Hancock Whitney Corporation (HWC) is a premier financial institution with deep roots in the Gulf South region, tracing its origins back to the late 1800s. As one of the largest and most respected regional banks in the Southeast, Hancock Whitney has built a formidable presence across Mississippi, Alabama, Florida, Louisiana, and Texas, serving both commercial and retail customers with a comprehensive suite of financial products and services.
The company's history is marked by a steadfast commitment to its core values of Honor & Integrity, Strength & Stability, Commitment to Service, Teamwork, and Personal Responsibility. This ethos has guided Hancock Whitney through numerous economic cycles, positioning the bank as a trusted financial partner for individuals, businesses, and communities across its footprint.
History and Background
Hancock Whitney Corporation was founded in 1899 in Gulfport, Mississippi, originally under the name Hancock Bank. In its early years, the company focused on serving the banking needs of the local Gulfport community. However, as the 20th century progressed, Hancock Bank steadily expanded its footprint throughout the Gulf South region. A significant milestone in the company's history occurred in 1987 when Hancock Bank merged with Whitney National Bank, forming the combined entity of Hancock Whitney Bank.
The company faced a major challenge in 2005 when Hurricane Katrina devastated the Gulf Coast region. Hancock Whitney demonstrated remarkable resilience during this time, working tirelessly to reopen branches and support its communities throughout the recovery process. This unwavering commitment to its customers and the region earned the company widespread admiration and strengthened its reputation as a trusted financial partner.
In recent decades, Hancock Whitney has continued to evolve and expand its capabilities. The company has made strategic investments to enhance its commercial and wealth management services, positioning itself as a leading provider of banking, trust, and investment management services across the Gulf South. Today, Hancock Whitney operates hundreds of financial centers and remains deeply rooted in the communities it serves.
Financials
In the latest reported fiscal year (2023), Hancock Whitney generated $1.37 billion in total revenue and $392.60 million in net income. The bank's strong financial performance was driven by a diverse revenue mix, with net interest income accounting for 80% of total revenue and noninterest income, including fees from its specialty lines of business, contributing the remaining 20%. Hancock Whitney's efficiency ratio, a key measure of operational effectiveness, stood at 55.58% in 2023, comparing favorably to many of its regional banking peers.
The company's balance sheet reflects a solid financial foundation, with total assets of $35.58 billion and a tangible common equity ratio of 8.37% as of December 31, 2023. Hancock Whitney's loan portfolio is well-diversified, with commercial and industrial (C&I) loans comprising 43% of the total, followed by commercial real estate (CRE) at 21%, residential mortgages at 16%, and consumer loans at 6% as of the latest reporting period. The bank's credit quality metrics have remained solid, with a nonperforming asset ratio of 0.26% and an allowance for loan losses to total loans ratio of 1.29% as of December 31, 2023.
In the most recent quarter (Q3 2024), Hancock Whitney reported solid financial results, with revenue of $367.66 million, net income of $115.57 million, or $1.33 per diluted share. The bank's net interest margin expanded to 3.39%, while fee income grew 8% quarter-over-quarter, reflecting the strong performance of its specialty business lines. Compared to the same quarter in the previous year, revenue increased by 3.5% and net income grew by 18.2%. However, operating cash flow (OCF) decreased by 36.3% to $172.10 million, and free cash flow (FCF) declined by 34.9% to $168.19 million, primarily due to an increase in net charge-offs compared to the prior year quarter.
Liquidity
Hancock Whitney's liquidity position remains robust, with a loan-to-deposit ratio of 79.39% and ample access to funding sources, including the Federal Home Loan Bank and the Federal Reserve's discount window. The company's debt-to-equity ratio stands at 0.15, indicating a conservative approach to leverage. As of the latest reporting period, Hancock Whitney held $1.19 billion in cash and cash equivalents, with an additional $5.56 billion available through its credit line with the Federal Home Loan Bank. The bank's current ratio and quick ratio both stand at 1.12, reflecting strong short-term liquidity.
Business Strategy and Performance
The company's focus on building long-term customer relationships has been a key driver of its success. Hancock Whitney's specialized business lines, including equipment finance, healthcare, and wealth management, have allowed the bank to deepen its ties with clients and generate high-quality, diversified revenue streams. The bank's emphasis on digital transformation has also enabled it to enhance the customer experience and remain competitive in an evolving financial services landscape.
Hancock Whitney's loan portfolio totaled $23.46 billion at September 30, 2024, down 2% from both June 30, 2024 and December 31, 2023. This decrease primarily reflects the bank's strategic reduction in shared national credits and moderating loan demand across certain portfolio segments. The Commercial and Industrial (C&I) loan portfolio, which includes both non-real estate and owner-occupied real estate secured loans, totaled $12.68 billion, down 3% from December 31, 2023. Commercial Real Estate (CRE) loans, including income-producing CRE and construction and land development loans, totaled $5.42 billion. The residential mortgage loan portfolio stood at $4.00 billion, up 3% from December 31, 2023, while consumer loans decreased to $1.37 billion, down 5% from the end of 2023.
Hancock Whitney also continued to maintain robust capital levels, with a tangible common equity ratio of 9.56% and a Common Equity Tier 1 (CET1) ratio of 13.78% as of September 30, 2024. These capital ratios now rank among the top quartile of the bank's peers, reflecting its strong financial position and conservative risk management approach.
Outlook and Future Prospects
Looking ahead, Hancock Whitney's management team has provided guidance for the remainder of 2024 and beyond. For the fourth quarter of 2024, the bank expects modest net interest margin expansion, despite two additional anticipated rate cuts, due to lower deposit rates and higher bond yields, partially offset by lower loan yields. The company projects noninterest income for the full year 2024 to increase between 6% and 7% from the adjusted 2023 level, while noninterest expenses are expected to grow between 1% and 2% year-over-year, inclusive of plans to hire additional revenue-generating staff.
Hancock Whitney anticipates its pre-provision net revenue (PPNR) to be flat to down slightly from 2023 adjusted levels, reflecting expectations on rate cuts, fee income, and expenses. The bank expects December 31, 2024 period-end loans to be flat or down slightly compared to the prior year end. Share repurchases are expected to continue at a similar pace in Q4 2024, subject to changes in balance sheet growth and share valuation.
The banking industry in Hancock Whitney's markets has experienced moderate loan growth and net interest margin expansion due to the rising interest rate environment. However, competition for deposits has increased, putting pressure on funding costs. Overall credit quality remains stable, though some deterioration has been seen in certain commercial loan segments.
Despite the broader economic uncertainties and challenges facing the banking industry, Hancock Whitney's track record of resilience, its diversified business model, and its commitment to serving the Gulf South region position the company as a steadfast financial institution poised for continued success. As Hancock Whitney celebrates its 125th anniversary in 2024, the bank's enduring legacy and unwavering dedication to its core values will undoubtedly guide its path forward in the years to come.