Hancock Whitney's Q4 Performance: A Strategic Acquisition and Strong Metrics Signal Growth Ahead

Strong Financial Performance and Earnings:
- Hancock Whitney Corporation reported a notable ROA of 1.40% for Q4, marking an improvement from previous quarters.
- The company's NIM expanded by 2 basis points to 3.41%, contributing to modest growth in net interest income.
- The strong performance was driven by strategic initiatives such as controlling funding costs, lowered loan yields, and favorable mix changes in new loan production.

Growth Strategy and Acquisitions:
- The company announced the acquisition of Sabal Trust Company, which will become the largest wealth management fee market share in their geographic footprint.
- This acquisition is expected to make the Tampa market the largest individual wealth management fee market, enhancing their wealth management capabilities.
- The strategy aligns with their goal to develop greater market share in high-growth areas, supported by a multi-year organic growth plan and expansion into Florida and Texas.

Credit Quality and Asset Metrics:
- The company's credit quality metrics normalized, with net charge-offs decreasing and a solid reserve of 147 basis points maintained.
- Despite an increase in nonaccrual and criticized commercial loans, the overall asset quality remains strong, with no significant migration noted.
- This stability is attributed to proactive management of lower-rated credits and a diverse loan portfolio, with minimal weakening in specific sectors or geographies.

Deposit and Loan Trends:
- Deposits increased by $510 million, despite a maturity of $183 million in broker deposits, driven by a welcomed uptick in DDA balances.
- Loan growth is anticipated to be mid-single digits in 2025, mainly influenced by the SNIC portfolio reduction, which removed a significant tailwind, and strategic hiring plans.
- The loan growth outlook is supported by strong business banking pipelines, improved CRE production, and the absence of SNIC payoffs.