Mississippi 0-13089 64-0169065
- ------------------------- -------------------- -----------------------------
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification Number)
incorporation)
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)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits.
99.1 Press Release issued by Hancock Holding Company
dated April 8, 2004, headed "Hancock Holding
Company reports first quarter 2004 earnings - up 4
percent"
Item 12. Results of Operation and Financial Condition. On April 8, 2004,
Hancock Holding Company announced by press release its earnings for first
quarter of 2004 were up 4 percent. A copy of this press release is attached
hereto as Exhibit 99.1.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 12, 2004
HANCOCK HOLDING COMPANY
(Registrant)
By: /s/ Paul D. Guichet
--------------------------------
Paul D. Guichet
Vice President
Investor Relations
Exhibit 99.1 to Hancock Holding Company Form 8-K
For Immediate Release For More Information
- --------------------- --------------------
April 8, 2004 George A. Schloegel, Chief Executive Officer
Carl J. Chaney, CFO, Hancock Holding Company
Paul D. Guichet, V.P., Investor Relations
800.522.6542 or 228.214.5242
- -------------------------------------------------------------------------------------------------------------------
Hancock Holding Company reports first quarter 2004 earnings - up 4 percent
GULFPORT, MS (April 8, 2004) - Hancock Holding Company (NASDAQ: HBHC) today announced earnings for the
quarter ended March 31, 2004. Net income for the first quarter of 2004 totaled $14.14 million, compared to
$13.66 million reported for the first quarter of 2003, an increase of $.5 million, or 4 percent. Diluted
earnings per share for the first quarter of 2004 were $0.43, compared to $0.41 for the first quarter of 2003,
resulting in an increase of $0.02 per share, or 5 percent.
Hancock's first quarter results were impacted by the following significant items:
o Hancock completed the acquisition of the former Guaranty National Bank of Tallahassee located in
Tallahassee, Florida on March 12, 2004. The Office of the Comptroller of the Currency closed all
locations of Guaranty National on March 12, 2004. With the transaction, Hancock acquired five locations
with approximately $40.0 million in performing loans and approximately $69.1 million in deposits from
the Federal Deposit Insurance Corporation (FDIC) for a premium of $13.6 million, or 20 percent of
acquired deposits.
o The Company completed the sale of four Louisiana branches to Sabine State Bank on March 8, 2004,
resulting in a $2.3 million pre-tax gain. Approximately $19.7 million in loans and $42.9 million in
deposits were sold to Sabine State Bank in this transaction. Other items affecting the first quarter
results were a pre-tax charge of $1.3 million related to several deferred compensation contracts and a
$250,000 charge related to an accrual for contingent legal liabilities.
o On March 18, 2004 the Company completed a two-for-one stock split in the form of a 100 percent common
stock dividend. All share and per share information contained in this release has been adjusted to give
effect to this stock split. In addition, the Company increased its regular quarterly common stock cash
dividend by $0.01 per common share, or 9%, (adjusted for aforementioned split), in the first quarter of
2004. Hancock's quarterly common dividend per share now stands at $0.125 per common share.
o On February 4, 2004, Hancock completed the redemption/conversion of all $37.1 million of the 8%
Cumulative Convertible Preferred Stock issued in partial payment for the acquisition of Lamar Capital
Corporation in July, 2001.
The Company's annualized returns on average assets and average common stockholders' equity for the first
quarter of 2004 were 1.33 percent and 13.01 percent, respectively, compared with 1.37 percent and 14.08 percent,
respectively, for the first quarter of 2003. Annualized returns on average assets and average common
stockholders' equity for the fourth quarter of 2003 were 1.47 percent and 15.21 percent, respectively.
As compared to the fourth quarter of 2003, net income for the first quarter of 2004 was $1.1 million, or 7
percent, lower. First quarter of 2004 diluted earnings per share were $0.03, or 7 percent, lower than the fourth
quarter of 2003. Other key performance trends for the first quarter of 2004 included:
o Net interest margin (te) was 4.41 percent in the current quarter, 13 basis points narrower than the
prior quarter, but 7 basis points wider than the same quarter a year ago. The efficiency ratio increased
622 basis points to 62.34 percent and was 501 basis points higher than the first quarter of 2003.
o Average loans grew $84 million, or 4 percent, over the previous quarter. The loan/deposit ratio was 70
percent for the current quarter - unchanged from the previous quarter, but improved 781 basis points from
the same quarter a year ago; average loans grew $385 million, or 18 percent, compared to the same quarter a
year ago.
o Average deposits grew $117 million, or 3 percent, over the previous quarter and $175 million, or 5
percent, over the same quarter a year ago.
o Non-performing assets ratio at March 31, 2004 improved 14 basis points from December 31, 2004 to 0.59
percent. The ratio of net charge-offs to average loans was 0.45 percent for the first quarter of 2004, an
improvement of 16 basis points from the previous quarter and 14 basis points from the same quarter a year
ago.
o Common stock repurchases totaled 51,754 shares in the first quarter of 2004
In commenting on Hancock's operating results for the first quarter of 2004, George A. Schloegel, Chief
Executive Officer, stated, "The Company's first quarter results reflect the dedication of all company associates
to making decisions that positively affect the long-term value of your investment in Hancock. Examples of two
important strategic decisions made this quarter include the Company's expansion into Florida and the sale of four
branches in the Central Louisiana region. While both decisions have a nominal effect on first quarter's
earnings, the long-term impact, we feel, will be very significant."
