Hancock Holding Company (HBHC - Analyst Report) reported second-quarter 2016 earnings of 59 cents per share, which easily surpassed the Zacks Consensus Estimate of 44 cents. Further, it reflects a 25% rise from the prior-year figure.
Better-than-expected results were driven by an improvement in the top line. Further, growth in loans and deposits continued to be strong. However, an energy-led rise in provisions and slight increase in operating expenses remained the undermining factors.
Net income came in at $46.9 million, a rise of 35% from the prior-year quarter.
Hancock Holding Company (HBHCÂ -Â Analyst Report) EPS BNRI & Surprise Percent – Last 5 Quarters | FindTheCompany
Revenue Growth Supports Results
Hancock’s net revenue summed $228.7 million, up 8% year over year. However, it lagged the Zacks Consensus Estimate of $230.4 million. Â
Net interest income grew 9% year over year to $165 million. However, reported net interest margin (“NIMâ€) fell 5 basis points (bps) from the prior-year quarter to 3.25%.
Non-interest income totaled $63.7 million, up 5% from the year-ago quarter. The growth was driven by an improvement in all the components, except insurance commissions and fee as well as an increase in amortization of FDIC loss share receivable.
Total operating expenses inched up nearly 1% year over year to $150.9 million. The rise was mainly triggered by an increase in personal expenses and other operating costs.
Deteriorating Credit Quality
Net charge-offs from the non-covered loan portfolio was 0.20% of average total loans, up from 0.03% in the year-ago quarter.
Further, provision for loan losses rose significantly year over year to $17.2 million owing to exposure to the stressed energy sector. Also, total nonperforming assets jumped significantly year over year to $325.1 million.
Strong Balance Sheet & Profitability Ratios; Capital Ratios Depict Weakness
As of Jun 30, 2016, total loans grew 11% year over year to $16.0 billion. Further, total deposits rose 9% year over year to $18.8 billion.
