Hancock Whitney Corporation (NASDAQ:HWC) Q3 2020 Earnings Conference Call - Final Transcript

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

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 risks 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 developments 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 afternoon 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.

Thanks, Chris, and good afternoon everyone. We're very pleased to report results today to reflect the execution of the de-risking strategy we implemented in the first half of 2020. Earlier this year we absorbed the impact of building a strong pandemic related reserve, issued additional subordinated debt and downsize future risk by divesting approximately $500 million in energy credits. With those actions taken we returned to profitability this quarter, we expect to return to profitability and de-risking strategy should lead to improve returns for our shareholders.

Net income of $79 million or $0.90 per share reflects performance in line with our third quarter expectations for operating in today's pandemic environment, pre-provision net revenue was up 7% linked quarter and our provision for credit losses return to a more normalized level. NIM was flat quarter-to-quarter, fees improved across all business lines and we kept expenses under control. Today, our reserve for loan losses is a solid 2.16% or excluding PPP loans 2.4%. We believe at this point we are adequately reserved for potential losses in our loan portfolio, including the