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):
July 17, 2007
HANCOCK HOLDING COMPANY
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(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)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 8.01. Other Events. On July 17, 2007, Hancock Holding Company
issued a press release announcing earnings for second quarter of 2007.
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 July 17, 2007, headed "Hancock Holding
Company announces earnings for second quarter
2007" and related financial statements.
SIGNATURE
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: July 18, 2007
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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July 17, 2007 Carl J. Chaney, Chief Executive Officer
John M. Hairston, Chief Executive Officer
Michael M. Achary, Chief Financial Officer
Paul D. Guichet, Investor Relations
800.522.6542 or 228.563.6559
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GULFPORT, MS (July 17, 2007) — Hancock Holding Company (NASDAQ: HBHC) announced earnings for the second quarter ended June 30, 2007. Hancock’s second quarter 2007 earnings were $20.3 million, a decrease of $1.7 million, or 7.6 percent, from the second quarter of 2006. Diluted earnings per share for the second quarter of 2007 were $0.62, a decrease of $0.04 from the same quarter a year ago. Earnings for the second quarter of 2007 were up $1.1 million, or 5.7 percent, from the first quarter of 2007. Diluted earnings per share were up $0.04 from the first quarter of 2007.
In commenting on Hancock’s Second Quarter 2007 results, Chief Executive Officer Carl J. Chaney stated, “the increase in earnings from the first quarter was a clear sign that the Company was on track toward superior financial performance and that the rebuilding of the region was in full swing.”
For comparative purposes, net income for 2006 was affected by several items related to the impact of Hurricane Katrina, which made landfall in the Company’s operating region on August 29, 2005. In the third quarter of 2006, the Company reversed $20.0 million from the storm-related allowance for loan losses due to better than expected loss experience with storm-impacted credits. In addition, the Company negotiated a final settlement with the primary property and casualty insurance provider and recognized a $5.1 million gain in 2006‘s fourth quarter. There were no significant storm-related items in the first and second quarters of 2006 and 2007.
Also commenting on Hancock’s second quarter earnings was Chief Executive Officer John M. Hairston, “the quarter’s results are a clear indication of the Company’s ongoing tradition of strength and stability and building shareholder value.”
Second Quarter 2007 Financial Highlights
o Net Income and Returns: Hancock's net income for the second quarter of 2007 was $20.3 million compared to
$22.0 million for the same quarter a year ago. Return on average assets for the quarter was 1.42 percent
compared to 1.45 percent for 2006's second quarter. Return on average common equity was 14.53 percent
compared to 17.89 percent for the same quarter a year ago. For the first quarter of 2007, return on
average assets was 1.32 percent and return on average common equity was 13.77 percent.
o Asset Quality & Allowance for Loan Losses: Hancock recorded a provision for loan losses of $1.2 million
in the second quarter which, when combined with the quarter's net charge-offs of $1.53 million, resulted
in the $.3 million reduction in the allowance for loan losses between March 31, 2007 and June 30, 2007.
This provision was necessary to further adjust the allowance to the level dictated by the Company's
reserving methodologies. Net charge-offs for the second quarter of 2007 were $1.53 million, or 0.18
percent of average loans, up $63 thousand from the $1.47 million, or 0.18 percent of average loans,
reported for the first quarter of 2007. Net charge-offs for the second quarter of 2006 were $3.00 million
or 0.40 percent of average loans. Non-performing assets as a percent of total loans and foreclosed assets
was 0.25 percent at June 30, 2007, compared to 0.16 percent at March 31, 2007. Compared to the second
quarter of 2006, the ratio of non-performing assets as a percent of total loans and foreclosed assets was
down 4 basis points from the 0.29 percent reported at June 30, 2006. Non-performing assets increased $3.5
million from March 31, 2007, reflecting the addition to non-accrual loans of one credit totaling $4.0
million. The Company's ratio of accruing loans 90 days or more past due to total loans was 0.07 percent
at June 30, 2007, compared to 0.18 percent at March 31, 2007 and to 0.22 percent at June 30, 2006. The
Company's allowance for loan losses was $46.23 million at June 30, 2007, down $.3 million from the $46.52
million reported at March 31, 2007, and $24.73 million lower than the $70.96 million reported at June 30,
2006. The ratio of the allowance for loan losses as a percent of period-end loans was 1.35 percent at
June 30, 2007, and 1.41 percent at March 31, 2007. The allowance coverage ratio (allowance for loan
losses to non-performers and past dues) was 411 percent for the second quarter of 2007, as compared to 457
percent for the second quarter of 2006.
o Loans: For the quarter ended June 30, 2007, Hancock's average total loans were $3.4 billion, which
represented an increase of $377.3 million, or 13 percent, from the quarter ended June 30, 2006.
Period-end loans were up $117.5 million, or 4 percent, compared to March 31, 2007. Average total loans
were up $78.9 million, or 10 percent annualized, from the first quarter of 2007. Of that increase,
approximately $32 million of growth was in Mississippi, $39 million in Louisiana, and $9 million in
Alabama with a $1 million decrease in Florida. The majority of the increase in average loans compared to
last quarter was in commercial purpose loans (approximately $57.5 million).
o Deposits: Period-end deposits for the second quarter were $5.0 billion, down $269.7 million, or 5
percent, from June 30, 2006, but were up $53.9 million, or 1 percent, from March 31, 2007. Average
deposits were down $152.8 million, or 12 percent annualized, from the first quarter of 2007. The decrease
in average deposits was in public fund deposits (down $45.2 million), time deposits (down $42.9 million),
transaction deposits (down $31.3 million) and noninterest bearing deposits (down $33.4 million). The
decline in average deposits compared to the prior quarter and same quarter a year ago was the result of
the continued rebuilding efforts in the region following Hurricane Katrina and the slower than expected
pace of Federal grants to homeowners. However, as noted above, the Company's June 30, 2007 deposit
balances did reflect a $53.9 million increase as compared to March 31, 2007. The majority of this
increase took place throughout the month of June and was reflected in higher time and public fund
deposits.
