Hancock Whitney (HWC)2025-04-15 23:48Financial Data and Key Metrics Changes - The company reported a net income of 1.38 per share, down from 1.40 per share in the previous quarter, but up 10% year-over-year [17] - The return on assets (ROA) was 1.41%, and the net interest margin (NIM) expanded by two basis points to 3.43% [8][18] - Total risk-based capital ended the quarter at 16.39%, with a common equity tier one ratio of 14.51% and a tangible common equity ratio of 10.01% [8][13] Business Line Data and Key Metrics Changes - Fee income is expected to increase by 9% to 10% year-over-year, driven by strong performance across most categories [10][25] - Loans decreased by 298 million, primarily due to seasonal public fund outflows, but the DDA balance increased [12][21] Market Data and Key Metrics Changes - The company experienced a decrease in interest-bearing transaction accounts due to reduced promotional rates, while the DDA mix remained stable at 36% [12][21] - The overall cost of funds decreased by 14 basis points to 1.59%, with a reduction in deposit costs contributing to this decline [19][20] Company Strategy and Development Direction - The company plans to pivot to growth through both organic and inorganic means, including the acquisition of Sable Trust Company, expected to close on May 2nd [14][15] - The focus remains on granular, full-relationship loans to achieve favorable loan yields and relationship revenue [11] - The company is optimistic about growth prospects in the second half of the year despite current market volatility [15] Management's Comments on Operating Environment and Future Outlook - Management noted that client sentiment reflects some apprehension, but there is no immediate fear of a significant recession [46][47] - The company is closely monitoring macroeconomic trends and believes it is well-positioned to navigate challenges due to strong capital and liquidity [16][15] - Future guidance reflects expectations for modest NIM expansion and NII growth of 3% to 4% in 2025 [24] Other Important Information - The company repurchased 350,000 shares of common stock and increased its common stock dividend to 45 cents per share, a 50% increase from the previous year [13] - The criticized commercial loans decreased, while non-accrual loans increased at a slower pace than in the prior quarter [26] Q&A Session Summary Question: Why not increase the buyback given the capital accretion and slower loan growth outlook? - Management indicated that they are indeed increasing buybacks and are focused on maintaining or slightly increasing the current level of repurchases [34][36][38] Question: What are the current efforts to assess credit impacts from tariffs? - Management is evaluating various sectors that could be impacted and preparing plans for potential risks [40][41][44] Question: How much of the increase in the PPNR guide is related to Sable versus core performance? - The increase in the PPNR guide is attributed to both the expected contributions from Sable and continued growth in fee income lines [48][50] Question: Update on hiring process and its impact on growth outlook? - The company has added four bankers in Q1 and plans to hire 20 to 30 throughout the year, with a focus on high-growth markets [57][59][61] Question: Thoughts on M&A versus organic growth? - Currently, the focus is on returning capital to shareholders and organic growth, with M&A being considered for the future [69][70] Question: Expected CD maturities and rate benefits? - The company expects about $5.5 billion of CD maturities over the next three quarters, with a projected repricing benefit [124][125] Question: Loan growth expectations and pipeline comfort? - The company anticipates loan growth to be driven by new hires, with a strong pipeline expected for the second half of the year [132][136]