Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q4 2023 Earnings Presentation
36 slides from Hancock Whitney's earnings presentation, Jan 16, 2024
Slide 1: Fourth Quarter 2023 Earnings Conference Call
Fourth Quarter 2023 Earnings Conference Call 1/16/2024 HANCOCK WHITNEY
Slide 2: Important cautionary statement about forward-looking statements
Important cautionary statement about 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 ma
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
Corporate Profile ► $35.6 billion in Total Assets ► $23.9 billion in Total Loans ► $29.7 billion in Total Deposits (Healthcare) ► CET1 ratio 12.39%(e) (ABL) ► Tangible Common Equity (TCE) ratio 8.37% (Operations) (Trust) ► $4.2 billion in Market Capitalization ► 182 full service banking locations an
Slide 5: HWC Strong and Stable for 125 Years
HWC Strong and Stable for 125 Years ► Strength to manage through a challenging economic environment ► Balance sheet de-risked in early 2020 and successfully executed bond restructuring and balance sheet deleverage in 4Q23 ► Stable, seasoned, diversified deposits; ability to organically grow deposits
Slide 6: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights ► Net income totaled $50.6 million, or $0.58 per ($s in millions; except per share data) 4Q23 3Q23 4Q22 diluted share, compared to $97.7 million, or $1.12 per diluted share in 3Q23 Net income $50.6 $97.7 $143.8 ─ 4Q23 results include a net pretax charge of ($75.4) Prov
Slide 7: Significant 4Q23 Supplemental Disclosure Items
Significant 4Q23 Supplemental Disclosure Items FDIC Special Assessment ► $26.1 million estimated pretax charge, or $0.24 EPS* Sale of Legacy Whitney ► Standalone facility in downtown New Orleans Parking Garage ► Proceeds of $29 million; pretax gain of $16.1 million, or $0.15 EPS* Bond Portfolio Rest
Slide 8: 2023 Highlights
2023 Highlights ► Net income of $392.6 million, or $4.50 per diluted ($s in millions; except per share data) 2023 2022 share, compared to $524.1 million, or $5.98 per diluted share, in 2022 Net income $392.6 $524.1 ─ Excluding the impact of supplemental disclosure items* Provision for credit losses
Slide 9: Loan Balances Virtually Flat Linked-Quarter
Loan Balances Virtually Flat Linked-Quarter ► Loans totaled $23.9 billion, down $61.8 million, or 1% LQA ► Increase in mortgage loans driven by one-time close Line Utilization product, which convert from construction to mortgage upon 50.0% construction completion ► Line utilization impacted by highe
Slide 10: Loan Portfolio Diverse, Limited Office Exposure
Loan Portfolio Diverse, Limited Office Exposure ► Loan portfolio diverse across a number of Total Loans % of Total ($s in millions) Outstanding Loans Commitment segments and industries Commercial non-RE (C&I) $7,821 32.7% $13,975 ► CRE loan portfolio is diversified by asset CRE - owner 2,528 10.6% 2
Slide 11: DDA Remix Continues to Slow; Brokered Deposits Decline
DDA Remix Continues to Slow; Brokered Deposits Decline ► Total deposits of $29.7 billion, down $630.3 million, or 8% EOP Deposits Mix ($) LQA 35,000 – Brokered deposits decreased due to $567.5 million in maturities 30,000 during 4Q23 that were not replaced 25,000 $ in millions 20,000 – Decrease in n
Slide 12: Continued Low Levels of Criticized and Nonaccrual Loans
Continued Low Levels of Criticized and Nonaccrual Loans $350 1.64% 1.59% 1.62% $300 1.46% 1.47% $250 $200 $150 $100 0.33% 0.23% 0.25% 0.25% 0.17% $50 $0 4Q22 1Q23 2Q23 3Q23 4Q23 Total Loans $23,114 $23,405 $23,790 $23,984 $23,922 Total Commercial Loans 18,444 18,550 18,703 18,799 18,589 Criticized C
Slide 13: Maintained a Solid Reserve
