Hancock Whitney Corporation (NASDAQ:HWC) today announced its financial results for the third quarter of 2024. Net income for the third quarter of 2024 totaled $115.6 million, or $1.33 per diluted common share (EPS), compared to $114.6 million, or $1.31 per diluted common share, in the second quarter of 2024. The company reported net income for the third quarter of 2023 of $97.7 million, or $1.12 per diluted common share.

Third Quarter 2024 Highlights

Net income totaled $115.6 million, compared to $114.6 million in the prior quarter
Pre-provision net revenue (PPNR) totaled $166.5 million, compared to $156.4 million in the prior quarter
Loans decreased $456 million, or 8% linked quarter annualized (LQA)
Deposits decreased $218 million, or 3% LQA
Criticized commercial loans increased and nonaccrual loans decreased
ACL coverage solid at 1.46%, up 3 bps compared to prior quarter
NIM 3.39%, up 2 bps compared to prior quarter
CET1 ratio estimated at 13.79%, up 54 bps linked-quarter; TCE ratio 9.56%, up 79 bps linked-quarter
Efficiency ratio 54.42%, down 176 bps linked-quarter

"The third quarter results reflect the continued strength and stability of our company," said John M. Hairston, President & CEO. "Our efforts to improve profitability continued with another quarter of 1.32% ROA, additional NIM expansion, fee income growth, and lower operating expenses. Credit metrics continued to normalize with an increase in criticized commercial loans at the end of the quarter. Non-accrual loans were down, and we've maintained a solid ACL to loans of 1.46%. Our capital ratios continue to grow due to strong earnings and are at top quartile levels. As we reflect on and celebrate our 125th anniversary, we remain dedicated to demonstrating our strength, stability, and commitment to our shareholders, clients, communities, and associates."

Loans

Total loans were $23.5 billion at September 30, 2024, down $456.0 million, or 2%, from June 30, 2024. The decrease was primarily due to the runoff of a Shared National Credit portfolio of $254 million as we remain focused on originating more granular loans, and higher payoffs on income-producing commercial real estate loans.

Average loans totaled $23.6 billion for the third quarter of 2024, down $365.4 million, or 2%, linked-quarter. Management expects 2024 period-end loan balances to be flat to down slightly from year-end 2023.

Deposits

Total deposits at September 30, 2024 were $29.0 billion, down $217.8 million, or less than 1%, from June 30, 2024. The linked-quarter decrease in deposits was driven primarily by a decrease in interest-bearing public funds driven by seasonal runoff and a decrease in DDAs. These decreases were partially offset by an increase in interest-bearing transactions and savings deposits due to mid-quarter inflows from equity markets and an increase in retail time deposits despite maturity concentrations and promotional rate reductions during the period.

DDAs totaled $10.5 billion at September 30, 2024, down $142.7 million, or 1%, from June 30, 2024 and comprised 36% of total period-end deposits. Interest-bearing transaction and savings deposits totaled $10.9 billion at the end of the third quarter of 2024, up $81.9 million, or 1%, linked-quarter. Compared to June 30, 2024, retail time deposits of $4.7 billion were up $70.3 million, or 2%, and brokered deposits were $190.5 million, down $9.6 million, or 5%, compared to the prior quarter. Interest-bearing public fund deposits decreased $217.6 million, or 7%, linked-quarter, totaling $2.7 billion at September 30, 2024.

Average deposits for the third quarter of 2024 were $28.9 billion, down $128.9 million, or less than 1%, linked-quarter. Management expects 2024 period-end deposit levels to be flat to down slightly from year-end 2023.

Asset Quality

The total allowance for credit losses (ACL) was $342.8 million at September 30, 2024, up $0.5 million, or less than 1%, from June 30, 2024. During the third quarter of 2024, the company recorded a provision for credit losses of $18.6 million, compared to a provision for credit losses of $8.7 million in the second quarter of 2024. There were $18.0 million of net charge-offs in the third quarter of 2024, or 0.30% of average total loans on an annualized basis, compared to net charge-offs of $7.3 million, or 0.12% of average total loans in the second quarter of 2024. The ratio of ACL to period-end loans was 1.46% at September 30, 2024, compared to 1.43% at June 30, 2024.

