August 14, 1995
Securities and Exchange Commission
450 Fifth St., N.W.
Judiciary Plaza
Washington, D.C. 20549-1004
Via Edgar Electronic Filing System
In Re: File Number 0-1026
------------------
Gentlemen:
Pursuant to regulations of the Securities and Exchange
Commission, submitted herewith for filing on behalf of Whitney Holding
Corporation (the "Company") is the Company's Report on Form 10-Q for the period
ended June 30, 1995.
This filing is being effected by direct transmission to the
Commission's EDGAR System.
Sincerely,
/s/ Edward B. Grimball
-----------------------------
Edward B. Grimball
Executive Vice President &
Chief Financial Officer
(504) 586-7570
EBG/drm
<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-1026
WHITNEY HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
Louisiana 72-6017893
------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
228 St. Charles Avenue, New Orleans, Louisiana 70130
-----------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(504) 586-7272
-----------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
The Company has only one class of common stock, of which 14,786,915 shares were
outstanding on July 31, 1995.
An exhibit index appears on page 19.
Page 1 of 30 Pages
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
Page
<S> <C>
Part I. Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets................................3
Consolidated Statements of Operations......................4
Consolidated Statements of Cash Flows......................5
Notes to Financial Statements..............................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................8
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders.............19
Item 6. Exhibits and Reports on Form 8-K................................19
Signature...................................................................21
</TABLE>
Page 2 of 30 Pages
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, unaudited)
June 30, December 31,
ASSETS 1995 1994
(unaudited)
------------- -------------
<S> <C> <C>
Cash and due from financial institutions......................................................... $ 162,284 $ 196,850
Investment in securities:
Securities available for sale (at fair value)............................................... 138,120 137,335
Securities held to maturity (fair value of $1,260,669 in 1995 and $1,350,581 in 1994)....... 1,258,119 1,395,643
Federal funds sold............................................................................... 64,650 17,600
Loans............................................................................................ 1,201,595 1,060,167
Less reserve for possible loan losses............................................................ 39,296 34,425
------------- -------------
Loans, net.................................................................................... 1,162,299 1,025,742
Bank premises and equipment, net................................................................. 67,311 63,209
Other real estate owned, net..................................................................... 6,031 6,685
Accrued income receivable........................................................................ 28,032 31,580
Other assets..................................................................................... 52,438 38,013
------------- -------------
TOTAL ASSETS........................................................................... $ 2,939,284 $ 2,912,657
============= =============
LIABILITIES
Deposits:
Non-interest-bearing demand deposits........................................................ $ 801,701 $ 768,811
Interest-bearing deposits................................................................... 1,630,276 1,642,252
------------- -------------
Total deposits.......................................................................... 2,431,977 2,411,063
Federal funds purchased and securities sold under repurchase agreements.......................... 168,354 179,806
Dividends payable................................................................................ 2,953 2,488
Other liabilities................................................................................ 19,318 21,621
------------- -------------
TOTAL LIABILITIES...................................................................... $ 2,622,602 $ 2,614,978
------------- -------------
SHAREHOLDERS' EQUITY
Common stock, no par value: 40,000,000 shares authorized, 15,373,739 shares
issued and 14,768,185 shares outstanding in 1995, 15,242,505 shares issued
and 14,634,701 shares outstanding in 1994.................................................... $ 2,800 $ 2,800
Capital surplus.................................................................................. 54,718 51,608
Retained earnings................................................................................ 266,293 256,041
Net unrealized gain (loss) on securities available for sale, net of tax effect of $(128) in......
1995 and $2,755 in 1994...................................................................... 237 (5,118)
------------- -------------
Total.................................................................................. 324,048 305,331
Treasury stock at cost, 605,554 shares in 1995 and 607,804
shares in 1994, and unearned restricted stock compensation.................................... 7,366 7,652
------------- -------------
TOTAL SHAREHOLDERS' EQUITY............................................................. $ 316,682 $ 297,679
------------- -------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY............................................................. $ 2,939,284 $ 2,912,657
============= =============
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 3 of 30 Pages
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per-share amounts, unaudited) FOR THE 3 MONTHS FOR THE 6 MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1995 1994 1995 1994
-------------------------- ---------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans...............................................$ 26,482 $ 20,164 $ 50,196 $ 38,244
Interest and dividends on investments-
U.S. Treasury and agency securities................................ 16,067 18,264 32,741 35,954
Mortgage-backed securities......................................... 2,262 2,610 4,582 5,335
Obligations of states and political subdivisions................... 1,614 1,613 3,266 3,178
Federal Reserve and corporate securities........................... 284 590 716 1,190
Interest on federal funds sold........................................... 527 601 971 1,484
-------------------------- ---------------------------
TOTAL........................................................$ 47,236 $ 43,842 $ 92,472 $ 85,385
-------------------------- ---------------------------
INTEREST EXPENSE
Interest on deposits.....................................................$ 13,562 $ 11,219 $ 25,823 $ 21,647
Interest on federal funds purchased and securities
sold under repurchase agreement.................................... 2,565 1,734 4,857 3,527
-------------------------- ---------------------------
TOTAL........................................................$ 16,127 $ 12,953 $ 30,680 $ 25,174
-------------------------- ---------------------------
Net interest income......................................................$ 31,109 $ 30,889 $ 61,792 $ 60,211
Provision for possible loan losses:
Expense of providing loss reserves................................... - - - -
