Earnings call transcript: Hancock Whitney Q2 2025 beats EPS forecast

Hancock Whitney Corporation (market cap: $5.19 billion) reported its Q2 2025 earnings, surpassing EPS expectations with adjusted net income of $1.37 per share against a forecast of $1.43. The stock rose 1.59% to $60.49, reflecting investor confidence in the company’s performance and strategic initiatives. According to InvestingPro analysis, the company trades at an attractive P/E ratio of 11.29x relative to its near-term earnings growth potential.

Key Takeaways

• Hancock Whitney exceeded EPS expectations, reporting $1.37 per share.
• Revenue projections were not provided in the call summary.
• Stock price increased by 1.59% post-earnings.
• Loan growth and strategic acquisitions were highlighted as key drivers.
• Anticipated modest net interest margin expansion in H2 2025.

Company Performance

Hancock Whitney demonstrated robust financial performance in Q2 2025, with a focus on organic growth and strategic acquisitions. The company’s net interest income rose by 2%, while fee income increased by 4%, reflecting effective management in a dynamic macroeconomic environment. The acquisition of Sable Trust and expansion in the Dallas market underscore Hancock Whitney’s commitment to growth.

Financial Highlights

• Revenue: Not specified in the summary.
• Earnings per share (EPS): $1.37, surpassing the forecast of $1.43.
• Net interest income: Increased by $7 million or 2%.
• Fee income: Increased by $4 million or 4%.
• Efficiency ratio: Improved to 54.91%.

Earnings vs. Forecast

Hancock Whitney’s EPS of $1.37 exceeded the forecasted $1.43, marking a positive surprise for investors. This performance aligns with the company’s historical trend of exceeding expectations, bolstered by strategic growth initiatives and effective cost management.

Market Reaction

Following the earnings announcement, Hancock Whitney’s stock rose by 1.59% to $60.49. The stock’s movement is within its 52-week range of $43.90 to $64.66, indicating a stable market response. The increase reflects investor confidence in the company’s strategic direction and financial health, supported by a strong 29% price return over the past six months. Based on InvestingPro’s Fair Value analysis, the stock currently appears slightly overvalued, suggesting investors should monitor entry points carefully.

Outlook & Guidance

Hancock Whitney projects low single-digit loan growth for 2025, with a modest expansion in net interest margin expected in the second half of the year. The company anticipates net interest income growth of 3-4% for the year and is preparing for potential Federal Reserve rate cuts.

Executive Commentary

CEO John Hairston emphasized the company’s focus on organic growth, stating, "We’re thrilled about our ability to restart organic loan growth." He also noted, "The only thing missing had been organic loan growth," highlighting the strategic importance of this initiative.

Risks and Challenges

• Macroeconomic pressures: Dynamic economic conditions could impact growth.
• Competitive banking landscape: Increased competition in Texas and surrounding markets.
• Deposit fluctuations: A $148 million decrease in deposits may affect liquidity.
• Potential rate cuts: Anticipated Federal Reserve actions could influence margins.
• Credit quality: While currently solid, any deterioration could pose risks.

Q&A

During the earnings call, analysts inquired about capital allocation priorities, loan growth drivers, and deposit beta expectations. The company also addressed potential mergers and acquisitions, underscoring strategic growth opportunities.

This comprehensive performance and strategic focus position Hancock Whitney well for continued growth, despite potential macroeconomic challenges. The company maintains strong profitability metrics, with a return on equity of 11% and a healthy Piotroski score of 7. Discover more detailed analysis and 12+ additional ProTips by accessing the full research report on InvestingPro, part of our coverage of 1,400+ US stocks.

Full transcript - Hancock Whitney Corp (HWC) Q2 2025:

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Good day, ladies and gentlemen, and welcome to Hancock Whitney Corporation’s second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this call may be recorded. I would now like to introduce your host for today’s conference, Catherine Mistich, Investor Relations Manager. You may begin. Thank you, and good afternoon. During today’s call, we may make forward-looking statements. We would like to remind everyone to carefully review the safe harbor language that was published with the earnings release and presentation and in the company’s most recent 10-K and 10-Q, including the risks and uncertainties identified therein. You should keep in mind that any forward-looking statements made by Hancock Whitney speak only as of the date on which they were made.

As everyone understands, the current economic environment is rapidly evolving and changing. Hancock Whitney’s ability to accurately project results or predict the effects of future plans or strategies, or predict market or economic developments, is inherently limited. We believe that the expectations reflected or implied by any forward-looking statements are based on reasonable assumptions but are not guarantees of performance or results, and our actual results and performance could differ materially from those set forth in our forward-looking statements. Hancock Whitney undertakes no obligation to update or revise any forward-looking statements, and you are cautioned not to place undue reliance on such forward-looking statements. Some of the remarks contain non-GAAP financial measures. You can find reconciliations to the most comparable GAAP measures in our earnings release and financial tables. The presentation slides included in our 8-K are also posted with the conference call webcast link on the Investor Relations website.

We will reference some of these slides in today’s call. Participating in today’s call are John Hairston, President and CEO; Michael Achary, CFO; and Chris Ziluca, Chief Credit Officer. I will now turn the call over to John Hairston.

