Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q2 2021 Earnings Presentation
30 slides from Hancock Whitney's earnings presentation, Jul 20, 2021
Slide 1: Second Quarter 2021 Earnings Conference Call
Second Quarter 2021 Earnings Conference Call 7/20/2021 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 June 30, 2021)
4 Corporate Profile (as of June 30, 2021) $35.1 billion in Total Assets $21.1 billion in Total Loans (includes $1.4 billion in PPP loans) $29.3 billion in Total Deposits CET1 ratio 10.98%(e) Tangible Common Equity (TCE) ratio 7.70% $3.9 billion in Market Capitalization 195 banking locations and near
Slide 5: Second Quarter 2021 Highlights
Second Quarter 2021 Highlights Net income totaled $88.7 million, or $1.00 per diluted share, down $18.5 million, or $0.21 per share, compared to 1Q21 Results include $42.2 million, or $0.37 per share, of net nonoperating items EPS (excluding the impact of nonoperating items) $1.37 Pre-provision net
Slide 6: Second Quarter Growth Impacted By Several Factors
Loans totaled $21.1 billion, down $516.3 million, net, linked-quarter $1.033 billion in PPP loan forgiveness $104.9 million in new PPP loan origination $411.8 million in core loan growth, or 9% LQA Quarterly core loan growth (excl PPP) impacted by: Fewer payoffs and paydowns in 2Q21 Stabilization of
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 2Q21, $1.033 billion in PPP loans were forgiven and $104.9 million in PPP loans were originated under the extende
Slide 8: Hospitality Rebounds From Leisure Tourism, Green Shoots in Conventions
Hospitality Rebounds From Leisure Tourism, Green Shoots in Conventions 8 East (MS, AL, FL, TN) Total hospitality loans equal $359 million The Florida Legislature’s Office of Economic & Demographic Research reported May general revenue collection at $3.6 billion, topping the forecast by 18.9% Upcomin
Slide 9: NPLs and Criticized Commercial Loans Continue to Decline
NPLs and Criticized Commercial Loans Continue to Decline Criticized commercial loans totaled $330 million, or 2.11% of total commercial loans (excluding PPP loans), at June 30, 2021, down $18 million, or 5%, linked-quarter; down $63 million, or 16%, from December 31, 2020 Nonperforming loans totaled
Slide 10: Modest Reserve Release Continues
Modest Reserve Release Continues Negative provision for the quarter of ($17.2) million, results from a reserve release of $27.7 million partially offset by $10.5 million of net charge-offs Weighting applied to Moody's June 2021 economic scenarios was 65% Baseline and 35% slower growth (S2), consiste
Slide 11: Securities Portfolio Positioned Well for Future Rise in Rates
11 Securities Portfolio Positioned Well for Future Rise in Rates Securities portfolio totaled $8.5 billion, up $537.6 million, or 7%, linked-quarter 16% HTM, 84% AFS $1.6 billion, or 22% of AFS securities, are FV hedged, and provide OCI protection and flexibility to reposition and/or reprice portfol
Slide 12: Core Deposits Remain Sticky
12 Core Deposits Remain “Sticky” Total deposits of $29.3 billion, up $62.6 million linked-quarter as stimulus and PPP payments were distributed during the quarter Noninterest-bearing demand deposits (DDAs) increased $231.5 million and interest-bearing transaction and savings deposits increased $108.
