HWCPZ — Hancock Whitney Corporation - 6

Hancock Whitney Corporation (HWCPZ) Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Adjusted Net Income: $128 million, or $1.49 per share, up from $118 million, or $1.37 per share in Q2 2025.
• Return on Assets (ROA): 1.46%, improved from 1.32% year-over-year.
• Net Interest Income (NII): Increased by $3 million (1%) to $297 million, with a stable Net Interest Margin (NIM) of 3.49%.
• Efficiency Ratio: Improved to 54.1% from 54.91% in the previous quarter.
• Loans: Grew by $135 million (2% annualized), with production up 6% quarter-over-quarter and 46% year-over-year.
• Deposits: Decreased by $387 million, primarily due to seasonal activities in public fund accounts.
• Capital Ratios: Total Capital Equity (TCE) at 10.01%, Common Equity Tier 1 (CET1) at 14.08%.

2. Strategic Updates and Business Highlights

• Continued focus on organic growth with the hiring of 20 new bankers, a 9% increase year-over-year.
• Plans to open five new branches in the Dallas market by late 2025 or early 2026.
• Record high fee income of $106 million, up 8% quarter-over-quarter, driven by insurance and annuity fees.
• Strong emphasis on improving loan yields through a focus on granular full relationship loans.

3. Forward Guidance and Outlook

• Anticipates low single-digit loan growth for Q4 2025, with expectations of continued profitability.
• Guidance includes two expected rate cuts in late 2025, which may impact loan yields.
• The company aims to maintain a CET1 ratio between 11% and 11.5%, with potential for increased share repurchases in the future.

4. Bad News, Challenges, or Points of Concern

• Loan Paydowns: Higher than expected paydowns, particularly in industrial sectors, impacted net loan growth.
• Deposit Declines: Seasonal reductions in public fund deposits and interest-bearing accounts contributed to a decrease in total deposits.
• Non-Accrual Loans: Increased modestly to $114 million, with concerns about rising operating costs affecting some clients.
• Competitive Pressures: The competitive landscape for deposits remains robust, with ongoing pressures from private credit and industry consolidation.

5. Notable Q&A Insights

• Management expressed confidence in loan production but acknowledged the challenge of offsetting paydowns, particularly from large projects and industry consolidation.
• There is a cautious outlook on the paydown environment, with expectations that it may remain high into 2026.
• Discussions around M&A revealed a current focus on organic growth rather than acquisitions, with no immediate plans for significant deals.
• Management highlighted the importance of hiring more bankers to support growth ambitions, particularly in competitive markets like Texas and Florida.

Overall, Hancock Whitney Corporation reported a strong quarter with solid profitability metrics, but faces challenges related to loan paydowns and deposit fluctuations. The company remains committed to its growth strategy while navigating a dynamic economic environment.