8-K: Hancock Whitney Reports Strong Fourth Quarter 2024 Results, Announces Sabal Trust Acquisition

Hancock Whitney Corporation announced a strong finish to 2024 with increased earnings per share and the acquisition of Sabal Trust Company.

Summary

• Hancock Whitney Corporation reported net income of $122.1 million, or $1.40 per diluted common share, for the fourth quarter of 2024.
• This compares to $115.6 million, or $1.33 per diluted common share, in the third quarter of 2024, and $50.6 million, or $0.58 per diluted common share, in the fourth quarter of 2023.
• Excluding supplemental disclosure items, EPS would have been $1.26 in Q4 2023.
• Loans decreased by $156.1 million, or 3% linked quarter annualized.
• Deposits increased by $509.9 million, or 7% linked quarter annualized.
• The net interest margin was 3.41%, up 2 bps linked-quarter.
• The CET1 ratio is estimated at 14.14%, up 36 bps linked-quarter.
• The TCE ratio was 9.47%, down 9 bps linked-quarter.
• The company also announced the acquisition of Sabal Trust Company, expected to close in the second quarter of 2025.
• Management expects 2025 period-end loan balances to be up mid-single digits from year-end 2024.
• Management expects 2025 period-end deposit levels to be up low-single digits from year-end 2024.
• The company repurchased 150,000 shares of its common stock at an average price of $52.50 per share during the fourth quarter of 2024.
• The company may purchase up to 5% of the shares of company common stock outstanding as of December 31, 2024 under the new authorization.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results and strategic acquisitions. The management's comments are optimistic, and the company appears well-positioned for future growth.

Positives

• Net income increased to $122.1 million in Q4 2024 from $115.6 million in Q3 2024.
• Deposits increased by $509.9 million, or 2%, from September 30, 2024.
• The net interest margin increased by 2 bps to 3.41%.
• The CET1 ratio increased by 36 bps to 14.14%.
• The company's efficiency ratio improved slightly to 54.46%.
• The acquisition of Sabal Trust Company is expected to expand revenue generation and financial center locations.
• The company's share buyback authorization was renewed.

Negatives

• Loans decreased by $156.1 million, or 1%, from September 30, 2024.
• Noninterest income decreased by $4.7 million, or 5%, from the third quarter of 2024.
• The tangible common equity (TCE) ratio decreased by 9 bps to 9.47%.

Risks

• The document contains forward-looking statements that are subject to significant risks and uncertainties.
• The company's performance and financial condition could be affected by general economic and business conditions, Federal Reserve actions, and other external factors.
• The company faces potential risks related to litigation, regulatory proceedings, and cybersecurity threats.
• The company's ability to successfully integrate the businesses of current or future business combinations is uncertain.

Future Outlook

Management expects mid-single digit loan growth and low-single digit deposit growth in 2025. They also anticipate modest and consistent NIM expansion throughout 2025, based on an assumption of three 25 bp rate cuts in 2025.

Management Comments

• The fourth quarter 2024 results reflect a strong conclusion to our year-long 125thanniversary celebration, said John M. Hairston, President & CEO.
• Our team delivered an impressive ROA of 1.40%, additional NIM expansion, and an efficiency ratio of 54.46%.
• Credit metrics continued to normalize, and weve maintained a solid ACL to loans of 1.47%.
• Our regulatory capital ratios continued to climb, with total risk-based capital reaching nearly 16%.
• We believe we are well-positioned as we enter 2025, and we are excited for the opportunities that lie ahead, including the announcement earlier today of the acquisition of Sabal Trust Company and the expansion of our outstanding team of revenue generators and financial center locations.
• I would like to thank our 3,500 associates, who worked tirelessly to deliver a 125th year we can all be proud of.

Industry Context

The acquisition of Sabal Trust Company reflects a trend in the banking industry towards expanding wealth management services and increasing fee income. The company's focus on maintaining strong capital ratios and managing expenses is also consistent with industry best practices.

Comparison to Industry Standards

• The document mentions that nonaccruals continue near top quartile levels, suggesting that Hancock Whitney's asset quality is better than many of its peers.
• The company's CET1 ratio of 14.14% is also relatively high compared to the regulatory minimum, indicating a strong capital position.
• The document does not provide specific comparisons to named companies, but the efficiency ratio of 54.46% is a key metric used to compare banks' operational performance.

Stakeholder Impact

• Shareholders will benefit from the increased profitability and the share buyback program.
• Employees will benefit from the company's growth and expansion.
• Customers will benefit from the expanded services and locations.
• The acquisition of Sabal Trust Company will create opportunities for both companies' stakeholders.

Next Steps

• The company intends to close the acquisition of Sabal Trust Company in the second quarter of 2025.
• The company will continue to execute its share buyback program.
• The company plans to hire additional wholesale, business, and wealth management revenue producers.
• The company plans to open five additional financial center locations in the Dallas MSA in 2025.

Key Dates