Criticized commercial loans totaled $508.0 million, or 2.81% of total commercial loans, at September 30, 2024, compared to $379.8 million, or 2.05% of total commercial loans at June 30, 2024. Nonaccrual loans totaled $82.9 million, or 0.35% of total loans, at September 30, 2024, compared to $86.3 million, or 0.36% of total loans, at June 30, 2024. ORE and foreclosed assets were $27.7 million at September 30, 2024, up $25.6 million, compared to June 30, 2024, largely due to property from one commercial borrower.

Net Interest Income and Net Interest Margin (NIM)

Net interest income (TE) for the third quarter of 2024 was $274.5 million, an increase of $1.2 million, or less than 1%, from the second quarter of 2024. The net interest margin (NIM) (TE) was 3.39% in the third quarter of 2024, up 2 bps linked-quarter. Higher rates on loans (+2 bps), higher securities yields (+1 bp) and a favorable borrowing mix (+1 bp), led to a 4 basis point improvement in NIM, partially offset by the change in deposit rates (-2 bps).

Average earning assets were $32.3 billion for the third quarter of 2024, down $275.6 million, or less than 1%, from the second quarter of 2024.

Noninterest Income

Noninterest income totaled $95.9 million for the third quarter of 2024, up $6.7 million, or 8%, from the second quarter of 2024.

Service charges on deposits were up $0.9 million, or 4%, from the second quarter of 2024, due to higher account activity. Bank card and ATM fees were down $0.2 million, or 1%, from the second quarter of 2024.

Investment and annuity income and insurance fees were up $1.1 million, or 11%, linked-quarter, related to sales and recurring fees on higher market value securities. Trust fees were down $0.5 million, or 2% linked-quarter. Fees from secondary mortgage operations totaled $3.4 million for the third quarter of 2024, down $0.2 million, or 5%, linked-quarter.

Other noninterest income was $18.8 million in the third quarter of 2024, up $5.6 million, or 42%, from the second quarter of 2024, due to higher derivative income, SBIC income, BOLI and SBA loan income.

Noninterest Expense & Taxes

Noninterest expense totaled $203.8 million, down $2.2 million, or 1% linked-quarter.

Personnel expense totaled $115.8 million in the third quarter of 2024, down $3.0 million, or 2%, linked-quarter. The decrease was due to a decrease in full-time equivalent employees and higher loan fee deferrals (FAS91). Net occupancy and equipment expense totaled $18.1 million in the third quarter of 2024, up $0.7 million, or 4%, from the second quarter of 2024, due to routine maintenance and hardware replacements. Amortization of intangibles totaled $2.3 million for the third quarter of 2024, down $0.1 million, or 4%, linked-quarter.

ORE and other foreclosed assets was a net gain of $0.4 million in the third quarter of 2024, compared to a net gain of $1.1 million in the second quarter of 2024.

Other expense totaled $68.1 million in the third quarter of 2024, down $0.5 million or less than 1%, linked-quarter.

The effective income tax rate for the third quarter of 2024 was 20.4%.

Capital

Common stockholders' equity at September 30, 2024 totaled $4.2 billion, up $254.0 million, or 6%, from June 30, 2024. The tangible common equity (TCE) ratio was 9.56%, up 79 bps linked-quarter. The company's CET1 ratio is estimated to be 13.79% at September 30, 2024, up 54 bps linked-quarter. Total risk-based capital ratio is estimated to be 15.57% at September 30, 2024, up 57 bps linked-quarter. During the third quarter of 2024, the company repurchased 300,000 shares of its common stock at an average price of $50.60 per share. This stock repurchase is pursuant to the company's share buyback program (authorizing the repurchase of up to 4,297,000 shares of the company's outstanding common stock), which is set to expire on December 31, 2024. To-date the company has repurchased 612,993 shares under this buyback program.

