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Hancock Whitney (HWC) Down 2.9% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Hancock Whitney (HWC - Free Report) . Shares have lost about 2.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hancock Whitney due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Hancock Whitney’s fourth-quarter 2020 adjusted earnings per share of 96 cents surpassed the Zacks Consensus Estimate of 91 cents. However, the figure compared unfavorably with the prior-year quarter’s adjusted number of $1.06.
Results for the reported quarter benefitted from an increase in revenues along with lower expenses. However, a significant rise in provisions was an undermining factor. The balance sheet position remained strong in the quarter.
After considering non-recurring items, net income was $103.6 million or $1.17 per share, up from $92.1 million or $1.03 per share recorded in the prior-year quarter.
For 2020, loss per share was 54 cents against earnings of $3.72 recorded in 2019. Net loss was $45.2 million against net income of $327.4 million in the previous year.
Revenues Improve, Expenses Decline
Total revenues for the reported quarter were $320.6 million, up 1.4% year over year. Also, the figure beat the Zacks Consensus Estimate of $318.2 million.
For the year, total revenues of $1.27 billion improved 4.6% from the prior year.
Quarterly, net interest income on a tax-equivalent basis grew 2% year over year to $241.4 million. However, NIM, on a tax-equivalent basis, was 3.22%, contracting 21 basis points (bps).
Non-interest income was $82.4 million, down marginally. The decline was primarily due to a fall in almost all fee income components except for secondary mortgage market operations.
Total non-interest expenses declined 2.4% to $193.1 million mainly due to a fall in all cost components except for net occupancy and equipment costs.
As of Dec 31, 2020, total loans were $21.8 billion, down 2% from the prior quarter end. Total deposits increased 2.5% sequentially to $27.7 billion.
Credit Quality: Mixed Bag
Provision for credit losses jumped significantly from $9.2 million in the year-ago quarter to $24.2 million. Also, net charge-offs (NCOs) (annualized) were 0.44% of average total loans, up 26 bps.
However, total non-performing assets declined 53.8% to $155.8 million.
Capital Ratios Mixed
As of Dec 31, 2020, Tier 1 leverage ratio was 7.87%, down from 8.76% at the end of the year-earlier quarter. Tier 1 risk-based capital ratio was 10.70%, up from 10.50% as of Dec 31, 2019.
Outlook
Management expects total loan balances to decline in first-quarter 2021.
NIM is expected to be down 10 bps in the first quarter due to high levels of excess liquidity and net paycheck protection program (PPP) activity.
The company expects up to $1 billion of the original PPP loans to be forgiven in the first quarter of 2021.
Provisions in the first quarter are expected between $10 million and $15 million. NCOs are expected to exceed provisions.
2021 quarterly effective tax rate is anticipated to be 18-20%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 7.31% due to these changes.
VGM Scores
Currently, Hancock Whitney has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Hancock Whitney has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Hancock Whitney (HWC) Down 2.9% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Hancock Whitney (HWC - Free Report) . Shares have lost about 2.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hancock Whitney due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Hancock Whitney Q4 Earnings Beat, Revenues Rise Y/Y
Hancock Whitney’s fourth-quarter 2020 adjusted earnings per share of 96 cents surpassed the Zacks Consensus Estimate of 91 cents. However, the figure compared unfavorably with the prior-year quarter’s adjusted number of $1.06.
Results for the reported quarter benefitted from an increase in revenues along with lower expenses. However, a significant rise in provisions was an undermining factor. The balance sheet position remained strong in the quarter.
After considering non-recurring items, net income was $103.6 million or $1.17 per share, up from $92.1 million or $1.03 per share recorded in the prior-year quarter.
For 2020, loss per share was 54 cents against earnings of $3.72 recorded in 2019. Net loss was $45.2 million against net income of $327.4 million in the previous year.
Revenues Improve, Expenses Decline
Total revenues for the reported quarter were $320.6 million, up 1.4% year over year. Also, the figure beat the Zacks Consensus Estimate of $318.2 million.
For the year, total revenues of $1.27 billion improved 4.6% from the prior year.
Quarterly, net interest income on a tax-equivalent basis grew 2% year over year to $241.4 million. However, NIM, on a tax-equivalent basis, was 3.22%, contracting 21 basis points (bps).
Non-interest income was $82.4 million, down marginally. The decline was primarily due to a fall in almost all fee income components except for secondary mortgage market operations.
Total non-interest expenses declined 2.4% to $193.1 million mainly due to a fall in all cost components except for net occupancy and equipment costs.
As of Dec 31, 2020, total loans were $21.8 billion, down 2% from the prior quarter end. Total deposits increased 2.5% sequentially to $27.7 billion.
Credit Quality: Mixed Bag
Provision for credit losses jumped significantly from $9.2 million in the year-ago quarter to $24.2 million. Also, net charge-offs (NCOs) (annualized) were 0.44% of average total loans, up 26 bps.
However, total non-performing assets declined 53.8% to $155.8 million.
Capital Ratios Mixed
As of Dec 31, 2020, Tier 1 leverage ratio was 7.87%, down from 8.76% at the end of the year-earlier quarter. Tier 1 risk-based capital ratio was 10.70%, up from 10.50% as of Dec 31, 2019.
Outlook
Management expects total loan balances to decline in first-quarter 2021.
NIM is expected to be down 10 bps in the first quarter due to high levels of excess liquidity and net paycheck protection program (PPP) activity.
The company expects up to $1 billion of the original PPP loans to be forgiven in the first quarter of 2021.
Provisions in the first quarter are expected between $10 million and $15 million. NCOs are expected to exceed provisions.
2021 quarterly effective tax rate is anticipated to be 18-20%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 7.31% due to these changes.
VGM Scores
Currently, Hancock Whitney has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Hancock Whitney has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.