NEW YORK--(BUSINESS WIRE)--May 14, 2018--Kroll Bond Rating Agency (KBRA) releases a comment on (NYSE: CADE, “Cadence” or “the Company”), which announced a definitive merger agreement with State Bank Financial Corporation (NASDAQ: STBZ or “State Bank”), headquartered in Atlanta, Georgia. Following the close of the transaction, State Bank and its subsidiary, State Bank and Trust Company, will be merged with and into Cadence. The all-stock transaction is valued at approximately $1.4 billion, or 2.5x tangible book value, which represents a 6% premium to State Bank’s May 11 th closing stock price. The transaction was approved by both companies’ boards and is expected to close in the fourth quarter of 2018 (pending regulatory approval) with an anticipated Q1’19 system conversion.

State Bank reported $4.9 billion in consolidated assets, $3.7 billion in loans, and deposits totaling $4.2 billion as of March 31, 2018. Following the close of this significant acquisition, the combined company’s pro forma total assets would be approximately $16 billion, with loans and deposits increasing to $12 and $13 billion, respectively. In KBRA’s opinion, the deal is potentially a credit positive to CADE in the medium-term, logically expanding its footprint and strengthening the Company’s deposit profile, while adding product lines that augment current offerings.

In October 2017, KBRA affirmed Cadence Bancorporation’s, (and its ultimate Parent company, Cadence Bancorp, LLC’s) ratings, including senior unsecured and subordinated debt ratings of BBB- and BB+, respectively. The subsidiary bank, Cadence Bank, N.A.’s, deposit and senior unsecured debt ratings of BBB and subordinated debt rating of BBB- were also affirmed at the same time. Additionally, the Outlook on all long-term ratings was changed to Positive from Stable, reflecting significant improvements in capitalization and earnings, as well as a positive asset quality trajectory and the strength of CADE’s management in navigating the recent energy downturn. Though KBRA does not rate State Bank Financial Corporation, it appears to be in sound financial condition as evidenced by KBRA’s financial strength rating of ‘B’ for the subsidiary bank, State Bank and Trust Company.

The ratings are based on KBRA’s published on February 19, 2016.

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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

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SOURCE: Kroll Bond Rating Agency

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