Click To Edit Master Title Style First Quarter 2018 Earnings Conference Call 4/18/2018
Important Cautionary Statement About Forward-Looking Statements This presentation contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward looking statements that we may make include statements regarding balance sheet and revenue growth, the provision for loans losses, loan growth expectations, management’s predictions about charge -offs for loans, including energy-related credits, the impact of changes in oil and gas prices on our energy portfolio, and the downstream impact on businesses that support the energy sector, especially in the Gulf Coast region, the impact of the sale of HFC on our performance and financial condition, the impact of the transactions with First NBC and Capital One (pending) on our performance and financial condition, including our ability to successfully integrate the businesses, deposit trends, credit quality trends, net interest margin trends, future expense levels, success of revenue-generating initiatives, projected tax rates, future profitability, improvements in expense to revenue (efficiency) ratio, purchase accounting impacts such as accretion levels, and the financial impact of regulatory requirements and tax reform legislation. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “forecast,” “goals,” “targets,” “initiatives,” “focus,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward -looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. Forward-looking statements are subject to significant risks and uncertainties. Any forward-looking statement made in this release is subject to the safe harbor protections set forth in the Private Securities Litigation Reform Act of 1995. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward looking statements. Additional factors that could cause actual results to differ materially from those described in the forward- looking statements can be found in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 and in other periodic reports that we file with the SEC. 2
Corporate Profile (as of March 31, 2018) ▸ $27.3 billion in Total Assets ▸ $19.1 billion in Total Loans ▸ $22.5 billion in Total Deposits ▸ Tangible Common Equity (TCE) ratio 7.80% ▸ Nearly 200 banking locations and 267 ATMs across our footprint ▸ Approximately 3,800 (FTE) employees corporate-wide ▸ Rated among the strongest, safest financial institutions in the country by BauerFinancial, Inc. for 114 consecutive quarters ▸ Earned top customer service marks with Greenwich Excellence Awards Moody’s long -term issuer rating: Baa3 ▸ ▸ S&P long-term issuer rating: BBB 3
First Quarter 2018 Highlights (compared to fourth quarter 2017) 1Q17 ($s in millions; except per share data) 1Q18 4Q17 ▸ Reported earnings increased $17.0 million, Net Income $72.5 $55.4 $49.0 or 31%; excluding the impact of the DTA re-measurement charge and nonoperating Earnings Per Share – diluted $.83 $.64 $.57 items, earnings increased $3.3 million, or Weighted Average Shares Outstanding (diluted) 85.4 85.3 84.6 4% Provision for loan losses $12.3 $15.0 $16.0 ▸ First quarter included $7.0 million of Return on Assets (%) (ROA) 1.08 0.82 0.80 nonoperating items related to the sale of Return on Tangible Common Equity (%) (ROTCE) 14.41 10.81 9.92 HFC, the pending acquisition of Capital One Total Loans (period-end) $19,093 $19,004 $18,205 Financial’s trust and asset management Total Deposits (period-end) $22,486 $22,253 $19,922 business, the brand consolidation project and a one-time all hands bonus pay Net Interest Margin (%) 3.37 3.48 3.37 Net Charge-offs (%) 0.26 0.44 0.70 ▸ Efficiency ratio was 57.5% compared to Tangible Common Equity (%) 7.80 7.73 7.94 56.6% LQ; the change is mainly related to the impact of tax reform on the TE Results Excluding Nonoperating Items (operating)* adjustment Nonoperating