In a year that included its IPO, new growth, its first dividend payment and two harrowing hurricanes, Cadence Bank didn’t miss a beat.
The company hasn’t stood still since its April 2017 IPO, with it reporting deposits growing by more than 10 percent. Cadence also reported completing two secondary stock offerings, winning the municipal banking business of one of the largest Texas county offices, and issuing its first dividend to stockholders. That dividend was part of Cadence’s plan according to Murphy. “Many investors won’t look at a company unless you pay a dividend,” he notes, “And we wanted to be on the radar screen of a lot more investors.”
Discussing 2017, it’s telling that Murphy doesn’t focus on the two separate level-four hurricanes that ripped through major swaths of the company’s footprint. Hurricane Harvey flooded Houston, where the company is headquartered, four months after the IPO. Not long after, Irma ripped through western Florida, where Cadence also has a presence.
“All of our disaster recovery training and planning worked with great effectiveness. We stayed open the whole time. Not all the branches were open, of course, but our customers’ ability to conduct business online never stopped,” says Murphy, noting that 38,000 homes in Houston sustained material damage. “If you are one of them, the impact on your life was potentially devastating.”
But Murphy notes that the bank’s holdings were only minimally impacted. “Of Cadence's 2,700 single-family loans in the affected area, we had about 70 people call for loan extensions or delayed payments,” he says, adding the bank extended payment moratoriums to help customers struggling with the hurricane’s aftermath.
It was the high winds of Irma that caused havoc for the company in Florida, where 14 Cadence branches had to be closed due to complications arising from the storm. Luckily, all of the branches reopened within several days, according to Cadence. Murphy credits phone trees, e-mail communication and the company’s digital portal with keeping business steady during both storms.
“Mobile banking and telephones allowed us to keep commerce happening,” Murphy says. “Our automated online system has a lot of feature functionality that cash managers find very efficient. You can initiate wire transfers and deal with payroll. So that was instrumental in conducting business as usual.”
Since the hurricanes, Cadence has been focused on its core business sectors: “Our credit quality at the company has been outstanding. We want to continue the great growth in loans and deposits and our wealth management businesses,” says Murphy.
Moving forward Cadence hopes to continue to expand its loan holdings in the real estate and technology areas, as well as its CD assets. “Our real estate exposure is pretty modest, especially for a bank our size, so we’re expecting to see more activity in that area, as well as in technology loans in Austin, Texas,” he says.
And Murphy is excited for the Fed’s anticipated interest rate hikes, and their effects on Cadence’s CD business. “The rates on CDs will very likely move up, and we think we’ll see deposits in that business increase.”
Murphy says the company, which has 65 branches in Florida, Alabama, Tennessee, Mississippi and Texas, is interested in expanding its physical footprint. But at the same time, it is taking a cautious approach to mergers and acquisitions. “I think our core growth will allow us to create value for shareholders, and if we can find the right M&A opportunity, that would be the icing on the cake.”
After its first year as a public company, Murphy appreciates the need to maintain consistency for Cadence Bank. “Continuing the trend of growth is our chief hope and aspiration. Just stay focused on the fundamentals. Be there for our clients, be a great place to work and manage our credit risk. I think if we do all those things, then our shareholders will be very pleased with us.”
After a recent merger expanded the products, services and footprint of the bank, it has stayed true to the culture that has driven its growth so far.
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