HWC - Earnings call transcript Q1 2020 | Hancock Whitney Corporation

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Operator

Good day, ladies and gentlemen. And welcome to the Hancock Whitney Corporation’s First Quarter 2020 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.

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

You begin. may

Trisha Carlson

Thank you, and good morning.

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

on as which statements You were made any by of in the speak Whitney keep date should forward-looking only they made. mind Hancock that

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

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

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

these some reference of will in slides call. today’s We

Credit Officer. Achary, Hairston, and Mike Chief and call CFO; Chris John today’s Ziluca, are President in Participating CEO;

John I over Hairston. will now to call the turn

John Hairston

know what are I busy of day. and hope a healthy. appreciate you families Thanks, Trisha. And very morning, good joining is and your us you all on safe We we everyone.

to challenges on addressing Before update for the COVID-XX. has been like and of I’d discussing how the operating company you the quarter, results

approximately operating open our XX% working area As are modified have corporate by open the lobbies our noted XX% with And centers and X Slides in financial operations appointment and service fully and of on of only lanes. our remotely. with X, we teams drive-up

clients banking and and We’re in also mobile the center. assisting our contact online via

programs have assistance provide. other can and help any in clients We place of with we waivers type deferrals, to

funded and credits participated of total billion. Protection in expanded existing X,XXX draws a have We for on of Program SBA’s and Paycheck originating X, lines the Tranche loans almost $X.X

with and $X.X families defenses protection contributions communities personal neighborhoods, meals We donated nationally and including frontline. low-income evictions equipment million care have associates, fighting chefs in for direct food and health recognized services pantries local for catering on have partnered providing legal to and the and workers to

We’ve over many history, a Mike challenges we’ll been and make one years. are is our for the comments company few applying for while XXX different, same environmental open in will guided the the we have our through core this then about I and and questions. that values still quarter, call

quarter As noted release, for a per share. loss reported in of the we $X.XX yesterday’s

loss. happy not reported have a to We’re

themes. you However, if will into two see distinct you underlying look numbers, the

margin, net that strengthened income and provide well-managed performance. revenue First, a capital and a expenses interest believe results solid net of We with and levels. loan fee performance blend and solid pre-provision growth picture of income, liquidity

provision portfolio and Pandemic-related for segments and pressure The our energy. allowance losses. impact markets our on loan a potential theme sizable quarter related by and on impacted restrictions economic our mandated footprint COVID-XX on first and led to second the credit provision most energy loan is CECL, to pressure for in losses remaining

our related reserves prices We credits current pressure uncertainty of the Because for to and of built we related to in reserve portfolio energy demand COVID-XX, crude the loan problems. apply what we believe is COVID-XX. to loss appropriate an specific potential both

in of charge-offs, larger resolution recent higher that XX which, turn, Slide reserves on bankruptcy in on RBL resulted note than remaining RBL anticipated credits. and also We several drove credits

unprecedented in it’s challenges We Thus, the energy volatile additional raising energy to prudent of company possibility recognize believe we environment. to X%. funded are reserve this nearly the

are models used were to solid. in Those quarter, and XX. activity return to a economic for remained reserves loan CECL loss region. are on our predicting Slides prolonged Moody’s normal build our the for economic Despite XX capital detailed through models portfolio collective the

can buffer, deck COVID-XX is XX. March Slide as despite measure at regulatory shows associated bill. X%. capital, our above And XX of Slide in the and loss ratios in target quarter’s first remain well XX the the of minimums, our to due the capital deck, internal you the conservation our see TCE, on of we capital including reserve

stressed all buffers. cases, We inclusive stressed million capital in much through million $XXX XXXX baseline, And and under as levels capital highly we above conservation year-end $XXX scenarios. of have minimums, as and capital of our over over to regulatory the have stressed

can intention environment every have dividend While confidence economic future the going say the we hourly, we we is don’t even of current the that changing holds, and know at common the with what level rapidly, forward. maintaining

complete As buyback October. we announced have for noted and authority, release we we And ASR now, deck, have any put while hold. in plans do the the on did buyback last remaining some

