Cadence Bank Q2 2025 Earnings Report

Cadence Bank EPS Results

• Actual EPS: $0.73
• Consensus EPS: $0.69
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: $0.73

Cadence Bank Revenue Results

• Actual Revenue: $476.32 million
• Expected Revenue: $467.60 million
• Beat/Miss: Beat by +$8.72 million
• YoY Revenue Growth: N/A

Cadence Bank Announcement Details

• Quarter: Q2 2025
• Date: 7/23/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 24, 2025
• Conference Call Time: 11:00AM ET

Cadence Bank (NYSE:CADE) 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.

Cadence Bank Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Our strategic acquisitions of First Chatham Bank and Industry Bank closed in Q2, expanding our presence in Georgia and Central Texas.
• Positive Sentiment: Adjusted net income from continuing operations rose to $137.5 million ($0.73/share) with an efficiency ratio improving to 56.7% and adjusted ROA at 1.14%.
• Positive Sentiment: Organic loan balances grew by $1.1 billion (12.6% annualized) across nearly all verticals, led by strong Texas performance and robust pipelines.
• Negative Sentiment: Net interest margin dipped six basis points to 3.40% after adding $2 billion in securities funded by FHLB borrowings, despite underlying earning asset yield improvements.
• Positive Sentiment: Full-year guidance was raised to target 11–15% loan growth, 12–15% core deposit growth, 10–12% total revenue growth, and 7–9% expense growth, supporting a strong EPS outlook.

Presentation

[Operator]

Good day, and welcome to the Cadence Bank Second Quarter twenty twenty five Earnings Webcast and Conference Call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press then one on a touch tone phone.

[Operator]

Please note this event is being recorded. I would now like to turn the conference over to Will Fizakerley, Director of Corporate Finance. Please go ahead.

[Will Fisackerly, Executive VP & Director of Corporate Finance at Cadence Bank]

Good morning and thank you for joining the Cadence Bank second quarter twenty twenty five earnings conference call. We have members from our executive management team here with us this morning, Dan Rollins, Chris Bagley, Valerie Toalson and Billy Braddock. Our speakers will be referring to prepared slides during the discussion. You can find the slides by going to our Investor Relations page at ir.cadencebank.com, where you'll find them on the link to our webcast or you can view them at the exhibit to the eight ks that we filed yesterday afternoon. These slides are also available in the presentation section of our Investor Relations website.

[Will Fisackerly, Executive VP & Director of Corporate Finance at Cadence Bank]

I would remind you that the presentation along with our earnings release contains our customary disclosures around forward looking statements and any non GAAP metrics that may be discussed. The disclosures regarding forward looking statements contained in those documents apply to our presentation today. And now I'll turn to Dan for his opening comments.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Good morning. Thank you for joining us today to discuss our second quarter results. I could not be prouder of our team and the results we are producing. I will cover a few highlights. Valerie will provide some additional detail on the financials.

[Dan Rollins, Chairman and CEO at Cadence Bank]

After our prepared comments, our executive management team will be available for questions. It was an active quarter for Cadence, both organically and for M and A. On the M and A front, we announced our acquisition of Industry Bank shares on April 25. We then completed our acquisition of First Chatham Bank effective May 1, and we closed the industry transaction on July 1. The announcement to close timeline for industry was sixty seven days, which followed the ninety nine day announced to close timeline for First Chatham.

[Dan Rollins, Chairman and CEO at Cadence Bank]

