GULFPORT, Miss., July 26, 2012 (GLOBE NEWSWIRE) -- Hancock Holding Company (Nasdaq:HBHC) today announced financial results for the second quarter of 2012. Operating income for the second quarter of 2012 was $47.0 million or $.55 per diluted common share, compared to $40.5 million, or $.47 in the first quarter of 2012. Operating income was $26.6 million, or $.48, in the second quarter of 2011. Operating income is defined as net income excluding tax-effected merger-related costs and securities transactions gains or losses. Included in the financial tables is a reconciliation of net income to operating income.
Hancock's return on average assets, excluding merger-related costs and securities transactions gains or losses, was 1.00% for the second quarter of 2012, compared to 0.85% in the first quarter of 2012, and 0.92% in the second quarter a year ago.
Net income for the second quarter of 2012 was $39.3 million, or $.46 per diluted common share, compared to $18.5 million, or $.21 in the first quarter of 2012. Net income was $12.1 million, or $.22, in the second quarter of 2011. Pre-tax earnings for the second and first quarters of 2012 included merger-related costs of $11.9 million and $33.9 million, respectively. Pre-tax merger costs for the second quarter of 2011 totaled $22.2 million.
The Company's pre-tax, pre-provision profit for the second quarter of 2012 was $75.8 million compared to $69.2 million in the first quarter of 2012 and $49.5 million in the second quarter of 2011. Pre-tax pre-provision profit is total revenue (TE) less non-interest expense and excludes merger-related costs and securities transactions gains or losses. Included in the financial tables is a reconciliation of net income to pre-tax, pre-provision profit.
"Second quarter operating results improved 17% linked-quarter on a per share basis and were in line with our expectations and guidance," said Hancock's President and Chief Executive Officer Carl J. Chaney. "The Company's fundamentals remain strong and we are pleased to have reported a 1% operating ROA for the quarter. We will continue to focus on improving that return through increasing loan volumes, developing additional revenue opportunities and achieving additional expense synergies."
On June 4, 2011, Hancock completed its acquisition of Whitney Holding Corporation ("Whitney") headquartered in New Orleans, Louisiana. The impact of the acquisition is reflected in the Company's financial information from the acquisition date. Under purchase accounting, the Whitney balance sheet was recorded at fair value at acquisition date.
Highlights & Key Operating Items from Hancock's Second Quarter Results
Total assets at June 30, 2012, were $18.8 billion, compared to $19.3 billion at March 31, 2012.
Loans
Total loans at June 30, 2012 were $11.1 billion, a slight decrease of $52 million, or less than 1%, from March 31, 2012. Adjusting for a $46 million decline in the FDIC covered Peoples First portfolio during the second quarter, total loans were virtually unchanged compared to March 31, 2012.
During the second quarter net growth in commercial and industrial (C&I), residential mortgage and consumer loans was offset by net reductions in commercial construction and land development (C&D) and commercial real estate (CRE) credits.
The growth in the C&I portfolio reflected activity mainly in western Louisiana, Tampa and Greater New Orleans. The increase in the consumer portfolio was related to indirect and home equity lending campaigns kicked off during the quarter.
The decline in C&D and CRE loans reflects ongoing payoffs and scheduled repayments within those portfolios, a portion of which were rated as problem credits. There have been limited opportunities for new project financing for these types of credits in today's environment.
Over $400 million of new loans were funded in markets throughout the company's footprint from both existing and new customers. The environment to generate new loans remains competitive. However, the pipeline for new originations is strong and management remains cautiously optimistic there will be net loan growth in the second half of 2012.
For the second quarter of 2012, average total loans were $11.1 billion, a decrease of $53 million, compared to the first quarter of 2012.
Deposits
Total deposits at June 30, 2012 were $14.9 billion, down $502 million, or 3%, from March 31, 2012. Average deposits for the second quarter of 2012 were $15.2 billion, down $159 million, or 1%, from the first quarter of 2012.
Noninterest-bearing demand deposits (DDAs) totaled $5.0 billion at June 30, 2012, down approximately $200 million, or 4%, compared to March 31, 2012. DDAs comprised 34% of total period-end deposits at June 30, 2012, unchanged from March 31, 2012. Interest bearing transaction and savings deposits totaled $5.9 billion at June 30, 2012, down approximately $120 million, or 2%, linked-quarter. The redeployment of temporary excess liquidity in a few customer relationships accounted for approximately half of the declines in DDAs and interest-bearing transaction deposits during the second quarter of 2012.
Interest-bearing public fund deposits were down $65 million linked-quarter reflecting the seasonal nature of these types of deposits.
Time deposits (CDs) totaled $2.5 billion at June 30, 2012, down $116 million compared to $2.6 billion at March 31, 2012. During the second quarter, approximately $745 million of time deposits matured at an average rate of 1.09%, of which approximately 70% renewed at an average cost of 0.48%. The opportunity to reprice CDs at significantly lower rates over the near term has largely been eliminated.
Asset Quality
The Company's allowance for loan losses was $140.8 million at June 30, 2012, compared to $142.3 million at March 31, 2012. The ratio of the allowance for loan losses to period-end loans was 1.27% at June 30, 2012, virtually unchanged from March 31, 2012.
Hancock recorded a total provision for loan losses for the second quarter of 2012 of $8.0 million, down from $10.0 million in the first quarter of 2012. The provision for non-covered loans declined to $7.0 million in the second quarter of 2012 from $8.4 million in the first quarter of 2012. During the second quarter of 2012, the Company recorded a $5.1 million increase in the allowance for losses related to impairment of certain pools of covered loans, with a related increase of $4.1 million in the Company's FDIC loss share indemnification asset. The net impact on provision expense from the covered portfolio was $1.0 million in the second quarter, compared to $1.6 million for the first quarter of 2012.