Loss reserve reduction............................................... - - - (10,000)
-------------------------- ---------------------------
Net interest income after provision for possible loan losses.............$ 31,109 $ 30,889 $ 61,792 $ 70,211
-------------------------- ---------------------------
NON-INTEREST INCOME
Gain on sale of securities...............................................$ - $ 44 $ - $ 44
Other non-interest income................................................ 7,983 8,275 16,118 17,323
-------------------------- ---------------------------
TOTAL........................................................$ 7,983 $ 8,319 $ 16,118 $ 17,367
-------------------------- ---------------------------
NON-INTEREST EXPENSE
Salaries and employee benefits...........................................$ 13,663 $ 13,355 $ 27,665 $ 26,385
Occupancy of bank premises, net.......................................... 1,844 1,667 3,600 3,333
Other non-interest expenses.............................................. 12,097 10,388 23,434 20,583
-------------------------- ---------------------------
TOTAL........................................................$ 27,604 $ 25,410 $ 54,699 $ 50,301
-------------------------- ---------------------------
Income before income taxes...............................................$ 11,488 $ 13,798 $ 23,211 $ 37,277
Income tax expense....................................................... 3,358 4,324 7,052 12,086
-------------------------- ---------------------------
Net income...............................................................$ 8,130 $ 9,474 $ 16,159 $ 25,191
========================== ===========================
Earnings per share $ 0.55 $ 0.65 $ 1.10 $ 1.74
========================== ===========================
Weighted average number of
shares outstanding.................................................... 14,762,579 14,555,041 14,734,538 14,503,929
========================== ===========================
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 4 of 30 Pages
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
For 6 Months Ended
June 30,
1995 1994
---------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income...................................................................$ 16,159 $ 25,191
Adjustments to reconcile net income to cash provided by (used in)
operating activities:
Depreciation.............................................................. 3,644 3,142
Provision for (Reduction of) reserves for possible loan losses............ - (10,000)
Provision for losses on OREO and other problem assets..................... 55 (1,161)
Amortization of intangible assets and unearned restricted stock
compensation........................................................... 1,741 2,118
Amortization of premiums and discounts on investment securities, net...... 6,972 7,159
Net gains on sales of OREO and other property............................. (787) (2,898)
Gains on sales of securities.............................................. - (44)
Deferred tax expense (benefit)............................................ (476) 3,392
Increase (Decrease) in accrued income taxes............................... (1,203) (1,729)
(Increase) Decrease in accrued income receivable and other assets......... 227 (1,708)
Increase (Decrease) in accrued expenses and other liabilities............. (2,336) 232
---------------------------------
Net cash provided by (used in) operating activities.......................$ 23,996 $ 23,694
---------------------------------
Cash flows from investing activities:
Proceeds from maturities of investment securities held to maturity...........$ 156,968 $ 650,476
Proceeds from maturities of investment securities available for sale......... 7,460 30,240
Proceeds from sales of investment securities held to maturity................ - 10,064
Purchases of investment securities held to maturity.......................... (12,571) (683,502)
Purchases of investment securities available for sale........................ - (10,100)
Net (increase) decrease in loans............................................. (93,281) 51,894
Net (increase) decrease in federal funds sold................................ (27,297) 106,950
Proceeds from sales of OREO and other property............................... 1,835 10,574
Capital expenditures......................................................... (4,937) (2,322)
Net cash (paid) received in business acquisition............................. (3,695) 35,659
Other........................................................................ (683) (1,409)
---------------------------------
Net cash provided by (used in) investing activities..........................$ 23,799 $ 198,524
---------------------------------
Cash flows from financing activities:
Net increase (decrease) in non-interest-bearing demand deposits..............$ 19,032 $ (54,158)
Net increase (decrease) in interest-bearing deposits other than
certificates of deposit................................................... (125,963) (132,378)
Net increase (decrease) in certificates of deposit........................... 38,336 (11,458)
Net increase (decrease) in federal funds purchased and securities sold
under repurchase agreements............................................... (11,452) (38,443)
Exercise of stock options.................................................... 32 213
Sale of common stock under employee savings plan and dividend
reinvestment plan......................................................... 3,087 171
Dividends paid............................................................... (5,433) (4,094)
---------------------------------
Net cash provided by (used in) financing activities..........................$ (82,361)$ (240,147)
---------------------------------
Net increase (decrease) in cash and cash equivalents............................$ (34,566)$ (17,929)
Cash and cash equivalents at the beginning of the period........................ 196,850 187,447
---------------------------------
Cash and cash equivalents at the end of the period..............................$ 162,284 $ 169,518
=================================
Interest income received........................................................$ 96,020 $ 85,872
=================================
Interest expense paid...........................................................$ 29,919 $ 24,401
=================================
Net federal income taxes paid...................................................$ 8,720 $ 10,423
=================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 5 of 30 Pages
<PAGE>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Whitney Holding Corporation and its subsidiaries (the "Company") follow
accounting and reporting policies generally accepted within the banking
industry. The consolidated financial statements of the Company include the
accounts of Whitney Holding Corporation and its wholly-owned subsidiaries,
Whitney National Bank ("WNB") and Whitney Bank of Alabama ("WBA"). All
adjustments have been made which, in the opinion of management, are necessary to
fairly state the financial results for the interim periods presented.
Pursuant to rules and regulations of the Securities and Exchange Commission,
certain financial information and disclosures have been condensed or omitted in
preparing the consolidated financial statements presented in this quarterly
report on Form 10-Q. The Company recommends that these financial statements be
read in conjunction with the Company's annual report on Form 10-K for the year
ended December 31, 1994.
