Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Hancock Holding — Q4 2015 Earnings Presentation
28 slides from Hancock Whitney's earnings presentation, Jan 21, 2016
Slide 1: Financial highlights summary table
Net interest income (TE) (a) 162,635 160,134 163,581 638,762 665,341 Noninterest income excluding securities transactions 59,655 60,207 56,961 236,949 227,999 Noninterest expense (excluding nonoperating items) 156,030 151,193 144,080 603,414 580,980 Net income 15,307 41,166 40,092 131,461 175,722 Pr
Slide 2: Fourth Quarter 2015 Financial Results
Fourth Quarter 2015Financial Results January 21, 2016
Slide 3: Forward Looking Statements
Certain of the statements or information included in this presentation may constitute forward-looking statements. Forward-looking statements include projections of revenue, costs, results of operations or financial condition or statements regarding future market conditions or our potential plans and
Slide 4: Hancock Holding Company
Hancock Holding Company $22.8 billion in Total Assets$15.7 billion in Total Loans$18.3 billion in Total DepositsTangible Common Equity (TCE) 7.62%Nearly 200 banking locations and 275 ATMs across a five-state footprintApproximately 4,000 employees corporate-wideRated among the strongest, safest finan
Slide 5: YTD 2015 Highlights
YTD 2015 Highlights(compared to YTD 2014) Total assets approximately $23 billionLoans increased $1.8 billion, or 13% Deposits increased $1.8 billion, or 11%Core revenue increased $33 millionFee income (excluding accretion in indemnification asset) relatively stableAllowance for energy loans $78.2 mi
Slide 6: Fourth Quarter 2015 Highlights
Fourth Quarter 2015 Highlights(compared to third quarter 2015) Loans increased $940 million, or 25% (annualized)Deposits increased $909 million, or 21% (annualized)Core revenue increased $2.8 millionFee income (excluding accretion in indemnification asset) relatively stableProvision for loan losses
Slide 7: Well-Diversified Loan Growth
Well-Diversified Loan Growth Loans totaled $15.7 billion at quarter-end, an increase of $940 million, or 6% linked-quarter (25% LQA)Net loan growth during the quarter was well-diversified by geography and loan typeEnergy loans totaled $1.58 billion, or 10% of total loans, down $80 million linked-qua
Slide 8: Core NIM Impacted By Decline in Core Loan Yield; Rate Increase Will Provide Tailwind
Core NIM Impacted By Decline in Core Loan Yield; Rate Increase Will Provide Tailwind Core NIM = reported net interest income (TE) excluding total net purchase accounting adjustments, annualized, as a percent of average earning assets. (See slide 23) Reported net interest margin (NIM) 3.21%, down 7bp
Slide 9: Energy Portfolio Well-Managed
Energy Portfolio Well-Managed The allowance for the energy portfolio was increased in the fourth quarter to $78.2 millionManagement currently estimates that charge-offs from energy-related credits could approximate $50-$75 million over the duration of the cycle 8 As of December 31, 2015 $s in billio
Slide 10: Diversified O&G Portfolio
Diversified O&G Portfolio 9 As of December 31, 2015 Energy portfolio totaled $1.58 billion at December 31, 2015, down $144 million, or 8%, from year-end 2014Relationship business dating back to post WWIIExcellent source of no/low cost core depositsDisciplined underwritingWith experienced management
Slide 11: Energy Portfolio Statistics
Energy Portfolio Statistics Borrowing base redeterminations twice per year (spring and fall); all credits were reviewed in 4Q15 and adjustments made to overall commitment levelsRBL commitments reduced approximately 15% on average in the spring of 2015 due to lower commodity prices, and again reduced
Slide 12: Energy Allowance and Balance Trends
Energy Allowance and Balance Trends 11 Total outstandingat 3-31-15 Total outstandingat 6-30-15 Total outstandingat 9-30-15 Total outstandingat 12-31-15 Energy ALLL3-31-15 Energy ALLL6-30-15 Energy ALLL9-30-15 Energy ALLL12-31-15 $623MM $627MM $607MM $566MM Upstream $5.0MM $10.1MM $11.0MM $12.7MM $10
Slide 13: Asset Quality Measures Reflect Impact Of Energy Cycle
Asset Quality Measures Reflect Impact Of Energy Cycle NPA ratio 1.22%, down 17 bps linked-quarter Nonperforming assets totaled $191 million, down $15.2 million from September 30, 2015Nonperforming energy loans totaled $70 million at December 31, 2015, down $28 million from last quarterProvision for
Slide 14: Allowance For Loan Losses
Allowance For Loan Losses The allowance for loan losses was $181.2 million (1.15%) up $41.6 million from $139.6 million (0.95%) linked-quarterThe allowance maintained on the non-FDIC acquired portion of the loan portfolio increased $44.0 million linked-quarter, totaling $158.1 million, while the all
