Cadence Bancorporation Files for IPO: Could Things Be Larger than they Seem?

Cadence Bancorp. is the holding company for Cadence Bank. The financial institution is based in Birmingham, Alabama. It only operates within the United States and currently has assets totaling to $9.2 billion. The company offers banking services centered towards both commercial and consumer clients. It specializes in small business banking, treasury management, international banking, specialized industry lending, wealth management and investment and trust services.

Further, the company also offers services for clients to plan their retirements, financial planning, mortgage services, home equity lines, and loans as well as credit cards. Subsidiaries of the company include Linscomb & Williams, Cadence Insurance and Cadence Investment Services. The firm’s headquarters are located in Houston, Texas.

The company lodged confidentially in September 2014. However, the company has now filed with the SEC for an Initial Public Offering targeted at $100 million. Goldman, Sachs & Co., JP Morgan, Sadler O’Neill and Keefe Bruyette Woods are to act as joint book runners in the new release. Other underwriters include Baird, Raymond James, Stephens Inc., SunTrust Robinson Humphrey and Tudor, Pickering, Holt & Co.

The company raised a revenue of $65.8 million in 2016, a $29.3 million increase from the previous year’s revenue of $39.3 million. This figure translated to a nearly 75 percent raise in income for the firm. Additionally, the company had $9.5 billion in assets as of December 2016. It also had $7.4 billion of gross loans and $8 billion in deposits. Also, Cadence had $1.1 billion in shareholder’s equity by the end of last year.  The growth in the company’s revenue and its returns are probably the reason the business has finally decided to go public. Since 2012, deposits in the bank have increased by 14.7 percent while loans rose by 16.8 percent, aiding the firm’s growth.

Financial analysts have looked at this figures and are in the view that the company put up the $100 million mark on the company’s expected returns from its release as a benchmark. As a result of its steady revenue growth over the years as well as the company’s physical expansion and as such increased clientele, it is likely the release will bring in returns of close an estimated $300 million.

Cadence Bancorporation was formed in 2009. It secured $1 billion in capital commitments the next year and from then has consequently continued to build its franchise. The company’s growth over the years has been stemmed from its acquisitions. These have included Cadence Bank, N.A. in 2011, Superior Bank in April 2011 and Encore Bank N.A. in July 2012. Currently, the company has over 1,700 employees and 66 branches spread over 5 locations within the United States. These include Alabama, Florida, Texas, Mississippi, and Tennessee.

Once it has been released to the public, the firm hopes to trade under the ticker “CADE.” No disclosures concerning the price per share or the number of shares have been made so far. The issuance of this bank could mark the first commercial bank to go public this year. It is likely the revenue generated from the IPO will go into the expansion of the bank in more locations. The company cites its likely success on its board of directors, ability to provide unique client-based services and their credit quality.