Breaking Down Cadence Bank (CADE) Financial Health: Key Insights for Investors

You're looking at Cadence Bank (CADE) and trying to reconcile a solid earnings beat with a stock that's struggled to find momentum, and honestly, that's where the real analysis starts. The third quarter of 2025 showed the bank reporting adjusted earnings per share (EPS) of $0.81, which handily surpassed analyst expectations, but the market still reacted negatively, sending the stock down about 2.86% after the announcement because revenue came in light at $517.21 million, missing the street's forecast. That's the near-term tension: strong profitability from efficiency versus a top-line growth concern. Still, the strategic picture is clearer: the successful integration of Industry Bancshares, Inc. added approximately $4.1 billion in assets, and the net interest margin (NIM) improved to 3.46%. For the full 2025 fiscal year, the consensus is pointing to an EPS of around $3.11 on revenue of approximately $2.01 billion, but with a consensus 'Hold' rating, you need to dig into what those numbers hide about credit quality and integration risk before making a move.

Revenue Analysis

You need to know where Cadence Bank (CADE) makes its money, especially with the recent acquisitions. The direct takeaway is that Cadence Bank's revenue engine is firing, largely driven by Net Interest Revenue (NIR), which now accounts for over 80% of the total, thanks to strategic growth and an improved margin. For the trailing twelve months (TTM) ending September 30, 2025, total revenue hit $2.923 billion, marking a strong 16.87% increase year-over-year. That's a defintely solid jump in a competitive banking environment.

The primary revenue source for any commercial bank is the spread between what it earns on loans and securities and what it pays on deposits-what we call Net Interest Revenue (NIR). In the third quarter of 2025 (Q3 2025), NIR was the clear dominant segment, totaling $423.7 million. This represents a significant 17.2% increase compared to the same quarter in 2024.

This growth in NIR is directly tied to the expansion of the balance sheet and a better Net Interest Margin (NIM), which reached 3.46% in Q3 2025. Here's the quick math on the Q3 revenue split, which shows how heavily the bank relies on core lending activities:

Noninterest Revenue, the fee-based side of the business, totaled $93.5 million in Q3 2025. While it was up from Q3 2024, it actually saw a quarter-over-quarter decline of 4.8% from Q2 2025. This segment is more volatile, and you need to look at the components to understand the risk.

The main segments contributing to Noninterest Revenue show a mixed picture, which is typical for a regional bank. Mortgage banking revenue, for instance, dropped sharply to just $4.5 million in Q3 2025, down from $8.7 million the prior quarter. This drop reflects seasonally lower mortgage production volume and adjustments to the mortgage servicing rights (MSR) valuation. Still, other fee-based areas showed strength:

• Deposit Service Charges: $19.0 million in Q3 2025, up from Q2 2025.
• Credit card, debit card and merchant fees: $13.5 million in Q3 2025, a slight increase from Q2 2025.
• Wealth Management Revenue: $24.5 million in Q3 2025, a small dip due to a seasonal trust tax revenue spike in the prior quarter.

The most significant change in the revenue stream is the impact of acquisitions. The completion of the Industry Bancshares, Inc. acquisition in July 2025, adding approximately $4.1 billion in assets, and the integration of First Chatham Bank, directly fueled the Q3 2025 surge in Net Interest Revenue and core customer deposits. The growth isn't purely organic, but it's strategic. What this estimate hides is the integration cost, but the revenue inflow is clear. For a deeper dive into the strategic direction driving these numbers, check out the Mission Statement, Vision, & Core Values of Cadence Bank (CADE).

Profitability Metrics

You want to know if Cadence Bank (CADE) is actually making money and how efficiently, especially with all the noise in the regional banking sector. The direct takeaway is that Cadence Bank's core operational efficiency is strong, but its bottom-line net profit margin is volatile, showing the impact of non-core items like provisions and taxes. Your focus should be on the Pre-Tax Pre-Provision Net Revenue (PPNR) margin, which is a better measure of the bank's underlying business health.

