XML 22 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Events
12 Months Ended
Dec. 31, 2018
Subsequent Events [Abstract]  
Subsequent Events

Note 2—Subsequent Events

 

Completion of Merger with State Bank Financial Corporation

On January 1, 2019, the Company completed its previously announced merger with State Bank Financial Corporation ("State Bank") whereby State Bank merged with and into the Company. Immediately following the merger, State Bank’s wholly owned subsidiary bank, State Bank and Trust Company, merged with and into the Company’s subsidiary bank, Cadence Bank, N.A. Under the terms of the agreement, each outstanding share of State Bank common stock was exchanged for 1.271 shares of Company Class A common stock. The purchase price was approximately $826 million and was comprised solely of stock consideration. The Company’s primary reasons for the transaction were to expand its market presence and create a more diverse business mix as well as an attractive funding base and leverage operating cost through economies of scale. During 2018, the Company incurred approximately $3.0 million of acquisition costs related to this transaction. These acquisition costs are reported in merger related expenses on the Company’s Consolidated Statements of Income and Comprehensive Income. The majority of the acquisition costs for this transaction are expected to be recorded during the first half of 2019. Additional disclosures required by ASC 805 have been omitted because the information needed for the disclosures is not available due to the close proximity of the closing of this transaction with the date these financial statements are being issued. State Bank, which is headquartered in Atlanta, Georgia, operated 32 banking locations throughout Georgia. As of December 31, 2018, State Bank had total assets of $4.9 billion, total loans of $3.4 billion and total deposits of $4.1 million as reported in their regulatory filings.

Equity-Based Compensation

Subsequent to year end, the Company granted equity-based awards to select executives. Restricted stock units totaling 657,998 shares were granted, of which a portion time vest over a 3-year period and the remaining units vest based on the attainment of certain performance goals over a 3 – 4 year period. Additionally, options were granted to purchase approximately 1.6 million shares of the Company’s common stock at a weighted average price of $20.43 and which will vest over a 3-year period.

Quarterly Dividend Approval

On January 22, 2019, the Company’s Board of Directors declared a quarterly cash dividend in the amount of $0.175 per share of outstanding common stock, representing an annualized dividend of $0.70 per share.  The dividend will be paid on March 15, 2019 to holders of record of Cadence’s Class A common stock on March 1, 2019. 

Share Repurchases 

In October 2018, the Company’s Board of Directors authorized a share repurchase program in an amount of up to $50 million as part of the Company’s overall capital management strategies. In December 2018, the Board approved an amendment to the repurchase program providing for the purchase of up to 4.3 million shares not to exceed an aggregate purchase of $81 million, subject to receipt of required regulatory approvals. In January and February of 2019, the Company repurchased approximately 1.8 million shares of common stock at a cost of $34.5 million.

 

 

New Derivative Agreement

 

As discussed in Note 1, the Company uses various derivative instruments to manage its interest rate risk. In February 2019, the Company entered into a $4.0 billion notional interest rate collar with a five-year term. The interest rate collar has a purchased cap strike of 4.70%, a sold cap strike of 3.50%, a sold floor strike of 0.00%, and a purchased floor strike of 3.00%. The purchased option price was $127.8 million.