John Hairston, President and CEO, Hancock Whitney Corporation: Thank you all for joining us on a busy reporting day. The second quarter of 2025 was another strong quarter. The results reflect our continued focus on profitability, efficiency, and meaningful progress in our multi-year growth plan. Our NIM expanded 6 basis points, and we achieved an ROA of 1.37% after adjusting for expenses related to our transaction with Sable Trust, which closed on May 2. As expected, loans grew $364 million or 6% annualized due to stronger demand, increased line utilization, and lower payoffs. We remain focused on more granular full relationship loans with the goal of achieving more favorable loan yields and relationship revenue. Our guidance on loan growth remains unchanged, and we expect low single-digit growth for the year 2025, which infers mid single-digit growth for the second half of 2025.

Deposits were down $148 million, reflecting a decrease in CDs due to maturity concentration and promotional rate reductions in the quarter, along with a decrease in public funds. However, interest-bearing transaction balances and DDA balances were up in the quarter, and DDA mix actually increased to 37%. NIM continued to expand as our average earning assets grew at higher yields, and we continued to reduce deposit cost. Our fee income grew again this year with trust fees driving most of the growth. Thanks to the additional team and client book from Sable, expenses remain controlled and in line with our expectations, reflecting investments we are making in new revenue producers and technology efforts to improve efficiency and client experience. During the quarter, we continued to return capital to investors by repurchasing 750,000 shares of common. We also deployed capital through the execution of our acquisition of Sable Trust.

Our capital ratios, despite all that, remain very solid with TCE of 9.84% and CET1 ratio of 14.03%. We made meaningful progress on our organic growth plan this quarter. We added 10 net new bankers to the team during the quarter, and it solidified the location of five new financial center locations for the Dallas market. We expect three of these financial centers to open in the back half of 2025, and the remaining two will open in 1H26. We will provide additional guidance on new offices and bankers on the January call. We remain very optimistic for our growth prospects for the rest of the year. The macroeconomic environment remains dynamic, but our ample liquidity, solid allowance for credit losses at 1.45% and strong capital keep us well positioned to navigate challenges and support our clients in any economy.

Before we continue the call, I want to take a moment to acknowledge the devastating floods that have impacted communities across Texas. Our thoughts are with all those affected. We are no strangers to the hardships that natural disasters can bring, and we’re committed to supporting recovery efforts across the region. As always, we stand ready to serve our communities with the same strength and resilience that define both our company and the people we are proud to serve. With that, I’ll invite Michael Achary to add additional comments.

Michael Achary, CFO, Hancock Whitney Corporation: Thanks, John. Good afternoon, everyone. As John mentioned, our results reflect another quarter of outstanding performance.

John Hairston, President and CEO, Hancock Whitney Corporation: Performance.

Michael Achary, CFO, Hancock Whitney Corporation: Our adjusted net income for the quarter was $118 million or $1.37 per share, compared to $120 million or $1.38 per share in the first quarter. Second quarter results included $6 million of supplemental disclosure items related to our acquisition of Sable Trust Company in May of this year. PPNR was up $5 million or 3% from last quarter and was a peer leading 1.95% of assets. Our NIM again expanded this quarter, but by 6 basis points, and NII was up $7 million or 2%. Fee income was up $4 million or 4%, and expenses adjusted for one-time items remain well controlled and were up $5 million or just 2%. Our efficiency ratio improved to 54.91% this quarter compared to 55.22% last quarter.

The NIM expansion was driven by higher average earning asset volumes and yields and lower deposit costs, which were only partially offset by an unfavorable mix related to other borrowed funds. That’s all shown on slide 15 of the investor deck. Bond yields were up 8 basis points to 2.86%. We had $233 million of principal cash flow at 3.15% while we reinvested $359 million into the bond portfolio at 4.71%. Additionally, another $40 million of our fair value hedges became effective this quarter and contributed 3 basis points to the overall yield pickup. Next quarter we expect about $152 million of principal cash flow at 3.11% that will be reinvested at higher yields. We expect the portfolio yield should continue to increase as we reinvest principal cash flows at higher rates. Our loan yield for the quarter was up 2 basis points to 5.86%.

Yields on fixed rate loans were up 13 basis points to 5.17% while yields on variable rate loans were down only 2 basis points. With no rate cuts expected in 3Q25, we expect the overall loan yield to again be largely flat. Our overall cost of funds was down 2 basis points to 1.57% due to a lower cost of deposits and less favorable borrowing mix as other borrowings increased compared to the prior quarter. The downward trend in our cost of deposits continued with a decrease of 5 basis points to 1.65% in the second quarter. The drivers here were CD maturities and renewals at lower rates. We expect the cost of deposits would be down marginally in the third quarter with an additional reduction in the fourth quarter, assuming the Fed cuts rates in September.

For the quarter, we had $2.5 billion of CD maturities that matured at 3.85% and were repriced at 3.59% with a strong 86% renewal rate. Additionally, our DDA balances increased again this quarter, up $24 million. Our NIB mix was also up this quarter to 37%. CDs will continue to reprice lower for the rest of 2025 given maturity, volume, and anticipated rate cuts. Total end of period deposits were down $148 million, mostly reflecting the impact this quarter, CD repricing, and other aspects of seasonality. We updated our guidance to reflect our current assumption of two rate cuts of 25 basis points in September and December, but with minimal impact. We expect modest NIM expansion in 2H25 and NII growth of between 3% and 4% for the year. There’s no change to our PPNR or efficiency ratio guidance.

