Hancock Whitney reports second quarter 2020 results
Results include impact of the sale of $497 million of energy loans; continued ACL build
GULFPORT, Miss., July 21, 2020 (GLOBE NEWSWIRE) -- Hancock Whitney Corporation (Nasdaq: HWC) today announced its financial results for the second quarter of 2020, a net loss of $117.1 million, or ($1.36) per diluted common share (EPS). The loss reflects a provision for credit losses of $306.9 million that includes both a special provision related to the sale of $497 million in energy loans and an additional build in the reserve for credit losses related to COVID-19.
The sale, which was announced on July 17, 2020, included reserve-based (RBL), midstream and nondrilling service credits. The company will receive proceeds of $257.5 million from the sale of these loans. All loans included in the transaction were re-classified as held for sale as of June 30, 2020, and today’s earnings results include a special provision for credit losses of approximately $160 million (pre-tax), or $1.47 per diluted share (21% tax rate), related to the energy loan sale.
The second quarter total provision for credit losses includes an additional $146.8 million as the company continued to build reserves for expected losses in sectors hardest hit by the economic fallout related to COVID-19. The company remains well capitalized with regulatory ratios well in excess of required levels including capital conservation buffers; CET1 ratio is estimated to be 9.77% at June 30, 2020.
The company reported a loss of $111.0 million, or ($1.28) EPS, in the first quarter of 2020 and a profit of $88.3 million, or $1.01 EPS, in the second quarter of 2019. Pre-provision net revenue (PPNR) totaled $118.5 million in the second quarter of 2020, an increase of $2.8 million, or 2.4%, linked-quarter. Excluding the special provision related to the energy loan sale (at a tax rate of 21%), the company’s earnings would be $9.4 million, or $.11 per diluted share, for the second quarter of 2020.
“The second quarter’s results reflect our continued focus on de-risking our balance sheet in light of today’s environment,” said John M. Hairston, President and CEO. “After building a solid reserve for credit losses in the first quarter, and then issuing subdebt in June, we made a strategic decision to opportunistically divest a large portion of our energy portfolio. Additionally, based on updated forecasts, we built a stronger level of reserves for what appears to be a longer and possibly deeper impact to our economies related to COVID-19. Despite those charges, our PPNR, the core business of our company, improved linked-quarter, and we remain committed to helping both our clients and associates manage through this event. Our capital remains solid with a 7.89% TCE ratio (excluding PPP loans), and we expect that our actions through the first half of 2020 will provide a stronger reserve with less risk in the balance sheet, which in turn should lead to improved returns for our shareholders.”
Second Quarter 2020 Highlights
Criticized commercial loans down $182 million, or 34%, and nonperforming loans down $94 million, or 33%, linked-quarter reflecting the loan sale and disposition of problem energy credits
Strengthened Allowance for Credit Losses (ACL)/Total Loans to 2.12% or 2.36% excluding PPP loans
Net loan growth totaled $1.1 billion linked-quarter; includes $2.3 billion in PPP loans, partially offset by the energy loan sale and reduced balances on lines of credit
Total deposits increased $2.3 billion, mainly reflecting customer’s additional liquidity from PPP loans
NIM of 3.23% declined 18 basis points (bps) linked-quarter; (see slide 21 in earnings slides for details)
Solid liquidity with over $17 billion available in additional sources of funding
Loans
Total loans at June 30, 2020 were $22.6 billion, up $1.1 billion, or 5%, linked-quarter. Average loans totaled $23.0 billion for the second quarter of 2020, up $1.7 billion, or 8%, linked-quarter. Growth in the second quarter was related to $2.3 billion of PPP loans funded during the quarter, partly offset by approximately $500 million in paydowns of draws on lines taken in the first quarter of 2020 by businesses as a precaution related to the impact from COVID-19, and also reduced by $497 million related to the energy loan sale (of which $255 million in loans were reclassified as held for sale). As of June 30, 2020, loans to the energy industry totaled $352 million, or 1.7% of total loans.
