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HWC Beats on Q4 Earnings on NII & Fee Income Growth, to Buy Sabal
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Hancock Whitney Corp.’s (HWC - Free Report) fourth-quarter 2024 earnings per share of $1.40 easily beat the Zacks Consensus Estimate of $1.28. The bottom line compared favorably with $1.26 earned in the year-ago quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The results benefited from the increase in non-interest income and net interest income (NII). Lower expenses and provisions were other positives. However, the decline in total loans was a headwind.
Net income was $122.1 million, up from $50.6 million in the prior-year quarter. Our estimate for the metric was $108.4 million.
For 2024, adjusted earnings of $5.31 surpassed the consensus estimate of $5.19 and grew 2.5% year over year. Net income (GAAP) was $460.8 million, up 17.4% from 2023.
HWC’s Revenues Rise, Expenses Fall
Quarterly total revenues amounted to $364.8 million, up 18.3% year over year. The top line beat the Zacks Consensus Estimate of $361.3 million.
For 2024, total revenues rose 4.3% to $1.45 billion. The top line outpaced the consensus estimate of $1.44 billion.
NII (on a tax-equivalent basis) increased 1.5% year over year to $276.3 million. The net interest margin (NIM) was 3.41%, which expanded 14 basis points (bps). Our estimates for NII and NIM were pegged at $276.4 million and 3.43%, respectively.
Non-interest income totaled $91.2 million, up substantially. The rise was driven by an increase in trust fees, service charges on deposit accounts and bank card and ATM fees. We had projected a non-interest income of $86.7 million. Adjusted non-interest income was up 3.4%.
Total non-interest expenses (GAAP) decreased 11.7% to $202.3 million. We had projected expenses of $205.4 million. Adjusted expenses declined marginally.
The efficiency ratio decreased to 54.46% from 55.58% in the year-ago quarter. A decline in the efficiency ratio indicates an increase in profitability.
As of Dec. 31, 2024, total loans were $23.3 billion, down marginally from the prior quarter. Total deposits grew 1.8% on a sequential basis to $29.5 billion. Our estimates for total loans and deposits were pegged at $23.9 billion and $29.7 billion, respectively.
HWC’s Credit Quality Improves
The provision for credit losses was $11.9 million, down 29.7% from the prior-year quarter. Our estimate for provisions was $18.6 million.
Net charge-offs (annualized) were 0.20% of average total loans, down 7 bps from the prior-year quarter.
HWC’s Capital Ratios & Profitability Ratios Improve
As of Dec. 31, 2024, the Tier 1 leverage ratio was 11.29%, up from 10.10% at the end of the year-earlier quarter. The common equity Tier 1 ratio was 14.14%, up from 12.33% as of Dec. 31, 2023.
At the end of the fourth quarter, the return on average assets was 1.40%, up from the year-ago period’s 0.56%. The return on average common equity was 11.74%, up from 5.64% in the prior-year quarter.
HWC’s Share Repurchase Update
In the reported quarter, HWC repurchased 0.15 million shares at an average price of $52.50 per share.
Hancock Whitney to Acquire Sabal Trust
Hancock Whitney, through its wholly owned bank subsidiary, Hancock Whitney Bank has agreed to acquire St. Petersburg, FL-based Sabal Trust Company. The financial terms of the all-cash deal were not disclosed.
The transaction is complementary to HWC’s 2018 acquisition of Capital One’s trust and asset management business.
Sabal Trust has four locations within the greater Tampa and Orlando metropolitan statistical areas. Following the completion of the deal (expected to close in the second quarter of 2025 after getting regulatory approvals), Florida will become the largest private wealth management fee income contributor for HWC.
The transaction is expected to be immediately accretive to Hancock Whitney’s GAAP earnings, excluding one-time costs. Last year, Sabal Trust recorded revenues of $22.1 million and had assets under management of almost $3 billion as of Dec. 31, 2024.
"This transaction is an excellent strategic opportunity to expand our wealth and asset management group within the high-growth Florida market and to add a strong team to our wealth and asset management business," said John M. Hairston, president & CEO.
Our View on Hancock Whitney
Hancock Whitney’s strategic expansion initiatives will likely keep supporting top-line growth. Lower rates are expected to support NIM expansion. Improving asset quality and a decrease in expenses are encouraging.
Hancock Whitney Corporation Price, Consensus and EPS Surprise
Bank OZK’s (OZK - Free Report) fourth-quarter 2024 earnings per share of $1.56 handily surpassed the Zacks Consensus Estimate of $1.45. The bottom line reflects a rise of 4% from the prior-year quarter’s actual.
OZK’s results benefited from a rise in NII, driven by improvement in loans and deposit balances. Lower non-interest expenses and provisions were also positives. However, lower non-interest income and rising funding costs were the undermining factors.
Synovus Financial Corp. (SNV - Free Report) reported fourth-quarter 2024 adjusted earnings per share of $1.25, which surpassed the Zacks Consensus Estimate of $1.16 per share. This compares with earnings of 80 cents per share a year ago.
Results benefited from strong year-over-year growth in non-interest revenues (NIR), a rise in NII, and a fall in expenses and provisions for credit losses. Also, improving deposit balances was a tailwind. However, a rise in non-performing loans was a major headwind for SNV.
