Hancock shifting HQ to N.O. with Whitney merger

BY: Greg LaRose, Editor, City Business

Hancock Bank will move its headquarters from Gulfport to New Orleans under Hancock’s merger acquisition of regional competitor Whitney National Bank in a $1.5 billion stock-for-stock transaction announced Wednesday.
Hancock CEO Carl Chaney said that although the headquarters of the combined companies will be located in New Orleans, much of Hancock’s back office operations will remain at its Gulfport base,
Hancock
The boards for the parent companies of Hancock Bank and Whitney National Bank unanimously approved the transaction that still requires regulatory and shareholder approval.
The Whitney name will remain in Louisiana and Texas, and Hancock will switch the brand on its 50 branches in Louisiana to Whitney. Whitney’s branches in Mississippi, Alabama and Florida will become Hancock locations.
No immediate closures of branches will occur, but the retail presence of the combined companies will be evaluated, Chaney said.
"There are some instances where you have a Whitney branch operating across the street from a Hancock branch," he said. "Where that happens, we’ll look at which branch is best to keep open from a shareholder’s perspective. And in some instances, that might be a Whitney branch."
Chaney said any reduction in back office or retail employees could be offset by Hancock’s plans for continued expansion.
John Hope III, Whitney’s CEO and chairman, said that negotiations with Hancock have been "going on for several months," which would predate the bank’s announced sale of $180 million in problem loans from its Florida branches. Chaney said that sale, and another $100 million in troubled assets designated for sale, were not conditions of the deal announced today.
To account for any additional problem loans, Hancock declared a $447 million credit mark to cover potential losses. The amount is roughly three times the amount of problem loans Hancock expects to acquire from Whitney, which includes a 6 percent discount on those assets.
The $11.5 billion Whitney reported non-current loans and leases of $455.9 million in the quarter, according to the FDIC.
Hancock, which did an Federal Deposit Insurance Corp. assisted acquisition of Peoples First Community Bank of Panama Beach, Fla., in December 2009, reported non-current loans and leases of $222.9 million in non-current loans in the third quarter, the FDIC said.
Chaney said the neither the FDIC nor the U.S. Treasury took part in the negotiations. The Treasury provided $300 million in aid to Whitney from its Troubled Asset Relief Program in exchange for preferred bank stock and warrants. Chaney said the $5.3 billion Hancock plans to repurchase that stock once its deal for Whitney closes late in the second quarter of 2011.

Under terms of the agreement, Whitney shareholders will receive 0.418 shares of Hancock stock in exchange for each share of Whitney common stock. The value of Whitney shares would be $15.48 based on Hancock’s closing price of $37.04 on the Nasdaq exchange Tuesday, a 42 percent premium to Whitney’s closing price of $10.87.
The combined companies will have approximately $20 billion in total assets, $16 billion in deposits, $12 billion in loans, 305 branches, 390 ATMs and almost 5,000 employees in Louisiana, Mississippi, Alabama, Florida and Texas.

A New Orleans bank that has been part of the city since 1883 will come under the control of one of its regional competitors in a deal announced yesterday. The boards for the parent companies of Whitney National Bank and Hancock Bank unanimously approved the $1.5 billion stock-for-stock transaction that still requires regulatory and shareholder approval.

The Whitney name will remain in Louisiana and Texas, and Hancock will switch the brand on its 50 branches in Louisiana to Whitney. Whitney’s branches in Mississippi, Alabama and Florida will become Hancock locations. The headquarters of the combined companies will be located in New Orleans, although much of Hancock’s back office operations will remain at its Gulfport, Miss., base, CEO Carl Chaney said.

There will be no immediate closures of branches, but the retail presence of the combined companies will be evaluated, Chaney said.

"There are some instances where you have a Whitney branch operating across the street from a Hancock branch," he said. "Where that happens, we’ll look at which branch is best to keep open from a shareholder’s perspective. And in some instances, that might be a Whitney branch."

Chaney said any reduction in back office or retail employees could be offset by Hancock’s plans for continued expansion.

John Hope III, Whitney’s CEO and chairman, said that negotiations with Hancock have been "going on for several months," which would predate the bank’s announced sale of $180 million in problem loans from its Florida branches. Chaney said that sale, and another $100 million in troubled assets designated for sale, were not conditions of the deal announced today.

To account for any additional problem loans, Hancock declared a $447 million credit mark to cover potential losses. The amount is roughly three times the amount of problem loans Hancock expects to acquire from Whitney, which includes a 6 percent discount on those assets.

Chaney said the neither the Federal Deposit Insurance Corp. nor the U.S. Treasury were parties to the negotiations. The Treasury provided $300 million in aid to Whitney from its Troubled Asset Relief Program in exchange for preferred bank stock and warrants. Chaney said Hancock plans to repurchase that stock once its deal for Whitney closes late in the second quarter of 2011.

Under terms of the agreement, Whitney shareholders will received 0.418 shares of Hancock stock in exchange for each share of Whitney common stock. The value of Whitney shares would be $15.48 based on Hancock’s closing price of $37.04 on the Nasdaq exchange Tuesday, a 42 percent premium to Whitney’s closing price of $10.87.
The combined companies will have approximately $20 billion in total assets, $16 billion in deposits, $12 billion in loans, 305 branches, 390 ATMs and almost 5,000 employees in Louisiana, Mississippi, Alabama, Florida and Texas.
Paul Guichet, Hancock VP & investor relations manager, said a proxy statement to shareholders will detail the operational and management structure of the newly merged banks.
MBJ Staff Writer Ted Carter contributed to this report.

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