Trustmark Corp. decided to buy its troubled competitor, Cadence Financial Corp., because Cadence already had written off tens of millions of bad loans and the company fit Trustmark’s profile for acquisition targets, Trustmark’s head said Thursday.

Cadence, based in Starkville, Miss., missed a Sunday deadline set by the federal Office of the Comptroller to raise its capital to a Tier 1 ratio of 9 percent — a measure of a bank’s solvency — and a possible lead-in to closure.

Late Wednesday, Jackson, Miss.-based Trustmark agreed to exchange $23.6 million in stock for Cadence stock, or about $2 per share, in a tax-free deal. That values Cadence stock at around $2 per share.

Trustmark also said it offered to pay $30 million in cash, plus accrued and unpaid dividends, for Cadence preferred shares issued to the U.S. Treasury. Last year, Cadence received money from the government’s troubled asset relief program.

During a conference call with investment analysts, Trustmark CEO Richard Hickson said a study of Cadence’s troubled loans led his company to believe that all problems were manageable, and the acquisition would benefit shareholders of both companies.

He said Trustmark was interested in only acquiring banks with a solid, long institutional history within its market, such as Cadence.

“We feel that this merger represents a very strategic opportunity for Trustmark that happens only once in a few decades,” Hickson said.

Cadence has 38 offices in Mississippi, Alabama, Tennessee, Florida and Georgia, with $1.1 billion in loans, $1.5 billion in deposits and about $1.9 billion in assets. But the last few years have spelled trouble for the company, mostly because of sour real estate loans that have plagued banking companies nationwide. The company posted a $112.2 million loss last year.

According to data supplied by Trustmark, $51 million of Cadence’s current total of $69.3 million in nonperforming loans are in the sectors of construction and land development and commercial real estate. The middle Tennessee region comprises 41 percent of the nonperforming loans, followed by Florida with 18 percent and Memphis with 16 percent.

But Trustmark officials said Cadence had been active in chopping its problem loans by decreasing its loan portfolio by 25.4 percent since the beginning of 2008 and charged off $95 million in bad loans over the same time.

Trustmark has 150 banking offices in Florida, Mississippi, Tennessee and Texas. Hickson said the acquisition would bring Trustmark into Birmingham, Ala., Nashville, Tenn., Sarasota, Fla. and Tuscaloosa Ala.

“Trustmark was absolutely the best option for our shareholders,” said Cadence CEO Lewis Mallory Jr. “We are elated with our new partner and we want to contribute to it and make it successful.”

The deal must be approved by Cadence shareholders and banking regulators. Trustmark said it intends to close the deal during the first quarter of 2011.

In Thursday trading, Cadence shares jumped 25 percent, or 41 cents, to $2.05. The shares have traded in a 52-week range of $1.01 to $4.08. Trustmark shares rose 5.8 percent, or $1.19 to $21.64. Those shares have traded in a 52-week range of $18.17 to $26.88.