Responding to the Federal Reserve raising its benchmark interest rate, Cadence Bank will increase its prime rate from 3.25 percent to 3.50 percent, effective Friday.
The Houston-based privately held bank formally headquarterd in Starkville said its rate hike followed the Fed Board of Governor’s unanimous approval of an increase between 0.25 percent and 0.50 percent, an increase from near zero. The vote marked the first time the Fed has raised its rate since December 2008.
The Fed emphasized it will likely lift it gradually thereafter in a test of the economy’s capacity to stand on its own with less support from super-easy monetary policy.
“The [Fed] expects economic conditions will evolve in a manner that will warrant only gradual increases in the fed funds rate,” the Fed said in a statement following its two-day meeting. To hammer home this point, officials added in their statement that they anticipated “gradual adjustments” in rates.
The $8.3 billion Cadence Bank, after its purchase by private investors, moved its headquarters out of Starkville to Birmingham four years ago Cadence later moved the HQ to Houston, home of the investment pool that purchased the then-publicly held bank after it got into hot water with regulators over inadequate capital ratios.
Cadence still has a significant presence in Northeast Mississippi, including back office operations in Starkville. In addition to Mississippi, it has more than 65 locations in Alabama, Florida, Tennessee and Texas.