Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q3 2021 Earnings Presentation
32 slides from Hancock Whitney's earnings presentation, Oct 19, 2021
Slide 1: Third Quarter 2021 Earnings Conference Call
Third Quarter 2021 Earnings Conference Call 10/19/2021 HANCOCK WHITNEY Exhibit 99.2
Slide 2: Forward-looking statements
This presentation contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements that we may make include statements regarding our expectations of our perf
Slide 3: Non-GAAP Reconciliations & Glossary of Terms
Non-GAAP Reconciliations & Glossary of Terms Throughout this presentation we may use non-GAAP numbers to supplement the evaluation of our performance. The items noted below with an asterisk, "*", are considered non-GAAP. These non-GAAP financial measures should not be considered alternatives to GAAP
Slide 4: Corporate Profile (as of September 30, 2021)
Corporate Profile (as of September 30, 2021) $35.3 billion in Total Assets $20.9 billion in Total Loans (includes $935.3 million in PPP loans) $29.2 billion in Total Deposits CET1 ratio 11.19%(e) Tangible Common Equity (TCE) ratio 7.85% $4.1 billion in Market Capitalization 177 banking locations and
Slide 5: Third Quarter 2021 Highlights
Third Quarter 2021 Highlights Net income totaled $129.6 million, or $1.46 per diluted share, up $40.9 million, or $0.46 per share, linked quarter 3Q21 results include ($1.4) million, or ($0.01) per share, of net nonoperating income items Excluding the impact of nonoperating items, EPS would be $1.45
Slide 6: Loan Growth Momentum Continues in Markets & Specialty Lines
Loans totaled $20.9 billion, down $262.5 million, net, linked-quarter $482.2 million in PPP loan forgiveness $219.7 million in core loan growth, or 4% LQA Quarterly core loan growth (excl PPP) impacted by: Fewer payoffs and paydowns in 3Q21 Slight uptick in line utilization rates Increased loan pipe
Slide 7: Paycheck Protection Program (PPP) Loans
Paycheck Protection Program (PPP) Loans Under the original and extended Paycheck Protection Programs (PPP), the company has originated more than 20,000 loans totaling $3.3 billion During 3Q21, $482 million in PPP loans were forgiven Expect up to $500 million of PPP loans to be forgiven in 4Q21, resu
Slide 8: NPLs and Criticized Commercial Loans Continue to Decline
NPLs and Criticized Commercial Loans Continue to Decline Criticized commercial loans totaled $294 million, or 1.84% of total commercial loans (excluding PPP loans), at September 30, 2021, down $36 million, or 11%, linked-quarter and down $118 million, or 29%, from a year ago Nonperforming loans tota
Slide 9: Modest Reserve Release Continues
Modest Reserve Release Continues Negative provision for the quarter of ($27.0) million, reflects $1.8 million of net charge-offs and a reserve release of $28.8 million Weighting applied to Moody's September 2021 economic scenarios was 50% Baseline and 50% slower growth (S2), compared to 65% Baseline
Slide 10: Securities Portfolio Positioned Well for Future Rise in Rates
Securities Portfolio Positioned Well for Future Rise in Rates Securities portfolio (excluding unrealized gains) totaled $8.3 billion, down $271.7 million, or 3%, linked-quarter 16% HTM, 84% AFS $1.6 billion, or 23% of AFS securities, are FV hedged, and provide OCI protection and flexibility to repos
Slide 11: Core Deposits Remain Elevated and Sticky
Core Deposits Remain Elevated and “Sticky” Total deposits of $29.2 billion, down $65.0 million linked-quarter; virtually unchanged Noninterest-bearing demand deposits (DDAs) increased $247.0 million Time deposits (retail) decreased $138.7 million, with a portion moving to transaction accounts in lig
Slide 12: NIM Compression; Flat Net Interest Income
Net interest margin (NIM) 2.94%, down 2 bps linked-quarter; net interest income (TE) was flat LQ NIM Headwinds: Ongoing impact of lower rates PPP loan forgiveness Continued elevated excess liquidity NIM Tailwinds: Deployment of excess liquidity into loans Steeper yield curve Modest reinvestment into
Slide 13: Loans, excluding PPP, totaled $20.0 billion
Loans, excluding PPP, totaled $20.0 billion at September 30, 2021 Loan portfolio 57% ($11.3 billion) variable at September 30, 2021 (excludes PPP) 63% ($7.1 billion) of variable loans are LIBOR-based (36% of loan portfolio excluding PPP) 96% of the LIBOR loans are tied to 1 month LIBOR; 2% of the LI
Slide 14: Impact of Hurricane Ida, Lower Mortgage Refi Drives Decline in Fees
Impact of Hurricane Ida, Lower Mortgage Refi Drives Decline in Fees Noninterest income totaled $93.4 million, down $0.9 million, or 1% linked-quarter 3Q21 included a $4.6 million gain from the sale of the remaining Hancock Horizon Funds (nonoperating item) Operating income (excluding nonoperating it
Slide 15: Expense Management and Efficiency Initiatives Ongoing
Expense Management and Efficiency Initiatives Ongoing Noninterest expense totaled $194.7 million, down $42.1 million linked-quarter (2Q21 results include $45 million of net nonoperating items) 3Q21 included $3.2 million of net expenses mostly related to Hurricane Ida (nonoperating item) Operating no
Slide 16: Solid Capital, TCE Up bps Linked-Quarter
