管理層發言
Good day, ladies and gentlemen, and welcome to Hancock Whitney Corporation's Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Ashleigh Flower Wilshire, Head of Investor Relations. You may begin.
Thank you, and good afternoon. During today's call, we may make forward-looking statements. We would like to remind everyone to carefully review the safe harbor language that was published with the earnings release and presentation and in the company's most recent 10-Ks and 10-Qs, including the risks and uncertainties identified therein. You should keep in mind that any forward-looking statements made by Hancock Whitney speak only as of the date on which they were made. As everyone understands, the current economic environment is rapidly evolving and changing. Hancock Whitney's ability to accurately project results or predict the effects of future plans or strategies or predict market or economic developments is inherently limited. We believe that the expectations reflected or implied by any forward-looking statements are based on reasonable assumptions, but are not guarantees of performance or results. Our actual results and performance could differ materially from those set in our forward-looking statements. Hancock Whitney undertakes no obligation to update or revise any forward-looking statements, and you are cautioned not to place undue reliance on such forward-looking statements. Some of the remarks contain non-GAAP financial measures. You can find reconciliations to the comparable GAAP measures in our earnings release and the financial tables. The presentation slides included in our earnings materials are also posted with the conference call webcast link on the Investor Relations website. We will reference some of these slides in today's call. Participating in today's call are John Hairston, President and CEO; Michael Achary, CFO; Christopher S. Zaylaca, Chief Credit Officer; and Shane Loper, Chief Operating Officer. I will now turn the call over to John Hairston.
Thank you, Ashleigh, and thanks, everyone, for joining us today. The second quarter of 2026 was another strong quarter of profitability, efficiency, and return of capital to shareholders. We were pleased to add solid balance sheet growth on both sides of the ledger to an already excellent quarter. Compared to the same period a year ago, we saw EPS improvement of 13%, PPNR growth of 6%, a sixth straight quarter of improvement in criticized commercial loans, 5% growth in loans, and 2% growth in total deposits. We were pleased to welcome another 15 net new bankers in the second quarter, bringing our total for the year to 42 against our annual goal of 50. Focusing on the second quarter, on a linked-quarter annualized basis, loans grew 10% and deposits 8%. As shown on Slide 9 of our investor deck, loan production was strong and line utilization improved. Growth was spread across every line of business except mortgage. Our guidance for the full year remains unchanged at mid-single-digit growth. For deposits, the 8% annualized growth was related to an increase in interest-bearing money market accounts of $786 million, partially offset by a slight decline in CD balances from maturities in the quarter. We have updated our guidance for deposits from low single-digit to mid-single-digit growth for the year. Profitability, efficiency, and returns continue to perform very well, with a 1.42% ROA, an efficiency ratio of 55.3%, and an ROTCE of 14.9%. Top-line revenue continued to cover significant offensive reinvestment and net interest margin improved modestly while substantially funding loan growth with core deposits. Expenses were well managed; nearly all our expense growth was due to the full-quarter impact of robust banker additions in Q1 and merit increases to our overall team in April. We were pleased to secure regulatory and shareholder approval in July for the 1st Florida Bank transaction (OFB) with an expected closing date of August 1st. Mike will add additional comments in his remarks, but I will note we have updated our guidance on page 20 to provide fiscal year 2026 outlook both excluding and including OFB. In both cases, the second-half 2026 guidance reflects a continuation of high profitability, strong capital, and continuing growth. Regarding capital deployment, our stated priorities remain capitalizing a growing balance sheet, supporting dividends, and completing the current 5% authorization by the end of this year. We are very pleased here at halftime of 2026 to see very solid performance and growth in alignment with our goals. We are very excited to welcome our new colleagues and clients from OFB in only 10 days, augmenting our profitability and growth story. With that, I will invite Mike to add additional comments.
