Cadence Bank

Good day, and welcome to the Cadence Bank second quarter 2023 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 touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Will Fazakerly, Director of Corporate Finance. Please go ahead.

Good morning, and thank you for joining the Cadence Bank second quarter 2023 earnings conference call. We have members from our executive management team here with us this morning, Dan Rollins, Chris Bagley, Valerie Tolson, Hank Holmes, and Billy Braddock. 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. These disclosures regarding forward-looking statements contained in those documents apply to our presentation today. And now I'll turn to Dan for his opening comments.

Good morning, everyone. Thanks for joining us today to discuss Cadence Bank's second quarter 2023 financial results. I will provide a few highlights, then Valerie will review our financials in more detail. Following our prepared remarks, our executive management team will be available for questions. We reported quarterly net income available to common shareholders of $111.7 million, or $0.61 per diluted share. The adjusted net income available to common shareholders was $116.9 million, or $0.64 per diluted common share, with the primary difference being non-routine expenses associated with our ongoing initiatives to improve efficiency, which I will discuss more in just a second. We had another strong quarter from a loan growth standpoint with net organic growth of 1.3 billion or 16.3% annualized. Year-to-date growth is now 2.2 billion or 14.7% annualized. Growth for the quarter was well distributed from a product and geographic perspective. Mortgage production was robust, supported by second quarter seasonality. Additionally, we saw continued fundings from CRE commitments during the quarter. We will continue to fund commitments in the coming quarters But overall, we expect the pace of loan growth to slow to an annualized mid-single-digit growth rate for the second half of the year. Total deposits declined just over $700 million in the quarter and have declined approximately $250 million year-to-date, or 1.3% annualized. Our community bank deposit base continues to hold up very well, with most of the pressure coming from corporate accounts. Some of the corporate declines are typical second-quarter seasonality – However, this year, some of it is also driven by commercial customers seeking yield. Community bank deposit outflows were $130 million in the quarter, while year-to-date growth for the community bank now stands at $347 million. Like many others, we felt the industry-wide pressure on funding costs at a faster pace this quarter and saw the impact on our margin accordingly. Valerie will discuss this as well as our revised expectations and her margin comments in a moment. As we look at a couple of our other highlights, our results reflect strong performance from our fee income businesses, including record quarterly insurance commission revenue of nearly $46 million. We reported a meaningful increase in P&C commissions driven by business growth and retention, as well as upward pressure on policy pricing. Finally, we continue to work aggressively towards improving our operating efficiency. We reported a decline of approximately $8 million, or 2.6%, in linked quarter total adjusted non-interest expense. We also refined our savings estimates related to the efficiency initiatives that we discussed in our first quarter call, including 35 branches that we expect to close within the next 30 days, as well as various ongoing initiatives, including early retirements and other personnel savings. These initiatives are now projected to produce non-interest expense, reduce non-interest expense by approximately $35 to $40 million annually. The majority of these actions associated with these initiatives will be implemented during the third quarter, and we expect to reflect the full benefit by the first quarter of 2024. Valerie, I'll turn the call over to you.