Hancock Whitney Corporation

Good day, ladies and gentlemen, and welcome to the Hancock Whitney Corporation's first quarter 2023 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 is being recorded. I would now like to introduce your host for today's conference, Catherine Misfich, 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 risks 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 AK 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 Harriston, President and CEO, Mike Ackery, CFO, and Chris Saluca, Chief Credit Officer. I will now turn the call over to John Harriston.

Thanks, Catherine. Good afternoon, everyone. Thank you for joining us today. The first quarter of 2023 was a solid start to the year, despite volatility within our industry launched by unique bank failures in early March. Despite all that noise, we've continued to maintain strong levels of liquidity, solid capital, and a stable, seasoned deposit base, well diversified among consumer, commercial, and wealth clients, as detailed on page six of the investor deck. Both linked quarter and since the bank failures the weekend of March 10th, we have seen growth in total deposits, including core client segments. In fact, a majority of our growth in core client deposits came after March 10th. For the quarter, core client deposits are up 234 million, of which 203 million was added post-March 10. We added additional details in the deck that we believe show the strength and stability we have in our markets and among our client base. We have weathered many storms, both literally and figuratively, over 124 years, and the name Hancock Whitney is synonymous with strength and stability in our footprint. We are pleased with deposit growth this quarter, though continued rate hikes coupled with the current banking environment and promotional CD pricing have resulted in a deposit remix to higher cost deposits. The remix has resulted in a higher than expected deposit beta for the quarter, however, Our overall deposit portfolio remains seasoned, stable, and well diversified. Details are included on slides six and seven of our earnings deck. DDAs as a percentage of total deposits remain strong at 43%, well above pre-pandemic levels. Our portfolio is diverse with 43% consumer, 36% commercial and small business, 12% public funds, 7% wealth, and only 2% brokered CDs. The brokered CDs were issued in late March as a precautionary measure only, and as of today, we don't anticipate needing to issue any more. Uninsured deposits were 36% at the end of March, and we continue to offer varied ways for both consumers and businesses to further insure their funds above current FDIC limits while maintaining their primary deposit relationship with Hancock Whitney. On slide 8, we updated our liquidity metrics, again indicating a position of strength. With almost $20 billion in available sources of funds, we currently use less than $4 billion, much of which was drawn as precautionary during the height of volatility in March. So we sit with approximately $16 billion in net available sources of funds in the unlikely event of persistent volatility in our industry. Moving on to capital, on slide 19, all of our capital measures have strengthened linked quarter despite the precautionary leverage noted earlier. The 36 basis point impact of leverage added a quarter in somewhat offset the benefit from a solid earnings result for the quarter, but should gradually reverse itself as headline volatility declines. We do note the first quarter in a while where we and many peers benefited from OCI impact to our TCE ratio. In summary, we are very mindful of the current operating environment and the macroeconomic trends which may impact our industry. But as I just detailed, given our strong liquidity, are solid capital and stable, seasoned, diverse, and granular deposit base, we believe we're well positioned for the environment. With that, I'll turn the call to Mike for further comments.