Hancock Whitney (HWC) Q2 Earnings & Revenue Beat, Expenses Up
Hancock Whitney Corporation’s HWC second-quarter 2021 adjusted earnings per share of $1.37 surpassed the Zacks Consensus Estimate of $1.15. The bottom line improved significantly from the prior-year quarter’s loss of $1.36.
Results gained from an increase in non-interest income and provision benefits. Deposit balance improved during the quarter. However, decline in net interest income, reflecting lower interest rates and soft loan demand, and higher expenses were headwinds.
Results in the reported quarter excluded the impact of non-operating items. Including these, net income came in at $88.7 million against net loss of $117.1 million incurred in the prior-year quarter.
Revenues Improve, Expenses Rise
Total revenues were $328.9 million, up 5.5% year over year. The top line beat the Zacks Consensus Estimate of $316.6 million.
Net interest income (NII) on a tax-equivalent basis declined 1.5% to $237.5 million. Net interest margin (NIM) (on a tax-equivalent basis) was 2.96%, contracting 27 basis points (bps).
Non-interest income was $94.3 million, surging 27.5%. The upswing was driven by a rise in almost all fee income components.
Total non-interest expenses jumped 20.5% year over year to $236.8 million, mainly due to a rise in other expenses and personnel expenses.
As of Jun 30, 2021, total loans were $21.1 billion, down 2.4% from the prior-quarter end. Total deposits were up marginally to $29.3 billion.
Credit Quality Improves
Provision for loan losses was a benefit of $17.2 million against a provision of $306.9 million in the prior-year quarter. Net charge-offs (annualized) were 0.20% of average total loans, down 510 bps from the year-ago quarter.
Total non-performing assets plummeted 54.1% to $97.6 million.
Capital Ratios Strong
As of Jun 30, 2021, Tier 1 leverage ratio was 7.83%, up from 7.37% at the end of the year-earlier quarter. Tier 1 risk-based capital ratio was 10.98%, up from 9.78% as of Jun 30, 2020.
Outlook
On a sequential basis, management projects core loans to be up $200-$300 million for the third quarter of 2021 and $400-$600 million for the fourth quarter.
The company forecasts NIM contraction of nearly 4 bps for the third quarter, while the NII is likely to be stable or slightly down.
Our Take
Supported by a solid balance-sheet position and inorganic expansion efforts, Hancock Whitney remains well poised for growth. Nevertheless, near-zero interest rates and soft loan demand are major near-term concerns.
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 of Other Banks
First Republic Bank FRC delivered an earnings surprise of 14.04% in second-quarter 2021 on solid top-line strength. Earnings per share of $1.95 surpassed the Zacks Consensus Estimate of $1.71. Additionally, the bottom line climbed 45.3% from the year-ago quarter.
Washington Federal’s WAFD third-quarter fiscal 2021 (ended Jun 30) earnings of 61 cents per share surpassed the Zacks Consensus Estimate of 52 cents. The figure reflects a year-over-year rise of 32.6%.
Zions Bancorporation’s ZION second-quarter 2021 net earnings per share of $2.08 surpassed the Zacks Consensus Estimate of $1.25. The bottom line marks a significant improvement from 34 cents earned in the year-ago quarter.
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