Hancock Whitney (US:HWC)2021-10-19 23:27Financial Data and Key Metrics Changes - The company reported net income of $130 million or $1.46 per share, an increase of $41 million or $0.46 linked quarter [8] - Adjusted EPS for the third quarter was $1.45, up $0.08 linked quarter [8] - A negative provision of $27 million in the third quarter compared to a negative provision of $17 million in the second quarter, attributed to less than $2 million of net charge-offs [9] - Criticized and non-performing loans decreased by 29% and 65% respectively from one year ago [9] Business Line Data and Key Metrics Changes - Core EOP loans grew by $220 million, partially offsetting $482 million in PPP forgiveness during the quarter [17] - Total reported loans decreased by $262 million, ending the quarter at just under $21 billion [17] - The company maintained guidance for core loan growth of $400 million to $500 million and PPP forgiveness of up to $500 million [18] Market Data and Key Metrics Changes - The company experienced a flat net interest income with only a 2 basis points compression in NIM [19] - The NIM was impacted by a full quarter's effect from the June redemption of subordinated debt and a lower cost of deposits, adding 5 basis points to the NIM [20] - The company expects an additional 4 basis points of compression in the fourth quarter due to continued levels of liquidity and lower rates [21] Company Strategy and Development Direction - The company aims for a 55% efficiency ratio and plans to deploy excess liquidity into loans and securities as rates rise [12] - The company is hiring bankers in new and growth markets, having added 15 new bankers recently [13] - The company is focused on strategic procurement and operational effectiveness gains through technology deployment [14] Management's Comments on Operating Environment and Future Outlook - Management noted that there is no significant pressure on credit from Hurricane Ida or the Delta surge, with asset quality metrics improving [10] - The company expects to maintain a strong position with TCE projected back to 8% or better by year-end [14] - Management expressed confidence in achieving solid loan growth and maintaining expense targets despite inflationary pressures [12][23] Other Important Information - The company repurchased just over 56,000 shares of common stock at an average price of $44.49 per share [24] - The company expects mortgage fees to slow as the boom in refinancing begins to subside [22] Q&A Session Summary Question: Efficiency ratio target and revenue expectations - Management directed attention to slide eighteen for guidance on loan growth and balance sheet management [32] Question: Credit quality and reserve levels - Management indicated potential for reserve releases similar to previous quarters, estimating around $27 million to $28 million [38] Question: Fee income guidance and mortgage impact - Management noted that secondary mortgage fee reduction was a significant detractor from fee income, but other categories showed improvement [44] Question: Margin pressure and loan pricing - Management acknowledged competitive pricing pressures in the market but indicated they are meeting competition effectively [76] Question: Investment securities portfolio growth - The bond book is currently at about $8.2 billion, representing approximately 25.6% of earning assets, with potential growth depending on market conditions [80]