A Louisiana community banking company has sued Hancock Holding Co., Gulfport, Miss., claiming it unlawfully backed out of a purchase agreement.
But Hancock said it was within its rights when it terminated its $59 million stock offer for American Security Bancshares this week. The $2.7 billion-asset company asserted that it would not have gotten what it bargained for in Ville Platte-based American Security.
In its lawsuit, $230 million-asset American Security is asking that Hancock be forced to complete the deal, which was announced in April. A hearing is scheduled Sept. 28 in Ville Platte District Court.
At the center of this disagreement is American Security Bank's branch in downtown Alexandria, La. At March 31, this office accounted for 17% of the 19-branch bank's total deposits and 32% of its total loans, according to Hancock estimates.
But American Security was unable to renew its lease on the property and will soon lose the branch.
Carl J. Chaney, Hancock's chief financial officer, acknowledged that his company was notified during due diligence that the lease on that branch had expired and that the bank was now renting it month-to-month. However, he said, Hancock officials were told the lease would be renewed as soon as American Security and the landlord could negotiate a fair price.
"We were informed that renewing the lease would not be a problem," Mr. Chaney said.
Instead, the landlord has agreed to lease the property to a start-up bank planning to open in Alexandria this year.
American Security suggested moving the branch into a temporary facility until a permanent replacement location could be found, according to Mr. Chaney. But requiring customers to follow the bank to two new locations was considered unacceptable, he said.
"When you are looking to make a double move, you are asking a lot of your customers," he said. "Asking them to go through that sort of turmoil, especially when there are other banks aggressively going after customers in the area, is too much."
American Security officials disputed that claim.
"The arrangements American Security made will not result in any disruption or any adverse effect on the bank," said Andy Correro, the bank's New Orleans-based attorney.
Regardless of how the suit plays out, Mr. Chaney said, Hancock will continue to look for expansion opportunities. It has $1 billion of assets in Louisiana, but this deal would have been its first step west of the Mississippi River.