Starkville, MS-based, $1.8 billion-asset Cadence Financial Corp. reported third-quarter insurance brokerage fee income dropped 25.9% to $1.06 million, down from $1.43 million in third quarter 2008, reflecting the August 31, 2009 sale of its insurance agency. Trust fee income decreased 2.8% to $527,000, down from $542,000, and comprised 7.8% of noninterest income, while insurance earnings comprised 15.8% of that revenue, which rose 8.0% to $6.73 million, up from $6.23 million, helped by $500,000 in gains tied to the insurance agency sale. Loan loss provisions, which jumped 76.9% to $20.7 million, up from $11.7 million, impacted a net interest loss of $9.12 million, compared to net interest income of $1.84 million a year ago. The company reported a net loss of $13.1 million, more than double the net loss of $5.3 million in third quarter 2008. Cadence Chairman and CEO Lewis Mallory said, “We are making real progress in reducing Cadence’s exposure to high risk real estate loans. We took aggressive steps to clean up our nonperforming loans and charged off $22.5 billion in loans in the third quarter.” Cadence has entered into an agreement with the Office of the Comptroller of the Currency (OCC) to improve its practices and raise its regulatory capital ratios for Total Risk-Based and Tier 1 Leverage Capital to 12% and 8%, respectively, by September 30, 2009. Mallory said this timetable could not be met but “we are working on steps that will lead to our compliance in the future.” In 2008, Cadence Financial reported $5.03 million in insurance brokerage income, which comprised 6.8% of its noninterest income. The company ranked 36th in insurance brokerage earnings among U.S. bank holding companies (BHCs) with assets between $1 billion and $10 billion, according to the Michael White-Prudential Bank Insurance Fee Income Report.
Monday, December 14, 2009
CADENCE FINANCIAL’S INSURANCE INCOME DROPS ON AGENCY SALE
Starkville, MS-based, $1.8 billion-asset Cadence Financial Corp. reported third-quarter insurance brokerage fee income dropped 25.9% to $1.06 million, down from $1.43 million in third quarter 2008, reflecting the August 31, 2009 sale of its insurance agency. Trust fee income decreased 2.8% to $527,000, down from $542,000, and comprised 7.8% of noninterest income, while insurance earnings comprised 15.8% of that revenue, which rose 8.0% to $6.73 million, up from $6.23 million, helped by $500,000 in gains tied to the insurance agency sale. Loan loss provisions, which jumped 76.9% to $20.7 million, up from $11.7 million, impacted a net interest loss of $9.12 million, compared to net interest income of $1.84 million a year ago. The company reported a net loss of $13.1 million, more than double the net loss of $5.3 million in third quarter 2008. Cadence Chairman and CEO Lewis Mallory said, “We are making real progress in reducing Cadence’s exposure to high risk real estate loans. We took aggressive steps to clean up our nonperforming loans and charged off $22.5 billion in loans in the third quarter.” Cadence has entered into an agreement with the Office of the Comptroller of the Currency (OCC) to improve its practices and raise its regulatory capital ratios for Total Risk-Based and Tier 1 Leverage Capital to 12% and 8%, respectively, by September 30, 2009. Mallory said this timetable could not be met but “we are working on steps that will lead to our compliance in the future.” In 2008, Cadence Financial reported $5.03 million in insurance brokerage income, which comprised 6.8% of its noninterest income. The company ranked 36th in insurance brokerage earnings among U.S. bank holding companies (BHCs) with assets between $1 billion and $10 billion, according to the Michael White-Prudential Bank Insurance Fee Income Report.
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