Net Interest Income
Net interest income (te) for the first quarter of 2004 increased $2.3 million or 6 percent, from the first
quarter of 2003, but was $710,000, or 2 percent, lower than the fourth quarter of 2003. The Company's net
interest margin (te) was 4.41 percent in the first quarter of 2004, 7 basis points wider than the same quarter a
year ago, but 13 basis points narrower than the previous quarter.
Compared to the same quarter a year ago, the primary driver of the $2.3 million increase in net interest
income (te) was a $140 million, or 4 percent, increase in average earning assets mainly from average loan growth
of $385 million, or 18 percent. Average deposit growth of $175 million, or 5 percent, along with a net decrease
in the securities portfolio of $179 million, or 12 percent, funded the Company's loan growth and related increase
in earning assets. This overall improvement in earning asset mix enabled the Company to maintain its loan to
deposit ratio at 70 percent in both the first quarter of 2004 and the prior quarter. In addition, loans now
comprise 65 percent of the Company's earning asset base, as compared to 57 percent for the same quarter a year
ago. The net interest margin (te) widened 7 basis points as the reduction in total funding costs (30 basis
points) more than offset the decline in the yield on loans, securities and short-term investments (23 basis
points).
The lower level of net interest income (te) (down $710,000, or 2 percent) and net interest margin (13 basis
points) as compared to the previous quarter was primarily due to a 22 basis point decline in total loan yield,
partially offset by a larger earning asset base (average earning assets were up $71 million from the prior
quarter). Average loans grew $84 million, or 4 percent, from the previous quarter and were funded largely
through average deposit growth. Average deposits were up $117 million, or 3 percent, from the prior quarter
primarily due to a $119 million increase in interest-bearing transaction deposits. The loan to deposit ratio for
the first quarter was unchanged at 70 percent in the current quarter as compared to the previous quarter. The
yield on the Company's $1.3 billion securities portfolio improved 6 basis points to 4.48 percent. The
portfolio's effective duration remains a relatively short 2.40 at March 31, 2004, a decrease from the 2.61
reported at December 31, 2003. Finally, the Company was able to reduce its overall funding costs by one basis
point from the prior quarter, mostly through a 6 basis point reduction in the cost of interest-bearing deposits.
Non-Interest Income and Expense
Non-interest income (excluding the gain on sale of branches and securities transactions) for the first
quarter of 2004 was up $2.9 million, or 17 percent, compared to the same quarter a year ago and was up $574,000,
or 3 percent, compared to the fourth quarter of 2003. The primary factor impacting the higher levels of
non-interest income as compared to the prior quarter, as well as the same quarter a year ago, were higher levels
of insurance fees mostly related to the December 31, 2003 purchase of Magna Insurance Company.
Operating expenses for the first quarter of 2004 were $6.3 million, or 19 percent, higher compared to the
same quarter a year ago and were $3.7 million, or 10 percent, higher than the previous quarter. The increase
from the prior quarter was mainly due to higher personnel expense (up $3.7 million). The increases from the same
quarter a year ago were reflected in higher personnel expense (up $2.7 million) and higher other operating
expense (up $2.9 million). Comparisons to prior quarters (both previous quarter and same quarter a year ago)
were impacted by the $1.3 million in increased amortization related to deferred compensation contracts that was
previously mentioned. The comparison to the prior quarter was also impacted by approximately $1.6 million of
incentive compensation reversals effected in the fourth quarter of 2003.
The Company's efficiency ratio (expressed as operating expenses as a percent of total revenue (te) before
gain on sale of branches, securities transactions and amortization of purchased intangibles) increased to 62.34
percent for the first quarter of 2004. This was compared to 57.33 percent for the same quarter a year ago, and
56.12 percent for the previous quarter. The Company's number of full service banking facilities was increased by
a net of 2 facilities during the first quarter of 2004 and stands at 103 as of March 31, 2004. Five facilities
were added as a result of the aforementioned Guaranty National Bank of Florida acquisition. In addition, Hancock
leased an 11,800 square foot branch in Metairie, La. (a suburb of New Orleans). As previously mentioned, Hancock
sold four central Louisiana branches to Sabine State Bank in the first quarter of 2004. The Company's number of
full-time equivalent employees was 1,717 at March 31, 2004, a reduction of 29 from one year ago.
Asset Quality
Non-performing assets as a percent of total loans and foreclosed assets was 0.59 percent at March 31, 2004,
compared to 0.73 percent at December 31, 2003. Non-performing assets decreased $3.1 million from December 31,
2003, reflected primarily in lower levels of non-accrual loans. Compared to the first quarter of 2003,
non-performing assets as a percent of total loans and foreclosed assets was down 22 basis points from the 0.81
percent reported at March 31, 2003. The composition of the Company's $14.9 million non-performing asset base
continues to reflect significant granularity with only 4 credits or properties exceeding $250,000 and 218
credit/properties below $250,000. The Company's ratio of accruing loans 90 days or more past due to total loans
was 0.20 percent at March 31, 2004, compared to 0.15 percent at December 31, 2003 and to 0.28 percent at March
31, 2003.
