The parent of Hancock Bank, founded in Mississippi 112 years ago, is acquiring New Orleans' Whitney National Bank, founded in 1883, in a deal valued at about $1.5 billion.
Hancock Holding Co. and Whitney Holding Corp. said Wednesday the stock-for-stock transaction was approved unanimously by both companies' boards.
Under terms of the transaction, shareholders of Whitney Holding will receive 0.418 shares of Hancock Holding in exchange for each share of Whitney. That values each Whitney share at $15.48, a 42 percent premium to Whitney's closing price Tuesday.
Also, Hancock expects to repurchase all of Whitney's preferred stock and warrants held by the U.S. Treasury. Whitney was one of hundreds of banks that received support during the financial crisis through the government's Trouble Asset Relief Program, or TARP. It got $300 million in TARP funds.
At midday Wednesday, Whitney's stock was up 30 percent, or $3.31, at $14.18. Hancock stock was trading at $35.05, down $1.99, or 5.4 percent.
The combination of "two similarly sized companies with complementary cultures and strong brands creates the premier banking franchise in the Gulf South," said Whitney Chairman and CEO John C. Hope III.
The combined company will have about $20 billion in total assets, $16 billion in deposits and $12 billion in loans. It will have 305 branches with nearly 5,000 employees across Texas, Louisiana, Mississippi, Alabama and Florida.
Hancock Holding is based in Gulfport, Miss., and is the parent company of Hancock Bank of Mississippi and Florida, Hancock Bank of Louisiana, and Hancock Bank of Alabama. It listed assets of about $8.2 billion as of September 30.
Whitney said it had assets of about $11.5 billion as of Sept. 30 and operates in 150 locations in the South.
Hancock expects cost savings of $134 million by 2013, and expects the deal will add 10 percent to earnings in 2012.
The agreement still needs regulatory approval. The companies anticipate completion of the merger in the second quarter of next year.
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