Cadence Bank (CADE) Q3 2024 Earnings Call Highlights: Strong Deposit Growth and Improved ...

GuruFocus News
4 min read

In This Article:

  • Net Income: $134.1 million or $0.72 per diluted common share.

  • Adjusted Net Income: $135.6 million or $0.73 per diluted common share, up 6% from the previous quarter.

  • Core Customer Deposits Growth: Over 11% annualized growth.

  • Net Interest Margin: 3.31%, an increase of 4 basis points from the previous quarter.

  • Allowance for Credit Losses: 1.38% of loans.

  • Adjusted Efficiency Ratio: 57.7% for the quarter.

  • Common Equity Tier 1 (CET1) Ratio: 12.3% as of September 30.

  • Total Capital Ratio: 14.5% as of September 30.

  • Tangible Book Value Per Share: Increased by $1.60.

  • Tangible Equity to Tangible Assets Ratio: 8.28% at the end of the quarter.

  • Loan-to-Deposit Ratio: 86%.

  • Net Interest Income: Increased by $5.1 million to $361 million.

  • Non-Interest Revenue: $88.8 million on an adjusted basis, up 3.7% in the third quarter.

  • Adjusted Non-Interest Expense: Just over $260 million, up 3.7% from the previous quarter.

  • Net Charge-Offs: $22.2 million or 26 basis points annualized.

  • Provision for Credit Losses: $12 million for the third quarter.

  • Non-Accrual Loans: Increased by $56 million in the third quarter.

Release Date: October 22, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Cadence Bank (NYSE:CADE) reported a net income of $134.1 million, with adjusted net income from continuing operations increasing by 6% compared to the previous quarter.

  • The bank achieved significant growth in core customer deposits, with an annualized increase of over 11%, while keeping deposit costs stable.

  • Net interest margin improved for the fourth consecutive quarter, reaching 3.31%, driven by stabilized deposit costs and upward repricing of loans.

  • Credit quality remained stable, with consistent net charge-offs and a solid allowance for credit losses at 1.38% of loans.

  • Cadence Bank (NYSE:CADE) repurchased over 323,000 shares of its stock, maintaining strong capital metrics, including a CET1 of 12.3% and total capital of 14.5%.

Negative Points

  • Loan balances remained flat for the quarter due to payoff pressures, despite meaningful new loan commitments.

  • There was an increase in non-accrual loans, primarily due to the migration of previously criticized credits.

  • Mortgage banking revenue declined by $5 million in the third quarter, impacted by changes in the rate environment and paydowns.

  • Total adjusted non-interest expense increased by 3.7% due to merit increases and other factors, impacting the efficiency ratio.

  • The bank faces ongoing competition in deposit rates, which could affect future deposit cost management.

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