Mergers and Acquisitions - Huntington Bancshares 已达成协议，将以 74 亿美元收购 Cadence Bank [1] - 该交易表明，在行业整合压力下，贷款机构的并购交易正在恢复 [1]

Group 1: Cadence Bank - Cadence Bank has a history of increasing dividends for 12 consecutive years, with a recent quarterly payout hike of 10% to $0.275 per share, translating to an annual figure of $1.10 per share [3] - The current dividend yield for Cadence Bank is 3.01% [3] - As of June 30, Cadence Bank's annual revenue was $1.82 billion, and for Q3 2025, the company reported revenues of $517.21 million, which was below the consensus estimate of $525 million, while EPS of $0.81 exceeded the consensus of $0.78 [4] Group 2: LCI Industries - LCI Industries has raised its dividends for nine consecutive years, with the latest increase from $1.05 to $1.15 per share, equating to an annual figure of $4.60 per share [5] - The current dividend yield for LCI Industries is 5.22% [5] - As of June 30, LCI Industries' annual revenue was $3.87 billion, and for Q2 2025, the company reported revenues of $1.11 billion and EPS of $2.39, both exceeding consensus estimates [6] Group 3: Hormel Foods - Hormel Foods Corp. is involved in the development, processing, and distribution of various food products, including meat and nuts, catering to foodservice, convenience stores, and commercial customers both domestically and internationally [7]

Cadence Bank (NYSE:CADE) Q3 2025 Earnings Call October 21, 2025 11:00 AM ET Company ParticipantsValerie Toalson - CFOChris Bagley - Chief Credit OfficerWill Fisackerly - EVP and Director of FinanceBilly Braddock - Chief Banking OfficerDan Rollins - CEOConference Call ParticipantsJon Arfstrom - AnalystCatherine Mealor - AnalystStephen Scouten - AnalystMatt Olney - AnalystBen Gerlinger - AnalystCasey Haire - AnalystManan Gosalia - AnalystJared Shaw - AnalystMichael Rose - AnalystBrett Rabatin - AnalystOperato ...

Financial Data and Key Metrics Changes - Adjusted net income from continuing operations increased to $152.8 million or $0.81 per share, with adjusted return on assets at 1.13% for the quarter [7] - Tangible book value per share declined only $0.12 to $22.82, largely offset by strong operating earnings and improvement in accumulated other comprehensive income (AOCI) [6] - Adjusted pre-tax pre-provision net revenue reached a record $224 million, up nearly 9% from the prior quarter [9] - Total adjusted revenue of $517 million increased by $41 million or 9% in the quarter, with net interest revenue up $46 million or 12% [10] Business Line Data and Key Metrics Changes - Deposits increased by $3.4 billion, with core customer deposits up $3.1 billion due to the influx from the Industry acquisition [7] - Loans rose by $1.3 billion, with $1 billion attributed to the Industry acquisition and over $300 million in organic growth across mortgage and multiple verticals [7] - Adjusted non-interest revenue of $93.5 million decreased by $4.7 million, primarily due to seasonal declines in mortgage banking revenue [12] Market Data and Key Metrics Changes - The company experienced an uptick in commercial real estate (CRE) paydowns during the quarter, but new origination activity remained strong across its footprint [8] - Non-performing asset levels and criticized and classified asset levels continued to reflect stability [8] Company Strategy and Development Direction - The company completed the acquisition of Industry Bankshares and integrated it into its systems, aiming to grow in Central Texas and Georgia markets [4] - The management expressed confidence in leveraging deposit products and services more fully now that integration is complete [7] - The company plans to continue focusing on organic growth while also considering additional acquisitions in a consolidating industry [60] Management's Comments on Operating Environment and Future Outlook - Management noted that the pipeline for loan growth remains strong, with expectations for continued modest improvement in net interest margin through the end of the year and into next year [11] - The company anticipates that the expense expectations will align with revenue expectations, driving operating leverage as they approach year-end [23] Other Important Information - The company reported a $4.3 million securities gain offset by a $4.3 million hedge loss, resulting in a net impact of zero on the P&L [9][12] - The adjusted efficiency ratio improved to 56.5% [7] Q&A Session Summary Question: Can you talk about the drivers of the slightly lower revenue and loan growth guide? - Management indicated that the shorter timeline for the remaining months of the year provides better clarity, and they expect good growth in the fourth quarter [20][21] Question: What sort of beta do you expect in the broker and time deposits as rates go down? - Management expects interest-bearing betas to reach about 50%, with total deposits between 30% and 40% [25][26] Question: What's the expectation for DDA specifically as we go through the rest of the year? - Management noted that non-interest-bearing deposits finished Q3 at 20.6%, with expectations to stabilize around 21% [32][33] Question: What should we think of as a good capital level or a base capital level that you're trying to manage to? - Management aims to continue being good stewards of capital, with plans to execute on organic growth and consider additional deals [39] Question: What was driving the increase in deposits this quarter? - Management clarified that the increase was largely due to the Industry acquisition, with stable core organic deposits [46] Question: Can you provide insight into the fee income businesses this quarter? - Management highlighted a typical seasonal dip in mortgage production but noted a year-over-year increase of 13% [124]

