Hancock Whitney (HWC) 16 Jan 202019 Q4 Earnings call transcript

Company Profile

Participants

Trisha Voltz Carlson	Investor Relations Manager
John Hairston	President and Chief Executive Officer
Michael Achary	Chief Financial Officer
Christopher Ziluca	Chief Credit Officer
Catherine Mealor	Keefe Bruyette & Woods, Inc.
Michael Rose	Raymond James Financial, Inc.
Brad Milsaps	Piper Sandler Companies
Casey Haire	Jefferies Group LLC
Matt Olney	Stephens, Inc.
Ebrahim Poonawala	Bank of America Merrill Lynch
Jennifer Demba	SunTrust Robinson Humphrey
Christopher Marinac	Janney Montgomery Scott LLC
Will Curtiss	Hovde Group

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to Hancock Whitney Corporation’s Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this call may be recorded.

I would now like to introduce your host for today’s conference, Trisha Carlson, Investor Relations Manager.

begin. may You

Trisha Voltz Carlson

good and Thank morning. you

yesterday’s During today’s therein. recent would language XX-K, forward-looking and with We including the uncertainties may to we that the remind identified most published Harbor make like Safe everyone statements. the presentation, and call, to company’s and release risk was in review

differ that or ability Whitney’s plans results is but strategies, forward-looking by predict from or project such forward-looking limited. our or place actual on no revise results statements and Whitney you Hancock economic inherently the statements. statements. set are performance developments reflected predict obligation reasonable Hancock or accurately our to could the We are forward-looking in forward-looking any reliance update assumptions, not believe or materially market implied to any undue forth future on undertakes to effects expectations those or statements. based And of cautioned

some financial this of morning In remarks non-GAAP contain the addition, measures.

the the comparable Relations measures X-K webcast included You can The also financial most slides on the GAAP link earnings call find with in posted release in are presentation our website. tables. and conference to Investor reconciliations our

call. reference and Credit Hairston, these of will in in Achary, slides John Officer. We call today’s Chris are President today’s Mike some CEO; Chief and Participating CFO; Ziluca,

turn over will to call the I now John Hairston.

John Hairston

healthy had Thanks, season. everyone. Trisha, Year, and and enjoyable holiday a New hope you We happy

note, surpassing $X.XX, solid As noted with up positive quarter. in our completed expectations linked a release yesterday, Earnings on costs X% excluding we results. merger were XXXX

decreased. million. expanded even a reduction levels of energy growth the quarter, and we remained share X. loan including our line increased NIM repurchases just Criticized in capital with portfolio leverage to guidance, during our Our loans and quarter over $XX with strong, operating quarter in reported

excluding were up ratio year-over-year loans Loans points. to XX XXXX, Criticized costs the Operating was our $X.X $XX increased TCE compared was grew and story nonperforming both merger up. declined XXXX. leverage million similar. Earnings billion. For year the and basis

began available we deck XXXX, a back, focused indicating our those look has in refer on through capitalizing positive to remains in on building markets. opportunities X team Please years. improvement upon company also made the earnings X-year Slide As our the see momentum and marked to

new reevaluate that and was designed appropriate we strategies a had make in the us for. environments rate course profitability charted and to We cause return XXXX planned to us to adjustments. Challenging credit levels

acquisitions. and earnings. During transactions the restarted years we benefitted a economy to same in past from that time accretive We immediately growing X nature in period, financial U.S. the X completed and were

capital a with over grow strengthened assets, in the best growth, our our our have we through to dividends, acquisitions. entry have growth, remix of in has increasing in new repurchases, stock strong helped ones. lending managed organic remained facilitated Along in markets, interest deliberate all, it it, and Through the transactions profitable the believe, $XX existing we to position and shareholders, and and and company billion mergers

and and peer credit falling to areas focus better despite we worked margin to bring rate With for back vigorously environment, addresses metrics holding levels than X peer to Slide a averages. our profitability XXXX. back or

on progress average above both, made have We actually on one. moving

past The the XXXX, levels. In we NIM. actually of X we a top on X quarter margin. for achieved shows better-than-peer-average chart right first Then Slide peer have the our reported quarters,

not lose it keep takes check sight can it on this what there. to box one, the we While on will we

related metrics to are other The X quality. asset

XX points only the TDRs. on of on narrowed basis XXXX loans made points have today, both. to XXX has progress the have has loans gap diminished do, basis to while criticized peers quarter to points NPLs and from gap still basis XX The points. in from XXX nonperforming on work meaningful to We But basis on especially first

each do we we Objectives Turning January, now CSOs updated on future, our have XX. or Slide Strategic Corporate the found as to

