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News/Press Releases  FOR
IMMEDIATE RELEASE
April 10, 2003 Hancock
Holding Company reports first quarter 2003 earnings - up 20 percent The Company's returns on average assets and average common stockholders' equity for the first quarter of 2003 were 1.37 percent and 14.08 percent, respectively, compared with 1.23 percent and 12.25 percent, respectively, for the first quarter of 2002. Annualized returns on average assets and average common stockholders' equity for the fourth quarter of 2002 were 1.39 percent and 13.87 percent, respectively. Loans were $2.121 billion at March 31, 2003, compared to $1.880 billion at March 31, 2002, an increase of $241 million, or 12.8 percent. Deposits were $3.459 billion at March 31, 2003, compared to $3.162 billion at March 31, 2002, an increase of $297 million, or 9.4 percent. Total assets were $4.153 billion at March 31, 2003, an 8.6 percent increase from $3.825 billion reported at March 31, 2002. Common stockholders' equity increased 5.4 percent to $393 million at March 31, 2003, from $373 million at March 31, 2002. Book value per share increased $2.00, or 8.5 percent, to $25.45 at March 31, 2003 from $25.45 at March 31, 2002. In commenting on Hancock's operating results for the first quarter of 2003, George A. Schloegel, Chief Executive Officer, stated, "Given the challenges of the continued softness in the economy, our first- quarter earnings reflect our ongoing efforts to expand our market share while enhancing asset quality." Net Interest Income Net interest income (te) for the first quarter of 2003 decreased $.278 million, or 0.7 percent, from the first quarter of 2002, and was $1.9 million, or 4.5 percent lower than the fourth quarter of 2002. The company's net interest margin (te) was 4.34 percent in the first quarter of 2003, 34 basis points lower than the same quarter a year ago, and 31 basis points lower than the previous quarter. Compared to the same quarter a year ago, the primary driver of the decreased level of net interest income (te) was the 34 basis point narrowing of the Company's net interest margin (te). The net interest margin narrowed as the overall yield on loans and securities fell more rapidly (90 basis points) than the Company's ability to reduce total funding costs (56 basis points). Somewhat mitigating the narrowing of the net interest margin was $211 million of average loan growth from first quarter 2002 to first quarter 2003, which was funded by $256 million of average deposit growth for the same period. The lower level of net interest income (te) and net interest margin (te) compression compared to the previous quarter was due to a larger reduction in the yield on loans and securities (45 basis points) than the reduction in funding costs (15 basis points). Another factor impacting the levels of net interest income (te) and net interest margin (te) as compared to the previous quarter was average deposit growth of $145 million. As loan growth slowed to $36 million in the current quarter, a greater percentage of the aforementioned deposit growth was invested in the securities portfolio at historically low yields. The Company is focused on efforts to further reduce deposit costs, resume loan growth at levels consistent with previous quarters, and slow the overall reductions in the yield on the securities portfolio. Non-Interest Income and Expense
Non-interest income for the first quarter of 2003 was up $.404 million,
or 2.3 percent, compared to the same quarter a year ago, but was
down $1.2 million, or 6.4 percent, compared to the previous quarter.
The first quarter 2003 levels did include a pretax net securities
gain of $.455 million related to the sale of $65 million of floating
rate securities. These securities were reinvested at a yield advantage
of approximately 187 basis points. Operating expenses for the first quarter of 2003 were $.605 million, or 1.8 percent lower, compared to the same quarter a year ago and was $2.447 million, or 6.9 percent, lower than the previous quarter. The vast majority of these decreases was reflected in other operating expenses and was spread over a wide range of operating expense categories. Continuation of focused expense control efforts was the primary reason for the operating expense reductions from the same quarter a year ago and from the previous quarter. Primarily due to the aforementioned operating reductions from the first quarter of 2002 and from the previous quarter, the Company's efficiency ratio (expressed as non-interest income as a percent of total revenue before securities transactions and amortization of purchased intangibles) was reduced to 57.33 percent in the first quarter of 2003. This was compared to 58.03 percent for the same quarter a year ago, and 57.97 percent for the previous quarter. Asset
Quality
Annualized net charge-offs as a percent of average loans for the
first quarter of 2003 was 0.59 percent, compared to 0.63 percent
for the fourth quarter of 2002. Net charge-offs were decreased $.246
million from fourth quarter 2002 to first quarter 2003 and were
reflected primarily in lower levels of charge-offs in commercial
loans and finance company loans. Compared to the first quarter of
2002, net charge-offs were reduced $4.7 million, or 108 basis points
(expressed as a percent of average loans). As with the improvement
in non-performing assets, the Company has recorded consistently
better performance in net charge-offs over the past four quarters.
The provision for loan losses in the first quarter of 2003 was $3.0
million, or 100 percent of the quarter's net charge-offs. This compares
to the $4.7 million provision for loan losses for the fourth quarter
of 2002, or approximately 144 percent of that quarter's net charge-offs. On February 22, 2003, the Company completed the acquisition of two Dryades Savings Bank branches located in Metairie, LA and Kenner, LA (both suburbs of New Orleans). The two acquired facilities have a combined total deposit base of approximately $40 million. As a result of this acquisition, the Company reported a net increase of two full-service banking facilities, from 102 offices at December 31, 2002 to 104 facilities at March 31, 2003.
Hancock Holding Company subscribes to the highest standards of corporate
responsibility with respect to legal, moral, and regulatory relationships
with shareholders, customers, employees, and communities Hancock
serves. Accordingly, these unwavering business principles support
a corporate culture of ethical compliance and accountability that
ensures that financial statements are prepared and audited in accordance
with Generally Accepted Accounting Principles (GAAP). The Company's
systems of internal controls and risk management processes are in
place and fully functional. "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. —
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