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Hancock Whitney (HWC) Q2 Earnings Match, Revenues Rise Y/Y

Zacks Equity Research

Hancock Whitney Corporation’s HWC second-quarter 2019 operating earnings per share of $1.01 came in line with the Zacks Consensus Estimate. The bottom line was 5.2% higher than the year-ago figure.

Improvement in net revenues, modest loan growth and decline in provision for loan losses supported the results. However, higher expenses and a slight fall in deposit balance were the undermining factors.

Net income was $88.3 million, up 24% from the prior-year quarter. Net income in the year-ago quarter included certain non-operating items.

Revenues & Expenses Rise

Net revenues were $299.1 million, up 6.7% year over year. The figure beat the Zacks Consensus Estimate of $294.0 million.

Net interest income on tax equivalent basis grew 3.7% year over year to $223.6 million. Net interest margin, on a tax-equivalent basis, came in at 3.45%, up 5 basis points (bps).

Non-interest income totaled $79.3 million, indicating 15.1% improvement from the year-ago quarter. Increase in all fee income components except service charges on deposits led to this upside.

Total operating expenses increased 8.9% year over year to $183.6 million. This upswing resulted from rise in all cost components except amortization of intangibles expenses.

As of Jun 30, 2019, total loans were $20.2 billion, slightly up from the prior-quarter end. Total deposits decreased nearly 1% from the previous quarter to $23.2 billion.

Credit Quality: Mixed Bag

Net charge-offs from the non-covered loan portfolio was 0.14% of average total loans, up 3 bps from the year-ago quarter.

However, provision for loan losses declined 9% year over year to $8.1 million. Further, total non-performing assets decreased 18.7% to $338.6 million.

Profitability & Capital Ratios Improve

Return on average assets was 1.24% at the end of the reported quarter, up from 1.04% recorded in the prior-year quarter. In addition, return on average common equity was 10.96% compared with 9.81% at the end of June 2018.

As of Jun 30, 2019, Tier 1 leverage ratio was 9.10%, up from 8.66% recorded in the year-earlier quarter. Tier 1 risk-based capital ratio was 10.99%, up from 10.48% as of Jun 30, 2018.

Our Viewpoint

Hancock looks well poised for top-line growth, backed by strong loan and deposit balances. Further, the deal to acquire MidSouth Bancorp is projected to be accretive to earnings in 2020. However, mounting operating expenses, owing to the company's business restructuring efforts and inorganic growth strategy, are expected to hamper bottom-line growth to some extent.

Hancock Whitney Corporation Price, Consensus and EPS Surprise

 

Hancock Whitney Corporation Price, Consensus and EPS Surprise

Hancock Whitney Corporation price-consensus-eps-surprise-chart | Hancock Whitney Corporation Quote

Currently, Hancock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates

Prosperity Bancshares, Inc. PB and BankUnited, Inc. BKU are scheduled to announce second-quarter results on Jul 24, while Associated Banc-Corp ASB is slated to report on Jul 25.

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