SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 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):
April 20, 2006
HANCOCK HOLDING COMPANY
(Exact name of registrant as specified in its charter)
Mississippi 0-13089 64-0169065
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification Number)
incorporation)
One Hancock Plaza, 2510 14th Street,
Gulfport, Mississippi 39501
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(Address of principal executive offices) (Zip code)
(228) 868-4000
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(Registrant's telephone number, including area code)
Item 8.01. Other Events. On April 20, 2006, Hancock Holding Company
issued a press release announcing its earnings for the first quarter of 2006. The
press release and related financial statements are attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits.
99.1 Press Release issued by Hancock Holding Company
dated April 20, 2006, headed "Hancock Holding
Company Announces Earnings for First Quarter 2006"
and related financial statements.
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 24, 2006
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
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April 20, 2006 George A. Schloegel, Chief Executive Officer
Carl J. Chaney, Chief Financial Officer
Michael M. Achary, Treasurer
Paul D. Guichet, Investor Relations
800.522.6542 or 228.563.6559
===================================================================================================================GULFPORT, MS (April 20, 2006) - Hancock Holding Company (NASDAQ: HBHC) and Leo W. Seal, Jr., President of Hancock Holding Company, today announced earnings for the quarter ended March 31, 2006. Hancock’s first quarter 2006 earnings were $22.01 million, an increase of $6.57 million, or 43 percent, from the first quarter of 2005. Diluted earnings per share for the first quarter of 2006 were $0.67, an increase of $0.20, or 43 percent, from the same quarter a year ago.
While Hancock’s earnings for the third and fourth quarters of 2005 were significantly impacted by Hurricane Katrina, the first quarter of 2006 contained no significant income statement items related to the impact of the storm. The financial impact of Hurricane Katrina on Hancock’s earnings for the past three quarters is summarized in the table below.
Earnings Summary
(dollars in thousands, except EPS)
3Q05 4Q05 1Q06
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Reported Earnings (GAAP) $1,435 $19,065 $22,011
Less Storm-related Items:
Estimated Credit Losses 35,201 - -
Net Gain on Insurance less
Direct Expenses (12,276) 5,692 -
Waived Fees 3,785 - -
Storm-related Tax Credits - 358 -
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Total Storm-related Items (pre-tax) 26,710 5,692 -
Total Storm-related Items
(after-tax) 17,362 3,342 -
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Adjusted Earnings (Non GAAP) $18,797 $22,407 $22,011
============ =========== ============
Reported (GAAP) Diluted EPS $0.04 $0.58 $0.67
Adjusted (Non GAAP) Diluted EPS $0.57 $0.68 $0.67
Compared to the fourth quarter of 2005, first quarter earnings were up $2.95 million, or 15 percent, with diluted earnings per share up $0.09. Excluding the impact of Hurricane Katrina (as indicated in the above table), the Company’s earnings for the fourth quarter 2005 were $22.41 million, with diluted earnings per share of $0.68.
Hancock’s first quarter 2006 performance was highlighted by the following significant items:
o Superior Returns: return on average assets of 1.49 percent and return on average common equity of 18.34
percent. In addition, the Company's efficiency ratio (non-interest expense as a percent of total
revenue) was 58.30 percent.
o Continued Strong Balance Sheet Growth: total assets were up $306 million, or 5 percent, between
December 31, 2005 and March 31, 2006, led by deposit growth of $329 million, or 7 percent; deposits are
up $1.52 billion, or 40 percent, since Hurricane Katrina made landfall on August 29, 2005; period-end
loans were down $18 million since December 31, 2005, as loan production was not able to keep pace with
maturities and pay-downs.
o Net Interest Income (te) Expansion: on the strength of deposit growth and the resulting earning asset
expansion, net interest (te) was up $3.77 million, or 7 percent between fourth quarter 2005 and first
quarter 2006; net interest income (te) was up $12.28 million, or 27 percent since first quarter 2005.
o Asset Quality: Hancock's provision for loan losses in the first quarter was a negative $705,000 due to
a large commercial recovery (favorable impact to net charge-offs of $1.75 million); total reported net
charge-offs for the quarter were a net recovery of $108,000 and included storm-related net charge-offs
of $597,000; excluding the impact of the large commercial recovery and the storm-related charge-offs,
net charge-offs would have been $1.05 million, or 0.14 percent, for the first quarter; non-performing
assets as a percent of loans and foreclosed assets fell 7 basis points to 0.35 percent at March 31,
2006, from December 31, 2005, while loans 90 days past due fell 64 basis points to 0.22 percent.
o Non-interest Income Growth: non-interest income was up $1.87 million, or 8 percent, from the prior
quarter with increases led by service charges (up $1.03 million), but also reflected increases in most
other fee income categories.
o Expensing of Stock Options: FAS Statement No. 123(r), which Hancock adopted on January 1, 2006,
requires entities to recognize in the income statement the grant-date fair value of share options and
other equity-based compensation issued to employees; the first quarter 2006 after-tax impact of
expensing stock options was $917,000 or $0.03 per common share.
In commenting on Hancock’s operating results for the first quarter of 2006, George A. Schloegel, Chief Executive Officer, stated, “While Hancock continues to be a major leader in the rebuilding efforts of the region, the Company is focused on doing our part to make the future a bright one for our associates, clients, and neighbors. Hancock’s first quarter results speak for themselves and are a testament to the human spirit that carries on and thrives in the face of adversity.”
Balance Sheet Growth and CapitalHancock continues to experience significant balance sheet growth in the aftermath of Hurricane Katrina. At March 31, 2006, Hancock had total loans of $2.97 billion and total deposits of $5.32 billion. The Company’s total asset size at March 31, 2006, was $6.26 billion. For the period from August 31, 2005, to March 31, 2006, total loans have grown $33 million, or 1 percent, and total deposits have grown $1.52 billion, or 40 percent, while total assets have increased $1.46 billion, or 31 percent.
