Hancock Holding Company (HBHC, Financial) filed Quarterly Report for the period ended 2010-09-30.
Hancock Holding Company has a market cap of $1.2 billion; its shares were traded at around $31.92 with a P/E ratio of 23.5 and P/S ratio of 2.4. The dividend yield of Hancock Holding Company stocks is 2.9%. Hancock Holding Company had an annual average earning growth of 6% over the past 10 years. GuruFocus rated Hancock Holding Company the business predictability rank of 2.5-star.HBHC is in the portfolios of Jim Simons of Renaissance Technologies LLC.
The most significant driver of the Companys improved earnings from last quarter was reflected in an $8.3 million reduction in the provision for loan losses. The lower provision resulted from the absence of any need to add to last quarters specific reserve related to the Gulf Oil Spill ($5.2 million) and also a lower level of required reserve build related to the Companys loan portfolio ($2.5 million this quarter versus $5.4 million last quarter). The lower level of required reserve build is due to a lower level of delinquencies. The Company also reduced operating expenses $4.1 million, or 5.6%, from last quarter, with much of that improvement related to the absence of second quarter nonrecurring merger costs related to the Peoples First acquisition, as well as on-going expense efficiencies.
Net charge-offs for 2010s third quarter were $13.8 million, or 1.10% of average loans, slightly down from the $13.9 million, or 1.11% of average loans reported in the second quarter of 2010, and slightly up from the $13.5 million, or 1.24% of average loans, reported for the third quarter of 2009. Non-performing assets as a percent of total loans and foreclosed assets were 3.55% (2.63% excluding Peoples First) at September 30, 2010, compared to 3.89% at June 30, 2010, but were up from 1.06% at September 30, 2009. Non-performing assets (which includes nonaccrual loans, restructured loans and foreclosed assets) decreased $19.6 million from June 30, 2010, but increased $130 million from September 30, 2009, mostly due to the acquisition of Peoples First. Loans 90 days past due or greater (accruing) as a percent of period-end loans decreased 3 basis points from September 30, 2009 to 0.15% at September 30, 2010. We recorded a provision for loan losses for the third quarter of $16.3 million, a decrease of $8.3 million from the second quarter of 2010 and an increase of $2.8 million from the third quarter of 2009. Our allowance for loan losses was $79.7 million at September 30, 2010, an increase of $2.5 million from June 30, 2010 and an increase of $15.9 million from September 30, 2009. The ratio of the allowance for loan losses as a percent of period-end loans was 1.62% at September 30, 2010, compared to 1.55% at June 30, 2010, and compared to 1.50% at September 30, 2009.
Total assets at September 30, 2010 were $8.2 billion, down from $8.70 billion at December 31, 2009. Compared to September 30, 2009, total assets increased $1.4 billion, or 21%. Period-end loans were down $206.5 million, or 4.0% from December 31, 2009, and were up $655.5 million, or 15%, from the same quarter a year ago. Period-end deposits decreased $487.0 million, or 7% from December 31, 2009, and increased $1.3 billion, or 24%, from September 30, 2009. The increases in period-end loans and period-end deposits, compared to September 30, 2009, were primarily due to the acquisition of Peoples First. We also remain very well capitalized with total equity of $865.8 million at September 30, 2010, up $28.1 million, or 3% from December 31, 2009 and up $211.0 million, or 32%, from September 30, 2009.
At September 30, 2010, the allowance for loan losses was $79.7 million compared with $66.1 million at December 31, 2009, an increase of $13.6 million. The increase in the allowance for loan losses through the first nine months of 2010 is primarily attributed to an additional $5.2 million provision designated to the 2010 Gulf Oil Spill based on detailed review of potentially impacted credits. In addition, an increased estimated provision of $5.4 million was added for specific reserve analysis for those loans considered impaired under FAS 114 and $3.0 million was added for loans that are considered non-impaired under FAS 5. We do not offer subprime home mortgage loans, and therefore, our increased reserve is not associated with those high risk loans. The only higher risk loans we offer are through our finance company but those loans are immaterial to our loan portfolio. Management utilizes quantitative methodologies and modeling to determine the adequacy of the allowance for loan and lease losses. Within the allowance for loan losses modeling, adequate segregation of geographic and specific loan types are documented and analyzed for appropriate risk metrics. We maintain a continuous credit quality policy that establishes acceptable loan-to-value thresholds on the front end underwriting process. Residential home values are continuously monitored by each market. A detailed description of our methodology was included in our annual report on Form 10-K for the year ended December 31, 2009. Management believes the September 30, 2010 allowance level is adequate.
Nonaccrual loans were $141.9 million at September 30, 2010, an increase of $106.3 million over $35.6 million at September 30, 2009. $54.5 million of the increase is due to the acquisition of Peoples First. The remainder of the increase, $51.8 million, is due to continued deterioration in our legacy loan portfolio, mostly related to the continued decline in real estate values and overall duration of the current economic recession.
