Cadence Bank (CADE) Stock: Slides 3% Despite Record Earnings and Strong Loan Growth

TLDR

• Cadence slips 3.09% despite record earnings and strong loan growth momentum.

• Solid margins and deposits rise, yet merger risks weigh heavily on investor sentiment.

• Strong 2025 results fail to lift shares amid rising credit costs and deal concerns.

• Loan growth accelerates, but Huntington merger timing keeps markets cautious.

• Earnings surge, costs stay controlled, but stock drops on merger uncertainty.

Cadence Bank (CADE) shares slipped 3.09% to $45.03 after a sharp early drop and sideways trading. The company posted record adjusted earnings and strong growth across loans and deposits. However, the stock still weakened as the market reacted to merger updates and rising credit costs.

Cadence Bank, CADE

Record Earnings Mark a Strong 2025 Performance

Cadence Bank delivered higher annual earnings and reported $582.2 million in adjusted net income for 2025. The bank raised adjusted PPNR to $857.7 million and expanded its operating scale. Annual net interest margin improved to 3.47 percent due to balance sheet growth and lower funding costs.

The company completed two strategic acquisitions that enhanced its presence in Georgia and Texas. It added $4.7 billion in assets through these transactions and expanded its branch network. Organic loan growth reached 6.4 percent for the year while core deposits increased 3%.

Cadence Bank strengthened operating efficiency and reduced its adjusted efficiency ratio to 56.4%. Management credited cost controls and improved revenue trends for the performance.  Tangible book value rose during the year due to strong earnings and portfolio improvements.

Quarterly Momentum Builds Ahead of Huntington Merger

Cadence Bank reported quarterly adjusted earnings of $160.6 million in the fourth quarter. The bank posted a stronger net interest margin of 3.55% driven by lower funding costs. Adjusted PPNR rose 6.1 percent from the prior quarter due to balance sheet growth.

Net organic loan growth reached $444.5 million in the fourth quarter. Core customer deposits increased by $529.0 million and supported lending activity. Nonperforming asset levels improved and credit metrics remained broadly stable.

The pending merger with Huntington Bancshares advanced toward completion. Regulators and shareholders approved the all-stock transaction that is set to close on February 1, 2026. The combination will form a top-ten national franchise with assets above $275 billion.

Loan Growth Expands While Funding Costs Decline

Cadence Bank increased total loans to $37.2 billion during the fourth quarter. Growth appeared across major categories and aligned with expansion goals. Meanwhile, the average cost of deposits decreased to 2.15 percent due to lower interest-bearing rates.

Securities cash flows supported loan growth and reduced the portfolio to $9.1 billion. The loan-to-deposit ratio remained near 84 percent and highlighted balanced funding. Likewise, cash and reserves increased during the period and improved liquidity.

Total capital levels remained strong as the CET1 ratio ended at 11.7%. The company maintained flexibility for future lending and integration activities. Yet higher net charge-offs modestly pressured credit costs during the quarter.

Noninterest Revenue and Expense Trends Support Operations

Cadence Bank increased noninterest revenue to $101.5 million in the fourth quarter. Mortgage banking recovered as volume improved and servicing valuations stabilized. Furthermore, wealth management and card activity posted additional gains.

Other noninterest revenue rose due to partnership income and higher BOLI results. SBA activity strengthened and contributed to fee momentum. The company also removed losses tied to terminated hedges from the prior quarter.

Adjusted noninterest expense declined to $290.6 million and supported efficiency gains. Data processing and occupancy costs moderated after earlier project spending. Salaries and benefit costs increased due to higher healthcare expenses.

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