HOUSTON and TUPELO, Miss., July 22, 2024 /PRNewswire/ -- Cadence Bank (NYSE:CADE) (the Company), today announced financial results for the quarter ended June 30, 2024. Highlights for the second quarter of 2024 included: Reported quarterly net income available to common shareholders of $135.1 million, or $0.73 per diluted common share, and adjusted net income from continuing operations available to common shareholders,(1) which excludes non-routine income and expenses,(2) of $127.9 million, or $0.69 per diluted common share, which represents an increase of $0.07 per share, or 11.3%, compared to the first quarter of 2024 adjusted net income from continuing operations available to common shareholders.(1) Achieved record adjusted pre-tax pre-provision net revenue from continuing operations (PPNR)(1) of $190.9 million, up $16.7 million from the prior quarter, and up $31.4 million from the same quarter one year ago. Year-to-date, adjusted PPNR(1) is $365.1 million, up $35.9 million or 11.0%, from the same period in 2023. Generated net organic loan growth of $430.2 million, or 5.3% on an annualized basis, for the second quarter of 2024. Year-to-date, net loan growth was $815.8 million or 5.0% annualized. Grew core customer deposits, which exclude brokered deposits and public funds, by $237.4 million, or 2.9% on an annualized basis. Year-to-date, core customer deposits have grown $637.2 or 4.0% annualized. Continued improvement in net interest margin by 5 basis points to 3.27%, benefiting from continued loan growth, stabilized funding costs, and upward repricing of earning assets. Experienced stable credit quality reflected by a flat linked quarter provision for credit losses and relatively stable net charge-offs as well as slight reductions in both nonperforming and criticized/classified loan levels. Materially enhanced operating efficiency reflected in an improvement in the adjusted efficiency ratio(1) of 339 basis points to 56.7%. Repurchased 256,033 shares of Company common stock during the second quarter at a weighted average price of $26.97 per share; regulatory capital remained strong with Common Equity Tier 1 Capital of 11.9% and Total Capital of 14.2%. "We are pleased to report another quarter of improved financial performance in virtually every aspect of our business," remarked Dan Rollins, Chairman and Chief Executive Officer of Cadence Bank. "Our second quarter results reflect steady loan and core customer deposit growth combined with stable funding costs, which led to additional improvement in our net interest margin. Importantly, our credit quality metrics remained stable, reflected by a flat linked quarter provision for credit losses and slight improvement in our past due loans as well as criticized and classified loans. Finally, our efforts to improve efficiency continue to be evident in the linked quarter decline in adjusted noninterest expense and continued improvement in our adjusted efficiency ratio to 56.7% in the second quarter." Earnings Summary All adjusted financial results discussed herein are adjusted results from continuing operations.(3) For the second quarter of 2024, the Company reported net income available to common shareholders of $135.1 million, or $0.73 per diluted common share, up from $111.7 million, or $0.61 per diluted common share, for the second quarter of 2023 and $114.6 million, or $0.62 per diluted common share, for the first quarter of 2024. Adjusted net income available to common shareholders from continuing operations(1) increased to $127.9 million, or $0.69 per diluted common share, for the second quarter of 2024, compared with $110.1 million, or $0.60 per diluted common share, for the second quarter of 2023 and $114.4 million, or $0.62 per diluted common share, for the first quarter of 2024. Additionally, the Company reported adjusted PPNR from continuing operations(1) of $190.9 million, or 1.59% of average assets on an annualized basis, for the second quarter of 2024, an increase of $16.7 million, or 9.6%, compared to the first quarter of 2024, and an increase of $31.4 million or 19.7% compared to the same quarter of 2023.  