Hancock Whitney Corporation (NASDAQ:HWC) Q3 2023 Earnings Call Transcript

At this point in time, I mean, what I’ve been pleasantly surprised with is that — when we’ve done stress tests in these different slices, the results haven’t been as alarming, I guess, as I would have thought they would have been. And that gives me comfort that there’s probably a little bit more cushion in there, at least in kind of a normal stressed environment. Obviously, if you stress them for something more significant, a severe scenario, you’re going to see a lot more in the way of theoretical defaults and losses. But we don’t really anticipate that. We do those stresses just to kind of understand the outer boundaries. But we tend to focus on the realistic stresses that might then help us think about our reserving levels and approaches.

Christopher Marinac: Okay, great. That’s helpful. And then Chris, just a follow-up on the SNC conversation and the disclosure in the slides. Are there other loans that would be kind of like club deals that are not the SNC definition, but are sort of non-organically originated by Hancock that you have above and beyond the 11%?

Chris Ziluca: Yes, definitely, there’s — not even — probably more than a handful of accounts that fall into that category. That’s kind of the normal course that you do as you are presented with an opportunity that may be a little bit larger than you’d like to do, but you want to support that relationship, you’ll bring in a partner and vice versa, those so-called club deals. And that, to us, is oftentimes with banks that we regularly trade with as it were rather than kind of the broadly syndicated transactions which oftentimes are led by much larger institutions.

Christopher Marinac: Would those loans have a higher default rate across the cycle? Or is it kind of too early to comment on those?

Chris Ziluca: I mean, I don’t view them any differently to be honest with you. And I don’t see them as having any materially different default rate.

Christopher Marinac: Okay. Great. Well, thank you for all the information this afternoon. It’s been great.

John Hairston: You bet. Thank you. Thanks for the call. Thanks for your patience.

Operator: There are no further questions at this time. I will turn the call back to John for closing remarks.

John Hairston: Thank you, Sarah, for moderating today, and thanks, everyone, for your interest. We look forward to seeing you on the road soon. Have a great night.

Operator: This concludes today’s conference call. Thank you for joining. You may now disconnect your lines. This concludes today’s conference call. Thank you.