Hancock Whitney Corporation (NASDAQ:HWC) Q4 2018 Earnings Conference Call Transcript

Jan 17, 2019 • 09:30 am ET

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Hancock Whitney Corporation (NASDAQ:HWC) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Hancock Whitney Corporation's Fourth Quarter 2018 Earnings Conference Call. (Operator Instructions) As a reminder, this call may be recorded.

I would now like to introduce your host for today's conference, Trisha Carlson, Investor Relations Manager. You may begin.

Executive
Trisha Carlson

Thank you and good morning.

During today's call, we may make forward-looking statements. We would like to remind everyone to review the Safe Harbor language that was published with yesterday's release and presentation and in the Company's most recent 10-K, including the risks and uncertainties identified therein. Hancock Whitney's ability to accurately project results or predict the effects of future plans or strategies or predict market or economic developments is inherently limited. We believe that the expectations reflected or implied by any forward-looking statements are based on reasonable assumptions, but our actual results and performance could differ materially from those set forth in our forward-looking statements. Hancock undertakes no obligation to update or revise any forward-looking statements, and you are cautioned not to place undue reliance on such forward-looking statements.

In addition, some of the remarks this morning contain non-GAAP financial measures. You can find reconciliations to the most comparable GAAP measures in our earnings release and financial tables.

The presentation slides included in our 8-K are also posted with the conference call webcast link on the Investor Relations website. We will reference some of these slides in today's call.

Participating in today's call are John Hairston, President and CEO; Mike Achary, CFO; and Sam Kendricks, Chief Credit Risk Officer.

I will now turn the call over to John Hairston.

Executive
John Hairston

Thanks, Trisha; and thanks, everyone, for joining us today. As we begin 2019, we are pleased to end the previous year with solid fourth quarter results and significantly improved performance for 2018 as a whole. For the full year 2018, on an operating basis, net income was up almost $100 million or 38%, earnings per share increased $1.10 to just under $4 per share and ROA was up 29 basis points to 1.25%.

Loans grew approximately $1 billion or 5% from the end of 2017. Commercial criticized loans declined $451 million or 42% during the year. And we achieved our goal of reducing our energy exposure to approximately 5%. The year ended with TCE back above 8% and improved operating leverage of $38 million.

We consolidated our two brands mid-year and closed two transactions; the consumer finance divestiture in early March and the trust and asset management acquisition in early July. During the fourth quarter, loans increased almost $500 million, exceeding our initial expectations and surpassing $20 billion in total. This net growth includes the sale of $116 million in lower yielding municipal loans, which Mike will discuss shortly.

Our performance in loan growth occurred primarily due to new opportunities generated that were not in the pipeline in early October and expected fourth quarter payoffs on certain credits to move to the first quarter of 2019.

You can see from the chart on slide