Thanks, John, and good afternoon, everyone. As John said at the onset, the company's performance in the second quarter was excellent. Net income for the quarter was $127 million, or $1.55 per share, compared to adjusted net income of $125 million or $1.52 per share in the first quarter. PPNR for the company was up 3% from the prior quarter to $178 million. Expressed as a return on average assets, this continues to be a solid 1.99%. Net interest income increased 3% this quarter. Our fee income business continues to perform remarkably well, and expenses are up but remained well controlled. Fee income for the company was up $2.3 million or 2% adjusted for the net loss on the bond portfolio restructuring last quarter. The increase was driven by higher activity in our investment and annuity income and insurance as well as our trust business. These increases were offset by a decrease in our syndication fees and SBIC income, which can be somewhat unpredictable from quarter to quarter. Expenses remain well controlled, up 2% from the prior quarter, and were primarily related to our annual merit increases and the impact of our new hires during the first half of 2026. As expected, our net interest margin was up this quarter, albeit at a slightly slower pace, with a 1 basis point increase from 3.55% to 3.56%. Our earning asset yield was up 2 basis points and our cost of funds was up 1 basis point. In addition, our level of average earning assets was up $570 million from last quarter. Within higher earning asset yield, we benefited from higher yield on the bond portfolio and higher average earning asset levels, partially offset by lower loan yields. Within our total cost of funds, unfavorable other borrowing balances and rates partially offset a lower cost of deposits. As expected, the yield on the bond portfolio was up 12 basis points to 3.35%, related to a full quarter's impact of the first quarter restructuring transaction but also due to reinvestment of principal cash flows during the quarter. Loan yields were down 2 basis points, mostly due to the impact of a 12-basis-point quarter-over-quarter drop in new loan rates, but this was partially offset by a healthy increase in average loans of $374 million linked quarter. Our cost of deposits was down 4 basis points to 1.43% for the quarter, due mostly to a lower rate on maturing CDs. We did increase promotional rate pricing on our interest-bearing transaction deposits and certain CD maturity buckets, which drove an increase in our end-of-period balances on those deposits. For the second half of 2026, we do expect the benefit from repricing maturing CDs will largely come to an end as new CD rates will likely be higher. Turning to asset quality: our criticized commercial loans improved for the sixth consecutive quarter, decreasing $30 million to $492 million. Nonaccrual loans increased $1 million to $114 million. Net charge-offs came in at 16 basis points, down from the prior quarter's 19 basis points. Our loan loss reserves are solid at 1.42% of loans. We continue to expect net charge-offs to average between 15 and 25 basis points of loans for full-year 2026. Finally, on Slide 20 of the earnings deck, you will see our forward guidance for the remainder of 2026. For guidance excluding OFB, we made a number of revisions mostly moving to the upper end of our previous ranges. For guidance including OFB, we expect loans and deposits to be up low double digits, net interest income up between 8% to 9%, fee income up between 6% to 7%, operating expenses up between 7.5% and 8.5%, and PPNR up between 7% to 8%. These expectations do not include any meaningful revenue synergies from the acquisition, such as expanding wealth products and services to OFB clients. Also, the cost savings will be fully realized by the time we enter 2027, and as John mentioned, we anticipate a closing date of August 1st. As we look forward to the second half of this year, we remain encouraged by the momentum across our franchise. While the operating environment continues to present challenges, our solid balance sheet, strong customer relationships, and disciplined execution position us well to deliver on objectives for the remainder of this year and going forward. I will now turn the call back to John.
Thank you, Mike. Let's open the call for questions.
分析師問答
We will now begin the question-and-answer session. If you would like to ask a question, press star 1 on your telephone keypad. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question and if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Rose from Raymond James. Please hold. Your line is open. Please go ahead.
Hey, good afternoon, everyone. Thanks for taking my questions. Just wanted to start on loan growth. Obviously, a very solid quarter, but I think what struck me was the almost 20% increase in quarter-over-quarter production, yet you kind of reiterated the standalone outlook for the year, which would imply maybe a bit of a slowdown to some degree. Is that just conservatism? Or is it competition where you are maybe seeing a little bit more pressure? Just looking to get a little more color on puts and takes. Thanks.
Shane, would you like to take that question?
Sure. Michael, maybe give you a little broader context. When we think about our clients, they are still approaching their business as broadly stable. The majority of them indicate generally steady performance with an optimistic outlook, but they are being really cautious. Right now, there is a lot of credit supply for limited demand, and that is where competition is creeping in. We feel like we did a great job with production this quarter: loan growth of $588 million and we produced $1.5 billion in loans, up from $1.2 billion in the first quarter, with strength in all of our segments—business banking, commercial, middle market, consumer performed well, and CRE continuing to perform well. A lot of net growth was supported with new originations; line fundings were up slightly this quarter, and then we saw normalized pay-down and payoff activity. I really look at our growth for the quarter as high quality, spread across all of our segments and geographies. Regarding pricing, it continues to be highly competitive. We are focused and disciplined in our pricing, trying to step up and match against the competition without giving too much so we can continue to grow the balance sheet.
