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Hancock Holding in Gulfport, Miss., has raised the ire of analysts and investors in an unusual way — by unveiling a plan to cut costs over the next two years.
April 26 -
Hancock Holding of Gulfport, Miss., has won all federal approvals to acquire Whitney Holding in New Orleans, setting the stage for the deal to close on June 4 and create a $20 billion-asset company with more than 300 branches stretching from Florida to Texas.
May 16
Hancock Holding in Gulfport, Miss., will close or sell roughly a fifth of its branches in markets where it has a small retail presence.
The $19.8 billion-asset company will shutter up to 45 branches that belong to Hancock Bank in Gulfport and Whitney Bank in New Orleans, Hancock said in a press release. Most closings are set for the end of August, though some may take place at the end of the year. Hancock expects the closures to save roughly $25 million a year in expenses.
Most closures will take place in large markets where Hancock has a relatively small retail presence, such as Houston and Jacksonville, Fla., Carl Chaney, the company's president and co-CEO, said in an interview. "In those markets, we're going to scale back and reinvest in commercial banking and wealth management," he said.
"In markets where you have large market share, you can still be successful in retail banking," Chaney said. "But in markets where you don't have market share, it's becomingly increasingly difficult to be successful."
Chaney said he could not provide the specific branches because Hancock is in the process of notifying customers. Hancock will convert several locations from traditional retail branches to business financial centers that will have desks in the lobbies rather than traditional teller windows, he said.
Hancock is also in the process of negotiating the sale of roughly eight branches, Chaney said.
Hancock expects to incur a one-time charge of $18 million to $22 million tied to the closures, it
The announcement comes less than a month after a quarterly earnings call in which
After completing the Whitney integration, Hancock reviewed its branch network to find underperformers, Chaney said.
"Now that we've gotten the bank integration behind us and have been fully integrated for two quarters, we've been able to find branches that were not meeting the profitability threshold," he said. Among the pressures on retail banking, he cited the Durbin amendment and customers' changing banking habits, including increased use of smartphones.
The branches marked for closure include eight of Hancock's 14 branches in Houston, the
Hancock has 259 branches in Louisiana, Texas, Mississippi, Alabama and Florida, according to the Federal Deposit Insurance Corp. Its largest concentrations of branches are in Louisiana, where it has 126 branches. It has 59 branches in Florida and 45 in Mississippi.