These achievements are the result of a tremendous amount of collaboration between the teams at each of the target banks and with the various regulatory bodies. We are excited about the opportunity to expand our presence in Georgia and Central Texas. We welcome these teammates and customers to the Cadence family. Regarding the second quarter results, we continue to perform exceptionally well. Adjusted net income from continuing operations increased to 137,500,000.0 or $0.73 per share, and adjusted ROA was 1.14% for the quarter.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Our balance sheet growth drove a meaningful increase in revenue, and our adjusted efficiency ratio improved by 90 basis points to 56.7%. Our loan growth once again highlighted the strength of our footprint. We achieved organic loan growth of $1,100,000,000 for the quarter or 12.6% annualized. The growth came across our geography and nearly all verticals, with the highest growth coming out of Texas. Our community bank, corporate bank, private banking, and mortgage teams all reported nice organic growth for the quarter, and our pipelines are strong and growing.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Our core customer deposit balances also showed growth, which offset some intentional runoff in brokered and a seasonal decline in public fund balances. Organic core customer deposits increased at a 4.4% annualized rate, with the largest portion of this growth in non interest bearing deposits. Credit results continue to remain in line with our expectations with net charge offs of 24 basis points annualized for the quarter. Finally, our tangible book value continued to improve, increasing to $22.94 per share and regulatory capital levels remained strong with CET1 of 12.2%. Now let me turn the call over to Valerie and she can get into the weeds and the details for our financials. Valerie?

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Great. Thank you, Dan. To add to Dan's comments, our pretax pre provision net revenue for the second quarter increased to an all time high of $2.00 $6,000,000 up over 8% from the prior quarter, driven by the balance sheet growth that Dan mentioned, combined with strong fee income performance and improved operating leverage. Average loans were up a little over $800,000,000 in the quarter, while period end loans grew by $1,400,000,000 a $1.1 in organic growth and close to $400,000,000 from the First Chatham acquisition. We also added just over $500,000,000 in deposits from First Chatham in the quarter, in addition to our organic core customer deposit growth of three seventy six million dollars These increases were partially offset by declines of $437,000,000 in brokered deposits and $300,000,000 in public funds.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Our period end non interest bearing deposits as a percent of total deposits actually increased this quarter to 22.6%. Average deposits were down, which is not unusual for the second quarter as seasonal runoff earlier in the quarter was offset by growth in the latter part of the quarter. Our second quarter total adjusted revenue was strong at $476,000,000 an increase of $28,000,000 or 6%. Net interest revenue increased $15,000,000 or 4% as a result of the robust loan growth as well as added securities. We added about $2,000,000,000 in securities in the late first quarter and early second quarter, funded by Federal Home Loan Bank term borrowings.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

These securities added nice revenue, but did result in a slight dip in the net interest margin in the quarter. The NIM declined six basis points in the second quarter to 3.4%. Before considering the impact of the added securities, the quarter's NIM actually increased two basis points as the trends in our earning asset yields and cost of funds were favorable. Loan yields were 6.34% in the quarter, up one basis point from the first quarter, and new and renewed loans in the quarter came on the books at just over 7%, which is well north of the total portfolio yield. Total cost of deposits also improved by five basis points linked quarter to 2.3%, and time deposit costs improved by 12 basis points as new and renewed time deposits in the quarter came in over 30 basis points lower than the total portfolio rate.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Adjusted non interest revenue reflected great performance, really across the board, increasing $13,000,000 or 15% compared to the first quarter. We had another big quarter in mortgage originations, and the MSR valuation adjustment improved as well. Our wealth management teams also had a good quarter, from improved market conditions as well as seasonal tax revenue. And finally, other non interest revenue increased just over $7,000,000 a combination of several items, including strong credit and customer swap fees, SBA income, Federal Home Loan Bank dividends, and BOLI income. Adjusted non interest expense increased $11,700,000 linked quarter, mostly as a result of the closing of First Chatham combined with costs associated with business growth and strong operating performance.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Salaries and employee benefits increased just over $4,000,000 about half of that related to FCB, and the rest mostly due to increases in commissions and share based payment accruals. Data processing increased $3,600,000 partially impacted by higher business and project volumes, and we incurred a seasonal increase in our advertising and PR expense. Legal costs were up 4,600,000 driven by final resolution of a legal matter, and the decline in other miscellaneous expense of over $5,000,000 was due to fraud and loss recoveries and lower consulting and regulatory expenses. Turning to credit on slides nine and ten. Net charge offs for the second quarter were $21,000,000 or 24 basis points annualized, which is down slightly from the first quarter and consistent with expectations.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Nonperforming loans declined just under $5,000,000 linked quarter, while nonperforming increased about two. All in all, a stable linked quarter. We did see an increase in criticized and classified loans linked quarter due to a handful of credits, but the balances continued to remain within historical ranges. The loan provision was $31,000,000 reflecting the day one provision of just over $4,000,000 associated with acquired loans, as well as the impact of loan growth in the quarter. Our allowance for credit loss coverage remained flat linked quarter at 1.34%.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

