Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Q2 2018 Earnings Presentation
32 slides from Hancock Whitney's earnings presentation, Jul 17, 2018
Slide 1: Second Quarter 2018 Earnings Conference Call
Second Quarter 2018Earnings Conference Call 7/18/2018
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. The items noted below with an asterisk, "*", are considered non-GAAP. Reconciliations of those non-GAAP results to the comparable GAAP measure are included in the appendix to this presentation. The
Slide 4: Corporate Profile (as of June 30, 2018)
Corporate Profile (as of June 30, 2018) $27.9 billion in Total Assets$19.4 billion in Total Loans$22.2 billion in Total DepositsTangible Common Equity (TCE) ratio 7.76%Nearly 200 banking locations and 269 ATMs across our footprintApproximately 3,800 (FTE) employees corporate-wideRated among the stro
Slide 5: Purchase of Capital One's Trust & Asset Management Business
Purchase of Capital One’s Trust & Asset Management Business Transaction closed July 13, 2018Expected to contribute $.07-$.08 EPS for full year 2019Hancock Whitney is now a Top 50 trust firm in the USSecures one of the highest market shares of trust and asset management business along the I-10 corrid
Slide 6: Second Quarter 2018 Highlights
Second Quarter 2018 Highlights (compared to first quarter 2018) Effective May 25th our name changed to Hancock Whitney Corporation and Hancock Whitney Bank; new ticker “HWC”Net income decreased $1.3 million, or 2% linked-quarter; excluding nonoperating items, earnings increased $5.4 million, or 7%Se
Slide 7: Growth Diversified Across Footprint and Many Lines of Business
Growth Diversified Across Footprint and Many Lines of Business Loans totaled $19.4 billion at quarter-end, an increase of $278 million, or 6% LQALoan portfolio 51% variable56% of variable loans are LIBOR-based 96% of the LIBOR loans are tied to 1mo L4% of the LIBOR loans are tied to 3mo LApproximate
Slide 8: Well-Diversified Loan Portfolio
Well-Diversified Loan Portfolio 8
Slide 9: Asset Quality Improvement - Criticized Commercial Loans Declined 17% LQ
Asset Quality Improvement - Criticized Commercial Loans Declined 17% LQ Total criticized loans $1,113 $1,108 $1,256 $1,268 $1,189 $1,153 $1,092 $1,076 $1,084 $897 Criticized –nonenergy $352 $310 $363 $379 $452 $466 $485 $526 $561 $489 Criticized – energy $761 $798 $893 $889 $737 $687 $607 $550 $523
Slide 10: Asset Quality Improvement - Nonperforming Loans Declined 11% LQ
Asset Quality Improvement - Nonperforming Loans Declined 11% LQ Total nonperforming loans $283 $302 $311 $358 $310 $329 $366 $373 $442 $394 Nonperforming loans - nonenergy $124 $105 $112 $119 $116 $121 $145 $159 $163 $157 Nonperforming loans – energy $159 $197 $199 $239 $194 $208 $221 $214 $279 $237
Slide 11: Energy Portfolio At Strategic Goal of 5%
Energy Portfolio At Strategic Goal of 5% As of June 30, 2018 ($ in millions) Total Outstanding Total Commitment % Utilization $ Criticized % Criticized $ Nonaccrual* % Nonaccrual* $ 30-day Past Due** % 30-day Past Due** Upstream $313 $604 52% $120 38% $13 4% $1 0% Midstream $60 $88 68% $- - $- - $-
Slide 12: Adequate Reserve Coverage
Adequate Reserve Coverage Allowance for loan losses (ALLL) $214.5 million in 2Q18, up $3.8 million linked-quarterALLL for energy credits $59 million at June 30, 2018, down $3.6 million from March 31, 2018 Nonenergy ALLL $155.5 million as of June 30, 2018, up $7.4 million from March 31, 2018 Net char
Slide 13: Securities Portfolio
Securities Portfolio Portfolio totaled $6.1 billion, up $184 million, or 3%, linked-quarterYield 2.50%, up 4 bps linked-quarterPremium amortization relatively unchanged linked-quarterUnrealized net loss of $109.9 million on AFS compared to $93.3 million at March 31, 201850% HTM, 50% AFSDuration 4.89
Slide 14: Solid Levels Of Core Deposit Funding
Solid Levels Of Core Deposit Funding Total deposits $22.2 billion, down $250 million, or 1%, linked-quarterNoninterest-bearing demand deposits (DDA) decreased $64 million Interest-bearing transaction and savings deposits decreased $347 millionTime deposits increased $414 million Interest-bearing pub
Slide 15: Net Interest Margin Expansion as Deposit Betas Decline
Reported net interest margin (NIM) of 3.40%, up 3 bps linked-quarterLoan yield up 12 bpsYield on securities portfolio up 4 bpsCost of funds up 6 bpsCore NIM (TE) of 3.31% up 5 bps linked-quarter NIM (TE) Expansion of 3 bps LQ as Deposit Betas Decline Betas 2Q18 1Q18 4Q15-2Q18 Loans 44% 47% 48% Depos
Slide 16: Focus On Growing Noninterest Income
Focus On Growing Noninterest Income Noninterest income, totaled $68.8 million, up $2.6 million, or 4%Loss on the sale of the consumer finance company (HFC) totaled $1.1 million in first quarter of 2018Expect trust and asset management transaction to add approximately $6 million per quarter to fee in
Slide 17: Growth in Balance Sheet and Revenue Drive Higher Expenses
Growth in Balance Sheet and Revenue Drive Higher Expenses Operating expense (noninterest expense excluding nonoperating items) totaled $168.6 million, up $3.7 million, or 2%Nonoperating expenses totaled $15.8 million in 2Q18 and $5.9 million in 1Q18Consumer finance company (HFC) expenses totaled $2.