Our criticized commercial loans decreased 4% to $594 million and nonaccrual loans decreased 9% to $95 million. Net charge-offs were up this quarter and came in at 31 basis points. Our loan portfolio is diverse and we see no significant weakening in any specific portfolio sector or geography. Our loan reserves are solid again at 1.45% of loans, down 4 basis points from last quarter. We expect net charge-offs to average loans will come in at between 15 and 25 basis points for the full year 2025. Lastly, a comment on capital. Our capital ratios remain remarkably strong. We deployed capital this quarter through our acquisition of Sable Trust Company and a higher level of share repurchases. We more than doubled the buyback this quarter and bought back 750,000 shares. We expect share repurchases will continue at this level for the foreseeable future.

Changes in the growth dynamics of our balance sheet, economic conditions, and share valuation could impact that view. I will now turn the call back to John.

John Hairston, President and CEO, Hancock Whitney Corporation: Thanks, Mike. Let’s open the call for questions.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: At this time I would like to remind everyone in order to ask the question, please press Star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Our first question comes from the line of Michael Rose with Raymond James. Your line is open.

John Hairston, President and CEO, Hancock Whitney Corporation: Hey, good afternoon everyone. Thanks for taking my call. My questions, maybe we can just start on the last topic on buybacks. Mike, just given some of the deregulatory efforts that we’ve seen here recently, I know you mentioned that buybacks would kind.

Michael Achary, CFO, Hancock Whitney Corporation: Continue at this pace, but do.

John Hairston, President and CEO, Hancock Whitney Corporation: You have a target CET1 ratio that you think you can kind of operate on through the cycle? Just assuming some of the deregulatory efforts and the fact that they’re likely to come downhill over time. Thanks. Yeah, Michael, great question.

Michael Achary, CFO, Hancock Whitney Corporation: As we think about capital, the two ratios, obviously, that we probably pay a little bit more attention to are TCE, and that’s down a little bit because of Sable, but still, you know, very close to 10%. In the Tier 1 Common, that still exceeds 14%, even with the acquisition of Sable. If we think about where those capital levels or where the company is kind of comfortable operating at, I would suggest that somewhere between 11% and 11.5% for Tier 1 Common. Certainly, anyone who knows our company knows that for TCE, it’s in the neighborhood of 8%.

John Hairston, President and CEO, Hancock Whitney Corporation: Okay. As I think about your CSOs going out to the end of 2027, it looks like the TCE would be around 8%. Would that, should we use that as a guide basically as we’re thinking about buybacks beyond this year and into 2026 and into 2027? Is that fair?

Michael Achary, CFO, Hancock Whitney Corporation: Yeah, I think so. Certainly, those levels, again, reiterate that those are levels we feel comfortable operating the company at. Our board feels comfortable, but they’re not necessarily hard lines. Depending on circumstances, we certainly could go below those levels or operate the company above those levels, as we’re doing now.

John Hairston, President and CEO, Hancock Whitney Corporation: Understood. Maybe just as a follow up question, just as it relates to loan growth and kind of the outlook.

Michael Achary, CFO, Hancock Whitney Corporation: Can you just give us a general.

John Hairston, President and CEO, Hancock Whitney Corporation: Update on kind of the health of borrowers? It does seem, if you listen to some of the larger guys today, that I think we’re at a point where even though there’s still some uncertainty around tariffs and things like that, I think there’s just a comfort level and borrowers are starting to move off the sidelines a little bit. I understand your guidance, but would just like to appreciate more what the drivers could be in the near term. I know utilization rates ticked a little bit higher, so maybe that’s a trend that could continue. What’s kind of the upper, what would drive you to the upper end versus the lower end of your guidance? Thanks. Sure.

Michael Achary, CFO, Hancock Whitney Corporation: Yeah.

John Hairston, President and CEO, Hancock Whitney Corporation: Michael, good question. This is John. If Chris or Mike want to weigh in, they can. Generally speaking, we’re really not relying on line utilization to drive the upper end of the range. Certainly, it would help if utilization continues to increase and it’s only going up marginally each quarter. We’re glad to have it. The bigger driver is simply going to be net new loans to net new clients, and we’ve had a really good quarter. I would expect that we’ll continue to have good quarters in the foreseeable future, barring any kind of macroeconomic changes that would cause clients to become more chill. I will suggest, a quarter ago when we had this call, Michael, it was clearly a disturbance in the force, if you will, people not really knowing how to make sense of Liberation Day and how it may impact their own business.

I think over the last three months, people, at least in our market areas from Texas to Florida and up in Tennessee, have largely become desensitized. Those headlines, and I don’t know if I would call it coming off the sidelines as much as I think they’re just not as sensitive to the headline of the day, and they’re back to relying more on whatever the facts may be that they’re going to use to make a decision of what to buy, expand, enter new markets, build a building, what have you. I think that’s important to note, since you asked the question about the upper range. I guess I would also call out, the only sector that we didn’t enjoy growth this quarter was in the construction development book. If you note in the deck on, I think that’s page nine, everything’s in the green.

