Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q4 2021 Earnings Presentation
30 slides from Hancock Whitney's earnings presentation, Jan 18, 2022
Slide 1: Fourth Quarter 2021 Earnings Conference Call
Fourth Quarter 2021 Earnings Conference Call 1/18/2022 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 December 31, 2021)
Corporate Profile (as of December 31, 2021) $36.5 billion in Total Assets $21.1 billion in Total Loans $30.5 billion in Total Deposits CET1 ratio 11.16%(e) Tangible Common Equity (TCE) ratio 7.71% $4.3 billion in Market Capitalization 177 banking locations and 240 ATMs across our footprint Approxima
Slide 5: Fourth Quarter 2021 Highlights
Fourth Quarter 2021 Highlights Net income totaled $137.7 million, or $1.55 per diluted share, up $8.2 million, or $0.09 per share, linked quarter 4Q21 results include ($4.9) million, or ($0.04) per share, of net nonoperating income items; 3Q21 results included ($1.4) million, or ($0.01) per share, o
Slide 6: 2021 Highlights
2021 Highlights Net income of $463.2 million, or $5.22 per diluted share, compared to a net loss of $45.2 million, or ($.54), in 2020 Results include $35.9 million, or $0.31 per share, of net nonoperating expense items, mostly related to efficiency initiatives Operating pre-provision net revenue (PP
Slide 7: Core Loan Growth Accelerates in 4Q Driving a Strong Finish to 2021
Loans totaled $21.1 billion, up $248.3 million, net, linked-quarter $652.5 million in core loan growth, or 13% LQA $404.3 million in PPP loan forgiveness Quarterly core loan growth (excl PPP) impacted by: Growth across entire footprint Increased loan pipeline pull-through rate Tailwinds and headwind
Slide 8: Higher Production Levels Driving Loan Growth; Yield on New Loans Impacted By Rate Environment
Higher Production Levels Driving Loan Growth; Yield on New Loans Impacted By Rate Environment * Excluding PPP loans
Slide 9: 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 During 4Q21, $404.3 million in PPP loans were forgiven Expect majority of remaining PPP loans to be forgiven by 2Q22; minima
Slide 10: NPLs, Criticized Commercial Loans Continue Improvement To Among Best in Class
NPLs, Criticized Commercial Loans Continue Improvement To Among Best in Class Criticized commercial loans totaled $287 million, or 1.73% of total commercial loans (excluding PPP loans), at December 31, 2021, down $7 million, or 2%, linked-quarter and down $106 million, or 27%, from a year ago Nonper
Slide 11: Modest Reserve Release Continues
Modest Reserve Release Continues Negative provision for the quarter of ($28.4) million, reflects $0.7 million of net charge-offs and a reserve release of $29.1 million Weighting applied to Moody's December 2021 economic scenarios was 40% Baseline and 60% slower growth (S2), compared to 50% Baseline
Slide 12: Securities Portfolio Positioned Well for Future Rise in Rates
Securities Portfolio Positioned Well for Future Rise in Rates Securities portfolio (excluding unrealized gains) totaled $8.6 billion, up $299 million, or 4%, linked-quarter 18% HTM, 82% AFS $1.8 billion, or 26% of AFS securities, are FV hedged, and provide OCI protection and flexibility to repositio
Slide 13: Seasonality and Hurricane Recovery Proceeds Drive Quarterly Growth
Seasonality and Hurricane Recovery Proceeds Drive Quarterly Growth Total deposits of $30.5 billion, up $1.3 billion, or 4.3%, linked-quarter Noninterest-bearing demand deposits (DDAs) increased $739.4 million due to hurricane recovery proceeds and seasonal deposit inflows Interest-bearing public fun
Slide 14: Excess Liquidity Once Again Drives NIM Compression
Net interest margin (NIM) 2.80%, down 14 bps linked-quarter NIM Headwinds: Ongoing impact of lower rates PPP loan forgiveness Continued elevated excess liquidity NIM Tailwinds: Deployment of excess liquidity into loans/bonds Steeper yield curve and potential 2022 rate increases Excess Liquidity Once
Slide 15: Loans, Securities and Swaps/Hedges
Loans Loans, excluding PPP, totaled $20.6 billion at December 31, 2021 57% variable, 43% fixed 61% ($7.1 billion) of variable loans are LIBOR-based (34% of loan portfolio excluding PPP) 34% ($3.9 billion) of variable loans tied to Wall Street Journal Prime $4.0 billion of variable loans have a floor
Slide 16: Core Fee Income Stable; Specialty Income Drives Total Decline
Core Fee Income Stable; Specialty Income Drives Total Decline Noninterest income totaled $89.6 million, down $3.7 million, or 4% linked-quarter; operating noninterest income totaled $86.0 million, down $2.8 million, or 3% linked-quarter 4Q21 included a $3.6 million gain from storm-related insurance
