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Hancock Whitney (HWC) Gets Nod for MidSouth Bancorp Deal

Zacks Equity Research

Hancock Whitney’s HWC proposed deal to acquire MidSouth Bancorp, Inc. MSL has received approval from the banking regulators. Last week, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Mississippi Department of Banking and Consumer Finance gave their consent.

The all-stock deal, announced in April, is expected to close later this week subsequent to the approval from MidSouth Bancorp’s shareholders. A special meeting will be held on Sep 18 to receive shareholders’ nod.

Per the agreement, each share of Lafayette, LA-based MidSouth Bancorp will convert to the right to receive 0.2952 shares of Hancock Whitney.Thus, deal value is expected to be nearly $213 million.

Notably, at the time of announcement, it was projected that transaction will result in one-time pre-tax expenses of $38 million. Also, according to MidSouth Bancorp’s 2019/2020 street estimates, it will lead to cost savings of 50-55% for Hancock Whitney.

Further, Hancock Whitney had expected 20 out of the 42 MidSouth Bancorp branches to be closed/consolidated. Moreover, excluding merger-related costs, the transaction is likely to be accretive to the company’s earnings by 13-15 cents, beginning first-quarter 2020.

John M. Hairston, the president and CEO of Hancock Whitney, had stated, “The merger fits perfectly with our stated strategies of adding scale and enhancing value through in-market, financially accretive, low-risk transactions that strengthen our current franchise and provide opportunities for future growth.”

Over the years, Hancock Whitney has grown substantially through business restructuring efforts. The company not only undertook measures to divest certain less profitable operations, it was able to strengthen profitability through opportunistic acquisitions.

Shares of Hancock Whitney have rallied 13.1% so far this year, underperforming the industry’s rise of 18.6%.



Currently, the stock carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Amid challenging operating environment owing to the Fed’s accommodative monetary policy, uncertainty over trade war and several other concerns, banks are taking inorganic growth strategy to expand market share and footprint. Over the recent months, many mid-sized regional banks including Valley National Bancorp, Glacier Bancorp, Inc., Ameris Bancorp, BancorpSouth Bank BXS and Associated Banc-Corp ASB have closed/ announced transactions that are expected to be accretive to earnings going forward.

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Associated Banc-Corp (ASB) : Free Stock Analysis Report
 
BancorpSouth Bank (BXS) : Free Stock Analysis Report
 
MidSouth Bancorp (MSL) : Free Stock Analysis Report
 
Hancock Whitney Corporation (HWC) : Free Stock Analysis Report
 
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