For a bank, the traditional 'Gross Profit' metric is less relevant; we look at Net Interest Income (NII) and Total Revenue. Still, Cadence Bank's trailing twelve months (TTM) Gross Profit ending September 30, 2025, was $1.893 billion, reflecting a 38.65% increase year-over-year. This massive jump is a clear sign that the bank's revenue engine is accelerating, largely due to recent acquisitions and a favorable interest rate environment. The full-year 2025 revenue is forecasted to hit approximately $2.022 billion.

The real measure of operational muscle is the Pre-Tax Pre-Provision Net Revenue (PPNR) margin, which acts as a proxy for operating profit margin before setting aside money for potential loan losses (provisions) and taxes. In the third quarter of 2025, Cadence Bank reported an adjusted PPNR of $224.1 million on revenue of $517.21 million, translating to an operating margin of roughly 43.33%. That's a solid margin.

When you get to the bottom line, the reported Net Income for Q3 2025 was $127.5 million, resulting in a Net Profit Margin of about 24.65% for the quarter. However, the recent TTM Net Profit Margin is closer to 18.15%. This difference highlights how provisions for credit losses and taxes can swing the final net income figure, which is why PPNR is so important.

• Gross Profit (TTM Sep 2025): $1.893 billion (Up 38.65% YoY)
• Operating Margin (Q3 2025 PPNR): 43.33%
• Net Profit Margin (Q3 2025): 24.65%

Comparative Efficiency and Margin Trends

Analyzing the trends shows a mixed, but generally positive, picture. Cadence Bank's reported net income for Q3 2025 at $127.5 million was actually lower than the $134.1 million reported in Q3 2024. This isn't a red flag, but a yellow one-it shows that while the PPNR (operating profit) is growing, the bank is either taking on more provisions or facing higher taxes, which eats into the final profit. You need to keep an eye on credit quality.

In terms of operational efficiency, Cadence Bank is competitive with the industry. The bank's adjusted efficiency ratio was 56.5% for Q3 2025. For context, the average efficiency ratio for all FDIC-insured institutions was 56.2% in Q1 2025, meaning Cadence Bank is operating at a similar level of cost control relative to its revenue.

The Net Interest Margin (NIM)-the difference between interest earned and interest paid-is also strong. Cadence Bank reported a NIM of 3.46% in Q3 2025. This is slightly above the Q1 2025 industry average of 3.25% for all FDIC-insured institutions and aligns well with the 3.44% reported by community banks in Q4 2024, placing Cadence Bank firmly in a healthy margin bracket. The P/E ratio of 12.8x is above the US Banks industry average of 11.3x, suggesting the market is pricing in this stronger-than-average profitability.

Here's the quick math on key comparative metrics:

The bank is defintely managing its operating costs well, as evidenced by the efficiency ratio. Still, the dip in net income year-over-year tells you that the risk side of the balance sheet-the loan loss provisions-is the main pressure point to watch, not the core operations. You can find more detail on this in Breaking Down Cadence Bank (CADE) Financial Health: Key Insights for Investors.

Next step: Dig into the credit loss provisions in the Q3 2025 report to see exactly what drove that net income dip.

Debt vs. Equity Structure

You're looking at Cadence Bank (CADE) and asking the right question: how is this bank funding its growth? For a bank, the debt-to-equity picture is a critical measure of financial stability and risk. The good news is that Cadence Bank's leverage, when looking strictly at non-deposit borrowings, is quite manageable, sitting comfortably below the industry average.

As of the third quarter of 2025, Cadence Bank's total shareholders' equity-the capital cushion against losses-stood at a solid $6.1 billion. This equity base supports the bank's total borrowings, which are the non-deposit forms of debt. Specifically, the bank reported approximately $1.43 billion in subordinated and long-term borrowings and about $1.07 billion in short-term FHLB (Federal Home Loan Bank) borrowings. That's a total of roughly $2.50 billion in non-deposit debt.

