Hancock Whitney Corporation Q2 FY2025 earnings call

• Strong quarter with focus on profitability, efficiency, and multiyear growth plan. NIM expanded six basis points and ROA was 1.37% after Sable-related expenses. - Loans grew $364 million or 6% annualized due to stronger demand, increased line utilization, and lower payoffs. - Deposits down $148 million but interest-bearing transaction and DDA balances up. - Fee income grew, led by trust fees from Sable. - Expenses controlled; capital ratios solid with TCE 9.84% and common equity tier one ratio 14.03%. - Repurchased 750,000 shares and acquired Sable Trust. - Added 10 net new bankers and solidified 5 new financial center locations in Dallas, with 3 opening in back half of 2025 and 2 in first half of 2026.

Loans grew $364 million or 6% annualized. Deposits were down $148 million due to CD maturity concentration, promotional rate reductions, and decrease in public funds, but interest-bearing transaction balances and DDA balances were up with DDA mix increasing 37%. NIM expanded six basis points. ROA was 1.37% after adjusting for Sable Trust expenses. Fee income grew, with trust fees driving most growth from the Sable acquisition. Loan yield was up two basis points to 5.86%, and NIM continued to expand as average earning assets grew at higher yields and deposit costs were reduced.

• Loan growth guidance unchanged: low single-digit growth for 2025, inferring mid-single-digit for Q2. - NIM expected to expand in second half of 2025. - NII growth expected to be between 3-4% for the year. - Share repurchases to continue at current level. - Comfortable operating capital ratios: tier one common around 11-11.5% and TCE around 8%.

• Macroeconomic environment dynamics pose challenges. - Deposit cost changes and regulatory changes could impact buybacks and capital ratios. - Credit risks related to potential weakening in loan portfolio sectors if macroeconomic conditions deteriorate.

Q: About buybacks, do you have a target CET1 ratio?

A: Mike Achary said they're comfortable operating between 11-11.5% for tier one common and around 8% for TCE, not hard lines.

Q: Update on loan growth and borrower health?

A: John Hairston said loan growth driver is net new loans to net new clients, construction development book expected to improve, and borrowers becoming less sensitive to headlines.

Q: NIM outlook?

A: Mike Achary said NIM expected to expand in second half with factors like stable DDA mix, reducing deposit costs, loan growth, and bond book cash flow repricing.

Q: M&A market and acquisitiveness?

A: Mike Achary said M&A not currently focused on, but opportunistic if circumstances arise.

Q: Buyback and share pricing impact?

A: Mike Achary said buyback continues at current level, dependent on share pricing and market conditions.

Q: Credit charge offs and criticized loans?

A: Chris Ziluca said charge offs expected to move lower with resolution of lingering credits and no systemic issues in portfolio. Criticized loans seen with more resolution than inflows.

Q: Hiring and M&A impact?

A: John Hairston said no ceiling on banker hires, with goal of 30 bankers to support loan growth, and M&A could increase hiring if opportunistic.

Q: Opportunities from new entrants in Texas?

A: John Hairston said disruption from new entrants is good, with open roles in highlighted markets and opportunistic approach to lending to nondepository borrowers.