UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 24, 2014

 

 

HANCOCK HOLDING COMPANY

(Exact name of registrant as specified in its charter)

 

 

 

Mississippi   0-13089   64-0693170

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

One Hancock Plaza

2510 14th Street

Gulfport, Mississippi

  39501
(Address of principal executive offices)   (Zip Code)

(228) 868-4000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On July 24, 2014, Hancock Holding Company issued a press release reporting its second quarter earnings for the period ended June 30, 2014. A copy of this press release and the accompanying financial statements and slide presentation are attached hereto as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits.

 

  (d) Exhibits.

 

Exhibit
Number

  

Description

99.1    Press Release dated July 24, 2014 for Quarter Ended June 30, 2014.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      HANCOCK HOLDING COMPANY
July 24, 2014      

/s/ Michael M. Achary

      Michael M. Achary
      Chief Financial Officer


Exhibit 99.1

 

LOGO

For Immediate Release

July 24, 2014

For More Information

Trisha Voltz Carlson

SVP, Investor Relations Manager

504.299.5208

trisha.carlson@hancockbank.com

 

 

 

Hancock reports second quarter 2014 financial results

Board of Directors Authorizes New 5% Common Stock Buyback

GULFPORT, Miss. (July 24, 2014) — Hancock Holding Company (Nasdaq: HBHC) today announced its financial results for the second quarter of 2014. Operating income for the second quarter of 2014 was $49.6 million or $.59 per diluted common share, compared to $49.1 million, or $.58 in the first quarter of 2014. Operating income was $46.9 million, or $.55, in the second quarter of 2013. We define our operating income as net income excluding tax-effected securities transactions gains or losses and nonoperating 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. The financial tables include a reconciliation of net income to operating income.

In the second quarter of 2014 net income was $40.0 million, or $.48 per diluted common share. Net income reflects the impact of certain nonoperating expenses of $12.1 million. Nonoperating expenses are detailed in the slide presentation accompanying the release. There were no adjustments between operating income and net income for the first quarter of 2014 and second quarter of 2013.

Highlights of the company’s second quarter of 2014 results:

 

    Ongoing improvement in the overall quality of earnings (replacing declining purchase accounting income with core results); core net interest income (TE) increased approximately $700,000 linked-quarter; core net interest margin (NIM) narrowed 2 basis points (bps) (we define our core results as reported results less the impact of net purchase accounting adjustments); core noninterest income increased approximately $1.0 million (after adjusting for the impact from purchase accounting items and normalizing for the sale of selected insurance lines in early second quarter 2014)

 

    Operating expenses declined $2.3 million linked-quarter, or 1.5%, exceeding the company’s expense management goals; however, management expects increases in operating expense in the near-term as investments are made in revenue-generating initiatives

 

1


Hancock reports second quarter 2014 financial results

July 24, 2014

 

 

    Efficiency ratio declined slightly to just under 62%; the company continues working on its goal of lowering the efficiency ratio to below 60%

 

    Approximately $383 million, or 13%, linked-quarter annualized net loan growth, and approximately $1.3 billion, or 12%, year-over-year loan growth (each excluding the FDIC-covered portfolio)

 

    Purchase accounting loan accretion declined $1.6 million linked-quarter; management expects sizeable quarterly declines in both the third and fourth quarters of 2014

 

    Continued improvement in asset quality metrics

 

    Solid capital levels with a tangible common equity (TCE) ratio of 9.29%

 

    Return on average assets (ROA) (operating) of 1.04% compared to 1.05% in the first quarter of 2014 and 0.99% in the second quarter a year ago

“The quarter’s results reflected solid performance across the company as we continued to improve the quality of our earnings by replacing purchase accounting income with core earnings,” said Hancock’s President and Chief Executive Officer Carl J. Chaney. “The double-digit loan growth, improvements in core revenue, reduced operating expense, improved asset quality and capital strength reflected in the second quarter’s numbers, contributed to the board’s decision and confidence in authorizing another common stock buyback. We remain focused on executing and achieving the strategic initiatives currently underway, with the ultimate goal of enhancing shareholder value.”

Loans

Total loans at June 30, 2014 were $12.9 billion, up $356 million from March 31, 2014. Excluding the FDIC-covered portfolio, which declined $27 million during the second quarter of 2014, total loans increased approximately $383 million, or 3% linked-quarter.

The largest component of linked-quarter net loan growth (excluding the FDIC-covered portfolio) was in the commercial and industrial portfolio, with additional growth and change in mix from the construction, residential mortgage and consumer portfolios. The majority of the growth during the second quarter came from the Houston and south Louisiana markets. For the full year of 2014 management expects period-end annual loan growth to be in the 8-11% range.

Average loans totaled $12.7 billion for the second quarter of 2014, up $302 million, or 2%, from the first quarter of 2014.

Deposits

Total deposits at June 30, 2014 were $15.2 billion, virtually unchanged from March 31, 2014. Average deposits for the second quarter of 2014 were $15.1 billion, down $209 million, or 1%, from the first quarter of 2014.

Noninterest-bearing demand deposits (DDAs) totaled $5.7 billion at June 30, 2014, up $110 million, or 2%, compared to March 31, 2014. DDAs comprised 38% of total period-end deposits at June 30, 2014.

Interest-bearing transaction and savings deposits totaled $6.1 billion at the end of the second quarter of 2014, down $38 million, or less than 1%, from March 31, 2014.

 

2


Hancock reports second quarter 2014 financial results

July 24, 2014

 

 

Time deposits (CDs) and interest-bearing public fund deposits totaled $3.4 billion at June 30, 2014, down $101 million, or 3%, from March 31, 2014. The decline was related to short-term time deposits that matured during the second quarter and were not renewed.

Asset Quality

Nonperforming assets (NPAs) totaled $157.5 million at June 30, 2014, down $22.2 million from March 31, 2014. During the second quarter of 2014, total nonperforming loans declined $12.1 million while foreclosed and surplus real estate (ORE) and other foreclosed assets decreased $10.1 million. Nonperforming assets as a percent of total loans, ORE and other foreclosed assets was 1.22% at June 30, 2014, down 21 bps from March 31, 2014.

The total allowance for loan losses was $128.7 million at June 30, 2014, up slightly from $128.2 million at March 31, 2014. The ratio of the allowance for loan losses to period-end loans was 1.00%, compared to 1.02% at the end of the first quarter of 2014. The change in the allowance during the second quarter was primarily related to a $2.7 million increase in allowance maintained on the noncovered portion of the loan portfolio, offset by a $2.3 million reduction in the allowance on covered loans.

Net charge-offs from the noncovered loan portfolio were $4.1 million, or 0.13% of average total loans on an annualized basis in the second quarter of 2014, virtually unchanged from $4.0 million, or 0.13% of average total loans in the first quarter of 2014.

During the second quarter of 2014, Hancock recorded a total provision for loan losses of $6.7 million, down $1.3 million from the first quarter of 2014. The provision for noncovered loans was $6.8 million in the second quarter of 2014, down from $8.3 million in the first quarter of 2014.

Net Interest Income and Net Interest Margin

Net interest income (TE) for the second quarter of 2014 was $167.3 million, down less than $1 million from the first quarter of 2014. The impact of purchase accounting items on net interest income was $26.7 million, down $1.6 million linked-quarter. Excluding the impact from purchase accounting items, core net interest income increased $0.7 million linked-quarter. Average earning assets were $16.8 billion, up approximately $51 million from the first quarter of 2014.

The reported net interest margin (TE) was 3.99% for the second quarter of 2014, down 7 bps from the first quarter of 2014. The core net interest margin (reported net interest income (TE) excluding total net purchase accounting adjustments, annualized, as a percent of average earning assets) declined 2 bps to 3.35% during the second quarter of 2014. Declines in the core loan yield (-5 bps) and securities portfolio yield (-4 bps) were partly offset by an improved earning asset mix and lower cost of funds (-1 bp).

 

3


Hancock reports second quarter 2014 financial results

July 24, 2014

 

 

Noninterest Income

Noninterest income, including securities transactions, totaled $56.4 million for the second quarter of 2014, virtually unchanged from the first quarter of 2014. Included in the total is a reduction of $3.3 million related to the amortization of the indemnification asset, compared to a reduction of $3.9 million in the first quarter of 2014. The total for the second quarter also reflects the divestiture of selected insurance business lines effective April 1, 2014. The loss of income from the divestiture was approximately $1.8 million per quarter. Excluding the impact of these items, core noninterest income increased by approximately $1.0 million linked-quarter.

Service charges on deposits totaled $19.3 million for the second quarter of 2014, up $0.6 million, or 3%, from the first quarter of 2014. Bankcard and ATM fees totaled $11.6 million, up $1.0 million, or 10%, from the first quarter of 2014.

Trust fees totaled $11.5 million, up $1.3 million, or 12%, from the first quarter of 2014 reflecting, in part, a seasonal increase related to tax preparation fees.

Fees from secondary mortgage operations totaled $1.8 million for the second quarter of 2014, down $0.2 million, or 11%, linked-quarter. A slightly higher percentage of the mortgage loans originated during the quarter were kept on the balance sheet as opposed to being sold in the secondary market.

