, specially designated bonuses granted by the Board of Directors as a result of the transition of Cadence’s ownership from being 100% owned by Cadence Bancorp, LLC (“LLC”), the original top-tier holding company, to being 100% owned by the public, significantly enhancing the liquidity of Cadence’s stock. This transition was effected through a succession of events beginning with Cadence’s IPO in April, 2017, followed by a series of five successful secondary offerings, and concluding with a final distribution of stock and cash, dissolving the LLC in December 2018. Cadence (NYSE: CADE) is the surviving, publicly held holding company.

Non-routine expense in the fourth quarter of 2017 included $1.3 million of secondary offering expenses, and $2.0 million related to legal expenses associated with a legacy bank matter resolved in 2018.   Non-routine expense in the third quarter of 2018 included $2.0 million in secondary offering expenses and $0.2 million in merger expenses.

Our efficiency ratio⁽¹⁾ for 2018 was 53.6% compared to 54.8% for 2017. The efficiency ratio in the current quarter was impacted by the noted non-routine expenses, with the fourth quarter of 2018 at 58.6%, as compared to the fourth quarter of 2017 and third quarter of 2018 ratios of 58.4% and 50.2%, respectively.  Excluding non-routine revenues and expenses, the adjusted efficiency ratio⁽¹⁾ was 49.6% for 2018 and 54.1% for 2017. The adjusted efficiency ratio was 49.0% for the fourth quarter of 2018.  This compares to an adjusted efficiency ratio of 55.6% and 48.4% for the fourth quarter of 2017 and third quarter of 2018, respectively.

 

 

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Taxes:

The effective tax rate for the quarter ended December 31, 2018 was 24.9% as compared to 34.8% in the fourth quarter of 2017 (excluding the one-time tax charge related to tax reform) and 24.2% in the third quarter of 2018.   Our effective tax rate for 2018 was 21.3%.

Quarterly Dividend:

 

On January 22, 2019, the Board of Directors of Cadence declared a quarterly cash dividend in the amount of $0.175 per share of outstanding common stock, representing an annualized dividend of $0.70 per share.  The dividend will be paid on March 15, 2019 to holders of record of Cadence’s Class A common stock on March 1, 2019.  

Cadence Bancorp, LLC Activity:

The LLC was dissolved in December 2018. At that time, the final distribution of net assets to unit holders was completed.

 

Supplementary Financial Tables (Unaudited):

 

Supplementary Financial Tables (Unaudited) are included in this release following the customary disclosure information.  

 

Fourth Quarter 2018 Earnings Conference Call:

 

Cadence Bancorporation executive management will host a conference call to discuss fourth quarter 2018 results on Monday, January 28, 2019, at 12:00 p.m. CT / 1:00 p.m. ET.  Slides to be presented by management on the conference call can be viewed by visiting www.cadencebancorporation.com and selecting “Events & Presentations” then “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.  

For those unable to participate in the live presentation, a replay will be available through February 11, 2019.  To access the replay, please use the following numbers:

 

 

 

 

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Webcast Access:

 

A webcast of the conference call presented by management can be viewed by visiting www.cadencebancorporation.com and selecting “Events & Presentations” then “Event Calendar”. Slides are available under the “Presentations” tab.

 

About Cadence Bancorporation

 

Cadence Bancorporation (NYSE: CADE), headquartered in Houston, Texas, is a regional financial holding company with $12.7 billion in assets as of December 31, 2018, and the recently acquired State Bank franchise had assets as of $4.9 billion as of December 31, 2018.  Cadence 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, personal and business insurance, consumer banking, consumer loans, mortgages, home equity lines and loans, and credit cards.  Clients have access to leading-edge online and mobile solutions, interactive teller machines, and 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; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; the laws and regulations applicable to our business; our ability to achieve organic loan and deposit growth and the composition of such growth; increased competition in the financial services industry, nationally, regionally or locally; our ability to maintain our historical earnings trends; our ability to raise additional capital to implement our business plan; material weaknesses in our internal control over financial reporting; systems failures or interruptions involving our information technology and telecommunications systems or third-party servicers; the composition of our management team and our ability to attract and retain key personnel; the fiscal position of the U.S. federal government and the soundness of other financial institutions; the composition of our loan portfolio, including the identify of our borrowers and the concentration of loans in energy-related industries and in our specialized industries; the portion of our loan portfolio that is comprised of participations and shared national credits; the amount of nonperforming and classified assets we hold; the possibility that the anticipated benefits of the merger with State Bank are not realized when expected or at all,

