8-K
HANCOCK WHITNEY CORP (HWC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________
FORM 8-K
________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 18, 2023
________________
| HANCOCK WHITNEY CORPORATION | |||
|---|---|---|---|
| (Exact Name of Registrant as Specified in Charter)________________ | |||
| Mississippi | 64-0693170 | ||
| (State or Other Jurisdictionof Incorporation) | (IRS Employer<br><br>Identification No.) | ||
| Hancock Whitney Plaza2510 14th StreetGulfport, Mississippi(Address of Principal Executive Offices) | 39501<br><br>(Zip Code) | ||
| Registrant’s telephone number, including area code: (228) 868-4000 | |||
| Securities registered pursuant to Section 12(b) of the Act: | |||
| Title of Each ClassCOMMON STOCK, 3.33 PAR VALUE6.25% SUBORDINATED NOTES | Trading Symbol<br><br>HWC<br><br>HWCPZ | Name of Exchange on Which Registered<br><br>The NASDAQ Stock Market, LLC<br><br>The NASDAQ Stock Market, LLC | |
| __________________ |
All values are in US Dollars.
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2)
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On April 18, 2023, Hancock Whitney Corporation (the “Company”) announced financial results for its first quarter ended March 31, 2023. A copy of this press release and the accompanying financial statements are attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 2.02. The press release is available on the Company’s website.
The information provided in Item 2.02 of this report, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Item 7.01 Regulation FD Disclosure.
On April 18 2023 at 4:00 p.m. (Central Time), the Company intends to hold an investor call and webcast to discuss financial results for the quarter ended March 31, 2023, including the press release. Additional presentation materials relating to such call are furnished hereto as Exhibit 99.2 and are, along with the press release and financial statements, incorporated herein by reference. All information in the press release and presentation materials speak as of the date thereof and the Company does not assume any obligation to update said information in the future. In addition, the Company disclaims any inferences regarding the materiality of such information which otherwise may arise as a result of it furnishing such information under Item 2.02 or Item 7.01 of this Form 8-K.
In accordance with the General Instruction B.2 of Form 8-K, the information presented herein pursuant to Item 2.02, “Results of Operations,” and Item 7.01, “Regulation FD,” shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall the information be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit<br><br>Number | Description |
|---|---|
| 99.1 | Press Release dated April 18, 2023 for Quarter Ended March 31, 2023. |
| 99.2 | Presentation Slides dated April 18, 2023 (furnished with the Commission as part of this Form 8-K). |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HANCOCK WHITNEY CORPORATION | ||
|---|---|---|
| April 18, 2023 | By: | /s/ Michael M. Achary |
| Michael M. Achary | ||
| Chief Financial Officer |
EX-99
Exhibit 99.1
| FOR IMMEDIATE RELEASE<br><br>April 18, 2023 |
|---|
For more information
Kathryn Shrout Mistich, VP, Investor Relations Manager
504.539.7836 or kathryn.mistich@hancockwhitney.com
Hancock Whitney reports first quarter 2023 EPS of $1.45
GULFPORT, Miss. (April 18, 2023) — Hancock Whitney Corporation (Nasdaq: HWC) today announced its financial results for the first quarter of 2023. Net income for the first quarter of 2023 totaled $126.5 million, or $1.45 per diluted common share (EPS), compared to $143.8 million, or $1.65 per diluted common share, in the fourth quarter of 2022. The company reported net income for the first quarter of 2022 of $123.5 million, or $1.40 per diluted common share.
First Quarter 2023 Highlights
• Pre-provision net revenue (PPNR) totaled $167.0 million, compared to $185.0 million at 4Q22
• Deposits increased $542.7 million, or 7% LQA
• Total loan growth of $290.5 million, or 5% LQA
• Criticized commercial loans and nonaccrual loans relatively stable, linked-quarter
• ACL coverage remained strong at 1.46%
• NIM decreased 13 basis points (bps) to 3.55%
• CET1 ratio estimated at 11.61%, up 20 bps; TCE ratio 7.16%, up 7 bps
• Efficiency ratio remains below 55% target at 53.76%
“The first quarter of 2023 was a solid start to the year, despite challenges to our industry following recent bank failures,” said John M. Hairston, President & CEO. “We continue to operate with strong liquidity, solid capital, and a stable, seasoned deposit base that is well-diversified among consumer, commercial, and wealth clients. Results for the quarter reflect both core client deposit and loan growth, relatively stable asset quality metrics, and a solid allowance for credit losses. We also ended the quarter with strong liquidity and improved capital ratios. Continued rate hikes and the current banking environment have led to increased deposit costs, in turn, compressing NIM and impacting our efficiency ratio. However, our goal of maintaining an efficiency ratio at or below 55% remains, and we will continue to proactively manage expenses and seek opportunities to enhance revenue in order to meet our CSOs.”
Loans
Total loans were $23.4 billion at March 31, 2023, up $290.5 million, or 1%, from December 31, 2022. One-time close products drove the increase in mortgage loans, while growth in commercial real estate-income producing (CRE-income producing) loans was driven by movement of construction and land development loans (C&D) to permanent financing at construction completion.
Average loans totaled $23.1 billion for the first quarter of 2023, up $363.3 million, or 2%, linked-quarter. Management expects 2023 period-end loan growth to be in the range of low- to mid-single digits compared to year-end 2022.
Deposits
Total deposits at March 31, 2023 were $29.6 billion, up $542.7 million, or 2%, from December 31, 2022. The growth in deposits is primarily due to an increase in core client deposits and brokered deposits, partly offset by typical seasonal runoff in public funds deposits. Competitive rates on certain time deposit (CD) products led to a shift from no and low cost deposits, including both demand deposit accounts (DDA) and interest-bearing priority checking and savings accounts, to higher-rate CD products. Following the bank failures in middle March and out of an abundance of caution, $568 million of brokered deposits were issued during the quarter to increase liquidity.
DDAs totaled $12.9 billion at March 31, 2023, down $785.1 million, or 6%, from December 31, 2022 and comprised 43% of total period-end deposits. Interest-bearing transaction and savings deposits totaled $10.7 billion at the end of the first quarter of 2023, a decrease of $66.3 million, or less than 1%, linked-quarter. Compared to December 31, 2022, time deposits of $2.4 billion were up $984.1 million, or 68%, and brokered deposits were up $568 million. Interest-bearing public fund deposits decreased $158.0 million, or 5%, linked-quarter, ending March 31, 2023 at $3.1 billion.
Average deposits for the first quarter of 2023 were $28.8 billion, virtually unchanged linked-quarter. Management expects 2023 period-end deposit level growth to be flat to low single digits compared to year-end 2022.
Asset Quality
The total allowance for credit losses (ACL) was $341.4 million at March 31, 2023, unchanged from December 31, 2022. During the first quarter of 2023, the company recorded a provision for credit losses of $6.0 million, compared to a provision of $2.5 million in the fourth quarter of 2022. There were $5.7 million of net charge-offs in the first quarter of 2023, or 0.10% of average total loans on an annualized basis, compared to net charge-offs of $1.0 million, or 0.02% of average total loans in the fourth quarter of 2022. The ratio of ACL to period-end loans was 1.46% at March 31, 2023, down slightly from 1.48% at December 31, 2022.
The company’s overall asset quality metrics were relatively stable linked-quarter, with criticized commercial loans slightly down and nonaccrual loans up slightly, linked-quarter. Criticized commercial loans totaled $295.5 million, or 1.59% of total commercial loans, at March 31, 2023, compared to $301.9 million, or 1.64% of total commercial loans at December 31, 2022. Nonaccrual loans totaled $54.3 million, or 0.23% of total loans, at March 31, 2023, compared to $39.0 million, or 0.17% of total loans, at December 31, 2022. ORE and foreclosed assets were $2.0 million, unchanged linked-quarter.
Net Interest Income and Net Interest Margin (NIM)
Net interest income (TE) for the first quarter of 2023 was $287.6 million, a decrease of $10.5 million, or 4%, from the fourth quarter of 2022. The net interest margin (NIM) (TE) was 3.55% in the first quarter of 2023, down 13 bps linked-quarter. A shift in the mix of earning assets led to a 33 basis point improvement in the NIM that was offset by the impact of deposit remix (-35 bps) and short-term borrowing costs (-11 bps). Additional NIM detail and guidance is included in the first quarter of 2023 earnings investor deck.
Average earning assets were $32.8 billion for the first quarter of 2023, up $509.1 million, or 2%, from the fourth quarter of 2022. The increase reflects the loan and short-term investments growth experienced during the quarter.
Noninterest Income
Noninterest income totaled $80.3 million for the first quarter of 2023, up $3.3 million, or 4%, from the fourth quarter of 2022.
Service charges on deposits were down $1.6 million, or 7%, from the fourth quarter of 2022. The decline was primarily related to the elimination of certain consumer nonsufficient funds (NSF) and overdraft (OD) fees effective December 1, 2022.
Bankcard and ATM fees were down $0.2 million, or less than 1%, from the fourth quarter of 2022. Investment and annuity income and insurance fees were up $2.0 million, or 30%, linked-quarter, related to the current rate environment and corporate underwriting fees. Trust fees were up $0.2 million, or 1% linked-quarter.
Fees from secondary mortgage operations totaled $2.2 million for the first quarter of 2023, up $0.7 million, or 44%, linked-quarter. The increase in secondary mortgage fees is due to higher activity driven by the lower mortgage rate environment plus more loans sold in the secondary market.
Other noninterest income totaled $11.2 million, up $2.1 million, or 23%, from the fourth quarter of 2022. The increase in other noninterest income is primarily related to a higher level of specialty fees (i.e., derivatives and SBIC income), compared to the fourth quarter of 2022.
Noninterest Expense & Taxes
Noninterest expense totaled $200.9 million, up $10.7 million, or 6% linked-quarter.
Personnel expense totaled $115.3 million in the first quarter of 2023, down $3.8 million, or 3% linked-quarter. The decline was primarily related to lower incentive pay, partly offset by higher payroll taxes. Net occupancy and equipment expense totaled $16.9 million in the first quarter of 2023, virtually unchanged from the fourth quarter of 2022. Amortization of intangibles totaled $3.1 million for the first quarter of 2023, down $0.2 million, or 5%, linked-quarter.
ORE and other foreclosed assets expense totaled $0.2 million in the first quarter of 2023. In the fourth quarter of 2022, gains exceeded expenses by $0.8 million.
Other operating expense totaled $65.4 million in the first quarter of 2023, up $13.8 million, or 27%, linked-quarter. The increase in other expenses is primarily due to higher regulatory fees (FDIC Assessment), an increase in pension expense, an increase in data processing expense, and an increase in ad valorem taxes. Additionally, the fourth quarter of 2022 included storm-related benefit.
The effective income tax rate for first quarter 2023 was 20.2%.
Capital
Common stockholders’ equity at March 31, 2023 totaled $3.5 billion, up $188.6 million, or 6%, from December 31, 2022. The tangible common equity (TCE) ratio was 7.16%, up 7 bps from December 31, 2022. The company’s CET1 ratio is estimated to be 11.61% at March 31, 2023, up 20 bps linked-quarter. The company’s share buyback authorization was renewed by the Board of Directors as of January 26, 2023; under this new authorization, the company may purchase up to 4,297,000 shares of its outstanding common stock, replacing the previous stock buyback program that expired on December 31, 2022. No shares were repurchased in the first quarter of 2023.
