Hancock Whitney Corporation (Nasdaq: HWC) today announced its
financial results for the first quarter of 2024. Net income for the
first quarter of 2024 totaled $108.6 million, or $1.24 per diluted
common share (EPS), compared to $50.6 million, or $0.58 per diluted
common share, in the fourth quarter of 2023. The first quarter of
2024 included a $3.8 million charge, or $0.04 per diluted common
share, of a supplemental disclosure item, related to a revision to
the FDIC Special Assessment. The fourth quarter of 2023 included a
net charge of $75.4 million, or $0.68 per diluted share after-tax,
of supplemental disclosure items, related to a loss on the
securities portfolio restructuring, gain on sale of a parking
facility, and FDIC Special Assessment. Excluding the impact of
these supplemental disclosure items, EPS would be $1.28, up $0.02
linked-quarter. The company reported net income for the first
quarter of 2023 of $126.5 million, or $1.45 per diluted common
share. There were no supplemental disclosure items in the first
quarter of 2023.
First Quarter 2024 Highlights
- Net income totaled $108.6 million, compared to $50.6 million in
prior quarter
- Adjusted pre-provision net revenue (PPNR) totaled $152.9
million, down $4.6 million, or 3% linked-quarter
- Loans increased $49.0 million, or 1% LQA
- Deposits increased $85.8 million, or 1% LQA
- Criticized commercial loans and nonaccrual loans continued to
normalize
- ACL coverage remained solid at 1.42%, up 1 bp, compared to
prior quarter
- NIM 3.32%, up 5 bps compared to 4Q23
- CET1 ratio estimated at 12.67%, up 34 bps linked-quarter; TCE
ratio 8.61%, up 24 bps linked-quarter
- Efficiency ratio 56.44%
“The first quarter’s results reflect a very positive start to
2024,” said John M. Hairston, President & CEO. “Our efforts to
reposition our balance sheet and create opportunities for NIM
expansion continued this quarter. NIM expansion was supported
primarily by the impact of last quarter’s bond portfolio
restructure and good control of deposit costs. We were also pleased
with the quarter’s performance in fees and expense management.
Credit metrics continued to normalize, but we do not see any broad
signs of weakening in any portfolio or geographic segment. We
maintained a robust ACL to loans of 1.42% and we continued to grow
capital this quarter. As we look forward to celebrating our 125th
year and beyond, we believe we continue to position ourselves to
effectively navigate any operating environment.”
Loans
Total loans were $24.0 billion at March 31, 2024, up $49.0
million, or less than 1%, from December 31, 2023. One-time close
products drove the increase in mortgage loans, which convert from
construction to mortgages upon construction completion.
Average loans totaled $23.8 billion for the first quarter of
2024, virtually unchanged linked-quarter. Management expects 2024
period-end loan growth to be low single digits from year-end 2023,
mostly in the second half of 2024.
Deposits
Total deposits at March 31, 2024 were $29.8 billion, up $85.8
million, or less than 1%, from December 31, 2023. The
linked-quarter increase in deposits was driven primarily by an
increase in interest-bearing transaction and saving and retail time
deposits due to a shift from DDA deposits, offset by decreases in
brokered deposits, noninterest-bearing DDAs, and interest-bearing
public funds due to seasonality.
DDAs totaled $10.8 billion at March 31, 2024, down $228.4
million, or 2%, from December 31 2023 and comprised 36% of total
period-end deposits. Interest-bearing transaction and savings
deposits totaled $11.0 billion at the end of the first quarter of
2024, up $294.3 million, or 3%, linked-quarter. Compared to
December 31, 2023, retail time deposits of $4.6 billion were up
$291.7 million, or 7%, and brokered deposits were $394.8 million,
down $195.0 million, or 33%, compared to the prior quarter.
Interest-bearing public fund deposits decreased $76.7 million, or
2%, linked-quarter, totaling $3.1 billion at March 31, 2024.
Average deposits for the first quarter of 2024 were $29.6
billion, down $414.0 million, or 1%, linked-quarter. Management
expects 2024 period-end deposit level growth to be low single
digits, compared to year-end 2023.
Asset Quality
The total allowance for credit losses (ACL) was $340.8 million
at March 31, 2024, up $4.0 million, or 1%, from December 31, 2023.
During the first quarter of 2024, the company recorded a provision
for credit losses of $13.0 million, compared to $17.0 million in
the fourth quarter of 2023. There were $9.0 million of net
charge-offs in the first quarter of 2024, or 0.15% of average total
loans on an annualized basis, compared to net charge-offs of $16.1
million, or 0.27% of average total loans in the fourth quarter of
2023. The ratio of ACL to period-end loans was 1.42% at March 31,
2024, compared to 1.41% at December 31, 2023.
