Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q3 2024 Earnings Presentation
35 slides from Hancock Whitney's earnings presentation, Oct 15, 2024
Slide 1: Third Quarter 2024 Earnings Conference Call
Third Quarter 2024 Earnings Conference Call 10/15/2024 HANCOCK WHITNEY
Slide 2: Important cautionary statement about forward-looking statements
Important cautionary statement about forward-looking statements This release 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 mak
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 $35.2 billion in Total Assets (Healthcare) $23.5 billion in Total Loans (ABL) (Trust) (Operations) $29.0 billion in Total Deposits CET1 Ratio 13.79%* TCE Ratio 9.56% $4.4 billion in Market Cap Baa3 180 223 Moody’s banking locations ATMs Long-term issuer rating; positive outlook BBB
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 challenging economic environments ► Density in resilient deposit markets ► Stable, seasoned, diversified deposits; ability to organically grow deposits ► Top quartile capital levels including all unrealized losses ► Ability to return c
Slide 7: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights ► Net income totaled $115.6 million, or $1.33 per ($s in millions; except per share data) 3Q24 2Q24 3Q23 diluted share, compared to $114.6 million, or $1.31 per diluted share in 2Q24 Net income $115.6 $114.6 $97.7 ► Pre-Provision Net Revenue (PPNR)* totaled $166.5 Provi
Slide 8: Planned SNC Runoff Drives Decrease in Loans
Planned SNC Runoff Drives Decrease in Loans ► Loans totaled $23.5 billion, down $456 million, or Line Utilization 8% LQA; primarily due to SNC runoff of $254 45.0% million – Excluding SNC runoff, loans were down $202 million, or 41.6% 41.7% 41.8% 41.3% 3% LQA 40.9% 40.5% 40.4% – Also contributing to
Slide 9: Loan Portfolio Composition Diversified and De-Risked
Loan Portfolio Composition Diversified and De-Risked ► Loan portfolio diverse across a number of Total Loans % of Total ($s in millions) Outstanding Loans Commitment segments and industries Commercial non-RE (C&I) $7,483 31.9% $13,297 ► Conservative underwriting in both type and CRE - owner 2,553 10
Slide 10: DDA Mix Stable; Retail Time Deposits Grow
DDA Mix Stable; Retail Time Deposits Grow ► Total deposits of $29.0 billion, down $218 million, or 3% LQA EOP Deposits Mix ($) – Brokered deposits decreased $9.6 million due to maturities that 35,000 were not replaced during 3Q24 30,000 25,000 – Pace of noninterest-bearing DDA outflows continued to
Slide 11: Asset Quality Metrics
Asset Quality Metrics $700 $600 2.81% $500 $400 2.05% 1.83% $300 1.46% 1.47% $200 $100 0.34% 0.36% 0.35% 0.25% 0.25% $0 3Q23 4Q23 1Q24 2Q24 3Q24 Total Loans $23,984 $23,922 $23,971 $23,912 $23,456 Total Commercial Loans 18,799 18,589 18,591 18,524 18,097 Criticized Commercial Loans 275 274 340 380 5
Slide 12: Maintained Solid Reserves
Maintained Solid Reserves ► Provision for the third quarter of 2024 of $18.6 million, Reserve Build / reflects $18.0 million of net charge-offs and a reserve Net Charge-offs (Release) Total Provision build of $0.6 million ($s in millions) 3Q24 2Q24 3Q24 2Q24 3Q24 2Q24 – Increase in reserve coverage,
Slide 13: Portfolio Reinvestment Drives Yield Increase
