Hancock Whitney (NASDAQ:HWC) reported first-quarter financial results on Tuesday. The transcript from the company’s first-quarter earnings call has been provided below.
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The full earnings call is available at https://events.q4inc.com/attendee/231849470
Summary
Hancock Whitney reported a solid start to 2026 with improved key metrics: Adjusted ROA at 1.43%, ROTCE at 14.64%, and EPS at $1.52, showing over a 10% increase in adjusted EPS from the same quarter last year.
The company welcomed 27 net new revenue producers, anticipated to drive balance sheet growth and profitability, maintaining a mid-single-digit loan growth guidance for the year.
Net interest margin expanded by 7 basis points due to higher securities yields from bond portfolio restructuring, with expenses well-managed despite a 1% rise.
Deposits declined by $198 million due to seasonal public fund outflows, but the company maintains a positive outlook with expectations for low single-digit deposit growth from 2025 levels.
Capital returns to shareholders were highlighted by the repurchase of 1.4 million shares and an 11% increase in the quarterly cash dividend to $0.50 per share.
The company completed a bond restructuring in January, which is expected to contribute positively to NIM throughout the year.
Management remains optimistic despite market volatility, emphasizing strong capital positions and liquidity to support growth in 2026.
Full Transcript
OPERATOR
Good day ladies and gentlemen and welcome to Hancock Whitney Corporation’s first quarter 2026 earnings conference call. At this time all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will follow at that time. As a reminder, this call may be recorded and I would now like to introduce your host for today’s conference, Catherine Mistich,, Investor Relations Manager. You may begin..
Catherine Mistich (Investor Relations Manager)
Thank you and good afternoon. During today’s call we may make forward looking statements. We would like to remind everyone to carefully review the safe harbor language that was published with the earnings release and presentation and in the Company’s most recent 10K and 10Q, including the risks and uncertainties identified therein. You should keep in mind that any forward looking statements made by Hancock Whitney speak only as of the date on which they were made. As everyone understands, the current economic environment is rapidly evolving and changing. Hancock Whitney’s ability to accurately project results or predict the effects of future plans or strategies, or predict market or economic developments is inherently limited. We believe that the expectations reflected or implied by any forward looking statements are based on reasonable assumptions but are not guarantees of performance or results and our actual results and performance could differ materially from those set forth in our forward looking statements. Hancock Whitney undertakes no obligation to update or revise any forward looking statements and you are cautioned not to place undue reliance on such forward looking statements. Some of the remarks contain non GAAP financial measures. You can find reconciliations to the most comparable GAAP measures in our earnings release and financial tables. The presentation slides included in our 8k are also posted with the Conference Call webcast link on the Investor Relations website. We will reference some of these slides in Today’s Call. Participating in Today’s Call are John Harrison, President and CEO Mike Ackery, CFO Chris Saluka, Chief Credit Officer and Shane Loper, Chief Operating Officer. I will now turn the call over to John Hairston.
John Hairston
Thank you Catherine and thanks to everyone for joining us this afternoon. We are pleased to report a solid start to 2026. Our adjusted ROA was 1.43%, ROTCE was 14.64% and EPS was $1.52, all improved from prior quarter. Adjusted EPS compared to the same quarter last year increased over 10%. We are very excited to welcome 27 net new revenue producers to our strong banking team and we expect to build on the momentum we have to generate meaningful balance sheet growth and profitability improvement. Over the rest of 2026 we achieved another quarter of solid earnings with NIM expansion. An efficiency ratio of about 55%, consistent strong fee income and well managed expenses. Net interest margin expanded 7 basis points this quarter due to higher securities yields following our bond portfolio restructuring and lower cost of funds that outpaced the impacts of lower loan yields and in this rate environment loans grew 33 million or 1%. Annualized loan production totaled 1.2 billion, down from last quarter but up 365 million compared to the same quarter last year. Historically, first quarter loan growth is seasonally softer, but average balances were up 250 million over fourth quarter. We anticipate average growth to improve as the year progresses. With a strong pipeline and continued success in adding bankers, our guidance of mid single digits for the year for loan growth is unchanged. Deposits were down 198 million or 3% annualized due to seasonal public funds outflows. Interest bearing public funds decreased 280 million and public fund DDAs decreased 75 million. Excluding the impact of public fund DDA outflows, DDAs would actually have been up 45 million. DDA mix ended the quarter at a very strong 36%. Interest bearing transaction and savings accounts were up 261 million with higher balances driven by competitive products and pricing. Retail time deposits were down 149 million due to maturities during the quarter. We continue to enjoy a healthy CD renewal rate of about 85%. We have not changed our guidance on deposits as we still expect balances to be up low single digits from 2025 levels this quarter. We continue to proactively return capital to shareholders through repurchasing 1.4 million shares of our common stock and increasing our quarterly cash dividend 11%, now standing at $0.50 per share. Additionally, we deployed capital through the previously announced bond restructuring effort which was completed in January. We ended the quarter with a solid TCE of 9.93% and a common equity tier 1 ratio of 13.3%. Despite market volatility and an emerging scenario of flat rates, we remain optimistic and confident for our growth prospects for the rest of 2026. We’re closely monitoring macroeconomic trends and indicators, including both nationally and within our footprint. While the environment remains dynamic, our ample liquidity, solid allowance for credit losses of 1.43% and very strong capital keep us well positioned to navigate challenges and support our clients in really any economic scenario. With that, I’ll invite Mike to add additional comments.