Beginning last quarter, the company began offering loan deferrals to customers impacted by COVID-19. At March 31, 2020 there were 1,618 notes deferred totaling $839.4 million in outstandings. Deferrals peaked in May at $3.6 billion of outstandings. In late June, deferrals began expiring, and as of June 30, 2020 there were 6,954 notes deferred totaling $2.7 billion in outstandings. As of July 15, 2020 there were $1.4 billion of active loan deferrals.
Deposits
Total deposits at June 30, 2020 were $27.3 billion, up $2.3 billion, or 9%, from March 31, 2020. An increase of $2.6 billion in noninterest-bearing deposits (DDAs) was the largest driver of the increase and mainly reflects additional customer liquidity resulting from PPP loan fundings. DDAs totaled $11.8 billion at June 30, 2020, up 28% from March 31, 2020 and comprised 43% of total period-end deposits at June 30, 2020.
Interest-bearing transaction and savings deposits totaled $9.6 billion at the end of the second quarter of 2020, up $674.1 million, or 8%, linked-quarter. Compared to March 31, 2020, time deposits of $2.6 billion were down $989.3 million, or 27%, split between decreases in both retail and brokered CDs. Interest-bearing public fund deposits increased $74.6 million, or 2%, to $3.3 billion.
Average deposits for the second quarter of 2020 were $26.7 billion, up $2.4 billion, or 10%, linked-quarter.
Asset Quality
The total allowance for credit losses (ACL) was $479.2 million at June 30, 2020, up $4.2 million, or 1%, from March 31, 2020. During the second quarter of 2020, the company recorded a total provision for credit losses of $306.9 million, compared to $246.8 million in the first quarter of 2020. Approximately $146.8 million of the provision for credit losses reflects updated Moody’s macroeconomic forecast scenarios that reflect today’s ongoing COVID-19 recessionary environment. As noted above, $160.1 million of the total provision is related to the energy loan sale.
Net charge-offs totaled $302.7 million in the second quarter of 2020, or 5.30% of average total loans on an annualized basis, up from $43.8 million, or 0.83% of average total loans in the first quarter of 2020. Included in the second quarter’s total were $243 million of charge-offs related to the energy loan sale and $26 million in other energy-related charge-offs.
The ratio of ACL to period-end loans was 2.12% (2.36% excluding PPP loans) at June 30, 2020, compared to 2.21% at March 31, 2020. The allowance for credits in the remaining energy portfolio totaled $19.9 million, or 5.7% of funded energy loans, at June 30, 2020. The allowance for credits in the nonenergy portfolio totaled $459.3 million, or 2.30% of funded nonenergy loans (excluding PPP loans), at June 30, 2020.
Nonperforming assets (NPAs) totaled $212.6 million at June 30, 2020, down $94.2 million, or 31%, from March 31, 2020. During the second quarter of 2020, total nonperforming loans decreased $94 million, or 33% reflecting the energy loan sale, while foreclosed and surplus real estate (ORE) and other foreclosed assets remained virtually unchanged. Nonperforming assets as a percent of total loans, ORE and other foreclosed assets was 0.94% at June 30, 2020, down 48 bps from March 31. 2020.
Net Interest Income and Net Interest Margin (NIM)
Net interest income (TE) for the second quarter of 2020 was $241.1 million, up $6.5 million from the first quarter of 2020. The increase mainly reflects the impact of PPP loans offsetting the reduction in income from lower rates and purchase accounting accretion.
The net interest margin (TE) was 3.23% for the second quarter of 2020, down 18 bps linked-quarter. The decline mainly reflects a decrease in the overall rate environment impacting earning assets (-40 bps), the impact of excess liquidity on the balance sheet related to COVID-19 (-6 bps), a decrease in purchase accounting accretion related to the MidSouth transaction (-4 bps), the impact from interest reversals (-2 bps) and the one month impact of the June 2020 subdebt issuance (-1 bp), partly offset by proactive deposit pricing and changes in wholesale funding (+30 bps), and the impact of $1.7 billion in average PPP loans at a 4% yield (+5 bps).
