Cadence Bancorporation Reports Fourth Quarter and Full Year 2020 Financial Results

HOUSTON--(BUSINESS WIRE)--Cadence Bancorporation (NYSE: CADE) (“Cadence”) today announced net income for the quarter ended December 31, 2020 of $200.6 million or $1.57 per share, compared to $51.4 million or $0.40 per share for the quarter ended December 31, 2019, and $49.3 million or $0.39 per share for the quarter ended September 30, 2020. For the full year ended December 31, 2020, Cadence reported a net loss of ($205.5) million or ($1.63) per diluted common share (“per share”), compared to net income of $202.0 million or $1.56 per share for the year ended December 31, 2019. The fourth quarter of 2020 included an acceleration of gain recognition from the interest rate collar we terminated in March 2020 which resulted in $129.5 million ($169.2 million pretax) or $1.02 per share being accelerated into fourth quarter earnings (“accelerated hedge revenue”). This acceleration was triggered by the determination of hedge accounting partial ineffectiveness as announced in our related Form 8-K filed January 7, 2021.

“We are pleased to report strong performance across multiple fronts in the fourth quarter. The provision for loan losses is down meaningfully linked quarter, as are nonperforming and criticized assets. With the exception of hospitality, we saw broad-based improvement in credit migration, as many businesses recover, and our portfolios continue to de-risk. Our deposit franchise improved materially in 2020, and in the fourth quarter it was encouraging to see an increase in net interest margin and yields on originated loans. Our hedging activities protected the bank from the sharp decline in interest rates this year, and the unwinding of the hedge has produced a significant increase in regulatory capital, with our Common Equity Tier 1 capital ratio ending the year at 14.0%. Considering these results, we are pleased to announce proactive capital actions, including an increase of our fourth quarter dividend to $0.15 cents per share, payable in the first quarter 2021. Furthermore, we plan to retire maturing and callable debt and reactivate our share buyback program, which had been put on hold during the shutdown. Cadence operates in some of the most attractive markets in America, with a highly motivated and experienced team focused on serving our customers and driving shareholder value. While there clearly remains uncertainty in the broader environment, we are encouraged by our performance and the opportunities to further leverage our excess capital and liquidity in 2021,” stated Paul B. Murphy, Jr., Chairman and Chief Executive Officer of Cadence Bancorporation.

Adjusted Performance Metrics ⁽¹⁾:

• Adjusted net income ⁽¹⁾, excluding non-routine income and expenses ⁽²⁾, was $206.7 million for the full year of 2020 compared to $223.1 million for 2019. For the fourth quarter of 2020, adjusted net income was $199.7 million, an increase of $147.8 million or 284% compared to the fourth quarter of 2019 and an increase of $148.3 million or 288% compared to the third quarter of 2020.
• Adjusted pre-tax pre-provision net revenue ⁽¹⁾ for the full year 2020 was $542.5 million, compared to $400.3 million for the full year 2019. Adjusted pre-tax pre-provision net earnings in the fourth quarter of 2020 was $260.0 million, an increase of $165.2 million or 174% compared to the fourth quarter of 2019 and an increase of $165.4 million or 175% compared to the third quarter of 2020.
• Adjusted EPS ⁽¹⁾ for the full year 2020 was $1.64 compared to $1.72 for 2019. Adjusted EPS for fourth quarter of 2020 of $1.57 increased from the prior year quarter of $0.40 and increased from the linked quarter of $0.40.
• Adjusted annualized returns on average assets ⁽¹⁾ and adjusted tangible common equity ⁽¹⁾ for the full year 2020 were 1.14% and 11.59%, respectively, compared to 1.26% and 13.60% for the full year 2019, respectively, and for the fourth quarter of 2020 were 4.33% and 41.72%, respectively, compared to 1.16% and 11.93%, respectively, for the fourth quarter of 2019 and 1.12% and 11.52%, respectively, for the third quarter of 2020.

Fourth Quarter 2020 Highlights:

Fourth quarter 2020 highlights (compared to the linked quarter where applicable) are as follows:

• The provision for credit losses for the fourth quarter of 2020 was $2.8 million compared to $33.0 million in the linked quarter reflecting improvement in overall credit metrics and lower loan balances. As ofDecember 31, 2020, our allowance for credit losses (“ACL”) increased to 2.89% of total loans, up from 2.86% at September 30, 2020. Excluding Paycheck Protection Program (“PPP”) loans, our ACL ratio to loans was 3.12% at December 31, 2020, up from 3.11% at September 30, 2020. Our ratio of ACL to total nonperforming loans increased to 261% from 204%.
• Our tax equivalent net interest margin (“NIM”) increased to 3.54%, up 5 basis points from prior quarter. The improvement in NIM was driven by continued management of deposit costs, declining 7 basis points to 0.25%, and fees earned on forgiven PPP loans and other loan payoffs.
• Common Equity Tier 1 capital ratio increased to 14.0% and total risk weighted capital increased to 16.7%, reflecting material increases from the prior quarter due to the strong quarterly earnings combined with lower risk weighted assets.
• Non-interest income in the fourth quarter of 2020 included the accelerated hedge revenue of $169.2 million.
• Annualized returns on average assets and tangible common equity ⁽¹⁾ for the fourth quarter of 2020 were 4.35% and 41.90%, respectively, compared to 1.08% and 11.08%, respectively, for the third quarter of 2020, with the increases reflecting the impact of the accelerated hedge revenue combined with lower loan provisions.

Balance Sheet:

Total assets were $18.7 billion as of December 31, 2020, an increase of $912.3 million or 5.1% from December 31, 2019, and an increase of $308.4 million or 1.7% from September 30, 2020. The linked quarter increase was driven by increases in core deposits, cash and securities, partially offset by net declines in loans.

Cash and Cash Equivalents at December 31, 2020 totaled $2.1 billion as compared to $1.0 billion at December 31, 2019 and to $1.2 billion at September 30, 2020. The $806.8 million increase in the fourth quarter of 2020 resulted from a decrease in loans combined with an increase in deposits.

Investment Securities at December 31, 2020 totaled $3.3 billion as compared to $2.4 billion at December 31, 2019 and $3.1 billion at September 30, 2020. Securities as a percent of earning assets was 18.6%, 14.6%, and 17.4% at December 31, 2020, December 31, 2019, and September 30, 2020, respectively. The increase in securities from both the prior year and linked quarter is a result of increased balance sheet liquidity resulting from growth in deposits and the declines in net loans. Securities acquired during the fourth quarter include primarily agency pass-through mortgage-backed securities along with some municipal securities.

Loans at December 31, 2020 totaled $12.7 billion as compared to $13.0 billion at December 31, 2019, a decrease of $264.5 million or 2.0%. Loans decreased $746.4 million or 5.5% from $13.5 billion at September 30, 2020. The decline in the quarter included paydowns and payoffs of $117 million in PPP loans, $113 million in criticized loans, $180 million in Shared National Credits (SNCs), and $94 million in leveraged loans without moderating factors (note there is some overlap between these categories). On a portfolio basis, Restaurants declined $120 million and Energy declined $80 million, reflecting our targeted risk reduction strategy in those portfolios. Commercial Real Estate (“CRE”) declined $200 million, primarily reflective of credits transitioning to the permanent debt markets. The $321 million decline in General Commercial &Industrial (“C&I”) included $90 million in PPP loans as well as paydowns and payoffs resulting from excess borrower liquidity, borrower migration to non-bank and Main Street Lending fundings, and resolutions of problem credits.

Goodwill at December 31, 2020 totaled $43.1 million, down from $486.0 million at December 31, 2019 and unchanged from September 30, 2020. As previously reported, the Company recorded a $443.7 million ($412.9 million, after-tax), non-cash goodwill impairment charge in the first quarter of 2020. The remaining goodwill at December 31, 2020 relates to our registered investment advisory subsidiary and trust division.

