Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q1 2022 Earnings Presentation
30 slides from Hancock Whitney's earnings presentation, Apr 19, 2022
Slide 1: First Quarter 2022 Earnings Conference Call
First Quarter 2022 Earnings Conference Call 4/19/2022 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 March 31, 2022)
Corporate Profile (as of March 31, 2022) $36.3 billion in Total Assets $21.3 billion in Total Loans $30.5 billion in Total Deposits CET1 ratio 11.12%(e) Tangible Common Equity (TCE) ratio 7.15% $4.5 billion in Market Capitalization 177 banking locations and 238 ATMs across our footprint Approximatel
Slide 5: First Quarter 2022 Highlights
First Quarter 2022 Highlights Net income totaled $123.5 million, or $1.40 per diluted share, down $14.3 million, or $0.15 per share, linked quarter Operating pre-provision net revenue (PPNR)* totaled $134.5 million, up slightly, linked-quarter Core loan growth of $385.3 million, or 8% LQA, more than
Slide 6: Core Loan Growth Momentum Continued in 1Q22
Loans totaled $21.3 billion, up $189.1 million, net, linked-quarter $385.3 million in core loan growth, or 8% LQA $196.2 million in PPP loan forgiveness Quarterly core loan growth (excl PPP) impacted by: Loan pipeline pull-through rate and increased line utilization Commercial growth across footprin
Slide 7: Yield on New Loans Improving, Helped By Rate Environment
Yield on New Loans Improving, Helped By Rate Environment $ in millions * Excluding PPP loans
Slide 8: 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 1Q22, $196.2 million in PPP loans were forgiven Expect majority of remaining PPP loans to be forgiven in 2Q22; minima
Slide 9: NPLs, Criticized Commercial Loans Decline to Historically Low Levels
NPLs, Criticized Commercial Loans Decline to Historically Low Levels Criticized commercial loans totaled $282 million, or 1.66% of total commercial loans (excluding PPP loans), at March 31, 2022, down $5 million, or 2%, linked-quarter and down $66 million, or 19%, from a year ago Nonperforming loans
Slide 10: Modest Reserve Releases Expected to Taper Off
Modest Reserve Releases Expected to Taper Off Negative provision for the quarter of ($22.5) million, reflects $0.3 million of net charge-offs and a reserve release of $22.8 million Weighting applied to Moody's March 2022 economic scenarios was 40% baseline and 60% slower growth (S2), consistent with
Slide 11: Securities Portfolio Positioned for Rising Rates
Securities Portfolio Positioned for Rising Rates Securities portfolio (excluding unrealized gains) totaled $8.9 billion, up $318 million, or 4%, linked-quarter Shift in mix from AFS to HTM 28% HTM, 72% AFS at 3/31/22 18% HTM, 82% AFS at 12/31/21 $1.7 billion of FV hedges on $1.9 billion of bonds, or
Slide 12: Deposits Virtually Unchanged, Mix Shift to Almost Half DDA
Deposits Virtually Unchanged, Mix Shift to Almost Half DDA Total deposits of $30.5 billion, up $33.8 million, or less than 1%, linked-quarter Noninterest-bearing demand deposits (DDAs) increased $583.9 million due to hurricane recovery proceeds and seasonal deposit inflows Interest-bearing transacti
Slide 13: Net Interest Margin
Net interest margin (NIM) 2.81%, up 1 bp linked-quarter Net interest income (TE) virtually unchanged linked-quarter despite two less business days in 1Q22 NIM Headwinds: PPP loan forgiveness 2Q22 Continued elevated excess liquidity NIM Tailwinds: Deployment of excess liquidity into loans/bonds Futur
Slide 14: Loans, Securities and Swaps/Hedges
Loans Loans, excluding PPP, totaled $21.0 billion at March 31, 2022 57% variable, 43% fixed 55% ($6.6 billion) of variable loans are LIBOR-based (31% of loan portfolio excluding PPP) 33% ($4.0 billion) of variable loans tied to Wall Street Journal Prime $3.2 billion of variable loans have a floor ≥
Slide 15: Secondary Mortgage Fees and Specialty Income Drive Decline
Secondary Mortgage Fees and Specialty Income Drive Decline Noninterest income totaled $83.4 million, down $6.2 million, or 7% linked-quarter Secondary mortgage fees impacted by a rising rate environment resulting in a lower level of refinance activity The decrease in other noninterest income is prim
Slide 16: Efficiency Initiatives Keep Expenses Manageable
Efficiency Initiatives Keep Expenses Manageable Noninterest expense totaled $179.9 million, down $2.5 million, or 1% linked-quarter Personnel expense continues to reflect recent efficiency initiatives Professional expenses down from lower consulting and legal fees Gain on sales of ORE and other fore
