Hancock Reports Third Quarter 2013 Financial Results

GULFPORT, Miss., Oct. 24, 2013 (GLOBE NEWSWIRE) -- Hancock Holding Company (Nasdaq:HBHC) today announced its financial results for the third quarter of 2013. Operating income for the third quarter of 2013 was $46.8 million or $.56 per diluted common share, compared to $46.9 million, or $.55 in the second quarter of 2013. Operating income was $49.8 million, or $.58, in the third quarter of 2012. Operating income is defined as net income excluding tax-effected securities transactions gains or losses and one-time noninterest expense items. Included in the financial tables is a reconciliation of net income to operating income. Management believes that operating income provides a useful measure of financial performance that helps investors compare the Company's fundamental operations over time.

Hancock's return on average assets (ROA) (operating) was 0.99% for the third quarter of 2013, unchanged from the second quarter of 2013. ROA (operating) was 1.07% in the third quarter a year ago.

Highlights of the Company's third quarter of 2013 results:
  • Net income included one-time noninterest expense items of $20.9 million, or $13.6 million after tax, or $.17 per diluted common share
  • Core net interest income (TE) and net interest margin (NIM) remained relatively stable (the Company defines its core results as reported results less the impact of net purchase accounting adjustments.)
  • An increase of $4.6 million, or a tax-effected $.04 per diluted share, in purchased loan accretion related to excess cash recoveries
  • Approximately $92 million linked-quarter net loan growth, or 3% annualized, and $464 million, or 4%, year-over-year loan growth (each excluding the FDIC-covered portfolio)
  • Continued improvement in overall asset quality metrics
  • Decline in operating expense linked-quarter; on track to meet 1Q14 expense target
  • Closed 26 banking locations across the five-state footprint on August 30, 2013

"Our third quarter results reflect progress in implementing our current strategic initiatives," said Hancock's President and Chief Executive Officer Carl J. Chaney. "Stabilization of the core margin and net interest income, better loan pricing, improved asset quality, reduced operating expenses and ongoing focus on efficiency, are all keys to achieving our goals for 2014 and beyond. Our associates are working diligently to implement the expense and efficiency initiative, and we are confident we will meet the targets set earlier this year."

Net income in the third quarter of 2013 was $33.2 million, or $.40 per diluted common share, compared to $46.9 million, or $.55, in the second quarter of 2013. Net income was $47.0 million, or $.55 per diluted common share, in the third quarter of 2012. Net income included certain one-time noninterest expenses of $20.9 million in the third quarter of 2013 and $5.3 million in the third quarter of 2012. Return on average assets (ROA) was 0.70% for the third quarter of 2013, compared to 0.99% in the second quarter of 2013 and 1.00% in the third quarter a year ago.

Loans

Total loans at September 30, 2013 were $11.7 billion, up $53 million from June 30, 2013. Excluding the FDIC-covered portfolio, which declined $39 million during the third quarter of 2013, total loans increased $92 million, or 1% linked-quarter.

Solid origination activity with commercial customers across the Company's footprint, especially in south Louisiana, was offset by higher than normal paydowns and payoffs, as well as some seasonal net reductions. As a result, commercial and industrial (C&I) loans were down slightly for the quarter.

The largest component of linked-quarter net growth was in the residential mortgage portfolio, reflecting mainly a strategic decision to retain more of these loans on the balance sheet.

The net growth in the commercial real estate (CRE) portfolio during the third quarter came mainly from the transition of construction and land development (C&D) loans to permanent status.

For the third quarter of 2013, average loans totaled $11.8 billion, up almost $200 million from the second quarter of 2013.

Deposits

Total deposits at September 30, 2013 were $15.1 billion, down $101 million, or less than 1%, from June 30, 2013. Average deposits for the third quarter of 2013 were $15.0 billion, down $190 million, or 1%, from the second quarter of 2013.

Noninterest-bearing demand deposits (DDAs) totaled $5.5 billion at September 30, 2013, up $140 million, or 3%, compared to June 30, 2013. DDAs comprised 36% of total period-end deposits at September 30, 2013.

Time deposits (CDs) and interest-bearing public fund deposits totaled $3.6 billion at September 30, 2013, down $283 million, or 7%, from June 30, 2013. As noted previously, public fund deposits typically reflect higher balances at year-end with subsequent reductions beginning in the second quarter and continuing into the third quarter.

Asset Quality

Non-performing assets (NPAs) totaled $216 million at September 30, 2013, slightly down from June 30, 2013. During the third quarter total non-performing loans declined $14 million, while foreclosed and surplus real estate (ORE) and other foreclosed assets increased almost $14 million. Approximately $16 million was transferred into ORE when certain bank locations were closed on August 30, 2013 in connection with the Company's efficiency initiative. Excluding the branch transfers, NPAs totaled $200 million at September 30, 2013, down $16 million from June 30, 2013. Non-performing assets as a percent of total loans, ORE and other foreclosed assets was 1.83% at September 30, 2013, compared to 1.84% at June 30, 2013.

