Cadence Bancorp. is facing a putative class-action lawsuit over alleged misleading statements in the year preceding its second-quarter results on July 22.
The suit focuses on the company's disclosure that it recorded second quarter provision for credit losses of $28.9 million and net charge-offs of $18.6 million, up from $1.3 million and $2.2 million, respectively. The company lost more than 19% of its market value on the news.
The lawsuit contends that the defendants failed to disclose to investors that the company lacked adequate internal controls to assess credit risk and that, as a result, their positive statements about the company's business, operations and prospects were materially misleading.
Chairman and CEO Paul Murphy and CFO Valerie Toalson were also named as defendants.
Cadence Bancorp. declined to comment on the litigation to S&P Global Market Intelligence.
