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Cadence keeps pace with IPO
Posted on Monday, 20 March 2017 13:32
US commercial lender Cadence Bancorporation is trying its hand at an initial public offering (IPO) on the New York Stock Exchange in what could be the first domestic banking sector listing so far in 2017.
The Texan company’s paperwork shows nine underwriters - with Goldman Sachs and JPMorgan acting as joint lead bookrunning managers - are handling the proposed sale currently comprising a USD 100.00 million placeholder.
It intends to dilute its equity through an issue of new stock and while Cadence Bancorp is opening up the investor base further by selling some existing shares, the current owner also wants to retain a majority of the voting power.
Cadence was formed in 2009 by industry veterans as a holding company of Cadence Bank, which was bought in March 2011 and followed by the franchise of Superior Bank in April 2011 and Encore Bank NA in July 2012.
Today, the group is a growth-oriented, middle-market focused lender providing commercial banking and wealth management services to high net worth individuals, business owners and retail customers.
Its network of 66 branches, as of 31st December 2016, is spread across Alabama (25), Florida (14), Texas (12), Mississippi (11) and Tennessee (4).
As at the end of 2016, Cadence had USD 9.50 billion of assets, USD 7.40 billion of gross loans, USD 8.00 billion in deposits and USD 1.10 billion in shareholder’s equity.
In terms of performance ratios, it had a return on average common equity of 6.0 per cent and efficiency of 59.8 per cent, while capital ratios included common equity tier 1 of 8.8 per cent, tier 1 risk-based capital of 9.1 per cent and total risk-based capital of 11.2 per cent.
As of 31st December 2016, 53.0 per cent of its loans and 38.0 per cent of its deposits were in Texas, and it originated 33.0 per cent of loan commitments in the state for the year.
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