Hancock Whitney Corporation Q3 FY2025 earnings call

• ROA improved to 1.46% versus 1.32% a year ago, reflecting continued profitability improvement. - Net interest income expanded with average earning assets growing at higher yields and deposit costs reduced. - Fee income grew 8% to $106 million, led by insurance and annuity fees. - Expenses remained well controlled, with adjusted net interest expense up less than $3 million. - Loans grew $135 million, with production strong but impacted by payoffs and line utilization issues. - Deposits down $387 million due to seasonal factors. - Capital ratios strong: TCE at 10.01%, common equity Tier one ratio at 14.08%. - Organic growth plan: hired 20 net new bankers, plan to open 5 new locations in the Dallas market by late 2025/early 2026.

Net interest income expanded as average earning assets grew at higher yields and deposit costs were reduced by 1 basis point. Fee income totaled $106 million, an 8% increase from the prior quarter, with investment in insurance and annuity fees leading the growth. Loans grew $135 million (2% annualized), with production up 6% quarter over quarter and 46% from the same quarter last year, but impacted by higher payoffs of larger credits and reduced line utilization among industrial contractors. Deposits were down $387 million, largely driven by seasonal activity in public fund DDA and interest-bearing accounts.

• Expect low single-digit growth in 2025 and low single-digit net growth for the fourth quarter. - Anticipate deposit costs to be down in the fourth quarter following expected rate cuts. - Share repurchases to continue at the current quarter's level in 2025. - Expect portfolio yield to increase with continued reinvestment at higher rates.

• Uncertainty in the macroeconomic environment limits the ability to accurately project results. - Actual results may differ materially from forward-looking statements. - Risks associated with non-GAAP financial measures and market developments.

Q: Michael Rose asked about loan growth, paydowns, and 2026 growth.

A: John Hairston responded about loan production being solid, paydowns from large industrial projects and client sales, and expectations for mid-single-digit growth in 2025 funded by high-quality deposits.

Q: Michael Rose followed up on capital and M&A.

A: Mike Achary stated no focus on M&A currently, capital priorities include organic growth, with potential to incrementally increase share repurchases and discuss dividends in January.

Q: Ben Gerlinger asked about branch expansion and investment.

A: Mike Achary explained annualized run rates for expenses related to hiring and new facilities in Dallas, with plans to continue investments in 2026.

Q: Casey Haire asked about NII guide and private credit paydowns.

A: Mike Achary discussed modest NII growth expectations, and John Hairston explained private credit and paydown drivers as industrial project completions and client sales.

Q: Catherine Mealor asked about deposit betas and variable rate loan yields.

A: Mike Achary said deposit betas expected to remain proactive, and variable rate loan yields affected by mix and pricing competition.

Q: Gary Tenner asked about deposit spot rate and non-accruals.

A: Mike Achary provided deposit spot rate data, and Chris Ziluca discussed non-accruals as a mix of consumer and C&I loans with companies performing better or seeking alternate financing.

Q: Matt Olney asked about criticized commercial loans and new loan producer opportunities.

A: Chris Ziluca discussed criticized commercial loans moving lower with companies refinancing or performing better, and John Hairston talked about hiring experienced bankers in emerging markets and Dallas disruption opportunities.

Q: Brett Rabatin asked about deposit growth and Dallas organic growth plan.

A: Mike Achary discussed seasonal deposit growth expectations, and John Hairston talked about Dallas market growth, staffing, and potential for additional locations in mid to late 2026 based on disruption.