At this level, combined with our capital foundation laid out on slide 16, we believe our strong balance sheet continues to be very well positioned. As a quick update on industry bank shares, we did close the transaction effective 07/01/2025, and as you may recall, Industry had a sizable municipal portfolio. Once we closed, we immediately sold a large majority of that portfolio, liquidating $1,900,000,000 of securities and continuing to hold just under 600,000,000 We have since used that 1,900,000,000.0 in liquidity to reinvest in 1,000,000,000 of securities yielding just over five and a quarter percent, with the remaining 900,000,000 used to lower wholesale funding. Additionally, we put on about five fifty million dollars in notional interest rate swaps to minimize any residual interest rate volatility in these securities that remained on our balance sheet. Finally, we have updated our guidance on slide 17 to reflect both the acquisition of First Chatham and Industry.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

We continue to expect solid loan demand for the latter half of the year, bringing full year loan growth, including the acquisitions, to between 1115%. This, combined with full year core customer deposit growth of between 1215%, supports our expectation for total revenue growth between ten percent and twelve percent. We forecast continued operating leverage, with expenses increasing between 79%, in support of the growth in the balance sheet and continued investment in our future. Combined with stable credit, we expect these results will continue to drive strong EPS performance for us throughout the rest of this year. Operator, we would like to open the call to questions, please.

[Operator]

We will now begin the question and answer session. To ask a question, you may press star, then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. We ask that you please limit yourself to one question and one follow-up.

[Operator]

At this time, we will pause momentarily to assemble our roster. The first question today comes from Casey Haire from Autonomous Research. Please go ahead.

[Casey Haire, Senior Analyst - US Mid-Cap Banks at Autonomous Research]

Thanks. Good morning. Can you guys hear me?

[Dan Rollins, Chairman and CEO at Cadence Bank]

Good to hear from

[Casey Haire, Senior Analyst - US Mid-Cap Banks at Autonomous Research]

you guys. Sorry, it's been a little bit choppy, so I apologize if I'm in and out. But I guess first off, I wanted to touch on the NII and the restructure. It feels like the margin can be bound to the mid-340s given what you did with the industry restructuring. Just wondering if I'm missing anything or just some help on the margin guide.

[Casey Haire, Senior Analyst - US Mid-Cap Banks at Autonomous Research]

And then also are you guys have you is there any more restructuring to be done with the on the side balance sheet? Thanks.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yeah, on the industry piece, we've done what we wanted to do. We certainly could divest a few more of those securities if we have that opportunity, but right now that's not on the top burner. Valerie, you need to go through all the NII and NIM.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Yeah, there's obviously a lot of moving parts, particularly with the acquisitions, but where we ended up with the repurchases of the industry security 05/27, when you combine that with the low yields, the new loans coming on north of 7% and some of the repricing expectations that we have for the other portions of the portfolio that we have in our slide deck, as well as the fact that our new CDs are coming in well south of where the maturity, maturing CDs are coming in. We expect some continued improvement there. So we're actually very optimistic about the net interest margin and anticipate that that would increase as we go through the rest of the year.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yeah, we knew that what we did at the end of the first quarter, beginning of the second quarter, bring on borrowings and buying the bonds was going to negatively impact NIM, but positively impact NII. Right.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

And so actually, hope you caught it basically that the impact of that was a negative eight basis points. If you just kind of set aside those security purchases, net interest margin would have actually increased in a quarter by a couple of basis points.

[Casey Haire, Senior Analyst - US Mid-Cap Banks at Autonomous Research]

Yep, okay. Great, thank you. And then, so just switching to M and A, just feels like it's activity is picking up here. You guys obviously have two deals under your belt year to date. Just wanted to get some updated thoughts on where you guys fit in on what appears to be M and A activity picking up.