Mike Ackery (Chief Financial Officer)
Thanks, John. Good afternoon everyone. As John said at the onset, the company’s performance in the first quarter was exceptional, adjusted for the net loss in the bond portfolio Restructuring net income for the first quarter was 125 million or $1.52 per share, compared to 126 million or $1.49 per share in the fourth quarter. As shown on slide 20 of the Investor Deck, we remain confident in the guidance provided at the beginning of the year and have not made any changes this quarter. We are however now assuming no rate cuts throughout 2026 with no significant impact to NII or our NIM. PPNR for the company was down slightly from the prior quarter or about 1% to 173 million, expressed as a return on average assets that continues to be a solid 1.98%. Net interest income increased 1% this quarter. Our fee income business continues to perform exceptionally and expenses were up but remained well controlled. Fee income, adjusted for the net loss on the bond portfolio restructuring was essentially flat with Last quarter down only 1 million. The slight decrease was driven by lower specialty income which tends to be somewhat unpredictable. Quarter to quarter expenses remained well controlled, only up 1% from last quarter. Much of this increase was from seasonal increases in payroll taxes and related benefits. We remain focused on making thoughtful investments in revenue generating activities while balancing expense growth with top line revenue creation. As expected, Our NIM was up 7 basis points this quarter to 3.55% driven by a reduction in our cost of deposits and a higher yield on our bond portfolio partly offset by lower loan yields. Following two rate cuts in the fourth quarter of last year, our overall cost of funds was down 8 basis points to 1.44% due to a lower cost of deposits and a better funding mix. Our cost of deposits was down 10 basis points to 1.47% for the quarter with the cost of deposits down to 1.46% in the month of March. During the quarter we reduced promotional rate pricing on our interest bearing transaction accounts and retail CDs. In 2026, we expect CDs will continue to mature and renew at lower rates, although the rate advantage will diminish over the year in a flat rate environment. Our earning Asset yield was down 1 basis point with loan yields down 13 basis points following the rate cuts in the fourth quarter quarter, our bond yields were up 25 basis points Related to the quarter’s restructuring transaction. Average earning assets were up 100 million driven by higher average loans partly offset by a lower level of adrift bonds. The yield on the bond portfolio as mentioned was up 25 basis points to 3.23 related to the quarter’s restructuring transaction. The transaction contributed 4 basis points to our NIM expansion this quarter. As a reminder, the first quarter did not include a full quarter’s impact from the transaction. We expect the full quarterly increase in bond Yields will approach 32 basis points and the annual contribution to NIM will be about 7 basis points. Aside from the restructuring transaction, we reinvested 181 million back into the bond portfolio at higher yields. Loan yields, as mentioned, were down 13 basis points following the rate cuts in the fourth quarter of 2025. The total fixed rate was unchanged from last quarter at 5.28% and the total variable rate was down about 14 basis points. Total new loan rates were down 10 basis points quarter over quarter, but that was partly offset by an increase in average loans of about 250 million linked quarter for the fifth consecutive quarter, our criticized commercial loans improved, decreasing 13 million to 522 million. Non accrual loans increased 6 million to 113 million. Net charge offs came in at 19 basis points, so down from the prior quarter’s 22 basis points. Our loan loss reserves are solid and unchanged at 1.43% of loans. We expect net charge offs to average loans will come in at about 15 to 25 basis points for the full year. Lastly, a comment on capital Our capital ratios remained remarkably strong even with the proactive capital deployment we completed during the quarter through the bond restructuring transaction, share repurchases and an increase in our common cash dividend. We expect that share repurchases will continue at similar levels throughout the year. Changes in the growth dynamics of our balance sheet, economic conditions and share valuation could impact that view. I will now turn the call back to John.
John Hairston
Thanks Mike. Let’s open the call for questions
OPERATOR
and thank you. We’ll now begin the question and answer session. If you have dialed in and would like to ask a question, please press Star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press Star one again. If you’re called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your questions. Again, it is Star one if you would like to join the queue and our first question comes from the line of Michael Rose with Raymond James. Your line is open.
Michael Rose (Equity Analyst)
Hey, good afternoon everyone. Thanks for taking my questions. Maybe we can just start on loan growth. I think that’s the one piece of the story that investors are really looking forward to seeing pick up here as we move through the year. Certainly understand the Elevated pay downs. Looks like originations were still pretty good in what is typically a seasonally weaker quarter. But it does look like a lot of the growth was maybe driven this quarter by higher SNC balances. So maybe. John, is there a way to kind of map out what we should expect for loan growth in the back half of the year? I know you have the guidance, but more specifically, what gives you confidence that you can actually begin to see some real net growth and for it to pick up here? Because I think that’s a big linchpin for investors. Thanks.
John Hairston
Sure Michael, thanks for the question. I’m going to let Shane tackle that question.
Shane Loper (Chief Operating Officer)
Thanks Michael. Our first quarter loan growth was 33 million and that I believe reflects solid underlying momentum. You know, we produced about a billion two in loans and that’s up from 850 from a year ago and really saw strength across business, banking, commercial, middle market, healthcare, commercial finance and cre. That net growth as you articulated was moderated though by some normal portfolio dynamics. So we had mortgage and consumer amortization and some planned paydowns in some of our larger credits across cre, health care and our specialty lines. That all was anticipated. And from the outset we’ve talked about indicating growth would be more weighted towards the mid and back half of the year. So if you look forward, I think we’re positioned to deliver the mid single digit full year growth. Geographic markets are continuing …
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