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

Michael Achary

And morning, Thanks, John. good everyone.

of was million the those credit results reported $X.XX As first $XXX per for share. million a $X.XX or for loss provision of quarter. a we losses per $XXX Included or John in share noted,

also wrote the two equity company restructurings. $X.XX share million bankruptcy $X.X interest energy of We down credits per in and received or

a quarter our usually write-downs, quarter is PPNR, quarter ago. mentioned, fourth nearly every flat flat in PPNR the of first lowest the pretty is up a performance. XXXX aforementioned Also the As year first good same excluding year was but from that was so earning quarter, seasonally actually from equity reminder quarter a X.X%

of One last NIM. of X The down from the from stability our NIM last basis points drivers was quarter reported quarter. was that

with decline to of which accretion However, recent to was MidSouth. related was the the expected much runoff, related merger

NIM. rate on our a first linked down basis about was The of yield million $X.X quarter was cuts accretion the points. March quarter basis NIM by headwind X accounting X about in or points loan and clipped Purchase Fed our impact

levels pricing by in deposit out then expanded offset of X wholesale positively of point NIM funding damage and changes proactive our the our that back core about we and basis impact X However, If from basis accretion, NIM points. impacted quarter. most last

income $XXX,XXX related Fee and $X.X last in quarter. spot tax BOLI mainly up was $X.X another credit income. for Fees the quarter, million were bright million sales from in to

with service accommodations. and charges, Offsets in the waivers and all in areas were of significant as March impacts fees trust fees more impacted card COVID-XX fee other became as such

impact and such as other on well duration is account withdrawals, CD impact results future as fee fee as waivers COVID-XX of company fees. providing money The market certain waivers customers, for quarters. upon in transaction the Depending products the our will our penalty-free of

the for for up earlier. Expenses and those noted quarter. were expenses write-offs merger write-offs MidSouth After flat linked million company quarter, costs million quarter $X.X were and the equity fourth for in adjusting in of the include million $X.X linked $X.X the

a X, or we loans. John provision, color. did We a the provide adopt effective of million summary January an XXXX. period but Like quarter at of just me let ended $XXX most end little ACL with X.XX% others, went through the CECL bit more

given under the Certainly, a the loss especially one or our of in XXX% New the year-end Orleans large at $XXX in is and linked-quarter old exposures ALLL we model, market. the hospitality incurred of prudent energy million increase believe

the increase January for was of of taken remainder the million. $XX booked by losses $XXX covered on About million of through provision our adoption The million $XXX first CECL credit with was Xst capital. and was quarter

ACL provision, our of up and size our the Given around have we our disclosures loan portfolio. beefed

X XX deck. our are Slides Slides see in same The and earnings through through on XX. XX can Those disclosures those on CECL applies methodology the for You provision. included

provision. out of easy waterfall to is journey ACL the through an I which the wanted walks Slide first grasp while of our quarter, components to XX, our Slide XX during quarter call

our I to think customer is million related noteworthy of specific $XXX for $XX another that it’s for That’s million reserves collectively of aside are segments. $XXX certain building nearly we this credits million built nearly quarter. set being with reserves provision

ball into can’t our and quarters. the no the could the company in We impact modeling, over we in local believe COVID-XX and of a proactive We reserving know play future, outlook account multiple to loss sell so out projections economies one our We approach what this be. environment. took our we for and will took that crystal a CECL has region

And additional in it’s be be future while quarters, a position in so could know reserving to required too or quantify. to early

annualized Should a necessary, be and ample PPNR nearly foundation have just equity Tier our XX%. million at $XXX with X capital common of that over at solid we

before X turn I previous And back or for like XXXX guidance would whether term our near John, formally all CSOs. to year to I call for finally, suspend the

any the of call. provide in to level past, have formal related expectations we the at COVID-XX, we’ll during uncertainty but this can we the time, as guidance remainder this the not will share best we given of Given

With that, I’ll back call to turn the John.

