Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Hancock Holding — Q1 2018 Earnings Presentation
32 slides from Hancock Whitney's earnings presentation, Apr 17, 2018
Slide 1: First Quarter 2018 Earnings Conference Call
First Quarter 2018Earnings Conference Call
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: Corporate Profile (as of March 31, 2018)
Corporate Profile (as of March 31, 2018) $27.3 billion in Total Assets.$19.1 billion in Total Loans.$22.5 billion in Total Deposits Tangible Common Equity (TCE) ratio 7.80%.Nearly 200 banking locations and 267 ATMs across our footprint. Approximately 3,800 (FTE) employees corporate-wide. Rated among
Slide 4: First quarter 2018 financial summary
($s in millions; except per share data) 1Q18 4Q17 1Q17 Net Income $72.5 $55.4 $49.0 Earnings Per Share –diluted $.83 $.64 $.57 Weighted Average Shares Outstanding (diluted) 85.4 85.3 84.6 Provision for loan losses $12.3 $15.0 $16.0 Return on Assets (%) (ROA) 1.08 0.82 0.80 Return on Tangible Common
Slide 5: Well-Diversified Loan Portfolio
Well-Diversified Loan Portfolio East Region (MS AL & FL)$4,402 23% Central Region (SE LA)$4,712 25% West Region (TX & SW LA)$3,329 17% Nashville Healthcare$482 3% Indirect$515 3% Equipment Finance $558 3% Mortgage $2,733 14% Energy$1,054 5% Other$1,308 7% Total Loans by Market/LOB $19,093 3/31/18 .L
Slide 6: Energy Portfolio Overview
As of March 31, 2018 ($ in millions) Total Outstanding Total Commitment % Utilization $ Criticized % Criticized $ Nonaccrual* % Nonaccrual* $ 30-day % 30-day Past Due** Upstream $ 344 $ 633 54% $ 178 52% $ 23 7% $ 8 2% Midstream $ 57 $ 78 73% $ -$ -$ -Support Drilling $ 125 $ 225 56% $ 68 54% $ 16 1
Slide 7: Asset Quality Measures – Criticized Commercial Loans
Asset Quality Measures –Criticized Commercial Loans. Provision for loan losses was $12.3 million, down $2.7 million linked-quarter; the decline was related to the HFC sale .Net charge-offs totaled $12.2 million, or 26 bps, down from $20.8 million, or 44 bps, in 4Q17 .Criticized commercial loans tota
Slide 8: Asset Quality Measures – Nonperforming Loans
Total nonperforming loans $98 $126 $173 $164 $283 $302 $311 $358 $310 $329 $366 $373 $442 Nonperforming loans- nonenergy $85 $81 $75 $94 $124 $105 $112 $119 $116 $121 $145 $159 $163 Nonperforming loans energy $13 $45 $98 $70 $159 $197 $199 $239 $194 $208 $221 $214 $279 Asset Quality Measures -Nonper
Slide 9: Adequate Reserve Coverage
Adequate Reserve Coverage .Allowance for loan losses (ALLL) $210.7 million (1.10%) in 1Q18, down $6.6 million from $217.3 million (1.14%) linked-quarter; decrease related to the sale of the consumer finance company .ALLL for energy credits $62.6 million, or 5.9%, at March 31, 2018, compared to $70.2
Slide 10: Securities Portfolio
Securities Portfolio totaled $5.9 billion, up $42 million, or 1%, linked-quarter Yield 2.46%, down 4bps linked-quarter; negative impact of tax reform on TE adjustment was 10 bps Premium amortization down $0.7 million linked-quarter Unrealized net loss of $93.3 million on AFS compared to $38.2 millio
Slide 11: Solid Levels of Core Deposit Funding
Solid Levels of Core Deposit Funding Total deposits $22.5 billion, up $233 million, or 1%, linked-quarter Noninterest-bearing demand deposits (DDA) decreased $77 million Includes impact of seasonal public fund deposits Interest-bearing transaction and savings deposits decreased $123 million Time dep
Slide 12: Net Interest Margin, Loan Yield and Cost of Funds
3.37% 3.43% 3.44% 3.48% 3.37% $100 $150 $200 $250 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.70% 1Q17 2Q17 3Q17 4Q17 1Q18 NII (TE) NIM – reported NIM (TE) Impacted By Tax Reform, Interest Reversals, HFC Sale 4.16% 4.36% 4.39% 4.46% 4.43% 2.52% 2.52% 2.48% 2.50% 2.46% 0.37% 0.44% 0.48% 0.50% 0.58% 0.00% 1
Slide 13: Focus On Growing Noninterest Income
Focus On Growing Noninterest Income Service Charges in Deposit $21.4 32% Investment & annuity and Insurance $6.1 9% Trust$11.3 17% Bankcard & ATM $14.5 21% Secondary mortgage $3.4 5% Other $10.6 16% Noninterest Income Mix 1Q18 (excluding nonoperating items) Noninterest income, excluding the loss on
Slide 14: Becoming a More Efficient Organization
Becoming a More Efficient Organization Personnel $96.4 59% Occupancy $10.9 7% Equipment $3.5 2% Other (inc. ORE) $48.5 29% Amortization of intangibles $5.6 3% Operating Expense Mix 1Q18 Operating expense (noninterest expense excluding nonoperating items) totaled $164.9 million, down $3.1 million, or
Slide 15: Managing Our Capital
TCE ratio 7.80%, up 7 bps linked-quarter Change in tangible assets +1 bp Tangible net retained earnings 29 bps OCI -17 bps; related to higher unrealized loss on the AFS securities portfolio Dividends -8 bps Stock-based comp activity & other +2 bps Will continue to manage capital in the best interest
Slide 16: Near-Term Outlook
