Hancock Holding Co. in Gulfport, Miss., lost out on a bid to buy a cluster of branches in Alabama but could still be in position to scoop up market share there, analysts say.
The $6.2 billion-asset Hancock has applied to regulators to charter a bank in Alabama, and its chief executive said it plans to open several branches along the Interstate 10 corridor in the Mobile area. With much of Mobile’s deposit market expected to be up for grabs as a result of the recent merger between two Birmingham, Ala., companies, Regions Financial Corp. and AmSouth Bancorp, analysts said Hancock could be making its move at just the right time.
The Mississippi bank had sought to buy 19 branches in the Mobile area that Regions and AmSouth were ordered to divest as a condition of their merger, which closed Nov. 4.
But it was RBC Centura Bank, a unit of Royal Bank of Canada, that emerged as the winner of the Mobile branches, as well as 20 others in Alabama. In all, the 39 Regions and AmSouth branches have $2 billion of deposits and $1.5 billion of loans. The sale, announced Nov. 1, is expected to close in March.
Chris Marinac, an analyst at FIG Partners LLC in Atlanta, said he expects many former Regions and AmSouth customers to shop for local banks rather than keep their accounts with a Canadian-owned institution.
“The belief is that because RBC Centura bought those deposits that there is an opportunity to win away business,” he said.
James Schutz, an analyst at Sterne, Agee & Leach Inc. in Birmingham, said Hancock’s “timing certainly should be pretty good.” RBC Centura “is a Canadian bank, and I think that a lot of local banks will make sure that everybody knows that.”
George Schloegel, Hancock’s chief executive officer, declined to speculate on potential deposit runoff. Hancock is interested in the Mobile market simply because it is “a good metropolitan area that is right next door to us,” he said.
Reconstruction efforts after 2003’s Hurricane Ivan and last year’s Hurricane Katrina have stimulated Mobile’s economy, Mr. Schutz said. “The town has got a lot of wind at its back,” he said.
Hancock has 105 branches in Louisiana, Mississippi, Florida, and Alabama. Its single Alabama branch was a loan production office until last summer when, in the aftermath of Hurricane Katrina, Hancock got approval from state regulators to convert it into an emergency branch so that it could serve its customers in Alabama who could not make it across state lines
Hancock’s Mobile office continues to operate as a full-service branch, but state law prohibits de novo branching, so Hancock had to apply for a state banking charter in order to make the emergency branch permanent and establish additional branches.
Mr. Schloegel said Hancock would open more branches in Alabama. “We plan to serve the market,” he said.
Paul D. Guichet, Hancock’s vice president for investor relations, said the company is eager to bulk up in Mobile to fill in a gap in its footprint.
Hancock filed its charter application with state regulators on Sept. 18. Elizabeth Bressler, the general counsel for the Alabama State Banking Department, declined to specify a timetable for a decision on the application.
