HOUSTON and TUPELO, Miss., July 23, 2025 /PRNewswire/ -- Cadence Bank (NYSE: CADE) (the Company), today announced financial results for the quarter ended June 30, 2025.
Highlights for the second quarter of 2025 included:
- Reported quarterly net income available to common shareholders of $129.9 million, or $0.69 per diluted common share, and adjusted net income available to common shareholders(1) of $137.5 million, or $0.73 per diluted common share.
- Achieved quarterly adjusted pre-tax pre-provision net revenue (PPNR)(1) of $206.0 million, an increase of $15.1 million, or 7.9% compared to the second quarter of 2024 and an increase of $16.0 million, or 8.4%, from the first quarter of 2025.
- Generated net organic loan growth of $1.1 billion for the second quarter of 2025, or 12.6% on an annualized basis; core customer deposit balances, which exclude brokered and public fund deposits, increased organically approximately $376.0 million, or 4.4% on an annualized basis.
- Maintained strong regulatory capital with Common Equity Tier 1 Capital of 12.2% and Total Capital of 13.8%.
- Effective May 1, 2025, completed the acquisition of FCB Financial Corp., the parent company of First Chatham Bank, which added approximately $604 million in assets to the Company's presence in Savannah, Georgia and surrounding areas.
- Effective July 1, 2025, completed the acquisition of Industry Bancshares, Inc., the parent company of Industry State Bank, The First National Bank of Bellville, Fayetteville Bank, Citizens State Bank, The First National Bank of Shiner and Bank of Brenham, which added approximately $4.1 billion in assets to the Company's presence in Central and Southeast Texas.
"Our second quarter results reflect another quarter of strong operating performance driven by continued organic balance sheet growth combined with the closing of the First Chatham transaction effective on May 1," remarked Dan Rollins, Chairman and Chief Executive Officer of Cadence Bank. "Our continued balance sheet growth contributed to a meaningful linked quarter increase in revenues, and our operating efficiency continued to improve. Finally, we are pleased to have closed the Industry transaction effective on July 1. We are excited about the opportunity this transaction provides to add valuable core deposits and to further expand our customer base in Texas."
At its regular quarterly meeting today, the Board of Directors declared quarterly cash dividends of $0.275 per share of common stock and $0.34375 per share of Series A Preferred Stock. The common stock dividend is payable on October 1, 2025 to shareholders of record at the close of business on September 15, 2025. The preferred stock dividend is payable on August 20, 2025 to shareholders of record at the close of business on August 5, 2025.
Earnings Summary
For the second quarter of 2025, the Company reported net income available to common shareholders of $129.9 million, or $0.69 per diluted common share, compared to $135.1 million, or $0.73 per diluted common share, for the second quarter of 2024 and $130.9 million, or $0.70 per diluted common share, for the first quarter of 2025. Adjusted net income available to common shareholders(1) was $137.5 million, or $0.73 per diluted common share, for the second quarter of 2025, compared with $127.9 million, or $0.69 per diluted common share, for the second quarter of 2024 and $131.4 million, or $0.71 per diluted common share, for the first quarter of 2025.
Return on average assets was 1.09% for the second quarter of 2025, compared to 1.15% for both the second quarter of 2024 and the first quarter of 2025. Adjusted return on average assets(1) was 1.14% for the second quarter of 2025, compared to 1.09% in the second quarter of 2024 and 1.15% in the first quarter of 2025. Additionally, the Company reported adjusted PPNR(1) of $206.0 million, or 1.67% of average assets on an annualized basis, for the second quarter of 2025, which represents an increase of $15.1 million, or 7.9%, compared to the same quarter of 2024 and an increase of $16.0 million, or 8.4% compared to the first quarter of 2025.
Net Interest Revenue
Net interest revenue was $378.1 million for the second quarter of 2025, compared to $356.3 million for the second quarter of 2024 and $363.2 million for the first quarter of 2025. The net interest margin (fully taxable equivalent) was 3.40% for the second quarter of 2025, compared with 3.27% for the second quarter of 2024 and 3.46% for the first quarter of 2025.
Net interest revenue increased $15.0 million, or 4.1%, compared to the first quarter of 2025 due primarily to organic loan growth and increases in investment securities, as well as an increase in day count and the closing of the First Chatham transaction. Purchase accounting accretion revenue was $2.6 million for the second quarter of 2025, flat compared to the first quarter of 2025. Average earning assets increased to $44.7 billion compared to $42.6 billion for the first quarter of 2025, primarily as a result of continued organic loan growth as well as an increase in investment securities. While net interest revenue increased notably, the linked quarter net interest margin declined by 6 basis points due to the impact of approximately $2 billion in investment securities added late in the first quarter of 2025 and early in the second quarter of 2025 that were funded by term FHLB borrowings. Otherwise, yields on our loans and securities, along with the cost of deposits, trended favorably in the second quarter of 2025.
