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    HWC
    Earnings call· Jun 2026(Q2 FY26)

    HANCOCK WHITNEY CORP HWC

    Jul 21, 2026 Source

    Executive summary

    Hancock Whitney Q2 FY26 — Strong Profitability, Balance Sheet Growth, and Capital Return

    Hancock Whitney delivered a strong Q2 FY26, marked by robust profitability, efficiency, and balance sheet expansion. The company achieved significant linked-quarter annualized growth in both loans and deposits, while maintaining solid asset quality and capital levels. Management is focused on integrating the One Florida Bank acquisition and continuing its strategic talent acquisition, with an eye on managing deposit costs in a competitive environment.

    Highlights

    5

    • EPS improved by 13% compared to the same period a year ago.

    • PPNR grew 6% year-over-year and 3% linked quarter to $178 million.

    • Commercial criticized loans decreased for the sixth consecutive quarter, falling $30 million to $492 million.

    • Loans grew 10% on a linked-quarter annualized basis, with full-year guidance maintained at mid-single-digit growth.

    • Deposits grew 8% on a linked-quarter annualized basis, with full-year guidance updated from low-single to mid-single-digit growth.

    Concerns

    3

    • New loan rates dropped 12 basis points quarter-over-core, contributing to a 2 basis point decline in overall loan yields.

    • Deposit costs are expected to increase by approximately 10 basis points from Q2 through Q4 FY26 due to promotional pricing.

    • Pricing in the commercial middle market segment remains highly competitive, making it challenging to secure quality deals.

    Guidance & targets

    13
    CategoryTargetConfidence
    Full-year 2026 loan growth
    mid-single-digit growth
    high materiality
    High
    Full-year 2026 deposit growth
    mid-single-digit growth
    high materiality
    High
    Full-year 2026 charge-offs to average loans
    between 15 and 25 basis points
    medium materiality
    High
    Second half 2026 Loans
    up low double digits
    high materiality
    High
    Second half 2026 Deposits
    up low double digits
    high materiality
    High
    Second half 2026 Net Interest Income
    up between 8% and 9%
    high materiality
    High
    Second half 2026 Fee Income
    up between 6% and 7%
    medium materiality
    High
    Second half 2026 Operating Expenses
    up between 7.5% and 8.5%
    medium materiality
    High
    Second half 2026 PPNR
    up between 7% and 8%
    high materiality
    High
    Second half 2026 Net Interest Margin (NIM)
    flat to slightly up
    high materiality
    Medium
    Second half 2026 Cost of deposits
    up around 10 basis points
    medium materiality
    Medium
    Second half 2026 Loan yield
    modest increase, call it, 4 to 5 basis points maybe
    medium materiality
    Medium
    One Florida Bank cost savings realization
    fully realized
    medium materiality
    High

    Operational metrics

    33
    Fee income increase (adjusted)
    $2.3 millionup 2% from prior quarter
    Q2 FY26

    adjusted for the net loss on the bond portfolio restructuring last quarter

    PPNR growth
    6%YoY
    Q2 FY26

    Compared to the same period a year ago

    PPNR
    $178 millionup 3% from prior quarter
    Q2 FY26

    Expressed as a return on average assets, this continues to be a solid 1.99%.

    Return on average assets
    1.42%
    Q2 FY26

    Solid profitability metric.

    Return on tangible common equity
    14.9%
    Q2 FY26

    Strong return on equity.

    Earning asset yield
    up 2 basis pointsQoQ
    Q2 FY26

    Contributed to NIM improvement.

    Cost of funds
    up 1 basis pointQoQ
    Q2 FY26

    Unfavorable other borrowing balances and rates were partially offset by a lower cost of deposits.

    Average earning assets
    up $507 millionlinked quarter
    Q2 FY26

    Increase in average earning assets.

    Bond portfolio yield
    3.35%up 12 basis points
    Q2 FY26

    Related to a full quarter's impact of the first quarter restructuring transaction and reinvestment of principal cash flows.

