Hancock Whitney Corporation Sees Strong Start to 2025 with Record Profitability and Growth Prospects
Hancock Whitney Corporation kicked off its fiscal year on a high note, reporting impressive profitability and growth prospects for 2025. In its first quarter earnings call, the company's leadership expressed optimism about the future despite current market volatility.
According to John Hairston, President and CEO of Hancock Whitney, the company achieved an impressive 1.41% return on assets (ROA), grew fee income, enjoyed continued net interest margin expansion, and ended the quarter with total risk-based capital of 16.39%. The net interest margin expanded as the company was able to control funding costs and mix that more than offset the impact of lower loan yields and lower average earning assets.
Fee income growth was another highlight of the quarter, with strong performance across most categories. Expenses remained well-controlled, increasing by only 1% this quarter. Hancock Whitney has updated its guidance to reflect the impact of the Sabal Trust transaction, anticipating fee income to be up between 9% and 10% year-over-year.
The company's loan portfolio showed some volatility, with a $201 million decline due to higher payoffs on large healthcare and commercial non-real estate loans. However, Hancock Whitney remains focused on more granular full relationship loans with the goal of achieving more favorable loan yields and relationship revenue. The company expects loans will grow low single digits in 2025, with most of the growth coming in the second half of the year.
Deposits also showed some fluctuation, driven primarily by seasonal public funds outflows. However, interest-bearing transaction accounts increased due to competitive product offerings, and retail CDs declined due to the reduction of promo rates, which helped control deposit costs. Hancock Whitney's demand deposit account (DDA) balance has actually increased for the second quarter in a row, with a stable DDA mix at 36%.
The company continued its capital return program by repurchasing 350,000 shares of common stock this quarter and increasing its common stock dividend to $0.45 per share, a cumulative increase of 50% from this time last year. Hancock Whitney's regulatory capital metrics showed strong growth due to excellent profitability, ending the quarter with a common equity Tier 1 ratio of 14.51% and tangible common equity ratio of 10.01%.
In other news, Hancock Whitney continues to execute its plan to pivot to growth, both organically and inorganically through the acquisition of Sabal Trust Company. The company has selected four new locations out of five planned in the northern area of the Dallas MSA. The Sabal transaction is expected to close on May 2, with Hancock Whitney looking forward to welcoming Sabal clients and associates to its best-in-class regional banking services in the Greater Tampa and Orlando areas.