Healthcare is a little bit of a push, and C and D was down a little under $100 million year to date. Commitments in that sector are actually up a little under $200 million. As we talked about in prior calls, it takes a few quarters for a client to burn through their equity in the project before they get to our line of credit. We would anticipate a sustainable growing C and D book to be somewhere towards the back half of 1Q2026 or the following quarter sustainably. That headwind will dissipate as we move through the year. If it does, that would eventually lead more to the upper end of the range, all other things being equal. Great. Inflection point that you guys are talking about. All right, thanks, guys, for all the color. I’ll step back. You bet. Thanks, Michael, for the question.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Our next question comes from the line of Catherine Mistich with KBW. Your line is open. Thanks. Good afternoon.

John Hairston, President and CEO, Hancock Whitney Corporation: Hi, Katherine.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Could you just give us a little bit more color around your NIM outlook? I know you’ve continued to say that you think there’s kind of upward NIM trajectory in the back half of the year, really, I guess, regardless of what rates do. We’ve pushed back rate cuts. We now only have two in your numbers. Just kind of help us think through where you think kind of NIM can go for in a stable rate environment and then sensitivity to things, those cuts in the back half of the year.

John Hairston, President and CEO, Hancock Whitney Corporation: Sure.

Michael Achary, CFO, Hancock Whitney Corporation: Kathryn, this is Mike, and I’m happy to share some thoughts and color around that. I think first off, and we did disclose this, I believe, on Slide 15 of the deck for us for the second half of the year, there really is not anywhere near a material difference between the impact on NII or our NIM. If we look at one, if we look at zero rate cuts or two rate cuts in the back half of the year, the difference is less than $1 million on NII, and it’s about one basis point on NIM. Certainly the dynamics are a little bit different in terms of how we get there. What we do have baked into our guidance is the two cuts, the one at the midpoint of September and then one in December, both 25 basis points.

Assuming those two cuts do occur, the things that I think are really going to be the drivers of our ability to continue to expand our NIM in the second half of the year are going to be largely the things that we experience in the first half of the year with the addition of, obviously, loan growth. We’re looking at a stable DDA mix. We’re at 37% now. We’re guiding for that mix to be between 37% and 38% by the end of this year. Feel really good about our ability to grow that mix to those levels, especially given where we are now. We’ll continue to reduce our cost of deposits. If you go back to Slide 15, you can see that over the course of the second quarter, our cost of deposits did begin to level out.

We certainly expect that leveling out to kind of continue in the second half of the year. We do think that we can reduce our cost of deposits by, let’s say, a couple of basis points in the third quarter and then probably a little bit more than that in the fourth quarter. That’s really on the heels of an expected rate cut in September. That is really very dependent upon our ability to continue to reprice our CDs lower. We’ve done a pretty good job of that, I think, through this cycle. Even with our cost of deposits kind of leveling out, we think we’ll be able to do that in the second half of the year. In the second half of the year we have about $3.6 billion of CDs coming off at about 3.62%. Those we think will reprice at about 3.5% or so.

No change in any of our promotional rates right now. Probably our best selling CD promotional rate is our eight month at 3.85%. That continues. We also have the loan growth for the second half of the year. We’re extremely proud of our ability to grow loans in the second quarter. The 6% link quarter annualized. You can see in the guidance that we’re expecting to kind of continue at more or less that level for the second half of the year. On an end of period basis, loans should come in, you know, again at that low single digit level year over year. Finally, we still have a.

John Hairston, President and CEO, Hancock Whitney Corporation: Pretty good ability to reprice cash flows.

Michael Achary, CFO, Hancock Whitney Corporation: Coming off the bond book as well as repricing fixed rate loans that are maturing in the second half of the year. Again, back to the NIM. We expanded our NIM by about 10 basis points the first half of the year. The expansion in the second half of the year won’t be at that level. It could be at something close to half that level, but still we believe firmly that we can expand our NIM by a couple of basis points each in the next couple of quarters. Hopefully that answered your question. Anything else I can help you with?

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: It does. No, that was very helpful. A lot of great data there. Maybe one follow up, just on the expense side. I know your expenses unchanged at the 4 to 5%. That includes Sable coming in this quarter. Now that the deal is closed, is there any kind of additional insight you can give us into how much of the expense base came from that? Just so we can kind of think about what one more, I guess one additional month of that deal in third quarter could mean versus where the expense growth is coming from, some of your hires and all of that. Just kind of thinking about trying to think about the cadence of the expense base over the two quarters in the back half of the year.

Michael Achary, CFO, Hancock Whitney Corporation: You look at the second quarter and again, we closed that deal at the very beginning of May. We had two months. The increase in our expenses in the second quarter related to Sable was about $2.5 million or so.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Okay, great. Thank you. Requirements?

Michael Achary, CFO, Hancock Whitney Corporation: You bet.

John Hairston, President and CEO, Hancock Whitney Corporation: Thank you.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Our next question comes from the line of Casey Haire with Autonomous Research. Your line is open.

John Hairston, President and CEO, Hancock Whitney Corporation: Great, thanks. Good afternoon everyone. Wanted to follow up, I guess, on the loan growth again.

Michael Achary, CFO, Hancock Whitney Corporation: The CRE showed very strong for you guys.

John Hairston, President and CEO, Hancock Whitney Corporation: We’ve been hearing that that’s been tough, tough sledding just given weak demand and just a little more color as to what you’re seeing to drive such strong results. It was a little muddled. You said on the CRE sector, Casey, is that right?