Conference Call and Slide Presentation
Management will host a conference call for analysts and investors at 4:00 p.m. Central Time on Tuesday, April 18, 2023 to review first quarter 2023 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 888-210-2654 or 646-960-0278, 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 25, 2023 by dialing 800-770-2030 or 647-362-9199, 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 loan production offices in Nashville, Tennessee and the greater metropolitan area of 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. These non-GAAP measures may reference the concept “operating.” We use 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 our business.
We define Operating Pre-Provision Net Revenue as total revenue (te) less noninterest expense, excluding nonoperating items. Management believes that operating 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.
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 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, any ongoing impact of the COVID-19 pandemic on the economy and our operations, the impacts related to Russia’s military action in Ukraine, Federal Reserve action with respect to interest rates, the adequacy of our enterprise risk management framework, potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions, as well as the impact of recent 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 reporting, the financial impact of regulatory requirements and tax reform legislation, the impact of the change in the reference rate reform, 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, 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.
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, 2022 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) | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||||||||
| NET INCOME | ||||||||||||||||||||||
| Net interest income | $ | 284,994 | $ | 295,501 | $ | 280,307 | $ | 245,732 | $ | 228,463 | ||||||||||||
| Net interest income (TE) (a) | 287,578 | 298,116 | 282,910 | 248,317 | 231,008 | |||||||||||||||||
| Provision for credit losses | 6,020 | 2,487 | 1,402 | (9,761 | ) | (22,527 | ) | |||||||||||||||
| Noninterest income | 80,330 | 77,064 | 85,337 | 85,653 | 83,432 | |||||||||||||||||
| Noninterest expense | 200,884 | 190,154 | 193,502 | 187,097 | 179,939 | |||||||||||||||||
| Income tax expense | 31,953 | 36,137 | 35,351 | 32,614 | 31,005 | |||||||||||||||||
| Net income | $ | 126,467 | $ | 143,787 | $ | 135,389 | $ | 121,435 | $ | 123,478 | ||||||||||||
| PERIOD-END BALANCE SHEET DATA | ||||||||||||||||||||||
| Loans | $ | 23,404,523 | $ | 23,114,046 | $ | 22,585,585 | $ | 21,846,068 | $ | 21,323,341 | ||||||||||||
| Securities | 8,390,684 | 8,408,536 | 8,333,191 | 8,531,393 | 8,481,095 | |||||||||||||||||
| Earning assets | 34,106,792 | 31,873,027 | 31,213,449 | 31,292,910 | 32,997,323 | |||||||||||||||||
| Total assets | 37,547,083 | 35,183,825 | 34,567,242 | 34,637,525 | 36,317,291 | |||||||||||||||||
| Noninterest-bearing deposits | 12,860,027 | 13,645,113 | 14,290,817 | 14,676,342 | 14,976,670 | |||||||||||||||||
| Total deposits | 29,613,070 | 29,070,349 | 28,951,274 | 29,866,432 | 30,499,709 | |||||||||||||||||
| Common stockholders' equity | 3,531,232 | 3,342,628 | 3,180,439 | 3,349,723 | 3,450,951 | |||||||||||||||||
| AVERAGE BALANCE SHEET DATA | ||||||||||||||||||||||
| Loans | $ | 23,086,529 | $ | 22,723,248 | $ | 22,138,709 | $ | 21,657,528 | $ | 21,122,038 | ||||||||||||
| Securities (b) | 9,137,034 | 9,200,511 | 9,177,460 | 8,979,364 | 8,687,758 | |||||||||||||||||
| Earning assets | 32,753,781 | 32,244,681 | 31,783,801 | 32,780,813 | 33,201,926 | |||||||||||||||||
| Total assets | 35,159,050 | 34,498,915 | 34,377,773 | 35,380,247 | 36,003,803 | |||||||||||||||||
| Noninterest-bearing deposits | 12,963,133 | 13,854,625 | 14,323,646 | 14,655,800 | 14,363,324 | |||||||||||||||||
| Total deposits | 28,792,851 | 28,816,338 | 29,180,626 | 29,979,940 | 30,029,793 | |||||||||||||||||
| Common stockholders' equity | 3,412,813 | 3,228,667 | 3,405,463 | 3,383,789 | 3,607,061 | |||||||||||||||||
| COMMON SHARE DATA | ||||||||||||||||||||||
| Earnings per share - diluted | $ | 1.45 | $ | 1.65 | $ | 1.55 | $ | 1.38 | $ | 1.40 | ||||||||||||
| Cash dividends per share | 0.30 | 0.27 | 0.27 | 0.27 | 0.27 | |||||||||||||||||
| Book value per share (period-end) | 41.03 | 38.89 | 37.12 | 39.08 | 39.91 | |||||||||||||||||
| Tangible book value per share (period-end) | 30.47 | 28.29 | 26.44 | 28.37 | 29.25 | |||||||||||||||||
| Weighted average number of shares - diluted | 86,282 | 86,249 | 86,020 | 86,354 | 86,936 | |||||||||||||||||
| Period-end number of shares | 86,066 | 85,941 | 85,686 | 85,714 | 86,460 | |||||||||||||||||
| Market data | ||||||||||||||||||||||
| High sales price | $ | 54.38 | $ | 57.00 | $ | 52.65 | $ | 53.15 | $ | 59.82 | ||||||||||||
| Low sales price | 34.42 | 45.64 | 41.62 | 42.61 | 50.25 | |||||||||||||||||
| Period-end closing price | 36.40 | 48.39 | 45.81 | 44.33 | 52.15 | |||||||||||||||||
| Trading volume | 39,030 | 29,996 | 24,976 | 27,493 | 29,005 | |||||||||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||||||||
| Return on average assets | 1.46 | % | 1.65 | % | 1.56 | % | 1.38 | % | 1.39 | % | ||||||||||||
| Return on average common equity | 15.03 | % | 17.67 | % | 15.77 | % | 14.39 | % | 13.88 | % | ||||||||||||
| Return on average tangible common equity | 20.49 | % | 24.64 | % | 21.58 | % | 19.77 | % | 18.66 | % | ||||||||||||
| Tangible common equity ratio (c) | 7.16 | % | 7.09 | % | 6.73 | % | 7.21 | % | 7.15 | % | ||||||||||||
| Net interest margin (TE) | 3.55 | % | 3.68 | % | 3.54 | % | 3.04 | % | 2.81 | % | ||||||||||||
| Noninterest income as a percentage of total revenue (TE) | 21.83 | % | 20.54 | % | 23.17 | % | 25.65 | % | 26.53 | % | ||||||||||||
| Efficiency ratio (d) | 53.76 | % | 49.81 | % | 51.62 | % | 54.95 | % | 56.03 | % | ||||||||||||
| Average loan/deposit ratio | 80.18 | % | 78.86 | % | 75.87 | % | 72.24 | % | 70.34 | % | ||||||||||||
| Allowance for loan losses as a percentage of period-end loans | 1.32 | % | 1.33 | % | 1.36 | % | 1.41 | % | 1.49 | % | ||||||||||||
| Allowance for credit losses as a percentage of period-end loans (e) | 1.46 | % | 1.48 | % | 1.50 | % | 1.55 | % | 1.63 | % | ||||||||||||
| Annualized net charge-offs to average loans | 0.10 | % | 0.02 | % | 0.02 | % | (0.01 | )% | 0.01 | % | ||||||||||||
| Allowance for loan losses as a % of nonaccrual loans | 569.31 | % | 789.38 | % | 769.00 | % | 809.58 | % | 748.94 | % | ||||||||||||
| FTE headcount | 3,679 | 3,627 | 3,607 | 3,594 | 3,543 | |||||||||||||||||
| (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. | ||||||||||||||||||||||
| (e) The allowance for credit losses includes the allowance for loan and lease losses and the reserve for unfunded lending commitments. | ||||||||||||||||||||||
| HANCOCK WHITNEY CORPORATION | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| INCOME STATEMENT | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||
| (in thousands, except per share data) | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||||||||
| NET INCOME | ||||||||||||||||||||||
| Interest income | $ | 372,603 | $ | 345,676 | $ | 299,737 | $ | 254,864 | $ | 236,786 | ||||||||||||
| Interest income (TE) (f) | 375,187 | 348,291 | 302,340 | 257,449 | 239,331 | |||||||||||||||||
| Interest expense | 87,609 | 50,175 | 19,430 | 9,132 | 8,323 | |||||||||||||||||
| Net interest income (TE) | 287,578 | 298,116 | 282,910 | 248,317 | 231,008 | |||||||||||||||||
| Provision for credit losses | 6,020 | 2,487 | 1,402 | (9,761 | ) | (22,527 | ) | |||||||||||||||
| Noninterest income | 80,330 | 77,064 | 85,337 | 85,653 | 83,432 | |||||||||||||||||
| Noninterest expense | 200,884 | 190,154 | 193,502 | 187,097 | 179,939 | |||||||||||||||||
| Income before income taxes | 158,420 | 179,924 | 170,740 | 154,049 | 154,483 | |||||||||||||||||
| Income tax expense | 31,953 | 36,137 | 35,351 | 32,614 | 31,005 | |||||||||||||||||
| Net income | $ | 126,467 | $ | 143,787 | $ | 135,389 | $ | 121,435 | $ | 123,478 | ||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||||
| Service charges on deposit accounts | $ | 20,622 | $ | 22,222 | $ | 23,272 | $ | 20,495 | $ | 21,674 | ||||||||||||
| Trust fees | 16,734 | 16,496 | 16,048 | 17,309 | 15,279 | |||||||||||||||||
| Bank card and ATM fees | 20,721 | 20,913 | 21,412 | 21,870 | 20,396 | |||||||||||||||||
| Investment and annuity fees and insurance commissions | 8,867 | 6,832 | 6,492 | 8,001 | 7,427 | |||||||||||||||||
| Secondary mortgage market operations | 2,168 | 1,504 | 3,284 | 2,990 | 3,746 | |||||||||||||||||
| Other income | 11,218 | 9,097 | 14,829 | 14,988 | 14,910 | |||||||||||||||||
