The Justice Department said Friday that it will not challenge Hancock Holding Co.'s deal to acquire Whitney Holding Corp. of New Orleans as long as the companies sell eight branches along the Gulf Coast.
Under an agreement designed to avoid running afoul with antitrust law, Whitney is to sell all seven of its branches in Biloxi and Gulfport, Miss. (where Hancock is based), along with a branch in Washington Parish, La. The agreement includes a total of $202.1 million of deposits and the commercial loans associated with the branches.
"With the divestiture, consumers and small businesses in local markets in Louisiana and Mississippi will continue to enjoy the benefits of competition in banking services," Christine Varney, an assistant attorney general overseeing the Justice Department's antitrust division, said in a press release Friday.
The $1.5 billion stock transaction still awaits approval from the Federal Reserve. The Justice Department said it will advise the Fed that it will not oppose the sale provided the branches are sold.
Hancock, which has assets of $8.1 billion, announced the deal for the $11.5 billion-asset Whitney in December. It was one of the biggest community bank deals unveiled last year. At the time, Hancock agreed to pay a 42% premium for Whitney.
Hancock raised $200 million in capital on March 25 as part of its agreement to pay off Whitney's Troubled Asset Relief Program funds.
A Hancock-Whitney combination would create one of the biggest community banks along the Gulf Coast, with assets of more than $20 billion and nearly 300 branches in five states. Hancock would enter Texas and an expand in Florida, Louisiana and Mississippi.
Hancock has not bought a whole bank since buying the failed Peoples First Community Bank from the FDIC in December 2009. Since then it has shrunk its assets by 6.4%, to $8.14 billion at Dec. 31. It said in March that it expected to close the Whitney deal in the spring.