Certain balances in prior periods have been reclassified to conform with
this period's financial presentation.
(2) RESERVE FOR POSSIBLE LOAN LOSSES
Effective January 1, 1995, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment
of a Loan," as amended by SFAS No. 118. Under this new standard, a loan is
considered impaired when it is probable that all contractual amounts will not be
collected as they become due. The extent of impairment is measured based on a
comparison of the recorded investment in the loan with either the expected cash
flows discounted using the loan's original effective interest rate or, in the
case of certain collateral-dependent loans, the fair value of the underlying
collateral. The measure of impairment is included in the reserve for possible
loan losses.
The provisions of SFAS No. 114 were not applied by the Company to measure
impairment for large groups of similar loans with relatively small balances,
such as consumer credit line loans and consumer installment loans. As allowed
under the standard, these loans may be collectively evaluated for impairment.
The guidance in SFAS No. 114 does not represent a significant departure from
existing procedures followed by the Company in evaluating the overall adequacy
of the reserve for possible loan losses. Furthermore, loans evaluated for
impairment would also meet the criteria currently in use by the Company to
identify loans on which the accrual of interest should be discontinued. As such,
the adoption of this new standard had no significant impact on the Company's
financial position or results of operations.
For the second quarter of 1995, the recorded investment in loans identified
as impaired under SFAS No. 114 averaged approximately $9 million. The extent of
impairment of these loans measured in accordance with SFAS No. 114 was
approximately $0.5 million at June 30, 1995. This amount is included in the
reserve for possible loan losses.
Page 6 of 30 Pages
<PAGE>
(3) BUSINESS ACQUISITION
On February 17, 1995, Whitney Bank of Alabama, a newly formed
state-chartered banking subsidiary of the Company, purchased the assets and
assumed the deposit liabilities of the five Mobile branch offices of The Peoples
Bank, Elba, Alabama. The assets acquired and deposits assumed totalled
approximately $90 million, including $47 million in loans. The purchase price
was approximately $12 million. Operating results from the date of acquisition
are included in the accompanying consolidated statements of operations for 1995.
(4) EARNINGS PER SHARE
Earnings per share is calculated using the weighted average number of shares
outstanding during each period presented. Potentially dilutive common stock
equivalents consist of stock options which have been granted to certain officers
and directors in prior periods. Incorporating these common stock equivalents
into the calculation of earnings per share using the treasury method does not
materially affect the reported results on either a primary or fully-diluted
basis.
Page 7 of 30 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY
Whitney Holding Corporation earned $8.1 million for the second quarter of
1995, or $0.55 per share. For the second quarter of 1994, the Company earned
$9.5 million or $0.65 per share. Year-to-date through June 30, 1995, the Company
earned $16.2 million or $1.10 per share as compared to $18.7 million or $1.29
per share for the comparable period in 1994, excluding the after-tax effect of a
$10 million reduction in the reserve for possible loan losses. The decrease in
1995 earnings for both the quarterly and year-to-date periods are a direct
result of a reduction between 1994 and 1995 in the positive impact on the
Company's operating results of successful problem asset resolutions during each
period.
The following compares the annualized return on average total assets and the
return on average shareholders' equity for the three-month and six-month periods
ended June 30, 1995 and 1994. Tax-effected loan loss reserve adjustments were
not annualized in calculating these returns.
<TABLE>
<CAPTION>
1995 1994
----- -----
<S> <C> <C>
Return on average assets:
Second quarter -
Total return 1.11% 1.26%
Year to date -
Total return 1.12% 1.47%
Return, before effect of reserve reduction 1.12% 1.26%
Return on average shareholders' equity:
Second quarter -
Total return 10.43% 13.85%
Year to date -
Total return 10.59% 16.43%
Return, before effect of reserve reduction 10.59% 14.02%
</TABLE>
Non-performing assets continued their steady decrease of the past several
years throughout the first six months of 1995. At June 30, 1995, non-performing
assets were $19.5 million, down $2.6 million or approximately 12% from year end
1994, and down $9.9 million or 34% from June 30, 1994. The reserve for possible
loan losses was $39.3 million on June 30, 1995, an amount which represented 292%
of non-performing loans and 3.3% of total loans. At year end 1994, the reserve
coverage was 224% of non-performing loans and 3.3% of total loans.
Average earning assets for the quarter ended June 30, 1995 totalled $2.63
billion, an increase of $26.2 million or 1.0% from 1995's first quarter and a
decrease of $80.1 million or 2.9% from the second quarter of 1994. The decrease
between 1994 and 1995 reflects both the funding of a net deposit outflow that
took place between these periods as rising market interest rates during 1994
attracted some deposit funds to higher yielding alternative investment
instruments as well as the reduced availability of correspondent bank funding
sources because of both industry consolidation and a general tightening in
industry liquidity as economic conditions improved.
Page 8 of 30 Pages
<PAGE>
Average loans outstanding were $1.15 billion for the second quarter of 1995,
an increase of $89.7 million or 8.4% over the first quarter of 1995 and $179
million or 18.3% over the second quarter of 1994. This loan growth is
attributable both to strengthening loan demand in the Company's market areas as
well as to the acquisition in Mobile, which added approximately $47 million to
the Company's loan portfolios. At June 30, 1995, total loans outstanding were
$1.20 billion, an increase of $141 million or 13.3% over the $1.06 billion of
total loans outstanding at the end of 1994.
Average total deposits in the second quarter of 1995 were $2.41 billion.