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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 Cadence and State Bank do business; 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; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction. 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 earnings,” are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

 

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.  A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables (Table 7).

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Contact Information

 

Media contact:

Danielle Kernell

713-871-4051

[email protected]

 

Investor relations contact:

Valerie Toalson

713-871-4103 or 800-698-7878

[email protected]

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Table 1 - Selected Financial Data

 

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Table 1 (Continued) - Selected Financial Data

 

 

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Table 2 - Average Balances/Yield/Rates

 

 

 

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Table 3 – Loan Interest Income Detail

 

 

 

 

Table 4 - Allowance for Credit Losses

 

 

 

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Table 5 -Noninterest Income

 

 

Table 6 -Noninterest Expense

 

 

 

 

 

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Table 7 - Reconciliation of Non-GAAP Financial Measures

 

 

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Table 7 (Continued) – Reconciliation of Non-GAAP Measures

 

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Table 7 (Continued) – Reconciliation of Non-GAAP Measures

 

 

 

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ANALYST PRESENTATION February 7, 2017 Paul B. Murphy, Jr. Chairman and CEO Full Year and Fourth Quarter 2018 Financial Results January 28, 2019 Exhibit 99.2

Disclaimers 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; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; the laws and regulations applicable to our business; our ability to achieve organic loan and deposit growth and the composition of such growth; increased competition in the financial services industry, nationally, regionally or locally; our ability to maintain our historical earnings trends; our ability to raise additional capital to implement our business plan; material weaknesses in our internal control over financial reporting; systems failures or interruptions involving our information technology and telecommunications systems or third-party servicers; the composition of our management team and our ability to attract and retain key personnel; the fiscal position of the U.S. federal government and the soundness of other financial institutions; the composition of our loan portfolio, including the identify of our borrowers and the concentration of loans in energy-related industries and in our specialized industries; the portion of our loan portfolio that is comprised of participations and shared national credits; the amount of nonperforming and classified assets we hold; the possibility that the anticipated benefits of the merger with State Bank are not 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 Cadence and State Bank do business; 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; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction. 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. 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 earnings,” are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods. These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included in the Appendix.

Full Year 2018 Highlights $ in millions, except per share and unless otherwise indicated (1) Favorable (Unfavorable) comparison versus prior period. YoY represents 12/31/18 vs. 12/31/17. (2) Considered a non-GAAP financial measure. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix (3) NPA% represents total nonperforming assets (NPAs) to total loans and OREO and other NPAs Net income of $166.3 million, a 62% increase from 2017 and earnings per share of $1.97, up $0.72 or 58% from prior year. On an adjusted basis, net income and earnings per share were $174.8 million and $2.07, resulting in an Adj. ROAA of 1.52% (2) and Adj. ROATCE(2) of 16.54%. Total revenue of $482.4 million, up 13% from 2017, and a result of both strong loan growth and stable NIM. NIM (FTE) of 3.61%, up 4 bp from 2017, reflecting the balance sheet asset sensitivity to rate increases. Adjusted efficiency ratio of 49.6%(2), improved from 54.1% in 2017, reflecting ongoing focus on managing expense and expanding revenue, partially offset by declines in acquired loan accretion. NPA%(3) dropped from 0.9% a year ago to 0.8% at year-end 2018. Net charge-offs of $5.9 million for the year or 6 bp of average loans.