Total Deposits at December 31, 2020 were $16.1 billion, an increase of $1.3 billion or 8.9% from the December 31, 2019 level and up $266.0 million or 1.7% from the September 30, 2020 level. Non-interest bearing deposits were $5.0 billion or 31.4% of total deposits at December 31, 2020, up from $3.8 billion or 26.0% at December 31, 2019 and essentially unchanged from September 30, 2020. Total cost of deposits declined to 0.25% for the fourth quarter 2020, significantly lower than both the fourth quarter 2019 cost of 1.14% and the third quarter 2020 cost of 0.32%.

Shareholders’ equity was $2.1 billion at December 31, 2020, a decrease of $339.7 million or 13.8% from December 31, 2019, and an increase of $49.6 million or 2.4% from September 30, 2020. The year over year decrease was driven by the goodwill impairment charge in the first quarter of 2020. The linked quarter increase included quarterly net income of $200.6 million, $9.4 million in cash dividends, and a decrease of $144.6 million in other comprehensive income (“OCI”) driven by the reclassification of hedge revenue into current earnings.

Tangible common shareholders’ equity ⁽¹⁾ was $2.0 billion at December 31, 2020, an increase of $124.4 million or 6.7% from December 31, 2019 and an increase of $54.8 million or 2.8% from September 30, 2020. The full year increase was driven by tangible earnings during the year. The linked quarter increase resulted from the same factors noted above.

• Total shareholders’ equity to total assets and tangible equity to tangible assets were 11.3% and 10.7%, respectively, at December 31, 2020 compared to 13.8% and 10.9% at December 31, 2019, and 11.3% and 10.6% at September 30, 2020, respectively.
• Tangible book value per share ⁽¹⁾ was $15.83 as of December 31, 2020, an increase of $1.18 or 8.1% from $14.65 as of December 31, 2019 and an increase of $0.43 or 2.8% from $15.40 as of September 30, 2020.
• Total outstanding shares at December 31, 2020 were 125.97 million.

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

	4Q20	3Q20	4Q19
Common equity Tier 1 capital	14.0%	12.0%	11.5%
Tier 1 leverage capital	10.9%	9.9%	10.3%
Tier 1 risk-based capital	14.0%	12.0%	11.5%
Total risk-based capital	16.7%	14.7%	13.7%

Asset Quality:

Credit quality metrics during the fourth quarter of 2020 reflected a number of improvements including declines in nonperforming and criticized loan balances but continued to reflect ongoing COVID-driven stress and economic uncertainty, particularly in the Hospitality sector.

• Net charge-offs for the full year 2020 were $106.1 million or 0.79% of average loans as compared to $85.8 million or 0.63% for the full year 2019. Net charge-offs for the fourth quarter of 2020 were $21.2 million or 0.64% annualized of average loans compared to $35.3 million or 1.04% annualized and $19.9 million or 0.58% annualized for the quarters ended December 31, 2019 and September 30, 2020, respectively. The current quarter net charge-offs included $4.2 million in Restaurant, $9.2 million in Commercial Real Estate (“CRE”), and $7.3 million in General C&I.
• Provision for credit losses for the full year 2020 was $278.0 million or 2.06% of average loans as compared to $111.0 million or 0.81% of average loans for 2019. Provision for credit losses for the fourth quarter of 2020 was $2.8 million as compared to $27.1 million for the fourth quarter of 2019 and $33.0 million for the third quarter of 2020. The current quarter’s provision was impacted by improvements in nonperforming and criticized loans and lower loan balances. The fourth quarter 2020 loan provision was concentrated in the CRE segment provision of $7.4 million (primarily due to the Hospitality portfolio), which was partially offset by reductions of $3.0 million in C&I and $1.4 million in Consumer segments.
• The ACL was $367.2 million or 2.89% of total loans as of December 31, 2020, as compared to $119.6 million or 0.92% of total loans as of December 31, 2019, and $385.4 million or 2.86% of total loans as of September 30, 2020. Excluding PPP loans, the ACL was 3.12% of total loans at December 31, 2020, increased from 3.11% at September 30, 2020.
• The material increase in the ACL during 2020 incorporated loan provisions of $278.0 million, net charge-offs of $106.1 million and “day 1” CECL adoption impact of $75.6 million.
• Total nonperforming loans (“NPL”) as a percent of total loans were 1.08% at December 31, 2020, compared to 0.92% at December 31, 2019 and 1.40% at September 30, 2020. NPL totaled $138.0 million, $119.6 million and $189.1 million as of December 31, 2020, December 31, 2019 and September 30, 2020, respectively. The linked quarter decline of $51.1 million or 27% was due primarily to payoffs and to a lesser extent, net charge-offs.
• The ACL coverage of NPL increased meaningfully to 266.1% as of December 31, 2020, as compared to 100.1% as of December 31, 2019, and 203.8% as of September 30, 2020.
• Total criticized loans at December 31, 2020 were $871.7 million or 6.85% of total loans as compared to $605.1 million or 4.66% at December 31, 2019 and $1.1 billion or 8.05% at September 30, 2020. The linked quarter decrease of $211.3 million or 20% was primarily in Restaurant, Energy, General C&I, and Healthcare credits, reflecting decreases of 28.7%, 21.0%, 30.2% and 49.0%, respectively.
• Active COVID related loan payment deferrals totaled $135 million at January 15, 2021, down from $376 million at September 30, 2020.
• Loans 30-89 days past due were 0.36% of total loans at December 31, 2020, compared to 0.17% at December 31, 2019 and 0.15% at September 30, 2020. While minor, the increase was primarily due to a small number of loans that includes $9.4 million in Hospitality loans and $4.8 million in Mortgage loans.

Total Revenue:

Total operating revenue ⁽¹⁾ for 2020 was $926.3 million, up $144.2 million or 18.4%, and for the fourth quarter of 2020 was $366.5 million, up $171.7 million or 88.1% from the same period in 2019 and up $181.8 million or 98.5% from the linked quarter.

Net interest income for the full year 2020 was $619.0 million as compared to $651.2 million for 2019, a decrease of $32.2 million or 4.9%. The year-over-year decline in earning asset yields of 117 basis points was driven by lower index rates partially offset by our hedges, combined with an increase in lower yielding securities. This decline was partially offset by our cost of funds declining 81 basis points as we achieved record low-deposit costs and record high levels of non-interest bearing deposits during 2020.

Net interest income for the fourth quarter of 2020 was $156.7 million, a decrease of $4.2 million or 2.6% from the same period in 2019 and an increase of $2.7 million or 1.8% from the third quarter of 2020. Compared to the linked quarter, loan interest income excluding accretion increased $0.9 million as loan fees from loan payoffs offset the impact of lower volumes, funding costs decreased by $2.5 million driven by continued reduction of deposit costs, and hedge interest income increased $0.2 million. These improvements were partially offset by a decrease of $0.5 million in loan accretion and a decrease of $0.3 million in investment income due to lower yielding securities.

• We continued to lower our interest rates on deposits with total cost of deposits dropping from 0.32% to 0.25% linked quarter, down 21.9%. Noninterest-bearing deposits as a percent of total deposits remained stable at 31.4% compared to 31.9% in the linked quarter. Total interest-bearing liability costs declined by 8 basis points from 0.59% to 0.51% linked quarter, down 13.6%. Average interest-bearing liabilities declined $244.2 million or 2.2% from the prior quarter to $10.9 billion.
• Yield on loans excluding accretion and hedge income was 3.89% in the fourth quarter of 2020, up 14 basis points from 3.75% in the third quarter of 2020. Excluding the impact of PPP loans, this yield was 3.98% and 3.87%, for the fourth and third quarters of 2020, respectively. Average loans declined $414.0 million or 3.0% from the prior quarter to $13.2 billion.
• Total hedge income in interest income (which includes the amortized effective collar gain recognition and other hedge income) for the fourth quarter of 2020 totaled $19.9 million as compared to $19.7 million for the third quarter of 2020. The effective portion of the collar gain was and will continue to be reflected in interest income, whereas the ineffective portion of the gain was reflected in noninterest income during the fourth quarter of 2020. At December 31, 2020, the remaining portion of the collar gain (included in OCI) yet to be amortized into revenue was $35.4 million, with $33.5 million expected to be amortized into interest income in 2021 and the final $1.9 million expected in early 2022.
• Accretion on acquired loans totaled $5.9 million for the fourth quarter of 2020 as compared to $6.4 million for the third quarter of 2020.
• Yield on investment securities declined to 1.87% in the fourth quarter of 2020 compared to 2.06% in the linked quarter, with the lower yield reflecting the impact of securities purchased in the fourth quarter and late in the third quarter. Average investment securities increased $241.4 million or 8.2% from the prior quarter to $3.2 billion. Fed funds sold and short-term investments also increased by $237.0 million or 25.2% from the prior quarter due to excess liquidity during the fourth quarter.
• Total earning asset yields declined slightly to 3.85% in the fourth quarter of 2020 compared to 3.86% in the linked quarter, with average balances increasing by $64.0 million or 0.4% to $17.7 billion.
• Our NIM for the full year 2020 decreased to 3.58% compared to 4.00% for 2019. Our net interest spread for 2020 decreased to 3.29% as compared to 3.48% for 2019. Our NIM for the fourth quarter of 2020 was 3.54% as compared to 3.89% for the fourth quarter of 2019 and 3.49% for the third quarter of 2020.

