Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q1 2024 Earnings Presentation
36 slides from Hancock Whitney's earnings presentation, Apr 16, 2024
Slide 1: First Quarter 2024 Earnings Conference Call
First Quarter 2024 Earnings Conference Call 4/16/2024 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 $35.2 billion in Total Assets (Healthcare) $24.0 billion in Total Loans (ABL) (Trust) (Operations) $29.8 billion in Total Deposits CET1 Ratio 12.67%* TCE Ratio 8.61% $4.0 billion in Market Cap 182 223 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; continue to build and remain well-capital
Slide 7: First Quarter 2024 Highlights
First Quarter 2024 Highlights ► Net income totaled $108.6 million, or $1.24 per ($s in millions; except per share data) 1Q24 4Q23 1Q23 diluted share, compared to $50.6 million, or $0.58 per diluted share in 4Q23 Net income $108.6 $50.6 $126.5 ─ Other supplemental disclosure items in 1Q24 results Pro
Slide 8: Loan Balances Virtually Flat Linked-Quarter
Loan Balances Virtually Flat Linked-Quarter ► Loans totaled $24.0 billion, up $49.0 million, or 1% LQA ► Increase in mortgage loans driven by one-time close Line Utilization product, which convert from construction to mortgage upon 50.0% construction completion ► Line utilization impacted by lower a
Slide 9: Loan Portfolio Composition Diversified and De-Risked
Loan Portfolio Composition Diversified and De-Risked ► Loan portfolio diverse across a number Total Loans % of Total ($s in millions) Outstanding Loans Commitment of segments and industries Commercial non-RE (C&I) $7,781 32.5% $13,664 ► Conservative underwriting in both type CRE - owner 2,522 10.5%
Slide 10: ICRE Segmentation Detail and Key Metrics
ICRE Segmentation Detail and Key Metrics ► CRE-Income producing (ICRE) loan portfolio is Total Loans % of Total diversified by asset class, industry and geographic ($s in millions) Outstanding Loans Commitment Multifamily $862 3.6% $874 region Office 715 3.0% 753 ► ICRE 16.9% of total loans and incl
Slide 11: Growth in Client Deposits; Brokered Deposits Lower
Growth in Client Deposits; Brokered Deposits Lower ► Total deposits of $29.8 billion, up $85.8 million, or 1% LQA EOP Deposits Mix ($) – Brokered deposits decreased due to $195.0 million in maturities 35,000 during 1Q24 that were not replaced 30,000 25,000 Decrease in noninterest-bearing DDA continu
Slide 12: Criticized Commercial and Nonaccrual Loans Normalize
Criticized Commercial and Nonaccrual Loans Normalize $400 $350 1.83% 1.59% 1.62% $300 1.46% 1.47% $250 $200 $150 $100 0.33% 0.34% 0.23% 0.25% 0.25% $50 $0 1Q23 2Q23 3Q23 4Q23 1Q24 Total Loans $23,405 $23,790 $23,984 $23,922 $23,971 Total Commercial Loans 18,550 18,703 18,799 18,589 18,591 Criticized
Slide 13: Maintained Solid Reserves
Maintained Solid Reserves ► Provision for the first quarter of 2024 of $13.0 million, Reserve Build / reflects $9.0 million of net charge-offs and a reserve Net Charge-offs (Release) Total Provision build of $4.0 million ($s in millions) 1Q24 4Q23 1Q24 4Q23 1Q24 4Q23 – Continued normalization in net
Slide 14: Securities Portfolio Restructuring Drives Yield Increase
