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Hancock Holding Buys Capital One's Asset Management Business

Zacks Equity Research

Hancock Holding Company’s HBHC subsidiary, Whitney Bank, has agreed to acquire the trust and asset management business of Capital One, National Association, a banking subsidiary of Capital One Financial Corporation COF. The deal, which is expected to be completed by second-quarter 2018, will be immediately accretive to the GAAP EPS of the acquiring company.

However, financial terms of the transaction have not yet been disclosed.

As of Sep 30, 2017, Whitney Bank had nearly $16 billion in assets under administration (AUA) and $6 billion in assets under management (AUM).

Upon successful completion of the acquisition, Whitney Bank will likely be considered among the Top 50 trust firms by revenues in the United States. The combined firm is expected to have annual revenues of nearly $70-$75 million, AUA of approximately $26 billion and AUM of $10 billion.

Whitney Bank’s CEO, John M. Hairston, said, “This transaction is an excellent strategic fit with our existing Hancock Whitney wealth management group, and illustrates the type of largely in-market, low-risk business deals we prefer under our current M&A strategy.”

He further added, “As a complement to our current lines of business for individuals and institutions, we believe Hancock Whitney will have one of the most talented teams of advisors located in wealth management offices across the Gulf South, with the opportunity to help improve our strategic goal of enhancing noninterest income as a percent of revenue.”

The majority of Capital One’s business that is being acquired is in Louisiana and East Texas. For the new and existing clients, the company will maintain its presence in the New York metro area.

Notably, Hancock Holding’s organic growth strategy also remains impressive. By making several investments, the company is well positioned to enhance its core revenues in the future. Also, its several branch acquisitions should support growth.

Shares of Hancock Holding have gained 17.7% in a year’s time, outperforming 3.1% growth of the industry it belongs to.

Currently, the stock carries a Zacks Rank #2 (Buy).

A couple of other stocks in the same space worth a look are Summit Financial Group, Inc. SMMF and Capstar Financial Holdings, Inc. CSTR.

Summit Financial has witnessed an upward earnings estimate revision of 3.7% for the current year, over the last 60 days. Its share price has increased 22% in the last six months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Capstar Financial’s earnings estimates for the current year have been revised 24.1% upward over the past 60 days. Its shares have gained 18.5% in the last six months. It carries a Zacks Rank of 2.

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Hancock Holding Company (HBHC) : Free Stock Analysis Report
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