Hancock Whitney Corporation Q4 FY2025 earnings call

• Fourth quarter had solid earnings with ROA of 1.41% and efficiency ratio under 55%. Fee income growth continued, expenses well managed. Net interest income grew with reduced cost of funds and higher security yields. - Completed bond portfolio restructuring last week, which benefits NIM by 7 basis points and EPS by $0.23 per share. - Expect to hire up to 50 additional revenue-generating associates in 2026 to support growth targets and improve profitability through focus on full relationship clients. - Loan production was strong in Q4 with $1.6 billion in production, geographically balanced across core markets, and commercial real estate, health care, commercial finance, and consumer loan segments contributing to growth.

Fourth quarter of 2025 was strong with year-over-year improvement in EPS of 8%, PPNR growth of 6%, and tangible book value per share increased 12%. Net interest income continued to grow as the cost of funds was reduced and security yields were higher. Loans grew $362 million or 6% annualized. Deposits were up $620 million or 9% annualized, largely driven by seasonal activity in public fund DDA and interest-bearing accounts. DDA mix ended the quarter at a strong 35%.

• Guidance for 2026 reflects organic growth benefits and bond portfolio restructuring impact. - Expect NII to be up between 5% and 6% from 2025 with modest NIM expansion. - PPNR guide is to be up between 4.5% and 5.5%. - Efficiency ratio expected to fall in the range of 54% and 55% in 2026. - Loan growth in 2026 is expected to be mid-single digits. - Board reauthorized a new 5% share buyback plan effective through the end of 2026.

• General risk of the current economic environment rapidly evolving and changing, which limits the ability to accurately project results or predict market or economic developments. - Uncertainty around ability to maintain profitability and balance sheet growth amidst economic fluctuations.

Q: Noticed that the fourth quarter loan production was up about 7.5% Q-on-Q, but paydowns were also up. What are expectations for gross production versus expected paydowns as we move through the year?

A: Shane Loper mentioned loan production increased for the third consecutive quarter with nearly $1.6 billion in Q4, geographically balanced across core markets. Paydowns are expected in CRE, but there's still private credit and other lending opportunities. The team is focused on generating business going forward.

Q: Talked about seeing modest NIM expansion in '26, but 7 basis points immediately upfront from bond restructure. What's thinking on margin outside of that onetime event?

A: Michael Achary said main underpinnings of margin expansion include organic balance sheet growth, securities yield improvement, ability to reduce cost of deposits. Loan yield may decline slightly but overall NIM expected to improve 12-15 basis points with 7 basis points from bond restructure.

Q: Fee guide is 4% to 5%, but feels a little conservative. Any thoughts?

A: Shane Loper mentioned fee income continues to deliver, with growth in consumer DDAs, mobile openings, business service charges, and wealth management. Michael Achary noted 2025 had distorted numbers due to Sabal and unpredictable specialty lines, but 4%-5% guide is solid and can be adjusted as needed.

Q: Concern about M&A appetite despite saying not focused on it. What's the stance?

A: Michael Achary stated stance is opportunistic, paying attention to market goings-on but not actively seeking M&A, described as being aware and talking to folks without being particularly focused on it.