This represents an increase of $24.4 million over 1995's first quarter and a
decrease of $93.1 million from the second quarter of 1994. Excluding the
deposits acquired in the Mobile transaction, second quarter 1995 average
deposits declined slightly from the first quarter of the year, mainly as a
result of seasonal fluctuations. The decrease in average deposits from 1994
reflects the rising market interest rates during 1994 which attracted some
deposit funds to higher yielding alternative investment instruments.
The growth in average loans outstanding in 1995 not related to acquisitions
and the net deposit outflows were funded primarily from maturities of investment
securities. The Company's average investment in securities totalled $1.45
billion for the second quarter of 1995, a decrease of $64.6 million or 4.3% from
the first quarter of 1995 and $228 million from the second quarter of 1994. At
June 30, 1995, the total investment in securities was $1.40 billion, a decrease
of $137 million or 8.9% from year end 1994.
On February 17, 1995, Whitney Bank of Alabama, a newly formed
state-chartered banking subsidiary of the Company, purchased the assets and
assumed the deposit liabilities of the five Mobile branch offices of The Peoples
Bank, Elba, Alabama. The fair value of the tangible assets acquired totalled
approximately $90 million, including $47 million in loans and $34 million in
investment securities and federal funds sold. WBA assumed non-interest-bearing
demand deposits of $14 million and interest-bearing transaction, savings and
time deposits totalling $76 million. The purchase price was approximately $12
million. Operating results from the date of acquisition are included in the
accompanying consolidated statements of operations for 1995.
On March 31, 1994, the Company and WNB purchased substantially all of the
assets and assumed the deposits and certain other liabilities of Baton Rouge
Bank and Trust Company. Included in the tangible assets acquired, whose fair
value totalled approximately $118 million, were cash and cash items of $41
million, investment securities and federal funds sold of $13 million, and $59
million in loans, as well as six banking offices in the Baton Rouge area. The
deposits assumed included approximately $24 million in non-interest-bearing
demand deposits and $94 million in interest-bearing transaction, savings and
time deposit accounts. As part of the acquisition price, which totalled
approximately $9 million, Whitney Holding Corporation issued 90,909 shares of
its common stock with a value of $2 million. The operating results from this
acquisition were reflected in the Company's consolidated statements of
operations beginning with the second quarter of 1994.
The Company declared cash dividends of $0.20 per share for each of the first
two quarters of 1995. This represents an increase of 18% over the $0.17 per
share dividend declared for the fourth quarter of 1994 and a 33% increase over
the $0.15 per share dividend in each of 1994's first two quarters.
Page 9 of 30 Pages
<PAGE>
FINANCIAL CONDITION
Loans
With continued improvement of economic conditions in the Company's market
area, which is primarily southern Louisiana and Mississippi and, most recently,
southern Alabama, together with a more aggressive effort to market the Banks'
retail and commercial loan products, the Company experienced growth in average
loans outstanding of $161 million or 17.0% for the first six months of 1995 when
compared to the same period of 1994 and $179 million or 18.3% for the second
quarter of 1995 when compared to 1994's second quarter. The Baton Rouge
acquisition in March, 1994 and the Mobile acquisition in February, 1995 also
contributed to the growth in average loans.
Total loans outstanding of $1.20 billion at June 30, 1995 were $141 million
above the total outstanding at year end 1994 and $207 million above the total of
a year earlier. During 1994, the Company expanded its lending resources, market
areas and loan products, and management expects to continue these efforts in
1995 as the Banks compete to place high quality credits in the communities they
serve.
Deposits and Short-Term Borrowings
The Company's average total deposits outstanding decreased $93.1 million to
$2.41 billion in the second quarter of 1995 as compared to $2.50 billion in the
second quarter of 1994, despite the impact of the Mobile acquisition. For the
first six months of 1995 average total deposits decreased $76.6 million from the
same period in 1994. As is shown in Table 1, total average lower cost deposits,
particularly regular savings deposits and NOW and MMDA deposits, decreased $145
million for the quarter and $125 million year to date in 1995. These decreases
reflect a typical customer response to the higher-rate investment alternatives
that became available during the past year. Average time deposits, which
includes both core deposits and certificates of deposit of $100,000 and over,
increased $51.9 million for the second quarter of 1995 and $48.5 million year to
date when compared to the same periods in 1994. Core certificates of deposit of
under $100,000 exhibited the most significant growth within the time deposit
category. The growth in time deposits is consistent with the expected impact of
the Mobile transaction.
The Company's short-term borrowings consist of purchases of federal funds
and sales of securities under repurchase agreements. Such borrowings are both a
source of funding for certain short-term lending facilities and part of the
Company's services to correspondent banks and other customers. For the quarter
and six months ended June 30, 1995, average short-term borrowings decreased
$24.2 million and $49.8 million, respectively, when compared to the same periods
in 1994. These decreases can be attributed in part to improved economic
conditions and a corresponding increase in demand for funds that would otherwise
be available for sale to the Company and in part to the loss of certain
correspondent relationships to consolidation within the banking industry.
Investment in Securities
The Company's total investment in securities was $1.40 billion at June 30,
1995, a decrease of approximately $137 million or 8.9% from the December 31,
1994 total of $1.53 billion. The average total investment securities portfolio
outstanding declined $228 million for the second quarter of 1995 and $189
million for the first six months of the year when compared to the same periods
in 1994. Funds from maturing investments, particularly U. S. Treasury and
government agency securities and mortgage-backed securities, have been used to
satisfy increased loan demand and deposit outflows.