These notable increases in financial performance were driven by improved operating efficiency, improved net interest margin, and continued improvement in earning asset mix. Net Interest Revenue Net interest revenue, driven by continued improvement in net interest margin, increased to $356.3 million for the second quarter of 2024, compared to $333.5 million for the second quarter of 2023 and $353.9 million for the first quarter of 2024. The net interest margin (fully taxable equivalent) improved to 3.27% for the second quarter of 2024, compared with 3.03% for the second quarter of 2023 and 3.22% for the first quarter of 2024. Net interest revenue increased $2.4 million, or 0.7%, compared to the first quarter of 2024 as the Company continues to benefit from slowing pressure on funding costs as well as an improved earning asset mix resulting from continued deployment of excess liquidity and net loan growth.  Purchase accounting accretion revenue was $3.0 million and $3.5 million for the second quarter of 2024 and the first quarter of 2024, respectively. Average earning assets declined slightly to $43.9 billion, as growth in average loans was offset by lower average investment securities and excess cash. Yield on net loans, loans held for sale, and leases excluding accretion, was 6.56% for the second quarter of 2024, up 10 basis points from 6.46% for the first quarter of 2024. Investment securities yielded 3.19% in the second quarter of 2024, up 6 basis points from 3.13% in the first quarter of 2024, and up 106 basis points from 2.13% in the second quarter of 2023, reflective of the securities restructurings that occurred in 2023. As a result, the yield on total interest earning assets increased to 5.90% for the second quarter of 2024, up 10 basis points from 5.80% for the first quarter of 2024. The average cost of total deposits was 2.53% for the second quarter of 2024, up 8 basis points compared to the first quarter of 2024. The second quarter increase in total deposit costs was the lowest quarterly increase cycle-to-date. Total interest-bearing liabilities cost was 3.45% for the second quarter of 2024 compared to 3.40% for the first quarter of 2024. Balance Sheet Activity Loans and leases, net of unearned income, increased $430.2 million during the second quarter, or 5.3% annualized to $33.3 billion.  The loan growth for the quarter was in the commercial and industrial, income-producing commercial real estate and residential mortgage portfolios. Total deposits were $37.9 billion as of June 30, 2024, a decline of $261.6 million from the prior quarter. The second quarter's decline included a $50.0 million reduction in brokered deposits to $452.2 million, and a decline of $449.0 million in public funds to $4.3 billion at June 30, 2024.  Importantly, core customer deposits, which excludes brokered deposits and public funds, reflected organic growth of approximately $237.4 million compared to March 31, 2024. The June 30, 2024 loan to deposit ratio was 88.0% and securities to total assets was 16.5%, reflecting continued strong liquidity. Noninterest bearing deposits represented 22.7% of total deposits at the end of the second quarter of 2024, down slightly from 23.1% at March 31, 2024, as the pace of migration to interest bearing products continued to slow. Total investment securities declined $0.4 billion during the quarter to $7.9 billion at June 30, 2024. Cash, due from balances and deposits at the Federal Reserve declined $0.4 billion to $2.6 billion at June 30, 2024, as the Company continues to utilize securities portfolio cash flow and excess liquidity to fund loan growth and reduce reliance on higher cost funding.In June 2024, the Company called $138.9 million in fixed-to-floating subordinated debt at par.  This debt was yielding 5.65%; however, was set to reprice to a weighted-average rate of SOFR+3.76% after the June call date. This debt repayment is estimated to be positive to earnings by approximately $5.0 million pre-tax over the next 12 months. Credit Results, Provision for Credit Losses and Allowance for Credit Losses Net charge-offs for the second quarter of 2024 were $22.6 million, or 0.28% of average net loans and leases on an annualized basis, compared with net charge-offs of $12.7 million, or 0.16% of average net loans and leases on an annualized basis, for the second quarter of 2023 and net charge-offs of $19.5 million, or 0.24% of average net loans and leases on an annualized basis, for the first quarter of 2024. The provision for credit losses for the second quarter of 2024 was $22.0 million, compared with $15.0 million for the second quarter of 2023 and $22.0 million for the first quarter of 2024. The allowance for credit losses of $470.0 million at June 30, 2024 declined slightly to 1.41% of total loans and leases compared to 1.44% of total loans and leases at March 31, 2024. Total nonperforming assets as a percent of total assets were 0.46% at June 30, 2024 compared to 0.33% at June 30, 2023 and 0.51% at March 31, 2024. Total nonperforming loans and leases as a percent of loans and leases, net were 0.65% at June 30, 2024, compared to 0.48% at June 30, 2023 and 0.73% at March 31, 2024.  