PPP loans averaged $1.0 billion in the fourth quarter at a yield of 2.82%, and along with cash in deposits associated with these loans, negatively impacted our fourth quarter NIM by 10 basis points as illustrated in the table below. Excluding the impact of the PPP program, the fourth quarter 2020 NIM remained stable at 3.64%, as lower deposit costs more than offset the impact of lower loan balances and lower securities yields. Specifically, the NIM change during the quarter included:

Quarterly Change	$ MM	NIM
3Q 2020 Net Interest Income	$154.5	3.49%
3Q 2020 Net Interest Income before PPP loans & associated cash	$148.4	3.64%
Loans (ex PPP & accretion)	(0.5)	(0.04%)
Deposits	2.6	0.07%
Hedge Income	0.2	0.00%
Accretion	(0.5)	(0.01%)
Securities	(0.3)	(0.01%)
Cash	0.2	0.00%
Borrowings	(0.2)	(0.01%)
NIM before PPP loans & cash*	$149.9	3.64%
PPP Loans & associated cash	7.4	(0.10%)
4Q 2020 Net Interest Margin	$157.3	3.54%

*Calculated by removing the quarterly average balance of PPP loans and income, as well as the quarterly average balance of cash associated with unused PPP funds.

Noninterest income for the full year of 2020 was $307.4 million, an increase of $176.4 million or 135% from 2019. Noninterest income for the fourth quarter of 2020 was $209.7 million, an increase of $175.8 million from the same period of 2019 and an increase of $177.2 million from the linked quarter. Adjusted noninterest income ⁽¹⁾ for the fourth quarter of 2020 was $208.4 million, an increase of $176.1 million from the fourth quarter of 2019, and an increase of $175.3 million from the linked quarter.

• The fourth quarter includes the accelerated hedge revenue of $169.2 million reclassified from OCI. The partial accounting ineffectiveness determination resulted from a significant decrease in forecasted LIBOR based loans to support future amortization of the remaining transaction gain on the termination of our interest rate collar. See additional discussion in our Form 8-K filed January 7, 2021.
• Excluding the accelerated hedge revenue, the linked quarter increase was $6.1 million including increases of $3.6 million in earnings from limited partnerships, $1.3 million in securities gains, $0.7 million in investment advisory revenue, and $0.6 million in credit related fees.
• Noninterest income as a percent of total revenue for 2020 was 33.2% as compared to 16.7% for 2019, and for the fourth quarter of 2020 was 57.2% as compared to 17.4% for the fourth quarter of 2019 and 17.5% for the linked quarter. Before the impact of the accelerated hedge revenue of $169.2 million, noninterest income as a percent of total revenue for 2020 and the fourth quarter of 2020 were 18.3% and 20.5%, respectively, both increased from the comparable periods.

Noninterest expense for the full year of 2020 was $826.5 million, an increase of $417.7 million or 102.2% from 2019 due to the goodwill impairment charge of $443.7 million recorded in the first quarter of 2020. Noninterest expense for the fourth quarter of 2020 was $105.3 million, an increase of $4.8 million or 4.8% from the same period in 2019 and an increase of $10.5 million or 11.0% from the linked quarter. Adjusted noninterest expense ⁽¹⁾, which excludes the impact of non-routine items ⁽²⁾, was $377.6 million for the full year of 2020, a decrease of $1.4 million or 0.4% from 2019. For the fourth quarter of 2020, adjusted noninterest expense was $105.1 million, up $6.7 million or 6.9% from the fourth quarter of 2019 and up $12.6 million or 13.6% from the third quarter of 2020. The linked quarter increase in noninterest expenses resulted from an increase of $8.1 million in personnel costs driven by an increase of $8.5 million in incentive compensation due to improved corporate performance partially offset by a reduction of $1.0 million in medical insurance expense due to improved claims experience.

Our adjusted efficiency ratio⁽¹⁾ for the full year of 2020 was 41.0% as compared to 48.6% for 2019. The adjusted efficiency ratio for the fourth quarter of 2020 was 28.8%, compared to the linked quarter ratio of 49.4% and the prior year’s fourth quarter ratio of 50.9%. The full year and linked quarter improvements are both a result of the accelerated hedge revenue of $169.2 million. Before the impact of the accelerated hedge revenue, the full year and fourth quarter 2020 efficiency ratios both reflected slight increases at 50.3% and 53.7%, respectively, with the full year increase reflecting lower revenues in 2020 and the linked quarter increase reflecting the higher fourth quarter expenses.

Taxes:

The effective tax rate for the full year 2020 was (15.3%) as compared to 23.0% for the full year 2019. The effective tax rate for the fourth quarter of 2020 was 22.4% compared to 16.1% for the linked quarter and 23.4% for the fourth quarter of 2019. The full year 2020 effective rate was impacted by $313.3 million in non-deductible goodwill impairment.

_____________________________
(1)	Considered a non-GAAP financial measure. See Table10 “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure.
(2)	See Table 10 for a detail of non-routine income and expenses. The fourth quarter 2020 accelerated hedge revenue is not included as an adjustment from GAAP earnings to arrive at the non-GAAP adjusted performance metrics presented herein due to the historical and continuing nature of hedge revenue in our earnings, and the revenue resulting from the partial ineffectiveness designation merely representing an acceleration of a portion of the fixed collar gain into earnings as compared to the original amortization expectation. The revised amortization expectation for the remainder of the collar gain is presented within this release for clarification of this component of ongoing hedge revenue.

Dividend:

On January 21, 2021, the board of directors of Cadence Bancorporation declared a quarterly cash dividend in the amount of $0.15 per share of outstanding common stock, representing an annualized dividend of $0.60 per share. The dividend will be paid on February 12, 2021 to holders of record of Cadence’s Class A common stock on February 5, 2021.

Share Repurchase Authorization:

On January 21, 2021, the board of directors of Cadence Bancorporation authorized a share repurchase program providing for the purchase of shares of the Company’s Class A common stock for an aggregate purchase price of up to $200 million, subject to regulatory approvals. The previously approved share repurchase program authorizing up to $100 million is set to expire in February 2021.

Supplementary Financial Tables (Unaudited):

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

Fourth Quarter 2020 Earnings Conference Call:

Cadence Bancorporation executive management will host a conference call to discuss fourth quarter 2020 results on Monday, January 25, 2021, at 7:30 a.m. CT / 8:30 a.m. ET. Slides to be presented by management on the conference call can be viewed by visiting www.cadencebancorporation.com and selecting “Events & Presentations” then “Presentations”.

Conference Call Access:

To access the conference call, please dial one of the following numbers approximately 10-15 minutes prior to the start time to allow time for registration and use the Elite Entry Number provided below.

