Hancock Whitney Corp ((HWC)) has held its Q4 earnings call. Read on for the main highlights of the call.
Invest with Confidence:
- Follow TipRanks' Top Wall Street Analysts to uncover their success rate and average return.
- Join thousands of data-driven investors – Build your Smart Portfolio for personalized insights.
Hancock Whitney Corp has delivered a positive earnings call, highlighting its strong financial performance, strategic growth initiatives, and effective deposit management. The company reported a robust ROA and common equity Tier 1 ratio, but also acknowledged challenges in credit quality and fee income that must be addressed.
Strong Financial Performance
Hancock Whitney Corp reported impressive financial metrics, including a notable return on assets (ROA) of 1.40% and a common equity Tier 1 ratio of 14.14%. The company achieved a net income of $122 million, or $1.40 per share, representing an increase of $6 million from the previous quarter, underscoring the firm’s financial robustness.
Acquisition of Sabal Trust Company
The acquisition of Sabal Trust Company was a significant highlight, positioning Florida as the largest wealth management fee stake for Hancock Whitney. This strategic move is expected to enhance the company’s market share in high-growth areas, reflecting its commitment to expanding its wealth management capabilities.
Deposit Growth and Cost Management
The company demonstrated effective deposit management with an increase of $510 million in deposits, despite the maturity of $183 million in broker deposits. Additionally, Hancock Whitney achieved a reduction in the cost of deposits by 17 basis points, bringing it down to 1.85%.
Loan Growth Strategy
Hancock Whitney unveiled a multiyear organic growth strategy, which includes the addition of new bankers. The company is optimistic about achieving mid-single-digit loan growth by 2025, further emphasizing its commitment to expanding its lending portfolio.
Credit Quality Concerns
While the overall financial performance was strong, the earnings call did highlight some concerns regarding credit quality. There was an increase in criticized commercial loans and nonaccruals, although it was noted that net charge-offs decreased this quarter.
Challenges in Fee Income
The company faced challenges in fee income, primarily due to a decrease in secondary mortgage volume and specialty income. This area remains a point of concern that the company aims to address moving forward.
Decline in Loan Yields
Loan yields saw a decline of 25 basis points to 6.02%, attributed mainly to lower variable rate loan yields. This decline is an area the company is likely to focus on in future strategic planning.
Guidance for 2025
Looking ahead, Hancock Whitney Corporation has laid out strategic initiatives for 2025 aimed at driving growth and profitability. These include a multiyear organic growth plan, hiring additional associates, and expanding into new markets with five new financial center locations in North Dallas. The company forecasts mid-single-digit growth in total loans and low single-digit deposit growth, with modest NIM expansion and NII growth expected to be between 3.5% and 4.5%. Noninterest income is projected to rise by 3.5% to 4.5%, while expenses are expected to increase by 4% to 5%, maintaining an efficiency ratio of 55% to 56%. The company also plans to continue share repurchases in 2025.
In summary, Hancock Whitney Corp’s earnings call reflects a strong financial position and optimistic growth outlook, despite some challenges in credit quality and fee income. The strategic acquisition of Sabal Trust Company and effective management of deposits underscore the company’s proactive approach to enhancing its market position and financial performance.