The Company's total allowance for loan losses was $138.2 million at September 30, 2013, up slightly from $138.0 million at June 30, 2013. The ratio of the allowance to period-end loans was 1.18%, unchanged from June 30, 2013. The allowance maintained on the originated portion of the loan portfolio totaled $77.4 million, or 0.89% of related loans, at September 30, 2013, compared to $76.4 million, or 0.93% of related loans, at June 30, 2013. 

Net charge-offs from the non-covered loan portfolio were $5.4 million, or 0.18% of average total loans on an annualized basis in the third quarter of 2013, down from $7.0 million, or 0.24% of average total loans in the second quarter of 2013. 

During the third quarter of 2013, Hancock recorded a total provision for loan losses of $7.6 million, down from $8.3 million in the second quarter of 2013. The provision for non-covered loans was $6.5 million in the third quarter of 2013, compared to $7.9 million in the second quarter of 2013. The net provision from the covered portfolio was $1.0 million for the third quarter of 2013 compared to $0.4 million for the second quarter of 2013. 

Net Interest Income

Net interest income (TE) for the third quarter of 2013 was $174.1 million, up $2.3 million from the second quarter of 2013. Average earning assets were $16.4 billion in the third quarter of 2013, down $116 million, or less than 1%, from the second quarter of 2013. 

The linked-quarter increase reflected mainly a higher level of total purchase-accounting loan accretion on acquired loans in the third quarter, mainly related to excess cash recoveries which can be volatile. Approximately $7.7 million ($.06 per diluted common share) of excess cash recoveries was included in the third quarter's results, while approximately $3.1 million ($.02 per diluted common share) was included in the second quarter's results. The slide presentation referenced below includes detailed information on expected loan accretion and excess cash recoveries. 

The net interest margin (TE) was 4.23% for the third quarter of 2013, up 6 basis points (bps) from the second quarter of 2013. The core margin of 3.37% (reported net interest income (TE) excluding total net purchase accounting adjustments, annualized, as a percent of average earning assets) compressed 1 basis point during the third quarter of 2013. The continued decline in the core loan yield was offset by improvement in the yield on investment securities and a slight decline in the cost of funds. 

Noninterest Income

Noninterest income totaled $63.1 million for the third quarter of 2013, down $0.8 million from the second quarter of 2013. 

Service charges on deposits totaled $20.5 million for the third quarter of 2013, up $0.7 million, or 3%, from the second quarter of 2013. Bankcard and ATM fees totaled $12.2 million, up $0.8 million, or 7%, from the second quarter of 2013.

Trust, investment and annuity, and insurance fees totaled $18.3 million, down $1.5 million, or 8%, from the second quarter of 2013. The linked-quarter decrease reflects some seasonality in these lines of business, in addition to the impact of higher equity market valuations in the second quarter of 2013. 

Fees from secondary mortgage operations totaled $2.5 million for the third quarter of 2013, down $1.7 million, or 40%, linked-quarter. The decline mainly reflects a lower level of loans sold during the quarter as noted earlier. Mortgage loan activity also slowed towards the end of the third quarter, reflecting mainly the impact of increased longer-term interest rates on originations.

Noninterest Expense & Taxes

Noninterest expense for the third quarter of 2013 totaled $182.2 million, including $20.9 million of one-time costs related mainly to the expense and efficiency initiative. Excluding these costs, noninterest expense (or operating expense) totaled $161.3 million, down $0.9 million from the second quarter of 2013. 

Total personnel expense, the largest component of the Company's expense base, was $86.9 million in the third quarter of 2013, down $0.7 million, or 1%, from the second quarter of 2013. 

ORE expense totaled $2.4 million in the third quarter of 2013, down $0.9 million from the second quarter, while other operating expense of $47.2 million was up $0.7 million, or 1%, from the second quarter of 2013. 

The Company remains on track to achieve its efficiency and expense reduction target for the first quarter of 2014. In August of 2013, the Company completed the previously announced closing of 26 branch locations across its five-state footprint. The sales of 10 additional branch locations, which were also announced previously, are subject to regulatory approvals and certain closing conditions, and will be reflected in Hancock's fourth quarter 2013 and first quarter of 2014 financial results. 

The effective income tax rate for the third quarter of 2013 was 26%, up slightly from the second quarter of 2013. The effective income tax rate continues to be less than the statutory rate of 35% due primarily to tax-exempt income and tax credits. 

Capital

Common shareholders' equity totaled $2.4 billion at September 30, 2013 and the tangible common equity (TCE) ratio increased 16 bps to 8.68%. Management continues to review the strategic opportunities presented by Hancock's strong capital position, including additional stock buybacks, organic growth, acquisitions or increased dividends. Additional capital ratios are included in the financial tables.

Conference Call and Slide Presentation

Management will host a conference call for analysts and investors at 9:00 a.m. Central Time on Friday, October 25, 2013 to review the results. A live listen-only webcast of the call will be available under the Investor Relations section of Hancock's website at www.hancockbank.com. A slide presentation related to third quarter results is also posted as part of the webcast link. To participate in the Q&A portion of the call, dial (877) 564-1219 or (973) 638-3429. An audio archive of the conference call will be available under the Investor Relations section of our website. A replay of the call will also be available through October 31, 2013 by dialing (855) 859-2056 or (404) 537-3406, passcode 74981574. 