Financial Data and Key Metrics Changes - Adjusted net income from continuing operations increased to $152.8 million or $0.81 per share, with adjusted return on assets at 1.13% for the quarter [6][10] - Adjusted pre-tax pre-provision net revenue reached a record $224 million, up nearly 9% from the prior quarter [9] - Total adjusted revenue of $517 million increased by $41 million or 9% in the quarter [10] - Net interest revenue was up $46 million or 12%, driven by a larger balance sheet and improved net interest margin [10] - Adjusted efficiency ratio improved to 56.5% [6] Business Line Data and Key Metrics Changes - Deposits increased by $3.4 billion, with core customer deposits up $3.1 billion due to the influx from the Industry acquisition [6] - Loans increased by $1.3 billion, with $1 billion from the Industry acquisition and over $300 million in organic growth [6] - Adjusted non-interest revenue of $93.5 million decreased by $4.7 million, primarily due to seasonal declines in mortgage banking revenue [12] Market Data and Key Metrics Changes - The securities portfolio grew by $780 million in the quarter, reflecting an improved mix and interest rate profile compared to the prior quarter [10] - Net interest margin improved by six basis points to 3.46%, driven by improved securities yields and a decline in overall funding costs [10] Company Strategy and Development Direction - The company completed the acquisition of Industry Bankshares and integrated it into its systems, aiming for growth in Central Texas and Georgia markets [4][5] - The company plans to leverage its deposit products and services more fully now that integration is complete [6] - The management expressed confidence in the performance and outlook for the markets, projecting growth in financial results through the end of the year [14] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains stable, with credit results in line with expectations and net charge-offs at 26 basis points annualized [7] - The company anticipates continued modest improvement in net interest margin through the end of the year and into next year [11] - Management highlighted strong pipelines and diverse growth opportunities across all business lines [75] Other Important Information - The company reported a decline in tangible book value per share by only $0.12 to $22.82, largely offset by strong operating earnings [5] - The company expects to continue building capital after the Industry transaction and is back in the buyback game sooner than anticipated [34] Q&A Session Summary Question: Can you talk about the drivers of the slightly lower revenue and loan growth guide? - Management indicated that the shorter timeline for the year provides better clarity, and they expect good growth in the fourth quarter [19][20] Question: What sort of beta do you expect in the broker and time deposits as rates go down? - Management expects interest-bearing betas to reach about 50% and total deposits between 30% and 40% [22] Question: What is the expectation for DDA specifically as we go through the rest of the year? - Management noted that non-interest-bearing deposits finished Q3 at 20.6%, down from 21.2% at year-end 2024, with fluctuations due to customer behavior [28][30] Question: What should we think of as a good capital level or a base capital level that you're trying to manage to? - Management aims to be good stewards of capital, focusing on core organic growth and potential inorganic opportunities [34] Question: Can you provide insight into loan pricing and competition in recent weeks? - Management acknowledged competitive pressures but noted that yields have been holding steady, particularly in the Community Bank segment [80][81]

