Hancock Whitney Corp Reports Q4 2023 Results Amidst Restructuring Charges
Net Income: Reported at $50.6 million for Q4 2023, down from $97.7 million in Q3 2023 and $143.8 million in Q4 2022.
Earnings Per Share (EPS): Q4 2023 EPS was $0.58, compared to $1.12 in Q3 2023 and $1.65 in Q4 2022. Adjusted EPS, excluding one-time charges, was $1.26.
Loans and Deposits: Loans slightly declined by $61.8 million, while deposits decreased by $630.3 million, primarily due to brokered deposits maturing.
Net Interest Margin (NIM): Remained stable at 3.27% in Q4 2023, consistent with the previous quarter.
Asset Quality: Nonaccrual loans remained low at 0.25% of total loans, and the allowance for credit losses (ACL) was solid at 1.41%.
Capital Ratios: Common equity tier 1 (CET1) ratio estimated at 12.39%, and tangible common equity (TCE) ratio improved to 8.37%.
Efficiency Ratio: Improved to 55.58% in Q4 2023.
On January 16, 2024, Hancock Whitney Corp (NASDAQ:HWC) released its 8-K filing, detailing the financial outcomes for the fourth quarter of 2023. The company, which operates bank offices and financial centers offering a range of financial products and services, faced a challenging quarter with net income totaling $50.6 million, or $0.58 per diluted common share (EPS). This represents a decrease from the $97.7 million, or $1.12 EPS, reported in the third quarter of 2023 and the $143.8 million, or $1.65 EPS, in the fourth quarter of 2022.
The fourth quarter results included a net charge of $75.4 million, or $0.68 per diluted share after-tax, related to a loss on the securities portfolio restructuring, sale of a parking facility, and an FDIC Special Assessment. Excluding these one-time items, the adjusted EPS would be $1.26, up $0.14 linked-quarter.
Financial Performance and Challenges
Hancock Whitney Corp's performance in the fourth quarter reflects the impact of strategic decisions, including the restructuring of its securities portfolio. While these actions incurred significant charges, they are part of the company's efforts to position itself for future stability and growth. The decrease in net income and EPS, both sequentially and year-over-year, highlights the challenges faced during the quarter. However, the company's management remains optimistic, citing a strong finish to the year and maintaining a robust ACL to loans ratio of 1.41%.
President & CEO John M. Hairston commented on the quarter's results, stating,
Fourth quarters results reflect a strong finish to 2023... We are looking forward to carrying the momentum from the strong year-end finish into 2024, not only for our company, but for our clients, associates, and communities we serve."
Key Financial Metrics
Despite the challenges, Hancock Whitney Corp reported several positive financial metrics. The adjusted pre-provision net revenue (PPNR) increased by 3% linked-quarter to $157.5 million, and the efficiency ratio improved to 55.58%. The net interest margin (NIM) remained stable at 3.27%, supported by improved loan yields and lower short-term borrowing costs.
On the balance sheet, total loans were $23.9 billion at the end of the quarter, a slight decrease from the previous quarter. Deposits saw a more significant decline, primarily due to the maturity of brokered deposits. Asset quality remained strong, with low levels of criticized commercial loans and nonaccrual loans.
The company's capital position strengthened, with the CET1 ratio estimated at 12.39%, up 33 basis points linked-quarter, and the TCE ratio improving to 8.37%, up 103 basis points linked-quarter.
Hancock Whitney Corp's financial achievements, particularly in maintaining a stable NIM and a solid ACL coverage, are crucial for the banking industry, where margins and loan quality are key indicators of financial health and operational efficiency.
For a more detailed financial analysis and to participate in the Q&A session with management, interested parties can join the conference call scheduled for 3:30 p.m. Central Time on January 16, 2024.
For further information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Hancock Whitney Corp for further details.
This article first appeared on GuruFocus.