About Hancock Holding Company

Hancock Holding Company is the parent company of Hancock Bank and Whitney Bank. The Company operates as Hancock Bank in south Mississippi, southern and central Alabama, and the northern, central, and panhandle regions of Florida; and as Whitney Bank in south Louisiana and Houston, Texas. The Hancock Holding Company family of financial services companies also includes Hancock Investment Services, Inc.; Hancock Insurance Agency and Whitney Insurance Agency, Inc.; corporate trust offices in Gulfport and Jackson, Mississippi, New Orleans and Baton Rouge, Louisiana, and Orlando, Florida; and Harrison Finance Company. Additional information is available at www.hancockbank.com and www.whitneybank.com.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, and we intend such forward-looking statements to be covered by the safe harbor provisions therein and are including this statement for purposes of invoking these safe-harbor provisions.  Forward-looking statements provide projections of results of operations or of financial condition or state other forward-looking information, such as expectations about future conditions and descriptions of plans and strategies for the future .  

Forward-looking statements that we may make include, but may not be limited to, comments with respect to future levels of economic activity in our markets,  loan growth, deposit trends, credit quality trends, future sales of nonperforming assets, net interest margin trends, future expense levels and the ability to achieve reductions in non-interest expense or other cost savings, projected tax rates, future profitability, improvements in expense to revenue (efficiency) ratio, purchase accounting impacts such as accretion levels, the impact of the branch rationalization process, and the financial impact of regulatory requirements.

Hancock's ability to accurately project results or predict the effects of future plans or strategies is inherently limited.  Although Hancock believes that the expectations reflected in its forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements.  Factors that could cause actual results to differ from those expressed in Hancock's forward-looking statements include, but are not limited to, those risk factors outlined in Hancock's public filings with the Securities and Exchange Commission, which are available at the SEC's internet site ( http://www.sec.gov).

You are cautioned not to place undue reliance on these forward-looking statements.  Hancock does not intend, and undertakes no obligation, to update or revise any forward-looking statements, whether as a result of differences in actual results, changes in assumptions or changes in other factors affecting such statements, except as required by law.
           
 Hancock Holding Company           
 Financial Highlights           
 (amounts in thousands, except per share data and FTE headcount)           
 (unaudited)           
           
   Three Months Ended   Nine Months Ended 
  9/30/2013 6/30/2013 9/30/2012 9/30/2013 9/30/2012
Per Common Share Data          
           
Earnings per share:          
 Basic $0.40 $0.55 $0.55 $1.51 $1.23
 Diluted $0.40 $0.55 $0.55 $1.51 $1.22
Operating earnings per share: (a)          
Basic $0.56 $0.55 $0.58 $1.67 $1.61
Diluted  $0.56 $0.55 $0.58 $1.67 $1.60
Cash dividends per share  $0.24 $0.24 $0.24 $0.72 $0.72
Book value per share (period-end) $28.70 $28.57 $28.71 $28.70 $28.71
Tangible book value per share (period-end) $19.04 $18.83 $18.97 $19.04 $18.97
Weighted average number of shares:          
 Basic  82,091  83,279  84,777  83,404  84,757
 Diluted  82,205  83,357  85,632  83,496  85,525
Period-end number of shares  82,107  82,078  84,782  82,107  84,782
Market data:          
 High sales price $33.85 $30.93 $33.27 $33.85 $36.73
 Low sales price $29.00 $25.00 $27.99 $25.00 $27.96
 Period end closing price  $31.38 $30.07 $30.98 $31.38 $30.98
 Trading volume  29,711  38,599  26,877  97,779  98,609
           
           
Other Period-end Data          
           
FTE headcount  4,068 4,160 4,290  4,068 4,290
Tangible common equity $1,563,542 $1,545,122 $1,608,285 $1,563,542 $1,608,285
Tier I capital $1,657,136 $1,632,874 $1,631,372 $1,657,136 $1,631,372
Goodwill  $625,675 $625,675 $628,877 $625,675 $628,877
Amortizing intangibles $167,116 $174,423 $197,139 $167,116 $197,139
           
