BancorpSouth Announces Third Quarter 2021 Results

TUPELO, Miss., Oct. 25, 2021 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the Company) today announced financial results for the quarter ended September 30, 2021.

Highlights for the third quarter of 2021 included:

• Achieved quarterly net income available to common shareholders of $70.4 million, or $0.65 per diluted common share, and net operating income available to common shareholders – excluding MSR – of $73.3 million, or $0.68 per diluted common share.
• Generated $90.1 million in pre-tax pre-provision net revenue (PPNR), or 1.29 percent of average assets on an annualized basis.
• Generated organic total deposit and customer repo growth of $722.2 million for the quarter, or 12.2 percent on an annualized basis, and total organic net loan growth of approximately $121.6 million, or 3.3 percent on an annualized basis, excluding Paycheck Protection Program (PPP) activity.
• Fee income businesses continue to perform at a high level as mortgage origination volume totaled $788.9 million for the quarter while insurance commission revenue grew over 9 percent compared to the third quarter of 2020.
• Continued stability in credit quality metrics including net recoveries of $2.1 million for the quarter; recorded negative provision for credit losses of $7.0 million for the quarter.
• Repurchased 1,742,474 shares of outstanding common stock at a weighted average price of $28.69 per share.
• Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.27 percent at September 30, 2021 compared to 14.50 percent at June 30, 2021.
• Recorded a charge of $2.4 million in accordance with Accounting Standards Codification (ASC) 715 "Compensation – Retirement Benefits" to reflect the settlement accounting impact of elevated lump sum retirement payments that have occurred in 2021.
• Recently received shareholder and regulatory approval to complete merger with Cadence Bancorporation, the parent company of Cadence Bank N.A., which is expected to close effective October 29, 2021, and create an approximately $48 billion institution on a pro forma basis that will be the 6th largest bank headquartered in the Company's nine-state footprint.

"Our third quarter financial results reflect many key successes despite certain continued industry headwinds, particularly related to the net interest margin dynamics," remarked Dan Rollins, Chairman and Chief Executive Officer. "While our back office and support teams have been focused on preparing for the closing and operational integration of the Cadence transaction, our customer facing teammates are continuing to generate growth. We reported deposit and customer repo growth of over $722 million for the quarter while net organic loan growth totaled approximately $122 million, which marks the second consecutive quarter of net organic loan growth. We are obviously pleased to see continued economic stability across our footprint as well as improved loan demand. We are also proud of the results reported by our fee income businesses. Our mortgage team generated $789 million in production volume for the quarter while our insurance commission revenue totaled $35.8 million, representing growth of just over nine percent compared to the third quarter of 2020."

"As we look at other highlights for the quarter, our credit quality metrics continue to remain very strong. We had a negative provision for credit losses of $7.0 million for the quarter, which was driven by net recoveries of $2.1 million for the quarter combined with stability in our other credit quality metrics. From a capital management standpoint, we were active in our share repurchase program as we repurchased approximately 1.7 million shares of common stock during the third quarter, which is the first activity in our repurchase program since prior to the pandemic. We still have approximately 4.3 million shares available for repurchase this year under our authorized repurchase plan."

Earnings Summary

The Company reported net income available to common shareholders of $70.4 million, or $0.65 per diluted common share, for the third quarter of 2021, compared with net income available to common shareholders of $71.5 million, or $0.69 per diluted common share, for the third quarter of 2020 and net income available to common shareholders of $73.2 million, or $0.69 per diluted common share, for the second quarter of 2021. The Company reported net operating income available to common shareholders – excluding MSR – of $73.3 million, or $0.68 per diluted common share, for the third quarter of 2021, compared with $71.2 million, or $0.69 per diluted common share, for the third quarter of 2020 and $90.6 million, or $0.86 per diluted common share, for the second quarter of 2021.

The Company reported PPNR of $90.1 million, or 1.29 percent of average assets on an annualized basis, for the third quarter of 2021 compared to $111.0 million, or 1.89 percent of average assets on an annualized basis, for the third quarter of 2020 and $119.9 million, or 1.80 percent of average assets on an annualized basis, for the second quarter of 2021.