[Dan Rollins, Chairman and CEO at Cadence Bank]

The next thing that we have noticed. Clearly there's a lot of talk, a lot of activity. We're seeing small transactions, a couple larger than what we've obviously done. I think what we've said when we announced the industry transaction earlier in the year was we thought we could get this transaction done quickly. We think we're in a position to continue to execute.

[Dan Rollins, Chairman and CEO at Cadence Bank]

We like the footprint that we serve. We like the nine states that we're in. We're looking for opportunities to continue to grow in those states, and we think we'll have future opportunities.

[Casey Haire, Senior Analyst - US Mid-Cap Banks at Autonomous Research]

Great. Thank you.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Appreciate it. Thanks, Casey.

[Operator]

The next question comes from Manon Ghislia with Morgan Stanley. Please go ahead.

[Manan Gosalia, Head - U.S. Midcaps Banks Research at Morgan Stanley]

Hey, good morning all. Can you provide some more color on the increase in the revenue guide? The differences in the old guide and the new guide on the loan and deposit side were particularly helpful. So I was wondering if the revenue guide is going up on an organic basis as well. And on the acquisitions piece, if you can just help us with some of the assumptions around purchase accounting?

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yes, so let me take a little bit of that and Valerie's going have to jump in here and help. I think from your question on is the guide up on an organic basis, yes. So we saw a tremendous loan growth in the quarter. The pipelines are good. Billy and Chris can talk about that.

[Dan Rollins, Chairman and CEO at Cadence Bank]

We really feel good about where we sit. Some of that's footprint. Some of that's our team just doing an outstanding job. We're bringing new customers into the bank. All of that moves the guide up.

[Dan Rollins, Chairman and CEO at Cadence Bank]

So with the increased guide on loan growth, that's going to produce organic revenue growth that you're seeing in the increased guide there. When you talk about purchase accounting marks, we're early in. We're twenty four days in from when we did that. Go ahead, Laura.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Yeah. You're exactly right. We'll be obviously reporting more on that as we go. But I guess just for a little color, just initially, and I'm speaking more to the industry when the first chat was really pretty small, the grinsky thing, far as first accounting marks. On the industry, on the securities, particularly, I think in the announcements, we assumed a 2.5% liquidity mark on some of those securities.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

We're actually able to dispose of those securities, but less than half of that. So we're coming in much better on that front.

[Dan Rollins, Chairman and CEO at Cadence Bank]

We just closed 1,400,000,000 to $1.9

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Yeah, and to Dan's point, we assumed that we're holding less ongoing. So again, less tangible book value impact from that transaction itself. The other pieces, the deposit pieces are fairly close to market values, loans, there wasn't too much of a market in there, and they refined that obviously over the next several weeks. But I would say, all in all, probably a little bit better on some of those marks than what we had originally estimated.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Does that help you, Raj?

[Manan Gosalia, Head - U.S. Midcaps Banks Research at Morgan Stanley]

Yep, and as my follow-up, just on the loan side, I mean loan growth is fairly strong. Value, I think I heard you mention the new loans are coming on at a little over 7%, so that might be a little bit of an improvement versus last quarter. And then if I look at the fixed rate and variable rate loans on Slide 12, those have also repriced up nicely. But the overall loan yields were up only one basis point Q on Q. Is there something that we might be missing there on the purchase accounting or anything related to the acquisitions there?

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Yeah, no, it really has the loans that pay down, loans that pay off, timing of some of those types of things are really what impacted that. We did dig into that as well because to your point, all the underlying support items would lead to a higher loan yield. So that's part of what drives our expectations for a higher net interest margin as we go through the rest of the year is continuing to see good pipelines in our loan portfolio, continuing to have good performance from where those rates are coming in as we look out through the rest of the year.

[Manan Gosalia, Head - U.S. Midcaps Banks Research at Morgan Stanley]

Got it. Thank you.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Appreciate your time.