Performance Ratios          
           
Return on average assets 0.70% 0.99% 1.00% 0.91% 0.74%
Return on average assets (operating) (a) 0.99% 0.99% 1.07% 1.00% 0.97%
Return on average common equity  5.63% 7.82% 7.77% 7.18% 5.86%
Return on average common equity (operating) (a) 7.93% 7.82% 8.24% 7.93% 7.68%
Return on average tangible common equity 8.54% 11.74% 11.87% 10.80% 9.06%
Return on average tangible common equity (operating) (a) 12.03% 11.74% 12.59% 11.94% 11.88%
Tangible common equity ratio  8.68% 8.52% 9.09% 8.68% 9.09%
Earning asset yield (TE) 4.47% 4.42% 4.84% 4.50% 4.82%
Total cost of funds 0.24% 0.25% 0.30% 0.26% 0.34%
Net interest margin (TE) 4.23% 4.17% 4.54% 4.24% 4.48%
Efficiency ratio (b) 64.95% 65.68% 64.33% 64.93% 65.93%
Allowance for loan losses as a percent of period-end loans 1.18% 1.18% 1.19% 1.18% 1.19%
Allowance for loan losses to non-performing loans + accruing loans 90 days past due 94.69% 91.43% 77.81% 94.69% 77.81%
Average loan/deposit ratio 78.70% 76.41% 75.85% 76.80% 74.14%
Noninterest income excluding securities transactions as a percent of total revenue (TE) 26.59% 27.11% 25.86% 26.36% 25.83%
(a) Excludes tax-effected securities transactions and one-time noninterest expense items. Management believes that operating income provides a useful measure of financial performance that helps investors compare the Company's fundamental operations over time.
(b) Efficiency ratio is defined as noninterest expense as a percent of total revenue (TE) before amortization of purchased intangibles, one-time noninterest expense items, and securities transactions.
 
           
 Hancock Holding Company           
 Financial Highlights           
 (amounts in thousands)           
 (unaudited)           
           
   Three Months Ended   Nine Months Ended 
  9/30/2013 6/30/2013 9/30/2012 9/30/2013 9/30/2012
Asset Quality Information          
           
Non-accrual loans (c) $100,649 $110,516 $135,499 $100,649 $135,499
Restructured loans (d) 29,705 33,741 32,339 29,705 32,339
Total non-performing loans 130,354 144,257 167,838 130,354 167,838
ORE and foreclosed assets 85,560 72,235 130,613 85,560 130,613
Total non-performing assets $215,914 $216,492 $298,451 $215,914 $298,451
Non-performing assets as a percent of loans, ORE and foreclosed assets 1.83% 1.84% 2.58% 1.83% 2.58%
Accruing loans 90 days past due (c) $15,620 $6,647 $6,423 $15,620 $6,423
Accruing loans 90 days past due as a percent of loans 0.13% 0.06% 0.06% 0.13% 0.06%
Non-performing assets + accruing loans 90 days past due to loans, ORE and foreclosed assets 1.96% 1.90% 2.64% 1.96% 2.64%
           
Net charge-offs - non-covered $5,430 $7,032 $9,728 $19,095 $26,993
Net charge-offs - covered 506 2,026 3,550 5,754 22,839
Net charge-offs - non-covered as a percent of average loans 0.18% 0.24% 0.34% 0.22% 0.32%
           
Allowance for loan losses $138,223 $137,969 $135,591 $138,223 $135,591
Allowance for loan losses as a percent of period-end loans 1.18% 1.18% 1.19% 1.18% 1.19%
Allowance for loan losses to non-performing loans + accruing loans 90 days past due 94.69% 91.43% 77.81% 94.69% 77.81%
           
Provision for loan losses $7,569 $8,257 $8,101 $25,404 $26,141
           
Allowance for Loan Losses          
           
Beginning Balance $137,969 $137,777 $140,768 $136,171 $124,881
 Net provision for loan losses - covered loans 1,024 362  -- 7,987 2,624
 Provision for loan losses - non-covered loans 6,545 7,895 8,101 17,417 23,517
Net provision for loan losses 7,569 8,257 8,101 25,404 26,141
Increase (decrease) in FDIC loss share receivable   (1,379) 993  -- 1,497 34,401
Charge-offs - non-covered 8,698 11,451 12,211 31,386 34,588
Recoveries - non-covered  (3,268) (4,419) (2,483) (12,291) (7,595)
Net charge-offs - covered  506 2,026 3,550 5,754 22,839
Net charge-offs 5,936 9,058 13,278 24,849 49,832
Ending Balance $138,223 $137,969 $135,591 $138,223 $135,591
           
           
Net Charge-off Information           
           
Net charge-offs - non-covered:          
Commercial/real estate loans $1,267 $3,834 $3,905 $9,405 $13,811
Residential mortgage loans 541 702 2,012 891 4,579
Consumer loans 3,622 2,496 3,811 8,799 8,603
Total net charge-offs - non-covered  $5,430 $7,032 $9,728 $19,095 $26,993
           
Average loans:          
Commercial/real estate loans $8,582,849 $8,418,140 $8,018,634 $8,429,559 $7,994,444
Residential mortgage loans 1,668,201 1,625,672 1,573,559 1,640,320 1,557,210
Consumer loans 1,570,345 1,579,397 1,667,399 1,589,366 1,646,100
Total average loans $11,821,395 $11,623,209 $11,259,592 $11,659,245 $11,197,754
           
Net charge-offs - non-covered to average loans:          
Commercial/real estate loans 0.06% 0.18% 0.19% 0.15% 0.23%
Residential mortgage loans 0.13% 0.17% 0.51% 0.07% 0.39%
Consumer loans 0.92% 0.63% 0.91% 0.74% 0.70%
Total net charge-offs - non-covered to average loans 0.18% 0.24% 0.34% 0.22% 0.32%
(c) Non-accrual loans and accruing loans past due 90 days or more do not include non-accrual restructured loans and acquired credit-impaired loans which were written down to fair value upon acquisition and accrete interest income over the remaining life of the loan.
(d) Included in restructured loans are $19.1 million, $22.2 million, and $21.6 million in non-accrual loans at 9/30/13, 6/30/13, and 9/30/12, respectively. Total excludes acquired credit-impaired loans.
           
