Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q4 2022 Earnings Presentation
30 slides from Hancock Whitney's earnings presentation, Jan 17, 2023
Slide 1: Fourth Quarter 2022 Earnings Conference Call
Fourth Quarter 2022 Earnings Conference Call 1/17/2023 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
Corporate Profile $35.2 billion in Total Assets $23.1 billion in Total Loans $29.1 billion in Total Deposits CET1 ratio 11.37%(e) Tangible Common Equity (TCE) ratio 7.09% $4.2 billion in Market Capitalization 177 full service banking locations and 226 ATMs across our footprint Approximately 3,600 (F
Slide 5: Fourth Quarter 2022 Highlights
Fourth Quarter 2022 Highlights Net income totaled $143.8 million, or $1.65 per diluted share, up $8.4 million, or $0.10 per share, linked quarter Pre-provision net revenue (PPNR)* totaled $185.0 million, up $10.3 million, or 6%, linked-quarter Total loan growth of $528.5 million, or 9% LQA, exceeded
Slide 6: 2022 Highlights
2022 Highlights Net income of $524.1 million, or $5.98 per diluted share, up $60.9 million, or $0.76 per share, compared to 2021 Operating pre-provision net revenue (PPNR)* totaled $641.1 million, up $103.5 million, or 19%, compared to 2021 Negative provision for credit losses of $28.4 million in 20
Slide 7: Loans totaled $23.1 billion, up $528.5 million
Loans totaled $23.1 billion, up $528.5 million, or 9% LQA Improving line utilization contributed to growth in most markets and lines of business; increase in mortgage driven by one-time close product Tailwinds and headwinds to future loan growth: Tailwinds: Continued improvement in utilization rates
Slide 8: Yield on New Loans Reflects High Rates
Yield on New Loans Reflects High Rates $ in millions * Excluding PPP loans New Loan Yield - Fixed 3.40% 3.73% 3.62% 4.45% 5.28% 5.95% New Loan Yield - Variable 2.94% 2.94% 2.92% 3.25% 4.79% 6.40%
Slide 9: Criticized Commercial Loans, NPLs Remain Near Historically Low Levels
Criticized Commercial Loans, NPLs Remain Near Historically Low Levels Criticized commercial loans totaled $302 million, or 1.64% of total commercial loans, at December 31, 2022, slightly down, linked-quarter Nonperforming loans totaled $41 million, or 0.18% of total loans, at December 31, 2022, rela
Slide 10: Solid Asset Quality Metrics, Low Net Charge-offs, Strong Reserve
Solid Asset Quality Metrics, Low Net Charge-offs, Strong Reserve Provision for the quarter of $2.5 million, reflects $1.0 million of net charge-offs and a reserve build of $1.5 million Weighting applied to Moody's December 2022 economic scenarios was 25% baseline and 75% slower growth (S2); scenario
Slide 11: Securities Portfolio Positioned for Rising Rates
Securities Portfolio Positioned for Rising Rates Securities portfolio (excluding unrealized losses) totaled $9.2 billion, up $2.4 million AFS/HTM mix 69% AFS, 31% HTM at 12/31/22 To reduce OCI volatility and provide flexibility to reposition and/or reprice the hedged assets in a changing rate enviro
Slide 12: Seasonality Drives Growth; Higher Rates Drive Slight Shift in Mix
Seasonality Drives Growth; Higher Rates Drive Slight Shift in Mix Total deposits of $29.1 billion, up $119.1 million, or 2% LQA Decrease in non-interest bearing DDA primarily due to commercial clients deploying excess liquidity into working capital Decrease in interest-bearing money market and savin
Slide 13: Widening NIM Reflects Fed Rate Increases, Change in EA Mix
Net interest margin (NIM) 3.68%, up 14 bps linked-quarter Net interest income (TE) increased $15.2 million, or 5%, linked-quarter, driven by increasing rates and a change in the mix of earning assets For every additional 25 bp increase in Fed Funds our NIM could widen 1-2 bps; expect NIM to peak whe
Slide 14: Loans, Securities, Swaps/Hedges
Loans Loans totaled $23.1 billion at December 31, 2022 41% fixed, 59% variable (includes hybrid ARMs) 33% ($4.5 billion) of variable loans are LIBOR-based 30% ($4.1 billion) of variable loans tied to Wall Street Journal Prime 29% ($3.9 billion) of variable loans tied to SOFR 6% ($848 million) of var
Slide 15: Reduced Specialty Income Drives Decline in Overall Fees
Reduced Specialty Income Drives Decline in Overall Fees Noninterest income totaled $77.1 million, down $8.3 million, or 10% linked-quarter Decrease in service charges was primarily related to certain NSF/OD fees eliminated effective December 1, 2022 Decline in secondary mortgage fees due to lower ac
Slide 16: Expenses Remained Relatively Flat in Most Categories
