8-K: Hancock Whitney Reports Solid First Quarter 2025 Results, Driven by Capital Growth

Hancock Whitney Corporation announced a net income of $119.5 million, or $1.38 per diluted share, for the first quarter of 2025, demonstrating a strong start to the year.

Summary

• Hancock Whitney Corporation reported a net income of $119.5 million, or $1.38 per diluted common share, for the first quarter of 2025.
• This compares to $122.1 million, or $1.40 per diluted common share, in the fourth quarter of 2024, and $108.6 million, or $1.24 per diluted common share, in the first quarter of 2024.
• Pre-provision net revenue (PPNR) totaled $162.4 million, compared to $165.2 million in the prior quarter.
• Loans decreased by $201.3 million, or 3% linked quarter annualized (LQA).
• Deposits decreased by $298.1 million, or 4% LQA.
• The net interest margin (NIM) was 3.43%, up 2 bps compared to the prior quarter.
• The CET1 ratio is estimated at 14.51%, up 37 bps linked-quarter, and the TCE ratio is 10.01%, up 54 bps linked-quarter.
• The efficiency ratio was 55.22%, compared to 54.46% in the prior quarter.
• Management expects 2025 period-end loan and deposit balances to be up low-single digits from year-end 2024.
• The company repurchased 350,000 shares of its common stock at an average price of $59.25 per share during the first quarter of 2025.

Sentiment

Score: 7

Explanation: The document presents a balanced view with both positive and negative aspects. While net income and PPNR are slightly down, capital ratios are up and the company is managing expenses well. The outlook is cautiously optimistic.

Positives

• ACL coverage is solid at 1.49%, up 2 bps compared to the prior quarter.
• NIM increased to 3.43%, up 2 bps from the prior quarter.
• The CET1 ratio is estimated at 14.51%, up 37 bps linked-quarter.
• The TCE ratio is 10.01%, up 54 bps linked-quarter.
• The total risk-based capital ratio is estimated at 16.39%, up 46 bps linked-quarter.
• Criticized commercial loans decreased during the quarter.
• The company increased the quarterly common stock dividend by 50% year-over-year.
• The company is set to welcome Sabal Trust Company associates and clients in May.
• The company repurchased 350,000 shares of its common stock at an average price of $59.25 per share during the first quarter of 2025.

Negatives

• Net income decreased to $119.5 million, compared to $122.1 million in the prior quarter.
• Pre-provision net revenue (PPNR) decreased to $162.4 million, compared to $165.2 million in the prior quarter.
• Loans decreased by $201.3 million, or 3% linked quarter annualized (LQA).
• Deposits decreased by $298.1 million, or 4% LQA.
• Nonaccrual loans increased to $104.2 million, or 0.45% of total loans, at March 31, 2025, compared to $97.3 million, or 0.42% of total loans, at December 31, 2024.

Risks

• The company faces risks related to economic conditions, including declines in the real estate market, tariffs, trade wars, high unemployment, and inflationary pressures.
• Changes in interest rates and Federal Reserve actions could impact financial projections and borrower stress.
• War, terrorism, climate change, and natural disasters pose potential risks.
• The company faces potential claims, damages, and penalties from litigation and regulatory proceedings.
• Increased cybersecurity risks could lead to business disruptions or financial losses.

Future Outlook

Management expects 2025 period-end loan and deposit balances to be up low-single digits from year-end 2024, and anticipates modest and consistent NIM expansion over the course of 2025, based on assumptions including three 25 bp rate cuts in June, July, and October 2025.

Management Comments

• The first quarter of 2025 was a very strong start to the year, said John M. Hairston, President & CEO.
• Our team delivered yet another quarter of solid profitability and capital growth.
• Our criticized loan levels decreased during the quarter, and our ACL to loans is robust at 1.49%.
• Our capital ratios continued to build this quarter, and we were able to return capital to our shareholders through share repurchases and a 50% year-over-year increase in the quarterly common stock dividend.
• We look forward to the rest of 2025 as we execute our organic growth plan and welcome the Sabal Trust Company associates and clients to Hancock Whitney this May.

Industry Context

The results reflect the ongoing challenges and opportunities in the banking sector, including managing interest rate risk, maintaining asset quality, and growing capital in a competitive environment.

Comparison to Industry Standards

• The company's CET1 ratio of 14.51% is strong compared to the regulatory minimum and peers.
• The efficiency ratio of 55.22% indicates good cost management compared to the industry average.
• The ACL coverage ratio of 1.49% suggests a conservative approach to managing credit risk.
• Nonaccruals continue near top quartile levels.
• The company expects to compare well to peers.

Stakeholder Impact

• Shareholders benefit from the increased dividend and share repurchases.
• Customers will gain access to expanded services with the Sabal Trust Company acquisition.
• Employees will see growth opportunities with the organic growth plan and facility expansion.

Next Steps

• The company will continue to execute its organic growth plan.
• The company will welcome Sabal Trust Company associates and clients in May.
• The company plans five additional financial center locations for Dallas MSA in 2025.
• The company expects to reinvest principal runoff of approximately $236 million plus $100 million in strategic growth in 2Q25.

Key Dates

Keywords

financial results, first quarter, Hancock Whitney, net income, loans, deposits, NIM, CET1 ratio, TCE ratio, capital, ACL, PPNR, efficiency ratio