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, an increase of 6% sequentially.
Core customer deposit growth: More than 11% annual growth.
Net interest margin: 3.31%, up 4 basis points from last quarter.
Allowance for credit losses: 1.38% of loan amount.
Adjusted efficiency ratio: 57.7% for the quarter.
Common Equity Tier 1 (CET1) ratio: 12.3% as of September 30th.
Total equity ratio: 14.5% as of September 30th.
Tangible book value per share: increase of $1.60.
Tangible capital to tangible assets ratio: 8.28% at quarter end.
Loan-to-deposit ratio: 86%.
Net interest income: Increased $5.1 million to $361 million.
Non-interest income: $88.8 million on an adjusted basis, an increase of 3.7% in the third quarter.
Adjusted non-interest expense: Just over $260 million, up 3.7% sequentially.
Net charge-off: $22.2 million or 26 basis points per year.
Allowance for credit losses: $12 million in the third quarter.
Loans receivable: Increased $56 million in the third quarter.
Release date: October 22, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
Cadence Bank (NYSE:CADE) reported net income of $134.1 million, with adjusted net income from continuing operations increasing 6% compared to the previous quarter.
The bank achieved significant annual growth in core customer deposits of more than 11%, while keeping deposit costs stable.
Net interest margin improved for the fourth consecutive quarter, reaching 3.31% due to stable deposit costs and loan repricing.
Credit quality remains stable, with consistent net charge-offs and credit loss provisions equal to 1.38% of loans.
Cadence Bank (NYSE:CADE) repurchased over 323,000 shares and maintained strong capital metrics, including CET1 of 12.3% and total capitalization of 14.5%.
Despite significant new financing commitments, loan balances were flat in the quarter due to repayment pressures.
Interest-free loans have increased, mainly due to the previously criticized credit migration.
Mortgage banking revenues decreased $5 million in the third quarter as a result of changes in the interest rate environment and payments.
Adjusted total non-interest expense increased by 3.7% due to credit increases and other factors impacting efficiency ratios.
The bank faces continued competition in deposit rates, which may impact future deposit cost management.
story continues
Q: Can you talk about the impact of near-term repricing of variable rate loans and fixed rate loans due next year? A: CFO Valerie Toalson said that even though she owns 27% of floating rate securities, I explained that loan yields continue to rise. New loans are being issued at interest rates that are higher than the current portfolio average. The weighted average interest rate for loan repricing over the next three to 12 months is 6.34%, with new loans being issued at higher interest rates, supporting the continued rise in loan yields.
Q: How are you managing your deposit costs? And what are your expectations for deposit beta in the coming quarters? A: Valérie Toarson expects deposit costs to increase by only 2 in the current quarter. I pointed out that it is a basis point. The bank is actively working to reduce deposit costs while maintaining growth. The company renewed a large number of term deposits in the fourth quarter, and interest rates are expected to be lower, which will help reduce deposit costs.
Q: Can you provide insight into the impact of loan pipeline and payoffs on loan growth? A: CEO James Rollins said total new loans for the quarter were approximately 1.07 billion, consistent with the prior quarter. Said to be dollars. The loan pipeline remains strong, but gains, particularly in the energy sector, are offsetting growth. The research team is optimistic that composition activity will eventually outweigh the benefits.
Q: What are your expectations for spending growth in 2025 and how does that relate to revenue growth? A: James Rollins He said he expects to continue investing in people and technology in line with inflation, although the increase is difficult to define. Revenue growth is expected to outpace expense growth in 2025 due to margin expansion and increased lending.
Q: How are you approaching share buybacks and M&A opportunities? A: James Rollins said the bank has consistently taken advantage of market conditions to buy back shares. When it comes to M&A, the focus is on expansion within existing markets rather than new developments. The bank is well-positioned with capital to execute on potential opportunities.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
