DEF 14A: Hancock Whitney Corp Reports Strong 2023 Performance Amidst Challenging Environment

Hancock Whitney Corporation reports solid 2023 financial results, highlighting earnings per share of $4.50 and strategic balance sheet management despite a tough operating landscape.

Summary

• Hancock Whitney Corporation reported earnings per diluted share of $4.50 for 2023, compared to $5.98 in 2022.
• The 2023 results include a net charge of $75.4 million (pre-tax), or $0.68 per share after tax, due to a securities portfolio restructure loss of $65.4 million and a $26.1 million FDIC special assessment charge, partially offset by a $16.1 million gain from a parking facility sale.
• Adjusted pre-provision net revenue (PPNR) totaled $635.7 million in 2023, slightly down from $641.1 million in 2022.
• Loan growth reached $808 million, a 3% increase from 2022, funded largely by deposit growth of $620 million, or 2%.
• The company completed a securities portfolio restructure in the fourth quarter of 2023, deleveraging the balance sheet and reinvesting in higher-yielding securities.
• Net interest margin in 2023 was 3.34%, up 8 bps from 2022, driven by rising interest rates and a favorable earning asset mix.
• Credit metrics remained strong, with criticized commercial loans and nonaccrual loans near historically low levels.
• The allowance for credit losses reserve coverage was 1.41% at year-end.
• The tangible common equity (TCE) ratio increased to 8.37%, and the common equity tier 1 (CET1) ratio rose to 12.33% at the end of 2023.
• In January 2023, the Board of Directors approved an 11% increase in the quarterly dividend payment to $0.30 per common share.

Sentiment

Score: 7

Explanation: The document presents a balanced view, highlighting both positive achievements and negative impacts from specific events. The overall tone is cautiously optimistic, emphasizing the company's resilience and strategic positioning for future success.

Positives

• Strong capital position with increased TCE and CET1 ratios.
• Solid allowance for credit losses reserve coverage at 1.41%.
• Uninterrupted quarterly dividend payments since 1967, with an 11% increase in 2023.
• Continued commitment to Diversity, Equity, and Inclusion (DEI) initiatives.
• Criticized commercial loans and nonaccrual loans remained near historically low levels throughout 2023.

Negatives

• Reported earnings per diluted share decreased from $5.98 in 2022 to $4.50 in 2023.
• Adjusted pre-provision net revenue (PPNR) decreased by $5.4 million compared to 2022.
• Efficiency ratio increased from 52.93% in 2022 to 55.25% in 2023.

Risks

• Challenging operating environment impacting financial results.
• Softer loan demand affecting loan growth.
• Increased expenses due to post-retirement expenses and regulatory costs.
• Change in deposit mix from noninterest-bearing deposits to retail time deposits.

Future Outlook

The company believes its efforts in 2023 have positioned it for continued success as a regional financial services leader.

Management Comments

• The Hancock Whitney team continued to achieve remarkable results despite the challenging operating environment.
• We believe our efforts in 2023 have helped position us for continued success as a regional financial services leader.
• We pledge exceptional service to our clients and communities and believe our commitment to DEI further strengthens our ability to meet the needs of our associates, communities, clients, and shareholders.

Industry Context

The document highlights the company's performance in a challenging operating environment, emphasizing its strength and stability compared to other institutions.

Comparison to Industry Standards

• The document references a Compensation Peer Group of 25 banks and bank holding companies with assets ranging from $25 billion to $100 billion.
• The company's compensation targets are generally aligned with the median of this peer group.
• The KBW Regional Bank Index is used as a peer group index for the TSR performance metric.

Related Party Transactions

• The Company, through the Bank, has made loans in the ordinary course of business to insiders of the Company and the Bank, and their related interests, on substantially the same terms as those prevailing at the time for comparable transactions with persons not related to the Company.

Stakeholder Impact

• Shareholders will receive information about the company's performance and executive compensation.
• Employees are recognized for their efforts in achieving the company's results.
• Clients and communities are assured of the company's commitment to service and DEI initiatives.

Next Steps

• The Annual Meeting of Shareholders will be held on April 24, 2024.
• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The Board and Compensation Committee will consider the outcome of the advisory vote on executive compensation when making future decisions.

Key Dates

Keywords

executive compensation, proxy statement, annual meeting, financial performance, corporate governance, Hancock Whitney