[Operator]

The next question comes from Catherine Mealor with KBW. Please go ahead.

[Catherine Mealor, Managing Director at Keefe, Bruyette & Woods (KBW)]

Thanks. Good morning.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Hey. Good morning, Catherine.

[Catherine Mealor, Managing Director at Keefe, Bruyette & Woods (KBW)]

Just curious kind of back to the loan growth, which was really strong this quarter. I think last quarter you talked about paydowns impacting some of your period end balances and it seems like that's getting better. Can you talk a little bit about kind of new origination volumes versus paid on activity and what you're seeing with both of those and your thoughts on that balance as we get into the back half of the year, particularly with maybe some rate cuts? Thanks.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yeah, you can see where we didn't grow was in the CRE book. That's where we saw some pay downs. Willy, you jump in here.

[Edward Braddock, Chief Banking Officer at Cadence Bank]

Yeah. Hey, Catherine.

[Edward Braddock, Chief Banking Officer at Cadence Bank]

So in the first quarter, we saw a lot in the merchant real estate portfolio from a pay down standpoint and from our midstream energy. We saw that kind of slow, while at the same time continuing really good origination, particularly in the midstream energy. That space, we've all the backfill, the payoffs that have occurred really over the last six quarters in that space. That's been a recurring theme. On top of that, we just had widespread success.

[Edward Braddock, Chief Banking Officer at Cadence Bank]

I mean, our C and I teams across the footprint all had some success. Our private banking team had significant success, and a lot of that's attributed to some hiring that we did last year and the team's been able to capitalize on that. So the pay down activity was more robust in the first quarter, specifically in that larger merchant CRE and midstream space, and that was curtailed. And pipelines? And pipelines continue to be widespread or robust.

[Edward Braddock, Chief Banking Officer at Cadence Bank]

The borrower activity with all the know, sitting this time last quarter, we were feeling more uncertain. Think there's still some thoughts of that, but borrowers talking to their vendors and clients, they've been able to formulate a strategy. And the loan pipelines are remaining as strong. And the pull through from our approvals is similar to what it's been. It's just the pipelines are stronger.

[Chris Bagley, President & Chief Credit Officer at Cadence Bank]

I guess just to add to that, really, loan growth has been broad, diverse, both geographies, lines of business, community bank, mortgage was healthy this quarter. So we really got it from all the orders. It was a good quarter for them.

[Catherine Mealor, Managing Director at Keefe, Bruyette & Woods (KBW)]

Okay, great. And then your accretion with industry with selling more of the bonds than originally expected, Is there any change to your expectations for the accretion just with that nuance?

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Yes, the accretion would be a little bit less, but of course your upfront impact to your tangible book value is less. So net net, it's But not material. Yeah, it's not usually material. We're still looking at a pretty meaningful impact to

[Chris Bagley, President & Chief Credit Officer at Cadence Bank]

our ABS. We look out of the stress of this year and next year with this acquisition.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yeah, the difference is difference in what we would have been earning off the bonds that we held versus the 5.7%. It's not that big.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

So it's less than 100 basis points on a portion of that security. Really important.

[Catherine Mealor, Managing Director at Keefe, Bruyette & Woods (KBW)]

That makes sense. And then, of course, also with the loan growth being better, your reinvestment rates probably higher too than you would have expected. Okay.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Remember we talked about wanting to grow loans within the industry footprint, 1,000,000,000 over the next five years, we did that organically in one quarter. Clearly the loan growth is a big difference for us.

[Catherine Mealor, Managing Director at Keefe, Bruyette & Woods (KBW)]

Yes, for sure. Okay, great. Thank you.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Thanks, Catherine.

[Operator]

The next question comes from Jared Shaw with Barclays. Please go ahead.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Hey, Jared.

[Jared Shaw, Managing Director at Barclays Capital]

Good morning. You may be shifting to the other side of the balance sheet, just the deposit growth, strength in that core deposit origination and especially on the DDA side. As we look out, should we think that there's still sort of steady growth in DDAs here? Or was there any sort of one time beyond the deal benefit from DDA growth?