That not the plan. based multiyear and CSOs business annual on results Our our changed. of budget has are

of profitability X longer out, our With particular represented metrics, Instead discussing the target a conventional for a better accomplish goals rates the to we X-year business we achieving we the annualized sharing specifying years an opted approach expect we plan. take early. are a outlook quarter like or expectations by previous goals. ones, term for more change interest If find acquisition the to to

and more changes challenges, presents longer environment could achieve. the us it take If to

convey about are to the questions readiness and today, description of headed, in scalability. is meant on we are investments. months, provides technology deck company CSOs where multiyear and investor we In the all Slide recent based outlook technology our believe shareholder the to value. where company’s focus in a Our designed fielded we enhance XX short

company The and improvements, competitive scalable both over already specifically quarters. in additional technology, deploying several the sales is with next

Mike will additional I that, the details. With comments few a for turn over call to and

Michael Achary

$X million merger or final MidSouth the Thanks, for to share and per $X.XX John. everyone. was Good costs morning, $X.XX nearly the EPS the acquisition. included of quarter related

So EPS expenses $X.XX. was excluding a nonoperating those

year, $XX the of include but related basis, $X.XX million For MSL reported merger EPS a did costs. almost on was

Excluding $X.XX. expected. growth year-over-year those within the in coming average was costs, line mid-single-digit Loan our quarter guidance operating the EPS with company in as growth for the for of year was

third $XXX MidSouth the million of did add quarter. loans in

decrease million XXXX. in saw over However, loans legacy $XXX a energy the course of of we also

reduction shrinking footprint business. our offsetting and more continue other with lines energy across in book and to that of in production XXXX granular specialty expect our We

while type activity no during do see expect and energy below continued that our remaining there problem to hit energy to as one-off are goal concentration our we cycle. on the of charge-offs of lending loans from the XXXX were we to goal energy quarter, type our we resolve X% de-emphasis strategic updating this with We X% X%,

resolving to blip pleased the be We’re XX related to exam. on September quarter million and after national loans in credit $XX from a were Criticized in track back last problem MidSouth shared credits. down

$XX Nonperforming loans of million. this had quarter a increase with small uptick an

improvement. show did numbers year-over-year our However,

basis the quarter-over-quarter always improvement that folks not do we will linear. to metrics, see progress forward, and annual but expect asset be Going remind on quality an continued our

net linked-quarter, Proactive year of points same reported the will deposit and bright year in XXXX Our NIM yields and reducing focus a to and a be XXXX. management costs with year-over-year. was margin interest expansion included focus that the for significant were both quarter quarter loan continue the one spots improving on and in ago

quarter-over-quarter. Slide XX NIM details the change

funding were As basis you The in full a quarter. net the points overall impact accretion of the interest MSL and the with of helped in swap from that acquisition impact last point can this from CDs to home the drive the see basis tailwind, and recent drove that expansion cuts quarter for were for altogether advances the headwinds. was quarter related and of There X brokered a recoveries rate welcome Fed XX to loan no quarter. coupled expansion

do our a forward, as CECL. Going discount to under see part we levels normal some in runoff reclass our expect of accretion as well activity from

activities management noted portfolio do expect the our remain given to However, we we core NIM stable. earlier, relatively

NIM additional any level XXXX. basically of guidance was specialty the Our cuts income include flat income. lower of was addition of as rate not does offset a linked-quarter The MidSouth’s quarter by in fees full

lines. million fees however, partly by the $XX up For specialty those year, were driven

about from MidSouth expense Operating total to as that up expense. was $X.X related quarter’s added $X million full linked-quarter were and personal million of a expenses impact expected, operating

in fourth noted the quarter. As all earlier, were saves MSL achieved related cost

the related decrease third strong John remained earlier, in with year was ending announced quarter noted we stock the at X.XX%. The from October. TCE As to capital buyback

ASR. included program As agreement an or into shares fourth October accelerated a quarter’s to we an X.X million repurchase to XX our entered about stock in reminder, share of is one, EPS million received we On which common on calculation. X repurchase shares our day

transaction for stock goals receive ASR stock it over a the allows We expect shares similar us the deal. our improving period. The profitability finally, basically of as shares a consisting number longer-term our balance forward a the by of mid-year and both issued includes to of cash to essentially near-term XX CSOs. guidance number on dependent number changing outlook And from that shares of for our Slide the and the MidSouth price acquisition, with buyback of to

to the call I’ll now John. turn back

John Hairston

And you, Thank let’s call Mike. for questions. open the

Operator

And is Instructions] question from KBW. Mealor first [Operator from our Catherine

now is open. line Your

Catherine Mealor

Good Thanks. morning.

John Hairston

Good morning.

Catherine Mealor

guide. you the if start wondering I’m first fee can on just

X% fees getting what how bit you’re think be how through specialty a we You had that bit in year, of what Thanks. said that that to guidance lower should that talk XXXX? the will than X% guidance you about which a is little including Street next you’re fees think little we up just saw and I to the about by you level in versus been believe Can modeling.

