Hancock Holding Co. in Gulfport, Miss., said first-quarter net income dropped 13% from a year earlier, to $19.2 million.

The decline was driven by an 8% drop in net interest income, to $53.8 million, the $5.9 billion-asset Hancock said Tuesday.

Carl J. Chaney, one of Hancock's two chief executive officers, said the decrease was caused by customers affected by the 2005 Gulf Coast hurricanes shifting insurance payoffs from low-cost deposit accounts to certificates of deposit and other higher-paying accounts.

"As a result, our cost of funding has increased, and our margin has compressed," Mr. Chaney said in an interview Wednesday.

Hancock's stock price fell 9.5%, on the news, to close at $39.82. Its previous 52-week low had been $41.88 a share.

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