Securities Portfolio Restructuring Drives Yield Increase ► Securities portfolio* totaled $8.2 billion at 3/31/24, flat linked-quarter Securities Portfolio* Mix 3/31/24 ► 68% AFS, 32% HTM at 3/31/24 $s in millions Munis ► To reduce OCI volatility and provide flexibility to $863 reposition and/or repr
Slide 15: NIM Expansion Linked-Quarter
NIM Expansion Linked-Quarter ► 1Q24 NIM 3.32%, up 5 bps from 4Q23 – NIM 3.33% for the month of March 2024 3.50% ► NII (TE) of $269.0 million, compared to $272.3 million prior 3.40% 0.06% 0.04% 0.03% quarter 3.30% Decrease in NII driven by lower average earning assets (AEA) and 3.20% 0.08% one less
Slide 16: New Loan Rates Impacted by Rate Environment
New Loan Rates Impacted by Rate Environment New Loans Fixed Loans Variable Loans Total New Loan Rate* $2,250 9.00% 8.03% 8.15% 7.91% $2,000 8.00% 7.40% 6.88% $1,750 7.00% 6.27% $1,500 6.00% $1,250 5.00% $ in millions $1,000 4.00% $750 3.00% $1,176 $845 $500 $725 2.00% $748 $648 $793 $250 $469 $481 1
Slide 17: Key IRR Metrics
Key IRR Metrics Loans ► Loans totaled $24.0 billion at March 31, 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 ► Reinvesting principal runoff
Slide 18: Fee Income Flat Linked-Quarter
Fee Income Flat Linked-Quarter $100 $49.3 $0.6 $0.8 $0.2 $0.8 $90 $80 $0.1 $2.7 $70 $s in millions $60 $50 $40 $88.3 $87.9 $30 $20 $39.0 $10 $0 4Q23 Supplemental 4Q23 Adjusted Service charges Bank card & Investment & Trust fees Secondary Other, net 1Q24 Noninterest Noninterest Disclosure Items Nonin
Slide 19: Expenses Well Controlled
Expenses Well Controlled Adjusted Noninterest Expense* Mix ► Noninterest expense totaled $207.7 million, down $21.5 3/31/24 $s in millions million linked-quarter; adjusted noninterest expense* totaled $203.9 million, virtually unchanged linked-quarter, Other, net (incl. Amortization up less than 1%
Slide 20: Capital Levels Continue to Improve
Capital Levels Continue to Improve ► CET1 ratio estimated at 12.67%, up 34 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 10.49%, up 39 March 31, 2024* 8.61% 10.49
Slide 21: Remain Well Capitalized Including All Unrealized Losses
Remain Well Capitalized Including All Unrealized Losses 3/31/2024 Inc. AOCI Inc. AOCI + HTM Well Capitalized As Reported* Losses (1) Losses(2) Minimum Tangible Common Equity Ratio 8.61% 8.61% 8.16% N/A Leverage (Tier 1) Ratio 10.49% 8.98% 8.53% 5.00% CET1 Ratio 12.67% 10.75% 10.17% 6.50% Tier 1 Risk
Slide 22: 2024 Forward Guidance
2024 Forward Guidance Guidance 1Q24 FY 2024 Direction Actual Outlook Loans (EOP) Unchanged $24.0B Expect EOP loan growth of low single digits from $23.9B at 12/31/23; expect most of 2024 growth in 2H24 Deposits (EOP) Unchanged $29.8B Expect EOP deposit growth of low single digits from $29.7B at 12/3
Slide 23: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations Appendix and Non-GAAP Reconciliations CHANCOCK WHITNEY
Slide 24: Summary Balance Sheet
Summary Balance Sheet ($ in millions) Change 1Q24 4Q23 1Q23 LQ Prior Year EOP Balance Sheet Loans 23,970.9 23,921.9 23,404.5 49.0 566.4 Securities 7,559.2 7,600.0 8,390.7 (40.8) (831.5) Earning assets 31,985.6 32,175.1 34,106.8 (189.5) (2,121.2) Total assets 35,247.1 35,578.6 37,547.1 (331.5) (2,300
Slide 25: Balance Sheet Summary