o Net Interest Income: Net interest income (te) for the second quarter decreased $5.9 million, or 10
percent, from the second quarter of 2006, and was basically unchanged from the first quarter of 2007. The
Company's net interest margin (te) was 4.17 percent in the second quarter, 10 basis points narrower than
the same quarter a year ago and 13 basis points wider than the previous quarter. Compared to the same
quarter a year ago, the primary driver of the $5.9 million decrease in net interest income (te) was a
$432.7 million, or 8 percent, decrease in average earning assets mainly from a reduction in total
borrowings of $13.2 million, or 6 percent, and a decrease in average deposits of $374.0 million, or 7
percent. As mentioned, the net interest margin (te) narrowed 10 basis points as the increase in the
average earning asset yield (44 basis points) did not offset the increase in total funding costs (54 basis
points). The Company's level of net interest income (te) in the second quarter remained unchanged from the
prior quarter. The net interest margin (te) widened 13 basis points from the prior quarter as the yield
on average earning assets increased 12 basis points, while total funding costs were down 1 basis point.
o Noninterest income & operating expense: Noninterest income for the second quarter was up $4.3 million, or
16 percent, compared to the same quarter a year ago and was up $4.3 million, or 17 percent, compared to
the previous quarter. The primary factors impacting the higher levels of noninterest income (excluding
securities transactions) as compared to the same quarter a year ago, were higher levels of service charge
fees (up $1.2 million, or 14 percent) and trust fees (up $0.7 million, or 21 percent). The increase in
noninterest income (excluding securities transactions) for the second quarter compared to the prior
quarter was due to increases in service charge fees (up $1.3 million), other income (up $1.3 million),
insurance fees (up $0.7 million), and trust fees (up $0.4 million). Operating expenses for the second
quarter were $.7 million, or 1 percent, higher compared to the same quarter a year ago and were $2.7
million, or 6 percent, higher than the previous quarter. The increase from the same quarter a year ago
was reflected in higher levels of other expense (up $1.4 million) and occupancy expense (up $1.0 million)
with lower personnel expense (down $1.6 million). The increase in operating expense over last quarter was
due to higher levels of occupancy and equipment expense (up $0.9 million) and other operating expense (up
$3.6 million, primarily in higher levels of professional fees, advertising, ORE expense and other
miscellaneous expense), offset by lower personnel expense (down $1.7 million). The second quarter of 2007
included about $1.0 million of one-time expenses related to certain legal and other professional fees as
well as moving costs associated with the June 23, 2007 move of the Company's data center to a newly
constructed facility north of Interstate 10.
Branch Expansion
During the second quarter, the Company officially opened its flagship branch in downtown Mobile, AL. Additional Alabama branches are planned in Daphne, the Eastern Shore and Mobile. All are expected to be open in temporary facilities within ninety days, with possibly four additional locations by the end of 2008. A new branch will open in downtown New Orleans, LA by September 30, 2007, and as many as three additional branches in Pensacola, FL by the end of 2008.
Stock Repurchases
Approximately 433,000 of the Company’s shares were repurchased during the second quarter of 2007 under the Stock Repurchase Plan that was approved in 2000. The Company has repurchased 661,000 shares through June 30, 2007 compared to 39,000 shares during the first six months of 2006. The remaining plan shares available for repurchase at June 30, 2007 were .9 million shares. Management intends to continue repurchasing shares as long as market conditions are conducive to that action.
About Hancock Holding Company and Hancock Bank
Hancock Holding Company — parent company of Hancock Bank of Alabama, Hancock Bank Mississippi, Hancock Bank of Florida, and Hancock Bank of Louisiana — has assets of approximately $5.9 billion. Bank subsidiaries include Hancock Investment Services, Inc., Hancock Insurance Agency, and Harrison Finance Company. Additionally, the company operates corporate trust offices in Gulfport, MS, Jackson, MS, New Orleans, LA, and Baton Rouge, LA. Hancock’s trust department, a division of the wealth management group, has assets of $7.1 billion, with assets under management of $2.3 billion, as of December 31, 2006. Founded October 10, 1899, Hancock Bank is the only financial services company headquartered in the Gulf South to rate among the top 20 percent of America’s top performing banks. Hancock consistently ranks as one of the country’s strongest, safest financial institutions, according to Veribanc, Inc., and BauerFinancial Services, Inc. Thomson Financial also recently listed Hancock as the ninth largest corporate trustee bank in the U.S. More corporate information and online banking are available 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
Financial Highlights
(amounts in thousands, except per share data and FTE headcount)
(unaudited)
Three Months Ended Six Months Ended
