New York, December 22, 2010 -- Moody's Investors Service placed all long-term and short-term
ratings of Hancock Holding Company and its subsidiaries under review for
possible downgrade. The holding company has an A2 issuer rating
and its lead bank, Hancock Bank, is rated B- for unsupported
bank financial strength and A1/Prime-1 for deposits. In
a related action, Moody's changed its review on Whitney Holding
Corporation (issuer at Baa1) and its subsidiary, Whitney National
Bank (unsupported bank financial strength at C and A3/Prime-2 for
deposits), to rating under review for possible upgrade. Prior
to today's announcement, Whitney's long-term
ratings had been under review for possible downgrade.
The rating reviews follow the announcement that Hancock Holding Company
has entered into a definitive agreement to acquire Whitney Holding Corporation
in an all-stock transaction valued at $1.5 billion.
Hancock also announced that it intends to repay Whitney's $300
million of TARP and to raise $200 million in common equity.
Moody's said the review on Hancock will focus on 1) the assimilation challenges
it faces in purchasing a company that is 40% larger than its size
and has asset quality problems, 2) the appropriateness of its mark
against Whitney's loan portfolio, that Hancock estimates to
be $447 million, 3) the expected performance of the large
commercial real estate exposure of both companies and 4) Hancock's
capital management plans. Hancock's capital ratios have traditionally
been high, which has been a credit positive, but on a pro
forma basis, these ratios are expected to fall. For example,
Hancock's Tier I Common ratio was 15% at the end of the second
quarter, and it expects this ratio to fall to 12% after the
acquisition.
Moody's noted that the acquisition offers the potential to harvest efficiencies
in the franchises of the two companies in Louisiana, Mississippi,
and Alabama if the merger is executed well. In addition,
Hancock has remained profitable and demonstrated lower earnings volatility
than many of its large U.S. regional bank peers throughout
the crisis by effectively managing its credit costs.
Moody's said the review on Whitney will focus on the likelihood of completion
of the transaction with Hancock. If the transaction is completed
as planned, Whitney's ratings would likely match those of
Hancock.
If the transaction is terminated and no alternative plans are announced
that would support Whitney's credit profile, then Whitney's
ratings would either be downgraded or be placed on review for possible
downgrade given the concerns Moody's had with the company's
ratings prior to today's announcement.
Moody's last rating action on Hancock was on July 21, 2010,
when Moody's affirmed the ratings and negative outlook of Hancock
Holding Company (issuer A2) and its subsidiaries, including its
lead bank, Hancock Bank (stand-along bank financial strength
rating B-, long-term deposits A1).
The last rating action on Whitney was on October 7, 2010,
when Moody's placed the long-term debt and deposit ratings of Whitney
Holding Corporation (long-term issuer Baa1) and its bank subsidiary,
Whitney National Bank (unsupported bank financial strength C, long-term
deposits A3) under review for possible downgrade. Moody's affirmed
the bank's Prime-2 rating.
The principal methodologies used in rating this issuer were Moody's "Bank
Financial Strength Ratings: Global Methodology", published
in February 2007, "Incorporation of Joint-Default Analysis
into Moody's Bank Ratings: A Refined Methodology", published
in March 2007, and "Moody's Guidelines for Rating Bank Hybrid Securities
and Subordinated Debt", published in November 2009. These
methodologies are available on www.moodys.com in the Rating
Methodologies sub-directory under the Research & Ratings tab.
Other methodologies and factors that may have been considered in the process
of rating this issuer can also be found in the Rating Methodologies sub-directory
on Moody's website.
Hancock Holding Company is headquartered in Gulfport, Mississippi
and reported assets of $8.3 billion at September 30,
2010. Whitney Holding Corporation is headquartered in New Orleans,
Louisiana and reported assets of $11.5 billion at September
30, 2010.
On Review for Possible Downgrade:
..Issuer: Hancock Bank
.... Bank Financial Strength Rating,
Placed on Review for Possible Downgrade, currently B-
.... Issuer Rating, Placed on Review
for Possible Downgrade, currently A1
.... OSO Rating, Placed on Review for
Possible Downgrade, currently P-1
.... Deposit Rating, Placed on Review
for Possible Downgrade, currently P-1
....OSO Senior Unsecured OSO Rating,
Placed on Review for Possible Downgrade, currently A1
....Senior Unsecured Deposit Rating,
Placed on Review for Possible Downgrade, currently A1
..Issuer: Hancock Bank of Louisiana
.... Bank Financial Strength Rating,
Placed on Review for Possible Downgrade, currently B-
.... Issuer Rating, Placed on Review
for Possible Downgrade, currently A1
.... OSO Rating, Placed on Review for
Possible Downgrade, currently P-1
.... Deposit Rating, Placed on Review
for Possible Downgrade, currently P-1
....OSO Senior Unsecured OSO Rating,
Placed on Review for Possible Downgrade, currently A1
....Senior Unsecured Deposit Rating,
Placed on Review for Possible Downgrade, currently A1
..Issuer: Hancock Holding Company
.... Issuer Rating, Placed on Review
for Possible Downgrade, currently A2
Outlook Actions:
..Issuer: Hancock Bank
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Hancock Bank of Louisiana
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Hancock Holding Company
....Outlook, Changed To Rating Under
Review From Negative
New York
Sean Jones
Senior Vice President
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Robert Young
MD - Financial Institutions
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's reviews Hancock and Whitney ratings after purchase announcement