Cadence Bank(US:CADE)2021-04-22 22:16Financial Data and Key Metrics Changes - The company reported a record net income available to common shareholders of $79.2 million, or $0.77 per diluted share for Q1 2021, an increase from $0.69 per diluted share in Q4 2020 and $0.33 in Q1 2020 [12][13] - The pretax pre-provision net revenue (PPNR) was $99.1 million, reflecting a 6% increase from Q4 2020 and an 8% increase from Q1 2020 [14][15] - The net interest margin, excluding accretion, decreased to 3.08% from 3.24% in Q4 2020, primarily due to balance sheet dynamics [20][21] Business Line Data and Key Metrics Changes - Total deposits and customer repo growth increased by $1.3 billion, or nearly 27% on an annualized basis [16][27] - Loan demand, excluding PPP loans, remained slow, with total loans flat quarter-over-quarter and a decline of approximately $140 million when excluding PPP loans [28] - Mortgage production reached $790 million, contributing $17.9 million in production and servicing revenue [17][33] Market Data and Key Metrics Changes - The company processed applications for forgiveness on nearly $700 million in PPP loans and funded over $460 million during 2021 [30] - Nonperforming assets (NPAs) declined by almost $22 million, or 16.5%, compared to Q4 2020 [15][31] Company Strategy and Development Direction - The company received regulatory approval for mergers with National United Bank and FMB Bank, expected to close on May 1 [10] - The merger with Cadence Bank is anticipated to create significant opportunities for growth in new markets, particularly in Texas and Florida [11][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic recovery in their footprint, with a cautious approach to COVID protocols as vaccination rates rise [8][36] - The company is focused on integrating new acquisitions while continuing to support existing customer relationships [37] Other Important Information - The company is experiencing challenges in loan demand due to the impact of PPP loans on traditional lending [40][41] - The company is actively monitoring higher-risk segments of the loan portfolio, particularly in hospitality [31] Q&A Session Summary Question: What are your thoughts on when loan demand will return? - Management indicated mixed signals, with some areas showing business activity while others remain slow [39][40] Question: How do you see the residential mortgage market for the spring and summer selling season? - Management noted strong demand but limited inventory, which may affect performance compared to last year [46][47] Question: What are your plans for expanding in the new markets from the Cadence transaction? - Management expressed interest in growth opportunities in Metro Atlanta and Florida, emphasizing the importance of attracting talent [50][51] Question: How do you plan to retain talent during the merger process? - Management highlighted the importance of treating employees well and providing retention incentives [55] Question: What is the outlook for net interest income growth in Q2? - Management is optimistic about growth due to more days in the quarter and potential deposit repricing [73][75] Question: How do you view loan yields and potential downside? - Management acknowledged the competitive environment but emphasized disciplined pricing strategies [80][81]