Hancock Whitney Corporation - 6 Q2 FY2025 earnings call

• Strong February quarter with focus on profitability, efficiency, and growth plan. NIM expanded six basis points, ROA 1.37% after Sable Trust expenses. - Loans grew $364 million or 6% annualized. Deposits down $148 million due to CD maturities and promotional rate cuts, but interest-bearing transaction and DDA balances up. - Fee income grew, led by trust fees from Sable. - Expenses controlled, with investments in revenue producers and technology. - Repurchased 750,000 shares and acquired Sable Trust. - Solid capital ratios. - Added 10 net new bankers, solidified 5 new financial center locations in Dallas, with 3 opening in back half of 2025 and 2 in first half of 2026. - Acknowledged support for Texas flood recovery.

Loans grew $364 million or 6% annualized. Deposits were down $148 million. NIM expanded six basis points, and ROA was 1.37% after adjusting for Sable Trust expenses. Fee income grew, with trust fees driving most of the growth from the additional team and client book from Sable. Capital ratios remained solid with TCE of 9.84% and common equity tier one ratio of 14.03%. Loan revenue contribution was from stronger demand, increased line utilization, and lower payoffs. Deposit contribution was affected by CD maturities and promotional rate reductions, but interest-bearing transaction and DDA balances were up.

• Loan growth guidance unchanged, expecting low single-digit growth in 2025, inferring mid-single-digit for February. - NIM expected to expand in second half of 2025, NII growth 3-4% for the year. - Charge offs expected to average 15-25 basis points full year 2025. - Share repurchases to continue at current pace. - CD maturities and renewals at lower rates expected to continue reducing deposit costs.

• Macroeconomic environment dynamics could impact projections. - Uncertainty in predicting market or economic developments affecting ability to accurately project results. - Credit risks related to loan portfolio performance and potential weakening in specific sectors.

Q: Michael Rose asked about buybacks and target CET1 ratio.

A: Mike Achary said capital levels are comfortable between eleven and eleven and a half for tier one common and TCE around 8%.

Q: Catherine Mealor asked about NIM outlook.

A: Mike Achary said NIM expansion in second half has minimal difference with zero or two rate cuts, driven by loan growth, DDA mix, reducing deposit costs, and repricing cash flows from bond book.

Q: Casey Haire asked about loan growth in CRE and M&A.

A: John Hairston said CRE growth was due to less payoffs, successful owner-occupied real estate campaign; Mike Achary said M&A is not currently focused on, but opportunistic down the road.

Q: Ben Gerlinger asked about SNCs and rate cuts.

A: John Hairston said SNCs are around 9.5% and likely to stay, Mike Achary said deposit beta would creep up with rate cuts, and loan rates would reprice accordingly.

Q: Brett Rabatin asked about loan growth and fee income.

A: John Hairston said loan growth mix is different, with benefit from low cost deposits; fee income growth expected to continue from trust and other sectors.

Q: Gary Tenner asked about buyback and deposit growth.

A: Mike Achary said buyback intent is to spend $40 million, deposit growth influenced by CD renewals and seasonality; John Hairston said deposit inflows in fourth quarter from public funds.

Q: Matt Olney asked about credit and charge offs.

A: Chris Ziluca said charge offs expected to move lower, with resolution of some credits and robust portfolio management.

Q: Stephen Scouten asked about M&A and hiring.

A: John Hairston said appetite for hiring is high, with goal of 30 bankers, and M&A is opportunistic; Mike Achary said focus is on organic growth and profitability.

Q: Christopher Marinac asked about opportunities from new entrants and nondepository borrowers.

A: John Hairston said disruption is good, with open roles in green markets; Chris Ziluca said nondepository borrowers could be opportunities but are opportunistic.