Dial in (toll free):	1-888-317-6003
International dial in:	1-412-317-6061
Canada (toll free):	1-866-284-3684
Participant Elite Entry Number:	3708183

For those unable to participate in the live presentation, a replay will be available through February 8, 2021. To access the replay, please use the following numbers:

US Toll Free:	1-877-344-7529
International Toll:	1-412-317-0088
Canada Toll Free:	1-855-669-9658
Replay Access Code:	10150788

Webcast Access:

The call and corresponding presentation slides will be webcast live on the home page of the Company’s website: www.cadencebancorporation.com.

About Cadence Bancorporation:

Cadence Bancorporation (NYSE: CADE), headquartered in Houston, Texas, is a regional financial holding company with $18.7 billion in total assets as of December 31, 2020. Its wholly owned subsidiary, Cadence Bank, N.A., operates 98 branch locations in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas, and provides corporations, middle-market companies, small businesses and consumers with a full range of innovative banking and financial solutions. Services and products include commercial and business banking, treasury management, specialized lending, asset-based lending, commercial real estate, SBA lending, foreign exchange, wealth management, investment and trust services, financial planning, retirement plan management, payroll and insurance services, consumer banking, consumer loans, mortgages, home equity lines and loans, and credit cards. Clients have access to leading-edge online and mobile solutions, interactive teller machines, and more than 55,000 ATMs. The Cadence team of 1,900 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; deteriorating asset quality and higher loan charge-offs; the laws and regulations applicable to our business; our ability to achieve organic loan and deposit growth and the composition of such growth; increased competition in the financial services industry, nationally, regionally or locally; our ability to maintain our historical earnings trends; our ability to raise additional capital to implement our business plan; material weaknesses in our internal control over financial reporting; systems failures or interruptions involving our information technology and telecommunications systems or third-party servicers; the composition of our management team and our ability to attract and retain key personnel; the fiscal position of the U.S. federal government and the soundness of other financial institutions; the composition of our loan portfolio, including the identity of our borrowers and the concentration of loans in energy-related industries and in our specialized industries; the portion of our loan portfolio that is comprised of participations and shared national credits; the amount of nonperforming and classified assets we hold; the extent of the impact of the COVID-19 pandemic on us and our customers, counterparties, employees, and third-party service providers, and the impacts to our business, financial position, results of operations, and prospects; the impact on our financial condition, results of operations, financial disclosures, and future business strategies related to the implementation of FASB Accounting Standards Update 2016-13, Financial Instruments – Credit Losses, commonly referred to as CECL. 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 revenue” are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis.

We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables (Table 10).

Table 1 – Selected Financial Data
	As of and for the Three Months Ended												As of and for the Years Ended December 31,
(In thousands, except per share data)	4Q20		3Q20		2Q20			1Q20			4Q19		2020			2019
Statement of Operations Data
Interest income	$	170,739	$	170,497	$	177,175		$	192,754		$	207,620	$	711,166		$	860,076
Interest expense		13,998		16,455		22,461			39,286			46,709		92,200			208,903
Net interest income		156,741		154,042		154,714			153,468			160,911		618,966			651,173
Provision for credit losses		2,835		32,973		158,811			83,429			27,126		278,048			111,027
Net interest income after provision		153,906		121,069		(4,097	)		70,039			133,785		340,918			540,146
Noninterest income ^(1)		209,745		32,591		29,950			35,069			33,898		307,355			130,925
Noninterest expense ^(2)		105,331		94,859		88,620			537,653			100,519		826,464			408,770
Income (loss) before income taxes		258,320		58,801		(62,767	)		(432,545	)		67,164		(178,191	)		262,301
Income tax expense (benefit)		57,737		9,486		(6,653	)		(33,234	)		15,738		27,336			60,343
Net income (loss)	$	200,583	$	49,315	$	(56,114	)	$	(399,311	)	$	51,426	$	(205,527	)	$	201,958
Weighted average common shares outstanding
Basic		125,974		125,957		125,925			126,630			127,954		126,121			128,914
Diluted		126,409		126,095		125,925			126,630			128,003		126,121			129,018
Earnings (loss) per share
Basic	$	1.58	$	0.39	$	(0.45	)	$	(3.15	)	$	0.40	$	(1.63	)	$	1.56
Diluted		1.57		0.39		(0.45	)		(3.15	)		0.40		(1.63	)		1.56
Period-End Balance Sheet Data
Cash and cash equivalents	$	2,053,946	$	1,247,172	$	1,899,369		$	609,351		$	988,764	$	2,053,946		$	988,764
Investment securities		3,332,168		3,088,699		2,661,433			2,461,644			2,368,592		3,332,168			2,368,592
Total loans, net of unearned income		12,719,129		13,465,556		13,699,097			13,392,191			12,983,655		12,719,129			12,983,655
Allowance for credit losses		367,160		385,412		370,901			245,246			119,643		367,160			119,643
Total assets		18,712,567		18,404,195		18,857,753			17,237,918			17,800,229		18,712,567			17,800,229
Total deposits		16,052,245		15,786,221		16,069,282			14,489,505			14,742,794		16,052,245			14,742,794
Noninterest-bearing deposits		5,033,748		5,033,338		5,220,109			3,959,721			3,833,704		5,033,748			3,833,704
Interest-bearing deposits		11,018,497		10,752,883		10,849,173			10,529,784			10,909,090		11,018,497			10,909,090
Borrowings and subordinated debentures		372,669		372,446		372,222			372,440			372,173		372,669			372,173
Total shareholders’ equity		2,121,102		2,071,472		2,045,480			2,113,543			2,460,846		2,121,102			2,460,846
Average Balance Sheet Data
Investment securities	$	3,201,722	$	2,960,357	$	2,487,467		$	2,397,275		$	2,003,339	$	2,763,450		$	1,776,689
Total loans, net of unearned income		13,238,440		13,652,395		13,884,220			13,161,371			13,423,435		13,483,895			13,714,731
Allowance for credit losses		393,306		389,243		267,464			201,785			132,975		313,377			114,256
Total assets		18,354,046		18,248,014		18,500,600			17,694,018			17,843,383		18,199,726			17,689,126
Total deposits		15,736,884		15,628,314		15,774,787			14,574,614			14,749,327		15,430,038			14,628,628
Noninterest-bearing deposits		5,245,478		4,892,079		4,587,673			3,658,612			3,648,874		4,598,544			3,431,300
Interest-bearing deposits		10,491,406		10,736,235		11,187,115			10,916,002			11,100,454		10,831,494			11,197,328
Borrowings and subordinated debentures		372,920		372,304		372,547			439,698			374,179		389,275			437,186
Total shareholders’ equity		2,072,030		2,052,079		2,118,796			2,446,810			2,471,398		2,171,826			2,373,856

(1)	The quarter ended December 31, 2020, includes hedge revenue of $169.2 million, $129.5 million after tax.
(2)	The quarter ended March 31, 2020, includes the non-cash goodwill impairment charge of $443.7 million, $412.9 million after-tax.