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yeah, think the teams are doing a great job of mixing it up in the community and trying to bring business into us. I don't know that one quarter is something that we can say this is a trend that we're on, but we certainly like what we look what we saw.

[Jared Shaw, Managing Director at Barclays Capital]

Okay, and then on the CDs, you talked about the renewal rates coming in lower. Are those now? And is there more room for CD costs to move lower assuming stable rates?

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Yeah, so I think there is. Right now we saw in the second quarter, we have out $3,800,000,000 in originations of CDs that were at just shy of $3.60. And so that's encouraging. We have a lot that are maturing, you know, you look at really the last half of twenty five, we've got about 5,400,000,000.0 that are maturing really right about 4%. So depending on where those come back on, how many we're repaying, you know, there is an opportunity to continue to see a little bit of compression in that overall amount.

[Dan Rollins, Chairman and CEO at Cadence Bank]

And his assumptions of rates are stable, I

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

think. Yeah, rates are stable. Right now, we've got two rate cuts later in the year in our forecast. And so if those come to fruition, then there's further opportunity there, obviously.

[Jared Shaw, Managing Director at Barclays Capital]

Okay. Thanks. That's good color on that. And then just on credit, credit overall good trends. Just anything you would call out on the criticizing classified migration that's either lumpy or episodic?

[Chris Bagley, President & Chief Credit Officer at Cadence Bank]

No, I can't cut, maybe a little, 22,000,000 or so of that was part of the first charter merger, so that was a fit of the increase. Most of the increase in criticized was special mention. I would call it normal range, normal process of working through credits in our normal processes. It's really those select few larger credits that moved in there along with the first chat merger. Thank you.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

I'll follow back up with your comment on the deposits. You know, the other thing that we got is a significant focus with our treasury management team. And so they continue to ramp up their efforts. And I think that's part of what we're seeing in some of the success that we've had.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

And so we would hope for more success there as we go through the rest

[Chris Bagley, President & Chief Credit Officer at Cadence Bank]

of year.

[Chris Bagley, President & Chief Credit Officer at Cadence Bank]

And thinking going forward, we're adding a lot of branches with new products We're going have a little having like next six months. We're excited about that. Thanks. Thanks, Jared.

[Operator]

The next question comes from Michael Rose with Raymond James. Please go ahead.

[Michael Rose, Managing Director at Raymond James Financial]

Hey, good morning everyone. Thanks for taking my questions. Just two quick ones. Any change into beta expectations either on the loan or deposit side with industry? And then that have any kind of material change to the interest rate sensitivity profile? Thanks.

[Chris Bagley, President & Chief Credit Officer at Cadence Bank]

Thanks sensitivity profile, the bond portfolio industry has an ability to move interest rate sensitivity, but we worked on that. Yeah, I

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

would say no significant changes on the betas. We'll be offering our products and services. And so, I think that over time, will just kind of work into a little bit consistent with some of the legacy efforts. There may be a little bit of movement in the first quarter or so, but I don't think that'll be ongoing. As far as interest sensitivity, Dan's right, really pretty consistent interest sensitivity.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

We continue to remain pretty neutral on that But then, you know, that one hundred and fifty days, plus or minus one hundred.

[Michael Rose, Managing Director at Raymond James Financial]

Okay, great. Thanks, Valerie. And then maybe just final. I know you guys have a buyback in place. You got a lot of deals going on.

[Michael Rose, Managing Director at Raymond James Financial]

I wouldn't expect that you'd be using it here. Maybe just holding out for other opportunities. Is that the right way to think about it? Just it's a tool at this point, but not really looking to use it? Thanks.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yeah, I think we said that when we announced the industry transaction, as we knew with that transaction, we needed to continue to build capital. So unless something drastic changes here, I think for this quarter, I don't think we'll be doing very much there.

[Michael Rose, Managing Director at Raymond James Financial]

All right, thanks for taking my questions.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Thanks, Michael.

[Operator]

The next question comes from Jon Arfstrom with RBC Capital Markets. Please go ahead.

