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][12] - Earnings for the fourth quarter were $126 million, or $1.49 per share, compared to $127 million in the third quarter [12] - The efficiency ratio improved to 54.9% for the quarter, down from 55.4% in 2024 [12][13] Business Line Data and Key Metrics Changes - Loan growth was $362 million, or 6% annualized, with strong production offsetting an increase in 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 grow between 4%-5% in 2026, supported by core deposit account growth [13][59] Market Data and Key Metrics Changes - Deposits increased by $620 million, or 9% annualized, primarily due to seasonal activity in public fund DDA 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 NIM by seven basis points and improve EPS by $0.23 per share [8][16] - The company aims to maintain a balance between profitability and reliable balance sheet growth, with a focus on full relationship clients [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, citing solid capital levels, robust allowance for credit losses, and positive trends in balance sheet growth [11] - The company expects NII to increase by 5%-6% from 2025, with modest NIM expansion [16] - Management highlighted the importance of consistent balance sheet growth and maintaining strong credit quality [32] 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’s capital ratios remain strong, with a TCE ratio over 10% and a Common Equity Tier 1 ratio of 13.66% [10] Q&A Session Summary Question: Expectations for loan production versus paydowns - Management noted that loan production increased for the third consecutive quarter, with expectations for sustained funding in 2026 despite anticipated paydowns in commercial real estate [20][24] Question: Clarification on ROA target and TCE ratio - Management indicated that consistent balance sheet growth is crucial for achieving higher ROA targets, with a focus on reinvesting in the company [28][30] Question: Insights on NIM expansion - Management discussed expectations for modest NIM expansion in 2026, driven by organic balance sheet growth and the impact of the bond portfolio restructuring [39][42] Question: Confidence in hiring plans - Management expressed confidence in hiring 50 new bankers in 2026, attributing this to enhanced recruiting processes and a strong pipeline of candidates [46][52] Question: Fee income guidance - Management provided insights on fee income growth, emphasizing the impact of Sable Trust and the potential for growth in various banking segments [56][61] Question: M&A appetite - Management reiterated a focus on organic growth while remaining opportunistic regarding M&A opportunities, emphasizing a disciplined approach [62][64] Question: Credit quality and charge-offs - Management reported a resilient credit portfolio, with a decrease in non-accruals and criticized loans, and indicated potential for gradual reduction in reserves [99][102]