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): July 22, 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):

 

 

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

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.  ☐

 

 

---

 

 

On July 22, 2019, Cadence Bancorporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended June 30, 2019. 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 July 22, 2019 at 12:00 p.m. CT / 1:00 p.m. ET to discuss its second quarter 2019 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

 

 

 

 

 

 

---

 

 

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

SECOND QUARTER 2019 FINANCIAL RESULTS

 

HOUSTON (July 22, 2019) – Cadence Bancorporation (NYSE: CADE) (“Cadence”) today announced net income for the quarter ended June 30, 2019 of $48.3 million, or $0.37 per diluted common share (“per share”), compared to $48.0 million or $0.57 per share for the quarter ended June 30, 2018, and $58.2 million or $0.44 per share for the quarter ended March 31, 2019. The first and second quarters of 2019 included merger related expenses of $22.0 million or $0.13 per share and $4.6 million or $0.03 per share, respectively.

“The results for second quarter of 2019 reflect continued organic loan and deposit growth and solid fundamental trends, that were unfortunately negatively impacted by higher credit costs including net charge-offs of $18.6 million and loan provisions of $28.9 million.  While the credit results are certainly disappointing, there have been many positive developments this year that add further strength to our platform.  As a reminder, in the first quarter of 2019, we meaningfully diversified assets and deposits with the State Bank & Trust (“State Bank”) merger and protected our interest income with the addition of a well-timed interest rate collar.  This quarter, we sold non-strategic acquired loans and grew originated loans 4.0% year-to-date, reflecting an intentional moderation of growth compared to prior years.  Additionally, we further lowered our use of wholesale funding and enhanced our capital base while lowering ongoing debt as we refinanced senior debt with sub-debt on attractive terms.  Our tangible book value per share increased over 7% from last quarter to $14.21.  The State Bank merger integration continues to progress well on all fronts, and we are encouraged by our prospects to grow this core business throughout Georgia.  We continue to focus on building our quality growth throughout our regional markets, while investing in scalable infrastructure to support ongoing customer service and profitable growth.  Looking forward, we believe the cumulative effect of these actions position Cadence well for future success,” stated Paul B. Murphy, Jr., Chairman and Chief Executive Officer of Cadence Bancorporation.

Adjusted Performance Metrics:

 

 

 

 

 

  

1

 

---

                                                                                                                    

Balance Sheet:

We continued to generate quality loan and deposit growth throughout our footprint during the quarter, bringing total assets to $17.5 billion as of June 30, 2019, an increase of $51.1 million or 0.3%, from March 31, 2019, and an increase of $6.2 billion or 54.8%, from June 30, 2018.  The year-over-year increases throughout this release are impacted by the acquisition of State Bank which added $4.8 billion in total assets on January 1, 2019, and the linked quarter increase was softened by $164 million of loan sales as well as a $70 million decline in the securities portfolio due to portfolio rebalancing during the current quarter.

Loans. Loan balances for the second quarter of 2019 reflected conservative organic growth, with period-end balances lessened by $164 million of loan sales aimed at reducing certain risk profiles.  

Loans at June 30, 2019 totaled $13.6 billion as compared to $9.0 billion and $13.6 billion at June 30, 2018 and March 31, 2019, respectively. Loans increased $1.5 billion or 16.4% since June 30, 2018, excluding the impact of the loans acquired from State Bank, and were essentially unchanged from March 31, 2019.  The second quarter included a sale of certain equipment finance loans acquired through the State Bank merger, reducing loans by $130 million, as well as $34 million in non-core mortgage sales. The sales resulted in a gain of $1.9 million during the quarter.  Excluding the impact of these sales, total loans grew $169 million or 1.0% during the second quarter of 2019.   On a year-to-date basis, originated loans grew 4.0%, as compared to 8.8% year-to-date for 2018, reflecting management’s intentional efforts to moderate loan growth in 2019.  The lower loan growth also reflects intentional movement away from targeted lending sectors and profiles.

Securities. Investment securities for the second quarter of 2019 declined modestly due to routine portfolio rebalancing that realized a net gain in the current quarter of $938 million.   Investment securities at June 30, 2019 were $1.7 billion as compared to $1.0 billion at June 30, 2018 and $1.9 billion at March 31, 2019.

Funding. Our funding activities reflected strong performance this quarter with meaningful core deposits growth, further decline in period-end brokered deposits and wholesale funds, and successful execution of a subordinated debt offering allowing us to lower debt and interest costs while adding to our capital base.

