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If the second quarter's results are any indication, Hancock Holding Co.'s acquisition of Whitney Holding Co. is destined to be a crowd pleaser.
July 22 -
First Bancshares in Hattiesburg, Miss., is buying seven Whitney National Bank branches in a deal that would more than double its branch network along the Gulf Coast and move it into a new market in Louisiana.
May 18 -
Four banks based in the state have agreed to sell since December, when Hancock Holding of Gulfport, Miss., said it would buy Whitney, a New Orleans stalwart.
April 6
A spirited fight for bankers and customers is brewing along the Gulf Coast as two of the region's biggest community banks aggressively pursue growth.
Hancock Holding Co.'s June purchase of Whitney Holding Corp. of New Orleans has elevated competition in Louisiana with IberiaBank Corp. in Lafayette, La., particularly for business loans.
"Sometimes the level of competition gets amplified because the party that's not involved in an acquisition sees an opportunity to take customers because of inherit disruption," said Kevin Fitzsimmons, an analyst at Sandler O'Neill & Partners LP.
In interviews, the companies' chief executives agreed that neither really viewed the other as a competitor until Whitney catapulted Hancock into a major player in Louisiana.
"Until the Whitney acquisition, we really hadn't overlapped and been face-to-face competitors for any meaningful extent," said Carl Chaney, Hancock's president and chief executive. "There are only so many good loans out there so there is clearly a strong competition between the two but it's a very professional competition."
"I wouldn't say we view Hancock as a competitor," said Daryl Byrd, IberiaBank's president and chief executive. "We're in so many markets that, frankly, they're not in" and so there are a "lot of places where we don't compete at all."
Growth trajectories have played a key role in this relatively new rivalry. Both banks have doubled in size since 2008, and analysts said each has taken harder swings at the other in terms of acquisitions and recruiting commercial lenders. With no intention of slowing down, analysts say the pair could be the next birthing of a rivalry not seen since First Union Corp. and NationsBank Corp. in the 1990s.
A reason why Hancock and IberiaBank are viewed by analysts as two of the toughest regional competitors is because very few regions have two community banks of similar size and markets in a strong growth position.
"In so many of these markets, it's really more about the community banks vis-a-vis the large banks," said Jeff Davis, an analyst at Guggenheim Securities.
The level of competition is heightened because of similarities that exist between the emerging powerhouses.
As IberiaBank expanded in New Orleans, it did so "on a very targeted basis that was not across the board. Their underwriting and level of conservatism is very comparable," said Joe Exnicios, a former chief risk officer at Whitney who now serves as the bank's president as part of Hancock.
Continued consoliation around Louisiana is helping both banks bulk up further by distributing employees between IberiaBank and Hancock. "IberiaBank has been aggressive and, to some extent, fairly successful hiring lenders," Davis said.
"This is a typical New Orleans gumbo ...contrary to what analysts might think as unhealthy competition, everybody knows everybody," Exnicios said. "It's good, healthy competition among people who know each other and know our strengths."
Davis said Whitney was known as the "blue-chip commercial lender" in New Orleans but "IberiaBank, in its own right, has very much emerged as its own regional institution."
Since 2009, IberiaBank has bought seven banks. Hancock's deals consist of a failed Florida bank and its $1.5 billion purchase of Whitney. IberiaBank has added $6 billion in assets from its deals since 2009; Hancock has gained $13 billion from acquisitions.
Fitzsimmons said Hancock has taken "very deliberate steps" to shield itself from losing key customers and lenders, including an effort to have officers sign three-year contracts.
Chaney said they have only lost two loan executives who had been at Hancock but left after the Whitney deal closed. Hancock has hired two separate integration firms to help with Whitney, allowing loan officers to focus on growth.
"I am very, very pleased with where we are and I'm very confident that we will be able to complete the integration seamlessly to our customers," said Chaney, who expects Whitney to be fully integrated early next year. "While doing that, we have an even larger work force out calling on customers and prospective customers."
New Orleans isn't the only focal point. Chaney and Byrd said they are also interested in Houston.
Analysts said the most challenging part for Hancock will involve integrating and maintaining the business it gained from Whitney while trying to grow organically. Company insiders also remain cautiously optimistic.
"It's only been 90 days" since the Whitney merger closed "but I don't want to be so bold to plant a victory flag," Exnicios said.
Hancock has not lost any loan officers or credit administration officers from Whitney. Exnicios said there were "no blips at all" when a wave of credits came up for renewal in June, around the time that the deal closed.
"The commitment of the relationship officers, all of whom have chosen to stay, have helped retain relationships long into the future," he said. "But we all have to pass the test of time."
