Cadence in Texas hopeful Harvey losses will be manageable
Cadence Bancorp in Houston is optimistic losses tied to Hurricane Harvey will be manageable.
The $9.8 billion-asset company said during a conference call Thursday that it has identified only 13 large commercial clients, representing $112 million in loan balances, that suffered significant damages.
Cadence made the determination after contacting all commercial lending relationships that were larger than $1 million. The review included nearly 420 clients with $2.8 billion in loans, or more than a third of all loans at June 30.
"I, for one, am pleased that its not a bigger number and not more companies," Paul Murphy Jr., Cadence's chairman and CEO, said during the call. "Our initial assessment with respect to the C&I book is that it is manageable and at this point no material negative credit surprises have been uncovered. "
About $700 million of residential mortgages are in areas hit by the hurricane, adding that about 87% of the homes were outside the flood zone. The other homes were required to have flood insurance.
Murphy said the storm was the worst he had witnessed in Houston in terms of its five-day duration.
“Houston is used to dealing with these storms,” Murphy said.
“This storm was different in that it had epic flooding but not wind damage," he added. "Submerged infrastructure is easier to repair than scattered debris.”
Cadence has reopened all but one branch and there were no interruptions of service tied to the company's systems. Cadence is offering assistance to its employees and encouraging community service efforts.
“From a facilities damage standpoint the out-of-pocket cost is de minimis,” Murphy said.
The company outlined steps it is taking to help customers recover, including special financing and quick decisions on vehicle and home improvement loans. Cadence also said it is offering expedited financing for small businesses, restructuring loan payments and waiving CD withdrawal penalties.