Yahoo Finance Cadence Bank (CADE) Q1 2024 Earnings Call Transcript Highlights: Strong Financial Performance ...
GAAP Net Income: $114.6 million for Q1 2024
Adjusted Net Income: $114.4 million from continuing operations for Q1 2024
Earnings Per Share (EPS): $0.62 per common share
Loan Growth: Increased by $385 million, or 4.8% annualized
Deposit Growth: Core customer deposits grew by approximately $400 million
Net Interest Margin: Increased by 18 basis points to 3.22%
Net Interest Income: $354 million, up $19 million or 5.8%
Non-Interest Revenue: $83.8 million on an adjusted basis, up $10.7 million or 14.6%
Efficiency Ratio: Improved to 60.1%, a nearly 600-basis-point reduction
Provision for Credit Losses: $22 million
Net Charge-Offs: $19.5 million, or 24 basis points of average loans on an annualized basis
Share Repurchase: Over 650,000 shares at a weighted average price of $25.65
Capital Metrics: CET1 at 11.7%, Total Capital at 14.5%
Total Shareholders' Equity: $5.2 billion, up $700 million or 16% year-over-year
Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you talk a little bit about the asset repricing and what kind of a lift you're expecting in asset yields in the next quarter or two? A: (Valerie Toalson - CFO) The biggest lift was from the fourth quarter to the first quarter due to securities repositioning. Going forward, the natural price lift from our balance sheet repricing will help maintain or potentially increase our margin slightly over the year.
Q: On slide 4, you mentioned core deposit growth of $400 million. Can you discuss the drivers and if this is repeatable? A: (James Rollins - CEO) The growth is driven by strong performance in the community bank, despite competitive pressures. Chris Bagley (President) added that active markets and great bankers contribute to this growth, suggesting potential for continuation.
Q: Regarding the NII component of the revenue guide, how should we think about it in an environment with no rate cuts this year? A: (James Rollins - CEO) Using the forward curve, no rate cuts this year would be incrementally positive to our NII, just under 1%.
Q: Can you provide insights on the loan growth outlook and line utilization sustainability? A: (James Rollins - CEO) Line utilization reflects normal business activities. Billy Braddock (Chief Banking Officer) noted that loan approval volumes are up 25% from their trough last year, indicating a positive trajectory in loan growth across various segments.
Q: What is the outlook for mortgage, and are you looking to sell more loans in the secondary market or portfolio some? A: (James Rollins - CEO) The inverted yield curve affects the secondary market, but there is a pickup in spring activity. Valerie Toalson (CFO) mentioned that they are selling more than portfolioing, with a mix that includes ARM products.
Q: With the updated forward curve, where do you see non-interest-bearing deposits trending by the end of the year? A: (Valerie Toalson - CFO) The mix is expected to go to about 20% non-interest-bearing deposits by year-end, with a gradual decline expected.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