Noninterest Expense & Taxes

Noninterest expense for the second quarter of 2014 totaled $156.9 million and included $12.1 million of nonoperating expenses. Excluding these costs, operating expense totaled $144.7 million in the second quarter of 2014, down $2.3 million, or 1.5%, linked-quarter. (The details of the changes in the noninterest expense categories noted below exclude the impact of nonoperating items.)

Total personnel expense was $79.5 million in the second quarter of 2014, down $1.9 million, or 2%, from the first quarter of 2014 reflecting, in part, seasonal items included in the first quarter. Occupancy and equipment expense totaled $14.9 million in the second quarter of 2014, down $0.6 million, or 4%, from the first quarter of 2014.

ORE expense totaled $84,000 in the second quarter of 2014, compared to $1.8 million in the first quarter of 2014. ORE expense in the second quarter includes net gains on ORE dispositions, and management does not expect this low level of ORE expense to be sustainable in future quarters.

Other operating expense totaled $43.5 million in the second quarter of 2014, up $2.3 million, or 6%, from the first quarter of 2014. The increase reflects a lower level of miscellaneous expense items in the first quarter.

 

4


Hancock reports second quarter 2014 financial results

July 24, 2014

 

 

The effective income tax rate for the second quarter of 2014 was 31%, up from 27% in the first quarter of 2014. The increase in the tax rate was related, in part, to the tax impact from the gain on the divestiture of selected insurance business lines early in the second quarter of 2014. Management expects the effective income tax rate to approximate 27% for the remainder of 2014. 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 at June 30, 2014 totaled $2.5 billion. The tangible common equity (TCE) ratio was 9.29%, up 5 bps from March 31, 2014. Final settlement of the accelerated share repurchase (ASR) transaction was completed in early May 2014, with approximately 590,000 shares received. As a result of Hancock’s continued strong capital position, the Board of Directors authorized a new common stock buyback program in July for up to 5%, or approximately 4 million shares, of the company’s common stock. The shares may be repurchased in the open market or in privately negotiated transactions from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations of the Securities and Exchange Commission. The buyback authorization will expire December 31, 2015. 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, July 25, 2014 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. Additional financial tables and a slide presentation related to second quarter results are 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 July 31, 2014 by dialing (855) 859-2056 or (404) 537-3406, passcode 69488929.

About Hancock Holding Company

Hancock Holding Company is a financial services company with regional business headquarters and locations throughout a growing Gulf South corridor. The company’s banking subsidiary provides a comprehensive network of full-service financial choices through Hancock Bank locations in Mississippi, Alabama, and Florida and Whitney Bank offices in Louisiana and Texas, including traditional and online banking; commercial and small business banking; energy banking; private banking; trust and investment services; certain insurance services; mortgage services; and consumer financing. More information and online banking are 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.

 

5


Hancock reports second quarter 2014 financial results

July 24, 2014

 

 

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 noninterest 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, details of the common stock buyback, possible repurchases of shares under stock buyback programs, 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.

 

6


HANCOCK HOLDING COMPANY

FINANCIAL HIGHLIGHTS

(Unaudited)

 

     Three Months Ended     Six Months Ended  

(amounts in thousands, except per share data)

   6/30/2014     3/31/2014     6/30/2013     6/30/2014     6/30/2013  

INCOME STATEMENT DATA

          

Net interest income

   $ 164,778      $ 165,562      $ 169,179      $ 330,340      $ 343,194   

Net interest income (TE) (a)

     167,332        168,198        171,822        335,530        348,563   

Provision for loan losses

     6,691        7,963        8,257        14,654        17,835   

Noninterest income excluding securities transactions

     56,398        56,699        63,897        113,097        124,084   

Securities transactions gains

     —          —          —          —          —     

Noninterest expense (excluding nonoperating expense items)

     144,727        146,982        162,250        291,709        321,852   

Nonoperating expense items

     12,131        —          —          12,131        —     

Net income

     39,962        49,115        46,862        89,077        95,438   

Operating income (b)

     49,575        49,115        46,862        98,690        95,438   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PERIOD-END BALANCE SHEET DATA

          

Loans

   $ 12,884,056      $ 12,527,937      $ 11,681,497      $ 12,884,056      $ 11,681,497   

Investment securities

     3,677,229        3,797,883        4,303,918        3,677,229        4,303,918   

Earning assets

     17,023,990        16,622,104        16,448,565        17,023,990        16,448,565   

Total assets

     19,349,431        19,004,170        18,934,301        19,349,431        18,934,301   

Noninterest-bearing deposits

     5,723,663        5,613,872        5,340,177        5,723,663        5,340,177   

Total deposits

     15,245,227        15,274,774        15,155,938        15,245,227        15,155,938   

Common shareholders’ equity

     2,492,582        2,462,534        2,345,340        2,492,582        2,345,340   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AVERAGE BALANCE SHEET DATA

          

Loans

   $ 12,680,861      $ 12,379,316      $ 11,594,920      $ 12,530,922      $ 11,544,150   

Investment securities

     3,716,563        3,935,616        4,423,441        3,825,484        4,177,713   

Earning assets

     16,791,744        16,740,353        16,500,215        16,766,191        16,508,910   

Total assets

     19,039,264        19,055,107        19,022,832        19,047,142        19,087,383   

Noninterest-bearing deposits

     5,505,735        5,499,993        5,346,916        5,502,878        5,330,871   

Total deposits

     15,060,581        15,269,143        15,211,363        15,164,285        15,261,746   

Common shareholders’ equity

     2,463,385        2,435,980        2,405,069        2,449,758        2,426,420   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

COMMON SHARE DATA

          

Earnings per share - diluted

   $ 0.48      $ 0.58      $ 0.55      $ 1.06      $ 1.11   

Operating earnings per share - diluted (b)

     0.59        0.58        0.55        1.17        1.11   

Cash dividends per share

   $ 0.24      $ 0.24      $ 0.24      $ 0.48      $ 0.48   

Book value per share (period-end)

   $ 30.45      $ 29.93      $ 28.57      $ 30.45      $ 28.57   

Tangible book value per share (period-end)

     21.08        20.47        18.83        21.08        18.83   

Weighted average number of shares - diluted

     82,174        82,534        83,357        82,348        84,153   

Market data

          

High sales price

   $ 37.86      $ 38.50      $ 30.93      $ 38.50      $ 33.59   

Low sales price

     32.02        32.66        25.00        32.02        25.00   

Period-end closing price

     35.32        36.65        30.07        35.32        30.07   

Trading volume

     27,432        31,328        38,599        58,760        68,068   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PERFORMANCE RATIOS

          

Return on average assets

     0.84     1.05     0.99     0.94     1.01

Return on average assets (operating) (b)

     1.04     1.05     0.99     1.04     1.01

Return on average common equity

     6.51     8.18     7.82     7.33     7.93

Return on average common equity (operating) (b)

     8.07     8.18     7.82     8.12     7.93

Return on average tangible common equity

     9.47     12.04     11.74     10.73     11.89

Return on average tangible common equity (operating) (b)

     11.75     12.04     11.74     11.89     11.89

Tangible common equity ratio (c)

     9.29     9.24     8.52     9.29     8.52

Net interest margin (TE) (a)

     3.99     4.06     4.17     4.03     4.24

Average loan/deposit ratio

     84.20     81.20     76.41     82.63     75.86

Efficiency ratio (d)

     61.67     62.23     65.68     61.95     64.92

Allowance for loan losses as a percent of period-end loans

     1.00     1.02     1.18     1.00     1.18

Annualized net charge-offs to average loans

     0.13     0.13     0.24     0.13     0.24

Allowance for loan losses to non-performing loans + accruing loans 90 days past due

     126.26     112.64     91.43     126.26     91.43

Noninterest income excluding securities transactions as a percent of total revenue (TE) (a)

     25.21     25.21     27.11     25.21     26.25

 

(a) Tax-equivalent (TE) amounts are calculated using a federal income tax rate of 35%.
(b) Operating income excludes tax-effected securities transactions and nonoperating 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.
(c) The tangible common equity ratio is common shareholders’ equity less intangible assets divided by total assets less intangible assets.
(d) The efficiency ratio is noninterest expense to total net interest (TE) and noninterest income excluding amortization of purchased intangibles, nonoperating expense items, and securities transactions.