Here's the quick math: by dividing their total non-deposit borrowings by their shareholders' equity, the bank's debt-to-equity ratio (D/E) is approximately 0.42. This aligns with the generally low leverage profile of regional banks. To be fair, some analysts cite a slightly higher D/E of 0.51 for Q3 2025, but either way, this is a healthy figure. For context, the regional bank industry average D/E ratio typically falls in the 0.50 to 0.58 range. Cadence Bank is defintely on the conservative side of that benchmark.

• D/E Ratio: Approximately 0.42 (below the industry average of 0.50-0.58).
• Equity Base: $6.1 billion as of September 30, 2025.
• Long-Term Debt: Around $1.43 billion in subordinated and long-term borrowings.

The bank is balancing its funding between debt and equity, often using debt for targeted liquidity and growth. For instance, in 2024, they demonstrated proactive debt management by calling $215.2 million in fixed-to-floating subordinated debt, reducing reliance on higher-cost funding. The recent growth strategy has been heavily equity-supported, with a focus on acquisitions like Industry Bancshares, Inc., which closed in July 2025. This is a smart way to grow market share while maintaining capital strength, which is reflected in their Common Equity Tier 1 capital ratio of 11.5% as of Q3 2025.

The market has also been reacting to the bank's financial health and strategic moves. In October 2025, S&P Global placed Cadence Bank's 'BBB+' long-term issuer credit rating on CreditWatch with positive implications following the announced acquisition by Huntington Bancshares Inc. This signals an expectation that the rating will likely be raised once the deal closes, which is a strong vote of confidence in the combined entity's credit profile. You can dive deeper into the players behind the stock by Exploring Cadence Bank (CADE) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if Cadence Bank (CADE) has the cash to cover its near-term obligations, and the quick answer is yes, but you have to look past the standard corporate ratios. For a bank, traditional liquidity metrics like the Current Ratio and Quick Ratio are less meaningful than the quality of their deposits, their contingent liquidity, and their capital cushion.

The reported Current Ratio and Quick Ratio for Cadence Bank are both around 0.87 as of late 2025. To be fair, a ratio below 1.0 would be a red flag for a manufacturing company, but for a bank, which manages assets and liabilities differently, this isn't the primary concern. Their real strength lies in their contingent liquidity and strong capital base, which is what I focus on.

Working Capital and Deposit Trends

Instead of working capital, we analyze the balance sheet's core funding and lending. Cadence Bank's acquisitions in 2025, like Industry Bancshares and First Chatham Bank, drove significant balance sheet growth. This is a clear opportunity, but it requires careful integration.

• Total deposits grew by $3.4 billion in the third quarter of 2025.
• Core customer deposits increased by $3.1 billion, showing a strong influx of sticky, non-wholesale funding.
• Total loans grew by $1.3 billion in Q3 2025, with $0.3 billion of that being net organic growth.

The loan-to-deposit ratio was a reasonable 84.4% as of March 31, 2025, which suggests a healthy balance between lending and funding. This organic growth plus the acquired deposits shows a positive trend in their funding profile, which is defintely a liquidity strength.

Cash Flow Statement Overview

When you review a bank's cash flow, you are looking for stability in operations and smart use of capital in investing and financing. Here's the quick math on their recent activity:

In the third quarter of 2025, Cadence Bank saw a significant decline in borrowed funds-a financing activity-of $750.0 million, primarily due to paying off Federal Home Loan Bank (FHLB) term borrowings. This reduces their reliance on higher-cost wholesale funding, which is a good sign for future net interest margin. On the investing side, they increased total investment securities by $0.8 billion to $9.6 billion at September 30, 2025, a move funded partly by the earlier FHLB borrowings.

For the full 2025 fiscal year, one estimate puts operating cash flow (OCF) at approximately $143.50 million. While this figure alone doesn't tell the whole story, the underlying trends show active balance sheet management to optimize funding costs and deploy capital into higher-yielding assets, which is the bank's core job.

