Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Hancock Holding — Q1 2016 Earnings Presentation
29 slides from Hancock Whitney's earnings presentation, Apr 19, 2016
Slide 1: Financial Summary Table
Net interest income (TE) (a) 168,179 162,635 160,134 154,879 161,114 Noninterest income 58,186 59,653 60,211 60,874 56,546 Nonoperating items 4,978 - - 8,927 6,981 Operating income (b) 7,075 15,307 41,166 40,631 44,697 Loans $ 15,978,124 $ 15,703,314 $ 14,763,050 $ 14,344,752 $ 13,924,386 Earning as
Slide 2: First Quarter 2016 Financial Results
4/19/2016 First Quarter 2016 Financial Results
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: Corporate Profile (as of March 31, 2016)
Corporate Profile (as of March 31, 2016) $22.8 billion in Total Assets$16.0 billion in Total Loans$18.7 billion in Total DepositsTangible Common Equity (TCE) 7.69%Nearly 200 banking locations and 275 ATMs across a five-state footprintApproximately 3,800 employees corporate-wideRated among the strong
Slide 5: First Quarter 2016 Highlights
Core pre-tax, pre-provision income $76.4 million, up $8.4 million or 12%Loans increased $275 million, or 7% (LQA)Deposits increased $307 million, or 7% (LQA)Core revenue increased $4.0 million; core NIM up 2 bps (up 4 bps excluding interest reversals)Allowance for the energy portfolio increased $33
Slide 6: Growth in Core Pre-Tax, Pre-Provision Income
Linked quarter growth in core pre-tax, pre-provision income +12%Year-over-year growth in core pre-tax, pre-provision income +20% Growth in Core Pre-Tax, Pre-Provision Income
Slide 7: Well-Diversified Loan Growth
Well-Diversified Loan Growth
Slide 8: Energy Portfolio Overview
Energy Portfolio Overview * Energy loans totaled $1.6 billion, or 130% 10% of total loans, up $53 million linked-quarter and down $41 million from a year ago 11.0% ° Net increase reflects approximately ct $85 million in payoffs and paydowns, $17 million in charge- oo offs, offset by approximately $1
Slide 9: Energy Portfolio Overview (cont'd)
Energy Portfolio Overview (cont’d) Net increase in outstandings of $53 million and a $79 million reduction in total commitmentsApproximately $33 million linked-quarter increase in RBL outstandings and a $53 million reduction in total commitments Approximately $20 million linked-quarter increase in s
Slide 10: Energy credits downgraded to criticized status in 1Q16
During 1Q16 there were over $300 million in outstanding energy credits that were downgraded to criticized status Downgrades were mainly related to the application of new regulatory guidance which was used in the recent shared national credit (SNC) exam that was completed on March 15, 2016Approximate
Slide 11: Energy Portfolio Overview (cont'd)
Borrowing base redeterminations twice per year (spring and fall); all credits are under review and adjustments are being made to overall commitment levelsRBL commitments expected to be reduced approximately 15-20% on average in the current redetermination due to continued low commodity pricesOur cli
Slide 12: Energy Allowance and Category Trends
Management currently estimates that charge-offs from energy-related credits could approximate $65-$95 million over the duration of the cycleCharge-offs to-date for current energy cycle (Nov-14 – Mar-16) total $21 million; includes $17 million in 1Q16 Energy Allowance and Category Trends Management c
Slide 13: Asset Quality Measures Reflect Impact Of Energy Cycle
NPA ratio 1.92%, up 70 bps linked-quarter Nonperforming assets totaled $307 million, up $116 million from December 31, 2015Nonperforming energy loans totaled $159 million at March 31, 2016, up $90 million from last quarterProvision for loan losses was $60.0 million, up $9.8 million from 4Q15Increase
Slide 14: Allowance for Loan Losses
The allowance for loan losses was $217.8 million (1.36%) up $36.6 million from $181.2 million (1.15%) linked-quarterThe allowance maintained on the non-FDIC acquired portion of the loan portfolio increased $39.2 million linked-quarter, totaling $197.3 million, while the allowance on the FDIC acquire
Slide 15: Securities Portfolio
Portfolio totaled $4.7 billion, up $204 million, or 5% linked-quarter Yield 2.36% - up 6 bps linked-quarterUnrealized gain (net) of $33.2 million on AFS54% HTM, 46% AFSDuration 3.69 compared to 3.89 at 12-31-15Balance sheet is asset sensitive over a 2 year period to rising interest rates under vario
Slide 16: Solid Levels Of Core Deposit Funding
Total deposits $18.7 billion, up $307 million, or 2%, linked-quarterNoninterest-bearing demand deposits (DDA) decreased $168 millionInterest-bearing transaction and savings deposits increased $276 millionTime deposits increased $300 million Public fund deposits decreased $101 millionFunding mix rema
Slide 17: Core NIM Reflects Improving Asset Yields
Reported net interest margin (NIM) 3.23%, up 2 bps linked-quarter Core NIM of 3.12% increased 2 bps linked-quarterCore loan yield up 5 bps Yield on bond portfolio up 6 bps Cost of funds up 3 bpsNet interest margin up 4 bps after adjusting for approximately $0.9 million of interest reversalsProjected
Slide 18: Focus On Growing Core Noninterest Income Across Business Lines
Focus On Growing Core Noninterest Income Across Business Lines
Slide 19: Quarterly Expenses Decreased; Remain Focused On Expense Control
Quarterly Expenses Decreased; Remain Focused On Expense Control
Slide 20: Solid Capital Levels
TCE ratio 7.69%, up 7 bps linked-quarterBalance sheet change +1 bpEarnings +2 bpsIntangible amortization +2bpsOCI & other, net +11 bpsDividends – 9 bpsCommon stock buyback placed on hold in 4Q15; no shares repurchased during the first quarter of 2016Will continue to manage capital in the best intere
Slide 21: 2016 Strategic Objectives
As we have previously noted, the company’s 2016 objectives are detailed below:Loan growth 5-7% (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%
Slide 22: Near-Term Outlook
Near-Term Outlook fr 1016 Itemsto note Outlook Loans 47% LOA +15% Y-0-Y Net Interest Margin 3.23% reported Reported up 2bps; (NIM) 3.12% core Core up 2bps Core Revenue $222.3 million Excludes PAAs (see slide 23) Loan Loss Provision $60.0 million Includes $50 million related to energy Noninterest Exp
Slide 23: Appendix: EPS Calculation (Operating)
Appendix: EPS Calculation (Operating)
Slide 24: Appendix: Purchase Accounting Adjustments Core NII & NIM Reconciliation
* Excess cash recoveries include cash collected on certain zero carrying value acquired loan pools above expected amounts. Appendix: Purchase Accounting Adjustments Core NII & NIM Reconciliation
Slide 25: Appendix: Historical Energy Data
Appendix: Historical Energy Data Appendix: Historical Energy Data
Slide 26: 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 amortization of the Peoples First indemnifica
Slide 27: Appendix: Non-GAAP Reconciliation
Appendix: Non-GAAP Reconciliation
Slide 28: Definitions and Abbreviations
LQA- 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 losses and nonoperating expen
Slide 29: First Quarter 2016 Financial Results
4/19/2016 First Quarter 2016 Financial Results