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Venerable financial institution remains optimistic

Hancock faces leadership change during economic crisis

Just as with banks across the state and nation, Hancock Holding Company is facing daunting challenges as the economy and the banking industry falter. However, this is especially difficult for Hancock Holding, the parent company of Hancock Bank, as it goes through a major leadership change.

In November, Leo Seal Jr., an icon who succeeded his father as president of the bank in 1963, died. Seal’s passing left the bank mourning and large management shoes to fill.

This was compounded by the retirement of Hancock Holding chairman George Schloegel, who left at the end of the year as a 52-year veteran of the bank, though he remains chairman of the parent company.

Carl J. Chaney, president & CEO, Hancock Holding Company, said, “Without question, our country is facing one the most challenging economic times in modern history. However, this is not Hancock’s first exposure to an economic crisis. As a 110-year-old company, we have tremendous institutional knowledge of how to steer through trying times, whether economic or natural disasters.

“George, Leo and Leo’s father, Leo Sr., sincerely believed in managing Hancock with a very conservative risk profile such that when ‘evil days’ appeared, the company would flourish. They instilled that core ideology — protect the customers’ deposits through strength and stability — in the management team who lead Hancock today.

“We are using the same roadmap to navigate economically troubled waters in 2009 that Hancock Bank has been used for more than a century. As evidenced by Hancock’s recent ranking by Bank Director magazine as the eighth best bank in the nation for 2008, the roadmap continues to work.”

Hancock was indeed well prepared for the leadership transition. In 2006, Chaney and John M. Hairston were approved as CEOs by the boards of both the holding company and the bank. Last December, Hancock announced it had further defined the two men’s roles — Chaney was elected president and CEO of Hancock Holding, Hancock Bank and all subsidiaries while Hairston was named CEO and COO of Hancock Holding.

Both are proven veterans. Chaney joined Hancock as CFO in 1998, and Hairston came to the financial institution in 1992 and was named COO two years later.

Their leadership skills have been invaluable as the economy tanked during final quarter of 2008 and continues to falter in 2009.

On Sept. 19, 2008, Hancock Holding’s shares were trading at $69.77 per share, a high for 2008. By Jan. 21, 2009, shares were trading at a 52-week low of $24.53, a more than 35 percent decrease.

On Jan. 21, Hancock reported net income for the fourth quarter of fiscal year 2008 was $8.3 million, a decrease of nearly 50 percent over the same period in 2007, and earnings for the year were $65.4 million, an 11.5 percent slide from the prior year.

However, there was plenty of good news during this period. Last November and for the 76th consecutive quarter, BauerFinancial named Hancock Bank one of the most financially-sound financial institutions in the nation. Just a day after this announcement, Hancock said, almost defiantly, it would refuse government bailout money under the U.S. Treasury Department’s Troubled Asset Relief Program.

Hancock has weathered this personal and professional loss and a troubled economy with admirable spirit. Hairston characterized the mood at Hancock as “extremely positive.”

“We were blessed by our customers with more than a billion dollars of growth in total assets in 2008 alone,” Hairston added. “Thousands of customers fled troubled banks who took too much risk during the good times. Those customers trust us to take care of their business unimpeded. We continue to make loans and invest in people and businesses.

“These results aren’t new to Hancock, as we have a history of growing the greatest during the worst of economic times. We refer to that as ‘flight to quality.’”

As to the fall in earnings and stock price, Hairston said, “Our conservative operating philosophy requires us to deal with issues as they arise. In the fourth quarter of 2008, we took a very proactive approach to review the loan portfolio for any potential problems, work with those customers to understand their troubles and deal properly with those risks through our loan loss reserve. Consequently, our earnings were less than the third quarter but were still much higher than our regional banking competitors and the top-performing banks in our size range across the nation.

“We share that good news with our customers and shareholders. We also make sure they know we didn’t take a dime of government bailout money. We have plenty of capital, plenty of liquidity and don’t need anyone to bail us out.

Chaney said Hancock is guardedly optimistic about 2009. The Coast region is generally outperforming the rest of the nation and markets are performing comparatively well.

“Our associates are not looking over their shoulder to see if the company will survive or if their jobs are at risk. They know they are secure and the company is rock-solid, so they can focus without interruption on their customers and making people’s financial hopes and dreams a reality.

“If we can continue that focus through the dark days of 2009, then this year will be another remarkable success for Hancock, its associates, customers and shareholders.

“Our vision is to continue creating opportunities for people and businesses in the markets we serve. We do that by continuing to keep Hancock a strong and stable organization. Our vision also includes expanding our footprint through acquisitions as we are well positioned to take advantage of opportunities that this economic cycle will present.

“At the end of the day, we expect to continue to be ranked as one of the nation’s strongest, safest financial institutions.”

Contact MBJ staff writer Wally Northway at wally.northway@msbusiness.com.


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