Return on Assets (ROA): 1.41% Total Risk-Based Capital: 16.39% Net Income: $120 million or $1.38 per share Net Interest Margin (NIM): Expanded 2 basis points to 3.43% Fee Income Growth: Expected to be up between 9% and 10% year over year Expense Growth: Expected between 4% and 5% year over year Loan Growth: Expected low single digits in 2025 Deposits: Down $298 million Common Equity Tier 1 Ratio: 14.51% Tangible Common Equity Ratio: 10.01% Share Repurchases: 350,000 shares Dividend Increase: $0.45 per share, a 50% increase from last year Cost of Funds: Down 14 basis points to 1.59% Loan Yield: Down 18 basis points to 5.84% Net Charge-Offs: 18 basis points Allowance for Credit Losses: 1.49% of loans

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Release Date: April 15, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Hancock Whitney Corp (NASDAQ:HWC) reported a strong start to 2025 with a 1.41% return on assets (ROA) and continued capital growth. The company achieved net income of $120 million or $1.38 per share, with earnings up 10% compared to the same quarter a year ago. Net interest margin (NIM) expanded by 2 basis points to 3.43%, driven by lower deposit costs and higher yields on the bond portfolio. Fee income grew across most categories, with expectations for a 9% to 10% increase year over year, partly due to the Sabal Trust transaction. Hancock Whitney Corp (NASDAQ:HWC) continues to return capital to investors, repurchasing 350,000 shares and increasing the common stock dividend by 50% from last year.

Negative Points

Loans were down $201 million due to higher payoffs on large healthcare and commercial non-real estate loans. Deposits decreased by $298 million, primarily driven by seasonal public funds outflows. The company lowered its loan growth guidance to low single digits for 2025, with most growth expected in the second half of the year. Net interest income (NII) was down due to two fewer accrual days and a lower level of average earning assets. The company faces uncertainty in the economic environment, which could impact future growth and performance.

Q & A Highlights

Q: Given the capital increase this quarter and a slower loan growth outlook, why not lean more into the buyback given where the stock trades? A: Michael Achary, CFO, explained that they are indeed leaning into the buyback, with plans to buy back at current levels or a bit higher consistently through the year. The external environment and share price dislocation are factors, but the intent is to maintain or increase buyback levels.

Story Continues

Q: What are you doing to assess potential credit impacts if tariffs go through at elevated levels, especially concerning small businesses? A: Christopher Ziluca, Chief Credit Officer, stated that they are evaluating sectors that could be impacted and preparing to engage with customers as needed. John Hairston, CEO, added that client sentiment doesn't currently reflect a fear of an impending recession, and they are not seeing significant line draws for liquidity.

Q: How much of the increase in the PPNR guide is related to the Sabal Trust acquisition versus core business performance? A: Michael Achary, CFO, noted that the increase in fees is more than what Sabal is expected to bring, indicating continued growth in various fee income lines. Expense guidance remains unchanged, implying savings elsewhere in the company.

Q: Can you provide an update on the hiring process and how it translates into your growth outlook? A: John Hairston, CEO, mentioned they added four new hires in Q1 and expect to hire 20 to 30 revenue producers this year. The volatility hasn't affected their hiring plans, and they remain focused on growth in high-performing markets.

Q: What is your updated stance on M&A versus organic growth and buybacks? A: Michael Achary, CFO, stated that M&A is not a current focus due to external environment disruptions and valuation impacts. The priority is returning capital to shareholders through dividends and buybacks while focusing on organic growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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