Hancock Whitney (NASDAQ:HWC) executives told investors the bank posted a “solid start to 2026,” citing higher profitability metrics, net interest margin (NIM) expansion, stable fee income, and disciplined expense management during the first quarter 2026 earnings call.
Quarterly performance and balance sheet trends
President and CEO John Hairston said adjusted return on assets was 1.43%, return on tangible common equity was 14.64%, and earnings per share were $1.52, each improving from the prior quarter. Hairston added that adjusted EPS was up more than 10% versus the year-ago quarter.
On the balance sheet, Hairston said loans grew $33 million (about 1% annualized). Loan production was $1.2 billion, down from the prior quarter but up $365 million from the year-ago quarter. He characterized first-quarter loan growth as seasonally softer, while noting average loan balances rose about $250 million from the fourth quarter. Management reiterated full-year guidance for mid-single-digit loan growth.
Deposits fell $198 million (about 3% annualized), which Hairston attributed primarily to seasonal public funds outflows. Interest-bearing public funds declined $280 million and public fund DDAs declined $75 million. Excluding public fund DDA outflows, Hairston said DDAs would have increased $45 million, and he reported DDA mix ended the quarter at 36%. Interest-bearing transaction and savings accounts rose $261 million, while retail time deposits fell $149 million due to maturities; management cited an approximately 85% CD renewal rate and maintained its expectation for low-single-digit deposit growth versus 2025 levels.
Net interest margin drivers and 2026 outlook assumptions
Achary said NIM expanded 7 basis points in the quarter to 3.55%, driven by a lower cost of deposits and higher bond portfolio yields, partially offset by lower loan yields following two rate cuts in the fourth quarter of 2025. The company’s overall cost of funds decreased 8 basis points to 1.44%, and cost of deposits fell 10 basis points to 1.47% (with 1.46% in March). He said the bank reduced promotional pricing on interest-bearing transaction accounts and retail CDs during the quarter.
Achary said earning asset yield was down 1 basis point, with loan yields down 13 basis points. Bond yields increased 25 basis points to 3.23%, reflecting the bond portfolio restructuring completed in January. He said the restructuring added 4 basis points to quarterly NIM expansion, and management expects the full quarterly increase in bond yields to approach 32 basis points with an annual contribution to NIM of about 7 basis points. Achary also said the company reinvested $181 million into the bond portfolio at higher yields.
Regarding outlook assumptions, Achary said Hancock Whitney is “now assuming no rate cuts throughout 2026,” and he said that change had “no significant impact” to net interest income or NIM. In response to analyst questions, Achary said loan portfolio yield is expected to remain “more or less” around the 5.60%–5.62% range without rate action, with NIM improvement expected to come from loan growth, the bond portfolio, and deposit costs rather than rising loan yields.
He also reiterated prior commentary that the bank was targeting 12–15 basis points of margin expansion from fourth quarter 2025 to fourth quarter 2026, saying management was confident in reaching that range and “maybe even some upside toward the upper end,” depending in part on achieving the loan growth target. Achary added the bank expects roughly $1 billion of principal cash flow from the bond portfolio that could be reinvested at higher yields, and said the bank still sees room to reprice CDs lower in 2026, though the benefit should diminish over time in a flat-rate environment.
Loan growth strategy and banker hiring
In the Q&A, Chief Operating Officer Shane Loper said first-quarter loan growth reflected “solid underlying momentum,” with strength across business banking, commercial, middle market, healthcare, commercial finance, and commercial real estate (CRE). He said net growth was moderated by amortization in mortgage and consumer portfolios and by planned paydowns in some larger credits across CRE, healthcare, and specialty lines, consistent with management’s expectation that growth would be more weighted to the mid and back half of the year.
Loper said the company added 27 net new bankers in the first quarter, with additional hires planned in the second quarter. He said most hires were in Texas and that approximately 70% were in business banking and 30% in commercial and middle market, exceeding management’s earlier 60/40 mix target. Loper said, based on internal benchmarking, new bankers typically begin contributing to loan growth within 12 months, become “meaningfully additive” in 12–24 months, and reach strong productivity in 24–36 months. He added the company is targeting around 50 net new bankers for 2026.
When asked about paydowns and prepayments, management said it plans expected payoffs into its production outlook but did not provide a specific forecast for unscheduled payoffs. Hairston said the “horsepower” behind the mid-single-digit growth outlook is expected production improvement, with unscheduled payments potentially varying but not expected to “swiftly go way up or way down.”
Credit trends and macro considerations
Achary said criticized commercial loans improved for the fifth consecutive quarter, declining $13 million to $322 million. Non-accrual loans increased $6 million to $113 million. Net charge-offs were 19 basis points, down from 22 basis points in the prior quarter. The allowance for credit losses remained 1.43% of loans, and Achary said the company expects net charge-offs to average 15–25 basis points for the full year.
On the criticized loan outlook, Achary told an analyst the company is seeing fewer inflows, but he expects more “flattening” than continued improvements, noting criticized loan levels are “pretty low.”
Executives also addressed the impact of geopolitical developments and higher energy prices on the bank’s footprint. Loper said client sentiment is “cautious” but optimistic, and that customers are focused on broader costs such as labor and insurance. Chief Credit Officer Chris Ziluca said it was “probably early to tell” how the situation may affect credit, though prolonged pressures could affect borrowers that cannot pass through higher costs.
Fee income, capital deployment, and shareholder returns
Achary said fee income, adjusted for the bond restructuring loss, was essentially flat versus the prior quarter, down about $1 million due to lower specialty income, which he said can be unpredictable. During Q&A, management said it continues to expect 4%–5% fee income growth for full-year 2026, citing strength in treasury and business service charges, merchant services, and SBA activity, with opportunities for syndication fees. Achary said guidance had a “bias” toward the upper end, but the company was not changing guidance at this time. On wealth management, executives said the business represented about 35% of total non-interest income and could be influenced by market levels given recurring fees tied to assets under management.
Expenses increased about 1% from the prior quarter, which Achary attributed largely to seasonal payroll tax and benefit costs, while emphasizing continued investment in revenue-generating activities. He also said expense guidance could trend toward the upper end of the range due to the pace of banker hiring.
On capital, Hairston said the company repurchased 1.4 million shares during the quarter and raised the quarterly cash dividend 11% to $0.50 per share. The quarter also included completion of the bond restructuring in January. The bank ended the period with tangible common equity (TCE) of 9.93% and a Common Equity Tier 1 (CET1) ratio of 13.3%.
In response to questions on capital targets, Achary pointed to longer-term objectives tied to a 2028 timeframe, citing a TCE target of roughly 9%–9.5% and a CET1 range of about 12%–12.5%. Achary said the company expects share repurchases to continue at similar levels through the year, with flexibility depending on market conditions, valuation, and balance sheet growth, and he said management intends to exhaust its current repurchase authority during 2026. He also noted the bank is modifying CD strategy to lengthen some maturities where possible, citing a promotional rate example of 3.5% for 11 months.
Hairston closed the call by reiterating confidence in the company’s positioning, citing liquidity, the allowance level, and “very strong capital” amid market volatility and an emerging flat-rate scenario.
About Hancock Whitney (NASDAQ:HWC)
Hancock Whitney Corporation (NASDAQ: HWC) is a regional financial services company headquartered in Gulfport, Mississippi. The firm was established in April 2019 through the merger of Hancock Holding Company and Whitney Holding Corporation, each of which traced its roots to the late 19th century. This combination created one of the largest bank holding companies in the Gulf South region, with a network of branches serving both urban and rural communities.
The company’s core business activities include commercial banking, retail banking and wealth management services.
