HANCOCK WHITNEY CORP Q1 FY2024 earnings call

• Solid start to 2024, marking 125th anniversary. • Net interest income down slightly due to portfolio restructure, but NIM expanded. • Loan growth modest, focusing on granular full relationship loans. • Credit quality metrics normalizing, net charge-offs modest, reserve at 1.42%. • Deposit growth of $86 million, including maturity of $195 million in brokered deposits. • Capital ratios continued to improve with TCE at 8.62% and common equity Tier 1 at 12.67%.

First quarter reported net income was $109 million or $1.24 per share. Adjusted PPNR was $153 million, down about $3 million from the prior quarter. NIM expanded 5 basis points to 3.32%. Net interest income was down due to a smaller average earning asset base. Deposit growth was $86 million, with client deposits up $281 million excluding brokered deposits. Capital ratios improved with TCE at 8.62% and common equity Tier 1 ratio at 12.67%.

No updates to guidance this quarter. Mentioned NIM expansion expected with potential rate cuts, but no change to previous guidance. The impact of no rate cuts on PPNR was disclosed, with a difference of about $7 million for the last three quarters of the year.

• Potential macroeconomic risks affecting credit quality. • Impact of interest rate changes on deposit costs and loan growth. • Uncertainty around credit quality migration and potential weakening in portfolio sectors or geography.

Q: Catherine Mealor asked about the increase in non-performers and criticized assets.

A: Chris Ziluca responded that criticized and non-approval loans are at historically low levels, with movement in criticized loans having no substantial common factor and non-accruals driven by a single commercial credit.

Q: Michael Rose inquired about loan growth acceleration and SNC commentary.

A: John Hairston explained that net growth in SNC is often a technical classification change, and there are tailwinds like line utilization improvement and paydowns, with expectations of growth in the back half of the year.

Q: Casey Haire asked about CD repricing and capital.

A: Mike Achary discussed CD maturities and their rollover, and mentioned consideration of resuming buybacks in the next quarter.

Q: Stephen Scouten asked about non-interest-bearing deposits and credit normalization.

A: Mike Achary talked about slowing DDA remix and Chris Ziluca discussed credit normalization towards peer average.

Q: Ben Gerlinger inquired about expenses and NIM.

A: Mike Achary explained expense increases due to raises and NIM expectations based on rate cut scenarios.

Q: Brandon King asked about loan yields and fixed-rate repricing.

A: Mike Achary discussed stable loan yields and pro-rata fixed-rate repricing.

Q: Brett Rabatin asked about office loan exposure and market performance.

A: Chris Ziluca provided details on office loan exposure and John Hairston discussed market performance in core regions.

Q: Matt Olney asked about CD promotional rates and credit recoveries.

A: Mike Achary discussed CD rates and Chris Ziluca talked about credit recoveries.

Q: Christopher Marinac asked about pass watch category and PPNR guidance.

A: Chris Ziluca and Mike Achary responded on pass watch category and future PPNR guidance.

Q: Gary Tenner asked about loan growth guide and PPNR with no rates.

A: John Hairston and Mike Achary discussed loan growth expectations and PPNR impact with no rate cuts.