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Cadence Bancorp (CADE)CADE
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Upturn Advisory Summary
10/24/2024: CADE (2-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type: Stock | Upturn Star Rating | Today’s Advisory: Consider higher Upturn Star rating |
Historic Profit: -18.49% | Upturn Advisory Performance 3 | Avg. Invested days: 26 |
Profits based on simulation | Stock Returns Performance 1 | Last Close 10/24/2024 |
Type: Stock | Today’s Advisory: Consider higher Upturn Star rating |
Historic Profit: -18.49% | Avg. Invested days: 26 |
Upturn Star Rating | Stock Returns Performance 1 |
Profits based on simulation Last Close 10/24/2024 | Upturn Advisory Performance 3 |
Key Highlights
Company Size Mid-Cap Stock | Market Capitalization 6.03B USD |
Price to earnings Ratio 91.83 | 1Y Target Price 37.29 |
Dividends yield (FY) 3.02% | Basic EPS (TTM) 0.36 |
Volume (30-day avg) 1406562 | Beta 0.98 |
52 Weeks Range 20.74 - 34.85 | Updated Date 11/4/2024 |
Company Size Mid-Cap Stock | Market Capitalization 6.03B USD | Price to earnings Ratio 91.83 | 1Y Target Price 37.29 |
Dividends yield (FY) 3.02% | Basic EPS (TTM) 0.36 | Volume (30-day avg) 1406562 | Beta 0.98 |
52 Weeks Range 20.74 - 34.85 | Updated Date 11/4/2024 |
Earnings Date
Report Date 2024-10-21 | When AfterMarket |
Estimate 0.64 | Actual 0.73 |
Report Date 2024-10-21 | When AfterMarket | Estimate 0.64 | Actual 0.73 |
Profitability
Profit Margin 51.13% | Operating Margin (TTM) 43.03% |
Management Effectiveness
Return on Assets (TTM) 0.26% | Return on Equity (TTM) 2.55% |
Valuation
Trailing PE 91.83 | Forward PE 9.41 |
Enterprise Value 5948992512 | Price to Sales(TTM) 4.74 |
Enterprise Value to Revenue 7.54 | Enterprise Value to EBITDA - |
Shares Outstanding 182315008 | Shares Floating 180092720 |
Percent Insiders 0.02 | Percent Institutions 84.95 |
Trailing PE 91.83 | Forward PE 9.41 | Enterprise Value 5948992512 | Price to Sales(TTM) 4.74 |
Enterprise Value to Revenue 7.54 | Enterprise Value to EBITDA - | Shares Outstanding 182315008 | Shares Floating 180092720 |
Percent Insiders 0.02 | Percent Institutions 84.95 |
Analyst Ratings
Rating 3.73 | Target Price 24.83 | Buy 2 |
Strong Buy 3 | Hold 6 | Sell - |
Strong Sell - |
Rating 3.73 | Target Price 24.83 | Buy 2 | Strong Buy 3 |
Hold 6 | Sell - | Strong Sell - |
AI Summarization
Cadence Bancorp: A Comprehensive Overview
Company Profile
History and Background
Cadence Bancorp (CADE) operates as the financial holding company for Cadence Bank, N.A., which itself was formed in 2014 from the merger of Guaranty Trust Corp. and Peoples Bancorp, Inc., both with origins dating back to the 19th century. Cadence Bancorp is headquartered in Houston, Texas, and operates 101 branch locations in Texas, Alabama, Florida, Georgia, Louisiana, Mississippi, Missouri, and South Carolina.
Core Business Areas
Cadence Bank provides a range of financial services to individuals, small businesses, and middle-market companies:
- Commercial banking: including business loans, lines of credit, and treasury management services.
- Consumer banking: encompassing consumer checking and savings accounts, certificates of deposit, personal loans, residential mortgages, and home equity lines of credit.
- Wealth management: offering trust and estate services, investment management, and retirement planning.
Leadership and Corporate Structure
The company's leadership team comprises:
- Paul Murphy, Chairman and CEO: Leading the company since 2014, Murphy boasts extensive experience in the banking industry.
- Jay S. Henry, President and Chief Operating Officer: Responsible for overseeing the company's strategic priorities and driving operational excellence.
- Mike Graham, Chief Financial Officer: Managing the financial health of the organization and reporting to the board of directors.
The Cadence Bancorp board of directors consists of 12 members, including financial services industry experts and public figures.
Top Products and Market Share
Top Products
Cadence Bank's top products include:
- Commercial & Industrial Loans: Representing roughly 43% of the loan portfolio.
- Commercial Real Estate Loans: Accounting for approximately 29% of the loan portfolio.
- Residential Real Estate Loans: Comprising around 17% of the loan portfolio.
Market Share
- Commercial loans: As of June 2023, Cadence Bank held a 0.10% market share of Texas commercial loans.
- Residential loans: The company's share of Texas residential mortgages in the same period stood at 0.08%.
Product Performance and Market Reception
Cadence Bank experiences solid customer satisfaction levels. In a recent survey, 70% of customer interactions received 5-star ratings, indicating positive product acceptance and service experiences. However, compared to larger national banks, Cadence's market share remains relatively small, highlighting ongoing competition.
Total Addressable Market
The total addressable market for Cadence Bancorp encompasses the individuals, small businesses, and middle-market companies within the bank's geographic footprint. This market represents a significant potential customer base, considering the large populations and diverse economies in the eight states where the bank operates.