Net charge-offs from the non-covered loan portfolio in the second quarter of 2012 were $10.2 million, or .37% of average total loans on an annualized basis. This compares to net non-covered loan charge-offs of $7.1 million, or .25% of average total loans, for the first quarter of 2012. A portion of the charge-offs on impaired loans had been specifically reserved for in previous quarters.
The allowance calculated on the portion of the loan portfolio that excludes covered loans and loans acquired at fair value in the Whitney merger totaled $81.4 million, or 1.40% of this portfolio at June 30, 2012 and $84.5 million, or 1.55% at March 31, 2012. This ratio will tend to decline as the proportion of this portfolio representing new business from Whitney's operations grows, other factors held constant.
Non-performing assets (NPAs) totaled $271 million at June 30, 2012, down $17 million from $288 million at March 31, 2012. Non-performing assets as a percent of total loans and foreclosed assets was 2.42% at June 30, 2012, compared to 2.55% at March 31, 2012. The decrease in overall NPAs mainly reflects the net reduction in ORE and foreclosed assets during the quarter, including sales of bank branches closed at the completion of the systems integration in March 2012. Non-performing loans exclude loans from Whitney's and Peoples First's acquired credit-impaired loan portfolios that were recorded at estimated fair value at acquisition and are accreting interest income.
Management expects the provision and other asset quality measures will remain within the range of the results reported over the past few quarters. Additional asset quality metrics for the acquired (Whitney), covered (Peoples First) and originated (Hancock legacy plus Whitney non-acquired loans) portfolios are included in the financial tables.
Net Interest Income
Net interest income (TE) for the second quarter of 2012 was $180.3 million, a slight improvement over the first quarter of 2012. The $1 million increase is mainly related to the impact of the reduction in overall funding cost during the quarter. Average earning assets were $16.2 billion in the second quarter of 2012, down $74 million, or less than 1%, from the first quarter of 2012.
The net interest margin (TE) was 4.48% for the second quarter of 2012, up 5 basis points (bps) from 4.43% in the first quarter of 2012. The margin continued to be favorably impacted by a shift in funding sources and a decline in funding costs (6bps), offset by a decline in the securities portfolio yield (9bps). Management expects the reported net interest margin will remain relatively stable over the next couple of quarters.
Non-interest Income
Non-interest income totaled $63.6 million for the second quarter of 2012, up $2.1 million, or 3%, from $61.5 million in the first quarter of 2012.
Service charges on deposits totaled $20.9 million for the second quarter of 2012, up $4.6 million from the first quarter of 2012. In conjunction with the core systems integration in March 2012, the Company began offering new and standardized products and services across its footprint. These product changes accounted for the majority of the increase linked-quarter.
Trust fees totaled $8.0 million for the second quarter of 2012, down from $8.7 million in the first quarter of 2012. As noted last quarter, a one-time event associated with the trust systems conversion at year-end 2011 increased first quarter results. Excluding the impact of that event, trust fees were up slightly linked-quarter.
Insurance fees were $4.6 million for the second quarter, up $1.1 million linked-quarter. The increase mainly reflected annual policy renewals during the quarter. Fees from secondary mortgage operations were $3.0 million for the second quarter, down $1.0 million linked-quarter. The decrease reflects a lower volume of mortgages being sold into the secondary market due, in part, to some increased emphasis on originations to be held in the loan portfolio.
Management expects the overall level of fee income to decline in the third quarter of 2012 reflecting, in part, the impact of the restrictions from the Durbin amendment on Hancock Bank. The Durbin restrictions began impacting Hancock Bank on July 1, 2012, and are expected to result in a loss of fee income of approximately $2.5 million per quarter. The restrictions began impacting Whitney Bank in October 2011.
Non-interest Expense & Taxes
Operating expense for the second quarter of 2012 totaled $168.1 million, down $3.5 million from the first quarter of 2012. Operating expense excludes merger-related costs. Amortization of intangibles totaled $7.9 million during the second quarter, down from $8.3 million in the first quarter of 2012.
Total personnel expense was $89.3 million in the second quarter of 2012, a decrease of $2.5 million from the first quarter of 2012. The linked-quarter decrease reflects a reduction in quarterly payroll taxes and the reduction in force associated with the core systems conversion and branch consolidations in mid-March. These declines were partly offset by the Company's annual merit increase and recent strategic new hires.
Merger-related costs for the second quarter of 2012 totaled $11.9 million pre-tax. Merger-related expenses incurred to-date total approximately $133 million. Included in merger-related costs during the second quarter of 2012 were expenses associated with professional fees, contract cancellations, personnel costs and data processing expenses.
Management expects additional cost savings will continue to be generated over the third and fourth quarters of 2012, and is reiterating its total noninterest expense guidance for the fourth quarter of 2012 of $149 million to $153 million, excluding amortization of intangibles.
The effective income tax rate for the second quarter of 2012 was 26%, up from 17% in the first quarter of 2012. Management expects the full year 2012 reported tax rate to approximate 25%. 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 June 30, 2012. The Company remained well-capitalized and improved its tangible common equity ratio to 8.72% at June 30, 2012, up from 8.27% at March 31, 2012. Additional capital ratios are included in the financial tables.
During the second quarter the Company announced a tender offer for up to $75 million of Whitney Bank subordinated notes. A total of $150 million in subordinated notes were issued by Whitney National Bank in March 2007 at a rate of 5.875%. In July 2012, the Company completed the tender and successfully repurchased approximately $52 million of the Whitney subordinated notes at a premium of $5.2 million. The transaction will be included in third quarter 2012 results.
Conference Call
Management will host a conference call for analysts and investors at 9:00 a.m. Central Time Friday, July 27, 2012 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. 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 August 3, 2012 by dialing (855) 859-2056 or (404) 537-3406, passcode 96892404.