Other real estate owned and other repossessed assets was $4.8 million at June 30, 2024 compared to the June 30, 2023 balance of $2.9 million and the March 31, 2024 balance of $5.3 million.  For the second quarter of 2024, criticized and classified loans were relatively stable. Criticized loans represented 2.51% of loans at June 30, 2024 compared to 2.74% at June 30, 2023 and 2.64% at March 31, 2024, while classified loans were 2.09% at June 30, 2024 compared to 1.90% at June 30, 2023 and 2.19% at March 31, 2024. Noninterest Revenue Noninterest revenue was $100.7 million for the second quarter of 2024 compared with $86.7 million for the second quarter of 2023 and $83.8 million for the first quarter of 2024.  Adjusted noninterest revenue(1) for the second quarter of 2024 was $85.7 million, compared with $86.6 million for the second quarter of 2023 and $83.8 million for the first quarter of 2024. Adjusted noninterest revenue(1) for the second quarter of 2024 excludes a gain of $15.0 million associated with the sale of businesses, primarily related to the sale of Cadence Business Solutions, LLC during the second quarter of 2024 (see Key Transactions below). Wealth management revenue increased to $24.0 million for the second quarter of 2024, compared with $22.8 million for the first quarter of 2024.  The second quarter 2024 increase was driven by asset management and trust revenue as well as retail brokerage. Credit card, debit card and merchant fee revenue was $12.8 million for the second quarter of 2024, up slightly from $12.2 million for the first quarter of 2024.  Deposit service charge revenue was $17.7 million for the second quarter of 2024 compared to $18.3 million for the first quarter of 2024 due to seasonality.  Other noninterest revenue was $40.1 million for the second quarter of 2024, increased from $24.0 million for the first quarter of 2024.  Other noninterest revenue for the second quarter of 2024 included the $15.0 million gain on sale of businesses as well as an increase of $3.1 million in partnership income as a result of improved SBIC investment valuations. Mortgage production and servicing revenue totaled $7.2 million for the second quarter of 2024, compared with $6.8 million for the second quarter of 2023 and $6.5 million for the first quarter of 2024. The net MSR valuation adjustment was a negative $1.0 million for the second quarter of 2024, compared with a positive $1.5 million for the second quarter of 2023 and an insignificant adjustment for the first quarter of 2024. Mortgage origination volume for the second quarter of 2024 was $758.4 million, compared with $848.9 million for the second quarter of 2023 and $437.2 million for the first quarter of 2024. Noninterest Expense Noninterest expense for the second quarter of 2024 was $256.7 million, compared with $267.5 million for the second quarter of 2023 and $263.2 million for the first quarter of 2024. Adjusted noninterest expense(1) for the second quarter of 2024 was $251.1 million, compared with $260.6 million for the second quarter of 2023 and $263.5 million for the first quarter of 2024.  Adjusted noninterest expense for the second quarter of 2024 excludes a $1.1 million gain on the extinguishment of debt as well as a charge of $6.3 million related to the FDIC deposit insurance special assessment.  The adjusted efficiency ratio(1) was 56.7% for the second quarter of 2024, meaningfully improved from both 60.1% for the first quarter of 2024 and 61.9% for the second quarter of 2023. The $12.4 million, or 4.7%, linked quarter decline in adjusted noninterest expense(1) was driven by declines in salaries and employee benefits expense as well as other noninterest expense, partially offset by a seasonal increase in advertising and public relations.  