The Company's allowance for loan losses increased $750,000, or 2 percent to $37.50 million at March 31, 2004
from $36.75 million at December 31, 2003 and was $2.76 million higher than the $34.74 million reported at March
31, 2003. The ratio of the allowance for loan losses as a percent of period-end loans was 1.49 percent at March
31, 2004, compared to 1.50 percent at December 31, 2003 and 1.64 percent at March 31, 2003. The increase in the
allowance for loan losses from March 31, 2003 was a function of the $402 million of period-end loan growth
experienced between March 31, 2003 and March 31, 2004. However, the ratio of the allowance for loan losses to
period-end loans did decrease from 1.64 percent at March 31, 2003 to 1.49 percent at March 31, 2004. The reserve
coverage ratio (allowance for loan losses to non-performers and past dues) was 189 percent in first quarter 2004
as compared to 150 percent in first quarter 2003 and 170 percent in fourth quarter 2003.
Annualized net charge-offs as a percent of average loans for the first quarter of 2004 were 0.45 percent,
compared to 0.61 percent for the fourth quarter of 2003. Net charge-offs decreased $894,000, or 16 basis points
(expressed as a percent of average loans) from the fourth quarter of 2003 and were reflected primarily in lower
levels of charge-offs in consumer loans and Finance Company loans. Compared to the first quarter of 2003, net
charge-offs decreased $234,000, or 14 basis points (expressed as a percent of average loans). The provision for
loan losses in the first quarter of 2004 was $3.5 million, or 127 percent of the quarter's net charge-offs. This
compares to the $4.2 million provision for the fourth quarter of 2003 and $3.0 million provision for the first
quarter of 2003. The ratio of provision for loan losses to net charge-offs was 127 percent in the first quarter
of 2004 compared to 114 percent in the fourth quarter of 2003 and 100 percent in the first quarter of 2003.
General
Hancock Holding Company subscribes to the highest standards of corporate responsibility with respect to
legal, moral, and regulatory relationships with shareholders, customers, employees, and communities Hancock
serves. Accordingly, these unwavering business principles support a corporate culture of ethical compliance and
accountability that ensures that financial statements are prepared and audited in accordance with accounting
principles generally accepted in the United States of America (GAAP). The Company's systems of internal controls
and risk management processes are in place and fully functional.
Hancock Holding Company - parent company of Hancock Bank (Mississippi), Hancock Bank of Louisiana, Hancock
Bank of Florida and Magna Insurance Company - has assets of $4.366 billion at March 31, 2004. Founded in 1899,
Hancock Bank stands among the strongest, safest five-star financial institutions in America. Hancock Bank
operates 103 full-service offices and more than 140 automated teller machines throughout South Mississippi,
Louisiana and Florida as well as subsidiaries Hancock Investment Services, Inc., Hancock Insurance Agency,
Hancock Mortgage Corporation and Harrison Finance Company. Investors can access additional corporate information
or online banking and bill pay services at www.hancockbank.com.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Congress passed the Private
Securities Litigation Act of 1995 in an effort to encourage corporations to provide information about companies'
anticipated future financial performance. This act provides a safe harbor for such disclosure, which protects
the companies from unwarranted litigation if actual results are different from management expectations. This
release contains forward-looking statements and reflects management's current views and estimates of future
economic circumstances, industry conditions, company performance, and financial results. These forward-looking
statements are subject to a number of factors and uncertainties which could cause the company's actual results
and experience to differ from the anticipated results and expectations expressed in such forward-looking
statements.
- more -
Hancock Holding Company - Add 4 -
Financial Highlights
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended
3/31/2004 12/31/2003 3/31/2003
----------------------------------------------
Per Common Share Data*
Earnings per share:
Basic $0.44 $0.48 $0.42
Diluted $0.43 $0.46 $0.41
Cash dividends per share $0.125 $0.115 $0.105
Book value per share (period end) $13.75 $13.06 $12.72
Tangible book value per share (period end) $11.73 $11.19 $10.80
Weighted average number of shares:
Basic 32,048 30,510 30,884
Diluted 32,632 33,288 33,512
Period end number of shares 32,558 30,450 30,870
Market data:
High closing price $32.00 $29.25 $23.47
Low closing price $27.08 $24.68 $21.40
Period end closing price $30.96 $27.29 $21.53
Trading volume 2,745 2,963 2,843
