Hancock Whitney Corporation · NASDAQ:HWC
Hancock Whitney — Hancock Holding — Q4 2016 Earnings Presentation
39 slides from Hancock Whitney's earnings presentation, Jan 17, 2017
Slide 1: Fourth Quarter 2016 Earnings Conference Call
1/18/2017 Fourth Quarter 2016Earnings Conference Call
Slide 2: Important Cautionary Statement About Forward-Looking Statements
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 ma
Slide 3: Corporate Profile (as of December 31, 2016)
Corporate Profile (as of December 31, 2016) $24.0 billion in Total Assets$16.8 billion in Total Loans$19.4 billion in Total DepositsTangible Common Equity (TCE) 8.64%Nearly 200 banking locations and 267 ATMs across our footprintApproximately 3,800 employees corporate-wideRated among the strongest,sa
Slide 4: YTD 2016 Highlights
(compared to YTD 2015) YTD 2016 Highlights Net Income and earnings per share both increased 14% year-over-yearIncrease in provision for loan losses related to current energy cycleCore pre-tax pre-provision income of $334.8 million, up $67.7 million, or 25%Total loans up $1.0 billion, or 7%Net intere
Slide 5: Fourth Quarter 2016 Highlights
(compared to third quarter 2016) Fourth Quarter 2016 Highlights ** Efficiency Ratio is noninterest expense to total net interest (TE) and noninterest income, excluding amortization of purchased intangibles and nonoperating expense. *See slides 31-33 for non-GAAP reconciliations Earnings up approxima
Slide 6: Year-over-year growth in core PTPP income
Year-over-year growth in core PTPP income +25%4Q16 v 4Q15 growth in core PTPP income +28% +28% $s in millions Beat core pre-tax pre-provision Income Goal for 2016 by $11 million; Up 25% vs. 2015 +25% See slide 31 for non-GAAP reconciliation
Slide 7: Well-Diversified Loan Portfolio
Well-Diversified Loan Portfolio Loans totaled $16.8 billion at quarter-end, an increase of $681 million linked-quarter or 17% LQANet loan growth during the quarter was diversified across the footprint and also in areas identified as part of the company’s revenue-generating initiativesReflects $12 mi
Slide 8: Energy Portfolio Overview
Energy Portfolio Overview Energy loans totaled $1.4 billion, or 8.4% of total loans, up $12 million linked-quarter and down $168 million from a year agoLinked-quarter change reflects approximately $62 million in payoffs and paydowns, plus approximately $12 million in charge-offs, offset by approxima
Slide 9: Energy Portfolio Overview (cont'd)
Energy Portfolio Overview (cont’d) Net increase in outstandings of $12 million linked-quarter and a $8 million increase in total commitments$24 million linked-quarter increase in upstream outstandings and a $61 million increase in total commitments $10 million linked-quarter decrease in support sect
Slide 10: Energy Allowance and Category Trends
Energy Allowance and Category Trends Management continues to estimate that charge-offs from energy-related credits could approximate $65-$95 million over the duration of the cycleCharge-offs to-date for current energy cycle (Nov ‘14 – Dec ‘16) total approximately $42 million; includes $12 million in
Slide 11: Asset Quality Measures Reflect Impact Of Energy Cycle
Asset Quality Measures Reflect Impact Of Energy Cycle NPA ratio 2.25%, up 19 bps linked-quarter Nonperforming assets totaled $377 million, up $46 million from September 30, 2016Nonperforming energy loans totaled $239 million at December 31, 2016, up $40 million from last quarter; includes $32 millio
Slide 12: Adequate Reserve Coverage
Adequate Reserve Coverage The allowance for loan losses (ALLL) was $229.4 million (1.37%) down $7 million from $236.1 million (1.47%) linked-quarterThe allowance maintained on the non-PCI portion of the loan portfolio decreased approximately $5.3 million linked-quarter, totaling $211.1 million, whil
Slide 13: Securities Portfolio
Securities Portfolio Portfolio totaled $5.0 billion, up $174 million, or 4% linked-quarter Yield 2.38%, up 4 bps linked-quarterUnrealized net loss of $45.1 million on AFS50% HTM, 50% AFSDuration 5.07 years compared to 3.78 years at 9-30-16Premium amortization up $0.3 million linked-quarterBalance sh
Slide 14: Solid Levels Of Core Deposit Funding
Solid Levels Of Core Deposit Funding Total deposits $19.4 billion, up $539 million, or 3% linked-quarterNoninterest-bearing demand deposits (DDA) increased $115 millionInterest-bearing transaction and savings deposits increased $290 millionTime deposits decreased $36 million Public fund deposits inc
Slide 15: Core NIM Expansion
Core NIM Expansion Reported net interest margin (NIM) 3.26%, up 6 bps linked-quarter Core NIM of 3.19% increased 7 bps linked-quarterImproved mix of earning assetsCore loan yield +2 bps Yield on bond portfolio +4 bps Cost of funds -1 bp See slide 33 for non-GAAP reconciliation
Slide 16: Focus On Growing Core Noninterest Income Across Business Lines
Focus On Growing Core Noninterest Income Across Business Lines Noninterest income, including securities transactions, totaled $65.9 million, up $2.9 million, or 5%, linked-quarterAmortization of the indemnification asset for FDIC covered loans totaled $1.2 million, down from $1.5 million in the thir