Slide 17: Solid Capital, TCE Impacted By OCI
Solid Capital, TCE Impacted By OCI CET1 ratio estimated at 11.12%, up 3 bps linked-quarter TCE ratio 7.15%, down 56 bps LQ Impact of OCI -86 bps Dividends -7 bps Stock buyback -5 bps Tangible net earnings +36 bps Change in tangible assets +4 bps Stock Compensation and other +2 bps Repurchased 350,00
Slide 18: 2022 Forward Guidance
2022 Forward Guidance Q1 2022 Actual FY 2022 Outlook ** Core Loans (EOP) (excl PPP loans) * $21.0B (excl PPP loans) Expect 6-8% EOP core loan growth from $20.6B at 12/31/21; quarterly results will reflect normal seasonality Deposits (EOP) $30.5B Expect EOP deposits to remain flat to slightly down fr
Slide 19: Additional Guidance Related to Future Rate Increases
Additional Guidance Related to Future Rate Increases 2022 annual guidance and CSOs do not include impacts of future interest rate changes Future rate increases are a tailwind for revenue and we could achieve our 55% efficiency ratio target sooner than 4Q22 We do not expect future rate increases to s
Slide 20: Efficiency ratio target of 55% to be achieved by 4Q22
Efficiency ratio target of 55% to be achieved by 4Q22 Successfully implemented efficiency initiatives during 2021 Thoughtful execution of revenue and efficiency strategies will continue throughout 2022: Continued momentum in core loan growth Maintain our focus on expense management in 2022 Additiona
Slide 21: Strategic Plan Designed To Provide Meaningful Shareholder Returns
Strategic Plan Designed To Provide Meaningful Shareholder Returns Updated CSOs Recover value and establish forward momentum Employer of Choice Path to 55% Efficiency Ratio Expense focus continues in order to fund revenue enhancements Revenue enhancements are the main driver in achieving goal by 4Q22
Slide 22: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations Appendix and Non-GAAP Reconciliations CHANCOCK WHITNEY
Slide 23: Summary Income Statement
Summary Income Statement ($ in millions, except for per share data) *Non-GAAP measure: see slide 27 for non-GAAP reconciliation Change 1Q22 4Q21 1Q21 LQ Prior Year Net Interest Income (TE) 231.0 231.9 237.5 (0.9) (6.5) Provision for Credit Losses (22.5) (28.4) (4.9) 5.9 (17.6) Noninterest Income 83.
Slide 24: Summary Balance Sheet
Summary Balance Sheet ($ in millions) 1Q22 includes $0.3 billion, 4Q21 includes $0.5 billion and 1Q21 includes $2.3 billion in PPP loans, net 1Q22 includes $0.4 billion, 4Q21 includes $0.7 billion and 1Q21 includes $2.2 billion in average PPP loans, net Average securities excludes unrealized gain/(l
Slide 25: Results
Results *Non-GAAP measure: see slide 27 for non-GAAP reconciliation 1Q21 2Q21 3Q21 4Q21 1Q22 Operating PPNR (TE)* ($000) 131,526 137,176 134,784 134,152 134,501 Net Interest Income (TE) ($000) 237,509 237,498 237,477 231,931 231,008 Net Interest Margin (TE) 3.09% 2.96% 2.94% 2.80% 2.81% Operating No
Slide 26: Balance Sheet Summary
Balance Sheet Summary 1Q21 2Q21 3Q21 4Q21 1Q22 Average Loans ($MM) 21,745 21,389 20,941 20,770 21,122 Average Total Securities ($MM) 7,469 8,195 8,369 8,378 8,688 Average Deposits ($MM) 28,139 29,229 29,237 29,751 30,030 Loan Yield (TE) 4.01% 3.95% 3.90% 3.83% 3.72% Cost of Deposits 0.13% 0.10% 0.07
Slide 27: Operating Revenue (TE), Operating PPNR (TE) Reconciliations
Operating Revenue (TE), Operating PPNR (TE) Reconciliations Three Months Ended (in thousands) 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Net interest income $228,463 $229,296 $234,709 $234,643 $234,587 Noninterest income 83,432 89,612 93,361 94,272 87,089 Total revenue $311,895 $318,908 $328
Slide 28: Loan Portfolio Composition
Loan Portfolio Composition As of March 31, 2022 HNCOCK WHITNEY 10 Total Loans Outstanding % of Total Loans Commitment ($s in millions) Real Estate, Rental and Leasing $3,536 16.6% $5,115 Retail Trade 1,882 8.8% 2,287 Health Care and Social Assistance 1,797 8.4% 2,306 Construction 1,249 5.9% 2,163 Ho
Slide 29: Current Hedge Positions
Current Hedge Positions Cash Flow (CF) Hedges Receive 152 bps/pay 1 month LIBOR on $1.3 billion $500 million of CF hedges terminated in 3Q21 will provide NII support of $16.7 million in 2022 and 2023 collectively No additional CF hedges were terminated in 1Q22 Total Termination Value on remaining ac
Slide 30: First Quarter 2022 Earnings Conference Call
First Quarter 2022 Earnings Conference Call 4/19/2022 HANCOCK WHITNEY