Average earning assets were $30.0 billion for the second quarter of 2020, up $2.4 billion, or 9%, from the first quarter of 2020.
Noninterest Income
Noninterest income totaled $73.9 for the second quarter of 2020, down $10.4 million, or 12%, from the first quarter of 2020 reflecting the slowdown in economic activity as a result of COVID-19. Additionally, the company began waiving certain fees in mid-late March, such as penalty-free CD withdrawals, MMDA and savings excessive withdrawal fees, overdraft protection transfer fees and checking account reopening fees. Depending on the duration of the impact of COVID-19 on our customers, reduced activity and fee waivers could continue impacting our results in future quarters.
Service charges on deposits totaled $15.5 million for the second quarter of 2020, down $7.3 million, or 32%, from the first quarter of 2020. Bank card and ATM fees totaled $16.0 million, down $1.4 million, or 8.1%, from the first quarter.
Trust fees totaled $14.2 million, down $0.6 million, or 4%, linked-quarter. Investment and annuity income and insurance fees totaled $5.4 million, down $1.8 million, or 25% linked-quarter.
Fees from secondary mortgage operations totaled $9.8 million for the second quarter of 2020, up $3.8 million, or 62% linked-quarter.
Other noninterest income totaled $13.1 million, down $3.0 million, or 19%, from the first quarter of 2020. The decrease in other noninterest income is primarily due to decreases in specialty income.
Noninterest Expense & Taxes
Noninterest expense totaled $196.5 million, down $6.8 million, or 3% linked-quarter. Included in first quarter of 2020 expense was $9.8 million of energy-related equity write-offs. Adjusting for the write-offs, noninterest expense was up $3.0 million. The adjusted increase includes $2.5 million in corporate contributions via community support such as food pantry cash donations, PPE for residents and first responders, housing relief to help fight evictions and contributions to the company’s employee assistance fund.
Total personnel expense was $120.4 million in the second quarter of 2020, up $6.9 million, or 6%, from the first quarter of 2020. The increase was mostly related to annual merit increases, and overtime pay related to mortgage lending and PPP applications.
Occupancy and equipment expense totaled $18.3 million in the second quarter of 2020, up $1.2 million, or 7%, from the first quarter of 2020. Amortization of intangibles totaled $5.2 million for the second quarter of 2020, down $0.2 million, or 3%, linked-quarter. Gains on sales of ORE and other foreclosed assets (OFA) exceeded expenses by $0.5 million in the second quarter of 2020. First quarter ORE expense included the $9.8 million in equity write-downs noted above.
Other operating expense totaled $53.1 million in the second quarter of 2020, down $4.1 million, or 7%, from the first quarter of 2020.
The effective income tax rate for the second quarter of 2020 was 39%. The unusually higher rate reflects both the impact from the energy loan sale and resulting quarterly loss. The company expects the tax rate to approximate 18% in both the third and fourth quarters of 2020. The effective income tax rate continues to be less than the statutory rate due primarily to tax-exempt income and tax credits.
Capital
Common stockholders’ equity at June 30, 2020 totaled $3.3 billion, down $104.9 million, or 3%, from March 31, 2020. The decline reflects the net impact of the energy loan sale. The tangible common equity (TCE) ratio was 7.33%, down from 8.00% March 31, 2020. TCE was mainly impacted by the addition of $2.3 billion in PPP loans (-56 bps) and the energy loan sale (-36 bps) in the quarter. A full reconciliation of the quarterly change is included in our slide presentation. The company remains well capitalized, with both bank and holding company capital levels in excess of required regulatory minimums. In early June, the company issued $172.5 million of new subdebt which qualifies as tier 2 capital. The company’s CET1 ratio is estimated to be 9.77% at June 30, 2020. The company intends to pay its next quarterly dividend and is in consultation with its examiners, while the board reviews the dividend payout policy quarterly.
