Hancock Whitney Corporation

Good day, ladies and gentlemen, and welcome to Hancock Whitney Corporation's third quarter 2024 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. And I would now like to introduce your host for today's conference, Catherine Mistich, 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 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 Harrison, President and CEO, Mike Ackery, CFO, and Chris Saluca, Chief Credit Officer. I will now turn the call over to John Harrison.

Thank you all for joining us this afternoon. We are pleased to report our third quarter results, again reflecting improved profitability and efficiency. We achieved an ROA of 1.32% and reported another quarter of NIM expansion, fee income growth, and lower operating expenses. Strong earnings facilitated continued growth in capital ratios, now among top quartile peers. Net interest income was up this quarter due to higher yields on loans and securities and a flat cost of funds. Fee income continues to outperform and expenses remain well-controlled And in fact, we're down quarter over quarter. In recent years, we made and continue to make strategic investments in fee income lines of business and are very pleased with continued impressive returns. Turning to the balance sheet, loans were down $450 million, over $250 million of which is related to our purposeful decrease in SNCC exposure. We also saw higher payoffs due to refinance and sales transactions within the CRE multifamily and CRE industrial portfolio across the footprint. The balance of overall loan reduction this quarter was largely the completion and liquidation of large industrial projects in the Lake Charles, Louisiana market. The balance sheet doesn't reflect the full story, though, as we enjoyed very solid production and new credits during the quarter. We're also very pleased to have attained peer levels of SNCC exposure a year ahead of the original schedule. So this particular line item will generally cease to be a purposeful headwind to growth. We are actively recruiting bankers to support growing the balance sheet next year now that we have reached all our goals in earnings efficiency and capital. Deposits were down in the quarter, but the DDA outflow remains moderated, and our DDA mix was consistent at around 36%. There was some normal seasonal runoff in public funds deposits, and we experienced growth in interest-bearing transaction accounts and in time deposits despite a reduction in promotional rates during the quarter. Mike will add more detail in his comments later. Our credit quality metrics continue to normalize with a decrease in non-accrual loans, but an increase in criticized loans, fully reflecting the results of the recent SNCC exam, which was impactful to criticize migration. We expect to compare well versus peers in criticized loans and expect to be in the top quartile for non-accrual loans. Net charge-offs were up quarter over quarter, but we continue to see no significant weakening in any specific portfolio sectors or geography. we continued to enjoy a solid reserve of 1.46%, up slightly from the prior quarter. We maintained our posture of returning capital to investors by repurchasing over 300,000 shares of common stock in the quarter. Even after returning capital, we had strong growth in all of our capital metrics due to solid profitability, ending the quarter with a TCE of 9.56% and a common equity tier one ratio of 13.79%. We've made modest changes to our guidance for the fourth quarter. And as a reminder, we will give full guidance for 2025 on next quarter's call. October the 9th marked the 125th anniversary of our bank charter. We attained this milestone because of our shareholders and clients' trust and the efforts of our current and past associates who live by the core values our founders set forth those many years ago. We have focused on achieving strong profitability and granular revenue sourcing, admirable earnings efficiency, solid capital and ACL reserves, a de-risked loan portfolio, and top quartile capital ratios. As we reflect on our past and celebrate our future, we look forward to another 125 years of strength and stability. Lastly, I would like to acknowledge the incredible efforts of our team during the recent hurricanes impacting our footprint, as we again were the last to close and the first to open locations in storm-impacted areas. I'm exceptionally proud to serve with colleagues who are intensely focused on a commitment to serve our communities in their time of greatest need. As we speak, our teams are delivering meals, ice, and fuel in hard-hit areas to assure we do our very best to serve. Our thoughts and our prayers are with those impacted by these storms, and we are committed to being a steadfast partner in the recovery process. For over a century, our bank has been here to help people rebuild and recover, and this time is no different. With that, I'll invite Mike to add additional comments.