Salaries and employee benefits declined $8.6 million compared to the first quarter of 2024 due primarily to lower compensation costs, increased deferred compensation related to loan originations, and anticipated seasonal reductions in payroll taxes and 401k match.  Other noninterest expense declined $5.3 million compared to the first quarter of 2024.  This decline included decreases in a number of expense items including recoveries in legal costs and operational losses as well as lower other miscellaneous expenses. Capital Management Total shareholders' equity was $5.3 billion at June 30, 2024 compared with $4.5 billion at June 30, 2023 and $5.2 billion at March 31, 2024. Estimated regulatory capital ratios at June 30, 2024 included Common Equity Tier 1 capital of 11.9%, Tier 1 capital of 12.3%, Total risk-based capital of 14.2%, and Tier 1 leverage capital of 9.7%. During the second quarter of 2024, the Company repurchased 256,033 shares of Company common stock at an average price of $26.97.  The company has 9.1 million shares remaining on its current share repurchase authorization, which expires on December 31, 2024.   Outstanding common shares were 182.4 million as of June 30, 2024. Summary Rollins concluded, "We are very proud of the accomplishments the Company has reported over the first half of 2024.  We announced back-to-back quarters reflecting strong operating performance driven by organic growth in loans, increases in our net interest margin, increased operating leverage and stable credit quality, all backed by strong capital and liquidity.  Our Company is driven and committed to taking care of our customers, our teammates and the communities we serve." Key Transactions Effective May 17, 2024, the Company completed the sale of Cadence Business Solutions, its payroll processing business unit, resulting in a net gain on sale of approximately $12 million.  The impact on both revenues and expenses is not material. The payroll processing unit had previously been part of Cadence Insurance, Inc., prior to its sale in November 2023.Effective November 30, 2023, the Company completed the sale of its insurance subsidiary, Cadence Insurance, to Arthur J. Gallagher & Co. for approximately $904 million. The Transaction resulted in net capital creation of approximately $625 million, including a net gain on sale of approximately $525 million.  The gain along with Cadence Insurance's historical financial results for periods prior to the divestiture have been reflected in the consolidated financial statements as discontinued operations.  Additionally, current and prior period adjusted earnings exclude the impact of discontinued operations.  Conference Call and Webcast The Company will conduct a conference call to discuss its second quarter 2024 financial results on July 23, 2024, at 10:00 a.m. (Central Time). This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing http://ir.cadencebank.com/events. The webcast will also be available in archived format at the same address. About Cadence Bank Cadence Bank (NYSE:CADE) is a leading regional banking franchise with approximately $50 billion in assets and more than 350 branch locations across the South and Texas. Cadence provides consumers, businesses and corporations with a full range of innovative banking and financial solutions. Services and products include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized lending, asset-based lending, commercial real estate, equipment financing, correspondent banking, SBA lending, foreign exchange, wealth management, investment and trust services, financial planning, and retirement plan management. Cadence is committed to a culture of respect, diversity and inclusion in both its workplace and communities. Cadence Bank, Member FDIC. Equal Housing Lender. (1) Considered a non-GAAP financial measure. A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears in Table 14 "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions" beginning on page 21 of this news release. (2) See Table 14 for detail on non-routine income and expenses. (3) Given the sale of Cadence Insurance, Inc. ("Cadence Insurance") in the fourth quarter of 2023, the financial results presented consist of both continuing operations and discontinued operations.  