| Total noninterest income | $ | 80,330 | $ | 77,064 | $ | 85,337 | $ | 85,653 | $ | 83,432 | ||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||||
| Personnel expense | $ | 115,323 | $ | 119,147 | $ | 118,922 | $ | 115,170 | $ | 107,396 | ||||||||||||
| Net occupancy and equipment expense | 16,942 | 16,927 | 16,938 | 16,928 | 16,547 | |||||||||||||||||
| Other real estate and foreclosed assets expense (income), net | 155 | (773 | ) | (1,782 | ) | (88 | ) | (1,764 | ) | |||||||||||||
| Other expense | 65,350 | 51,582 | 55,996 | 51,501 | 54,012 | |||||||||||||||||
| Amortization of intangibles | 3,114 | 3,271 | 3,428 | 3,586 | 3,748 | |||||||||||||||||
| Total noninterest expense | $ | 200,884 | $ | 190,154 | $ | 193,502 | $ | 187,097 | $ | 179,939 | ||||||||||||
| COMMON SHARE DATA | ||||||||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||
| Basic | $ | 1.45 | $ | 1.65 | $ | 1.56 | $ | 1.39 | $ | 1.40 | ||||||||||||
| Diluted | 1.45 | 1.65 | 1.55 | 1.38 | 1.40 | |||||||||||||||||
| (f) Taxable equivalent (TE) amounts are calculated using a federal income tax rate of 21%. | ||||||||||||||||||||||
| HANCOCK WHITNEY CORPORATION | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| PERIOD-END BALANCE SHEET | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| (dollars in thousands) | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||||||||
| ASSETS | ||||||||||||||||||||||
| Commercial non-real estate loans | $ | 10,013,482 | $ | 10,146,453 | $ | 9,905,427 | $ | 9,645,092 | $ | 9,584,480 | ||||||||||||
| Commercial real estate - owner occupied loans | 3,050,748 | 3,033,058 | 3,033,133 | 2,964,474 | 2,868,233 | |||||||||||||||||
| Total commercial and industrial loans | 13,064,230 | 13,179,511 | 12,938,560 | 12,609,566 | 12,452,713 | |||||||||||||||||
| Commercial real estate - income producing loans | 3,758,455 | 3,560,991 | 3,686,540 | 3,641,243 | 3,563,299 | |||||||||||||||||
| Construction and land development loans | 1,726,916 | 1,703,592 | 1,541,257 | 1,408,727 | 1,286,655 | |||||||||||||||||
| Residential mortgage loans | 3,329,793 | 3,092,605 | 2,843,723 | 2,615,807 | 2,462,900 | |||||||||||||||||
| Consumer loans | 1,525,129 | 1,577,347 | 1,575,505 | 1,570,725 | 1,557,774 | |||||||||||||||||
| Total loans | 23,404,523 | 23,114,046 | 22,585,585 | 21,846,068 | 21,323,341 | |||||||||||||||||
| Loans held for sale | 23,436 | 26,385 | 33,008 | 44,253 | 59,877 | |||||||||||||||||
| Securities | 8,390,684 | 8,408,536 | 8,333,191 | 8,531,393 | 8,481,095 | |||||||||||||||||
| Short-term investments | 2,288,149 | 324,060 | 261,665 | 871,196 | 3,133,010 | |||||||||||||||||
| Earning assets | 34,106,792 | 31,873,027 | 31,213,449 | 31,292,910 | 32,997,323 | |||||||||||||||||
| Allowance for loan losses | (309,385 | ) | (307,789 | ) | (306,116 | ) | (308,175 | ) | (317,843 | ) | ||||||||||||
| Goodwill and other intangible assets | 908,533 | 911,646 | 914,917 | 918,345 | 921,932 | |||||||||||||||||
| Other assets | 2,841,143 | 2,706,941 | 2,744,992 | 2,734,445 | 2,715,879 | |||||||||||||||||
| Total assets | $ | 37,547,083 | $ | 35,183,825 | $ | 34,567,242 | $ | 34,637,525 | $ | 36,317,291 | ||||||||||||
| LIABILITIES | ||||||||||||||||||||||
| Noninterest-bearing deposits | $ | 12,860,027 | $ | 13,645,113 | $ | 14,290,817 | $ | 14,676,342 | $ | 14,976,670 | ||||||||||||
| Interest-bearing transaction and savings deposits | 10,660,420 | 10,726,686 | 10,902,399 | 11,334,253 | 11,460,993 | |||||||||||||||||
| Interest-bearing public fund deposits | 3,086,209 | 3,244,225 | 2,796,363 | 2,883,664 | 3,014,307 | |||||||||||||||||
| Time deposits | 3,006,414 | 1,454,325 | 961,695 | 972,173 | 1,047,739 | |||||||||||||||||
| Total interest-bearing deposits | 16,753,043 | 15,425,236 | 14,660,457 | 15,190,090 | 15,523,039 | |||||||||||||||||
| Total deposits | 29,613,070 | 29,070,349 | 28,951,274 | 29,866,432 | 30,499,709 | |||||||||||||||||
| Short-term borrowings | 3,519,497 | 1,871,271 | 1,542,981 | 630,011 | 1,620,302 | |||||||||||||||||
| Long-term debt | 242,115 | 242,077 | 236,410 | 240,091 | 240,454 | |||||||||||||||||
| Other liabilities | 641,169 | 657,500 | 656,138 | 551,268 | 505,875 | |||||||||||||||||
| Total liabilities | 34,015,851 | 31,841,197 | 31,386,803 | 31,287,802 | 32,866,340 | |||||||||||||||||
| COMMON STOCKHOLDERS' EQUITY | ||||||||||||||||||||||
| Common stock net of treasury and capital surplus | 2,030,136 | 2,026,397 | 2,024,960 | 2,020,411 | 2,051,534 | |||||||||||||||||
| Retained earnings | 2,188,561 | 2,088,413 | 1,968,260 | 1,856,489 | 1,758,693 | |||||||||||||||||
| Accumulated other comprehensive (loss) | (687,465 | ) | (772,182 | ) | (812,781 | ) | (527,177 | ) | (359,276 | ) | ||||||||||||
| Total common stockholders' equity | 3,531,232 | 3,342,628 | 3,180,439 | 3,349,723 | 3,450,951 | |||||||||||||||||
| Total liabilities & stockholders' equity | $ | 37,547,083 | $ | 35,183,825 | $ | 34,567,242 | $ | 34,637,525 | $ | 36,317,291 | ||||||||||||
| For informational purposes only - included above | ||||||||||||||||||||||
| SBA Paycheck Protection Program (PPP) loans | $ | 25,691 | $ | 38,752 | $ | 75,719 | $ | 151,315 | $ | 334,828 | ||||||||||||
| CAPITAL RATIOS | ||||||||||||||||||||||
| Tangible common equity | $ | 2,622,699 | $ | 2,430,982 | $ | 2,265,522 | $ | 2,431,378 | $ | 2,529,019 | ||||||||||||
| Tier 1 capital (g) | 3,369,185 | 3,279,419 | 3,154,419 | 3,034,240 | 2,963,501 | |||||||||||||||||
| Common equity as a percentage of total assets | 9.40 | % | 9.50 | % | 9.20 | % | 9.67 | % | 9.50 | % | ||||||||||||
| Tangible common equity ratio | 7.16 | % | 7.09 | % | 6.73 | % | 7.21 | % | 7.15 | % | ||||||||||||
| Leverage (Tier 1) ratio (g) | 9.63 | % | 9.53 | % | 9.27 | % | 8.68 | % | 8.38 | % | ||||||||||||
| Common equity tier 1 (CET1) ratio (g) | 11.61 | % | 11.41 | % | 11.10 | % | 11.08 | % | 11.12 | % | ||||||||||||
| Tier 1 risk-based capital ratio (g) | 11.61 | % | 11.41 | % | 11.10 | % | 11.08 | % | 11.12 | % | ||||||||||||
| Total risk-based capital ratio (g) | 13.23 | % | 12.97 | % | 12.67 | % | 12.70 | % | 12.82 | % | ||||||||||||
| (g) Estimated for most recent period-end. Regulatory capital ratios reflect the election to use the five-year transition rules for the adoption of ASC 326, commonly referred to as Current Expected Credit Loss, or CECL. | ||||||||||||||||||||||
| HANCOCK WHITNEY CORPORATION | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||
| AVERAGE BALANCE SHEET | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||
| (in thousands) | 3/31/2023 | 12/31/2022 | 3/31/2022 | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||
| Commercial non-real estate loans | $ | 9,940,138 | $ | 9,932,218 | $ | 9,497,772 | ||||||||||||||||
| Commercial real estate - owner occupied loans | 3,044,495 | 3,037,534 | 2,867,252 | |||||||||||||||||||
| Total commercial and industrial loans | 12,984,633 | 12,969,752 | 12,365,024 | |||||||||||||||||||
| Commercial real estate - income producing loans | 3,585,108 | 3,590,060 | 3,510,957 | |||||||||||||||||||
| Construction and land development loans | 1,752,448 | 1,618,684 | 1,243,314 | |||||||||||||||||||
| Residential mortgage loans | 3,214,439 | 2,968,876 | 2,441,359 | |||||||||||||||||||
| Consumer loans | 1,549,901 | 1,575,876 | 1,561,384 | |||||||||||||||||||
| Total loans | 23,086,529 | 22,723,248 | 21,122,038 | |||||||||||||||||||
| Loans held for sale | 22,922 | 24,825 | 64,271 | |||||||||||||||||||
| Securities (h) | 9,137,034 | 9,200,511 | 8,687,758 | |||||||||||||||||||
| Short-term investments | 507,296 | 296,097 | 3,327,859 | |||||||||||||||||||
| Earning assets | 32,753,781 | 32,244,681 | 33,201,926 | |||||||||||||||||||
| Allowance for loan losses | (309,479 | ) | (307,403 | ) | (338,385 | ) | ||||||||||||||||
| Goodwill and other intangible assets | 910,043 | 913,223 | 923,752 | |||||||||||||||||||
| Other assets | 1,804,705 | 1,648,414 | 2,216,510 | |||||||||||||||||||
| Total assets | $ | 35,159,050 | $ | 34,498,915 | $ | 36,003,803 | ||||||||||||||||
| LIABILITIES AND COMMON STOCKHOLDERS' EQUITY | ||||||||||||||||||||||
| Noninterest-bearing deposits | $ | 12,963,133 | $ | 13,854,625 | $ | 14,363,324 | ||||||||||||||||
| Interest-bearing transaction and savings deposits | 10,650,434 | 10,810,751 | 11,423,421 | |||||||||||||||||||
| Interest-bearing public fund deposits | 3,160,651 | 2,972,985 | 3,154,540 | |||||||||||||||||||
| Time deposits | 2,018,633 | 1,177,977 | 1,088,508 | |||||||||||||||||||
| Total interest-bearing deposits | 15,829,718 | 14,961,713 | 15,666,469 | |||||||||||||||||||
| Total deposits | 28,792,851 | 28,816,338 | 30,029,793 | |||||||||||||||||||
| Short-term borrowings | 2,098,629 | 1,575,826 | 1,689,906 | |||||||||||||||||||
| Long-term debt | 242,096 | 236,674 | 241,828 | |||||||||||||||||||
| Other liabilities | 612,661 | 641,410 | 435,215 | |||||||||||||||||||
