this offering, could cause the market price of our Class A common stock to decline significantly and make it more difficult for us to sell equity or equity-related securities in the future
at a time and on terms that we deem appropriate. The issuance of any shares of our Class A common stock in the future also would, and equity-related securities could, dilute the percentage ownership interest held by stockholders prior to such
issuance. We may issue all of these shares without any action or approval by our stockholders, and these shares, once issued (including upon exercise of outstanding options), will be available for sale into the public market, subject to the
restrictions described below, if applicable, for affiliate holders. In connection with the merger, we intend to issue approximately 45 million additional shares of our Class A common stock to State Bank stockholders (based on the number of
State Bank shares of common stock and equity awards outstanding as of August 31, 2018).
Our future ability to pay dividends is subject to
restrictions.
We currently conduct substantially all of our operations through our subsidiaries, and a significant part of our
income is attributable to dividends from the Bank and we principally rely on the profitability of the Bank to conduct operations and satisfy obligations. Our principal source of funds to pay dividends on our common and preferred stock and service
any of our obligations are dividends received directly from our subsidiaries, including Cadence Bank and our wholly owned subsidiary Cadence Insurance. As is the case with all financial institutions, the profitability of the Bank is subject to the
fluctuating cost and availability of money, changes in interest rates, and in economic conditions in general. In addition, various federal and state statutes and regulations limit the amount of dividends that the Bank may pay to us, with or without
regulatory approval.
Holders of our Class A common stock are entitled to receive only such cash dividends as our board of directors
may declare out of funds legally available for such payments. Any declaration and payment of dividends on Class A common stock will depend upon our earnings and financial condition, liquidity and capital requirements, the general economic and
regulatory climate, our ability to service any equity or debt obligations senior to the Class A common stock, and other factors deemed relevant by the board of directors. Furthermore, consistent with our business plans, growth initiatives,
capital availability, projected liquidity needs, and other factors, we have made, and will continue to make, capital management decisions and policies that could adversely impact the amount of dividends, if any, paid to our common stockholders.
Our board of directors intends to retain earnings to promote growth and build capital. On July 20, 2018, our board of directors declared
a dividend of $0.15 per share of outstanding Class A common stock, which will be paid on September 17, 2018 to stockholders of record on the close of business on September 4, 2018. On May 13, 2018, in connection with announcing
our entry into the Merger Agreement with State Bank, we announced that we intend to further increase our quarterly cash dividend to $0.175 per share following closing of the Merger with State Bank. We are subject to certain restrictions on the
payment of cash dividends as a result of banking laws, regulations and policies. Finally, our ability to pay dividends to our stockholders depends on our receipt of dividends from the Bank, which is also subject to restrictions on dividends as a
result of banking laws, regulations and policies. Any actual future dividend payments are subject to declaration by our board of directors and will depend on a number of factors, including: (1) our historic and projected financial condition,
liquidity and results of operations, (2) our capital levels and needs, (3) tax considerations, (4) any acquisitions or potential acquisitions that we may examine, (5) statutory and regulatory prohibitions and other limitations,
(6) the terms of any credit agreements or other borrowing arrangements that restrict our ability to pay cash dividends, (7) general economic conditions and (8) other factors deemed relevant by our board of directors. See
Dividend Policy.
Our corporate governance documents, and certain corporate and banking laws applicable to us, could make a takeover
more difficult, thereby depressing the trading price of our Class A Common Stock.
Certain provisions of our certificate of
incorporation and bylaws, and corporate and federal banking laws, could delay, defer, or prevent a third party from acquiring control of our organization or conduct a proxy contest,
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