           
 Hancock Holding Company           
 Financial Highlights           
 (amounts in thousands)           
 (unaudited)           
           
   Three Months Ended   Nine Months Ended 
  9/30/2013 6/30/2013 9/30/2012 9/30/2013 9/30/2012
Income Statement          
           
Interest income  $181,639 $179,649 $189,205 $546,560 $571,410
Interest income (TE) 184,221 182,292 192,071 554,511 580,060
Interest expense 10,109 10,470 11,949 31,836 40,407
Net interest income (TE) 174,112 171,822 180,122 522,675 539,653
Provision for loan losses 7,569 8,257 8,101 25,404 26,141
Noninterest income excluding securities transactions  63,057 63,897 62,842 187,141 187,888
Securities transactions gains  --  -- 917  -- 929
Noninterest expense  182,205 162,250 169,714 504,057 555,149
Income before income taxes 44,813 62,569 63,200 172,404 138,530
Income tax expense 11,611 15,707 16,216 43,764 33,747
Net income $33,202 $46,862 $46,984 $128,640 $104,783
           
Adjustments from net to operating income          
Securities transactions gains  --  -- 917  -- 929
One-time noninterest expense items          
Merger-related expenses   --  -- (38)  -- 45,789
Sub-debt early redemption costs  --  -- 5,336  -- 5,336
Expense & efficiency initiative and other items 20,887  --  -- 20,887  --
Total one-time noninterest expense items 20,887  -- 5,298 20,887 51,125
Taxes on adjustments at 35% 7,310  -- 1,533 7,310 17,569
Total adjustments (net of taxes) 13,577  -- 2,848 13,577 32,627
Operating income (e) $46,779 $46,862 $49,832 $142,217 $137,410
           
Noninterest Income and Noninterest Expense          
           
Service charges on deposit accounts $20,519 $19,864 $20,834 $59,398 $58,015
Trust fees 9,477 9,803 7,743 27,972 24,464
Bank card and ATM fees 12,221 11,399 11,869 34,678 37,586
Investment & annuity fees 5,186 5,192 4,269 14,955 13,291
Secondary mortgage market operations 2,467 4,139 4,312 10,989 11,328
Insurance fees 3,661 4,845 4,045 12,500 12,103
Other income 9,526 8,655 9,770 26,649 31,101
Noninterest income excluding securities transactions 63,057 63,897 62,842 187,141 187,888
Securities transactions gains  --  -- 917  -- 929
Total noninterest income including securities transactions $63,057 $63,897 $63,759 $187,141 $188,817
           
Personnel expense $86,850 $87,595 $88,176 $262,372 $269,376
Occupancy expense (net) 12,369 12,404 13,169 37,099 41,173
Equipment expense 5,120 4,919 5,010 15,340 16,811
Other real estate owned expense (net) 2,439 3,355 4,590 6,502 10,014
Other operating expense 47,234 46,546 45,361 139,565 142,314
Amortization of intangibles 7,306 7,431 8,110 22,292 24,336
Total operating expense 161,318 162,250 164,416 483,170 504,024
One-time noninterest expense items 20,887  -- 5,298 20,887 51,125
Total noninterest expense  $182,205 $162,250 $169,714 $504,057 $555,149
(e) Net income less tax-effected securities gains/losses and one-time noninterest expense items. Management believes that operating income provides a useful measure of financial performance that helps investors compare the Company's fundamental operations over time.
 
           
 Hancock Holding Company           
 Financial Highlights           
 (amounts in thousands)           
 (unaudited)           
           
   Three Months Ended 
  9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Period-end Balance Sheet          
           
Commercial non-real estate loans  $4,625,315 $4,653,342 $4,425,286 $4,433,288 $4,235,823
Construction and land development loans  920,408 966,499 992,820 989,306 1,044,637
Commercial real estate loans  2,914,969 2,872,254 2,873,403 2,923,094 2,907,007
Residential mortgage loans 1,695,197 1,616,093 1,587,519 1,577,944 1,561,640
Consumer loans 1,578,583 1,573,309 1,603,734 1,654,170 1,685,341
Total loans 11,734,472 11,681,497 11,482,762 11,577,802 11,434,448
Loans held for sale 18,444 20,233 34,813 50,605 50,389
Securities 4,124,202 4,303,918 4,662,279 3,716,460 4,053,271
Short-term investments 462,313 442,917 475,677 1,500,188 320,057
Earning assets 16,339,431 16,448,565 16,655,531 16,845,055 15,858,165
Allowance for loan losses (138,223) (137,969) (137,777) (136,171) (135,591)
Other assets 2,600,638 2,623,705 2,546,369 2,755,601 2,800,472
Total assets $18,801,846 $18,934,301 $19,064,123 $19,464,485 $18,523,046
           
