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HANCOCK WHITNEY CORP (HWC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid profitability with diluted EPS of $1.32 and adjusted EPS of $1.37 (excluding $5.9M one-time Sabal Trust acquisition costs), while NIM expanded 6 bps to 3.49% and efficiency improved to 54.91% .
  • Loans grew $364M (+6% LQA), noninterest income rose 4% led by trust fees (+26%, including $3.6M from Sabal), and asset quality improved (lower criticized and nonaccrual balances), though deposits fell $148M on retail CD maturities and seasonal public funds outflows .
  • Versus Street, EPS modestly missed consensus ($1.32 vs $1.361*), while total GAAP revenue was essentially in line ($375.5M vs $376.2M*); management reiterated modest NIM expansion in 2H25 and updated the macro assumption to two 25 bp cuts (Sept/Dec) with minimal impact on NIM/NII .
  • Capital remained strong (CET1 14.03%, TCE 9.84%) despite acquisition and buybacks (750k shares at $52.36), with continued repurchases targeted around ~$40M per quarter and a maintained $0.45 quarterly dividend (announced for Q3 2025) .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded to 3.49% and adjusted ROA reached 1.37%; management expects further modest NIM expansion in 2H25 even under zero-cut scenarios: “Modeling of zero rate cut scenario in 2025 yields virtually unchanged results” .
  • Fee growth led by trust: trust fees up $4.7M (+26%) with $3.6M from Sabal; bank card & ATM also increased (+$1.3M, +6%) .
  • Credit metrics improved: criticized commercial down to $569M (3.15%), nonaccrual loans down to $95M (0.40% of loans), ACL coverage 1.45% .
  • CEO on performance and growth: “Adjusted ROA was 1.37%, NIM continued to expand, and our efficiency ratio improved to 54.91%… The pivot to loan growth began with a 6.3% LQA improvement across the footprint” .

What Went Wrong

  • Deposits fell $148M (−2% LQA) driven by retail time deposit maturities and seasonal public funds outflows; DDA increased but CDs repriced lower .
  • Net charge-offs increased to 0.31% annualized (vs 0.18% in Q1), with provision rising to $14.9M (vs $10.5M) .
  • Capital ratios modestly declined Q/Q due to buybacks and acquisition: CET1 14.03% (−45 bps), total risk-based capital 15.87% (−50 bps), TCE 9.84% (−17 bps) .
  • Noninterest expense rose $10.9M (+5% LQ), including $5.9M one-time Sabal acquisition costs; other expense ex-one-time was higher primarily from professional services .

Financial Results

Summary vs prior year, prior quarter, and Street estimates

MetricQ2 2024 (Oldest)Q1 2025Q2 2025 (Newest)
Total GAAP Revenue ($MM)$359.604 $364.696 $375.483
Net Interest Income (TE) ($MM)$273.258 $272.711 $279.455
Noninterest Income ($MM)$89.174 $94.791 $98.524
Diluted EPS ($)$1.31 $1.38 $1.32
Adjusted EPS ($)$1.31 $1.38 $1.37
NIM (TE, %)3.37% 3.43% 3.49%
Efficiency Ratio (%)56.18% 55.22% 54.91%
Street MetricConsensus*Actual
EPS ($)1.361*1.32
Revenue ($MM)376.195*375.483

*Values retrieved from S&P Global.

Noninterest income breakdown

Category ($MM)Q2 2024 (Oldest)Q1 2025Q2 2025 (Newest)
Service charges on deposits$22.275 $24.119 $24.256
Trust fees$18.473 $18.022 $22.753
Bank card & ATM fees$21.827 $20.714 $22.004
Investment, annuity & insurance$9.789 $11.415 $10.603
Secondary mortgage operations$3.546 $3.468 $4.147
Other income$13.264 $17.053 $14.761
Total noninterest income$89.174 $94.791 $98.524

Key performance indicators (KPIs)

KPIQ2 2024 (Oldest)Q1 2025Q2 2025 (Newest)
Loans ($MM, EOP)$23,912 $23,098 $23,462
Deposits ($MM, EOP)$29,201 $29,195 $29,047
ROA (%)1.32% 1.41% 1.32%
ROTCE (%)15.73% 14.72% 13.71%
CET1 (%)13.25% 14.48% 14.03%
TCE (%)8.77% 10.01% 9.84%
ACL / Loans (%)1.43% 1.49% 1.45%
Annualized NCOs / Avg Loans (%)0.12% 0.18% 0.31%
Criticized Commercial ($MM)$508 $594 $569
Nonaccrual Loans ($MM)$86 $104 $95

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
Loans (EOP)FY2025Up low-single digits vs 12/31/24 Up low-single digits vs 12/31/24 Maintained
Deposits (EOP)FY2025Up low-single digits vs 12/31/24 Up low-single digits vs 12/31/24 Maintained
Net Interest Income (TE)FY2025Up 3–4%; modest NIM expansion; assumes three 25 bp cuts (Jun/Jul/Oct) Up 3–4%; modest NIM expansion; assumes two 25 bp cuts (Sep/Dec) Updated (macro assumption)
Adjusted PPNRFY2025Up 6–7% vs FY24 adjusted Up 6–7% vs FY24 adjusted Maintained
Reserve/Net Charge-offsFY2025“Modest charge-offs” (no range) NCOs to average loans 0.15–0.25% Updated (range added)
Noninterest IncomeFY2025Up 9–10% vs FY24 Up 9–10% vs FY24 Maintained
Adjusted Noninterest ExpenseFY2025Up 4–5% vs FY24 adj. Up 4–5% vs FY24 adj. Maintained
Effective Tax RateFY2025~20–21% ~20–21% Maintained
Efficiency RatioFY202554–56% 54–56% Maintained
DividendQ3 2025—$0.45 per share (payable Sep 15, 2025) Affirmed payout level