Earnings Net income of $32.3 million, compared to $14.7 million in 4Q17 and $47.1 million in 3Q18. Earnings per share of $0.39, ROAA of 1.05%; ROATCE(1) of 11.68%. Adjusted net income(1) and adjusted earnings per share(1) were $41.5 million and $0.50, respectively, which reflects the impact of non-routine items. Revenue Balance Sheet Efficiency Credit Quality Operating revenue(1) of $124.2 million, up 9% from 4Q17 & up 2% from 3Q18, driven largely by strong loan and deposit growth combined with relatively stable margins. Net Interest Margin (“NIM”) was down slightly in 4Q18 to 3.55% as compared to 3.59% for 4Q17 and 3.58% for 3Q18, resulting from strong balance sheet growth and inherent asset sensitivity which was partially offset by the impact of Fed fund rate increases on deposit costs. Total period end assets of $12.7 billion, up $1.8 billion or 16% from 4Q17. Loans of $10.1 billion, up $1.8 billion or 22% from 4Q17, reflecting healthy organic trends. Core Deposits(3) of $9.7 billion, increasing $1.5 billion or 18% from 4Q17; Total Deposits of $10.7 billion, up $1.7 billion or 19% from 4Q17. Adj. efficiency ratio of 49.0%(1), improved from 55.6% in the year ago quarter, reflecting steady revenue growth and continued focus on expense discipline. Noninterest expenses to average assets of 2.37% compared to 2.11% in 3Q18 and 2.51% in 4Q17. Continued overall credit stability in the loan portfolio, with net charge-offs of $0.2 million or 1 bp of average loans in 4Q18 compared to $3.1 million or 13 bps of average loans in 3Q18 and $2.7 million or 13 bps of average loans in 4Q17. Total NPAs to total loans, OREO and other NPAs of 0.8% as of 4Q18, relatively stable from 0.7% in 3Q18 and 0.9% in 4Q17. Allowance for credit losses increased to 0.94% of total loans at 4Q18. (1) Considered a non-GAAP financial measure. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix. (2) Presented on a fully taxable equivalent (FTE) basis using a tax rate of 21.0% (3) Core deposits are defined as total deposits excluding brokered deposits Fourth Quarter 2018 Highlights

Fourth Quarter 2018 Highlights $ in millions, except per share and unless otherwise indicated (1) Favorable (Unfavorable) comparison versus prior period. YoY represents 12/31/18 vs. 12/31/17. QoQ represents 12/31/18 vs. 9/30/18. (2) Considered a non-GAAP financial measure. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix (3) Annualized for the three month periods

Adjusted Net Income Key Profitability Metrics – Adjusted(1) Adjusted Earnings Per Share Adjusted Return on Tangible Equity $ in millions, unless otherwise indicated Adjusted Return on Assets (1) “Adjusted” figures are considered non-GAAP financial measures. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix

Historical Financial Performance 44% 62% 74% 17% 26% 74% 80% 84% 20% 16% 92% 8% 96% 4% (1) Considered a non-GAAP financial measure. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix 3.46% 3.71% 3.52% 3.59% 3.64% 3.66% 3.58% 3.55% Net Interest Margin (%)

Highlights Robust Loan Growth $ in millions, unless otherwise indicated Broad-Based Loan Generation Loans grew $1.8 billion or 22% to $10.1 billion from the year ago period. Increases in loans reflect our dynamic markets and expertise in energy, specialized, real estate, and general C&I. Cadence continues to be commercial-focused, reflecting 74% of total loans. Organic loan production and pipelines remain attractive with strong commercial customer activity. (1) Period End Financials. (2) Figures do not equal 100% due to rounding. (3) Favorable (Unfavorable) comparison versus prior period. YoY represents 12/31/18 vs. 12/31/17. QoQ represents 12/31/18 vs. 9/30/18. 4Q18 Loan Breakdown and Historical Comparison