Conference Call and Slide Presentation

Management will host a conference call for analysts and investors at 3:30 p.m. Central Time on Tuesday, October 15, 2024 to review third quarter of 2024 results. A live listen-only webcast of the call will be available under the Investor Relations section of Hancock Whitney's website at investors.hancockwhitney.com. A link to the release with additional financial tables, and a link to a slide presentation related to third quarter results are also posted as part of the webcast link. To participate in the Q&A portion of the call, dial 888-210-2654 or 646-960-0278, access code 6914431.

An audio archive of the conference call will be available under the Investor Relations section of our website. A replay of the call will also be available through October 22, 2024 by dialing 800-770-2030 or 609-800-9909, access code 6914431.

About Hancock Whitney

Since the late 1800s, Hancock Whitney has embodied core values of Honor & Integrity, Strength & Stability, Commitment to Service, Teamwork, and Personal Responsibility. Hancock Whitney offices and financial centers in Mississippi, Alabama, Florida, Louisiana, and Texas offer comprehensive financial products and services, including traditional and online banking; commercial and small business banking; private banking; trust and investment services; healthcare banking; and mortgage services. The company also operates combined loan and deposit production offices in the greater metropolitan areas of Nashville, Tennessee and Atlanta, Georgia. More information is available at www.hancockwhitney.com.

Non-GAAP Financial Measures

This news release includes non-GAAP financial measures to describe Hancock Whitney's performance. These non-GAAP financial measures should not be considered alternatives to GAAP-basis financial statements and other bank holding companies may define or calculate these non-GAAP measures or similar measures differently. The reconciliations of those measures to GAAP measures are provided either in the financial tables or in Appendix A thereto.

Consistent with the provisions of subpart 229.1400 of the Securities and Exchange Commission's Regulation S-K, "Disclosures by Bank and Savings and Loan Registrants," the company presents net interest income, net interest margin and efficiency ratios on a fully taxable equivalent ("TE") basis. The TE basis adjusts for the tax-favored status of net interest income from certain loans and investments using the statutory federal tax rate to increase tax-exempt interest income to a taxable equivalent basis. The company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

The company presents certain additional non-GAAP financial measures to assist the reader with a better understanding of the company's performance period over period, as well as to provide investors with assistance in understanding the success management has experienced in executing its strategic initiatives. The company highlights certain items that are outside of our principal business and/or are not indicative of forward-looking trends in supplemental disclosures items below our GAAP financial data and presents certain "Adjusted" ratios that exclude these disclosed items. These adjusted ratios provide management or the reader with a measure that may be more indicative of forward-looking trends in our business, as well as demonstrates the effects of significant gains or losses and changes.

We define Adjusted Pre-Provision Net Revenue as net income excluding provision expense and income tax expense, plus the taxable equivalent adjustment (as defined above), less supplemental disclosure items (as defined above). Management believes that adjusted pre-provision net revenue is a useful financial measure because it enables investors and others to assess the company's ability to generate capital to cover credit losses through a credit cycle. We define Adjusted Revenue as net interest income (te) and noninterest income less supplemental disclosure items. We define Adjusted Noninterest Expense as noninterest expense less supplemental disclosure items. We define our Efficiency Ratio as noninterest expense to total net interest income (te) and noninterest income, excluding amortization of purchased intangibles and supplemental disclosure items, if applicable. Management believes adjusted revenue, adjusted noninterest expense and the efficiency ratio are useful measures as they provide a greater understanding of ongoing operations and enhance comparability with prior periods.