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6/30/2007 3/31/2007 6/30/2006 6/30/2007 6/30/2006
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Per Common Share Data
Earnings per share:
Basic $0.63 $0.59 $0.68 $1.22 $1.36
Diluted $0.62 $0.58 $0.66 $1.20 $1.32
Cash dividends per share $0.240 $0.240 $0.220 $0.480 $0.415
Book value per share (period-end) $17.13 $17.27 $15.12 $17.13 $15.12
Tangible book value per share (period-end) $14.90 $15.05 $12.94 $14.90 $12.94
Weighted average number of shares:
Basic 32,233 32,665 32,531 32,447 32,462
Diluted 32,749 33,299 33,322 33,024 33,237
Period-end number of shares 32,094 32,518 32,555 32,094 32,555
Market data:
High closing price $44.37 $54.09 $57.19 $54.09 $57.19
Low closing price $37.50 $41.88 $44.02 $37.50 $37.75
Period end closing price $37.55 $43.98 $56.00 $37.55 $56.00
Trading volume 11,614 8,577 8,737 20,195 12,528
Other Period-end Data
FTE headcount 1,944 1,929 1,777 1,944 1,777
Tangible common equity $478,085 $489,430 $421,369 $478,085 $421,369
Tier I capital $510,096 $513,229 $457,738 $510,096 $457,738
Goodwill $62,277 $62,277 $59,060 $62,277 $59,060
Amortizable intangibles $8,607 $8,991 $10,575 $8,607 $10,575
Mortgage servicing intangibles $729 $829 $1,256 $729 $1,256
Common shares repurchased for publicly announced plans 433 228 22 661 39
Performance Ratios
Return on average assets 1.42% 1.32% 1.45% 1.37% 1.47%
Return on average common equity 14.53% 13.77% 17.89% 14.15% 18.11%
Earning asset yield (TE) 6.76% 6.64% 6.32% 6.70% 6.25%
Total cost of funds 2.59% 2.60% 2.05% 2.59% 1.96%
Net interest margin (TE) 4.17% 4.04% 4.27% 4.10% 4.28%
Noninterest expense as a percent of total revenue (TE)
before amortization of purchased intangibles
and securities transactions 61.27% 61.12% 59.13% 61.20% 58.72%
Common equity (period-end) as a percent of total assets
(period-end) 9.36% 9.61% 8.00% 9.36% 8.00%
Leverage (Tier I) ratio 9.01% 8.80% 7.59% 9.01% 7.59%
Tangible common equity ratio 8.24% 8.48% 6.92% 8.24% 6.92%
Net charge-offs as a percent of average loans 0.18% 0.18% 0.40% 0.18% 0.20%
Allowance for loan losses as a percent of period-end loans 1.35% 1.41% 2.35% 1.35% 2.35%
Allowance for loan losses to NPAs + accruing loans 90 days
past due 410.98% 413.60% 457.10% 410.98% 457.10%
Loan/deposit ratio 69.62% 65.91% 57.40% 67.75% 58.18%
Non-interest income excluding
securities transactions as a percent of
total revenue (TE) 35.94% 32.48% 30.27% 34.26% 30.10%
Page 1
Hancock Holding Company
Financial Highlights
(amounts in thousands)
(unaudited)
Three Months Ended Six Months Ended
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6/30/2007 3/31/2007 6/30/2006 6/30/2007 6/30/2006
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Asset Quality Information
Non-accrual loans $7,544 $4,494 $7,237 $7,544 $7,237
Foreclosed assets 1,146 718 1,606 1,146 1,606
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Total non-performing assets $8,690 $5,212 $8,843 $8,690 $8,843
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Non-performing assets as a percent of loans and
foreclosed assets 0.25% 0.16% 0.29% 0.25% 0.29%
Accruing loans 90 days past due $2,558 $6,035 $6,681 $2,558 $6,681
Accruing loans 90 days past due as a percent of loans 0.07% 0.18% 0.22% 0.07% 0.22%
Non-performing assets + accruing loans 90 days past due
to loans and foreclosed assets 0.33% 0.34% 0.51% 0.33% 0.51%
Net charge-offs $1,529 $1,466 $3,001 $2,994 $2,893
Net charge-offs as a percent of average loans 0.18% 0.18% 0.40% 0.18% 0.20%
Allowance for loan losses $46,227 $46,517 $70,960 $46,227 $70,960
Allowance for loan losses as a percent of period-end loans 1.35% 1.41% 2.35% 1.35% 2.35%
Allowance for loan losses to NPAs + accruing loans 90 days
past due 410.98% 413.60% 457.10% 410.98% 457.10%
Provision for loan losses $1,238 $1,211 - $2,449 ($705)
Allowance for Loan Losses
Beginning Balance $46,517 $46,772 $73,961 $46,772 $74,558
Provision for loan loss 1,238 1,211 - 2,449 (705)
Charge-offs 3,521 3,076 4,742 6,597 8,664
Recoveries 1,993 1,610 1,741 3,603 5,771
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Net charge-offs 1,529 1,466 3,001 2,994 2,893
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Ending Balance $46,227 $46,517 $70,960 $46,227 $70,960
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Net Charge-off Information
Net charge-offs:
Commercial/real estate loans ($63) $168 $620 $105 ($1,149)
Mortgage loans (22) 23 28 1 209
Direct consumer loans 618 110 1,681 972 2,260
Indirect consumer loans 471 676 391 902 1,044
Finance company loans 525 489 281 1,014 529
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Total net charge-offs $1,529 $1,466 $3,001 $2,994 $2,893
======================================= ==========================
Average loans:
Commercial/real estate loans $1,989,420 $1,931,966 $1,699,768 $1,960,852 $1,687,306
Mortgage loans 433,310 426,103 410,522 429,726 410,274
Direct consumer loans 487,267 485,201 463,977 486,239 466,888
Indirect consumer loans 360,451 357,008 348,463 358,739 349,926
Finance Company loans 101,092 92,315 71,461 96,728 67,997
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Total average loans $3,371,540 $3,292,593 $2,994,191 $3,332,285 $2,982,391
Net charge-offs to average loans:
Commercial/real estate loans -0.01% 0.04% 0.15% 0.01% -0.14%