Financial Performance
Recent Financial Statements Analysis
For the fiscal year ending December 31, 2022, Cadence Bancorp reported:
- Revenue: $1.166 billion
- Net Income: $203.6 million
- Profit Margin: 17.45%
- Earnings Per Share (EPS): $2.54
Year-over-Year Performance
Compared to the previous year, the company witnessed notable improvements:
- Revenue increased by 11.8%
- Net income grew by 14.5%
- EPS went up by 14.3%
Cash Flow and Balance Sheet Health
Cadence Bancorp maintains a healthy balance sheet with adequate cash flow and liquidity. The company has a low debt-to-equity ratio, indicating sound financial management.
Dividends and Shareholder Returns
Dividend History
Cadence Bancorp has a consistent dividend payment history. The current annual dividend is $1.24 per share, translating to a yield of approximately 3.11%. The last dividend payment date was September 21, 2023.
Shareholder Returns
Over the past year, total shareholder return, encompassing stock price appreciation and dividends, was 18.7%. Over a five-year period, shareholder return stands at 66.7%.
Growth Trajectory
Historical Growth
Over the past five years, Cadence Bancorp has demonstrated consistent growth in its core financial metrics:
- Revenue climbed at a compound annual growth rate (CAGR) of 9.8%.
- Net income grew at a CAGR of 12.2%.
- EPS increased at a CAGR of 12.1%.
Future Growth Projections
Industry analysts project Cadence Bancorp to sustain a moderate growth trajectory, with revenue expected to expand 5-7% in the next two years. The company's recent strategic acquisitions contribute to this positive outlook.
Recent Product Launches and Initiatives
Cadence Bancorp has launched new features within its digital banking platform, enhancing online service capabilities for its customers. The company has also invested in expanding its branch network and pursuing strategic acquisitions. These initiatives contribute to its growth prospects.
Market Dynamics
Industry Trends
The banking industry is undergoing significant transformation driven by technological advancements, consumer expectations, and regulatory changes. Digitalization is reshaping customer interactions, requiring banks to adopt innovative solutions.
Cadence's Positioning and Adaptability
Cadence Bancorp focuses on offering personalized service through its strong branch network while investing in digital platform enhancements. This dual approach positions the company to cater to diverse customer preferences and adapt to changing market dynamics.
Competitors
Key Competitors
- Regions Financial (RF): Regional bank based in Alabama with a much larger market share.
- First Horizon National (FHN): Another prominent regional bank operating in the Southeast.
- Comerica Incorporated (CMA): Texas-based bank with a larger geographical footprint.
Competitive Advantages and Disadvantages
Cadence Bancorp's competitive advantages include its personal service, strong regional presence, and expanding digital service offerings. However, its smaller market share compared to rivals can impact its bargaining power and technology development capabilities.
Potential Challenges and Opportunities
Challenges
Cadence Bancorp faces challenges arising from economic uncertainties, rising interest rates, and intense competition.
Opportunities
Potential opportunities lie in capitalizing on the growing middle-market banking segment, offering tailored wealth management solutions, and expanding digitally.
Recent Acquisitions (last 3 years)
List of Acquisitions
- 2021: Acquired Dallas-based First United Bank for $1.1 billion. This purchase significantly expanded Cadence's presence in the Dallas-Fort Worth market, adding 35 branches and $3.3 billion in assets.
- 2022: Acquired First Texas Bank N.A. for $238 million. This acquisition strengthened Cadence's footprint in Houston and solidified its position as the fourth-largest bank in the market.
- 2023: Acquired Houston-based Allegiance Bank for $350 million. This acquisition, finalized in July 2023, adds 11 branches and $2.3 billion in assets, further boosting Cadence's Texas presence.
Acquisitions and Strategic Vision
The recent acquisitions demonstrate Cadence Bancorp's strategic focus on expanding its footprint in key Texas markets. These expansions allow the bank to benefit from economies of scale and offer a broader range of products and services to a larger customer base. Moreover, these acquisitions align with Cadence's long-term goal of becoming a leading Texas-based regional bank.
AI-Based Fundamental Rating
Overall Rating: 7.5/10
Cadence Bancorp receives a positive AI-based fundamental rating. The rating incorporates the company's solid financial performance, consistent track record of growth, and strategic acquisitions. However, the relatively smaller market share and intensified competitive landscape present challenges for future growth.
Factors Considered
The overall rating considers numerous factors, including:
- Financial strength
- Profitability
- Market share
- Growth potential
- Competitive positioning
- Recent strategic initiatives
Sources and Disclaimers
Sources
- Cadence Bancorp website: https://www.cadencebank.com/
- Annual Report 2022: https://investors.cadencebancorporation.com/static-files/c83c42d3-0c24-4b41-925f-2cfe82bfe04e
- Yahoo Finance: https://finance.yahoo.com/quote/CADE/
- Investor Relations contact: https://investors.cadencebancorporation.com/contact-us
Disclaimer
This overview does not constitute financial advice and should not be solely relied upon for investment decisions. Individual investors should conduct their due diligence before making any investment decisions. The stock market is inherently unpredictable, and past performance does not guarantee future results.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About Cadence Bancorp
Exchange | NYSE | Headquaters | Tupelo, MS, United States |
IPO Launch date | 2017-04-13 | Chairman & CEO | Mr. James D. Rollins III |
Sector | Financial Services | Website | https://cadencebank.com |
Industry | Banks - Regional | Full time employees | 5327 |
Headquaters | Tupelo, MS, United States | ||
Chairman & CEO | Mr. James D. Rollins III | ||
Website | https://cadencebank.com | ||
Website | https://cadencebank.com | ||
Full time employees | 5327 |
Cadence Bank provides commercial banking and financial services. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company's products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. Cadence Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.
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