-
Hancock, of Gulfport, Miss., is buying the larger New Orleans-based Whitney. Hancock would gain an entree into Texas and Louisiana and a bigger presence in Florida and Mississippi.
December 22 -
Hancock Holding of Gulfport, Miss., has won all federal approvals to acquire Whitney Holding in New Orleans, setting the stage for the deal to close on June 4 and create a $20 billion-asset company with more than 300 branches stretching from Florida to Texas.
May 16 -
Hancock Holding Co. in Gulfport, Miss., said its earnings rose 11% from a year earlier. The $8.31 billion-asset company posted earnings of $15.3 million, compared with $13.8 million a year earlier.
April 20 -
The Justice Department said Friday that it will not challenge Hancock Holding's deal to acquire Whitney Holding of New Orleans as long as the companies sell eight branches.
April 1
Carl Chaney, the president and chief executive of Hancock Holding Co., just closed the deal of his career. Next up?
Reversing a recent credit rating downgrade and going back on the prowl for more acquisitions, he said, now that Hancock's purchase of Gulf Coast rival Whitney Holding Corp. is official.
Both things depend on a smooth integration of Whitney's 150 branches in five states. Moody's Investors Service this month downgraded Hancock's long-term and short-term ratings: It said Hancock could struggle absorbing the bigger Whitney, which has lost money for two years.
Chaney's team intends to prove Moody's wrong, he told American Banker in an interview. Having tapped two integration consultants, Hancock is on track to blend in Whitney's back-office systems by January, he said. It should be able to start weighing possible deals in the first quarter.
"We look forward to successfully integrating this transaction and inviting Moody's back in at the appropriate time and getting our ratings back up," Chaney said.
Chaney, 49, was a bank mergers and acquisitions attorney prior to becoming a bank executive. He has been CEO of Hancock, of Gulfport, Miss., since 2006, and president since 2008.
Whitney, of New Orleans, had been in somewhat-heated talks with another buyer for months when Chaney sent an unsolicited email to Whitney's CEO in mid-December, inquiring about merging, according to regulatory filings. The deal was announced less than a week later.
Hancock is now one of the country's 50 largest banks, with $20 billion of assets and nearly 300 branches along the Gulf Coast from Texas to Florida. The following is an edited transcript of the conversation with Chaney last week:
How did the downgrade come about? What happens now?
CARL CHANEY: It is very customary when a publicly traded company does an acquisition that whoever rates you, they go in look at the transaction. DBRS and Fitch both upgraded our ratings, and Moody's downgraded. While we were a little disappointed it wasn't a real surprise. Moody's did come out and say, though, that the outlook was stable, which means that they believe that there is a real opportunity to upgrade. We take that on as an opportunity. We look forward to successfully integrating this transaction and inviting Moody's back in at the appropriate time and getting our ratings back up to where we're accustomed to.
How do you intend to manage the integration?
We're very confident in our ability to successfully integrate. In early January [we talked to] different integration firms and ended up selecting Accenture, who we believe is probably the very best in the country. We didn't stop there, though. We went and actually went and hired KPMG to also work, basically, from an auditing standpoint following behind to make sure nothing falls through the cracks. We have two integration firms: one leading the effort, and the second one auditing our steps.
Things are well on schedule. Customer from both bank today can go to each other's. We have 400 ATMs across five states. We expect to have the back office systems completely integrated in January. And we are well on our way, and on time in our scheduling right now.
Any more deals for Hancock after this one?
We'll continue to expand. We're going to focus all of our efforts, though, right now on taking care of our customers, and taking care of our associates. If you take care of those two groups than the third important aspect, which is shareholders, automatically gets taken care of. We're focused on that for the balance of this calendar year.
I think it's very fair to say in the first quarter of next year we will be in a position where we would then be able to look at other opportunities to expand. But it's going to be strategic. We have no intention of growing just for the sake of growing. It has to be strategic.
What's your outlook for failed-bank deals?
We've only had 360-something banks to fail in this cycle. But you've got 860-something problem banks. Not all of those are going to fail by any means. But let's just say half of them — that's another 400 banks. There is still a lot of resolution that has to take place by the FDIC.
How about non-failed deal?
In the beginning of 2012, I think you'll start to see a real consolidation among small community banks: Banks of less than $1 billion, particularly less than $500 million. Those banks are going to come together and realize that in order to remain competitive, to be able to afford compliance and regulatory costs, to be able to provide the necessary technology that then provides the right products that can be competitive, they are going to have to find other banks that are three, four, $500 million in size.
You end up with about $1 billion in assets. Then, I think, you're at a size where those banks can effectively afford the compliance costs, the regulatory costs the technology costs. They will also be able to deal with the hit in revenue that the Durbin amendment is going to provide in just a few weeks.
