Cadence Bancorp To Merge With State Bank Financial

Cadence Bancorp (CADE) and State Bank Financial (STBZ) jointly announced the entry into a definitive merger agreement in a stock-for-stock transaction, creating a combined organization with $16B in assets, $12B in loans, $13B in deposits and approximately 100 branches serving Texas, Georgia, Florida, Alabama, Tennessee and Mississippi, based on the companies' balance sheets as of March 31, 2018.

Under the terms of the merger agreement, State Bank Financial shareholders will receive 1.160 shares of Cadence Bancorp Class A common stock for each share of State Bank common stock, valuing the transaction at approximately $1.4B based on the closing share price of Cadence of $30.23 on May 11, 2018.

After closing, legacy Cadence and State Bank shareholders will collectively own approximately 65% and 35% of the combined company, respectively. Cadence expects this acquisition to be ~7% accretive to earnings per common share in 2020, excluding one-time charges, and expects the transaction to deliver strong returns on capital.

The transaction is expected to produce approximately 4% tangible book value per share dilution at closing with an earnback period of less than three years. The merger agreement has been unanimously approved by the boards of both companies. Closing is subject to customary approvals by regulators and the shareholders of State Bank, and is expected to occur in the fourth quarter of 2018.

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