Michael Achary, CFO, Hancock Whitney Corporation: Yeah.

John Hairston, President and CEO, Hancock Whitney Corporation: The difference, quarter to quarter, there was a little less payoffs, a very successful owner occupied real estate campaign in the business and commercial banking sectors. We ended up with some bridge financing numbers that were pretty attractive out of the investor CRE Group that shows up in CRE, not C&D. Does that answer your question or do you want a little more detail?

Michael Achary, CFO, Hancock Whitney Corporation: No, that’s great.

John Hairston, President and CEO, Hancock Whitney Corporation: That’s great. Sounds like.

Michael Achary, CFO, Hancock Whitney Corporation: Yeah.

John Hairston, President and CEO, Hancock Whitney Corporation: Payoffs slowing down. Okay. Just switching to M&A, I know you guys sound very organic and heads down here. You did enter the year as, you know, looking to be acquisitive. Just wondering what is the M&A market like in your markets and is active and what would draw you back into looking to be acquisitive.

Michael Achary, CFO, Hancock Whitney Corporation: Casey, this is Mike. The narrative around M&A for us is completely unchanged with the narrative that we talked about on the first quarter call. Back in April and back then we said that right now M&A is just not something we’re focused on. We did caveat that by saying that may change or could change at some point down the road. If we look at our capital priorities, first and foremost is to support organic balance sheet growth and more specifically our organic growth plan. Second is return of capital to shareholders through dividends and buybacks. Third is M&A opportunities that may or may not surface down the road. I don’t know that I want to be any more specific about that other than to maybe add the way we think about M&A down the road is opportunistic.

It’s hard to put really a hard label on what that is until those circumstances arrive. Okay, great.

John Hairston, President and CEO, Hancock Whitney Corporation: Thank you. Yep, you bet.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Our next question comes from the line of Ben Gerlinger with Citi. Your line is open.

Michael Achary, CFO, Hancock Whitney Corporation: Hi, good afternoon.

John Hairston, President and CEO, Hancock Whitney Corporation: Hey, Brett.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: I don’t know.

John Hairston, President and CEO, Hancock Whitney Corporation: Hi. Sorry. I didn’t know if you guys said it in the prepared remarks, but I know that the SNCs are below 10% and you guys have good core organic growth. Is it fair to think that the shared national credits are at a floor on a dollar percentage or dollar rather than percentage, or is it you two? We still expect some runoff? No, it’s about a push. If you look at the numbers on. What’s the slide number for this next slide?

Michael Achary, CFO, Hancock Whitney Corporation: Yeah, it’s slide 10.

John Hairston, President and CEO, Hancock Whitney Corporation: Yeah, we’re running about 9.5% and I think between 9% and 10% is about where that’s going to stay. The book on an absolute magnitude basis probably grows as loans grow, as we maybe feel good about one particular sector. At the end of the day that percentage will not get above 10%. Gotcha.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Okay.

John Hairston, President and CEO, Hancock Whitney Corporation: The question was, should you expect any big runoff? The answer to that is probably also no. I think where it is right now is where we’re comfortable.

Michael Achary, CFO, Hancock Whitney Corporation: Got it.

John Hairston, President and CEO, Hancock Whitney Corporation: Okay, yeah, that helps. When you think about rate cuts, I know that when they first started cutting rates, it kind of seemed almost predetermined that we were going to get 50 or potentially 100. Obviously, we ended up with 100 basis points for the first wave. It gave you some flexibility on deposit pricing, but if it ends up being like if the Fed only moves 25 bps or so, when you think about the flexibility, should we expect kind of the same relative beta despite it being like 25 bps, or is it something a little bit more muted considering the first 100 is the easiest 100 on pricing on the right-hand side?

Michael Achary, CFO, Hancock Whitney Corporation: Ben, this is Mike and that’s a really good question. I would suggest that, you know, if the Fed does move, let’s say 25 in September, 25 in December, that, you know, we would achieve something pretty close to where our cumulative, where we think our cumulative deposit beta is going to end up for the cycle. For total deposit beta, that’s 37% to 38%, we’re sitting at 35% now. I think that would creep up closer to that expected level. On interest bearing deposits, we expect for the cycle to be at 57%, 58%. We’re sitting at 55% now. Similar to the total, you would see the interest bearing deposit beta start to kind of creep up. You know, we’ll be very proactive in reducing our deposit costs if and when the Fed does move, as we’ve been so far this cycle.

We have 70%, 72% of our loans are variable, so those will reprice down. We have to be very cognizant of that fact and then also reduce our funding costs accordingly. I think we’ve done a real good job of that during this cycle and have done that mostly through repricing our CDs and it’s worked out pretty well.

John Hairston, President and CEO, Hancock Whitney Corporation: Gotcha. I appreciate the color. Thanks, Chris.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Our next question comes from the line of Brett Rabatin with Hovde Group. Your line is open.

Michael Achary, CFO, Hancock Whitney Corporation: Hey, good afternoon everyone.

John Hairston, President and CEO, Hancock Whitney Corporation: Wanted to ask about going back to.

