Hancock Whitney Corp ((HWC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call of Hancock Whitney Corp presented a generally positive outlook, highlighting a strong quarter with notable improvements in key financial metrics. The company reported enhancements in return on assets (ROA) and fee income growth, alongside strategic expansions in the Dallas market. However, challenges such as deposit declines and loan payoffs were also discussed, indicating areas that require attention.
Strong ROA Improvement
The company reported a significant improvement in its return on assets (ROA), which increased to 1.46% from 1.32% a year ago. This improvement reflects Hancock Whitney’s enhanced profitability and successful execution of its organic growth plan.
Fee Income Growth
Fee income saw a robust growth for the third consecutive quarter, reaching $106 million. This marks an 8% increase from the previous quarter, driven by record-high investments in insurance and annuity fees, showcasing the company’s strong performance in these areas.
Loan Production Increase
Loan production was notably strong, with a 6% increase quarter over quarter and a 46% rise from the same quarter last year. This contributed to an overall loan growth of $135 million or 2% annualized, indicating a healthy demand for loans.
Capital Strength
Hancock Whitney’s capital ratios remain robust, with a tangible common equity (TCE) ratio of 10.01% and a common equity Tier 1 (CET1) ratio of 14.08%. The company also repurchased 662,000 shares of common stock, reflecting confidence in its financial stability.
Expansion in Dallas Market
The company is making progress in its strategic expansion in the Dallas market, with plans to open five new locations. These branches are expected to open either in late 2025 or early 2026, aligning with the company’s growth strategy.
Deposit Decline
Deposits decreased by $387 million, primarily due to seasonal activity in public fund demand deposit accounts (DDA) and a $269 million reduction in interest-bearing accounts. This decline presents a challenge that the company needs to address.
Higher Payoffs Impact Loan Growth
Loan growth was affected by higher payoffs of larger credits, including syndicated national credits (SNCs) which decreased by $114 million. Additionally, there was a larger than expected reduction in line utilization among industrial contractors.
Challenges with Private Credit and Equity
The company faced challenges with private credit and equity takedowns, which contributed to reduced loan balances and impacted performance in the healthcare sector.
Forward-Looking Guidance
Looking ahead, Hancock Whitney Corp provided a positive outlook with plans for continued growth and profitability. The company anticipates opening five new branches in the Dallas market and expects to maintain strong financial performance into 2026, despite the evolving economic environment.
In conclusion, Hancock Whitney Corp’s earnings call painted a picture of a company on a strong financial footing, with impressive improvements in profitability and strategic growth plans. While challenges such as deposit declines and loan payoffs exist, the company’s robust capital position and expansion efforts in the Dallas market provide a solid foundation for future growth.