Hancock Whitney Corporation

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 Saluca, Chief Credit Officer. I will now turn the call over to John Harriston.

Good afternoon, and thank you all for joining us today. The third quarter of 2025 was a remarkably strong quarter, with an ROA of 1.46% versus 1.32% a year ago, Our results reflect continued profitability improvement, reduction in our efficiency ratio, and progress on our organic growth plan. Net interest income continued to expand as our average earning assets grew at higher yields, and we continued to reduce deposit costs down one basis point this quarter. For the third quarter in a row, fee income grew, totaling $106 million, an increase of 8% from prior quarters. Investment, insurance, and annuity fees lead this increase, hitting a record high for the organization. Expenses remain well controlled. Compared to prior quarter's adjusted non-interest expense, we were up less than $3 million, or 1%, from prior quarter. Much of this increase was in personnel expenses due to our investment in revenue producers, along with higher incentive income from a strong quarter of loan production and really terrific fee income. Loans grew $135 million, or 2% annualized. As shown on slide 27 of our investor deck, our production was quite strong, increasing 6% quarter over quarter and 46% from the same quarter last year. The net growth number was impacted by higher payoffs of larger credits, including SNICs, which were down $114 million and ended the quarter at 8.9% of total loans. We likewise encountered a larger-than-expected reduction in line utilization among industrial contractors, as favorable project completion dates led to earlier payments on very large projects. We remain focused on more granular full-relationship loans with the goal of achieving more favorable loan yields and relationship revenue. We expect low single-digit growth in 2025 and perhaps low single-digit net growth for the fourth quarter as paydowns persist. Deposits were down $387 million. largely driven by seasonal activity in public fund DDA and interest-bearing accounts, which decreased $269 million. Our interest-bearing transaction balances were up and retail time deposits and DDA balances down, reflecting promotional pricing changes inside the quarter. DDA mixed into the quarter at a strong 36%. Earnings contributed to growth in all of our capital ratios while we continued to return capital to investors by repurchasing 662,000 shares of common stock. We ended the quarter with TCE of 10.01% and common equity tier one ratio of 14.08%. This quarter, we continue to make progress on our organic growth plan. We've hired 20 net new bankers from the same quarter last year, a 9% run rate. We're well underway in our plan to open five new locations in the Dallas market. These branches will open either in late 2025 or early 2026. While too early in the year for 2026 guidance, we do anticipate an increase in the pace of hiring to solidify our target compounded annual balance sheet growth rate. We remain optimistic about closing out 2025 with continued growth and profitability. As we look back over the past several years, we hope investors are pleased to see the combination of a fortress capital stack solid allowance for credit losses, superior profitability, ample liquidity, benign asset quality, and a new emerging trend of balance sheet growth. Despite the current somewhat dynamic macroeconomic environment, we are confident in the company's ability to navigate any challenges before us, support our clients, and continue running a very successful playbook. With that, I'll invite Mike to add additional comments.

Thanks, John. Good afternoon. As John mentioned, we're very pleased with the company's strong performance this quarter. Our adjusted net income for the quarter was nearly $128 million or $1.49 per share compared to adjusted net income of $118 million or $1.37 per share in the second quarter. Second quarter results included $6 million of supplemental disclosure items related to our acquisition of Sable Trust Company. PPNR for the company was up 8 million, or 5%, from the prior quarter. Our NIM was stable at 3.49%, and NII was up 3 million, or 1%. Fee income was up 7 million, or 8%, from the prior quarter, and expenses remained well-controlled, up just 3 million, or 1%, from the prior quarter's adjusted expense. Our efficiency ratio continued to improve. reaching 54.1 percent this quarter compared to 54.91 percent last quarter. Our efficiency ratio year-to-date of 54.73 percent is nearly 100 basis points lower than last year's 55.67 percent. The quarter at stable NIM was driven by a better earning asset mix, higher average loans, and a higher securities yield. which was offset partially by higher other borrowings, volumes, and rates, as shown on slide 15 of our investor deck. The yield on the bond portfolio was up six basis points to 2.92%. We had $135 million of principal cash flow at 3.08%, and we reinvested $200 million back into the bond portfolio at 4.61%. Next quarter, we expect about $207 million of principal cash flow at 3.53% that will be reinvested at higher yields. We expect the portfolio yield should increase with continued reinvestment at higher rates for the remainder of 2025. Our loan yield for the quarter was up one basis point to 5.87%. Yields on fixed-rate loans were up seven basis points to 5.24%, while the yield on variable rate loans was down six basis points. The yield on new loans was flat at 6.78%. With two rate cuts expected in the fourth quarter of 25, we expect the overall loan yield will be down accordingly. Our overall cost of funds was up two basis points to 1.59% due to higher average other borrowing volumes and rates partially offset by lower deposit costs. The downward trend in our cost of deposits continued, albeit at a slower pace, with a decrease of one basis point to 1.64 percent in the third quarter. The drivers were CD maturities and renewals at lower rates and lower rates on public fund deposits. We expect deposit costs will be down in the fourth quarter following expected rate cuts in October and December. For the quarter, we had $2.4 billion of CD maturities at 3.69 percent that were repriced at 3.58 percent with a strong 88 percent renewal rate. CDs will continue to reprice lower in the fourth quarter given maturity volumes and anticipated rate cuts. As shown on slide 11, EOP deposits were down $387 million mostly reflecting 269 million in seasonal reductions of public fund balances. DDA balances were down 334 million, including an $83 million reduction in public fund DDAs. Retail time deposits were down 145 million, but interest-bearing transaction deposits were up 278 million. Our updated guidance is included on slide 20 and as mentioned, includes two rate cuts of 25 basis points in October and December. For the third consecutive quarter, our criticized commercial loans improved, decreasing $20 million to $549 million. Non-accrual loans increased modestly to $114 million. Net charge-offs were down this quarter and came in at 19 basis points. Our loan portfolio is diverse and we see no significant weakening in any specific portfolio sectors or geography. Our loan reserves are solid at 1.45 percent of loans, consistent with last quarter. We expect net charge-offs to average loans will come in at between 15 and 25 basis points for the full year 2025. Lastly, a comment on capital. Our capital ratios remain remarkably strong with growth this quarter due to our higher earning levels. We bought back about $40 million of shares consistent with prior quarter. We expect share repurchases will continue at this quarter's level in the fourth quarter of 2025. Changes in the growth dynamics of our balance sheet, economic conditions, and share valuation could impact that view. I will now turn the call back to John.