| Common stockholders' equity | 3,412,813 | 3,228,667 | 3,607,061 | |||||||||||||||||||
| Total liabilities & stockholders' equity | $ | 35,159,050 | $ | 34,498,915 | $ | 36,003,803 | ||||||||||||||||
| For informational purposes only - included above | ||||||||||||||||||||||
| SBA Paycheck Protection Program (PPP) loans | $ | 32,376 | $ | 53,934 | $ | 430,363 | ||||||||||||||||
| (h) Average securities does not include unrealized holding gains/losses on available for sale securities. | ||||||||||||||||||||||
| HANCOCK WHITNEY CORPORATION | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| AVERAGE BALANCE AND NET INTEREST MARGIN SUMMARY | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| 12/31/2022 | 3/31/2022 | |||||||||||||||||||||
| (dollars in millions) | Interest | Rate | Average<br> Balance | Interest | Rate | Average<br> Balance | Interest | Rate | ||||||||||||||
| AVERAGE EARNING ASSETS | ||||||||||||||||||||||
| Commercial & real estate loans (TE) (i) | 18,322.2 | $ | 259.1 | 5.73 | % | $ | 18,178.5 | $ | 240.6 | 5.25 | % | $ | 17,119.3 | $ | 150.3 | 3.56 | % | |||||
| Residential mortgage loans | 3,214.4 | 28.1 | 3.49 | % | 2,968.9 | 25.6 | 3.45 | % | 2,441.3 | 21.0 | 3.44 | % | ||||||||||
| Consumer loans | 1,549.9 | 29.2 | 7.63 | % | 1,575.9 | 27.2 | 6.86 | % | 1,561.4 | 18.4 | 4.77 | % | ||||||||||
| Loan fees & late charges | — | (0.4 | ) | 0.00 | % | — | (0.2 | ) | 0.00 | % | — | 4.4 | 0.00 | % | ||||||||
| Total loans (TE) (j) (k) | 23,086.5 | 316.0 | 5.54 | % | 22,723.3 | 293.2 | 5.12 | % | 21,122.0 | 194.1 | 3.72 | % | ||||||||||
| Loans held for sale | 22.9 | 0.3 | 5.21 | % | 24.8 | 0.3 | 4.53 | % | 64.3 | 0.7 | 4.36 | % | ||||||||||
| US Treasury and government agency securities | 541.3 | 3.4 | 2.49 | % | 500.3 | 2.9 | 2.32 | % | 397.8 | 1.6 | 1.64 | % | ||||||||||
| CMOs and mortgage backed securities | 7,668.0 | 43.3 | 2.26 | % | 7,769.1 | 42.8 | 2.20 | % | 7,352.5 | 34.5 | 1.88 | % | ||||||||||
| Municipals (TE) | 904.3 | 6.7 | 2.98 | % | 907.5 | 6.8 | 2.97 | % | 916.5 | 6.7 | 2.93 | % | ||||||||||
| Other securities | 23.5 | 0.2 | 3.50 | % | 23.6 | 0.2 | 3.50 | % | 21.0 | 0.2 | 3.31 | % | ||||||||||
| Total securities (TE) (l) | 9,137.1 | 53.6 | 2.35 | % | 9,200.5 | 52.7 | 2.29 | % | 8,687.8 | 43.0 | 1.98 | % | ||||||||||
| Total short-term investments | 507.3 | 5.3 | 4.27 | % | 296.1 | 2.1 | 2.88 | % | 3,327.8 | 1.5 | 0.19 | % | ||||||||||
| Average earning assets yield (TE) | 32,753.8 | $ | 375.2 | 4.63 | % | $ | 32,244.7 | $ | 348.3 | 4.29 | % | $ | 33,201.9 | $ | 239.3 | 2.91 | % | |||||
| INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||
| Interest-bearing transaction and savings deposits | 10,650.4 | $ | 27.3 | 1.04 | % | $ | 10,810.7 | $ | 14.6 | 0.53 | % | $ | 11,423.4 | $ | 1.1 | 0.04 | % | |||||
| Time deposits | 2,018.6 | 13.4 | 2.70 | % | 1,178.0 | 3.2 | 1.09 | % | 1,088.5 | 0.6 | 0.24 | % | ||||||||||
| Public funds | 3,160.7 | 23.7 | 3.04 | % | 2,973.0 | 18.2 | 2.43 | % | 3,154.6 | 2.1 | 0.26 | % | ||||||||||
| Total interest-bearing deposits | 15,829.7 | 64.4 | 1.65 | % | 14,961.7 | 36.0 | 0.96 | % | 15,666.5 | 3.8 | 0.10 | % | ||||||||||
| Short-term borrowings | 2,098.6 | 20.1 | 3.88 | % | 1,575.8 | 11.1 | 2.79 | % | 1,689.9 | 1.4 | 0.34 | % | ||||||||||
| Long-term debt | 242.1 | 3.1 | 5.11 | % | 236.7 | 3.1 | 5.21 | % | 241.8 | 3.1 | 5.17 | % | ||||||||||
| Total borrowings | 2,340.7 | 23.2 | 4.00 | % | 1,812.5 | 14.2 | 3.10 | % | 1,931.7 | 4.5 | 0.95 | % | ||||||||||
| Total interest-bearing liabilities cost | 18,170.4 | 87.6 | 1.95 | % | 16,774.2 | 50.2 | 1.19 | % | 17,598.2 | 8.3 | 0.19 | % | ||||||||||
| Net interest-free funding sources | 14,583.4 | 15,470.5 | 15,603.7 | |||||||||||||||||||
| Total cost of funds | 32,753.8 | 87.6 | 1.08 | % | 32,244.7 | 50.2 | 0.62 | % | 33,201.9 | 8.3 | 0.10 | % | ||||||||||
| Net Interest Spread (TE) | $ | 287.6 | 2.67 | % | $ | 298.1 | 3.11 | % | $ | 231.0 | 2.72 | % | ||||||||||
| Net Interest Margin (TE) | 32,753.8 | $ | 287.6 | 3.55 | % | $ | 32,244.7 | $ | 298.1 | 3.68 | % | $ | 33,201.9 | $ | 231.0 | 2.81 | % | |||||
| (i) Taxable equivalent (TE) amounts are calculated using a federal income tax rate of 21%. | ||||||||||||||||||||||
| (j) Includes nonaccrual loans. | ||||||||||||||||||||||
| (k) Included in interest income is net purchase accounting accretion of 0.8 million, 0.8 million and 1.5 million for the three months ended March 31, 2023. December 31, 2022, and March 31, 2022, respectively. | ||||||||||||||||||||||
| (l) Average securities does not include unrealized holding gains/losses on available for sale securities. |
All values are in US Dollars.
| HANCOCK WHITNEY CORPORATION | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| ASSET QUALITY INFORMATION | |||||||||
| (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| (dollars in thousands) | 3/31/2023 | 12/31/2022 | 3/31/2022 | ||||||
| Nonaccrual loans (m) | $ | 54,344 | $ | 38,991 | $ | 42,439 | |||
| ORE and foreclosed assets | 1,976 | 2,017 | 6,345 | ||||||
| Total nonaccrual loans + ORE and foreclosed assets | $ | 56,320 | $ | 41,008 | $ | 48,784 | |||
| Nonaccrual loans as a percentage of loans | 0.23 | % | 0.17 | % | 0.20 | % | |||
| Nonaccrual loans + ORE and foreclosed assets as a % of loans, ORE and foreclosed assets | 0.24 | % | 0.18 | % | 0.23 | % | |||
| Accruing loans 90 days past due | $ | 13,155 | $ | 4,585 | $ | 4,258 | |||
| Accruing loans 90 days past due as a percentage of loans | 0.06 | % | 0.02 | % | 0.02 | % | |||
| Modified/restructured loans - still accruing (n) | |||||||||
| Modified loans - still accruing | $ | 10 | |||||||
| Modified loans - still accruing as a % of loans | 0.00 | % | |||||||
| Restructured loans - still accruing | $ | 1,907 | $ | 2,903 | |||||
| Restructured loans - still accruing as a % of loans | 0.01 | % | 0.01 | % | |||||
| PROVISION AND ALLOWANCE FOR CREDIT LOSSES: | |||||||||
| Allowance for Loan Losses: | |||||||||
| Beginning balance | $ | 307,789 | $ | 306,116 | $ | 342,065 | |||
| Provision for loan losses | 7,315 | 2,646 | (23,903 | ) | |||||
| Charge-offs | (7,972 | ) | (4,643 | ) | (5,385 | ) | |||
| Recoveries | 2,253 | 3,670 | 5,066 | ||||||
| Net charge-offs | (5,719 | ) | (973 | ) | (319 | ) | |||
| Ending Balance | $ | 309,385 | $ | 307,789 | $ | 317,843 | |||
| Reserve for Unfunded Lending Commitments: | |||||||||
| Beginning balance | $ | 33,309 | $ | 33,468 | $ | 29,334 | |||
| Provision for losses on unfunded lending commitments | (1,295 | ) | (159 | ) | 1,376 | ||||
| Ending balance | $ | 32,014 | $ | 33,309 | $ | 30,710 | |||
| Total Allowance for Credit Losses | $ | 341,399 | $ | 341,098 | $ | 348,553 | |||
| Total Provision for Credit Losses | $ | 6,020 | $ | 2,487 | $ | (22,527 | ) | ||
| Allowance for loan losses as a percentage of period-end loans | 1.32 | % | 1.33 | % | 1.49 | % | |||
| Allowance for credit losses as a percentage of period-end loans | 1.46 | % | 1.48 | % | 1.63 | % | |||
| Allowance for loan losses as a % of nonaccrual loans | 569.31 | % | 789.38 | % | 748.94 | % | |||
| NET CHARGE-OFF INFORMATION | |||||||||
| Net charge-offs (recoveries): | |||||||||
| Commercial & real estate loans | $ | 3,355 | $ | (1,201 | ) | $ | (814 | ) | |
| Residential mortgage loans | (161 | ) | (251 | ) | (19 | ) | |||
| Consumer loans | 2,525 | 2,425 | 1,152 | ||||||
| Total net charge-offs | $ | 5,719 | $ | 973 | $ | 319 | |||
| Net charge-offs (recoveries) as a percentage of average loans: | |||||||||
| Commercial & real estate loans | 0.07 | % | (0.03 | )% | (0.02 | )% | |||
| Residential mortgage loans | (0.02 | )% | (0.03 | )% | (0.00 | )% | |||
| Consumer loans | 0.66 | % | 0.61 | % | 0.30 | % | |||
| Total net charge-offs as a percentage of average loans | 0.10 | % | 0.02 | % | 0.01 | % |
(m) Included in nonaccrual loans are nonaccruing modified loans to borrowers experiencing financial difficulties totaling $1.6 million at March 31, 2023 and troubled debt restructured loans totaling $2.6 million, and $3.6 million at December 31, 2022, and March 31, 2022, respectively. The definition of reportable modifcations/restructured loans changed for modifications made after January 1, 2023 with the adoption of ASU 2022-02. Refer to Note 1 of the 2022 Annual Report for a discussion of this standard.
(n) Reflects the balance outstanding at March 31, 2023 of accruing modified loans to borrowers experiencing financial difficulty since adoption of ASU 2022-02. Refer to Note 1 of the 2022 Annual Report for a discussion of this standard. Periods presented prior to that date reflect the outstanding balance of accruing troubled debt restructures as defined by superseded accounting guidance of ASC 310-40. Accruing loans are those where we expect to collect all amounts contractually due.
