Hancock Whitney's Strong Q4 2024 EPS: A Reflection of Robust Performance

Hancock Whitney Corporation (Nasdaq: HWC) recently announced its financial results for the fourth quarter of 2024, with net income totaling $122.1 million, or $1.40 per diluted common share (EPS). This figure exceeded analysts' expectations of $1.28 per share, representing a 9.38% surprise. The company's EPS growth can be attributed to several key drivers, which appear to be sustainable based on management's outlook and the company's overall performance.



1. Net Interest Margin (NIM) Expansion: Hancock Whitney's NIM increased to 3.41% in the fourth quarter of 2024, up 2 basis points (bps) from the prior quarter. This expansion was driven by a combination of higher interest rates and increased loan yields. The company expects this trend to continue, with management anticipating mid-single-digit growth in loan balances by the end of 2025.
2. Efficiency Ratio Improvement: The efficiency ratio improved to 54.46% in the fourth quarter of 2024, up 4 bps from the prior quarter. This improvement was due to cost control measures and increased revenue, indicating that the company is effectively managing its expenses while growing its top line. Management expects this trend to continue, with the efficiency ratio remaining around the 54% range.
3. Credit Metrics Normalization: Credit metrics continued to normalize in the fourth quarter of 2024, with criticized commercial loans and nonaccrual loans decreasing. The allowance for credit losses (ACL) coverage remained solid at 1.47%, up 1 bp from the prior quarter. This normalization indicates that the company's loan portfolio is improving, which should lead to lower provision for credit losses and net charge-offs in the future.
4. Regulatory Capital Ratios Climb: Hancock Whitney's total risk-based capital ratio reached nearly 16% in the fourth quarter of 2024, up from 14.14% in the prior quarter. This increase in regulatory capital ratios indicates that the company is well-capitalized and able to withstand potential economic downturns. The company's CET1 ratio also improved to 14.14%, up 36 bps from the prior quarter.
5. Deposit Growth: Total deposits increased by 7% linked-quarter annualized (LQA) in the fourth quarter of 2024, driven by seasonal inflows, competitive products, and pricing. Management expects 2025 period-end deposit levels to be up low-single digits from year-end 2024. This deposit growth provides a stable funding base for the company's lending activities.



Hancock Whitney's regulatory capital ratios and asset quality metrics have shown improvement over the past year, indicating a strengthening financial position and positive long-term prospects. The company's CET1 ratio has increased from 10.78% in Q4 2023 to 14.14% in Q4 2024, while the total risk-based capital ratio has increased to nearly 16% in Q4 2024. The allowance for credit losses (ACL) coverage has remained solid at 1.47%, and the net charge-offs (NCO) rate has decreased from 0.30% in Q3 2024 to 0.20% in Q4 2024.

In conclusion, Hancock Whitney's strong fourth quarter 2024 EPS performance reflects the company's robust financial performance and sustainable growth trends. The company's ability to expand its net interest margin, improve efficiency ratios, normalize credit metrics, and maintain strong regulatory capital ratios bodes well for its long-term prospects. As the company enters 2025, it is well-positioned to capitalize on new opportunities, including the acquisition of Sabal Trust Company and the expansion of its outstanding team of revenue generators and financial center locations.