Yield on net loans, loans held for sale and leases, excluding accretion, was 6.31% for the second quarter of 2025, up 1 basis point from 6.30% for the first quarter of 2025. Investment securities yielded 3.33% in the second quarter of 2025, improving from 3.00% for the first quarter of 2025. The average cost of total deposits of 2.30% for the second quarter of 2025 declined by 5 basis points from 2.35% for the first quarter of 2025, driven by improvement in the cost of time deposits.
Balance Sheet Activity
Loans and leases, net of unearned income, increased to $35.5 billion at June 30, 2025 compared to $34.1 billion at March 31, 2025. Net organic loan growth of $1.1 billion, or 12.6% annualized, for the second quarter of 2025 was driven by diverse growth across asset classes in our community bank, corporate bank, private banking, and mortgage teams. Year-to-date, net organic loan growth was $1.4 billion, or 8.3% annualized.
Total deposits were $40.5 billion as of June 30, 2025, increasing $0.2 billion from $40.3 billion at the end of the first quarter of 2025. Core customer deposits increased organically by $376.0 million, or 4.4% annualized, compared to March 31, 2025 while brokered deposits declined $437.0 million and public fund deposits declined $301.0 million over the same time period. Year to date, core customer deposits have grown $367.0 million, or 2.1% annualized. The loan to deposit ratio was 87.6% as of June 30, 2025. Noninterest bearing deposits improved to 22.6% of total deposits at the end of the second quarter of 2025 compared to 21.2% at the end of the first quarter of 2025. Borrowed funds increased $2.2 billion during the second quarter of 2025 compared to the first quarter of 2025, due to the addition of FHLB term borrowings.
Total investment securities increased $0.9 billion from March 31, 2025 to $8.8 billion at June 30, 2025, representing 17.5% of total assets. Cash, due from balances and deposits at the Federal Reserve of $1.5 billion at June 30, 2025, was relatively flat compared to $1.6 billion at March 31, 2025.
Credit Results, Provision for Credit Losses and Allowance for Credit Losses
Credit metrics for the second quarter of 2025 reflected continued overall stability in credit quality. Net charge-offs for the second quarter of 2025 were $21.2 million, or 0.24% of average net loans and leases on an annualized basis, compared with net charge-offs of $22.6 million, or 0.28%, for the second quarter of 2024 and net charge-offs of $23.0 million, or 0.27%, for the first quarter of 2025. The provision for credit losses for the second quarter of 2025 was $31.0 million, compared with $22.0 million for the second quarter of 2024 and $20.0 million for the first quarter of 2025. The provision for credit losses for the second quarter of 2025 included $4.2 million in day-one provision associated with performing loans and leases acquired in the First Chatham transaction during the quarter. The allowance for credit losses of $474.7 million at June 30, 2025 was 1.34% of total loans and leases compared to 1.41% of total loans and leases at June 30, 2024 and 1.34% of total loans and leases at March 31, 2025.
Total nonperforming assets as a percent of total assets were 0.49% at June 30, 2025 compared to 0.46% at June 30, 2024 and 0.51% at March 31, 2025. Total nonperforming loans and leases as a percentage of loans and leases, net were 0.65% at June 30, 2025 compared to 0.65% at June 30, 2024 and 0.69% at March 31, 2025. Other real estate owned and other repossessed assets was $15.6 million at June 30, 2025 compared to the June 30, 2024 balance of $4.8 million and the March 31, 2025 balance of $8.5 million. Criticized loans represented 2.65% of loans at June 30, 2025 compared to 2.51% at June 30, 2024 and 2.39% at March 31, 2025, while classified loans were 2.01% at June 30, 2025 compared to 2.09% at June 30, 2024 and 1.95% at March 31, 2025.
Noninterest Revenue
Noninterest revenue was $98.2 million for the second quarter of 2025 compared with $100.7 million for the second quarter of 2024 and $85.4 million for the first quarter of 2025. Adjusted noninterest revenue(1) was $98.2 million for the second quarter of 2025 compared with $85.7 million for the second quarter of 2024 and $85.4 million for the first quarter of 2025. Adjusted noninterest revenue(1) for the second quarter of 2024 excludes a gain of $15.0 million primarily related to the sale of Cadence Business Solutions, LLC.
