Dive Brief:
- The Federal Reserve has ended its enforcement action with Texas-based Industry Bancshares, a holding company for six Texas community banks, the central bank said Tuesday.
- The cease-and-desist order, issued in November and terminated last Thursday, had charged the bank holding company with unsafe or unsound banking practices. The $4.4 billion-asset firm was ordered to submit written plans to strengthen board oversight, enhance risk management practices, and enhance liquidity and fund management programs, among other things, for the enforcement action to be lifted.
- Cadence Bank’s acquisition of Industry Bancshares closed July 1, just over two months after the deal was announced. “Upon completion of the merger on July 1, Cadence Bank assumed Industry Bancshares, and the former entities ceased to exist. The termination of the actions in this situation is standard procedure as the regulators close Industry’s files,” Cadence Bank CEO Dan Rollins said in a statement, adding that the bank is “pleased these matters have concluded.”
Dive Insight:
Under the Fed order, Industry Bancshares was also told to submit a plan to improve its earnings and overall condition, and a capital plan addressing expected uses and sources of capital and a detailed description of its process for assessing capital adequacy.
The bank holding company struggled after soaring interest rates crushed the value of its assets, which are heavily composed of bonds.
The six bank subsidiaries of the embattled holding company have also faced regulatory scrutiny. Last year, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency each hit bank subsidiaries of Industry Bancshares with enforcement actions. Industry State Bank, Fayetteville Bank and Citizens State Bank were cited by the FDIC, while the OCC took action against The First National Bank of Shriner, Bank of Brenham and The First National Bank of Bellville.
When Cadence’s acquisition of Industry Bancshares closed July 1, Cadence said the merger “provides stability and consistency to Industry’s banking operations and customer experience, and increased liquidity to support lending in Industry’s markets.” Cadence paid $20 million in cash for Industry, a Cadence spokesperson said.
Cadence has $52 billion in assets and dual headquarters in Tupelo, Mississippi and Houston. The deal gives the combined bank about 380 branches across the South and Texas.
The Fed declined to comment.