** Regional lender Cadence Bank CADE.N late Friday agreed to acquire privately held Industry Bancshares, a distressed Texas-based bank with $4.4 billion in assets for as much as $60 million
** Rapid rise in rates from 2022 punched a hole in the value of Industry's large bond portfolio, resulting in several consent orders from U.S. banking regulators
BRANCH PURCHASE
** Morgan Stanley ("overweight," PT: $33) says CADE is essentially acquiring Industry's 27 branches and deposit customer relationships
** Says key questions include CADE's plans for managing rate risk on retained bond portfolio
** KBW ("outperform," PT: $38) says deal is unique and effectively resembles a branch purchase given Industry's negative equity position
** Says deal further evidences CADE's strong regulatory standing
** Raymond James ("strong buy") says deal represents unique capital deployment opportunity given minimal consideration to be paid and earnings boost through sale of Industry's bond portfolio
** Stephens ("overweight," PT: $36) says transaction closing risk is elevated should rates move higher and push final deal value below minimum consideration
(Reporting by Arasu Kannagi Basil in Bengaluru)
((ArasuKannagi.Basil@thomsonreuters.com;))
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