John Hairston

income. specialty fees of The is this and assume environment, a outperformed. didn’t Mike I’m is And this time add not course, very guidance when Catherine. color things Sure, out year. rate John forward-looking might Then, some typically want same the which way done. that for work last on beneficial fees the presumes to static thing and We

So would the that I on environment conservative fair depending rate a what say little it think guidance like. the may looks to be be

which flat presumes a little in also That little it, mortgage may also refi income rate be environment conservative. very

in to will believe quarters. the we So we try honest be what coming in very happen

be income. And helpful may to environment in conservative. prove rate so, our terribly fee assumptions are That won’t the be that

you Mike, add? you want else got anything to

Michael Achary

Yeah, thank John. you,

guidance. have of the outperform range the think an And I to on I admittedly fees, X% guidance conservative side. So to X% certainly again, we there that is on the think opportunity

half we of fee As things that really mentioned, mentioned, look our John especially that’s XXXX, so was almost income and BOLI, banking mortgage second John all the capital derivative over fees, growth venture our the fees, in syndication. if specialty lines of back, like

in go performance complete it the on those point the lines, performance, of is income second this not We XXXX of in to something fee is this that assumption at those specialty had all count we we the with can we really as growth excellent have feel XXXX. certainly absolutely potential half confidence. while And that into repeat lines

So again, and outperform, I think. certainly guidance the to conservative an opportunity around assumption

Catherine Mealor

CSO Okay. goals. appreciate then, I And That’s the term longer helpful.

got As think – then, this expense there with is together. growth, of stable X% maybe fairly some of and this we growth And piece to year, guidance your margin. we with there. We’ve then, higher mid-single-digit But growth. kind which fee that a about X% kind upside of coupled low-single-digit if

about for it operating leverage and we a should operating positive maybe like a be or year? get show think do leverage way year positive to there to the think that this more hard that’s are feels Is event. you XXXX ways It you will of this

Michael Achary

be right. we’re in around outperform But loan we I think think Well, probably in growth I opportunities side, have talked the think to bit. in income. those I The income. opportunities guidance fee also We again And certainly, giving do have is conservative we’re that opportunity we about spread you’re if going to that a mid-single-digits.

our to some If the perform we have an accretion. to we absolutely around well, there related have to continues outperform. then NIM, opportunity economy And headwinds

Some an guidance, mentioned some of believe accounting it good related related moving is the CECL change in to the to ACL. excellent we as when we to have our the that and discount that of NIM. to stability opportunity to core have really comes we But

You’ve materials. seen our

job remix think can little our excellent focus. bit later, that I but with about especially, a deposit done We more we’ve cost. an talk on

absolutely So helped things XXXX that in around us think gives in will continue certainly efforts year. leverage and the those this some positive year opportunities I to show operating outperform NIM us this

John Hairston

which of management is this the the number years. I the X% you’d that, to expense we’ve guess, The be would expense what several of last X.X%, call since I add up John. increases the, broke the type we guidance brought same to apart thing you indicative Catherine, of normal had in is, would inflationary only

our take to teams increase investment. the The in That’s understand, offensive to geared of easy number, overall bankers border. to which and western MSL, advantage is most out rest border the of had sweeping disruption that our from we’ve technology probably what expense the all investment, is market in purely is take eastern

believe we benefit occurring of the the some to invest of timing. of the this a And the So load get is so, offensive year before and doing to and that gains is good we timing expense playing that ball. aggressively lead may

better improvement leverage operating than may say in you XXXX when So XXXX. be

that’s And all of timing relative We a good absolutely will may positive. benefit in investment to XXXX believe be But XXXX. to little lead a the dampened. bit it be that more

positive expense It’s It’s we at would the we expect you be negative. we’re going a benefits – What where to looking look of at forward. as encourage So number, not. investing. it because don’t

Catherine Mealor

you Right. super Thank That’s helpful. so much.

John Hairston

questions. the bet. Thanks for You

Operator

you. Thank

next from James. Our Michael Raymond question is Rose from

Your line is now open.

Michael Rose

my for questions. Hey, thanks taking

additional multiyear incremental talking planned. build-out, XXXX, wanted the should expect the meaning initiatives Slide XXXX appreciate that a go and Just year? back of to outside period we investment expenses. how to growth I stand guys the Thanks. of that about XX, trying you could this the X% all into have Is you beyond technology have terms investments in size to X.X% technology be. will where investment long and expense of then to Just every you the kind inflationary XXXX,

John Hairston

question, the This Michael. XXXX expense to is the John. in for growth playing No, Thanks you’d down. expect

We’re doing around the about terms of specifically is not been cover really guidance from aggressively all that. of operational this prepared and with X synergies beginning. have been than numeric able We’ve for increases within years now wrapping technology the this up company. or the more investment technology the multiyear the But to X give in and X, investments, those to last cost heretofore, a

I create together that, look investments in XXXX XXXX. the But Is X in doing larger clear? in that back for the for over one increases X. more plus XXXX little bit customary our to The up disruption, investments advantageous would to combination market pile those the versus of

Michael Rose

that’s helpful. Okay,

So the investment this is end of kind the of process.

clear. That’s Okay.