| HANCOCK WHITNEY CORPORATION | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ASSET QUALITY INFORMATION | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| (dollars in thousands) | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
| Nonaccrual loans (m) | $ | 54,344 | $ | 38,991 | $ | 39,807 | $ | 38,066 | $ | 42,439 | |||||
| ORE and foreclosed assets | 1,976 | 2,017 | 2,085 | 3,467 | 6,345 | ||||||||||
| Total nonaccrual loans + ORE and foreclosed assets | $ | 56,320 | $ | 41,008 | $ | 41,892 | $ | 41,533 | $ | 48,784 | |||||
| Nonaccrual loans as a percentage of loans | 0.23 | % | 0.17 | % | 0.18 | % | 0.17 | % | 0.20 | % | |||||
| Nonaccrual loans + ORE and foreclosed assets as a % of loans, ORE and foreclosed assets | 0.24 | % | 0.18 | % | 0.19 | % | 0.19 | % | 0.23 | % | |||||
| Accruing loans 90 days past due | $ | 13,155 | $ | 4,585 | $ | 2,600 | $ | 4,697 | $ | 4,258 | |||||
| Accruing loans 90 days past due as a percentage of loans | 0.06 | % | 0.02 | % | 0.01 | % | 0.02 | % | 0.02 | % | |||||
| Modified/restructured loans - still accruing (n) | |||||||||||||||
| Modified loans - still accruing | $ | 10 | |||||||||||||
| Modified loans - still accruing as a % of loans | 0.00 | % | |||||||||||||
| Restructured loans - still accruing | $ | 1,907 | $ | 1,925 | $ | 2,492 | $ | 2,903 | |||||||
| Restructured loans - still accruing as a % of loans | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||
| PROVISION AND ALLOWANCE FOR CREDIT LOSSES: | |||||||||||||||
| Allowance for loan losses | $ | 309,385 | $ | 307,789 | $ | 306,116 | $ | 308,175 | $ | 317,843 | |||||
| Reserve for unfunded lending commitments | 32,014 | 33,309 | 33,468 | 31,303 | 30,710 | ||||||||||
| Total allowance for credit losses | $ | 341,399 | $ | 341,098 | $ | 339,584 | $ | 339,478 | $ | 348,553 | |||||
| Total provision for credit losses | $ | 6,020 | $ | 2,487 | $ | 1,402 | $ | (9,761 | ) | $ | (22,527 | ) | |||
| Allowance for loan losses as a percentage of period-end loans | 1.32 | % | 1.33 | % | 1.36 | % | 1.41 | % | 1.49 | % | |||||
| Allowance for credit losses as a percentage of period-end loans | 1.46 | % | 1.48 | % | 1.50 | % | 1.55 | % | 1.63 | % | |||||
| Allowance for loan losses as a % of nonaccrual loans | 569.31 | % | 789.38 | % | 769.00 | % | 809.58 | % | 748.94 | % | |||||
| NET CHARGE-OFF INFORMATION | |||||||||||||||
| Net charge-offs (recoveries) | |||||||||||||||
| Commercial & real estate loans | $ | 3,355 | $ | (1,201 | ) | $ | (270 | ) | $ | (1,611 | ) | $ | (814 | ) | |
| Residential mortgage loans | (161 | ) | (251 | ) | (894 | ) | (448 | ) | (19 | ) | |||||
| Consumer loans | 2,525 | 2,425 | 2,460 | 1,373 | 1,152 | ||||||||||
| Total net charge-offs | $ | 5,719 | $ | 973 | $ | 1,296 | $ | (686 | ) | $ | 319 | ||||
| Net charge-offs (recoveries) as a percentage of average loans: | |||||||||||||||
| Commercial & real estate loans | 0.07 | % | (0.03 | )% | (0.01 | )% | (0.04 | )% | (0.02 | )% | |||||
| Residential mortgage loans | (0.02 | )% | (0.03 | )% | (0.13 | )% | (0.07 | )% | (0.00 | )% | |||||
| Consumer loans | 0.66 | % | 0.61 | % | 0.62 | % | 0.35 | % | 0.30 | % | |||||
| Total net charge-offs as a percentage of average loans: | 0.10 | % | 0.02 | % | 0.02 | % | (0.01 | )% | 0.01 | % | |||||
| AVERAGE LOANS | |||||||||||||||
| Commercial & real estate loans | $ | 18,322,189 | $ | 18,178,496 | $ | 17,855,937 | $ | 17,562,053 | $ | 17,119,295 | |||||
| Residential mortgage loans | 3,214,439 | 2,968,876 | 2,713,383 | 2,534,600 | 2,441,359 | ||||||||||
| Consumer loans | 1,549,901 | 1,575,876 | 1,569,389 | 1,560,875 | 1,561,384 | ||||||||||
| Total average loans | $ | 23,086,529 | $ | 22,723,248 | $ | 22,138,709 | $ | 21,657,528 | $ | 21,122,038 |
(m) Included in nonaccrual loans are nonaccruing modified loans to borrowers experiencing financial difficulties totaling $1.6 million at March 31, 2023 and troubled debt restructured loans totaling $2.6 million, $2.8 million, $3.2 million, and $3.6 million, at December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, respectively. The definition of reportable modifcations/restructured loans changed for modifications made after January 1, 2023 with the adoption of ASU 2022-02. Refer to Note 1 of the 2022 Annual Report for a discussion of this standard.
(n) Reflects the balance outstanding at March 31, 2023 of accruing modified loans to borrowers experiencing financial difficulty since adoption of ASU 2022-02. Refer to Note 1 of the 2022 Annual Report for a discussion of this standard. Periods persented prior to that date reflect the outstanding balance of accruing troubled debt restructures as defined by superseded accounting guidance of ASC 310-40. Accruing loans are those where we expect to collect all amounts contractually due.
| HANCOCK WHITNEY CORPORATION | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Appendix A to the Earnings Release | |||||||||||||||
| Reconciliation of Non-GAAP Measure | |||||||||||||||
| (Unaudited) | |||||||||||||||
| OPERATING REVENUE (TE) AND OPERATING PRE-PROVISION NET REVENUE (TE) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| (in thousands) | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
| Net interest income | $ | 284,994 | $ | 295,501 | $ | 280,307 | $ | 245,732 | $ | 228,463 | |||||
| Noninterest income | 80,330 | 77,064 | 85,337 | 85,653 | 83,432 | ||||||||||
| Total revenue | 365,324 | 372,565 | 365,644 | 331,385 | 311,895 | ||||||||||
| Taxable equivalent adjustment (n) | 2,584 | 2,615 | 2,603 | 2,585 | 2,545 | ||||||||||
| Nonoperating revenue | — | — | — | — | — | ||||||||||
| Operating revenue (TE) | 367,908 | 375,180 | 368,247 | 333,970 | 314,440 | ||||||||||
| Noninterest expense | (200,884 | ) | (190,154 | ) | (193,502 | ) | (187,097 | ) | (179,939 | ) | |||||
| Nonoperating expense | — | — | — | — | — | ||||||||||
| Operating pre-provision net revenue (TE) | $ | 167,024 | $ | 185,026 | $ | 174,745 | $ | 146,873 | $ | 134,501 | |||||
| (n) Taxable equivalent (TE) amounts are calculated using a federal income tax rate of 21%. |
First Quarter 2023 Earnings Conference Call 4/18/2023 HANCOCK WHITNEY Exhibit 99.2
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, any ongoing impact of the COVID-19 pandemic on the economy and our operations, the impacts related to Russia’s military action in Ukraine, Federal Reserve action with respect to interest rates, the adequacy of our enterprise risk management framework, potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions, as well as the impact of recent 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 reporting, the financial impact of regulatory requirements and tax reform legislation, the impact of the change in the reference rate reform, 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, 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 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, 2022 and in other periodic reports that we file with the SEC. Important cautionary statement about forward-looking statements HNCOCK WHITNEY 2
Non-GAAP Reconciliations & Glossary of Terms Throughout this presentation we may use non-GAAP numbers to supplement the evaluation of our performance. The items noted below with an asterisk, "*", are considered non-GAAP. 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. Reconciliations of those non-GAAP measures to the comparable GAAP measure are included in the appendix to this presentation. The earnings release, financial tables and supporting slide presentation can be found on the company’s Investor Relations website at investors.hancockwhitney.com. ABL – Asset Based Lending AFS – Available for sale securities ACL – Allowance for credit losses AMBR – Ameribor Unsecured Overnight Rate Annualized – Calculated to reflect a rate based on a full year AOCI – Accumulated other comprehensive income ARM – Adjustable Rate Mortgage B – Dollars in billions Beta – repricing based on a change in market rates bps – basis points Brokered Deposits – deposits obtained directly or indirectly through a deposit broker typically offering higher interest rates BOLI – Bank-owned life insurance BSBY – Bloomberg Short-Term Bank Yield Index C&D – Construction and land development loans CD – Certificate of deposit CET1 – Common Equity Tier 1 Ratio CF – Cash flow Core Client Deposits – All deposits excluding public funds and brokered deposits COVID-19 – Pandemic related virus CRE – Commercial real estate CSO – Corporate strategic objective C-stores – Convenience stores DDA – Noninterest-bearing demand deposit accounts (e) – estimated HNCOCK WHITNEY 3 *Efficiency ratio – noninterest expense to total net interest (TE) and noninterest income, excluding amortization of purchased intangibles and nonoperating items EOP – End of period EPS – Earnings per share Excess liquidity - deposits held at the Fed plus investment in the bond portfolio above normal levels Fed - Federal Reserve Bank FF – Federal Funds FHLB – Federal Home Loan Bank FRB-DW – Federal Reserve Bank Discount Window Free Securities – market value of unencumbered investment securities owned by the bank FTE – Full time equivalent FV – Fair Value HFS – Held for sale HTM – Held to maturity securities ICRE – Income-producing commercial real estate ICS – Insured Cash Sweep IRR – Interest rate risk LIBOR – London Inter-Bank Offered Rate Line Utilization - represents the used portion of a revolving line resulting in a funded balance for a given portfolio; credit cards, construction loans (commercial and residential), and consumer lines of credit are excluded from the calculation Linked-quarter (LQ) – current quarter compared to previous quarter LQA – Linked-quarter annualized LOC – Line of credit M&A – Mergers and acquisitions MM – Dollars in millions MMDDYY – Month Day Year NII – Net interest income *NIM – Net interest margin (TE) OCI – Other comprehensive income OFA – Other foreclosed assets *Operating – Financial measure excluding nonoperating items *Operating Leverage – Operating revenue (TE) less operating expense; also known as PPNR ORE – Other real estate O/N– Overnight Funds PF – Public Funds *PPNR – Pre-provision net revenue (operating); also known as operating leverage Repo – Customer repurchase agreements ROA – Return on average assets ROTCE – Return on tangible common equity SBIC – Small business investment company SOFR – Secured Overnight Financing Rate S2 – Slower growth, downside scenario S3 – Recessionary downside scenario TCE – Tangible common equity ratio (common shareholders’ equity less intangible assets divided by total assets less intangible assets) *TE – Taxable equivalent (calculated using the current statutory federal tax rate) XHYY – Half Year XQYY – Quarter Year Y-o-Y – Year over year
