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Hancock Whitney Q3 Earnings Beat Estimates on Fee Income Growth
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Hancock Whitney Corp.’s (HWC - Free Report) third-quarter 2024 earnings per share of $1.33 beat the Zacks Consensus Estimate of $1.31. The bottom line compared favorably with $1.12 per share registered in the year-ago quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The results were aided by an increase in non-interest income and net interest income (NII). Lower expenses and provisions were positives. However, the decline in total loans and deposits affected the results to some extent.
Net income was $115.6 million, up 18.2% year over year. Our estimate for the metric was $110.5 million.
Revenues Rise, Expenses Decrease
Revenues amounted to $367.7 million, up 3.5% year over year. The top line beat the Zacks Consensus Estimate of $363.5 million.
Net interest income (on a tax-equivalent basis) marginally increased year over year to $274.5 million. The net interest margin (NIM) was 3.39%, which expanded 12 basis points (bps) from the prior-year quarter. Our estimates for NII and NIM were pegged at $274.8 million and 3.43%, respectively.
Non-interest income totaled $95.9 million, up 11.5% from the prior-year quarter's level. The rise was driven by an increase in all fee income components. We had projected a non-interest income of $91.5 million.
Total non-interest expenses marginally decreased year over year to $203.8 million. We had projected expenses of $210.6 million.
The efficiency ratio decreased to 54.42% from 56.38% in the year-ago quarter. A decline in the efficiency ratio indicates an increase in profitability.
As of Sept. 30, 2024, total loans were $23.46 billion, down 1.9% from the prior-quarter level. Total deposits marginally decreased on a sequential basis to $28.98 billion. Our estimates for total loans and deposits were pegged at $23.89 billion and $29.61 billion, respectively.
Credit Quality Strengthens
The provision for credit losses was $18.6 million, down from $28.5 million in the prior-year quarter. Our estimate for provisions was $11.1 million.
Net charge-offs (annualized) were 0.30% of average total loans, down 34 bps from the prior-year quarter.
Capital Ratios & Profitability Ratios Improve
As of Sept. 30, 2024, the Tier 1 leverage ratio was 11.03%, up from 10.01% at the end of the year-earlier quarter. The common equity Tier 1 ratio was 13.79%, up from 12.06% as of Sept. 30, 2023.
At the end of the third quarter, the return on average assets was 1.32%, up from the year-ago period’s 1.09%. The return on average common equity was 11.43%, up from 10.85% in the prior-year quarter.
Share Repurchase Update
In the reported quarter, HWC repurchased 3 million shares at an average price of $50.60 per share.
Q4 2024 Outlook
NIM is expected to modestly expand on the assumptions of two 25 bps rate cuts in the fourth quarter of 2024.
Management expects to maintain an efficiency ratio of 55-56%. Hancock Whitney expects modest charge-offs and provisions.
2024 Outlook
Management expects the period-end loan balance to be flat to down slightly from the 2023 level.
Further, deposit balances are anticipated to be flattish or slightly down from the prior-year level.
Adjusted pre-provision net revenues are expected to be flat to down slightly year over year.
Adjusted non-interest income is expected to grow 6-7% from 2023 level.
Adjusted non-interest expenses are expected to rise 1-2% year over year.
The company expects an effective tax rate of 20-21%.
Our View
Hancock Whitney’s strategic expansion initiatives will likely keep supporting top-line growth. While higher rates will aid NIM expansion, higher funding costs will exert pressure on it. Improving asset quality and a decrease in expenses is encouraging.
Hancock Whitney Corporation Price, Consensus and EPS Surprise
State Street Corporation’s (STT - Free Report) third-quarter 2024 earnings of $2.26 per share surpassed the Zacks Consensus Estimate of $2.08. The bottom line also increased 80.8% from the prior-year quarter.
STT’s results were primarily aided by growth in fee revenues and higher net interest revenues. Also, the company witnessed improvements in the total assets under custody and assets under management balances. However, higher expenses have hurt the results to some extent.
Wells Fargo & Company (WFC - Free Report) reported its third-quarter 2024 adjusted earnings per share of $1.52, which surpassed the Zacks Consensus Estimate of $1.27. In the prior-year quarter, the company reported earnings per share of $1.39.
Results benefited from higher non-interest income. An improvement in capital ratios, a decline in provisions and non-interest expenses were other positives. However, the decrease in net interest income and loan balances were the undermining factors for WFC.