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
NIM trajectory & rate sensitivityExpect modest expansion; three cuts modeled; deposit repricing drivers Modest and consistent expansion in 2025; zero-cut scenario near unchanged Two cuts assumed; zero-cut impact immaterial; NIM expansion expected in 2H25 Improving, resilient
Deposit betas & CDsCDs repricing lower; DDA mix rising; brokered CD runoff Renewal ~mid-70s–80s%; book turns twice; cost of deposits down Q2 renewals at 86%; more modest cost reductions ahead Easing costs
Loan growth driversPivot to growth; CRE payoffs pressure; pipelines rebuilding Expect growth leaning to 2H; new hires contribute more in 2026 Net new clients; owner-occupied CRE campaigns; bridge financing; C&D lag Turning positive
Credit normalizationCriticized up in Q4; modest NCOs expected Solid reserves; modest PCL/NCOs Higher NCOs in Q2; FY NCOs guided 15–25 bps; more outflows than inflows in criticized Normalization continues
Wealth management (Sabal)Announced acquisition; strategic add-on Closing May 2; accretive; EPS lift over time Trust fees +$3.6M; expenses +$5.9M one-time; full run-rate in Q3 Integration progressing
Capital & buybacksStrong CET1; repurchases continuing Target repurchases ~300k/quarter; adaptable ~$40M per quarter spend intent; CET1/TCE comfort bands reiterated Ongoing return

Management Commentary

  • CEO: “Adjusted ROA was 1.37%, NIM continued to expand, and our efficiency ratio improved to 54.91%… The pivot to loan growth began with a 6.3% LQA improvement… We look forward to the rest of 2025 as we execute our organic growth plan” .
  • CFO: “Our NIM again expanded this quarter… NII was up $7M or 2%… Fee income was up $4M or 4%… efficiency ratio improved to 54.91%” .
  • CFO on rates and NIM: “Zero rate cut scenario in 2025 yields virtually unchanged results… we can expand our NIM by a couple of basis points each in the next couple of quarters” .
  • CFO on capital return: “We more than doubled the buyback this quarter and bought back 750,000 shares… expect share repurchases will continue at this level for the foreseeable future” .
  • CEO on asset quality: “Not experiencing broad signs of weakness among any industry, collateral type, or geography” .

Q&A Highlights

  • Capital targets and buybacks: Management comfortable operating CET1 ~11–11.5% and TCE ~8% through cycles; buybacks targeted at ~$40M spend per quarter with flexibility .
  • Loan growth drivers: Emphasis on net new clients, owner-occupied CRE campaigns, and bridge financing; C&D book to turn later (back half of 1Q26) .
  • NIM sensitivity: Two 25 bp cuts assumed; minimal impact from zero-cut case; deposit costs expected to moderate further in 2H25 via CD repricing .
  • Deposit beta strategy: Total deposit betas expected to end cycle ~37–38%; IB deposits ~57–58%; proactive repricing planned as loans reprice lower .
  • Credit outlook: Higher Q2 NCOs tied to resolutions; FY NCO guidance 15–25 bps; criticized inflows easing with more outflows/resolutions .

Estimates Context

  • EPS came in slightly below consensus ($1.32 vs $1.361*), largely reflecting $5.9M one-time acquisition costs; adjusted EPS of $1.37 was essentially in line .
  • Total GAAP revenue was very close to consensus ($375.5M actual vs $376.2M*), aided by NIM expansion and stronger trust fees .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Rate-insensitive NIM setup: With CDs repricing down and fair value hedges lifting securities yields, HWC can expand NIM modestly in 2H25 even under zero-cut scenarios .
  • Fee income diversification gaining traction: Trust fees growth (including Sabal) and card activity support revenue durability; expect fuller Sabal run-rate in Q3 .
  • Loan growth pivot underway: Broad-based commercial growth offsetting earlier payoffs; C&D to lag until equity burns off—monitor loan mix and yield compression from competitive pricing .
  • Credit normalization manageable: Higher Q2 NCOs reflect specific resolutions; FY NCO guide 15–25 bps suggests contained losses with ACL 1.45% providing cushion .
  • Capital optionality remains: CET1 14.03% and TCE 9.84% support ~$40M/quarter buybacks and dividend continuity; expect capital ratios to moderate with growth and repurchases .
  • Near-term trading: Modest EPS drag from one-time costs likely behind; incremental beats hinge on deposit cost declines, fee momentum, and net loan growth pace .
  • Medium-term thesis: Sustained efficiency (~55%), NIM resilience, and fee diversification position HWC to compound earnings as growth plan and Sabal integration mature .

Notes: All document-based figures and quotes are cited. Estimates marked with an asterisk are Values retrieved from S&P Global.