The discontinued operations include the financial results of Cadence Insurance prior to the sale, as well as the associated gain on sale in the fourth quarter of 2023. The discontinued operations are presented as a single line item below income from continuing operations and as separate lines in the balance sheet in the accompanying tables for all periods presented. Forward-Looking Statements Certain statements made in this news release constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor under the Private Securities Litigation Reform Act of 1995 as well as the "bespeaks caution" doctrine. These statements are often, but not exclusively, made through the use of words or phrases like "assume," "believe," "budget," "contemplate," "continue," "could," "foresee," "indicate," "may," "might," "outlook," "prospect," "potential," "roadmap," "should," "target," "will," "would," the negative versions of such words, or comparable words of a future or forward-looking nature. These forward-looking statements may include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, or any of the Company's comments related to topics in its risk disclosures or results of operations as well as the impact of the Cadence Insurance sale on the Company's financial condition and future net income and earnings per share, and the Company's ability to deploy capital into strategic and growth initiatives. Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, the Company's management at the time such statements were made. Forward-looking statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company's control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. Risks, uncertainties and other factors the Company may face include, without limitation: general economic, unemployment, credit market and real estate market conditions, including inflation, and the effect of such conditions on customers, potential customers, assets, investments and liquidity; risks arising from market and consumer reactions to the general banking environment, or to conditions or situations at specific banks; risks arising from media coverage of the banking industry; risks arising from perceived instability in the banking sector; the risks of changes in interest rates and their effects on the level, cost, and composition of, and competition for, deposits, loan demand and timing of payments, the values of loan collateral, securities, and interest sensitive assets and liabilities; the ability to attract new or retain existing deposits, to retain or grow loans or additional interest and fee income, or to control noninterest expense; the effect of pricing pressures on the Company's net interest margin; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, or uncertainties surrounding the debt ceiling and the federal budget; uncertainties surrounding the functionality of the federal government; potential delays or other problems in implementing and executing the Company's growth, expansion, acquisition, or divestment strategies, including delays in obtaining regulatory or other necessary approvals, or the failure to realize any anticipated benefits or synergies from any acquisitions, growth, or divestment strategies; the ability to pay dividends or coupons on the Company's 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; changes in legal, financial, accounting, and/or regulatory requirements; the costs and expenses to comply with such changes; the enforcement efforts of federal and state bank regulators; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity and the impact of generative artificial intelligence; increased competition in the financial services industry, particularly from regional and national institutions; the impact of a failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers. The Company also faces risks from natural disasters or acts of war or terrorism; international or political instability, including the impacts related to or resulting from Russia's military action in Ukraine, the escalating conflicts in the Middle East, and additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments. The Company also faces risks from: possible adverse rulings, judgments, settlements or other outcomes of pending, ongoing and future litigation, as well as governmental, administrative and investigatory matters; the impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; the diversion of management's attention from ongoing business operations and opportunities; and the company's success in executing its business plans and strategies, and managing the risks involved in all of the foregoing. The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company's periodic and current reports filed with the FDIC, including those factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, particularly those under the heading "Item 1A. Risk Factors," in the Company's Quarterly Reports on Form 10-Q under the heading "Part II-Item 1A. Risk Factors," and in the Company's Current Reports on Form 8-K. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, except as required by applicable law. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section. Table 1 Selected Financial Data (Unaudited) Quarter Ended Year-to-date (In thousands) Jun 2024 Mar 2024 Dec 2023 Sep 2023 Jun 2023 Jun 2024 Jun 2023 Earnings Summary: Interest revenue $       642,210 $       637,113 $       615,187 $       595,459 $       573,395 $    1,279,323 $ 1,099,521 Interest expense 285,892 283,205 280,582 266,499 239,868 569,097 411,730 Net interest revenue 356,318 353,908 334,605 328,960 333,527 710,226 687,791 Provision for credit losses 22,000 22,000 38,000 17,000 15,000 44,000 25,000 Net interest revenue, after provision for credit losses 334,318 331,908 296,605 311,960 318,527 666,226 662,791 Noninterest revenue 100,658 83,786 (311,460) 73,989 86,664 184,444 121,127 Noninterest expense 256,697 263,207 329,367 274,442 267,466 519,904 552,113 Income (loss) from continuing operations before income taxes 178,279 152,487 (344,222) 111,507 137,725 330,766 231,805 Income tax expense (benefit) 40,807 35,509 (80,485) 24,355 30,463 76,316 51,536 Income (loss) from continuing operations 137,472 116,978 (263,737) 87,152 107,262 254,450 180,269 Income from discontinued operations, net of taxes — — 522,801 5,431 6,766 — 10,388 Net income 137,472 116,978 259,064 92,583 114,028 254,450 190,657 Less: Preferred dividends 2,372 2,372 2,372 2,372 2,372 4,744 4,744 Net income available to common shareholders $       135,100 $       114,606 $       256,692 $         90,211 $       111,656 $       249,706 $   185,913 Balance Sheet - Period End Balances Total assets $  47,984,078 $  48,313,863 $  48,934,510 $  48,523,010 $  48,838,660 $  47,984,078 $  48,838,660 Total earning assets 43,525,688 43,968,692 44,192,887 43,727,058 44,010,411 43,525,688 44,010,411 Available for sale securities 7,921,422 8,306,589 8,075,476 9,643,231 10,254,580 7,921,422 10,254,580 Loans and leases, net of unearned income 33,312,773 32,882,616 32,497,022 32,520,593 32,556,708 33,312,773 32,556,708 Allowance for credit losses (ACL) 470,022 472,575 468,034 446,859 466,013 470,022 466,013 Net book value of acquired loans 5,543,419 6,011,007 6,353,344 6,895,487 7,357,174 5,543,419 7,357,174 Unamortized net discount on acquired loans 20,874 23,715 26,928 30,761 37,000 20,874 37,000 Total deposits 37,858,659 38,120,226 38,497,137 38,335,878 38,701,669 37,858,659 38,701,669 Total deposits and repurchase agreements 37,913,693 38,214,616 38,948,653 39,198,467 39,492,427 37,913,693 39,492,427 Other short-term borrowings 3,500,000 3,500,000 3,500,000 3,500,223 3,500,226 3,500,000 3,500,226 Subordinated and long-term debt 269,353 430,123 438,460 449,323 449,733 269,353 449,733 Total shareholders' equity 5,287,758 5,189,932 5,167,843 4,395,257 4,485,850 5,287,758 4,485,850 Total shareholders' equity, excluding AOCI (1) 6,070,220 5,981,265 5,929,672 5,705,178 5,648,925 6,070,220 5,648,925 Common shareholders' equity 5,120,765 5,022,939 5,000,850 4,228,264 4,318,857 5,120,765 4,318,857 Common shareholders' equity, excluding AOCI (1) $    5,903,227 $    5,814,272 $    5,762,679 $    5,538,185 $    5,481,932 $    5,903,227 $ 5,481,932 Balance Sheet - Average Balances Total assets $  48,192,719 $  48,642,540 $  48,444,176 $  48,655,138 $  49,067,121 $  48,417,630 $  48,860,807 Total earning assets 43,851,822 44,226,077 43,754,664 44,003,639 44,229,519 44,038,950 44,024,558 Available for sale securities 8,033,552 8,269,708 9,300,714 10,004,441 10,655,791 8,151,630 11,003,194 Loans and leases, net of unearned income 32,945,526 32,737,574 32,529,030 32,311,572 31,901,096 32,841,550 