In latest move, Cadence reorganizes its management structure

Cadence Bank, which spent much of last year trying to reduce expenses, has eliminated layers of management and expanded the responsibilities of several executives, including its president.

Among the key changes: President Chris Bagley is now also serving as chief credit officer and Billy Braddock has shifted from chief credit officer to chief banking officer, the Tupelo, Mississippi, company announced in a press release. In addition, Chief Financial Officer Valerie Toalson, who will stay in that role, is also now in charge of Cadence's mortgage and wealth management businesses, including asset management and trusts as well as investment services.

The $50 billion-asset company is also moving a revenue-generating business line, the financial institutions group, under the umbrella of the corporate treasury department, which Toalson oversees. The financial institutions group provides services to other financial institutions.

As a result of the changes, most of which took effect on April 1, Toalson's new title will be CFO and president of banking services, the release said.

Cadence, which is the product of an October 2021 merger between BancorpSouth Bank in Tupelo, and Cadence Bancorp. in Dallas, has shrunk its management committee from 15 to 12 members in the two-and-a-half years since the deal was finalized, according to the release.

In addition to rolling the responsibilities of the chief credit officer and the president of banking services into other existing roles, the company eliminated the role of vice chair in 2023.

"This organizational realignment afforded us the opportunity to simplify our operating model and further the development of some of our most senior leaders," CEO Dan Rollins said in the release. In addition, the changes "provide a foundation for driving growth and efficiencies, while strengthening our focus on putting customers at the center of our business," Rollins added.

The overhaul of Cadence's management structure is the latest in a series of moves that executives say will position the Southeast regional bank for growth. Last year, it sold its insurance business, closed 35 branches and completed a voluntary retirement buyout program that reduced headcount by nearly 500.

The sale of Cadence Insurance in late November generated an after-tax gain of about $520 million of additional capital. In December, the company used about half of that to restructure about one-quarter of its available-for-sale securities portfolio. Executives have said taking such actions will have a positive impact on net interest income and the common equity tier 1 ratio.

Cadence has struggled to meet certain financial targets that it set when the merger was announced. For instance, its adjusted efficiency ratio was 66% in the fourth quarter, much higher than the estimated 54.4% efficiency ratio the post-merger bank had hoped to realize by 2022.

Rollins has been candid about his dissatisfaction, saying the bank must improve performance.

The management restructure "streamlines the organization and eliminates management layers to expedite decision making, enhance accountability and further a laser-focused approach to client relationships," the bank said in the press release announcing the reorganization.

Some of the changes stem from retirements and departures. 

Sheila Ray, who is Cadence's chief talent officer, plans to retire in June and her responsibilities will be shifted to Jerrell Moore, who was hired by Cadence last year as chief diversity officer. 

Given Ray's pending retirement, Moore will move into the newly created role of chief human resources and diversity officer, effective May 1, a spokesperson for Cadence said.

Toalson takes on the president of banking services role following the retirement of Mike Meyer in December, the press release said. In addition, Braddock is succeeding Hank Holmes in the chief banking officer role due to Holmes' decision to pursue other opportunities in entrepreneurship, startup ventures and building organizations, according to the release. 

Holmes has assumed the role of special advisor to Braddock through June 30, the release said. Braddock, who will continue to be part of the company's management and executive management committees, will continue to lead the corporate bank and also now oversee the treasury management and private banking divisions, the release said.

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The Southeast regional bank plans to use the deal's sizable proceeds to pay down wholesale borrowings and restructure its securities portfolio. Numerous banks have made similar moves in recent months.

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Meanwhile, Cathy Freeman, who is Cadence's chief administrative officer, will remain in that role while taking on responsibilities for the company's "experience office," which was previously overseen by Rollins, the spokesperson said. That group manages customer and employee experiences, the spokesperson said.

Toalson, Bagley, Braddock, Freeman and Moore will report directly to Rollins, as will Shanna Kusdzal, Cadence's chief legal officer, and Ty Lambert, chief risk officer, the release said.

Mary Katherine Franklin, who was a private banking executive, is now chief credit officer of the corporate bank, according to the release. Franklin, who is not a member of the management committee, will report to Bagley, as will Jeff Jaggers, chief operating officer; Brian Walhood, president of community banking; and Keith Vandersteeg, chief lending officer, the release said.

The final member of the management committee, Kevin McMahon, who is the deputy chief operating officer and chief information officer, will continue to report to Jaggers, the release said.

Cadence's management restructuring is similar to what's been rolled out at other larger banks. Citigroup has been reducing its management layers from 13 to eight, completely eliminating a layer between CEO Jane Fraser and the heads of the company's five main businesses.

Truist Financial in Charlotte, North Carolina, has also reorganized its leadership structure as it tries to improve its efficiency and performance. Last fall, it reworked its 11-member executive management team into a 21-person "operating council" that was designed, in part, to help break down silos, executives said.