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FOR
IMMEDIATE RELEASE
January 30, 2007
Hancock
Holding Company announces earnings for fourth quarter 2006
GULFPORT,
MS (January 30, 2007) - Hancock Holding Company (NASDAQ: HBHC)
and Leo W. Seal, Jr., President of Hancock Holding Company,
today announced earnings for the fourth quarter ended December
31, 2006. Hancock's fourth quarter 2006 earnings were $21.8
million, an increase of $2.7 million, or 14 percent, from
the fourth quarter of 2005. Diluted earnings per share for
the fourth quarter of 2006 were $0.65, an increase of $0.07
from the same quarter a year ago.
Net
income for 2006 totaled $101.8 million, compared to $54.0
million reported for 2005, an increase of $47.8 million. Diluted
earnings per share for 2006 were $3.06, compared to $1.64
for 2005, resulting in an increase of $1.42 per share.
Net
income for both 2006 and 2005 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 2005,
net income was negatively affected by storm-related items
totaling $21.1 million on an after tax basis. The largest
of 2005's items was the establishment of a $35.2 million (pre-tax)
allowance for loan losses related to the storm. 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.
Hancock
Holding Company Chief Executive Officers Carl J. Chaney and
John M. Hairston both expressed gratitude and congratulations
to all Hancock family members for their personal sacrifices
in the aftermath of the 2005 storm and for a job well done
in 2006. Both executives also expressed optimism for the continued
rebuilding efforts in the Company's operating region.
Highlights and key operating items from Hancock's fourth quarter
earnings are as follows:
- Net
Income and Returns: Hancock's net income for the fourth
quarter of 2006 was $21.8 million compared to $19.1 million
for the same quarter a year ago. Return on average assets
for the quarter was 1.44 percent compared to 1.39 percent
for 2005's fourth quarter. Return on average common equity
was 15.54 percent compared to 15.98 percent for the same
quarter a year ago.
- Insurance
Settlement: In the fourth quarter the Company negotiated
a final settlement with the primary property and casualty
insurance provider for all claims related to the impact
of Hurricane Katrina. A $5.1 million pretax gain related
to the settlement was recorded in the fourth quarter. All
of the Company's insurance claims related to the storm have
now been settled.
- Partial
Restructuring of Securities Portfolio: During the fourth
quarter, the interest rate environment presented Hancock
with an opportunity to sell $162.9 million in certain U.S.
Agency securities. The bonds were sold at a pretax book
loss of $5.4 million and had a book yield of 3.81 percent.
The proceeds were immediately reinvested in a combination
of federal funds and other short-term instruments yielding
approximately 5.18 percent.
- Asset
Quality & Allowance for Loan Losses: Hancock recorded
a negative provision for loan losses of $57,000 in the fourth
quarter, which when combined with the quarter's net charge-offs
of $1.5 million, resulted in the $1.6 million reduction
in the allowance for loan losses between September 30, 2006,
and December 31, 2006. This negative provision was necessary
to further adjust the allowance to the level dictated by
the Company's reserving methodologies. Net charge-offs for
the fourth quarter were $1.5 million, or 0.19 percent of
average loans, down $1.1 million from the $2.6 million,
or 0.34 percent of average loans, reported for the third
quarter of 2006. Net charge-offs for the fourth quarter
of 2005 were $3.1 million, or 0.41 percent of average loans.
Total storm-related net charge-offs for all of 2006 were
$1.8 million and for 2005 were $2.4 million. Non-performing
assets as a percent of total loans and foreclosed assets
was 0.13 percent at December 31, 2006, compared to 0.20
percent at September 30, 2006. Compared to the fourth quarter
of 2005, the ratio of non-performing assets as a percent
of total loans and foreclosed assets was down 29 basis points
from the 0.42 percent reported at December 31, 2005. Non-performing
assets decreased $2.0 million from September 30, 2006, reflecting
primarily lower levels of non-accrual loans. The Company's
ratio of accruing loans 90 days or more past due to total
loans was 0.08 percent at December 31, 2006, compared to
0.12 percent at September 30, 2006, and to 0.86 percent
at December 31, 2005. The Company's allowance for loan losses
was $46.8 million at December 31, 2006, down $1.6 million
from the $48.4 million reported at September 30, 2006, and
$27.8 million lower than the $74.6 million reported at December
31, 2005. The ratio of the allowance for loan losses as
a percent of period-end loans was 1.43 percent at December
31, 2006, and 1.54 percent at September 30, 2006. The allowance
coverage ratio (allowance for loan losses to non-performers
and past dues) was 695 percent for the fourth quarter of
2006, as compared to 196 percent for the fourth quarter
of 2005.
