A year after expanding eastward into Jacksonville with the purchase of Peoples First Community Bank, Gulfport, Miss.-based Hanco*ck Holding Co. announced a deal to expand more to the west.
The parent company of Hanco*ck Bank announced Wednesday an agreement to buy New Orleans-based Whitney Holding Corp. in a stock-for-stock transaction valued at about $1.5 billion.
The merger will move Hanco*ck into Texas for the first time and create a bank with about $20 billion in assets and 305 branches across Florida, Alabama, Mississippi, Louisiana and Texas.
"We believe this agreement presents an unprecedented opportunity to enhance shareholder value and strengthen the financial options available to individuals and businesses from Texas to Central Florida," Hanco*ck CEO Carl Chaney said in a news release.
Hanco*ck entered the Jacksonville market in December 2009 when it purchased 29 branches from the failed People First, which was based in Panama City. That deal also moved Hanco*ck into the Orlando market.
The bank has four branches in Northeast Florida. But Chaney told the Times-Union a year ago that the company would look for opportunities to grow in the Jacksonville market by acquisitions or building new branches.
Whitney reported a net loss of $65.5 million in the first nine months this year after losing $62.1 million in 2009. The bank was included on a list of takeover targets by Rochdale Securities banking analyst Richard Bove.
"It's the beginning of the wave of consolidation that's expected in this industry," Bove told Bloomberg News.
As part of the deal, Hanco*ck expects to repurchase all of Whitney's preferred stock and warrants held by the U.S. Treasury under the Troubled Asset Relief Program. Whitney received $300 million in TARP funds from the Treasury.
Whitney shareholders will receive 0.418 shares of Hanco*ck common stock for each common share of Whitney. Based on Hanco*ck's closing price of $37.04 on Tuesday, the deal values Whitney's shares at $15.48, 42 percent above Whitney's closing price on Tuesday, the companies said.
"I believe it is also the best course of action for our employees, customers and communities," Whitney CEO John Hope said in the news release.
The merger is expected to be completed in the second quarter of 2011.
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