John Hairston

to you’d a too years. lot investment, finish Michael, last weeds course. did complicate just is don’t is dynamics, say of would say normalized. the there But Well, automation back-office want far I we get the kind investment never of also, the the several But to in think and what of in no it. And it’s and more I I

So office in late areas from what part to paper of whatnot. elimination remainder cover the that bulk will make work that being revenue branches some happen back those in operational come profitable the just the it very XXXX, through simply the But synergies of a the and cost, venture. that is reductions the where just XXXX of away goes of and and growth,

analytics, we’re not the those to detail there, So beneficial. of and and usage XXXX. adoption revenue. in dramatically has create facilitate and did the operatings digital both have will around. prepared increased redirection But additional any That used over servicing to of digital XXXX dollars also which really The give to brick-and-mortar for out transactions expense of in been some from investments to

at as new. look ago would a something I years finishing few think this I we So more began what than

already technology We of the of bulk cost. have all our absorbed

Michael Rose

very helpful. It’s

Michael Achary

Mike. Mike, is this

investments in is some help As the and this the we’ll John That XXXX what mentioned, future see of offset will benefits making investments we’re year. expenses. of

Michael Rose

the touch of the in follow-up on quality. for the me, understood. wanted So has past leverage, previous Energy couple question months. just about clearly operating One asset been to headlines over

cycle, downturn, from you guys. Just you now? XXXX, in Where first wanted of space the sense of being improvement we this to XXXX now are negative get across process think a years the the kind migration couple and of of the second some

point? next of Do near of of over this year think you or of kind plays course kind it out we the the end this the is at Thanks. are

John Hairston

impact is And – the balance really on start at energy. and Well, altogether. wave I’ll we the is reducing to AQ John. specifically. I’ll this two Chris energy is use if But and the the sheet, of been balances AQ look we’ve words, look steadily One pretty second at second the sheet the there address can is specifically. your ways balance

don’t And but and pretty going we’ve some of reduction in that numbers given, healthy for remember the it’s been energy, the continue. color a outstanding. slide And to that’s I

is volatile. energy E&P good more specifically has while been And and a business

business, full the of the to and time So book relationship we’re continue continue of reduce. overall will that to non-core of press as relationship on result, course a we we’re down while taking paper care core but responsible being over clients,

clients, very energy doing work So we full a with about. relationship we know new no lot are core except

the to so, X% versus the play target there. the that’s in guidance X% you X%, noted And when the

will cycle down. another energy in balances So the impact force those of

some, that the of includes all more gave And lines for of some granular, the by not the offset loan guidance we of reductions, year, energy business. it expected and spready more

So balance hopefully Chris, talk the that about specifically? sheet want AQ address to will you part.

Christopher Ziluca

be going continue to bounce Yeah. my any anticipate perspective we energy really an is sector. from focus in sort I improvement don’t the of an we think for back area us. to of that mean, And –

continue from an are drive the specifically. as perspective a down issues result, in energy to actions quality asset asset more portfolio quality our of all So to

John Hairston

interesting couple of in energy. to I again. bought the the John when related is we phenomena was is a book, think, improvement some This And impressive, the that quarters last really lot in criticized of

the prices lesser a so and And downward gas. which has almost if pressure uniquely, uniquely crude we nat particularly extent, been expect performance of not really E&P, didn’t completely the see with to to

our it’s fit as still Therefore, less predictable be in so, disappointing to has certainly to And industry. have we’re that energy. to less doesn’t volatile desire about an earnings future. even talking somewhat proven the And

reason, will continue to book for energy So the decline. that

Michael Rose

all That’s very much. color guys it. for helpful. I you very the Thank appreciate you [indiscernible]. Thank

John Hairston

You bet.

Operator

Thank you.

Our Piper question next Sandler. from Milsaps from is Brad

open. line now Your is

Brad Milsaps

guys. Hi, morning, good

John Hairston

Brad. morning, Good

Brad Milsaps

I delve appreciate more a just stable your NIM wanted maybe NIM. color all guidance I and the guidance. to into core the around little a bit

Slide Just were kind bit the in you’ve of maybe deposit from to of due a balance come fair kind maybe loan yields, we is that and changes of moving some in to XX, going parts the see think, it’s you’ll in might show side, context if amount been there, more versus the the expired do those linked-quarter coming stability curious I think running you tick particularly, on curious you make particularly I of, specials specials where just quarters. up opportunities think, a to sheet new that down

Michael Achary

Yeah.