    Loan yields
    down 2 basis pointsQoQ
    Q2 FY26

    Mostly due to a 12 basis point quarter-over-core drop in new loan rates, partially offset by increased average loans.

    New loan rates
    6.04%down 12 basis points quarter over-core
    Q2 FY26

    Still higher than the 5.60% average loan yield.

    Average loan yields
    5.60%
    prior quarter

    Reference point for new loan rates.

    Cost of deposits
    1.43%down 4 basis points
    Q2 FY26

    Due mostly to a lower rate on maturing CDs.

    Promotional CD rate
    3.85%
    Q2 FY26

    Offered in Florida and Texas, expanded to Louisiana, Mississippi, and Alabama.

    Promotional Money Market rate
    3.75%
    Q2 FY26

    Promotional offering for existing customers.

    Promotional Money Market rate
    4%
    Q2 FY26

    Promotional offering for new customers.

    Commercial criticized loans
    $492 milliondecreased $30 million
    Q2 FY26

    Sixth consecutive quarter of improvement.

    Nonaccrual loans
    $114 millionincreased $1 million
    Q2 FY26

    Slight increase in nonaccrual loans.

    Loan loss reserves
    1.42%
    Q2 FY26

    Solid reserves as a percentage of loans.

    Net new bankers added (Q2)
    15
    Q2 FY26

    Part of ongoing talent acquisition strategy.

    Net new bankers added (YTD)
    42against annual goal of 50
    YTD FY26

    Strong progress towards annual hiring target.

    Loan production
    $1.5 billionup from $1.2 billion in Q1
    Q2 FY26

    Strong loan production across segments.

    Loan growth
    $588 million
    Q2 FY26

    Linked quarter growth.

    Average loans
    increased $374 millionlinked quarter
    Q2 FY26

    Healthy increase in average loan balances.

    Deposit growth (interest-bearing money market)
    $786 million
    Q2 FY26

    Partially offset by a slight decline in CD balances from maturities.

    Deposit growth (end-of-period)
    up $550 millionlinked quarter
    Q2 FY26

    Most of the deposit growth was back-ended towards the end of the second quarter.

    CECL scenario weights
    50-50changed from 40-60
    Q2 FY26

    Baseline scenario became more conservative, reflecting geopolitical impacts.

    New banker contribution to loan growth
    26%
    Q2 FY26

    Contribution from bankers hired this year.

    Capital ratios return to pre-deal levels
    8 quarters
    post-OFB acquisition

    Data point for how long it would take for capital ratios to return to pre-deal levels, not an explicit intent.

    Tangible Common Equity (TCE) ratio
    down about 120 basis points
    post-OFB acquisition

    Expected impact on TCE from One Florida Bank acquisition from 6/30 levels.

    Common Equity Tier 1 (CET1) ratio
    down around 170 basis points
    post-OFB acquisition

    Expected impact on CET1 from One Florida Bank acquisition from 6/30 levels.

    Tangible Common Equity (TCE) ratio
    9%
    ongoing

    Management's comfortable range for TCE.

    Common Equity Tier 1 (CET1) ratio
    12%
    ongoing

    Management's comfortable range for CET1.

    Industry KPIs

    13
    MetricValueDetails
    Loansup 10%%
    Depositsup 8%%
    Rotce ROE14.9%%
    Cet1 ratio—
    Capital returns2 million sharesshares
    Fee income linesup $2.3 millionUSD
    Allowance reserves1.42%%
    Net interest incomeincreased 3%%
    Net interest margin3.56%%
    Net charge offs npls16 basis pointsbps
    Total operating expensesup 2%%
    Provision for credit losses—
    Efficiency ratio operating leverage55.3%%

    Deals & partnerships

    1
    One Florida BankAcquisition of One Florida Bank

    Regulatory and shareholder approval secured in July. Integration expected mid-to-late Q4 FY26.

    Risks & headwinds

    4
    Potential rate increases and inflationsecond half of the year

    macro conditions that could cause it up

    Mitigation: Realistic guidance, disciplined pricing, focus on high-quality growth.

