Full Year and Fourth Quarter 2022

Financial Results

Presented January 31, 2023

Full Year 2022 Financial Highlights

● Net income available to common shareholders of $453.7 million, or $2.46 per diluted common share, and adjusted net

income available to common shareholders(1) of $542.3 million, or $2.94 adjusted earnings per common share,(1)

Earnings

reflecting strong business growth, stable credit, and continued operating leverage focus.

Highlights

● Return on average common shareholders' equity was 10.3% and the adjusted return on average tangible common

equity(1) was 19.3% for the year.

● Adjusted pre-taxpre-provision net revenue(1) of $722.3 million in 2022, or 1.52% of average assets for the year.

● Generated net organic loan growth of $3.5 billion for the year, a 12.9% increase from the prior year. Total deposits

Balance Sheet

declined $861.1 million, a 2.2% decline versus a year ago, reflecting the impact of inflation on our consumer accounts

and the decline of industry-wide deposits.

● Loan to deposit ratio of 77.9% and securities to assets of 24.5% at December 31, 2022.

● The stable credit environment combined with a continued disciplined credit risk management approach contributed to

strong asset quality metrics for the year.

Credit

● Total non-performing assets ("NPAs") decreased $70.7 million, a 37.8% decline from a year ago, as the NPAs to total

assets ratio was 0.24% in 2022 compared to 0.39% in 2021.

● Total recoveries offset total loans charged-off, resulting in net recoveries of $49 thousand in 2022. Allowance for

credit losses to total loans was 1.45% at December 31, 2022.

● Total revenue of $1.8 billion in 2022 up $660.5 million or 55.8% from 2021, reflecting the full year impact of the legacy

Revenue and

Cadence merger, increased loan production and higher interest rates.

● Non-interest revenue made up 26.7% of total revenue in 2022. A strong annual increase in insurance revenue and

Expenses

solid contribution from card revenues and wealth management offset a decline in mortgage revenue.

● The adjusted efficiency ratio(1) declined to 60.7% in 2022, from 61.6% in 2021.

● Total shareholders' equity was $4.3 billion at year-end and $5.5 billion excluding AOCI.(1)

Capital

● Tier 1 capital ratio of 10.7% and Total risk-based capital ratio of 12.8%, currently estimated as of December 31, 2022.

● Repurchased 6.1 million shares of common stock in 2022.

(1) Considered a non-GAAP financial measure. See "Non-GAAP Reconciliation" in the appendix.

2

Fourth Quarter 2022 Financial Highlights

● Net income available to common shareholders of $95.6 million, or $0.52 per diluted common share, and adjusted net

income available to common shareholders(1) of $142.9 million, or $0.78 adjusted earnings per common share,(1)

Earnings

reflecting strong business growth, stable credit, and continued operating leverage focus.

Highlights

● Return on average tangible common equity(1) was 15.4% and the adjusted return on average tangible common

equity(1) was 23.0% for the quarter.

● Adjusted pre-taxpre-provision net revenue(1) of $195.5 million in 4Q22, or 1.62% of average assets.

● Generated net organic loan growth of $1.1 billion for the fourth quarter, or 14.3% on an annualized basis, while total

Balance Sheet

deposits were flat quarter over quarter.

● Loan to deposit ratio of 77.9% and securities to assets of 24.5% at December 31, 2022.

● Credit quality metrics for the fourth quarter of 2022 reflect stability in overall credit quality, highlighted by net

recoveries for the quarter (sixth quarter of net recoveries in the prior seven quarters), a decline in total non-

performing assets, and a modest provision for credit losses necessary to support continued growth in loans and

Credit

unfunded commitments.

● Total non-performing assets declined $10.4 million, or 8.2%, in the fourth quarter from $126.5 million at September

30, 2022 to $116.1 million at December 31, 2022.

● Net recoveries in 4Q22 were $5.0 million, or 0.07% of net loans and leases on an annualized basis.

● Total revenue of $474.2 million for the fourth quarter of 2022, compared with $375.1 million for the fourth quarter of

Revenue and

2021 and $479.8 million for the third quarter of 2022.

● Noninterest revenue was $114.9 million for the fourth quarter of 2022, compared with $103.9 million for the fourth

Expenses

quarter of 2021 and $124.5 million for the third quarter of 2022.

● The adjusted efficiency ratio(1) declined to 58.7% in 4Q22, from 60.3% in 3Q22 and 63.5% in 4Q21.

● Total shareholders' equity was $4.3 billion, and $5.5 billion excluding AOCI(1) as of December 31, 2022.

Capital

● Tier 1 capital ratio of 10.7% and total risk-based capital ratio of 12.8%, currently estimated as of December 31, 2022.