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Hancock Whitney Q3 Earnings Beat Estimates on Fee Income Growth
Hancock Whitney Corp.’s (HWC - Free Report) third-quarter 2024 earnings per share of $1.33 beat the Zacks Consensus Estimate of $1.31. The bottom line compared favorably with $1.12 per share registered in the year-ago quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The results were aided by an increase in non-interest income and net interest income (NII). Lower expenses and provisions were positives. However, the decline in total loans and deposits affected the results to some extent.
Net income was $115.6 million, up 18.2% year over year. Our estimate for the metric was $110.5 million.
Revenues Rise, Expenses Decrease
Revenues amounted to $367.7 million, up 3.5% year over year. The top line beat the Zacks Consensus Estimate of $363.5 million.
Net interest income (on a tax-equivalent basis) marginally increased year over year to $274.5 million. The net interest margin (NIM) was 3.39%, which expanded 12 basis points (bps) from the prior-year quarter. Our estimates for NII and NIM were pegged at $274.8 million and 3.43%, respectively.
Non-interest income totaled $95.9 million, up 11.5% from the prior-year quarter's level. The rise was driven by an increase in all fee income components. We had projected a non-interest income of $91.5 million.
Total non-interest expenses marginally decreased year over year to $203.8 million. We had projected expenses of $210.6 million.
The efficiency ratio decreased to 54.42% from 56.38% in the year-ago quarter. A decline in the efficiency ratio indicates an increase in profitability.
As of Sept. 30, 2024, total loans were $23.46 billion, down 1.9% from the prior-quarter level. Total deposits marginally decreased on a sequential basis to $28.98 billion. Our estimates for total loans and deposits were pegged at $23.89 billion and $29.61 billion, respectively.
Credit Quality Strengthens
The provision for credit losses was $18.6 million, down from $28.5 million in the prior-year quarter. Our estimate for provisions was $11.1 million.
Net charge-offs (annualized) were 0.30% of average total loans, down 34 bps from the prior-year quarter.
Capital Ratios & Profitability Ratios Improve
As of Sept. 30, 2024, the Tier 1 leverage ratio was 11.03%, up from 10.01% at the end of the year-earlier quarter. The common equity Tier 1 ratio was 13.79%, up from 12.06% as of Sept. 30, 2023.
At the end of the third quarter, the return on average assets was 1.32%, up from the year-ago period’s 1.09%. The return on average common equity was 11.43%, up from 10.85% in the prior-year quarter.
Share Repurchase Update
In the reported quarter, HWC repurchased 3 million shares at an average price of $50.60 per share.
Q4 2024 Outlook
NIM is expected to modestly expand on the assumptions of two 25 bps rate cuts in the fourth quarter of 2024.
Management expects to maintain an efficiency ratio of 55-56%. Hancock Whitney expects modest charge-offs and provisions.
2024 Outlook
Management expects the period-end loan balance to be flat to down slightly from the 2023 level.
Further, deposit balances are anticipated to be flattish or slightly down from the prior-year level.
Adjusted pre-provision net revenues are expected to be flat to down slightly year over year.
Adjusted non-interest income is expected to grow 6-7% from 2023 level.
Adjusted non-interest expenses are expected to rise 1-2% year over year.
The company expects an effective tax rate of 20-21%.
Our View
Hancock Whitney’s strategic expansion initiatives will likely keep supporting top-line growth. While higher rates will aid NIM expansion, higher funding costs will exert pressure on it. Improving asset quality and a decrease in expenses is encouraging.
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
State Street Corporation’s (STT - Free Report) third-quarter 2024 earnings of $2.26 per share surpassed the Zacks Consensus Estimate of $2.08. The bottom line also increased 80.8% from the prior-year quarter.
STT’s results were primarily aided by growth in fee revenues and higher net interest revenues. Also, the company witnessed improvements in the total assets under custody and assets under management balances. However, higher expenses have hurt the results to some extent.
Wells Fargo & Company (WFC - Free Report) reported its third-quarter 2024 adjusted earnings per share of $1.52, which surpassed the Zacks Consensus Estimate of $1.27. In the prior-year quarter, the company reported earnings per share of $1.39.
Results benefited from higher non-interest income. An improvement in capital ratios, a decline in provisions and non-interest expenses were other positives. However, the decrease in net interest income and loan balances were the undermining factors for WFC.