Noninterest bearing deposits $5,479,696 $5,340,177 $5,418,463 $5,624,127 $5,151,146
Interest bearing transaction and savings deposits 6,008,042 5,965,372 6,017,735 6,038,003 5,876,638
Interest bearing public fund deposits 1,240,336 1,410,866 1,528,790 1,580,260 1,321,227
Time deposits 2,326,797 2,439,523 2,288,363 2,501,798 2,423,940
Total interest bearing deposits 9,575,175 9,815,761 9,834,888 10,120,061 9,621,805
Total deposits  15,054,871 15,155,938 15,253,351 15,744,188 14,772,951
Short-term borrowings 782,779 828,107 722,537 639,133 748,634
Long-term debt 376,664 385,122 393,920 396,589 308,327
Other liabilities 231,090 219,794 217,215 231,297 258,646
Common shareholders' equity 2,356,442 2,345,340 2,477,100 2,453,278 2,434,488
Total liabilities & common equity $18,801,846 $18,934,301 $19,064,123 $19,464,485 $18,523,046
           
Capital Ratios          
           
Common shareholders' equity $2,356,442 $2,345,340 $2,477,100 $2,453,278 $2,434,488
Tier 1 capital (f) 1,657,136 1,632,874 1,700,115 1,668,809 1,631,372
Tangible common equity ratio  8.68% 8.52% 9.14% 8.77% 9.09%
Common equity (period-end) as a percent of total assets (period-end) 12.53% 12.39% 12.99% 12.60% 13.14%
Leverage (Tier 1) ratio (f) 9.17% 8.96% 9.28% 9.11% 9.17%
Tier 1 risk-based capital ratio (f) 12.16% 11.98% 12.78% 12.64% 12.49%
Total risk-based capital ratio (f) 13.62% 13.43% 14.41% 14.28% 14.14%
(f) Estimated for most recent period-end.
           
 Hancock Holding Company           
 Financial Highlights           
 (amounts in thousands)           
 (unaudited)           
           
   Three Months Ended   Nine Months Ended 
  9/30/2013 6/30/2013 9/30/2012 9/30/2013 9/30/2012
Average Balance Sheet          
           
Commercial non-real estate loans  $4,720,608 $4,539,259 $4,056,457 $4,558,934 $3,903,767
Construction and land development loans  970,411 984,449 1,092,181 976,702 1,197,915
Commercial real estate loans  2,891,830 2,894,432 2,869,996 2,893,923 2,892,762
Residential mortgage loans 1,668,201 1,625,672 1,573,559 1,640,320 1,557,210
Consumer loans 1,570,345 1,579,397 1,667,399 1,589,366 1,646,100
Total loans (g) 11,821,395 11,623,209 11,259,592 11,659,245 11,197,754
Securities (h) 4,135,348 4,423,441 4,039,191 4,163,436 4,174,956
Short-term investments 427,892 453,565 531,195 644,349 705,205
Earning assets 16,384,635 16,500,215 15,829,978 16,467,030 16,077,915
Allowance for loan losses (137,936) (137,815) (140,661) (137,624) (136,257)
Other assets 2,549,328 2,660,432 2,909,649 2,659,791 2,983,774
Total assets $18,796,027 $19,022,832 $18,598,966 $18,989,197 $18,925,432
           
Noninterest bearing deposits $5,415,303 $5,346,916 $5,076,152 $5,359,325 $5,194,751
Interest bearing transaction and savings deposits 5,919,709 5,965,769 5,869,281 5,955,711 5,792,586
Interest bearing public fund deposits 1,302,425 1,483,267 1,426,405 1,463,750 1,491,514
Time deposits 2,384,248 2,415,411 2,473,450 2,402,061 2,624,039
Total interest bearing deposits 9,606,382 9,864,447 9,769,136 9,821,522 9,908,139
Total deposits 15,021,685 15,211,363 14,845,288 15,180,847 15,102,890
Short-term borrowings 820,500 790,103 794,925 791,641 842,702
Long-term debt 385,203 393,641 317,379 391,712 344,638
Other liabilities 229,694 222,656 236,134 228,056 245,940
Common shareholders' equity 2,338,945 2,405,069 2,405,240 2,396,941 2,389,262
Total liabilities & common equity $18,796,027 $19,022,832 $18,598,966 $18,989,197 $18,925,432
(g) Includes loans held for sale
(h) Average securities does not include unrealized holding gains/losses on available for sale securities.
 