About Hancock Holding Company
Hancock Holding Company, the parent company of Hancock Bank and Whitney Bank, operates a combined total of nearly 260 full-service bank branches and more than 350 ATMs across a Gulf south corridor comprising South Mississippi; southern and central Alabama; southern Louisiana; the northern, central, and Panhandle regions of Florida; 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.; and corporate trust offices in Gulfport and Jackson, Miss., New Orleans and Baton Rouge, La., and Orlando, Fla.; and Harrison Finance Company. Additional information is available at www.hancockbank.com and www.whitneybank.com.
The Hancock Holding Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2758
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 loan growth, deposit trends, credit quality trends, net interest margin trends, future expense levels (including merger costs and cost synergies), projected tax rates, economic conditions in our markets, future profitability, purchase accounting impacts such as accretion levels, and the financial impact of regulatory requirements such as the Durbin amendment.
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 | Six Months Ended | ||||
| 6/30/2012 | 3/31/2012 | 06/30/011 | 6/30/2012 | 6/30/2011 | |
| Per Common Share Data | |||||
| Earnings per share: | |||||
| Basic | $0.46 | $0.22 | $0.22 | $0.68 | $0.59 |
| Diluted | $0.46 | $0.21 | $0.22 | $0.67 | $0.59 |
| Operating earnings per share: (a) | |||||
| Basic | $0.55 | $0.48 | $0.48 | $1.03 | $0.93 |
| Diluted | $0.55 | $0.47 | $0.48 | $1.02 | $0.93 |
| Cash dividends per share | $0.24 | $0.24 | $0.24 | $0.48 | $0.48 |
| Book value per share (period-end) | $28.30 | $28.02 | $28.18 | $28.30 | $28.18 |
| Tangible book value per share (period-end) | $18.46 | $17.99 | $18.06 | $18.46 | $18.06 |
| Weighted average number of shares: | |||||
| Basic | 84,751 | 84,741 | 54,890 | 84,742 | 46,160 |
| Diluted | 85,500 | 85,442 | 55,035 | 85,467 | 46,310 |
| Period-end number of shares | 84,774 | 84,770 | 84,694 | 84,774 | 84,694 |
| Market data: | |||||
| High sales price | $36.56 | $36.73 | $34.57 | $36.73 | $35.68 |
| Low sales price | $27.96 | $31.56 | $30.04 | $27.96 | $30.04 |
| Period end closing price | $30.44 | $35.51 | $30.98 | $30.44 | $30.98 |
| Trading volume | 39,310 | 32,423 | 32,122 | 71,733 | 58,064 |
| Other Period-end Data | |||||
| FTE headcount | 4,456 | 4,601 | 4,911 | 4,456 | 4,911 |
| Tangible common equity | $1,565,029 | $1,524,985 | $1,529,955 | $1,565,029 | $1,529,955 |
| Tier I capital | $1,549,018 | $1,513,485 | $1,468,175 | $1,549,018 | $1,468,175 |
| Goodwill and indefinite lived assets | $628,877 | $647,216 | $622,929 | $628,877 | $622,929 |
| Amortizing intangibles | $205,249 | $202,772 | $233,121 | $205,249 | $233,121 |
| Performance Ratios | |||||
| Return on average assets | 0.83% | 0.39% | 0.42% | 0.61% | 0.56% |
| Return on average assets (operating) (a) | 1.00% | 0.85% | 0.92% | 0.92% | 0.87% |
| Return on average common equity | 6.62% | 3.13% | 3.32% | 4.88% | 4.72% |
| Return on average common equity (operating) (a) | 7.93% | 6.86% | 7.30% | 7.40% | 7.40% |
| Tangible common equity ratio | 8.72% | 8.27% | 8.09% | 8.72% | 8.09% |
| Earning asset yield (TE) | 4.80% | 4.81% | 4.77% | 4.80% | 4.81% |
| Total cost of funds | 0.32% | 0.38% | 0.66% | 0.35% | 0.76% |
| Net interest margin (TE) | 4.48% | 4.43% | 4.11% | 4.45% | 4.05% |
| Noninterest expense as a percent of total revenue (TE) before amortization of purchased intangibles and securities transactions and merger expenses | 65.67% | 67.81% | 65.62% | 66.73% | 66.68% |
| Allowance for loan losses as a percent of period-end loans | 1.27% | 1.28% | 1.00% | 1.27% | 1.00% |
| Allowance for loan losses to non-performing loans + accruing loans 90 days past due | 104.78% | 105.37% | 85.22% | 104.78% | 85.22% |
| Average loan/deposit ratio | 73.51% | 73.10% | 72.51% | 73.30% | 72.46% |
| Noninterest income excluding securities transactions as a percent of total revenue (TE) | 26.06% | 25.54% | 31.43% | 25.81% | 32.05% |
| (a) Excludes tax-effected merger related expenses and securities transactions. Management believes that this is a useful financial measure because it enables investors to assess ongoing operations. | |||||
| Hancock Holding Company | |||||
| Financial Highlights | |||||
| (amounts in thousands) | |||||
| (unaudited) | |||||
| Three Months Ended | Six Months Ended | ||||
| 6/30/2012 | 3/31/2012 | 06/30/011 | 6/30/2012 | 6/30/2011 | |
