Hancock Whitney (HWC) - 2025 Q2 - Quarterly Report

Part I ITEM 1. Financial Statements This section presents unaudited consolidated financial statements and detailed notes for Hancock Whitney Corporation, covering balance sheets, income, comprehensive income, equity, and cash flows Consolidated Balance Sheets The consolidated balance sheets show changes in assets, liabilities, and equity between June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Total Assets | $35,212,652 | $35,081,785 | +$130,867 | | Loans, net | $23,148,561 | $22,980,565 | +$168,000 | | Securities available for sale | $5,636,676 | $5,161,491 | +$475,185 | | Interest-bearing bank deposits | $604,236 | $939,306 | -$335,070 | | Total Deposits | $29,046,612 | $29,492,851 | -$446,239 | | Total Liabilities | $30,847,233 | $30,954,149 | -$106,916 | | Total Stockholders' Equity | $4,365,419 | $4,127,636 | +$237,783 | Consolidated Statements of Income The consolidated statements of income detail revenues, expenses, and net income for the six months ended June 30, 2025 and 2024 | Metric | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----- | | Total Interest Income | $797,902 | $849,229 | -$51,327 | | Total Interest Expense | $251,038 | $312,628 | -$61,590 | | Net Interest Income | $546,864 | $536,601 | +$10,263 | | Provision for Credit Losses | $25,387 | $21,691 | +$3,696 | | Total Noninterest Income | $193,315 | $177,025 | +$16,290 | | Total Noninterest Expense | $421,038 | $413,738 | +$7,300 | | Net Income | $233,035 | $223,169 | +$9,866 | | Diluted EPS | $2.69 | $2.55 | +$0.14 | | Dividends Paid per Share | $0.90 | $0.70 | +$0.20 | Consolidated Statements of Comprehensive Income The consolidated statements of comprehensive income present net income and other comprehensive income components for the six months ended June 30, 2025 and 2024 | Metric | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change | | :------------------------------------------------ | :------------------------------------ | :------------------------------------ | :----- | | Net Income | $233,035 | $223,169 | +$9,866 | | Net change in unrealized loss on securities AFS, cash flow hedges and equity method investment (before tax) | $157,783 | $(98,151) | +$255,934 | | Other comprehensive income (loss) net of income taxes | $136,265 | $(36,809) | +$173,074 | | Comprehensive Income | $369,300 | $186,360 | +$182,940 | Consolidated Statements of Changes in Stockholders' Equity This statement outlines changes in stockholders' equity, including net income, OCI, dividends, and stock repurchases, from December 31, 2024, to June 30, 2025 | Metric | Balance, December 31, 2024 (in thousands) | Net Income (in thousands) | Other Comprehensive Income (in thousands) | Dividends Declared (in thousands) | Repurchase of Common Stock (in thousands) | Balance, June 30, 2025 (in thousands) | | :-------------------------------- | :------------------------------------ | :------------------------ | :---------------------------------------- | :------------------------------- | :--------------------------------------- | :------------------------------------ | | Total Stockholders' Equity | $4,127,636 | $233,035 | $136,265 | $(78,614) | $(60,464) | $4,365,419 | Consolidated Statements of Cash Flows The consolidated statements of cash flows detail cash movements from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----- | | Net cash provided by operating activities | $229,985 | $271,713 | -$41,728 | | Net cash (used in) provided by investing activities | $(109,236) | $28,924 | -$138,160 | | Net cash used in financing activities | $(183,157) | $(361,011) | +$177,854 | | Net decrease in cash and due from banks | $(62,408) | $(60,374) | -$2,034 | | Cash and due from banks, ending | $512,502 | $500,828 | +$11,674 | Notes to Unaudited Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the unaudited consolidated financial statements 1. Basis of Presentation This note describes the basis for preparing the unaudited, condensed financial statements under GAAP, relying on management estimates - Financial statements are unaudited, condensed, and prepared under GAAP, relying on management estimates, with no material changes to critical accounting policies or estimates during the period[27][29][30] 2. Acquisition This note details the acquisition of Sabal Trust Company, including consideration paid, assets