Hancock Holding quarterly earnings decline on energy loans

Fourth-quarter earnings for Hancock Holding Co., parent company of Hancock Bank and Whitney Bank, were affected by the depth and duration of falling oil prices on energy loans.

The earnings report released Thursday showed net income for the fourth quarter of 2015 at $15.3 million, or 19 cents per share, compared with $41.2 million, or 52 cents a share a year ago, a 63 percent decline.

CEO John Hairston said the allowance for energy loans was increased by $43 million to $78.2 million, or 4.95 percent of energy loans. That is up from 2.12 percent and the largest provision in company history.

Oil was below $30 a barrel Thursday. "Layoffs at energy companies continue," Hairston said. "Some energy companies are really struggling," he said, but many will come through the downturn successfully.

Most jobs lost in energy seem to be getting absorbed into other industries, he said.

In the fourth quarter, the bank had $3.76 million in total energy losses. "That's not a lot of money compared to a billion and a half energy portfolio," he said.

The energy losses come from loans that are gone because a company went out of business or was sold and there was not enough money to cover all the debt.

The bank is building a reserve for loan losses that haven't happened yet, he said.

Outside of the energy sector, loans increased by $940 million during the quarter; deposits were up $909 million; and core revenue increased $2.8 million.

Hairston said that was the best loan and deposit growth in the history of the company except for the period after 2005's Hurricane Katrina.