Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q2 2024 Earnings Presentation
36 slides from Hancock Whitney's earnings presentation, Jul 16, 2024
Slide 1: Second Quarter 2024 Earnings Conference Call
Second Quarter 2024 Earnings Conference Call 7/16/2024 HANCOCK 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
Corporate Profile $35.4 billion in Total Assets (Healthcare) $23.9 billion in Total Loans (ABL) (Trust) (Operations) $29.2 billion in Total Deposits CET1 Ratio 13.25%* TCE Ratio 8.77% $4.1 billion in Market Cap 180 223 Baa3 Moody’s banking locations ATMs Long-term issuer rating; stable outlook Appro
Slide 5: How we do business
How we do business Our Mission. Our Purpose. Our Promise to Associates. Each day, we reaffirm our We work hard to create We honor and respect mission to help people achieve opportunities for people and associates with a heartfelt their financial goals and the communities we serve—our promise: You ca
Slide 6: HWC Strong and Stable for 125 Years
HWC Strong and Stable for 125 Years ► Strength to manage through a challenging economic environment ► Density and market share in resilient deposit markets ► Stable, seasoned, diversified deposits; ability to organically grow deposits ► Solid capital levels continued to build and remain well-capital
Slide 7: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights ► Net income totaled $114.6 million, or $1.31 per ($s in millions; except per share data) 2Q24 1Q24 2Q23 diluted share, compared to $108.6 million, or $1.24 per diluted share in 1Q24 Net income $114.6 $108.6 $117.8 ─ There were no supplemental disclosure items in 2Q24.
Slide 8: Loan Balances Virtually Flat Linked-Quarter
Loan Balances Virtually Flat Linked-Quarter ► Loans totaled $23.9 billion, down $59 million, or 1% LQA; primarily due to SNC runoff of $221 million Line Utilization ► Healthcare contraction driven primarily by strategic 50.0% reductions in large credit-only deals ► Line utilization impacted by lower
Slide 9: Loan Portfolio Composition Diversified and De-Risked
Loan Portfolio Composition Diversified and De-Risked ► Loan portfolio diverse across a number of Total Loans % of Total ($s in millions) Outstanding Loans Commitment segments and industries Commercial non-RE (C&I) $7,751 32.4% $13,451 ► Conservative underwriting in both type and CRE - owner 2,537 10
Slide 10: DDA Mix Stable; Brokered Deposits Lower
DDA Mix Stable; Brokered Deposits Lower ► Total deposits of $29.2 billion, down $575 million, or 8% LQA EOP Deposits Mix ($) – Brokered deposits decreased $195 million due to maturities that 35,000 were not replaced during 2Q24 30,000 25,000 – Pace of noninterest-bearing DDA outflows continued to sl
Slide 11: Criticized Commercial and Nonaccrual Loans Normalize
Criticized Commercial and Nonaccrual Loans Normalize $450 $400 2.05% 1.83% $350 1.62% $300 1.46% 1.47% $250 $200 $150 $100 0.33% 0.34% 0.36% 0.25% 0.25% $50 $0 2Q23 3Q23 4Q23 1Q24 2Q24 Total Loans $23,790 $23,984 $23,922 $23,971 $23,912 Total Commercial Loans 18,703 18,799 18,589 18,591 18,524 Criti
Slide 12: Maintained Solid Reserves
Maintained Solid Reserves ► Provision for the second quarter of 2024 of $8.7 million, Reserve Build / reflects $7.3 million of net charge-offs and a reserve build Net Charge-offs (Release) Total Provision of $1.4 million ($s in millions) 2Q24 1Q24 2Q24 1Q24 2Q24 1Q24 – Continued normalization in net
Slide 13: Portfolio Reinvestment Drives Yield Increase
Portfolio Reinvestment Drives Yield Increase ► Securities portfolio* totaled $8.2 billion at 6/30/24, flat linked-quarter Securities Portfolio* Mix 6/30/24 ► 69% AFS, 31% HTM at 6/30/24 $s in millions Munis ► To reduce OCI volatility and provide flexibility to $833 reposition and/or reprice the hedg
