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Cadence Bank (CADE)
NYSE:CADE
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Cadence Bank
(NYSE:CADE)
74Outperform
Positive Factors
Brand and Market Presence
The Cadence brand and larger footprint should benefit CADE on the deposit side.
Cost Efficiency
CADE expects to generate cost saves of 40% of Industry's expense base by consolidating 6 entities into 1, offering efficiencies from a regulatory and system consolidation perspective.
Customer Retention
CADE should be able to bring back core deposits from customers that left due to concerns on the negative capital position at Industry.
Negative Factors
Capital Ratios
The transaction will bring Cadence's CET1 ratio down from 12.4% to 11.0%.
Earnings Per Share
The expected ~10% EPS accretion from the acquisition is lower than CADE's own estimate of ~13% due to a conservative approach on execution of growth opportunities.
Tangible Book Value
Industry has negative tangible book value (TBV) from the mark-to-market.
Cadence Bank (CADE) vs. S&P 500 (SPY)
Market Cap
$5.81B
Dividend Yield3.22%
Average Volume (3M)1.53M
Price to Earnings (P/E)11.1
Beta (1Y)1.26
Revenue Growth19.04%
EPS GrowthN/A
CountryUS
Employees5,356
SectorFinancial
Sector Strength87
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.70
Shares Outstanding182,732,960
10 Day Avg. Volume1,014,067
30 Day Avg. Volume1,532,130
Financial Highlights & Ratios
PEG Ratio4.24
Price to Book (P/B)1.00
Price to Sales (P/S)0.00
P/FCF Ratio7.37
Enterprise Value/Market Cap1.11
Enterprise Value/Revenue1.19
Enterprise Value/Gross Profit3.62
Enterprise Value/Ebitda3.03
Forecast
1Y Price Target
$35.88Price Target Upside13.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Cadence Bank Business Overview & Revenue Model
Company DescriptionCadence Bank provides commercial banking and financial services in the United States. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company's products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. As of March 3, 2022, it operated approximately 400 branch locations across the South, Midwest, and Texas. The company was incorporated in 1876 and is headquartered in Tupelo, Mississippi.
How the Company Makes MoneyCadence Bank makes money primarily through interest income generated from its lending activities, which include loans to individuals, small businesses, and corporate clients. The bank also earns revenue from non-interest income sources such as fees and commissions from its various financial services, including treasury management and wealth management. Additionally, Cadence Bank leverages its deposit base to invest in securities, further contributing to its earnings. Strategic partnerships with fintech companies and collaborations with local businesses enhance its service offerings and customer reach, supporting its overall revenue growth.
Cadence Bank Financial Statement Overview
Summary
Cadence Bank demonstrates strong financial health with notable revenue growth and effective cost management. The company benefits from a robust cash flow generation and prudent leverage management. However, slight concerns regarding cash reserves and variable EBIT/EBITDA margins are noted.Income Statement
Cadence Bank demonstrated strong financial performance with notable growth in total revenue, increasing by approximately 40% from the previous year. The gross profit margin and net profit margin are robust, reflecting effective cost management and operational efficiency. However, EBIT and EBITDA margins show some variability, indicating potential fluctuations in operating expenses or other non-operating costs.75
Positive
Balance Sheet
The balance sheet shows a solid equity base with a consistent equity ratio around 12%. The debt-to-equity ratio is low, signaling prudent leverage management, which is crucial in the banking sector. However, slight decreases in cash and short-term investments could indicate liquidity management challenges or strategic allocation changes.68
Positive
Cash Flow
Operating cash flow is healthy and growing, with a positive free cash flow trajectory. The free cash flow to net income ratio indicates strong cash generation relative to accounting profits, although the operating cash flow to net income ratio has shown some fluctuations over the years.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.72B | 1.24B | 1.84B | 1.18B | 1.03B | Gross Profit |
| 1.72B | 1.24B | 1.84B | 1.18B | 1.03B | EBIT |
| 854.25M | 96.11M | 808.66M | 246.93M | 287.55M | EBITDA |
| 688.48M | 334.71M | 638.25M | 297.84M | 330.92M | Net Income Common Stockholders |
| 523.60M | 542.30M | 463.24M | 195.16M | 228.05M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.67B | 4.23B | 13.94B | 16.90B | 6.65B | Total Assets |
| 47.02B | 48.93B | 48.65B | 47.67B | 24.08B | Total Debt |
| 10.71M | 3.94B | 3.56B | 482.41M | 301.65M | Net Debt |
| -1.72B | -293.81M | 1.56B | -812.27M | -115.72M | Total Liabilities |
| 41.45B | 43.77B | 44.34B | 482.41M | 21.26B | Stockholders Equity |
| 5.57B | 5.17B | 4.31B | 5.25B | 2.82B |
| Cash Flow | Free Cash Flow | |||
| 776.59M | 457.62M | 828.55M | 1.10B | 170.63M | Operating Cash Flow |
| 856.66M | 563.51M | 923.05M | 1.17B | 226.54M | Investing Cash Flow |
| -782.16M | 2.40B | -1.71B | -3.15B | -2.43B | Financing Cash Flow |
| -2.58B | -715.44M | 1.49B | 2.86B | 2.29B |
Cadence Bank Technical Analysis
Positive
31.71
Price Trends
29.58
Positive
31.75
Negative
32.30
Negative
Market Momentum
0.77
Negative
61.64
Neutral
72.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CADE, the sentiment is Positive. The current price of 31.71 is above the 20-day moving average (MA) of 30.33, above the 50-day MA of 29.58, and below the 200-day MA of 32.30, indicating a neutral trend. The MACD of 0.77 indicates Negative momentum. The RSI at 61.64 is Neutral, neither overbought nor oversold. The STOCH value of 72.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CADE.
