Hancock Whitney Corporation

Good day, ladies and gentlemen, and welcome to Hancock Whitney Corporation's first quarter 2022 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, Tricia Carlson, Investor Relations Manager. 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-K and 10-Q, including the risk 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, and our actual results and performance could differ materially from those set forth 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 most comparable GAAP measures in our earnings release and financial tables. The presentation slides included in our 8K 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, Mike Ackery, CFO, and Chris Saluca, Chief Credit Officer. I will now turn the call over to John Hairston.

Thanks, Tricia, and thanks to everyone for joining us. We hope you had a safe and enjoyable holiday weekend. We're pleased to report another solid quarter and a healthy launch for 2022. The company's first quarter results were on track with core loan growth of 8% linked quarter annualized. Mix improvement in a stable deposit base, initiation of a widening net interest margin, superior AQ metrics, continuing excellent expense management, improved operating PPNR, and solid capital levels. Momentum from 2021 carried into the first quarter with an increase in core loans of $385 million linked quarter. This growth more than offset the almost $200 million in PPP forgiveness. Increasing economic activity in our markets, increasing line utilization and pull-through rates all led to growth broadly across our markets and lines of business. New loan yields rose a couple of basis points as production levels remained strong. We expect these trends will continue and be more positively impactful as PPP forgiveness impact is a less significant headwind next quarter. Speaking of decreasing headwinds, I'd like to share an update on the New Orleans MSA. As I pointed out on previous calls, most of our footprint experienced record tourism and very healthy hospitality industry segments throughout the pandemic. New Orleans was an exception due to dependence on convention, trade show, and festival business as an economic driver. We are pleased to report a resurgent New Orleans in 2022. Beginning with the New Year's Sugar Bowl game, a robust Mardi Gras season, hotels were booked, festival tourists returned, and the city rebounded as a national an international destination. March brought relaxed pandemic restrictions and family tourism surge during the spring break vacation period. We were proud to host the final four basketball tournament and are preparing for the return of the Jazz and Heritage Festival and the Zurich Classic Golf Tournament. Conventions have returned, guided tours and restaurants are fully available, and we hope to see many of you in a couple of weeks at the Gulf South Bank Conference. So the New Orleans MSA has joined the rest of our footprint and economic recovery. We're also pleased to report another quarter of superb asset quality metrics. After peaking in the fourth quarter of 2016 at 10.1%, our commercial criticized loan ratio improved for the sixth straight quarter to 1.7% of total commercial loans. From a high of 2.3% in the first quarter of 2018, Non-performing loans are in the ninth straight quarter of improvement and sit at 0.22% of total loans. And net charge-offs were, again, only one basis point for the quarter. I'm very proud of our team for maintaining diligence throughout the pandemic disruption. The combination of their very hard work and de-risking our balance sheet delivered AQ metrics among the best compared to peers. Our capital levels remain solid. I recognize a TCE of 7.15%. is well off our internal target of 8%. However, the primary driver of the decline is related to valuation of the available for sale portfolio at March 31. This was the primary driver of the 56 basis point decline in our TCE ratio during the quarter, and a trend we expect to see repeated across the banking sector due to rapidly rising rates. Other capital metrics remain solid, however, with an estimated tier one ratio of 11.12%, up three basis points in the quarter. We opportunistically continued buying back shares during the quarter and repurchased 350,000 shares at $52.79. And finally, before I turn the call back to Mike, I'd like to update you on a strategic decision we made and announced last month addressing recent trends by others in the industry regarding consumer segment NSF and OD fees. On March 25th, we published a press release detailing the decision to proactively eliminate consumer NSF and certain OD fees by the end of 2022. We shared an estimate of an annual impact of 10 to 11 million in fee income from that decision. We believe these changes are in line with an evolving retail banking industry as traditional banks adjust products to meet consumer needs and provide them with the tools needed to help manage their overall finances. We expect to see improving consumer account acquisition rates in 2023 with this change and as we launch additional retail products and features and expand our digital storefront. With that, I'll turn the call over to Mike for further comments.