BXS - Cadence Bancorp Finds Its Buyer

• BancorpSouth and Cadence announce a merger of equals that will see BancorpSouth acquire Cadence for 0.70 shares of BXS stock and a $1.25/share special dividend to CADE shareholders.
• Cadence will meaningfully boost BXS' presence in the attractive Houston MSA, while also adding exposure to growth markets in Georgia and Florida, as well as a strong C&I lending operation.
• Cadence's higher exposure to energy and restaurant lending brings in more credit risk, but the high loan mark (3.75%) reflects that risk, and the deal doesn't have obvious integration issues.
• This is a solid long-term move for BXS, and while CADE shareholders may be disappointed at the initial valuation, the stock-for-stock structure gives them leverage to longer-term upside.

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