On Dec 30, 2013, we reiterated our long-term recommendation on Hancock Holding Company (HBHC) at Neutral. This was based on the company’s efficient organic and inorganic growth strategies, backed by a strong capital position. However, rising expenses and a still low interest rate environment remain concerns.
Hancock Holding continues to concentrate on organic growth, as evident from the increase in deposits as well as net interest income over the last few years. Further, Hancock Holding is consistently expanding through acquisitions. Given its favorable liquidity and capital position, we believe that there is scope for meaningful acquisitions, going forward.
Moreover, on Oct 24, 2013, Hancock Holding’s third-quarter earnings per share beat the Zacks Consensus Estimate. Results benefited from a rise in fee income as well as lower provision for loan losses and operating expenses, partially offset by a decline in net interest income.
However, over the last 60 days, the Zacks Consensus Estimate for 2013 fell 0.5% to $2.13 per share. Further, for 2014, the Zacks Consensus Estimate decreased nearly 1.0% at $2.34 per share over the same time period. Hence, Hancock Holding currently has a Zacks Rank #3 (Hold).
Additionally, despite taking measures to improve efficiency, mounting expenses remains a challenge for Hancock Holding. Moreover, pressure on core net interest margin is expected to continue owing to sluggish economic recovery and the company’s asset-sensitive balance sheet position.
Other Stocks to Consider
Some better-ranked banks include State Bank Financial Corporation (STBZ), First Bancorp (FBNC) and First NBC Bank Holding Company (NBCB). All these stocks carry a Zacks Rank #1 (Strong Buy).
Read the Full Research Report on FBNC
Read the Full Research Report on NBCB
Read the Full Research Report on STBZ
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