Steady Credit Quality $ in millions, unless otherwise indicated Nonperforming Assets(1) Highlights Net Charge Offs (1) NPA% represents total nonperforming assets (NPAs) to total loans and OREO and other NPAs Net-charge offs of $0.2 million in 4Q18 or 1 bp of average loans (annualized) with no significant charge off or recoveries occurring in the quarter. 2018 annualized net-charge offs were 6 bps, primarily driven by one legacy E&P borrower. NPA%(1) was 0.8% compared to 0.9% in 4Q17 and 0.7% in 3Q18. Total nonperforming assets increased $12 million from prior year and increased $20 million during 4Q18 to $82 million due to two credits migrating to non-accrual. Originated portfolio delinquency (30+ days past due) of 14 bps compared to 17 bps in 3Q18 primarily due to the payoff of a past-due credit. Bank’s provision in 4Q18 of $8.4 million was driven by robust loan growth and increased qualitative adjustments related to the recent volatility in oil prices and certain economic factors, partially offset by a net reduction from credit migration. The allowance for credit losses was $94.4 million or 0.9% of total loans at 4Q18.

Highlights Targeted Core Deposit(2) Growth $ in millions, unless otherwise indicated Deposit Growth 4Q18 Deposit Breakdown and Comparison Core Deposit(2) growth remains a top strategic focus, increasing $1.5 billion or 18% from prior year and $837 million or 9% from linked quarter, driven by across the board customer expansion as well as seasonal fourth quarter growth. Noninterest bearing deposits grew $211.3 million, or 9.4% since 4Q17, and $359.2 million, or 17.1% from 3Q18. (1) Favorable (Unfavorable) comparison versus prior period. YoY represents 12/31/18 vs. 12/31/17. QoQ represents 12/31/18 vs. 9/30/18. (2) Core deposits are defined as total deposits excluding brokered deposits (3) Figures may not total due to rounding Deposit Composition (12/31/18)

Net Interest Margin $ in millions, unless otherwise indicated Highlights Net interest margin (tax equivalent) was 3.55% compared to 3.58% for 3Q18, impacted by higher cash balances and lower securities yields. Originated loan yields in 4Q18 were 5.20%, +12bp from prior quarter and +73bp from year ago period. Total loan yields increased to 5.32% from 4.72% a year ago as the total cost of funds for 4Q18 was 1.51% compared to 0.89% for 4Q17. Total cost of deposits was 1.34% for 4Q18 vs. 1.15% for the linked quarter, reflecting the six-month cumulative lag effect of the March, June and September Fed funds rate increases, consistent with our forecasted 55% total deposit beta. Inherent asset sensitivity with over 71% of portfolio floating rate loans, of which 75% is tied to one-month LIBOR, partially offset by $650 million in rate hedges, with $300 million maturing on 12/31/19. NIM, Yields & Costs (1) Figures may not total due to rounding Net Interest Margin (TE) Rollforward(1)

Interest Rate Sensitivity – Positively Positioned $ in millions, unless otherwise indicated Highlights (1) Based on December 31, 2018 interest rate sensitivity modeling of instantaneous rate shock over 1-12 months (2) Cycle-to-date reflects changes since 4Q15 and incorporates the nine (9) increases in the Fed Funds rate and one-month Libor since December 16, 2015 Cumulative Betas (Cycle-to-date) Quarterly Betas Asset sensitive balance sheet with a projected 7.3% increase in net interest income in +100bp scenario and up 14.0% in +200bp(1). The originated loan beta (including acquired non-credit impaired loans) was 79% cycle-to-date(2) demonstrating the interest-sensitivity of the loan portfolio. The 4Q18 originated loan beta of 49% was up 18bps from the prior quarter’s beta. The cycle-to-date(2) total deposit beta is 49% and we are currently forecasting 55% total deposit beta over the long-term in our internal Asset/Liability modeling. Total deposit beta was 93% in 4Q18, up 13bps from the prior quarter. The consecutive increases in the Fed Funds rate continues to impact the quarterly deposit beta on a lag basis. Loan Betas are calculated by dividing the change in loan yields by change in the average 1-month LIBOR and Deposit Betas are calculated by dividing the change in deposit costs by change in the average Fed Target rate.

