• Return on Assets (ROA): 1.40% for the fourth quarter.
• Total Risk-Based Capital: Nearly 16% at the end of the quarter.
• Net Income: $122 million or $1.40 per share for the fourth quarter.
• Pre-Provision Net Revenue (PPNR): $165.2 million, slightly down by less than 1%.
• Net Interest Margin (NIM): Expanded by 2 basis points to 3.41%.
• Deposits: Increased by $510 million, with a DDA mix consistent at 36%.
• Common Equity Tier 1 Ratio: 14.14% at the end of the quarter.
• Tangible Common Equity (TCE): 9.47% at the end of the quarter.
• Cost of Funds: Down 21 basis points to 1.73%.
• Cost of Deposits: Down 17 basis points to 1.85%.
• Loan Yield: Down 25 basis points to 6.02%.
• Bond Yields: Increased by 5 basis points to 2.71%.
• Share Repurchases: 150,000 shares of common stock repurchased during the quarter.
• Efficiency Ratio: Expected to fall between 55% and 56% in 2025.
• Credit Quality: Solid reserve of 147 basis points, with net charge-offs down for the quarter.

• Warning! GuruFocus has detected 7 Warning Signs with BOKF.

Release Date: January 21, 2025

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

Positive Points

• Hancock Whitney Corp (NASDAQ:HWC) achieved a notable return on assets (ROA) of 1.40% for the fourth quarter, reflecting strong profitability.
• The company announced the acquisition of Sabal Trust Company, which will significantly enhance its wealth management presence in Florida.
• HWC plans to expand its footprint in Florida and Texas with the opening of five additional financial centers in North Dallas, indicating a strategic focus on growth markets.
• The company reported an increase in deposits by $510 million, despite the maturity of $183 million in broker deposits, showcasing strong deposit growth.
• HWC maintained strong regulatory capital metrics, ending the quarter with a common equity Tier 1 ratio of 14.14% and a total risk-based capital of nearly 16%.

Negative Points

• Net interest income and net interest margin (NIM) faced pressure due to lower loan yields, particularly on variable rate loans.
• Fee income was modestly down due to lower secondary mortgage volume and reduced specialty income compared to the previous quarter.
• The company experienced a decline in loans by $156 million, primarily due to higher payoffs on commercial real estate loans.
• Criticized commercial loans increased, indicating some normalization in credit quality metrics.
• Operating expenses are expected to rise by 4% to 5% in 2025, partly due to the company's organic growth plan.

Q & A Highlights

Q: Can you provide more details on the buyback strategy given the current stock valuation? A: Michael Achary, CFO, explained that the company stepped down buybacks in Q4 due to stock price increases and the Sabal transaction. Moving forward, they plan to revert to buying around 300,000 shares per quarter, with potential for increased activity depending on market conditions.

Q: What are the drivers behind the optimistic loan growth outlook for 2025? A: John Hairston, CEO, highlighted that the absence of SNC portfolio paydowns is a significant tailwind. Growth is expected from core conventional growth, particularly in small business, commercial banking, and equipment finance. The CRE sector is also expected to become a net growth engine in the latter half of the year.

Q: Can you discuss the strategic rationale behind the Sabal Trust acquisition and future M&A opportunities in wealth management? A: John Hairston noted that the acquisition aligns with their strategy to expand in high-growth markets like Florida. It enhances their wealth management capabilities, making it a significant part of their fee income. Michael Achary added that the company is open to further inorganic growth opportunities, both in banking and non-banking sectors.

Q: What is the outlook for credit quality and charge-offs in 2025? A: Christopher Ziluca, Chief Credit Officer, stated that while there is some increase in criticized loans, it is largely in line with peers and considered transitory. Michael Achary mentioned that they expect modest charge-offs in the upper teens to low 20s basis points, consistent with peer levels.

Q: How does the company plan to manage expenses in 2025, and what impact will the organic growth strategy have? A: Michael Achary explained that expenses are expected to rise by 4% to 5% in 2025, with about 100 basis points attributed to the organic growth plan. Incentive compensation will vary based on performance, but the focus remains on controlling costs while supporting growth initiatives.

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