Hancock Whitney Corporation’s (HWC - Free Report) third-quarter 2021 adjusted earnings of $1.45 per share outpaced the Zacks Consensus Estimate of $1.29. The bottom line improved 61.1% from the prior-year quarter.
Results gained from higher non-interest income, fall in operating expenses, and provision benefit. However, a decline in net interest income, which reflected lower interest rates and a fall in loan balance, was the undermining factor.
Results excluded the impact of non-operating items. Including these, net income came in at $129.6 million, up from $79.3 million in the prior-year quarter.
Revenues Improve, Expenses Inch Down
Total revenues were $328.1 million, up 2.9% year over year. The top line beat the Zacks Consensus Estimate of $324 million.
Net interest income (NII) on a tax-equivalent basis declined marginally to $237.5 million. Net interest margin (NIM) (on a tax-equivalent basis) was 2.97%, contracting 29 basis points (bps).
Non-interest income was $93.4 million, growing 11.5%. The rise was driven by a jump in almost all fee income components except for secondary mortgage market operations fees.
Total non-interest expenses declined modestly to $194.7 million. This was mainly attributable to a rise in other expenses, net occupancy and equipment expenses, and personnel expenses.
Efficiency ratio decreased to 57.44% from 59.29% in the year-ago quarter. A decline in efficiency ratio indicates an improvement in profitability.
As of Sep 30, 2021, total loans were $20.9 billion, down 1.2% from the prior-quarter end. Total deposits fell marginally to $29.2 billion.
Credit Quality Improves
Provision for loan losses was a benefit of $27 million against a provision of $25 million in the prior-year quarter. Net charge-offs (annualized) were 0.03% of average total loans, down 40 bps from the year-ago quarter.
Total non-performing assets plummeted 62.6% to $71.9 million.
Capital & Profitability Ratios Improve
As of Sep 30, 2021, Tier 1 leverage ratio was 8.15%, up from 7.70% at the end of the year-earlier quarter. Tier 1 risk-based capital ratio was 11.19%, up from 10.30% as of Sep 30, 2020.
At the end of the third quarter, return on average assets was 1.46%, up from the year-ago period’s 0.97%. Return on average common equity was 14.26%, up from 9.42% in the prior-year quarter.
Share Repurchase Update
During the quarter, Hancock Whitney repurchased 56,349 shares at an average price of $44.49 per share.
Outlook
Management projects loan balance to be nearly $20.4 billion for 2021.
The company expects NIM contraction to continue in the fourth quarter while NII is likely to be slightly down on a sequential basis.
Our Take
Supported by a solid balance-sheet position and inorganic expansion efforts, Hancock Whitney remains well poised for growth. However, near-zero interest rates and soft loan demand are major near-term concerns.
Currently, Hancock Whitney carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Schedule of Other Banks
Associated Banc-Corp (ASB - Free Report) , East West Bancorp, Inc. (EWBC - Free Report) , and Bank OZK (OZK - Free Report) will announce quarterly numbers on Oct 21.
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No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.
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Hancock Whitney Corporation’s (HWC - Free Report) third-quarter 2021 adjusted earnings of $1.45 per share outpaced the Zacks Consensus Estimate of $1.29. The bottom line improved 61.1% from the prior-year quarter.
Results gained from higher non-interest income, fall in operating expenses, and provision benefit. However, a decline in net interest income, which reflected lower interest rates and a fall in loan balance, was the undermining factor.
Results excluded the impact of non-operating items. Including these, net income came in at $129.6 million, up from $79.3 million in the prior-year quarter.
Revenues Improve, Expenses Inch Down
Total revenues were $328.1 million, up 2.9% year over year. The top line beat the Zacks Consensus Estimate of $324 million.
Net interest income (NII) on a tax-equivalent basis declined marginally to $237.5 million. Net interest margin (NIM) (on a tax-equivalent basis) was 2.97%, contracting 29 basis points (bps).
Non-interest income was $93.4 million, growing 11.5%. The rise was driven by a jump in almost all fee income components except for secondary mortgage market operations fees.
Total non-interest expenses declined modestly to $194.7 million. This was mainly attributable to a rise in other expenses, net occupancy and equipment expenses, and personnel expenses.
Efficiency ratio decreased to 57.44% from 59.29% in the year-ago quarter. A decline in efficiency ratio indicates an improvement in profitability.
As of Sep 30, 2021, total loans were $20.9 billion, down 1.2% from the prior-quarter end. Total deposits fell marginally to $29.2 billion.
Credit Quality Improves
Provision for loan losses was a benefit of $27 million against a provision of $25 million in the prior-year quarter. Net charge-offs (annualized) were 0.03% of average total loans, down 40 bps from the year-ago quarter.
Total non-performing assets plummeted 62.6% to $71.9 million.
Capital & Profitability Ratios Improve
As of Sep 30, 2021, Tier 1 leverage ratio was 8.15%, up from 7.70% at the end of the year-earlier quarter. Tier 1 risk-based capital ratio was 11.19%, up from 10.30% as of Sep 30, 2020.
At the end of the third quarter, return on average assets was 1.46%, up from the year-ago period’s 0.97%. Return on average common equity was 14.26%, up from 9.42% in the prior-year quarter.
Share Repurchase Update
During the quarter, Hancock Whitney repurchased 56,349 shares at an average price of $44.49 per share.
Outlook
Management projects loan balance to be nearly $20.4 billion for 2021.
The company expects NIM contraction to continue in the fourth quarter while NII is likely to be slightly down on a sequential basis.
Our Take
Supported by a solid balance-sheet position and inorganic expansion efforts, Hancock Whitney remains well poised for growth. However, near-zero interest rates and soft loan demand are major near-term concerns.
Currently, Hancock Whitney carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Schedule of Other Banks
Associated Banc-Corp (ASB - Free Report) , East West Bancorp, Inc. (EWBC - Free Report) , and Bank OZK (OZK - Free Report) will announce quarterly numbers on Oct 21.
Highest Returns for Any Asset Class
It’s not even close. Despite ups and downs, Bitcoin has been more profitable for investors than any other decentralized, borderless form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.
Hurry, Download Special Report – It’s FREE >>
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