Performance Ratios
Return on average assets 1.33% 1.47% 1.37%
Return on average common equity 13.01% 15.21% 14.08%
Earning asset yield (TE) 5.82% 5.96% 6.05%
Total cost of funds 1.41% 1.42% 1.71%
Net interest margin (TE) 4.41% 4.54% 4.34%
Non-interest expense as a percent of total revenue (TE)
before amortization of purchased intangibles, gain on sale of
branches and securities transactions 62.34% 56.12% 57.33%
Average common equity as a percent of average total assets 10.24% 9.63% 9.73%
Leverage ratio 8.97% 9.29% 9.05%
Tangible common equity to assets 8.87% 8.32% 8.14%
Net charge-offs as a percent of average loans 0.45% 0.61% 0.59%
Allowance for loan losses as a percent of period end loans 1.49% 1.50% 1.64%
Allowance for loan losses to NPAs + accruing loans 90 days past 188.51% 169.73% 149.63%
due
Provision for loan losses to net charge-offs 126.92% 113.59% 100.00%
Loan/Deposit Ratio 70.16% 70.10% 62.35%
Non-interest income, excluding gain on sale of branches and
securities transactions, as a percent of total revenue (TE) 32.39% 31.40% 30.29%
* Note: Share, market data and per share data give effect to the 2-for-1 stock split effective March 8, 2004
Hancock Holding Company - Add 5 -
Financial Highlights
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended
3/31/2004 12/31/2003 3/31/2003
----------------------------------------------
Asset Quality Information
Non-accrual loans $9,670 $12,161 $11,949
Foreclosed assets $5,212 $5,809 $5,230
Total non-performing assets $14,882 $17,970 $17,179
Non-performing assets as a percent of loans and foreclosed 0.59% 0.73% 0.81%
assets
Accruing Loans 90 days past due $5,011 $3,682 $6,039
Accruing Loans 90 days past due as a percent of loans 0.20% 0.15% 0.28%
Non-performing assets + accruing loans 90 days past due
to loans and foreclosed assets 0.79% 0.88% 1.09%
Net charge-offs $2,786 $3,680 $3,020
Net charge-offs as a percent of average loans 0.45% 0.61% 0.59%
Allowance for loan losses $37,500 $36,750 $34,740
Allowance for loan losses as a percent of period end loans 1.49% 1.50% 1.64%
Allowance for loan losses to NPAs + accruing loans 90 days 188.51% 169.73% 149.63%
past due
Provision for loan losses $3,536 $4,180 $3,020
Provision for loan losses to net charge-offs 126.92% 113.59% 100.00%
Reserve for Loan Losses
Beginning Balance 36,750 36,250 34,740
Provision for loan loss 3,536 4,180 3,020
Charge-offs 5,695 5,446 4,771
Recoveries 2,909 1,766 1,751
----------------------------------------------
Net charge-offs 2,786 3,680 3,020
----------------------------------------------
Ending Balance 37,500 36,750 34,740
----------------------------------------------
Net Charge-Off Information
Net charge-offs:
Commercial/real estate loans $1,159 $599 $741
Mortgage loans (1) 74 35
Direct consumer loans 637 1,583 1,251
Indirect consumer loans 442 576 588
Finance company loans 549 848 405
----------------------------------------------
Total net charge-offs $2,786 $3,680 $3,020
Average loans:
Commercial/real estate loans $1,299,399 $1,237,715 $1,061,644
Mortgage loans 367,320 361,715 294,611
Direct consumer loans 487,452 491,340 498,822
Indirect consumer loans 268,311 248,817 190,648
Finance Company loans 55,488 54,598 47,484
----------------------------------------------
Total average loans $2,477,971 $2,394,185 $2,093,209
Net charge-offs to average loans:
Commercial/real estate loans 0.36% 0.19% 0.28%
Mortgage loans 0.00% 0.08% 0.05%
Direct consumer loans 0.53% 1.28% 1.02%
Indirect consumer loans 0.66% 0.92% 1.25%
Finance Company loans 3.98% 6.16% 3.46%
----------------------------------------------
Total net charge-offs to average loans 0.45% 0.61% 0.59%
Hancock Holding Company - Add 6 -
Financial Highlights
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended
3/31/2004 12/31/2003 3/31/2003
--------------------------------------------
Income Statement
Interest income $53,842 $54,697 $53,616
Interest income (TE) 55,696 56,464 55,479
Interest expense 13,470 13,529 15,581
--------------------------------------------
Net interest income (TE) 42,226 42,936 39,898
Provision for loan losses 3,536 4,180 3,020
Non-interest income excluding gain on sale of branches
and securities transactions 20,231 19,657 17,339
Gain on sale of branches 2,258 - -
Securities transactions gain/(loss) 149 553 455
Non-interest expense 39,262 35,568 32,991
--------------------------------------------
Income before income taxes 20,212 21,630 19,818
Income tax expense 6,068 6,382 6,156
--------------------------------------------
Net income 14,144 15,248 13,663
Preferred dividends - 663 663
--------------------------------------------
Net income to common $14,144 $14,585 $13,000
=============================================
Non-interest Income and Operating Expense
Service charges on deposit accounts $10,230 $11,071 $10,155
Trust fees 1,985 1,976 1,940
Credit card merchant discount fees 861 870 801
Insurance fees 2,484 557 516
