We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cadence (CADE) Earnings & Revenues Surpass Estimates in Q3
Read MoreHide Full Article
Cadence Bank (CADE - Free Report) reported third-quarter 2022 adjusted earnings per share of 78 cents, beating the Zacks Consensus Estimate of 77 cents. However, the bottom line rose 13% year over year.
The company's results were backed by significant growth in net interest revenues and fee income. The balance sheet position was decent with the increase in loan and lease balances. However, a weak capital position and a notable increase in expenses were offsetting factors.
The company’s net income available to common shareholders in the third quarter was $121 million, up 72% from the year-ago quarter.
Revenues Climb, Expenses Rise
Total revenues in the reported quarter increased 27.9% year over year to $479.85 million. In addition, the top line surpassed the Zacks Consensus Estimate of $464.7 million.
Net interest revenues in the quarter were $355.4 million, up 95.8% year over year. The fully taxable equivalent net interest margin (NIM) was 3.28%, up from 2.86% in the prior-year quarter.
Non-interest revenues improved 47.3% year over year to $124.5 million. The upside resulted from the increase in credit card, debit card and merchant fees, deposit service charges, and wealth management revenues.
Non-interest expenses were $319.7 million, which increased 77.7% year over year. The increase stemmed primarily from a rise in all the components.
As of Sep 30, 2022, total deposits decreased 3% to $39 billion on a sequential basis, while loans and leases, net of unearned income, increased 3.3% sequentially to $29.3 billion.
Credit Quality Improves
Non-performing loans and leases were 0.40% of net loans and leases as of Sep 30, 2022, down from 0.56% as of Sep 30, 2021. Allowance for credit losses to net loans and leases was 1.48% as of Sep 30, 2022, down from 1.74%.
In the third quarter, the company recorded no provision for credit losses against a benefit of $7 million in the prior-year quarter. However, non-performing assets were $126.5 million, up 26.1% from the prior-year quarter.
Capital Position Weak
As of Sep 30, 2022, tier 1 capital and tier 1 leverage capital ratios were 10.70% and 8.43%, respectively, compared with 11.63% and 8.13% at the end of the prior-year quarter.
Also, the ratio of tangible shareholders' equity to tangible assets was down to 5.24% from the prior-year quarter’s 6.82%. The ratio of its total shareholders' equity to total assets was 8.74% at the end of the third quarter, down from 10.77% as of Sep 30, 2021.
Our Viewpoint
Cadence put up a decent performance in the third quarter. Improvements in NIM and credit quality were the encouraging factors. However, the rise in expenses and a decline in deposits hurt the results to some extent.
Hancock Whitney Corporation’s (HWC - Free Report) third-quarter 2022 earnings of $1.55 per share were in line with the Zacks Consensus Estimate. The bottom line rose 6.9% from the prior-year quarter’s adjusted earnings of $1.45.
Results benefited from higher net interest income, a rise in the loan balance and increasing rates. However, lower non-interest income mainly due to rising mortgage rates was the undermining factor. Higher adjusted expenses and a rise in provisions were other headwinds for HWC.
Washington Federal’s (WAFD - Free Report) fourth-quarter fiscal 2022 (ended Sep 30) earnings of $1.07 per share handily surpassed the Zacks Consensus Estimate of 91 cents. The figure reflects a year-over-year jump of 48.6%.
Results were primarily aided by higher rates, robust deposits and improving loan balances, which drove the net interest income. However, an increase in expenses, a fall in total other income and higher provisions were headwinds for WAFD.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Cadence (CADE) Earnings & Revenues Surpass Estimates in Q3
Cadence Bank (CADE - Free Report) reported third-quarter 2022 adjusted earnings per share of 78 cents, beating the Zacks Consensus Estimate of 77 cents. However, the bottom line rose 13% year over year.
The company's results were backed by significant growth in net interest revenues and fee income. The balance sheet position was decent with the increase in loan and lease balances. However, a weak capital position and a notable increase in expenses were offsetting factors.
The company’s net income available to common shareholders in the third quarter was $121 million, up 72% from the year-ago quarter.
Revenues Climb, Expenses Rise
Total revenues in the reported quarter increased 27.9% year over year to $479.85 million. In addition, the top line surpassed the Zacks Consensus Estimate of $464.7 million.
Net interest revenues in the quarter were $355.4 million, up 95.8% year over year. The fully taxable equivalent net interest margin (NIM) was 3.28%, up from 2.86% in the prior-year quarter.
Non-interest revenues improved 47.3% year over year to $124.5 million. The upside resulted from the increase in credit card, debit card and merchant fees, deposit service charges, and wealth management revenues.
Non-interest expenses were $319.7 million, which increased 77.7% year over year. The increase stemmed primarily from a rise in all the components.
As of Sep 30, 2022, total deposits decreased 3% to $39 billion on a sequential basis, while loans and leases, net of unearned income, increased 3.3% sequentially to $29.3 billion.
Credit Quality Improves
Non-performing loans and leases were 0.40% of net loans and leases as of Sep 30, 2022, down from 0.56% as of Sep 30, 2021. Allowance for credit losses to net loans and leases was 1.48% as of Sep 30, 2022, down from 1.74%.
In the third quarter, the company recorded no provision for credit losses against a benefit of $7 million in the prior-year quarter. However, non-performing assets were $126.5 million, up 26.1% from the prior-year quarter.
Capital Position Weak
As of Sep 30, 2022, tier 1 capital and tier 1 leverage capital ratios were 10.70% and 8.43%, respectively, compared with 11.63% and 8.13% at the end of the prior-year quarter.
Also, the ratio of tangible shareholders' equity to tangible assets was down to 5.24% from the prior-year quarter’s 6.82%. The ratio of its total shareholders' equity to total assets was 8.74% at the end of the third quarter, down from 10.77% as of Sep 30, 2021.
Our Viewpoint
Cadence put up a decent performance in the third quarter. Improvements in NIM and credit quality were the encouraging factors. However, the rise in expenses and a decline in deposits hurt the results to some extent.
Cadence Bank Price, Consensus and EPS Surprise
Cadence Bank price-consensus-eps-surprise-chart | Cadence Bank Quote
Currently, Cadence carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Hancock Whitney Corporation’s (HWC - Free Report) third-quarter 2022 earnings of $1.55 per share were in line with the Zacks Consensus Estimate. The bottom line rose 6.9% from the prior-year quarter’s adjusted earnings of $1.45.
Results benefited from higher net interest income, a rise in the loan balance and increasing rates. However, lower non-interest income mainly due to rising mortgage rates was the undermining factor. Higher adjusted expenses and a rise in provisions were other headwinds for HWC.
Washington Federal’s (WAFD - Free Report) fourth-quarter fiscal 2022 (ended Sep 30) earnings of $1.07 per share handily surpassed the Zacks Consensus Estimate of 91 cents. The figure reflects a year-over-year jump of 48.6%.
Results were primarily aided by higher rates, robust deposits and improving loan balances, which drove the net interest income. However, an increase in expenses, a fall in total other income and higher provisions were headwinds for WAFD.