Stockholders' Equity

12 Months Ended

Dec. 31, 2023

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Note 12. Stockholders’ Equity

Common Shares Outstanding

Common shares outstanding excludes treasury shares of 6.3 million and 6.3 million with a first-in-first-out cost basis of $236.7 million and $238.6 million at December 31, 2023 and 2022, respectively. Shares outstanding also excludes unvested restricted share awards of $0.3 million and $0.7 million at December 31, 2023 and 2022, respectively.

Stock Buyback Programs

On January 26, 2023, the Company’s board of directors approved a stock buyback program whereby the Company is authorized to repurchase up to approximately 4.3 million shares of its common stock through the program’s expiration date of December 31, 2024. The program allows the Company to repurchase its common shares in the open market, by block purchase, through accelerated share repurchase programs, in privately negotiated transactions, or otherwise, in one or more transactions. The Company is not obligated to purchase any shares under this program, and the board of directors has the ability to terminate or amend the program at any time prior to the expiration date. To date, the Company has not repurchased shares under this program.

Prior to its expiration on December 31, 2022, the Company had in place a stock repurchase program authorized by the board of directors on April 22, 2021, whereby the Company was authorized to repurchase up to approximately 4.3 million shares of its common stock. The program allowed the Company to repurchase its common shares in the open market, by block purchase, through accelerated share repurchase programs, in privately negotiated transactions, or otherwise, in one or more transactions. During the year ended December

31, 2022, the Company repurchased 1,204,368 shares of its common stock at an average cost of $48.90 per share, inclusive of commissions. In total, the Company repurchased 1,654,244 million shares at an average cost of $48.77 per share under this plan.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income or Loss (“AOCI”) is reported as a component of stockholders’ equity. AOCI can include, among other items, unrealized holding gains and losses on securities available for sale (“AFS”), including the Company’s share of unrealized gains and losses reported by a partnership accounted for under the equity method, gains and losses associated with pension or other post-retirement benefits that are not recognized immediately as a component of net periodic benefit cost, and gains and losses on derivative instruments that are designated as, and qualify as, cash flow hedges. Net unrealized gains and losses on AFS securities reclassified as securities held to maturity (“HTM”) also continue to be reported as a component of AOCI and will be amortized over the estimated remaining life of the securities as an adjustment to interest income. Subject to certain thresholds, unrealized losses on employee benefit plans will be reclassified into income as pension and post-retirement costs are recognized over the remaining service period of plan participants. Accumulated gains or losses on cash flow hedges of variable rate loans described in Note 11 will be reclassified into income over the life of the hedge. Accumulated other comprehensive loss resulting from the terminated interest rate swaps will be amortized over the remaining maturities of the designated instruments. Gains and losses within AOCI are net of deferred income taxes, where applicable.

A rollforward of the components of Accumulated Other Comprehensive Income (Loss) is presented in the table that follows:

($ in thousands)	Available for Sale Securities			HTM Securities Transferred from AFS			Employee Benefit Plans			Cash Flow Hedges			Equity Method Investment			Total
Balance, December 31, 2020	$	171,224		$	276		$	(125,573	)	$	39,511		$	(5,369	)	$	80,069
Net change in unrealized gain (loss)		(208,760	)		—			—			(3,258	)		438			(211,580	)
Reclassification of net (gain) loss realized and included in earnings		2,166			—			4,555			(26,674	)		4,468			(15,485	)
Valuation adjustments to pension plan attributable to VERIP and curtailment		—			—			59,606			—			—			59,606
Other valuation adjustments for employee benefit plans		—			—			(6,735	)		—			—			(6,735	)
Amortization of unrealized net gain on securities transferred to held to maturity		—			(158	)		—			—			—			(158	)
Income tax (expense) benefit		46,407			35			(12,799	)		6,705			—			40,348
Balance, December 31, 2021	$	11,037		$	153		$	(80,946	)	$	16,284		$	(463	)	$	(53,935	)
Net change in unrealized gain (loss)		(785,538	)		—			—			(113,171	)		468			(898,241	)
Reclassification of net (gain) loss realized and included in earnings		1,707			—			2,274			(9,928	)		—			(5,947	)
Valuation adjustments to employee benefit plans		—			—			(24,139	)		—			—			(24,139	)
Transfer of net unrealized loss from AFS to HTM securities portfolio		15,405			(15,405	)		—			—			—			—
Amortization of unrealized net loss on securities transferred to held to maturity		—			1,355			—			—			—			1,355
Income tax benefit		172,981			3,163			4,859			27,722			—			208,725
Balance, December 31, 2022	$	(584,408	)	$	(10,734	)	$	(97,952	)	$	(79,093	)	$	5		$	(772,182	)
Net change in unrealized gain (loss)		104,543			—			—			(13,850	)		368			91,061
Reclassification of net loss realized and included in earnings		68,105			—			6,800			40,714			—			115,619
Valuation adjustments to employee benefit plans		—			—			(13,325	)		—			—			(13,325	)
Amortization of unrealized net loss on securities transferred to held to maturity		—			1,747			—			—			—			1,747
Income tax (expense) benefit		(38,988	)		(398	)		1,416			(6,077	)		—			(44,047	)
Balance, December 31, 2023	$	(450,748	)	$	(9,385	)	$	(103,061	)	$	(58,306	)	$	373		$	(621,127	)