Slide 18: Managing Our Capital In The Best Interests of All Stakeholders
Managing Our Capital In The Best Interests of All Stakeholders TCE ratio 7.76%, down 4 bps linked-quarterGrowth in tangible assets -18 bpsTangible net earnings +29 bpsOCI -9 bps; mostly related to higher unrealized loss on the AFS securities portfolioDividends -8 bpsStock-based comp activity & other
Slide 19: Near-Term Outlook
Near-Term Outlook 2Q18 Actual Items to note 2H18 Outlook Loans up $278 million or 6% LQA; up $897 million or 5% Y-o-Y Energy loans declined $69 million and total just under $1 billion or 5.1% of total loans Expect net loan growth of $250-$300 million for 3Q18 and 5%-6% EOP growth year-over-year Net
Slide 20: Long-Term Outlook – Goal To Achieve Objectives By 4Q19
Long-Term Outlook – Goal To Achieve Objectives By 4Q19 Quarterly Objective 2Q18 Actual Earnings (EPS)/quarter (excluding nonoperating items) $1.00 - $1.10+ $.96 ROA (operating) 1.15% - 1.25%+ 1.22% TCE 8.5%+ 7.76% ROTCE (operating) 15%+ 16.12% Efficiency Ratio ≤56% 57.4% 2018/2019 Corporate Strategi
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 22: Operating Earnings & Operating EPS Reconciliations
Operating Earnings & Operating EPS Reconciliations Three Months Ended (in thousands, except per share amounts) 6/30/2018 3/31/2018 12/31/2017 9/30/2017 6/30/2017 Net Income $71,177 $72,475 $ 55,449 $58,902 $52,267 Net income allocated to participating securities (1,328) (1,366) (1,104) (1,244) (1,16
Slide 23: Operating ROA, ROE & ROTCE Reconciliations
Operating ROA, ROE & ROTCE Reconciliations Three Months Ended (dollars in thousands, except ratios) 6/30/2018 3/31/2018 12/31/2017 9/30/2017 6/30/2017 Net Income $71,177 $72,475 $55,449 $58,902 $52,267 Nonoperating items, net of income tax benefit 12,486 5,782 --- 7,405 6,902 Income tax resulting fr
Slide 24: Operating Revenue (TE) & Operating PPNR (TE) Reconciliations
Operating Revenue (TE) & Operating PPNR (TE) Reconciliations Three Months Ended (dollars in thousands) 6/30/2018 3/31/2018 12/31/2017 9/30/2017 6/30/2017 Net interest income $211,547 $205,664 $208,047 $202,857 $199,717 Noninterest income 68,832 66,252 69,688 67,115 67,487 Total revenue $280,379 $271
Slide 25: Core NII (TE) & Core NIM (TE) Reconciliation
Core NII (TE) & Core NIM (TE) Reconciliation Three Months Ended (dollars in thousands, except ratios) 6/30/2018 3/31/2018 12/31/2017 9/30/2017 6/30/2017 Net interest income $211,547 $205,664 $208,047 $202,857 $199,717 Taxable equivalent adjustment (a) 4,081 3,963 8,949 8,579 8,564 Net interest incom
Slide 26: Appendix
Appendix
Slide 27: Operating Earnings
Operating Earnings See slides 22-25 for non-GAAP reconciliations 27 2Q17 3Q17 4Q17 1Q18 2Q18 Operating Earnings ($000) 59,169 66,307 74,969 78,257 83,663 Operating EPS $0.68 $0.76 $0.86 $0.90 $0.96 Net Interest Income (TE) ($000) 208,281 211,436 216,996 209,627 215,628 Noninterest Inc excl non-op ($
Slide 28: Key Operating Ratios
Key Operating Ratios See slides 22-25 for non-GAAP reconciliations 28 2Q17 3Q17 4Q17 1Q18 2Q18 Operating Return on Assets 0.89% 0.99% 1.10% 1.17% 1.22% Operating Return on Equity 8.52% 9.27% 10.37% 11.05% 11.54% Operating Return on TCE 12.11% 13.14% 14.62% 15.56% 16.12% Tangible Common Equity Ratio
Slide 29: Balance Sheet Summary
Balance Sheet Summary 29 2Q17 3Q17 4Q17 1Q18 2Q18 Average Loans ($MM) 18,369 18,591 18,840 19,028 19,193 Average Total Securities ($MM) 5,242 5,680 5,801 5,897 6,032 Average Deposits ($MM) 20,933 21,350 21,763 22,043 22,101 Loan Yield (TE) 4.36% 4.39% 4.46% 4.43% 4.55% Securities Yield (TE) 2.52% 2.
Slide 30: Historical Energy Data
Historical Energy Data $s in millions Energy Outstandings by Type 30
Slide 31: Energy Portfolio Support Services
Energy Portfolio Support Services 31
Slide 32: Second Quarter 2018 Earnings Conference Call
Second Quarter 2018Earnings Conference Call 7/18/2018