Conference Call and Slide Presentation
Management will host a conference call for analysts and investors at 4:00 p.m. Central Time on Tuesday, July 21, 2020 to review the results. A live listen-only webcast of the call will be available under the Investor Relations section of Hancock Whitney’s website at www.hancockwhitney.com/investors. A link to the release with additional financial tables, and a link to a slide presentation related to second quarter results are also posted as part of the webcast link. To participate in the Q&A portion of the call, dial (877) 564-1219 or (973) 638-3429. An audio archive of the conference call will be available under the Investor Relations section of our website. A replay of the call will also be available through July 28, 2020 by dialing (855) 859-2056 or (404) 537-3406, passcode 1757957.
About Hancock Whitney
Since the late 1800s, Hancock Whitney has embodied core values of Honor & Integrity, Strength & Stability, Commitment to Service, Teamwork, and Personal Responsibility. Hancock Whitney offices and financial centers in Mississippi, Alabama, Florida, Louisiana, and Texas offer comprehensive financial products and services, including traditional and online banking; commercial and small business banking; private banking; trust and investment services; healthcare banking; certain insurance services; and mortgage services. The company also operates a loan production office in Nashville, Tennessee, as well as trust and asset management offices in New Jersey and New York. BauerFinancial, Inc., the nation’s leading independent bank rating and analysis firm, consistently recommends Hancock Whitney as one of America’s most financially sound banks. More information is available at www.hancockwhitney.com.
Non-GAAP Financial Measures
This news release includes non-GAAP financial measures to describe Hancock Whitney’s performance. These non-GAAP financial measures should not be considered alternatives to GAAP-basis financial statements and other bank holding companies may define or calculate these non-GAAP measures or similar measures differently. The reconciliations of those measures to GAAP measures are provided either in the financial tables or in Appendix A thereto.
Consistent with Securities and Exchange Commission Industry Guide 3, the company presents net interest income, net interest margin and efficiency ratios on a fully taxable equivalent (“TE”) basis. The TE basis adjusts for the tax-favored status of net interest income from certain loans and investments using the statutory federal tax rate to increase tax-exempt interest income to a taxable equivalent basis. The company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.
The company presents certain additional non-GAAP financial measures to assist the reader with a better understanding of the company’s performance period over period, as well as to provide investors with assistance in understanding the success management has experienced in executing its strategic initiatives. These non-GAAP measures may reference the concept “operating.” The company uses the term “operating” to describe a financial measure that excludes income or expense considered to be nonoperating in nature. Items identified as nonoperating are those that, when excluded from a reported financial measure, provide management or the reader with a measure that may be more indicative of forward-looking trends in the company’s business.
Important Cautionary Statement about Forward-Looking Statements
This news release 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 our expectations regarding our performance and financial condition, balance sheet and revenue growth, the provision for credit losses, loan growth expectations, management’s predictions about charge-offs for loans, including energy-related credits, the impact of significant decreases in oil and gas prices on our energy portfolio, the impact of COVID-19 on the economy and our operations, the adequacy of our enterprise risk management framework, the impact of the MidSouth acquisition, or future business combinations on our performance and financial condition, including our ability to successfully integrate the businesses, success of revenue-generating initiatives, the effectiveness of derivative financial instruments and hedging activities to manage risks, projected tax rates, increased cybersecurity risks, including potential business disruptions or financial losses, the adequacy of our internal controls over financial reporting, the financial impact of regulatory requirements and tax reform legislation, the impact of the referenced rate reform, deposit trends, credit quality trends, changes in interest rates, net interest margin trends, future expense levels, future profitability, improvements in expense to revenue (efficiency) ratio, purchase accounting impacts, accretion levels and expected returns.
Given the many unknowns and risks being heavily weighted to the downside, our forward-looking statements are subject to the risk that conditions will be substantially different than we are currently expecting. If efforts to contain COVID-19 are unsuccessful and restrictions on movement last into the third quarter or beyond, the recession would be much longer and much more severe. Ineffective fiscal stimulus, or an extended delay in implementing it, are also major downside risks. The deeper the recession is, and the longer it lasts, the more it will damage consumer fundamentals and sentiment. This could both prolong the recession, and/or make any recovery weaker. Similarly, the recession could damage business fundamentals, and an extended global recession due to COVID-19 would weaken the U.S. recovery. As a result, the outbreak and its consequences, including responsive measures to manage it, have had and are likely to continue to have an adverse effect, possibly materially, on our business and financial performance by adversely affecting, possibly materially, the demand and profitability of our products and services, the valuation of assets and our ability to meet the needs of our customers.
