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Hancock Whitney (HWC) Down 10.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Hancock Whitney (HWC - Free Report) . Shares have lost about 10.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hancock Whitney due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hancock Whitney's Q3 Earnings In Line, Revenues Increase
Hancock Whitney Corporation’s third-quarter 2018 adjusted earnings per share of $1.01 came in line with the Zacks Consensus Estimate. Also, the figure represents an improvement of nearly 32.9% year over year.
Results benefited from an improvement in net revenues and decline in provision for loan losses. Further, loan and deposit growth remained strong. However, an increase in expenses and lower net interest margin were the downsides.
After considering the impact of several non-recurring items, net income for the quarter came in at $83.9 million or 96 cents per share, up from $58.9 million or 68 cents per share reported in the prior-year quarter.
Revenues Improve, Expenses Flare Up
Hancock’s net revenues were $289.7 million, up 7.3% year over year. The figure missed the Zacks Consensus Estimate of $292.7 million.
Net interest income grew 5.6% year over year to $214.2 million. Net interest margin, on a tax-equivalent basis, came in at 3.36%, contracting 8 basis points.
Non-interest income totaled $75.5 million, reflecting an increase of 14% from the year-ago quarter. The figure included $5.5 million in trust fees, which resulted from the Capital One Trust and Asset Management acquisition.
Total operating expenses increased 6.1% year over year to $176.4 million. This was due to increase in personnel expense as well as acquisition expense.
Credit Quality: Mixed Bag
Net charge-offs from the non-covered loan portfolio was 0.14% of average total loans, edging down from 0.25% in the year-ago quarter. Also, provision for loan losses declined 43.9% year over year to roughly $6.9 million.
However, total non-performing assets increased marginally year over year to $391.3 million.
Strong Balance Sheet, Higher Profitability and Capital Ratios
As of Sep 30, 2018, total loans were $19.5 billion, up from $19.4 billion recorded at the prior-quarter end. Furthermore, total deposits increased 0.8% from the prior quarter to $22.4 billion.
Return on average assets was 1.19% at the end of the quarter, up from 0.88% in the prior-year quarter. Moreover, return on average common equity was 11.27% compared with 8.23% at the end of September 2017.
As of Sep 30, 2018, Tier 1 leverage ratio was 8.50%, up from 8.34% a year ago. However, Tier 1 risk-based capital ratio was 10.39%, increasing from 10.10% as of Sep 30, 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 7.53% due to these changes.
VGM Scores
At this time, Hancock Whitney has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hancock Whitney has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Hancock Whitney (HWC) Down 10.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Hancock Whitney (HWC - Free Report) . Shares have lost about 10.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hancock Whitney due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hancock Whitney's Q3 Earnings In Line, Revenues Increase
Hancock Whitney Corporation’s third-quarter 2018 adjusted earnings per share of $1.01 came in line with the Zacks Consensus Estimate. Also, the figure represents an improvement of nearly 32.9% year over year.
Results benefited from an improvement in net revenues and decline in provision for loan losses. Further, loan and deposit growth remained strong. However, an increase in expenses and lower net interest margin were the downsides.
After considering the impact of several non-recurring items, net income for the quarter came in at $83.9 million or 96 cents per share, up from $58.9 million or 68 cents per share reported in the prior-year quarter.
Revenues Improve, Expenses Flare Up
Hancock’s net revenues were $289.7 million, up 7.3% year over year. The figure missed the Zacks Consensus Estimate of $292.7 million.
Net interest income grew 5.6% year over year to $214.2 million. Net interest margin, on a tax-equivalent basis, came in at 3.36%, contracting 8 basis points.
Non-interest income totaled $75.5 million, reflecting an increase of 14% from the year-ago quarter. The figure included $5.5 million in trust fees, which resulted from the Capital One Trust and Asset Management acquisition.
Total operating expenses increased 6.1% year over year to $176.4 million. This was due to increase in personnel expense as well as acquisition expense.
Credit Quality: Mixed Bag
Net charge-offs from the non-covered loan portfolio was 0.14% of average total loans, edging down from 0.25% in the year-ago quarter. Also, provision for loan losses declined 43.9% year over year to roughly $6.9 million.
However, total non-performing assets increased marginally year over year to $391.3 million.
Strong Balance Sheet, Higher Profitability and Capital Ratios
As of Sep 30, 2018, total loans were $19.5 billion, up from $19.4 billion recorded at the prior-quarter end. Furthermore, total deposits increased 0.8% from the prior quarter to $22.4 billion.
Return on average assets was 1.19% at the end of the quarter, up from 0.88% in the prior-year quarter. Moreover, return on average common equity was 11.27% compared with 8.23% at the end of September 2017.
As of Sep 30, 2018, Tier 1 leverage ratio was 8.50%, up from 8.34% a year ago. However, Tier 1 risk-based capital ratio was 10.39%, increasing from 10.10% as of Sep 30, 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 7.53% due to these changes.
VGM Scores
At this time, Hancock Whitney has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hancock Whitney has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.