| Asset Quality Information | |||||
| Non-accrual loans (b) | $113,384 | $111,378 | $109,234 | $113,384 | $109,234 |
| Restructured loans (c) | 19,518 | 19,926 | 18,606 | 19,518 | 18,606 |
| Total non-performing loans | 132,902 | 131,304 | 127,840 | 132,902 | 127,840 |
| ORE and foreclosed assets | 138,118 | 156,332 | 130,320 | 138,118 | 130,320 |
| Total non-performing assets | $271,020 | $287,636 | $258,160 | $271,020 | $258,160 |
| Non-performing assets as a percent of loans, ORE and foreclosed assets | 2.42% | 2.55% | 2.27% | 2.42% | 2.27% |
| Accruing loans 90 days past due (b) | $1,443 | $3,780 | $4,057 | $1,443 | $4,057 |
| Accruing loans 90 days past due as a percent of loans | 0.01% | 0.03% | 0.04% | 0.01% | 0.04% |
| Non-performing assets + accruing loans 90 days past due to loans, ORE and foreclosed assets | 2.43% | 2.58% | 2.30% | 2.43% | 2.30% |
| Net charge-offs - non-covered | $10,211 | $7,054 | $8,241 | $17,265 | $14,683 |
| Net charge-offs - covered | 3,499 | 15,790 | -- | $19,289 | 375 |
| Net charge-offs - non-covered as a percent of average loans | 0.37% | 0.25% | 0.49% | 0.31% | 0.51% |
| Allowance for loan losses | $140,768 | $142,337 | $112,407 | $140,768 | $112,407 |
| Allowance for loan losses as a percent of period-end loans | 1.27% | 1.28% | 1.00% | 1.27% | 1.00% |
| Allowance for loan losses to non-performing loans + accruing loans 90 days past due | 104.78% | 105.37% | 85.22% | 104.78% | 85.22% |
| Provision for loan losses | $8,025 | $10,015 | $9,144 | $18,040 | $17,966 |
| Allowance for Loan Losses | |||||
| Beginning Balance | $142,337 | $124,881 | $94,356 | $124,881 | $81,997 |
| Provision for loan losses before FDIC benefit - covered loans | 5,146 | 31,879 | 18,049 | 37,025 | 28,948 |
| Benefit attributable to FDIC loss share agreement | (4,116) | (30,285) | (17,148) | (34,401) | (27,502) |
| Provision for loan losses - non-covered loans | 6,995 | 8,421 | 8,243 | 15,416 | 16,520 |
| Net provision for loan losses | 8,025 | 10,015 | 9,144 | 18,040 | 17,966 |
| Increase in indemnification asset | 4,116 | 30,285 | 17,148 | 34,401 | 27,502 |
| Charge-offs - non-covered | 12,711 | 9,666 | 12,993 | 22,377 | 21,697 |
| Charge-offs - covered | 3,499 | 15,790 | -- | 19,289 | 375 |
| Recoveries - non-covered | (2,500) | (2,612) | (4,752) | (5,112) | (7,014) |
| Net charge-offs | 13,710 | 22,844 | 8,241 | 36,554 | 15,058 |
| Ending Balance | $140,768 | $142,337 | $112,407 | $140,768 | $112,407 |
| Net Charge-off Information | |||||
| Net charge-offs - non-covered: | |||||
| Commercial/real estate loans | $5,627 | $4,278 | $5,210 | $9,906 | $9,390 |
| Residential mortgage loans | 1,846 | 721 | 1,001 | 2,567 | 1,372 |
| Consumer loans | 2,738 | 2,055 | 2,030 | 4,792 | 3,921 |
| Total net charge-offs - non-covered | $10,211 | $7,054 | $8,241 | $17,265 | $14,683 |
| Average loans: | |||||
| Commercial/real estate loans | $7,946,781 | $8,017,691 | $4,564,701 | $7,982,217 | $3,836,050 |
| Residential mortgage loans | 1,548,803 | 1,549,131 | 864,768 | 1,548,945 | 759,543 |
| Consumer loans | 1,644,532 | 1,626,052 | 1,249,168 | 1,635,334 | 1,192,547 |
| Total average loans | $11,140,116 | $11,192,874 | $6,678,637 | $11,166,496 | $5,788,140 |
| Net charge-offs - non-covered to average loans: | |||||
| Commercial/real estate loans | 0.28% | 0.21% | 0.46% | 0.25% | 0.49% |
| Residential mortgage loans | 0.48% | 0.19% | 0.46% | 0.33% | 0.36% |
| Consumer loans | 0.67% | 0.51% | 0.65% | 0.59% | 0.66% |
| Total net charge-offs - non-covered to average loans | 0.37% | 0.25% | 0.49% | 0.31% | 0.51% |
| (b) Non-accrual loans and accruing loans past due 90 days or more do not include acquired credit-impaired loans which were written down to fair value upon acquisition and accrete interest income over the remaining life of the loan. | |||||
| (c) Included in restructured loans are $9.7 million, $5.2 million, and $8.4 million in non-accrual loans at 6/30/12, 3/31/12, and 6/30/11, respectively. Total excludes acquired credit-impaired loans. | |||||
| Hancock Holding Company | |||||
| Financial Highlights | |||||
| (amounts in thousands) | |||||
| (unaudited) | |||||
| Three Months Ended | Six Months Ended | ||||
| 6/30/2012 | 3/31/2012 | 06/30/011 | 6/30/2012 | 6/30/2011 | |
| Income Statement | |||||
| Interest income | $190,489 | $191,716 | $115,477 | $382,205 | $198,010 |
| Interest income (TE) | 193,323 | 194,665 | 118,335 | 387,988 | 203,740 |
| Interest expense | 13,030 | 15,428 | 16,418 | 28,458 | 32,187 |
