By Ted Carter
Having gained Federal Reserve approval Tuesday, Starkville-based Cadence Financial Corp. says it expects its acquisition by Community Bancorp LLC to be completed by March 1.
The Fed approval marked the last regulatory hurdle for the takeover of Cadence, said John Boydston, director of marketing. “This completes all of the regulatory requirements for us to pursue closing of the deal,” he said, and added Cadence and its new owners will hold a press conference March 2 in Starkville.
With completion of the acquisition, the $1.6 billion regional bank holding company with operations in Mississippi, Tennessee, Alabama, Florida and Georgia will go private.
Under terms of the acquisition agreement, Cadence shareholders will receive $2.50 in cash per Cadence common share. Cadence will be the surviving corporation in the merger transaction, with its identity, charter and personnel in tact, and become a wholly owned subsidiary of Community Bancorp, a Houston-based banking investment group that has raised commitments of about $1 billion for acquisitions, primarily of community banks. Starkville is to become the hub of the new banking group’s operations as it completes acquisitions of community banks.
Cadence executives said they expect a consent order from the Office of the Comptroller of the Currency to be lifted once the acquisition is completed. The consent order mandated Cadence significantly increase its amount of Tier 1 leverage and risk-based capital. Those reserves dropped from $107.8 million in the third quarter of 2009 to $87 million in the third quarter this year.
In the third quarter, Cadence reported a net loss to common shareholders of $7.5 million, or 63 cents a diluted share. For the third quarter of 2009, Cadence had a net loss of $13.1 million, or $1.10 per diluted share.
The bank has yet to release its fourth quarter earnings. Boydston said it will release earnings sometime after the closing of the acquisition. “All of our efforts have focused on putting this together and getting it done,” he said.
The Securities & Exchange Commission says the bank can take up to 90 days to file its 10-Q financial report after the close of the quarter.
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