Important Cautionary Statement about Forward-Looking Statements

This release contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements that we may make include statements regarding our expectations of our performance and financial condition, balance sheet and revenue growth, the provision for credit losses, capital levels, deposits (including growth, pricing, and betas), investment portfolio, other sources of liquidity, loan growth expectations, management's predictions about charge-offs for loans, general economic business conditions in our local markets, Federal Reserve action with respect to interest rates, the effects of war or other conflicts, acts of terrorism, climate change, the impact of natural or man-made disasters, the adequacy of our enterprise risk management framework, potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings, assessments, and enforcement actions, as well as the impact of negative developments affecting the banking industry and the resulting media coverage; the potential impact of future business combinations on our performance and financial condition, including our ability to successfully integrate the businesses, success of revenue-generating and cost reduction initiatives, the effectiveness of derivative financial instruments and hedging activities to manage risks, projected tax rates, increased cybersecurity risks, including potential business disruptions or financial losses, the adequacy of our internal controls over financial and non-financial reporting, the financial impact of regulatory requirements and tax reform legislation, deposit trends, credit quality trends, the impact of current and future economic conditions, including the effects of declines in the real estate market, high unemployment, inflationary pressures, increasing insurance costs, elevated interest rates, including the impact of changes in interest rates on our financial projections, models and guidance and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing, net interest margin trends, future expense levels, future profitability, improvements in expense to revenue (efficiency) ratio, purchase accounting impacts, accretion levels and expected returns. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words "believes," "expects," "anticipates," "estimates," "intends," "plans," "forecast," "goals," "targets," "initiatives," "focus," "potentially," "probably," "projects," "outlook," or similar expressions or future conditional verbs such as "may," "will," "should," "would," and "could." Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events.

Forward-looking statements are subject to significant risks and uncertainties. Any forward-looking statement made in this release is subject to the safe harbor protections set forth in the Private Securities Litigation Reform Act of 1995. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Additional factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, and in other periodic reports that we file with the SEC.

HANCOCK WHITNEY CORPORATION
FINANCIAL HIGHLIGHTS
(Unaudited)

	Three Months Ended									Nine Months Ended
(dollars and common share data in thousands, except per share amounts)	9/30/2024			6/30/2024			9/30/2023			9/30/2024			9/30/2023
NET INCOME
Net interest income	$	271,764		$	270,430		$	269,234		$	808,365		$	828,139
Net interest income (TE) (a)		274,457			273,258			272,086			816,716			836,412