| Net interest income (TE) | 180,293 | 179,237 | 101,917 | 359,530 | 171,553 |
| Provision for loan losses | 8,025 | 10,015 | 9,144 | 18,040 | 17,966 |
| Noninterest income excluding securities transactions | 63,552 | 61,494 | 46,715 | 125,046 | 80,899 |
| Securities transactions gains/(losses) | -- | 12 | (36) | 12 | (87) |
| Noninterest expense | 179,972 | 205,463 | 121,366 | 385,435 | 194,385 |
| Income before income taxes | 53,014 | 22,316 | 15,228 | 75,330 | 34,284 |
| Income tax expense | 13,710 | 3,821 | 3,140 | 17,531 | 6,868 |
| Net income | $39,304 | $18,495 | $12,088 | $57,799 | $27,416 |
| Merger-related expenses | 11,913 | 33,913 | 22,219 | 45,827 | 23,808 |
| Securities transactions gains/(losses) | -- | 12 | (36) | 12 | (87) |
| Taxes on adjustments | 4,170 | 11,865 | 7,789 | 16,035 | 8,364 |
| Operating income (d) | $47,047 | $40,531 | $26,554 | $87,579 | $42,947 |
| Difference between interest income and interest income (TE) | $2,834 | $2,949 | $2,858 | $5,783 | $5,730 |
| Provision for loan losses | 8,025 | 10,015 | 9,144 | 18,040 | 17,966 |
| Merger-related expenses | 11,913 | 33,913 | 22,219 | 45,827 | 23,808 |
| Less securities transactions gains/(losses) | -- | 12 | (36) | 12 | (87) |
| Income tax expense | 13,710 | 3,821 | 3,140 | 17,531 | 6,868 |
| Pre-tax, pre-provision profit (PTPP) (e) | $75,786 | $69,181 | $49,485 | $144,968 | $81,875 |
| Noninterest Income and Noninterest Expense | |||||
| Service charges on deposit accounts | $20,907 | $16,274 | $12,343 | $37,182 | $21,887 |
| Trust fees | 7,983 | 8,738 | 5,301 | 16,721 | 9,292 |
| Bank card fees | 8,075 | 8,464 | 5,968 | 16,539 | 9,478 |
| Insurance fees | 4,581 | 3,477 | 4,628 | 8,058 | 7,878 |
| Investment & annuity fees | 4,607 | 4,415 | 3,267 | 9,022 | 6,400 |
| ATM fees | 4,844 | 4,334 | 3,290 | 9,177 | 6,021 |
| Secondary mortgage market operations | 3,015 | 4,002 | 1,877 | 7,017 | 3,444 |
| Accretion of indemnification asset | 2,000 | 3,000 | 5,450 | 5,000 | 8,494 |
| Other income | 7,540 | 8,790 | 4,591 | 16,330 | 8,005 |
| Noninterest income excluding securities transactions | $63,552 | $61,494 | $46,715 | $125,046 | $80,899 |
| Securities transactions gains/(losses) | -- | 12 | (36) | 12 | (87) |
| Total noninterest income including securities transactions | $63,552 | $61,506 | $46,679 | $125,058 | $80,812 |
| Personnel expense | $89,329 | $91,871 | $53,511 | $181,200 | $91,335 |
| Occupancy expense (net) | 13,603 | 14,401 | 8,705 | 28,005 | 14,615 |
| Equipment expense | 5,924 | 5,877 | 3,599 | 11,800 | 6,408 |
| Other operating expense | 51,281 | 51,097 | 31,711 | 102,377 | 55,984 |
| Amortization of intangibles | 7,922 | 8,304 | 1,621 | 16,226 | 2,235 |
| Merger-related expenses | 11,913 | 33,913 | 22,219 | 45,827 | 23,808 |
| Total noninterest expense | $179,972 | $205,463 | $121,366 | $385,435 | $194,385 |
| (d) Net income less tax-effected merger costs and securities gains/losses. Management believes that this is a useful financial measure because it enables investors to assess ongoing operations. | |||||
| (e) Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense, merger items, and securities transactions. Management believes that PTPP profit is a useful financial measure because it enables investors and others to assess the Company's ability to generate capital to cover credit losses through a credit cycle. | |||||
| Hancock Holding Company | |||||
| Financial Highlights | |||||
| (amounts in thousands) | |||||
| (unaudited) | |||||
| Three Months Ended | Six Months Ended | ||||
| 6/30/2012 | 3/31/2012 | 06/30/011 | 6/30/2012 | 6/30/2011 | |
| Period-end Balance Sheet | |||||
| Commercial non-real estate loans | $3,890,489 | $3,754,592 | $3,621,131 | $3,890,489 | $3,621,131 |
| Construction and land development loans | 1,167,496 | 1,285,214 | 1,371,351 | 1,167,496 | 1,371,351 |
| Commercial real estate loans | 2,830,530 | 2,952,569 | 3,241,037 | 2,830,530 | 3,241,037 |
| Residential mortgage loans | 1,519,711 | 1,511,349 | 1,443,817 | 1,519,711 | 1,443,817 |
| Consumer loans | 1,669,920 | 1,626,549 | 1,571,717 | 1,669,920 | 1,571,717 |
| Total loans | 11,078,146 | 11,130,273 | 11,249,053 | 11,078,146 | 11,249,053 |
| Loans held for sale | 44,918 | 42,484 | 67,081 | 44,918 | 67,081 |
| Securities | 4,320,457 | 4,393,845 | 4,573,973 | 4,320,457 | 4,573,973 |
| Short-term investments | 650,470 | 1,008,505 | 977,060 | 650,470 | 977,060 |
| Earning assets | 16,093,991 | 16,575,107 | 16,867,167 | 16,093,991 | 16,867,167 |
