Loan growth at Hancock Whitney in 2023 could be held back by slow deposit growth, company executives said, explaining that they're narrowing their lending focus in response to the funding challenges.
The Gulfport, Mississippi-based bank expects loan growth in the low- to-mid-single-digit range alongside flat to low-single-digit growth in deposits, it said Tuesday.
Hancock Whitney fell short of funding its loan with deposits in the fourth quarter of 2022, the bank said. This year, it will narrow its focus to core relationship lending, which will slow loan growth but increase the bank's chances of funding its loans with deposits, CEO John Hairston said on a call with analysts.
"We expect continued hurdles with funding loan growth with deposits and are guiding toward an environment where core deposit growth will be available, but perhaps a bit more rate-sensitive," Hairston said.
The $35.2 billion-asset bank's loans grew by $528.5 million to $23.1 billion between the third and fourth quarters. Deposits increased $119.1 million to $29.1 billion over the same period.
Overall, Hancock Whitney reported revenue of $372.5 million in the fourth quarter, almost $16 million below analysts' expectations. Profit totaled $143.8 million, up from $137.7 million a year ago. The bank's net interest margin increased from 3.54% to 3.68%.
High interest rates weighed on fee income in the fourth quarter, which fell 10% to $8.3 million. The decline was particularly steep in the bank's secondary mortgage business, which recorded a 54% decline from a year ago.
Last year,
Hancock Whitney expects fee income growth of 3% to 4% in 2023 thanks to strong fee results in its wealth and cards businesses.
The bank's stock price was down more than 4% on Wednesday afternoon.
