Hancock Whitney Corporation (NASDAQ:HWC) Q4 2019 Earnings Conference Call - Final Transcript

Jan 16, 2020 • 09:30 am ET


Hancock Whitney Corporation (NASDAQ:HWC) Q4 2019 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to Hancock Whitney Corporation's Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions] Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]

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

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 risk 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 Whitney 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 Chris Ziluca, Chief Credit Officer.

I will now turn the call over to John Hairston.

John M. Hairston

Thanks, Trisha and happy New Year, everyone. We hope you had a healthy and enjoyable holiday season. As noted in our release yesterday, we completed 2019 on a positive note, surpassing expectations with solid results. Earnings excluding merger costs were $1.06, up 3% linked quarter. Our operating leverage increased quarter-to-quarter and we reported loan growth in line with guidance, including a reduction in our energy portfolio of just over $70 million. Criticized loans decreased, NIM expanded and our capital levels remained strong, even with the share repurchases during quarter four.

For the year 2019, the story was similar. Earnings excluding merger costs were up; operating leverage increased $24 million compared to 2018; loans grew $1.2 billion, criticized and non-performing loans both declined year-over-year; and our TCE ratio was up 43 basis points. As we begin 2020, our team remains focused on building upon positive momentum and also capitalizing on available opportunities in our markets.

Please refer to Slide 6 in the earnings deck to see a five-year look back, indicating marked improvement the company has made through those years. We charted a new course in 2015 that was designed to return us to the profitability levels we had planned for. Challenging rate and credit environments caused us to reevaluate strategies and make appropriate adjustments. During the same time period, we benefited from a growing US economy and