John Hairston

Mike. you, Thank

Let’s ahead just straight to and go go questions.

Operator

you. Kevin our question Instructions] Davidson. from with comes the [Operator of line Fitzsimmons Thank first And D.A.

Kevin Fitzsimmons

Good morning, everyone. you? How are

John Hairston

morning, Good Kevin.

Kevin Fitzsimmons

say couch Mike, you heard enough, guess a is detailed it’s your approach in that have experiences And a admittedly and answer, question, been the past. to through took maybe guys toward big And the appreciate disclosure this a many modeling. I just you I morning. all you this - is deck the I right, the Mike? guys this proactive way in guess comments to I is tough and one

reopening economy helping and Katrina. customers through an out been You’ve with

crises You’ve energy-related past. the through been in

reserve of simply applied to the spit in So and this in in how maybe it talk learned was what experiences plugging it and out? build. of the from that’s lessons more if deciding it some numbers forecast, be Or and you terms those economic aggressive to can you

Michael Achary

morning. was of Yeah, I it all those things Kevin. Good really combined. think Hey,

our And of and of had going BP kind the in comes now back when quite crisis financial that in a oil this spill do DNA, the our experience, like to XXXX, and we be bit to proactive it’s things it Katrina, this. environment. to So before and certainly, and particular culture conservative have

again, this the range. other being now arrived of into in market, our the thought energy with Moody’s looked consideration New appropriately that the the are to at close Orleans we We’ve ACL to We as the took have is a We the impact hospitality modeling. those where and weighted up scenarios, version as on going approach. million $XXX most scenarios, brought things likely certainly paid used So them. we to attention took and well at proactive recent on

comments, this will And it’s reserving be to quarters And multiple forward. required. tell said in I that too we’ve believe over out additional think going certainly, I the might think as whether prepared play we early

to of case. Again, lots do that, prepared We’re capital. that’s have we if the

over build from. a to nearly million have Our X and XX%, base we common $XXX at Tier of PPNR of

that and capital. continue at every doing the We stressed We capacity feel intention looked about of our have to forward. We’ve capability and good going dividend. certainly that our

of company do So prepared here. there’s need we’re the to a going again, unknowns to of lot best forward. And do to our what interest we

that. best we the kind it’s can way think I of that couch

Kevin Fitzsimmons

Mike. right. All One Thanks, follow-up. quick

You there’ll as guys view you’re mentioned profitable, the and this assuming the at buybacks, more at and but CETX about How do of X%? reserve slowly capital to you - Is you bottom you maybe quarter, likely ratio. guys, do that ratio be that stay time? and that magnitude not for up here sitting you you and over the using look building TCE build not that a most guys

Michael Achary

below Again, we the think to things drop going TCO good again, past. X%, might We’ve that Yeah, prepared level let time in feel drop X% play But about additional that’s whether capital And go will forward. as below that. - TCE forward. right. below whether reserving our we the do need levels we’re so out will drop and may tell we I

Kevin Fitzsimmons

guys. Thanks, Okay.

John Hairston

Kevin. you, Thank

Operator

[Operator I’m this Instructions] time. no at And questions showing further

and Hairston, I’ll So turn with to remarks. President back that, CEO, over for closing the call John

John Hairston

your organization. Thanks, the with quarter. the call And look listening to We for today. to Thanks forward Andrew. everyone handling you thanks next for in interest

Operator

in and Ladies all the you program, participating gentlemen, This conclude thank and conference. disconnect. today’s for may does you

Trisha Carlson	Executive VP & IR Manager
John Hairston	President, CEO
Michael Achary	Senior EVP & CFO
Chris Ziluca	Chief Credit Officer
Kevin Fitzsimmons	D.A. Davidson

Hancock Whitney (HWC) 1 May 202020 Q1 Earnings call transcript