The Company’s deposit and earning asset growth continued into the first quarter of 2006. Total deposits were up $329 million, or 7 percent, at March 31, 2006, compared to year-end 2005. While loans were down $18 million for the same time period, earning assets were up $308 million, or 6 percent. The composition of the first quarter 2006 deposit inflows consisted of 14 percent non-interest-bearing demand accounts, 55 percent low cost interest-bearing transaction accounts, and 30 percent time deposits. Loan growth in the Company’s operating region is expected to increase significantly once the inflows of insurance and federal aid funds begin to subside at some point later in 2006.
The Loan/Deposit Ratio averaged 66 percent for the fourth quarter, but dropped to 59 percent for the first quarter of 2006, due to an average increase in deposits of $522 million, compared to $28 million decrease in average loans for the same period. At March 31, 2006, the Loan/Deposit Ratio was 56 percent.
Hancock remains very well capitalized even with a $1.46 billion increase in total assets since the storm made landfall on August 29, 2005. As of March 31, 2006, Hancock’s Leverage (tier one) Ratio stands at 7.45 percent, while the Tangible Equity Ratio is 6.75 percent.
Net Interest IncomeNet interest income (te) for the first quarter of 2006 increased $12.28 million, or 27 percent, from the first quarter of 2005, and was up $3.77 million, or 7 percent, from the fourth quarter of 2005. The Company’s net interest margin (te) was 4.30 percent in the first quarter of 2006, 5 basis points narrower than the same quarter a year ago and 14 basis points narrower than the previous quarter.
Compared to the same quarter a year ago, the primary driver of the $12.28 million increase in net interest income (te) was an $1.20 billion, or 28 percent, increase in average earning assets mainly from average deposit growth of $1.20 billion, or 31 percent, much of which was related to deposits inflows in the aftermath of Hurricane Katrina. The unprecedented deposit growth caused the Loan/Deposit Ratio to decline to 59 percent in the first quarter of 2006. The $1.20 billion increase in average earning assets was deployed into securities portfolio (average increase of $802 million, or 59 percent), short-term investments (average increase of $203 million), and into loans (average increase of $194 million, or 7 percent). Loans now comprise 54 percent of the Company’s average earning asset base, as compared to 61 percent for the same quarter a year ago. The net interest margin (te) narrowed 5 basis points as the increase in the average earning asset yield (27 basis points) did not offset the increase in total funding costs (33 basis points).
The Company’s level of net interest income (te) in the first quarter of 2006 increased $3.77 million, or 7 percent, from the prior quarter. Average earning assets increased $571 million, or 12 percent, over the previous quarter. Fueled by storm-related deposit inflows, average deposits increased $522 million, or 12 percent, compared to the prior quarter. Of the $571 million increase in average earning assets, $19 million was deployed into short-term investments (mostly fed funds) and the balance, $581 million, into the securities portfolio. Average loans were down $28 million from the prior quarter as loan pay-downs continued to eclipse loan production. The net interest margin (te) narrowed 14 basis points from the prior quarter as the yield on average earning assets increased just 3 basis points, while total funding costs were up 18 basis points. The yield on average earning assets was impacted by the larger percent of the Company’s earning assets in securities and short-term investments (46 percent) than the previous quarter (39 percent). The total cost of funds was up 18 basis points mostly due to increase in cost of public fund deposits (indexed to short-term market rates).
Excluding the impact of net storm-related items and securities transactions, non-interest income for the first quarter of 2006 was up $2.46 million, or 11 percent, compared to the same quarter a year ago. Non-interest income was up $1.87 million, or 8 percent, compared to the fourth quarter of 2005. The primary factors impacting the higher levels of non-interest income as compared to the same quarter a year ago were higher levels of insurance fees (up $1.28 million) mostly related to higher revenues associated with Magna Insurance Company, the Company’s wholly owned insurance company, and the July, 1, 2005, acquisition of J. Everett Eaves, Inc. In addition, other income was up $1.26 million, when compared to the same quarter a year ago. However, service charges were down $1.61 million principally due to waived return item fees and other service charges as a result of accommodations to customers impacted by Hurricane Katrina. The increase in non-interest income for the first quarter of 2006 (excluding the 2005 net storm-related items and securities transactions) compared to the prior quarter was due to increases in service charges (up $1.03 million) and ATM fees (up $489,000).
Operating expenses for the first quarter of 2006 were $7.52 million, or 18 percent, higher compared to the same quarter a year ago and were $4.54 million, or 10 percent, higher than the previous quarter. The increase from the same quarter a year ago was reflected in higher levels of personnel expense (up $3.82 million), occupancy expense (up $1.16 million), telephone expense (up $910,000) and all other expenses (up $1.62 million). The increase from the prior quarter was reflected in higher personnel expense (up $1.62 million) and higher other operating expenses (up $2.34 million). The Company’s overall increase in operating expenses for the first quarter of 2006, while not containing any significant direct expenses related to the impact of Hurricane Katrina, did include an unquantifiable level of expenses indirectly related to the storm. This would include on-going expenditures related to occupancy (due to large numbers of employees remaining displaced from their regular pre-storm workplaces), equipment replacement, repair and maintenance expenses, and other costs related to the resumption of non-storm related expenditures.
Asset QualityAnnualized net charge-offs as a percent of average loans for the first quarter of 2006 were a negative 0.01 percent (indicating a net recovery), compared to 0.33 percent for the first quarter of 2005, and to 0.41 percent in the fourth quarter of 2005. That represents a decrease of 42 basis points, or $3.21 million from the prior quarter and a decrease of 34 basis points, or $2.37 million from the same quarter a year ago. During the first quarter of 2006, the Company recovered a large commercial credit totaling $1.75 million. In addition, net charge-offs of $597,000, or 0.08 percent, were related to Hurricane Katrina and were charged directly against the $35.2 million storm-related allowance for loan losses established by the Company in the third quarter of 2005. Excluding the first quarter storm-related net charge-offs of $597,000 and the large commercial recovery of $1.75 million, net charge-offs for the first quarter were $1.05 million, or 0.14 percent of average loans.