Investment & annuity fees 693 874 931
ATM fees 1,128 1,016 966
Secondary mortgage market operations 385 582 640
Other income 2,465 2,712 1,390
--------------------------------------------
Non-interest income excluding gain on sale
of branches and securities transactions 20,231 19,657 17,339
Gain on sale of branches 2,258 0 0
Securities transactions gain/(losses) 149 553 455
--------------------------------------------
Total non-interest income including gain on
sale of branches and securities transactions 22,638 20,209 17,794
--------------------------------------------
Personnel expense 22,896 19,242 20,171
Occupancy expense (net) 2,413 2,362 2,117
Equipment expense 2,326 2,331 2,086
Other operating expense 11,302 11,193 8,438
Amortization of intangibles 325 440 178
--------------------------------------------
Total non-interest expense 39,262 35,568 32,991
--------------------------------------------
FTE Headcount 1,717 1,734 1,746
Hancock Holding Company - Add 7 -
Financial Highlights
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended
3/31/2004 12/31/2003 3/31/2003
-------------------------------------------
Period-end Balance Sheet
Commercial/real estate loans $1,319,388 $1,279,925 $1,073,526
Mortgage loans 388,447 362,274 314,048
Direct consumer loans 483,019 491,925 495,388
Indirect consumer loans 275,810 258,803 190,719
Finance Company loans 56,216 55,716 47,657
-------------------------------------------
Total loans 2,522,878 2,448,644 2,121,338
Securities 1,349,504 1,278,049 1,661,626
Short-term investments 78,185 11,288 40,371
-------------------------------------------
Earning assets 3,950,567 3,737,981 3,823,335
-------------------------------------------
Reserve for loan losses (37,500) (36,750) (34,740)
Other assets 452,600 449,127 364,592
-------------------------------------------
Total assets $4,365,666 $4,150,358 $4,153,186
============================================
Non-interest bearing deposits $650,867 $636,745 $611,901
Interest bearing transaction deposits 1,818,983 1,698,714 1,700,917
Time deposits 1,160,823 1,112,388 1,146,078
-------------------------------------------
Total interest bearing deposits 2,979,806 2,811,102 2,846,995
-------------------------------------------
Total deposits 3,630,673 3,447,847 3,458,895
Other borrowed funds 214,859 210,158 226,931
Other liabilities 72,566 57,472 37,526
Preferred stock 36 37,067 37,069
Common shareholders' equity 447,533 397,814 392,765
-------------------------------------------
Total liabilities, preferred stock & common equity $4,365,666 $4,150,358 $4,153,186
===========================================
Average Balance Sheet
Commercial/real estate loans $1,299,399 $1,237,715 $1,061,644
Mortgage loans 367,320 361,715 294,611
Direct consumer loans 487,452 491,340 498,822
Indirect consumer loans 268,311 248,817 190,648
Finance Company loans 55,488 54,598 47,484
-------------------------------------------
Total loans 2,477,971 2,394,185 2,093,209
Securities 1,287,487 1,362,532 1,466,360
Short-term investments 75,311 13,129 140,805
-------------------------------------------
Earning assets 3,840,769 3,769,847 3,700,374
-------------------------------------------
Allowance for loan losses (36,927) (36,360) (34,740)
Other assets 467,781 393,672 379,632
-------------------------------------------
Total assets $4,271,623 $4,127,158 $4,045,265
===========================================
Non-interest bearing deposits $622,271 $618,544 $582,992
Interest bearing transaction deposits 1,808,254 1,689,252 1,651,450
Time deposits 1,101,385 1,107,491 1,122,536
-------------------------------------------
Total interest bearing deposits 2,909,639 2,796,743 2,773,986
-------------------------------------------
Total deposits 3,531,911 3,415,287 3,356,978
Other borrowed funds 229,352 237,737 223,895
Other liabilities 64,080 39,456 33,726
Preferred stock 9,009 37,068 37,069
Common shareholders' equity 437,272 397,610 393,597
-------------------------------------------
Total liabilities, preferred stock & common equity $4,271,623 $4,127,158 $4,045,265
===========================================
Hancock Holding Company - Add 8 -
Financial Highlights
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended
3/31/2004 12/31/2003 3/31/2003
------------------------------------------------
Average Balance Sheet Mix
Percentage of earning assets/funding sources:
Loans 64.52% 63.51% 56.57%
Securities 33.52% 36.14% 39.63%
Short-term investments 1.96% 0.35% 3.81%
------------------------------------------------
Earning assets 100.00% 100.00% 100.00%
================================================
Non-interest bearing deposits 16.20% 16.41% 15.75%
Interest bearing transaction deposits 47.08% 44.81% 44.63%
Time deposits 28.68% 29.38% 30.34%
------------------------------------------------
Total deposits 91.96% 90.59% 90.72%
Other borrowed funds 5.97% 6.31% 6.05%