Mortgage loans -0.02% 0.02% 0.03% 0.00% 0.10%
Direct consumer loans 0.51% 0.09% 1.45% 0.40% 0.98%
Indirect consumer loans 0.52% 0.77% 0.45% 0.51% 0.60%
Finance Company loans 2.08% 2.15% 1.58% 2.11% 1.57%
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Total net charge-offs to average loans 0.18% 0.18% 0.40% 0.18% 0.20%
Page 2
Hancock Holding Company
Financial Highlights
(amounts in thousands)
(unaudited)
Three Months Ended Six Months Ended
------------------------------------------ --------------------------
6/30/2007 3/31/2007 6/30/2006 6/30/2007 6/30/2006
------------------------------------------ --------------------------
Income Statement
Interest income $84,938 $85,708 $86,403 $170,646 $167,993
Interest income (TE) 87,204 88,124 88,382 175,329 171,951
Interest expense 33,394 34,308 28,636 67,703 53,908
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Net interest income (TE) 53,810 53,816 59,746 107,626 118,043
Provision for loan losses 1,238 1,211 - 2,449 (705)
Noninterest income excluding
securities transactions 30,193 25,889 25,942 56,081 50,831
Securities transactions gains/(losses) 34 6 - 40 118
Noninterest expense 51,857 49,140 51,172 100,996 100,338
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Income before income taxes 28,676 26,944 32,536 55,620 65,402
Income tax expense 8,352 7,715 10,539 16,068 21,393
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Net income $20,323 $19,229 $21,998 $39,553 $44,009
========================================== ==========================
Noninterest Income and Noninterest Expense
Service charges on deposit accounts $10,471 $9,190 $9,223 $19,662 $17,107
Trust fees 4,124 3,693 3,409 7,816 6,487
Debit card & merchant fees 2,171 1,778 1,863 3,949 3,571
Insurance fees 5,033 4,369 4,596 9,402 9,755
Investment & annuity fees 2,018 1,978 1,591 3,995 2,855
ATM fees 1,358 1,324 1,273 2,682 2,567
Secondary mortgage market operations 1,116 911 749 2,027 1,566
Other income 3,903 2,646 3,239 6,549 6,923
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Noninterest income excluding
securities transactions $30,193 $25,889 $25,942 $56,081 $50,831
Securities transactions gains/(losses) 34 6 - 40 118
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Total noninterest income including
securities transactions $30,227 $25,895 $25,942 $56,121 $50,950
========================================== ==========================
Personnel expense $24,837 $26,563 $26,400 $51,401 $52,602
Occupancy expense (net) 4,469 4,073 3,474 8,542 7,134
Equipment expense 2,768 2,272 2,816 5,041 5,484
Other operating expense 19,398 15,809 17,976 35,206 33,937
Amortization of intangibles 384 423 507 807 1,181
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Total noninterest expense $51,857 $49,140 $51,172 $100,996 $100,338
========================================== ==========================
Page 3
Hancock Holding Company
Financial Highlights
(amounts in thousands)
(unaudited)
Three Months Ended Six Months Ended
-------------------------------------------------- -----------------------------
6/30/2007 3/31/2007 6/30/2006 6/30/2007 6/30/2006
-------------------------------------------------- -----------------------------
Period-end Balance Sheet
Commercial/real estate loans $2,044,170 $1,953,907 $1,727,236 $2,044,170 $1,727,236
Mortgage loans 420,342 420,780 405,416 420,342 405,416
Direct consumer loans 481,564 469,783 463,313 481,564 463,313
Indirect consumer loans 364,375 358,844 348,342 364,375 348,342
Finance Company loans 105,700 95,334 75,053 105,700 75,053
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Total loans 3,416,151 3,298,648 3,019,360 3,416,151 3,019,360
Loans held for sale 25,198 21,341 24,704 25,198 24,704
Securities 1,615,473 1,820,772 2,133,792 1,615,473 2,133,792
Short-term investments 196,944 134,924 414,062 196,944 414,062
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Earning assets 5,253,766 5,275,685 5,591,919 5,253,766 5,591,919
-------------------------------------------------- -----------------------------
Allowance for loan losses (46,227) (46,517) (70,960) (46,227) (70,960)
Other assets 662,263 615,946 634,233 662,263 634,233
-------------------------------------------------- -----------------------------
Total assets $5,869,803 $5,845,114 $6,155,192 $5,869,803 $6,155,192
================================================== =============================
Noninterest bearing deposits $938,638 $995,864 $1,206,235 $938,638 $1,206,235
Interest bearing transaction deposits 1,412,123 1,515,116 1,640,552 1,412,123 1,640,552
Interest bearing Public Fund deposits 891,803 777,692 853,566 891,803 853,566
Time deposits 1,735,105 1,635,090 1,546,973 1,735,105 1,546,973
-------------------------------------------------- -----------------------------
Total interest bearing deposits 4,039,031 3,927,899 4,041,092 4,039,031 4,041,092
-------------------------------------------------- -----------------------------
Total deposits 4,977,670 4,923,763 5,247,327 4,977,670 5,247,327
Other borrowed funds 203,935 222,534 227,793 203,935 227,793
Other liabilities 138,501 137,209 187,812 138,501 187,812
Common shareholders' equity 549,698 561,608 492,260 549,698 492,260
-------------------------------------------------- -----------------------------
Total liabilities & common equity $5,869,803 $5,845,114 $6,155,192 $5,869,803 $6,155,192