equity some that, of the we’ve related consumer Specifically done. home that was Brad, and on some that of promotions

there think, bit. have our core are efforts that on yield forward opportunity help to bounce for new question, answer our if the stable, of with to not an little a kind to basis outperform NIM go expect several But absolutely us back. a on I will production keep we our your So to areas

certainly be remixing will And that’s it’s efforts loan continue manage having to again, and the been, yields, and that’s striving will so absolutely book for past down so. in NIM bright a spot granular, our production First to our segment continue. around efforts our or in think, more year the higher I

pushback. had In reducing that way think, of rates slide you in customer there, really success cost with it in in rates. proactive deposit a of can deck, pretty good Second, our in shows deposits. we’ve deposit And I see the our the breakout being monthly little of very pretty

the environment. in aiding we efforts those in of deposit flat a bit absolutely pretty especially be So good a Kind at CD of believe our than less cost is $X rate half billion XXXX, a little coming even continue than a be quantity will will maturities, bit of the bit we of little phase X%. have what first that off of that less will

those CDs significantly helpful. obviously lower of be reinvestment the So will at rate a

And the sheet. thirdly, managing then balance

talk also again, to at our portfolio. bond have we, think have But to bit. guidance opportunities to – will certainly outperform of loan certainly some able I I potentially things you opportunities not the of be that But in maybe sense? I’m growth restructuring make we as now. mentioned, our about to any helpful a look doing right those ready on execute overall are any that Does detail if to were that degree efforts.

Brad Milsaps

the one you the Yeah. starting expenses. kind And release? with Great. guys million disclosed expense guidance then that kind of helpful. question it core That’s the $XXX follow-up Is the of the is point number in right XXXX, just versus on housekeeping

Michael Achary

That’s correct.

related So $XX MSL. million to million merger $XXX cost that of excludes about

Brad Milsaps

that revenues for both regards? you’re say you’ve to maybe of gone sort case expenses, conservative fee with in scenario fair for kind maybe worst-case guidance worst be your of and it Would

Michael Achary

given. discussion the conservative as Well, fees. that’s that think some guidance mentioned We of in in the of do kind we early we’ve around

there’s opportunity that are on the occur or think, XXXX. expense an levels X% side, in of over the to of will end believe the so, to the the those range. But we I come lower On maybe X% that course

investments adds the modest numbers. pretty then X% of expenses, rounds the annualization some the disruption And or base X% a market related so. and again kind have another well that We out increase the in MSL technology as to as then

John Hairston

John. Brad. This is Yeah,

number. I in offensive of comment, spend only mentioned case earlier, that the lot on using just phrase worst a think the I expense that.

that And the wouldn’t parts beat able we’re our I at grow higher more terms to bankers expect we of want of are those granular in because So coming to bankers being targeted own were our to we number, think, number unable we to into now, those business the hire. kind I of of areas. the

those create don’t do to those say, investments I so, want down be but want I high, the And I to see make to road. expenses wanted value and to returns

Michael Achary

shy disruption… Yeah. to spending market those advantage I take going money about to don’t think we’re of

John Hairston

all. at Not

I a it. good to think, it’s do time

Michael Achary

little markets looking a as time It’s opportunity once to happening a And again, that bit much that opportunities disruption talked around. Yeah. something of the about serve. in those lifetime in that we we’re enhance with we many

John Hairston

by This focused It’s fact large as not in are at exacerbated markets some very, are. very somewhat is those John. the our that in also of we the organizations markets as those –

things the is And invest that minds there. clients, pretty and hearts we’re and aggressive all so of of all that time sum the prospective of opportunity good a why win believe so in we to it’s

Brad Milsaps

it. Thank I really guys. you, appreciate

John Hairston

Sure.

You bet.

Operator

you. Thank

Our next from is question Casey Jefferies. Haire from

now Your line open. is

Casey Haire

of that Thanks. disruption seeing versus that – from tech you guys it like could then have and would driving any to opportunities. the How Good expenses that X% Wanted X XXXX? MSL, is between that components, And driving again, then each you contribute you’re core Can your the be is guys X%? the – X.X%, X% to X% just to gravy disruptions the inflation to the a expectation much Or provide morning, to do on core breakdown there touch to X%. per guidance? guys.

Michael Achary

add we tech/market as the a while then around of I will and start expenses the X% Casey, of X.X%. the of at and to [ph] annualization base ago, little expenditures this related is [X%] the think, expenses first looking increase the X.X%. disruption kind Mike. of to kind then the buildup another mentioned, MSL And I’ll year-to-year with X%,

so. to get we now that’s X.X% the or So

Casey Haire

know, some tech like, on some I the assumed like, revenues that do assuming mentioned Are you that from any of year. assume these is mid-single-digit the – is so produce business disruption this then, will Okay. growth side, this you tires year? the loan you guide, And Great. get

Michael Achary

first I to your think, expense disruption some any come that loan benefit don’t market year this that growth spend. will with related any But given point. the offsets. about off, of this The in answer revenue the question does market Well, to around technology we’ve disruption, associated not mid-single-digits is related at there XXXX the to include benefits guidance