Page 10 of 30 Pages
<PAGE>
The mix of period-end and average investments has remained relatively
stable, with U.S. Treasury and government agency securities, excluding mortgage-
backed issues, representing approximately 81% of the totals. The weighted-
average maturity of the overall portfolio of securities was 24.5 months at June
30, 1995 as compared with 30 months at June 30, 1994. As is shown in Table 1,
the weighted-average taxable-equivalent portfolio yield was 5.83% for both the
second quarter and first six months of 1995, a modest increase of from 11 to 12
basis points over the yields in the comparable periods of 1994.
Asset Quality
Overall asset quality has exhibited a trend of steady improvement over the
past four years. As is shown in Table 2, this trend continued during the first
six months of 1995. Non-performing assets totalled $19.5 million at June 30,
1995, which was $2.6 million or approximately 12% below the $22.1 million total
at year end 1994 and $9.9 million or 34% lower than the total from a year
earlier. For the first six months of 1995, the Company recovered $5.4 million of
previously charged-off loans. For the same period, the Company identified only
$2.3 million of loans to be charged off, resulting in a net recovery of $3.1
million year to date through June 30, 1995. The Company was in a net recovery
position of approximately $6.9 million for the first six months of 1994, with
recoveries of $8.7 million offset by identified charge-offs of only $1.8
million.
The reserve for possible loan losses is maintained at a level believed by
management to be adequate to absorb potential losses in the portfolio. With the
significant recoveries in the first quarter of 1994 and the continued
improvement in overall asset quality, the Company was able to return $10 million
of the reserve for possible loan losses to income in that quarter. No provision
or reserve reduction was required for the second quarter of 1994 or for the
first six months of 1995. The reserve for possible loan losses represented 292%
of non-performing loans at June 30, 1995. At year end 1994 this reserve coverage
was 224%.
Whitney National Bank has several property interests which were acquired
through routine banking transactions generally prior to 1933 and which are
recorded in its financial records at a nominal value. Management continually
investigates ways to maximize the return on these assets. The operating income
from these property interests, which include mineral rights and real estate, was
approximately $83,000 for the first six months of 1995 and $94,000 for the same
period in 1994. No significant dispositions of these property interests were
made during the year ended December 31, 1994 or the first six months of 1995.
Future dispositions may result in the recognition of substantial gains.
Capital Adequacy
The Company's risk-based regulatory capital ratios declined slightly between
December 31, 1994 and June 30, 1995. This decline is attributable mainly to the
acquisition of intangible assets as part of the purchase of the Mobile banking
operations in February, 1995. Intangible assets generally must be deducted from
both regulatory capital and risk-weighted assets before calculating regulatory
capital ratios. Also contributing to this decrease was the shift in the asset
mix to loans which are generally assigned a risk-weighting higher than for
investment securities in the capital ratio calculation.
Page 11 of 30 Pages
<PAGE>
The Company's regulatory capital ratios are shown here compared to the
minimums currently required for regulatory classification as a "well
capitalized" institution. The regulatory capital ratios for the Banks were also
well in excess of minimum requirements at June 30, 1995.
<TABLE>
<CAPTION>
Required for
June 30, December 31, well-capitalized
1995 1994 institution
------------ ------------- ---------------
<S> <C> <C> <C>
Tier 1 risk-based
capital ratio 18.62% 20.70% 6.00%
Total risk-based
capital ratio 19.89% 21.97% 10.00%
Tier 1 leverage
capital ratio 9.93% 9.84% 5.00%
</TABLE>
Page 12 of 30 Pages
<PAGE>
RESULTS OF OPERATIONS
Net Interest Income
Taxable-equivalent net interest income for the second quarter of 1995 was
virtually unchanged from the same period of 1994, increasing $125,000 or 0.4%.
For the first six months of 1995, taxable-equivalent net interest income
increased $1.6 million or 2.6% over the comparable 1994 period. The current year
taxable-equivalent net interest margin has increased over the prior year both in
the second quarter, to 4.87% from 4.71%, and for the year-to-date period, to
4.88% from 4.61%. A combination of factors contributed to these increases, the
components of which are detailed in Table 1.
Taxable-equivalent loan interest income increased $6.2 million or 31% for
the second quarter and $11.9 million or 31% for the first six months of 1995
when compared to 1994. Approximately 60% of the year-to-date increase was driven
by the $161 million growth in average loans outstanding, with the remaining
portion driven by the rise in the effective yield on the Company's loan
portfolio. Market interest rates generally rose throughout 1994, and bank prime
rates increased approximately 2.0 percentage points from the first six months of
1994 to the same period in 1995. The effective yield on the Company's average
loan portfolio, approximately 40% of which reprices with changes in prime,
increased approximately 1.0 percentage point over this same period. Included in
loan interest income and in the effective yield calculation is interest
recognized as cash payments are received on certain nonaccrual loans or as
workout efforts on nonaccrual loans yield results in excess of previous
expectations. Interest recognized on nonaccrual loans for the first six months
of 1995 decreased $1.6 million from 1994.
Taxable-equivalent interest income on investment securities in 1995's second
quarter decreased $2.9 million or 11.9% from the second quarter of 1994. For the
first six months of 1995, the decrease in investment interest income was $4.3
million or 9.1% from 1994. These decreases are consistent with the reductions in
the average investment in securities outstanding between 1994 and 1995, which
totalled $228 million for the quarter and $189 million for the year-to-date
period. Because of its maturity structure, the effective yield on the Company's
investment securities portfolio is not as immediately responsive to rising
market rates as are its loan yields. The effective portfolio yield was 5.83% for
the second quarter of 1995 as well as for the year-to-date period, an increase
of approximately 11 basis points over the yields for the comparable periods in
1994.