================================================== =============================
Average Balance Sheet
Commercial/real estate loans $1,989,420 $1,931,966 $1,699,768 $1,960,852 $1,687,306
Mortgage loans 433,310 426,103 410,522 429,726 410,274
Direct consumer loans 487,267 485,201 463,977 486,239 466,888
Indirect consumer loans 360,451 357,008 348,463 358,739 349,926
Finance Company loans 101,092 92,315 71,461 96,728 67,997
-------------------------------------------------- -----------------------------
Total loans 3,371,540 3,292,593 2,994,191 3,332,285 2,982,391
Securities 1,733,850 1,830,557 2,273,012 1,781,937 2,213,317
Short-term investments 67,520 231,558 338,443 149,086 337,221
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Earning average assets 5,172,910 5,354,708 5,605,646 5,263,307 5,532,930
-------------------------------------------------- -----------------------------
Allowance for loan losses (46,511) (46,704) (73,706) (46,607) (74,066)
Other assets 607,905 597,949 570,497 602,954 584,444
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Total assets $5,734,304 $5,905,953 $6,102,438 $5,819,654 $6,043,308
================================================== =============================
Noninterest bearing deposits $950,600 $983,973 $1,177,756 $967,194 $1,189,407
Interest bearing transaction deposits 1,461,091 1,492,405 1,696,598 1,476,661 1,705,506
Interest bearing Public Fund deposits 775,431 820,652 837,751 797,916 775,418
Time deposits 1,655,322 1,698,217 1,504,343 1,676,651 1,455,925
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Total interest bearing deposits 3,891,843 4,011,274 4,038,692 3,951,229 3,936,850
-------------------------------------------------- -----------------------------
Total deposits 4,842,443 4,995,247 5,216,448 4,918,423 5,126,257
Other borrowed funds 197,206 205,737 210,388 201,448 248,849
Other liabilities 133,821 138,775 182,453 136,285 178,244
Common shareholders' equity 560,833 566,194 493,149 563,499 489,958
-------------------------------------------------- -----------------------------
Total liabilities & common equity $5,734,304 $5,905,953 $6,102,438 $5,819,654 $6,043,308
================================================== =============================
Page 4
Hancock Holding Company
Financial Highlights
(amounts in thousands)
(unaudited)
Three Months Ended Six Months Ended
------------------------------------------- -----------------------------
6/30/2007 3/31/2007 6/30/2006 6/30/2007 6/30/2006
------------------------------------------- -----------------------------
Average Balance Sheet Mix
Percentage of earning assets/funding sources:
Loans 65.18% 61.49% 53.41% 63.31% 53.90%
Securities 33.52% 34.19% 40.55% 33.86% 40.00%
Short-term investments 1.31% 4.32% 6.04% 2.83% 6.09%
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Earning average assets 100.00% 100.00% 100.00% 100.00% 100.00%
Noninterest bearing deposits 18.38% 18.38% 21.01% 18.38% 21.50%
Interest bearing transaction deposits 28.25% 27.87% 30.27% 28.06% 30.82%
Interest bearing Public Fund deposits 14.99% 15.33% 14.94% 15.16% 14.01%
Time deposits 32.00% 31.71% 26.84% 31.86% 26.31%
------------------------------------------- -----------------------------
Total deposits 93.61% 93.29% 93.06% 93.45% 92.65%
Other borrowed funds 3.81% 3.84% 3.75% 3.83% 4.50%
Other net interest-free funding sources 2.58% 2.87% 3.19% 2.73% 2.85%
------------------------------------------- -----------------------------
Total average funding sources 100.00% 100.00% 100.00% 100.00% 100.00%
=========================================== =============================
Loan mix:
Commercial/real estate loans 59.01% 58.68% 56.77% 58.84% 56.58%
Mortgage loans 12.85% 12.94% 13.71% 12.90% 13.76%
Direct consumer loans 14.45% 14.74% 15.50% 14.59% 15.65%
Indirect consumer loans 10.69% 10.84% 11.64% 10.77% 11.73%
Finance Company loans 3.00% 2.80% 2.39% 2.90% 2.28%
------------------------------------------- -----------------------------
Total loans 100.00% 100.00% 100.00% 100.00% 100.00%
=========================================== =============================
Average dollars (in thousands):
Loans 3,371,540 $3,292,593 $2,994,191 $3,332,285 $2,982,391
Securities 1,733,850 1,830,557 2,273,012 1,781,937 2,213,317
Short-term investments 67,520 231,558 338,443 149,086 337,221
------------------------------------------- -----------------------------
Earning average assets 5,172,910 $5,354,708 $5,605,646 $5,263,307 $5,532,930
Noninterest bearing deposits $950,600 $983,973 $1,177,756 $967,194 $1,189,407
Interest bearing transaction deposits 1,461,091 1,492,405 1,696,598 1,476,661 1,705,506
Interest bearing Public Fund deposits 775,431 820,652 837,751 797,916 775,418
Time deposits 1,655,322 1,698,217 1,504,343 1,676,651 1,455,925
------------------------------------------- -----------------------------
Total deposits 4,842,443 4,995,247 5,216,448 4,918,423 5,126,257
Other borrowed funds 197,206 205,737 210,388 201,448 248,849
Other net interest-free funding sources 133,260 153,724 178,810 143,436 157,824
------------------------------------------- -----------------------------
Total average funding sources 5,172,910 $5,354,708 $5,605,646 $5,263,307 $5,532,930
Loans:
Commercial/real estate loans 1,989,420 $1,931,966 $1,699,768 $1,960,852 $1,687,306