Slide 17: Revenue Generating Initiatives - Fees
Revenue Generating Initiatives - Fees $s in thousands
Slide 18: Remain Focused On Expense Control
Remain Focused On Expense Control $s in millions Noninterest expenses totaled $156.3 million in 4Q16, up $7.2 million, or 5%, linked quarter; the increase linked-quarter is mostly driven by personnel expense and additional expenses related to the flooding in south Louisiana in AugustPersonnel expens
Slide 19: Managing Our Capital…
TCE ratio 8.64%, up 71 bps linked-quarterCapital raise +117 bpsBalance sheet change -29 bpsTangible earnings +21 bpsOCI -29 bps (primarily valuation of bond portfolio)Dividends -9 bpsWill continue to manage capital in the best interests of the Company and our shareholders Stock buybacks totaled $258
Slide 20: …Quickly Deploying Capital
…Quickly Deploying Capital Signed an agreement to purchase certain assets and liabilities, including 9 branches, from First NBC Bank; the transaction is expected to close in the first quarter of 2017Transaction is between Hancock Holding Company’s banking subsidiary Whitney Bank (“Whitney”) and Firs
Slide 21: Transaction Highlights
Transaction Highlights In-market, strategic transaction to opportunistically add scale in the Greater New Orleans areaAcquiring approximately $1.3 billion of loans Acquired approximately $160 million of the identified loans on January 4, 2017First NBC Bank also has the option to sell a second tranch
Slide 22: Illustrative Pro Forma Metrics – Balance Sheet
Illustrative Pro Forma Metrics – Balance Sheet Compelling Financial Impact (cont’d) * Net of estimated 4% loan mark 4Q16 includes $259 million capital raise on 12-16-16; pro forma ratios include deployment of a portion of that capital
Slide 23: Illustrative Pro Forma Metrics – Income Statement
Key assumptions are conservative:4.0% gross loan markOne-time acquisition expenses of approximately $12 million (pre-tax)Conservative level of initial loan and deposit run-off included in modeling projectionsAdditional $3 million net incremental annual operating expense assumed (includes net increas
Slide 24: Strengthening Attractive New Orleans MSA
Strengthening Attractive New Orleans MSA Hancock/Whitney (200) Acquired Branches (9) Deposit Market Share - New Orleans MSA* Geographic Overview Acquiring Branches in Orleans, Jefferson, St. Tammany, Terrebonne and Tangipahoa Parishes; will consolidate 10 branches due to overlap * Based on 6-30-2016
Slide 25: Diversified Loan Portfolio
Diversified Loan Portfolio Yield on Loans 3.99% Yield on Loans 5.10% Yield on Loans 4.07% + * As of December 31, 2016 Pro Forma* $1.3 Billion Acquired Loans
Slide 26: High Quality Loans Acquired with Limited Credit Risk
Acquiring a portfolio of approximately $1.3 billion of loans in markets that we know well and with loan products we already offerComprehensive, in-depth loan diligence conducted on acquired First NBC portfolioEstimated 4% loan mark on acquired portfolio (approximately $52 million)Conservative loan p
Slide 27: No Time Deposits Acquired
No Time Deposits Acquired Cost of Deposits 0.24% + * As of December 31, 2016 9 Branches Cost of Deposits 0.88% Cost of Deposits 0.26% Pro Forma*
Slide 28: Near-Term Outlook
Near-Term Outlook* * Excludes impact of First NBC transaction except where otherwise noted; to be updated post First NBC transaction close See slides 31-33 for non-GAAP reconciliations
Slide 29: Appendix/Non-GAAP Reconciliations
Appendix/Non-GAAP Reconciliations
Slide 30: Appendix: EPS Calculation
Appendix: EPS Calculation See Note 13 in the most recent 10K for more details on the two-class method for E.P.S. calculation.
Slide 31: Appendix: Core pre-tax pre-provision Reconciliation
Appendix: Core pre-tax pre-provision Reconciliation
Slide 32: Appendix: Core Revenue Reconciliation
Appendix: Core Revenue Reconciliation
Slide 33: Appendix: Purchase Accounting Adjustments Core NII & NIM Reconciliation
Appendix: Purchase Accounting Adjustments Core NII & NIM Reconciliation
Slide 34: Appendix: Core Revenue
Appendix: Core Revenue 175.0 Net Interest Income TE (core) 170.0 1650 160.0 155.0 Millions 150.0 145.0 140.0 135.0 (SeaAecal t583 [isso 87 | ars | a9 | 1908 68.0 [ate 6 | Aare 70 | vas | 1058 | t057 | 1715 c SS vars | 2018 | 3016 1385 | 1399 | 1990 | 1406 | 1487 | 1476 vasa | 1472 | 1838 | Nonintere
Slide 35: Appendix: Operating Expense (excl nonoperating items)
Appendix: Operating Expense (excl nonoperating items)
Slide 36: Appendix: Historical Energy Data
Appendix: Historical Energy Data $s in millions Energy Outstandings by Type $1,724 $1,674 $1,669 $1,660 $1,580 $1,633
Slide 37: Appendix: Energy Portfolio Support Services
Appendix: Energy Portfolio Support Services
Slide 38: Appendix: Glossary of Terms
Appendix: Glossary of Terms LPO – Loan production officeLQA- Linked-quarter annualizedM&A – Mergers and acquisitionsNII – Net interest income NIM – Net interest marginNPA – Nonperforming assetsO&G – Oil and gasORE – Other real estatePAA – Purchase accounting adjustments, including loan accretion fro
Slide 39: Fourth Quarter 2016 Earnings Conference Call
1/18/2017 Fourth Quarter 2016Earnings Conference Call