Michael Achary, CFO, Hancock Whitney Corporation: The loan growth one more time. Wanted to ask if we look at slide 27, it shows the new loan rates impacted by the rate environment. I noticed that 2Q in particular had what appeared to be some spread compression on both variable and fixed rate loan originations. I just wanted to get some color on if that’s, you know, spread compression competitively or if you guys were being more aggressive and that was, you know, kind of the outcome being loan.

John Hairston, President and CEO, Hancock Whitney Corporation: Growth, better loan growth for the quarter.

Michael Achary, CFO, Hancock Whitney Corporation: Just any color on the new loan originations would be helpful. I can start. I would suggest that there really is probably a combination of both those things. Certainly the environment out there is super competitive when it comes to, you know, not only securing new credit from customers, but also pricing that credit. I think overall we’ve done a tremendous job of really restarting that growth engine as evidenced by the 6% link quarter annualized growth in the quarter. The overall rate on the new loans to the balance sheet did compress by about 28 basis points. I would suggest most of that is really related to pricing. However, it’s also important to understand that the overall yield in our loan book is 5.86%.

Certainly our ability to again reprice mostly fixed rate loans higher is one of the things that will certainly help us continue to expand our NIM in the second half of the year. John, any color you want to add?

John Hairston, President and CEO, Hancock Whitney Corporation: No, I think that was very good. The only points I’d add is when you note the mix is a good bit different in Q2 2025 than it was a year ago. The size of the fixed rate new loan book has been tied a great deal to the degree of aggressive calling campaigns that we’ve had on specifically the owner occupied real estate opportunities that come with partially or fully compensated deposit balances. We’ve talked on the last several calls about our very aggressive desire to have full service relationships. While the loan yield may suffer a little bit on the overall, the benefit we’re getting is on the low cost deposit on the other side, and that drives the NIM to a better view. That makes sense. Okay, yeah, no, that’s helpful.

Michael Achary, CFO, Hancock Whitney Corporation: You know, you’ve got, I think, next one to three years, $2 billion repricing at 5.17%. That’s helpful too.

John Hairston, President and CEO, Hancock Whitney Corporation: The other question I had was just

Michael Achary, CFO, Hancock Whitney Corporation: Around the fee income guidance, with the trust fees continuing or trust fees likely to head higher, just wanted to see that the 9 to 10% growth, is that based on continued strength in trust or do you expect some of the other businesses that have done pretty well to continue to do so?

John Hairston, President and CEO, Hancock Whitney Corporation: It’s a great question. Thanks for the way you finished it because I was going to try to slip that good news in too. Generally speaking, the trust quarter was actually good. Even without Sable. The Sable chunk of the $4.7 million increase in trust fees was only $3.6 million for the partial quarter. Now I’ll remind you, trust fees are not particularly level month to month inside the quarter. Some accounts are skewed to the first month, some to the last month of the quarter. You can generally prorate that to see what the number will be, but it won’t be exact. The bottom line is trust did well. The $3.6 million from Sable goose the number on up to nearly $5 million up. We would expect to see the full benefit of the Sable team and that client book when we get into Q3.

Aside from that, the business and consumer service deposit account charges via the treasury products also performed very well for the second quarter. Generally speaking, we can expect those fee increases to continue with the size and number of accounts added inside the book of consumer and business. We think the second half is going to continue seeing growth on the fee income side from those sectors. Besides those, our fee categories like card revenue, treasury accounts, and merchant are also doing quite well. Secondary mortgage will be driven by, number one, our completing the pivot to secondary loans as a predominant source of fee income. If rates do decline, we should see a nice benefit from fee income on the secondary side. Does that answer your question? Yeah. Yeah, that’s very helpful.

Michael Achary, CFO, Hancock Whitney Corporation: Thanks, John.

John Hairston, President and CEO, Hancock Whitney Corporation: You bet. Thank you for asking.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Our next question comes from the line of Gary Tenner with D.A. Davidson. Your line is open.

John Hairston, President and CEO, Hancock Whitney Corporation: Thanks.

Michael Achary, CFO, Hancock Whitney Corporation: Good afternoon.

John Hairston, President and CEO, Hancock Whitney Corporation: I had a couple of questions. First, to go back to the buyback for a minute. I know Mike, in your prepared remarks you suggested that the buyback continues at the same level. I think in a follow-up you kind of said it depends on the pricing. You purchased a lot more shares this quarter at $52 versus what you bought in the first quarter, around $59. We’re a lot closer to $59 right now. I just wanted to make sure I understood the moving parts of your comment there in terms of what to expect, at least in the short term.

Michael Achary, CFO, Hancock Whitney Corporation: Great way to distinguish that, Gary. Appreciate that. I think the way to think about it is if you look at the dollar amount of shares that we repurchased during the quarter, it was just a little bit under $40 million. The intent would be to return at least that much in terms of money to shareholders via buybacks. Certainly the number of shares that we’re able to buy back with that $40 million will change a little bit from quarter to quarter depending on market conditions and where our stock price is. I think the controlling variable there would be the $40 million or so that we’ll spend.

John Hairston, President and CEO, Hancock Whitney Corporation: Okay, appreciate it. Just trying to think through the dynamics of deposit growth in the back half of the year, getting to that kind of low single digit expectation, I guess two parts of that. One, since the CDs are projected to reprice lower by just a small amount, do you expect the retention of the CDs to be higher in the back half of the year than they were in the first half of the year? How much of the total growth for the year would you suggest is kind of driven by public funds in the fourth quarter?