Slide 13: Strong Liquidity
Strong Liquidity 13 * Includes PPP loans June 30, 2021 loan/deposit ratio 72.2% Relatively Low Average Loan/Deposit Ratio Strong Core Funding 89.0% 88.0% 87.0% 86.0% 85.0% 84.0% 83.0% 82.0% 81.0% 80.0% 4Q18 88.1% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20* 88.2% 83.7% 81.6% Equity 10% Other liabilities
Slide 14: NIM Compression; Flat Net Interest Income
Net interest margin (NIM) at 2.96%, down 13 bps LQ; net interest income (TE) was flat linked quarter NIM Headwinds: Impact of lower rates PPP forgiveness Continued elevated excess liquidity NIM Tailwinds: Deployment of excess liquidity into loans Sub-debt redemption Proactive deposit pricing helped
Slide 15: Loans, excluding PPP, totaled $19.7 billion
Loans, excluding PPP, totaled $19.7 billion at June 30, 2021 Loan portfolio 56% ($11 billion) variable at June 30, 2021 (excludes PPP) 62% ($6.8 billion) of variable loans are LIBOR-based (35% of loan portfolio excluding PPP) 96% of the LIBOR loans are tied to 1 month LIBOR; 2% of the LIBOR loans ar
Slide 16: Increased Economic Activity Drives Improvement in Fee Income
16 Increased Economic Activity Drives Improvement in Fee Income Noninterest income totaled $94.3 million, up $7.2 million, or 8% linked-quarter; included in total noninterest income is $2.8 million gain from sale of Mastercard Class B common stock (nonoperating items) Operating income (excluding non
Slide 17: Expense Management: Completion of Efficiency Initiatives
17 Expense Management: Completion of Efficiency Initiatives Noninterest expense totaled $236.8 million, up $43.7 million linked-quarter; included in total expense is $45.0 million of nonoperating items (primarily efficiency initiatives) Operating expense (excluding nonoperating items) totaled $191.8
Slide 18: Solid Capital, TCE Up bps Linked-Quarter
Solid Capital, TCE Up 44 bps Linked-Quarter TCE ratio 7.70%, up 44 bps LQ Tangible net earnings +27 bps Change in OCI +22 bps Stock Compensation and other +2 bps Dividends -7 bps Decrease of 66 bps in total risk-based capital mostly related to redemption of 2015 subdebt CET1 ratio estimated at 10.98
Slide 19: Solid Capital in Excess of Regulatory Minimums
Solid Capital in Excess of Regulatory Minimums 19 (1) Regulatory minimum with Capital Conservation Buffer (CCB) must be met in order for a bank holding company to engage in certain capital activities including, but not limited to, paying shareholder dividends. Leverage ratio does not have a CCB requ
Slide 20: Near Term Outlook
Near Term Outlook * See slide 7 for details on PPP loans ** Excludes 2Q21 nonoperating items 20
Slide 21: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations Appendix and Non-GAAP Reconciliations CHANCOCK WHITNEY
Slide 22: Summary Income Statement
Summary Income Statement ($ in millions, except for share data) 22 *Non-GAAP measure. See slide 26 for non-GAAP reconciliation.
Slide 23: Summary Balance Sheet
Summary Balance Sheet ($ in millions) 23 2Q21 includes $1.4 billion, 1Q21 includes $2.3 billion and 2Q20 includes $2.3 billion in PPP loans, net 2Q21 includes $2.0 billion, 1Q21 includes $2.2 billion and 2Q20 includes $1.7 billion in average PPP loans, net Average securities excludes unrealized gain
Slide 24: Results
24 Results *Non-GAAP measures. See slide 26 for non-GAAP reconciliation Results *Non-GAAP measures. See slides 29-31 for non-GAAP reconciliations 4Q19 1Q20 2Q20 3Q20 4Q20 Operating PPNR (TE)* ($000) 125,660 115,688 118,518 126,346 130,607 Net Interest Income (TE)* ($000) 236,736 234,636 241,114 238,
Slide 25: Balance Sheet Summary
25 Balance Sheet Summary Balance Sheet Summary 4Q19 1Q20 2Q20 3Q20 4Q20 Average Loans ($MM) 21,038 21,234 22,957 22,408 22,066 Average Total Securities ($MM) 6,202 6,149 6,130 6,389 6,921 Average Deposits ($MM) 23,848 24,327 26,703 26,764 27,040 Loan Yield (TE) 4.69% 4.56% 4.04% 3.95% 3.99% Cost of
Slide 26: Total Revenue (TE), Operating PPNR (TE) Reconciliations
26 Total Revenue (TE), Operating PPNR (TE) Reconciliations Total Revenue (TE), Operating PPNR (TE) Reconciliations Taxable equivalent (TE) amounts are calculated using a federal income tax rate of 21%. Three Months Ended (in thousands) 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Net interest
Slide 27: Commercial Loans (C&I, CRE, C&D)
Commercial Loans (C&I, CRE, C&D)* 27 *Excludes $1.4 billion in net PPP loans As of June 30, 2021 HNCOCK WHITNEY 10
Slide 28: Sectors Under Focus
28 * Excludes PPP loans ** Structured solutions total $385 million company-wide, with $17 million criticized, and $54 million pass-watch As of June 30, 2021 Sectors Under Focus* East (MS, AL, FL, TN); Central (Greater N.O., SELA); West (SWLA, TX) HNCOCK WHITNEY 11
Slide 29: Current Hedge Positions
29 Current Hedge Positions Cash Flow (CF) Hedges Current net receive % on notional CF hedges is about 1.81% on $1.5 billion or approximately $28 million annualized Total Termination Value is approximately $40.5 million as of 6/30/2021 Termination locks in current economic value but removes protectio
Slide 30: Second Quarter 2021 Earnings Conference Call
Second Quarter 2021 Earnings Conference Call 7/20/2021 HANCOCK WHITNEY