Expenses Remained Relatively Flat in Most Categories Noninterest expense totaled $190.2 million, down $3.3 million, or 2% linked-quarter Decrease in other expenses primarily due to storm-related gains Noninterest Expense Mix 12/31/22 $s in millions A Focus on Expense Control; More Initiatives Underw
Slide 17: Remain Well Capitalized, TCE Impacted By OCI
Remain Well Capitalized, TCE Impacted By OCI CET1 ratio estimated at 11.37%, up 27 bps linked-quarter TCE ratio 7.09%, up 36 bps LQ Tangible net earnings +44 bps Impact of OCI +12 bps Higher tangible assets -13 bps Dividends -7 bps No shares repurchased during 4Q22 Will continue to manage capital in
Slide 18: 2023 Forward Guidance
2023 Forward Guidance 2022 Actual FY 2023 Outlook Loans (EOP) $23.1B Expect EOP loan growth in the range of low to mid single digits from $23.1B at 12/31/22 Deposits (EOP) $29.1B Expect EOP deposit growth in the range of flat to low single digits from $29.1B at 12/31/22; likely will utilize cash flo
Slide 19: Positioned Well For Today's Economic Environment
Positioned Well For Today’s Economic Environment Balance sheet de-risked in early 2020 Credit metrics continue at historically low levels Robust ACL at 1.48% of loans Solid capital levels Significant efficiency initiatives executed in 2020/2021 Technology projects focused on scalability and effectiv
Slide 20: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations Appendix and Non-GAAP Reconciliations CHANCOCK WHITNEY
Slide 21: Summary Income Statement
Summary Income Statement ($ in millions, except for per share data) *Non-GAAP measure: see slide 25 for non-GAAP reconciliation Change Change 4Q22 3Q22 4Q21 LQ Prior Year YTD 2022 YTD 2021 Y-O-Y 298.1 282.9 231.9 15.2 66.2 Net Interest Income (TE) 1,060.4 944.4 116.0 2.5 1.4 (28.4) 1.1 30.9 Provisio
Slide 22: Summary Balance Sheet
Summary Balance Sheet ($ in millions) 4Q22 includes $38.8 million, 3Q22 includes $75.7 million and 4Q21 includes $531.1 million in PPP loans, net 4Q22 includes $53.9 million, 3Q22 includes $108.9 million and 4Q21 includes $708.4 million in average PPP loans, net; YTD 2022 includes $204.8 million and
Slide 23: Operating Results
Operating Results *Non-GAAP measure: see slide 25 for non-GAAP reconciliation 4Q21 1Q22 2Q22 3Q22 4Q22 Operating PPNR (TE)* ($000) 134,152 134,501 146,873 174,745 185,026 Net Interest Income (TE) ($000) 231,931 231,008 248,317 282,910 298,116 Net Interest Margin (TE) 2.80% 2.81% 3.04% 3.54% 3.68% Op
Slide 24: Balance Sheet Summary
Balance Sheet Summary 4Q21 1Q22 2Q22 3Q22 4Q22 Average Loans ($MM) 20,770 21,122 21,658 22,139 22,723 Average Total Securities ($MM) 8,378 8,688 8,979 9,177 9,201 Average Deposits ($MM) 29,751 30,030 29,980 29,181 28,816 Loan Yield (TE) 3.83% 3.72% 3.86% 4.49% 5.12% Cost of Deposits 0.06% 0.05% 0.07
Slide 25: Operating Revenue (TE), Operating PPNR (TE) Reconciliation
Operating Revenue (TE), Operating PPNR (TE) Reconciliation Three Months Ended Twelve Months Ended (in thousands) 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 12/31/2022 12/31/2021 Net interest income $295,501 $280,307 $245,732 $228,463 $229,296 $1,050,003 $933,235 Noninterest income 77,064 85
Slide 26: Tangible Common Equity Ratio Excl. AOCI Reconciliation
Tangible Common Equity Ratio Excl. AOCI Reconciliation Three Months Ended Twelve Months Ended (in thousands) 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 12/31/2022 12/31/2021 End of period balance sheet: Total common stockholders’ equity $3,342,628 $3,180,439 $3,349,723 $3,450,951 $3,670,352
Slide 27: Paycheck Protection Program (PPP) Loans
Paycheck Protection Program (PPP) Loans Under the original and extended Paycheck Protection Programs (PPP), the company originated more than 20,000 loans totaling $3.3 billion; $38.8 million in loans outstanding at December 31, 2022 During 4Q22, $37.0 million in PPP loans were forgiven Expect contin
Slide 28: Loan Portfolio Composition
Loan Portfolio Composition As of December 31, 2022 HNCOCK WHITNEY 10 Total Loans Outstanding % of Total Loans Commitment ($s in millions) Commercial non-RE $7,798 33.7% $13,429 CRE - owner 2,572 11.1% 2,719 CRE - income producing (ICRE) 2,981 12.9% 3,161 C&D 1,607 7.0% 3,702 Healthcare 2,082 9.0% 2,
Slide 29: Current Hedge Positions
Current Hedge Positions Cash Flow (CF) Hedges Receive 232 bps versus paying 1m LIBOR/SOFR on $2.1 billion $500 million of CF hedges terminated in 3Q21 will provide NII support of $7.9 million through 1Q24 No additional CF hedges were terminated in 4Q22 Total Termination Value on remaining active CF
Slide 30: Fourth Quarter 2022 Earnings Conference Call
Fourth Quarter 2022 Earnings Conference Call 1/17/2023 HANCOCK WHITNEY