The following table shows the line items in the consolidated statements of income affected by amounts reclassified from AOCI:

Amount reclassified from AOCI (a)	Year Ended December 31,						Increase (decrease) in affected line
($ in thousands)	2023			2022			item in the income statement
Amortization of unrealized net loss on securities transferred to HTM	$	1,747		$	1,355		Interest income
Tax effect		(398	)		(305	)	Income taxes
Net of tax		1,349			1,050		Net income
Loss on sale of AFS securities		(68,105	)		(1,707	)	Securities transactions, net
Tax effect		15,380			385		Income taxes
Net of tax		(52,725	)		(1,322	)	Net income
Amortization of defined benefit pension and post-retirement items		(6,800	)		(2,274	)	Other noninterest expense
Tax effect		1,476			505		Income taxes
Net of tax		(5,324	)		(1,769	)	Net income
Reclassification of unrealized loss on cash flow hedges		(47,285	)		(1,748	)	Interest income
Tax effect		10,697			394		Income taxes
Net of tax		(36,588	)		(1,354	)	Net income
Amortization of gain on terminated cash flow hedges		6,571			11,676		Interest income
Tax effect		(1,486	)		(2,629	)	Income taxes
Net of tax		5,085			9,047		Net income
Total reclassifications, net of tax	$	(88,203	)	$	5,652		Net income

(a)Amounts in parentheses indicate reduction in net income.

Regulatory Capital

Measures of regulatory capital are an important tool used by regulators to monitor the financial health of financial institutions. The primary quantitative measures used to gauge capital adequacy are Common Equity Tier 1, Tier 1 and Total regulatory capital to risk-weighted assets (risk-based capital ratios) and the Tier 1 capital to average total assets (leverage ratio). Both the Company and the Bank subsidiary are required to maintain minimum risk-based capital ratios of 8.0% total capital, 4.5% Common Equity Tier 1, and 6.0% Tier 1 capital. The minimum leverage ratio is 3.0% for bank holding companies and banks that meet certain specified criteria, including having the highest supervisory rating. All others are required to maintain a leverage ratio of at least 4.0%.

To evaluate capital adequacy, regulators compare an institution’s regulatory capital ratios with their agency guidelines, as well as with the guidelines established as part of the uniform regulatory framework for prompt corrective supervisory action toward financial institutions. The framework for prompt corrective action categorizes capital levels into one of five classifications rating from well-capitalized to critically under-capitalized. For an institution to be eligible to be classified as well capitalized its Total risk-based capital ratios must be at least 10.0% for total capital, 6.5% for Common Equity Tier 1 and 8.0% for Tier 1 capital, and its leverage ratio must be at least 5.0%. In reaching an overall conclusion on capital adequacy or assigning a classification under the uniform framework, regulators also consider other subjective and quantitative measures of risk associated with an institution. The Company and the Bank were deemed to be well capitalized based upon the most recent notifications from their regulators. There are no conditions or events since those notifications that management believes would change the classifications. At December 31, 2023 and 2022, the Company and the Bank were in compliance with all of their respective minimum regulatory capital requirements.