Net Interest Revenue

Net interest revenue was $181.5 million for the third quarter of 2021, an increase of 3.2 percent from $175.9 million for the third quarter of 2020 and an increase of 0.7 percent from $180.2 million for the second quarter of 2021. The fully taxable equivalent net interest margin was 2.86 percent for the third quarter of 2021, compared with 3.31 percent for the third quarter of 2020 and 2.99 percent for the second quarter of 2021. Yields on net loans and leases were 4.46 percent for the third quarter of 2021, compared with 4.54 percent for the third quarter of 2020 and 4.43 percent for the second quarter of 2021, while yields on total interest earning assets were 3.15 percent for the third quarter of 2021, compared with 3.77 percent for the third quarter of 2020 and 3.31 percent for the second quarter of 2021.

The net interest margin, excluding accretable yield, was 2.81 percent for the third quarter of 2021, compared with 3.23 percent for the third quarter of 2020 and 2.94 percent for the second quarter of 2021, while yields on net loans and leases, excluding accretable yield, were 4.38 percent for the third quarter of 2021, compared with 4.44 percent for the third quarter of 2020 and 4.35 percent for the second quarter of 2021. Net interest income for the third quarter of 2021 included approximately $1.0 million of accelerated PPP fee income recognition resulting from the payoff of loans that were forgiven by the Small Business Administration (SBA) during the quarter. The average cost of deposits was 0.24 percent for the third quarter of 2021, compared with 0.44 percent for the third quarter of 2020 and 0.27 percent for the second quarter of 2021.

Balance Sheet Activity

Loans and leases, net of unearned income, decreased $12.8 million during the third quarter of 2021 while deposits and customer repos increased $722.2 million. Forgiveness payments were received on PPP loans during the quarter totaling approximately $135.0 million. Excluding the impact of PPP activity, total organic loan growth totaled approximately $121.6 million, or 3.3 percent annualized compared to June 30, 2021. There were no acquisitions closed during the third quarter of 2021.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the third quarter of 2021 reflect a negative provision for credit losses of $7.0 million, compared with a provision for credit losses of $16.0 million for the third quarter of 2020 and a provision for credit losses of $11.5 million for the second quarter of 2021. The negative provision for credit losses recorded during the third quarter of 2021 is primarily attributed to improvement in overall credit quality and a reduction in the level of classified loan balances. Net recoveries for the third quarter of 2021 were $2.1 million, or 0.05 percent of net loans and leases on an annualized basis, compared with net charge-offs of $1.4 million for the third quarter of 2020 and net recoveries of $1.8 million for the second quarter of 2021. The allowance for credit losses was $260.3 million, or 1.74 percent of net loans and leases, at September 30, 2021, compared with $250.6 million, or 1.64 percent of net loans and leases, at September 30, 2020, and $265.7 million, or 1.77 percent of net loans and leases, at June 30, 2021. The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.74 percent of net loans and leases at September 30, 2021, compared with 1.78 percent at September 30, 2020 and 1.79 percent at June 30, 2021.

Total non-performing assets were $100.3 million, or 0.36 percent of total assets, at September 30, 2021, compared with $157.3 million, or 0.67 percent of total assets, at September 30, 2020, and $101.8 million, or 0.37 percent of total assets, at June 30, 2021. Other real estate owned was $16.5 million at September 30, 2021, compared with $6.4 million at September 30, 2020 and $17.3 million at June 30, 2021.

Noninterest Revenue

Noninterest revenue was $84.4 million for the third quarter of 2021, compared with $89.9 million for the third quarter of 2020 and $101.9 million for the second quarter of 2021. These results include a positive mortgage servicing rights (MSR) valuation adjustment of $2.0 million for the third quarter of 2021, compared with a positive MSR valuation adjustment of $0.4 million for the third quarter of 2020 and a negative MSR valuation adjustment of $1.9 million for the second quarter of 2021. Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.

Mortgage production and servicing revenue was $11.0 million for the third quarter of 2021, compared with $26.7 million for the third quarter of 2020 and $11.0 million for the second quarter of 2021. Mortgage origination volume for the third quarter of 2021 was $788.9 million, compared with $937.7 million for the third quarter of 2020 and $906.4 million for the second quarter of 2021. Home purchase money volume was $511.1 million for the third quarter of 2021, compared with $568.4 million for the third quarter of 2020 and $619.0 million for the second quarter of 2021. Of the total mortgage origination volume for the third quarter of 2021, $257.8 million was portfolio loans, compared with $218.0 million for the third quarter of 2020 and $344.1 million for the second quarter of 2021.

