Cadence Bank

Good day and welcome to the Cadence Bank third quarter 2022 webcast and conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchstone phone. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Wilson Zachary Lee, Director of Corporate Finance. Please go ahead.

Good morning, and thank you for joining the Cadence Bank third quarter 2022 earnings conference call. We have our executive management team with us here this morning, Dan, Paul, Chris, Valerie, and Hank. Our speakers will be referring to prepared slides during the discussion. You can find the slides by going to our investor relations page at ir.cadencebank.com. where you'll find them on the link to our webcast, or you can view them at the exhibit to the 8K that we filed yesterday afternoon. These slides are also in the presentation section of our investor relations website. I would remind you that the presentation, along with our earnings release, contain our customary disclosures around forward-looking statements and any non-GAAP metrics that may be discussed. The disclosures regarding forward-looking statements contained in those documents apply to our presentation today. And I'll now turn to Dan Rollins for his opening comments.

Good morning, everyone. Thank you for joining us today to discuss Cadence Bank's third quarter 2022 financial results. I'd like to start with a few comments on our recent systems conversion and rebranding effort, and then Valerie and I will cover the financial results for the quarter. Following our prepared remarks, our full executive management team will be available for questions. Earlier this month, we successfully completed our core operating system conversion, as well as the rebranding of over 400 locations across our footprint and the launch of our new website. This project, initiated almost 18 months ago, is the largest conversion most of us will ever be involved with during our careers. Just a few stats over the past few weeks. We converted approximately a quarter of a million accounts. Our facilities team rebranded over 400 locations with over 5,000 new signs, and our completely new website has received over one million page views in the past few weeks. Additionally, over the past few months, We brought a new data center online while shutting down three others and doubled the technological capacity for our call center. And we have, or are in the process of, decommissioning hundreds of legacy applications and migrating all of our employees to a common operating model. This is a tremendous success story for our entire team. I'm extremely proud of each and every one of our teammates. Their dedication to excellence has paid off. This is truly an historical accomplishment for our company. Our teammates are now serving customers and communities across our nine-state footprint as one unified brand, and the excitement around the new brand – the new logo, the new colors, the new Sonic branding – has exceeded even our highest expectations. As to our financial results for the quarter, we reported adjusted net income available to common shareholders of $143.7 million, or 78 cents, per diluted common share. Even with the intense focus on our conversion, this performance represents another record quarterly earnings for Cadence and another increase in adjusted PPNR to $189.8 million. Our adjusted earnings and PPNR both increased approximately 7% compared to our second quarter results. Moving to the balance sheet, we had another solid loan growth quarter, reporting net loan growth of $936 million or 13% annualized. This brings our year-to-date total to $2.4 billion, or 12% annualized. Our loan growth for the quarter was again very diverse, both from a geographic and product standpoint, which positively reflects the economic environment and our footprint, as well as our team's ability to remain forward-focused throughout this integration. For the quarter, we reported growth across several regions of our community bank, led by the Texas region. And our corporate banking group had the great quarter across the board, including CNI, energy, and real estate, along with certain other specialized industry verticals. We reported a decline in deposits for the quarter of $1.2 billion, nearly half of which was public funds and correspondent bank balances, and the remainder is reflective of slightly lower average account balances across our footprint. The core funding provided by our community bank positions us very well from both a deposit retention and cost standpoint in this environment. While our liquidity position has allowed us to be disciplined on pricing more rate-sensitive deposits, our bankers are doing a phenomenal job protecting our core customer relationships. Our credit quality continues to be stable, reflected in the 3% decline in total non-performing assets compared to the second quarter and no provision for credit losses for the quarter. We did see a slight increase in net charge-offs to nine basis points for the quarter after five consecutive quarters of reporting net recoveries. However, this increase was entirely related to one acquired energy credit that was reflected as a PCD credit at the merger date. Without the charge-off of this acquired credit, we would have posted another quarter of net recoveries. Of course, credit remains a key focus for us, particularly with the significant increase in interest rates and the recessionary winds blowing. As a reminder, when we completed our merger with Cadence this time last year, we were able to assess nearly half of our loan portfolio and provide for any credit marks deemed necessary at that time. We believe that process, on top of our 1.4% ACL coverage with our consistent approach to credit, is positioning us very well in this credit environment. Wrapping up, I'd like to briefly mention our operating efficiencies. Revenue growth for the quarter contributed to improvement in our adjusted efficiency ratio to 60.3% for the quarter, despite some moving parts in our expenses that Valerie will go over with you in more detail. With our core conversion now behind us, we expect a further benefit from merger efficiencies as we finish the year and move into 2023. This, combined with the interest rate environment, should provide a catalyst for continued improvement in our operating performance as we look forward to next year. With that, I'd like to turn it to Valerie for her comments. Valerie?