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Hancock Holding Company has a market cap of $1.2 billion; its shares were traded at around $31.92 with a P/E ratio of 23.5 and P/S ratio of 2.4. The dividend yield of Hancock Holding Company stocks is 2.9%. Hancock Holding Company had an annual average earning growth of 6% over the past 10 years. GuruFocus rated Hancock Holding Company the business predictability rank of 2.5-star.HBHC is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Our third quarter 2010 net income was $14.9 million, an increase of $8.4 million, or 129%, compared to the second quarter of 2010 and a decrease of $0.4 million, or 2.4%, from the third quarter of 2009. Diluted earnings per share were $0.40, an increase of $0.23, or 135%, compared to the second quarter of 2010 and a decrease of $0.08, or 17%, from the same quarter a year ago. Return on average assets for the third quarter of 2010 was 0.70% compared to 0.31% in the second quarter of 2010 and compared to 0.87% for the third quarter of 2009. Our 2010 results include the impact of our common stock offering and acquisition of Peoples First Community Bank (Peoples First), both of which were completed in the fourth quarter of 2009.The most significant driver of the Companys improved earnings from last quarter was reflected in an $8.3 million reduction in the provision for loan losses. The lower provision resulted from the absence of any need to add to last quarters specific reserve related to the Gulf Oil Spill ($5.2 million) and also a lower level of required reserve build related to the Companys loan portfolio ($2.5 million this quarter versus $5.4 million last quarter). The lower level of required reserve build is due to a lower level of delinquencies. The Company also reduced operating expenses $4.1 million, or 5.6%, from last quarter, with much of that improvement related to the absence of second quarter nonrecurring merger costs related to the Peoples First acquisition, as well as on-going expense efficiencies.
Net charge-offs for 2010s third quarter were $13.8 million, or 1.10% of average loans, slightly down from the $13.9 million, or 1.11% of average loans reported in the second quarter of 2010, and slightly up from the $13.5 million, or 1.24% of average loans, reported for the third quarter of 2009. Non-performing assets as a percent of total loans and foreclosed assets were 3.55% (2.63% excluding Peoples First) at September 30, 2010, compared to 3.89% at June 30, 2010, but were up from 1.06% at September 30, 2009. Non-performing assets (which includes nonaccrual loans, restructured loans and foreclosed assets) decreased $19.6 million from June 30, 2010, but increased $130 million from September 30, 2009, mostly due to the acquisition of Peoples First. Loans 90 days past due or greater (accruing) as a percent of period-end loans decreased 3 basis points from September 30, 2009 to 0.15% at September 30, 2010. We recorded a provision for loan losses for the third quarter of $16.3 million, a decrease of $8.3 million from the second quarter of 2010 and an increase of $2.8 million from the third quarter of 2009. Our allowance for loan losses was $79.7 million at September 30, 2010, an increase of $2.5 million from June 30, 2010 and an increase of $15.9 million from September 30, 2009. The ratio of the allowance for loan losses as a percent of period-end loans was 1.62% at September 30, 2010, compared to 1.55% at June 30, 2010, and compared to 1.50% at September 30, 2009.
Total assets at September 30, 2010 were $8.2 billion, down from $8.70 billion at December 31, 2009. Compared to September 30, 2009, total assets increased $1.4 billion, or 21%. Period-end loans were down $206.5 million, or 4.0% from December 31, 2009, and were up $655.5 million, or 15%, from the same quarter a year ago. Period-end deposits decreased $487.0 million, or 7% from December 31, 2009, and increased $1.3 billion, or 24%, from September 30, 2009. The increases in period-end loans and period-end deposits, compared to September 30, 2009, were primarily due to the acquisition of Peoples First. We also remain very well capitalized with total equity of $865.8 million at September 30, 2010, up $28.1 million, or 3% from December 31, 2009 and up $211.0 million, or 32%, from September 30, 2009.
At September 30, 2010, the allowance for loan losses was $79.7 million compared with $66.1 million at December 31, 2009, an increase of $13.6 million. The increase in the allowance for loan losses through the first nine months of 2010 is primarily attributed to an additional $5.2 million provision designated to the 2010 Gulf Oil Spill based on detailed review of potentially impacted credits. In addition, an increased estimated provision of $5.4 million was added for specific reserve analysis for those loans considered impaired under FAS 114 and $3.0 million was added for loans that are considered non-impaired under FAS 5. We do not offer subprime home mortgage loans, and therefore, our increased reserve is not associated with those high risk loans. The only higher risk loans we offer are through our finance company but those loans are immaterial to our loan portfolio. Management utilizes quantitative methodologies and modeling to determine the adequacy of the allowance for loan and lease losses. Within the allowance for loan losses modeling, adequate segregation of geographic and specific loan types are documented and analyzed for appropriate risk metrics. We maintain a continuous credit quality policy that establishes acceptable loan-to-value thresholds on the front end underwriting process. Residential home values are continuously monitored by each market. A detailed description of our methodology was included in our annual report on Form 10-K for the year ended December 31, 2009. Management believes the September 30, 2010 allowance level is adequate.
Nonaccrual loans were $141.9 million at September 30, 2010, an increase of $106.3 million over $35.6 million at September 30, 2009. $54.5 million of the increase is due to the acquisition of Peoples First. The remainder of the increase, $51.8 million, is due to continued deterioration in our legacy loan portfolio, mostly related to the continued decline in real estate values and overall duration of the current economic recession.
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