Michael Achary, CFO, Hancock Whitney Corporation: Again, good question. If we think about CDs and the renewal rate, that’s been one of the things that really has been kind of the star of the show, if you will, around our ability to retain that money and reprice it lower. It was something like 86% in the second quarter. The assumption for the back half of the year is that it’ll be at least 81%, if not a little bit better. The other thing that I would suggest when we look at not only the guidance for deposits but also the levels that we think will come in is because of the CNI nature of our book, there’s a lot of seasonality built into it. You mentioned the public funds and certainly that does drive the numbers with a public fund book of around $3 billion or so.

Typically in the second quarter, we see really the last couple of months of the outflows related to public funds and then we also see outflows related to tax payments, both corporate as well as individual. Typically in the third quarter those deposit levels begin to stabilize, if not grow a little bit. On a seasonal basis, the fourth quarter tends to be our best quarter. There are typically inflows related to corporate and middle market deposits. Then you have the arrival of the public fund inflows. Those can range between as much as $200 million to $300 million, just depending on primarily the sales tax collections and property tax collections that typically happen in the fourth quarter.

John Hairston, President and CEO, Hancock Whitney Corporation: Thanks for the call. You bet.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Our next question comes from the line of Matt Olney with Stephens. Your line is open.

Michael Achary, CFO, Hancock Whitney Corporation: Hey, thanks guys.

John Hairston, President and CEO, Hancock Whitney Corporation: Want to ask about credit and the charge-offs in the second quarter were.

Michael Achary, CFO, Hancock Whitney Corporation: A little bit heavier than we were expecting.

John Hairston, President and CEO, Hancock Whitney Corporation: It sounds like you feel really good about charge-offs the back half.

Michael Achary, CFO, Hancock Whitney Corporation: Of the year moving lower.

John Hairston, President and CEO, Hancock Whitney Corporation: Can you just kind of flesh this out for us?

Michael Achary, CFO, Hancock Whitney Corporation: Did you get some resolutions?

John Hairston, President and CEO, Hancock Whitney Corporation: Of some lingering credits in 2Q.

Michael Achary, CFO, Hancock Whitney Corporation: Any color you can give us?

John Hairston, President and CEO, Hancock Whitney Corporation: As far as the charge-offs in 2Q and the outlook, hey, Matt, Chris Ziluca, thanks for the question. Good question as well. Yeah, we feel pretty good about the guidance that we’ve given around the charge-off range. I mean, as we’ve said kind of going into this year and even last year, you know, we expect normalization of net charge-offs kind of as the cycle winds through, and we really aren’t seeing any sort of specific systemic issues in the portfolio, which really gives us comfort as to kind of the forward view around the remainder of the year.

Yes, we did have some accounts that were kind of in our line of sight for resolution during the quarter, and we decided we had some reserves in place, specific reserves in place on one of them in particular that we decided that we would take down and just kind of resolve that to the best that we could. That way we’re kind of looking forward and looking at a bit more of a positive view.

Michael Achary, CFO, Hancock Whitney Corporation: Okay, appreciate that.

John Hairston, President and CEO, Hancock Whitney Corporation: As a follow up to that, we’ve seen consecutive quarters of improving criticized commercial loans. We’d love just to get your feel for criticized loans as we look at the back half of the year.

Michael Achary, CFO, Hancock Whitney Corporation: What your visibility is there.

John Hairston, President and CEO, Hancock Whitney Corporation: Yeah, so again, good follow-up question. From our visibility, what we’re seeing is a little bit more resolution and therefore outflows than we are seeing inflows. Normally, we would expect to see in this quarter a little bit more potential inflows. We were pleasantly surprised that we were seeing less inflows and a little bit more resolution of outflows related to some of our longer-standing credits. As I mentioned, I think on one of the earlier calls, it usually takes three to four quarters before kind of a criticized loan can get either rehabilitated or resolved or paid off, you know, what have you, the whole portfolio management workout process. With the lesser number of inflows, we feel pretty good about where we sit. Not to say that as the quarters go through that there aren’t things that kind of catch us a little off guard.

We feel like we have a pretty robust portfolio management and workout process to deal with those. Okay, thank you guys. Thank you.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Our next question comes from the line of Stephen Scouten with Piper Sandler. Your line is open.

John Hairston, President and CEO, Hancock Whitney Corporation: Good afternoon. Thanks guys. I know Mike, you gave some commentary around M&A saying it’s largely unchanged outlook there. I’m kind of curious as to how you think about the future past. To me, the only thing that’s maybe been lacking from y’all’s story has been organic loan growth. We’re seeing great signs of that already this quarter. Should we think about you guys letting that story play out, profitability and efficiency continue to play out, and then, if your shares warrant the valuation, I’m sure you feel they should, that’s when M&A might be pursued down the line. Is that a decent way to think about it?

Michael Achary, CFO, Hancock Whitney Corporation: Yeah, that’s a very plausible path. We’re thrilled about our ability to restart organic loan growth. We have a very well thought through organic growth plan that we’re executing on right now. We’ve talked a lot about our earnings efficiency being extremely high right now or high, and the only thing missing had been organic loan growth. We’re thrilled with where we are and we’re very anxious to continue to improve our earnings efficiency and overall profitability going forward. That really is the focus of what we’re trying to do.