 

7


HANCOCK HOLDING COMPANY

QUARTERLY HIGHLIGHTS

(Unaudited)

 

     Three Months Ended  

(amounts in thousands, except per share data)

   6/30/2014     3/31/2014     12/31/2013     9/30/2013     6/30/2013  

INCOME STATEMENT DATA

          

Net interest income

   $ 164,778      $ 165,562      $ 166,007      $ 171,530      $ 169,179   

Net interest income (TE) (a)

     167,332        168,198        168,466        174,112        171,822   

Provision for loan losses

     6,691        7,963        7,331        7,569        8,257   

Noninterest income excluding securities transactions

     56,398        56,699        58,894        63,057        63,897   

Securities transactions gains

     —          —          105        —          —     

Noninterest expense (excluding nonoperating expense items)

     144,727        146,982        157,097        161,318        162,250   

Nonoperating expense items

     12,131        —          17,116        20,887        —     

Net income

     39,962        49,115        34,716        33,202        46,862   

Operating income (b)

     49,575        49,115        45,773        46,779        46,862   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PERIOD-END BALANCE SHEET DATA

          

Loans

   $ 12,884,056      $ 12,527,937      $ 12,324,817      $ 11,734,472      $ 11,681,497   

Investment securities

     3,677,229        3,797,883        4,033,124        4,124,202        4,303,918   

Earning assets

     17,023,990        16,622,104        16,651,295        16,339,431        16,448,565   

Total assets

     19,349,431        19,004,170        19,009,251        18,801,846        18,934,301   

Noninterest-bearing deposits

     5,723,663        5,613,872        5,530,253        5,479,696        5,340,177   

Total deposits

     15,245,227        15,274,774        15,360,516        15,054,871        15,155,938   

Common shareholders’ equity

     2,492,582        2,462,534        2,425,069        2,356,442        2,345,340   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AVERAGE BALANCE SHEET DATA

          

Loans

   $ 12,680,861      $ 12,379,316      $ 11,903,603      $ 11,805,330      $ 11,594,920   

Investment securities

     3,716,563        3,935,616        4,070,657        4,135,348        4,423,441   

Earning assets

     16,791,744        16,740,353        16,376,587        16,384,635        16,500,215   

Total assets

     19,039,264        19,055,107        18,739,091        18,796,027        19,022,832   

Noninterest-bearing deposits

     5,505,735        5,499,993        5,483,918        5,415,303        5,346,916   

Total deposits

     15,060,581        15,269,143        14,915,677        15,021,685        15,211,363   

Common shareholders’ equity

     2,463,385        2,435,980        2,355,768        2,338,945        2,405,069   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

COMMON SHARE DATA

          

Earnings per share - diluted

   $ 0.48      $ 0.58      $ 0.41      $ 0.40      $ 0.55   

Operating earnings per share - diluted (b)

     0.59        0.58        0.55        0.56        0.55   

Cash dividends per share

   $ 0.24      $ 0.24      $ 0.24      $ 0.24      $ 0.24   

Book value per share (period-end)

   $ 30.45      $ 29.93      $ 29.49      $ 28.70      $ 28.57   

Tangible book value per share (period-end)

     21.08        20.47        19.94        19.04        18.83   

Weighted average number of shares - diluted

     82,174        82,534        82,220        82,205        83,357   

Market data

          

High sales price

   $ 37.86      $ 38.50      $ 37.12      $ 33.85      $ 30.93   

Low sales price

     32.02        32.66        30.09        29.00        25.00   

Period-end closing price

     35.32        36.65        36.68        31.38        30.07   

Trading volume

     27,432        31,328        27,816        29,711        38,599   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PERFORMANCE RATIOS

          

Return on average assets

     0.84     1.05     0.74     0.70     0.99

Return on average assets (operating) (b)

     1.04     1.05     0.97     0.99     0.99

Return on average common equity

     6.51     8.18     5.85     5.63     7.82

Return on average common equity (operating) (b)

     8.07     8.18     7.71     7.93     7.82

Return on average tangible common equity

     9.47     12.04     8.79     8.54     11.74

Return on average tangible common equity (operating) (b)

     11.75     12.04     11.59     12.03     11.74

Tangible common equity ratio (c)

     9.29     9.24     9.00     8.68     8.52

Net interest margin (TE) (a)

     3.99     4.06     4.09     4.23     4.17

Average loan/deposit ratio

     84.20     81.20     79.93     78.70     76.41

Efficiency ratio (d)

     61.67     62.23     65.94     64.95     65.68

Allowance for loan losses as a percent of period-end loans

     1.00     1.02     1.08     1.18     1.18

Annualized net charge-offs to average loans

     0.13     0.13     0.17     0.18     0.24

Allowance for loan losses to non-performing loans + accruing loans 90 days past due

     126.26     112.64     111.97     94.69     91.43

Noninterest income excluding securities transactions as a percent of total revenue (TE) (a)

     25.21     25.21     25.90     26.59     27.11

 

(a) Tax-equivalent (TE) amounts are calculated using a federal income tax rate of 35%.
(b) Operating income excludes tax-effected securities transactions and nonoperating 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.
(c) The tangible common equity ratio is common shareholders’ equity less intangible assets divided by total assets less intangible assets.
(d) The efficiency ratio is noninterest expense to total net interest (TE) and noninterest income excluding amortization of purchased intangibles, nonoperating expense items, and securities transactions.

 

8


HANCOCK HOLDING COMPANY

INCOME STATEMENT

(Unaudited)

 

     Three Months Ended      Six Months Ended  

(dollars in thousands, except per share data)

   6/30/2014     3/31/2014     6/30/2013      6/30/2014     6/30/2013  

NET INCOME

         

Interest income

   $ 174,001      $ 175,140      $ 179,649       $ 349,141      $ 364,921   

Interest income (TE)

        176,555           177,776           182,292            354,331           370,290   

Interest expense

     9,223        9,578        10,470         18,801        21,727   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income (TE)

     167,332        168,198        171,822         335,530        348,563   

Provision for loan losses

     6,691        7,963        8,257         14,654        17,835   

Noninterest income excluding securities transactions

     56,398        56,699        63,897         113,097        124,084   

Securities transactions gains

     —          —          —           —          —     

Noninterest expense

     156,858        146,982        162,250         303,840        321,852   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income before income taxes

     57,627        67,316        62,569         124,943        127,591   

Income tax expense

     17,665        18,201        15,707         35,866        32,153   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 39,962      $ 49,115      $ 46,862       $ 89,077      $ 95,438   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

ADJUSTMENTS FROM NET TO OPERATING INCOME

         

Securities transactions gains

     —          —          —           —          —     

Nonoperating expense items

         

Impact of insurance business lines divestiture

     (9,101     —          —           (9,101     —     

FDIC settlement

     10,268        —          —           10,268        —     

Expense and efficiency initiatives and other items

     7,503        —          —           7,503        —     

Early debt redemption

     3,461        —          —           3,461        —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total nonoperating expense items

     12,131        —          —           12,131        —     

Taxes on adjustments at marginal tax rate

     2,518        —          —           2,518        —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total adjustments (net of taxes)

     9,613        —          —           9,613        —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Operating income (e)

   $ 49,575      $ 49,115      $ 46,862       $ 98,690      $ 95,438   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

NONINTEREST INCOME AND NONINTEREST EXPENSE

         

Service charges on deposit accounts

   $ 19,269      $ 18,712      $ 19,864       $ 37,981      $ 38,879   

Trust fees

     11,499        10,238        9,803         21,737        18,495   

Bank card and ATM fees

     11,596        10,569        11,399         22,165        22,457   

Investment & annuity fees

     5,097        4,952        5,192         10,049        9,769   

Secondary mortgage market operations

     1,758        1,965        4,139         3,723        8,522   

Insurance fees

     1,888        3,744        4,845         5,632        8,839   

Amortization of FDIC loss share receivable

     (3,321     (3,908     —           (7,229     —     

Other income

     8,612        10,427        8,655         19,039        17,123   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Noninterest income excluding securities transactions

     56,398        56,699        63,897         113,097        124,084   

Securities transactions gains

     —          —          —           —          —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total noninterest income including securities transactions

   $ 56,398      $ 56,699      $ 63,897       $ 113,097      $ 124,084   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Personnel expense

   $ 79,506      $ 81,432      $ 87,595       $ 160,938      $ 175,522   

Occupancy expense (net)

     10,840        11,266        12,404         22,106        24,730   

Equipment expense

     4,059        4,274        4,919         8,333        10,220   

Other real estate owned expense (net)

     84        1,777        3,355         1,861        4,063   

Other operating expense

     43,494        41,195        46,546         84,689        92,331   

Amortization of intangibles

     6,744        7,038        7,431         13,782        14,986   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total operating expense

     144,727        146,982        162,250         291,709        321,852   

Nonoperating expense items

     12,131        —          —           12,131        —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total noninterest expense

   $ 156,858      $ 146,982      $ 162,250       $ 303,840      $ 321,852   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

COMMON SHARE DATA

         

Earnings per share:

         

Basic

   $ 0.48      $ 0.58      $ 0.55       $ 1.06      $ 1.11   

Diluted

     0.48        0.58        0.55         1.06        1.11   

Operating earnings per share:

         

Basic

   $ 0.59      $ 0.58      $ 0.55       $ 1.18      $ 1.11   

Diluted

     0.59        0.58        0.55         1.17        1.11   

 

(e) Net income less tax-effected securities transactions and nonoperating 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.