Deposits at June 30, 2019 totaled $14.5 billion as compared to $9.3 billion and $14.2 billion at June 30, 2018 and March 31, 2019, respectively. Excluding the impact of deposits assumed from State Bank, deposits increased by $1.1 billion or 11.4% from June 30, 2018. The year-over-year deposit increase was driven by growth in core customer deposits (total deposits excluding brokered deposits) of $1.0 billion, or 12.0%, from June 30, 2018. The linked quarter increase included an increase of $276 million, or 2.1% in core deposits, while brokered deposits were $868 million or 6.0% of total deposits at June 30, 2019.  Additionally, on July 3, 2019, $228 million in brokered deposits matured that we don’t currently anticipate replacing in the latter half of 2019.

Total borrowings at were $376 million at June 30, 2019 down from $471 million at June 30, 2018 and $717 million at March 31, 2019.  The linked quarter decline was largely due to lower FHLB borrowings as a result of increased core deposits. Additionally, in June 2019, we paid off $145 million of senior debt yielding 4.875% with cash and proceeds from an $85 million subordinated debt offering.   The subordinated debt has a ten-year maturity, is fixed rate for five years at 4.75% and qualifies for Tier 2 capital at the holding company.

Shareholders’ equity reflected a 5.4% growth during the second quarter of 2019 driven by increases in the value of our interest rate collar based on lower interest rate expectations, as well as net earnings for the quarter.   Shareholder’s equity was $2.4 billion at June 30, 2019, an increase of $1.0 billion from June 30, 2018, and an increase of $123.2 million from March 31, 2019.

 

2

 

---

                                                                                                                    

Asset Quality:

Credit quality.  Credit costs were elevated during the second quarter of 2019 as we experienced deterioration in certain credits resulting in charge-offs and increased loan provisions.

Total Revenue:

This quarter’s total operating revenue reflected stable underlying revenue driven by flat earning assets that, as compared to the linked quarter, was negatively impacted by timing of hedge income and lower accretion on acquired loans.

Total operating revenue⁽¹⁾ for the second quarter of 2019 was $192.5 million, up 60.3% from the same period in 2018 and down 3.7% from the linked quarter. On a year-to-date basis, operating revenue for the first half of 2019 was $392.5 million, up 66.1% from the same period in 2018.   The year over year revenue increase reflects strong loan growth during the period as well as the impact of the State Bank acquisition.  

 

3

 

---

                                                                                                                    

 

Net interest income for the 2019 second quarter compared to the linked quarter reflected solid growth in both average loans and deposits with an expected modest increase in core deposit costs combined with a slightly softer originated loan yield (excluding hedge impacts).   The margin was also impacted by timing of income related to our hedges and accretion.

Net interest income for the second quarter of 2019 was $160.8 million, an increase of $65.4 million or 68.6%, from the same period in 2018, and a decrease of $8.5 million or 5.0% from the first quarter of 2019.

The year-over-year increase in NIM reflects the merger with State Bank and the related positive impact on our funding costs, loan yields and accretion income.  The NIM decline in the second quarter of 2019 as compared to the linked quarter was driven primarily by:

Average earning assets for the second quarter of 2019 were $16.3 billion, an increase of $5.8 billion from the prior year’s quarter from both organic and acquired growth, and a decline of $0.1 billion from the linked quarter due to increases in average loans offset by lower short-term investments in the current quarter.

Originated Loans and Hedge Income:

Acquired Loans:

4

 

---

                                                                                                                    

  

    Cost of Funds:

Noninterest income for the second quarter of 2019 was $31.7 million, an increase of $7.1 million or 28.6% from the same period of 2018 due to broader growth and the State Bank merger, and an increase of $1.1 million or 3.5% over the linked quarter.

 

Noninterest expense for the second quarter of 2019 declined compared to the linked quarter as merger costs materially declined during the second quarter, partially offset by an expected increase in broader operating costs associated with a larger company post-State Bank integration.  

5

 

---

                                                                                                                    

 

Noninterest expense for the second quarter of 2019 was $100.5 million, an increase of $38.1 million or 61.0% from $62.4 million for the same period in 2018, and a decrease of $12.9 million or 11.4% from $113.4 million for the first quarter of 2019. The linked quarter decrease resulted primarily from a decrease of $17.4 million in merger related expenses, partially offset by an increase of $4.5 million in operating expense.

