Hancock Whitney Corporation

Good day, ladies and gentlemen, and welcome to Hancock Whitney Corporation's second 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.

Thank you, Tricia, and thanks to everyone for joining us today to discuss another solid quarter. The momentum we've reported the past few quarters continues, and we hope you agree reflects a company well-positioned for today's uncertain environment. As expected, the movement in rates served as a tailwind this quarter, and helped us beat our targeted efficiency ratio of 55% well ahead of plan. Also as expected, the upward rate migration pushed our NIM back over 3% as earning assets repriced and deposit betas lagged. Core loan growth exceeded our expectations up over $700 million, more than offsetting this quarter's runoff in PPP loans. Improving line utilization, production in all geographic markets across our footprint Coupled with a strong showing in health care, real estate, and mortgage, these were all contributors to the 13% linked quarter annualized growth. We are especially pleased to report that almost $150 million of the quarter's growth were from bankers in expansion markets across our footprint, particularly Beaumont, Dallas, and San Antonio in Texas, and Jackson in Mississippi. Even with a strong second quarter, however, we continued prior guidance for the year at 6% to 8%, but with a clear bias to the high end of the range. In 3Q, we expect a moderation in pipeline and pull-through rate, followed by a rebound in Q4. So moving on to deposits, well, we reported a 2% runoff. The drivers were commercial clients converting cash on their balance sheet into working capital, and some opted to use excess liquidity to pay down debt in light of increasing money rates. We saw normal seasonal reductions from public funds and consumer clients paying taxes, and there was a portion of migration elsewhere in pursuit of higher rates. There was relatively no change in our best-in-class deposit mix, with almost half in DDA and the other half in low-cost categories. Credit continued improving despite being at historically low levels last quarter. NPLs and criticized loans declined once again, and net charge-offs were actually in net recovery for the quarter. As a result of this performance, we finished the quarter with a strong allowance at 1.55%. I began my comments saying we believe we are well-positioned for today's environment. I would refer you to slide 20 in our earnings deck to observe the rationale for that case. With that, I'll ask Mike to share any further comments.