 

9


HANCOCK HOLDING COMPANY

INCOME STATEMENT

(Unaudited)

 

     Three months ended  

(dollars in thousands)

   6/30/2014     3/31/2014     12/31/2013     9/30/2013     6/30/2013  

Interest income

   $ 174,001      $ 175,140      $ 175,650      $ 181,639      $ 179,649   

Interest income (TE)

     176,555        177,776        178,109        184,221        182,292   

Interest expense

     9,223        9,578        9,643        10,109        10,470   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income (TE)

     167,332        168,198        168,466        174,112        171,822   

Provision for loan losses

     6,691        7,963        7,331        7,569        8,257   

Noninterest income excluding securities transactions

     56,398        56,699        58,894        63,057        63,897   

Securities transactions gains

     —          —          105        —          —     

Noninterest expense

     156,858        146,982        174,213        182,205        162,250   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     57,627        67,316        43,462        44,813        62,569   

Income tax expense

     17,665        18,201        8,746        11,611        15,707   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 39,962      $ 49,115      $ 34,716      $ 33,202      $ 46,862   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTMENTS FROM NET TO OPERATING INCOME

        

Securities transactions gains

     —          —          105        —          —     

Total nonoperating expense items

     12,131        —          17,116        20,887        —     

Taxes on adjustments at marginal tax rate

     2,518        —          5,954        7,310        —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments (net of taxes)

     9,613        —          11,057        13,577        —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

   $ 49,575      $ 49,115      $ 45,773      $ 46,779      $ 46,862   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NONINTEREST INCOME AND NONINTEREST EXPENSE

        

Service charges on deposit accounts

   $ 19,269      $ 18,712      $ 19,605      $ 20,519      $ 19,864   

Trust fees

     11,499        10,238        10,214        9,477        9,803   

Bank card and ATM fees

     11,596        10,569        11,261        12,221        11,399   

Investment & annuity fees

     5,097        4,952        4,619        5,186        5,192   

Secondary mortgage market operations

     1,758        1,965        1,554        2,467        4,139   

Insurance fees

     1,888        3,744        3,304        3,661        4,845   

Amortization of loss share receivable

     (3,321     (3,908     (3,908     (590     —     

Other income

     8,612        10,427        9,986        10,116        8,655   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest income excluding securities transactions

     56,398        56,699        58,894        63,057        63,897   

Securities transactions gains

     —          —          105        —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total noninterest income including securities transactions

   $ 56,398      $ 56,699      $ 58,999      $ 63,057      $ 63,897   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Personnel expense

   $ 79,506      $ 81,432      $ 84,912      $ 86,850      $ 87,595   

Occupancy expense (net)

     10,840        11,266        11,613        12,369        12,404   

Equipment expense

     4,059        4,274        4,679        5,120        4,919   

Other real estate owned expense (net)

     84        1,777        1,535        2,439        3,355   

Other operating expense

     43,494        41,195        47,180        47,234        46,546   

Amortization of intangibles

     6,744        7,038        7,178        7,306        7,431   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expense

     144,727        146,982        157,097        161,318        162,250   

Nonoperating expense items

     12,131        —          17,116        20,887        —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total noninterest expense

   $ 156,858      $ 146,982      $ 174,213      $ 182,205      $ 162,250   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

10


HANCOCK HOLDING COMPANY

PERIOD-END BALANCE SHEET

(Unaudited)

 

     Three Months Ended  

(dollars in thousands)

   6/30/2014     3/31/2014     12/31/2013     9/30/2013     6/30/2013  

ASSETS

        

Commercial non-real estate loans

   $ 5,393,691      $ 5,198,029      $ 5,064,224      $ 4,625,315      $ 4,653,342   

Construction and land development loans

     1,040,656        978,798        915,541        920,408        966,499   

Commercial real estate loans

     3,056,263        3,069,316        3,042,841        2,914,969        2,872,254   

Residential mortgage loans

     1,771,271        1,720,307        1,720,614        1,695,197        1,616,093   

Consumer loans

     1,622,175        1,561,487        1,581,597        1,578,583        1,573,309   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

     12,884,056        12,527,937        12,324,817        11,734,472        11,681,497   

Loans held for sale

     22,017        15,911        24,515        18,444        20,233   

Securities

     3,677,229        3,797,883        4,033,124        4,124,202        4,303,918   

Short-term investments

     440,688        280,373        268,839        462,313        442,917   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earning assets

     17,023,990        16,622,104        16,651,295        16,339,431        16,448,565   

Allowance for loan losses

     (128,672     (128,248     (133,626     (138,223     (137,969

Goodwill

     621,193        625,675        625,675        625,675        625,675   

Other intangible assets, net

     145,825        152,734        159,773        167,116        174,423   

Other assets

     1,687,095        1,731,905        1,706,134        1,807,847        1,823,607   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 19,349,431      $ 19,004,170      $ 19,009,251      $ 18,801,846      $ 18,934,301   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES

        

Noninterest-bearing deposits

   $ 5,723,663      $ 5,613,872      $ 5,530,253      $ 5,479,696      $ 5,340,177   

Interest-bearing transaction and savings deposits

     6,079,837        6,118,150        6,162,959        6,008,042        5,965,372   

Interest-bearing public fund deposits

     1,484,188        1,451,430        1,571,532        1,240,336        1,410,866   

Time deposits

     1,957,539        2,091,322        2,095,772        2,326,797        2,439,523   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits

     9,521,564        9,660,902        9,830,263        9,575,175        9,815,761   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     15,245,227        15,274,774        15,360,516        15,054,871        15,155,938   

Short-term borrowings

     1,063,664        712,634        657,960        782,779        828,107   

Long-term debt

     374,991        380,001        385,826        376,664        385,122   

Other liabilities

     172,967        174,227        179,880        231,090        219,794   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     16,856,849        16,541,636        16,584,182        16,445,404        16,588,961   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

COMMON SHAREHOLDERS’ EQUITY

        

Common stock and capital surplus

     1,838,931        1,837,461        1,832,282        1,827,551        1,823,469   

Retained earnings

     676,942        657,062        628,166        613,662        600,566   

Accumulated other comprehensive income

     (23,291     (31,989     (35,379     (84,771     (78,695
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total common shareholders’ equity

     2,492,582        2,462,534        2,425,069        2,356,442        2,345,340   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities & shareholders’ equity

   $ 19,349,431      $ 19,004,170      $ 19,009,251      $ 18,801,846      $ 18,934,301   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CAPITAL RATIOS

        

Tangible common equity

   $ 1,725,489      $ 1,684,037      $ 1,639,524      $ 1,563,542      $ 1,545,122   

Tier 1 capital (f)

     1,758,179        1,725,947        1,685,058        1,656,497        1,632,874   

Common equity (period-end) as a percent of total assets (period-end)

     12.88     12.96     12.76     12.53     12.39

Tangible common equity ratio

     9.29     9.24     9.00     8.68     8.52

Leverage (Tier 1) ratio (f)

     9.61     9.43     9.34     9.10     8.96

Tier 1 risk-based capital ratio (f)

     11.93     11.90     11.76     12.07     12.00

Total risk-based capital ratio (f)

     13.07     13.20     13.11     13.52     13.45

 

(f) Estimated for most recent period-end.

 

11


HANCOCK HOLDING COMPANY

AVERAGE BALANCE SHEET

(Unaudited)

 

     Three Months Ended     Six Months Ended  

(dollars in thousands)

   6/30/2014     3/31/2014     6/30/2013     6/30/2014     6/30/2013  

ASSETS

          

Commercial non-real estate loans

   $ 5,298,978      $ 5,088,061      $ 4,536,711      $ 5,194,102      $ 4,473,906   

Construction and land development loans

     1,005,025        953,328        984,449        979,320        979,900   

Commercial real estate loans

     3,051,193        3,054,217        2,894,432        3,052,697        2,894,988   

Residential mortgage loans

     1,744,313        1,720,640        1,599,931        1,732,542        1,596,320   

Consumer loans

     1,581,352        1,563,070        1,579,397        1,572,261        1,599,036   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

     12,680,861        12,379,316        11,594,920        12,530,922        11,544,150   

Loans held for sale

     14,681        19,207        28,289        16,932        32,676   

Securities (g)

     3,716,563        3,935,616        4,423,441        3,825,484        4,177,713   

Short-term investments

     379,639        406,214        453,565        392,853        754,371   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earning assets

     16,791,744        16,740,353        16,500,215        16,766,191        16,508,910   

Allowance for loan losses

     (126,887     (134,670     (137,815     (130,757     (137,465

Goodwill and other intangible assets

     770,294        781,434        803,679        775,833        807,425   

Other assets

     1,604,113        1,667,990        1,856,753        1,635,875        1,908,513   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 19,039,264      $ 19,055,107      $ 19,022,832      $ 19,047,142      $ 19,087,383   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES

          

Noninterest-bearing deposits

   $ 5,505,735      $ 5,499,993      $ 5,346,916      $ 5,502,878      $ 5,330,871   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest-bearing transaction and savings deposits

     6,078,115        6,072,113        5,965,769        6,075,131        5,974,011   

Interest-bearing public fund deposits

     1,450,312        1,526,611        1,483,267        1,488,251        1,545,749   

Time deposits

     2,026,419        2,170,426        2,415,411        2,098,025        2,411,115   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits

     9,554,846        9,769,150        9,864,447        9,661,407        9,930,875   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     15,060,581        15,269,143        15,211,363        15,164,285        15,261,746   

Short-term borrowings

     957,386        785,063        790,103        871,701        776,973   

Long-term debt

     380,151        386,026        393,641        383,073        395,020   

Other liabilities

     177,761        178,895        222,656        178,325        227,224   

Common shareholders’ equity

     2,463,385        2,435,980        2,405,069        2,449,758        2,426,420   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities & shareholders’ equity

   $ 19,039,264      $ 19,055,107      $ 19,022,832      $ 19,047,142      $ 19,087,383   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(g) Average securities does not include unrealized holding gains/losses on available for sale securities.