Cadence Bank Risk Analysis
Cadence Bank disclosed 73 risk factors in its most recent earnings report. Cadence Bank reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cadence Bank Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.79B | 14.01 | 10.63% | 2.61% | 6.67% | 8.50% | |
74 Outperform | $5.81B | 11.14 | 9.90% | 3.22% | 19.04% | ― | |
73 Outperform | $4.85B | 22.87 | 6.63% | 3.09% | 8.10% | 6.95% | |
69 Neutral | $5.07B | 13.34 | 5.48% | 4.80% | 1.60% | -18.84% | |
68 Neutral | $5.29B | 13.80 | 7.30% | 3.98% | 6.39% | 2.93% | |
67 Neutral | $5.13B | 22.19 | 14.60% | 2.01% | 16.01% | 15.70% | |
64 Neutral | $12.82B | 9.87 | 7.67% | 17000.34% | 12.39% | -5.85% |
* Financial Sector Average
Performance Comparison
CADE
Cadence Bank
31.71
3.70
13.21%
FFIN
First Financial Bankshares
35.87
5.06
16.42%
GBCI
Glacier Bancorp
42.52
4.20
10.96%
HOMB
Home Bancshares
29.21
5.70
24.25%
UBSI
United Bankshares
37.32
4.62
14.13%
VLY
Valley National Bancorp
9.05
1.71
23.30%
Cadence Bank Earnings Call Summary
Earnings Call Date:Apr 21, 2025
(Q1-2025)
| % Change Since: 14.93%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook, with strong financial performance and strategic growth initiatives such as the acquisition of First Channel Bank. While there were some challenges, such as loan yield compression and increased loan provisions, the highlights, including significant net income growth, improved net interest margin, and stable credit results, outweighed the lowlights.Q1-2025 Updates
Positive Updates
Regulatory Approval for Acquisition
Cadence Bank received all regulatory approvals to complete its acquisition of First Channel Bank in under 100 days, with plans to close on May 1.
Increase in GAAP Net Income
GAAP net income increased to $130.9 million, or $0.70 per share, and adjusted net income from continuing operations increased to $131.4 million, or $0.71 per share.
Improved Net Interest Margin
Net interest margin increased by 8 basis points in the quarter.
Loan Growth
First-quarter loan growth was nearly 4% on an annualized basis, with strong performance in Georgia, Florida, and Texas.
Stable Credit Results
Net charge-offs were 27 basis points annualized, and nonperforming loans declined 11% or $29 million in the first quarter.
Strong Capital Levels
Tangible book value increased to $22.30 per share, and CET1 capital ratio grew to 12.4%.
Stable Deposit Balances
Average deposits increased by $610 million, and core customer deposits maintained stability in balances and mix.
Strong Pretax Pre-Provision Net Revenue
Pretax pre-provision net revenue increased to $190 million, up over 3% from the prior quarter.
Negative Updates
Loan Yield Compression
Competition has driven loan yields down by around 25 basis points, particularly in merchant commercial real estate.
Impact of Interest Rate Cuts
Loan yields were down 9 basis points due to interest rate cuts, and total cost of deposits similarly declined by 9 basis points.
Slight Decline in Total Adjusted Revenue
Total adjusted revenue was down slightly by less than 0.5% compared to the prior quarter, primarily due to fewer days in the first quarter.
Increased Loan Provision
Loan provision increased slightly to $20 million, driven by a more conservative macroeconomic outlook.
Company Guidance
During the first quarter of fiscal year 2025, Cadence Bank demonstrated financial robustness with a GAAP net income increase to $130.9 million or $0.70 per share, and an adjusted net income from continuing operations rising to $131.4 million or $0.71 per share, with an improved ROA of 1.15%. The bank's net interest margin expanded by 8 basis points, thanks to strategic balance sheet management, while the adjusted efficiency ratio improved by over 100 basis points. Loan growth was nearly 4% on an annualized basis, driven by strong performance in Georgia, Florida, and Texas. Average deposits rose by $610 million, although period-end deposits remained flat due to typical first-quarter volatility. Credit performance was stable with net charge-offs at 27 basis points annualized, and the tangible book value increased to $22.30 per share, with CET1 capital levels growing to 12.4%. The bank expects continued stability and potential growth within its existing financial guidance, even as it prepares to integrate First Channel Bank following regulatory approval for its acquisition.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.