Cadence Bank(US:CADE)2025-10-21 16:00Financial 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]