[Jon Arfstrom, MD & Associate Director - US Research at RBC Capital Markets]

Thanks. Good morning.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Jon, good morning.

[Jon Arfstrom, MD & Associate Director - US Research at RBC Capital Markets]

Hey. Back back to loan growth. Would you would you guys call the pace of growth in the second quarter abnormal at all in terms of what you expect going forward? I mean, was it a rebound or catch up from the uncertainty in the first quarter? Or is this like, a like, real change in demand where this is a realistic pace of growth?

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yeah. I think I've said for a while, I think what we saw post, you know, liberation day was people took their foot off the accelerator and question marks about what was going on out there. I think that's just catching back up with us. No, I don't know that this was abnormal. I think when we look at what's coming through, just watching the flow, we're as busy as we've ever been.

[Edward Braddock, Chief Banking Officer at Cadence Bank]

Billy? Yeah, that's right. I mean, John, I touched on it, but our kind of our weekly volumes that we're seeing come through are as high as they've been in over a year. And that's continued from the last couple months of the quarter to now. I mean, it's a continuing trend, so we're not

[Dan Rollins, Chairman and CEO at Cadence Bank]

seeing it slow. Just talking to bankers across our footprint, there's excitement about opportunities in front of us.

[Chris Bagley, President & Chief Credit Officer at Cadence Bank]

Yeah, I would just add, I mean, take the other side of it, you know, if capital markets open up, you can see some downward volume impact via purchase builders moving some things out. That is a little slower, but that could impact volumes going forward but the pipelines are good, new originations.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Okay, good.

[Jon Arfstrom, MD & Associate Director - US Research at RBC Capital Markets]

Dan, a question for you on Texas industry. I think we'll take your Texas deposit your share up to 35% of total deposits. The approach in Texas is that right? Is that the right number?

[Dan Rollins, Chairman and CEO at Cadence Bank]

That's a verified that some people believe that you go in question. They're they're they're pulling It's just

[Jon Arfstrom, MD & Associate Director - US Research at RBC Capital Markets]

the the question is are are do you have to do anything in different in Texas, or is it just kinda business as as usual? Because it's obviously a much, much larger piece of your franchise than it has been, you know, over the last several years.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yeah. Yeah. So we're at 37% of deposits in Texas with this, but we're higher than that with loans in Texas. So, you know, I I think the answer is no. We continue to see outsized growth.

[Dan Rollins, Chairman and CEO at Cadence Bank]

When we look at our footprint and you see where growth is coming from, Texas continues to drive that growth. The high growth markets of Georgia, Florida, Tennessee continue to add to us, but frankly, we're seeing growth across our footprint. Texas just continues to lead.

[Jon Arfstrom, MD & Associate Director - US Research at RBC Capital Markets]

Okay. Just last one, Valerie, for you. On the expense range, is it safe to assume the higher end of the range is aligned with the higher end of your loan growth, or is there something else that we need to think about in terms of expenses that that higher or lower end of your range?

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Yeah. No. The higher end tends to align with higher revenues. You know, there are associated costs associated with that. So that would drive that. Yep.

[Jon Arfstrom, MD & Associate Director - US Research at RBC Capital Markets]

Okay. All right. Thank you very much.

[Operator]

Okay. Thanks, John. The The next question comes from Ben Gerlinger with Citi. Please go ahead.

[Michael Rose, Managing Director at Raymond James Financial]

Good morning.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Ben, good morning, Ben.

[Ben Gerlinger, VP - Equity Research at Citigroup]

Seems like prior to this week, every bank that operates with a SEC football school in their state has highlighted growth through hirings and putting up numbers. It seems like, I mean, you guys have always had a little bit of a different strategy. But with the footprint that you have, I mean, know you've been doing both at the same time, but is have we seen outsized level of hirings from potential or even already announced acquisitions? Or is it more so just kind of filling in, letting the operation because you now have these two deals to integrate? How should we think about the organic perspective of hirings and loan growth over the next year or two?

