Bearish stock to watch: Hancock Whitney Corp (NASDAQ: HWC)

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Hancock Whitney Corp (NASDAQ: HWC) stock fell over 0.2% on October 16th, 2019 (As of 9:39 am GMT-4; Source: Google finance) after the company posted mixed results for the third quarter of FY 19 due to costs related to its acquisition of Lafayette-based MidSouth Bancorp. The net income fell to $67.8 million from $83.9 million, a year ago. The bank’s costs related to the acquisition of MidSouth Bancorp (MSL) had affected the earnings by $28.8 million. The company had closed MSL acquisition effective on September 21, 2019 with a simultaneous systems conversion. HWC’s common shareholders’ equity at the end of September 2019 totaled $3.6 billion, up 8%, from June 30, 2019. The tangible common equity (TCE) ratio was 8.82%, up 7 bps from June 30, 2019.

HWC in the third quarter of FY 19 has reported the adjusted earnings per share of $1.03, beating the analysts’ estimates for the adjusted earnings per share of $1.01, as per Zacks Consensus Estimate. The company had reported the adjusted revenue of $306.17 million in the third quarter of FY 19, missing the analysts’ estimates for revenue by 0.58%.

Moreover, total loans at September 30, 2019 were $21.0 billion, which has grown approximately $860 million linked-quarter. Net loan growth during the third quarter includes $785 million (net of $41 million loan mark) from the acquisition of the MSL portfolio. Total deposits at the end of  September 2019 were $24.2 billion, which is up $965 million from June 30, 2019, that includes $1.3 billion related to the MSL acquisition. Average deposits for the third quarter of 2019 were $23.1 billion, which had declined $46 million, from linked-quarter. Nonperforming assets (NPAs) fell 7% to $314.7 million at September 30, 2019, from June 30, 2019. The decline is mainly due to reduction of $40 million in accruing energy TDRs.

Further, Net interest income (TE) for the third quarter of 2019 was up $3.0 million to $226.6 million, from the second quarter of 2019. The improvement in net interest income was mainly due to one additional accrual day in the quarter and higher earning assets, offset by the impact from two Fed rate decreases.  The net interest margin (TE) was 3.41% for the third quarter of 2019, down 4 bps from the second quarter of 2019.

Additionally, during the third quarter the company has approved an increase in its common stock buyback authorization to 5.5 million shares and extended the authorization through December 31, 2020.

 

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