Regional banking company Cadence Bank (NYSE: CADE) fell short of the market’s revenue expectations in Q3 CY2025, but sales rose 7.6% year on year to $485.2 million. Its non-GAAP profit of $0.81 per share was 4.6% above analysts’ consensus estimates.

Is now the time to buy CADE? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Cadence Bank’s third quarter results were shaped by the integration of recent acquisitions and changes in its deposit mix, leading to a negative market reaction. Management attributed quarterly performance to the completed acquisition and integration of Industry Bank Shares, noting the positive impact on both core deposit growth and loan balances. CEO Dan Rollins highlighted that the successful disposal of Industry’s securities portfolio and the retention of core customer deposits were key factors, while CFO Valerie Toalson pointed to improved net interest margin and stable credit results as additional contributors to the quarter. The bank also acknowledged a seasonal decline in mortgage banking revenue and noted that most of the increase in expenses was tied to merger-related compensation and integration costs.

Looking ahead, Cadence Bank’s forward guidance is built on expectations of further margin improvement and operational leverage as it continues to integrate recent acquisitions and optimize its funding mix. Management anticipates that ongoing cost savings, particularly from the Industry integration, and further deposit mix improvements will support earnings. CFO Valerie Toalson stated, “We anticipate continued modest improvement in net interest margin through the end of the year and into next year.” The bank is also focused on organic growth opportunities across its footprint and leveraging expanded product offerings in newly acquired markets to drive future performance.

Key Insights from Management’s Remarks

Management attributed Q3 performance to the integration of Industry Bank Shares, balance sheet optimization, and retention of core deposits, while highlighting improvements in margin and credit stability.

• Acquisition integration complete: Management emphasized the successful integration of both Industry Bank Shares and First Chatham, which contributed to deposit and loan growth, as well as operational efficiencies. The teams focused on retaining core customer relationships through the transition.
• Balance sheet restructuring: The sale and reinvestment of Industry’s large securities portfolio allowed Cadence Bank to improve its asset mix and interest rate profile. CFO Valerie Toalson noted that the proceeds were used to reduce higher-cost funding sources and invest in higher-yielding assets.
• Deposit composition shift: The influx of deposits from Industry was mainly in time deposits (CDs), which carry higher costs compared to core deposits. Management discussed ongoing efforts to improve the deposit mix and gradually replace brokered and higher-cost deposits.
• Margin improvement drivers: Net interest margin increased due to improved securities yields, lower overall funding costs, and the addition of loans at higher yields than the existing portfolio. Management expects these trends to continue in the near term.
• Stable credit trends: Credit performance remained consistent with expectations, with low net charge-offs and non-performing assets staying stable. Management expressed continued confidence in the quality of the loan portfolio, including limited exposure to non-bank financial institutions.

Drivers of Future Performance

Cadence Bank’s outlook is shaped by the continued impact of recent acquisitions, deposit mix optimization, and expectations for gradual margin expansion.

• Deposit mix improvement: Management plans to gradually shift the deposit base away from higher-cost time and brokered deposits brought in through acquisitions, aiming to reduce funding costs and enhance profitability. They expect the Industry portfolio’s deposit composition to become more aligned with Cadence’s traditional mix over time.
• Cost savings realization: The full benefits of cost synergies from the Industry integration are expected to materialize in the coming quarters, especially as merger-related expenses subside. Management anticipates that 2026 will reflect a normalized expense base, with ongoing operating leverage from previous acquisitions.
• Organic growth and product expansion: Leadership highlighted strong loan pipelines across geographies and business lines, with particular focus on community banking and expanded product offerings in new markets. Management believes that the expanded footprint and enhanced capabilities will drive incremental growth, despite headwinds from commercial real estate paydowns.

Catalysts in Upcoming Quarters

In the coming quarters, StockStory’s analysts will monitor (1) the pace of deposit mix improvement and reduction of higher-cost funding, (2) realization of cost synergies and operating leverage from recent acquisitions, and (3) organic loan growth across newly expanded markets. Additionally, we will be tracking the impact of commercial real estate trends and the bank’s ability to sustain net interest margin gains as competitive pressures and rate cycles evolve.

Cadence Bank currently trades at $35.63, down from $37.01 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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