Hancock Holding (HBHC) in Gulfport, Miss., reported higher quarterly earnings after it aggressively cut costs.
The $19.6 billion-asset company's earnings rose 1% from a year earlier, to $49.1 million. Earnings per share of 58 cents were a penny higher than the average estimate of analysts polled by Bloomberg.
Hancock substantially lowered its operating costs, with noninterest expense decreasing 8%, to $147 million. The company reduced personnel, occupancy and equipment expenses by selling seven Houston-area branches in November and three Louisiana branches in January. It closed two other branches.
The company said in a press release Wednesday that it plans to close another 16 branches in Mississippi, Florida and Louisiana early in the third quarter. "A lot of hard work and focus has allowed us to meet our expense target three quarters ahead of schedule, and I would like to thank all of our associates for achieving this aggressive goal," Carl Chaney, Hancock's president and co-CEO, said in the release.
"As we continue our work to improve the quality of our earnings we expect operating earnings per share to remain flat in the near term," Chaney added. "Over the next couple of quarters you may see expenses rise slightly as we reinvest in higher-return, revenue-generating lines of business to help achieve our efficiency ratio targets. However we remain committed to keeping expenses for the fourth quarter of 2014 in line with our stated goal."
Hancock's net interest income fell 3%, to $168.2 million. Its total loans increased 9%, to $12.5 billion. The company's net interest margin narrowed by 26 basis points, to 4.06%.
Noninterest income fell 6%, to $56.7 million. Hancock said it expects insurance revenue to decline by roughly half starting this quarter because it is selling two insurance businesses to AssuredPartners in Lake Mary, Fla.
The company's loan-loss provision decreased 17%, to $8 million.