Interest expense increased approximately $3.2 million or 24% in 1995's
second quarter as compared to the second quarter of 1994. Year-to-date interest
expense through June 30, 1995 also increased over the comparable 1994 period, by
$5.5 million or 22%. The increased expense in 1995 came despite a decrease from
1994 in average interest-bearing liabilities outstanding of $117 million in the
second quarter and $123 million for the year-to-date period. The increases
reflect the impact of rising rates during 1994, the rate structures of the
markets in which the Company has made acquisitions since the beginning of 1994,
and a shift in the deposit mix toward core time deposits from other lower cost
core deposit categories, a shift which is also partly attributable to recent
acquisitions. The overall cost of funds rate on interest-bearing liabilities was
3.55% for the second quarter of 1995 and 3.40% year to date. This represents
increases over 1994 cost of funds rates of 87 basis points for the quarter and
78 basis points year to date.
Page 13 of 30 Pages
<PAGE>
Other Income and Expense
Total non-interest income decreased from $8.3 million in the second quarter
of 1994 to $8.0 million in 1995. Excluding the net gain recognized on sales of
OREO in each of these periods, which totalled $0.5 million in 1995 and $1.1
million in 1994, non-interest income increased $0.3 million or 3.7% in 1995 over
the second quarter of 1994. Excluding year-to-date net gains on OREO sales of
$0.8 million in 1995 and $2.9 million in 1994, non-interest income for the first
six months of 1995 increased approximately $0.9 million or 6.0%, to $15.4
million from $14.5 million for the first six months of 1994.
Income from service charges on deposit accounts, which accounted for more
than half of adjusted non-interest income in each of these quarterly and
year-to-date periods, decreased slightly between the second quarter of 1994 and
1995, largely as a result of increases in the earnings credit rate applied to
business account balances. Year-to-date income from service charges on deposit
accounts in 1995 showed a modest increase from 1994, primarily reflecting the
impact of bank acquisitions. Fee income from credit card related operations,
automated teller services, and from services which support the international
activities of the Company's customers increased from 1994 to 1995 for both the
quarterly and year-to-date periods, reflecting both economic conditions as well
as the successful marketing of existing and new banking products and services.
Salaries and employee benefits expense totalled approximately $13.7 million
for the second quarter of 1995 compared to $13.4 million for the second quarter
of 1994, an increase of $0.3 million or 2.3%. This increase is largely
attributable to the new banking operations acquired in Mobile. The impact of
acquisitions and regular merit pay increases on salaries and employee benefits
expense was partially offset by reductions in certain management incentives.
Year to date, there was an increase in this expense category of $1.3 million or
4.9% for 1995. The same factors contributed to both the year-to-date and
quarterly increases.
Non-interest expense, other than personnel-related expenses, increased $1.9
million in the second quarter of 1995 and $3.1 million for the first six months
when compared to the same periods in 1994. For the second quarter and first six
months of 1994, the Company was in a net recovery position with respect to
provisions for losses on OREO and other problem assets, while in 1995 there was
essentially no net provision. Excluding the effect of the net recovery in 1994,
the total increase in expenses between 1994 and 1995 was $0.6 million or 4.7%
for the second quarter and $1.9 million or 7.6% for the year-to-date period.
Acquisitions added approximately $0.7 million to these non-interest expenses
for the second quarter of 1995 and $1.3 million for the year-to-date period,
with the increases concentrated primarily in occupancy expense, marketing
expense, and the amortization of intangible assets. Enhancements to the
Company's data processing systems and automation capabilities as well as
expansion of its ATM network contributed to a $0.4 million increase for the
first six months of 1995 in the expense for furnishings and equipment. Taxes and
insurance expense increased approximately $0.5 million for the year-to-date
period in 1995 as the Company's earnings and improved equity were added to the
assessment base used to compute certain state ad valorem taxes. For the second
quarter and first six months of 1995, the amortization expense related to
intangible assets acquired before 1994 decreased $0.6 million and $1.0 million,
respectively, when compared to the previous year. The net expense of maintaining
and operating OREO also decreased between 1994 and 1995 for both the second
quarter and six-month periods, with the year-to-date decrease totalling
approximately $0.5 million.
Page 14 of 30 Pages
<PAGE>
Income Taxes
Including the tax effect of reductions in the reserve for possible loan
losses, the Company provided for income taxes at an overall effective rate of
30.4% for the first half of 1995 compared to 32.4% for the comparable period of
1994. The effective rates in each period differ from the statutory rate of 35%
primarily because of the tax exempt income earned on investments in state and
municipal obligations.
Accounting Changes
Effective January 1, 1995, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 114, as amended by SFAS No. 118, which
addresses the accounting by creditors for impairment of certain loans. The
Company's reserve for possible loan losses at June 30, 1995 includes a measure
of impairment related to those loans identified for evaluation under the new
standard. This measurement is based on a comparison of the recorded investment
in each impaired loan with either the expected cash flows discounted using the
loan's original effective interest rate or, in the case of certain
collateral-dependent loans, the fair value of the underlying collateral.
Adoption of this standard did not have a material impact on the Company's
financial position or results of operations.
Page 15 of 30 Pages
<PAGE>
LIQUIDITY AND OTHER MATTERS
Liquidity
The Company, WNB and WBA manage their liquidity positions to ensure their
ability to satisfy customer demand for credit, to fund deposit withdrawals, to
meet operating and other corporate obligations, and to take advantage of
investment opportunities, all in a timely and cost-effective manner.