And Michael, I will add to Shane's comments. It is probably good to look at the first half of the year as a body of work and the second half as another. While the numbers for Q2 were outstanding—one of our better quarters in several years—a lot of that work did happen in Q1 and closed in early Q2. Hence, the average balance for the second quarter increased. If you look at the second half of the year, I would not say we are being conservative. I think what Shane's telling you is exactly what we expect. But we do have to remember potential rate increases and inflation, even if well behaved, are macro conditions that could dampen appetite. So we want to be realistic in our guidance to mid-singles for the year.
Your next question comes from the line of Catherine Malcolm. Do you have a follow-up? Apologies. We can bring Michael back. Did you have a follow-up, Michael? Please hold one moment. Michael, your line is open. Please go ahead.
All right. Sorry about that. I could not get off mute. Okay. Maybe just as a follow-up. Mike, maybe if you can talk about some of the deposit competition and what you are seeing there. I know Shane touched on the loan side. It looks like the NIB mix did tick down 60 or 70 basis points quarter on quarter. Can you talk about the ongoing ability to fund loan growth and competitive trends in and around your markets? Thanks.
Sure. I'd be glad to, Michael. The best way to describe the deposit pricing environment is that it is competitive, but at least in our markets, it is pretty rational. We are in an environment where banks experiencing more demand for loans want to fund loan growth with deposit growth, and we are no different. So you are seeing the elevation in deposit costs that we've discussed for the past couple of quarters. For us, one of the things we are most pleased with about the quarter was not only the arrival of significant organic balance sheet growth but the fact that we were able to fund that growth dollar for dollar with deposits. That is what we are trying to achieve. As we think about the second half of the year, the plan is to continue to do that. While you alluded to a little bit of a step down in loan growth for the second half, you should also note a bit of a step up in deposit growth for the second half. You will see us land at the end of the year with loan growth pretty much matched dollar for dollar with deposit growth. That is exactly how we would like to manage our balance sheet now and going forward. Hopefully that is helpful.
Yep. Very helpful. I will step back now. Thanks for taking my questions.
Your next question comes from the line of Catherine Mealor from KBW. Please go ahead.
Thanks. Just want to follow up on deposit pricing. You talked about an increase in deposit growth at the end of the quarter just from some promotional interest-bearing transactions. Can you talk about the cost around what that looks like? And as you grow your interest-bearing transaction accounts, where do you think that trends to, absent any changes in rates, with this promotional deposit coming in?
Sure. If you look at the second quarter, a bit of an unusual situation where most of the deposit growth was really back-ended toward the end of the second quarter. We had the increase in end-of-period deposits of about $550 million, but the average for the quarter was actually down about $50 million. Going forward in the second half, you should see that end-of-period growth match pretty well the average growth in the third quarter. What we did in the second quarter was focus on bringing in deposits through a couple of promotional offerings. We have an 11-month CD at 3.85% that we had been offering in Florida and Texas and expanded to Louisiana, Mississippi, and Alabama, which proved successful. We also have a money market offering at 3.75% for some existing customers and a 4% money market for new customers. In addition, we are offering a promotional CD in Orlando related to OFB. Those were the promotional deposit pricing offerings in place, and they were successful in the second quarter and we think they will continue to be effective going forward.
So is it fair to say we are at a bottom for deposit cost and that cost will start to increase as we move to the back half of the year?
Yes, I think so. In the second half of the year, you will see net interest income continue to grow. It may not grow as much as it did in the second quarter, but it will grow. I think our NIM will be flat to slightly up, and we will see an increase in deposit costs as well as our cost of funds. Our cost of deposits could be up around 10 basis points from the second quarter through the fourth quarter. We will continue to reprice bonds and fixed-rate loans higher, which is a tailwind, and the biggest tailwind will be continued organic balance sheet growth. Regarding loan yields, new loan yields came in around 6.04% recently, still higher than the 5.60% average, but new loan yields have come down over the past few quarters. I do think over the back half of the year we will see a modest increase in loan yield, perhaps 4 to 5 basis points. We also got a head start in July with SOFR up about 4 basis points, which should be a tailwind.