 

12


HANCOCK HOLDING COMPANY

AVERAGE BALANCE AND NET INTEREST MARGIN SUMMARY

(Unaudited)

 

     Three Months Ended  
     6/30/2014     3/31/2014     6/30/2013  

(dollars in millions)

   Volume      Interest      Rate     Volume      Interest      Rate     Volume      Interest      Rate  

AVERAGE EARNING ASSETS

                     

Commercial & real estate loans (TE)

   $ 9,355.2       $ 108.2         4.64   $ 9,095.7       $ 107.9         4.81   $ 8,415.6       $ 103.3         4.92

Residential mortgage loans

     1,744.3         21.0         4.83     1,720.6         21.3         4.96     1,599.9         27.3         6.82

Consumer loans

     1,581.4         23.6         5.99     1,563.1         23.1         6.00     1,579.4         26.5         6.74

Loan fees & late charges

     —           0.8         0.00     —           0.8         0.00     —           1.2         0.00
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total loans (TE)

     12,680.9         153.6         4.86     12,379.4         153.1         5.00     11,594.9         158.3         5.47
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Loans held for sale

     14.7         0.1         4.14     19.2         0.2         4.06     28.3         0.3         3.53
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

US Treasury and government agency securities

     0.0         0.0         0.00     93.5         0.5         2.28     0.1         —           4.66

CMOs and mortgage backed securities

     3,490.9         20.1         2.30     3,612.8         21.2         2.34     4,182.3         20.7         1.98

Municipals (TE)

     205.8         2.4         4.63     217.0         2.5         4.56     233.0         2.6         4.51

Other securities

     19.8         0.1         1.19     12.3         0.1         3.87     8.0         0.1         2.79
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total securities (TE) (h)

     3,716.5         22.6         2.43     3,935.6         24.3         2.47     4,423.4         23.4         2.11
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total short-term investments

     379.6         0.2         0.22     406.2         0.2         0.23     453.6         0.3         0.25
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Average earning assets yield (TE)

   $ 16,791.7         176.5         4.21   $ 16,740.4         177.8         4.29   $ 16,500.2         182.3         4.42
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

INTEREST-BEARING LIABILITIES

                     

Interest-bearing transaction and savings deposits

   $ 6,078.1         1.5         0.10   $ 6,072.1         1.5         0.10   $ 5,965.8         1.5         0.10

Time deposits

     2,026.4         3.0         0.60     2,170.4         3.1         0.58     2,415.4         3.8         0.63

Public funds

     1,450.3         0.7         0.21     1,526.6         0.8         0.20     1,483.3         0.9         0.23
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-bearing deposits

     9,554.8         5.2         0.22     9,769.1         5.4         0.22     9,864.5         6.2         0.25
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Short-term borrowings

     957.4         0.8         0.34     785.1         1.0         0.54     790.1         1.1         0.54

Long-term debt

     380.2         3.2         3.32     386.0         3.2         3.34     393.6         3.2         3.28
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total borrowings

     1,337.6         4.0         1.19     1,171.1         4.2         1.46     1,183.7         4.3         1.45
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-bearing liabilities cost

     10,892.4         9.2         0.34     10,940.2         9.6         0.36     11,048.2         10.5         0.38
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net interest-free funding sources

     5,899.3           5,800.2           5,452.0      
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total cost of funds

     16,791.7         9.2         0.22     16,740.4         9.6         0.23     16,500.2         10.5         0.25
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net Interest Spread (TE)

      $ 167.3         3.87      $ 168.2         3.93      $ 171.8         4.04
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net Interest Margin (TE)

   $ 16,791.7       $ 167.3         3.99   $ 16,740.4       $ 168.2         4.06   $ 16,500.2       $ 171.8         4.17
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

(h) Average securities does not include unrealized holding gains/losses on available for sale securities.

 

13


HANCOCK HOLDING COMPANY

AVERAGE BALANCE AND NET INTEREST MARGIN SUMMARY

(Unaudited)

 

     Six Months Ended  
     6/30/2014     6/30/2013  

(dollars in millions)

   Volume      Interest      Rate     Volume      Interest      Rate  

AVERAGE EARNING ASSETS

             

Commercial & real estate loans (TE)

   $ 9,226.1       $ 216.1         4.72   $ 8,348.8       $ 216.7         5.23

Residential mortgage loans

     1,732.5         42.4         4.89     1,596.3         52.6         6.60

Consumer loans

     1,572.3         46.8         6.00     1,599.0         53.0         6.69

Loan fees & late charges

     —           1.4         0.00     —           1.8         0.00
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total loans (TE)

     12,530.9         306.7         4.93     11,544.1         324.1         5.65
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Loans held for sale

     16.9         0.3         4.10     32.7         0.6         3.65
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

US Treasury and government agency securities

     46.5         0.5         2.26     2.8         0.0         1.29

CMOs and mortgage backed securities

     3,551.5         41.3         2.32     3,941.7         39.4         2.00

Municipals (TE)

     211.4         4.9         4.59     225.0         5.2         4.61

Other securities

     16.1         0.2         2.22     8.2         0.1         2.37
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total securities (TE) (h)

     3,825.5         46.9         2.45     4,177.7         44.7         2.14
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total short-term investments

     392.9         0.4         0.23     754.4         0.9         0.25
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Average earning assets yield (TE)

   $ 16,766.2         354.3         4.25   $ 16,508.9         370.3         4.51
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

INTEREST-BEARING LIABILITIES

             

Interest-bearing transaction and savings deposits

   $ 6,075.1         3.0         0.10   $ 5,974.0         3.2         0.11

Time deposits

     2,098.0         6.1         0.59     2,411.1         7.9         0.66

Public funds

     1,488.3         1.5         0.20     1,545.8         1.8         0.24
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-bearing deposits

     9,661.4         10.6         0.22     9,930.9         12.9         0.26
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Short-term borrowings

     871.7         1.9         0.43     777.0         2.4         0.62

Long-term debt

     383.1         6.3         3.33     395.0         6.4         3.28
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total borrowings

     1,254.8         8.2         1.32     1,172.0         8.8         1.51
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-bearing liabilities cost

     10,916.2         18.8         0.35     11,102.9         21.7         0.39
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net interest-free funding sources

     5,850.0           5,406.0      
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total cost of funds

     16,766.2         18.8         0.22     16,508.9         21.7         0.27
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net Interest Spread (TE)

  

   $ 335.5         3.90      $ 348.6         4.12
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net Interest Margin (TE)

   $ 16,766.2       $ 335.5         4.03   $ 16,508.9       $ 348.6         4.24
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

(h) Average securities does not include unrealized holding gains/losses on available for sale securities.

 

14


HANCOCK HOLDING COMPANY

ASSET QUALITY INFORMATION

(Unaudited)

 

     Three Months Ended     Six Months Ended  

(dollars in thousands)

   6/30/2014     3/31/2014     6/30/2013     6/30/2014     6/30/2013  

Nonaccrual loans (i)

   $ 89,901      $ 101,400      $ 132,716      $ 89,901      $ 132,716   

Restructured loans - still accruing

     7,868        8,459        11,541        7,868        11,541   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

     97,769        109,859        144,257        97,769        144,257   

ORE and foreclosed assets

     59,732        69,813        72,235        59,732        72,235   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets

   $ 157,501      $ 179,672      $ 216,492      $ 157,501      $ 216,492   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Nonperforming assets as a percent of loans, ORE and foreclosed assets

     1.22     1.43     1.84     1.22     1.84

Accruing loans 90 days past due

   $ 4,142      $ 3,998      $ 6,647      $ 4,142      $ 6,647   

Accruing loans 90 days past due as a percent of loans

     0.03     0.03     0.06     0.03     0.06

Nonperforming assets + accruing loans 90 days past due to loans, ORE and foreclosed assets

     1.25     1.46     1.90     1.25     1.90
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ALLOWANCE FOR LOAN LOSSES

      

Beginning Balance

   $ 128,248      $ 133,626      $ 137,777      $ 133,626      $ 136,171   

Net provision for loan losses - covered loans

     (73     (302     362        (375     6,963   

Provision for loan losses - noncovered loans

     6,764        8,265        7,895        15,029        10,872   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net provision for loan losses

     6,691        7,963        8,257        14,654        17,835   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Decrease) increase in FDIC loss share receivable

     (1,022     (6,853     993        (7,875     2,876   

Charge-offs - noncovered

     7,309        7,482        11,451        14,791        22,688   

Recoveries - noncovered

     (3,245     (3,504     (4,419     (6,749     (9,023

Net charge-offs - covered

     1,181        2,510        2,026        3,691        5,248   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net charge-offs

     5,245        6,488        9,058        11,733        18,913   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending Balance

   $ 128,672      $ 128,248      $ 137,969      $ 128,672      $ 137,969   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for loan losses as a percent of period-end loans

     1.00     1.02     1.18     1.00     1.18

Allowance for loan losses to nonperforming loans + accruing loans 90 days past due

     126.26     112.64     91.43     126.26     91.43
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET CHARGE-OFF INFORMATION

      

Net charge-offs - noncovered:

      

Commercial/real estate loans

   $ 1,148      $ 1,392      $ 3,834      $ 2,540      $ 8,138   

Residential mortgage loans

     587        147        702        734        350   

Consumer loans

     2,329        2,439        2,496        4,768        5,177   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net charge-offs - noncovered

   $ 4,064      $ 3,978      $ 7,032      $ 8,042      $ 13,665   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net charge-offs - noncovered to average loans:

      

Commercial/real estate loans

     0.05     0.06     0.18     0.06     0.20

Residential mortgage loans

     0.13     0.03     0.17     0.09     0.04

Consumer loans

     0.59     0.63     0.63     0.61     0.65
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net charge-offs - noncovered to average loans

     0.13     0.13     0.24     0.13     0.24
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(i) Nonaccrual 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. Included in nonaccrual loans are $11.5 million, $16.1 million, and $22.2 million at 06/30/14, 03/31/14 and 06/30/13, respectively, in nonaccruing restructured loans.

