Cadence Bank (CADE) Q2 2024 earnings summary

Executive summary

• Net income available to common shareholders was $135.1 million ($0.73 per diluted share), with adjusted net income of $127.9 million ($0.69 per share), up over 11% sequentially from Q1 2024.

• Record adjusted pre-tax pre-provision net revenue of $190.9 million, up 9.6% from Q1 2024 and 19.7% year-over-year.

• Net organic loan growth of $430.2 million (5.3% annualized) and core customer deposit growth of $237.4 million (2.9% annualized) in Q2 2024.

• 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 supports both organic and inorganic growth.

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%.

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

• Adjusted ROA rose to 1.09%; adjusted ROTCE increased to 14.4%.

• 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 mid-single digit loan growth and low single digit core deposit growth for 2024.

• Full-year adjusted revenue growth guidance maintained at 5%-8%; adjusted expense guidance flat to up 1%, expected at the lower end.

• Non-interest-bearing deposit mix expected to trend toward 21% by year-end, with further decline to 20% by mid-2025.

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

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