acquired, and related costs - On May 2, 2025, the Company acquired Sabal Trust Company for $114.5 million in cash to expand its investment management and trust business[31][33] | Acquisition Impact (in thousands) | Amount | | :-------------------------------- | :----- | | Consideration paid | $114,488 | | Net assets acquired | $44,537 | | Goodwill | $69,951 | | Identifiable intangible assets | $41,800 | - Acquisition-related costs of approximately $5.9 million were incurred during the three and six months ended June 30, 2025[35] 3. Securities This note provides information on the Company's investment securities, including fair values, unrealized losses, and liquidity management | Securities (in thousands) | June 30, 2025 Fair Value | December 31, 2024 Fair Value | Change | | :-------------------------------- | :------------------------- | :------------------------- | :----- | | Securities Available for Sale | $5,636,676 | $5,161,491 | +$475,185 | | Securities Held to Maturity | $2,083,072 | $2,233,526 | -$150,454 | | Total Gross Unrealized Losses (AFS) | $486,411 | $615,672 | -$129,261 | | Total Gross Unrealized Losses (HTM) | $148,592 | $202,306 | -$53,714 | - The Company invests only in investment-grade securities, primarily U.S. agency and municipal, with zero expectation of nonpayment for held-to-maturity securities backed by the U.S. government[42] - At June 30, 2025, the Company had adequate liquidity and did not plan to liquidate securities with unrealized losses before amortized cost recovery[48] 4. Loans and Allowance for Credit Losses This note details loan categories, allowance for credit losses, and asset quality metrics, including nonaccrual loans and past due loans | Loan Category (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Commercial non-real estate | $9,760,733 | $9,876,592 | -$115,859 | | Commercial real estate - owner occupied | $3,136,182 | $3,011,955 | +$124,227 | | Commercial real estate - income producing | $3,940,309 | $3,798,612 | +$141,697 | | Construction and land development | $1,219,514 | $1,281,115 | -$61,601 | | Residential mortgages | $4,057,307 | $3,961,328 | +$95,979 | | Consumer | $1,347,705 | $1,369,845 | -$22,140 | | Total Loans | $23,461,750 | $23,299,447 | +$162,303 | | Credit Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Allowance for loan losses | $313,189 | $318,882 | -$5,693 | | Reserve for unfunded lending commitments | $27,100 | $24,053 | +$3,047 | | Total allowance for credit losses | $340,289 | $342,935 | -$2,646 | | Total Nonaccrual Loans | $94,922 | $97,335 | -$2,413 | | Loans 90 days past due and still accruing | $58,702 | $21,852 | +$36,850 | - The allowance for credit losses calculation at June 30, 2025, weighted Moody's baseline economic forecast at 50% and the downside S-2 scenario at 50%, reflecting continued market stress[62] - Reportable modified loans to borrowers experiencing financial difficulty (MEFDs) decreased to $75.3 million at June 30, 2025, from $99.5 million at December 31, 2024[66] 5. Investments in Low Income Housing Tax Credit Entities This note discusses the Company's investments in affordable housing limited partnerships and their immaterial financial impact - Investments in affordable housing limited partnerships totaled $37.5 million at both June 30, 2025, and December 31, 2024[85] - The net impact of the low-income housing tax credit program was not material to the Consolidated Statements of Income or Cash Flows[85] 6. Short term borrowings This note provides details on the Company's short-term borrowing activities, including FHLB advances and repurchase agreements | Short-Term Borrowings (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------- | :------------ | :---------------- | :----- | | FHLB advances | $400,000 | $0 | +$400,000 | | Securities sold under agreements to repurchase | $534,627 | $638,715 | -$104,088 | | Federal funds purchased | $110,300 | $300 | +$110,000 | | Total Short-Term Borrowings | $1,044,927 | $639,015 | +$405,912 | 7. Derivatives This note outlines the Company's derivative instruments, including notional amounts, fair values, and credit risk features | Derivative Type (in thousands) | June 30, 2025 Notional Amount | December 31, 2024 Notional Amount | | :----------------------------- | :------------------------------ | :-------------------------------- | | Total derivatives designated as hedging