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Hancock Whitney (HWC) Q3 Earnings In Line, Revenues Increase
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Hancock Whitney Corporation’s (HWC - Free Report) third-quarter 2018 adjusted earnings per share of $1.01 came in line with the Zacks Consensus Estimate. Also, the figure represents an improvement of nearly 32.9% year over year.
Results benefited from an improvement in net revenues and decline in provision for loan losses. Further, loan and deposit growth remained strong. However, an increase in expenses and lower net interest margin were the downsides.
After considering the impact of several non-recurring items, net income for the quarter came in at $83.9 million or 96 cents per share, up from $58.9 million or 68 cents per share reported in the prior-year quarter.
Revenues Improve, Expenses Flare Up
Hancock’s net revenues were $289.7 million, up 7.3% year over year. The figure missed the Zacks Consensus Estimate of $292.7 million.
Net interest income grew 5.6% year over year to $214.2 million. Net interest margin, on a tax-equivalent basis, came in at 3.36%, contracting 8 basis points.
Non-interest income totaled $75.5 million, reflecting an increase of 14% from the year-ago quarter. The figure included $5.5 million in trust fees, which resulted from the Capital One Trust and Asset Management acquisition.
Total operating expenses increased 6.1% year over year to $176.4 million. This was due to increase in personnel expense as well as acquisition expense.
Credit Quality: Mixed Bag
Net charge-offs from the non-covered loan portfolio was 0.14% of average total loans, edging down from 0.25% in the year-ago quarter. Also, provision for loan losses declined 43.9% year over year to roughly $6.9 million.
However, total non-performing assets increased marginally year over year to $391.3 million.
Strong Balance Sheet, Higher Profitability and Capital Ratios
As of Sep 30, 2018, total loans were $19.5 billion, up from $19.4 billion recorded at the prior-quarter end. Furthermore, total deposits increased 0.8% from the prior quarter to $22.4 billion.
Return on average assets was 1.19% at the end of the quarter, up from 0.88% in the prior-year quarter. Moreover, return on average common equity was 11.27% compared with 8.23% at the end of September 2017.
As of Sep 30, 2018, Tier 1 leverage ratio was 8.50%, up from 8.34% a year ago. However, Tier 1 risk-based capital ratio was 10.39%, increasing from 10.10% as of Sep 30, 2017.
Outlook
Management continues to expect charge-offs from energy-related credits to be roughly $95 million. Further, it expects the tax rate to be 8-10% in fourth-quarter 2018.
Our Viewpoint
Hancock looks well poised for top-line growth, given its continued improvement in loans and deposits. Further, the company’s decent profitability ratios and solid capital position indicate good financials. However, its increasing operating expenses will likely hamper bottom-line growth. Also, pressure on net interest margin remains a major concern.
Hancock Whitney Corporation Price, Consensus and EPS Surprise
Among other Southeast banks, Regions Financial Corporation (RF - Free Report) and Synovus Financial Corp. (SNV - Free Report) are slated to release third-quarter 2018 results on Oct 23, while Carolina Financial Corporation is scheduled to report quarterly numbers on Oct 25.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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Hancock Whitney (HWC) Q3 Earnings In Line, Revenues Increase
Hancock Whitney Corporation’s (HWC - Free Report) third-quarter 2018 adjusted earnings per share of $1.01 came in line with the Zacks Consensus Estimate. Also, the figure represents an improvement of nearly 32.9% year over year.
Results benefited from an improvement in net revenues and decline in provision for loan losses. Further, loan and deposit growth remained strong. However, an increase in expenses and lower net interest margin were the downsides.
After considering the impact of several non-recurring items, net income for the quarter came in at $83.9 million or 96 cents per share, up from $58.9 million or 68 cents per share reported in the prior-year quarter.
Revenues Improve, Expenses Flare Up
Hancock’s net revenues were $289.7 million, up 7.3% year over year. The figure missed the Zacks Consensus Estimate of $292.7 million.
Net interest income grew 5.6% year over year to $214.2 million. Net interest margin, on a tax-equivalent basis, came in at 3.36%, contracting 8 basis points.
Non-interest income totaled $75.5 million, reflecting an increase of 14% from the year-ago quarter. The figure included $5.5 million in trust fees, which resulted from the Capital One Trust and Asset Management acquisition.
Total operating expenses increased 6.1% year over year to $176.4 million. This was due to increase in personnel expense as well as acquisition expense.
Credit Quality: Mixed Bag
Net charge-offs from the non-covered loan portfolio was 0.14% of average total loans, edging down from 0.25% in the year-ago quarter. Also, provision for loan losses declined 43.9% year over year to roughly $6.9 million.
However, total non-performing assets increased marginally year over year to $391.3 million.
Strong Balance Sheet, Higher Profitability and Capital Ratios
As of Sep 30, 2018, total loans were $19.5 billion, up from $19.4 billion recorded at the prior-quarter end. Furthermore, total deposits increased 0.8% from the prior quarter to $22.4 billion.
Return on average assets was 1.19% at the end of the quarter, up from 0.88% in the prior-year quarter. Moreover, return on average common equity was 11.27% compared with 8.23% at the end of September 2017.
As of Sep 30, 2018, Tier 1 leverage ratio was 8.50%, up from 8.34% a year ago. However, Tier 1 risk-based capital ratio was 10.39%, increasing from 10.10% as of Sep 30, 2017.
Outlook
Management continues to expect charge-offs from energy-related credits to be roughly $95 million. Further, it expects the tax rate to be 8-10% in fourth-quarter 2018.
Our Viewpoint
Hancock looks well poised for top-line growth, given its continued improvement in loans and deposits. Further, the company’s decent profitability ratios and solid capital position indicate good financials. However, its increasing operating expenses will likely hamper bottom-line growth. Also, pressure on net interest margin remains a major concern.
Hancock Whitney Corporation Price, Consensus and EPS Surprise
Hancock Whitney Corporation price-consensus-eps-surprise-chart | Hancock Whitney Corporation Quote
At present, Hancock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other Southeast banks, Regions Financial Corporation (RF - Free Report) and Synovus Financial Corp. (SNV - Free Report) are slated to release third-quarter 2018 results on Oct 23, while Carolina Financial Corporation is scheduled to report quarterly numbers on Oct 25.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>