Solid Capital, TCE Up 15 bps Linked-Quarter TCE ratio 7.85%, up 15 bps LQ Tangible net earnings +39 bps Stock Compensation and other +1 bp Change in OCI -13 bps Dividends -7 bps Change in tangible assets -5 bps Repurchased 56,349 shares of common stock during 3Q21 at an average price of $44.49 per s
Slide 17: Near Term Outlook
Near Term Outlook Q3 2021 Actual Items to note Q4 2021 Outlook FY 2021 Outlook Core Loans (EOP) (excl PPP loans) * $20.0B (excl PPP loans) Core loans up $219.7MM; PPP loans down $482.2MM LQ Expect EOP core loans to be up $400 to $500MM linked-quarter Expect core loans to end the year at approximatel
Slide 18: Efficiency ratio target of 55% set for 4Q22
Efficiency ratio target of 55% set for 4Q22 Thoughtful execution of revenue and efficiency strategies will continue into 2022: Continued momentum in core loan growth at a mid-single digit LQA level throughout 2022 Maintain our 4Q21 targeted expense level of $187mm and run rate (LQA) in 2022, or $750
Slide 19: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations HANCOCK WHITNEY
Slide 20: Summary Income Statement
Summary Income Statement ($ in millions, except for share data) *Non-GAAP measure: see slide 24 for non-GAAP reconciliation Change Change 3Q21 2Q21 3Q20 LQ Prior Year YTD 2021 YTD 2020 Y-o-Y 237.5 237.5 238.4 -— (0.9) Net Interest Income (TE)* 712.5 714.1 (1.6) (27.0) (17.2) 25.0 (9.8) (52.0) Provis
Slide 21: Summary Balance Sheet
Summary Balance Sheet ($ in millions) 3Q21 includes $0.9 billion, 2Q21 includes $1.4 billion and 3Q20 includes $2.3 billion in PPP loans, net 3Q21 includes $1.2 billion, 2Q21 includes $2.0 billion and 3Q20 includes $2.3 billion in average PPP loans, net Average securities excludes unrealized gain/(l
Slide 22: Results
Results *Non-GAAP measures: see slide 24 for non-GAAP reconciliation 3Q20 4Q20 1Q21 2Q21 3Q21 Operating PPNR (TE)* ($000) 126,346 130,607 131.526 137,176 134,784 Net Interest Income (TE)* ($000) 238,372 241,401 237,509 237,498 237,477 Net Interest Margin (TE)* 3.23% 3.22% 3.09% 2.96% 2.94% Operating
Slide 23: Balance Sheet Summary
Balance Sheet Summary 3Q20 4Q20 1Q21 2Q21 3Q21 Average Loans ($MM) 22,408 22,066 21,745 21,389 20,941 Average Total Securities ($MM) 6,389 6,921 7,469 8,195 8,369 Average Deposits ($MM) 26,764 27,040 28,139 29,229 29,237 Loan Yield (TE) 3.95% 3.99% 4.01% 3.95% 3.90% Cost of Deposits 0.22% 0.18% 0.13
Slide 24: Operating Revenue (TE), Operating PPNR (TE) Reconciliations
Operating Revenue (TE), Operating PPNR (TE) Reconciliations Three Months Ended (in thousands) 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 Net interest income $234,709 $234,643 $234,587 $238,286 $235,183 Noninterest income 93,361 94,272 87,089 82,350 83,748 Total revenue $328,070 $328,915 $321
Slide 25: Commercial Loans (C&I, CRE, C&D)
Commercial Loans (C&I, CRE, C&D)* *Excludes $0.9 billion in PPP loans As of September 30, 2021 Total Commercial Loans Outstanding % of Total Loans Commitment ($s in millions) Real Estate, Rental and Leasing $3,370 16.9% $4,618 Retail Trade 1,814 9.1% 2,236 Health Care and Social Assistance 1,741 8.7
Slide 26: Sectors Under Focus
* Excludes PPP loans ** Structured solutions total $260 million company-wide, with $8 million criticized, and $22 million pass-watch As of September 30, 2021 Sectors Under Focus* East (MS, AL, FL, TN); Central (Greater N.O., SELA); West (SWLA, TX) Criticized NPL Pass-Watch Structured Solutions** $ i
Slide 27: Current Hedge Positions
Current Hedge Positions Cash Flow (CF) Hedges Current net receive on notional CF Hedges is approximately 1.50% on $1 billion or approximately $15 million annualized $500 million in CF Hedges were terminated in 3Q21 Total Termination Value on remaining active CF Hedges is approximately $10.1 million
Slide 28: Strong Liquidity $20.9 Billion in Available Sources
Strong Liquidity $20.9 Billion in Available Sources ($ in millions) Total Available Amount Used Net Availability Internal Sources Free Securities and other $7,829 $— $7,829 External Sources Federal Home Loan Bank (FHLB) 5,834 2,134 3,700 Federal Reserve Bank (FRB) 3,605 — 3,605 Brokered Deposits 4,3
Slide 29: Solid Capital in Excess of Regulatory Minimums
Solid Capital in Excess of Regulatory Minimums (1) Regulatory minimum with Capital Conservation Buffer (CCB) must be met in order for a bank holding company to engage in certain capital activities including, but not limited to, paying shareholder dividends. Leverage ratio does not have a CCB require
Slide 30: Hurricane Ida Update
Hurricane Ida Update Hurricane Ida made landfall in Southeast Louisiana on August 29th as a Category 4 hurricane 80 banking locations and 113 ATMs were located in the hurricane-impacted areas Associates worked diligently to open financial centers and power ATMs after the storm passed impacting the r
Slide 31: Hurricane Ida Update
Hurricane Ida Update Reinforced with technological and structural enhancements the company has implemented since Hurricane Katrina, our corporate headquarters in Gulfport MS, technology center and operations centers opened without storm damage Loan portfolios in the impacted markets have been review
Slide 32: Third Quarter 2021 Earnings Conference Call
Third Quarter 2021 Earnings Conference Call 10/19/2021 HANCOCK WHITNEY