Financial Data and Key Metrics Changes - Adjusted net income from continuing operations increased to $152.8 million or $0.81 per share, with an adjusted return on assets of 1.13% for the quarter [6][7] - Adjusted pretax pre-provision net revenue reached a record $224 million, up nearly 9% from the prior quarter [9] - Total adjusted revenue increased to $517 million, a rise of $41 million or 9% in the quarter [10] - Net interest revenue was up $46 million or 12%, driven by balance sheet growth and improved net interest margin [10][11] - Adjusted efficiency ratio improved to 56.5% [6] Business Line Data and Key Metrics Changes - Deposits increased by $3.4 billion, with core customer deposits up $3.1 billion due to the influx from the Industry acquisition [7] - Loans rose by $1.3 billion, with $1 billion attributed to the Industry acquisition and over $300 million in organic growth [7] - Adjusted non-interest revenue decreased by $4.7 million, primarily due to seasonal declines in mortgage banking revenue [12] Market Data and Key Metrics Changes - The net interest margin improved by six basis points to 3.46%, driven by improved securities yields and a decline in overall funding costs [11] - Loan yields were 6.37%, up three basis points due to added accretion, while securities yields improved by 32 basis points to 3.65% [11] Company Strategy and Development Direction - The company completed the acquisition of Industry Bank shares and integrated operations, aiming for growth in Central Texas and Georgia markets [5] - The focus remains on organic growth and potential inorganic opportunities, with a strong emphasis on maintaining a good capital level for future investments [41][96] - The company is confident in its performance and outlook for the markets, projecting continued growth through the end of the year [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth machine, noting that the shorter time frame for the year-end guidance reflects clarity in expectations [21] - The company anticipates continued modest improvement in net interest margin through the end of the next year [11] - Management highlighted strong market activity and a solid pipeline supporting growth expectations [99] Other Important Information - The company reported a decline in tangible book value per share by only $0.12 to $22.82, largely offset by strong operating earnings [6] - The acquisition of Industry Bank shares resulted in an additional $143 million in tangible common equity relative to initial estimates [14] Q&A Session Summary Question: Can you talk about the drivers of the slightly lower revenue and loan growth guide? - Management indicated that the shorter time frame for the year-end guidance provides better clarity, and they expect good growth in the fourth quarter [21][23] Question: What sort of beta do you expect in the broker and time deposits as rates go down? - Management expects interest-bearing betas to reach about 50%, with total deposits between 30% and 40% [26][27] Question: Is there anything impacting DDA specifically as we go through the rest of the year? - Management noted that non-interest bearing deposits finished at 20.6%, consistent with their historical trends [32][33] Question: What should we think of as a good capital level or base capital level moving forward? - Management aims to be good stewards of capital, looking for opportunities for organic growth and potential acquisitions [41] Question: Any thoughts on loan pricing and competition in recent weeks? - Management acknowledged competitive pressures but noted that yields have been holding steady [107][108]

Financial Highlights - Adjusted net income available to common shareholders reached $152.8 million[5], or $0.81 per diluted common share[6] - Adjusted pre-tax pre-provision net revenue (PPNR) was $224.1 million, an increase of 8.8% compared to the second quarter of 2025[5, 6] - Net interest margin improved to 3.46%, a linked quarter increase of 6 basis points[5, 6] - Total loans grew by $1.3 billion, including $1.0 billion through acquisition and $0.3 billion in net organic growth[6] - Total deposits grew by $3.4 billion, with core customer deposits up $3.1 billion[6] Acquisition and Expansion - Completed the acquisition of Industry Bancshares, Inc, adding approximately $4.1 billion in assets[6] - Converted First Chatham Bank and Industry Bancshares banks to Cadence systems and branding[6] Loan Portfolio - Total loans and leases increased $1.3 billion to $36.8 billion[10, 13] - Commercial and Industrial (C&I) loans represent 39.5% of total loans, totaling $14.5 billion[10, 14, 19] - Commercial Real Estate (CRE) loans represent 28% of total loans, totaling $10.4 billion[10, 20, 24] Credit Quality - Net charge-offs for 3Q25 were $23.6 million, or 0.26% of average net loans and leases on an annualized basis[27, 30] - Total nonperforming assets excluding government guaranteed assets were 0.41% of total assets[25, 30] Capital Strength - Total shareholders' equity was $6.1 billion[58, 60] - Common Equity Tier 1 capital was 11.5%[5, 58, 60] - Total Capital Ratio was 13.1%[5, 58, 60] Industry Bancshares Acquisition Update - Updated purchase accounting resulted in improved tangible common equity of $143 million and reduced goodwill of $133 million compared to initial estimates[64] - Recognized net deferred tax asset of $100 million, initially modeled at $20 million[61, 64]