Highlights Attractive Noninterest Income Platform Total Noninterest Income Composition(1) Total Noninterest Income Growth(3) $ in millions, unless otherwise indicated 4Q18 Total Noninterest Income: $ 21mm Total noninterest income of $21.0 million is down from $25.7 million a year ago, primarily due to the sale of Cadence Insurance and commencement of Durbin Amendment impact in 2018. These declines were partially offset by increase of $1.8 million YoY in credit related fees due to increased capital markets income and growth in loan originations. Credit fees represented 25% of total noninterest income in 4Q18. Assets Under Management(2) (1) Figures may not total due to rounding (2) Total Assets Under Management adjusted to exclude Escrow, Safekeeping & QSF (3) Cadence Insurance was sold to Baldwin Krystyn Sherman Partners in June 2018 Total Noninterest Income / Total Revenue 22.6 % 21.5 % 20.6 % 19.6 % 16.9 %

Adjusted Net Income(1) Adjusted Net Earnings(1) Growth & Expense Management Adjusted Noninterest Expense(1) Highlights $ in millions, unless otherwise indicated 2018 adjusted net income(1) was up 42% from 2017, representing strong core growth and operating leverage. The adjusted efficiency ratio(1) for 2018 of 49.6%, improved from 54.1% in 2017, reflecting strong growth in organic revenue combined with realization of capacity within the organization. Adjusted noninterest expenses were flat, largely a result of modest increases in operating costs due to business and balance sheet growth, offset by lower amortization and OREO costs during 2018. Adjusted Efficiency Ratio(1) (1) Considered a non-GAAP financial measure. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix + 42 % + 3 % - 456 bp

Appendix

Summary Balance Sheet – Period End $ in millions Note: Figures may not total due to rounding.

Summary Income Statement $ in millions (1) Considered a non-GAAP financial measure. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix Note: Figures may not total due to rounding.

Allowance for Credit Losses Rollforward $ in thousands Note: Figures may not total due to rounding.

Energy Loans Detail $ in millions Note: Figures may not total due to rounding. .

Non-GAAP Measures and Ratio Reconciliation $ in millions (1) Other non-routine expenses for 2Q18 were $1.1 million and included expenses related to the sale of the assets of our insurance company. This compares to $2.3 million and $2.0 million for 1Q18 and 4Q17, respectively, each representing legal costs associated with litigation related to a pre-acquisition matter of a legacy acquired bank that has been resolved. Note: Figures may not total due to rounding.

Non-GAAP Measures and Ratio Reconciliation, continued Note: Figures may not total due to rounding. (1) Annualized for the three month periods. $ in millions, unless otherwise indicated

Non-GAAP Measures and Ratio Reconciliation, continued $ in thousands, unless otherwise indicated (1) Annualized for the three month periods. (2) Other non-routine expenses for 2Q18 were $1.1 million and included expenses related to the sale of the assets of our insurance company. This compares to $2.3 million and $2.0 million for 1Q18 and 4Q17, respectively, each representing legal costs associated with litigation related to a pre-acquisition matter of a legacy acquired bank that has been resolved. Note: Figures may not total due to rounding.

State Bank Financial - Full Year 2018 Highlights $ in millions, except per share and unless otherwise indicated (1) Favorable (Unfavorable) comparison versus prior period. YoY represents 12/31/18 vs. 12/31/17. (2) Considered a non-GAAP financial measure. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix Cadence Bancorporation closed the acquisition of State Bank Financial on January 1, 2019 State Bank’s 2018 financial statements are unaudited Merger expenses in 2018 totaled $29.9 million Financial statements are historical and do not include any acquisition accounting adjustments

State Bank Financial Non-GAAP Measures $ in millions