Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q1 2021 Earnings Presentation
30 slides from Hancock Whitney's earnings presentation, Apr 20, 2021
Slide 1: First Quarter 2021 Earnings Conference Call
First Quarter 2021 Earnings Conference Call 4/20/2021 HNCOCK 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 (as of March 31, 2021)
Corporate Profile (as of March 31, 2021) ► $35.1 billion in Total Assets ► $21.7 billion in Total Loans (includes $2.3 billion in PPP loans) ► $29.2 billion in Total Deposits ► CET1 ratio 11.02%(e) ► Tangible Common Equity (TCE) ratio 7.26% (7.80% excluding PPP loans) ► $3.6 billion in Market Capita
Slide 5: First Quarter 2021 Highlights
First Quarter 2021 Highlights ► Net income of $107.2 million, or $1.21 per diluted share, ($s in millions; except per share data) 1Q21 4Q20 1Q20 was up $3.6 million, or $0.04 per share, compared to 4Q20 Net Income (loss) $107.2 $103.6 ($111.0) ► Pre-provision net revenue (PPNR)* totaled $131.5 milli
Slide 6: 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 19,000 loans totaling $3.2 billion ► During 1Q21, $836 million in PPP loans were originated under the extended CARES Act program with $496 million in PPP
Slide 7: Loan Decline Reflects Lower Demand and Lower Line Utilization
Loan Decline Reflects Lower Demand and Lower Line Utilization ► Loans totaled $21.7 billion, down $125.1 million, net, linked-quarter – $836.4 million in new PPP loan origination – $496.0 million in PPP loan forgiveness – $465.5 million in net payoffs and paydowns of core loans ► Core loans declined
Slide 8: Hospitality Outlook Across our Footprint
Hospitality Outlook Across our Footprint West (S.W. LA & TX) Central (S.E. LA) East (MS, AL, FL, TN) ▶ Total hospitality loans equal $251 million ▶ Total hospitality loans equal $535 million ▶ Total hospitality loans equal $357 million ▶ Operating limits and mask mandates in ▶ As of March 29, all Lo
Slide 9: Commercial Loans (C&I, CRE, C&D)
Commercial Loans (C&I, CRE, C&D)* Total Commercial Loans % of Total ($s in millions) Outstanding Loans Commitment Real Estate, Rental and Leasing $3,253 16.8% $4,273 Retail Trade 1,765 9.1% 2,153 Health Care and Social Assistance 1,619 8.4% 2,087 Hospitality 1,143 5.9% 1,285 Manufacturing 963 5.0% 1
Slide 10: Cautious Optimism Leads to Narrowed Sectors Under Focus
Cautious Optimism Leads to Narrowed Sectors Under Focus* Criticized NPL Pass-Watch Structured Solutions** $ in millions East Central West Other Total $ % $ % $ % $ % Retail Retail - ICRE 149 303 219 — 670 5 1% 4 1% 12 2% 55 8% Retail Goods and Services 357 371 238 129 1,095 7 1% 6 1% 29 3% — — Total
Slide 11: NPLs and Criticized Commercial Loans Continue to Decline
NPLs and Criticized Commercial Loans Continue to Decline $600 3.24% $500 2.70% 2.57% $400 2.26% 2.31% 1.34% $300 0.95% 0.91% $200 0.73% 0.59% $100 $0 1Q20 2Q20 3Q20 4Q20 1Q21 Total Loans excl. PPP $21,516 $20,341 $19,919 $19,784 $19,319 Total Commercial Loans excl. PPP $16,384 $15,420 $15,216 $15,26
Slide 12: Modest Reserve Release
Modest Reserve Release ► Net charge-offs of $18.3 million and a reserve release of $23.2 million drove a negative provision for the quarter of ($4.9) million Net Reserve Build Total ― Charge-offs include $13.8 million from one legacy energy credit ($s in millions) Charge-Offs (Release) Provision Com
Slide 13: Securities Portfolio Conservative with Minimal Risk
Securities Portfolio Conservative with Minimal Risk ► Securities portfolio totaled $8.0 billion, up $861.8 million, or 12%, linked-quarter Securities Portfolio Mix Munis 3/31/21 ► Purchases during 1Q21 were mainly in mortgage $s in millions $933 backed securities at an average yield of 1.30% 12% CMB
Slide 14: Higher Core Deposits Reflects Resiliency
Higher Core Deposits Reflects Resiliency ► Total deposits of $29 billion, up $1.5 billion, or 5%, linked-quarter as Total Deposits 3/31/21 stimulus and PPP payments were distributed during the quarter $s in millions Interest- ― Noninterest-bearing demand deposits (DDAs) increased $975.2 bearing mill
Slide 15: Strong Liquidity
Strong Liquidity $19.8 Billion in Available Sources Total Amount Net ($ in millions) Available Used Availability Internal Sources Free Securities and other $6,363 $— $6,363 External Sources Federal Home Loan Bank (FHLB) 5,849 2,585 3,263 Federal Reserve Bank (FRB) 4,691 — 4,691 Brokered Deposits 4,3
Slide 16: NIM Compression; Stable Net Interest Income
NIM Compression; Stable Net Interest Income ► Net interest margin (NIM) at 3.09%, down 13 bps; net interest income (TE) down 3.40% $3.9 million 3.30% ― $3.6 million of the decline due to two less 3.20% accrual days in the first quarter 0.02% 0.07% 0.05% 3.10% ► NIM Headwinds: 3.00% 3.22% 0.13% ― Imp
