Cadence Bank (CADE) Q2 2024 earnings summary

Executive summary

• Net income available to common shareholders was $135.1 million ($0.73 per diluted share); adjusted net income was $127.9 million ($0.69 per share), up 11.3% sequentially from Q1 2024.

• Loan growth was $430.2 million (5.3% annualized), with growth in CRE, C&I, and residential mortgage portfolios; core customer deposits grew $237.4 million (2.9% annualized), offsetting declines in public funds and brokered deposits.

• Adjusted pre-tax pre-provision net revenue reached $190.9 million, up 9.6% sequentially and 19.7% year-over-year.

• Regulatory capital ratios remained strong, with CET1 at 11.9% and total capital at 14.2% as of June 30, 2024.

• Repurchased 256,033 shares at $26.97 average price; capital allocation remains opportunistic.

Financial highlights

• Net interest income/revenue rose to $356.3 million, up 0.7% sequentially and 6.8% year-over-year.

• Net interest margin improved to 3.27%, up 5 bps sequentially and 24 bps year-over-year.

• Adjusted EPS from continuing operations was $0.69, up 11.3% sequentially and 15% year-over-year.

• Adjusted efficiency ratio improved to 56.7%, down 339 bps from Q1 2024.

• Wealth management and mortgage origination revenues increased sequentially and year-over-year.

Outlook and guidance

• Management expects full-year adjusted revenue growth of 5%-8% and adjusted noninterest expense to be flat to up 1% versus 2023.

• Loan growth pipelines remain strong, with broad-based contributions expected.

• Non-interest-bearing deposit mix expected to trend toward 21% by year-end, not reaching 20% until mid-2025.

• Deposit costs are stabilizing, with potential for near-term peak.

• Net charge-offs are expected to remain in a similar range as 2023, with a stable tax rate of 23%.