Cadence Bank (CADE, Financial) has announced a definitive merger agreement with Industry Bancshares, a move set to significantly bolster its footprint in Texas. Industry Bancshares, established in 1911 and headquartered in Industry, Texas, operates 27 full-service branches across Central and Southeast Texas.
The merger aims to enhance Cadence Bank's market position in these growing regions, leveraging Industry Bancshares' established customer relationships and local community connections. As of March 31, Industry Bancshares reported total assets amounting to $4.4 billion, loans of $1.1 billion, and deposits reaching $4.5 billion.
Under the merger terms, Cadence Bank will pay between $20 million and $60 million in cash for all of Industry Bancshares' outstanding common stock, contingent on certain conditions and possible adjustments. This transaction received unanimous approval from the boards of both companies. Completion of the merger is dependent on regulatory approvals, shareholder consent, and Industry Bancshares maintaining a specified level of equity capital at closing. The deal is anticipated to finalize in the latter part of 2025.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Cadence Bank (CADE, Financial) is $34.36 with a high estimate of $38.00 and a low estimate of $31.00. The average target implies an upside of 19.11% from the current price of $28.85. More detailed estimate data can be found on the Cadence Bank (CADE) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, Cadence Bank's (CADE, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Cadence Bank (CADE, Financial) in one year is $32.59, suggesting a upside of 12.96% from the current price of $28.85. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Cadence Bank (CADE) Summary page.
CADE Key Business Developments
Release Date: April 22, 2025
- GAAP Net Income: $130.9 million or $0.70 per share.
- Adjusted Net Income: $131.4 million or $0.71 per share.
- Return on Assets (ROA): 1.15%.
- Net Interest Margin: Increased by 8 basis points to 3.46%.
- Loan Growth: Nearly 4% annualized, with strong growth in Georgia, Florida, and Texas.
- Net Charge-Offs: 27 basis points annualized.
- Tangible Book Value: Increased to $22.30 per share.
- Common Equity Tier 1 (CET1) Capital Ratio: 12.4%.
- Pre-Tax Pre-Provision Net Revenue: Increased to $190 million, up over 3% from the prior quarter.
- Average Loans: Increased by $482 million in the quarter.
- Average Deposits: Increased by $610 million in the quarter.
- Loan Yields: 6.33%, down 9 basis points.
- Total Cost of Deposits: Declined by 9 basis points to 2.35%.
- Adjusted Efficiency Ratio: Improved to 57.6%, down 150 basis points from the fourth quarter.
- Non-Performing Loans: Declined by 11% or $29 million in the first quarter.
- Allowance Coverage: 1.34%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cadence Bank (CADE, Financial) received all regulatory approvals to complete the acquisition of First Chatham Bank, with plans to close by May 1, expanding their presence in Georgia.
- GAAP net income increased to $130.9 million or $0.70 per share, with adjusted net income from continuing operations at $131.4 million or $0.71 per share.
- The bank's net interest margin improved by 8 basis points this quarter, driven by effective balance sheet management.
- First-quarter loan growth was nearly 4% on an annualized basis, with strong performance in Georgia, Florida, and Texas.
- Credit results remained stable, with net charge-offs at 27 basis points annualized, and non-performing loans declined by 11%.
Negative Points
- Competition in the commercial real estate market has driven yields down, impacting profitability.
- Loan yields decreased by 9 basis points due to the impact of a December interest rate cut.
- Total adjusted revenue was down slightly, less than one-half of 1% compared to the prior quarter, primarily due to fewer days in the first quarter.
- The bank experienced a slight decline in brokered deposits, offset by a pickup in public funds, leading to flat period-end deposits.
- The macroeconomic outlook remains uncertain, with potential economic disruptions that could impact future performance.