Noninterest revenue improved $12.8 million, or 15.0%, compared to the first quarter of 2025 driven by increases in mortgage banking revenue, card fee and service charge revenue, wealth management revenue, and other noninterest revenue. Wealth management revenue was $25.3 million for the second quarter of 2025, improved from $23.3 million for the first quarter of 2025 including approximately $1 million in seasonal trust tax revenue as well as favorable market conditions for managed assets. Deposit service charge revenue was $18.1 million for the second quarter of 2025, compared to $17.7 million for the first quarter of 2025, partially due to the higher day count in the second quarter of 2025. Credit card, debit card and merchant fee revenue was $13.0 million for the second quarter of 2025, up from $12.0 million for the first quarter of 2025, reflecting typical seasonal trends.
Mortgage banking revenue totaled $8.7 million for the second quarter of 2025, compared to $6.2 million for the second quarter of 2024 and $6.6 million for the first quarter of 2025. The $2.1 million improvement compared to the first quarter of 2025 was primarily due to seasonally higher mortgage production and servicing revenue, as well as linked quarter improvement in the mortgage servicing rights valuation adjustment.
Other noninterest revenue was $33.1 million for the second quarter of 2025, representing an increase of $7.4 million from $25.8 million for the first quarter of 2025, driven by various sources including higher customer swap fees, credit related fees, SBA income, FHLB dividend income and BOLI income.
Noninterest Expense
Noninterest expense for the second quarter of 2025 was $272.9 million, compared with $256.7 million for the second quarter of 2024 and $259.3 million for the first quarter of 2025. Adjusted noninterest expense(1) for the second quarter of 2025 was $270.4 million, compared with $251.1 million for the second quarter of 2024 and $258.6 million for the first quarter of 2025. Adjusted noninterest expense for the second quarter of 2025 excludes $2.2 million of merger expense and $0.6 million of incremental merger related expense. The adjusted efficiency ratio(1) was 56.7% for the second quarter of 2025, compared to 56.7% for the second quarter of 2024 and 57.6% for the first quarter of 2025.
The $11.7 million, or 4.5%, linked quarter increase in adjusted noninterest expense(1) was driven primarily by the closing of the First Chatham transaction combined with costs associated with business growth and strong operating performance. Salaries and employee benefits increased $4.4 million compared to the first quarter of 2025, including approximately $2 million related to the addition of First Chatham, as well as increases in commission expense associated with strong fee revenue performance and higher share based payment accruals. Data processing and software expense increased $3.6 million compared to the first quarter of 2025 including both volume increases and other contractual and service increases. Advertising and public relations reflected seasonal increases of $3.1 million, while other miscellaneous expense declined by $5.3 million due to fraud and operational loss recoveries and lower consulting and regulatory costs.
Capital Management
Total shareholders' equity was $5.9 billion at June 30, 2025, up from $5.3 billion at June 30, 2024 and $5.7 billion at March 31, 2025. Estimated regulatory capital ratios at June 30, 2025 included Common Equity Tier 1 capital of 12.2%, Tier 1 capital of 12.6%, Total risk-based capital of 13.8%, and Tier 1 leverage capital of 10.3%. During the second quarter of 2025, the Company did not repurchase any shares of Company common stock. The Company had 186.3 million outstanding shares of common stock as of June 30, 2025.
Summary
Rollins concluded, "The hard work and successes of our team over the first half of 2025 have had a meaningful impact on our Company's growth and financial results. These efforts have driven continued improvement in many of our performance metrics, including earnings per share and operating efficiency, all while maintaining strong credit quality and capital. With the growth we have achieved, both organically and through the strategic partnerships with Industry and First Chatham, I am encouraged with our momentum into the remainder of this year and into 2026."
Key Transactions
On May 1, 2025, the Company completed the merger with FCB Financial Corp., the bank holding company for First Chatham Bank (collectively referred to as "First Chatham"), pursuant to which First Chatham was merged with and into the Company. First Chatham was a Savannah, Georgia-based community bank that operated eight branches across the Greater Savannah Area. As of April 30, 2025, First Chatham reported total assets of $604 million, total loans of $387 million, and total deposits of $525 million. Under the terms of the definitive merger agreement, the Company issued approximately 2.3 million shares of common stock plus $23.1 million in cash for all outstanding shares of First Chatham. The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.
On July 1, 2025, the Company completed the merger with Industry Bancshares, Inc., the bank holding company for Industry State Bank, The First National Bank of Bellville, Fayetteville Bank, Citizens State Bank, The First National Bank of Shiner and Bank of Brenham, (collectively referred to as "Industry"), pursuant to which Industry was merged with and into the Company. Founded in 1911 and headquartered in Industry, Texas, Industry operated 27 full-service branches across Central and Southeast Texas. As of June 30, 2025, Industry reported total assets of $4.1 billion, total loans of $1.1 billion, and total deposits of $4.3 billion. Under the terms of the definitive merger agreement, the Company paid $20.0 million in cash for all outstanding shares of Industry.
