Speedy integration of State Bank has Cadence set to expand in Georgia
Cadence Bancorp. in Houston is looking to make the most of its Jan. 1 purchase of State Bank Financial in Atlanta.
The $17.4 billion-asset Cadence has already wrapped up the systems and branding conversions, allowing it to focus more attention to bringing in business, Paul Murphy Jr., the company's chairman and CEO, said during a Monday conference call to discuss first-quarter results.
"I like our expanded footprint and the diversity that it brings to our business model," Murphy said. "I see many opportunities to grow and expand ... in Georgia and throughout the footprint."
Cadence has cut costs quicker than it had originally modeled for the $826 million acquisition. It is already two-thirds — or even three-fourths — of the way toward realizing all the savings from the deal. On the revenue side, executives pointed to opportunities with wealth management, which was not a focus for State Bank.
Cadence reported that its first-quarter profit rose 50% from a year earlier to $58.2 million, or 44 cents a share. The quarter included State Bank's operations, along with $22 million of merger-related expenses.
Total revenue increased by 72% to $200 million.
Net interest income rose by 86% to $169.3 million. Total loans rose by 58% to $13.6 billion, while the net interest margin widened by 57 basis points to 4.21%.
Deposits rose by 58% to $14.2 billion. Excluding State Bank, deposits increased by 9.8%.
The company's loan-loss provision rose by 33%, to $11.2 million. Net charge-offs totaled $0.6 million, or 0.02% of total loans on an annualized basis.
Murphy said the provision was "a bit larger" than what was planned for the quarter, reflecting six credits, including two tied to the restaurant industry.
Cadence is "tapping the brakes" on restaurant lending, and Murphy said overall classified and criticized loans are flat.
Noninterest income increased by 23% to $30.7 million. Total service fees rose 17% to $27.9 million.