July 24, 2009 12:04:00 PM
Starkville-based Cadence Financial Corp. reported a wider-than-expected second-quarter loss, hurt mainly by higher non-interest expenses and provision for bad loans.
The financial holding company''s net loss applicable to common shareholders was $14.7 million, or $1.23 a share, compared with a net income of $1.9 million, or 16 cents a share, last year.
Two analysts on average had expected a loss of 34 cents a share, excluding items, according to Reuters Estimates.
Provision for loan losses rose to $23 million from $3.3 million in the year-ago period.
"The majority of the increase in Cadence''s non-performing loans since last year was due to real estate loans in the residential construction and development sectors, reflecting the economy''s impact on real estate based loans," the company said in a release. "In the latest quarter, the growth in non-performing loans was due largely to the middle Tennessee market where Cadence has added staff with the sole focus on managing special assets."
Cadence has operations in Mississippi, Tennessee, Alabama, Florida and Georgia.
The results come amid plans for the company to issue a stock offering that Cadence Chairman and CEO Lewis F. Mallory Jr. said could raise between $80 and $90 million for the bank.
Cadence earlier had taken TARP money from the U.S. Treasury, which now holds $44 million worth of preferred shares in Cadence. "Cadence''s second quarter 2009 loss applicable to common shareholders included $652,000 related to the preferred dividend and accretion of the discount recorded in relation to the preferred stock," the company reported.
Cadence shares were trading at $1.67 Friday morning. The stock was trading as high as $23 a share in January 2007.