● Announced 10 million share repurchase authorization of common stock for the 2023 stock buyback program.

(1) Considered a non-GAAP financial measure. See "Non-GAAP Reconciliation" in the appendix.

3

Summary Financial Results

$ in millions, unless otherwise indicated

Three Months/Period Ended

Year Ended

% Change

12/31/22

9/30/22

(QoQ)

12/31/22

12/31/21

Net interest revenue

$

359.4

$

355.4

1.1

%

$

1,351.3

$

805.7

Provision for credit losses

6.0

0.0

NM

7.0

138.1

Noninterest revenue

114.9

124.5

(7.7)

493.0

378.2

Noninterest expense

340.7

319.7

6.5

1,238.0

798.9

Income before income taxes

127.6

160.1

(20.3)

599.4

246.9

Income tax expense

29.6

36.7

(19.3)

136.1

51.8

Net income

$

97.9

$

123.4

(20.6) %

$

463.2

$

195.2

Less: Preferred dividends

2.4

2.4

-

9.5

9.5

Net income available to common shareholders

$

95.6

$

121.0

(21.0) %

$

453.7

$

185.7

Plus: Non-routine items, net of tax

47.3

22.6

109.0

88.5

162.9

Adjusted net income available to common shareholders(1)

$

142.9

$

143.7

(0.6) %

$

542.3

$

348.5

Diluted earnings per share

$

0.52

$

0.66

(21.2) %

$

2.46

$

1.54

Adjusted earnings per share(1)

$

0.78

$

0.78

-

$

2.94

$

2.89

Return on average assets

0.81%

1.03%

(21.4) %

0.97%

0.65%

Return on average common shareholders' equity

9.36%

11.06%

(15.4)

10.30%

5.86%

Adjusted return on average assets(1)

1.21%

1.22%

(0.8) %

1.16%

1.19%

Adjusted return on average tangible common equity(1)

23.04%

20.66%

11.5

19.27%

16.26%

Adjusted pre-taxpre-provision net revenue (PPNR)(1)

$

195.5

$

189.8

3.0

%

$

722.3

$

453.0

Adjusted PPNR to total average assets(1)

1.62%

1.58%

2.5

1.52%

1.51%

Tangible book value per share, including AOCI(1)

$

13.99

$

13.25

5.6

%

$

13.99

$

18.45

Tangible book value per share, excluding AOCI(1)

$

20.69

$

20.36

1.6

%

$

20.69

$

19.19

(1) Considered a non-GAAP financial measure. See "Non-GAAP Reconciliation" in the appendix.

4

Net Interest Revenue / Net Interest Margin

$ in millions, unless otherwise indicated

NIM, Yields & Costs

5.54%

4.82%

4.34%

4.23%

4.29%

2.92%

3.06%

3.28%

3.33%

2.90%

1.30%

1.42%

1.49%

1.60%

1.20%

0.35%

0.76%

0.17%

0.15%

0.17%

4Q21

1Q22

2Q22

3Q22

4Q22

Yield on Loans

Yield on Securities (FTE)

NIM (FTE)

Cost of Total Deposits

Interest Revenue & Interest Expense

$474

$406

HIGHLIGHTS

• Net interest margin increased 5 bp in the fourth quarter

of 2022 to 3.33% reflecting continued improvement in

earning asset yields which outpaced acceleration in rates

on deposits and other funding. Rising rates and asset mix

shifts (as runoff in the securities book is reinvested in

loans) positively impacting asset yields.

• Yields on net loans, loans held for sale, and leases

excluding accretion, were up 71 bp to 5.41% for the

fourth quarter of 2022 compared with 4.70% for the

third quarter of 2022.

• The average cost of deposits increased to 0.76% for the

fourth quarter of 2022 compared to 0.35% in the prior

quarter, and 0.17% in the year ago quarter, reflecting

rate increases and continued competition.

• For the fourth quarter of 2022, the yield on total interest

earning assets was 4.38% and total cost of interest

$332 $350

$291

$19 $20 $25

$114

$50

bearing liabilities was 1.54%. Interest bearing liabilities to

interest earning assets was 68.4% at December 31, 2022.

• Total interest revenue of $474 million in 4Q22 included

$9.2 million in accretion income on acquired loans

compared to $8.1 million in the third quarter of 2022.

Excluding the impact of accretion, the linked quarter net

interest margin increased by 3 basis points.

4Q21

1Q22

2Q22

3Q22

4Q22

Interest Revenue

Interest Expense

5

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Cadence Bank published this content on 30 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 January 2023 22:06:01 UTC.