Table 1 (Continued) – Selected Financial Data
	As of and for the Three Months Ended															As of and for the Years Ended December 31,
(In thousands, except per share data)	4Q20 ^(4)			3Q20			2Q20			1Q20			4Q19			2020 ^(4)			2019
Per Share Data:
Book value	$	16.84		$	16.45		$	16.24		$	16.79		$	19.29		$	16.84		$	19.29
Tangible book value ^(1)		15.83			15.40			15.15			15.65			14.65			15.83			14.65
Cash dividends declared		0.075			0.050			0.050			0.175			0.175			0.350			0.700
Dividend payout ratio		4.75	%		12.82	%		(11.11	)%		(5.56	)%		43.75	%		(21.47	)%		44.87	%
Performance Ratios:
Return on average common equity^(2)		38.51	%		9.56	%		(10.65	)%		(65.64	)%		8.26	%		(9.46	)%		8.51	%
Return on average tangible common equity^(1) (2)		41.90			11.08			(10.56	)		3.86			11.82			11.63			12.40
Return on average assets ^(2)		4.35			1.08			(1.22	)		(9.08	)		1.14			(1.13	)		1.14
Net interest margin ^(2)		3.54			3.49			3.51			3.80			3.89			3.58			4.00
Efficiency ratio^(1)		28.74			50.83			47.99			285.17			51.60			89.22			52.27
Adjusted efficiency ratio^(1)		28.79			49.45			47.93			49.88			50.91			41.04			48.64
Asset Quality Ratios:
Total NPA to total loans, OREO, and other NPA		1.24	%		1.55	%		1.74	%		1.31	%		0.97	%		1.24	%		0.97	%
Total nonperforming loans ("NPL") to total loans		1.08			1.40			1.64			1.19			0.92			1.08			0.92
Total ACL to total loans		2.89			2.86			2.71			1.83			0.92			2.89			0.92
ACL to total NPL		266.05			203.82			165.30			153.61			100.07			266.05			100.07
Net charge-offs to average loans^(2)		0.64			0.58			0.94			0.99			1.04			0.79			0.63
Capital Ratios:
Total shareholders’ equity to assets		11.3	%		11.3	%		10.8	%		12.3	%		13.8	%		11.3	%		13.8	%
Tangible common equity to tangible assets ^(1)		10.7			10.6			10.2			11.5			10.9			10.7			10.9
Common equity Tier 1 capital ^(3)		14.0			12.0			11.7			11.4			11.5			14.0			11.5
Tier 1 leverage capital ^(3)		10.9			9.9			9.5			10.1			10.3			10.9			10.3
Tier 1 risk-based capital^(3)		14.0			12.0			11.7			11.4			11.5			14.0			11.5
Total risk-based capital ^(3)		16.7			14.7			14.3			13.8			13.7			16.7			13.7

_____________________
(1)	Considered a non-GAAP financial measure. See Table 10 "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure.
(2)	Quarterly periods are annualized.
(3)	Current quarter regulatory capital ratios are estimates.
(4)	Asset Quality Ratios do not include nonperforming loans held for sale of $176 thousand.

Table 2 – Average Balances/Yield/Rates
	For the Three Months Ended December 31,
	2020									2019
	Average			Income/			Yield/			Average			Income/			Yield/
(In thousands)	Balance			Expense			Rate			Balance			Expense			Rate
ASSETS
Interest-earning assets:
Loans, net of unearned income ^(1)
Originated loans	$	10,939,304		$	125,535			4.57	%	$	10,160,970		$	134,450			5.25	%
ANCI portfolio		2,126,553			25,943			4.85			3,017,005			46,247			6.08
PCD portfolio ^(3)		172,583			3,820			8.81			245,474			9,857			15.93
Total loans		13,238,440			155,298			4.67			13,423,449			190,554			5.63
Investment securities
Taxable		2,895,541			12,597			1.73			1,806,932			11,699			2.57
Tax-exempt ^(2)		306,181			2,427			3.15			196,407			1,829			3.69
Total investment securities		3,201,722			15,024			1.87			2,003,339			13,528			2.68
Federal funds sold and short-term investments		1,178,973			548			0.18			930,910			3,392			1.45
Other investments		76,878			380			1.97			77,348			530			2.72
Total interest-earning assets		17,696,013			171,250			3.85			16,435,046			208,004			5.02
Noninterest-earning assets:
Cash and due from banks		216,116									107,180
Premises and equipment		125,955									128,458
Accrued interest and other assets		709,268									1,305,674
Allowance for credit losses		(393,306	)								(132,975	)
Total assets	$	18,354,046								$	17,843,383
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits	$	7,881,093		$	4,145			0.21	%	$	8,195,455		$	26,946			1.30	%
Savings deposits		336,304			127			0.15			262,638			320			0.48
Time deposits		2,274,009			5,711			1.00			2,642,361			14,983			2.25
Total interest-bearing deposits		10,491,406			9,983			0.38			11,100,454			42,249			1.51
Other borrowings		149,981			931			2.47			152,102			953			2.49
Subordinated debentures		222,939			3,085			5.51			222,077			3,507			6.27
Total interest-bearing liabilities		10,864,326			13,999			0.51			11,474,633			46,709			1.61
Noninterest-bearing liabilities:
Demand deposits		5,245,478									3,648,874
Accrued interest and other liabilities		172,212									248,478
Total liabilities		16,282,016									15,371,985
Shareholders' equity		2,072,030									2,471,398
Total liabilities and shareholders' equity	$	18,354,046								$	17,843,383
Net interest income/net interest spread					157,251			3.34	%					161,295			3.40	%
Net yield on earning assets/net interest margin								3.54	%								3.89	%
Taxable equivalent adjustment:
Investment securities					(510	)								(384	)
Net interest income				$	156,741								$	160,911

_____________________
(1)	Nonaccrual loans are included in loans, net of unearned income. No adjustment has been made for these loans in the calculation of yields.
(2)	Interest income and yields are presented on a fully taxable equivalent basis using an income tax rate of 21%.
(3)	Prior to the adoption of CECL on January 1, 2020, these loans were referred to as ACI loans, but with the adoption of CECL they are referred to as PCD loans.

Table 2 (Continued) – Average Balances/Yield/Rates
	For the Three Months Ended December 31, 2020									For the Three Months Ended September 30, 2020
	Average			Income/			Yield/			Average			Income/			Yield/
(In thousands)	Balance			Expense			Rate			Balance			Expense			Rate
ASSETS
Interest-earning assets:
Loans, net of unearned income^(1)
Originated loans	$	10,939,304		$	125,535			4.57	%	$	11,168,913		$	123,177			4.39	%
ANCI portfolio		2,126,553			25,943			4.85			2,295,097			28,214			4.89
PCD portfolio ^(3)		172,583			3,820			8.81			188,385			3,460			7.31
Total loans		13,238,440			155,298			4.67			13,652,395			154,851			4.51
Investment securities
Taxable		2,895,541			12,597			1.73			2,694,012			13,164			1.94
Tax-exempt ^(2)		306,181			2,427			3.15			266,345			2,150			3.21
Total investment securities		3,201,722			15,024			1.87			2,960,357			15,314			2.06
Federal funds sold and short-term investments		1,178,973			548			0.18			942,017			432			0.18
Other investments		76,878			380			1.97			77,262			350			1.80
Total interest-earning assets		17,696,013			171,250			3.85			17,632,031			170,947			3.86
Noninterest-earning assets:
Cash and due from banks		216,116									170,241
Premises and equipment		125,955									127,432
Accrued interest and other assets		709,268									707,553
Allowance for credit losses		(393,306	)								(389,243	)
Total assets	$	18,354,046								$	18,248,014
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits	$	7,881,093		$	4,145			0.21	%	$	8,037,801		$	4,681			0.23	%
Savings deposits		336,304			127			0.15			319,004			140			0.17
Time deposits		2,274,009			5,711			1.00			2,379,430			7,741			1.29
Total interest-bearing deposits		10,491,406			9,983			0.38			10,736,235			12,562			0.47
Other borrowings		149,981			931			2.47			149,973			931			2.47
Subordinated debentures		222,939			3,085			5.51			222,331			2,961			5.30
Total interest-bearing liabilities		10,864,326			13,999			0.51			11,108,539			16,454			0.59
Noninterest-bearing liabilities:
Demand deposits		5,245,478									4,892,079
Accrued interest and other liabilities		172,212									195,317
Total liabilities		16,282,016									16,195,935
Stockholders' equity		2,072,030									2,052,079
Total liabilities and stockholders' equity	$	18,354,046								$	18,248,014
Net interest income/net interest spread					157,251			3.34	%					154,493			3.27	%
Net yield on earning assets/net interest margin								3.54	%								3.49	%
Taxable equivalent adjustment:
Investment securities					(510	)								(451	)
Net interest income				$	156,741								$	154,042

_____________________
(1)	Nonaccrual loans are included in loans, net of unearned income. No adjustment has been made for these loans in the calculation of yields.
(2)	Interest income and yields are presented on a fully taxable equivalent basis using an income tax rate of 21%.
(3)	Prior to the adoption of CECL on January 1, 2020, these loans were referred to as ACI loans, but with the adoption of CECL they are referred to as PCD loans.