Provision for credit losses		18,564			8,723			28,498			40,255			42,151
Noninterest income		95,895			89,174			85,974			272,920			249,529
Noninterest expense		203,839			206,016			204,675			617,577			607,697
Income tax expense		29,684			30,308			24,297			84,712			85,821
Net income	$	115,572		$	114,557		$	97,738		$	338,741		$	341,999
Supplemental disclosure items - included above, pre-tax
Included in noninterest expense
FDIC special assessment	$	—		$	—		$	—		$	3,800		$	—
PERIOD-END BALANCE SHEET DATA
Loans	$	23,455,587		$	23,911,616		$	23,983,679		$	23,455,587		$	23,983,679
Securities		7,769,780			7,535,836			7,916,101			7,769,780			7,916,101
Earning assets		32,045,222			32,056,415			32,733,591			32,045,222			32,733,591
Total assets		35,238,107			35,412,291			36,298,301			35,238,107			36,298,301
Noninterest-bearing deposits		10,499,476			10,642,213			11,626,371			10,499,476			11,626,371
Total deposits		28,982,905			29,200,718			30,320,337			28,982,905			30,320,337
Common stockholders' equity		4,174,687			3,920,718			3,501,003			4,174,687			3,501,003
AVERAGE BALANCE SHEET DATA
Loans	$	23,552,002		$	23,917,361		$	23,830,724		$	23,759,083		$	23,526,808
Securities (b)		8,218,896			8,214,172			8,888,477			8,210,192			9,010,201
Earning assets		32,263,748			32,539,363			33,137,565			32,452,619			33,171,798
Total assets		34,780,386			34,998,880			35,626,927			34,959,722			35,665,505
Noninterest-bearing deposits		10,359,390			10,526,903			11,453,236			10,519,199			12,184,410
Total deposits		28,940,163			29,069,097			29,757,180			29,189,160			29,311,176
Common stockholders' equity		4,021,211			3,826,296			3,572,487			3,889,265			3,518,105
COMMON SHARE DATA
Earnings per share - diluted	$	1.33		$	1.31		$	1.12		$	3.88		$	3.92
Cash dividends per share		0.40			0.40			0.30			1.10			0.90
Book value per share (period-end)		48.47			45.40			40.64			48.47			40.64
Tangible book value per share (period-end)		38.10			35.04			30.16			38.10			30.16
Weighted average number of shares - diluted		86,560			86,765			86,437			86,650			86,368
Period-end number of shares		86,136			86,355			86,148			86,136			86,148
Market data
High sales price	$	57.78		$	49.11		$	45.15		$	57.78		$	54.38
Low sales price		45.26			41.56			35.34			41.19			31.02
Period-end closing price		51.17			47.83			36.99			51.17			36.99
Trading volume		35,017			29,308			34,506			94,834			112,391
PERFORMANCE RATIOS
Return on average assets		1.32	%		1.32	%		1.09	%		1.29	%		1.28	%
Return on average common equity		11.43	%		12.04	%		10.85	%		11.63	%		13.00	%
Return on average tangible common equity		14.70	%		15.73	%		14.53	%		15.12	%		17.51	%
Tangible common equity ratio (c)		9.56	%		8.77	%		7.34	%		9.56	%		7.34	%
Net interest margin (TE)		3.39	%		3.37	%		3.27	%		3.36	%		3.37	%
Noninterest income as a percentage of total revenue (TE)		25.89	%		24.60	%		24.01	%		25.05	%		22.98	%
Efficiency ratio (d)		54.42	%		56.18	%		56.38	%		55.67	%		55.14	%
Average loan/deposit ratio		81.38	%		82.28	%		80.08	%		81.40	%		80.27	%
Allowance for loan losses as a percentage of period-end loans		1.35	%		1.32	%		1.28	%		1.35	%		1.28	%
Allowance for credit losses as a percentage of period-end loans (e)		1.46	%		1.43	%		1.40	%		1.46	%		1.40	%
Annualized net charge-offs to average loans		0.30	%		0.12	%		0.64	%		0.19	%		0.27	%
Allowance for loan losses as a % of nonaccrual loans		382.87	%		366.54	%		507.68	%		382.87	%		507.68	%
FTE headcount		3,458			3,541			3,681			3,458			3,681


