Hancock Whitney Corp Reports Strong Earnings Amid Challenges

Hancock Whitney Corp ((HWC)) has held its Q1 earnings call. Read on for the main highlights of the call.

Hancock Whitney Corp’s recent earnings call conveyed a positive sentiment overall, highlighting strong financial performance despite some challenges. The company achieved notable successes in net interest margin (NIM) expansion and fee income growth. However, declines in loans and deposits were acknowledged as areas of concern. Strategic initiatives, such as the Sable Trust acquisition and capital returns, were well-received, but the economic environment and loan yield pressures continue to pose challenges.

Strong Financial Performance

Hancock Whitney Corporation reported a robust return on assets (ROA) of 1.41% and concluded the quarter with a total risk-based capital ratio of 16.39%. These figures underscore the company’s solid financial standing and its ability to navigate challenging market conditions.

Net Interest Margin Expansion

The company achieved a two basis point increase in its Net Interest Margin (NIM), reaching 3.43%. This expansion was primarily driven by lower deposit costs and a favorable funding mix, showcasing Hancock Whitney’s effective financial management.

Fee Income Growth

Fee income saw a significant increase of 9% to 10% year-over-year, with strong performance across most categories. This growth highlights the company’s successful diversification of revenue streams.

Capital Return to Shareholders

Hancock Whitney demonstrated its commitment to returning capital to shareholders by repurchasing 350,000 shares of common stock and increasing the common stock dividend to $0.45 per share, marking a 50% increase from the previous year.

Sable Trust Acquisition

The acquisition of Sable Trust Company is on track to close on May 2nd and is expected to contribute approximately two cents per share to earnings in 2025. This strategic move is anticipated to bolster the company’s earnings potential.

Loan Decline

Loans decreased by $201 million, attributed to higher payoffs, particularly in the healthcare and commercial non-real estate sectors. This decline reflects the challenges faced in maintaining loan growth.

Deposit Decline

Deposits fell by $298 million, mainly due to seasonal public fund outflows. Despite this decline, the company’s non-interest-bearing deposit mix remained stable at 36%.

Lower Loan Yield

Loan yields decreased by 18 basis points to 5.84%, impacted by lower average loan balances and yields on the variable rate loan portfolio, indicating pressure on loan profitability.

Forward-Looking Guidance

Looking ahead, Hancock Whitney anticipates low single-digit loan growth for 2025, with most growth expected in the second half of the year. Fee income is projected to rise by 9% to 10% year-over-year, supported by the Sable Trust transaction. The company maintains robust capital metrics, with a common equity tier one ratio of 14.51% and a tangible common equity ratio of 10.01%.

In summary, Hancock Whitney Corp’s earnings call highlighted a strong financial performance with strategic initiatives poised to drive future growth. While challenges remain, particularly in loans and deposits, the company’s effective management and strategic acquisitions position it well for continued success.