Hancock Whitney Holds Steady on Dividend Amid Mixed Financial Crosscurrents

Hancock Whitney Corporation (NYSE: HWBC) has maintained its quarterly dividend at $0.45 per share, payable June 16 to shareholders of record as of June 5. The decision reflects the bank’s confidence in its capital resilience despite a challenging first quarter marked by declining loans and deposits, while also signaling strategic focus on shareholder returns amid a cautiously optimistic outlook.

A Dividend Maintained, but What Drives It?

The dividend, which surged 50% in January 2025, remains intact despite Q1 headwinds. This stability is underpinned by Hancock Whitney’s robust capital metrics: its Common Equity Tier 1 (CET1) ratio stood at 14.51%, well above regulatory minimums, and its Tangible Common Equity (TCE) ratio was 10.01%. These figures, combined with net income growth of 10% year-over-year to $120 million, suggest the bank has ample room to sustain payouts.

Financial Crosscurrents: Strengths and Weaknesses

Hancock Whitney’s Q1 performance revealed both opportunities and challenges:
- Net Interest Margin (NIM) Expands: The NIM rose 2 basis points to 3.43%, driven by lower deposit costs (down 14 bps to 1.59%) and higher bond portfolio yields. This bodes well for future net interest income, though NII fell slightly due to fewer accrual days and reduced earning assets.
- Loan Portfolio Headwinds: Loans dropped $201 million, primarily from large healthcare and commercial non-real estate payoffs. Management now expects “low single-digit” loan growth in 2025, with most expansion delayed to the latter half of the year.
- Deposit Declines: Public funds outflows caused deposits to shrink $298 million, a seasonal but concerning trend as banks compete for stable funding.

Strategic Priorities: Capital Returns and Organic Growth

Hancock Whitney’s strategy is clear: prioritize returns over acquisitions. In Q1, it repurchased 350,000 shares and emphasized buying more at current valuations. CFO Michael Achary noted the stock’s “compelling valuation,” with buybacks planned even as the share price inches upward. Meanwhile, CEO John Hairston’s focus on hiring—four new revenue producers in Q1, with plans for 20–30 more in 2025—aims to fuel future growth organically.

Navigating Economic Uncertainties

Despite strong capital and fee income growth projections (9–10% annually), Hancock Whitney faces macroeconomic risks. The CFO highlighted tariff-related uncertainties and their impact on small businesses, though client sentiment has not yet signaled widespread recession fears. Credit quality remains stable, with net charge-offs at 18 bps and an allowance for credit losses at 1.49% of loans—comfortably above pre-pandemic levels.

Conclusion: A Steady Hand in a Volatile Landscape

Hancock Whitney’s decision to hold its dividend at $0.45 per share underscores its financial discipline and capital strength. While loan and deposit declines pose near-term challenges, the bank’s robust CET1 ratio, expanding NIM, and strategic focus on buybacks and hiring position it to weather economic uncertainty.

Investors should note the dividend’s sustainability: the payout ratio for Q1 2025 is roughly 33% ($0.45 dividend vs. $1.38 EPS), leaving ample room for growth. With shares trading at approximately 1.6x tangible book value—a discount to its five-year average of 1.8x—and the stock repurchase plan accelerating, the bank appears poised to reward shareholders even as it navigates a cautious growth path.

In a sector where many regional banks face margin pressures and loan stagnation, Hancock Whitney’s blend of capital fortitude, stable credit metrics, and shareholder-friendly policies makes it a compelling choice for income-oriented investors. The dividend may not be rising for now, but its consistency—and the underlying strength supporting it—speaks volumes.