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yeah. We we've not gone out and hired big teams of people. That's just not been in our past practices. We continue to hire good people. So we've added in Texas.

[Dan Rollins, Chairman and CEO at Cadence Bank]

We've added in Georgia. We've added across our footprint in Multin Florida over the last several quarters. But those are one and two. The acquisitions that we've got, we've not lost any of those people, if you're asking. So I think on the other side, I think we've got good people that are out there wanting to grow business.

[Dan Rollins, Chairman and CEO at Cadence Bank]

And I think we've got capacity to grow with the team that we have today.

[Ben Gerlinger, VP - Equity Research at Citigroup]

Gotcha. That's helpful. And then just one modeling question, Valerie. I know you said marks were a little bit smaller, so dilution should be a little bit less. And originally at eight and a half on TBV, is it fair to think it's less than that at this point or is it still de minimis?

[Dan Rollins, Chairman and CEO at Cadence Bank]

I don't know. We have a number put out today.

[Valerie Toalson, Senior EVP & CFO at Cadence Bank]

Yeah, no, I think that we'll be obviously working on refining all of that as we go through the quarter. But overall, I mean, would just say that we still anticipate regardless for the numbers move, but this just really gonna be a great acquisition for us. Yeah.

[Chris Bagley, President & Chief Credit Officer at Cadence Bank]

Yeah. Our execution is significant.

[Ben Gerlinger, VP - Equity Research at Citigroup]

Gotcha. Yeah. No, I appreciate it. Okay. Thank you.

[Operator]

The next question comes from Puneet with Stephens. Please go ahead.

[Analyst]

Yeah. Thanks. Good morning. Just similar to Ben's last question on the industry impact in the third quarter. Any color on the capital ratios and when these can look like at September 30 with the impact of industry on there?

[Dan Rollins, Chairman and CEO at Cadence Bank]

Yeah, Matt, good to hear from you. That's what we were talking about earlier. We're twenty four days in the marks. We just don't have anything to be able to give you where we think we're going to end up. The pieces of the puzzle all look good to us and not far off of what we were talking about when we made the announcement back in April.

[Dan Rollins, Chairman and CEO at Cadence Bank]

It's just too quick. And we understand it's a big transaction that could move the needle. So we hope to be able to, as we're out on the road, maybe file some investor deck that would give us some mid quarter update to some of that.

[Analyst]

Okay. Thank you. That's all for me.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Thanks, Matt. Appreciate the time.

[Operator]

This concludes our question and answer session. I would like to turn the conference back over for any closing remarks.

[Dan Rollins, Chairman and CEO at Cadence Bank]

Hey. Thank you all very much for joining this morning. Since we brought up the SEC with college football only twenty nine days away, we're glad that we finished the first half of twenty twenty five here at Cadence, and we had a great first half. We continue to report growth and improvement in many of our operating metrics, including earnings per share, ROTCE, ROA, operating efficiency, just to name a few. I continue to be very confident that we've achieved both organically and through strategic partnerships in Texas and Georgia, that we positioned ourselves to continue that momentum through the second half of twenty twenty five, and it sets us up in a position of strength for 2026. We appreciate everybody's support on our call today. This concludes the call. We look forward to seeing you all again soon.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Will Fisackerly, Executive VP & Director of Corporate Finance
• Dan Rollins, Chairman and CEO
• Valerie Toalson, Senior EVP & CFO
• Edward Braddock, Chief Banking Officer
• Chris Bagley, President & Chief Credit Officer

Analysts

• Casey Haire, Senior Analyst - US Mid-Cap Banks at Autonomous Research
• Manan Gosalia, Head - U.S. Midcaps Banks Research at Morgan Stanley
• Catherine Mealor, Managing Director at Keefe, Bruyette & Woods (KBW)
• Jared Shaw, Managing Director at Barclays Capital
• Michael Rose, Managing Director at Raymond James Financial
• Jon Arfstrom, MD & Associate Director - US Research at RBC Capital Markets
• Ben Gerlinger, VP - Equity Research at Citigroup
• Analyst