 

15


HANCOCK HOLDING COMPANY

ASSET QUALITY INFORMATION

(Unaudited)

 

     Three months ended  

(dollars in thousands)

   6/30/2014     3/31/2014     12/31/2013     9/30/2013     6/30/2013  

Nonaccrual loans

   $ 89,901      $ 101,400      $ 99,711      $ 119,749      $ 132,716   

Restructured loans - still accruing

     7,868        8,459        9,247        10,605        11,541   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

     97,769        109,859        108,958        130,354        144,257   

ORE and foreclosed assets

     59,732        69,813        76,979        85,560        72,235   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets

   $ 157,501      $ 179,672      $ 185,937      $ 215,914      $ 216,492   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Nonperforming assets as a percent of loans, ORE and foreclosed assets

     1.22     1.43     1.50     1.83     1.84

Accruing loans 90 days past due

   $ 4,142      $ 3,998      $ 10,387      $ 15,620      $ 6,647   

Accruing loans 90 days past due as a percent of loans

     0.03     0.03     0.08     0.13     0.06

Nonperforming assets + accruing loans 90 days past due to loans, ORE and foreclosed assets

     1.25     1.46     1.58     1.96     1.90
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for loan losses

   $ 128,672      $ 128,248      $ 133,626      $ 138,223      $ 137,969   

Allowance for loan losses as a percent of period-end loans

     1.00     1.02     1.08     1.18     1.18

Allowance for loan losses to nonperforming loans + accruing loans 90 days past due

     126.26     112.64     111.97     94.69     91.43
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Provision for loan losses

   $ 6,691      $ 7,963      $ 7,331      $ 7,569      $ 8,257   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET CHARGE-OFF INFORMATION

          

Net charge-offs - noncovered:

          

Commercial/real estate loans

   $ 1,148      $ 1,392      $ 2,183      $ 1,267      $ 3,834   

Residential mortgage loans

     587        147        (197     541        702   

Consumer loans

     2,329        2,439        3,230        3,622        2,496   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net charge-offs - noncovered

   $ 4,064      $ 3,978      $ 5,216      $ 5,430      $ 7,032   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net charge-offs - noncovered to average loans:

          

Commercial/real estate loans

     0.05     0.06     0.10     0.06     0.18

Residential mortgage loans

     0.13     0.03     (0.05 )%      0.13     0.17

Consumer loans

     0.59     0.63     0.81     0.92     0.63
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net charge-offs - noncovered to average loans

     0.13     0.13     0.17     0.18     0.24
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AVERAGE LOANS

          

Commercial/real estate loans

   $ 9,355,196      $ 9,095,606      $ 8,629,013      $ 8,582,849      $ 8,415,592   

Residential mortgage loans

     1,744,313        1,720,640        1,701,144        1,668,201        1,599,931   

Consumer loans

     1,581,352        1,563,070        1,573,446        1,570,345        1,579,397   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total average loans

   $ 12,680,861      $ 12,379,316      $ 11,903,603      $ 11,821,395      $ 11,594,920   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

16


HANCOCK HOLDING COMPANY

SUPPLEMENTAL ASSET QUALITY INFORMATION

(Unaudited)

 

     Originated Loans      Acquired Loans (j)     Covered Loans (k)     Total  

(dollars in thousands)

   6/30/2014  

Nonaccrual loans (l)

   $ 74,533       $ 12,048      $ 3,320      $ 89,901   

Restructured loans - still accruing

     4,823         3,045        —          7,868   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total nonperforming loans

     79,356         15,093        3,320        97,769   

ORE and foreclosed assets (m)

     40,158         —          19,574        59,732   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total nonperforming assets

   $ 119,514       $ 15,093      $ 22,894      $ 157,501   
  

 

 

    

 

 

   

 

 

   

 

 

 

Accruing loans 90 days past due

   $ 3,416       $ 726        —        $ 4,142   

Allowance for loan losses

   $ 78,573       $ 8,947      $ 41,152      $ 128,672   
     3/31/2014  

Nonaccrual loans (l)

   $ 79,400       $ 18,626      $ 3,374      $ 101,400   

Restructured loans - still accruing

     4,538         3,921        —          8,459   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total nonperforming loans

     83,938         22,547        3,374        109,859   

ORE and foreclosed assets (m)

     45,386         —          24,427        69,813   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total nonperforming assets

   $ 129,324       $ 22,547      $ 27,801      $ 179,672   
  

 

 

    

 

 

   

 

 

   

 

 

 

Accruing loans 90 days past due

   $ 2,543       $ 1,455        —        $ 3,998   

Allowance for loan losses

   $ 79,560       $ 5,259      $ 43,429      $ 128,248   
     Originated Loans      Acquired Loans (j)     Covered Loans (k)     Total  

LOANS OUTSTANDING

   6/30/2014  

Commercial non-real estate loans

   $ 4,610,696       $ 769,159      $ 13,836      $ 5,393,691   

Construction and land development loans

     903,610         119,847        17,199        1,040,656   

Commercial real estate loans

     2,173,006         836,646        46,611        3,056,263   

Residential mortgage loans

     1,469,977         111,724        189,570        1,771,271   

Consumer loans

     1,501,163         84,403        36,609        1,622,175   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total loans

   $ 10,658,452       $ 1,921,779      $ 303,825      $ 12,884,056   
  

 

 

    

 

 

   

 

 

   

 

 

 

Change in loan balance from previous quarter

   $ 734,088       ($ 350,657   ($ 27,312   $ 356,119   
  

 

 

    

 

 

   

 

 

   

 

 

 
     3/31/2014  

Commercial non-real estate loans

   $ 4,353,549       $ 830,211      $ 14,269      $ 5,198,029   

Construction and land development loans

     824,837         134,443        19,518        978,798   

Commercial real estate loans

     2,110,096         907,170        52,050        3,069,316   

Residential mortgage loans

     1,228,170         293,111        199,026        1,720,307   

Consumer loans

     1,407,712         107,501        46,274        1,561,487   
  

 

 

    

 

 

   

 

 

   

Total loans

   $ 9,924,364       $ 2,272,436      $ 331,137      $ 12,527,937   
  

 

 

    

 

 

   

 

 

   

Change in loan balance from previous quarter

   $ 430,232       ($ 199,583   ($ 27,530   $ 203,119   
  

 

 

    

 

 

   

 

 

   

 

 

 

 

(j) Loans which have been acquired and no allowance brought forward in accordance with acquisition accounting.
(k) Acquired loans which are covered by loss sharing agreements with the FDIC providing considerable protection against credit risk.
(l) Included in originated nonaccrual loans are $11.5 million and $16.1 million at 06/30/14 and 03/31/14, respectively, in nonaccruing restructured loans.
(m) ORE received in settlement of acquired loans is no longer subject to purchase accounting guidance and has been included with ORE from originated loans. ORE received in settlement of covered loans remains covered under the FDIC loss share agreements.

 

17


Second Quarter
2014 Financial
Results
July 24, 2014
Second Quarter
2014 Financial
Results
July 24, 2014


Certain of the statements or information included in this presentation may constitute
forward-looking statements.  Forward-looking statements include projections of revenue,
costs, results of operations or financial condition or statements regarding future market
conditions
or
our
potential
plans
and
strategies
for
the
future.
Hancock’s
ability
to
accurately project results or predict the effects of future plans or strategies is inherently
limited. 
We believe that the expectations reflected or implied by any forward-looking statements
are based on reasonable assumptions, but actual results and performance could differ
materially from those set forth in the forward-looking statements.  Factors that could
cause actual results or outcomes to differ from those expressed in the Company's
forward-looking statements include, but are not limited to, those outlined in Hancock's
SEC filings, including the “Risk Factors”
section of the Company’s 10-K for the year
ended December 31, 2013 and form 10-Q for the most recent quarter end. 
Hancock undertakes no obligation to update or revise any forward-looking statements,
and you are cautioned not to place undue reliance on such forward-looking statements.
Forward Looking Statement
2