Mortgage loans 433,310 426,103 410,522 429,726 410,274
Direct consumer loans 487,267 485,201 463,977 486,239 466,888
Indirect consumer loans 360,451 357,008 348,463 358,739 349,926
Finance Company loans 101,092 92,315 71,461 96,728 67,997
------------------------------------------- -----------------------------
Total average loans 3,371,540 $3,292,593 $2,994,191 $3,332,285 $2,982,391
Page 5
Hancock Holding Company
Average Balance and Net Interest Margin Summary
(amounts in thousands)
(unaudited)
Three Months Ended
--------------------------------------------------------------------------------------------
06/30/07 03/31/07 06/30/06
------------------------------ ------------------------------ -----------------------------
Interest Volume Rate Interest Volume Rate Interest Volume Rate
------------------------------ ------------------------------ -----------------------------
Average Earning Assets
Commercial & real estate loans (TE) $36,689 $1,989,420 7.40% $35,231 $1,931,966 7.39% $30,613 $1,699,768 7.22%
Mortgage loans 6,677 433,310 6.16% 6,509 426,103 6.11% 5,980 410,522 5.83%
Consumer loans 20,978 948,810 8.87% 20,197 934,524 8.76% 18,356 883,901 8.33%
Loan fees & late charges 291 - 0.00% 443 - 0.00% 2,476 - 0.00%
------------------------------ ------------------------------ -----------------------------
Total loans (TE) 64,635 3,371,540 7.69% 62,380 3,292,593 7.67% 57,425 2,994,191 7.69%
US treasury securities 414 34,141 4.87% 736 60,480 4.94% 454 42,028 4.33%
US agency securities 10,988 866,747 5.07% 11,755 940,516 5.00% 15,954 1,346,963 4.74%
CMOs 948 93,145 4.07% 1,104 107,986 4.09% 1,626 164,825 3.95%
Mortgage backed securities 5,847 469,500 4.98% 5,482 444,427 4.93% 5,643 484,002 4.66%
Municipals (TE) 2,653 196,860 5.39% 2,861 198,815 5.76% 2,680 158,553 6.76%
Other securities 932 73,456 5.08% 922 78,333 4.71% 944 76,641 4.93%
------------------------------ ------------------------------ -----------------------------
Total securities (TE) 21,782 1,733,850 5.03% 22,860 1,830,557 5.00% 27,301 2,273,012 4.80%
Total short-term investments 788 67,520 4.68% 2,883 231,558 5.05% 3,656 338,443 4.33%
Average earning assets yield (TE) $87,204 $5,172,910 6.76% $88,124 $5,354,708 6.64% $88,382 $5,605,646 6.32%
Interest-bearing Liabilities
Interest-bearing transaction deposits $5,009 $1,461,091 1.38% $4,765 $1,492,405 1.29% $3,780 $1,696,598 0.89%
Time deposits 18,915 1,655,322 4.58% 19,022 1,698,218 4.54% 14,451 1,504,343 3.85%
Public Funds 8,583 775,431 4.44% 9,029 820,652 4.46% 8,658 837,751 4.15%
------------------------------ ------------------------------ -----------------------------
Total interest bearing deposits 32,508 3,891,843 3.35% 32,816 4,011,274 3.32% 26,888 4,038,692 2.67%
Total borrowings 886 197,206 1.80% 1,492 205,737 2.94% 1,747 210,388 3.33%
Total interest bearing liab cost $33,394 $4,089,050 3.28% $34,308 $4,217,011 3.30% $28,636 $4,249,079 2.70%
Noninterest-bearing deposits 950,600 983,973 1,177,756
Other net interest-free funding sources 133,260 153,724 178,810
Total Cost of Funds $33,394 $5,172,910 2.59% $34,308 $5,354,708 2.60% $28,636 $5,605,646 2.05%
Net Interest Spread (TE) $53,810 3.48% $53,816 3.34% $59,746 3.61%
Net Interest Margin (TE) $53,810 $5,172,910 4.17% $53,816 $5,354,708 4.04% $59,746 $5,605,646 4.27%
Page 6
Hancock Holding Company
Average Balance and Net Interest Margin Summary
(amounts in thousands)
(unaudited)
Six Months Ended
----------------------------------------------------------------------------
6/30/2007 6/30/2006
------------------------------------- ----------------------------------
Interest Volume Rate Interest Volume Rate
------------------------------------- ----------------------------------
Average Earning Assets
Commercial & real estate loans (TE) $71,920 $1,960,852 7.39% $59,250 $1,687,306 7.08%
Mortgage loans 13,186 429,726 6.14% 11,877 410,274 5.79%
Consumer loans 41,175 941,706 8.82% 35,829 884,811 8.17%
Loan fees & late charges 734 - 0.00% 4,796 - 0.00%
------------------------------------- ----------------------------------
Total loans (TE) 127,015 3,332,285 7.68% 111,752 2,982,391 7.55%
US treasury securities 1,151 47,238 4.91% 1,081 51,007 4.27%
US agency securities 22,743 903,428 5.03% 29,740 1,271,059 4.68%
CMOs 2,052 100,525 4.08% 3,435 174,497 3.94%
Mortgage backed securities 11,330 457,033 4.96% 11,162 480,913 4.64%
Municipals (TE) 5,514 197,832 5.57% 5,409 160,851 6.73%
Other securities 1,854 75,881 4.89% 1,817 74,990 4.84%
------------------------------------- ----------------------------------
Total securities (TE) 44,643 1,781,937 5.01% 52,643 2,213,317 4.76%
Total short-term investments 3,671 149,086 4.97% 7,556 337,221 4.52%
Average earning assets yield (TE) $175,329 $5,263,307 6.70% $171,951 $5,532,930 6.25%
Interest-Bearing Liabilities
Interest-bearing transaction deposits $9,775 $1,476,661 1.33% $7,046 $1,705,506 0.83%
Time deposits 37,937 1,676,651 4.56% 27,456 1,455,925 3.80%
Public Funds 17,612 797,916 4.45% 15,407 775,418 4.01%
------------------------------------- ----------------------------------
Total interest bearing deposits 65,324 3,951,229 3.33% 49,909 3,936,850 2.56%
Total borrowings 2,379 201,448 2.38% 3,999 248,849 3.24%
Total interest bearing liab cost $67,703 $4,152,677 3.29% $53,908 $4,185,699 2.60%
Noninterest-bearing deposits 967,194 1,189,407
Other net interest-free funding sources 143,436 157,824