In addition, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “forecast,” “goals,” “targets,” “initiatives,” “focus,” “potentially,” “probably,” “projects,” “outlook", or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. Forward-looking statements are subject to significant risks and uncertainties. Any forward-looking statement made in this release is subject to the safe harbor protections set forth in the Private Securities Litigation Reform Act of 1995. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Additional factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, in Part II, “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and in other periodic reports that we file with the SEC.
HANCOCK WHITNEY CORPORATION | ||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
(dollars and common share data in thousands, except per share amounts) | 6/30/2020 | 3/31/2020 | 6/30/2019 | 6/30/2020 | 6/30/2019 | |||||||||||||||
NET INCOME | ||||||||||||||||||||
Net interest income | $ | 237,866 | $ | 231,188 | $ | 219,868 | $ | 469,054 | $ | 439,122 | ||||||||||
Net interest income (TE) (a) | 241,114 | 234,636 | 223,586 | 475,750 | 446,664 | |||||||||||||||
Provision for credit losses | 306,898 | 246,793 | 8,088 | 553,691 | 26,131 | |||||||||||||||
Noninterest income | 73,943 | 84,387 | 79,250 | 158,330 | 149,753 | |||||||||||||||
Noninterest expense | 196,539 | 203,335 | 183,567 | 399,874 | 359,267 | |||||||||||||||
Income tax expense (benefit) | (74,556 | ) | (23,520 | ) | 19,186 | (98,076 | ) | 36,036 | ||||||||||||
Net income (loss) | $ | (117,072 | ) | $ | (111,033 | ) | $ | 88,277 | $ | (228,105 | ) | $ | 167,441 | |||||||
For informational purposes - included above, pre-tax | ||||||||||||||||||||
Provision for credit loss associated with energy loan sale | $ | 160,101 | $ | — | $ | — | $ | 160,101 | $ | — | ||||||||||
PERIOD-END BALANCE SHEET DATA | ||||||||||||||||||||
Loans | $ | 22,628,377 | $ | 21,515,681 | $ | 20,175,812 | $ | 22,628,377 | $ | 20,175,812 | ||||||||||
Securities | 6,381,803 | 6,374,490 | 5,725,735 | 6,381,803 | 5,725,735 | |||||||||||||||
Earning assets | 30,134,790 | 28,834,072 | 26,088,759 | 30,134,790 | 26,088,759 | |||||||||||||||
Total assets | 33,215,400 | 31,761,693 | 28,761,863 | 33,215,400 | 28,761,863 | |||||||||||||||
Noninterest-bearing deposits | 11,759,085 | 9,204,631 | 8,114,632 | 11,759,085 | 8,114,632 | |||||||||||||||
Total deposits | 27,322,268 | 25,008,496 | 23,236,042 | 27,322,268 | 23,236,042 | |||||||||||||||
Common stockholders' equity | 3,316,157 | 3,421,064 | 3,318,915 | 3,316,157 | 3,318,915 | |||||||||||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||||||||||
Loans | $ | 22,957,032 | $ | 21,234,016 | $ | 20,150,104 | $ | 22,095,524 | $ | 20,138,590 | ||||||||||
Securities (b) | 6,129,616 | 6,149,432 | 5,586,390 | 6,139,524 | 5,621,345 | |||||||||||||||
Earning assets | 30,013,829 | 27,630,652 | 25,992,894 | 28,822,240 | 26,006,595 | |||||||||||||||
Total assets | 33,136,706 | 30,663,601 | 28,537,810 | 31,900,154 | 28,494,917 | |||||||||||||||
