BancorpSouth Bank Stock

Cadence Bank provides commercial banking and financial services in the United States. The company operates commercial banking, mortgage and insurance locations in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Missouri, Tennessee and Texas, including a single insurance location in Illinois and a single loan production office in Oklahoma.

Products and Services

Lending Activities

The company's lending activities include both commercial and consumer loans. Loan originations are derived from a number of sources, including direct solicitation by its loan officers, existing depositors and borrowers, builders, attorneys, walk-in customers and, in some instances, other lenders, real estate broker referrals and mortgage loan companies.

The company has established systematic procedures for approving and monitoring loans that vary depending on the size and nature of the loan, and applies these procedures in a disciplined manner. The company's loan portfolio includes commercial and industrial loans, residential real estate loans, commercial real estate loans and other consumer loans. The principal risk associated with each category of loans it makes is the creditworthiness of the borrower.

Commercial Lending

The company offers a variety of commercial loan services including term loans, lines of credit, equipment and receivable financing, energy, restaurant, healthcare, technology, Small Business Administration (SBA) and agricultural loans. A broad range of short-to-medium term commercial loans, both secured and unsecured, are made available to businesses for working capital (including inventory and receivables), business expansion (including acquisition and development of real estate and improvements), and the purchase of equipment and machinery. The company also makes construction loans to real estate developers for the acquisition, development and construction of residential and commercial properties.

Residential Consumer Lending

A portion of the company's lending activity consists of the origination of fixed and adjustable rate residential mortgage loans secured by owner-occupied property located in the company's primary market areas. Home mortgage banking is unique in that a broad geographic territory may be served by originators working from strategically placed offices either within its traditional banking facilities or from other locations. In addition, the company offers construction loans, second mortgage loans and home equity lines of credit.

The company finances the construction of individual, owner-occupied houses on the basis of written underwriting and construction loan management guidelines. First mortgage construction loans are made to qualified individual borrowers and is generally supported by a take-out commitment from a permanent lender. The company makes residential construction loans to individuals who intend to erect owner-occupied housing on a purchased parcel of real estate. The construction phase of these loans has certain risks, including the viability of the contractor, the contractor's ability to complete the project and changes in interest rates.

Mortgage lending serves to finance residential properties through long-term mortgages, both sold into the secondary market and retained in the bank portfolio. Ongoing efforts to grow the bank portfolio through the company's Right@Home product for low- to moderate-income borrowers have contributed to the department's production. Revenue is primarily derived from loan originations and servicing fees paid to the company by government-sponsored enterprises and other investors who purchase the mortgages after origination. The sale of mortgage loans to the secondary market allows the company to manage the interest rate risk related to such lending operations.

Non-Residential Consumer Lending

Non-residential consumer loans made by the company include loans for automobiles, recreation vehicles, boats, personal (secured and unsecured) and deposit account secured loans. Non-residential consumer loans are attractive to the company because they typically have a shorter term and carry higher interest rates than those charged on other types of loans. The company also issues credit cards solicited on the basis of applications received through referrals from the company's branches and other marketing efforts. The company generally has a small portfolio of credit card receivables outstanding. Credit card lines are underwritten using conservative credit criteria, including past credit history and debt-toincome ratios, similar to the credit policies applicable to other personal consumer loans.

The company grants consumer loans based on employment and financial information solicited from prospective borrowers, as well as credit records collected from various reporting agencies. Financial stability and credit history of the borrower are the primary factors the company considers in granting such loans. The availability of collateral is also a factor considered in making such loans. The geographic area of the borrower is another consideration, with preference given to borrowers in the company's primary market areas.

Shared National Credits (SNC)

The federal banking agencies define a SNC as any loan(s) extended to a borrower by a supervised institution or any of its subsidiaries and affiliates which aggregates $100 million or more and is shared by three or more institutions under a formal lending agreement or a portion of which is sold to two or more institutions, with the purchasing institutions assuming its pro rata share of the credit risk.

Deposits and Other Funding Sources

The company offers its customers a variety of deposit products, including checking accounts, savings accounts, money market accounts, time deposits, and other deposit accounts through multiple channels, including its extensive network of full-service branches, drive-through branches, ATMs, ITMs, and its online, mobile and telephone banking platforms. The company intends to continue its efforts to provide funding for its business from customer relationship deposits.

Other Services

Cadence Insurance, Inc., the company's insurance service brokerage and payroll services subsidiary, serves as an agent in the sale of commercial and personal lines of insurance with a full line of property, casualty, life, health and employee benefits products and risk management services and operates offices across the Gulf- and Mid-South regions. The company's business model centers on developing a customized experience with a strategy centered on its clients' goals related to risk management, human capital, and/or their insurance program.

