The growth of loans at Hancock Whitney in 2023 can be stopped by the slowdown of deposits, said the management of the companies, explaining that they are reducing their loans in response to funding challenges.
The Gulfport, Mississippi-based bank expects loan growth in the low to mid-single digits along with a decline in low-single-digit growth in deposits, it said Tuesday.
Hancock Whitney failed to fund its loan with deposits in the fourth quarter of 2022, the bank said. This year, it will shorten its focus on core loans, which will slow down loan growth but increase the bank’s opportunity to finance its loans with deposits, said the CEO of John Hairston on the phone with the researchers.
“We expect that there will continue to be disruptions in the financing of loans to deposits and that this is leading to an environment where there will be growth in deposits, but perhaps it will be more sensitive,” said Hairston.
The bank’s loans of $35.2 billion increased by $528.5 million to $23.1 billion between the third and fourth quarters. Deposits increased $119.1 million to $29.1 billion during the same period.
Overall, Hancock Whitney reported revenue of $372.5 million in the fourth quarter, nearly $16 million below analysts’ expectations. Profits totaled $143.8 million, up from $137.7 million last year. The bank’s interest rate increased from 3.54% to 3.68%.
Higher interest rates weighed on earnings in the fourth quarter, which fell 10% to $8.3 million. The decline was sharpest in the bank’s second mortgage business, which posted a 54% drop from a year ago.
Last year, the bank said it would be removed All non-sufficient funds fees and certain transaction fees are consumer protection fees.
Hancock Whitney expects revenue growth of 3% to 4% in 2023 thanks to strong inflation in its business and cards.
The bank’s stock price was down 4% on Wednesday afternoon.