Hancock Whitney Corporation

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 conference call is being recorded. I would now like to introduce your host for today's conference, Catherine Mistick, 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 8 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 Oluka, Chief Credit Officer. I will now turn the call over to John Harriston.

Thank you, Catherine. Happy New Year, everyone, and thank you all for joining us today. We are pleased to report a strong end to 2023 with a very solid fourth quarter. The results reflect our successful bond portfolio restructuring, remarkable growth in our capital ratios, a hopeful end to NIM compression, and improvement in PPNR fee income and expenses after adjusting for the significant items we previously discussed in the mid-quarter update. We hope to carry this momentum into 2024, which will be a year to celebrate our 125-year legacy of commitment by our associates to clients and to the communities we serve. As anticipated, we have revised our three-year corporate strategic objectives, or CSOs, and have provided updated guidance for 2024, both of which are detailed on slide 22 of the Investor Day. Starting with the balance sheet, loan balances were relatively flat this quarter as loan demand once again was tepid in Q4, similar to the last several quarters. Under the surface, however, the team was successful at producing loans at a volume necessary to hold our own. and overcome a more select credit appetite, continued focus on pricing, and in replacing large credit-only relationships with granular relationships. Business banking continued to impress on both sides of the balance sheet, and consumer lending volume has begun to cover the remnant of pandemic recovery paydowns. As we look forward into 2024, we expect loan demand will return after rates begin to soften mid-year, and therefore much of our loan growth is anticipated in the second half of the year. Credit quality metrics were flat quarter over quarter, with criticized commercial and non-accrual loans at very low levels. As mentioned in the mid-quarter update, charge-offs began to normalize in Q4, but we still see no significant weakening in any portfolio sector. Despite impressive AQ ratios, we continue to be mindful of the current and potential macroeconomic environments. We are proactive in monitoring risks, and we continue to maintain a solid reserve of 1.41%. Total deposits were down 630 million this quarter, driven primarily by the maturity of 567 million in broker deposits. We were able to use the proceeds from the bond portfolio restructuring to deliver these higher cost deposits. Aside from that, client deposits were roughly flat with prior quarter. Seasonal inflows of public funds did occur as expected. The DDA remix continued, but pleasantly at a slower pace. We ended the quarter with 37% of our deposits in DDAs, and we're pleased to finish Q4 at the top end of the range contemplated in the mid-quarter update. Retail time deposits grew, and interest-bearing transaction and savings accounts were stable, thanks to the promotional pricing we offered on CDs and money market accounts. Our clients remain rate sensitive, and we really don't expect a significant moderation until rates begin to decline in the second half of this year. Mike will make a few comments in a moment regarding our future expectations for rates. In 2024, we expect low single-digit growth in our deposit balances year over year used to fund loan growth. Another bright spot for the quarter was growth in all of our capital ratios. Our TCE grew to over 8% due to lower longer-term yields and the benefits of our bond portfolio restructuring. Our total risk-based capital ratio reached 14% this quarter, and we remain well capitalized, inclusive of all AOCI and unrealized losses. As we look back on 2023 and forward into 2024, we believe we have positioned ourselves to effectively navigate the operating environment this year. Our deposit base has been remarkably stable and we expect it will continue to support our funding needs. Our ACL is quite robust and our capital levels grew throughout the year, which we feel will help position us for success in 2024. With that, I'll invite Mike to add additional comments.