Slide 15: Securities Portfolio – Portfolio Mix Increased Net Interest Income
Securities Portfolio – Portfolio Mix Increased Net Interest Income Portfolio totaled $4.5 billion, down $85 million, or 2% linked-quarter Yield 2.30% - up 5 bps linked-quarterUnrealized gain (net) of $6.7 million on AFS53% HTM, 47% AFSDuration 3.89 compared to 3.87 at 9-30-15Balance sheet is asset s
Slide 16: Solid Levels Of Core Deposit Funding
Solid Levels Of Core Deposit Funding Total deposits $18.3 billion, up $909 million, or 5%, linked-quarterNoninterest-bearing demand deposits (DDA) increased $1.2 billion, reflecting changes in consumer product offeringInterest-bearing transaction and savings deposits decreased $593 million, decline
Slide 17: Focus On Growing Core Noninterest Income Across Business Lines
Focus On Growing Core Noninterest Income Across Business Lines Noninterest income, including securities transactions, totaled $59.7 million, down $0.6 million, or 1%, linked-quarterAmortization of the indemnification asset for FDIC covered loans totaled $1.7 million, compared to $1.6 million in the
Slide 18: Quarterly Expenses Increased; Remain Focused On Expense Control
Quarterly Expenses Increased; Remain Focused On Expense Control Operating expenses totaled $156.0 million in 4Q15, up $4.8 million, or 3%, linked-quarterPersonnel expense totaled $85.3 million, up $1.2 million, or 1%, linked-quarter, mainly related to an increase in salary and incentive expense for
Slide 19: Continuing Efforts To Diversify Loan Portfolio Through Healthcare
Continuing Efforts To Diversify Loan Portfolio Through Healthcare LPO and Team in Nashville 18 Acquired approximately $185 million in healthcare loans in 4Q15Operating today in markets such as Houston with its well-known medical sector, and New Orleans with its revitalized medical district, we see t
Slide 20: Solid Capital Levels
Solid Capital Levels TCE ratio 7.62%, down 62 bps linked-quarter$1.2 billion asset growth -46 bpsEarnings excluding provision +22 bpsProvision (net of tax) -15 bpsDividends – 9 bpsChanges in OCI -15 bpsAnnounced 5% common stock buyback August 2015Repurchased only 173,114 shares in 4Q15 at an average
Slide 21: 2016 Strategic Objectives
2016 Strategic Objectives Loan growth 7-9% (EOP)Fund loan growth primarily with depositsCore pre-tax, pre-provision growth of 25% compared to 2014Assumes no additional rate hikes in 2016Expect core revenue growth of 9-10%Expect expense growth of 2% or lessBased on current expectations, provision for
Slide 22: Near-Term Outlook
Near-Term Outlook 4Q15 Items to note Outlook Loans +25% LQA +13% Y-o-Y Includes $80 million in net reductions from energy portfolio; includes $185 million in purchased healthcare portfolio 7-9% EOP growth for full year 2016(includes approximately $200 million of expected paydowns from energy portfol
Slide 23: Appendix: EPS calculation
Appendix:EPS calculation $s in thousands, except E.P.S. Three Months Ended 12/31/15 Three Months Ended 9/30/15 Three Months Ended 12/31/14 Net income to common shareholders $15,307 $41,166 $46,376 Income allocated to participating securities (354) ($840) ($981) Net income allocated to common shareho
Slide 24: Appendix: Purchase Accounting Adjustments Core NII & NIM Reconciliation
Appendix: Purchase Accounting Adjustments Core NII & NIM Reconciliation ($s in millions) 4Q15 3Q15 2Q15 1Q15 4Q14 Net Interest Income (TE) – reported (NII) $162.6 $160.1 $154.9 $161.1 $163.6 Whitney expected loan accretion (performing) 0.4 0.6 1.1 1.2 2.7 Whitney expected loan accretion (credit impa
Slide 25: Appendix: Purchase Accounting Impact/Trend
Appendix: Purchase Accounting Impact/Trend Impact of Purchase Accounting Adjustments(projections will be updated quarterly; subject to change) $s in millions *Projected revenue includes loan accretion from Whitney and Peoples First, offset by amortization of the Whitney bond portfolio premium and am
Slide 26: Appendix: Non-GAAP Reconciliation (Net Income, ROA, E.P.S.)
Appendix: Non-GAAP Reconciliation (Net Income, ROA, E.P.S.) $s in millions (except EPS) Three Months Ended 12/31/15 Three Months Ended 9/30/15 Three Months Ended 12/31/14 Twelve Months Ended 12/31/15 Twelve Months Ended 12/31/14 Net income $15.3 $41.2 $40.1 $131.5 $175.7 Adjustments from net to oper
Slide 27: Glossary of abbreviations and definitions
LPO – Loan production officeLQA- Linked-quarter annualizedM&A – Mergers and acquisitionsNII – Net interest income NIM – Net interest marginNPA – Nonperforming assetsO&G – Oil and gasOperating Income – Operating income is defined as net income excluding tax-effected securities transactions gains or l
Slide 28: Fourth Quarter 2015 Financial Results
Fourth Quarter 2015Financial ResultsJanuary 21, 2016