Credit card, debit card, and merchant fee revenue was $11.4 million for the third quarter of 2021, compared with $9.9 million for the third quarter of 2020 and $11.6 million for the second quarter of 2021. Deposit service charge revenue was $10.3 million for the third quarter of 2021, compared with $8.9 million for the third quarter of 2020 and $8.8 million for the second quarter of 2021. Wealth management revenue was $7.1 million for the third quarter of 2021, compared with $6.5 million for the third quarter of 2020 and $7.5 million for the second quarter of 2021. Insurance commission revenue was $35.8 million for the third quarter of 2021, compared with $32.8 million for the third quarter of 2020 and $36.1 million for the second quarter of 2021. Other noninterest revenue was $6.9 million for the third quarter of 2021, compared with $4.8 million for the third quarter of 2020 and $7.1 million for the second quarter of 2021. Additionally, second quarter 2021 results included a $21.6 million gain on the sale of PPP loans.

Noninterest Expense

Noninterest expense for the third quarter of 2021 was $179.9 million, compared with $154.5 million for the third quarter of 2020 and $174.0 million for the second quarter of 2021. Salaries and employee benefits expense was $113.0 million for the third quarter of 2021, compared with $104.2 million for the third quarter of 2020 and $108.2 million for the second quarter of 2021. Occupancy expense was $13.4 million for the third quarter of 2021, compared with $13.1 million for the third quarter of 2020 and $13.2 million for the second quarter of 2021. Other noninterest expense was $43.2 million for the third quarter of 2021, compared with $31.2 million for the third quarter of 2020 and $46.0 million for the second quarter of 2021. Merger-related expense, which is included as a component of other noninterest expense, was $3.4 million for the third quarter of 2021, compared with merger-related expense of $0.1 million for the third quarter of 2020 and $10.0 million for the second quarter of 2021. Noninterest expense for the third quarter of 2021 included a charge of $2.4 million in accordance with ASC 715 "Compensation – Retirement Benefits" to reflect the settlement accounting impact of elevated lump sum retirement pension payouts in 2021.

Capital Management

The Company's ratio of shareholders' equity to assets was 10.77 percent at September 30, 2021, compared with 11.81 percent at September 30, 2020 and 11.12 percent at June 30, 2021. The ratio of tangible common shareholders' equity to tangible assets was 6.82 percent at September 30, 2021, compared with 7.56 percent at September 30, 2020 and 7.11 percent at June 30, 2021.

During the third quarter of 2021, the Company repurchased 1,742,474 shares of its common stock at a weighted average price of $28.69 pursuant to its share repurchase program. The Company has 4,257,526 shares remaining on its current share repurchase authorization, which will expire on December 31, 2021.

Estimated regulatory capital ratios at September 30, 2021 were calculated in accordance with the Basel III capital framework as well as the interagency final rule published on September 30, 2020 entitled "Revised Transition of the Current Expected Credit Losses Methodology for Allowances". The Company is a "well capitalized" bank, as defined by federal regulations, at September 30, 2021, with Tier 1 risk-based capital of 11.63 percent and total risk-based capital of 14.27 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification.

Summary

Rollins concluded, "As we move into the fourth quarter, our team is looking forward to the opportunity to finish the year strong. With PPP being mostly behind us, the renewed focus of our bankers on getting out and taking care of customers is evident in our loan and deposit growth success. The economies across our footprint are open and performing quite well with minimal lingering impact from the pandemic. Our mortgage team continues to produce at strong levels despite the expected headwinds on refinance activity while our insurance team is winning new customers and taking advantage of a firmer premium market. Finally, we recently received shareholder and regulatory approval to complete our merger with Cadence and we look forward to the opportunity to close the transaction before the end of this month. The optimism around our Company regarding the impact the transaction will have for our teammates, customers, communities, and shareholders is at an all-time high."

TRANSACTIONS

Cadence Bancorporation (NYSE: CADE)

On April 12, 2021, the Company announced the signing of a definitive merger agreement (the Cadence Merger Agreement) with Cadence Bancorporation, the parent company of Cadence Bank N.A., (collectively referred to as Cadence), pursuant to which Cadence will be merged with and into the Company (the Cadence Merger). Cadence operates 99 full-service banking offices in the southeast. As of September 30, 2021, Cadence collectively reported total assets of $19.8 billion, total loans of $11.5 billion and total deposits of $17.1 billion. Under the terms of the Cadence Merger Agreement, each Cadence shareholder will receive 0.70 shares of the Company's common stock in exchange for each share of Cadence common stock they hold. In addition, Cadence will pay a one-time special dividend of $1.25 per share on October 28, 2021. For more information regarding the Cadence Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (FDIC) on April 12, 2021. The Cadence Merger Agreement has been unanimously approved by the Boards of Directors and shareholders of the Company and Cadence. The Company recently received all required regulatory approvals to complete the merger with Cadence. Subject to the satisfaction of all closing conditions, the Cadence Merger is expected to close effective October 29, 2021, although the Company can provide no assurance that the Cadence Merger will close on that date. The target closing date of October 29, 2021 has been accelerated from the previously announced date of October 31, 2021. The Company will begin trading on the NYSE under the ticker symbol CADE on that date.