Corporate Profile $37.5 billion in Total Assets $23.4 billion in Total Loans $29.6 billion in Total Deposits CET1 ratio 11.61%(e) Tangible Common Equity (TCE) ratio 7.16% $3.1 billion in Market Capitalization 180 full service banking locations and 225 ATMs across our footprint Approximately 3,675 (FTE) employees corporate-wide Moody’s long-term issuer rating: Baa3; outlook stable S&P long-term issuer rating: BBB; outlook stable Ranked in top 100 Best Banks in America by Forbes Recognized for top client satisfaction ranking by J.D. Power Earned top customer service marks with Greenwich Excellence Awards Diversity, equity and inclusion (DEI) are fundamental to the spirit of HWC’s purpose, mission and values HWC Nasdaq Listed HNCOCK WHITNEY 4 As of March 31, 2023 (Healthcare) (ABL) (Operations) (Trust)
First Quarter 2023 Highlights Net income totaled $126.5 million, or $1.45 per diluted share, compared to $143.8 million, or $1.65 per diluted share at 4Q22 Pre-provision net revenue (PPNR)* totaled $167 million, compared to $185 million at 4Q22 Deposits increased $542.7 million, or 7% LQA (See slides 6 and 7) Total loan growth of $290.5 million, or 5% LQA (See slide 9) Criticized commercial loans and nonaccrual loans relatively stable, linked-quarter (See slide 12) ACL coverage remained strong at 1.46% (See slide 13) NIM decreased 13 bps to 3.55% (See slide 15) CET1 ratio estimated at 11.61%, up 20 bps; TCE ratio 7.16%, up 7 bps (See slide 19) Efficiency ratio remains below 55% target at 53.76% ($s in millions; except per share data) 1Q23 4Q22 1Q22 Net Income $126.5 $143.8 $123.5 Provision for credit losses $6.0 $2.5 ($22.5) Earnings Per Share – diluted $1.45 $1.65 $1.40 Return on Assets (%) (ROA) 1.46 1.65 1.39 Return on Tangible Common Equity (%) (ROTCE) 20.49 24.64 18.66 Net Interest Margin (TE) (%) 3.55 3.68 2.81 Net Charge-offs (%) 0.10 0.02 0.01 CET1 Ratio (%) 11.61(e) 11.41 11.12 Tangible Common Equity (%) 7.16 7.09 7.15 Pre-Provision Net Revenue (TE)* $167.0 $185.0 $134.5 Efficiency Ratio (%) 53.76 49.81 56.03 *Non-GAAP measure: see appendix for non-GAAP reconciliation
Maintaining a Seasoned, Stable, Diversified Deposit Base DDAs as a % of total deposits remains above pre-2020 levels 43% at 3/31/23 37% at 12/31/19 Uninsured deposits (adjusted for collateralized public funds) are 36% at March 31, 2023 compared to 38% at year-end 2022 The Insured Cash Sweep (ICS) product is available to clients as a way to insure deposits above FDIC limits; balances at March 31, 2023 were $111 million, up from $12 million at year-end 2022 Repurchase (Repo) agreements are another way for clients to insure deposits; balances at March 31, 2023 were $420 million, relatively stable linked-quarter Consumer clients comprise 43% of total deposits, while commercial clients comprise 36% In mid-March, as a cautionary measure, we added $568 million in Brokered CDs at a rate of 5.45%; these deposits will mature in late December 2023 Promotional CD offerings and continued deposit remix have resulted in higher deposit costs 0.91% at 1Q23 0.50% at 4Q22 Select Average Deposit Account Size by Line of Business Line of Business ($ in thousands) 3/31/23 12/31/22 Consumer $18.5 $18.7 Commercial $205.8 $206.5 Wealth $140.1 $143.5 Total Deposits $38.3 $38.3
$ in millions Growth in Core Client Deposits Linked-Quarter & Post March 10 Total deposits of $29.6 billion Linked-quarter growth of $543 million, or 7% LQA, reflects increases in core client deposits of $234 million and brokered deposits of $568 million, partly offset by typical seasonal runoff in public funds deposits of $259 million Increase since 3/10/23 of $780 million driven by increases in core client deposits of $203 million, brokered deposits of $568 million, and public funds deposits of $9 million Shift in mix of deposits from DDA to interest bearing, mainly time deposits, continued in the first quarter DDA as a % of total deposits was 43% (44% excluding brokered deposits) at March 31, 2023, down from 47% at year-end 2022 Total Deposits 12/31/20 $s in millions Time Deposits (retail) $1,835 7% Time Deposits (brokered) $14 ― Interest-bearing public funds $3,235 12% Interest-bearing transaction & savings $10,414 37% Noninterest bearing $12,200 44% $s in billions Avg Qtrly Deposits LQA EOP growth $28.0 $26.0 $24.0 $22.0 $20.0 $18.0 $16.0 1Q20 $24.3 20% 2Q20 $26.7 37% 3Q20 $26.8 -4% 4Q20 $27.0 10% 1Q21 $27.0 10% HNCOCK WHITNEY 15 EOP Deposits Mix ($) % of Total Deposits EOP Deposits Mix (%) * Includes Public Funds DDA
Currently have approximately $20 billion in internal and external sources of liquidity available if needed As a cautionary measure, we issued $568 million of brokered deposits and borrowed an additional $1.2 billion from the FHLB in late March Nearly $16 billion in remaining net liquidity available at March 31, 2023 At March 31, 2023 $ in millions Total Available Amount Used Net Availability Internal Sources Free Securities $ 2,262 $ - $ 2,262 External Sources FHLB 6,588 3,200 3,388 FRB-DW 4,904 - 4,904 Brokered Deposits 4,442 573 3,869 Overnight Fed Funds LOCs 1,369 - 1,369 Total Liquidity $ 19,565 $ 3,773 $ 15,792 Strong Liquidity Position; Multiple Sources of Funding Available At March 31, 2023 $ in millions Cash and O/N $ 2,883 Cash and O/N as a % of Assets 7.7% Cash and O/N + Net Availability $ 18,675 Uninsured Deposits excl. PF Deposits $ 10,710 Cash and O/N + Net Availability to Adj. Uninsured deposits 174.4%
Loans totaled $23.4 billion, up $290.5 million, or 5% LQA Increase in mortgage loans driven by one-time close product CRE-income producing growth driven by movement of C&D loans to permanent financing at construction completion Tailwinds and headwinds to future loan growth: Tailwinds: Improvement in utilization rates Headwinds: Amortizing only indirect portfolio Limiting growth in CRE Potential economic slowdown Quarterly Loan Growth in Line With Expectations Bar Chart
CRE Exposure Limited, Diversified Total Loans Outstanding % of Total Loans Commitment ($s in millions) Commercial non-RE (C&I) $7,818 33.4% $13,673 CRE - owner 2,547 10.9% 2,674 ICRE 3,184 13.6% 3,404 C&D 1,633 7.0% 3,531 Healthcare 2,063 8.8% 2,512 Equipment Finance 1,074 4.6% 1,074 Energy 231 1.0% 349 Total Commercial 18,550 79.3% 27,217 Mortgage 3,330 14.2% 3,336 Consumer 1,428 6.1% 3,426 Indirect 97 0.4% 97 Grand Total $23,405 100.0% $34,076 For Information Purposes Only (included in categories above) Retail (C&I and CRE) $1,985 8.5% $2,384 Hospitality (C&I and CRE) $1,171 5.0% $1,380 Office - ICRE $878 3.8% $925 Office - owner $813 3.5% $849 Multifamily – ICRE $574 2.5% $595 Multifamily – C&D $444 1.9% $1,221 CRE loan portfolio is diversified by asset class, industry and geographic region Income-producing CRE (ICRE) approximately 14% of total loans and includes retail, hospitality, office, industrial, and multifamily Conservative underwriting in both type and structure Over the past few years we have been shifting our focus away from traditional office to more medical office within office-ICRE 40% of the office-ICRE portfolio is related to medical offices Office buildings tend to be more mid-rise not necessarily high-rise that rely upon large tenants taking large space The retail portfolio is mostly necessity-based businesses (i.e., grocery stores, pharmacies, c-stores, etc.) 70% of the healthcare portfolio is in market and represents broad-based traditional medical loans As of March 31, 2023
Yield on New Loans Reflects Higher Rates $ in millions New Loan Yield - Fixed 3.73% 3.62% 4.45% 5.28% 5.95% 6.47% New Loan Yield - Variable 2.94% 2.92% 3.25% 4.79% 6.40% 7.10%
Criticized Commercial and Nonaccrual Loans Relatively Stable Criticized commercial loans totaled $296 million, or 1.59% of total commercial loans, at March 31, 2023, down $6 million, or 2%, linked-quarter Nonaccrual loans totaled $54 million, or 0.23% of total loans, at March 31, 2023, up $15 million, or 38%, linked-quarter; increase mostly due to one commercial credit 1.63% 0.20% 1.64% Total Loans $21,323 $21,846 $22,586 $23,114 $23,405 Total Commercial Loans 17,303 17,660 18,166 18,444 18,550 Criticized Commercial Loans 282 281 304 302 296 Nonaccrual Loans 42 38 40 39 54 1.59% 0.17% 1.68% 0.18% 0.17% 1.59% 0.23% $700 $600 $500 $400 $300 $200 $100 $0 3Q20 4Q20 1Q21 2Q21 3Q21 HNCOCK WHITNEY 12 $ in millions
Maintained Strong Reserve, Net Charge-Offs Normalize Provision for the quarter of $6.0 million, reflects $5.7 million of net charge-offs and a reserve build of $0.3 million Net charge-offs were impacted by various smaller charge-offs and lower recoveries compared to 4Q22 Weighting applied to Moody's March 2023 economic scenarios was 40% baseline, 50% slower growth (S2), and 10% recessionary scenario (S3) Given inflation levels, market conditions, and recession concerns, scenario mix and weighting captures greater potential for slower near term economic growth than provided for in the baseline scenario Net Charge-offs Reserve Build Total Provision ($s in millions) 1Q23 4Q22 1Q23 4Q22 1Q23 4Q22 Commercial $3.4 ($1.2) ($1.0) ($0.1) $2.4 ($1.3) Mortgage (0.2) (0.2) 2.1 1.5 1.9 1.3 Consumer 2.5 2.4 (0.8) 0.1 1.7 2.5 Total $5.7 $1.0 $0.3 $1.5 $6.0 $2.5 3/31/2023 12/31/2022 Portfolio ($ in millions) Amount % of Loan and Leases Outstanding Amount % of Loan and Leases Outstanding Commercial $247 1.33% $247 1.34% Mortgage 35 1.04% 32 1.05% Consumer 27 1.80% 28 1.78% Allowance for Loan and Lease Losses (ALLL) $309 1.32% $307 1.33% Reserve for Unfunded Lending Commitments 32 --- 34 --- Allowance for Credit Losses (ACL) $341 1.46% $341 1.48%