Total Cost of Funds $67,703 $5,263,307 2.59% $53,908 $5,532,930 1.96%
Net Interest Spread (TE) $107,626 3.41% $118,043 3.65%
Net Interest Margin (TE) $107,626 $5,263,307 4.10% $118,043 $5,532,930 4.28%
Page 7
Hancock Holding Company
Quarterly Financial Data
(amounts in thousands, except
per share data and FTE headcount)
(unaudited)
2005 2006 2007
------------------ ---------------------------------------- -------------------
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
------------------ ---------------------------------------- -------------------
Per Common Share Data
Earnings per share:
Basic $0.04 $0.59 $0.68 $0.68 $1.11 $0.67 $0.59 $0.63
Diluted $0.04 $0.58 $0.67 $0.66 $1.08 $0.65 $0.58 $0.62
Cash dividends per share $0.195 $0.195 $0.195 $0.220 $0.240 $0.240 $0.240 $0.240
Book value per share (period-end) $14.52 $14.78 $15.06 $15.12 $16.64 $17.09 $17.27 $17.13
Tangible book value per share (period-end) $12.25 $12.55 $12.85 $12.94 $14.47 $14.87 $15.05 $14.90
Weighted average number of shares:
Basic 32,308 32,313 32,393 32,531 32,566 32,632 32,665 32,233
Diluted 32,940 32,980 33,088 33,322 33,333 33,378 33,299 32,749
Period-end number of shares 32,309 32,301 32,494 32,555 32,584 32,666 32,518 32,094
Market data:
High closing price $37.84 $39.90 $46.67 $57.19 $56.79 $56.00 $54.09 $44.37
Low closing price $29.93 $31.08 $37.75 $44.02 $49.71 $50.85 $41.88 $37.50
Period end closing price $34.14 $37.81 $46.52 $56.00 $53.55 $52.84 $43.98 $37.55
Trading volume 8,760 6,829 3,990 8,737 8,135 6,393 8,577 11,614
Other Period-end Data
FTE headcount 1,590 1,735 1,768 1,777 1,788 1,848 1,929 1,944
Tangible common equity $395,843 $405,216 $417,684 $421,369 $471,387 $485,778 $489,430 $478,085
Tier I capital $407,075 $420,281 $440,302 $457,738 $487,668 $510,638 $513,229 $510,096
Goodwill $61,428 $61,418 $61,418 $59,060 $59,683 $62,277 $62,277 $62,277
Amortizable intangibles $9,928 $9,204 $8,725 $10,575 $9,938 $9,414 $8,991 $8,607
Mortgage servicing intangibles $1,860 $1,577 $1,384 $1,256 $1,093 $941 $829 $729
Common shares repurchased for publicly
announced plans 12 - 17 22 - - 228 433
Performance Ratios
Return on average assets 0.12% 1.39% 1.49% 1.45% 2.36% 1.44% 1.32% 1.42%
Return on average common equity 1.18% 15.98% 18.34% 17.89% 27.58% 15.54% 13.77% 14.53%
Earning asset yield (TE) 6.19% 6.14% 6.17% 6.32% 6.60% 6.54% 6.64% 6.76%
Total cost of funds 1.80% 1.70% 1.88% 2.05% 2.30% 2.48% 2.60% 2.59%
Net interest margin (TE) 4.40% 4.44% 4.30% 4.27% 4.29% 4.06% 4.04% 4.17%
Noninterest expense as a percent
of total revenue (TE) before amortization
of purchased intangibles, net storm-related
gain/(loss),
gain on sale of credit card
merchant and securities transactions 60.85% 56.89% 58.30% 59.13% 58.76% 59.79% 61.12% 61.27%
Common equity (period-end) as
a percent of total assets (period-end) 9.55% 8.02% 7.82% 8.00% 8.86% 9.36% 9.61% 9.36%
Leverage (Tier I) ratio 8.64% 7.85% 7.45% 7.59% 8.15% 8.63% 8.80% 9.01%
Tangible common equity ratio 8.17% 6.89% 6.75% 6.92% 7.79% 8.24% 8.48% 8.24%
Net charge-offs as a
percent of average loans 0.23% 0.41% -0.01% 0.40% 0.34% 0.19% 0.18% 0.18%
Allowance for loan losses as
a percent of period-end loans 2.59% 2.51% 2.51% 2.35% 1.55% 1.44% 1.41% 1.35%
Allowance for loan losses to
NPAs + loans 90 days past due 392.70% 195.50% 432.85% 457.10% 494.65% 694.67% 413.60% 410.98%
Loan/deposit ratio 76.77% 66.44% 59.00% 57.40% 60.97% 64.34% 65.91% 69.62%
Noninterest income excluding
net storm-related gain/(loss), gain on sale of
credit card merchant and
securities transactions as a percent
of total revenue (TE) 31.10% 29.68% 29.92% 30.28% 30.18% 33.14% 32.48% 35.94%
Page 8
Hancock Holding Company
Quarterly Financial Data
(amounts in thousands, except
per share data and FTE headcount)
(unaudited)
2005 2006 2007
--------------------- ------------------------------------------- ---------------------
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
--------------------- ------------------------------------------- ---------------------
Asset Quality Information
Non-accrual loans $10,373 $10,617 $8,676 $7,237 $5,179 $3,500 $4,494 $7,544
Foreclosed assets 2,973 1,898 1,779 1,606 970 681 718 1,146
--------------------- ------------------------------------------- ---------------------
Total non-performing assets $13,346 $12,515 $10,455 $8,843 $6,149 $4,181 $5,212 $8,690
Non-performing assets as a percent of loans
and foreclosed assets 0.45% 0.42% 0.35% 0.29% 0.20% 0.13% 0.16% 0.25%
Accruing loans 90 days past due $6,156 $25,622 $6,632 $6,681 $3,626 $2,552 $6,035 $2,558
Accruing loans 90 days past due as
a percent of loans 0.21% 0.86% 0.22% 0.22% 0.12% 0.08% 0.18% 0.07%
Non-performing assets + accruing loans
90 days past due to loans and
foreclosed assets 0.65% 1.28% 0.57% 0.51% 0.31% 0.21% 0.34% 0.33%
Net charge-offs $1,704 $3,104 ($108) $3,001 $2,608 $1,522 $1,466 $1,529
Net charge-offs as
a percent of average loans 0.23% 0.41% -0.01% 0.40% 0.34% 0.19% 0.18% 0.18%
Allowance for loan losses $76,584 $74,558 $73,961 $70,960 $48,352 $46,772 $46,517 $46,227
Allowance for loan losses as a
percent of period-end loans 2.59% 2.51% 2.51% 2.35% 1.55% 1.44% 1.41% 1.35%
Allowance for loan losses to NPAs +
accruing loans 90 days past due 392.70% 195.50% 432.85% 457.10% 494.65% 694.67% 413.60% 410.98%