instruments | $2,102,500 | $1,827,500 | | Total derivatives not designated as hedging instruments | $5,372,021 | $5,565,032 | | Total Derivatives | $7,474,521 | $7,392,532 | | Derivative Fair Value (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------- | :------------ | :---------------- | :----- | | Total derivative assets | $121,090 | $150,253 | -$29,163 | | Total derivative liabilities | $118,519 | $160,623 | -$42,104 | | Net derivative assets/(liabilities) | $2,571 | $(10,370) | +$12,941 | - The Company's derivative instruments contain credit risk-related contingent features, with no violations at June 30, 2025[111] 8. Stockholders' Equity This note details changes in stockholders' equity, common shares outstanding, stock repurchases, and accumulated other comprehensive income | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Stockholders' Equity | $4,365,419 | $4,127,636 | +$237,783 | | Common shares outstanding | 85,351 | 86,124 | -773 | - During the six months ended June 30, 2025, the Company repurchased 1.1 million shares at an average cost of $54.58 per share[116] | Accumulated Other Comprehensive Income (Loss) (in thousands) | December 31, 2024 | June 30, 2025 | Change | | :----------------------------------------------------------- | :---------------- | :------------ | :----- | | Balance | $(606,092) | $(469,827) | +$136,265 | 9. Other Noninterest Income This note provides a breakdown of various other noninterest income components for the three and six months ended June 30, 2025 and 2024 | Other Noninterest Income (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Income from bank-owned life insurance | $5,313 | $3,760 | $10,186 | $7,989 | | Credit related fees | $2,713 | $3,130 | $5,553 | $6,261 | | Gain (loss) from customer and other derivatives | $1,969 | $(1,060) | $1,698 | $(3,862) | | Net gains on sales of premises, equipment and other assets | $1,036 | $1,043 | $2,893 | $3,822 | | Other miscellaneous | $3,730 | $6,391 | $11,484 | $12,232 | | Total other noninterest income | $14,761 | $13,264 | $31,814 | $26,442 | 10. Other Noninterest Expense This note details various other noninterest expense components for the three and six months ended June 30, 2025 and 2024 | Other Noninterest Expense (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Corporate value and franchise taxes and other non-income taxes | $4,733 | $5,086 | $9,036 | $10,157 | | Entertainment and contributions | $3,347 | $2,685 | $6,734 | $5,863 | | Tax credit investment amortization | $1,068 | $1,555 | $2,136 | $3,109 | | Net other retirement expense | $(3,907) | $(4,507) | $(7,791) | $(9,331) | | Other miscellaneous | $8,796 | $8,646 | $16,969 | $16,270 | | Total other noninterest expense | $22,755 | $21,693 | $43,392 | $41,601 | 11. Earnings Per Common Share This note presents basic and diluted earnings per common share and explains the exclusion of anti-dilutive shares | EPS Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $1.32 | $1.31 | $2.70 | $2.56 | | Diluted EPS | $1.32 | $1.31 | $2.69 | $2.55 | - Weighted average potentially dilutive common shares totaling 142,030 (three months) and 3,008 (six months) were excluded from diluted EPS as anti-dilutive[128] 12. Segment Reporting This note identifies the Capital Committee as the chief operating decision maker and banking operations as the sole reportable segment - The Capital Committee serves as the chief operating decision maker, with overall banking operations identified as the sole reportable segment[129] 13. Retirement Plans This note describes the Company's closed defined benefit pension and nonqualified plans, and net periodic benefit costs - The Company's qualified and nonqualified defined benefit pension plans are closed to new entrants[131] - No contributions were made to the pension plan during the three and six months ended June 30, 2025 and 2024, with none anticipated for 2025[131] | Net Periodic Benefit Cost (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Pension Benefits | $(4,577) | $(5,363) | | Other Post-Retirement Benefits | $(44) | $(44) | 14. Share-Based Payment Arrangements This note details nonvested share awards, unrecognized compensation expense, and restricted stock units granted during the period | Nonvested Share Awards | Number of Shares | Weighted Average Grant Date Fair Value | | :--------------------- | :--------------- | :----------------------------------- | | Nonvested