Hancock Whitney Corp. 10-Q Summary: Q3 2025
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025. Hancock Whitney Corporation (HWC) is a financial holding company headquartered in Gulfport, Mississippi, operating primarily through its subsidiary, Hancock Whitney Bank. The company serves markets in Mississippi, Alabama, Louisiana, Florida, Texas, Tennessee, and Georgia. A significant event during the period was the acquisition of Sabal Trust Company on May 2, 2025, adding approximately $3 billion in assets under management and expanding the company's trust and asset management footprint in Central Florida.
Key Financial Metrics
| Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 |
|---|---|---|---|---|
| Net Income | $127.5 million | $115.6 million | $360.5 million | $338.7 million |
| Diluted EPS | $1.49 | $1.33 | $4.17 | $3.88 |
| Net Interest Income (TE) | $282.3 million | $274.5 million | $834.5 million | $816.7 million |
| Net Interest Margin (TE) | 3.49% | 3.39% | 3.47% | 3.36% |
| Noninterest Income | $106.0 million | $95.9 million | $299.3 million | $272.9 million |
| Noninterest Expense | $212.8 million | $203.8 million | $633.8 million | $617.6 million |
| Efficiency Ratio (Non-GAAP) | 54.10% | 54.42% | 54.73% | 55.67% |
| Total Assets | $35.77 billion | $35.24 billion | $35.77 billion | $35.24 billion |
| Total Loans | $23.60 billion | $23.46 billion | $23.60 billion | $23.46 billion |
| Total Deposits | $28.66 billion | $28.98 billion | $28.66 billion | $28.98 billion |
| Allowance for Credit Losses | $341.5 million | $342.8 million | $341.5 million | $342.8 million |
| Coverage Ratio (ACL/Loans) | 1.45% | 1.46% | 1.45% | 1.46% |
| Nonaccrual Loans | $113.6 million (0.48%) | $82.9 million (0.35%) | $113.6 million | $82.9 million |
| Tangible Common Equity Ratio | 10.01% | 9.56% | 10.01% | 9.56% |
Material Changes vs. Prior Period
- Profitability: Net income increased 10% year-over-year (Q3 2025 vs. Q3 2024) and 6% sequentially (Q3 vs. Q2 2025). The sequential increase was driven by higher noninterest income and lower net charge-offs, while the year-over-year increase was supported by improved net interest income and noninterest income.
- Net Interest Income (NII): NII (TE) rose 3% year-over-year. The margin expanded 10 basis points to 3.49% due to a decline in the cost of funds (driven by lower rates on interest-bearing deposits and the elimination of brokered time deposits) outpacing the decline in loan yields.
- Noninterest Income: Increased 11% year-over-year, largely driven by the Sabal Trust acquisition (adding full quarter impact to trust fees), higher investment and annuity fees, and income from bank-owned life insurance (BOLI).
- Expense Management: Noninterest expense increased 4% year-over-year. Excluding one-time items (Sabal acquisition costs of $5.9M in 2025 and FDIC special assessment of $3.8M in 2024), adjusted expenses rose 2% due to higher professional services and data processing costs.
- Asset Quality: Nonaccrual loans increased to $113.6 million (0.48% of loans) from $82.9 million (0.35%) in Q3 2024, primarily due to specific commercial and residential loan modifications. However, annualized net charge-offs improved to 0.19% in Q3 2025 from 0.30% in Q3 2024.
- Balance Sheet: Total loans grew 1% year-over-year, while total deposits declined 1% due to seasonal outflows in public funds and retail time deposit maturities.
Guidance, Outlook, and Risks
- Economic Outlook: Management utilizes Moody's Analytics forecasts, weighting the baseline scenario and a downside "S-2" mild recession scenario equally (50/50) for allowance calculations. The baseline assumes modest GDP growth (1.8% in 2025) and rising unemployment (peaking at 4.8% in late 2026). The S-2 scenario projects a mild recession starting Q4 2025 with unemployment peaking at 7.2%.
- Interest Rate Risk: The company remains asset-sensitive. Modeling indicates that a 100 basis point increase in rates would increase Net Interest Income (NII) by 1.53% in Year 1, while a 100 basis point decrease would reduce NII by 1.89%.
- Capital Actions: The company repurchased 662,500 shares in Q3 2025 at an average price of $60.48. A new buyback program authorized in December 2024 allows for up to 4.3 million shares through December 2026. Dividends were increased to $0.45 per share in Q3 2025.
- Risks: Key risks include the impact of tariffs and geopolitical events on economic growth, potential credit deterioration in commercial real estate and consumer portfolios, and the uncertainty surrounding the FDIC special assessment related to the Silicon Valley Bank and Signature Bank failures (estimated exposure remains unknown).
Investor Verification Checklist
- Sabal Integration: Verify the realization of synergies and revenue growth from the Sabal Trust acquisition in subsequent quarters.
- Nonaccrual Trends: Monitor the trajectory of nonaccrual loans, which rose to 0.48% of the portfolio, to ensure they do not accelerate into higher charge-offs.
- Deposit Stability: Assess the stability of the deposit base, particularly the shift away from time deposits and the reliance on public funds, which are subject to seasonal volatility.
- FDIC Assessment: Track updates on the final FDIC special assessment liability, as the current estimate ($29.4M expensed to date) may change based on loss share agreements.
- Interest Rate Sensitivity: Review future NII performance as the Federal Reserve adjusts rates, given the company's asset-sensitive position.