The provision for loan losses in the first quarter of 2006 was negative $705,000, due to the aforementioned large credit recovery. This compares to the $1.08 million provision booked in the fourth quarter of 2005, and to $2.76 million for the first quarter of 2005.
Non-performing assets as a percent of total loans and foreclosed assets was 0.35 percent at March 31, 2006, compared to 0.42 percent at December 31, 2005. Compared to the first quarter of 2005, the ratio of non-performing assets as a percent of total loans and foreclosed assets was down 1 basis point from the 0.36 percent reported at March 31, 2005. Non-performing assets decreased $2.06 million from December 31, 2005, reflecting primarily lower levels of non-accrual assets. The composition of the Company’s $10.46 million non-performing asset base continues to reflect granularity with many smaller credits and/or properties (only 7 credits or properties exceeding $250,000 and 160 credits or properties below $250,000). The Company’s ratio of accruing loans 90 days or more past due to total loans was 0.22 percent at March 31, 2006, compared to 0.86 percent at December 31, 2005 and to 0.10 percent at March 31, 2005. The higher level of loans 90 days or more past due at December 31, 2005, was due to storm-related accommodations granted to certain loan customers. In the aftermath of Hurricane Katrina, Hancock recognized that many credit customers (mostly residential mortgage holders) were in a position where time would be needed to recover sufficiently from the storm before they could resume payments on their loans. Accommodations in the form of loan payment extensions (most for 90 days) were granted on a customer-by-customer basis. As of March 31, 2006, accommodations in the form of loan payment extensions totaled $1.58 million and were not included in the aforementioned amounts and ratios of loans 90 days past due.
The Company’s allowance for loan losses was $73.96 million at March 31, 2006, down $597,000 from the $74.56 million reported at December 31, 2005, and $32.78 million higher than the $41.18 million reported at March 31, 2005. The ratio of the allowance for loan losses as a percent of period-end loans was 2.49 percent at March 31, 2006, unchanged from December 31, 2005. The allowance coverage ratio (allowance for loan losses to non-performers and past dues) was 433 percent in first quarter 2006, as compared to 196 percent in fourth quarter 2005, and 324 percent in first quarter 2005. As previously mentioned, the Company had established a specific allowance of $35.20 million for estimated credit losses related to the impact of Hurricane Katrina on Hancock’s loan portfolio in the third quarter of 2005. Hancock recorded storm-related net charge-offs of $2.35 million during the fourth quarter and $597,000 in the first quarter that were charged directly against the aforementioned allowance. In doing so, the storm-related allowance was reduced by $2.95 million and as of March 31, 2006, stands at $32.25 million. Hancock is continuously reviewing the adequacy of the special storm-related allowance and, based on current information, views the current level to be adequate.
GeneralHancock Holding Company - parent company of Hancock Bank (Mississippi), Hancock Bank of Louisiana, Hancock Bank of Florida, and Magna Insurance Company - has assets of $6.26 billion at March 31, 2006. Founded in 1899, Hancock Bank stands among the strongest, safest five-star financial institutions in America. Hancock Bank operates 100 Hancock full-service offices and 120 automated teller machines throughout South Mississippi, Louisiana, and Florida as well as subsidiaries Hancock Investment Services, Inc., Hancock Insurance Agency, 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.
Hancock Holding Company
Financial Highlights
(amounts in thousands, except per share data and FTE headcount)
(unaudited)
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Three Months Ended
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3/31/2006 12/31/2005 3/31/2005
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Per Common Share Data
Earnings per share:
Basic $0.68 $0.59 $0.48
Diluted $0.67 $0.58 $0.47
Cash dividends per share $0.195 $0.195 $0.165
Book value per share (period-end) $15.06 $14.78 $14.16
Tangible book value per share (period-end) $12.85 $12.55 $11.99
Weighted average number of shares:
Basic 32,393 32,313 32,463
Diluted 33,088 32,980 33,019
Period-end number of shares 32,494 32,301 32,463
Market data:
High closing price $46.67 $39.90 $34.20
Low closing price $37.75 $31.08 $30.25
Period end closing price $46.52 $37.81 $32.50
Trading volume 3,990 6,829 3,284
Other Period-end Data
FTE headcount 1,768 1,735 1,766
Tangible common equity $417,684 $405,216 $389,344
Tier I capital $440,302 $420,281 $408,163
Goodwill $61,418 $61,418 $55,409
Amortizable intangibles $8,725 $9,204 $12,510
Mortgage servicing intangibles $1,384 $1,577 $2,288
Common shares repurchased for publicly announced plans 17 - 40
Performance Ratios
Return on average assets 1.49% 1.39% 1.32%
Return on average common equity 18.34% 15.98% 13.32%
Earning asset yield (TE) 6.17% 6.14% 5.90%
Total cost of funds 1.88% 1.70% 1.55%
Net interest margin (TE) 4.30% 4.44% 4.35%
Non-interest expense as a percent of total revenue (TE)
before amortization of purchased intangibles, net storm-related items,