Maintained a Solid Reserve ► Provision for the fourth quarter of $17.0 million, reflects Reserve Build / $16.1 million of net charge-offs and a reserve build of Net Charge-offs (Release) Total Provision $0.9 million ($s in millions) 4Q23 3Q23 4Q23 3Q23 4Q23 3Q23 – Charge-offs returned to a more norm
Slide 14: Bond Portfolio Restructure Completed, Increases Yield
Bond Portfolio Restructure Completed, Increases Yield ► Securities portfolio* totaled $8.2 billion, down $649 million linked-quarter Securities Portfolio* Mix − Portfolio restructure completed in 4Q23, $1.04 billion 12/31/23 bonds sold with net proceeds of $977 million; $s in millions Munis purchase
Slide 15: NIM Stable Linked-Quarter; Increased in December
NIM Stable Linked-Quarter; Increased in December ► 4Q23 NIM flat at 3.27% linked-quarter – NIM 3.31% for the month of December 2023, reflects approximately one month of impact from bond portfolio 3.50% 3.40% 0.08% 0.03% restructure 0.06% 3.30% ► NII (TE) of $272.3 million, virtually unchanged linked
Slide 16: New Loan Rates Reflect Ongoing Pricing Efforts
New Loan Rates Reflect Ongoing Pricing Efforts New Loans Fixed Loans Variable Loans Total New Loan Rate* $2,250 9.00% 8.03% 8.15% $2,000 8.00% 7.40% 6.88% $1,750 7.00% 6.27% $1,500 6.00% 4.93% $1,250 5.00% $ in millions $1,000 4.00% $750 3.00% $1,132 $1,176 $845 $500 $725 2.00% $748 $648 $250 $472 $
Slide 17: Key IRR Metrics
Key IRR Metrics Loans ► Loans totaled $23.9 billion at December 31, 2023 – 40% fixed, 60% variable (includes hybrid ARMs) – 70% of variable loans tied to SOFR – 23% of variable loans tied to Wall Street Journal Prime – 7% of variable loans tied to other indices Securities ► Expect runoff of approxim
Slide 18: Maintained Focus on Growing Fee Income
Maintained Focus on Growing Fee Income $100 $0.2 $2.6 $0.2 $0.4 $90 $80 $0.6 $0.5 $70 $s in millions $60 $50 $88.3 $86.0 $40 $49.3 $30 $20 $39.0 $10 $0 3Q23 Service charges Bank card & Investment & Trust fees Secondary Other, net 4Q23 Adjusted Supplemental 4Q23 Noninterest Noninterest on deposit ATM
Slide 19: Expense Control Efforts Continue
Expense Control Efforts Continue $250 $225 $1.9 $0.7 $0.1 $0.4 $200 $26.1 $s in millions $1.5 $175 $204.7 $203.1 $229.2 $150 $125 $100 3Q23 Noninterest Personnel Occupancy and Amortization of ORE/OFA Other (net) 4Q23 Adjusted Supplemental 4Q23 Noninterest Expense Expense Equipment Intangibles expens
Slide 20: Capital Levels Improve; TCE Above 8%
Capital Levels Improve; TCE Above 8% ► CET1 ratio estimated at 12.39%, up 33 bps linked-quarter ► Leverage (Tier 1) ratio estimated at 10.10%, Capital Ratios up 9 bps linked-quarter 15% ► TCE ratio 8.37%, up 103 bps linked-quarter – Dividends -7 bps – Impact of AOCI +77 bps 10% – Lower tangible asse
Slide 21: Remain Well Capitalized Including All Unrealized Losses
Remain Well Capitalized Including All Unrealized Losses 12/31/2023 Inc. AOCI Inc. AOCI + HTM Well Capitalized As Reported Losses (1) Losses(2) Minimum Tangible Common Equity Ratio 8.37% 8.37% 7.96% N/A Leverage (Tier 1) Ratio (e) 10.10% 8.81% 8.40% 5.00% CET1 Ratio (e) 12.39% 10.64% 10.12% 6.50% Tie
Slide 22: 2024 Forward Guidance
2024 Forward Guidance 2023 FY 2024 Actual Outlook Loans (EOP) $23.9B Expect EOP loan growth of low single digits from $23.9B at 12/31/23; expect most of 2024 growth in 2H24 Deposits (EOP) $29.7B Expect EOP deposit growth of low single digits from $29.7B at 12/31/23 Adjusted Pre-Provision, Net $635.7
Slide 23: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations Appendix and Non-GAAP Reconciliations CHANCOCK WHITNEY
Slide 24: Summary Balance Sheet ($ in millions)
Summary Balance Sheet ($ in millions) Change Change 4Q23 3Q23 4Q22 LQ Prior Year YTD 2023 YTD 2022 Y-o-Y EOP Balance Sheet 23,921.9 23,983.7 23,114.0 (61.8) 807.9 Loans 23,921.9 23,114.0 807.9 7,600.0 7,916.1 8,408.5 (316.1) (808.5) Securities 7,600.0 8,408.5 (808.5) 32,175.1 32,733.6 31,873.0 (558.
