Hancock Holding Company ( HBHC ) announced its plan to divest 10 of the 40 branches that were slated to close by this year-end. These branches are part of Whitney Holding Corporation, which the company acquired in Jun 2011.
Hancock signed a deal with Many, LA-based Sabine State Bank to divest 3 branches located in Louisiana. Upon closure of the transaction, Sabine will likely acquire about $20 million in loans and assume nearly $30 million of deposits.
Further, Hancock is slated to sell another 7 branches in Texas to Lake Jackson, Texas-based Texas Dow Employees Credit Union (TDECU). Following the deal's completion, TDECU will get approximately $34 million of loans and assume $30 million of deposits.
The sale of branches, still subject to regulatory approvals and certain closing conditions, is anticipated to be complete by the end of this year. Moreover, financial impact from the sale will be reflected in Hancock's fourth-quarter 2013 results. Morgan Stanley ( MS ) acted as a financial advisor for the company.
Earlier in Sep 2011, Hancock divested 7 Whitney Bank branches in Mississippi Gulf Coast region and 1 branch in Bogalusa, Louisiana in order to resolve branch concentration concerns of the U.S. Department of Justice relating to the Whitney merger.
The present branch sale is part of Hancock's efficiency improvement program. Increasing operating expenses remain a major cause of concern. Hence, in Apr 2013, management announced an efficiency and process improvement initiative to lower annual expense levels by $50 million by the end of 2014.
Currently, Hancock carries a Zacks Rank #4 (Sell).
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