and securities transactions 58.30% 56.89% 59.99%
Average common equity as a percent of average total assets 8.13% 8.72% 9.94%
Leverage Ratio 7.45% 7.85% 8.75%
Tangible common equity to assets 6.75% 6.89% 8.28%
Net charge-offs as a percent of average loans -0.01% 0.41% 0.33%
Allowance for loan losses as a percent of period-end loans 2.49% 2.49% 1.48%
Allowance for loan losses to NPAs + accruing loans 90 days past due 432.85% 195.50% 323.66%
Provision for loan losses to net charge-offs 655.76% 34.76% 122.13%
Loan/deposit ratio 59.00% 66.44% 72.40%
Non-interest income excluding net storm-related items,
and securities transactions as a percent of
total revenue (TE) 29.92% 29.68% 32.77%
Hancock Holding Company
Financial Highlights
(amounts in thousands, except per share data and FTE headcount)
(unaudited)
--------------------------------------------
Three Months Ended
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3/31/2006 12/31/2005 3/31/2005
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Asset Quality Information
Non-accrual loans $8,676 $10,617 $6,335
Foreclosed assets 1,779 1,898 3,591
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Total non-performing assets $10,455 $12,515 $9,926
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Non-performing assets as a percent of loans and foreclosed assets 0.35% 0.42% 0.36%
Accruing loans 90 days past due $6,632 $25,622 $2,798
Accruing loans 90 days past due as a percent of loans 0.22% 0.86% 0.10%
Non-performing assets + accruing loans 90 days past due
to loans and foreclosed assets 0.57% 1.28% 0.46%
Net charge-offs ($108) $3,104 $2,260
Net charge-offs as a percent of average loans -0.01% 0.41% 0.33%
Allowance for loan losses $73,961 $74,558 $41,182
Allowance for loan losses as a percent of period-end loans 2.49% 2.49% 1.48%
Allowance for loan losses to NPAs + accruing loans 90 days past due 432.85% 195.50% 323.66%
Provision for loan losses ($705) $1,079 $2,760
Provision for loan losses to net charge-offs 655.76% 34.76% 122.13%
Allowance for Loan Losses
Beginning Balance $74,558 $76,584 $40,682
Provision for loan loss (705) 1,079 2,760
Charge-offs 3,922 4,546 4,026
Recoveries 4,030 1,442 1,766
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Net charge-offs (108) 3,104 2,260
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Ending Balance $73,961 $74,558 $41,182
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Storm-related allowance for loan losses (included above) $32,253 $32,851 -
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Net Charge-off Information
Net charge-offs:
Commercial/real estate loans ($1,769) $332 $770
Mortgage loans 181 (7) 68
Direct consumer loans 579 1,831 501
Indirect consumer loans 653 272 540
Finance company loans 248 676 381
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Total net charge-offs (including storm-related) ($108) $3,104 $2,260
Storm-related net charge-offs 597 2,350 -
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Total net charge-offs (excluding storm-related) ($705) $754 $2,260
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Average loans:
Commercial/real estate loans $1,674,706 $1,660,804 $1,491,008
Mortgage loans 410,023 442,977 407,258
Direct consumer loans 469,832 489,150 503,700
Indirect consumer loans 351,405 342,203 313,542
Finance Company loans 64,496 63,663 60,720
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Total average loans $2,970,461 $2,998,797 $2,776,229
Net charge-offs to average loans:
Commercial/real estate loans -0.43% 0.08% 0.21%
Mortgage loans 0.18% -0.01% 0.07%
Direct consumer loans 0.50% 1.49% 0.40%
Indirect consumer loans 0.75% 0.32% 0.70%
Finance Company loans 1.56% 4.21% 2.54%
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Total net charge-offs to average loans (including storm-related) -0.01% 0.41% 0.33%
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Total net charge-offs to average loans (excluding storm-related) -0.10% 0.10% 0.33%
Hancock Holding Company
Financial Highlights
(amounts in thousands, except per share data and FTE headcount)
(unaudited)
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Three Months Ended
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3/31/2006 12/31/2005 3/31/2005
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Income Statement
Interest income $81,590 $73,429 $60,531
Interest income (TE) 83,563 75,433 62,302
Interest expense 25,273 20,911 16,289
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Net interest income (TE) 58,290 54,522 46,013
Provision for loan losses (705) 1,079 2,760
Non-interest income excluding net storm-related items,
and securities transactions 24,890 23,016 22,427
Net storm-related items (net gain on insurance less direct expenses incurred) - (5,692) -
Securities transactions gains/(losses) 118 (27) 7
Non-interest expense 49,165 44,626 41,642
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Income before income taxes 32,865 24,112 22,273
Income tax expense 10,854 5,047 6,836
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Net income $22,011 $19,065 $15,438
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Non-interest Income and Operating Expense
Service charges on deposit accounts $7,884 $6,850 $9,490
Trust fees 3,078 2,946 2,541
Debit card & merchant fees 1,709 1,717 1,030
Insurance fees 5,159 4,837 3,881
Investment & annuity fees 1,264 1,037 1,188
