Hancock Whitney (US:HWC)2026-01-20 22:32Financial Data and Key Metrics Changes - The fourth quarter of 2025 saw an 8% year-over-year improvement in EPS, a 6% growth in PP&R, and a 12% increase in tangible book value per share [6] - Fourth quarter earnings were $126 million, or $1.49 per share, compared to $127 million, or $1.49 per share in the third quarter [12] - The efficiency ratio improved to 54.9% for the quarter, down 58 basis points from 2024's 55.4% [12][13] Business Line Data and Key Metrics Changes - Loans grew by $362 million, or 6% annualized, with strong production offsetting prepayments [9] - Fee income totaled $107 million in the fourth quarter, with growth across all categories driven by higher specialty income [13] - The company expects fee income to increase by 4%-5% in 2026, supported by core deposit account growth [13] Market Data and Key Metrics Changes - Deposits increased by $620 million, or 9% annualized, primarily due to seasonal activity in public fund DBA and interest-bearing accounts [9] - Interest-bearing transaction balances rose by $223 million, while retail time deposits decreased by $90 million due to maturities [10] - The company anticipates low single-digit deposit growth from 2025 levels in 2026 [10] Company Strategy and Development Direction - The company plans to hire up to 50 additional revenue-generating associates in 2026 as part of its multi-year organic growth plan [6] - A bond portfolio restructuring is expected to benefit NEM by seven basis points and improve EPS by $0.23 per share [8][16] - The company aims to maintain a balanced growth strategy, focusing on both profitability and reliable balance sheet growth [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, highlighting solid capital levels, robust allowance for credit losses, and benign asset quality [11] - The company expects NII to grow by 5%-6% in 2026, with modest NEM expansion and an efficiency ratio between 54% and 55% [16] - Management noted that the current economic environment is rapidly evolving, impacting their ability to project results accurately [3][4] Other Important Information - The company fully exhausted its share buyback authority last quarter, impacting capital ratios, but has approved a new 5% buyback plan effective through the end of 2026 [10] - The company reported a decrease in criticized commercial loans and non-accrual loans, indicating improved credit quality [16][17] Q&A Session Summary Question: Loan production and paydowns expectations - Management noted that loan production increased for the third consecutive quarter, with expectations for sustained funding throughout 2026 despite anticipated paydowns in commercial real estate [20][24] Question: ROA target and TCE ratio - Management discussed the importance of consistent balance sheet growth and the assumptions underlying their targets, including Fed funds rate expectations [28][30] Question: NIM expansion and bond restructure impact - Management explained that the bond portfolio restructure would contribute to NIM improvement, alongside organic balance sheet growth and reduced cost of deposits [39][42] Question: Fee income guidance and growth expectations - Management expressed confidence in achieving a 4%-5% fee income growth target, supported by strong performance across various banking segments [56][59] Question: M&A appetite and strategy - Management reiterated their opportunistic stance on M&A, emphasizing a focus on organic growth while remaining aware of market conditions [62][64] Question: Credit quality and charge-offs - Management reported a resilient credit portfolio with decreasing non-accruals and criticized loans, indicating a stable outlook for charge-offs [98][100]