FNS Bancshares, Inc.

On May 1, 2021, the Company completed the merger with FNS Bancshares, Inc., the parent company of FNB Bank, (collectively referred to as FNS), pursuant to which FNS was merged with and into the Company. FNS operated 17 full-service banking offices in Alabama, Georgia and Tennessee. The merger expanded the Company's presence in Jackson, DeKalb and Marshall counties in Alabama and the Chattanooga, Tennessee-Georgia and Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical areas. As of May 1, 2021, FNS collectively reported total assets of $826.6 million, total loans of $464.7 million and total deposits of $720.7 million. Under the terms of the definitive merger agreement, the Company issued approximately 2,975,000 shares of the Company's common stock plus $18.0 million in cash for all outstanding shares of FNS. For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3, 2021. The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

National United Bancshares, Inc.

On May 1, 2021, the Company completed the merger with National United Bancshares, Inc., the parent company of National United, (collectively referred to as National United), pursuant to which National United was merged with and into the Company. National United operated 6 full-service banking offices in the Killeen-Temple, Texas; Waco, Texas; and Austin-Round Rock-Georgetown, Texas metropolitan statistical areas. As of May 1, 2021, National United collectively reported total assets of $817.3 million, total loans of $434.6 million and total deposits of $742.9 million. Under the terms of the definitive merger agreement, the Company issued approximately 3,110,000 shares of the Company's common stock plus $33.25 million in cash for all outstanding shares of National United. For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3, 2021. The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

Non-GAAP Measures and Ratios

This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions" beginning on page 24 of this news release.

Statement Regarding Impact of COVID-19 Pandemic

The Company prioritizes the health and safety of its teammates and customers, and it will continue to do so throughout the duration of the COVID-19 pandemic. At the same time, the Company remains focused on improving shareholder value, managing credit exposure, challenging expenses, enhancing the customer experience and supporting the communities it serves. Lastly, as a SBA Preferred Lender, the Company participated in the SBA's PPP for the betterment of its customers and the communities that it serves.

In the presentation that accompanies this news release and in its earnings conference call, the Company has sought and will seek to describe the historical and future impact of the COVID-19 pandemic (including any variant of the COVID-19 virus) on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, including the information and discussions regarding negative pressure on its net interest margin and loan demand. Although the Company believes that the statements that pertain to future events, results and trends and their impact on the Company's business are reasonable at the present time, those statements are not historical facts and are based upon current assumptions, expectations, estimates and projections, many of which, by their nature, are beyond the Company's control. Accordingly, all discussions regarding future events, results and trends and their impact on the Company's business, even in the near term, are necessarily uncertain given the fluid and evolving nature of the pandemic.

If the health, logistical or economic effects of the pandemic worsen, or if the assumptions, expectations, estimates or projections that underlie the Company's statements regarding future effects or trends prove to be incorrect, then the Company's actual assets, business, cash flows, financial condition, liquidity, prospects and results of operations and the trading prices of its capital stock may be materially and adversely impacted in ways that the Company cannot reasonably forecast.

Accordingly, when reading this news release and the accompanying presentation and when listening to the earnings conference call, undue reliance should not be placed upon any statement pertaining to future events, results and trends and their impact on the Company's business in future periods.

Conference Call and Webcast

The Company will conduct a conference call to discuss its third quarter 2021 financial results on October 26, 2021, at 10:00 a.m. (Central Time). This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing www.bancorpsouth.investorroom.com/webcasts. The webcast will also be available in archived format at the same address.

About BancorpSouth Bank

BancorpSouth Bank (NYSE: BXS) is headquartered in Tupelo, Mississippi, with approximately $28 billion in assets. BancorpSouth operates approximately 315 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois. BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com. Like us on Facebook; follow us on Twitter and Instagram: @MyBXS; or connect with us through LinkedIn.