Liquidity Strengths and Contingent Capital

The real measure of a bank's liquidity is its ability to access funds quickly if needed. Cadence Bank is sitting on significant contingent liquidity. As of March 31, 2025, their total contingent liquidity sources amounted to over $22.26 billion. This massive cushion is what matters most for a bank's stability.

This total is broken down into three main buckets:

What this estimate hides is the potential stress test scenario, but having over $14.2 billion in secured lines of credit is a powerful backstop. The liquidity position is strong, supported by robust core customer deposit growth and significant, immediately accessible contingent funding. If you want to dive deeper into who is betting on this stability, check out Exploring Cadence Bank (CADE) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at Cadence Bank (CADE) and wondering if the market is giving you a fair shake on its price. The quick answer is that the stock appears to be trading near its fair value, leaning slightly toward being undervalued based on book value, but priced at a premium on earnings compared to its banking peers.

As of mid-November 2025, Cadence Bank's stock closed around $38.41. Its performance over the last year shows a steady recovery, delivering a 5.24% total shareholder return. Honestly, that's a solid, if unspectacular, return for a regional bank in a volatile market. The stock is up nearly 14% year-to-date, suggesting building momentum and investor confidence in its Sunbelt market growth strategy.

When we look at the core valuation multiples-the nuts and bolts of how we judge a bank-the picture is mixed. For a bank, the Price-to-Book (P/B) ratio is key, as it tells you what the market is willing to pay for every dollar of the bank's net assets (shareholders' equity). Cadence Bank's P/B ratio is currently around 1.17. This is a slight premium over a P/B of 1.0, which is often considered fair value, but it's still relatively low, suggesting the stock might be slightly undervalued compared to its tangible assets.

Here's the quick math on the key multiples:

• Price-to-Earnings (P/E) Ratio (Trailing): 13.44x
• Price-to-Book (P/B) Ratio: 1.17x
• Enterprise Value-to-EBITDA (EV/EBITDA): 5.23x

The trailing Price-to-Earnings (P/E) ratio of 13.44x is where the premium appears. It trades above the broader industry average of approximately 11.1x, which suggests investors are paying more for Cadence Bank's current earnings than they are for its competitors. But, the forward P/E drops to about 11.18x, which means analysts expect earnings growth to bring the valuation back in line with the industry average quickly. That's defintely a good sign.

For income-focused investors, Cadence Bank pays an annual dividend of $1.10 per share, which translates to a dividend yield of approximately 2.95%. The payout ratio, based on adjusted earnings, is a comfortable 36.6%, meaning the dividend is well-covered by earnings and has room for future increases. This is a crucial point for a bank stock.

Wall Street's consensus on Cadence Bank is a firm Hold. Out of the analysts covering the stock, the average price target sits between $41.00 and $42.33, with a high target of $49.00. This average target suggests a modest upside of around 6.74% from the current price. The general sentiment is to maintain existing positions, waiting for clearer signals on net interest margin (NIM) expansion. If you want to dive deeper into how these factors play out in the bank's operational health, you should check out the full analysis at Breaking Down Cadence Bank (CADE) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at Cadence Bank (CADE)'s strong 2025 performance-like the adjusted net income of $152.8 million in Q3-and asking what could derail this momentum. Honestly, the biggest near-term risks aren't a sudden credit crisis; they're about execution and the cost of capital. The bank is expanding, so managing that growth is the main job.

The core challenge is integrating the recent mergers, specifically the Industry and First Chatham transactions completed in 2025. This is a strategic risk. While the acquisitions enhance their footprint, they initially caused a slight dip in tangible book value per common share, which declined by $0.12 linked quarter to $22.82 as of September 30, 2025. This is a temporary accounting effect, but it's a tangible hit to shareholder equity that management has to earn back quickly. Integration is defintely the name of the game right now.

Beyond integration, the company's filings highlight several persistent operational and financial risks that are standard for any bank, but still need your attention. They are managing these, but they don't disappear just because earnings are up.