Through Linscomb & Williams Inc., a subsidiary of Cadence Bank, and Cadence Trust, a division of the bank, the company offers wealth management and other fiduciary and private banking services targeted to affluent clients, including individuals, business owners, families and professional service companies. In addition to generating fiduciary and investment management fee income, these services enable it to build new relationships and expand existing relationships to grow its deposits and loans. Through its wealth management line of business and its relationships with LPL Financial LLC, the company offers financial planning, retirement services and trust and investment management by a team of seasoned advisors, providing access for affluent clients, as well as mass market clients, to a wide range of certificates of deposits, mutual funds, estate planning products, insurance and annuities, individual retirement accounts, stocks, bonds, brokerage accounts, money market accounts, investment advisory services, and other financial products and services. The focus of its wealth management line of business is on the mass affluent ($500,000 to $2 million in investible assets) and highly affluent ($2 million to $5 million in investible assets) markets.

In addition to traditional banking activities and the other products and services specified, the company provides a broad array of financial services to its customers, including debit and credit card products, treasury management services, merchant services, automated clearing house services, lock-box services, remote deposit capture services, foreign exchange services, and other treasury services.

Investment Portfolio

The company's investment portfolio includes the U.S. treasury securities; obligations of U.S. government agencies; residential pass-through, such as guaranteed by Government National Mortgage Association (GNMA) and issued by Federal National Mortgage Association (FNMA) and FHLMC; other residential mortgage-backed securities; commercial mortgage-backed securities; obligations of states and political subdivisions; other domestic debt securities; and foreign debt securities.

Regulation and Supervision

The company is subject to the supervision and examination of the Federal Deposit Insurance Corporation (FDIC) and the Mississippi Department of Banking and Consumer Finance (the MDBCF). Under federal and state laws and regulations pertaining to the safety and soundness of insured depository institutions, the FDIC and the MDBCF have the authority to compel or restrict certain actions on the company's part if they determine that it has insufficient capital or other resources, or is otherwise operating in a manner that may be deemed to be inconsistent with safe and sound banking practices. Under the Change in Bank Control Act and the regulations thereunder, a person or group must give advance notice to the FDIC before acquiring control of the company.

The company is required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations adopted by the SEC, the Public Company Accounting Oversight Board (United States) (PCAOB), and the NYSE.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), created the CFPB, which is granted broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, including the Equal Credit Opportunity Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, the Consumer Financial Privacy provisions of the Gramm-Leach-Bliley Act and certain other statutes. The CFPB has authority to prevent unfair, deceptive or abusive practices in connection with the offering of consumer financial products. The company is subject to examination by the Consumer Financial Protection Bureau (CFPB).

The company is subject to Regulation W, which comprehensively implements statutory restrictions on transactions between a bank and its affiliates. Regulation W combines the Federal Reserve's interpretations and exemptions relating to Sections 23A and 23B of the Federal Reserve Act. Regulation W and Section 23A place limits on the amount of loans or extensions of credit to, investments in, or certain other transactions with affiliates, and on the amount of advances to third parties collateralized by the securities or obligations of affiliates. Regulation W and Section 23B prohibit a bank from, among other things, engaging in certain transactions with affiliates unless the transactions are on terms substantially the same, or at least as favorable to the bank, as those prevailing at the time for comparable transactions with non-affiliated companies.

The company is also subject, in connection with its deposit, lending and leasing activities, to numerous federal and state laws aimed at protecting consumers, including the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Equal Credit Opportunity Act, the Truth in Lending Act, the Truth in Savings Act, the Fair Housing Act, the Fair Credit Reporting Act, the Electronic Funds Transfer Act, the Currency and Foreign Transactions Reporting Act, the National Flood Insurance Act, the Flood Protection Act, laws and regulations governing unfair, deceptive, and/or abusive acts and practices, the Servicemembers Civil Relief Act, the Housing and Economic Recovery Act, and the Credit Card Accountability Act, among others, as well as various state laws.

Section 13 of the BHC Act, commonly referred to as the Volcker Rule, generally prohibits the company and its subsidiaries from engaging in certain proprietary trading, and acquiring or retaining an ownership interest in or sponsoring a covered fund, all subject to certain exceptions. The Volcker Rule also specifies certain limited activities in which the company and its subsidiaries may continue to engage and requires it to maintain a compliance program. The company is affected by the policies of regulatory authorities, including the Federal Reserve, the FDIC, and the MDBCF.

History

Cadence Bank was founded in 1876. The company was incorporated in 1876.