John Hairston, President and CEO, Hancock Whitney Corporation: Yeah, I think that’s fantastic. As it pertains to the plans you guys have laid out for hiring, I think it was what, another 14 people, give or take, slated for the rest of 2025. With the uptick in M&A kind of in and around your markets, would there be potential upside to those numbers if you could be more opportunistic given M&A in your markets, or do you kind of want to manage the expense build and the personnel build throughout the rest of the year? How should we think about the potential?

Michael Achary, CFO, Hancock Whitney Corporation: For upsizing to that?

John Hairston, President and CEO, Hancock Whitney Corporation: Good question, Steven. This is John. I think our appetite for good talent that is seasoned, knows the market, knows the type of clients that we would like to add. We really don’t have a ceiling in how many bankers we would add over a given term. We’ve set the goal at 30 to be communicated externally just to help investors understand our degree of interest in growing loans, not just this year but have that growth pattern flywheel up over the next several years and get back to that 85% to maybe higher 80s loan deposit ratio which is really our sweetest spot in terms of earnings capability. The 30 number was essentially a 10% compounded annual number and we would anticipate being at about 10% next year as well. Certainly if opportunities came up for that number to be higher, we would gladly take it.

Our rate of people that don’t survive over the long term, once added, is actually quite low primarily because we try to screen very well and have potential bankers meet with people both in the line of business and in credit to assure that their appetite for clients matches up with us. Their potential for success is very high. I’m sure there is a maximum somewhere where Mike will get nervous about the expense. So far my attitude is we would gladly take on that problem and be happy to explain that to investors because we have more offensive players on the field.

Michael Achary, CFO, Hancock Whitney Corporation: There is no max to the revenue, right?

John Hairston, President and CEO, Hancock Whitney Corporation: There’s no max. Yes, right. That’s the question, is when we should expect the compensating revenue. So far, that expectation for this year was about 15% of our total loan growth would be coming from new hires. I think we’re on track to hit that. In fact, the business bankers we’ve added are probably going to exceed that for the year, but it’s really too early to call. I wouldn’t want to commit to it just yet. Got it. Thanks. That’s really great color, and congrats on a great quarter. Thank you very much, Stephen.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Our next question comes from the line of Christopher Marinac with Janney Montgomery Scott. Your line is open.

John Hairston, President and CEO, Hancock Whitney Corporation: Thanks. Good afternoon, John. It seems that history is repeating itself with some new entrants coming to Texas. I was curious on your thoughts about opportunities that could create for Hancock in the future quarters ahead. I’ll start and Mike can add color if he likes. Disruption is usually good for us. I think we’re viewed as a safe haven for people who for whatever reason would like to maybe raise their hand where otherwise they might not have. That disruption happens all around the footprint. We really never know how to size it. Certainly the phone lines and email inboxes are open to inbound calls. There’s no secret across our footprint that we are indeed looking for good talent and we are a great place for people to land who want to build a book rapidly with great partnership with their credit folks across the line.

Thanks for asking the question that gives me a chance for a free commercial. We’re definitely hiring really in every place. If you saw from page, I think it’s page seven, is that right, Catherine? In the deck you see the green markets. That’s where we actually have open roles that we’re actively searching for now. Not every market is highlighted right there primarily because some of those markets we added people in last year and we didn’t make the circles bigger or smaller to denote how many people were in those different areas. It does show that we’re not piling everybody into one market. I would allow that the largest concentration of people are in markets that we consider higher growth for obvious benefit.

It would not surprise me to see most of the called out markets in that sheet populated with new hires by the time we get to the end of next year. Note, this is a net document, not an absolute document. Good, John, thanks for that. Just a follow up for Chris. Chris, are you seeing opportunities for some of the non-depository borrowers who are not banks but looking for credit from your spouse company? Is that an opportunity in the commercial book? We do definitely see that as potential opportunities for us, but it’s not something that we’re specifically targeting. Could those loans have a depository element to them over time? Yeah, I mean they can, obviously as they kind of grow and rehabilitate out of just being part of that non-depository lending environment to a traditional banking environment. I know that I’ve seen that before.

The hit rate’s always a little bit lower than you hope, but it certainly is an opportunity for us and we certainly hope that some of them spin off into opportunities for direct relationships. Chris, this is John. The only thing I’d add, it’s not that we’re necessarily averse to it, but I think I would use the word opportunistic just like Mike did earlier. If it makes a lot of sense for us and the client, then we certainly would explore it. We’re not designating a group of new hires to target that. That’s something we would rather have a longer relationship and understand the client before we jumped in too far. Got it. Thank you all for taking my questions. We appreciate it.

Michael Achary, CFO, Hancock Whitney Corporation: Thank you.

John Hairston, President and CEO, Hancock Whitney Corporation: Thank you for hanging in there on a busy day.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: I will turn the call back over to John Hairston for closing remarks.

John Hairston, President and CEO, Hancock Whitney Corporation: Thanks, Kate, for moderating the call. Thanks to everyone for your attention and interest. We look forward to seeing you on the road over the next quarter.

Catherine Mistich, Investor Relations Manager, Hancock Whitney Corporation: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.