Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q1 2019 Earnings Presentation
29 slides from Hancock Whitney's earnings presentation, Apr 16, 2019
Slide 1: First Quarter 2019 Earnings Conference Call
First Quarter 2019 Earnings Conference Call 4/17/2019 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 balance sheet and revenue gr
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, 2019)
Corporate Profile (as of March 31, 2019) $28.5 billion in Total Assets $20.1 billion in Total Loans $23.4 billion in Total Deposits Tangible Common Equity (TCE) ratio 8.36% Nearly 200 banking locations and 271 ATMs across our footprint Approximately 3,900 (FTE) employees corporate-wide Rated among t
Slide 5: First Quarter 2019 Highlights
First Quarter 2019 Highlights (compared to fourth quarter 2018) Net income of $79.2 million, or $.91 per diluted share, down $17.1 million, or $.19 per share; operating earnings of $87.1 million, down $10.6 million, or $.12 per share Linked-quarter changes impacted by provision/chargeoff related to
Slide 6: Growth Diversified Across Footprint and Many Lines of Business
Growth Diversified Across Footprint and Many Lines of Business Loans totaled $20.1 billion at quarter-end, an increase of $86 million, or 2% LQA Items impacting first quarter growth versus expectation: Unanticipated paydowns Loan charge-offs Sale of mortgage loans Loan portfolio 53% variable 58% of
Slide 7: A More Balanced Energy Portfolio
A More Balanced Energy Portfolio Energy loans totaled $1.1 billion, or 5.3% of total loans, virtually unchanged from both last quarter and a year earlier Continued efforts to change the mix between RBL/midstream and support services Energy portfolio comprised of 54% RBL and midstream credits, 46% su
Slide 8: Criticized Commercial Loans Down 7% Linked-Quarter
Criticized Commercial Loans Down 7% Linked-Quarter Total criticized commercial loans % of total commercial loans $1,084 7.56% $897 6.19% $834 5.72% $626 4.18% $584 3.88% Criticized – Nonenergy % of total commercial loans $561 3.91% $489 3.37% $477 3.27% $346 2.31% $320 2.12% Criticized – energy % of
Slide 9: Criticized Commercial Loan Trends Nearing Peer Average
Criticized Commercial Loan Trends Nearing Peer Average *Using 4Q18 as proxy for 1Q19 Investor Peers: ASB, BXS, BKU, BOKF, CBSH, CFR, FHN, IBKC, PNFP, PB, SNV, TCBI, UMBF, WBS
Slide 10: Nonperforming Loans Improved Slightly Linked-Quarter
Nonperforming Loans Improved Slightly Linked-Quarter Total nonperforming loans % of total loans $442 2.31% $394 2.03% $364 1.86% $326 1.63% $322 1.60% Nonperforming loans – nonenergy % of total loans $163 0.85% $157 0.81% $144 0.74% $130 0.65% $141 0.70% Nonperforming loans – energy % of total loans
Slide 11: NPL Components
NPL Components ($ Millions) 1Q18 2Q18 3Q18 4Q18 1Q19 Nonaccrual Loans 275 242 202 187 205 Accruing TDRs 167 153 162 139 118 NPL Totals 442 394 364 326 322 % NPLs Accruing 38% 39% 45% 43% 37% Accruing NPLs Account For Approximately One-Third of Total NPLs Nonaccrual loans of $205 million at 1Q19 decl
Slide 12: Provision for Loan Losses Impacted by Alleged Fraud Loss
Provision for Loan Losses Impacted by Alleged Fraud Loss Provision Provision for loan losses was $18.0 million; $10.1 million related to the alleged DC Solar fraud Net charge-offs totaled $17.9 million, or 36 bps; $10.1 million related to DC Solar Opportunity for possible recoveries on DC Solar cred
Slide 13: NIM Expansion Reflects Full Quarter Impact of Portfolio Restructuring
Net interest margin (NIM) of 3.46%, up 7 bps linked-quarter; 5 bps related to full quarter impact of 4Q18 portfolio restructuring Loan yield up 13 bps Yield on securities portfolio up 7 bps Cost of funds up 7 bps Cost of deposits up 11 bps NIM Expansion Reflects Full Quarter Impact of Portfolio Rest
Slide 14: Securities Portfolio
Securities Portfolio Portfolio totaled $5.6 billion, down $93 million, or 2%, linked-quarter Yield 2.69%, up 7 bps linked-quarter Premium amortization down $0.7 million linked-quarter Unrealized net loss of $17.8 million on AFS compared to $64.8 million at December 31, 2018 52% HTM, 48% AFS Duration
Slide 15: First Quarter Growth Impacted by Seasonality
