Cadence Bank (CADE) AI Stock Analysis

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Cadence Bank

(NYSE:CADE)

Rating:74Outperform

Price Target:

$34.00

▲( 12.58% Upside)

Cadence Bank's strong earnings performance and attractive valuation are the primary drivers of its positive stock score. While technical analysis shows neutrality, the company's strategic initiatives and financial robustness, especially highlighted in the earnings call, contribute significantly to its potential for growth.

Positive Factors

Cost savings

CADE expects to generate cost saves of 40% of Industry's expense base by consolidating 6 entities into 1, offering multiple efficiencies from a regulatory and system consolidation perspective.

Deposit growth

The Cadence brand and larger footprint should benefit CADE on the deposit side.

Negative Factors

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.

Share buybacks

Lower buybacks are partially offsetting the EPS accretion from the acquisition.

Cadence Bank (CADE) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$5.52B

Dividend Yield3.34%

Average Volume (3M)1.46M

Price to Earnings (P/E)10.6

Beta (1Y)1.27

Revenue Growth19.04%

EPS GrowthN/A

CountryUS

Employees5,356

SectorFinancial

Sector Strength82

IndustryBanks - Regional

Share Statistics

EPS (TTM)0.70

Shares Outstanding182,732,960

10 Day Avg. Volume1,225,766

30 Day Avg. Volume1,455,237

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 Cap1.16

Enterprise Value/Revenue1.19

Enterprise Value/Gross Profit3.62

Enterprise Value/Ebitda3.03

Forecast

1Y Price Target

$35.88

Price Target Upside18.81% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering8

Cadence Bank Business Overview & Revenue Model

Company DescriptionCadence Bank (CADE) is a regional financial institution offering a comprehensive range of banking and financial services. Headquartered in Tupelo, Mississippi, and with operations primarily in the Southeastern United States, Cadence Bank provides commercial and consumer banking, treasury management, and wealth management services. The bank is committed to delivering personalized and community-focused financial solutions tailored to meet the needs of individuals, businesses, and institutions.

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

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Negative

Last Price30.20

Price Trends

50DMA

29.69

Positive

100DMA

31.64

Negative

200DMA

32.33

Negative

Market Momentum

MACD

0.54

Positive

RSI

51.42

Neutral

STOCH

24.65

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 30.2 is below the 20-day moving average (MA) of 30.69, above the 50-day MA of 29.69, and below the 200-day MA of 32.33, indicating a neutral trend. The MACD of 0.54 indicates Positive momentum. The RSI at 51.42 is Neutral, neither overbought nor oversold. The STOCH value of 24.65 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
HOMB	74 Outperform	$5.57B	13.48	10.63%	2.71%	6.67%	8.50%
CADE	74 Outperform	$5.52B	10.58	9.90%	3.34%	19.04%	―
GBCI	73 Outperform	$4.62B	21.76	6.63%	3.21%	8.10%	6.95%
VLY	69 Neutral	$4.87B	12.67	5.48%	5.06%	1.60%	-18.84%
UBSI	68 Neutral	$5.13B	13.40	7.30%	4.10%	6.39%	2.93%
FFIN	67 Neutral	$4.93B	21.33	14.60%	2.08%	16.01%	15.70%
Sector *	64 Neutral	$12.64B	9.78	7.67%	17015.08%	12.23%	-6.02%

* Financial Sector Average

Performance Comparison

CADE

Cadence Bank

30.20

2.86

10.46%

FFIN

First Financial Bankshares

34.21

4.82

16.40%

GBCI

Glacier Bancorp

40.67

3.78

10.25%

HOMB

Home Bancshares

28.08

4.97

21.51%

UBSI

United Bankshares

36.01

4.65

14.83%

VLY

Valley National Bancorp

8.70

1.72

24.64%

Cadence Bank Earnings Call Summary

Earnings Call Date:Apr 21, 2025

(Q1-2025)

% Change Since: 9.46%|

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.