 

The linked quarter decrease resulted from:

Adjusted noninterest expenses⁽²⁾, which exclude the impact of non-routine items⁽²⁾, were $96.0 million for the second quarter of 2019, up $36.6 million or 61.6% from $59.4 million for the second quarter of 2018 and up $4.5 million or 5.0% from $91.4 million for the first quarter of 2019. Non-routine expenses for the second quarter and first quarter of 2019 consisted of $4.6 million and $22.0 million, respectively, in State Bank merger related expenses. For the second quarter of 2018, non-routine expenses included $1.2 million in secondary offering expenses, $0.8 million in merger related expenses, and $1.1 million in other expenses.

Our efficiency ratio⁽¹⁾ for the second quarter of 2019 reflects lower operating revenue combined with increases in quarterly operating expenses.   The second quarter of 2019 efficiency ratio was 52.2% compared to 52.0% for the second quarter of 2018 and 56.7% for the first quarter of 2019. The efficiency ratio in all quarters was impacted by the noted non-routine expenses.  Excluding non-routine revenues and expenses, the adjusted efficiency ratio⁽¹⁾ was 50.0%, 50.7%, and 45.7% for the second quarter of 2019, second quarter of 2018, and first quarter of 2019, respectively.

Taxes:

The effective tax rate for the quarter ended June 30, 2019, was 23.3% compared to 22.7% for the quarter ended March 31, 2019, and 14.9% for the quarter ended June 30, 2018.  The full year 2019 effective tax rate is currently estimated as 23.1%.

 

Supplementary Financial Tables (Unaudited):

 

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

 

 

 

 

6

 

---

                                                                                                                    

 

Second Quarter 2019 Earnings Conference Call:

 

Cadence Bancorporation executive management will host a conference call to discuss second quarter 2019 results on Monday, July 22, 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 August 5, 2019.  To access the replay, please use the following numbers:

 

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 $17.5 billion in assets as of June 30, 2019. 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, payroll and insurance services, consumer banking, consumer loans, mortgages, home equity lines and loans, and credit cards. Clients have access to leading-edge online and mobile solutions, interactive teller machines, and more than 55,000 ATMs. The Cadence team of 1,800 associates is committed to exceeding customer expectations and helping their clients succeed financially.

 

7

 

---

                                                                                                                    

 

Cautionary Statement Regarding Forward-Looking Information

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our results of operations, financial condition and financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are

inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict.

Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.  Such factors include, without limitation, the “Risk Factors” referenced in our Registration Statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”) on May 21, 2018, and our Registration Statement on Form S-4 filed with the SEC on July 20, 2018, other risks and uncertainties listed from time to time in our reports and documents filed with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and the following factors: business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic market areas; economic, market, operational, liquidity, credit and interest rate risks associated with our business; deteriorating asset quality and higher loan charge-offs; the laws and regulations applicable to our business; our ability to achieve organic loan and deposit growth and the composition of such growth; increased competition in the financial services industry, nationally, regionally or locally; our ability to maintain our historical earnings trends; our ability to raise additional capital to implement our business plan; material weaknesses in our internal control over financial reporting; systems failures or interruptions involving our information technology and telecommunications systems or third-party servicers; the composition of our management team and our ability to attract and retain key personnel; the fiscal position of the U.S. federal government and the soundness of other financial institutions; the composition of our loan portfolio, including the identity of our borrowers and the concentration of loans in energy-related industries and in our specialized industries; the portion of our loan portfolio that is comprised of participations and shared national credits; the amount of nonperforming and classified assets we hold; the 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. 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

8

 

---

                                                                                                                    

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).

###

Contact Information

 

Cadence Bancorporation

 

Media contact:

Danielle Kernell

713-871-4051

[email protected]

 

Investor relations contact:

Valerie Toalson

713-871-4103 or 800-698-7878

[email protected]

9

 

---

                                                                                                                    

Table 1 - Selected Financial Data

 

 

10

 

---

                                                                                                                    

 

 

Table 1 (Continued) - Selected Financial Data

 

 

11

 

---

                                                                                                                    

 

 

Table 2 - Average Balances/Yield/Rates

 

 

 

12

 

---

                                                                                                                    

 

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

 

 

 

 

 

 

13

 

---

                                                                                                                    

 

 

Table 3 – Loan Interest Income Detail

 

 

 

 

 

Table 4 - Allowance for Credit Losses

 

14

 

---

                                                                                                                    

 

Table 5 -Noninterest Income

 

 

 

 

Table 6 -Noninterest Expense

 

 

 

15

 

---

                                                                                                                    

Table 7 - Reconciliation of Non-GAAP Financial Measures

 

 

16

 

---

                                                                                                                    

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

17

 

ANALYST PRESENTATION February 7, 2017 Paul B. Murphy, Jr. Chairman and CEO Second Quarter 2019 Financial Results July 22, 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. 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.

