Hancock Whitney's Strategic Move: Acquiring Sabal Trust Company

In the ever-evolving landscape of financial services, strategic acquisitions can often be the key to unlocking new growth opportunities and enhancing market position. Hancock Whitney Corporation (HWC) has just taken a significant step in this direction with the announcement that its wholly-owned subsidiary, Hancock Whitney Bank, has received all regulatory approvals to acquire Sabal Trust Company, a prominent non-depository trust company based in St. Petersburg, Florida. This acquisition, initially announced on January 21, 2025, is set to close on May 2, 2025, subject to the satisfaction of remaining customary closing conditions. Let's delve into the details and implications of this strategic move.



Strategic Alignment and Market Expansion

The acquisition of Sabal Trust Company aligns perfectly with Hancock Whitney's strategic goals, particularly in expanding its wealth and asset management services in the high-growth Florida market. Sabal Trust Company, with its strong presence in Tampa, Sarasota, and the Villages, Florida, brings a substantial asset base of approximately $3 billion under management. This geographic footprint and asset base provide Hancock Whitney with a significant entry point into the high-growth markets of Tampa and Orlando, where Sabal Trust Company has four locations. The acquisition is expected to build Hancock Whitney's market share of investment management and trust business in these areas, which are experiencing strong population growth and wealth accumulation.

Financial Performance and Synergies

The transaction is projected to be immediately accretive to GAAP EPS excluding one-time costs and meets or exceeds the Company’s minimum thresholds for Internal Rate of Return (IRR) and Return on Invested Capital (ROIC). This financial performance indicates that the acquisition is not only strategically beneficial but also financially sound, aligning with Hancock Whitney's goals of expanding its fee income and enhancing its overall financial stability.



Potential Synergies and Cost Savings

Hancock Whitney is poised to realize several potential synergies and cost savings from this acquisition. The acquisition will allow Hancock Whitney to expand its wealth and asset management group within the high-growth Florida market. This expansion is expected to grow fee income and expand relationships with private banking, wholesale banking, and retail services offerings. The acquisition of Sabal Trust Company, which has four locations within the greater Tampa and Orlando metropolitan statistical areas (MSAs), will build the Company’s market share of investment management and trust business in these high-growth markets. This increased market share can lead to economies of scale, allowing Hancock Whitney to reduce operational costs and improve efficiency.

Long-Term Impact and Growth Opportunities

In the long term, the acquisition will allow Hancock Whitney to leverage Sabal Trust Company's expertise and client base to expand its wealth management services. This will not only increase fee-based income but also provide a stable revenue stream, which is less sensitive to interest rate fluctuations compared to traditional banking services. The acquisition of Sabal Trust Company represents a strategic move into Florida's lucrative wealth management market. With $22.1 million in 2024 revenue and $3 billion in assets under management, this deal strengthens HWC's fee-based income stream—a crucial factor for banking stability in volatile rate environments.

Conclusion

The acquisition of Sabal Trust Company by Hancock Whitney Corporation is a strategic move that aligns with the company's goals of expanding its wealth and asset management services in the high-growth Florida market. The acquisition brings immediate financial benefits, potential synergies, and long-term growth opportunities. As Hancock Whitney continues to embody its core values of Honor & Integrity, Strength & Stability, Commitment to Service, Teamwork, and Personal Responsibility, this acquisition is a testament to its commitment to growth and innovation in the financial services industry. Investors should keep a close eye on how this acquisition unfolds and its impact on Hancock Whitney's financial performance in the coming quarters.