In further evidence that an anticipated increase in bank mergers is underway, Gulfport, Miss.-based Hancock Holding Co., parent company of 112-year-old Hancock Bank, and New Orleans-based Whitney Holding Corp. , which was founded in 1883, announced they have entered into a definitive agreement for Whitney to merge into Hancock in a stock-for-stock transaction. The transaction was approved unanimously by both companies' boards of directors, and is expected to be completed in the second quarter of 2011.
Under the terms of the agreement, subject to shareholder and regulatory approval and other customary conditions, shareholders of Whitney Holding Corp. will receive 0.418 shares of Hancock Holding Company common stock in exchange for each share of Whitney common stock. The value of a Whitney share would be $15.48 based on Hancock's closing price on Dec. 21, 2010, of $37.04, a premium of 42 percent to Whitney's closing price of $10.87 on the same date.
Upon completion of the transaction, the combined company will have approximately $20 billion in total assets, $16 billion in deposits, $12 billion in loans, 305 branches, 390 ATMs, and almost 5,000 employees across the five contiguous states of Texas, Louisiana, Mississippi, Alabama, and Florida. Subject to the receipt of requisite approvals, Hancock expects to repurchase all of Whitney's TARP preferred stock and warrants held by the U.S. Treasury at closing.
Hancock Holding Co. says it expects to realize substantial cost savings of $134 million on a pre-tax basis once fully phased in by 2013, and anticipates that the transaction will be 10 percent accretive to earnings in 2012 and 19 percent accretive once the synergies are fully phased in for 2013. Following the merger, Hancock Holding Co. anticipates an 8 percent tangible common equity ratio after restructuring charges and an anticipated common stock raise of approximately $200 million. Five members of the Whitney board of directors will join the Hancock board upon completion of the merger.
"Hancock and Whitney were both founded to facilitate commerce and opportunities for people throughout the Gulf South region. For more than a century, both institutions have served complementary geographical footprints according to core values that reflect the spirit of those communities -- integrity, service, resilience, and teamwork. 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," said Hancock Holding Co. CEO Carl J. Chaney, in a press release.
"The merger of two similarly sized companies with complementary cultures and strong brands creates the premier banking franchise in the Gulf South," said Whitney Holding Corp. Chairman and CEO John C. Hope, III, in the press release. "The organization will be the employer of choice in the Southeast, maintain a conservative management culture, a commitment to strong capital and a diversified earnings stream. Joining with a well-known, well-respected and well-capitalized company like Hancock positions us to be even more competitive in the markets where we operate. Not only does this transaction create significant shareholder value, I believe it is also the best course of action for our employees, customers and communities."