Criticized commercial loans and nonaccrual loans remained at low
levels at March 31, 2024. Criticized commercial loans totaled
$339.9 million, or 1.83% of total commercial loans, at March 31,
2024, compared to $273.7 million, or 1.47% of total commercial
loans at December 31, 2023. Nonaccrual loans totaled $82.1 million,
or 0.34% of total loans, at March 31, 2024, compared to $59.0
million, or 0.25% of total loans, at December 31, 2023. ORE and
foreclosed assets were $2.8 million at March 31, 2024, down $0.8
million, linked-quarter.
Net Interest Income and Net Interest Margin (NIM)
Net interest income (TE) for the first quarter of 2024 was
$269.0 million, a decrease of $3.3 million, or 1%, from the fourth
quarter of 2023. The net interest margin (NIM) (TE) was 3.32% in
the first quarter of 2024, up 5 bps linked-quarter. A change in
loan yields (+4 bps), a shift in average earning assets and reduced
borrowings (+6 bps) and the securities portfolio restructuring (+3
bps) led to a 13 basis point improvement in NIM, offset by the
impact of change in deposit mix and rates (-8 bps). Additional NIM
detail and guidance is included in the first quarter of 2024
earnings investor deck.
Average earning assets were $32.6 billion for the first quarter
of 2024, down $571.3 million, or 2%, from the fourth quarter of
2023.
Noninterest Income
Noninterest income totaled $87.9 million for the first quarter
of 2024, up $48.9 million, or 126%, from the fourth quarter of
2023. There were no supplemental disclosure items in the first
quarter of 2024. The fourth quarter of 2023 included two
supplemental disclosure items of a $16.1 million gain on the sale
of a parking facility and a ($65.4) million loss related to the
securities portfolio restructuring.
Service charges on deposits were up $0.6 million, or 3%, from
the fourth quarter of 2023. Bank card and ATM fees were virtually
unchanged from the fourth quarter of 2023.
Investment and annuity income and insurance fees were up $0.8
million, or 7%, linked-quarter, related to higher activity. Trust
fees were up $0.2 million, or 1% linked-quarter. Fees from
secondary mortgage operations totaled $2.9 million for the first
quarter of 2024, up $0.8 million, or 39%, linked-quarter, due to
higher origination and sales activity.
There were no gains or losses related to securities transactions
in the first quarter of 2024. Securities transactions, net was a
loss of $65.4 million in the fourth quarter of 2023, related to the
securities portfolio restructuring included as a supplemental
disclosure item.
Other noninterest income was $13.2 million in the first quarter
of 2024, compared to $32.0 million in the fourth quarter of 2023.
There were no supplemental disclosure items in the first quarter of
2024. In the fourth quarter of 2023, other noninterest income was
impacted by the $16.1 million gain on the sale of the parking
facility.
Noninterest Expense & Taxes
Noninterest expense totaled $207.7 million, down $21.4 million,
or 9% linked-quarter. Included in the total was $3.8 million of a
supplemental disclosure item related to a revision to the FDIC
Special Assessment. Expenses in the fourth quarter of 2023 included
a $26.1 million supplemental disclosure item related to an FDIC
Special Assessment. Adjusting for these items, noninterest expense
for the first quarter of 2024 totaled $203.9 million, virtually
unchanged, up less than 1%, linked-quarter.
Personnel expense totaled $121.2 million in the first quarter of
2024, up $6.8 million, or 6%, linked-quarter. The increase was
primarily due to higher incentive expense, lower deferred salaries
related to lending activities, and a seasonal increase in benefits
costs. Net occupancy and equipment expense totaled $17.6 million in
the first quarter of 2024, up $0.1 million, or 1%, from the fourth
quarter of 2023. Amortization of intangibles totaled $2.5 million
for the first quarter of 2024, down $0.1 million, or 5%,
linked-quarter.
ORE and other foreclosed assets was a net gain of $0.2 million
in the first quarter of 2024, compared to a net gain of $0.5
million in the fourth quarter of 2023.
Other expense, excluding the supplemental disclosure item,
totaled $62.8 million in the first quarter of 2024, down $6.2
million, or 9%, linked-quarter, related to lower data processing
and professional services expense.
The effective income tax rate for the first quarter of 2024 was
18.5%.
Capital
Common stockholders’ equity at March 31, 2024 totaled $3.9
billion, up $49.8 million, or 1%, from December 31, 2023. The
tangible common equity (TCE) ratio was 8.61%, up 24 bps
linked-quarter. The company’s CET1 ratio is estimated to be 12.67%
at March 31, 2024, up 34 bps linked-quarter. Total risk-based
capital ratio is estimated to be 14.37% at March 31, 2024, up 44
bps linked-quarter. The company’s share buyback authorization
(allowing the repurchase of up to 4,297,000 shares of the company’s
outstanding common stock), is set to expire on December 31, 2024.