Items (pre-tax) $7.0 -- $2.1 DTA re-measurement charge -- $19.5 -- ▸ Return on average assets (ROA) improved Operating income $78.3 $75.0 $50.4 26 bps to 1.08%; excluding nonoperating Earnings Per Share – diluted $.90 $.86 $.58 items and the 4Q17 DTA charge, ROA Pre-provision net revenue (TE) $112.1 $118.6 $92.0 increased 7 bps to 1.17% ROA (%) 1.17 1.10 0.83 ▸ Tangible common equity (TCE) ratio ROTCE (%) 15.56 14.62 10.20 increased 7 bps to 7.80% Efficiency Ratio** (%) 57.5 56.6 61.2 *See slides 19-22 for non-GAAP reconciliations ** Efficiency Ratio is noninterest expense to total net interest (TE) and noninterest income, excluding amortization of purchased intangibles and nonoperating items. 4
Total Loans by Market/LOB Well-Diversified Loan Portfolio $19,093 Consumer 3/31/18 $2,029 11% ▸ Loans totaled $19.1 billion at quarter-end, an increase of $88 million Mortgage $2,733 14% ▸ Reflects decline of $95 million in consumer finance company C&I $8,336 loans related to the sale of Harrison Finance on March 9, 2018 44% ▸ Energy portfolio virtually unchanged ▸ Net loan growth during the quarter continues to be diversified Income-producing CRE $2,395 both regionally and in areas identified as part of the company’s 13% C&D $1,414 revenue-generating initiatives Owner-occupied 7% CRE $2,186 11% $19,500 $19,400 $19,300 Total Loans by Market/LOB $43 $25 $19,093 $19,200 $24 $2 $55 $115 3/31/18 $19,100 $95 Energy $18 $21 19,093 $1,054 $37 Other $19,000 5% $1,308 Millions 19,004 7% East Region (MS $18,900 AL & FL) $4,402 23% $18,800 Mortgage $2,733 14% $18,700 $18,600 Equipment Finance $18,500 $558 3% $18,400 Indirect $18,300 $515 3% Central Region $18,200 (SE LA) 4Q17 East Region Central Region West Region Nashville Indirect Equipment Mortgage Energy HFC (consumer Other 1Q18 $4,712 (MS. AL & FL) (SE LA) (TX & SW LA) Healthcare Finance finance co) 25% Nashville Healthcare $482 West Region (TX 3% & SW LA) $3,329 17% $s in millions 5
Energy Portfolio Overview Support Nondrilling Upstream 50% (RBL) 33% ▸ Energy loans totaled $1.1 billion, or 5.5% of total loans, relatively unchanged linked- Upstream (RBL) quarter and down $235 million compared to a year earlier Midstream Support Drilling • Linked-quarter change reflects approximately $76 million in net reductions and $7.6 million of charge-offs, offset by Support Nondrilling approximately $85 million in fundings Midstream 5% ▸ Net decrease in outstandings of $2 million linked-quarter and a $46 million decrease in Support total commitments Drilling 12% • $9 million linked-quarter decrease in upstream sector outstandings and an $11 million decrease in total Energy Portfolio as a % of Total Loans commitments 14.0% 13.0% • $5 million linked-quarter increase in midstream sector outstandings with total commitments unchanged 12.0% 11.0% • 10.0% $1 million linked-quarter increase in support sector outstandings and a $37 million reduction in total commitments 9.0% 8.0% ▸ Net increase of $20 million in nonaccrual energy loans 7.0% 6.0% ▸ Accruing energy TDRs totaled $163 million at March 31, 2018 5.0% 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 % of total loans 13.0% 12.4% 12.0% 11.6% 11.2% 10.1% 10.2% 9.2% 8.7% 8.4% 7.1% 6.7% 6.0% 5.6% 5.5% As of March 31, 2018 $ 30-day % 30-day ($ in millions) Total Outstanding Total Commitment % Utilization $ Criticized % Criticized $ Nonaccrual* % Nonaccrual* Past Due** Past Due** Upstream $ 344 $ 633 54% $ 178 52% $ 23 7% $ 8 2% Midstream $ 57 $ 78 73% $ - - $ - - $ - - Support Drilling $ 125 $ 225 56% $ 68 54% $ 16 13% $ 46 37% Support Nondrilling $ 527 $ 717 74% $ 277 53% $ 77 15% $ 47 9% Downstream $ 1 $ 58 2% $ - - $ - - $ - - Total Energy $ 1,054 $ 1,712 62% $ 523 50% $ 116 11% $ 101 10% * Nonaccruals exclude accruing TDRs; **Includes accrual and nonaccrual loans 6
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