Okay. Great. Very helpful. Thank you.
Your next question comes from the line of Freddie Strickland from Hovde Group. Line is open. Please go ahead.
Hey. Good afternoon. Just want to follow along with Catherine's line of questioning on the loan yields. Specifically, I wanted to ask about middle-market C&I. Has there been any abatement in competition in that space, or is it still pretty tight?
It is still very tight. As I mentioned earlier, clients are managing through uncertainty and there is a fair amount of loan demand, but supply is much higher. To get quality deals and grow responsibly is tough right now in terms of pricing. We've improved our pricing model and we are talking with each of our bankers to ensure we get the best pricing we can. We're also trying to win deals to grow the balance sheet and do it in a high-quality manner. Bankers are doing a great job calling, saving deals that we have on the books, and bringing on new deals.
Got it. Appreciate that. And just switching gears to noninterest income, it looks like you revised the guide up a bit. Is there a particular component driving better expectations there—trust, investment annuity insurance—or is it just what you have seen so far this year? Curious what led you to increase that a little bit.
We continue to be very proud of wealth management execution and the progress they're making, both in the broker-dealer and across the trust platforms. We do have a little tailwind from the Sable deal from last year, but overall penetration into the current client book and new business wins are performing very well. We have to give kudos to the wealth management team. Card and merchant services have always been a strong suit and continue to perform well. Secondary mortgage is pretty much in line with expectations. We'd like to see more syndication fees as we move forward; that team's working on it. But wealth management is really performing well, and I think that's a result of investments we've made over the last five to eight years in skills, processes, tools, and capabilities.
Understood. That is helpful. Thanks for taking my questions.
You bet. Thanks for asking.
Your next question comes from the line of Stephen Scouten from Piper Sandler. Please go ahead.
Yeah. Good afternoon. Thanks for the time. Curious briefly about the changes in CECL methodology you mentioned in the presentation. Can you give any additional color on what precipitated that? Was it Moody's worsening scenarios overall, or what drove that change?
Steven, I'll start and Christopher can add color if he'd like. What we saw with the scenarios was the baseline becoming more conservative than before. A quarter ago, the baseline probably did not fully include the impact of developments in the Middle East. Now it does. We felt it was appropriate to add a little more emphasis to the baseline and round things out with the slow-growth scenario. We moved from a 40/60 mix to a 50/50 mix. It is really just that simple.
Got it. Very helpful. And just on the pace of hiring—obviously you're getting close to that 50-person goal, already halfway through the year—what upside is there to that number? Would you extend beyond the 50-person headcount if good people were available, even if it meant the efficiency ratio going a bit higher near-term? How should we think about the push-pull on investment timing?
This is a bright spot. We have had great success this year with 42 hires against our goal of 50. We feel very confident in the 50. As we look forward, we'll continue to focus on opportunities that come up. Our bankers are performing as expected and the momentum flywheel is building. About 26% of the growth for the quarter came from new bankers we've hired, so we're seeing momentum. We're proud of the leadership team executing recruiting that started in Q4 2025. We feel good about the 50 and will look for opportunities that present themselves.
Okay. Is there an impediment to going much beyond that just from an expense perspective? Would you space hires out more ratably, or be opportunistic irrespective of timing if good people come to you?
I don't think we have a specific cap. We know what it costs to bring on a new banker and the time it takes for them to become accretive, and we feel like we have room to add the bankers we need.
Steven, you will note we did increase guidance around operating expenses excluding OFB. Some of that was a nod to the potential that we could add a few more people.
Great. I appreciate that.
Your next question comes from the line of Brett Rabatin from Stonex Group. Please go ahead.
Hey. Good afternoon, everyone. Thanks for taking my questions. I wanted to talk about the franchise post the OFB deal. Any thoughts about additional expansion in Florida? Post bulking up in Orlando, has the organic growth level of the franchise moved up a few percentage points with recent hires in Texas and Florida? Any thoughts on how you view yourselves as a growth company going forward?
