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Hancock Whitney (HWC) Q4 Earnings Beat Estimates, Revenues Rise

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Hancock Whitney Corporation’s (HWC - Free Report) fourth-quarter 2022 earnings of $1.65 per share surpassed the Zacks Consensus Estimate of $1.63. The bottom line rose 6.5% from the prior-year quarter’s earnings of $1.55.

Results benefited from higher net interest income (NII), a rise in loan balance and increasing interest rates. However, lower non-interest income, mainly due to higher mortgage rates, was the undermining factor. Also, higher expenses and a rise in provisions were concerns.    

Net income came in at $143.8 million, rising 4.4% year over year.

In 2022, earnings of $5.98 per share surpassed the Zacks Consensus Estimate of $5.96 per share and were up from $5.22 in the prior year. Net income was $524.1 million, up from $463.2 million in 2021.

Revenues & Expenses Rise

The quarterly total revenues were $372.6 million, up 16.8% year over year. The top line, however, missed the Zacks Consensus Estimate of $384.72 million.

In 2022, net revenues increased 6.5% to $1.38 billion. However, the top line lagged the Zacks Consensus Estimate of $1.40 billion.

The NII (on a tax-equivalent basis) jumped 28.5% to $298.1 million. The net interest margin was 3.68%, rising 88 basis points.

The non-interest income was $77.1 million, declining 14%. A drastic fall in secondary mortgage market operations fees and other income mainly led to this decrease.

The total non-interest expenses increased 4.2% to $190.2 million.

The efficiency ratio decreased to 49.81% from 56.57% in the year-ago quarter. A decline in the efficiency ratio indicates an improvement in profitability.

As of Dec 31, 2022, total loans were $23.1 billion, up 2.3% from prior-quarter end. The total deposits increased marginally to $29.2 billion.

Credit Quality: Mixed Bag

The provision for loan losses was $2.5 million against a benefit of $28.4 million in the prior-year quarter.

The net charge-offs (annualized) were 0.02% of average total loans, up from 0.01% in the last year's quarter. The total non-performing assets plunged 35.8% from the prior-year quarter to $42.9 million.

Capital & Profitability Ratios Solid

As of Dec 31, 2022, the Tier 1 leverage ratio was 9.53%, up from 8.25% at the end of the year-earlier quarter. The common equity Tier 1 ratio was 11.37%, up from 11.09% as of Dec 31, 2021.

At the end of the fourth quarter, the return on average assets was 1.65%, up from the year-ago period’s 1.53%. The return on average common equity was 17.67%, up from 15% in the prior-year quarter.

Share Repurchase Update

During the reported quarter, HWC did not repurchase any shares.

2023 Outlook

Management expects total loans to grow in the low to mid-single digits range.

The company also expects total deposit growth in the flat to low single digits range.

Our View

Supported by a solid balance-sheet position, Hancock Whitney remains well-poised for growth. With expectations of higher interest rates and robust loan demand, the company is likely to witness growth in NII in the quarters ahead. Yet, the dismal performance of the mortgage business and worsening macroeconomic outlook are 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance & Earnings Date of Other Banks

Washington Federal’s (WAFD - Free Report) first-quarter fiscal 2023 (ended Dec 31, 2022) earnings of $1.16 per share handily surpassed the Zacks Consensus Estimate of $1.11. The figure reflects a year-over-year jump of 63%.

Results were primarily supported by robust loan balances and an increase in net interest income. However, a substantial increase in provision for credit losses, rising expenses and decrease in other income were headwinds for WAFD.

Associated Banc-Corp (ASB - Free Report) is scheduled to release fourth-quarter and full-year 2022 numbers on Jan 26.

Over the past 30 days, the Zacks Consensus Estimate for Associated Banc-Corp’s quarterly earnings has moved 1.6% north to 65 cents. This suggests a 32.7% increase from the prior-year quarter.

In-Depth Zacks Research for the Tickers Above

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Washington Federal, Inc. (WAFD) - free report >>

Associated Banc-Corp (ASB) - free report >>

Hancock Whitney Corporation (HWC) - free report >>

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