at January 1, 2025 | 1,391,236 | $46.14 | | Granted | 552,317 | $56.08 | | Vested | (371,826) | $49.14 | | Forfeited | (26,799) | $47.36 | | Nonvested at June 30, 2025 | 1,544,928 | $48.96 | - Total unrecognized compensation expense for nonvested share awards was $61.5 million, to be recognized over a 3.2-year weighted average period[138] - The Company granted 437,066 restricted stock units and performance share awards to employees and executive management during the six months ended June 30, 2025[139][140] 15. Commitments and Contingencies This note covers off-balance sheet commitments, lending reserves, legal proceedings, and the FDIC special assessment | Off-Balance Sheet Instruments (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------- | :------------ | :---------------- | | Commitments to extend credit | $9,280,007 | $9,249,468 | | Letters of credit | $417,869 | $420,614 | - The Company had a reserve for credit losses on unfunded lending commitments totaling $27.1 million at June 30, 2025[146] - Management does not believe loss contingencies from legal and regulatory matters will have a material adverse effect on financial position or liquidity[148] - The Company expensed $29.4 million for the FDIC special assessment as of June 30, 2025, with exact exposure still unknown[149][150] 16. Fair Value Measurements This note details recurring and nonrecurring fair value measurements, including classifications and valuation methodologies | Recurring Fair Value Measurements (in thousands) | June 30, 2025 Total Fair Value | December 31, 2024 Total Fair Value | | :----------------------------------------------- | :----------------------------- | :----------------------------- | | Total available for sale securities | $5,636,676 | $5,161,491 | | Mortgage loans held for sale | $29,960 | $18,929 | | Derivative assets | $71,083 | $73,840 | | Derivative liabilities | $118,517 | $160,623 | - The majority of recurring fair value measurements are classified as Level 2, relying on observable market data[153][155][156][157] - The Company's Level 3 liability is a Visa Class B derivative, valued using discounted cash flow with unobservable inputs[158][162] | Nonrecurring Fair Value Measurements (in thousands) | June 30, 2025 Total | December 31, 2024 Total | | :-------------------------------------------------- | :------------------ | :---------------------- | | Collateral-dependent loans individually evaluated for credit loss | $31,909 | $28,301 | | Other real estate owned and foreclosed assets, net | $26,847 | $27,797 | 17. Recent Accounting Pronouncements This note discusses recently issued accounting standards and their expected impact on the Company's financial statements - No new accounting standards were adopted during the six months ended June 30, 2025[178] - FASB issued ASU 2023-09 and ASU 2024-03, disclosure-only amendments not expected to impact financial condition or results of operations[179][180] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of financial condition and results, covering economic overview, net interest income, credit losses, noninterest income/expense, taxes, liquidity, capital, and balance sheet components FORWARD-LOOKING STATEMENTS This section highlights that forward-looking statements are subject to significant risks and uncertainties and are not obligations to update - Forward-looking statements are subject to significant risks and uncertainties, including economic conditions, geopolitical events, and regulatory changes[182][185][187] - The Company assumes no obligation to update or revise forward-looking statements[184][186] OVERVIEW This overview discusses economic volatility, the Sabal Trust acquisition, and key financial highlights for Q2 2025 - Q2 2025 saw economic volatility and changing tariffs, yet real GDP grew 3.0% on an annualized basis[195] - The Sabal Trust Company acquisition on May 2, 2025, added approximately $3 billion in assets under management and administration[193] - Management uses Moody's economic forecasts, weighting baseline and downside S-2 scenarios at 50% each for credit loss allowance, reflecting continued uncertainty[198][201] | Financial Highlight (Q2 2025 vs Q1 2025) | Q2 2025 | Q1 2025 | Change | | :--------------------------------------- | :------ | :------ | :----- | | Net Income (in millions) | $113.5 | $119.5 | -$6.0 | | Diluted EPS | $1.32 | $1.38 | -$0.06 | | Adjusted pre-provision net revenue (in millions) | $167.9 | $162.4 | +$5.5 | | Period-end loans (in billions) | $23.5 | $23.1 | +$0.4 | | Period-end deposits (in billions) | $29.0 | $29.2 | -$0.2 | | Net interest margin | 3.49% | 3.43% | +6 bps | | Efficiency ratio | 54.91% | 55.22% | -31 bps | Net Interest Income This section analyzes net interest income and net interest margin trends, including drivers and full-year 2025 expectations | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | Change (QoQ) | 6 Months 2025 (in millions) | 6 Months 2024 (in millions) | Change (YoY) | | :--------------------- | :-------------------- | :-------------------- | :----------- | :-------------------------- | :-------------------------- | :----------- | | Net interest income (te) | $279.5 | $272.7 | +$6.8 | $552.2 | $542.3 | +$9.9 | | Net interest margin (te) | 3.49% | 3.43% | +6 bps | 3.46% | 3.34% | +12 bps | - Net interest income (te) increased due to an additional accrual day, favorable earning asset mix, and higher loan/securities yields, partially offset by increased short-term borrowings[213] - Full year 2025 net interest income (te) is expected to be up 3% to 4%, with modest net interest margin expansion in H2 2025, assuming 25 bp rate cuts in September and December[217] Provision for Credit Losses This section examines the provision for credit losses, net charge-offs, and their impact on asset quality | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | Change (QoQ) | 6 Months 2025 (in millions) | 6 Months 2024 (in millions) | Change (YoY) | | :-------------------------------- | :-------------------- | :-------------------- | :----------- | :-------------------------- | :-------------------------- | :----------- | | Provision for credit losses | $14.9 | $10.5 | +$4.4 | $25.4 | $21.7 | +$3.7 | | Net charge-offs | $17.8 | $10.3 | +$7.5 | $28.0 | $16.3 | +$11.7 | | Annualized net charge-offs to average loans | 0.31% | 0.18% | +0.13% | 0.24% | 0.14% | +0.10% | - The Q2 2025 provision increase was largely due to a $14.6 million commercial charge-off from a single borrower[224] - Net charge-offs as a percentage of average loans are expected to range from 0.15% to 0.25% for 2025[228] Noninterest Income This section analyzes noninterest income components, including trust fees and secondary mortgage market operations, and full-year expectations | Noninterest Income (in thousands) | Q2 2025 | Q1 2025 | Change (QoQ) | 6 Months 2025 | 6 Months 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------------ | :------------ | :----------- | | Total Noninterest Income | $98,524 | $94,791 | +$3,733 | $193,315 | $177,025 | +$16,290 | | Trust fees | $22,753 | $18,022 | +$4,731 | $40,775 | $35,550 | +$5,225 | | Bank card and ATM fees | $22,004 | $20,714 | +$1,290 | $42,718 | $42,449 | +$269 | | Secondary mortgage market operations | $4,147 | $3,468 | +$679 | $7,615 | $6,437 | +$1,178 | - Trust fees increased significantly due to the Sabal acquisition, contributing $3.6 million in Q2 2025[232] - Full year 2025 noninterest income is expected to be up 9% to 10% from 2024, including the Sabal acquisition impact[243] Noninterest Expense This section details noninterest expense components, including acquisition expenses, professional services, and personnel costs, with full-year expectations | Noninterest Expense (in thousands) | Q2 2025 | Q1 2025 | Change (QoQ) | 6 Months 2025 | 6 Months 2024 | Change (YoY) | | :--------------------------------- | :------ | :------ | :----------- | :------------ | :------------ | :----------- | | Total Noninterest Expense | $215,979 | $205,059 | +$10,920 | $421,038 | $413,738 | +$7,300 | | Sabal Trust Company acquisition expense | $5,911 | $0 | +$5,911 | $5,911 | $0 | +$5,911 | | Professional services expense | $16,371 | $12,235 | +$4,136 | $28,606 | $18,494 | +$10,112 | | Personnel expense | $116,512 | $114,347 | +$2,165 | $230,859 | $239,883 | -$9,024 | | Deposit insurance and regulatory fees | $4,822 | $5,026 | -$204 | $9,848 | $14,939 | -$5,091 | - Excluding supplemental items, Q2 2025 noninterest expense was up 2% QoQ and 1% YoY for the six months ended June 30, 2025[244] - Adjusted noninterest expense is expected to be up 4% to 5% for full year 2025, including the Sabal acquisition impact[259] Income Taxes This section analyzes the effective income tax