Cadence Bank

Good day and welcome to the Cadence Bank second quarter 2024 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 a touch-tone 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, Executive Vice President and Corporate Finance.

Please go ahead. Good morning, and thank you for joining the Cadence Bank second quarter 2024 earnings conference call. We have members from our executive management team here with us this morning, Dan Rollins, Chris Bagley, Valerie Tolson, 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. The 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. Thank you all for joining us this morning to discuss our strong second quarter 2024 results. Valerie will provide more detail on our financials after I cover a few highlights. Our executive management team will be available for questions following our prepared comments. We are proud of our progress over the past few years and we're very pleased to report another quarter of continued improvement across virtually all facets of our business. Our results are a reflection of our vision of helping people, companies, and communities prosper, as well as our core values, including putting customers at the center of our business. In the second quarter, we achieved steady loan growth, successful retention and expansion of core deposits, stable credit quality and capital, and continued focus on enhancing our operating efficiency. It's really a pretty straightforward formula, resulting in the improvements we've reported. We reported gap net income for the second quarter of 135.1 million, or 73 cents per diluted common share, with adjusted net income from continuing operations for the second quarter of 127.9, or 69 cents per diluted common share, which represents an increase of 7 cents or over 11% compared to the first quarter of 2024. The difference in our GAAP and adjusted earnings numbers was driven by a couple of items that Valerie will spend a few minutes on in just a second. From a balance sheet perspective, our loan pipelines continue to be active. As we have in each and every quarter since we announced the merger between Bancorp South and Legacy Cadence, we posted good loan growth. We reported net loan growth of $430 million, or just over 5% annualized, right in line with our full-year expectations. The growth for the quarter was within our income-producing CRE, commercial and industrial, and residential mortgage portfolios spread across our footprint, further reflecting the strength of our diversified business model. While total deposits declined just over $260 million, when you exclude public funds and broker deposits, Core customer deposits grew $237 million or just under 3% annualized and have grown approximately 4% annualized year-to-date. We continue to reduce broker deposits and be very selective around public fund money. These two funding sources collectively declined approximately $500 million during the quarter. In fact, since quarter end, we have further reduced broker deposits by approximately $100 million, which represents the bulk of this non-core funding source. As a result of our diversified loan growth, improved earning asset mix, and slowed deposit cost increases, we reported our third consecutive quarter of improvement in our net interest margin to 3.27%, which was up five basis points compared with the first quarter margin of 3.22%. Additionally, credit quality continued to reflect stability for the quarter. Our provision for credit losses and net charge-offs were both relatively flat compared to the first quarter. and we saw improvement in our non-performing, criticized, and classified loan totals as well as near-term delinquencies. We continue to see what we believe to be mostly normal inflows and outflows in our credit processes and no pervasive sign of weakness. Our results for the quarter also reflect continued improvement in operating efficiency. Our adjusted expenses declined by over $12 million compared to the first quarter. which resulted in our adjusted efficiency ratio improving to 56.7% for the quarter. While this improvement did include a few one-off tailwinds that Valerie will discuss in just a moment, the fruits of our efficiency initiatives are obvious. You can all rest assured, while we're proud of the efficiency improvements we've made, we are not finished. We intend to continue to chip away on this as we move forward. We called $139 million in outstanding subordinated debt at a weighted average coupon of 5.65%, and again took advantage of market swings and repurchased just over 256,000 shares of our stock. Our capital metrics remain strong with CET1 of 11.9 and total capital of 14.2 at June 30, 2024. I'll now turn the call over to Valerie for her comments. Valerie?