Conservative Securities Portfolio Securities portfolio* totaled $9.1 billion, down $123 million 69% AFS, 31% HTM at 3/31/23 To reduce OCI volatility and provide flexibility to reposition and/or reprice the hedged assets in a changing rate environment, we have $514 million of FV hedges on $559 million of bonds, or 9% of AFS securities Terminated $203 million in FV hedges during 1Q23 (will increase the asset yield on the underlying assets) Yield 2.35%, up 6 bps linked-quarter Premium amortization totaled $8.2 million, down $0.6 million linked-quarter Effective duration remains stable at 4.8 years at 3/31/23 compared to 4.9 years at 12/31/22 Net unrealized losses on securities portfolio Securities Portfolio Mix 12/31/20 $s in millions CMBS $2,873 41% CMO $513 7% U.S. Agencies and other $219 3% RMBS $2,582 36% Munis $936 13% HNCOCK WHITNEY 15 Bar chart,pie chart Net Unrealized Loss $ in millions 3/31/2023 12/31/22 AFS ($673) ($754) HTM ($201) ($237) Total ($875) ($991) * Excluding unrealized losses and FV hedges adjustment
Net interest margin (NIM) 3.55%, down 13 bps linked-quarter Net interest income (TE) decreased $10.5 million, or 4%, linked-quarter, driven by change in the funding mix and increasing deposit betas Forecasting an additional 25 bps increase in the Federal Funds rate in May and flat through year-end 2023 Expect additional NIM compression in 2Q23 as deposit betas increase; expect NIM stabilization in 2H23 if rates and betas moderate NIM Reflects Change in Funding Mix, Higher Deposit Betas Cost of Deposits 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% Mar-20 Apr-20 May-20 Jun 20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Mar-21e .59% .41% .33% .29% .25% .21% .20% .19% .17% .17% .13% 3.40% 3.30% 3.20% 3.10% 3.00% 2.90% 2.80% 3Q20 NIM (TE) Impact of Securities Portfolio Purchase/Premium amortization Impact of change in earnings asset mix Lower cost of deposits Net impact of interest reversals and recoveries/loan fees accretion 4Q20 NIM (TE) 0.02% 0.06% 0.05% 0.02% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 4Q19 1Q20 2Q20 3Q20 4Q20 4.69% 3.43% 2.56% 0.76% 4.56% 3.41% 2.53% 0.67% 4.04% 3.23% 2.47% 0.38% 3.95% 3.23% 2.31% 0.30% 3.99% 3.22% 2.23% 0.25% Loan Yield Securities Yield Cost of Fund NIM HNCOCK WHITNEY 18 Line chart NIM Yield / Cost Quarter Month
Loans Loans totaled $23.4 billion at March 31, 2023 41% fixed, 59% variable (includes hybrid ARMs) 35% ($4.9 billion) of variable loans tied to SOFR 29% ($4.0 billion) of variable loans tied to Wall Street Journal Prime 28% ($3.9 billion) of variable loans are LIBOR-based 6% ($811 million) of variable loans tied to AMBR 1% ($206 million) of variable loans tied to BSBY Securities Expect runoff from bond portfolio to continue funding loan growth as needed in 2023 $125 million of cash flows from the bond portfolio was used to fund quarterly loan growth Swaps/Hedges (See slide 28 for more information) $1.6 billion of active receive fixed/pay 1 month SOFR swaps designated as Cash Flow Hedges on the balance sheet; extends asset duration $514 million of pay fixed/receive Fed Effective swaps designated as Fair Value Hedges on $559 million of securities; provides OCI protection and flexibility to reposition and/or reprice the hedged assets in a changing rate environment Deposits Deposits totaled $29.6 billion at March 31, 2023 79% of deposits are MMDA, savings, or DDA Shift in deposit mix as interest rates continue to rise Rate Betas Rate Floors Floor Rate Balance * Balance Cumulative 25-49 bps $670 million $670 million 50-74 bps $804 million $1.5 billion 75-99 bps $546 million $2.0 billion 100-150 bps $1.8 billion $3.8 billion > 150 bps $172 million $4.0 billion IRR Sensitivity Table HWC (Hedges Removed) As of 4Q21 As of 4Q21 Peers * Immediate 100 bps 7.3% 8.4% 7.3% Gradual 100 bps 3.2% 3.6% 4.3% Deposits $ in millions Time Deposits $1,129 4% Interest-bearing public funds $3,295 11% Interest-bearing transaction & savings $11,650 38% Noninterest bearing $14,393 47% Focused on IRR Sensitivity IRR Sensitivity Table HWC HWC (Hedges Removed) As of 1Q23 As of 1Q23 Immediate +100 bps 3.3% 4.5% Immediate -100 bps -3.6% -4.8% Gradual +100 bps 2.2% 2.7% Gradual -100 bps -1.3% -1.8% 1Q22- 2Q22 2Q22- 3Q22 3Q22- 4Q22 4Q22- 1Q23 Cycle to date (1Q22-1Q23) Total Deposit Betas 3% 8% 21% 48% 19% IB Deposit Betas 5% 16% 40% 81% 35% Loan Betas 24% 45% 43% 50% 42%
Wealth, Specialty Income Drive Increase in Overall Fees Noninterest income totaled $80.3 million, up $3.3 million, or 4% linked-quarter Decrease in service charges was primarily related to the elimination of certain NSF/OD fees Increase in investment, annuity and insurance income related to the current rate environment and corporate underwriting fees Increase in other noninterest income is primarily related to a higher level of specialty fees (i.e., derivatives and SBIC) Noninterest Income Mix 3/31/23 $s in millions Lower Mortgage, Specialty Income Partly Offset by Higher Service Fees Noninterest income totaled $82.4 million, down $1.3 million, or 2% linked-quarter Service charges and bank card & ATM fees up primarily due to increased activity, although lower than pre-pandemic levels Secondary mortgage fees continue to be impacted by the favorable rate environment, albeit a lower level of refinance activity compared to previous quarters Other income decrease related to lower levels of specialty income (BOLI) in 4Q20 partially offset by higher derivative income Expect 1Q21 fee income to be down related to anticipated lower levels of specialty income and secondary mortgage fees Secondary Mortgage Fees $11.5 14%Other $12.8 16% Noninterest Income Mix 12/31/20 $s in millions Service Charges on Deposit $19.9 24% Investment & Annuity and Insurance $5.8 7% Trust Fees $14.8 18% Bank Card & ATM Fees $17.6 21% 3Q20 NON INTEREST INCOME SERVICE CHARGES ON DEPOSIT accounts bank card & atm fees investment & annuity income and insurance trust fees secondary mortgage fees other 4q20 Non interest income Pie chart
Regulatory Fees, Pension Expense Drive Increase in Expense Noninterest expense totaled $200.9 million, up $10.7 million, or 6% linked-quarter Personnel expense decrease mostly related to lower incentive pay, partly offset by higher payroll taxes Other expenses increased primarily due to: Higher regulatory fees, incl. FDIC Assessment ($1.9 million) Increase in pension expense ($3.9 million) Increase in data processing expense ($1.4 million) Increase in ad valorem taxes ($1.3 million) 4Q22 included storm-related benefit ($5.1 million) Noninterest Expense Mix 3/31/23 $s in millions A Focus on Expense Control; More Initiatives Underway Noninterest expense totaled $193.1 million, down $2.7 million, or 1% LQ Decline in personnel expense related to savings from efficiency measures taken to-date, including staff attrition and recent financial center closures Increase in other expenses mainly related to nonrecurring hurricane expense and branch closures Expense reduction initiatives to-date Closed 12 financial centers in 4Q20 8 additional financial centers closures announced in 1Q21 Ongoing branch rationalization reviews Closed Wealth Management trust offices in the NE corridor FTE down 210 compared to June 30, 2020 through staff attrition and other initiatives Early retirement package offered to select employees in 1Q21 Expect 1Q21 expenses to be flat as efficiency initiatives continue and offset typical beginning of the year increases; does not include nonrecurring charges for certain initiatives (i.e. early retirement)
Improved Capital Levels Linked-Quarter CET1 ratio estimated at 11.61%, up 20 bps linked-quarter TCE ratio 7.16%, up 7 bps LQ Tangible net earnings +38 bps Impact of OCI +25 bps Stock compensation and other +1 bps Higher tangible assets -49 bps Mostly due to late quarter leverage added to build liquidity (36 bps impact on TCE) Dividends -8 bps No shares repurchased during 1Q23 Will continue to manage capital in the best interests of the Company and our shareholders; our priorities are: Organic growth Dividends Buybacks M&A Tangible Common Equity Ratio Leverage (Tier 1) Ratio CET1 Ratio and Tier 1 Risked-Based Capital Ratio Total Risk-Based Capital Ratio March 31, 2023 7.16% 9.63%(e) 11.61%(e) 13.23%(e) December 31, 2022 7.09% 9.53% 11.41% 12.97% September 30, 2022 6.73% 9.27% 11.10% 12.67% June 30, 2022 7.21% 8.68% 11.08% 12.70% March 31, 2022 7.15% 8.38% 11.12% 12.82% (e) Estimated for most recent period-end Capital Rebuild Continues After 1H20 De-Risking Activities TCE ratio 7.64%, up 11 bps LQ (7.99% excluding PPP loans) Tangible net earnings +34 bps Change in tangible assets/additional excess liquidity -10 bps Dividends -7 bps Change in OCI & other -6 bps CET1 ratio 10.70%, up 40 bps linked-quarter Intend to pay quarterly dividend in consultation with examiners; board reviews dividend policy quarterly Buybacks on hold Tangible Common Equity Ratio Leverage (Tier 1) Ratio CET1 Ratio and Tier 1 Risked-Based Capital Ratio Total Risk-Based Capital Ratio December 31, 2020 7.64% 7.87%(e) 10.70%(e) 13.31%(e) September 30, 2020 7.53% 7.70% 10.30% 12.92% June 30, 2020 7.33% 7.37% 9.78% 12.36% March 31, 2020 8.00% 8.40% 10.02% 11.87% December 31, 2019 8.45% 8.76% 10.50% 11.90% (e) Estimated for most recent period-end; effective March 31, 2020 regulatory capital ratios reflect the election to use the five-year CECL transition rules
Remain Well Capitalized Including All Unrealized Losses 3/31/2023 As Reported Inc. AOCI Losses (1) Inc. AOCI + HTM Losses(2) Well Capitalized Minimum Tangible Common Equity Ratio 7.16% 7.16% 6.76% N/A Leverage (Tier 1) Ratio 9.63% (e) 8.09% 7.67% 5.00% CET1 Ratio 11.61% (e) 9.64% 9.11% 6.50% Tier 1 Risked-Based Capital Ratio 11.61% (e) 9.64% 9.11% 8.00% Risk-Based Capital Ratio 13.23% (e) 11.26% 10.73% 10.00% Reflected above is the hypothetical impact on capital if the mark on AOCI Losses(1) and AOCI + HTM(2) were included in the regulatory capital calculations Neither scenario is currently included, nor required to be included in the Company’s regulatory capital ratios (e) Estimated for most recent period-end Assumes AOCI adjustments related to market valuations on securities and related hedges are included for regulatory capital calculations Assumes HTM securities are also included as AOCI adjustment