rate and discusses the expected impact of recent tax law changes | Income Tax Metric | Q2 2025 | Q1 2025 | Change (QoQ) | 6 Months 2025 | 6 Months 2024 | Change (YoY) | | :---------------- | :------ | :------ | :----------- | :------------ | :------------ | :----------- | | Effective income tax rate | 21.5% | 19.9% | +1.6% | 20.7% | 19.8% | +0.9% | - Management expects the effective income tax rate for 2025 to be in the 20% to 21% range[261] - The "One Big Beautiful Bill Act" (OBBBA) is not anticipated to have a material impact on financial position or results of operations[265][266] Liquidity This section details the Company's liquidity position, including available funding sources, uninsured deposits, and key liquidity ratios | Liquidity Metric (in thousands) | June 30, 2025 | | :------------------------------ | :------------ | | Total Available Sources of Funding | $19,881,908 | | Net Availability | $18,238,394 | | Cash and other interest-bearing bank deposits | $1,117,111 | | Total Liquidity | $19,355,505 | - Available liquidity of $19.4 billion at June 30, 2025, exceeds estimated uninsured, noncollateralized deposits of $11.2 billion[268][311] | Liquidity Ratio | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------- | :---------------- | | Free securities / total securities | 59.44% | 58.64% | 48.65% | | Core deposits / total deposits | 94.68% | 94.34% | 94.12% | | Liquid assets / total liabilities | 17.67% | 18.08% | 15.26% | | Quarter-to-date average loans / quarter-to-date average deposits | 81.15% | 80.23% | 79.87% | - The Parent targets cash and liquid assets to fund approximately six quarters of cash needs, exceeding its internal target with $256.2 million at June 30, 2025[276] Capital Resources This section reviews the Company's capital ratios, regulatory status, and recent capital actions, including dividends and share repurchases | Capital Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Stockholders' equity (in billions) | $4.4 | $4.1 | +$0.3 | | Tangible common equity (TCE) ratio | 9.84% | 9.47% | +37 bps | | Common equity tier 1 (CET1) ratio | 13.97% | 14.14% | -17 bps | | Total risk-based capital ratio | 15.82% | 15.93% | -11 bps | - The Company and Bank are "well-capitalized," exceeding minimum regulatory capital ratios by at least $1.2 billion[279] - The Board declared a $0.45 per share common stock cash dividend and authorized a repurchase program for up to 4.3 million shares through December 31, 2026[282][283] Short-Term Investments This section provides an overview of the Company's short-term investment balances at June 30, 2025, and December 31, 2024 | Short-Term Investments (in millions) | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------- | :------------ | :---------------- | :----- | | Short-term investments | $604.6 | $939.7 | -$335.1 | Securities This section details the Company's securities portfolio, including available-for-sale and held-to-maturity categories, composition, and hedging strategies | Securities (in billions) | June 30, 2025 | December 31, 2024 | Change | | :----------------------- | :------------ | :---------------- | :----- | | Total Investment in Securities | $7.9 | $7.6 | +$0.3 | | Securities available for sale | $5.7 | $5.2 | +$0.5 | | Securities held to maturity | $2.2 | $2.4 | -$0.2 | - The securities portfolio primarily consists of U.S. government agency-backed residential and commercial mortgage-backed securities and CMOs[288] - At June 30, 2025, the portfolio had an average expected maturity of 5.35 years, effective duration of 3.94 years, and a weighted-average yield of 2.77%[288] - Approximately $514.0 million of available-for-sale securities are hedged with $477.5 million in fair value hedges to reduce duration and provide flexibility[288] Loans This section provides a breakdown of loan categories, commercial and industrial loan growth, shared national credits, and full-year growth expectations | Loan Category (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Commercial non-real estate | $9,760,733 | $9,876,592 | -$115,859 | | Commercial real estate - owner occupied | $3,136,182 | $3,011,955 | +$124,227 | | Commercial real estate - income producing | $3,940,309 | $3,798,612 | +$141,697 | | Construction and land development | $1,219,514 | $1,281,115 | -$61,601 | | Residential mortgages | $4,057,307 | $3,961,328 | +$95,979 | | Consumer | $1,347,705 | $1,369,845 | -$22,140 | | Total Loans | $23,461,750 | $23,299,447 | +$162,303 | - Commercial and industrial (C&I) loans totaled $12.9 billion at June 30, 2025, up 2% QoQ, reflecting increased demand[292] - Shared national credits outstanding were approximately $2.2 billion, representing 9.5% of total loans at June 30, 2025[291] - Management expects low single-digit loan growth for full year 2025 compared to December 31, 2024[297] Allowance for Credit Losses and Asset Quality This section analyzes the allowance for credit losses, asset quality metrics, criticized loans, and net charge-off expectations | Credit Metric (in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------- | :---------------- | | Total Allowance for Credit Losses | $340,289 | $343,150 | $342,227 | | Allowance for credit losses to period-end loans | 1.45% | 1.49% | 1.47% | | Criticized commercial loans | $569,300 | $594,100 | $623,000 | | Nonaccrual loans | $94,922 | $104,214 | $97,335 | | Loans 90 days past due still accruing | $58,702 | $15,593 | $21,852 | - The decrease in allowance for credit losses was due to net charge-offs partially offset by provision, maintaining a stable credit loss outlook[298] - Loans 90 days past due still accruing at June 30, 2025, include $36.7 million from a single relationship with recently extended matured loans[306] - Net charge-offs as a percentage of average loans are expected to range from 0.15% to 0.25% for 2025[307] Deposits This section details deposit categories, noninterest-bearing demand deposits, interest rates, uninsured deposits, and full-year growth expectations | Deposit Category (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Noninterest-bearing deposits | $10,638,785 | $10,597,461 | +$41,324 | | Interest-bearing retail transaction and savings deposits | $11,498,300 | $11,327,725 | +$170,575 | | Interest-bearing public fund deposits | $2,985,985 | $3,212,499 | -$226,514 | | Retail time deposits | $3,923,542 | $4,348,265 | -$424,723 | | Brokered time deposits | $0 | $6,901 | -$6,901 | | Total Deposits | $29,046,612 | $29,492,851 | -$446,239 | - Noninterest-bearing demand deposits comprised 37% of total deposits at June 30, 2025[313] - The rate paid on interest-bearing deposits for Q2 2025 was 2.58%, down 5 bps from Q1 2025[315] - Estimated uninsured deposits were approximately $14.4 billion at June 30, 2025, with $11.2 billion noncollateralized, covered by $19.4 billion total liquidity[311] - Management expects low single-digit period-end deposit growth for full year 2025 compared to December 31, 2024[317] Short-Term Borrowings This section provides an overview of the Company's short-term borrowings, including FHLB advances, at June 30, 2025, and December 31, 2024 | Short-Term Borrowings (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------- | :------------ | :---------------- | :----- | | Short-term borrowings | $1,044,927 | $639,015 | +$405,912 | | FHLB borrowings outstanding | $400,000 | $0 | +$400,000 | Long-Term Debt This section details the Company's long-term debt, including subordinated notes payable that qualify as Tier 2 capital | Long-Term Debt (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :---------------------------- | :------------ | :---------------- | :----- | | Long-term debt | $210,620 | $210,544 | +$76 | - Long-term debt includes $172.5 million in 6.25% subordinated notes maturing June 15, 2060, qualifying as Tier 2 capital[321] OFF-BALANCE SHEET ARRANGEMENTS This section outlines the Company's off-balance sheet arrangements, including commitments to extend credit and letters of credit | Off-Balance Sheet Instruments (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------- | :------------ | :---------------- | | Commitments to extend credit | $9,280,007 | $9,249,468 | | Letters of credit | $417,869 | $420,614 | - The Company had a reserve for credit losses on unfunded lending commitments totaling $27.1 million at June 30, 2025[326] CRITICAL ACCOUNTING POLICIES AND ESTIMATES This section confirms no material changes to critical accounting policies and estimates, which rely on management's judgment - No material changes occurred in critical accounting policies and estimates during the reporting period[329] - Financial statements conform to GAAP, requiring management estimates and assumptions about future events[330] NEW ACCOUNTING PRONOUNCEMENTS