Hancock Holding Co.'s fourth-quarter results included hefty costs associated with buying Whitney Holding Corp.
The company's net income fell 38% from the third quarter but rose 12% from a year earlier, to $19 million. The fourth quarter included $40.2 million in merger-related costs, compared with $22.8 million in the third quarter.
Most of the merger costs were related to Hancock's integration of Whitney in New Orleans, which The Gulfport, Miss., company acquired June 4. Since then, Hancock has sold eight Whitney branches and insurance unit, Magna Insurance Co.
Hancock reported a net interest margin of 4.39% in the fourth quarter, thought the company said in a Thursday press release that net purchase accounting adjustments for the Whitney transaction added about 37 basis points to the margin.
The $19.8 billion-asset company said the total pretax merger costs for Whitney will be lower than the original guidance of $125 million. Merger expenses to date were $87 million. Hancock expects to book the remaining expenses this quarter and convert Whitney’s core systems on March 16. Annual expense reductions are still in line with Hancock's guidance of $134 million starting next year.
Hancock also raised its loan-loss provision as more credits soured from its acquisition of the failed Peoples First Community Bank, though most of those assets are covered. The provision rose 24% from a quarter earlier, to $11.5 million.
Nonperforming assets rose nearly 17% from a quarter earlier, to $278 million, or 2.45% of total loans and foreclosures. Hancock said the increase was because of foreclosed assets from Peoples First and some previously identified commercial real estate loans from its own loan portfolio that moved to non-accrual status.