31,399,156 Total deposits 38,100,087 38,421,272 38,215,379 38,465,975 38,934,793 38,260,680 38,919,505 Total deposits and repurchase agreements 38,165,908 38,630,620 38,968,397 39,293,030 39,708,963 38,398,265 39,670,703 Other short-term borrowings 3,500,000 3,500,000 3,503,320 3,510,942 3,541,985 3,500,000 3,434,688 Subordinated and long-term debt 404,231 434,579 443,251 449,568 455,617 419,405 458,982 Total shareholders' equity 5,207,254 5,194,048 4,507,343 4,505,162 4,539,353 5,200,651 4,468,302 Common shareholders' equity $    5,040,261 $    5,027,055 $    4,340,350 $    4,338,169 $    4,372,360 $    5,033,658 $ 4,301,309 Nonperforming Assets: Nonperforming loans and leases (NPL) (2) (3) 216,746 241,007 216,141 150,038 157,243 216,746 157,243 Other real estate owned and other assets 4,793 5,280 6,246 2,927 2,857 4,793 2,857 Nonperforming assets (NPA) $       221,539 $       246,287 $       222,387 $       152,965 $       160,100 $       221,539 $   160,100 (1) Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 22 - 26. (2) At June 30, 2024, $71.4 million of NPL is covered by government guarantees from the SBA, FHA, VA or USDA. Refer to Table 7 on page 13 for related information. (3) At June 30, 2024, NPL does not include nonperforming loans held for sale of $2.7 million.   Table 2 Selected Financial Ratios Quarter Ended Year-to-date Jun 2024 Mar 2024 Dec 2023 Sep 2023 Jun 2023 Jun 2024 Jun 2023 Financial Ratios and Other Data: Return on average assets from continuing operations (2) 1.15 % 0.97 % (2.16) % 0.71 % 0.88 % 1.06 % 0.74 % Return on average assets (2) 1.15 % 0.97 % 2.12 % 0.75 % 0.93 % 1.06 % 0.79 % Adjusted return on average assets from continuing operations (1)(2) 1.09 0.97 0.62 0.82 0.92 1.03 0.97 Return on average common shareholders' equity from continuing operations (2) 10.78 9.17 (24.32) 7.75 9.62 9.98 8.23 Return on average common shareholders' equity (2) 10.78 9.17 23.46 8.25 10.24 9.98 8.72 Adjusted return on average common shareholders' equity from continuing operations (1)(2) 10.21 9.15 6.65 8.93 10.10 9.68 10.82 Return on average tangible common equity from continuing operations (1)(2) 15.18 12.94 (36.79) 11.75 14.55 14.07 12.56 Return on average tangible common equity (1)(2) 15.18 12.94 35.49 12.50 15.49 14.07 13.30 Adjusted return on average tangible common equity from continuing operations (1)(2) 14.37 12.92 10.06 13.53 15.27 13.65 16.52 Pre-tax pre-provision net revenue from continuing operation to total average assets (1)(2) 1.67 1.44 (2.51) 1.05 1.25 1.56 1.06 Adjusted pre-tax pre-provision net revenue from continuing operations to total average assets (1)(2) 1.59 1.44 1.13 1.18 1.30 1.52 1.36 Net interest margin-fully taxable equivalent 3.27 3.22 3.04 2.98 3.03 3.25 3.16 Net interest rate spread-fully taxable equivalent 2.45 2.40 2.25 2.21 2.29 2.42 2.46 Efficiency ratio fully tax equivalent (1) 56.09 60.05 NM 67.93 63.49 58.03 68.08 Adjusted efficiency ratio fully tax equivalent (1) 56.73 60.12 66.01 64.35 61.87 58.42 61.58 Loan/deposit ratio 87.99 % 86.26 % 84.41 % 84.83 % 84.12 % 87.99 % 84.12 % Full time equivalent employees 5,290 5,322 5,333 6,160 6,479 5,290 6,479 Credit Quality Ratios: Net charge-offs to average loans and leases (2) 0.28 % 0.24 % 0.29 % 0.42 % 0.16 % 0.26 % 0.09 % Provision for credit losses to average loans and leases (2) 0.27 0.27 0.46 0.21 0.19 0.27 0.16 ACL to loans and leases, net 1.41 1.44 1.44 1.37 1.43 1.41 1.43 ACL to NPL 216.85 196.08 216.54 297.83 296.36 216.85 296.36 NPL to loans and leases, net 0.65 0.73 0.67 0.46 0.48 0.65 0.48 NPA to total assets 0.46 0.51 0.45 0.32 0.33 0.46 0.33 Equity Ratios: Total shareholders' equity to total assets 11.02 % 10.74 % 10.56 % 9.06 % 9.19 % 11.02 % 9.19 % Total common shareholders' equity to total assets 10.67 10.40 10.22 8.71 8.84 10.67 8.84 Tangible common shareholders' equity to tangible assets (1) 7.87 7.60 7.44 5.86 6.00 7.87 6.00 Tangible common shareholders' equity, excluding AOCI, to tangible assets, excluding AOCI (1) 9.40 9.13 8.90 8.41 8.25 9.40 8.25 Capital Adequacy (3): Common Equity Tier 1 capital 11.9 % 11.7 % 11.6 % 10.3 % 10.1 % 11.9 % 10.1 % Tier 1 capital 12.3 12.2 12.1 10.8 10.5 12.3 10.5 Total capital 14.2 14.5 14.3 12.9 12.7 14.2 12.7 Tier 1 leverage capital 9.7 9.5 9.3 8.6 8.5 9.7 8.5 (1) Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 22 - 