This section refers to Note 17 for details on recent accounting pronouncements and their potential impact - Refer to Note 17 for details on recent accounting pronouncements[331] ITEM 3. Quantitative and Qualitative Disclosures about Market Risk This section details the Company's market risk exposure, primarily interest rate risk, and management strategies, including NII at risk and EVE analyses under various rate scenarios Net Interest Income at Risk This section analyzes the Company's net interest income sensitivity to various hypothetical interest rate changes over one and two years - The Company's primary market risk is interest rate risk, managed by measuring NII sensitivity under various rate scenarios[332] | Change in Interest Rates (basis points) | Estimated Increase (Decrease) in NII (Year 1) | Estimated Increase (Decrease) in NII (Year 2) | | :-------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | -300 | -6.19% | -14.87% | | -200 | -4.04% | -9.98% | | -100 | -1.85% | -4.66% | | +100 | 1.58% | 4.00% | | +200 | 2.98% | 7.64% | | +300 | 4.37% | 11.26% | - Results indicate general asset sensitivity, with interest rate risk driven by mid to long-term yield curve changes due to funding mix shifts[335] Economic Value of Equity (EVE) This section presents the Economic Value of Equity (EVE) analysis, calculating the present value of future cash flows under various interest rate scenarios - EVE analysis calculates the present value of future cash flows from assets minus liabilities, including off-balance sheet items[337] | Change in Interest Rates (basis points) | Estimated Change in EVE at June 30, 2025 | | :-------------------------------------- | :--------------------------------------- | | -300 | 2.51% | | -200 | 2.48% | | -100 | 1.75% | | +100 | -2.43% | | +200 | -5.20% | | +300 | -8.05% | - The net changes in EVE are within the parameters approved by the Board of Directors[339] ITEM 4. Controls and Procedures This section confirms the effectiveness of disclosure controls and procedures and the absence of material changes in internal control over financial reporting as of June 30, 2025 - The Company's disclosure controls and procedures were effective as of June 30, 2025[340] - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[341] Part II. Other Information ITEM 1. Legal Proceedings This section confirms the Company's involvement in ordinary course legal proceedings, with no anticipated material adverse effect on financial position or liquidity - The Company is party to various legal proceedings, but does not believe they will have a material adverse effect on financial position or liquidity[344] ITEM 1A. Risk Factors This section refers investors to the 2024 Form 10-K for risk factors, confirming no material changes during the current reporting period - Investors should consider risk factors from the 2024 Form 10-K; no material changes occurred during the current reporting period[345][346] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the Board-approved stock buyback program, authorizing repurchase of up to 4.3 million shares, and reports Q2 2025 repurchase activity - The Company has a Board-approved stock buyback program to repurchase up to 4.3 million shares through December 31, 2026[347] | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----------------------------- | :----------------------------- | :--------------------------- | | April 1, 2025 - April 30, 2025 | 400,429 | $50.71 | | May 1, 2025 - May 31, 2025 | 328,179 | $54.27 | | June 1, 2025 - June 30, 2025 | 25,000 | $54.39 | | Total (3 months ended June 30, 2025) | 753,608 | $52.38 | ITEM 5. Other Information This section confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, terminated, or modified by directors or executive officers during Q2 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, terminated, or modified by directors or executive officers during Q2 2025[351] ITEM 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL taxonomy documents - The report includes certifications (31.1, 31.2, 32.1, 32.2) and various Inline XBRL documents[352] SIGNATURES This section contains the official signatures of Hancock Whitney Corporation's President & CEO and SVP & CFO, certifying the report filing on August 7, 2025 - The report was signed by John M. Hairston (President & CEO) and Michael M. Achary (SVP & CFO) on August 7, 2025[354]