Forward-Looking Statements

Certain statements made in this news release are not statements of historical fact and constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "aspire," "assume," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "forecast," "foresee," "goal," "hope," "indicate," "intend," "may," "might," "outlook," "plan," "project," "projection," "predict," "prospect," "potential," "roadmap," "seek," "should," "target," "will," and "would," or the negative versions of those words or other comparable words of a future or forward-looking nature. These forward-looking statements include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, including the impact of the COVID-19 pandemic (including any variant of the COVID-19 virus) on the Company's business; the Company's: assets; business; cash flows; financial condition; liquidity; prospects; results of operations; deposit and customer repo growth; interest and fee-based revenue; capital resources; capital metrics; efficiency ratio; valuation of mortgage servicing rights; net income; net interest revenue; non-interest revenue; net interest margin; interest expense; non-interest expense; earnings per share; interest rate sensitivity; interest rate risk; balance sheet and liquidity management; off-balance sheet arrangements; fair value determinations; asset quality; credit quality; credit losses; provision and allowance for credit losses, impairments, charge-offs, recoveries and changes in loan volumes; investment securities portfolio yields and values; ability to manage the impact of pandemics, natural disasters and other force majeure events; adoption and use of critical accounting policies; adoption and implementation of new accounting standards and their effect on the Company's financial results and the Company's financial reporting; utilization of non-GAAP financial metrics; declaration and payment of dividends; ability to pay dividends or coupons on the Company's 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029; mortgage origination volume; mortgage servicing and production revenue; insurance commission revenue; implementation and execution of cost savings initiatives; ability to successfully litigate, resolve or otherwise dispense with threatened, pending, ongoing and future litigation and governmental, administrative and investigatory matters; ability to successfully complete pending or future acquisitions, dispositions and other strategic growth opportunities and initiatives; ability to successfully obtain regulatory approval for acquisitions and other growth initiatives; ability to successfully integrate and manage acquisitions; opportunities and efforts to grow market share; reputation; ability to compete with other financial institutions; ability to recruit and retain key employees and personnel; access to capital markets; availability of capital; investments in the securities of other financial institutions; and ability to operate the Company's regulatory compliance programs in accordance with applicable law.

Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, the Company's management at the time such statements were made. Forward-looking statements are not historical facts, are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company's control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, without limitation, potential delays or other problems in implementing and executing the Company's growth, expansion and acquisition strategies, including delays in obtaining regulatory or other necessary approvals or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies; the risks of changes in interest rates and their effects on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; the availability of and access to capital; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans; the ability to grow additional interest and fee income or to control noninterest expense; the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Company's net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those actions in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "Economic Aid Act") and any related rules and regulations; changes in U.S. Government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the enforcement efforts of federal and state bank regulators; possible adverse rulings, judgments, settlements and other outcomes of pending, ongoing and future litigation and governmental, administrative and investigatory matters (including litigation or actions arising from the Company's participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan programs authorized by the CARES Act and the Economic Aid Act); the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the magnitude and duration of the pandemic, and the effect of actions taken to mitigate the impact of the COVID-19 pandemic on the Company, the Company's employees, the Company's customers, the global economy and the financial markets; international or political instability; impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; adoption of new accounting standards, including the effects from the adoption of the current expected credit loss methodology on January 1, 2020, or changes in existing standards; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the Cadence Merger Agreement; the outcome of any legal proceedings that have been or may be instituted against the Company or Cadence in respect of the Cadence Merger; the possibility that the Cadence Merger will not close when expected or at all because required approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the ability of the Company and Cadence to meet expectations regarding the timing, completion and accounting and tax treatments of the Cadence Merger; the risk that any announcements relating to the Cadence Merger could have adverse effects on the market price of the common stock of either or both parties to the Cadence Merger; the possibility that the anticipated benefits of the Cadence Merger will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company and Cadence do business; certain restrictions during the pendency of the Cadence Merger that may impact the parties' ability to pursue certain business opportunities or strategic transactions; the possibility that the Cadence Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the Cadence Merger within the expected timeframes or at all and to successfully integrate Cadence's operations and those of the Company; such integration may be more difficult, time consuming or costly than expected; revenues following the Cadence Merger may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Cadence Merger; the Company and Cadence's success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by the Company's issuance of additional shares of its capital stock in connection with the Cadence Merger and other factors as detailed from time to time in the Company's press and news releases, periodic and current reports and other filings the Company files with the FDIC.

The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company's periodic and current reports filed with the FDIC, including those factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 under the heading "Item 1A. Risk Factors," in the Company's Quarterly Reports on Form 10-Q under the heading "Part II-Item 1A. Risk Factors" and in the Company's Current Reports on Form 8-K.

Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.