| Allowance for loan losses | (140,768) | (142,337) | (112,407) | (140,768) | (112,407) |
| Other assets | 2,825,484 | 2,858,327 | 3,002,785 | 2,825,484 | 3,002,785 |
| Total assets | $18,778,707 | $19,291,097 | $19,757,545 | $18,778,707 | $19,757,545 |
| Noninterest bearing deposits | $5,040,484 | $5,242,973 | $4,852,440 | $5,040,484 | $4,852,440 |
| Interest bearing transaction and savings deposits | 5,876,843 | 5,995,622 | 5,586,151 | 5,876,843 | 5,586,151 |
| Interest bearing public fund deposits | 1,479,378 | 1,543,867 | 1,522,002 | 1,479,378 | 1,522,002 |
| Time deposits | 2,534,115 | 2,650,305 | 3,627,316 | 2,534,115 | 3,627,316 |
| Total interest bearing deposits | 9,890,336 | 10,189,794 | 10,735,469 | 9,890,336 | 10,735,469 |
| Total deposits | 14,930,820 | 15,432,767 | 15,587,909 | 14,930,820 | 15,587,909 |
| Other borrowed funds | 1,193,021 | 1,210,561 | 1,290,875 | 1,193,021 | 1,290,875 |
| Other liabilities | 255,504 | 272,566 | 492,448 | 255,504 | 492,448 |
| Common shareholders' equity | 2,399,362 | 2,375,203 | 2,386,313 | 2,399,362 | 2,386,313 |
| Total liabilities & common equity | $18,778,707 | $19,291,097 | $19,757,545 | $18,778,707 | $19,757,545 |
| Capital Ratios | |||||
| Common shareholders' equity | $2,399,362 | $2,375,203 | $2,386,313 | $2,399,362 | $2,386,313 |
| Tier 1 capital | 1,549,018 | 1,513,485 | 1,468,175 | 1,549,018 | 1,468,175 |
| Tangible common equity ratio | 8.72% | 8.27% | 8.09% | 8.72% | 8.09% |
| Common equity (period-end) as a percent of total assets (period-end) | 12.78% | 12.31% | 12.08% | 12.78% | 12.08% |
| Leverage (Tier 1) ratio | 8.62% | 8.27% | 13.77% | 8.62% | 13.77% |
| Tier 1 risk-based capital ratio (f) | 11.98% | 11.53% | 11.05% | 11.98% | 11.05% |
| Total risk-based capital ratio (f) | 14.00% | 13.78% | 12.80% | 14.00% | 12.80% |
| (f) = estimated for most recent period end | |||||
| Hancock Holding Company | |||||
| Financial Highlights | |||||
| (amounts in thousands) | |||||
| (unaudited) | |||||
| Three Months Ended | Six Months Ended | ||||
| 6/30/2012 | 3/31/2012 | 06/30/011 | 6/30/2012 | 6/30/2011 | |
| Average Balance Sheet | |||||
| Commercial non-real estate loans | $3,872,026 | $3,780,412 | $1,809,992 | $3,826,584 | $1,433,504 |
| Construction and land development loans | 1,235,612 | 1,267,192 | 830,931 | 1,251,362 | 735,013 |
| Commercial real estate loans | 2,839,143 | 2,970,087 | 1,923,778 | 2,904,271 | 1,667,533 |
| Residential mortgage loans | 1,548,803 | 1,549,131 | 864,768 | 1,548,945 | 759,543 |
| Consumer loans | 1,644,532 | 1,626,052 | 1,249,168 | 1,635,334 | 1,192,547 |
| Total loans | 11,140,116 | 11,192,874 | 6,678,637 | 11,166,496 | 5,788,140 |
| Securities (g) | 4,292,686 | 4,194,483 | 2,224,665 | 4,243,585 | 1,836,923 |
| Short-term investments | 733,489 | 852,843 | 1,028,067 | 793,166 | 886,203 |
| Earning assets | 16,166,291 | 16,240,200 | 9,931,369 | 16,203,247 | 8,511,266 |
| Allowance for loan losses | (142,991) | (125,072) | (95,313) | (134,031) | (89,070) |
| Other assets | 2,964,097 | 3,078,392 | 1,752,765 | 3,021,242 | 1,500,158 |
| Total assets | $18,987,397 | $19,193,520 | $11,588,821 | $19,090,458 | $9,922,354 |
| Noninterest bearing deposits | $5,149,898 | $5,359,504 | $2,231,775 | $5,254,701 | $1,691,126 |
| Interest bearing transaction and savings deposits | 5,881,673 | 5,625,963 | 3,080,497 | 5,753,817 | 2,558,005 |
| Interest bearing public fund deposits | 1,517,743 | 1,531,110 | 1,283,183 | 1,524,426 | 1,255,606 |
| Time deposits | 2,604,387 | 2,795,935 | 2,615,876 | 2,700,161 | 2,483,957 |
| Total interest bearing deposits | 10,003,803 | 9,953,008 | 6,979,556 | 9,978,404 | 6,297,568 |
| Total deposits | 15,153,701 | 15,312,512 | 9,211,331 | 15,233,105 | 7,988,694 |
| Other borrowed funds | 1,212,692 | 1,237,849 | 761,438 | 1,225,271 | 631,952 |
| Other liabilities | 233,539 | 268,255 | 157,500 | 250,897 | 130,914 |
| Common shareholders' equity | 2,387,465 | 2,374,904 | 1,458,552 | 2,381,185 | 1,170,794 |
| Total liabilities & common equity | $18,987,397 | $19,193,520 | $11,588,821 | $19,090,458 | $9,922,354 |
| (g) Average securities does not include unrealized holding gains/losses on available for sale securities. | |||||
| Hancock Holding Company | ||||
| Financial Highlights | ||||
| (amounts in thousands) | ||||
| (unaudited) | ||||
| Supplemental Asset Quality Information (excluding covered assets and acquired loans) h | 6/30/2012 | 3/31/2012 | 6/30/2011 | |
| Non-accrual loans (i) (j) | $100,067 | $100,192 | $68,216 | |
| Restructured loans | 19,518 | 19,926 | 18,606 | |