Slide 14: NIM Expansion Linked-Quarter
NIM Expansion Linked-Quarter ► 2Q24 NIM 3.37%, up 5 bps from 1Q24 – NIM 3.37% for the month of June 2024 3.50% 0.06% 0.01% 0.01% ► NII (TE) of $273.3 million, compared to $269.0 million 3.40% prior quarter 3.30% 0.03% 3.20% Increase in NII driven by higher loan and securities yields 3.10% and lowe
Slide 15: New Loan Rates Impacted by Rate Environment
New Loan Rates Impacted by Rate Environment New Loans Fixed Loans Variable Loans Total New Loan Rate* 9.00% $1,500 8.03% 8.15% 7.91% 8.01% 7.40% 7.50% 6.88% $1,250 6.00% $1,000 $ in millions 4.50% $750 $845 3.00% $500 $725 $748 $648 $621 $793 $250 1.50% $481 $397 $333 $291 $266 $247 $0 0.00% 1Q23 2Q
Slide 16: Key IRR Metrics
Key IRR Metrics Loans ► Loans totaled $23.9 billion at June 30, 2024 – 39% fixed, 61% variable (includes hybrid ARMs) – 71% of variable loans tied to SOFR – 22% of variable loans tied to Wall Street Journal Prime – 7% of variable loans tied to other indices Securities ► Expect reinvestment of princi
Slide 17: Fee Income Growth Linked-Quarter
Fee Income Growth Linked-Quarter $100 $1.2 $1.4 $0.7 $0.1 $90 $80 $2.1 $70 $60 $s in millions $50 $87.9 $89.2 $40 $30 $20 $10 $0 1Q24 Noninterest Bank card & Investment & Trust fees Secondary Other 2Q24 Noninterest Income ATM fees annuity income mortgage Income and insurance fees Noninterest Income
Slide 18: Expenses Remain Well Controlled
Expenses Remain Well Controlled Noninterest Expense Mix ► Noninterest expense totaled $206.0 million, down $1.7 6/30/24 $s in millions million, or 1% linked-quarter; ─ There were no supplemental disclosure items in 2Q24; 1Q24 Other, net (incl. Amortization of included $3.8 million related to the FDI
Slide 19: Capital Levels Continue to Improve
Capital Levels Continue to Improve ► CET1 ratio estimated at 13.25%, up 60 bps linked- CET1 Ratio and quarter Tangible Tier 1 Risked- Total Common Leverage Based Capital Risk-Based Equity Ratio Ratio Ratio Capital Ratio ► Leverage (Tier 1) ratio estimated at 10.71%, up 22 bps linked-quarter June 30,
Slide 20: Remain Well Capitalized Including All Unrealized Losses
Remain Well Capitalized Including All Unrealized Losses 6/30/2024 Inc. AOCI Inc. AOCI + HTM Well Capitalized As Reported* Losses (1) Losses(2) Minimum Tangible Common Equity Ratio 8.77% 8.77% 8.31% N/A Leverage (Tier 1) Ratio 10.71% 9.21% 8.75% 5.00% CET1 Ratio 13.25% 11.26% 10.66% 6.50% Tier 1 Risk
Slide 21: 2024 Forward Guidance
2024 Forward Guidance Guidance 2Q24 FY 2024 Direction Actual Outlook Loans (EOP) Updated $23.9B Expect EOP loans at 12/31/24 to be flat to down slightly from 12/31/23 levels Deposits (EOP) Updated $29.2B Expect EOP deposits at 12/31/24 to be flat to down slightly from 12/31/23 levels Adjusted Pre-Pr
Slide 22: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations Appendix and Non-GAAP Reconciliations CHANCOCK WHITNEY
Slide 23: Summary Balance Sheet
Summary Balance Sheet ($ in millions) Change Change 2Q24 1Q24 2Q23 LQ Prior Year YTD 2024 YTD 2023 Y-o-Y EOP Balance Sheet 23,911.6 23,970.9 23,789.9 (59.3) 121.7 Loans 23,911.6 23,789.9 121.7 7,535.8 7,559.2 8,195.7 (23.4) (659.9) Securities 7,535.8 8,195.7 (659.9) 32,056.4 31,985.6 32,715.6 70.8 (
Slide 24: Balance Sheet Summary
Balance Sheet Summary Average Loans Average Securities* Average Deposits ($s in billions) ($s in billions) ($s in billions) $25 $11 $32 $23.8 $23.8 $23.8 $23.9 $23.7 $24 $30.0 $10 $29.8 $29.6 $30 $29.4 $9.0 $29.1 $23 $8.9 $9 $8.6 $22 $8.2 $8.2 $28 $8 $21 $20 $7 $26 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23
Slide 25: ICRE Segmentation Detail and Key Metrics
ICRE Segmentation Detail and Key Metrics ► CRE-Income producing (ICRE) loan portfolio is Total Loans % of Total diversified by asset class, industry and geographic ($s in millions) Outstanding Loans Commitment region Multifamily $914 3.8% $922 Office $711 3.0% $740 ► ICRE 16.9% of total loans and in
