Hancock Holding in Gulfport, Miss., reported lower second-quarter profit, citing higher incentive pay for employees and lower yields on both loans and securities.

The $21.5 billion-asset company's net income fell 13% to $34.8 million, or 44 cents per share, from a year earlier.

Net interest income fell 8% to $151.8 million The average earning assets yield narrowed 63 basis points to 3.58%. The net interest margin shrank 69 basis points to 3.30%.

Total loans rose 11% to $14.3 billion. Hancock said the loan growth came from multiple geographic markets and from indirect auto and mortgage loans and specialty finance.

Energy loans comprise about 12% of Hancock's total loan portfolio. Hancock increased its reserves by $10.6 million to account for pressure on energy-industry borrowers because of low oil and gas prices.

Fee income rose 8% to $60.9 million. Better performance from secondary mortgage market operations and higher insurance commissions and fees offset a drop in service charges on deposit accounts.

Noninterest expense rose 4% to $150 million on higher salaries and occupancy costs. The efficiency ratio worsened by 500 basis points to 66.67%.

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