We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Hancock Whitney (HWC) Posts Q1 Loss due to Higher Provisions
Read MoreHide Full Article
Hancock Whitney Corporation (HWC - Free Report) reported first-quarter 2020 loss per share of $1.28against the Zacks Consensus Estimate for earnings of34 cents. The bottom line was wider than earnings of 91 cents in the year-ago quarter.
Substantially higher provisions, increase in operating expenses and lower interest rates hurt the results. Nevertheless, improvement in revenues and rise in loans as well as deposits acted as tailwinds.
Net loss came in at $111 million versus net income of $79.2 million in the prior-year quarter.
Revenues & Expenses Rise
Net revenues amounted to $315.6 million, up 8.9% year over year. The figure surpassed the Zacks Consensus Estimate of $306.3 million.
Net interest income on tax equivalent basis rose 5.2% year over year to $234 million. Net interest margin (NIM), on a tax-equivalent basis, came in at 3.41%, down 5 basis points (bps).
Non-interest income totaled $84.4 million, up 19.7% from the year-ago quarter’s level. Increase in service charges on deposit accounts, secondary mortgage market operations and other income primarily supported the uptick.
Total operating expenses rose 15.7% year over year to $203.3 million. This upswing can be attributed to rise in all the cost components.
As of Mar 31, total loans were $21.5 billion, up 1.4% from the prior-quarter end. Also, total deposits moved up 5.1% from the previous quarter’s level to $25 billion.
Credit Quality Worsens
Provision for credit losses surged substantially from $18 million to$246.8 million. The rise was mainly caused by coronavirus-induced uncertainty and declining oil prices.
Net charge-offs was 0.83% of average total loans, up 47 bps from the year-ago quarter’s level. However, total non-performing assets declined12.2% year over year to $306.8 million.
Capital Ratios Deteriorate
As of Mar 31, Tier 1 leverage ratio was 8.40%, down from the 8.85% recorded at the end of the year-earlier quarter. Tier 1 risk-based capital ratio was 10.03%, down from 10.74%.
Share Repurchase Update
During the first quarter, Hancock Whitney settled the accelerated share repurchase (ASR) announced in October 2019. The company received an additional around 1 million shares and $12.1 million in cash as final settlement of the ASR. Further, the company had repurchased 0.3 million shares in a privately-negotiated transaction.
Notably, the company’s has suspended buyback authorization.
Guidance
Hancock Whitney has withdrawn all prior guidance, including near-term, 2020 and 3-year Corporate Strategic Objectives.
Our Viewpoint
Backed by improving loan and deposit balances as well as the acquisition of MidSouth Bancorp, Hancock Whitney is likely to register further top-line growth. Nevertheless, rising expenses and near-zero interest rates are major concerns. Also, ambiguity related to coronavirus-related economic impact makes us apprehensive.
Hancock Whitney Corporation Price, Consensus and EPS Surprise
Zions Bancorporation’s (ZION - Free Report) first-quarter 2020 net earnings per share of 4 cents missed the Zacks Consensus Estimate of 48 cents. The results included certain non-recurring items.
Washington Federal’s (WAFD - Free Report) second-quarter fiscal 2020 (ended Mar 31) earnings were 49 cents per share, which missed the Zacks Consensus Estimate of 55 cents. The figure also declined 22.2% year over year.
Associated Banc-Corp’s (ASB - Free Report) first-quarter 2020 adjusted earnings of 28 cents per share comfortably outpaced the Zacks Consensus Estimate of a breakeven. However, the figure declined 46% from the prior-year quarter’s reported number. Quarterly earnings in the reported quarter excluded certain acquisition-related costs.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Hancock Whitney (HWC) Posts Q1 Loss due to Higher Provisions
Hancock Whitney Corporation (HWC - Free Report) reported first-quarter 2020 loss per share of $1.28against the Zacks Consensus Estimate for earnings of34 cents. The bottom line was wider than earnings of 91 cents in the year-ago quarter.
Substantially higher provisions, increase in operating expenses and lower interest rates hurt the results. Nevertheless, improvement in revenues and rise in loans as well as deposits acted as tailwinds.
Net loss came in at $111 million versus net income of $79.2 million in the prior-year quarter.
Revenues & Expenses Rise
Net revenues amounted to $315.6 million, up 8.9% year over year. The figure surpassed the Zacks Consensus Estimate of $306.3 million.
Net interest income on tax equivalent basis rose 5.2% year over year to $234 million. Net interest margin (NIM), on a tax-equivalent basis, came in at 3.41%, down 5 basis points (bps).
Non-interest income totaled $84.4 million, up 19.7% from the year-ago quarter’s level. Increase in service charges on deposit accounts, secondary mortgage market operations and other income primarily supported the uptick.
Total operating expenses rose 15.7% year over year to $203.3 million. This upswing can be attributed to rise in all the cost components.
As of Mar 31, total loans were $21.5 billion, up 1.4% from the prior-quarter end. Also, total deposits moved up 5.1% from the previous quarter’s level to $25 billion.
Credit Quality Worsens
Provision for credit losses surged substantially from $18 million to$246.8 million. The rise was mainly caused by coronavirus-induced uncertainty and declining oil prices.
Net charge-offs was 0.83% of average total loans, up 47 bps from the year-ago quarter’s level. However, total non-performing assets declined12.2% year over year to $306.8 million.
Capital Ratios Deteriorate
As of Mar 31, Tier 1 leverage ratio was 8.40%, down from the 8.85% recorded at the end of the year-earlier quarter. Tier 1 risk-based capital ratio was 10.03%, down from 10.74%.
Share Repurchase Update
During the first quarter, Hancock Whitney settled the accelerated share repurchase (ASR) announced in October 2019. The company received an additional around 1 million shares and $12.1 million in cash as final settlement of the ASR. Further, the company had repurchased 0.3 million shares in a privately-negotiated transaction.
Notably, the company’s has suspended buyback authorization.
Guidance
Hancock Whitney has withdrawn all prior guidance, including near-term, 2020 and 3-year Corporate Strategic Objectives.
Our Viewpoint
Backed by improving loan and deposit balances as well as the acquisition of MidSouth Bancorp, Hancock Whitney is likely to register further top-line growth. Nevertheless, rising expenses and near-zero interest rates are major concerns. Also, ambiguity related to coronavirus-related economic impact makes us apprehensive.
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 #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Zions Bancorporation’s (ZION - Free Report) first-quarter 2020 net earnings per share of 4 cents missed the Zacks Consensus Estimate of 48 cents. The results included certain non-recurring items.
Washington Federal’s (WAFD - Free Report) second-quarter fiscal 2020 (ended Mar 31) earnings were 49 cents per share, which missed the Zacks Consensus Estimate of 55 cents. The figure also declined 22.2% year over year.
Associated Banc-Corp’s (ASB - Free Report) first-quarter 2020 adjusted earnings of 28 cents per share comfortably outpaced the Zacks Consensus Estimate of a breakeven. However, the figure declined 46% from the prior-year quarter’s reported number. Quarterly earnings in the reported quarter excluded certain acquisition-related costs.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>