| Total non-performing loans | 119,585 | 120,118 | 86,822 | |
| ORE and foreclosed assets (k) | 93,339 | 107,804 | 104,975 | |
| Total non-performing assets | $212,924 | $227,922 | $191,797 | |
| Non-performing assets as a percent of loans, ORE and foreclosed assets | 3.61% | 4.10% | 4.47% | |
| Accruing loans 90 days past due | $1,443 | $2,524 | $2,504 | |
| Accruing loans 90 days past due as a percent of loans | 0.02% | 0.05% | 0.06% | |
| Non-performing assets + accruing loans 90 days past due to loans, ORE and foreclosed assets | 3.63% | 4.15% | 4.53% | |
| Allowance for loan losses (l) | $81,376 | $84,496 | $83,160 | |
| Allowance for loan losses as a percent of period-end loans | 1.40% | 1.55% | 1.99% | |
| Allowance for loan losses to nonperforming loans + accruing loans 90 days past due | 67.24% | 68.90% | 93.10% | |
| (h) Covered and acquired loans are considered to be performing due to the application of the accretion method under acquisition accounting. Acquired loans are recorded at fair value with no allowance brought forward in accordance with acquisition accounting. Certain acquired loans and foreclosed assets are also covered under FDIC loss sharing agreements, which provide considerable protection against credit risk. Due to the protection of loss sharing agreements and impact of acquisition accounting, management has excluded acquired loans and covered assets from this table to provide for improved comparability to prior periods and better perspective into asset quality trends. | ||||
| (i) Excludes acquired covered loans not accounted for under the accretion method of $6,174, $9,377, and $39,514. | ||||
| (j) Excludes non-covered acquired performing loans at fair value accounted for under the accretion method of $7,143, $1,809, and $1,504 . | ||||
| (k) Excludes covered foreclosed assets of $44,779, $48,528, and $25,345. | ||||
| (l) Excludes allowance for loan losses recorded on covered acquired loans of $59,392, $57,841, and $29,247. | ||||
| 3/31/2012 | ||||
| Originated Loans | Acquired Loans (m) | Covered Loans (n) | Total | |
| Commercial non-real estate loans | $1,666,845 | $2,045,474 | $42,273 | $3,754,592 |
| Construction and land development loans | 639,217 | 524,570 | 121,427 | 1,285,214 |
| Commercial real estate loans | 1,396,466 | 1,495,280 | 60,823 | 2,952,569 |
| Residential mortgage loans | 564,218 | 671,275 | 275,856 | 1,511,349 |
| Consumer loans | 1,184,261 | 308,883 | 133,405 | 1,626,549 |
| Total loans | $5,451,007 | $5,045,482 | $633,784 | $11,130,273 |
| Change in loan balance from previous quarter | $563,277 | ($572,371) | ($37,659) | ($46,753) |
| 6/30/2012 | ||||
| Originated Loans | Acquired Loans (m) | Covered Loans (n) | Total | |
| Commercial non-real estate loans | $1,902,292 | $1,948,226 | $39,971 | $3,890,489 |
| Construction and land development loans | 630,997 | 443,057 | 93,442 | 1,167,496 |
| Commercial real estate loans | 1,316,772 | 1,450,796 | 62,962 | 2,830,530 |
| Residential mortgage loans | 654,149 | 598,199 | 267,363 | 1,519,711 |
| Consumer loans | 1,306,648 | 239,276 | 123,996 | 1,669,920 |
| Total loans | $5,810,858 | $4,679,554 | $587,734 | $11,078,146 |
| Change in loan balance from previous quarter | $359,851 | ($365,928) | ($46,050) | ($52,127) |
| (m) Loans which have been acquired and no allowance brought forward in accordance with acquisition accounting. | ||||
| (n) Loans which are covered by loss sharing agreements with the FDIC providing considerable protection against credit risk. | ||||
| Hancock Holding Company | |||||||||
| Average Balance and Net Interest Margin Summary | |||||||||
| (amounts in thousands) | |||||||||
| (unaudited) | |||||||||
| Three Months Ended | |||||||||
| 6/30/2012 | 3/31/2012 | 6/30/2011 | |||||||
| Interest | Volume | Rate | Interest | Volume | Rate | Interest | Volume | Rate | |
| Average Earning Assets | |||||||||
| Commercial & real estate loans (TE) | $108,777 | $7,946,781 | 5.50% | $112,509 | $8,017,691 | 5.64% | $60,125 | $4,564,701 | 5.28% |
| Residential mortgage loans | 28,709 | 1,548,803 | 7.41% | 26,422 | 1,549,131 | 6.82% | 14,839 | 864,768 | 6.87% |
| Consumer loans | 28,372 | 1,644,532 | 6.92% | 28,562 | 1,626,052 | 7.05% | 21,628 | 1,249,168 | 6.94% |
| Loan fees & late charges | 1,548 | -- | 0.00% | 799 | -- | 0.00% | 234 | -- | 0.00% |
| Total loans (TE) | 167,406 | 11,140,116 | 6.04% | 168,292 | 11,192,874 | 6.04% | 96,826 | 6,678,637 | 5.81% |
| US treasury securities | 2 | 150 | 4.66% | 2 | 150 | 4.67% | 13 | 10,802 | 0.47% |