- Loans:
At December 31, 2006, Hancock's total loans were $3.3 billion,
which represented an increase of $277.4 million, or 9 percent,
from December 31, 2005. Period-end loans were up $125.4
million, or 4 percent, compared to September 30, 2006. Average
loans were up $120.6 million, or 16 percent annualized,
from the third quarter. Of that increase, approximately
$55.2 million of growth was in Louisiana, $42.0 million
in Mississippi, and $23.4 million in Florida. The majority
of the increase in average loans compared to last quarter
was in commercial purpose loans (approximately $96.3 million).
- Deposits:
Period-end deposits for the fourth quarter were $5.0 billion,
up $41.2 million, or 0.8 percent, from December 31, 2005,
and were up $30.4 million, or 0.6 percent, from September
30, 2006. Average deposits were down $76.9 million, or 6
percent annualized, from the third quarter. The majority
of the decrease in average deposits was in transaction deposits
($145.3 million) and public fund deposits ($58.0 million),
while time deposits were up significantly ($126.3 million).
The slower growth in deposits on an annual basis and the
decline in the fourth quarter of 2006 was the result of
the continued rebuilding efforts in the region following
Hurricane Katrina.
-
Net
Interest Income: Net interest income (te) for the fourth
quarter increased $0.9 million, or 2 percent, from the
fourth quarter of 2005, but was $3.9 million lower than
the third quarter of 2006. The Company's net interest
margin (te) was 4.06 percent in the fourth quarter, 38
basis points narrower than the same quarter a year ago,
and 23 basis points narrower than the previous quarter.
Compared to the same quarter a year ago, the primary driver
of the $0.9 million increase in net interest income (te)
was a $548.7 million, or 11 percent, increase in average
earning assets, mainly from average deposit inflows of
$461.6 million or 10 percent. As mentioned, the net interest
margin (te) narrowed 38 basis points. As the increase
in the average earning asset yield (40 basis points) did
not offset the increase in total funding costs (78 basis
points). The Company's level of net interest income (te)
in the fourth quarter decreased $3.9 million, or 7 percent,
from the prior quarter. The net interest margin (te) narrowed
23 basis points from the prior quarter as the yield on
average earning assets decreased 5 basis points, while
total funding costs were up 17 basis points.
- Non-interest
income & operating expense: Excluding the impact of
storm-related gains/(losses) and securities transactions,
non-interest income for the fourth quarter was up $4.4 million,
or 19 percent, compared to the same quarter a year ago.
Non-interest income was up $1.8 million, or 7 percent, compared
to the third quarter. The primary factors impacting the
higher levels of non-interest income as compared to the
same quarter a year ago, were higher levels of service charge
fees (up $2.6 million, or 37 percent). In addition, trust
fees were up $0.7 million, when compared to the same quarter
a year ago. The increase in non-interest income for the
fourth quarter (excluding securities transactions) compared
to the prior quarter was due to increases in insurance fees
(up $1.2 million) and trust fees (up $0.5 million). Operating
expenses for the fourth quarter were $5.4 million, or 12
percent, higher compared to the same quarter a year ago
and were $0.3 million, or 1 percent, lower than the previous
quarter. The increase from the same quarter a year ago was
reflected in higher levels of professional services (up
$3.2 million), data processing expense (up $.5 million),
communication expense (up $.5 million) and all other expenses
(up $1.2 million).
Hancock
Holding Company - parent company of Hancock Bank (Mississippi),
Hancock Bank of Louisiana, Hancock Bank of Florida, and Magna
Insurance Company - has assets of $6.0 billion. Founded in
1899, Hancock Bank stands among the strongest, safest financial
institutions in the United States and 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
offers comprehensive financial solutions through more than
140 banking
and financial services offices and more than 131 automated
teller machines across south Mississippi, Louisiana, south
Alabama, and the Florida Panhandle. Additional corporate
information and on-line
banking and bill
pay services are available at www.hancockbank.com.
Financial
Highlights (1) | Financial
Highlights (2) | Financial
Highlights (3)
"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.
FOR
MORE INFORMATION
Carl J. Chaney, Chief Executive Officer
John M. Hairston, Chief Executive Officer
Michael M. Achary, Treasurer
Paul D. Guichet, Investor Relations
800.522.6542 or 228.563.6559
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