(a) Taxable equivalent (TE) amounts are calculated using a federal income tax rate of 21%.
(b) Average securities does not include unrealized holding gains/losses on available for sale securities.
(c) The tangible common equity ratio is common shareholders' equity less intangible assets divided by total assets less intangible assets.
(d) The efficiency ratio is noninterest expense to total net interest income (TE) and noninterest income, excluding amortization of purchased intangibles and supplemental disclosure items noted above.
(e) The allowance for credit losses includes the allowance for loan and lease losses and the reserve for unfunded lending commitments.

HANCOCK WHITNEY CORPORATION
QUARTERLY FINANCIAL HIGHLIGHTS
(Unaudited)

	Three Months Ended
(dollars and common share data in thousands, except per share amounts)	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
NET INCOME
Net interest income	$	271,764		$	270,430		$	266,171		$	269,460		$	269,234
Net interest income (TE) (a)		274,457			273,258			269,001			272,294			272,086
Provision for credit losses		18,564			8,723			12,968			16,952			28,498
Noninterest income		95,895			89,174			87,851			38,951			85,974
Noninterest expense		203,839			206,016			207,722			229,151			204,675
Income tax expense		29,684			30,308			24,720			11,705			24,297
Net income	$	115,572		$	114,557		$	108,612		$	50,603		$	97,738
Supplemental disclosure items - included above, pre-tax
Included in noninterest income
Gain on sale of parking facility	$	—		$	—		$	—		$	16,126		$	—
Loss on securities portfolio restructure		—			—			—			(65,380	)		—
Included in noninterest expense
FDIC special assessment		—			—			3,800			26,123			—
PERIOD-END BALANCE SHEET DATA
Loans	$	23,455,587		$	23,911,616		$	23,970,938		$	23,921,917		$	23,983,679
Securities		7,769,780			7,535,836			7,559,182			7,599,974			7,916,101
Earning assets		32,045,222			32,056,415			31,985,610			32,175,097			32,733,591
Total assets		35,238,107			35,412,291			35,247,119			35,578,573			36,298,301
Noninterest-bearing deposits		10,499,476			10,642,213			10,802,127			11,030,515			11,626,371
Total deposits		28,982,905			29,200,718			29,775,906			29,690,059			30,320,337
Common stockholders' equity		4,174,687			3,920,718			3,853,436			3,803,661			3,501,003
AVERAGE BALANCE SHEET DATA
Loans	$	23,552,002		$	23,917,361		$	23,810,163		$	23,795,681		$	23,830,724
Securities (b)		8,218,896			8,214,172			8,197,410			8,579,444			8,888,477
Earning assets		32,263,748			32,539,363			32,556,821			33,128,130			33,137,565
Total assets		34,780,386			34,998,880			35,101,869			35,538,300			35,626,927
Noninterest-bearing deposits		10,359,390			10,526,903			10,673,060			11,132,354			11,453,236
Total deposits		28,940,163			29,069,097			29,560,956			29,974,941			29,757,180
Common stockholders' equity		4,021,211			3,826,296			3,818,840			3,560,978			3,572,487
COMMON SHARE DATA
Earnings per share - diluted	$	1.33		$	1.31		$	1.24		$	0.58		$	1.12
Cash dividends per share		0.40			0.40			0.30			0.30			0.30
Book value per share (period-end)		48.47			45.40			44.49			44.05			40.64
Tangible book value per share (period-end)		38.10			35.04			34.12			33.63			30.16
Weighted average number of shares - diluted		86,560			86,765			86,726			86,604			86,437
Period-end number of shares		86,136			86,355			86,622			86,345			86,148
Market data
High sales price	$	57.78		$	49.11		$	49.10		$	49.65		$	45.15
Low sales price		45.26			41.56			41.19			32.16			35.34
Period-end closing price		51.17			47.83			46.04			48.59			36.99
Trading volume		35,017			29,308			30,508			38,574			34,506
PERFORMANCE RATIOS
Return on average assets		1.32	%		1.32	%		1.24	%		0.56	%		1.09	%
Return on average common equity		11.43	%		12.04	%		11.44	%		5.64	%		10.85	%
Return on average tangible common equity		14.70	%		15.73	%		14.96	%		7.55	%		14.53	%
Tangible common equity ratio (c)		9.56	%		8.77	%		8.61	%		8.37	%		7.34	%
Net interest margin (TE)		3.39	%		3.37	%		3.32	%		3.27	%		3.27	%
Noninterest income as a percentage of total revenue (TE)		25.89	%		24.60	%		24.62	%		12.51	%		24.01	%
Efficiency ratio (d)		54.42	%		56.18	%		56.44	%		55.58	%		56.38	%
Average loan/deposit ratio		81.38	%		82.28	%		80.55	%		79.39	%		80.08	%
Allowance for loan losses as a percentage of period-end loans		1.35	%		1.32	%		1.31	%		1.29	%		1.28	%
Allowance for credit losses as a percentage of period-end loans (e)		1.46	%		1.43	%		1.42	%		1.41	%		1.40	%
Annualized net charge-offs to average loans		0.30	%		0.12	%		0.15	%		0.27	%		0.64	%
Allowance for loan losses as a % of nonaccrual loans		382.87	%		366.54	%		382.21	%		521.56	%		507.68	%
FTE headcount		3,458			3,541			3,564			3,591			3,681


(a) Taxable equivalent (TE) amounts are calculated using a federal income tax rate of 21%.
(b) Average securities does not include unrealized holding gains/losses on available for sale securities.
(c) The tangible common equity ratio is common shareholders' equity less intangible assets divided by total assets less intangible assets.
(d) The efficiency ratio is noninterest expense to total net interest income (TE) and noninterest income, excluding amortization of purchased intangibles and supplemental disclosures noted above.
(e) The allowance for credit losses includes the allowance for loan and lease losses and the reserve for unfunded lending commitments.

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