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HWC Beats on Q4 Earnings on NII & Fee Income Growth, to Buy Sabal
Hancock Whitney Corp.’s (HWC - Free Report) fourth-quarter 2024 earnings per share of $1.40 easily beat the Zacks Consensus Estimate of $1.28. The bottom line compared favorably with $1.26 earned in the year-ago quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The results benefited from the increase in non-interest income and net interest income (NII). Lower expenses and provisions were other positives. However, the decline in total loans was a headwind.
Net income was $122.1 million, up from $50.6 million in the prior-year quarter. Our estimate for the metric was $108.4 million.
For 2024, adjusted earnings of $5.31 surpassed the consensus estimate of $5.19 and grew 2.5% year over year. Net income (GAAP) was $460.8 million, up 17.4% from 2023.
HWC’s Revenues Rise, Expenses Fall
Quarterly total revenues amounted to $364.8 million, up 18.3% year over year. The top line beat the Zacks Consensus Estimate of $361.3 million.
For 2024, total revenues rose 4.3% to $1.45 billion. The top line outpaced the consensus estimate of $1.44 billion.
NII (on a tax-equivalent basis) increased 1.5% year over year to $276.3 million. The net interest margin (NIM) was 3.41%, which expanded 14 basis points (bps). Our estimates for NII and NIM were pegged at $276.4 million and 3.43%, respectively.
Non-interest income totaled $91.2 million, up substantially. The rise was driven by an increase in trust fees, service charges on deposit accounts and bank card and ATM fees. We had projected a non-interest income of $86.7 million. Adjusted non-interest income was up 3.4%.
Total non-interest expenses (GAAP) decreased 11.7% to $202.3 million. We had projected expenses of $205.4 million. Adjusted expenses declined marginally.
The efficiency ratio decreased to 54.46% from 55.58% in the year-ago quarter. A decline in the efficiency ratio indicates an increase in profitability.
As of Dec. 31, 2024, total loans were $23.3 billion, down marginally from the prior quarter. Total deposits grew 1.8% on a sequential basis to $29.5 billion. Our estimates for total loans and deposits were pegged at $23.9 billion and $29.7 billion, respectively.
HWC’s Credit Quality Improves
The provision for credit losses was $11.9 million, down 29.7% from the prior-year quarter. Our estimate for provisions was $18.6 million.
Net charge-offs (annualized) were 0.20% of average total loans, down 7 bps from the prior-year quarter.
HWC’s Capital Ratios & Profitability Ratios Improve
As of Dec. 31, 2024, the Tier 1 leverage ratio was 11.29%, up from 10.10% at the end of the year-earlier quarter. The common equity Tier 1 ratio was 14.14%, up from 12.33% as of Dec. 31, 2023.
At the end of the fourth quarter, the return on average assets was 1.40%, up from the year-ago period’s 0.56%. The return on average common equity was 11.74%, up from 5.64% in the prior-year quarter.
HWC’s Share Repurchase Update
In the reported quarter, HWC repurchased 0.15 million shares at an average price of $52.50 per share.
Hancock Whitney to Acquire Sabal Trust
Hancock Whitney, through its wholly owned bank subsidiary, Hancock Whitney Bank has agreed to acquire St. Petersburg, FL-based Sabal Trust Company. The financial terms of the all-cash deal were not disclosed.
The transaction is complementary to HWC’s 2018 acquisition of Capital One’s trust and asset management business.
Sabal Trust has four locations within the greater Tampa and Orlando metropolitan statistical areas. Following the completion of the deal (expected to close in the second quarter of 2025 after getting regulatory approvals), Florida will become the largest private wealth management fee income contributor for HWC.
The transaction is expected to be immediately accretive to Hancock Whitney’s GAAP earnings, excluding one-time costs. Last year, Sabal Trust recorded revenues of $22.1 million and had assets under management of almost $3 billion as of Dec. 31, 2024.
"This transaction is an excellent strategic opportunity to expand our wealth and asset management group within the high-growth Florida market and to add a strong team to our wealth and asset management business," said John M. Hairston, president & CEO.
Our View on Hancock Whitney
Hancock Whitney’s strategic expansion initiatives will likely keep supporting top-line growth. Lower rates are expected to support NIM expansion. Improving asset quality and a decrease in expenses are encouraging.
Hancock Whitney Corporation Price, Consensus and EPS Surprise
Hancock Whitney Corporation price-consensus-eps-surprise-chart | Hancock Whitney Corporation Quote
Currently, Hancock Whitney carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Hancock Whitney’s Peers
Bank OZK’s (OZK - Free Report) fourth-quarter 2024 earnings per share of $1.56 handily surpassed the Zacks Consensus Estimate of $1.45. The bottom line reflects a rise of 4% from the prior-year quarter’s actual.
OZK’s results benefited from a rise in NII, driven by improvement in loans and deposit balances. Lower non-interest expenses and provisions were also positives. However, lower non-interest income and rising funding costs were the undermining factors.
Synovus Financial Corp. (SNV - Free Report) reported fourth-quarter 2024 adjusted earnings per share of $1.25, which surpassed the Zacks Consensus Estimate of $1.16 per share. This compares with earnings of 80 cents per share a year ago.
Results benefited from strong year-over-year growth in non-interest revenues (NIR), a rise in NII, and a fall in expenses and provisions for credit losses. Also, improving deposit balances was a tailwind. However, a rise in non-performing loans was a major headwind for SNV.