Hancock Holding in Gulfport, Miss., reported an increase in quarterly earnings despite ongoing challenges with energy loans.
The $27 billion-asset company said in a press release late Tuesday that its second-quarter profit rose 11.4% from a year earlier, to $52.3 million, or 60 cents a share.
The results reflected the company’s March purchase of nine branches and roughly $1.3 billion in loans from First NBC Bank in New Orleans. Hancock gained more branches, deposits and assets from First NBC when that bank failed in late April.
Energy remains a big focus at Hancock, which reduced its exposure by 17% from a year earlier, to $1.2 billion in loans. Energy loans made up 6.7% of total loans on March 31. About 56% of Hancock’s energy loans are considered criticized, while a tenth are on nonaccrual status.
Though Hancock said it believes its energy issues are manageable, it warned that more chargeoffs should be expected. The release said reserve-based credits are showing signs of improvement, given a stabilization in oil prices, and that the company expects “improvement in land-based services and non-drilling services in the Gulf of Mexico to follow.”
Hancock’s overall loan-loss provision fell by 13% to roughly $15 million.
Net interest income rose 21% to $199.7 million. Total loans increased by 15% to $18.5 billion, while the net interest margin widened by 18 basis points to 3.43%. Construction and land development loans rose by 49% to $1.3 billion. Residential mortgages increased by 23.6% to $2.5 billion.
Noninterest income rose by 6% to $67.5 million, led by a nearly 15% increase in bank and ATM fees.
Noninterest expenses rose 21.5% to $183.5 million, though $10.6 million in expenses were tied to the First NBC acquisitions and a decision to terminate loss-share agreements tied to previous failed-bank deals. Personnel expenses rose 14.2% to $96.2 million.