Casey Haire

you. Got

John Hairston

We’re timing some times in utilities pretty we’ve the the year. the loaded the lending far half weeds the working schedule the for of towards down on that, of been the first on investment, is of but I’ll share rollout some in granular

timing is that we’re we’re a then pretty that, some but quickly the quickly. that for pretty counting giving. the the of And mid-year gate additional out hit bankers benefit follow guidance on that, of not presuming that successful on we we addition to may the that If see So rollout. XXXX, in we’re

little they than if come it many is be and if is. great, we away it to from available and pro working more hard timing longer, a outperform, when But cost on kind takes of I little the there, hires who’s on quarters but the the forma what the you’re XXXX. And then will predict this know,

timing, CSOs. to terms the direction. of there what we we in get maybe of to So impact And is be invest a outperform where best to of give expect CSOs the direction and the we but this if we’re expressed And we’ll think doing of that year. that’s intended our our earlier, kind will

Casey Haire

of in Okay. the front, thinking switching loans. And us sort grow the most to line just with of are think, balance – just sheet I NII the

that guys just I’m profile? expectation guys deposits. you you Or that I Is bit we side You profile. assets, the on positive average that does the some little lag earning strong have funding brokered growth? dip saw into get that to liquidity a dip shifts into does and the do it track liquidity it, guys loan guess, mix your with trying a basically, if

Michael Achary

a combination bit little of of a think I both.

you for billion. bond the assume at So pretty that can stay purposes, portfolio practical all $X.X will around static

have NIM On the ratio to asset liquidity opportunities, a and lot we that of side, manage a of assured maximize in in net a offset how think, do as well different But that with that and we’re going terms to move bit of loan-to-deposit helps a growth. earning sheet. little flexibility of interest up have lot the we way certainly, our levers income. of And we balance as again avenues some rest I that us

Casey Haire

Last on you. sort X for the one Got day CECL of just me provisioning.

Your on a for saying provision, here what Is first quarter quarter the million similar growth $X guide you’re basically versus it will flat loan fourth at expectation be pace. for that you’re provisioning. doesn’t of it? to impact it X that and CECL as – from a Is it seems usual like business the much day it’s – there’s not an way look at

Michael Achary

Yeah.

be as a and it’s that impacted that be in from going I forward, think certainly provisioning duration. growth loan will growth things but by also nature, The been. CECL Certainly, both have the continue to kind of expectations important always loss charge-offs, for case. we will loan that quarters next couple the of perspective terms the of of

we impact as the provisioning. world that things CECL will the all move are those So through

for is. impact as But I just will described of next in less. CECL we of provisioning out kind environment. The macroeconomic Right of it really that the that of there, that’s couple thing what now, too, but that’s kind to of think, is other is is the the or our down around at certainly fairly assumptions the the some benign, change point form road quarters, have

Casey Haire

Great. Okay.

The the XXXX is if one overall? that core Just versus I stable, Or versus X.XX%? NIM more fourth is relatively could. that at quarter here

Michael Achary

bit relative from for a potential little stability mean, I fourth it, quarter with about the talking some We’re expansion. on of

Casey Haire

Great. Thank you.

Michael Achary

You’re welcome.

Operator

Thank you.

Matt from is question Olney next from Inc. Our Stephens,

now open. Your line is

Matt Olney

behind growth strip you give granular I us can XXXX morning, the Good If more to of us lending, I MidSouth, guidance our you’ve loan of to categories you So the specifically loan commentary John, think, I was some thanks. to what’s guys. can mid-single-digits. more drive closer And organic these follow-up tell think, growth? X%? growth at and new loans? look details the more I on Hey, mentioned XXXX and which around you expect want on kind

John Hairston

and XXXX? essentially you’re XXXX takes puts growth about over So talking a loan on

Matt Olney

Right.

John Hairston

Did you I right? hear

Matt Olney

Right.

John Hairston

already Sure. the apps what going a Well, are won’t to That’s let’s talk I mentioned be We one. any energy, further declining first. about than go that.

mean, part think, not upside year, now. adjusted add-ons are the consumer I yield the right, just will risk lending risk-adjusted is don’t at yields captives just believe the attractive and the decline they’re is I as for right that are indirect financing on we – the the perhaps of upside

indirect. diminish we’ll So

quarter big think, for a paydown CRE QX, in was I fact.

million we I and and we that much growth actually about solid we quarter quarter down paydowns, granular was part consistent was had QX in of the expected, with number the about the X. of it offset But some than think, a is $XXX anticipated. of bigger which

So year. a I QX, to banking, good I commercial CRE, be banking, paydown it’s think, it though see will we’ll growth a the continue even story business think, big for in

we’re commercial across And should our the perhaps see year to investments markets banking particularly the begin back We we disruption advantages half see from and then some making. in market. begins and good as the of the middle

will the is think, headed be everything energy I for up and year. indirect else headed and really downward So

Matt Olney

transition of it runoff the a outlook. that reclass into XXXX? the I throughout pace margin the as reclass The the then, of or put ACO. we us for Can on and Okay. kind Mike, That’s around our And around from helpful. for CECL size XXXX, then help up this levels guidance lower guess, accretion commentary XQ models to you on range

Michael Achary

Yeah.

