On Jul 3, we initiated our coverage on regional bank,
Hancock Holding Company
) at Neutral, based on its strong organic and inorganic growth
prospects. However, persistently rising operating expenses, a low
rate environment and increased regulations remain major causes of
CAPITAL CITY BK (CCBG): Free Stock Analysis
HANCOCK HLDG CO (HBHC): Free Stock Analysis
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Why the Neutral Stance?
Hancock's focus on its organic growth strategy as well as
expansion through acquisitions prompted us to initiate with this
stance. Further, the company continues to build capital,
resulting in a better financial position that will help in
fulfilling the stringent capital requirements. Moreover, with a
strong liquidity position and meaningful capital deployment,
Hancock remains an asset for yield-seeking investors.
Nevertheless, due to the low interest rate environment, Hancock
is expected to continue experiencing pressure on its net interest
margin. Moreover, increased non-interest expenses and significant
exposure to real estate markets remain major causes of concern
for the company. In addition, Hancock's profitability remains
subject to the stringent regulatory landscape.
Further, in the first quarter of 2013, Hancock lagged the Zacks
Consensus Estimate due to decreased revenues and higher operating
expenses. The company is scheduled to announce its second-quarter
results on Jul 25.
The Zacks Consensus Estimate for the quarter is pegged at 56
cents per share. The Zacks Earnings ESP (Read
: Zacks Earnings ESP: A Better Method
) for Hancock is +1.79% for the second quarter. This, along with
its Zacks Rank #3 (Hold), makes it likely for the company to
report a positive earnings surprise.
Other Stocks to Consider
Other stocks in the same industry that are currently performing
Capital City Bank Group Inc.
SY Bancorp Inc.
). All of them carry a Zacks Rank #1 (Strong Buy).