Hancock Holding sees post-merger earnings increase
Published: July 22,2011
GULFPORT — Hancock Holding Co. posted an 86 percent boost in second-quarter earnings as its June 4 acquisition of banking rival Whitney Holding Corp. kicked in, the company reported yesterday.
For the three months ending June 30, Hancock earned $12.1 million, or 22 cents per share, compared with year-ago earnings of $6.5 million, or 17 cents per share.
Hancock said it had $22.2 million of pre-tax costs associated with the Whitney acquisition during the latest quarter. The company reduced the value of Whitney’s troubled loan portfolio by $463 million — a 6.7 percent discount — to reflect fair market value and recorded goodwill and other intangibles of about $783 million.
During the quarter, Hancock said it continued to experience limited loan demand in its operating region along the Gulf Coast.
Because of the acquisition, Hancock’s average deposits rose to $9.2 billion from $6.8 billion at the end of the first quarter of 2011. However, without Whitney, deposits fell abouot 4 percent, Hancock said. Interest income rose quarter to quarter to $101.9 million from $69.6 million and non-interest income rose to $46.7 million from $34.1 million.
Hancock said that because of new restrictions on debit card fees, fee income could be cut by $2 million to $3 million for the rest of 2011 and $15 million to $18 million in 2012.
Nonperforming assets totaled $258.2 million at the end of the second quarter, primarily because of the addition of $81.2 million of Whitney’s foreclosed assets. The company’s second-quarter allowance for loan losses totaled $112.4 million, up from $94.4 million at the end of the first quarter.
Hancock totaled the price of the Whitney acquisition at $1.6 billion, including the exchange of 40.8 million of Hancock common shares for Whitney shares and $308 million paid to the U.S. Treasury to redeem Whitney preferred shares. Whitney received the money in exchange for the shares when it participated in the federal government’s troubled asset relief program.
The results were released after financial markets closed. In yesterday’s trading, Hancock shares rose 36 cents, or 1.2 percent, to close at $31.01. The shares have traded in a 52-week range of $26.82 to $37.26.
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