Portfolio Reinvestment Drives Yield Increase ► Securities portfolio* totaled $8.2 billion at 9/30/24, flat linked-quarter Securities Portfolio* Mix 9/30/24 ► 70% AFS, 30% HTM at 9/30/24 $s in millions Munis ► To reduce OCI volatility and provide flexibility to $829 reposition and/or reprice the hedg
Slide 14: NIM Expansion Linked-Quarter
NIM Expansion Linked-Quarter ► 3Q24 NIM 3.39%, up 2 bps from 2Q24 – NIM 3.40% for the month of September 2024 3.50% 0.02% 0.01% 0.01% ► NII (TE) of $274.5 million, compared to $273.3 million 3.40% 0.02% prior quarter 3.30% 3.20% − Increase in NII primarily driven by higher loan yields and 3.10% secu
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% 8.01% 7.91% 7.81% 7.40% 7.50% $1,250 6.00% $1,000 $ in millions 4.50% $750 $845 3.00% $500 $748 $648 $621 $724 $793 $250 1.50% $481 $333 $291 $281 $266 $247 $0 0.00% 2Q23 3Q
Slide 16: Key IRR Metrics
Key IRR Metrics Loans ► Loans totaled $23.5 billion at September 30, 2024 – 40% fixed, 60% variable (includes hybrid ARMs) – 71% of variable loans tied to SOFR – 23% of variable loans tied to Wall Street Journal Prime – 6% of variable loans tied to other indices ► Approximately 4.4% ($520MM) of the
Slide 17: Fee Income Growth Linked-Quarter
Fee Income Growth Linked-Quarter $120 $5.6 $100 $1.1 $0.9 $0.2 $0.5 $0.2 $80 $s in millions $60 $95.9 $89.2 $40 $20 $0 2Q24 Noninterest Service charges Bank card & Investment & Trust fees Secondary Other 3Q24 Noninterest Income on deposit accounts ATM fees annuity income mortgage Income and insuranc
Slide 18: Expenses Remain Well Controlled
Expenses Remain Well Controlled $225 $3.0 $0.1 $0.5 $200 $0.7 $0.7 $s in millions $175 $206.0 $203.8 $150 $125 $100 2Q24 Noninterest Personnel Occupancy and Amortization of ORE/OFA Other (net) 3Q24 Noninterest Expense expense Equipment intangibles expenses Expense Noninterest Expense Mix ► Nonintere
Slide 19: Capital Levels Continue to Improve
Capital Levels Continue to Improve ► CET1 ratio estimated at 13.79%, up 54 bps linked- CET1 Ratio and Tangible Tier 1 Risked- Total quarter Common Leverage Based Capital Risk-Based Equity Ratio Ratio Ratio Capital Ratio ► Leverage (Tier 1) ratio estimated at 11.03%, up 32 bps September 30, 2024* 9.5
Slide 20: Remain Well Capitalized Including All Unrealized Losses
Remain Well Capitalized Including All Unrealized Losses 9/30/2024 Inc. AOCI Inc. AOCI + HTM Well Capitalized As Reported* Losses (1) Losses(2) Minimum Tangible Common Equity Ratio 9.56% 9.56% 9.25% N/A Leverage (Tier 1) Ratio 11.03% 10.02% 9.71% 5.00% CET1 Ratio 13.79% 12.41% 12.00% 6.50% Tier 1 Ris
Slide 21: 2024 Forward Guidance
2024 Forward Guidance Guidance 3Q24 FY 2024 Direction Actual Outlook Loans (EOP) Unchanged $23.5B Expect EOP loans at 12/31/24 to be flat to down slightly from 12/31/23 levels Deposits (EOP) Unchanged $29.0B Expect EOP deposits at 12/31/24 to be flat to down slightly from 12/31/23 levels Adjusted Pr
Slide 22: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations Appendix and Non-GAAP Reconciliations CHANCOCK WHITNEY
Slide 23: Summary Balance Sheet
Summary Balance Sheet ($ in millions) Change Change 3Q24 2Q24 3Q23 LQ Prior Year YTD 2024 YTD 2023 Y-o-Y EOP Balance Sheet 23,455.6 23,911.6 23,983.7 (456.0) (528.1) Loans 23,455.6 23,983.7 (528.1) 7,769.8 7,535.8 7,916.1 234.0 (146.3) Securities 7,769.8 7,916.1 (146.3) 32,045.2 32,056.4 32,733.6 (1