ATM fees 1,294 805 1,372
Secondary mortgage market operations 817 670 499
Other income 3,684 4,154 2,426
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Non-interest income excluding net storm-related items,
and securities transactions $24,890 $23,016 $22,427
Net storm-related items (net gain on insurance less direct expenses incurred) - (5,692) -
Securities transactions gains/(losses) 118 (27) 7
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Total non-interest income including net storm-related items,
and securities transactions $25,008 $17,298 $22,433
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Personnel expense $26,202 $24,580 $22,379
Occupancy expense (net) 3,659 3,237 2,495
Equipment expense 2,668 2,511 2,357
Other operating expense 15,961 13,780 13,828
Amortization of intangibles 675 518 584
Total non-interest expense $49,165 $44,626 $41,642
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Hancock Holding Company
Financial Highlights
(amounts in thousands, except per share data and FTE headcount)
(unaudited)
--------------------------------------------
Three Months Ended
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3/31/2006 12/31/2005 3/31/2005
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Period-end Balance Sheet
Commercial/real estate loans $1,688,820 $1,677,716 $1,488,523
Mortgage loans 408,750 423,563 414,346
Direct consumer loans 456,888 477,716 510,116
Indirect consumer loans 349,412 346,071 318,164
Finance Company loans 67,300 64,121 60,679
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Total loans 2,971,171 2,989,186 2,791,829
Securities 2,278,613 1,959,261 1,414,037
Short-term investments 417,373 410,226 94,930
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Earning assets 5,667,157 5,358,673 4,300,796
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Allowance for loan losses (73,961) (74,558) (41,182)
Other assets 662,983 666,073 509,402
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Total assets $6,256,180 $5,950,187 $4,769,016
============== ============== ==============
Non-interest bearing deposits $1,225,744 $1,324,938 $724,338
Interest bearing transaction deposits 1,730,873 1,680,959 1,332,269
Interest bearing Public Fund deposits 892,894 633,488 724,362
Time deposits 1,469,438 1,350,436 1,106,238
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Total interest bearing deposits 4,093,205 3,664,882 3,162,870
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Total deposits 5,318,949 4,989,820 3,887,208
Other borrowed funds 273,629 307,429 266,528
Other liabilities 174,391 175,523 155,729
Common shareholders' equity 489,211 477,415 459,551
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Total liabilities, preferred stock & common equity $6,256,180 $5,950,187 $4,769,016
============== ============== ==============
Average Balance Sheet
Commercial/real estate loans $1,674,706 $1,660,804 $1,491,008
Mortgage loans 410,023 442,977 407,258
Direct consumer loans 469,832 489,150 503,700
Indirect consumer loans 351,405 342,203 313,542
Finance Company loans 64,496 63,663 60,720
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Total loans 2,970,461 2,998,797 2,776,229
Securities 2,152,958 1,571,723 1,350,505
Short-term investments 335,986 317,409 132,582
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Earning average assets 5,459,405 4,887,929 4,259,316
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Allowance for loan losses (74,429) (76,488) (40,688)
Other assets 598,541 612,144 512,166
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Total assets $5,983,517 $5,423,586 $4,730,794
============== ============== ==============
Non-interest bearing deposits $1,201,186 $1,126,356 $701,144
Interest bearing transaction deposits 1,714,514 1,573,039 1,332,152
Interest bearing Public Fund deposits 712,394 568,803 711,789
Time deposits 1,406,969 1,245,271 1,089,367
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Total interest bearing deposits 3,833,877 3,387,112 3,133,308
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Total deposits 5,035,063 4,513,468 3,834,452
Other borrowed funds 287,738 263,358 271,473
Other liabilities 173,987 173,555 154,801
Common shareholders' equity 486,728 473,204 470,068
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Total liabilities, preferred stock & common equity $5,983,517 $5,423,586 $4,730,794
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Hancock Holding Company
Financial Highlights
(amounts in thousands, except per share data and FTE headcount)
(unaudited)
--------------------------------------------
Three Months Ended
--------------------------------------------
3/31/2006 12/31/2005 3/31/2005
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Average Balance Sheet Mix
Percentage of earning assets/funding sources:
Loans 54.41% 61.35% 65.18%
Securities 39.44% 32.16% 31.71%
Short-term investments 6.15% 6.49% 3.11%
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Earning average assets 100.00% 100.00% 100.00%
============== ============== ==============
Non-interest bearing deposits 22.00% 23.04% 16.46%
Interest bearing transaction deposits 31.40% 32.18% 31.28%
Interest bearing Public Fund deposits 13.05% 11.64% 16.71%
Time deposits 25.77% 25.48% 25.58%
-------------- -------------- --------------
Total deposits 92.23% 92.34% 90.03%