2023 Forward Guidance Guidance Direction 1Q23 Actual FY 2023 Outlook Loans (EOP) Unchanged $23.4B Expect EOP loan growth in the range of low to mid single digits from $23.1B at 12/31/22 Deposits (EOP) Unchanged $29.6B Expect EOP deposit growth in the range of flat to low single digits from $29.1B at 12/31/22; will continue to utilize cash flows from securities portfolio to help fund loan growth in 2023 Operating Pre-Provision, Net Revenue (PPNR)* Updated $167.0MM Expect PPNR to increase 3%-7% from FY22 ($641.1MM); assumes full expense guidance; updated to reflect current deposit/rate environment Reserve for Credit Losses Unchanged $341.4MM or 1.46% of total loans Future assumptions in economic forecasts and any change in our own asset quality metrics will drive level of reserves; expect low to modest charge-offs and provision throughout 2023 Noninterest Income Unchanged $80.3MM Expect noninterest income to be up 3%-4% from FY22 ($331.5MM) Noninterest Expense Unchanged $200.9MM Expect operating expense to be up 6%-7% from FY22 ($750.7MM) or up 4%-5% excluding increases in pension expense & FDIC assessment Effective Tax Rate Unchanged 20.2% Approximately 21% Efficiency Ratio Updated 53.76% Expect to maintain efficiency ratio below 55% for FY23 Corporate Strategic Objectives (CSOs) Long-term operating objectives reviewed/updated annually (Rate environment will either benefit or challenge us to reach our objectives) 3 Year Objective (4Q25) 1Q23 Actual ROA ≥ 1.55% 1.46% TCE ≥ 8% 7.16% ROTCE ≥ 18% 20.49% Efficiency Ratio ≤ 50% 53.76% * See additional information on NIM guidance on Slide 15; Forecasting an additional 25 bps increase in the Federal Funds rate in May and flat through year-end 2023
Appendix and Non-GAAP Reconciliations Appendix and Non-GAAP Reconciliations CHANCOCK WHITNEY
Summary Income Statement ($ in millions, except for per share data) *Non-GAAP measure: see slide 27 for non-GAAP reconciliation Change 1Q23 4Q22 1Q22 LQ Prior Year Net interest income (TE) 287.6 298.1 231.0 (10.5) 56.6 Provision for credit losses 6.0 2.5 (22.5) 3.5 28.5 Noninterest income 80.3 77.1 83.4 3.2 (3.1) Noninterest expense 200.9 190.2 179.9 10.7 21.0 Income before income tax 158.4 179.9 154.5 (21.5) 3.9 Income tax expense 31.9 36.1 31.0 (4.2) 0.9 Net income 126.5 143.8 123.5 (17.3) 3.0 Operating PPNR (te)* 167.0 185.0 134.5 (18.0) 32.5 Net income 126.5 143.8 123.5 (17.3) 3.0 Net income allocated to participating securities (1.4) (1.8) (1.9) 0.4 0.5 Net income available to common shareholders 125.1 142.0 121.6 (16.9) 3.5 Weighted average common shares - diluted (millions) 86.3 86.2 86.9 0.1 (0.6) Reported EPS 1.45 1.65 1.40 (0.2) 0.05 NIM (te) 3.55% 3.68% 2.81% -13 bps 74 bps ROA 1.46% 1.65% 1.39% -19 bps 7 bps ROE 15.03% 17.67% 13.88% -264 bps 115 bps Efficiency ratio 53.76% 49.81% 56.03% 395 bps -227 bps
Summary Balance Sheet ($ in millions) Average securities excludes unrealized gain/(loss) Summary Balance Sheet ($ in millions) 4Q20 and YTD 2020 include $2.0 billion and 3Q20 included $2.3 billion in PPP loans, net Average securities excludes unrealized gain /(loss) Change 4Q20 3Q20 4Q19 LQ PY Line Item YTD 2020 YTD 2019 Y-o-Y EOP Balance Sheet $21,789.9 $22,240.2 $21,212.8 ($450.3) $577.1 Loans (1) $21,789.9 $21,212.8 $577.1 7,356.5 7,056.3 6,243.3 300.2 1,113.2 Securities 7,356.5 6,243.3 1,113.2 30,616.3 30,179.1 27,622.2 437.2 2,994.1 Earning Assets 30,616.3 27,622.2 2,994.1 33,638.6 33,193.3 30,600.8 445.3 3,037.8 Total assets 33,638.6 30,600.8 3,037.8 $27,698.0 $27,030.7 $23,803.6 $667.3 $3,894.4 Deposits $27,698.0 $23,803.6 $3,894.4 1,667.5 1,906.9 2,714.9 (239.4) (1,047.4) Short-term borrowings 1,667.5 2,714.9 (1,047.4) 30,199.6 29,817.7 27,133.1 381.9 3,066.5 Total Liabilities 30,199.6 27,133.1 3,066.5 3,439.0 3,375.6 3,467.7 63.4 (28.7) Stockholders' Equity 3,439.0 3,467.7 (28.7) Avg Balance Sheet $22,065.7 $22,407.8 $21,037.9 ($342.1) $1,027.8 Loans $22,166.5 $20,380.0 $1,786.5 6,921.1 6,389.2 6,201.6 531.9 719.5 Securities (2) 6,398.7 5,864.2 534.5 29,875.5 29,412.3 27,441.5 463.2 2,434.0 Average earning assets 29,235.3 26,476.9 2,758.4 33,067.5 32,685.4 30,343.3 382.1 2,724.2 Total assets 32,391.0 29,125.4 3,265.6 $27,040.4 $26,763.8 $23,848.4 $276.6 $3,192.0 Deposits $26,212.3 $23,299.3 $2,913.0 1,779.5 1,733.3 2,393.4 46.2 (613.9) Short-term borrowings 1,978.2 1,942.1 36.1 29,660.8 29,333.8 26,869.6 327.0 2,791.2 Total Liabilities 28,957.9 25,822.8 3,135.1 3,406.6 3,351.6 3,473.7 55.0 (67.1) Stockholders' Equity 3,433.1 3,302.7 130.4 3.99% 3.95% 4.69% 4 bps -70 bps Loan Yield 4.13% 4.81% -68 bps 2.23% 2.31% 2.56% -8 bps -33 bps Securities Yield 2.38% 2.62% -24 bps 0.31% 0.39% 1.11% -8 bps -80 bps Cost of IB Deposits 0.57% 1.25% -68 bps 79% 82% 89% -361 bps -1045 bps Loan/Deposit Ratio (Period End) 79% 89% -1045 bps CHANCOCK WHITNEY 26 Change 1Q23 4Q22 1Q22 LQ Prior Year EOP Balance Sheet Loans 23,404.5 23,114.0 21,323.3 290.5 2,081.2 Securities 8,390.7 8,408.5 8,481.1 (17.8) (90.4) Earning assets 34,106.8 31,873.0 32,997.3 2,233.8 1,109.5 Total assets 37,547.1 35,183.8 36,317.3 2,363.3 1,229.8 Deposits 29,613.1 29,070.3 30,499.7 542.8 (886.6) Short-term borrowings 3,519.5 1,871.3 1,620.3 1,648.2 1,899.2 Total liabilities 34,015.8 31,841.2 32,866.3 2,174.6 1,149.5 Stockholders' equity 3,531.2 3,342.6 3,451.0 188.6 80.2 Avg Balance Sheet Loans 23,086.5 22,723.2 21,122.0 363.3 1,964.5 Securities (1) 9,137.0 9,200.5 8,687.8 (63.5) 449.2 Average earning assets 32,753.8 32,244.7 33,201.9 509.1 (448.1) Total assets 35,159.0 34,498.9 36,003.8 660.1 (844.8) Deposits 28,792.9 28,816.3 30,029.8 (23.4) (1,236.9) Short-term borrowings 2,098.6 1,575.8 1,689.9 522.8 408.7 Total liabilities 31,746.2 31,270.2 32,396.7 476.0 (650.5) Stockholders' equity 3,412.8 3,228.7 3,607.1 184.1 (194.3) Loan yield 5.54% 5.12% 3.72% 42 bps 182 bps Securities yield 2.35% 2.29% 1.98% 6 bps 37 bps Cost of IB deposits 1.65% 0.96% 0.10% 69 bps 155 bps Loan/Deposit ratio (EOP) 79.03% 79.51% 69.91% -48 bps 912 bps
Operating Results *Non-GAAP measure: see slide 27 for non-GAAP reconciliation 1Q22 2Q22 3Q22 4Q22 1Q23 Operating PPNR (TE)* ($000) 134,501 146,873 174,745 185,026 167,024 Net Interest Income (TE) ($000) 231,008 248,317 282,910 298,116 287,578 Net Interest Margin (TE) 2.81% 3.04% 3.54% 3.68% 3.55% Operating Noninterest Income* ($000) 83,432 85,653 85,337 77,064 80,330 Operating Expense* ($000) 179,939 187,097 193,502 190,154 200,884 Efficiency Ratio 56.03% 54.95% 51.62% 49.81% 53.76% Results *Non-GAAP measures. See slides 29-31 for non-GAAP reconciliations 4Q19 1Q20 2Q20 3Q20 4Q20 Operating PPNR (TE)* ($000) 125,660 115,688 118,518 126,346 130,607 Net Interest Income (TE)* ($000) 236,736 234,636 241,114 238,372 241,401 Net Interest Margin (TE)* 3.43% 3.41% 3.23% 3.23% 3.22% Noninterest Income ($000) 82,924 84,387 73,943 83,748 82,350 Operating Expense* ($000) 194,000 203,335 196,539 195,774 193,144 Efficiency Ratio* 58.88% 62.06% 60.74% 59.29% 58.23% CHANCOCK WHITNEY 27
Balance Sheet Summary 1Q22 2Q22 3Q22 4Q22 1Q23 Average Loans ($MM) 21,122 21,658 22,139 22,723 23,087 Average Total Securities ($MM) 8,688 8,979 9,177 9,201 9,137 Average Deposits ($MM) 30,030 29,980 29,181 28,816 28,793 Loan Yield (TE) 3.72% 3.86% 4.49% 5.12% 5.54% Cost of Deposits 0.05% 0.07% 0.18% 0.50% 0.91% Tangible Common Equity Ratio 7.15% 7.21% 6.73% 7.09% 7.16% Balance Sheet Summary 4Q19 1Q20 2Q20 3Q20 4Q20 Average Loans ($MM) 21,038 21,234 22,957 22,408 22,066 Average Total Securities ($MM) 6,202 6,149 6,130 6,389 6,921 Average Deposits ($MM) 23,848 24,327 26,703 26,764 27,040 Loan Yield (TE) 4.69% 4.56% 4.04% 3.95% 3.99% Cost of Interest Bearing Deposits 1.11% 1.01% 0.58% 0.39% 0.31% Tangible Common Equity Ratio 8.45% 8.00% 7.33% 7.53% 7.64% CHANCOCK WHITNEY 28
Operating Revenue (TE), Operating PPNR (TE) Reconciliation Three Months Ended (in thousands) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Net interest income $284,994 $295,501 $280,307 $245,732 $228,463 Noninterest income 80,330 77,064 85,337 85,653 83,432 Total revenue $365,324 $372,565 $365,644 $331,385 $311,895 Taxable equivalent adjustment 2,584 2,615 2,603 2,585 2,545 Nonoperating revenue — — — — — Operating revenue (TE) $367,908 $375,180 $368,247 $333,970 $314,440 Noninterest expense (200,884) (190,154) (193,502) (187,097) (179,939) Nonoperating expense — — — — — Operating expense (200,884) (190,154) (193,502) (187,097) (179,939) Operating pre-provision net revenue (TE) $167,024 $185,026 $174,745 $146,873 $134,501 Total Revenue (TE), Operating PPNR (TE) Reconciliations Taxable equivalent (TE) amounts are calculated using a federal income tax rate of 21%. Three Months Ended (in thousands) 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Net interest income $238,286 $235,183 $237,866 $231,188 $233,156 Noninterest income 82,350 83,748 73,943 84,387 82,924 Total revenue $320,636 $318,931 $311,809 $315,575 $316,080 Taxable equivalent adjustment 3,115 3,189 3,248 3,448 3,580 Total revenue (TE) $323,751 $322,120 $315,057 $319,023 $319,660 Noninterest expense (193,144) (195,774) (196,539) (203,335) (197,856) Nonoperating expense — — — — 3,856 Operating pre-provision net revenue $130,607 $126,346 $118,518 $115,688 $125,660 CHANCOCK WHITNEY 31 Taxable equivalent (TE) amounts are calculated using a federal tax rate of 21%
Current Hedge Positions Cash Flow (CF) Hedges Receive 215 bps versus paying 1 month SOFR on $1.6 billion $400 million of CF hedges were terminated in 1Q23 to slightly reduce asset duration to match a similar reduction in liability duration; provides $5.1 million of annual NII support given stable rates Total Termination Value on remaining active CF Hedges is approximately ($81) million as of 3/31/23 Future maturities of existing CF hedges range from December 2025 through March 2028 Fair Value (FV) Hedges $559 million in securities are hedged with $514 million of FV hedges Duration (Market Price Risk) reduced from approximately 7.3 years to 3.3 years on hedged securities Terminated $203 million in FV hedges in 1Q23 at a gain of $16.6 million (will be recognized as a book value adjustment and increase the asset yield on the underlying assets by 106 bps; provides $2.1 million of NII support over the remaining life of the underlying bonds) Current Termination Value of FV hedges is approximately $19 million at 3/31/2023 FV hedges become fully effective beginning January 2025 through July 2026; at that point we pay fixed 1.89% and receive the FF effective rate (resulting in these bonds being a variable rate of FF plus 48 bps) When FV hedges are terminated, the value of each hedge is an adjustment to the book value of the underlying security, thereby changing its current book yield and extending its duration
First Quarter 2023 Earnings Conference Call 4/18/2023 HANCOCK WHITNEY