26. (2) Annualized. (3) Current quarter regulatory capital ratios are estimated. NM - Not meaningful   Table 3 Selected Financial Information Quarter Ended Year-to-date Jun 2024 Mar 2024 Dec 2023 Sep 2023 Jun 2023 Jun 2024 Jun 2023 Common Share Data: Diluted earnings (losses) per share from continuing operations $         0.73 $         0.62 $       (1.46) $         0.46 $         0.57 $      1.35 $      0.96 Adjusted earnings per share from continuing operations (1) 0.69 0.62 0.40 0.53 0.60 1.31 1.26 Diluted earnings per share 0.73 0.62 1.41 0.49 0.61 1.35 1.01 Cash dividends per share 0.250 0.250 0.235 0.235 0.235 0.500 0.47 Book value per share 28.07 27.50 27.35 23.15 23.65 28.07 23.65 Tangible book value per share (1) 20.08 19.48 19.32 15.09 15.56 20.08 15.56 Market value per share (last) 28.28 29.00 29.59 21.22 19.88 28.28 19.88 Market value per share (high) 29.95 30.03 31.45 25.87 21.73 30.03 28.18 Market value per share (low) 26.16 24.99 19.67 19.00 16.95 24.99 16.95 Market value per share (average) 28.14 27.80 24.40 22.56 19.73 27.97 22.32 Dividend payout ratio from continuing operations 34.25 % 40.48 % (16.13) % 51.09 % 41.23 % 37.04 % 48.96 % Adjusted dividend payout ratio from continuing operations (1) 36.23 % 40.32 % 58.75 % 44.34 % 39.17 % 38.17 % 37.30 % Total shares outstanding 182,430,427 182,681,325 182,871,775 182,611,075 182,626,229 182,430,427 182,626,229 Average shares outstanding - diluted 185,260,963 185,574,130 182,688,190 184,645,004 183,631,570 185,417,547 183,770,759 Yield/Rate: (Taxable equivalent basis) Loans, loans held for sale, and leases 6.59 % 6.50 % 6.48 % 6.39 % 6.24 % 6.55 % 6.13 % Loans, loans held for sale, and leases excluding net accretion on acquired loans and leases 6.56 6.46 6.43 6.31 6.18 6.51 6.03 Available for sale securities: Taxable 3.18 3.11 2.45 2.07 2.09 3.15 1.94 Tax-exempt 4.12 4.25 3.78 3.23 3.21 4.19 3.21 Other investments 5.45 5.48 5.41 5.36 5.05 5.47 4.85 Total interest earning assets and revenue 5.90 5.80 5.59 5.38 5.21 5.85 5.05 Deposits 2.53 2.45 2.32 2.14 1.87 2.49 1.57 Interest bearing demand and money market 3.13 3.11 3.02 2.79 2.49 3.12 2.26 Savings 0.57 0.57 0.56 0.56 0.51 0.57 0.43 Time 4.53 4.42 4.22 3.98 3.69 4.47 3.15 Total interest bearing deposits 3.28 3.21 3.10 2.88 2.58 3.24 2.23 Fed funds purchased, securities sold under agreement to repurchase and other 4.47 4.86 4.33 4.27 3.97 4.76 3.85 Short-term FHLB borrowings — — — 3.54 5.24 — 4.91 Short-term BTFP borrowings 4.77 4.84 5.04 5.15 5.15 4.81 5.15 Total interest bearing deposits and short-term borrowings 3.44 3.39 3.33 3.16 2.90 3.41 2.56 Subordinated and long-term borrowings 4.41 4.35 4.18 4.22 4.23 4.38 4.25 Total interest bearing liabilities 3.45 3.40 3.34 3.17 2.92 3.43 2.59 Interest bearing liabilities to interest earning assets 75.97 % 75.73 % 76.08 % 75.74 % 74.57 % 75.85 % 72.92 % Net interest income tax equivalent adjustment (in thousands) $          644 $          636 $          987 $       1,081 $       1,063 $     1,280 $     2,114 (1)  Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 22 - 26. NM - Not meaningful   Table 4 Consolidated Balance Sheets (Unaudited) As of (In thousands) Jun 2024 Mar 2024 Dec 2023 Sep 2023 Jun 2023 ASSETS Cash and due from banks $         516,715 $         427,543 $         798,177 $         594,787 $         722,625 Interest bearing deposits with other banks and Federal funds sold 2,093,820 2,609,931 3,434,088 1,400,858 1,005,889 Available for sale securities, at fair value 7,921,422 8,306,589 8,075,476 9,643,231 10,254,580 Loans and leases, net of unearned income 33,312,773 32,882,616 32,497,022 32,520,593 32,556,708 Allowance for credit losses 470,022 472,575 468,034 446,859 466,013 Net loans and leases 32,842,751 32,410,041 32,028,988 32,073,734 32,090,695 Loans held for sale, at fair value 197,673 169,556 186,301 162,376 193,234 Premises and equipment, net 808,705 822,666 802,133 789,698 804,732 Goodwill 1,366,923 1,367,785 1,367,785 1,367,785 1,367,785 Other intangible assets, net 91,027 96,126 100,191 104,596 109,033 Bank-owned life insurance 648,970 645,167 642,840 639,073 634,985 Other assets 1,496,072 1,458,459 1,498,531 1,590,769 1,486,070 Assets of discontinued operations — — — 156,103 169,032 Total Assets $    47,984,078 $    48,313,863 $    48,934,510 $    48,523,010 $    48,838,660 LIABILITIES