New hires fuel Hancock Whitney’s 4Q loan growth

New hires fuel Hancock Whitney’s 4Q loan growth
Written by Publishing Team

John Hurston, CEO of Hancock Whitney, has a simple strategy to spread the deluge of deposits the bank has acquired in Gulfport, Mississippi over the past year: Hire more bankers to make the loans.

The $36.5 billion asset company added 15 bankers during the second half of 2021, and those new employees generated $125 million in new loans during the fourth quarter, Hurston said Tuesday in a conference call with analysts. He said Hancock Whitney will take a “robust” approach to hiring in 2022 as he looks to invest nearly $4 billion in excess cash.

“You can see why in terms of the fourth quarter,” Hurston explained. Aggressive recruitment “is not an unimportant feature. It is tangible and it is there for us to see.”

John Hurston, CEO of Hancock Whitney, said he will take a “robust” approach to hiring in 2022 as he looks to invest nearly $4 billion in excess cash.

Like many banks, Hancock Whitney handles huge amounts of cash accumulated on its balance sheet. The company reported year-end deposits of $30.5 billion, up 4.3% from September 30 and 10% from the end of 2020. Demand deposits totaled $14.4 billion as of December 31, up 18% year-over-year.

That money, help Hurricane Ida– Related insurance revenue and federal government stimulus weighed on profitability in 2021. Hancock Whitney reported fourth-quarter net interest margin of 2.80%, down from 3.22% at the end of 2020.

Relief should be on the way in 2022. Hancock Whitney expects its stock portfolio to grow $300 million each quarter. It also expects core loans to grow from 6% to 8%.

“That translates into dollars, between $1.24 billion and $1.65 billion of loan growth that we’re looking to channel for next year,” Chief Financial Officer Michael Achari said on the conference call.

Brett Rabatin, director of research at Hovde, said in a research note on Wednesday that the recent appointments should help Hancock Whitney meet its loan growth goals.

“Increasing the lender base by 15 in the second half of 2021 is respectable and should help achieve the 6% to 8% loan growth target to be reasonable for this year,” Rabat wrote.

Hancock Whitney reported $21.1 billion in loans on December 31. This total is down 3% from the previous year, reflecting the impact of the $1.5 billion Paycheck Protection Program loan forgiveness throughout 2021. On a quarterly basis, however, the loan portfolio is nearly $250 million.

Overall, Hancock Whitney reported fourth-quarter net income of $137.7 million, up 33% from the fourth quarter of 2020. Strong expense controls and improved credit metrics helped boost net profit. Fourth-quarter results included the release of a reserve of $29.1 million as non-performing loans decreased to $59 million or 0.29% of total loans on December 31, compared to $144 million and 0.73% a year earlier.

Rabat boosted its full-year 2022 earnings estimates by 19 cents to $5.46 per share. Christopher Marinac, director of Janie Montgomery Scott research, increased his 2022 earnings estimate for Hancock Whitney by 15 cents, to $4.98 per share.


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