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Hancock Whitney (HWC) Up 2.1% on Q1 Earnings & Revenue Beat

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Shares of Hancock Whitney Corporation (HWC - Free Report) rallied 2.1% during after-market trading following the first-quarter 2021 results. Earnings per share of $1.21 surpassed the Zacks Consensus Estimate of 97 cents. Also, the figure shows significant improvement from the prior-year quarter’s loss of $1.28.

Results benefitted from an increase in revenues, lower expenses and provision benefits. Moreover, deposit balance climbed during the quarter. However, lower interest rates and soft loan demand were headwinds.

Net income came in at $107.2 million against the net loss of $111 million seen in the prior-year quarter.

Revenues Improve, Expenses Decline

Total revenues were $321.7 million, up 1.9% year over year. Also, the figure beat the Zacks Consensus Estimate of $310.2 million.

Net interest income (NII) on a tax-equivalent basis inched up 1.2% year on year to $237.5 million. Yet, net interest margin (NIM) (on a tax-equivalent basis) was 3.09%, contracting 32 basis points (bps).

Non-interest income was $87.1 million, up 3.2% from the year-ago level. This upswing was primarily driven by a rise in almost all fee income components, except for service charges on deposit account and other income.

Total non-interest expenses declined 5% year over year to $193.1 million mainly due to a fall in net occupancy and equipment expense, net other real estate and foreclosed assets expense other operating expenses and amortization of intangibles.

As of Mar 31, 2021, total loans were $21.7 billion, down marginally from the prior-quarter end. Total deposits were up 5.5% sequentially to $29.2 billion.

Credit Quality Improve

Provision for loan losses was a benefit of $4.9 million against a provision of $246.8 million in the prior-year quarter. Also, net charge-offs (annualized) were 0.34% of average total loans, down 49 bps from the year-ago quarter.

Further, total non-performing assets plummeted 59.5% from the prior-year quarter end to $124.2 million.

Capital Ratios Mixed

As of Mar 31, 2021, Tier 1 leverage ratio was 7.89%, down from 8.40% at the end of the year-earlier quarter. Tier 1 risk-based capital ratio was 11.02%, up from 10.02% as of Mar 31, 2020.

Q2 Outlook

Management projects core loans to remain stable. Further, the company expects more PPP loans to be forgiven, which might lead to a decline in the overall loan balance.

The company forecasts continued NIM contraction, while the NII is likely to remain stable.

Our Take

Supported by a solid balance-sheet position and inorganic expansion efforts, Hancock Whitney remains well poised for growth. Nevertheless, near-zero interest rates and soft loan demand are major near-term concerns.

Hancock Whitney Corporation Price, Consensus and EPS Surprise

Hancock Whitney Corporation Price, Consensus and EPS Surprise

Hancock Whitney Corporation price-consensus-eps-surprise-chart | Hancock Whitney Corporation Quote

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.

Performance of Other Banks

First Republic Bank (FRC - Free Report) delivered an earnings surprise of 16.2% in first-quarter 2021 on solid top-line strength. Earnings per share of $1.79 surpassed the Zacks Consensus Estimate of $1.54. Additionally, the bottom line jumped 53.1% from the year-ago quarter.

M&T Bank Corp. (MTB - Free Report) reported first-quarter earnings surprise of 15%. Net operating earnings per share of $3.41 beat the Zacks Consensus Estimate of $2.96. Also, the bottom line compared favorably with the $1.95 per share recorded in the year-ago quarter.

Webster Financial (WBS - Free Report) recorded first-quarter 2021 adjusted earnings per share of $1.25, which surpassed the Zacks Consensus Estimate of 89 cents. The figure excluded noteworthy items such as charges related to strategic optimization initiatives.

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