Slide 17: Expenses Beat 4Q21 Guidance as Impact of Efficiency Initiatives Evident
Expenses Beat 4Q21 Guidance as Impact of Efficiency Initiatives Evident Noninterest expense totaled $182.5 million, down $12.2 million linked-quarter; operating noninterest expense totaled $183.8 million, down $7.7 million, or 4% linked-quarter 4Q21 included $1.3 million of net nonoperating items ma
Slide 18: Solid Capital, TCE Impacted By OCI and Excess Liquidity
Solid Capital, TCE Impacted By OCI and Excess Liquidity TCE ratio 7.71%, down 14 bps LQ Change in tangible assets -27 bps Change in OCI -16 bps Dividends -7 bps Stock buyback -6 bps Tangible net earnings +41 bps Stock Compensation and other +1 bp Repurchased 393,527 shares of common stock during 4Q2
Slide 19: 2022 Forward Guidance
2022 Forward Guidance 2021 Actual FY 2022 Outlook ** Core Loans (EOP) (excl PPP loans) * $20.6B (excl PPP loans) Expect 6-8% EOP core loan growth; quarterly results will reflect normal seasonality Deposits (EOP) $30.5B Expect EOP deposits to remain flat to slightly down Net Interest Margin (NIM) 2.9
Slide 20: Path to 55% Efficiency Ratio
Efficiency ratio target of 55% to be achieved by 4Q22 Successfully implemented efficiency initiatives during 2021 Thoughtful execution of revenue and efficiency strategies will continue into 2022: Continued momentum in core loan growth at a mid-single digit LQA level throughout 2022 Maintain our foc
Slide 21: Strategic Plan Designed To Provide Meaningful Shareholder Returns
Strategic Plan Designed To Provide Meaningful Shareholder Returns Updated CSOs Recover value and establish forward momentum Employer of Choice Path to 55% Efficiency Ratio Expense focus continues in order to fund revenue enhancements Revenue enhancements are the main driver in achieving goal by 4Q22
Slide 22: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations Appendix and Non-GAAP Reconciliations CHANCOCK WHITNEY
Slide 23: Summary Income Statement
Summary Income Statement ($ in millions, except for share data) *Non-GAAP measure: see slide 27 for non-GAAP reconciliation Change Change 4Q21 3Q21 4Q20 LQ Prior Year YTD 2021 YTD 2020 Y-o-Y 231.9 237.5 241.4 (5.6) (9.5) Net Interest Income (TE) 944.4 955.5 (11.1) (28.4) (27.0) 24.2 (1.4) (52.6) Pro
Slide 24: Summary Balance Sheet
Summary Balance Sheet ($ in millions) 4Q21 includes $0.5 billion, 3Q21 includes $0.9 billion and 4Q20 includes $2.0 billion in PPP loans, net 4Q21 includes $0.7 billion, 3Q21 includes $1.2 billion and 4Q20 includes $2.2 billion in average PPP loans, net Average securities excludes unrealized gain/(l
Slide 25: Results
Results *Non-GAAP measures: see slide 27 for non-GAAP reconciliation 4Q20 1Q21 2Q21 3Q21 4Q21 Operating PPNR (TE)* ($000) 130,607 131,526 137,176 134,784 134,152 Net Interest Income (TE) ($000) 241,401 237,509 237,498 237,477 231,931 Net Interest Margin (TE) 3.22% 3.09% 2.96% 2.94% 2.80% Operating N
Slide 26: Balance Sheet Summary
Balance Sheet Summary 4Q20 1Q21 2Q21 3Q21 4Q21 Average Loans ($MM) 22,066 21,745 21,389 20,941 20,770 Average Total Securities ($MM) 6,921 7,469 8,195 8,369 8,378 Average Deposits ($MM) 27,040 28,139 29,229 29,237 29,751 Loan Yield (TE) 3.99% 4.01% 3.95% 3.90% 3.83% Cost of Deposits 0.18% 0.13% 0.10
Slide 27: Operating Revenue (TE), Operating PPNR (TE) Reconciliations
Operating Revenue (TE), Operating PPNR (TE) Reconciliations Three Months Ended (in thousands) 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 Net interest income $229,296 $234,709 $234,643 $234,587 $238,286 Noninterest income 89,612 93,361 94,272 87,089 82,350 Total revenue $318,908 $328,070 $32
Slide 28: Commercial Loans (C&I, CRE, C&D)
Commercial Loans (C&I, CRE, C&D)* *Excludes $0.9 billion in PPP loans As of December 31, 2021 HNCOCK WHITNEY 10 Total Commercial Loans Outstanding % of Total Loans Commitment ($s in millions) Real Estate, Rental and Leasing $3,347 16.2% $4,827 Health Care and Social Assistance 1,889 9.2% 2,346 Retai
Slide 29: Current Hedge Positions
Current Hedge Positions Cash Flow (CF) Hedges Current net receive on notional CF hedges is approximately 1.42% on $1.1 billion or approximately $16 million annualized with no rate changes $500 million of CF hedges terminated in 3Q21 will provide NII support of $19.2 million in 2022 and 2023 collecti
Slide 30: Fourth Quarter 2021 Earnings Conference Call
Fourth Quarter 2021 Earnings Conference Call 1/18/2022 HANCOCK WHITNEY