Kroll Bond Rating Agency Releases Cadence Bancorp, LLC Earnings Comment - Fourth Quarter 2014

NEW YORK--()--Kroll Bond Rating Agency (KBRA) releases Cadence Bancorp, LLC. Earnings Comment for fourth quarter 2014. Cadence Bancorp, LLC (Cadence) booked strong and improved earnings results with net income of $11 million for the quarter ending December 31, 2014 compared to $3 million for the quarter ending December 31, 2013. Quarterly net interest income was nearly flat in the fourth quarter at $64 million as compared to $63 million in the year-ago quarter. However, noninterest income grew to $23 million for the quarter from $17 million in the fourth quarter of 2013. Cadence appears to be well positioned for 2015, but energy related lending exposure may curb earnings growth in the medium term.

  • At year-end 2014, some 17% of Cadence Bancorp LLC’s $6.2 billion loan portfolio was comprised of energy (oil and gas) related lending.
  • KBRA does not anticipate that Cadence will encounter difficulties related to energy lending due to sound reserve levels, careful lending strategies, and the ability of its borrowers to access additional capital.
  • Despite its exposure to the energy market, Cadence Bancorp reported increased earnings and capital levels, as well as improved efficiency and asset quality metrics.

KBRA assigned a senior long-term rating of BBB- and a subordinated rating of BB+ to Cadence Bancorp, LLC and its subsidiary intermediary bank holding company, Cadence Financial Corporation. Additionally, Cadence’s lead banking subsidiary, Cadence Bank, N.A. (the Bank), carries a KBRA senior deposit rating of BBB and a subordinated debt rating of BBB-. For more information about the credit ratings, see KBRA’s Cadence Financial Corporation rating report. The ratings are based on KBRA’s Global Bank and Bank Holding Company Rating Methodology, published on May 2, 2013. The ratings and supporting rationale are available at www.kbra.com.

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Analytical Contacts:
Kroll Bond Rating Agency
Ben Stewart, 240-394-4153
Associate
bstewart@kbra.com
or
Managing Director
Marjan Riggi, 646-731-2354
mriggi@kbra.com
or
Christopher Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com

Contacts

Analytical Contacts:
Kroll Bond Rating Agency
Ben Stewart, 240-394-4153
Associate
bstewart@kbra.com
or
Managing Director
Marjan Riggi, 646-731-2354
mriggi@kbra.com
or
Christopher Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com