Noninterest-bearing deposits | 10,989,921 | 8,763,359 | 8,099,621 | 9,876,640 | 8,163,306 | |||||||||||||||
Total deposits | 26,702,622 | 24,327,242 | 23,137,563 | 25,514,932 | 23,125,916 | |||||||||||||||
Common stockholders' equity | 3,465,617 | 3,509,727 | 3,230,503 | 3,487,672 | 3,174,588 | |||||||||||||||
COMMON SHARE DATA | ||||||||||||||||||||
Earnings (loss) per share - diluted | $ | (1.36 | ) | $ | (1.28 | ) | $ | 1.01 | $ | (2.64 | ) | $ | 1.92 | |||||||
Cash dividends per share | 0.27 | 0.27 | 0.27 | 0.54 | 0.54 | |||||||||||||||
Book value per share (period-end) | 38.41 | 39.65 | 38.70 | 38.41 | 38.70 | |||||||||||||||
Tangible book value per share (period-end) | 27.38 | 28.56 | 28.46 | 27.38 | 28.46 | |||||||||||||||
Weighted average number of shares - diluted | 86,301 | 87,186 | 85,835 | 86,744 | 85,810 | |||||||||||||||
Period-end number of shares | 86,342 | 86,275 | 85,759 | 86,342 | 85,759 | |||||||||||||||
Market data | ||||||||||||||||||||
High sales price | $ | 28.50 | $ | 44.24 | $ | 44.74 | $ | 44.24 | $ | 44.74 | ||||||||||
Low sales price | 14.88 | 14.32 | 37.03 | 14.32 | 34.11 | |||||||||||||||
Period-end closing price | 21.20 | 19.52 | 40.06 | 21.20 | 40.06 | |||||||||||||||
Trading volume | 48,174 | 50,390 | 27,874 | 98,564 | 55,998 | |||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||
Return on average assets | (1.42 | )% | (1.46 | )% | 1.24 | % | (1.44 | )% | 1.18 | % | ||||||||||
Return on average common equity | (13.59 | )% | (12.72 | )% | 10.96 | % | (13.15 | )% | 10.64 | % | ||||||||||
Return on average tangible common equity | (18.75 | )% | (17.51 | )% | 15.07 | % | (18.13 | )% | 14.73 | % | ||||||||||
Tangible common equity ratio (c) | 7.33 | % | 8.00 | % | 8.75 | % | 7.33 | % | 8.75 | % | ||||||||||
Net interest margin (TE) | 3.23 | % | 3.41 | % | 3.45 | % | 3.31 | % | 3.45 | % | ||||||||||
Noninterest income as a percent of total revenue (TE) | 23.47 | % | 26.45 | % | 26.17 | % | 24.97 | % | 25.11 | % | ||||||||||
Efficiency ratio (d) | 60.74 | % | 62.06 | % | 58.95 | % | 61.41 | % | 58.53 | % | ||||||||||
Average loan/deposit ratio | 85.97 | % | 87.28 | % | 87.09 | % | 86.60 | % | 87.08 | % | ||||||||||
Allowance for loan losses as a percentage of period-end loans | 1.96 | % | 1.98 | % | 0.97 | % | 1.96 | % | 0.97 | % | ||||||||||
Allowance for credit losses as a percent of period-end loans | 2.12 | % | 2.21 | % | 0.97 | % | 2.12 | % | 0.97 | % | ||||||||||
Annualized net charge-offs to average loans | 5.30 | % | 0.83 | % | 0.14 | % | 3.15 | % | 0.25 | % | ||||||||||
Allowance for loan losses to nonperforming loans + accruing loans 90 days past due | 222.37 | % | 139.17 | % | 61.60 | % | 222.37 | % | 61.60 | % | ||||||||||
FTE headcount | 4,196 | 4,148 | 3,930 | 4,196 | 3,930 | |||||||||||||||
(a) Taxable equivalent (TE) amounts are calculated using a federal income tax rate of 21%. | ||||||||||||||||||||
(b) Average securities does not include unrealized holding gains/losses on available for sale securities. | ||||||||||||||||||||
(c) The tangible common equity ratio is common shareholders' equity less intangible assets divided by total assets less intangible assets. | ||||||||||||||||||||