Continued Improvement In The Overall
Quality Of Earnings
Board authorized new 5% common stock buyback; solid capital levels and TCE ratio of 9.29%
Return on average assets (ROA) (operating) of 1.04%
Continued the trend of replacing declining purchase accounting income with core results*
Core net interest income (TE) increased approximately $700,000 linked-quarter
Core noninterest income increased approximately $1.0 million after adjusting for the impact from
purchase accounting items and normalizing for the sale of selected insurance lines
Purchase accounting loan accretion declined $1.6 million linked-quarter; management expects sizeable
quarterly declines in both the third and fourth quarters of 2014
Operating expenses declined $2.3 million linked-quarter, or 1.5%, surpassing the quarterly expense
goals set for 2014; management expects increases in the near-term as investments are made in revenue-
generating initiatives
13% linked-quarter annualized net loan growth (excluding the FDIC-covered portfolio)
Continued improvement in asset quality metrics
Efficiency ratio declined slightly to just under 62%
* See slides 12, 21, 22
3


Improving Trends in Core Results;
Narrowing The Gap Between Reported and Core
Core is defined as reported results less purchase accounting adjustments.  See table on slide 22.
4
E.P.S.
ROA


Second Quarter 2014 Highlights
Operating income $49.6 million or
$.59 per diluted common share
$12.1 million of nonoperating
expense items included in net
income (see slide 14)
ROA (operating) 1.04%
ROTCE (operating) 11.75%
NIM 3.99%
Efficiency Ratio 61.67%
TCE 9.29%
Operating income is defined as net income excluding tax-effected securities
transactions gains or losses and nonoperating expense items. 
*  Core is defined as reported results less purchase accounting adjustments. 
See table on slide 21.
**  Noninterest expense to total revenue (TE) excluding amortization of
purchased intangibles, nonoperating expense items, and securities
transactions.
($s in millions; except per share
data)
2Q14
1Q14
LQ
change
Operating Income
$49.6
$49.1
+1%
Earnings Per Share (diluted) -
operating
$.59
$.58
+2%
Net Income
$40.0
$49.1
n/m
Earnings Per Share (diluted)
$.48
$.58
n/m
Nonoperating expense items
$12.1
---
n/m
Return on Assets (operating) (%)
1.04
1.05
-1bp
Return on Tangible Common
Equity (operating) (%)
11.75
12.04
-29bps
Total Loans (excluding covered
loans)
$12,580
$12,197
+3%
Net Interest Margin (%)
3.99
4.06
-7bps
Net Interest Margin (%) (core)*
3.35
3.37
-2bps
Net Charge-offs (%)
(non-covered)
0.13
0.13
---
Tangible Common Equity (%)
9.29
9.24
+5bps
Efficiency Ratio**  (%)
61.67
62.23
-56bps
5


Level of Loan Originations Continues To
Exceed Expectations
Excluding FDIC covered loans, total loans of $12.6
billion were up $383 million, or 13% LQA
The largest component of linked-quarter net loan
growth (excluding the FDIC-covered portfolio) was
in the commercial and industrial (C&I) portfolio,
with additional growth and better mix from the
construction, residential mortgage and consumer
portfolios
The majority of the growth came from the Houston
and south Louisiana markets
For the full year of 2014, management expects
period-end annual loan growth to be in the 8-11%
range
Period-end balances. As of June 30, 2014
$s in millions; includes covered loans
$s in millions; includes covered loans
6


Continued Improvement In  Asset Quality
Metrics
Nonperforming assets totaled $157.5 million, down $22.2
million compared to March 31, 2014
Nonperforming loans declined $12.1 million linked-quarter
ORE and foreclosed assets declined $10.1 million linked-quarter
NPA ratio 1.22%, down from 1.43% linked-quarter
The allowance for loan losses was $128.7 million (1.00%)
compared to $128.2 million (1.02%) linked-quarter
The allowance maintained on the noncovered portion of the loan
portfolio increased $2.7 million linked-quarter, totaling $87.5
million
The allowance on the covered loan portfolio declined $2.3
million linked-quarter
Provision for loan losses was $6.7 million, down from $8.0
million in 1Q14
The provision for noncovered loans was $6.8 million in the
second quarter, down from $8.3 million in the first quarter
Noncovered net charge-offs totaled $4.1 million, or 0.13%,
virtually unchanged from $4.0 million, or 0.13%, in 1Q14
As of June 30, 2014
7


Securities Portfolio Funded 2Q14 Loan Growth
Will Begin To Rely On Core Deposit Funding In The Near Term
Portfolio totaled $3.7 billion, down $121 million
linked-quarter
Decline continues to fund loan growth
Better earning asset mix
The level of the securities portfolio has reached a
floor and is expected to rise in the near term
Initiatives have been established to increase core
deposits to begin funding loan growth
Yield 2.43% for 2Q14, down 4 bps linked-quarter
Unrealized gain (net) of $28.4 million on AFS
64% HTM, 36% AFS
Duration 4.12, compared to 3.81 at March 31, 2014
Extends to 4.5 in +100 bps shift in the yield curve
Extends to 4.7 in +200 bps shift in the yield curve
$s in millions
Period-end balances. As of June 30, 2014
8


Initiatives In Place To Grow Stronger
Levels Of Core Deposit Funding
Total deposits $15.2 billion, down $29 million
linked-quarter
Linked-quarter decline mainly related to a $134
million decrease in time deposits, offset by growth
of $110 million in noninterest-bearing demand
deposits (DDA)
Funding mix remained strong
DDA comprised 38% of total period-end deposits
No and low cost deposits comprised 78% of total
period-end deposits
Cost of funds decreased 1 basis point to 22 bps
Period-end balances. As of June 30, 2014
$s in millions
$s in millions
9


Continued Stabilization of Core NIM
Reported net interest margin (NIM) 3.99%, down 7 bps linked-quarter
Core NIM declined 2 bps
Decline in core loan yield (-5bps) and decline the securities portfolio yield (-4bps) impacted NIM
Slight decline in cost of funds related to debt repurchase in 2Q14
Better earning asset mix and increased loan volume
Core
NIM
=
reported
net
interest
income
(TE)
excluding
total
net
purchase
accounting adjustments, annualized, as a percent of average earning assets.
(See slide 21)
As of June 30, 2014
10


Sizeable Declines in Purchased Loan
Accretion Expected in Future Quarters
$s in  millions
Impact of Purchase Accounting Adjustments 2012-2016
(2014-2016 projections
will be updated quarterly; subject to change)
As of June 30, 2014
Revenue includes loan accretion from Whitney and Peoples First, offset by
amortization of the Whitney bond portfolio premium and amortization of the Peoples
First indemnification asset.
11


Core Noninterest Income Increased
Linked-Quarter
Noninterest income, including securities transactions, totaled
$56.4 million, down $0.3 million linked-quarter
Amortization
of
the
indemnification
asset
for
FDIC
covered
loans
totaled
$3.3
million,
compared
to
$3.9
million
in
the
first
quarter;
the
amortization
is
a
reduction
to
noninterest
income
and
is
result
of
a
lower
level
of
expected
future
losses
on
covered
loans
(non-core)
Completed
the
divestiture
of
the
P&C
and
group
benefits
insurance
lines
of
business
April
1,
2014;
insurance
revenue
declined
by
approximately
$1.8
million
in
the
second
quarter
Noninterest income adjusted for the items noted above increased
approximately $1.0 million linked-quarter
Service charges on deposits totaled $19.3 million, up $0.6 million,
or 3%, from the first quarter
Bankcard and ATM fees totaled $11.6 million, up $1.0 million,
or 10%, linked-quarter
Trust fees totaled $11.5 million, up $1.3 million, or 12%, from the first quarter reflecting,
in part, a seasonal increase related to tax preparation fees
Fees from secondary mortgage operations totaled $1.8 million, down $0.2 million, or
11%, linked-quarter
A slightly higher percentage of the mortgage loans originated during the quarter were kept on
the balance sheet as opposed to being sold in the secondary market
As of June 30, 2014
12


Continuing To Manage To A Lower Level
Of Operating Expense
Operating expense totaled $145 million in 2Q14, down $2.3 million linked-quarter
Personnel expense totaled $79.5 million, a decrease of $1.9 million linked-quarter reflecting, in part, first quarter seasonality
Occupancy
and
equipment
totaled
$14.9
million,
down
$0.6
million
linked-quarter
ORE expense totaled $84,000 in the second quarter, compared to $1.8 million in the first quarter
Other operating expense increased approximately $2.3 million linked-quarter, reflecting a lower level of miscellaneous expense items
in
the first quarter
As of June 30, 2014; excluding nonoperating expense items
13
2Q14 operating expense excludes $12.1 million of nonoperating expenses (see slide 14)
The second quarter total includes gains on ORE dispositions, and
management does not expect this low level of ORE expense to be
sustainable in future quarters


Nonoperating expense items for 2Q14 totaled $12.1 million and include:
($9.1MM)
Impact of select insurance business lines divestiture
$10.3MM
FDIC settlement
$7.5MM
Expense & Efficiency initiative and other items (branch closures, charter consolidation, etc.)
$3.4MM
Early debt redemption
$12.1MM
Total nonoperating expense items
In April 2014, the company sold its property and casualty and group benefits insurance intermediary business.
An approximate $9.4 million gain was recorded on the sale based on a $15.5 million sales price less the related
tangible and intangible assets
As
noted
in
the
company’s
2013
10-K,
the
FDIC
issued
an
assessment
related
to
a
targeted
review
of
certain
previously-paid loss claim reimbursements on the covered loan portfolio.
The settlement of these matters totaled $10.3 million (less than
the upper amount of $11.5 million originally
noted in the 10-K disclosure)
In April 2014 the company announced the closing of branches in Mississippi, Florida and Louisiana as part of its
ongoing branch rationalization process.
15 branches will close July 25, 2014 with nonoperating expense of $3.2 million
In
June
2014,
the
company
redeemed
a
portion
of
its
outstanding
debt
by
“unwinding”
$115
million
of
fixed
rate
reverse repos with an average rate of 3.43%.
The
$3.4
million
nonoperating
cost
of
unwinding
these
repos
will
allow
the
company
to
save
approximately
$4.0 million of interest expense annually
Nonoperating Expense Items
14