Other net interest-free funding sources 2.07% 3.10% 3.23%
------------------------------------------------
Total funding sources 100.00% 100.00% 100.00%
================================================
Loan mix:
Commercial/real estate loans 52.44% 51.70% 50.72%
Mortgage loans 14.82% 15.11% 14.07%
Direct consumer loans 19.67% 20.52% 23.83%
Indirect consumer loans 10.83% 10.39% 9.11%
Finance Company loans 2.24% 2.28% 2.27%
------------------------------------------------
Total loans 100.00% 100.00% 100.00%
================================================
Average dollars (in thousands):
Loans 2,477,971 2,394,185 $2,093,209
Securities 1,287,487 1,362,532 1,466,360
Short-term investments 75,311 13,129 140,805
------------------------------------------------
Earning assets 3,840,769 3,769,847 $3,700,374
Non-interest bearing deposits $622,271 $618,544 $582,992
Interest bearing transaction deposits 1,808,254 1,689,252 1,651,450
Time deposits 1,101,385 1,107,491 1,122,536
------------------------------------------------
Total deposits 3,531,911 3,415,287 3,356,978
Other borrowed funds 229,352 237,737 223,895
Other net interest-free funding sources 79,506 116,823 119,501
------------------------------------------------
Total funding sources $3,840,769 $3,769,847 $3,700,374
Loans:
Commercial/real estate loans $1,299,399 $1,237,715 $1,061,644
Mortgage loans 367,320 361,715 294,611
Direct consumer loans 487,452 491,340 498,822
Indirect consumer loans 268,311 248,817 190,648
Finance Company loans 55,488 54,598 47,484
------------------------------------------------
Total average loans $2,477,971 $2,394,185 $2,093,209
Hancock Holding Company - Add 9 -
Average Balance and Net Interest Margin Summary
(amounts in thousands)
(unaudited)
Three Months Ended
----------------------------------------------------------------------------------------------------
03/31/04 12/31/03 03/31/03
--------------------------------- -------------------------------- -------------------------------
Interest Volume Rate Interest Volume Rate Interest Volume Rate
--------------------------------- -------------------------------- -------------------------------
Average Earning Assets
Commercial & real estate
loans (TE) $17,925 $1,299,399 5.55% $17,582 $1,237,715 5.64% $16,188 $1,061,644 6.18%
Mortgage loans 5,196 367,320 5.66% 5,296 361,715 5.86% 4,723 294,611 6.41%
Consumer loans 15,816 811,252 7.84% 16,081 794,756 8.03% 15,691 736,954 8.64%
Loan fees & late charges 2,163 - 0.00% 2,439 - 0.00% 2,381 - 0.00%
----------------------------------------------------------------------------------------------------
Total loans (TE) 41,100 2,477,971 6.66% 41,397 2,394,185 6.88% 38,983 2,093,209 7.54%
US treasury securities 48 10,118 1.93% 59 10,389 2.26% 412 50,265 3.33%
US agency securities 3,783 371,647 4.07% 4,085 427,156 3.83% 5,706 522,735 4.37%
CMOs 3,038 319,916 3.80% 3,264 326,049 4.00% 4,419 544,997 3.24%
Mortgage backed securities 3,900 367,585 4.24% 4,009 380,907 4.21% 1,474 109,890 5.37%
Municipals (TE) 3,286 183,969 7.14% 3,314 192,226 6.90% 3,740 206,975 7.23%
Other securities 367 34,252 4.29% 309 25,804 4.79% 336 31,498 4.27%
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Total securities (TE) 14,422 1,287,487 4.48% 15,041 1,362,532 4.42% 16,087 1,466,360 4.39%
Fed funds sold 153 64,192 0.96% 18 7,422 0.98% 330 113,667 1.18%
Cds with banks 8 5,626 0.54% 7 5,708 0.51% 13 5,204 1.04%
Other short-term investments 13 5,493 0.97% - - 0.00% 65 21,935 1.21%
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Total short-term investments 174 75,311 0.93% 26 13,129 0.78% 408 140,805 1.18%
Average earning assets $55,696 $3,840,769 5.82% $56,464 $3,769,847 5.96% $55,479 $3,700,374 6.05%
yield (TE)
Interest-Bearing Liabilities
Interest-bearing transaction $3,838 $1,808,254 0.85% $3,847 $1,689,252 0.90% $5,118 $1,651,450 1.26%
deposits
Time deposits 8,602 1,101,385 3.14% 8,709 1,107,491 3.12% 9,499 1,122,536 3.43%
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Total interest bearing 12,440 2,909,639 1.72% 12,556 2,796,743 1.78% 14,618 2,773,986 2.14%
deposits
Customer repos 338 169,830 0.80% 343 174,525 0.78% 369 171,072 0.87%
Other borrowings 692 59,522 4.68% 630 63,212 3.95% 594 52,823 4.56%
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Total borrowings 1,030 229,352 1.81% 972 237,737 1.62% 963 223,895 1.74%
Total interest bearing liab $13,470 $3,138,992 1.73% $13,529 $3,034,480 1.77% $15,581 $2,997,881 2.11%
cost
Noninterest-bearing deposits 622,271 618,544 582,992
Other net interest-free funding 79,506 116,823 119,501
sources
Total Cost of Funds $13,470 $3,840,769 1.41% $13,529 $3,769,847 1.42% $15,581 $3,700,374 1.71%
Net Interest Spread (TE) $42,226 4.09% $42,936 4.19% $39,898 3.94%
Net Interest Margin (TE) $42,226 $3,840,769 4.41% $42,936 $3,769,847 4.54% $39,898 $3,700,374 4.34%
Hancock Holding Company - Add 10 -
Quarterly Financial Data
(amounts in thousands, except per share data)