Table 2 (Continued) – Average Balances/Yield/Rates
	For the Year Ended December 31,
	2020									2019
	Average			Income/			Yield/			Average			Income/			Yield/
(In thousands)	Balance			Expense			Rate			Balance			Expense			Rate
ASSETS
Interest-earning assets:
Loans, net of unearned income ^(1)
Originated loans	$	10,874,853		$	504,036			4.63	%	$	10,053,507		$	542,543			5.40	%
ANCI portfolio		2,415,141			127,774			5.29			3,387,367			219,183			6.47
PCD portfolio ^(3)		193,902			16,328			8.42			273,857			34,559			12.62
Total loans		13,483,895			648,138			4.81			13,714,731			796,285			5.81
Investment securities
Taxable		2,515,807			51,983			2.07			1,568,599			42,450			2.71
Tax-exempt ^(2)		247,643			8,332			3.36			208,090			7,983			3.84
Total investment securities		2,763,450			60,315			2.18			1,776,689			50,433			2.84
Federal funds sold and short-term investments		1,023,367			3,092			0.30			759,026			12,762			1.68
Other investments		77,908			1,371			1.76			70,127			2,274			3.24
Total interest-earning assets		17,348,620			712,916			4.11			16,320,573			861,754			5.28
Noninterest-earning assets:
Cash and due from banks		203,413									115,268
Premises and equipment		127,151									128,448
Accrued interest and other assets		833,919									1,239,093
Allowance for credit losses		(313,377	)								(114,256	)
Total assets	$	18,199,726								$	17,689,126
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits	$	8,101,392		$	38,005			0.47	%	$	7,983,237		$	117,462			1.47	%
Savings deposits		305,031			763			0.25			253,170			1,066			0.42
Time deposits		2,425,071			36,647			1.51			2,960,921			69,550			2.35
Total interest-bearing deposits		10,831,494			75,415			0.70			11,197,328			188,078			1.68
Other borrowings		166,730			3,906			2.34			256,815			8,704			3.39
Subordinated debentures		222,545			12,879			5.79			180,371			12,121			6.72
Total interest-bearing liabilities		11,220,769			92,200			0.82			11,634,514			208,903			1.80
Noninterest-bearing liabilities:
Demand deposits		4,598,544									3,431,300
Accrued interest and other liabilities		208,587									249,456
Total liabilities		16,027,900									15,315,270
Shareholders' equity		2,171,826									2,373,856
Total liabilities and shareholders' equity	$	18,199,726								$	17,689,126
Net interest income/net interest spread					620,716			3.29	%					652,851			3.48	%
Net yield on earning assets/net interest margin								3.58	%								4.00	%
Taxable equivalent adjustment:
Investment securities					(1,750	)								(1,678	)
Net interest income				$	618,966								$	651,173

_____________________
(1)	Nonaccrual loans are included in loans, net of unearned income. No adjustment has been made for these loans in the calculation of yields.
(2)	Interest income and yields are presented on a fully taxable equivalent basis using an income tax rate of 21%.
(3)	Prior to the adoption of CECL on January 1, 2020, these loans were referred to as ACI loans, but with the adoption of CECL they are referred to as PCD loans.

Table 3 – Loan Interest Income Detail
	For the Three Months Ended,															For the Year Ended,
(In thousands)	4Q20			3Q20			2Q20			1Q20			4Q19			December 31, 2020			December 31, 2019
Interest Income Detail
Originated loans	$	125,535		$	123,177		$	125,922		$	129,402		$	134,450		$	504,036		$	542,543
ANCI loans: interest income		20,507			22,850			26,264			32,940			37,637			102,562			180,974
ANCI loans: accretion		5,436			5,364			6,703			7,710			8,610			25,212			38,209
PCD loans: interest income ^(1)		3,355			2,421			3,111			3,039			3,839			11,926			29,927
PCD loans: accretion ^(1)		465			1,039			854			2,043			6,018			4,402			4,632
Total loan interest income	$	155,298		$	154,851		$	162,854		$	175,134		$	190,554		$	648,138		$	796,285
Yields
Originated loans		4.57	%		4.39	%		4.53	%		5.10	%		5.25	%		4.63	%		5.40	%
ANCI loans without discount accretion		3.84			3.96			4.20			4.85			4.95			4.25			5.34
ANCI loans discount accretion		1.01			0.93			1.08			1.14			1.13			1.04			1.13
PCD loans without discount accretion		7.73			5.11			6.30			5.65			6.20			6.15			10.93
PCD loans discount accretion		1.08			2.20			1.73			3.80			9.73			2.27			1.69
Total loan yield		4.67	%		4.51	%		4.72	%		5.35	%		5.63	%		4.81	%		5.81	%

(1)	Prior year PCD amounts have been revised to be comparable to the current year presentation. Interest income for PCD loans represents contractual interest.

Table 4 – Allowance for Credit Losses (“ACL”) ^(1)
	For the Three Months Ended															For the Year Ended December 31,
(In thousands)	4Q20			3Q20			2Q20			1Q20			4Q19			2020			2019
Balance at beginning of period	$	385,412		$	370,901		$	245,246		$	119,643		$	127,773		$	119,643		$	94,378
Cumulative effect of the adoption of CECL ^(2)		—			—			—			75,850			—			75,850			—
Charge-offs		(23,956	)		(21,830	)		(33,452	)		(33,098	)		(35,432	)		(112,336	)		(87,001	)
Recoveries		2,770			1,936			901			613			176			6,220			1,239
Net charge-offs		(21,186	)		(19,894	)		(32,551	)		(32,485	)		(35,256	)		(106,116	)		(85,762	)
Provision for loan losses		2,934			34,405			158,206			82,238			27,126			277,783			111,027
Balance at end of period	$	367,160		$	385,412		$	370,901		$	245,246		$	119,643		$	367,160		$	119,643

(1)	This table represents the activity in the ACL for funded loans.
(2)	The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (“CECL”), on January 1, 2020 and recorded this cumulative effect adjustment as a result of accounting change.

Table 5 – ACL Activity by Segment
	For the Three Months Ended December 31, 2020
(In thousands)	Commercial and Industrial			Commercial Real Estate			Consumer			Total Allowance for Credit Losses			Reserve for Unfunded Commitments ^(1)			Total
As of September 30, 2020	$	202,197		$	143,008		$	40,207		$	385,412		$	2,395		$	387,807
Provision for credit losses		(2,990	)		7,372			(1,448	)		2,934			(99	)		2,835
Charge-offs		(12,870	)		(10,500	)		(586	)		(23,956	)		—			(23,956	)
Recoveries		1,028			1,307			435			2,770			—			2,770
As of December 31, 2020	$	187,365		$	141,187		$	38,608		$	367,160		$	2,296		$	369,456
	For the Year Ended December 31, 2020
(In thousands)	Commercial and Industrial			Commercial Real Estate			Consumer			Total Allowance for Credit Losses			Reserve for Unfunded Commitments ^(1)			Total
As of December 31, 2019	$	89,796		$	15,319		$	14,528		$	119,643		$	1,699		$	121,342
Cumulative effect of the adoption of CECL		32,951			20,599			22,300			75,850			332			76,182
As of January 1, 2020		122,747			35,918			36,828			195,493			2,031			197,524
Provision for credit losses		157,580			117,792			2,411			277,783			265			278,048
Charge-offs		(96,277	)		(14,283	)		(1,776	)		(112,336	)		—			(112,336	)
Recoveries		3,315			1,760			1,145			6,220			—			6,220
As of December 31, 2020	$	187,365		$	141,187		$	38,608		$	367,160		$	2,296		$	369,456

