Hancock Holding Company (NASDAQ:HBHC) Q3 2016 Earnings Conference Call - Final Transcript

Oct 19, 2016 • 10:00 am ET

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Hancock Holding Company (NASDAQ:HBHC) Q3 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning and welcome to Hancock Holding Company's Third Quarter 2016 Earnings Conference Call.

[Operator Instructions]

I will now turn the call over to Trisha Carlson, Investor Relations Manager. You may begin.

Executive
Trisha Voltz Carlson

Thank you and good morning.

During today's call, we may make forward-looking statements. We would like to remind everyone to review the Safe Harbor language that was published with yesterday's release and presentation, and in the company's most recent 10-K and 10-Q, including the risk and uncertainties identified therein.

Hancock's ability to accurately project results or predict the effects of future plans or strategies or predict market or economic developments is inherently limited. We believe that the expectations reflected or implied by any forward-looking statements are based on reasonable assumptions, but our actual results and performance could differ materially from those set forth in our forward-looking statements. Hancock undertakes no obligation to update or revise any forward-looking statements, and you are cautioned not to place undue reliance on such forward-looking statements. The presentation slides included in our 8-K are also posted with the conference call webcast link on the investor relations website. We will reference some of these slides in today's call.

Participating in today's call are John Hairston, President and CEO, Mike Achary, CFO, and Sam Kendricks, Chief Credit Risk Officer.

I will now turn the call over to John Hairston.

Executive
John M. Hairston

Okay. Thanks, Trisha, and good morning, everyone.

Overall, we had a good quarter, stable earnings that put us on track to beat our core pre-tax pre-provision goal for 2016. Our revenue was stable, and given the seasonality that typically impacts certain line items in the third quarter, stable was good. Our revenue generating initiatives remain a focus and we are planning on restoring growth in the fourth quarter. Some of those initiatives were reflected in this quarter's results. Within fees, the mortgage area improved again, up $700,000 from last quarter, and based on the third quarter results, that line item is now close to a $20 million annualized run rate compared to $12.5 million last year. We believe the turnaround in secondary mortgage is a win with more good news to come.

Moving to the balance sheet, loans were up 3% linked-quarter annualized, excluding the energy portfolio. As you can see from the waterfall graph on Slide 6 of the investor deck, the areas that contributed to the growth were mortgage, equipment finance, and the Nashville Healthcare team. All of these areas are either new to the organization or targeted as part of our revenue generation initiatives.

On the expense side, we once again found efficiencies across the organization and were able to report a lower level of expense for the third quarter. These cost savings, along with a lower level of taxes, helped offset a slightly higher provision for loan losses. In last quarter's earnings call we shared how we expect the recovery in the current energy cycle to play out. Even with improving oil prices, we expected a lag in the recovery of energy services