(d) The efficiency ratio is noninterest expense to total net interest income (TE) and noninterest income, excluding amortization of purchased intangibles and nonoperating items. | ||||||||||||||||||||
HANCOCK WHITNEY CORPORATION | ||||||||||||||||||||
QUARTERLY FINANCIAL HIGHLIGHTS | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(dollars and common share data in thousands, except per share amounts) | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | |||||||||||||||
NET INCOME | ||||||||||||||||||||
Net interest income | $ | 237,866 | $ | 231,188 | $ | 233,156 | $ | 222,939 | $ | 219,868 | ||||||||||
Net interest income (TE) (a) | 241,114 | 234,636 | 236,736 | 226,591 | 223,586 | |||||||||||||||
Provision for credit losses | 306,898 | 246,793 | 9,156 | 12,421 | 8,088 | |||||||||||||||
Noninterest income | 73,943 | 84,387 | 82,924 | 83,230 | 79,250 | |||||||||||||||
Noninterest expense | 196,539 | 203,335 | 197,856 | 213,554 | 183,567 | |||||||||||||||
Income tax expense (benefit) | (74,556 | ) | (23,520 | ) | 16,936 | 12,387 | 19,186 | |||||||||||||
Net income (loss) | $ | (117,072 | ) | $ | (111,033 | ) | $ | 92,132 | $ | 67,807 | $ | 88,277 | ||||||||
For informational purposes - included above, pre-tax | ||||||||||||||||||||
Provision for credit loss associated with energy loan sale | $ | 160,101 | $ | — | $ | — | $ | — | $ | — | ||||||||||
Nonoperating merger-related expenses | — | — | 3,856 | 28,810 | — | |||||||||||||||
PERIOD-END BALANCE SHEET DATA | ||||||||||||||||||||
Loans | $ | 22,628,377 | $ | 21,515,681 | $ | 21,212,755 | $ | 21,035,952 | $ | 20,175,812 | ||||||||||
Securities | 6,381,803 | 6,374,490 | 6,243,313 | 6,404,719 | 5,725,735 | |||||||||||||||
Earning assets | 30,134,790 | 28,834,072 | 27,622,161 | 27,565,973 | 26,088,759 | |||||||||||||||
Total assets | 33,215,400 | 31,761,693 | 30,600,757 | 30,543,549 | 28,761,863 | |||||||||||||||
Noninterest-bearing deposits | 11,759,085 | 9,204,631 | 8,775,632 | 8,686,383 | 8,114,632 | |||||||||||||||
Total deposits | 27,322,268 | 25,008,496 | 23,803,575 | 24,201,299 | 23,236,042 | |||||||||||||||
Common stockholders' equity | 3,316,157 | 3,421,064 | 3,467,685 | 3,586,380 | 3,318,915 | |||||||||||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||||||||||
Loans | $ | 22,957,032 | $ | 21,234,016 | $ | 21,037,942 | $ | 20,197,114 | $ | 20,150,104 | ||||||||||
Securities (b) | 6,129,616 | 6,149,432 | 6,201,612 | 6,004,688 | 5,586,390 | |||||||||||||||
Earning assets | 30,013,829 | 27,630,652 | 27,441,459 | 26,437,613 | 25,992,894 | |||||||||||||||
Total assets | 33,136,706 | 30,663,601 | 30,343,293 | 29,148,106 | 28,537,810 | |||||||||||||||
Noninterest-bearing deposits | 10,989,921 | 8,763,359 | 8,601,323 | 8,092,482 | 8,099,621 | |||||||||||||||
Total deposits | 26,702,622 | 24,327,242 | 23,848,374 | 23,091,355 | 23,137,563 | |||||||||||||||
Common stockholders' equity | 3,465,617 | 3,509,727 | 3,473,693 | 3,383,738 | 3,230,503 | |||||||||||||||
COMMON SHARE DATA | ||||||||||||||||||||
