We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Hancock Holding (HBHC) Q2 Earnings in Line, Revenues Rise
Read MoreHide Full Article
Hancock Holding Company reported second-quarter 2017 adjusted earnings of 68 cents per share, in line with the Zacks Consensus Estimate. The bottom line compares favorably with the prior-year quarter earnings of 59 cents.
The earnings growth was supported by a rise in the net interest income and non-interest income. Growth in loans and deposits remained strong. Lower provisions for loans also acted favorably. However, higher expenses was the key dampener. A rise in non-performing assets was also on the downside.
Considering several one-time items, net income for the quarter came in at $52.3 million, up 11.5% from the prior-year quarter.
Revenue and Expenses Increase
Hancock’s net revenue for the quarter was $267.2 million, up 16.9% year over year. Revenues outpaced the Zacks Consensus Estimate of $265 million.
Quarterly net interest income grew 21.1% year over year to $199.7 million. Also, reported net interest margin (NIM) rose 18 basis points from the prior-year quarter to 3.43%.
Non-interest income totaled $67.5 million, up 6% from the year-ago quarter. The growth was driven by an improvement in all the components, except trust fees, insurance commissions and fees and securities transaction fees.
Total adjusted operating expenses increased 14.6% year over year to $172.9 million. The rise was primarily due to higher personnel, net occupancy, equipment and other operating expenses along with amortization of intangibles.
Credit Quality Shows Overall Improvement
Net charge-offs from the non-covered loan portfolio was 0.13% of average total loans, down from 0.20% in the year-ago quarter. But, total nonperforming assets increased 6.7% year over year to $346.8 million.
Provision for loan losses declined 14% year over year to roughly $15 million thanks to a rebound in oil prices.
Strong Balance Sheet; Deterioration in Profitability & Capital Ratios
As of Jun 30, 2017, total loans grew 6.2% sequentially to $18.4 billion. Further, total deposits rose 7.2% from the prior quarter to $20.9 billion.
Return on average assets was 0.79% at Jun 30, 2017, down from 0.82% as of Jun 30, 2016. Moreover, as of Jun 30, 2017, return on average common equity was 7.52% compared with 7.76% as of Jun 30, 2016.
As of Jun 30, 2017, Tier 1 leverage ratio was 8.21%, down from 8.22% as of Jun 30, 2016. Further, Tier 1 risk-based capital ratio came in at 9.98%, up from 9.94% as of Jun 30, 2016.
Outlook for 2017
Management estimates charge-offs from energy-related credits to be roughly in the range of $65-$95 million. The company expects additional charge-offs in the energy portfolio, though it believes these will be manageable.
Moreover, the company expects to have a strong capital position along with sufficient reserves.
Our Viewpoint
We believe Hancock’s organic and inorganic growth strategies will accelerate revenue generation going forward. Further, the company's efforts to upgrade its online banking facility are expected to lower expenses in the quarters ahead.
Hancock Holding Company Price, Consensus and EPS Surprise
Among the other Southeast banking stocks, First Horizon National Corporation (FHN - Free Report) posted earnings of 27 cents per share in second-quarter 2017, surpassing the Zacks Consensus Estimate by a penny. Decline in expenses and improving credit quality are attributable to this outperformance.
Both Capstar Financial Holdings, Inc. and Trustmark Corp. (TRMK - Free Report) are scheduled to report their quarterly earnings reports on Jul 27 and Jul 25, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Hancock Holding (HBHC) Q2 Earnings in Line, Revenues Rise
Hancock Holding Company reported second-quarter 2017 adjusted earnings of 68 cents per share, in line with the Zacks Consensus Estimate. The bottom line compares favorably with the prior-year quarter earnings of 59 cents.
The earnings growth was supported by a rise in the net interest income and non-interest income. Growth in loans and deposits remained strong. Lower provisions for loans also acted favorably. However, higher expenses was the key dampener. A rise in non-performing assets was also on the downside.
Considering several one-time items, net income for the quarter came in at $52.3 million, up 11.5% from the prior-year quarter.
Revenue and Expenses Increase
Hancock’s net revenue for the quarter was $267.2 million, up 16.9% year over year. Revenues outpaced the Zacks Consensus Estimate of $265 million.
Quarterly net interest income grew 21.1% year over year to $199.7 million. Also, reported net interest margin (NIM) rose 18 basis points from the prior-year quarter to 3.43%.
Non-interest income totaled $67.5 million, up 6% from the year-ago quarter. The growth was driven by an improvement in all the components, except trust fees, insurance commissions and fees and securities transaction fees.
Total adjusted operating expenses increased 14.6% year over year to $172.9 million. The rise was primarily due to higher personnel, net occupancy, equipment and other operating expenses along with amortization of intangibles.
Credit Quality Shows Overall Improvement
Net charge-offs from the non-covered loan portfolio was 0.13% of average total loans, down from 0.20% in the year-ago quarter. But, total nonperforming assets increased 6.7% year over year to $346.8 million.
Provision for loan losses declined 14% year over year to roughly $15 million thanks to a rebound in oil prices.
Strong Balance Sheet; Deterioration in Profitability & Capital Ratios
As of Jun 30, 2017, total loans grew 6.2% sequentially to $18.4 billion. Further, total deposits rose 7.2% from the prior quarter to $20.9 billion.
Return on average assets was 0.79% at Jun 30, 2017, down from 0.82% as of Jun 30, 2016. Moreover, as of Jun 30, 2017, return on average common equity was 7.52% compared with 7.76% as of Jun 30, 2016.
As of Jun 30, 2017, Tier 1 leverage ratio was 8.21%, down from 8.22% as of Jun 30, 2016. Further, Tier 1 risk-based capital ratio came in at 9.98%, up from 9.94% as of Jun 30, 2016.
Outlook for 2017
Management estimates charge-offs from energy-related credits to be roughly in the range of $65-$95 million. The company expects additional charge-offs in the energy portfolio, though it believes these will be manageable.
Moreover, the company expects to have a strong capital position along with sufficient reserves.
Our Viewpoint
We believe Hancock’s organic and inorganic growth strategies will accelerate revenue generation going forward. Further, the company's efforts to upgrade its online banking facility are expected to lower expenses in the quarters ahead.
Hancock Holding Company Price, Consensus and EPS Surprise
Hancock Holding Company Price, Consensus and EPS Surprise | Hancock Holding Company Quote
Presently, Hancock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Upcoming Releases of Other Stocks
Among the other Southeast banking stocks, First Horizon National Corporation (FHN - Free Report) posted earnings of 27 cents per share in second-quarter 2017, surpassing the Zacks Consensus Estimate by a penny. Decline in expenses and improving credit quality are attributable to this outperformance.
Both Capstar Financial Holdings, Inc. and Trustmark Corp. (TRMK - Free Report) are scheduled to report their quarterly earnings reports on Jul 27 and Jul 25, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>