Following is a summary of the actual regulatory capital amounts and ratios for the Company and the Bank together with corresponding regulatory capital requirements at December 31, 2023 and 2022.

	Actual				Required for Minimum Capital Adequacy				Required To Be Well Capitalized
($ in thousands)	Amount		Ratio %		Amount		Ratio %		Amount		Ratio %
At December 31, 2023
Tier 1 leverage capital
Hancock Whitney Corporation	$	3,584,474		10.10	$	1,419,209		4.00	$	1,774,011		5.00
Hancock Whitney Bank		3,493,531		9.86		1,417,854		4.00		1,772,318		5.00
Common equity tier 1 (to risk weighted assets)
Hancock Whitney Corporation	$	3,584,474		12.33	$	1,308,034		4.50	$	1,889,383		6.50
Hancock Whitney Bank		3,493,531		12.03		1,306,464		4.50		1,887,115		6.50
Tier 1 capital (to risk weighted assets)
Hancock Whitney Corporation	$	3,584,474		12.33	$	1,744,046		6.00	$	2,325,394		8.00
Hancock Whitney Bank		3,493,531		12.03		1,741,952		6.00		2,322,603		8.00
Total capital (to risk weighted assets)
Hancock Whitney Corporation	$	4,049,245		13.93	$	2,325,394		8.00	$	2,906,743		10.00
Hancock Whitney Bank		3,785,802		13.04		2,322,603		8.00		2,903,254		10.00
At December 31, 2022
Tier 1 leverage capital
Hancock Whitney Corporation	$	3,279,419		9.53	$	1,376,092		4.00	$	1,720,115		5.00
Hancock Whitney Bank		3,279,536		9.54		1,374,761		4.00		1,718,451		5.00
Common equity tier 1 (to risk weighted assets)
Hancock Whitney Corporation	$	3,279,419		11.41	$	1,293,035		4.50	$	1,867,717		6.50
Hancock Whitney Bank		3,279,536		11.43		1,291,467		4.50		1,865,453		6.50
Tier 1 capital (to risk weighted assets)
Hancock Whitney Corporation	$	3,279,419		11.41	$	1,724,046		6.00	$	2,298,728		8.00
Hancock Whitney Bank		3,279,536		11.43		1,721,956		6.00		2,295,942		8.00
Total capital (to risk weighted assets)
Hancock Whitney Corporation	$	3,726,834		12.97	$	2,298,728		8.00	$	2,873,411		10.00
Hancock Whitney Bank		3,554,451		12.39		2,295,942		8.00		2,869,927		10.00

The Company elected the five-year rule that provides a full delay of the estimated impact of CECL on regulatory capital transition (0%) for 2020 and 2021, followed by a three-year transition (25% of the impact included in 2022, 50% in 2023, 75% in 2024 and 100% thereafter). The two-year delay included the full impact of day one CECL plus the estimated impact of current CECL activity calculated quarterly as 25% of the current ACL over the day one balance (“modified transition amount”). The modified transition amounts were recalculated each quarter in 2020 and 2021, with the December 31, 2021 impact of $24.9 million, plus the day one impact of $44.1 million (net of tax) carrying through the remaining three years of the transition.

Regulatory Restrictions on Dividends

Regulatory policy statements provide that generally, bank holding companies should pay dividends only out of current operating earnings and that the level of dividends must be consistent with current and expected capital requirements. Dividends received from the Bank have been the primary source of funds available to the Company for the payment of dividends to its stockholders. Federal and State banking laws and regulations restrict the amount of dividends the Bank may distribute to the Company without prior regulatory approval, as well as the amount of loans it may make to the Company. Dividends paid by the Bank are subject to approval by the Commissioner of Banking and Consumer Finance of the State of Mississippi. Further, a capital conservation buffer of 2.5% above each of the minimum capital ratio requirements (Common Equity Tier 1, Tier 1, and Total risk-based capital) must be met for a bank or bank holding company to be able to pay dividends without restrictions.