Investors have been pressuring Hancock Holding (HBHC) in Gulfport, Miss., to speed up cost cuts after its $1.5 billion purchase of Whitney Holding in 2011. Second-quarter results strengthened their case.
The $18.9 billion-asset company said noninterest expense in the second quarter fell 9.8% to $162.3 million, compared with a year earlier. However, the year-ago figure included $11.9 million in expenses incurred specifically to close the Whitney deal. Compared with the first quarter of this year, Hancock's total noninterest expense actually increased 1.7%.
Because of persistently high costs and the investor pressure, Hancock said it would close up to 45 branches in markets where it has a small presence, like Houston and Jacksonville, Fla. This week, it found two buyers for 10 of those branches. The moves should help Hancock save $25 million in yearly expenses, starting in the first quarter, the company said Thursday.
In part because of the "ongoing implementation of the expense and efficiency initiative," Hancock management "believe[s] our company is becoming better positioned to operate in both today's economic environment as well as an eventual sustained, positive turn in the overall economy," Carl Chaney, president and chief executive, said in a news release.
In the first quarter, investors had criticized Hancock's plan to cut $50 million, saying it should have come earlier and did not go deep enough.
For the second quarter, Hancock reported net income of $46.9 million, a 19.2% increase from a year ago. Net interest income fell 4.7% to $171.8 million. Noninterest income was little changed at $63.9 million.