Targeted Efficiency Ratio:
Below 60% By 2016
Exceeded first quarter goal and achieved the targeted fourth quarter goal ahead of schedule
Continuing to manage expenses in the near-term, however expenses may rise over the next
couple of quarters as investments in higher-return, revenue-generating lines of business are
made
Remain committed to keeping expenses in line with expectations; expect normal annual
increases
Expect to incur additional nonoperating expenses through the remainder of the initiative
*The
efficiency
ratio
is
noninterest
expense
to
total
revenue
(TE)
excluding
amortization
of
0purchased
intangibles,
0nonoperating
expense
items,
and
securities
transactions.
15


Revenue Initiatives
Continuing to invest in automation that will lead to additional efficiency and
improvements in officer productivity
Continuing initiatives designed to add loan volume, improve pricing and enhance
loan/earning asset mix
Open strategically located Business Financial Centers with additional teams of
relationship bankers
Investments in wealth management products and services
Trust
Mutual Funds
Investments in Treasury Management products and services
16


Solid Capital Levels; Board Authorizes New
Common Stock Buyback
TCE ratio 9.29%, up 5 bps linked-quarter
Completed stock buyback (ASR) in May 2014
New
5%
common
stock
buyback
authorized
by
the
Board
of
Directors
in
July
2014
Approximately 4 million shares
Will begin buyback immediately
Authorization effective through December 31, 2015
Will continue to review additional options to deploy excess capital in the best interest of the
Company and its shareholders
Projected capital levels exceed Basel III fully implemented, required guidelines
As of June 30, 2014
17


Appendix:
Near-Term Outlook
2Q14
Items to note
Guidance
Loans
+13% LQA
+12% Y-o-Y
Excludes covered
portfolio
8-11% EOP growth for the full year of 2014
Purchase Accounting
Adjustments
$16.7 million
(see slide 22)
Includes items
impacting revenue
and expense
$9 million decline in PAA revenue over the next 2
quarters per slide 11
Net Interest Margin
(NIM)
3.99% reported
3.35% core
Reported
down
7bps
Core
down
2bps
Core NIM relatively stable; reported NIM decrease
Noninterest Expense
$144.7 million
operating
$12.1
million
of
nonoperating
costs
Slightly higher in the near term as investments are
made in revenue-generating initiatives
E.P.S. (operating,
diluted)
$.59
See calculation on
slide 20
E.P.S. flat to down in the near term due to sizeable
quarterly declines in purchase accounting revenue
18


Whitney Bank locations
Hancock Bank locations
Appendix:
Footprint Map
19


Appendix:
Non-GAAP Reconciliation & EPS calculation
*Management believes that adjusting net income to operating income provides a
useful measure of financial performance that helps investors compare the
Company’s fundamental operations over time.
$s in millions
Three
Months
Ended
6/30/14
Three
Months
Ended
3/31/14
Three
Months
Ended
6/30/13
Net income
$40.0
$49.1
$46.9
Adjustments
from
net
to
operating
income
Securities transactions gains/(losses)
-
-
-
Nonoperating expense items:
Impact of insurance business lines  
divestiture
(9.1)
-
-
FDIC settlement
10.3
-
-
Expense & efficiency initiative and other  
items
7.5
-
-
Early debt redemption
3.4
Total nonoperating expense items
12.1
-
-
Taxes on adjustments at marginal tax rate
2.5
-
-
Total adjustments (net of taxes)
9.6
-
-
Operating income*
$49.6
$49.1
$46.9
20
$s in
thousands,
except E.P.S.
Three
Months
Ended
6/30/14
Three
Months
Ended
3/31/14
Three
Months
Ended
6/30/13
Operating
income to
common
shareholders
$49,575
$49,115
$46,862
Income
allocated to
participating
securities
(1,066)
(1,081)
(880)
Operating
income
allocated to
common
shareholders
$48,509
$48,034
$45,982
Weighted
average
common
shares –
diluted
82,174
82,534
83,357
E.P.S. -
diluted
$.59
$.58
$.55
See Note 7 in the 1Q14 10Q for more details
on the two-class method for E.P.S.
calculation.


Appendix: Purchase Accounting
Adjustments Core NII & NIM Reconciliation
21
* Excess cash recoveries include cash collected on certain zero carrying value acquired loan pools above expected amounts.


Appendix: Purchase Accounting Core E.P.S. 
& ROA Reconciliation
($s in millions)
2Q14
1Q14
2Q13
Average Assets
$19,039
$19,055
$19,023
Operating Income
$49.6
$49.1
$46.9
PAA –
Net Interest Margin (see slide 21)
26.7
28.3
32.7
Intangible Amortization (noninterest expense)
-6.7
-6.9
-7.3
Accretion on Indemnification Asset (noninterest income)
-3.3
-3.9
--
Total Purchase Accounting Impact
$16.7
$17.5
$25.4
Core Income (Operating less purchase accounting items)
$38.7
$37.7
$30.3
ROA (operating)
1.04%
1.05%
0.99%
Core ROA
0.82%
0.80%
0.64%
Weighted Average Diluted Shares (thousands)
82,174
82,534
83,357
E.P.S. (operating)
$.59
$.58
$.55
Core E.P.S.
$.46
$.45
$.36
22


Appendix:
Additional Loan Data
23
$s in millions
6/30/2014
3/31/2014
$ change
% change
LQA
6/30/2013
$ change
% change
Loans (EOP)
12,884
$   
12,528
$   
356
$     
3%
11%
11,681
$   
1,203
10%
Commercial
5,394
5,198
196
4%
15%
4,653
740
16%
Construction
1,041
979
62
6%
25%
966
74
8%
Real Estate
3,056
3,069
(13)
0%
-2%
2,872
184
6%
Residential mortgage
1,771
1,720
51
3%
12%
1,616
155
10%
Consumer
1,622
1,561
61
4%
16%
1,573
49
3%
Covered Loans
304
$         
331
$         
(27)
$     
-8%
431
$         
(127)
$   
-29%
Commercial
14
14
(0)
-3%
26
(13)
-48%
Construction
17
20
(2)
-12%
26
(9)
-34%
Real Estate
47
52
(5)
-10%
72
(26)
-36%
Residential mortgage
190
199
(9)
-5%
235
(46)
-19%
Consumer
37
46
(10)
-21%
70
(34)
-48%
Loans excluding covered
12,580
$   
12,197
$   
383
$     
3%
13%
11,251
$   
1,329
12%
Commercial
5,380
5,184
196
4%
15%
4,627
753
16%
Construction
1,023
959
64
7%
27%
940
83
9%
Real Estate
3,010
3,017
(8)
0%
-1%
2,800
210
7%
Residential mortgage
1,582
1,521
60
4%
16%
1,381
201
15%
Consumer
1,586
1,515
70
5%
19%
1,503
83
6%


Appendix:
Whitney Portfolio Continues Solid Performance
Loan mark on the acquired-performing portfolio accreted into earnings over the life of the
portfolio
Credit-impaired loan mark available for charge-offs; if not needed for charge-offs then
accreted into income
Quarterly reviews of accretion levels and portfolio performance will impact reported margin
$s in millions
Credit-
Impaired
Performing
Total
Whitney loan mark at acquisition
(as adjusted in 4Q11)
$284
$187
$471
Acquired portfolio loan balances at acquisition
$818
$6,101
$6,919
Discount at acquisition
34.7%
3.1%
6.8%
Remaining Whitney loan mark at 6/30/14
$91
$14
$105
Remaining acquired portfolio loan balances at 6/30/14
$161
$1,867
$2,027
Acquired loan charge-offs from acquisition thru 6/30/14
$26
$13
$39
Discount at 6/30/14
56.4%
0.8%
5.2%
As of June 30, 2014
24


Appendix:
Peoples First Loan Mark Used For Charge-Offs
FDIC covered loan portfolio
Entire loan mark available for charge-offs; if not needed for charge-offs then accreted into income
Quarterly reviews of accretion levels and portfolio performance will impact reported margin
FDIC loss share receivable totaled $90.3 million at June 30, 2014
$s in millions
Credit Impaired
Peoples First loan mark at acquisition  (12/2009)
$509
Charge-offs from acquisition thru 6/30/14
$428
Accretion since acquisition date
$89
Remaining loan mark at 6/30/14
$35
Impairment reserve at 6/30/14
$41
Remaining covered portfolio loan balances at 6/30/14
$338
Discount & allowance at 6/30/14
22%
As of June 30, 2014
25


Second Quarter
2014 Financial
Results
July 24, 2014
Second Quarter
2014 Financial
Results
July 24, 2014
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