GULFPORT, Miss. (AP) — Regional bank Hancock Holding Co. said Wednesday that it has met efficiency targets nearly a year early, as quarterly profits bounced back thanks to lower expenses.
Hancock, which operates Hancock Bank in Mississippi, Alabama and Florida, and Whitney Bank in Louisiana and Texas, posted first-quarter 2014 profit of $49.1 million, or 58 cents per share. That's up slightly from $48.6 million, or 56 cents per share, in 2013's first quarter. But the numbers are up sharply from profits in the last six months of 2013, when Hancock spent $38 million to reduce costs, cutting into its bottom line.
Analysts polled by FactSet estimated 57 cents per share for the quarter ended March 31.
CEO Carl Chaney said in a statement that the bank is committed to holding down expenses, but that they could rise temporarily.
"Over the next couple of quarters you may see expenses rise temporarily as we reinvest in higher-return, revenue-generating lines of business," he said.
Hancock said it plans to close an additional 16 branches in Mississippi, Florida and Louisiana early in the third quarter "as part of its ongoing branch rationalization process." The company had 251 branches as of Dec. 31.
Part of the pressure to hold down expenses comes from declining net interest income across the banking industry. That's the amount the bank collects in interest from borrowers, net of what it pays out to savers, and is traditionally a cornerstone of bank profits. Net interest fell again in the first quarter at Hancock to $165.6 million, continuing a downward drift. The bank's net interest margin, a measure of that spread divided by all loans, fell to 4.06 percent in 2014's first quarter from 4.32 percent in 2013's first quarter.
More positively, loans continued to rise at the bank, climbing $203 million, or 1.6 percent, from Dec. 31 to March 31. Hancock said business lending was the strongest component of growth, with strength concentrated in the Houston area, southwest Louisiana, Mississippi and central Florida.
Return on average assets, a key measure of bank profitability, was 1.05 percent in the first quarter, the highest level in more than a year. That's above the national average of 0.96 percent that all banks nationwide achieved in the three months ended Dec. 31, according to Federal Deposit Insurance Corp. statistics.
Hancock said that a previously announced plan to sell parts of its insurance business would cut insurance revenue — $3.7 million in the first quarter — by about half beginning in the second quarter.
Gulfport-based Hancock has $19 billion in assets.