Other borrowed funds 5.27% 5.39% 6.37%
Other net interest-free funding sources 2.50% 2.27% 3.60%
-------------- -------------- --------------
Total average funding sources 100.00% 100.00% 100.00%
============== ============== ==============
Loan mix:
Commercial/real estate loans 56.38% 55.38% 53.71%
Mortgage loans 13.80% 14.77% 14.67%
Direct consumer loans 15.82% 16.31% 18.14%
Indirect consumer loans 11.83% 11.41% 11.29%
Finance Company loans 2.17% 2.12% 2.19%
-------------- -------------- --------------
Total loans 100.00% 100.00% 100.00%
============== ============== ==============
Average dollars (in thousands):
Loans $2,970,461 $2,998,797 $2,776,229
Securities 2,152,958 1,571,723 1,350,505
Short-term investments 335,986 317,409 132,582
-------------- -------------- --------------
Earning average assets $5,459,405 $4,887,929 $4,259,316
Non-interest bearing deposits $1,201,186 $1,126,356 $701,144
Interest bearing transaction deposits 1,714,514 1,573,039 1,332,152
Interest bearing Public Fund deposits 712,394 568,803 711,789
Time deposits 1,406,969 1,245,271 1,089,367
-------------- -------------- --------------
Total deposits 5,035,063 4,513,468 3,834,452
Other borrowed funds 287,738 263,358 271,473
Other net interest-free funding sources 136,604 111,103 153,391
-------------- -------------- --------------
Total average funding sources $5,459,405 $4,887,929 $4,259,316
Loans:
Commercial/real estate loans $1,674,706 $1,660,804 $1,491,008
Mortgage loans 410,023 442,977 407,258
Direct consumer loans 469,832 489,150 503,700
Indirect consumer loans 351,405 342,203 313,542
Finance Company loans 64,496 63,663 60,720
-------------- -------------- --------------
Total average loans $2,970,461 $2,998,797 $2,776,229
-------------- -------------- --------------
Hancock Holding Company
Average Balance and Net Interest Margin Summary
(amounts in thousands)
(unaudited)
Three Months Ended
---------------------------------------------------------------------------------------------
03/31/06 12/31/05 03/31/05
--------------------------------------------------------------- ----------------------------
Interest Volume Rate Interest Volume Rate Interest Volume Rate
---------- ---------- ------ -------- --------- ------ -------- --------- -----
Average Earning Assets
Commercial & real estate loans (TE) $28,637 $1,674,706 6.93% $28,365 $1,660,804 6.78% $22,303 $1,491,008 6.06%
Mortgage loans 5,897 410,023 5.75% 6,119 442,977 5.53% 5,697 407,258 5.60%
Consumer loans 17,473 885,732 8.00% 17,797 895,016 7.89% 16,409 877,963 7.58%
Loan fees & late charges 2,320 - 0.00% 2,104 - 0.00% 1,978 - 0.00%
---------- ---------- ------ -------- --------- ------ -------- --------- -----
Total loans (TE) 54,327 2,970,461 7.40% 54,386 2,998,797 7.20% 46,387 2,776,229 6.76%
US treasury securities 627 60,086 4.23% 350 33,735 4.11% 60 11,058 2.20%
US agency securities 13,786 1,194,312 4.62% 7,403 678,190 4.37% 4,285 430,408 3.98%
CMOs 1,810 184,276 3.93% 1,946 206,910 3.76% 2,686 267,037 4.02%
Mortgage backed securities 5,519 477,789 4.62% 4,917 430,409 4.57% 4,547 412,573 4.41%
Municipals (TE) 2,723 163,175 6.67% 2,747 159,401 6.89% 2,871 163,543 7.02%
Other securities 872 73,320 4.76% 633 63,078 4.01% 672 65,886 4.08%
---------- ---------- ------ -------- --------- ------ -------- --------- -----
Total securities (TE) 25,336 2,152,958 4.71% 17,995 1,571,723 4.58% 15,122 1,350,505 4.48%
Fed funds sold 3,586 328,544 4.43% 3,043 309,603 3.90% 711 118,503 2.43%
Cds with banks 314 7,442 17.11% 9 7,806 0.48% 49 8,361 2.37%
Other short-term investments - - 0.00% - - 0.00% 32 5,718 2.26%
---------- ---------- ------ -------- --------- ------ -------- --------- -----
Total short-term investments 3,900 335,986 4.71% 3,052 317,409 3.81% 792 132,582 2.42%
Average earning assets yield (TE) $83,563 $5,459,405 6.17% $75,433 $4,887,929 6.14% $62,302 $4,259,316 5.90%
Interest-bearing Liabilities
Interest-bearing transaction deposits $3,266 $1,714,514 0.77% $2,836 $1,573,039 0.72% $1,921 $1,332,152 0.58%
Time deposits 13,005 1,406,969 3.75% 11,503 1,245,271 3.66% 9,360 1,089,367 3.48%
Public Funds 6,750 712,394 3.84% 4,825 568,803 3.37% 3,751 711,789 2.14%
---------- ---------- ------ -------- --------- ------ -------- --------- -----
Total interest bearing deposits 23,021 3,833,877 2.44% 19,164 3,387,112 2.24% 15,032 3,133,308 1.95%
Customer repos 1,641 230,725 2.88% 1,125 204,386 2.18% 664 214,878 1.25%
Other borrowings 611 57,014 4.35% 622 58,972 4.18% 593 56,595 4.25%
---------- ---------- ------ -------- --------- ------ -------- --------- -----
Total borrowings 2,252 287,738 3.17% 1,747 263,358 2.63% 1,256 271,473 1.88%
Total interest bearing liab cost $25,273 $4,121,615 2.49% $20,911 $3,650,470 2.27% $16,289 $3,404,781 1.94%
Noninterest-bearing deposits 1,201,186 1,126,356 701,144
Other net interest-free funding
sources 136,604 111,103 153,391
Total Cost of Funds $25,273 $5,459,405 1.88% $20,911 $4,887,929 1.70% $16,289 $4,259,316 1.55%
Net Interest Spread (TE) $58,290 3.69% $54,522 3.87% $46,013 3.96%
Net Interest Margin (TE) $58,290 $5,459,405 4.30% $54,522 $4,887,929 4.44% $46,013 $4,259,316 4.35%
Hancock Holding Company
Quarterly Financial Data
(amounts in thousands, except
per share data and FTE headcount)
(unaudited)
2004 2005 2006
------------------------------- ----------------------------------- -----
