Hancock Holding Co. has confirmed that the $20 billion regional bank plans to close up to 45 branch offices by the end of the year, but has targeted only one branch in Mississippi for closing.
Closings in Louisiana will be few as well, with just two branches to be shut down in the New Orleans market.
In most instances, the branches that will close will be in localities in which Hancock and recently acquired Whitney Bank do not have strong market share, said John Hairston, Co-CEO and executive VP, in an interview late Monday afternoon. “To adequately pursue retail banking you need to have considerable market share,” he noted.
Some of the closings will be offset by the opening of new centers for private banking and business banking, two areas in which the bank has had strong growth in many of its markets, Hairston said. “We’re having wonderful success in private banking and business banking in every market.”
Employees laid off in the branch closings will have first dibs at jobs in the new centers, according to Hairston.
Hancock essentially is repositioning expenses from one line of business into others in the same market, he said.
The closings are part of an initiative to trim $50 million from non-interest expenses. Gulfport-based Hancock, which recently completed an acquisition of the slightly larger New Orleans-based Whitney Bank, reported net income of $18.5 million in the first quarter. But it emphasized at the time that “headwinds impacting overall revenue” will cause near term earnings to remain flat or slightly down from current levels.
Management expects the pressure and headwinds will continue into the foreseeable future. As a result, Hancock has determined that certain areas of the company needed to be right-sized or retooled.”
Co-CEO Carl Chaney, in the earnings report, said Hancock expects to achieve 50 percent of its targeted reduction by the end of the first quarter of 2014 and the remainder by the close of 2014.
Half of the $50 million in cost-cutting will come from the branch closings, according to Hairston.
Severance, professional fees and lease buyouts will bring one-time expenses but the scale of these costs “cannot currently be estimated with certainty,” Hancock said in the earnings report.
Hancock operates nearly 300 full-service branches in five states and employs around 5,000 workers. Louisiana and Texas branches continue to hold the Whitney Bank name.