 Hancock Holding Company 
 Average Balance and Net Interest Margin Summary 
 (amounts in thousands) 
 (unaudited) 
                   
  Three Months Ended
  9/30/2013 6/30/2013 9/30/2012
  Interest Volume Rate Interest Volume Rate Interest Volume Rate
                   
Average Earning Assets                  
Commercial & real estate loans (TE) $109,450 $8,582,849 5.06% $103,344 $8,418,140 4.92% $109,069 $8,018,634 5.41%
Residential mortgage loans  24,968  1,668,201 5.99%  27,540  1,625,672 6.78%  28,533  1,573,559 7.25%
Consumer loans  25,740  1,570,345 6.51%  26,534  1,579,397 6.74%  29,942  1,667,399 7.14%
Loan fees & late charges  689  -- 0.00%  1,236  -- 0.00%  891  -- 0.00%
 Total loans (TE)  160,847  11,821,395 5.41%  158,654  11,623,209 5.47%  168,435  11,259,592 5.95%
                   
US Treasury and government agency securities  33  5,585 2.34%  1  150 2.67%  51  18,419 1.10%
CMOs  7,278  1,463,403 1.99%  7,454  1,589,017 1.88%  7,820  1,663,741 1.88%
Mortgage backed securities  13,042  2,410,763 2.16%  13,217  2,593,270 2.04%  12,530  2,097,097 2.39%
Municipals (TE)  2,715  247,140 4.39%  2,630  232,987 4.51%  2,864  252,771 4.51%
Other securities  53  8,457 2.51%  56  8,017 2.79%  63  7,163 3.58%
 Total securities (TE) (i)  23,121  4,135,348 2.24%  23,358  4,423,441 2.11%  23,328  4,039,191 2.30%
                   
 Total short-term investments  253  427,892 0.23%  280  453,565 0.25%  308  531,195 0.23%
                   
 Average earning assets yield (TE) $184,221 $16,384,635 4.47% $182,292 $16,500,215 4.42% $192,071 $15,829,978 4.84%
                   
Interest-bearing Liabilities                  
Interest-bearing transaction and savings deposits  $1,398 $5,919,709 0.09% $1,542 $5,965,769 0.10% $1,688 $5,869,281 0.11%
Time deposits  3,687  2,384,248 0.61%  3,795  2,415,411 0.63%  4,829  2,473,450 0.78%
Public funds  766  1,302,425 0.23%  852  1,483,267 0.23%  1,002  1,426,405 0.28%
 Total interest bearing deposits  5,851  9,606,382 0.24%  6,189  9,864,447 0.25%  7,519  9,769,136 0.31%
                   
Short-term borrowings  1,074  820,500 0.52%  1,058  790,103 0.54%  1,522  794,925 0.76%
Long-term debt  3,184  385,203 3.28%  3,223  393,641 3.28%  2,908  317,379 3.65%
 Total borrowings  4,258  1,205,703 1.40%  4,281  1,183,744 1.45%  4,430  1,112,304 1.58%
                   
 Total interest bearing liabilities cost $10,109 $10,812,085 0.37% $10,470 $11,048,191 0.38% $11,949 $10,881,440 0.44%
                   
Net interest-free funding sources    5,572,550      5,452,024      4,948,538  
                   
Total Cost of Funds $10,109 $16,384,635 0.24% $10,470 $16,500,215 0.25% $11,949 $15,829,978 0.30%
                   
Net Interest Spread (TE) $174,112   4.10% $171,822   4.04% $180,122   4.40%
                   
Net Interest Margin (TE) $174,112 $16,384,635 4.23% $171,822 $16,500,215 4.17% $180,122 $15,829,978 4.54%
(i) Average securities does not include unrealized holding gains/losses on available for sale securities.
 
 Hancock Holding Company 
 Average Balance and Net Interest Margin Summary 
 (amounts in thousands) 
 (unaudited) 
             
  Nine Months Ended
  9/30/2013 9/30/2012
  Interest Volume Rate Interest Volume Rate
             
Average Earning Assets            
Commercial & real estate loans (TE) $326,090 $8,429,559 5.17% $330,355 $7,994,444 5.52%
Residential mortgage loans  78,188  1,640,320 6.36%  83,664  1,557,210 7.16%
Consumer loans  78,775  1,589,366 6.63%  86,876  1,646,100 7.05%
Loan fees & late charges  2,493  -- 0.00%  3,238  -- 0.00%
 Total loans (TE)  485,546  11,659,245 5.56%  504,133  11,197,754 6.01%
             
US Treasury and government agency securities  51  3,771 1.81%  2,052  126,273 2.17%
CMOs  21,823  1,528,825 1.90%  22,586  1,534,909 1.96%
Mortgage backed securities  37,864  2,390,098 2.11%  40,858  2,237,794 2.43%
Municipals (TE)  7,899  232,478 4.53%  8,872  267,793 4.42%
Other securities  150  8,264 2.42%  255  8,187 4.15%
 Total securities (TE) (j)  67,787  4,163,436 2.17%  74,623  4,174,956 2.39%
             
 Total short-term investments  1,178  644,349 0.24%  1,304  705,205 0.25%
             
 Average earning assets yield (TE) $554,511 $16,467,030 4.50% $580,060 $16,077,915 4.82%
             