Traditionally, these liquidity needs have been met by maintaining a strong base
of core deposits and by carefully managing the maturity structure of the
investment portfolios. The funds provided by current operations and forecasts of
loan repayments are also considered in the liquidity management process.
The Banks enter into short-term borrowing arrangements by purchasing federal
funds and selling securities under repurchase agreements, mainly as part of
their services to correspondent banks and certain other customers. Neither the
Company nor the Banks have made access to the short or long term debt markets a
part of liquidity management.
Average core deposits, defined as all deposits other than time deposits of
$100,000 or more, decreased some $108 million or 4.8% to $2.15 billion in the
second quarter of 1995 from $2.26 billion in 1994's second quarter. Core
deposits comprised approximately 90% of total average deposits for both of these
periods.
As of June 30, 1995, approximately $350 million or 28% of the portfolio of
investment securities held to maturity was scheduled to mature within one year.
An additional $138 million of investment securities was classified as available
for sale at the end of 1995's second quarter, although management's
determination of this classification does not derive primarily from liquidity
considerations.
The Banks had $834 million in unfunded loan commitments outstanding at June
30, 1995, an increase of $252 million from the level at December 31, 1994.
Contingent obligations under letters of credit and financial guarantees
decreased slightly between these dates to a total of $70 million at June 30,
1995. Available credit card lines were $31 million at June 30, 1995, slightly
above the level at year end 1994. Draws under these financial commitments should
not place any unusual strain on the Company's liquidity position.
Page 16 of 30 Pages
<PAGE>
<TABLE>
<CAPTION>
TABLE 1.
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
ANALYSIS OF CHANGES IN INTEREST INCOME AND INTEREST EXPENSE
(dollars in thousands, unaudited)
SECOND QUARTER ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
----------------------------------------------------------------------------------------------------------------
|1995 |1994 |1995 |1994
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans (tax
equivalent)(1)....$1,154,389 $26,551 9.22% $975,666 $20,328 8.35% $1,110,081 $50,331 9.14% $948,763 $38,386 8.15%
U. S. Treasury
securities........ $965,186 $13,070 5.43% $1,030,646 $13,760 5.36% $978,297 $26,389 5.44% $1,000,934 $26,770 5.39%
U.S. government
agency securities. 201,864 2,997 5.94 324,056 4,504 5.56 215,997 6,352 5.88 342,886 9,184 5.36
Mortgage-backed
securities (3).... 137,900 2,261 6.46 161,744 2,610 6.39 137,712 4,582 6.47 168,347 5,335 6.40
State and municipal
securities (tax
equivalent) (1).. 121,069 2,483 8.20 121,520 2,482 8.17 122,818 5,025 8.18 119,116 4,890 8.21
Corporate bonds and
other securities.. 21,928 285 5.20 38,415 590 6.14 25,426 716 5.63 38,423 1,190 6.19
----------------------------------------------------------------------------------------------------------------
Total investment
in securities..$1,447,947 $21,096 5.83% $1,676,381 $23,946 5.72% $1,480,250 $43,064 5.83% $1,669,706 $47,369 5.71%
----------------------------------------------------------------------------------------------------------------
Federal funds sold.. 31,480 527 6.72% 61,861 601 3.90% 28,312 971 6.92% 87,397 1,484 3.42%
Interest-bearing
deposits......... - - - - - - - - - - - -
----------------------------------------------------------------------------------------------------------------
Total interest-
earning assets...$2,633,816 $48,174 7.33% $2,713,908 $44,875 6.62% $2,618,643 $94,366 7.24% $2,705,866 $87,239 6.49%
----------------------------------------------------------------------------------------------------------------
Cash and due from
financial
institutions..... 177,958 190,417 178,546 191,531
Bank premises and
equipment, net.... 67,262 63,128 66,061 61,450
Other real estate
owned, net........ 6,960 11,678 6,849 13,827
Other assets........ 84,642 74,144 80,453 71,477
Reserve for possible
loan losses....... (38,356) (40,431) (36,969) (43,225)
----------------------------------------------------------------------------------------------------------------
Total assets......$2,932,282 $3,012,844 $2,913,583 $3,000,926
========== ========== ========== ==========
LIABILITIES
Savings deposits.... $465,721 $3,110 2.68% $554,694 $3,724 2.69% $475,057 $6,314 2.68% $558,789 $7,495 2.70%
NOW and MMDA
deposits.......... 547,391 2,637 1.93 603,381 2,703 1.80 557,790 5,249 1.90 596,232 5,313 1.80
Time deposits....... 627,360 7,815 5.00 575,496 4,792 3.34 603,332 14,260 4.77 554,831 8,839 3.21
----------------------------------------------------------------------------------------------------------------
Total interest-
bearing
deposits.......$1,640,472 $13,562 3.32% $1,733,571 $11,219 2.60% $1,636,179 $25,823 3.18% $1,709,852 $21,647 2.55%
----------------------------------------------------------------------------------------------------------------
Federal funds
purchased and
repurchase
agreements........ 183,939 2,565 5.59% 208,114 1,734 3.34% 181,525 4,857 5.40% 231,305 3,527 3.07%
----------------------------------------------------------------------------------------------------------------
Total interest-
bearing
liabilities....$1,824,411 $16,127 3.55% $1,941,685 $12,953 2.68% $1,817,704 $30,680 3.40% $1,941,157 $25,174 2.62%
----------------------------------------------------------------------------------------------------------------
Demand deposits,
non-interest-
bearing........... 769,440 769,459 761,505 764,446
Other liabilities... 25,850 27,418 26,555 26,406
Shareholders' equity 312,581 274,282 307,819 268,917
Total liabilities ----------------------------------------------------------------------------------------------------------------
shareholders'
equity.........$2,932,282 $3,012,844 $2,913,583 $3,000,926
========== ========== ========== ==========
Net interest
income/margin
(tax
equivalent)(1) $32,047 4.87% $31,922 4.71% $63,686 4.88% $62,065 4.61%
============= ============= ============= =============
<FN>
(1) Tax equivalent amounts are calculated using a marginal federal income tax
rate of 35%.