Slide 25: Balance Sheet Summary
Balance Sheet Summary Average Loans Average Securities* Average Deposits ($s in billions) ($s in billions) ($s in billions) $25 $11 $32 $23.7 $23.8 $23.8 $24 $30.0 $23.1 $10 $29.8 $22.7 $9.2 $30 $29.4 $9.1 $9.0 $23 $8.9 $28.8 $28.8 $9 $8.6 $22 $28 $8 $21 $20 $7 $26 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23
Slide 26: EOP Loan Repricing and Maturity
EOP Loan Repricing and Maturity Repricing/Maturity Term (1) Rate Structure 3 months 4-12 Over 15 Total Loans Variable Fixed 1-3 Years 3-5 Years 5-15 Years ($s in millions) or less months Years (EOP) Rate Rate Commercial Non-RE $6,367 $276 $925 $1,222 $1,092 $75 $9,957 $6,481 $3,476 CRE-Owner 994 80
Slide 27: Total Loan Rates and Yield Trends
Total Loan Rates and Yield Trends Total Loans $30,000 Fixed Loans Variable Loans Total Loan Yield** 7.00% 6.01% 6.11% 5.81% 6.00% $25,000 5.54% 5.12% 5.00% $20,000 4.49% 4.00% $ in millions $15,000 3.00% $13,201 $13,632 $13,828 $14,144 $14,329 $14,311 $10,000 2.00% $5,000 1.00% $9,384 $9,482 $9,577
Slide 28: Maintaining a Seasoned, Stable, Diversified Deposit Base
Maintaining a Seasoned, Stable, Diversified Deposit Base ► DDAs as a % of total deposits remains among best-in-class at EOP Deposits by Line of Business 37% at December 31, 2023 12/31/23 ► Uninsured deposits (adjusted for collateralized public funds) Consumer were 34.4% at December 31, 2023, virtual
Slide 29: Strong Liquidity Position; Multiple Sources of Funding Available
Strong Liquidity Position; Multiple Sources of Funding Available ▶ Currently have approximately $18.5 billion in At December 31, 2023 Total Amount Net internal and external sources of liquidity if $ in millions Sources Used Availability needed Internal Sources Free Securities $ 2,845 $ - $ 2,845 ▶ N
Slide 30: Summary Income Statement
Summary Income Statement ($ in millions, except for per share data) Change Change 4Q23 3Q23 4Q22 LQ Prior Year YTD 2023 YTD 2022 Y-o-Y 272.3 272.1 298.1 0.2 (25.8) Net interest income (TE) 1,108.7 1,060.4 48.3 17.0 28.5 2.5 (11.5) 14.5 Provision for credit losses 59.1 (28.4) 87.5 39.0 86.0 77.1 (47.
Slide 31: Income Statement Summary (as Adjusted*)
Income Statement Summary (as Adjusted*) Adjusted PPNR* Net Interest Income (TE) Net Interest Margin (TE) ($s in millions) ($s in millions) $200 $320 3.75% 3.68% $190 $185.0 $298.1 $300 3.60% 3.55% $287.6 $180 $167.0 $276.7 $272.1 $272.3 $170 $157.8 $280 3.45% 3.30% $157.5 3.27% $153.4 3.27% $160 $26
Slide 32: Current Hedge Positions
Current Hedge Positions Cash Flow (CF) Hedges ► Receive 215 bps versus paying 1 month SOFR on $1.6 billion ► No new CF hedges were executed and no CF hedges were terminated in 4Q23 ► Total termination value on remaining active CF hedges is approximately ($78) million as of 12/31/23 ► Future maturiti
Slide 33: PPNR (TE) and Adjusted PPNR (TE) Reconciliation
PPNR (TE) and Adjusted PPNR (TE) Reconciliation Three Months Ended Twelve Months Ended (in thousands) 4Q23 3Q23 2Q23 1Q23 4Q22 2023 2022 Net Income (GAAP) $50,603 $97,738 $ 117,794 $126,467 $143,787 $392,602 $524,089 Provision for credit losses 16,952 28,498 7,633 6,020 2,487 59,103 (28,399) Income
Slide 34: Adjusted Efficiency Ratio
Adjusted Efficiency Ratio Three Months Ended Twelve Months Ended (in thousands) 4Q23 3Q23 2Q23 1Q23 4Q22 2023 2022 Net interest income $269,460 $269,234 $273,911 $284,994 $295,501 $1,097,599 $1,050,003 Noninterest income 38,951 85,974 83,225 80,330 77,064 288,480 331,486 Total GAAP revenue 308,411 3
Slide 35: Adjusted Earnings Per Share - Diluted; Adjusted ROA and ROTCE
Adjusted Earnings Per Share - Diluted (in thousands) 4Q23 2023 Net Income (GAAP) $50,603 $392,602 Net income allocated to participating securities (440) (4,014) Net income available to common shareholders 50,163 388,588 Supplemental disclosure items, net of income tax* 59,548 59,548 Supplemental dis
Slide 36: Fourth Quarter 2023 Earnings Conference Call
Fourth Quarter 2023 Earnings Conference Call 1/16/2024 HANCOCK WHITNEY