First Quarter Growth Impacted by Seasonality Total deposits $23.4 billion, up $230 million, or 1%, linked-quarter Noninterest-bearing demand deposits (DDA) decreased $340 million, mainly related to expected seasonal outflows Interest-bearing transaction and savings deposits increased $224 million Ti
Slide 16: Seasonality and Market Conditions Drive Changes in Fees
Seasonality and Market Conditions Drive Changes in Fees Noninterest income totaled $70.5 million, down $4.0 million, or 5% linked-quarter Fourth quarter of 2018 included a $0.6 million net gain related to the portfolio restructuring during the quarter Mainly related to early 1Q19 market conditions I
Slide 17: Focused on Managing Expenses
Focused on Managing Expenses Operating expense (noninterest expense excluding nonoperating items) totaled $175.7 million, down $1.2 million, or 1% linked-quarter There were no nonoperating expenses in 1Q19 compared to $2.5 million in 4Q18 related to the trust and asset management acquisition, expens
Slide 18: Internal Capital Generation Drives Higher TCE
Internal Capital Generation Drives Higher TCE TCE ratio 8.36%, up 34 bps linked-quarter Growth in tangible assets -7 bps Tangible net earnings +29 bps OCI +18 bps; related to improvement in unrealized loss on the AFS securities portfolio Dividends -9 bps Stock-based comp activity & other +3 bps Will
Slide 19: Near-Term Outlook
Near-Term Outlook 1Q19 Actual Items to note 2019 Outlook Loans (EOP) +$86 million or 2% LQA; +up $1 billion or 5% Y-o-Y Expect net loan growth of $75-$125 million for 2Q19 due to higher anticipated paydowns; expect full year average growth for 2019 in mid single digits Net Interest Margin (NIM) 3.46
Slide 20: Long-Term Outlook – Goal to Achieve Objectives by 4Q20
Long-Term Outlook – Goal to Achieve Objectives by 4Q20 Quarterly Objective (to be achieved by 4Q20) Earnings (EPS)/quarter (excluding nonoperating items) $1.20 - $1.25 ROA (operating) 1.40% - 1.45% TCE >8% ROTCE (operating) >15% Efficiency Ratio <56% 2019/2020 Corporate Strategic Objectives (CSOs) G
Slide 21: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations
Slide 22: Operating Results
Operating Results *Non-GAAP measures. See slides 26-28 for non-GAAP reconciliations 1Q18 2Q18 3Q18 4Q18 1Q19 Operating Earnings* ($000) 78,257 83,663 87,691 97,705 87,130 Operating EPS* $0.90 $0.96 $1.01 $1.12 $1.00 Net Interest Income (TE)* ($000) 209,627 215,628 218,289 221,471 223,078 Operating N
Slide 23: Key Operating Ratios
Key Operating Ratios 1Q18 2Q18 3Q18 4Q18 1Q19 Operating Return on Assets* 1.17% 1.22% 1.24% 1.37% 1.24% Operating Return on Equity * 11.05% 11.54% 11.78% 12.95% 11.33% Operating Return on TCE* 15.56% 16.12% 16.84% 18.43% 15.83% Tangible Common Equity Ratio 7.80% 7.76% 7.67% 8.02% 8.36% Net Interest
Slide 24: Balance Sheet Summary
Balance Sheet Summary 1Q18 2Q18 3Q18 4Q18 1Q19 Average Loans ($MM) 19,028 19,193 19,465 19,818 20,127 Average Total Securities ($MM) 5,897 6,032 6,186 5,965 5,657 Average Deposits ($MM) 22,043 22,101 22,022 22,498 23,114 Loan Yield (TE) 4.43% 4.55% 4.63% 4.71% 4.84% Securities Yield (TE) 2.46% 2.50%
Slide 25: Well-Diversified Loan Portfolio
Well-Diversified Loan Portfolio
Slide 26: Operating Earnings & Operating EPS Reconciliations
Operating Earnings & Operating EPS Reconciliations Three Months Ended (in thousands, except per share amounts) 3/31/2019 12/31/2018 9/30/2018 6/30/2018 3/31/2018 Net Income $79,164 $96,240 $83,878 $71,177 $72,475 Net income allocated to participating securities (1,337) (1,691) (1,544) (1,328) (1,366
Slide 27: Operating ROA, ROE & ROTCE Reconciliations
Operating ROA, ROE & ROTCE Reconciliations Three Months Ended (dollars in thousands) 3/31/2019 12/31/2018 9/30/2018 6/30/2018 3/31/2018 Net Income $79,164 $96,240 $83,878 $71,177 $72,475 Nonoperating items, net of income tax benefit 7,966 1,465 3,813 12,486 5,782 Operating earnings $87,130 $97,705 $
Slide 28: Operating Revenue (TE) & Operating PPNR (TE) Reconciliations
Operating Revenue (TE) & Operating PPNR (TE) Reconciliations Three Months Ended (in thousands) 3/31/2019 12/31/2018 9/30/2018 6/30/2018 3/31/2018 Net interest income $219,254 $217,433 $214,194 $211,547 $205,664 Noninterest income 70,503 74,538 75,518 68,832 66,252 Total revenue $289,757 $291,971 $28
Slide 29: First Quarter 2019 Earnings Conference Call
First Quarter 2019 Earnings Conference Call 4/17/2019