Earnings Net income of $48.3 million, compared to $48.0 million in 2Q18 and $58.2 million in 1Q19. Earnings per share of $0.37, ROAA of 1.10%; ROATCE(1) of 12.23%. Adjusted net income(1) and adjusted earnings per share(1) were $51.5 million and $0.40, respectively, which reflects the impact of non-routine items, primarily merger expenses. Revenue Balance Sheet Efficiency Credit Quality Operating revenue(1) of $192.5 million, up 60.3% from 2Q18 & down 3.7% from 1Q19, reflecting strong organic growth during the period as well as the impact of the State Bank acquisition. Net Interest Income of $160.8 million, up 69% from 2Q18 & down 5% from 1Q19, reflected State Bank assets and solid fundamental growth. Modestly higher core deposit costs and hedge timing and lower accretion impacted the quarter’s NIM of 3.97%. Total period end assets of $17.5 billion, up $6.2 billion or 55% from 2Q18 and up $51.1 million or 0.3% from 1Q19, reflecting the State Bank acquisition in 1Q19 and loan sales in 2Q19. Loans of $13.6 billion and total deposits of $14.5 billion. Loan/Deposit ratio of 94% vs. 96% QoQ. Tangible common equity was $1.8 billion, up 7.4% from 1Q19, or a 10.8% tangible common equity ratio at 2Q19. Adj. noninterest expenses(1) were $96.0 million in 2Q19, which exclude $4.6 million of merger costs. Adj. efficiency ratio of 49.97%(1), improved from 50.74% in the year ago quarter, reflecting steady revenue growth and continued focus on expense discipline. Targeted charge-offs and credit resolutions resulted in $18.6 million of net charge-offs or 54 bps of average loans in 2Q19, while adding $28.9 million to the provision during the quarter. Total NPAs to total loans, OREO and other NPAs of 0.85% as of 2Q19, up from 0.63% in both 1Q19 and 2Q18. Allowance for credit losses was 0.85% of total loans compared to 0.77% in 1Q19. (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 Second Quarter 2019 Highlights

Second Quarter 2019 Highlights $ in millions, except per share and unless otherwise indicated (1) Favorable (Unfavorable) comparison versus prior period. YoY represents 6/30/19 vs. 6/30/18. QoQ represents 6/30/19 vs. 3/31/19. (2) Considered a non-GAAP financial measure. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix (3) Annualized for the three month periods

Net Income ($mm) Key Profitability Metrics Earnings Per Share Return on Tangible Equity Return on Assets (1) “Adjusted” figures are considered non-GAAP financial measures. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix GAAP Reporting Basis Adjusted ("Non-GAAP")(1)

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 3.52% 3.59% 3.64% 3.66% 3.58% 3.55% 4.21% 3.97% Net Interest Margin (%)

Highlights Loan Portfolio Metrics $ in millions, unless otherwise indicated Broad-Based Loan Generation Total loans of $13.6 billion were flat QoQ, reflecting intentional efforts to moderate loan growth in 2019 and the impact of ~$160 million in loan sales. New business development remain healthy, as our experienced bankers across the regional markets remain focused on selectively growing customer relationships. (1) Period End Financials. (2) Figures do not equal 100% due to rounding. (3) Favorable (Unfavorable) comparison versus prior period. YoY represents 6/30/19 vs. 6/30/18. QoQ represents 6/30/19 vs. 3/31/19. 2Q19 Loan Breakdown and Historical Comparison

Credit Quality $ in millions, unless otherwise indicated Nonperforming Assets(1) Highlights Allowance for Credit Losses Rollforward (1) NPA% represents total nonperforming assets (NPAs) to total loans and OREO and other NPAs NPA%(1) increased to 0.85% compared to 0.63% in both 1Q18 and 0.80% in 4Q18. Total nonperforming assets increased $30 million from the prior quarter, primarily from the addition of three loans, and increased $59 million from the prior year period. Originated portfolio delinquency (30+ days past due) remained relatively flat at 22 bps compared to 23 bps in 1Q19. Net-charge offs of $18.6 million during the quarter were predominantly related to four credits, all previously designated as impaired. The Net Charge-Offs to Average Loans ratio on a quarterly basis has averaged 18 bps over the last four quarters. Provision in 2Q19 of $28.9 million was driven by charge offs, increases in reserves on specifically reviewed credits, and credit migration, primarily in C&I. The allowance for credit losses was $115.3 million or 0.85% of total loans at 2Q19, up from 0.77% in 1Q19. The allowance for credit losses for originated loans was $105.4 million or 1.04% of total loans at 2Q19, up from 0.98% in 1Q19.

