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Operating Results Stable; Impacted by Seasonality and Energy Cycle
Hancock Holding Company (Nasdaq:HBHC) today announced its financial results for the first quarter of 2015. Operating income for the first quarter of 2015 was $44.7 million, or $.55 per diluted common share, compared to $46.4 million, or $.56, in the fourth quarter of 2014. Operating income was $49.1 million, or $.58, in the first quarter of 2014.
In a statement the company said “We define our operating income as net income excluding tax-effected securities transactions gains or losses and nonoperating expense items. Nonoperating expenses totaled $7.3 million and $9.7 million (pre-tax), in the first quarter of 2015 and fourth quarter of 2014, respectively. There were no adjustments between operating income and net income for the first quarter 2014. Management believes that operating income is one useful measure of our financial performance that helps investors compare the company’s fundamental operational performance from period to period. The financial tables include a reconciliation of net income to operating income”.
Net income for the first quarter of 2015 was $40.2 million, or $.49 per diluted common share, compared to $40.1 million, or $.48 and $49.1 million, or $.58, in the fourth and first quarters of 2014 respectively.
“Over the past several quarters we have disclosed our focus on strategic initiatives that are designed to replace declining levels of purchase accounting income from acquisitions with improvement in core income, which the company defines as operating income excluding tax-effected purchase accounting adjustments. Over time, this strategic focus should improve the company’s core income. Management believes that consistent reporting of core income helps investors understand the success management has had in executing its strategic initiatives. Our core income for the first quarter of 2015 was $39.6 million or $.49 per diluted common share, compared to $41.5 million or $.50 in the fourth quarter of 2014 and $37.7 million, or $.45, in the first quarter of 2014. The financial tables include a reconciliation of net income to core income”.
Based on current projections for net purchase accounting adjustments, management expects core and operating results to be the same (or not significantly different) beginning in the second quarter of 2015, with net, operating and core results to be essentially the same in the second half of 2015.
“Our first quarter’s results were impacted by both typical seasonality and the current energy cycle,” said Hancock’s President and Chief Executive Officer John M. Hairston, “however, we reported solid results and positioned our company for future opportunities. During the quarter we completed our previously announced common stock buyback and issued $150 million of holding company subordinated debt. Our efforts to grow revenue continued, and while the current economic impact of the energy cycle in a few of our markets may delay the timing of achieving some of our consolidated goals, we have not lost sight of those targets and are focused on growing our company for the long term.”
Highlights of the company’s first quarter of 2015 results:
– Stable operating results — in line with expectations
– Completed 5% common stock buyback authorization
– Issued subordinated debt — fuel for growth
– Investing now for the future
– Loans increased $92 million, or 3% LQA; excludes net paydowns in the energy and FDIC acquired loan portfolios
– Noninterest-bearing demand deposits (DDAs) increased $256 million, or 4%, linked-quarter
– Seasonality and energy cycle impacted results