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
------------------------------- ----------------------------------- -----
Per Common Share Data
Earnings per share:
Basic $0.50 $0.47 $0.49 $0.48 $0.56 $0.04 $0.59 $0.68
Diluted $0.50 $0.47 $0.48 $0.47 $0.55 $0.04 $0.58 $0.67
Cash dividends per share $0.125 $0.165 $0.165 $0.165 $0.165 $0.195 $0.195 $0.195
Book value per share (period-end) $13.32 $14.16 $14.32 $14.16 $14.87 $14.52 $14.78 $15.06
Tangible book value per share (period-end) $11.17 $12.03 $12.16 $11.99 $12.73 $12.25 $12.55 $12.85
Weighted average number of shares:
Basic 32,549 32,495 32,467 32,463 32,396 32,308 32,313 32,393
Diluted 33,042 33,054 33,076 33,019 32,928 32,940 32,980 33,088
Period-end number of shares 32,538 32,472 32,440 32,463 32,310 32,309 32,301 32,494
Market data:
High closing price $32.25 $34.27 $34.83 $34.20 $34.87 $37.84 $39.90 $46.67
Low closing price $25.00 $27.32 $30.00 $30.25 $28.25 $29.93 $31.08 $37.75
Period end closing price $29.06 $31.79 $33.46 $32.50 $34.40 $34.14 $37.81 $46.52
Trading volume 3,252 2,792 2,781 3,286 3,527 8,760 6,829 3,990
Other Period-end Data
FTE headcount 1,754 1,731 1,767 1,766 1,813 1,590 1,735 1,768
Tangible common equity $363,451 $390,696 $394,389 $389,344 $411,203 $395,843 $405,216 $417,684
Tier I capital $381,428 $391,098 $399,320 $408,163 $416,312 $407,075 $420,281 $440,302
Goodwill $56,474 $56,474 $55,409 $55,409 $55,409 $61,428 $61,418 $61,418
Amortizable intangibles $11,410 $10,852 $12,263 $12,510 $11,746 $9,928 $9,204 $8,725
Mortgage servicing intangibles $2,171 $1,922 $2,520 $2,288 $2,082 $1,860 $1,577 $1,384
Common shares repurchased for publicly
announced plans 100 84 - 40 96 12 - 17
Performance Ratios
Return on average assets 1.49% 1.37% 1.39% 1.32% 1.52% 0.12% 1.39% 1.49%
Return on average common equity 14.97% 13.67% 13.54% 13.32% 15.27% 1.18% 15.98% 18.34%
Earning asset yield (TE) 5.83% 5.86% 6.00% 5.90% 6.08% 6.19% 6.14% 6.17%
Total cost of funds 1.43% 1.44% 1.47% 1.55% 1.66% 1.80% 1.70% 1.88%
Net interest margin (TE) 4.40% 4.42% 4.53% 4.35% 4.42% 4.40% 4.44% 4.30%
Non-interest expense as a percent
of total revenue (TE) before amortization
of purchased intangibles, net storm-related items,
gain on sale of credit card
merchant and securities transactions 56.79% 57.55% 54.95% 59.99% 57.83% 60.85% 56.89% 58.30%
Average common equity as
a percent of average total assets 9.95% 10.00% 10.26% 9.94% 9.94% 10.13% 8.72% 8.13%
Leverage ratio 8.76% 8.86% 8.97% 8.75% 8.83% 8.64% 7.85% 7.45%
Tangible common equity to assets 8.27% 8.83% 8.58% 8.28% 8.71% 8.17% 6.89% 6.75%
Net charge-offs as a
percent of average loans 0.47% 0.45% 0.56% 0.33% 0.24% 0.23% 0.41% -0.01%
Allowance for loan losses as
a percent of period-end loans 1.47% 1.45% 1.48% 1.48% 1.45% 2.57% 2.49% 2.49%
Allowance for loan losses to
NPAs + loans 90 days past due 211.55% 225.17% 251.85% 323.66% 284.75% 392.70% 195.50% 432.85%
Provision for loan losses to net charge-offs 126.52% 114.34% 150.98% 122.13% 111.83% 2165.65% 34.76% 655.76%
Loan/deposit ratio 70.13% 73.07% 75.19% 72.40% 73.63% 76.77% 66.44% 59.00%
Non-interest income excluding
net storm-related items, gain on sale of
credit card merchant and
securities transactions as a percent
of total revenue (TE) 35.93% 31.98% 32.37% 32.77% 34.06% 31.10% 29.68% 29.92%
Hancock Holding Company
Quarterly Financial Data
(amounts in thousands, except
per share data and FTE headcount)
(unaudited)
2004 2005 2006
------------------------------------ ---------------------------------------------- --------
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
------------------------------------ ---------------------------------------------- --------
Asset Quality Information
Non-accrual loans $10,134 $7,770 $7,480 $6,335 $8,052 $10,373 $10,617 $8,676
Foreclosed assets 4,270 4,151 3,513 3,591 2,567 2,973 1,898 1,779
------------------------------------ ---------------------------------------------- --------
Total non-performing assets $14,404 $11,921 $10,993 $9,926 $10,619 $13,346 $12,515 $10,455
Non-performing assets as a percent
of loans and foreclosed assets 0.55% 0.44% 0.40% 0.36% 0.37% 0.45% 0.42% 0.35%
Accruing loans 90 days past due $3,701 $5,277 $5,160 $2,798 $3,914 $6,156 $25,622 $6,632
Accruing loans 90 days past due as
a percent of loans 0.14% 0.20% 0.19% 0.10% 0.14% 0.21% 0.86% 0.22%
Non-performing assets + accruing loans
90 days past due to loans and
foreclosed assets 0.69% 0.64% 0.59% 0.46% 0.51% 0.65% 1.28% 0.57%
Net charge-offs $3,017 $2,963 $3,839 $2,260 $1,691 $1,704 $3,104 ($108)
Net charge-offs as
a percent of average loans 0.47% 0.45% 0.56% 0.33% 0.24% 0.23% 0.41% -0.01%
Allowance for loan losses $38,300 $38,725 $40,682 $41,182 $41,382 $76,584 $74,558 $73,961
Allowance for loan losses as a
percent of period-end loans 1.47% 1.45% 1.48% 1.48% 1.45% 2.57% 2.49% 2.49%
Allowance for loan losses to NPAs +
accruing loans 90 days past due 211.55% 225.17% 251.85% 323.66% 284.75% 392.70% 195.50% 432.85%
Provision for loan losses $3,817 $3,388 $5,796 $2,760 $1,891 $36,905 $1,079 ($705)
Provision for loan losses to net
charge-offs 126.52% 114.34% 150.98% 122.13% 111.83% 2165.65% 34.76% 655.76%
Net Charge-off Information
Net charge-offs:
Commercial/real estate loans $788 $734 $1,003 $770 $202 ($17) $332 ($1,769)
Mortgage loans (26) (22) 38 68 (5) 7 (7) 181
Direct consumer loans 1,182 1,222 1,173 501 491 861 1,831 579