Group 1 - Cadence reported revenue of $517.21 million for the quarter ended September 2025, reflecting a 15.6% increase year-over-year [1] - The company's EPS was $0.81, up from $0.73 in the same quarter last year, with an EPS surprise of +3.85% against a consensus estimate of $0.78 [1] - The reported revenue fell short of the Zacks Consensus Estimate of $527.63 million, resulting in a surprise of -1.98% [1] Group 2 - Cadence's stock has returned -2.2% over the past month, while the Zacks S&P 500 composite increased by +1.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3] Group 3 - Adjusted Efficiency Ratio was 56.5%, slightly above the average estimate of 56.1% [4] - Net Interest Margin remained stable at 3.5%, matching the average estimate [4] - Total noninterest income was reported at $93.48 million, below the average estimate of $99 million [4]

Core Insights - Cadence (CADE) reported quarterly earnings of $0.81 per share, exceeding the Zacks Consensus Estimate of $0.78 per share, and showing an increase from $0.73 per share a year ago, resulting in an earnings surprise of +3.85% [1] - The company posted revenues of $517.21 million for the quarter ended September 2025, which was below the Zacks Consensus Estimate by 1.98%, compared to $447.36 million in the same quarter last year [2] - Over the last four quarters, Cadence has surpassed consensus EPS estimates four times but has only topped revenue estimates once [2] Earnings Outlook - The sustainability of Cadence's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.83, with expected revenues of $533.03 million, and for the current fiscal year, the EPS estimate is $3.01 on revenues of $1.99 billion [7] Industry Context - The Zacks Industry Rank for Banks - Southeast, to which Cadence belongs, is currently in the top 31% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

Core Viewpoint - Cadence Bank reported strong financial results for Q3 2025, driven by steady loan growth, improved net interest margin, operational efficiency, and stable credit quality, alongside successful acquisitions of Industry Bancshares and First Chatham Bank [2][10]. Earnings Summary - Net income available to common shareholders for Q3 2025 was $127.5 million, or $0.67 per diluted share, compared to $134.1 million, or $0.72 per diluted share in Q3 2024 [3][10]. - Adjusted net income for Q3 2025 was $152.8 million, or $0.81 per diluted share, up from $135.6 million, or $0.73 per diluted share in Q3 2024 [3][10]. - Adjusted pre-tax pre-provision net revenue (PPNR) was $224.1 million, an increase of 18.0% year-over-year [4][10]. Net Interest Revenue - Net interest revenue for Q3 2025 was $423.7 million, up from $361.5 million in Q3 2024, reflecting a 12.1% increase [5][10]. - The net interest margin improved to 3.46% in Q3 2025, compared to 3.31% in Q3 2024 [5][10]. - Average earning assets increased to $48.8 billion from $44.7 billion in the previous quarter [5][10]. Balance Sheet Activity - Loans and leases increased to $36.8 billion as of September 30, 2025, with $1.0 billion from acquisitions and $328.4 million in organic growth [6][10]. - Total deposits rose to $43.9 billion, an increase of $3.4 billion from the previous quarter [7][10]. - The loan-to-deposit ratio was 83.8% as of September 30, 2025 [7][10]. Credit Quality - Net charge-offs for Q3 2025 were $23.6 million, or 0.26% of average net loans, stable compared to previous periods [9][10]. - The provision for credit losses was $32.0 million, up from $12.0 million in Q3 2024 [9][10]. - Total nonperforming assets as a percentage of total assets were 0.50% at September 30, 2025, down from 0.57% a year earlier [12][10]. Noninterest Revenue - Noninterest revenue for Q3 2025 was $93.5 million, compared to $85.9 million in Q3 2024 [13][10]. - Mortgage banking revenue totaled $4.5 million, significantly down from $8.7 million in the previous quarter [15][10]. - Wealth management revenue was $24.5 million, slightly down from $25.3 million in the previous quarter [14][10]. Noninterest Expense - Noninterest expense for Q3 2025 was $320.2 million, up from $259.4 million in Q3 2024 [17][10]. - Adjusted noninterest expense was $293.2 million, excluding merger-related costs [17][10]. - The adjusted efficiency ratio improved to 56.5% compared to 57.7% in Q3 2024 [17][10]. Capital Management - Total shareholders' equity was $6.1 billion as of September 30, 2025, up from $5.6 billion a year earlier [19][10]. - Common Equity Tier 1 capital ratio was 11.5% as of September 30, 2025 [19][10]. - The company did not repurchase any shares during the third quarter [19][10]. Key Transactions - The acquisition of Industry Bancshares was completed on July 1, 2025, adding approximately $4.1 billion in assets [10][21]. - The merger with First Chatham Bank was completed on May 1, 2025, contributing additional assets and deposits [10][21].