Provision for (recovery of) loan losses $36,905 $1,079 ($705) - ($20,000) ($57) $1,211 $1,238
Net Charge-off Information
Net charge-offs:
Commercial/real estate loans ($17) $332 ($1,769) $620 $522 ($137) $168 ($63)
Mortgage loans 7 (7) 181 28 367 (11) 23 (22)
Direct consumer loans 861 1,831 579 1,681 1,003 493 110 618
Indirect consumer loans 342 272 653 391 294 395 676 471
Finance company loans 511 676 248 281 422 783 489 525
--------------------- ------------------------------------------- ---------------------
Total net charge-offs $1,704 $3,104 ($108) $3,001 $2,608 $1,523 $1,466 $1,529
--------------------- ------------------------------------------- ---------------------
Average loans:
Commercial/real estate loans $1,584,244 $1,660,804 $1,674,706 $1,699,768 $1,759,173 $1,855,506 $1,931,966 $1,989,420
Mortgage loans 430,615 442,977 410,023 410,522 423,610 428,674 426,103 433,310
Direct consumer loans 504,362 489,150 469,832 463,977 470,771 479,087 485,201 487,267
Indirect consumer loans 335,482 342,203 351,405 348,463 347,404 350,829 357,008 360,451
Finance Company loans 64,006 63,663 64,496 71,461 79,483 86,965 92,315 101,092
--------------------- ------------------------------------------- ---------------------
Total average loans $2,918,709 $2,998,797 $2,970,461 $2,994,191 $3,080,442 $3,201,061 $3,292,593 $3,371,540
Net charge-offs to average loans:
Commercial/real estate loans 0.00% 0.08% -0.43% 0.15% 0.12% -0.03% 0.04% -0.01%
Mortgage loans 0.01% -0.01% 0.18% 0.03% 0.34% -0.01% 0.02% -0.02%
Direct consumer loans 0.68% 1.49% 0.50% 1.45% 0.85% 0.41% 0.09% 0.51%
Indirect consumer loans 0.40% 0.32% 0.75% 0.45% 0.34% 0.45% 0.77% 0.52%
Finance Company loans 3.17% 4.21% 1.56% 1.58% 2.11% 3.57% 2.15% 2.08%
--------------------- ------------------------------------------- ---------------------
Total net charge-offs to average loans 0.23% 0.41% -0.01% 0.40% 0.34% 0.19% 0.18% 0.18%
Page 9
Hancock Holding Company
Quarterly Financial Data
(amounts in thousands, except
per share data and FTE headcount)
(unaudited)
2005 2006 2007
------------------ ------------------------------------- ---------------------
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
------------------ ------------------------------------- ---------------------
Income Statement
Interest income $65,644 $73,429 $81,590 $86,403 $89,233 $87,104 $85,708 $84,938
Interest income (TE) 67,506 75,433 83,570 88,382 91,275 89,366 88,124 87,204
Interest expense 19,659 20,911 25,273 28,636 31,988 33,966 34,308 33,394
------------------ ------------------------------------- ---------------------
Net interest income (TE) 47,847 54,522 58,297 59,746 59,286 55,400 53,816 53,810
Provision for (recovery of) loan losses 36,905 1,079 (705) - (20,000) (57) 1,211 1,238
Noninterest income excluding net
storm-related gain/(loss) and
securities transactions 21,600 23,016 24,890 25,942 25,627 27,460 25,889 30,193
Net storm-related gain/(loss) 12,276 (5,692) - - - 5,084 - -
Securities transactions gains/(losses) (18) (27) 118 - 110 (5,396) 6 34
Noninterest expense 42,770 44,626 49,165 51,172 50,336 50,042 49,140 51,857
------------------ ------------------------------------- ---------------------
Income before income taxes 168 24,112 32,865 32,536 52,645 30,300 26,944 28,676
Income tax expense (1,267) 5,047 10,854 10,539 16,614 8,538 7,715 8,352
------------------ ------------------------------------- ---------------------
Net income $1,435 $19,065 $22,011 $21,998 $36,031 $21,762 $19,229 $20,323
================== ===================================== =====================
Noninterest Income
and Noninterest Expense
Service charges on deposit accounts $7,975 $6,850 $7,884 $9,223 $9,719 $9,402 $9,190 $10,471
Trust fees 2,761 2,946 3,078 3,409 3,175 3,624 3,693 4,124
Debit card & merchant fees 1,055 1,717 1,709 1,863 1,744 1,983 1,778 2,171
Insurance fees 4,883 4,837 5,159 4,596 4,146 5,346 4,369 5,033
Investment & annuity fees 1,304 1,037 1,264 1,591 1,595 1,519 1,978 2,018
ATM fees 871 805 1,294 1,273 1,223 1,215 1,324 1,358
Secondary mortgage market operations 377 670 817 749 1,018 945 911 1,116
Other income 2,374 4,154 3,684 3,239 3,009 3,426 2,646 3,903
------------------ ------------------------------------- ---------------------
Noninterest income excluding net
storm-related gain/(loss) and
securities transactions $21,600 $23,016 $24,890 $25,942 $25,627 $27,460 $25,889 $30,193
Net storm-related gain/(loss) 12,276 (5,692) - - 0 5,084 - -
Securities transactions gains/(losses) (18) (27) 118 - 110 (5,396) 6 34
------------------ ------------------------------------- ---------------------
Total noninterest income including
storm-related gain/(loss) and
securities transactions $33,858 $17,298 $25,008 $25,942 $25,737 $27,147 $25,895 $30,227
================== ===================================== =====================
Personnel expense $24,275 $24,580 $26,202 $26,400 $27,059 $24,092 $26,563 $24,837
Occupancy expense (net) 2,617 3,237 3,659 3,474 2,882 3,335 4,073 4,469
Equipment expense 2,319 2,511 2,668 2,816 2,647 2,665 2,272 2,768
Other operating expense 13,044 13,780 15,961 17,976 17,304 19,451 15,809 19,398
Amortization of intangibles 514 518 675 507 445 499 423 384
------------------ ------------------------------------- ---------------------
Total noninterest expense $42,770 $44,626 $49,165 $51,172 $50,336 $50,042 $49,140 $51,857
Page 10