President, Chief Executive Officer & Director, HANCOCK WHITNEY CORP
Home and insurance costs are hurting consumers more than rates, says Hancock Whitney CEO
John Hairston, president and CEO of Hancock Whitney, joins 'The Exchange' to discuss Hancock Whitney opening up its first San ...
About John Hairston
During Hancock Whitney's second quarter 2026 earnings call, John Hairston discussed the company's commercial lending growth and its impact on net interest income. He noted that promotional deposit pricing offerings, including a money market account at 3.75% for existing customers and 4% for new customers, along with a promotional CD in Orlando, were successful in the second half of the quarter. Hairston stated that net interest income is expected to continue growing in the second half of the year, though possibly at a slower pace than in the second quarter, and that deposit costs and cost of funds are anticipated to increase. Hairston also addressed a recent acquisition, describing it as a "clean transaction" that received quick regulatory approval. He said the company plans to fully realize cost savings from the deal by the end of the fourth quarter, allowing the new year to begin with those savings fully reflected.
Transcript (13 segments)
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Narrator0:00
Multigenerational cash involved in order to make these purchases affordable. Diana, thank you.
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Host0:06
Now to shares of Hancock Whitney. The bank moving lower after they beat on earnings third quarter. But low growth continues to moderate as higher rates and insurance costs change consumer behavior. Joining us now with more on the business is President and CEO of Hancock Whitney. John, great to have you here. I don't think you've been on before with us. Welcome.
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John Hairston0:29
No, first time on the show. Thank you for including me.
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Host0:32
Down in the Gulf, Mississippi area and so forth. We are hoping maybe you have a different and better read on the economy, maybe a stronger one. But it sounds like you are experiencing slowdown trends.
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John Hairston0:45
I'm actually in San Antonio today. We opened up our first San Antonio office. So many of the markets across our footprint have done quite well and good for growth. The slower parts of the market have low pressure during downtown. So it's a healthy balance.
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Host1:06
How long have you been in the business? This is a question becoming more relevant than ever. Those that have lived through a couple of cycles with higher interest rates are going to have better institutional memory than those who haven't. How do you compare banking in these times with what you have been through or not been through?
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John Hairston1:26
It's a great point. When we look at the ages of bankers and credit people in the industry, it's shocking to remember how many of the gray hairs are left. I've been in the business over 30 years and in this company for 29. So this is just another cycle.
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Host1:45
The main certain, there are many, we'll talk commercial real estate exposure. I was struck by Goldman's CEO says they pared their exposure by 50%. So being very conservative. Is that your experience, as well?
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John Hairston2:06
No. I think some of the comments you hear from other players are due to urban concentration. Understandably, there is a lot more pressure due to the lesser number of people working in those buildings. Our footprint, while we have some urban areas, we have less than one hand of projects in our books, all which are extremely low.
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Host2:30
Really interesting. Let's talk about the impact higher yields have had. I don't know if you find yourself in the same awkward position as some of your peers or how you made those decisions at the time about what to do with your deposit explosion, if you were among the many banks that had one. What is the status today?
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John Hairston2:47
That's a great question. Back when the pandemic was in its go-go days and the government was putting money in, we were a PPP lender. So we did see a huge inflow of deposits. But we are a conventional bank. The company celebrated its 124th anniversary last week. At one point in time, the free money component of our deposit book was 50%. 50% of our deposits were in checking accounts. So those are real clients. This third quarter, as we see the deposit cost mitigate a little bit, I think we're beginning to see the coming out, we're beginning to see compression ease. So the beginning signs of stabilization.
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Host3:45
So what's the impact on the consumer, on some of the commercial business from higher rates? I have a hard time imagining that people can handle 9%, 10% borrowing rates. I mean, it just seems difficult.
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John Hairston4:03
We're seeing a dramatic downturn in the amount of big ticket purchases. We don't see as many people doing large purchases like they did back in the day where average account balances were so high. A lot of that access has flown out of the market, and in reality, we see the summer of '24 is when average size balances move towards prepandemic normals. So we're probably in the late third quarter of the game in terms of getting people back to a normal spending habit. I will say this, Kelly, and you mentioned this prior on a show, the bigger pressure on consumers is housing costs. Costs have gone up tremendously, and there's a lack of affordable housing in the country that makes it difficult for people to house their families.