Near-Term Outlook 1Q18 Actual Items to note Outlook Loans up $88 million or less than 1% LQA; up $888 million or 5% Y-o-Y Includes reduction of approximately $95million in loans related to the sale of HFC Expect net loan growth of $250-$300 million in 2Q18; 5%-6% EOP growth year-over-year Net Intere
Slide 17: Long-Term Outlook – 2018/19
Long-Term Outlook –2018/19 Goal is to achieve CSOs by the 4thquarter of 2019 Includes impact of tax reform Does not include any additional Fed rate increases in 2018 or 2019 CSOs included pending capital One Trust & Asset Management transaction CSOs did not include HFC sale Expect HFC sale and pendi
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 19: Operating Earnings & Operating EPS Reconciliations
Operating Earnings & Operating EPS Reconciliations Three Months Ended (in thousands, except per share amounts) 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Net Income $72,475 $55,449 $58,902 $52,267 $49,014 Net income allocated to participating securities (1,366) (1,104) (1,244) (1,166) (1,156
Slide 20: Operating ROA, ROE & ROTCE Reconciliations
Operating ROA, ROE & ROTCE Reconciliations Three Months Ended (in thousands, except ratios) 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Net Income $72,475 $$55,449 $58,902 $52,267 $49,014 Nonoperating items, net of income tax benefit 5,782 7,405 6,902 1,372 Income tax resulting from re-measur
Slide 21: Operating Revenue (TE) & Operating PPNR (TE) Reconciliations
Operating Revenue (TE) & Operating PPNR (TE) Reconciliations Three Months Ended (dollars in thousands) 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Net interest income $205,664 $208,047 $202,857 $199,717 $181,691 Noninterest income 66,252 69,688 67,115 67,487 63,491 Total revenue $271,916 $277
Slide 22: Core NII (TE) & Core NIM (TE) Reconciliation
Core NII (TE) & Core NIM (TE) Reconciliation Three Months Ended (dollars in thousands) 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Net interest income $205,664 $208,047 $202,857 $199,717 $181,691 Taxable equivalent adjustment (a) 3,963 8,949 8,579 8,564 8,298 Net interest income (TE) $209,627
Slide 23: Appendix
Appendix Hancock Holding Company
Slide 24: Sale of Harrison Finance
Sale of Harrison Finance Announced the sale of Hancock’s consumer finance company (Harrison Finance) line of business on February 22, 2018 The transaction closed March 9, 2018 Loans totaled $95 million at year-end 2017 Operated 35 branches with 137 FTE employees in LA, MS, AL & FL Loss on sale total
Slide 25: Pending Purchase of Capital One's Trust & Asset Management Business
Pending Purchase of Capital One’s Trust & Asset Management Business Announced the proposed acquisition of Capital One’s trust & asset management line of business on December 18, 2017 The transaction is expected to close early third quarter of 2018, after receipt of regulatory approvals and the satis
Slide 26: Operating Earnings
Operating Earnings See slides 19-22 for non-GAAP reconciliations 1Q17 2Q17 3Q17 4Q17 1Q18 Operating Earnings ($000) 50,386 59,169 66,307 74,969 78,257 Operating EPS $0.58 $0.68 $0.76 $0.86 $0.90 Net Interest Income (TE) ($000) 189,989 208,281 211,436 216,996 209,627 Noninterest Inc excl non-op ($000
Slide 27: Key Operating Ratios
Key Operating Ratios See slides 19-22 for non-GAAP reconciliations 1Q17 2Q17 3Q17 4Q17 1Q18 Operating Return on Assets 0.83% 0.89% 0.99% 1.10% 1.17% Operating Return on Equity 7.48% 8.52% 9.27% 10.37% 11.05% Operating Return on TCE 10.20% 12.11% 13.14% 14.62% 15.56% Tangible Common Equity Ratio 7.94
Slide 28: Balance Sheet Summary
Balance Sheet Summary 1Q17 2Q17 3Q17 4Q17 1Q18 Average Loans ($MM) 17,303 18,369 18,591 18,840 19,028 Average Total Securities ($MM) 5,037 5,242 5,680 5,801 5,897 Average Deposits ($MM) 19,248 20,933 21,350 21,763 22,043 Loan Yield (TE) 4.16% 4.36% 4.39% 4.46% 4.43% Securities Yield (TE) 2.52% 2.52%
Slide 29: Historical Energy Data
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Nondrilling 663 672 658 682 650 682 671 691 697 617 604 545 529 527 Drilling 310 270 280 269 258 244 220 172 156 166 160 153 121 125 Midstream 102 109 104 103 105 108 88 79 77 81 66 55 52 57 Upstream 648 623 627 607 566 599 502 45
Slide 30: Energy Portfolio Support Services
Energy Portfolio Support Services Contract drillers$34 27% Rental tools$39 31% Completion services$26 20% other $27 22% Support Drilling Subcategories $125 million 3/31/18 Helicopter Transport$49 9% Marine Transport $244 47% Fabrication, construction, installation$86 16% other $88 17% Supply manufac
Slide 31: Glossary of Terms
Glossary of Terms. IRR–Interest rate risk .Linked-quarter (LQ)–current quarter compared to previous quarter. Loan Mark–Fair value discount on loans acquired in a business combination. LOB–Line of Business .LPO –Loan production office. LQA–Linked-quarter annualized .M&A –Mergers and acquisitions .NII
Slide 32: First Quarter 2018 Earnings Conference Call
4/18/2018 First Quarter 2018Earnings Conference Call 4/18/2018 First Quarter 2018Earnings Conference Call