Cadence Bank CEO Sam Tortorici shares his thoughts on the company’s post-IPO future, becoming a big bank, targeting Alabama and working with winners.
Birmingham, Ala.-based Cadence Bank (NYSE: CADE) is a full-service bank with 65 locations in Alabama, Florida, Mississippi, Tennessee and Texas. We spoke with Cadence CEO Sam Tortorici about the values, strategies and priorities that have been essential to its success, as well as what he sees for the future.
What has been the immediate impact of Cadence’s April IPO on the NYSE? How will Cadence use that capital?
Sam Tortorici: One thing the IPO accomplished was to boost employee morale to an all-time high. The IPO also added another element of credibility to Cadence, which helped establish us as a greater force in the market. In more tangible terms, it’s provided us with more capital, and more capital in banking is a very good thing.
We plan to use that capital to fuel fresh growth. We’ve been on a very nice growth trajectory from an organic standpoint, growing close to a billion dollars a year for the last five years. We made no secret about being very open to select acquisitions. And having public currency can help us accomplish that.
From your perspective, and given the growth in the last five years, what has been the secret to Cadence’s success?
ST: For starters, we brought on top talent, particularly in the areas of commercial banking, private banking and treasury management. At the core of those hires are more than 70 very experienced bankers, whom I like to refer to as the ‘Navy Seals of banking’. We hired them very early, which gave us a tremendous amount of capacity to grow. From there, it was just a matter of our bankers getting out and attracting clients to Cadence and bringing in new business.
Commercial banking is one of Cadence's core strengths. What’s been the strategy for growing that business?
ST: The people, the talent and the technology we’ve put in place are helping us grow the segment. But we’ve also invested heavily in the kind of technology infrastructure to support both our people and our customers. We’ve focused on our treasury management software because commercial middle-market companies need help managing their working capital cycle.
We’ve also upgraded our website and our mobile app, which offer key capabilities such as balance reporting, mobile deposit capability, and account aggregation among accounts held in outside institutions. And we’ll continue to invest in digital technology, because that is how our customers like to bank with us.
Let me add that we are very interested in acquisitions within what we call our ‘Southeastern Conference footprint’. Alabama is where the bulk of the company’s back-office infrastructure resides: our HR department, legal department, compliance, loan operations and bank operations. So as the company grows through acquisition, I would anticipate that our Alabama-based infrastructure would have to grow commensurately to support the overall company.
Cadence’s rapid growth has created new challenges from a regulatory standpoint– how do you plan to handle those demands?
ST: One aspect of our rapid growth is that we will become subject to a wide range of new requirements. One is the Dodd-Frank Act stress test, which represents a sizable project for our finance team. But we have planned all along to be a large bank, so we’ve already made significant investments in people, reporting, stress testing and all of the regulatory requirements that come with that. We believe that our regulatory preparedness positions us well for acquisitions that make strategic sense for Cadence.
You’re a graduate of the University of Alabama, and Cadence sponsors ’Bama’s athletic program. Is that your doing?
ST: I’d like to say I was responsible for it, but Cadence actually made this commitment a few months before I joined the company. But I’m pleased that they did.
We have a sizable market share in the Birmingham, Tuscaloosa and North Alabama markets. So, the University of Alabama was just a logical place for us to build brand awareness. We’re still a fairly new company, so being in a highly visible setting with a broad audience has been very beneficial to us.
It’s great to have radio ads during football and basketball broadcasts and sponsor fun events, like a dash-for-cash during basketball games. But it’s also nice to align our brand with the brand of a winner. So we’re the sponsor of Coach Nick Saban’s weekly press conferences on Facebook Live during this year’s football season.
What opportunities are you most excited about in the coming year?
ST: What I’m most excited about is that it’s business as usual at Cadence. Our teams are going to keep doing what they’ve been doing very successfully — growing organically, taking care of clients and bringing in new ones. I hate to sound boring and say “same old, same old,” but it’s been a recipe for success for us. We still expect to see high single-digit, low double-digit growth rates for the foreseeable future.
I’m also very excited by the increase in inbound interest from banks who see us as a potential ally. It will be very interesting to see what opportunities present themselves over the coming year from a merger-and-acquisition standpoint.