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

Oct 19, 2016 • 10:00 am ET


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


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Michael M. Achary

or seven quarters, and certainly we have achieved success in that regard. The company continues to remain focused on controlling expenses and so expenses were down almost $2 million linked-quarter. Personnel expense, which is 56% of total expense, was down just over $1 million. There were a couple of unusual items in other expense this quarter, which are not expected to repeat in future quarters. Over $5 million of ORE gains related to one property were more than offset by $2.5 million in bank property losses from the August flooding in south Louisiana and by a $4 million charge related to an early contract termination.

The company's tax rate for the quarter came in at 20%. This reflects a lower level of earnings for the year as a result of the first quarter's elevated provision. We expect a similar rate in the fourth quarter, which should return to normalized levels in 2017. Our TCE ratio of 7.93% was up 12 basis points and puts us almost back in line with our internal target of 8%. However, before we look at whether we will exceed that level next quarter and are asked about excess capital, I would like to remind everyone about the annual pension valuation review coming up in the fourth quarter. And so we expect TCE at year end to come in a little under the current level.

And, finally, while this quarter is about stability, I would like to review two slides in our deck that shows just where we have been and really how far we have come. So, Slides 28 and 29 show the challenges from the early years post merger and the progress made to get where we are today. Like John said earlier, stable is good in today's environment, but it's not where we want to be.

I will now turn the call back over to John.

John M. Hairston

Okay, thanks, Mike. Well done.

I am glad you wrapped by pointing out those two slides. As you said, both are graphical evidence of the progress we have made and our commitment to the future. I opened with the comment on track to beat our core pre-tax pre-provision goal and I am very confident we will get there. We are up almost $16 million, or 22%, from the same quarter in 2015. To meet the goal, we need $75 million, so if we are flat in the fourth quarter from third quarter, we beat the goal by about $10 million. But that's not the plan, not what we would like to see. Our plan is to restart growth and build upon success over the last several quarters.

So with that, Charlotte, let's open the call to questions.