Hancock Whitney Corporation (NASDAQ:HWC) Q2 2020 Earnings Conference Call - Final Transcript

Jul 21, 2020 • 05:00 pm ET


Hancock Whitney Corporation (NASDAQ:HWC) Q2 2020 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to Hancock Whitney Corporation's Second Quarter 2020 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.

Trisha Voltz Carlson

Thank you, and good afternoon. During today's call, we may make forward-looking statements. We would like to remind everyone to carefully review the Safe Harbor language that was published with the earnings release and presentation and in the company's most recent 10-K and 10-Q, including the risk and uncertainties identified therein. You should keep in mind that any forward-looking statements made by Hancock Whitney speak only as of the date on which they were made.

As everyone understands the current economic environment is rapidly evolving and changing. Hancock Whitney's ability to accurately project results or predict the effects of future plans or strategies or predict market or economic development is inherently limited. We believe that the expectations reflected or implied by any forward-looking statements are based on reasonable assumptions, but are not guarantees of performance or results and 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

Thank you, Trisha and good afternoon everyone. Our timing for this quarter's earnings release and call is different than our normal practice, and we thank you for joining us late in the day. Today's economic environment is challenging and evolves daily sometimes hourly. In light of those challenges and volatility, we took significant steps in the second quarter to continue derisking our balance sheet. After building a solid reserve for credit losses in the first quarter and then issuing sub-debt in June, we made a strategic decision to opportunistically divest a large portion of our energy portfolio. Since 2014 we have communicated a goal of reducing our energy-related exposure. We went from a high of 13.4% of total loans to just under 4.5% as of March 31.

Our plan to diminish the reliance upon and impact from this portion of our loan book was successfully working the book down to a less material level. In recent months growing concerns due to an ongoing supply-demand mismatch were exacerbated by the global pandemic, leading to a decision to accelerate reductions in exposure. We were pleased to reach an agreement