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 $24 $23.6 $10 $29.8 $30.0 $8.9 $29.6 $8.6 $30 $29.1 $23 $9 $28.9 $8.2 $8.2 $8.2 $22 $8 $28 $21 $7 $20 $6 $26 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4
Slide 25: ICRE Segmentation Detail and Key Metrics
ICRE Segmentation Detail and Key Metrics ► ICRE loan portfolio is diversified by asset class, Total Loans % of Total industry and geographic region ($s in millions) Outstanding Loans Commitment Multifamily $845 3.6% $853 ► ICRE 17% of total loans and includes a variety of Office $684 2.9% $706 colla
Slide 26: EOP Loan Repricing and Maturity
EOP Loan Repricing and Maturity Repricing/Maturity Term (1) Rate Structure 3 months 4-12 Over 15 Total Loans Variable Fixed 1-3 Years 3-5 Years 5-15 Years ($s in millions) or less months Years (EOP) Rate Rate Commercial Non-RE $6,082 $296 $966 $1,209 $955 $80 $9,588 $6,218 $3,370 CRE-Owner 1,038 57
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% 6.24% 6.27% 6.01% 6.11% 6.16% 5.81% 6.00% $25,000 5.00% $20,000 4.00% $ in millions $15,000 3.00% $14,144 $14,329 $14,311 $14,524 $14,474 $14,021 $10,000 2.00% $5,000 1.00% $9,646 $9,655 $9,611
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 September 30, 2024 ► Uninsured deposits (adjusted for collateralized public funds) were 37.1% at September 30, 2024, up 1% linked-quarter EOP Deposits by Line of Business –
Slide 29: Strong Liquidity Position; Multiple Sources of Funding Available
Strong Liquidity Position; Multiple Sources of Funding Available ▶ Currently have approximately $20 billion in At September 30, 2024 Total Amount Net internal and external sources of liquidity if $ in millions Sources Used Availability needed Internal Sources Free Securities $ 4,344 $ - $ 4,344 ▶ Ov
Slide 30: Summary Income Statement
Summary Income Statement ($ in millions, except for per share data) Change Change 3Q24 2Q24 3Q23 LQ Prior Year YTD 2024 YTD 2023 Y-o-Y 274.5 273.3 272.1 1.2 2.4 Net interest income (TE) 816.7 836.4 (19.7) 18.6 8.7 28.5 9.9 (9.9) Provision for credit losses 40.3 42.2 (1.9) 95.9 89.2 86.0 6.7 9.9 Noni
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% $166.5 $170 $300 3.60% $157.5 $156.4 $272.1 $272.3 $273.3 $274.5 3.39% $160 $153.4 $152.9 $280 $269.0 3.45% 3.37% 3.32% 3.27% 3.27% $150 $260 3.3
Slide 32: Current Hedge Positions
Current Hedge Positions Cash Flow (CF) Hedges ► Receive 232 bps versus paying 1 month SOFR on $1.4 billion ► $200 million in notional CF hedges were terminated in the 3Q24 with no new CF hedges added; these terminations resulted in a slight reduction of asset duration to offset changes in liability
Slide 33: PPNR (TE) and Adjusted PPNR (TE) Reconciliation
PPNR (TE) and Adjusted PPNR (TE) Reconciliation Three Months Ended Nine Months Ended (in thousands) 3Q24 2Q24 1Q24 4Q23 3Q23 YTD 2024 YTD 2023 Net Income (GAAP) $115,572 $114,557 $108,612 $50,603 $97,738 $338,741 $341,999 Provision for credit losses 18,564 8,723 12,968 16,952 28,498 40,255 42,151 In
Slide 34: Adjusted Efficiency Ratio
Adjusted Efficiency Ratio Three Months Ended Nine Months Ended (in thousands) 3Q24 2Q24 1Q24 4Q23 3Q23 YTD 2024 YTD 2023 Net interest income $271,764 $270,430 $266,171 $269,460 $269,234 $808,365 $828,139 Noninterest income 95,895 89,174 87,851 38,951 85,974 272,920 249,529 Total GAAP revenue 367,659
Slide 35: Third Quarter 2024 Earnings Conference Call
Third Quarter 2024 Earnings Conference Call 10/15/2024 HANCOCK WHITNEY