Jefferies Downgrades Hancock Whitney (HWC) to Hold, 'Deposit franchise outperformance will be tougher going forward'

Jefferies analyst Ken Usdin downgraded Hancock Whitney (NASDAQ: HWC) from Buy to Hold with a price target of $42.00 (from $45.00).

The analyst comments "Deposit franchise outperformance will be tougher going forward. HWC has been a top performer through the Fed's tightening cycle as demonstrated by cumulative interest-bearing deposit beta and DDA mix, which at 35%/45%, respectively, has outperformed the peer average of 41%/32%. Though HWC's deposit franchise has proved resilient thus far, we believe HWC's deposit's performance will convert closer to the industry average in the coming quarters. Notably, HWC's cumulative total/interest-bearing deposit betas of 19%/35% is tracking 10% better than the previous Fed tightening cycle (3Q15-2Q19) of 29%/45%, respectively. This is far better than the rest of our coverage universe, which is averaging 3%/1% better than total/interestbearing cumulative deposit betas, respectively. Further, management guidance calls for a low-30% cumulative deposit beta, which also suggests there is some catch-up to come with much of the group headed toward 50%. Finally, FHN is being more competitive on the deposit front in the wake of the deal break with TD, which we believe will put upward pressure on HWC's deposit beta performance given its footprint overlap. Though we believe HWC will underperform peers on deposit beta in coming quarters, we are confident that cumulative beta will end below the peer group average, as it did in the last tightening cycle."

For an analyst ratings summary and ratings history on Hancock Whitney click here. For more ratings news on Hancock Whitney click here.

Shares of Hancock Whitney closed at $40.17 yesterday.

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