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

Table 6 – Criticized Loans by Segment
	As of December 31, 2020
(Amortized cost in thousands)	Special Mention		Substandard		Doubtful		Total Criticized
Commercial and industrial
General C&I	$	61,910	$	90,896	$	12,583	$	165,389
Energy		93,708		150,810		8,115		252,633
Restaurant		55,141		133,709		6,987		195,837
Healthcare		761		29,614		—		30,375
Total commercial and industrial		211,520		405,029		27,685		644,234
Commercial real estate
Industrial, retail, and other		35,992		26,540		—		62,532
Hospitality ^(1)		54,449		83,460		—		137,909
Multifamily		90		198		—		288
Office		4,863		7,843		—		12,706
Total commercial real estate		95,394		118,041		—		213,435
Consumer
Residential		—		14,023		—		14,023
Other		—		4		—		4
Total consumer		—		14,027		—		14,027
Total	$	306,914	$	537,097	$	27,685	$	871,696
	As of September 30, 2020
(Amortized cost in thousands)	Special Mention		Substandard		Doubtful		Total Criticized
Commercial and industrial
General C&I	$	71,384	$	156,323	$	9,270	$	236,977
Energy sector		146,772		165,277		7,816		319,865
Restaurant industry		97,315		169,899		7,624		274,838
Healthcare		722		58,802		—		59,524
Total commercial and industrial		316,193		550,301		24,710		891,204
Commercial real estate
Industrial, retail, and other		29,574		11,856		—		41,430
Hospitality ^(1)		64,323		46,465		—		110,788
Multifamily		91		200		—		291
Office		346		13,250		3,029		16,625
Total commercial real estate		94,334		71,771		3,029		169,134
Consumer
Residential real estate		—		22,770		—		22,770
Other		—		358		—		358
Total consumer		—		23,128		—		23,128
Total	$	410,527	$	645,200	$	27,739	$	1,083,466

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

Table 7 – Nonperforming Assets
	As of
(In thousands)	4Q20 ^(3)			3Q20			2Q20			1Q20			4Q19
Nonperforming loans ^(1)
Commercial and industrial	$	109,000		$	145,570		$	182,839		$	136,712		$	106,803
Commercial real estate		14,969			27,163			25,261			8,133			1,127
Consumer		14,033			16,364			16,284			14,808			7,289
Small business ^(2)		—			—			—			—			4,337
Total nonperforming loans ("NPL")		138,002			189,097			224,384			159,653			119,556
Foreclosed OREO and other NPA		19,788			20,344			13,949			15,679			5,958
Total nonperforming assets	$	157,790		$	209,441		$	238,333		$	175,332		$	125,514
NPL as a percentage of total loans		1.08	%		1.40	%		1.64	%		1.19	%		0.92	%
NPA as a percentage of loans plus OREO/other		1.24	%		1.55	%		1.74	%		1.31	%		0.97	%
NPA as a percentage of total assets		0.84	%		1.14	%		1.26	%		0.99	%		0.71	%
Total accruing loans 90 days or more past due	$	13,880		$	7,260		$	3,123		$	1,999		$	23,364

(1)	Amounts are not comparable due to our adoption of CECL on January 1, 2020. Prior to this date, pools of individual ACI loans were excluded because they continued to earn interest income from the accretable yield at the pool level. With the adoption of CECL, the pools were discontinued, and performance is based on contractual terms for individual loans. Additionally, prior to January 1, 2020, we used recorded investment in this table. With the adoption of CECL, we now use amortized cost.
(2)	Upon the adoption of CECL, small business loans are included in commercial and industrial and commercial real estate loans.
(3)	Nonperforming loans do not include nonperforming loans held for sale of $176 thousand.

Table 8 – Noninterest Income
	For the Three Months Ended										Years Ended December 31,
(In thousands)	4Q20		3Q20		2Q20		1Q20		4Q19		2020		2019
Noninterest Income
Hedge revenue	$	169,248	$	—	$	—	$	—	$	—	$	169,248	$	—
Investment advisory revenue		7,457		6,797		6,505		5,605		6,920		26,364		24,890
Trust services revenue		4,885		4,556		4,092		4,815		4,713		18,349		18,066
Service charges on deposit accounts		6,028		5,847		4,852		6,416		5,181		23,143		20,503
Mortgage banking income		3,062		3,535		2,020		1,111		841		9,727		3,174
Credit-related fees		4,766		4,202		4,401		5,983		5,094		19,352		21,265
Bankcard fees		1,775		1,745		1,716		1,958		1,933		7,194		8,486
Payroll processing revenue		1,309		1,255		1,143		1,367		1,373		5,074		5,149
SBA income		2,889		3,037		1,335		1,908		2,153		9,169		7,232
Other service fees		1,751		1,450		1,528		1,912		1,701		6,641		7,412
Securities gains, net		1,353		79		2,286		2,994		317		6,712		2,018
Other		5,222		88		72		1,000		3,672		6,382		12,730
Total noninterest income	$	209,745	$	32,591	$	29,950	$	35,069	$	33,898	$	307,355	$	130,925

Table 9 – Noninterest Expenses
	For the Three Months Ended										Years Ended December 31,
(In thousands)	4Q20		3Q20		2Q20		1Q20		4Q19		2020		2019
Noninterest Expenses
Salaries and employee benefits	$	59,833	$	51,734	$	47,158	$	48,807	$	54,840	$	207,532	$	213,874
Premises and equipment		11,036		10,716		10,634		10,808		11,618		43,194		44,637
Merger related expenses		—		2,105		—		1,282		925		3,386		28,497
Intangible asset amortization		5,164		5,299		5,472		5,592		5,876		21,528		23,862
Data processing		3,047		3,024		3,084		3,352		3,343		12,507		13,013
Software amortization		4,480		4,432		4,036		3,547		3,427		16,495		13,352
Consulting and professional fees		3,450		3,320		3,009		2,707		3,552		12,485		10,301
Loan related expenses		1,709		953		735		760		654		4,157		2,383
FDIC insurance		3,007		2,528		3,939		2,436		1,245		11,910		5,394
Communications		1,175		1,119		1,002		1,156		1,236		4,453		5,116
Advertising and public relations		956		716		920		1,464		1,764		4,057		5,017
Legal expenses		726		681		579		411		306		2,398		1,608
Other		10,748		8,232		8,052		11,636		11,732		38,667		41,716
Noninterest expenses excluding goodwill impairment charge		105,331		94,859		88,620		93,958		100,519		382,769		408,770
Goodwill impairment charge		—		—		—		443,695		—		443,695		—
Total noninterest expenses	$	105,331	$	94,859	$	88,620	$	537,653	$	100,519	$	826,464	$	408,770