(unaudited)
2002 2003 2004
----------------------------- ------------------------------------------ -----------
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
----------------------------- ------------------------------------------ -----------
Per Common Share Data*
Earnings per share:
Basic $0.38 $0.40 $0.42 $0.42 $0.38 $0.42 $0.48 $0.44
Diluted $0.37 $0.39 $0.41 $0.41 $0.37 $0.41 $0.46 $0.43
Cash dividends per share $0.10 $0.10 $0.10 $0.105 $0.105 $0.115 $0.115 $0.125
Book value per share (period end) $12.33 $12.58 $12.55 $12.72 $12.92 $12.81 $13.06 $13.75
Tangible book value per share (period end) $10.56 $10.77 $10.72 $10.80 $11.02 $10.92 $11.19 $11.73
Weighted average number of shares:
Basic 31,738 31,418 30,974 30,884 30,840 30,624 30,510 32,048
Diluted 34,312 34,094 33,644 33,512 33,484 33,298 33,288 32,632
Period end number of shares 31,596 31,034 30,886 30,870 30,778 30,522 30,450 32,558
Market data:
High closing price $22.57 $24.87 $25.19 $23.47 $24.63 $25.85 $29.25 $32.00
Low closing price $17.59 $19.67 $21.00 $21.40 $21.00 $23.01 $24.68 $27.08
Period end closing price $22.46 $23.49 $22.33 $21.53 $23.38 $24.68 $27.29 $30.96
Trading volume
4,492 7,380 4,705 2,843 2,573 3,032 2,963 2,745
Performance Ratios
Return on average assets 1.30% 1.36% 1.39% 1.37% 1.20% 1.31% 1.47% 1.33%
Return on average common equity 13.04% 13.30% 13.87% 14.08% 12.42% 13.79% 15.21% 13.01%
Earning asset yield (TE) 6.73% 6.77% 6.50% 6.05% 5.95% 5.99% 5.96% 5.82%
Total cost of funds 2.06% 1.97% 1.86% 1.71% 1.58% 1.46% 1.42% 1.41%
Net interest margin (TE) 4.66% 4.80% 4.65% 4.34% 4.37% 4.54% 4.54% 4.41%
Non-interest expense as a percent
of total revenue (TE) before amortization
of purchased intangibles, gain on sale
of branches and securities
transactions 57.34% 57.97% 57.97% 57.33% 60.09% 57.90% 56.12% 62.34%
Average common equity as
a percent of average total assets 9.97% 10.24% 10.05% 9.73% 9.68% 9.49% 9.63% 10.24%
Leverage ratio 9.35% 9.30% 9.19% 9.05% 9.00% 9.10% 9.29% 8.97%
Tangible common equity to assets 8.73% 8.53% 8.45% 8.14% 8.31% 8.15% 8.32% 8.87%
Net charge-offs as a
percent of average loans 0.88% 0.51% 0.63% 0.59% 0.64% 0.52% 0.61% 0.45%
Allowance for loan losses as
a percent of period end loans 1.65% 1.65% 1.65% 1.64% 1.57% 1.54% 1.50% 1.49%
Allowance for loan losses to
NPAs + loans 90 days past due 122.93% 134.42% 143.48% 149.63% 138.95% 147.27% 169.73% 188.51%
Provision for loan losses to net 116.21% 141.23% 143.64% 100.00% 114.43% 133.92% 113.59% 126.92%
charge-offs
Loan/Deposit Ratio 59.78% 62.47% 64.06% 62.35% 63.38% 66.78% 70.10% 70.16%
Non-interest income, excluding gain on
sale of branches and securities
transactions, as a percent of
total revenue (TE) 29.66% 29.29% 31.27% 30.29% 29.09% 30.70% 31.40% 32.39%
* Note: Share, market data and per share data give effect to the 2-for-1 stock split effective March 8, 2004
Hancock Holding Company - Add 11 -
Quarterly Financial Data
(amounts in thousands, except per share data)
(unaudited)
2002 2003 2004
----------------------------- ------------------------------------------ ---------
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
----------------------------- ------------------------------------------ ---------
Asset Quality Information
Non-accrual loans $12,210 $12,373 $11,870 $11,949 $16,860 $13,988 $12,161 $9,670
Foreclosed assets $7,335 $7,178 $5,936 $5,230 $5,685 $6,187 $5,809 $5,212
Total non-performing assets $19,545 $19,551 $17,806 $17,179 $22,545 $20,175 $17,970 $14,882
Non-performing assets as a percent of
loans and foreclosed assets 1.00% 0.96% 0.84% 0.81% 1.00% 0.86% 0.73% 0.59%
Accruing Loans 90 days past due $6,702 $5,234 $6,407 $6,039 $2,817 $4,439 $3,682 $5,011
Accruing Loans 90 days past due as
a percent of loans 0.34% 0.26% 0.30% 0.28% 0.13% 0.19% 0.15% 0.20%
Non-performing assets + accruing loans
90 days past due to loans and
foreclosed assets 1.34% 1.22% 1.15% 1.09% 1.12% 1.05% 0.88% 0.79%
Net charge-offs $4,198 $2,547 $3,266 $3,020 $3,466 $2,978 $3,680 $2,786
Net charge-offs as
a percent of average loans 0.88% 0.51% 0.63% 0.59% 0.64% 0.52% 0.61% 0.45%
Allowance for loan losses $32,265 $33,315 $34,740 $34,740 $35,240 $36,250 $36,750 $37,500
Allowance for loan losses as a
percent of period end loans 1.65% 1.65% 1.65% 1.64% 1.57% 1.54% 1.50% 1.49%
Allowance for loan losses to NPAs +
accruing loans 90 days past due 122.93% 134.42% 143.48% 149.63% 138.95% 147.27% 169.73% 188.51%
Provision for loan losses $4,879 $3,597 $4,691 $3,020 $3,966 $3,988 $4,180 $3,536
Provision for loan losses to net
charge-offs 116.21% 141.23% 143.64% 100.00% 114.43% 133.92% 113.59% 126.92%
Net Charge-Off Information
Net charge-offs:
Commercial/real estate loans $2,111 $256 $920 $741 $1,605 $880 $599 $1,159
Mortgage loans - 1 32 35 4 - 74 (1)
Direct consumer loans 1,167 1,420 1,370 1,251 1,094 1,094 1,583 637
Indirect consumer loans 462 405 428 588 334 637 576 442