No shares were repurchased in the first quarter of 2024.
Conference Call and Slide Presentation
Management will host a conference call for analysts and
investors at 3:30 p.m. Central Time on Tuesday, April 16, 2024 to
review first quarter of 2024 results. A live listen-only webcast of
the call will be available under the Investor Relations section of
Hancock Whitney’s website at investors.hancockwhitney.com. A link
to the release with additional financial tables, and a link to a
slide presentation related to first quarter results are also posted
as part of the webcast link. To participate in the Q&A portion
of the call, dial 888-596-4144 or 646-968-2525, access code
6914431.
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 April 23, 2024 by dialing
800-770-2030 or 609-800-9909, access code 6914431.
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; and mortgage services. The company
also operates combined loan and deposit production offices in the
greater metropolitan areas of Nashville, Tennessee and Atlanta,
Georgia. 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 the provisions of subpart 229.1400 of the
Securities and Exchange Commission’s Regulation S-K, “Disclosures
by Bank and Savings and Loan Registrants,” 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. The Company
highlights certain items that are outside of our principal business
and/or are not indicative of forward-looking trends in supplemental
disclosures items below our GAAP financial data and presents
certain “Adjusted” ratios that exclude these disclosed items. These
adjusted ratios provide management or the reader with a measure
that may be more indicative of forward-looking trends in our
business, as well as demonstrates the effects of significant gains
or losses and changes.
We define Adjusted Pre-Provision Net Revenue as net
income excluding provision expense and income tax expense, plus the
taxable equivalent adjustment (as defined above), less supplemental
disclosure items (as defined above). Management believes that
adjusted pre-provision net revenue is a useful financial measure
because it enables investors and others to assess the Company’s
ability to generate capital to cover credit losses through a credit
cycle. We define Adjusted Revenue as net interest income
(te) and noninterest income less supplemental disclosure items. We
define Adjusted Noninterest Expense as noninterest expense
less supplemental disclosure items. We define our Efficiency
Ratio as noninterest expense to total net interest income (te)
and noninterest income, excluding amortization of purchased
intangibles and supplemental disclosure items, if applicable.
Management believes adjusted revenue, adjusted noninterest expense
and the efficiency ratio are useful measures as they provide a
greater understanding of ongoing operations and enhance
comparability with prior periods.
Important Cautionary Statement about 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 our expectations of our performance and financial
condition, balance sheet and revenue growth, the provision for
credit losses, capital levels, deposits (including growth, pricing,
and betas), investment portfolio, other sources of liquidity, loan
growth expectations, management’s predictions about charge-offs for
loans, general economic business conditions in our local markets,
Federal Reserve action with respect to interest rates, the impacts
related to Russia’s military action in Ukraine, the effects of the
Israel-Hamas war, the adequacy of our enterprise risk management
framework, potential claims, damages, penalties, fines and
reputational damage resulting from pending or future litigation,
regulatory proceedings, assessments, and enforcement actions, as
well as the impact of negative developments affecting the banking
industry and the resulting media coverage; the potential impact of
future business combinations on our performance and financial
condition, including our ability to successfully integrate the
businesses, success of revenue-generating and cost reduction
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 and non-financial reporting, the financial
impact of regulatory requirements and tax reform legislation,
deposit trends, credit quality trends, the impact of natural or
man-made disasters, the impact of current and future economic
conditions, including the effects of declines in the real estate
market, high unemployment, inflationary pressures, increasing
insurance costs, elevated interest rates and slowdowns in economic
growth, as well as the financial stress on borrowers as a result of
the foregoing, net interest margin trends, future expense levels,
future profitability, improvements in expense to revenue
(efficiency) ratio, purchase accounting impacts, accretion levels
and expected returns. Also, 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
presentation 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, 2023, and in other periodic reports that we file with
the SEC.