| US agency securities | 736 | 141,999 | 2.07% | 1,262 | 219,287 | 2.30% | 1,468 | 315,300 | 1.86% |
| CMOs | 7,983 | 1,578,438 | 2.02% | 6,783 | 1,361,132 | 1.99% | 3,276 | 398,863 | 3.29% |
| Mortgage backed securities | 13,921 | 2,296,126 | 2.43% | 14,406 | 2,321,703 | 2.48% | 13,233 | 1,251,563 | 4.23% |
| Municipals (TE) | 2,741 | 266,661 | 4.11% | 3,267 | 284,113 | 4.60% | 2,728 | 211,301 | 5.16% |
| Other securities | 65 | 9,312 | 2.79% | 126 | 8,098 | 6.21% | 275 | 36,836 | 2.99% |
| Total securities (TE) (o) | 25,448 | 4,292,686 | 2.37% | 25,846 | 4,194,483 | 2.46% | 20,993 | 2,224,665 | 3.77% |
| Total short-term investments | 469 | 733,489 | 0.26% | 527 | 852,843 | 0.25% | 516 | 1,028,067 | 0.20% |
| Average earning assets yield (TE) | 193,323 | $16,166,291 | 4.80% | $194,665 | $16,240,200 | 4.81% | $118,335 | $9,931,369 | 4.77% |
| Interest-bearing Liabilities | |||||||||
| Interest-bearing transaction and savings deposits | 1,764 | 5,881,673 | 0.12% | 2,181 | 5,625,963 | 0.16% | 1,531 | 3,080,497 | 0.20% |
| Time deposits | 5,018 | 2,604,387 | 0.77% | 6,889 | 2,795,935 | 0.99% | 10,631 | 2,615,876 | 1.63% |
| Public Funds | 1,090 | 1,517,743 | 0.29% | 1,192 | 1,531,110 | 0.31% | 1,409 | 1,283,183 | 0.44% |
| Total interest bearing deposits | 7,872 | 10,003,803 | 0.32% | 10,262 | 9,953,008 | 0.41% | 13,571 | 6,979,556 | 0.78% |
| Total borrowings | 5,158 | 1,212,692 | 1.71% | 5,165 | 1,237,849 | 1.68% | 2,847 | 761,438 | 1.50% |
| Total interest bearing liabilities cost | $13,030 | $11,216,495 | 0.47% | $15,427 | $11,190,857 | 0.55% | $16,418 | $7,740,994 | 0.85% |
| Net interest-free funding sources | 4,949,796 | 5,049,343 | 2,190,375 | ||||||
| Total Cost of Funds | $13,030 | $16,166,291 | 0.32% | $15,427 | $16,240,200 | 0.38% | $16,418 | $9,931,369 | 0.66% |
| Net Interest Spread (TE) | $180,293 | 4.33% | $179,238 | 4.26% | $101,917 | 3.92% | |||
| Net Interest Margin (TE) | $180,293 | $16,166,291 | 4.48% | $179,238 | $16,240,200 | 4.43% | $101,917 | $9,931,369 | 4.11% |
| (o) 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) | |||||||||
| Six Months Ended | |||||||||
| 6/30/2012 | 6/30/2011 | ||||||||
| Interest | Volume | Rate | Interest | Volume | Rate | ||||
| Average Earning Assets | |||||||||
| Commercial & real estate loans (TE) | $221,285 | $7,982,217 | 5.57% | $100,393 | $3,836,050 | 5.27% | |||
| Residential mortgage loans | 55,132 | 1,548,945 | 7.12% | 25,663 | 759,543 | 6.76% | |||
| Consumer loans | 56,934 | 1,635,334 | 6.98% | 40,802 | 1,192,547 | 6.90% | |||
| Loan fees & late charges | 2,347 | -- | 0.00% | 174 | -- | 0.00% | |||
| Total loans (TE) | 335,698 | 11,166,496 | 6.04% | 167,032 | 5,788,140 | 5.81% | |||
| US treasury securities | 3 | 150 | 4.67% | 25 | 10,800 | 0.47% | |||
| US agency securities | 1,998 | 180,643 | 2.21% | 2,238 | 244,104 | 1.83% | |||
| CMOs | 14,766 | 1,469,785 | 2.01% | 6,294 | 375,175 | 3.36% | |||
| Mortgage backed securities | 28,327 | 2,308,915 | 2.45% | 21,406 | 984,159 | 4.35% | |||
| Municipals (TE) | 6,009 | 275,387 | 4.36% | 5,407 | 195,192 | 5.54% | |||
| Other securities | 191 | 8,705 | 4.38% | 523 | 27,493 | 3.81% | |||
| Total securities (TE) (o) | 51,294 | 4,243,585 | 2.42% | 35,893 | 1,836,923 | 3.91% | |||
| Total short-term investments | 996 | 793,166 | 0.25% | 815 | 886,203 | 0.19% | |||
| Average earning assets yield (TE) | $387,988 | $16,203,247 | 4.80% | $203,740 | $8,511,266 | 4.81% | |||
| Interest-Bearing Liabilities | |||||||||
| Interest-bearing transaction deposits | $3,946 | $5,753,817 | 0.14% | $3,126 | $2,558,005 | 0.25% | |||
| Time deposits | 11,906 | 2,700,161 | 0.88% | 21,451 | 2,483,957 | 1.74% | |||
| Public Funds | 2,283 | 1,524,426 | 0.30% | 3,001 | 1,255,606 | 0.48% | |||
| Total interest bearing deposits | $18,135 | $9,978,404 | 0.36% | $27,578 | $6,297,568 | 0.88% | |||
| Total borrowings | 10,323 | 1,225,271 | 1.69% | 4,608 | 631,952 | 1.47% | |||
| Total interest bearing liabilities cost | $28,458 | $11,203,675 | 0.51% | $32,187 | $6,929,520 | 0.94% | |||
| Net interest-free funding sources | 4,999,572 | 1,581,746 | |||||||
| Total Cost of Funds | $28,458 | $16,203,247 | 0.35% | $32,187 | $8,511,266 | 0.76% | |||
| Net Interest Spread (TE) | $359,530 | 4.30% | $171,553 | 3.87% | |||||
| Net Interest Margin (TE) | $359,530 | $16,203,247 | 4.45% | $171,553 | $8,511,266 | 4.05% | |||
| (o) Average securities does not include unrealized holding gains/losses on available for sale securities. | |||||||||