Slide 17: IRR Sensitivity
IRR Sensitivity ► Loans, excluding PPP, totaled $19.3 billion at March 31, 2021 ► Loan portfolio 56% ($11 billion) variable at March 31, 2021 (excludes PPP) ― 61% ($6.6 billion) of variable loans are LIBOR-based (34% of loan portfolio excluding PPP) ● 96% of the LIBOR loans are tied to 1 month LIBOR
Slide 18: Higher Specialty Income Drives Improvement in Fee Income
Higher Specialty Income Drives Improvement in Fee Income $90 $88 $2.9 $86 $0.2 $1.6 $0.2 $84 $0.5 $s in millions $82 $80 $0.7 $87.1 $78 $82.4 $76 $74 $72 $70 4Q20 Noninterest Service Charges on Bank Card & ATM Fees Investment & Annuity Trust Fees Secondary Mortgage Other 1Q21 Noninterest Income Depo
Slide 19: A Focus on Expense Control Continues; More Initiatives Underway
A Focus on Expense Control Continues; More Initiatives Underway $225 $0.1 $0.2 $3.2 $200 $0.4 $3.5 $s in millions $7.4 $175 $193.1 $193.1 $150 4Q20 Noninterest Personnel Occupancy and Amortization of Professional ORE Expense Other (net) 1Q21 Noninterest Expense Expense Equipment Intangibles services
Slide 20: Solid Capital, TCE Impacted by Excess Liquidity and OCI
Solid Capital, TCE Impacted by Excess Liquidity and OCI ► TCE ratio 7.26%, down 38 bps LQ Capital Ratios (7.80% excluding PPP loans) 15% ― Change in OCI & other -34 bps ― Change in tangible assets/additional excess liquidity -32 bps 10% ― Dividends -7 bps ― Tangible net earnings +34 bps ― Stock Comp
Slide 21: Solid Capital In Excess of Regulatory Minimums
Solid Capital In Excess of Regulatory Minimums Estimated Regulatory Capital as of March 31, 2021 Common Total Tier 1 Equity Tier 1 Risk-based Leverage $s in millions Tier 1 Capital Capital Ratio Total Asset Base $23,786 $23,786 $23,786 $33,233 Total Capital 2,622 2,622 3,242 2,622 Capital Ratio 11.0
Slide 22: Near Term Outlook
Near Term Outlook Q1 2021 Items to note Q2 2021 FY 2021 Actual Outlook Outlook Core Loans $19.3 Core loans down Expect core loans to be flat Expect EOP core loans to be up $700 to $800 million (EOP) (excl billion (excl $465.5 million linked- in 2H21 and end the year at approximately $20.1 PPP loans)
Slide 23: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations Appendix and Non‐GAAP Reconciliations CHANCOCK WHITNEY
Slide 24: Summary Income Statement
Summary Income Statement ($ in millions, except for share data) Change 1Q21 4Q20 1Q20 LQ Prior Year Net Interest Income (te) 237.5 241.4 234.6 (3.9) 2.9 Provision for Credit Losses (4.9) 24.2 246.8 (29.1) (251.7) Noninterest Income 87.1 82.4 84.4 4.7 2.7 Noninterest Expense 193.1 193.1 203.3 (0.1) (
Slide 25: Summary Balance Sheet
Summary Balance Sheet ($ in millions) Change 1Q21 4Q20 1Q20 LQ Prior Year EOP Balance Sheet Loans (1) 21,664.9 21,789.9 21,515.7 (125.1) 149.2 Securities 8,006.0 7,356.5 6,374.5 649.5 1,631.5 Earning Assets 32,134.6 30,616.3 28,834.0 1,518.4 3,300.5 Total assets 35,072.6 33,638.6 31,761.7 1,434.0 3,
Slide 26: Results
Results Operating PPNR* Net Interest Income (TE)* Net Interest Margin (TE)* $150 ($s in millions) $250 ($s in millions) 3.45% 3.41% $140 $131.5 $245 $241.1 $241.4 3.30% $126.3 3.23% 3.23% 3.22% $130 $238.4 $118.5 $130.6 $240 $237.5 $115.7 $234.6 $120 3.15% 3.09% $235 $110 $100 $230 3.00% 1Q20 2Q20 3
Slide 27: Balance Sheet Summary
Balance Sheet Summary Average Loans Average Securities Average Deposits $26 ($s in billions) $8 ($s in billions) $30 ($s in billions) $7.5 $28.1 $24 $23.0 $6.9 $28 $26.7 $26.8 $27.0 $22.4 $22.1 $7 $21.7 $6.4 $22 $21.2 $6.1 $6.1 $26 $24.3 $6 $20 $24 $18 $5 $22 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20
Slide 28: EPS Calculation
EPS Calculation Three Months Ended (in thousands, except per share amounts) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Net Income (loss) $107,172 $103,575 $79,356 ($117,072) ($111,033) Net income or dividends allocated to participating securities (2,337) (2,076) (1,436) (422) (427) Net incom
Slide 29: Total Revenue (TE), Operating PPNR (TE) Reconciliations
Total Revenue (TE), Operating PPNR (TE) Reconciliations Three Months Ended (in thousands) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Net interest income $234,587 $238,286 $235,183 $237,866 $231,188 Noninterest income 87,089 82,350 83,748 73,943 84,387 Total revenue $321,676 $320,636 $318,931
Slide 30: First Quarter 2021 Earnings Conference Call
First Quarter 2021 Earnings Conference Call 4/20/2021 Fourth Quarter 2020 Earnings Conference Call 1/20/2021 CHANCOCK WHITNEYa