Interest-Bearing Liabilities            
Interest-bearing transaction deposits  $4,599 $5,955,711 0.10% $5,634 $5,792,586 0.13%
Time deposits  11,568  2,402,061 0.64%  16,735 2,624,039 0.85%
Public funds  2,618  1,463,750 0.24%  3,285 1,491,514 0.29%
 Total interest bearing deposits  18,785  9,821,522 0.26%  25,654  9,908,139 0.35%
             
Short-term borrowings  3,450  791,641 0.58%  4,792  842,702 0.76%
Long-term debt  9,601  391,712 3.28%  9,961  344,638 3.86%
 Total borrowings  13,051  1,183,353 1.47%  14,753  1,187,340 1.66%
             
 Total interest bearing liabilities cost $31,836 $11,004,875 0.39% $40,407 $11,095,479 0.49%
             
Net interest-free funding sources    5,462,155     4,982,436  
             
Total Cost of Funds $31,836 $16,467,030 0.26% $40,407 $16,077,915 0.34%
             
Net Interest Spread (TE) $522,675   4.11% $539,653   4.33%
             
Net Interest Margin (TE) $522,675 $16,467,030 4.24% $539,653 $16,077,915 4.48%
(j) Average securities does not include unrealized holding gains/losses on available for sale securities.
 
 Hancock Holding Company 
 Quarterly Financial Data 
 (amounts in thousands, except per share data and FTE headcount) 
 (unaudited) 
  Three Months Ended
  9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Per Common Share Data          
           
Earnings per share:          
 Basic $0.40 $0.55 $0.56 $0.55 $0.55
 Diluted $0.40 $0.55 $0.56 $0.54 $0.55
Operating earnings per share: (k)          
Basic $0.56 $0.55 $0.56 $0.54 $0.58
Diluted  $0.56 $0.55 $0.56 $0.54 $0.58
Cash dividends per share  $0.24 $0.24 $0.24 $0.24 $0.24
Book value per share (period-end) $28.70 $28.57 $29.18 $28.91 $28.71
Tangible book value per share (period-end) $19.04 $18.83 $19.67 $19.27 $18.97
Weighted average number of shares:          
 Basic 82,091 83,279 84,871 84,798 84,777
 Diluted 82,205 83,357 84,972 85,777 85,632
Period-end number of shares 82,107 82,078 84,882 84,848 84,782
Market data:          
 High sales price $33.85 $30.93 $33.59 $32.50 $33.27
 Low sales price $29.00 $25.00 $29.37 $29.47 $27.99
 Period end closing price  $31.38 $30.07 $30.92 $31.73 $30.98
 Trading volume 29,711 38,599 29,469 20,910 26,877
           
Other Period-end Data          
           
FTE headcount 4,068 4,160 4,197 4,235 4,290
Tangible common equity $1,563,542 $1,545,122 $1,669,435 $1,634,833 $1,608,285
Tier I capital $1,657,136 $1,632,874 $1,700,115 $1,668,809 $1,631,372
Goodwill $625,675 $625,675 $625,675 $628,877 $628,877
Amortizing intangibles $167,116 $174,423 $181,853 $189,409 $197,139
           
Performance Ratios          
           
Return on average assets 0.70% 0.99% 1.03% 0.99% 1.00%
Return on average assets (operating) (k) 0.99% 0.99% 1.03% 0.98% 1.07%
Return on average common equity 5.63% 7.82% 8.05% 7.67% 7.77%
Return on average common equity (operating) (k) 7.93% 7.82% 8.05% 7.60% 8.24%
Return on average tangible common equity 8.54% 11.74% 12.04% 11.58% 11.87%
Return on average tangible common equity (operating) (k) 12.03% 11.74% 12.04% 11.48% 12.59%
Tangible common equity ratio  8.68% 8.52% 9.14% 8.77% 9.09%
Earning asset yield (TE) 4.47% 4.42% 4.60% 4.76% 4.84%
Total cost of funds 0.24% 0.25% 0.28% 0.28% 0.30%
Net interest margin (TE) 4.23% 4.17% 4.32% 4.48% 4.54%
Efficiency ratio (l) 64.95% 65.68% 64.17% 60.78% 64.33%
Allowance for loan losses as a percent of period-end loans 1.18% 1.18% 1.20% 1.18% 1.19%
Allowance for loan losses to non-performing loans + accruing loans 90 days past due 94.69% 91.43% 87.34% 81.40% 77.81%
Average loan/deposit ratio 78.70% 76.41% 75.30% 76.29% 75.85%
Noninterest income excluding securities transactions as a percent of total revenue (TE) 26.59% 27.11% 25.40% 26.02% 25.86%
(k) Excludes tax-effected securities transactions and one-time noninterest expense items. Management believes that operating income provides a useful measure of financial performance that helps investors compare the Company's fundamental operations over time.
(l) Efficiency ratio is defined as noninterest expense as a percent of total revenue (TE) before amortization of purchased intangibles, one-time noninterest expense items, and securities transactions.
 
CONTACT: For More Information         Trisha Voltz Carlson         SVP, Investor Relations Manager         504.299.5208         trisha.carlson@hancockbank.com

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