Conference Call and Webcast
The Company will conduct a conference call to discuss its second quarter 2025 financial results on July 24, 2025, at 10:00 a.m. (Central Time). This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing http://ir.cadencebank.com/events. The webcast will also be available in archived format at the same address.
About Cadence Bank
Cadence Bank (NYSE: CADE) is a $55 billion regional financial services company committed to helping people, companies and communities prosper. With more than 390 locations spanning the South and Texas, Cadence offers comprehensive banking, investment, trust and mortgage products and services to meet the needs of individuals, businesses and corporations. Accolades include being recognized as one of the nation's best employers by Forbes and U.S. News & World Report and a 2025 America's Best Banks by Forbes. Cadence has dutifully served customers for nearly 150 years. Learn more at www.cadencebank.com. Cadence Bank, Member FDIC. Equal Housing Lender.
(1) Considered a non-GAAP financial measure. A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears in Table 14 "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions" beginning on page 21 of this news release. |
Forward-Looking Statements
Certain statements made in this news release constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor under the Private Securities Litigation Reform Act of 1995 as well as the "bespeaks caution" doctrine. These statements are often, but not exclusively, made through the use of words or phrases like "assume," "believe," "budget," "contemplate," "continue," "could," "foresee," "indicate," "may," "might," "outlook," "prospect," "potential," "roadmap," "should," "target," "will," "would," the negative versions of such words, or comparable words of a future or forward-looking nature. These forward-looking statements may include, without limitation, discussions regarding general economic, interest rate, trade, real estate market, competitive, employment, and credit market conditions, or any of the Company's comments related to topics in its risk disclosures or results of operations as well as the impact on the Company's financial condition, future net income and earnings per share resulting from the integration of its recently completed acquisitions of First Chatham and Industry, and the Company's ability to deploy capital into strategic and growth initiatives. Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, the Company's management at the time such statements were made. Forward-looking statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company's control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements.
Risks, uncertainties and other factors the Company may face include, without limitation: general economic, unemployment, trade, credit market and real estate market conditions, including inflation, and the effect of such conditions on customers, potential customers, assets, investments and liquidity; risks arising from market and consumer reactions to the general banking environment, or to conditions or situations at specific banks; reputational risks arising from media coverage of the banking industry and digital misinformation; the risks of changes and continued volatility in interest rates and their effects on the level, cost, and composition of, and competition for, deposits, loan demand and timing of payments, the values of loan collateral, securities, and interest sensitive assets and liabilities; the ability to attract new or retain existing deposits, to retain or grow loans or additional interest and fee income, or to control noninterest expense; the effect of pricing pressures on the Company's net interest margin; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; continued uncertainties surrounding the impact of the U.S.'s tariffs, including potential negative impact to our loan portfolio and profitability, potential for increases in problem loans, potential re-evaluation of credit marks and interest rates, and lower equity valuation and potential slowdown in capital markets; uncertain duration of trade conflicts; magnitude of the impact that the tariffs may continue to have on our customers' businesses; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, or uncertainties surrounding the debt ceiling and the federal budget; uncertainties surrounding the functionality of the federal government; potential delays or other problems in implementing and executing the Company's growth, expansion, acquisition, or divestment strategies, including delays in obtaining regulatory or other necessary approvals, or the failure to realize any anticipated benefits or synergies from any acquisitions, growth, or divestment strategies; the ability to pay dividends on the Company's 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; changes in legal, financial, accounting, and/or regulatory requirements; the costs and expenses to comply with such changes; the enforcement efforts of federal and state bank regulators; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity and the impact of generative artificial intelligence; increased competition in the financial services industry, particularly from regional and national institutions; the impact of a failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers. The Company also faces risks from natural disasters or acts of war or terrorism; international or political instability, including the impacts related to or resulting from the U.S.'s tariffs and international trade conflicts, Russia's military action in Ukraine, the escalating conflicts in the Middle East, and additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments.
The Company also faces risks from: possible adverse rulings, judgments, settlements or other outcomes of pending, ongoing and future litigation, as well as governmental, administrative and investigatory matters; the impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; the diversion of management's attention from ongoing business operations and opportunities; and the Company's success in executing its business plans and strategies, and managing the risks involved in all of the foregoing.