Slide 26: EOP Loan Repricing and Maturity
EOP Loan Repricing and Maturity Repricing/Maturity Term (1) Rate Structure 3 months 4-12 Over 15 Total Loans Variable Fixed 1-3 Years 3-5 Years 5-15 Years ($s in millions) or less months Years (EOP) Rate Rate Commercial Non-RE $6,297 $249 $1,039 $1,225 $958 $80 $9,848 $6,470 $3,378 CRE-Owner 1,041 5
Slide 27: Total Loan Rates and Yield Trends
Total Loan Rates and Yield Trends Total Loans $30,000 Fixed Loans Variable Loans Total Loan Yield** 7.00% 6.16% 6.24% 6.01% 6.11% 5.81% 6.00% $25,000 5.54% 5.00% $20,000 4.00% $ in millions $15,000 3.00% $13,828 $14,144 $14,329 $14,311 $14,524 $14,474 $10,000 2.00% $5,000 1.00% $9,577 $9,646 $9,655
Slide 28: Maintaining a Seasoned, Stable, Diversified Deposit Base
Maintaining a Seasoned, Stable, Diversified Deposit Base ► DDAs as a % of total deposits remains among best-in-class at 36% at June 30, 2024 ► Uninsured deposits (adjusted for collateralized public funds) were 35.9% at June 30, 2024, up 1% linked-quarter EOP Deposits by Line of Business – The Insure
Slide 29: Strong Liquidity Position; Multiple Sources of Funding Available
Strong Liquidity Position; Multiple Sources of Funding Available ▶ Currently have approximately $20.2 billion in At June 30, 2024 Total Amount Net internal and external sources of liquidity if $ in millions Sources Used Availability needed Internal Sources Free Securities $ 4,050 $ - $ 4,050 ▶ Over
Slide 30: Summary Income Statement
Summary Income Statement ($ in millions, except for per share data) Change Change 2Q24 1Q24 2Q23 LQ Prior Year YTD 2024 YTD 2023 Y-o-Y 273.3 269.0 276.7 4.3 (3.4) Net interest income (TE) 542.3 564.3 (22.0) 8.7 13.0 7.6 (4.3) 1.1 Provision for credit losses 21.7 13.7 8.0 89.2 87.9 83.2 1.3 6.0 Nonin
Slide 31: Income Statement Summary (as Adjusted)
Income Statement Summary (as Adjusted*) Adjusted PPNR* Net Interest Income (TE) Net Interest Margin (TE) ($s in millions) ($s in millions) $180 $320 3.75% $170 $300 3.60% $157.8 $276.7 $157.5 $156.4 $272.1 $272.3 $273.3 $160 $153.4 $152.9 $280 $269.0 3.45% 3.37% 3.30% 3.32% 3.27% 3.27% $150 $260 3.3
Slide 32: Current Hedge Positions
Current Hedge Positions Cash Flow (CF) Hedges ► Receive 215 bps versus paying 1 month SOFR on $1.6 billion ► No new CF hedges were executed and no CF hedges were terminated in 2Q24 ► Total termination value on remaining active CF hedges is approximately ($91) million as of 6/30/24 ► Future maturitie
Slide 33: PPNR (TE) and Adjusted PPNR (TE) Reconciliation
PPNR (TE) and Adjusted PPNR (TE) Reconciliation Three Months Ended (in thousands) 2Q24 1Q24 4Q23 3Q23 2Q23 Net Income (GAAP) $114,557 $108,612 $50,603 $97,738 $ 117,794 Provision for credit losses 8,723 12,968 16,952 28,498 7,633 Income tax expense 30,308 24,720 11,705 24,297 29,571 Pre-provision ne
Slide 34: Adjusted Efficiency Ratio
Adjusted Efficiency Ratio Three Months Ended (in thousands) 2Q24 1Q24 4Q23 3Q23 2Q23 Net interest income $270,430 $266,171 $269,460 $269,234 $273,911 Noninterest income 89,174 87,851 38,951 85,974 83,225 Total GAAP revenue 359,604 354,022 308,411 355,208 357,136 Taxable equivalent adjustment* 2,828
Slide 35: Adjusted Earnings Per Share - Diluted; Adjusted ROA and ROTCE
Adjusted Earnings Per Share - Diluted Three Months Ended (in thousands) 2Q24 1Q24 Net Income (GAAP) $114,557 $108,612 Net income allocated to participating securities (810) (784) Net income available to common shareholders 113,747 107,828 Supplemental disclosure items, net of income tax* — 3,002 Sup
Slide 36: Second Quarter 2024 Earnings Conference Call
Second Quarter 2024 Earnings Conference Call 7/16/2024 HANCOCK WHITNEY