And from related a So of reclass, level that $X.X first the a to occur for that, more for million out will accretion the of little in even quarter. There so runoff the is the the should year. or point bit. it’s little on then bit that amount accretion around

Matt Olney

last I And on on see the think, this there. then, the we And and me TCE not CSOs. us appreciate EPS X-year And we’ve but you Okay. previous time? I seen gave why EPS that the question a CSOs. color the for in include ROA, ROTCE, to update. of this decision the didn’t update more appreciate Any

John Hairston

I certainly, macro range think, I CSOs with a numbers. to of you point targets, an that we those perspective, from trying ROA. we’ve given think, challenges it by EPS of imply in Matt. information the are probably an the of view, now enough projecting we’re substituting to just thought served that around can was bit And again, EPS the more approach in a little context it X-year because more But better kind from

Matt Olney

Thank sense. makes That Okay. you.

John Hairston

You bet.

Operator

Thank you.

Our next Poonawala from Securities. Ebrahim from question is BofA

Your line is open. now

Ebrahim Poonawala

Good morning, guys.

John Hairston

morning. Good

Ebrahim Poonawala

Just, I question. guess, one

Is times mentioned a we suggest we in don’t because – that any the that a Given MidSouth terms could of type kind Does of likely being market in on dislocations you most a deal of see path see participant happening the another taking should multiple of where as that a year that’s M&A. larger deal expect M&A? and Hancock conclusion? you’ve fair advantage

Michael Achary

Yeah.

I it’s absolutely, fair. think,

M&A think, us you an from or X, So last X I is what least, can perspective, or kind at year we’ve the expect in years. next of transactions from for X the done the

opportunities Add we to So on I year nature of sense really that the that the for market think be and the us. X. disruption things or of think, have will next for stance, from and NBC we our make First MidSouth,

Ebrahim Poonawala

stock? Could open yet the of terms are of and stock where in you as do additional in buy you how us quarter. buy buyback, operate able which in, second think, and I million to the maintain terms Mike, you buybacks? the we the part shares Just should And more and just in so meantime, TCE of be to want remind the additional That’s – about in come you levels the market bank about ASR any mentioned want you of in helpful. to $X.X

Michael Achary

Sure.

So related in projected. stronger came – the [ph], at bit a little we than that we you had probably see [XX.XX] the to number TCE,

TCE buybacks. as and as an good or not that challenge we’re a implement future any toward being far So

stock So our and back ASR as than get still the of somewhere on said quarter. we own, while kind back between that At ASR does the X is before, from end million that we’re the on of focused the still shares. authority point, second no not later X.X presumably happen, We buying have really we’ll million happening. preclude And should remaining. the completing us ASR

be is a But our half, at second decision and looking point to doubt, think will of the this I intent those that and consider without certainly we’ll go-forward on ASR, the additional doing on So potentially shares. a at back that at look focus basis. completing benefits buying

Ebrahim Poonawala

I’m helpful. And sure. not last just question, one That’s

little growth about of, hear, potential in getting talked upcoming given and loan more or So this like year, for or if just the would remain terms sentiment across to business around done but expect you you’ve markets upside you’re things any we what growth, love around in should appetite? John, do to deal state the along things this color your cautious, seeing difference any you’re elections better we’ve week? got a your this as expect move markets later seeing surprise Is

John Hairston

question. It’s a great

any in seen quarter-over-quarter. We haven’t really sentiment change

a mindful are We disparity investment platforms could and to lead election fair those that some business. of that it year in amount concern is are who from the leaders and there is an the business

some have could industries. they may to beneficial direct concern for a it on as less growth. And so degree a if XXXX closer their investment that get and we And have impact curtail begin November to of beyond would in loan appetite, be that which environment

of quarters, in change maybe positive, where momentary at a anything, about that to is, It we’re seems couple no sentiment I wringing really died bit of recession any a hand had all. a normal. down sentiment simply to think And impact. lot So there because more now if have back hasn’t and was of sort slightly really good

would think, I sentiment be marketplace, our overall, considered positive. So

Ebrahim Poonawala

Thanks taking questions. it. Got my for

John Hairston

Sure. for you Thank asking.