The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company's periodic and current reports filed with its primary federal regulator, including those factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, particularly those under the heading "Item 1A. Risk Factors," in the Company's Quarterly Reports on Form 10-Q under the heading "Part II-Item 1A. Risk Factors," and in the Company's Current Reports on Form 8-K.
Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, except as required by applicable law. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.
Table 1 Selected Financial Data
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Quarter Ended | Year-to-date | |||||||
(In thousands) | Jun 2025 | Mar 2025 | Dec 2024 | Sep 2024 | Jun 2024 | Jun 2025 | Jun 2024 | |
Earnings Summary: | ||||||||
Interest revenue | $ 635,599 | $ 599,257 | $ 620,321 | $ 647,713 | $ 642,210 | $ 1,234,856 | $ 1,279,323 | |
Interest expense | 257,459 | 236,105 | 255,790 | 286,255 | 285,892 | 493,564 | 569,097 | |
Net interest revenue | 378,140 | 363,152 | 364,531 | 361,458 | 356,318 | 741,292 | 710,226 | |
Provision for credit losses | 31,000 | 20,000 | 15,000 | 12,000 | 22,000 | 51,000 | 44,000 | |
Net interest revenue, after provision for credit losses | 347,140 | 343,152 | 349,531 | 349,458 | 334,318 | 690,292 | 666,226 | |
Noninterest revenue | 98,181 | 85,387 | 86,165 | 85,901 | 100,658 | 183,568 | 184,444 | |
Noninterest expense | 272,863 | 259,349 | 266,186 | 259,438 | 256,697 | 532,212 | 519,904 | |
Income before income taxes | 172,458 | 169,190 | 169,510 | 175,921 | 178,279 | 341,648 | 330,766 | |
Income tax expense | 37,813 | 35,968 | 36,795 | 39,482 | 40,807 | 73,781 | 76,316 | |
Net income | 134,645 | 133,222 | 132,715 | 136,439 | 137,472 | 267,867 | 254,450 | |
Less: Preferred dividends | 4,744 | 2,372 | 2,372 | 2,372 | 2,372 | 7,116 | 4,744 | |
Net income available to common shareholders | $ 129,901 | $ 130,850 | $ 130,343 | $ 134,067 | $ 135,100 | $ 260,751 | $ 249,706 | |
Balance Sheet - Period End Balances | ||||||||
Total assets | $ 50,378,840 | $ 47,743,294 | $ 47,019,190 | $ 49,204,933 | $ 47,984,078 | $ 50,378,840 | $ 47,984,078 | |
Total earning assets | 45,400,518 | 43,172,997 | 42,386,627 | 44,834,897 | 43,525,688 | 45,400,518 | 43,525,688 | |
Available for sale securities | 8,837,400 | 7,912,159 | 7,293,988 | 7,841,685 | 7,921,422 | 8,837,400 | 7,921,422 | |
Loans and leases, net of unearned income | 35,465,181 | 34,051,610 | 33,741,755 | 33,303,972 | 33,312,773 | 35,465,181 | 33,312,773 | |
Allowance for credit losses (ACL) | 474,651 | 457,791 | 460,793 | 460,859 | 470,022 | 474,651 | 470,022 | |
Net book value of acquired loans | 4,594,171 | 4,365,789 | 4,783,206 | 5,521,000 | 5,543,419 | 4,594,171 | 5,543,419 | |
Unamortized net discount on acquired loans | 19,414 | 13,060 | 15,611 | 17,988 | 20,874 | 19,414 | 20,874 | |
Total deposits | 40,493,518 | 40,335,728 | 40,496,201 | 38,844,360 | 37,858,659 | 40,493,518 | 37,858,659 | |
Total deposits and repurchase agreements | 40,514,743 | 40,355,399 | 40,519,817 | 38,861,324 | 37,913,693 | 40,514,743 | 37,913,693 | |
Other short-term borrowings | 1,575,000 | 235,000 | — | 3,500,000 | 3,500,000 | 1,575,000 | 3,500,000 | |
Subordinated and long-term borrowings | 1,430,674 | 560,690 | 10,706 | 225,823 | 269,353 | 1,430,674 | 269,353 | |
Total shareholders' equity | 5,916,283 | 5,718,541 | 5,569,683 | 5,572,863 | 5,287,758 | 5,916,283 | 5,287,758 | |
Total shareholders' equity, excluding AOCI (1) | 6,492,440 | 6,339,744 | 6,264,178 | 6,163,205 | 6,070,220 | 6,492,440 | 6,070,220 | |
Common shareholders' equity | 5,749,290 | 5,551,548 | 5,402,690 | 5,405,870 | ||||