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Cadence Bank (CADE)
NYSE:CADE
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Cadence Bank
(NYSE:CADE)
65Neutral
Positive Factors
Credit Quality
Credit trends improved with criticized and classified loans, as well as NPLs down.
Earnings
Operating EPS beat consensus estimates, driven by lower provisions, showcasing financial stability.
Financial Performance
NIM/NII improved for the fourth quarter in a row, indicating a strong performance.
Negative Factors
Earnings Potential
It's hard to see incremental outperformance relative to the group at these multiples when rate cuts should put some modest pressure on earnings power and M&A sounds unlikely.
Financial Performance
Slightly lower NII is expected due to slower loan growth and earlier BTFP paydown.
Stock Recommendation
Analyst recommends lowering to Neutral as YTD outperformance has played out as expected.
Cadence Bank (CADE) vs. S&P 500 (SPY)
Market Cap
$5.50B
Dividend Yield3.32%
Average Volume (3M)1.23M
Price to Earnings (P/E)10.9
Beta (1Y)1.39
Revenue Growth26.53%
EPS GrowthN/A
CountryUS
Employees5,335
SectorFinancial
Sector Strength81
IndustryBanks - Regional
Share Statistics
EPS (TTM)2.77
Shares Outstanding182,732,960
10 Day Avg. Volume1,275,853
30 Day Avg. Volume1,231,737
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)N/A
Price to Sales (P/S)2.83
Price to Cash Flow (P/CF)7.00
P/FCF Ratio4.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$41.00Price Target Upside36.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
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 and non-interest income. Interest income is generated from loans provided to individuals and businesses, including mortgages, personal loans, and commercial loans. The bank earns a spread between the interest paid on deposits and the interest received from lending activities. Non-interest income is derived from service charges, fees from wealth management services, and transaction-based fees such as account maintenance and transaction processing. Additionally, Cadence Bank benefits from strategic partnerships and collaborations that enhance its service offerings and extend its market reach.
Cadence Bank Financial Statement Overview
Summary
Cadence Bank exhibits strong financial health with robust revenue growth and efficient cost management. The balance sheet is solid with prudent leverage, though there are slight concerns about cash reserves. Overall, the company is positioned for continued growth and profitability.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 |
| -1.66B | -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
Negative
30.12
Price Trends
32.69
Negative
34.25
Negative
32.24
Negative
Market Momentum
-0.53
Negative
40.38
Neutral
51.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CADE, the sentiment is Negative. The current price of 30.12 is below the 20-day moving average (MA) of 30.32, below the 50-day MA of 32.69, and below the 200-day MA of 32.24, indicating a bearish trend. The MACD of -0.53 indicates Negative momentum. The RSI at 40.38 is Neutral, neither overbought nor oversold. The STOCH value of 51.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $7.30B | 9.99 | 13.15% | 3.40% | 7.91% | 13.79% | |
71 Outperform | $68.02B | 12.51 | 11.10% | 3.69% | 7.24% | 7.51% | |
71 Outperform | $19.40B | 11.08 | 10.72% | 4.58% | 2.70% | -8.16% | |
65 Neutral | $5.50B | 10.87 | 9.75% | 3.32% | 26.53% | ― | |
65 Neutral | $7.70B | 11.73 | 10.72% | 4.84% | -6.54% | -21.90% | |
64 Neutral | $14.24B | 10.27 | 8.97% | 4.33% | 16.38% | -11.94% | |
58 Neutral | $9.89B | 14.18 | 8.70% | 3.12% | 4.56% | -13.90% |
* Financial Sector Average
Performance Comparison
CADE
Cadence Bank
30.12
2.35
8.46%
CMA
Comerica
58.72
7.29
14.17%
FHN
First Horizon
19.23
4.79
33.17%
PNC
PNC Financial
171.88
17.63
11.43%
RF
Regions Financial
21.42
1.73
8.79%
ZION
Zions Bancorporation National Association
49.47
7.90
19.00%
Cadence Bank Earnings Call Summary
Earnings Call Date: Jan 22, 2025 | % Change Since: -15.32% | Next Earnings Date: Apr 21, 2025
Earnings Call Sentiment Positive
The earnings call was generally positive with strong financial performance and strategic growth through mergers. The company showed significant improvement in revenue and efficiency, with a positive outlook for future growth. However, there were minor declines in noninterest revenue and noninterest-bearing deposits.Highlights
Merger with FCB Financial Corporation
Cadence Bank announced a merger with FCB Financial Corporation, expanding its presence in the Greater Savannah market with an expected cost saving of 25% of noninterest expenses.
Strong Financial Performance in 2024
GAAP net income was $130.3 million for Q4 and $514.1 million for the full year. Adjusted earnings per share increased by 25% compared to 2023.
Core Customer Deposits Growth
Core customer deposits grew $260 million or 3% annualized for the quarter and $2.2 billion or approximately 7% for the full year.
Net Interest Margin Improvement
Net interest margin improved by 7 basis points to 3.38% for the quarter and by 22 basis points for the full year to 3.30%.
Improved Operating Efficiency
The efficiency ratio improved by 5 percentage points from 63.3% in 2023 to 58.4% in 2024.
Dividend Increase
The Board approved a 10% increase in the quarterly common dividend to $0.275 per share.
Lowlights
Noninterest Revenue Decline
Adjusted noninterest revenue was $86.2 million, declining 2.9% in the fourth quarter compared to the previous quarter.
Noninterest-Bearing Deposits Decline
Noninterest-bearing deposits as a percent of total deposits declined to 21.2% during the quarter.
Company Guidance
During the Cadence Bank Fourth Quarter 2024 earnings call, the management provided guidance for 2025, anticipating low to mid-single-digit organic growth rates in loans and core customer deposits. They expect total adjusted revenue growth between 5% to 8% over 2024 levels, with potential net interest margin improvement throughout the year. The call highlighted the successful merger with FCB Financial Corporation, projected to close in the third quarter of 2025, which is expected to be accretive to earnings with cost savings of approximately 25% of First Chatham's noninterest expense base. Pro forma impacts on tangible book value per share and regulatory capital metrics are minimal. The bank aims for annual net charge-offs between 20 and 30 basis points and expects expenses to rise by 4% to 6% over 2024 levels, focusing on investments in people and technology.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.