Operator

you. Thank

is from from question next Jennifer Demba Our SunTrust.

now Your open. line is

Jennifer Demba

morning. Good you. Thank

John Hairston

morning. Good

Jennifer Demba

market the hiring with opportunities disruption. on Question

budget Sounds Louisiana hires how in and given gave? the guidance the like many your to guessing, the market, you you you – do And want Mississippi. have more expense legacy for at biased guidance, towards I’m XXXX,

John Hairston

And not more the across first footprint. where on to really disruption as remember, Nashville, beginning is the is It’s Well, healthcare promising question as core. a of our our Tennessee whole little look limited to where, out have bit practice well. spread really you we may

So franchise-wide opportunities. it’s more really

banking little so we opportunity, based The find a areas, if it’s where business granular of changes banking. on a of in bankers, numbers may more market, banking little be could In commercial And and bit bit terms lower. in be a it little very middle higher. if it’s number the in

bankers I to past across, we be share the want with any So that in hired single or would of wouldn’t in XXXX we it assumption public. the the really an largest have X But for year have number X.

So a little bit had more the substantial we’ve hiring past. in than

Jennifer Demba

helpful. earlier as details balance can you share to the are And, right Okay. restructuring might considering? any be considering what you now you Mike, call, That’s have sheet. Do you mentioned you in the

Michael Achary

related point portfolio the not to to that the is was some again, comment I to think was prepared bond and opportunity All doing in later stating that. related at anything The share I an year. as

Jennifer Demba

your other sounds missing Okay. guidance Last any conservative. based comments conversely income in like your call, Are opportunity parts more like there you feel are is guide the on parts feel earlier are like in or you right now? on the side environment question, fairly of there – have you fee this conservative feel the any for

Michael Achary

or the really disruption I balance think so. plan will add built is again sheet I there revenue to market don’t related that. no the growth opportunities, into to related that

the upside to those of to that’s investments some yield positive results, then should So guidance. begin certainly

Jennifer Demba

much. so Thanks

Michael Achary

You you. bet. Thank

Operator

you. Thank

Marinac Christopher question next is Our from Janney Montgomery. from

is now line Your open.

Christopher Marinac

morning. Good Thanks.

presentation yield the quick one in a that loan on last you night. mentioned Just the

I’m onetime new or changed when of that it much is little trend, than continue be bit will is issue. yield the that the the so here, just So X just change in is quarters? the last somewhat last if an Michael, drop loan to rates we worse the in look at This a curious real sort that quarter. But

John Hairston

new – precipitously, – not year’s the slide Chris, particular was average – more That day XX And new about the likes. and give to at initiate I’ll look they can you’re if but the he the business was This production we influenced cyclically if – curve heavily number toward throughout fourth LIBOR a in the rates, we John. curve actual got November, Slide transaction. production yield. little the you time rate between December, the pronounced the of our color. is this even the this deck, the talking December, around Mike October, rate add you of is by December. quarter and

that in X. rates And production so quarter but than the that business, teaser timestamp better X.XX. a those this lines That numbers the exacerbated usually come to a LIBOR dragged the the adjust was line for by us, is not on time which equity – prescriptively month big it good thing was XQ in number And was. December – than better which down expected computed expected to

was the mix. due lot number lower so like and a And number. that timing But of looks much to a

taxes lower. market that And so, we tax of benefit the also credit that there a a new also to the side. that, the little component was put on number But enjoyed

predict So books we wouldn’t what tough call have day the going But the be loan total. on and a I it really to impact is can sometime on an normal. on LIBOR it’s to put the that

that for how if the But you. that’s was. really got know to what color helpful don’t I number it was

Michael Achary

number that The only through to do add we expect I is as would that, thing improve XXXX. we go

Christopher Marinac

for you here. much color Okay. guys. super, very the additional Thank That’s

Operator

you. Thank

Hovde Our from Group. Curtiss next Will question is from

open. now Your line is

Will Curtiss

Hey, good everyone. morning,

John Hairston

Will. Hi,

Will Curtiss

But the you mean, able think Are modeling One of you’ve question, kind in expenses I out X.X. of is Thanks. merger back related bit I expenses addressed can of everything just that in of? those just provide of where terms little of we a else. – to curious terms out break in somewhat

John Hairston

It’s a categories. variety of different

kind related Some and And, total final well. of The that’s is some expense personnel that as our $XX was to cost other MSL. million. merger again, of

Will Curtiss

the color of… can provide of Okay. break is in not But And I out, as that pronounced how additional any there last to you terms know as majority where of in quarter. it’s terms

John Hairston

expense. that share personnel I I Yeah, just think and other between

Will Curtiss

all thanks. Okay, right,

John Hairston

bet. You

Operator

Thank to turn you. no I further call closing for would to questions. remarks. At Hairston time, the showing John this like over I’m back

John Hairston

on road Have constructive very the We great everyone, questions. sometime day. a good you Thanks, soon. some forward to for Okay. seeing look

Operator

Ladies call. for participating. you and Thank gentlemen, conference this today’s concludes

disconnect. now may You

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