trending Market Intelligence /marketintelligence/en/news-insights/trending/fMXweecQMKt_nKIJ94EA6A2 content esgSubNav
In This List

Hancock Whitney expects EPS boost, margin expansion in 2019 from stock sale

Blog

Balance Sheet Strategy in an Unusual Rate Environment

Blog

Investors' Views of the Industry Today & the Outlook for Tomorrow

Podcast

Street Talk | Episode 98: Regulatory scrutiny having cooling effect on community bank M&A

Blog

Insight Weekly: M&A outlook; US community bank margins; green hydrogen players' EU expansion


Hancock Whitney expects EPS boost, margin expansion in 2019 from stock sale

Hancock Whitney Corp. expects a benefit of 7 basis points in net interest margin in 2019, and a boost of 5 cents per share in earnings, annualized, resulting from the sale of 192,000 shares of VISA-B stock and related portfolio restructuring conducted late in the fourth quarter of 2018.

During the fourth quarter, the Gulfport, Miss.-based company recorded a net gain of $33.2 million from the sale, which offset losses associated with selling $481 million of lower-yielding bonds and $116 million of lower-yielding municipal loans. Proceeds from the sales were used to buy $260 million of higher-yielding bonds and to pay down $346 million of Federal Home Loan Banks advances.

CFO Michael Achary, during the company's earnings call, said that the portfolio restructuring added 2 basis points of NIM improvement in the fourth quarter of 2018 and is expected to add another 5 basis points in the first quarter of 2019. Fourth-quarter NIM, on a taxable equivalent basis, stood at 3.39%, up from 3.36% in the third quarter of 2018.

In terms of the energy portfolio, Hancock Whitney was able to achieve its goal of reducing its energy exposure to approximately 5% in 2018. CEO John Hairston reiterated that the company intends to maintain the current concentration, with a targeted shift in the energy portfolio that emphasizes the upstream and midstream business sectors. "Our goal is to shift our energy portfolio. So it is approximately one-third energy services and two-thirds upstream and midstream business sectors," Hairston said during the call.

Commercial criticized loans declined $451 million, or 42%, during the year. On a linked-quarter basis, commercial criticized loans declined $208 million, or 25%.

The Gulfport, Miss.-based company reported fourth-quarter 2018 net income available to common shareholders of $94.5 million, or $1.10 per share, up from $54.3 million, or 64 cents per share, in the fourth quarter of 2017. Operating earnings available to common shareholders, which included nonoperating items, for the fourth quarter of 2018 amounted to $96.0 million, or $1.12 per share. This is compared to operating earnings of $73.5 million, or 86 cents per share in the last quarter of 2017, which included income tax resulting from re-measurement of deferred tax.

The S&P Global Market Intelligence consensus GAAP EPS estimate for the 2018 fourth quarter was $1.11.

The company repurchased 200,000 shares during the fourth quarter and remains opportunistic on buybacks.