Earnings (loss) per share - diluted | $ | (1.36 | ) | $ | (1.28 | ) | $ | 1.03 | $ | 0.77 | $ | 1.01 | ||||||||
Cash dividends per share | 0.27 | 0.27 | 0.27 | 0.27 | 0.27 | |||||||||||||||
Book value per share (period-end) | 38.41 | 39.65 | 39.62 | 39.49 | 38.70 | |||||||||||||||
Tangible book value per share (period-end) | 27.38 | 28.56 | 28.63 | 28.73 | 28.46 | |||||||||||||||
Weighted average number of shares - diluted | 86,301 | 87,186 | 88,315 | 86,462 | 85,835 | |||||||||||||||
Period-end number of shares | 86,342 | 86,275 | 87,515 | 90,822 | 85,759 | |||||||||||||||
Market data | ||||||||||||||||||||
High sales price | $ | 28.50 | $ | 44.24 | $ | 44.42 | $ | 42.11 | $ | 44.74 | ||||||||||
Low sales price | 14.88 | 14.32 | 35.45 | 33.63 | 37.03 | |||||||||||||||
Period-end closing price | 21.20 | 19.52 | 43.88 | 38.30 | 40.06 | |||||||||||||||
Trading volume | 48,174 | 50,390 | 30,850 | 29,038 | 27,874 | |||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||
Return on average assets | (1.42 | )% | (1.46 | )% | 1.20 | % | 0.92 | % | 1.24 | % | ||||||||||
Return on average common equity | (13.59 | )% | (12.72 | )% | 10.52 | % | 7.95 | % | 10.96 | % | ||||||||||
Return on average tangible common equity | (18.75 | )% | (17.51 | )% | 14.62 | % | 10.77 | % | 15.07 | % | ||||||||||
Tangible common equity ratio (c) | 7.33 | % | 8.00 | % | 8.45 | % | 8.82 | % | 8.75 | % | ||||||||||
Net interest margin (TE) | 3.23 | % | 3.41 | % | 3.43 | % | 3.41 | % | 3.45 | % | ||||||||||
Noninterest income as a percentage of total revenue (TE) | 23.47 | % | 26.45 | % | 25.94 | % | 26.86 | % | 26.17 | % | ||||||||||
Efficiency ratio (d) | 60.74 | % | 62.06 | % | 58.88 | % | 58.05 | % | 58.95 | % | ||||||||||
Average loan/deposit ratio | 85.97 | % | 87.28 | % | 88.22 | % | 87.47 | % | 87.09 | % | ||||||||||
Allowance for loan losses as a percent of period-end loans | 1.96 | % | 1.98 | % | 0.90 | % | 0.93 | % | 0.97 | % | ||||||||||
Allowance for credit losses as a percent of period-end loans | 2.12 | % | 2.21 | % | 0.92 | % | 0.93 | % | 0.97 | % | ||||||||||
Annualized net charge-offs to average loans | 5.30 | % | 0.83 | % | 0.18 | % | 0.25 | % | 0.14 | % | ||||||||||
Allowance for loan losses to nonperforming loans + accruing loans 90 days past due | 222.37 | % | 139.17 | % | 60.97 | % | 67.06 | % | 61.60 | % | ||||||||||
FTE headcount | 4,196 | 4,148 | 4,136 | 3,894 | 3,930 | |||||||||||||||
(a) Taxable equivalent (TE) amounts are calculated using a federal income tax rate of 21%. | ||||||||||||||||||||
(b) Average securities does not include unrealized holding gains/losses on available for sale securities. | ||||||||||||||||||||
(c) The tangible common equity ratio is common shareholders' equity less intangible assets divided by total assets less intangible assets. | ||||||||||||||||||||
(d) The efficiency ratio is noninterest expense to total net interest income (TE) and noninterest income, excluding amortization of purchased intangibles and nonoperating items. | ||||||||||||||||||||
For more information
Trisha Voltz Carlson, EVP, Investor Relations Manager
504.299.5208 or trisha.carlson@hancockwhitney.com