Highlights Core Deposit(2) Growth $ in millions, unless otherwise indicated Deposit Growth 2Q19 Deposit Breakdown and Comparison Core Deposits(2) increased $276 million, or 2% QoQ, while brokered deposits declined to 6% of total deposits at the end of 2Q19. On July 3, 2019, $228 million in brokered deposits matured without renewal. Total deposits increased by $1.1 billion or 11% YoY excluding the impact of the State Bank merger. Noninterest bearing deposits increased $87 million or 3% since 1Q19 and now make up 23% of total deposits. (1) Favorable (Unfavorable) comparison versus prior period. YoY represents 6/30/19 vs. 6/30/18. QoQ represents 6/30/19 vs. 3/31/19. (2) Core deposits are defined as total deposits excluding brokered deposits (3) Figures may not total due to rounding Core Deposit Geography (6/30/19)(3)

Net Interest Margin $ in millions, unless otherwise indicated Highlights (1) Acquired non-credit impaired (“ANCI”) loans NIM, Yields & Costs Net interest margin for 2Q19 vs. 1Q19 reflected solid growth in both average loans and deposits with an expected modest increase in core deposit costs combined with a slightly softer originated loan yield. The NIM was also negatively impacted from timing related to our hedges and changes in acquired loan accretion. Net interest margin (tax equivalent) was 3.97% vs. 4.21% for 1Q19. The decline in NIM during 2Q19 includes a timing adjustment for the collar income and lower acquired loan accretion that combined drove 14bp of the decline. Originated loan yields excluding hedge impact, were 5.56% in 2Q19 compared 5.60% in 1Q19. Approx. 69% of the total loan portfolio is floating at 2Q19. Total cost of deposits was 1.39% for 2Q19 up 9bp from 1Q19. 2Q19 deposit costs were impacted primarily by increases in both interest-bearing demand and time deposits, as well as seasonal brokered deposits averages. Total earning asset yields increased 60 bp from the year ago period to 5.35% as the total cost of interest bearing liabilities increased 42 bp to 1.91% year over year. In a -100bp interest rate scenario, net interest income is modeled to decline 1%. Net Interest Margin (TE) Rollforward(1)

Highlights Attractive Noninterest Income Platform Total Noninterest Income Composition(1) Total Noninterest Income Growth(3) $ in millions, unless otherwise indicated 2Q19 Total Noninterest Income: $ 31.7mm Total noninterest income of $31.7 million, up $7.1 million or 28.6% from 2Q18, and an increase of $1.1 million or 3.5% from 1Q19. Noninterest income as a percent of operating revenue was 16.5% for 2Q19 and includes the addition of State Bank and new revenue sources. The broad diversification in noninterest income is highlighted by 18% investment advisory fees, 17% credit fees, 15% deposit service fees, and 14% trust services. 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 / Operating Revenue 20.6 % 19.6 % 16.9 % 15.3 % 16.5 %

Expense Management & Operating Leverage Noninterest Expense ($mm) Highlights 2Q19 adjusted net income(1) excluding non-routine income and expenses primarily related to the merger, was $51.5 million for the second quarter of 2019, an increase of $9.3 million compared to 2Q18 due to organic growth & State Bank merger. The adjusted efficiency ratio(1) of 50.0% for 2Q19 is indicative of strong operating efficiency throughout the organization. The combination with State Bank brings further opportunity to leverage balance sheet growth. Efficiency Ratio(1) (1) Considered a non-GAAP financial measure. See “Non-GAAP Measures and Ratio Reconciliation” in the appendix GAAP Reporting Basis Adjusted ("Non-GAAP")(1) Net Income ($mm)

Appendix

Net Interest Income Dynamics $ in millions, unless otherwise indicated (1) Favorable (Unfavorable) comparison versus prior period.

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.

Components of Net Income $ in millions Note: Figures may not total due to rounding.

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

Capital Ratios

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 for 1Q18, 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 millions, 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 for 1Q18, 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.