Balance Sheet Summary Average Loans Average Securities* Average Deposits ($s in billions) ($s in billions) ($s in billions) $25 $11 $32 $23.7 $23.8 $23.8 $23.8 $24 $30.0 $23.1 $10 $29.8 $29.6 $30 $29.4 $9.1 $9.0 $23 $8.9 $28.8 $9 $8.6 $22 $8.2 $28 $8 $21 $20 $7 $26 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23
Slide 26: EOP Loan Repricing and Maturity
EOP Loan Repricing and Maturity Repricing/Maturity Term (1) Rate Structure 3 months 4-12 Over 15 Total Loans Variable Fixed 1-3 Years 3-5 Years 5-15 Years ($s in millions) or less months Years (EOP) Rate Rate Commercial Non-RE $6,388 $248 $1,004 $1,219 $989 $78 $9,926 $6,602 $3,324 CRE-Owner 995 84
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% 6.01% 6.11% 6.16% 5.81% 6.00% $25,000 5.54% 5.12% 5.00% $20,000 4.00% $ in millions $15,000 3.00% $13,632 $13,828 $14,144 $14,329 $14,311 $14,524 $10,000 2.00% $5,000 1.00% $9,482 $9,577 $9,646
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 March 31, 2024 ► Uninsured deposits (adjusted for collateralized public funds) were 35.4% at March 31, 2024, up 1% linked- EOP Deposits by Line of Business quarter 3/31/24
Slide 29: Strong Liquidity Position; Multiple Sources of Funding Available
Strong Liquidity Position; Multiple Sources of Funding Available ▶ Currently have approximately $19.3 billion in At March 31, 2024 Total Amount Net internal and external sources of liquidity if $ in millions Sources Used Availability needed Internal Sources Free Securities $ 3,287 $ - $ 3,287 ▶ Over
Slide 30: Summary Income Statement
Summary Income Statement ($ in millions, except for per share data) Change 1Q24 4Q23 1Q23 LQ Prior Year Net interest income (TE) 269.0 272.3 287.6 (3.3) (18.6) Provision for credit losses 13.0 17.0 6.0 (4.0) 7.0 Noninterest income 87.9 39.0 80.3 48.9 7.6 Noninterest expense 207.7 229.2 200.9 (21.5)
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) $200 $320 3.75% $190 3.55% $300 $287.6 3.60% $180 $276.7 $167.0 $272.1 $272.3 $170 $157.8 $280 $269.0 3.45% 3.30% 3.32% $157.5 3.27% $153.4 $152.9 3.27% $160 $26
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 1Q24 ► Total termination value on remaining active CF hedges is approximately ($94) million as of 3/31/24 ► Future maturitie
Slide 33: PPNR (TE) and Adjusted PPNR (TE) Reconciliation
PPNR (TE) and Adjusted PPNR (TE) Reconciliation Three Months Ended (in thousands) 1Q24 4Q23 3Q23 2Q23 1Q23 Net Income (GAAP) $108,612 $50,603 $97,738 $ 117,794 $126,467 Provision for credit losses 12,968 16,952 28,498 7,633 6,020 Income tax expense 24,720 11,705 24,297 29,571 31,953 Pre-provision ne
Slide 34: Adjusted Efficiency Ratio
Adjusted Efficiency Ratio Three Months Ended (in thousands) 1Q24 4Q23 3Q23 2Q23 1Q23 Net interest income $266,171 $269,460 $269,234 $273,911 $284,994 Noninterest income 87,851 38,951 85,974 83,225 80,330 Total GAAP revenue 354,022 308,411 355,208 357,136 365,324 Taxable equivalent adjustment* 2,830
Slide 35: Adjusted Earnings Per Share - Diluted; Adjusted ROA and ROTCE
Adjusted Earnings Per Share - Diluted Three Months Ended (in thousands) 1Q24 4Q23 Net Income (GAAP) $108,612 $50,603 Net income allocated to participating securities (784) (440) Net income available to common shareholders 107,828 50,163 Supplemental disclosure items, net of income tax* 3,002 59,548
Slide 36: First Quarter 2024 Earnings Conference Call
First Quarter 2024 Earnings Conference Call 4/16/2024 HANCOCK WHITNEY