HANCOCK WHITNEY CORPORATION
QUARTERLY FINANCIAL HIGHLIGHTS (Unaudited) Three
Months Ended (dollars and common share data in thousands,
except per share amounts)
3/31/2024 12/31/2023
9/30/2023 6/30/2023 3/31/2023 NET
INCOME Net interest income
$
266,171
$
269,460
$
269,234
$
273,911
$
284,994
Net interest income (TE) (a)
269,001
272,294
272,086
276,748
287,578
Provision for credit losses
12,968
16,952
28,498
7,633
6,020
Noninterest income
87,851
38,951
85,974
83,225
80,330
Noninterest expense
207,722
229,151
204,675
202,138
200,884
Income tax expense
24,720
11,705
24,297
29,571
31,953
Net income
$
108,612
$
50,603
$
97,738
$
117,794
$
126,467
Supplemental disclosure items - included above, pre-tax
Included in noninterest income Gain on sale of parking facility
$
—
$
16,126
$
—
$
—
$
—
Loss on securities portfolio restructure
—
(65,380
)
—
—
—
Included in noninterest expense FDIC special assessment
3,800
26,123
—
—
—
PERIOD-END BALANCE SHEET DATA Loans
$
23,970,938
$
23,921,917
$
23,983,679
$
23,789,886
$
23,404,523
Securities
7,559,182
7,599,974
7,916,101
8,195,679
8,390,684
Earning assets
31,985,610
32,175,097
32,733,591
32,715,630
34,106,792
Total assets
35,247,119
35,578,573
36,298,301
36,210,148
37,547,083
Noninterest-bearing deposits
10,802,127
11,030,515
11,626,371
12,171,817
12,860,027
Total deposits
29,775,906
29,690,059
30,320,337
30,043,501
29,613,070
Common stockholders' equity
3,853,436
3,803,661
3,501,003
3,554,476
3,531,232
AVERAGE BALANCE SHEET DATA Loans
$
23,810,163
$
23,795,681
$
23,830,724
$
23,654,994
$
23,086,529
Securities (b)
8,197,410
8,579,444
8,888,477
9,007,821
9,137,034
Earning assets
32,556,821
33,128,130
33,137,565
33,619,829
32,753,781
Total assets
35,101,869
35,538,300
35,626,927
36,205,396
35,159,050
Noninterest-bearing deposits
10,673,060
11,132,354
11,453,236
12,153,453
12,963,133
Total deposits
29,560,956
29,974,941
29,757,180
29,372,899
28,792,851
Common stockholders' equity
3,818,840
3,560,978
3,572,487
3,567,260
3,412,813
COMMON SHARE DATA Earnings per share - diluted
$
1.24
$
0.58
$
1.12
$
1.35
$
1.45
Cash dividends per share
0.30
0.30
0.30
0.30
0.30
Book value per share (period-end)
44.49
44.05
40.64
41.27
41.03
Tangible book value per share (period-end)
34.12
33.63
30.16
30.76
30.47
Weighted average number of shares - diluted
86,726
86,604
86,437
86,370
86,282
Period-end number of shares
86,622
86,345
86,148
86,123
86,066
Market data High sales price
$
49.10
$
49.65
$
45.15
$
43.73
$
54.38
Low sales price
41.19
32.16
35.34
31.02
34.42
Period-end closing price
46.04
48.59
36.99
38.38
36.40
Trading volume
30,508
38,574
34,506
38,854
39,030
PERFORMANCE RATIOS Return on average assets
1.24
%
0.56
%
1.09
%
1.30
%
1.46
%
Return on average common equity
11.44
%
5.64
%
10.85
%
13.24
%
15.03
%
Return on average tangible common equity
14.96
%
7.55
%
14.53
%
17.76
%
20.49
%
Tangible common equity ratio (c)
8.61
%
8.37
%
7.34
%
7.50
%
7.16
%
Net interest margin (TE)
3.32
%
3.27
%
3.27
%
3.30
%
3.55
%
Noninterest income as a percentage of total revenue (TE)
24.62
%
12.51
%
24.01
%
23.21
%
21.83
%
Efficiency ratio (d)
56.44
%
55.58
%
56.38
%
55.33
%
53.76
%
Average loan/deposit ratio
80.55
%
79.39
%
80.08
%
80.53
%
80.18
%
Allowance for loan losses as a percentage of period-end loans
1.31
%
1.29
%
1.28
%
1.32
%
1.32
%
Allowance for credit losses as a percentage of period-end loans (e)
1.42
%
1.41
%
1.40
%
1.45
%
1.46
%
Annualized net charge-offs to average loans
0.15
%
0.27
%
0.64
%
0.06
%
0.10
%
Allowance for loan losses as a % of nonaccrual loans
382.21
%
521.56
%
507.68
%
402.07
%
569.31
%
FTE headcount
3,564
3,591
3,681
3,705
3,679
(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 supplemental
disclosures noted above. (e) The allowance for credit losses
includes the allowance for loan and lease losses and the reserve
for unfunded lending commitments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240416842533/en/
Kathryn Shrout Mistich, VP, Investor Relations Manager
504.539.7836 or kathryn.mistich@hancockwhitney.com
Hancock Whitney (NASDAQ:HWC)
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