Thanks for the question. The initial focus with the August 1st close is welcoming the OFB clients and team members and getting them comfortable over the next several months as we focus on integration. Integration should be mid to late Q4 to fully wrap up. The back half of the year in Orlando is about acclimating the team and clients, and as we move into 2027 we'll be able to talk about expectations in Orlando. Several team members there are familiar with surrounding markets. We've shared previously our desire to build a bigger book in Jacksonville, but it is a bit early to share a detailed plan. After the integration and by the January call, we'll be able to address that more. A few years ago we pivoted to growth with a deliberate intent to hire talent in core markets as it became available. We focused on hiring experienced team members and have been successful, and then doubled down in markets where we did not have a big presence but saw high organic growth potential—hence focus in Texas and Florida. As we move into the next couple of years, we'll be in a position to talk more about what the macro looks like and whether we can do better over time. For now, we're targeting a mid-single-digit compound annual growth rate. If the flywheel yields something better, we'll talk about it then. Our focus now is acclimating new team members and clients, covering loan growth in the back half of the year with deposits, and improving DDA growth trajectory as quickly as we can.
And on capital, you bought back over 700 thousand shares this quarter. With 2 million shares remaining on the authorization, do you expect to be as active in the back half of the year as you were in Q2?
Yes, Brett. The intent is to exhaust the buyback authority. We have the 5% for this year and 2 million shares remaining. We expect to exhaust that authority over the course of the second half of the year, probably on a pro rata basis between Q3 and Q4. As far as next year, we'll cross that bridge when we get there. It is likely we'll have some authority in place next year, but the level is something we will discuss with the board when appropriate.
Okay. Great. Appreciate the color, guys.
You bet. Thank you for the questions.
Your next question comes from the line of Casey Haire from Autonomous. Please go ahead.
Great. Thanks. Good afternoon, guys. One more on NIM—how much purchase accounting is in this guide here?
The guidance excluding OFB, which is flat to slightly up, does not include any purchase accounting related to OFB. And honestly, Casey, it is not a significant number, so it really won't move the needle materially. The guidance including OFB is essentially the same.
Okay. Gotcha. And then just touching on capital management—it sounds like you plan to exhaust the authorization this year. You mentioned rebuilding capital to pre-OFB levels; what's the timeline around that and what does it mean for buybacks in 2027 and buyback appetite post-2026?
You can see our capital ratios are disclosed and we also disclosed where we think they will be once we fold in OFB in August. Our tangible common equity will be down about 120 basis points and common Tier 1 down around 170 basis points. For the back half of the year, those ratios probably will not change much; that is inclusive of the organic balance sheet growth in our guidance and the buybacks. The notion of 'rebuilding capital' we disclosed was an illustrative data point showing it would take about eight quarters, all else equal, to get back to pre-deal levels. That does not mean it is the intent to do that on a specific timetable. We feel comfortable with TCE in the 9% range and common Tier 1 somewhere around the 12% range. If we did not do buybacks in the second half, we'd be around those data points. Going forward, we plan to exhaust the buyback authority this year, and continuing buyback authority next year is something we'll disclose when appropriate.
Thank you.
A reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Your next question comes from the line of Christopher Marinac from Janney. Please go ahead.
Approval from OFB—does that make it more interesting to consider additional M&A, or were you not surprised by how quickly this happened?
I don't think we were surprised by the speed of approval. That has been the pace for the regulatory bodies we've dealt with lately. We expected a fairly rapid approval and the timeline was what we expected. The integration looks like it's going to be mid to maybe later Q4, so a pretty rapid integration as well. Mike, would you agree?
Very much so. In this environment, the regulatory focus has been more accommodative to these types of transactions. It was an extremely clean and rather small deal, so the quick approval and timeline to integration were things we planned for. Also, as John mentioned earlier, we expect to have the cost takeouts fully realized by the start of 2027, so when we start the new year the cost saves will be fully reflected.
Great. Thanks for hosting us today. I appreciate it.
At this time, there are no further questions. I would like to now pass the call back to Mr. John Hairston for closing remarks.
Okay. Thank you, Jay, for moderating the call. Thanks, everyone, for your attention and time, and we look forward to seeing you on the road very soon.
This concludes today's call. Thank you all for attending. You may now disconnect.