• Litigation and Regulatory Changes: Adverse rulings or new compliance hurdles can hit earnings unexpectedly.
• Goodwill Impairment: If acquired assets don't perform, the goodwill on the balance sheet could be written down, which directly impacts capital.
• Key Personnel Loss: Losing top talent, especially in specialized areas like commercial lending or wealth management, can slow growth and hurt client relationships.
• Interest Rate Volatility: While their Net Interest Margin (NIM) improved to 3.46% in Q3 2025, a sudden shift in the Federal Reserve's rate policy could pressure funding costs or loan demand.

Here's the quick math on their capital position, which is their primary mitigation against financial risk. They are well-capitalized, which is what you want to see.

Their mitigation strategy is a blend of proactive capital management and operational discipline. They are maintaining a strong capital base, which acts as a buffer against unexpected credit losses or market shocks. Also, management has focused on repositioning the investment securities portfolio, which grew by $780 million in Q3 2025, to improve its interest rate profile and yield. This is a smart move to insulate the balance sheet from rate risk. They also continue to drive operational efficiency, evidenced by the adjusted efficiency ratio improving to 56.5% in Q3 2025.

For a deeper dive into who is betting on Cadence Bank's ability to navigate these risks, you should check out Exploring Cadence Bank (CADE) Investor Profile: Who's Buying and Why?

Growth Opportunities

Cadence Bank (CADE) is defintely poised for a growth spurt, but it's not a secret; it's a deliberate, acquisition-fueled expansion into high-growth markets. Your direct takeaway is this: the bank's near-term growth is mapped to successful integration of its 2025 acquisitions, which are expected to drive full-year revenue to an estimated $1.98 billion and earnings per share (EPS) to roughly $2.91.

Acquisitions Driving Immediate Scale

The core of Cadence Bank's 2025 growth story is strategic market expansion, specifically in the Sunbelt. This isn't just adding branches; it's about adding scale in lucrative, underserved regions. The major move was the July 1, 2025, completion of the Industry Bancshares, Inc. acquisition, which immediately added approximately $4.1 billion in assets and $4.3 billion in deposits, significantly bolstering their Texas footprint.

Plus, the earlier May 1, 2025, merger with FCB Financial Corp. (First Chatham Bank) strengthened their Georgia presence, bringing in another $604 million in assets. Here's the quick math: these deals drove a total loan growth of $1.3 billion in the third quarter of 2025 alone, with $1.0 billion coming from the acquired entities. That's how you buy market share efficiently.

• Industry Bancshares: Added 27 branches in Central and Southeast Texas.
• First Chatham Bank: Deepened presence in the Savannah, Georgia, area.
• Organic Loan Growth: Still contributed $0.3 billion in Q3 2025.

Projections and Strategic Focus

Management's confidence is clear, targeting overall loan growth of 11% to 15% and revenue growth of 10% to 12% for the full 2025 fiscal year, thanks to these integrations. The focus is on leveraging the new, stable core deposits-like the $3.1 billion in core customer deposits added in Q3 2025-to improve the net interest margin (NIM), which already improved to 3.46% in the third quarter of 2025. This is a smart move to reduce reliance on more expensive wholesale funding, a key vulnerability for many regional banks.

The competitive advantage for Cadence Bank centers on its relationship-driven community banking model, especially for small business and middle market clients. In fact, the bank earned four Coalition Greenwich Best Bank Awards in 2025, including Overall Satisfaction for Middle Market Banking in the U.S. This client focus means stickier deposits and better cross-selling opportunities across their full suite of services, from commercial banking to specialized lending and wealth management.

What this estimate hides, though, is the risk of integration hiccups. Merging systems and cultures is never seamless, and unexpected cost pressures from rapid acquisitions could challenge the optimistic growth outlook. Still, the bank's strong regulatory capital, with Common Equity Tier 1 capital at 11.5% as of September 30, 2025, suggests they have the buffer to manage these risks. If you want a deeper dive into who is betting on this strategy, check out Exploring Cadence Bank (CADE) Investor Profile: Who's Buying and Why?

Next Step: Review the Q4 2025 guidance when released to confirm the projected $2.91 EPS target remains on track.