Finance company loans 458 465 516 405 429 367 848 549
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Total net charge-offs $4,198 $2,547 $3,266 $3,020 $3,466 $2,978 $3,680 $2,786
Average loans:
Commercial/real estate loans $972,234 $1,004,067 $1,044,411 $1,061,644 $1,100,310 $1,159,338 $1,237,715 $1,299,399
Mortgage loans 230,653 252,350 279,397 294,611 331,930 367,134 361,715 367,320
Direct consumer loans 501,761 501,673 500,241 498,822 492,484 484,736 491,340 487,452
Indirect consumer loans 172,605 183,652 187,303 190,648 198,917 225,199 248,817 268,311
Finance Company loans 39,949 43,983 46,107 47,484 49,164 52,509 54,598 55,488
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Total average loans $1,917,200 $1,985,726 $2,057,459 $2,093,209 $2,172,805 $2,288,917 $2,394,185 $2,477,971
Net charge-offs to average loans:
Commercial/real estate loans 0.87% 0.10% 0.35% 0.28% 0.59% 0.30% 0.19% 0.36%
Mortgage loans 0.00% 0.00% 0.05% 0.05% 0.00% 0.00% 0.08% 0.00%
Direct consumer loans 0.93% 1.12% 1.09% 1.02% 0.89% 0.90% 1.28% 0.53%
Indirect consumer loans 1.07% 0.87% 0.91% 1.25% 0.67% 1.12% 0.92% 0.66%
Finance Company loans 4.60% 4.19% 4.44% 3.46% 3.50% 2.77% 6.16% 3.98%
----------------------------------------------------------------------------------------
Total net charge-offs to average loans 0.88% 0.51% 0.63% 0.59% 0.64% 0.52% 0.61% 0.45%
Hancock Holding Company - Add 12 -
Quarterly Financial Data
(amounts in thousands, except per share data)
(unaudited)
2002 2003 2004
----------------------------- ------------------------------------------ --------
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
----------------------------- ------------------------------------------ --------
Income Statement
Interest income $58,071 $58,403 $56,702 $53,616 $54,627 $55,208 $54,697 $53,842
Interest income (TE) 59,931 60,260 58,557 55,479 56,400 56,975 56,464 55,696
Interest expense 18,373 17,597 16,762 15,581 14,963 13,889 13,529 13,470
--------------------------------------------------------------------------------------
Net interest income (TE) 41,558 42,663 41,795 39,898 41,438 43,087 42,936 42,226
Provision for loan losses 4,879 3,597 4,691 3,020 3,966 3,988 4,180 3,536
Non-interest income excluding gain on
sale of branches and securities
transactions 17,519 17,669 19,012 17,339 17,004 19,091 19,657 20,231
Gain on sale of branches - - - - - - - 2,258
Securities transactions gain/(loss) (0) 5 (1) 455 659 0 553 149
Non-interest expense 34,063 35,163 35,438 32,991 35,297 36,352 35,568 39,262
Income before income taxes 18,275 19,721 18,822 19,818 18,063 20,071 21,630 20,212
Income tax expense 5,694 6,430 5,072 6,156 5,681 6,409 6,382 6,068
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Net income 12,581 13,291 13,750 13,663 12,382 13,662 15,248 14,144
Preferred dividends 663 663 663 663 663 663 663 -
--------------------------------------------------------------------------------------
Net income to common $11,918 $12,627 $13,086 $13,000 $11,719 $12,998 $14,585 $14,144
======================================================================================
Non-interest Income
and Operating Expense
Service charges on deposit accounts $10,568 $11,080 $11,151 $10,155 $10,202 $11,117 $11,071 $10,230
Trust fees 1,828 1,785 1,903 1,940 2,032 1,776 1,976 1,985
Credit card merchant discount fees 887 792 851 801 1,091 882 870 861
Insurance fees 589 650 559 516 836 841 557 2,484
Investment & annuity fees 1,234 855 855 931 840 970 874 693
ATM fees 969 1,003 938 966 990 1,021 1,016 1,128
Secondary mortgage market operations 539 416 775 640 (203) 710 582 385
Other income 904 1,088 1,979 1,390 1,216 1,774 2,712 2,465
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Non-interest income excluding gain
on sale of branches and securities
transactions 17,519 17,669 19,012 17,339 17,004 19,091 19,657 20,231
Gain on sale of branches 0 0 0 0 0 0 0 2,258
Securities transactions gain/(losses) 0 5 (1) 455 659 0 553 149
--------------------------------------------------------------------------------------
Total non-interest income including
gain on sale of branches and securities
transactions 17,519 17,674 19,011 17,794 17,663 19,091 20,209 22,638
--------------------------------------------------------------------------------------
Personnel expense 19,995 19,510 18,728 20,171 20,705 21,290 19,242 22,896
Occupancy expense (net) 2,075 2,220 2,204 2,117 2,294 2,512 2,362 2,413
Equipment expense 2,171 2,260 2,483 2,086 2,221 2,459 2,331 2,326
Other operating expense 9,633 10,985 11,835 8,438 9,899 9,738 11,193 11,302
Amortization of intangibles 188 188 188 178 178 352 440 325
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Total non-interest expense 34,062 35,163 35,438 32,991 35,297 36,352 35,568 39,262
--------------------------------------------------------------------------------------
FTE Headcount 1,769 1,773 1,790 1,746 1,789 1,751 1,734 1,717