Indirect consumer loans 572 402 910 540 538 342 272 653
Finance company loans 501 627 715 381 465 511 676 248
------------------------------------ ---------------------------------------------- --------
Total net charge-offs (including
storm-related) $3,017 $2,963 $3,839 $2,260 $1,691 $1,704 $3,104 ($108)
Storm-related net charge-offs - - - - - - 2,350 597
---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total net charge-offs (excluding
storm-related) $3,017 $2,963 $3,839 $2,260 $1,691 $1,704 $754 ($705)
---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Average loans:
Commercial/real estate loans 1,352,432 $1,396,149 $1,439,074 $1,491,008 $1,523,348 $1,584,244 $1,660,804 $1,674,706
Mortgage loans 391,270 400,710 408,535 407,258 417,307 430,615 442,977 410,023
Direct consumer loans 483,150 487,139 498,336 503,700 509,628 504,362 489,150 469,832
Indirect consumer loans 279,230 296,755 307,413 313,542 323,100 335,482 342,203 351,405
Finance Company loans 57,829 59,935 60,604 60,720 62,124 64,006 63,663 64,496
---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total average loans 2,563,910 $2,640,689 $2,713,963 $2,776,229 $2,835,506 $2,918,709 $2,998,797 $2,970,461
Net charge-offs to average loans:
Commercial/real estate loans 0.23% 0.21% 0.28% 0.21% 0.05% 0.00% 0.08% -0.43%
Mortgage loans -0.03% -0.02% 0.04% 0.07% 0.00% 0.01% -0.01% 0.18%
Direct consumer loans 0.98% 1.00% 0.94% 0.40% 0.39% 0.68% 1.49% 0.50%
Indirect consumer loans 0.82% 0.54% 1.18% 0.70% 0.67% 0.40% 0.32% 0.75%
Finance Company loans 3.48% 4.16% 4.69% 2.54% 3.00% 3.17% 4.21% 1.56%
---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total net charge-offs to average
loans (excl storm-related) 0.47% 0.45% 0.56% 0.33% 0.24% 0.23% 0.41% -0.01%
---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total net charge-offs to average
loans (incl storm-related) 0.47% 0.45% 0.56% 0.33% 0.24% 0.23% 0.10% -0.10%
Hancock Holding Company
Quarterly Financial Data
(amounts in thousands, except
per share data and FTE headcount)
(unaudited)
2004 2005 2006
--------------------------------- --------------------------------------- -------------
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Income Statement
Interest income $56,318 $57,424 $59,190 $60,531 $64,027 $65,644 $73,429 $81,590
Interest income (TE) 58,115 59,184 61,051 62,302 65,767 67,506 75,433 83,563
Interest expense 14,218 14,567 15,014 16,289 17,961 19,659 20,911 25,273
--------------------------------- --------------------------------------- -------------
Net interest income (TE) 43,897 44,617 46,037 46,013 47,807 47,847 54,522 58,290
Provision for loan losses 3,817 3,388 5,796 2,760 1,891 36,905 1,079 (705)
Non-interest income excluding net
storm-related items
gain on sale of credit card
merchant and securities transactions 21,619 20,973 22,037 22,427 24,695 21,600 23,016 24,890
Net storm-related items - - - - - 12,276 (5,692) -
Gain on sale of credit card merchant 3,000 - - - - - - -
Securities transactions gains/(losses) 11 (2) 4 7 (15) (18) (27) 118
Non-interest expense 39,437 38,306 37,945 41,642 42,505 42,770 44,626 49,165
--------------------------------- --------------------------------------- -------------
Income before income taxes 23,476 22,134 22,475 22,273 26,350 168 24,112 32,865
Income tax expense 7,104 6,737 6,684 6,836 8,256 (1,267) 5,047 10,854
--------------------------------- --------------------------------------- -------------
Net income $16,372 $15,396 $15,791 $15,438 $18,094 $1,435 $19,065 $22,011
================================ ======================================= =============
Non-interest Income
and Operating Expense
Service charges on deposit accounts $10,771 $11,567 $11,062 $9,490 $10,459 $7,975 $6,850 $7,884
Trust fees 2,277 2,281 2,487 2,541 2,859 2,761 2,946 3,078
Debit card & merchant fees 1,042 1,197 1,172 1,030 1,074 1,055 1,717 1,709
Insurance fees 2,828 2,056 1,824 3,881 3,499 4,883 4,837 5,159
Investment & annuity fees 584 438 581 1,188 1,547 1,304 1,037 1,264
ATM fees 1,136 1,129 1,119 1,372 1,154 871 805 1,294
Secondary mortgage market operations 531 529 1,489 499 676 377 670 817
Other income 2,450 1,776 2,302 2,426 3,428 2,374 4,154 3,684
--------------------------------- --------------------------------------- -------------
Non-interest income excluding net
storm-related items,
and securities transactions $21,619 $20,973 $22,037 $22,427 $24,695 $21,600 $23,016 $24,890
Net storm-related items - - - - - 12,276 (5,692) -
Gain on sale of credit card merchant 3,000 - - - - - - -
Securities transactions gains/(losses) 11 (2) 4 7 (15) (18) (27) 118
--------------------------------- --------------------------------------- -------------
Total non-interest income including
storm-related items, gains on sale
credit card merchant and securities
transactions $24,631 $20,971 $22,041 $22,433 $24,680 $33,858 $17,298 $25,008
================================ ======================================= =============
Personnel expense $21,137 $20,664 $21,706 $22,379 $22,925 $24,275 $24,580 $26,202
Occupancy expense (net) 2,405 2,470 2,627 2,495 2,576 2,617 3,237 3,659
Equipment expense 2,376 2,419 2,548 2,357 2,366 2,319 2,511 2,668
Other operating expense 12,996 12,194 10,526 13,828 14,059 13,044 13,780 15,961
Amortization of intangibles 524 558 538 584 578 514 518 675
Total non-interest expense $39,437 $38,306 $37,945 $41,642 $42,505 $42,770 $44,626 $49,165