    Competitive pricing in loan marketCurrent

    very tough right now

    Mitigation: Improved pricing model, focus on winning quality deals, bankers calling and saving deals.

    Increased deposit costssecond half of the year (Q2 through Q4)

    up around 10 basis points

    Mitigation: Promotional rate pricing on interest-bearing transaction deposits and CDs.

    Operating environment challengesOngoing

    continues to present challenges

    Mitigation: Solid balance sheet, strong customer relationships, disciplined execution.

    What to watch in Q3 FY26

    5

    Deposit cost trajectory

    Q3 FY26 / Q4 FY26
    CurrentDown 4 bps to 1.43% in Q2 FY26
    TargetUp around 10 bps from Q2 through Q4 FY26

    Why it matters

    Deposit costs are a key driver of NIM and profitability, especially with promotional offerings.

    So in the second half of the year, our cost of deposits could be up around 10 basis points or so. And that's from the second quarter through the fourth quarter.

    Q&A highlights

    7

    Why is the full-year loan growth guidance maintained at mid-single-digits despite strong Q2 production (10% annualized), suggesting a slowdown? Is it conservatism or competition?

    Management explained that Q2's strong production included work from Q1. While demand is limited, there's high credit supply, leading to competitive pricing. They aim for high-quality growth across segments and geographies, but macro conditions (potential rate increases, inflation) could dampen appetite, making the mid-single-digit guide realistic, not conservative.

    “So I think if you look at the second half of the year, I wouldn't say we're being conservative. I think what Shane is telling you is exactly what we expect. But we do have to remember in the face of potential rate increases and inflation that while it may be well behaved, certainly there are macro conditions that could cause it up. We could see some dampening of appetite. So we want to be realistic in our guide to mid-singles for the year.”

    asked by Michael Rose · answered by John Hairston

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q2 Performance and Balance Sheet Growth

    Hancock Whitney reported a strong Q2 FY26 with net income of $127 million and EPS of $1.55. The company achieved 10% annualized loan growth and 8% annualized deposit growth linked quarter, driven by strong production across all segments except mortgage. This growth was largely funded by core deposits, aligning with the company's strategy to match loan growth with deposit growth.

    02

    Net Interest Margin and Deposit Dynamics

    The net interest margin modestly improved by 1 basis point to 3.56%, with earning asset yield up 2 bps and cost of funds up 1 bp. The cost of deposits decreased by 4 bps to 1.43% due to maturing CDs, but promotional pricing for interest-bearing deposits and CDs was introduced, leading to an expected increase in deposit costs of about 10 bps in the second half of the year.

    03

    Asset Quality and Credit Outlook

    Asset quality continued to improve, with commercial criticized loans decreasing for the sixth consecutive quarter by $30 million to $492 million. Net charge-offs were 16 basis points, down from 19 bps in the prior quarter, and loan loss reserves remained solid at 1.42% of loans. The full-year 2026 charge-off guidance is maintained at 15-25 basis points.

    04

    Strategic Investments and Talent Acquisition

    The company continues to make significant offensive reinvestments, including adding 15 net new bankers in Q2, bringing the year-to-date total to 42 against an annual goal of 50. These new hires contributed 26% of the quarter's loan growth, demonstrating the success of the talent acquisition strategy.

    05

    One Florida Bank Acquisition and Integration

    Regulatory and shareholder approval for the One Florida Bank (OFB) transaction was secured in July, with an expected closing date of August 1. The integration is anticipated to be completed by mid-to-late Q4, with cost savings fully realized by early 2027. The acquisition is expected to contribute low double-digit growth in loans and deposits for the second half of 2026.

    06

    Capital Management and Shareholder Returns

    Hancock Whitney's capital deployment priorities include capitalizing a growing balance sheet, supporting dividends, and completing the current 5% share repurchase authorization by year-end. The company plans to exhaust the remaining 2 million shares of buyback authority pro rata over Q3 and Q4. Management is comfortable with TCE in the 9% range and CET1 around 12%.

    AI-generated summary of the company’s earnings call. Not investment advice.