Insights into Hancock Whitney Corporation's Financial Performance and Future Outlook
2024-01-17
Hancock Whitney Corporation recently held its Q4 2023 Earnings Conference Call on January 16, 2024. The call featured key participants such as John Hairston (President and CEO), Mike Achary (CFO), and Chris Ziluca (Chief Credit Officer). During the call, they discussed various topics related to the company's financial performance and future outlook.
In terms of earnings results, Q4 2023 showed an EPS of $0.58, missing by $0.54, and revenue of $311.25M (-17.04% Y/Y), missing by $32.75M. The company also cautioned about forward-looking statements, emphasizing that the current economic environment was rapidly evolving and changing.
One of the key topics discussed was loan growth. The company mentioned that loan demand in Q4 had been tepid, similar to previous quarters. However, they highlighted their success in producing loans by focusing on pricing and replacing large credit-only relationships with more granular relationships. They anticipated loan growth to occur in the second half of the year after rates began to soften.
The company also addressed the decrease in total deposits, attributing it to the maturity of broker deposits, which were deleveraged using proceeds from the bond portfolio restructuring. At the end of the quarter, 37% of deposits were in DDAs (Demand Deposit Accounts).
The conference call also covered topics related to net interest income (NII) and net interest margin (NIM) outlook. The company mentioned that three rate hikes were built into the forecast for next year, expected to occur in June, September, and December. They planned to manage their CD maturities and adjust rates to mitigate the impact of rate cuts on their margin. They expected loan growth in the back half of the year to come from replacing credit-only relationships with more granular relationships.
Regarding the bond book, the company expected it to be relatively flat from the end of the year, and they planned to reinvest paydowns and maturities back into the bond book. They aimed for loan growth to be funded through deposit growth and anticipated average earning assets to be flattish.
The company also discussed topics such as charge-offs, stress testing, customer acceptance of higher loan rates, line utilization, and financial statements. They emphasized the importance of audited or accountant prepared financial statements and tax return type statements. They stressed test their portfolio regularly and mentioned anemic demand for new real estate transactions due to high costs.
In terms of growth, the company expressed interest in growing in granular sectors, particularly investor CRE (Commercial Real Estate). They mentioned their brand's performance in core markets and investments made in growth markets. They expected to perform better in a more optimistic macro environment.
Overall, the Q4 2023 Earnings Conference Call provided insights into Hancock Whitney Corporation's financial performance, loan growth, deposit management, interest rates, and future outlook. The company aimed to navigate the evolving economic environment and capitalize on growth opportunities in various sectors.