It has been about a month since the last earnings report for Hancock Whitney (HWC Quick QuoteHWC - Free Report) . Shares have added about 8.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Hancock Whitney due for a pullback? 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 Posts Q1 Loss due to Higher Provisions

Hancock Whitney reported first-quarter 2020 loss per share of $1.28 against the Zacks Consensus Estimate for earnings of 34 cents.

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, 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.

Outlook

Due to the concerns and uncertainties owing to the impact of coronavirus, the company has withdrawn its 2020 guidance as well as its three-year corporate strategic objectives.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Hancock Whitney has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. It's no surprise Hancock Whitney has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.