Table 10 – Reconciliation of Non-GAAP Financial Measures
	As of and for the Three Months Ended															As of and for the Year Ended December 31,
(In thousands, except share and per share data)	4Q20			3Q20			2Q20			1Q20			4Q19			2020			2019
Efficiency ratio
Noninterest expenses (numerator)	$	105,331		$	94,859		$	88,620		$	537,653		$	100,519		$	826,464		$	408,770
Net interest income	$	156,741		$	154,042		$	154,714		$	153,468		$	160,911		$	618,966		$	651,173
Noninterest income		209,745			32,591			29,950			35,069			33,898			307,355			130,925
Operating revenue (denominator)	$	366,486		$	186,633		$	184,664		$	188,537		$	194,809		$	926,321		$	782,098
Efficiency ratio		28.74	%		50.83	%		47.99	%		285.17	%		51.60	%		89.22	%		52.27	%
Adjusted efficiency ratio
Noninterest expenses	$	105,331		$	94,859		$	88,620		$	537,653		$	100,519		$	826,464		$	408,770
Less: non-cash goodwill impairment charge		—			—			—			443,695			—			443,695			—
Less: merger related expenses		—			2,105			—			1,282			925			3,386			28,497
Less: pension plan termination expense		—			—			—			—			1,225			—			1,225
Less: expenses related to COVID-19 pandemic		215			235			1,205			122			—			1,777			—
Adjusted noninterest expenses (numerator)	$	105,116		$	92,519		$	87,415		$	92,554		$	98,369		$	377,606		$	379,048
Net interest income	$	156,741		$	154,042		$	154,714		$	153,468		$	160,911		$	618,966		$	651,173
Noninterest income		209,745			32,591			29,950			35,069			33,898			307,355			130,925
Plus: impairment charge on branch building		—			538			—			—			—			538			—
Less: gain on sale of acquired loans		—			—			—			—			1,263			—			2,777
Less: securities gains, net		1,353			79			2,286			2,994			317			6,712			2,018
Adjusted noninterest income		208,392			33,050			27,664			32,075			32,318			301,181			128,130
Adjusted operating revenue (denominator)	$	365,133		$	187,092		$	182,378		$	185,543		$	193,229		$	920,147		$	779,303
Adjusted efficiency ratio		28.79	%		49.45	%		47.93	%		49.88	%		50.91	%		41.04	%		48.64	%
Tangible common equity ratio
Shareholders’ equity	$	2,121,102		$	2,071,472		$	2,045,480		$	2,113,543		$	2,460,846		$	2,121,102		$	2,460,846
Less: goodwill and other intangible assets, net		(126,841	)		(132,005	)		(137,318	)		(142,782	)		(590,949	)		(126,841	)		(590,949	)
Tangible common shareholders’ equity		1,994,261			1,939,467			1,908,162			1,970,761			1,869,897			1,994,261			1,869,897
Total assets		18,712,567			18,404,195			18,857,753			17,237,918			17,800,229			18,712,567			17,800,229
Less: goodwill and other intangible assets, net		(126,841	)		(132,005	)		(137,318	)		(142,782	)		(590,949	)		(126,841	)		(590,949	)
Tangible assets	$	18,585,726		$	18,272,190		$	18,720,435		$	17,095,136		$	17,209,280		$	18,585,726		$	17,209,280
Tangible common equity ratio		10.73	%		10.61	%		10.19	%		11.53	%		10.87	%		10.73	%		10.87	%
Tangible book value per share
Shareholders’ equity	$	2,121,102		$	2,071,472		$	2,045,480		$	2,113,543		$	2,460,846		$	2,121,102		$	2,460,846
Less: goodwill and other intangible assets, net		(126,841	)		(132,005	)		(137,318	)		(142,782	)		(590,949	)		(126,841	)		(590,949	)
Tangible common shareholders’ equity	$	1,994,261		$	1,939,467		$	1,908,162		$	1,970,761		$	1,869,897		$	1,994,261		$	1,869,897
Common shares outstanding		125,978,561			125,946,793			125,930,741			125,897,827			127,597,569			125,978,561			127,597,569
Tangible book value per share	$	15.83		$	15.40		$	15.15		$	15.65		$	14.65		$	15.83		$	14.65

Table 10 (Continued) – Reconciliation of Non-GAAP Measures
	As of and for the Three Months Ended															As of and for the Year Ended December 31,
(In thousands, except share and per share data)	4Q20			3Q20			2Q20			1Q20			4Q19			2020			2019
Return on average tangible common equity
Average common equity	$	2,072,030		$	2,052,079		$	2,118,796		$	2,446,810		$	2,471,398		$	2,171,826		$	2,373,856
Less: average intangible assets		(130,146	)		(135,491	)		(140,847	)		(584,513	)		(595,439	)		(247,121	)		(598,546	)
Average tangible common shareholders’ equity	$	1,941,884		$	1,916,588		$	1,977,949		$	1,862,297		$	1,875,959		$	1,924,705		$	1,775,310
Net income (loss)	$	200,583		$	49,315		$	(56,114	)	$	(399,311	)	$	51,426		$	(205,527	)	$	201,958
Plus: non-cash goodwill impairment charge, net of tax		—			—			—			412,918			—			412,918			—
Plus: intangible asset amortization, net of tax		3,939			4,042			4,174			4,261			4,477			16,416			18,240
Tangible net income (loss)	$	204,522		$	53,357		$	(51,940	)	$	17,868		$	55,903		$	223,807		$	220,198
Return on average tangible common equity^(1)		41.90	%		11.08	%		(10.56	)%		3.86	%		11.82	%		11.63	%		12.40	%
Adjusted return on average tangible common equity
Average tangible common shareholders’ equity	$	1,941,884		$	1,916,588		$	1,977,949		$	1,862,297		$	1,875,959		$	1,924,705		$	1,775,310
Tangible net income (loss)	$	204,522		$	53,357		$	(51,940	)	$	17,868		$	55,903		$	223,807		$	220,198
Non-routine items:
Plus: merger related expenses		—			2,105			—			1,282			925			3,386			28,497
Plus: pension plan termination expense		—			—			—			—			1,225			—			1,225
Plus: expenses related to COVID-19 pandemic		215			235			1,205			122			—			1,777			—
Plus: impairment loss on branch building		—			538			—			—			—			538			—
Less: gain on sale of acquired loans		—			—			—			—			1,263			—			2,777
Less: securities gains, net		1,353			79			2,286			2,994			317			6,712			2,018
Tax Expense:
Less: income tax effect of tax deductible non-routine items		(270	)		664			(256	)		(464	)		48			(326	)		5,756
Total non-routine items, after tax		(868	)		2,135			(825	)		(1,126	)		522			(684	)		21,171
Adjusted tangible net income (loss)	$	203,654		$	55,492		$	(52,765	)	$	16,742		$	56,425		$	223,122		$	241,369
Adjusted return on average tangible common equity^(1)		41.72	%		11.52	%		(10.73	)%		3.62	%		11.93	%		11.59	%		13.60	%
Adjusted return on average assets
Average assets	$	18,354,046		$	18,248,014		$	18,500,600		$	17,694,018		$	17,843,383		$	18,199,726		$	17,689,126
Net income (loss)	$	200,583		$	49,315		$	(56,114	)	$	(399,311	)	$	51,426		$	(205,527	)	$	201,958
Return on average assets		4.35	%		1.08	%		(1.22	)%		(9.08	)%		1.14	%		(1.13	)%		1.14	%
Net income (loss)	$	200,583		$	49,315		$	(56,114	)	$	(399,311	)	$	51,426		$	(205,527	)	$	201,958
Plus: non-cash goodwill impairment charge, net of tax		—			—			—			412,918			—			412,918			—
Total non-routine items, after tax		(868	)		2,135			(825	)		(1,126	)		522			(684	)		21,171
Adjusted net income (loss)	$	199,715		$	51,450		$	(56,939	)	$	12,481		$	51,948		$	206,707		$	223,129
Adjusted return on average assets^(1)		4.33	%		1.12	%		(1.24	)%		0.28	%		1.16	%		1.14	%		1.26	%
Adjusted diluted earnings (loss) per share
Diluted weighted average common shares outstanding		126,408,959			126,094,868			125,924,652			126,630,446			128,003,089			126,120,534			129,017,599
Net income (loss) allocated to common stock	$	198,765		$	48,884		$	(56,114	)	$	(399,311	)	$	51,248		$	(205,527	)	$	201,275
Plus: non-cash goodwill impairment, net of tax		—			—			—			412,918			—			412,918			—
Total non-routine items, after tax		(868	)		2,135			(825	)		(1,126	)		522			(684	)		21,171
Adjusted net income (loss) allocated to common stock	$	197,897		$	51,019		$	(56,939	)	$	12,481		$	51,770		$	206,707		$	222,446
Adjusted diluted earnings (loss) per share	$	1.57		$	0.40		$	(0.45	)	$	0.10		$	0.40		$	1.64		$	1.72
Adjusted pre-tax, pre-provision net revenue
Income (loss) before taxes	$	258,320		$	58,801		$	(62,767	)	$	(432,545	)	$	67,164		$	(178,191	)	$	262,301
Plus: provision for credit losses		2,835			32,973			158,811			83,429			27,126			278,048			111,027
Plus: non-cash goodwill impairment		—			—			—			443,695			—			443,695			—
Plus: Total non-routine items before taxes		(1,138	)		2,799			(1,081	)		(1,590	)		570			(1,011	)		26,927
Adjusted pre-tax, pre-provision net revenue	$	260,017		$	94,573		$	94,963		$	92,989		$	94,860		$	542,541		$	400,255

(1)	Quarterly periods are annualized.