On Sep 30, 2013, we reaffirmed our Neutral recommendation on
Hancock Holding Company
). This was based on the company's efficient organic and
inorganic growth strategies, backed by a stable liquidity
position. However, we remain concerned about the persistent rise
in operating expenses, a still low interest rate environment and
stringent regulatory requirements.
On Jul 25, Hancock Holding reported second-quarter 2013
earnings per share of 55 cents, in line with the Zacks Consensus
Estimate. Results benefited from a marginal rise in fee income
and a decline in operating expenses. However, a fall in net
interest income and a rise in provision for loan losses were the
The Zacks Consensus Estimate for 2013 increased 0.4% to $2.24
per share over the last 60 days. Further, for 2014, the Zacks
Consensus Estimate remained unchanged at $2.37 per share over the
same time period. Hence, Hancock Holding currently carries a
Zacks Rank #3 (Hold).
Hancock Holding is focused on organic growth strategy, which
is evident from the rise in its deposits as well as net interest
income over the last few years. Continuous progress in deposit
mix, backed by rising average non-interest-bearing deposit
accounts, remains the company's key strength. Further, Hancock
Holding continues to expand through acquisitions. Given its
favorable liquidity and capital position, we believe that there
is scope for meaningful acquisitions going forward.
However, despite taking measures to improve efficiency,
mounting non-interest expenses remain a major cause of concern
for Hancock Holding. Further, expenses are likely to rise further
owing to increased regulatory compliance costs as well as the
company's expansion strategies. Moreover, pressure on core net
interest margin is expected to continue owing to sluggish
economic recovery and the company's asset-sensitive balance sheet
Other Stocks to Consider
Some better-performing banks include
SY Bancorp Inc.
Simmons First National Corporation
City Holding Co.
). While SY Bancorp and Simmons First National Corporation carry
a Zacks Rank #1 (Strong Buy), City Holding has a Zacks Rank #2
CITY HLDGS CO (CHCO): Free Stock Analysis
HANCOCK HLDG CO (HBHC): Free Stock Analysis
SIMMONS FIRST A (SFNC): Free Stock Analysis
S Y BANCORP INC (SYBT): Free Stock Analysis
To read this article on Zacks.com click here.