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BancorpSouth Bank and Cadence Bank’s merger was announced in 2021, with the branding and name change to Cadence happening at the end of last year. From an operations standpoint, what has this new bank allowed for?
Legacy Cadence was more of a commercial, corporate bank. BancorpSouth came into it very focused on community banking. Those two lined up perfectly. What it’s provided us is greater access for our customers. We had about 300 locations before; now we have 400. There are people that are in Springfield that go to Florida frequently – they go on vacation, there’s people that have homes down there. We didn’t have any presence down in the Tampa area. That’s actually helped us better serve our existing customers [and] helped us pick up new customers. The addition of ITMs, interactive teller machines, that’s something we did not previously have. That’s a very costly service, but it’s a good long-term technology move. In Springfield, all six of our locations now have ITMs. It allows us to serve our customers better because now our hours are expanded. Expanded expertise. Bringing in Cadence really brings us some additional industry expertise, and specifically that’s in energy, health care and technology. Also, international services. We have a very broad array of foreign exchange services, global trade. With legacy Cadence being very much of a commercial bank, we got the benefit as we bought them in really implementing their technology throughout BancorpSouth. So that’s just expanded cash management services; that’s new products and expanded fraud protection. Cadence Business Solutions is brand new to us. It includes payroll processing, employee benefit management and human resources support and tools. There’s 30-plus banks in Springfield. We want to set ourselves apart and provide more depth of services. We actually grew our insurance platform with the merger. Legacy Cadence had some insurance operations; blending those together makes us the second largest bank-owned insurance company in the nation.
When Guaranty Bank merged with SFC Bank, officials stated their goal clearly: to have the largest local market share. Is that an aspiration for Cadence Bank? You currently hold 3% of local market share with $445 million in deposits.
That was an in-market merger. You took two banks that have decent market share, merge them together and by design, that got them to No. 2 or No. 3. To get to No. 1, that’s going to take a process, but really they’re not that far away. That’s not our focus. We want to grow our book of business organically for loans and deposits, and we’re going to do that by winning relationships. We’ve already had growth.
Where do you feel is the most opportunity within southwest Missouri to grow?
We’re definitely looking at Nixa and Ozark, Republic, the Joplin/Carthage area. We’re really trying to figure out what best would meet our customers’ needs. With technology, brick and mortar isn’t as necessary.
In recent years, we saw mortgage interest rates as low as 2% and in recent months upwards of 7%. How has that impacted the volume of your mortgages?
We definitely saw a reduction in volume when rates started moving up. That was March of last year. We’ve recently seen an uptick in mortgage activity this year. The available inventory is slowly increasing. That’s a combination of existing homes where people were maybe hesitant to sell in the past. We’re also seeing the supply of new homes begin to increase. That’s a function of rates. There’s less people chasing new homes at this point with higher rates. We have more mortgage options than we’ve ever had.
We have an appetite to do portfolio in-house mortgages. They’ve expanded our lineup of mortgage products. You can get an in-house mortgage at about 1% lower than what you kind of threw out there. It’s an adjustable-rate mortgage. That’s what we’re seeing people use to get into homes.
Do you have a sense if the Federal Reserve will start easing off its rate hikes?
We expect the rate policy to stabilize this year. The Fed’s primary focus has been on getting inflation under control. The recent data that we’ve seen shows that inflation is normalizing. The Fed meets again (Jan. 31). Right now, we’re expecting the Fed to raise rates again. The market is currently expecting the Fed will go with a smaller increase, possibly 25 basis points. The Fed could surprise us with a larger increase similar to the 50 basis points they did in December.
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