Street View: Cadence Bank deal for distressed Industry Bancshares effectively a branch purchase

Cadence Bank

28/04/2025 14:51

** Regional lender Cadence Bank CADE.N late Friday agreed to acquire privately held Industry Bancshares, a distressed Texas-based bank with $4.4 billion in assets for as much as $60 million

** Rapid rise in rates from 2022 punched a hole in the value of Industry's large bond portfolio, resulting in several consent orders from U.S. banking regulators

BRANCH PURCHASE

** Morgan Stanley ("overweight," PT: $33) says CADE is essentially acquiring Industry's 27 branches and deposit customer relationships

** Says key questions include CADE's plans for managing rate risk on retained bond portfolio

** KBW ("outperform," PT: $38) says deal is unique and effectively resembles a branch purchase given Industry's negative equity position

** Says deal further evidences CADE's strong regulatory standing

** Raymond James ("strong buy") says deal represents unique capital deployment opportunity given minimal consideration to be paid and earnings boost through sale of Industry's bond portfolio

** Stephens ("overweight," PT: $36) says transaction closing risk is elevated should rates move higher and push final deal value below minimum consideration

 (Reporting by Arasu Kannagi Basil in Bengaluru)

 ((ArasuKannagi.Basil@thomsonreuters.com;))