(2) Average balance includes nonaccruing loans of $13,411 and $24,473 for the second quarters and $13,806 and $27,975 for the six
month periods in 1995 and 1994, respectively.
(3) Average balance includes unrealized gain (loss) on securities available for sale of ($2,005) and ($1,548) for the second
quarters and periods in 1995 and 1994 respectively. These gains (losses) are excluded in calculatng yields.
</FN>
</TABLE>
Page 17 of 30 Pages
<PAGE>
<TABLE>
<CAPTION>
TABLE 2.
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
RESERVE FOR POSSIBLE LOAN LOSSES
(by quarter, in millions, unaudited)
1995 1994
------------- ---------------------------
2nd 1st 4th 3rd 2nd 1st
------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Reserve, beginning of quarter............ $37.5 $34.4 $42.7 $41.4 $39.4 $44.5
Balance acquired through acqisition...... - 1.8 - - - -
Provision for possible loan lossses:
Expense of providing loss reserves... - - - - - -
Reduction of loss reserves........... - - (10.0) (6.1) - (10.0)
Loans charged off........................ (1.0) (1.3) (0.9) (0.9) (0.3) (1.5)
Recoveries............................... 2.8 2.6 2.6 8.3 2.3 6.4
------------- ---------------------------
Reserve, end of quarter.................. $39.3 $37.5 $34.4 $42.7 $41.4 $39.4
============= ===========================
</TABLE>
<TABLE>
<CAPTION>
TABLE 3.
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
NON-PERFORMING ASSETS AND OTHER SELECTED DATA
(end of quarter, dollars in millions, unaudited)
1995 1994
------------- ---------------------------
2nd 1st 4th 3rd 2nd 1st
------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Non-performing loans........................ $13.5 $14.2 $15.4 $17.5 $22.0 $26.4
Other real estate owned, net................ 6.0 7.0 6.7 7.4 7.4 13.4
Other foreclosed assets..................... - - - 0.1 - -
------------- ---------------------------
Total non-performing assets................. $19.5 $21.3 $22.1 $25.0 $29.4 $39.8
============= ===========================
Net gain on sales of OREO................... $0.5 $0.3 $0.1 $0.3 $1.1 $1.8
============= ===========================
Reserve for possible loan losses as a percent of:
Total non-performing loans............... 292% 264% 224% 243% 188% 149%
Total loans.............................. 3.3% 3.4% 3.3% 4.1% 4.2% 4.0%
Non-performing loans as a percent of
total loans............................... 1.12% 1.27% 1.45% 1.69% 2.22% 2.70%
Non-performing assets as a percent of
total assets.............................. 0.66% 0.72% 0.80% 0.87% 1.01% 1.28%
</TABLE>
Page 18 of 30 Pages
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of Whitney Holding Corporation
was held on April 26, 1995, for the purpose of electing a board of
directors and approving the appointment of auditors. Proxies for the
meeting were solicited pursuant to Section (14)a of the Securities
Exchange Act of 1934 and there was no solicitation in opposition to
management's solicitations.
All of management's nominees for directors as listed in the proxy
statement were elected. The votes for each nominee are set forth below:
<TABLE>
<CAPTION>
Shares
Voted Shares
For Withheld
<S> <C> <C>
Joel B. Bullard, Jr. 12,360,566 67,376
Angus R. Cooper, II 12,370,711 57,231
Robert E. Howson 12,369,714 58,228
John J. Kelly 12,369,736 58,206
William L. Marks 12,368,854 59,089
Warren K. Watters 12,359,692 68,250
</TABLE>
The appointment of Arthur Andersen LLP as independent auditor was
approved by the following vote:
<TABLE>
<CAPTION>
Shares Shares
Voted Voted Shares
FOR AGAINST ABSTAINING
<S> <C> <C> <C>
12,362,542 13,509 51,892
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) (3) Exhibits:
Exhibit 3.1 - Copy of Composite Charter, incorporated by
reference to the Company's March 31, 1993 Form 10-Q
Exhibit 3.2 - Copy of Bylaws, as amended, March 1994
Exhibit 10.1 - Stock Option Agreement between Whitney Holding
Corporation and William L. Marks, incorporated by reference to
the Company's 1990 Form 10-K
Exhibit 10.2 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and William L. Marks,
incorporated by reference to the Company's June 30, 1993 Form
10-Q
Page 19 of 30 Pages
<PAGE>
Exhibit 10.3 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and R. King Milling,
incorporated by reference to the Company's June 30, 1993 Form
10-Q
Exhibit 10.4 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and Edward B. Grimball,
incorporated by reference to the Company's June 30, 1993 Form
10-Q
Exhibit 10.5 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and Kenneth A. Lawder, Jr.,
incorporated by reference to the Company's June 30, 1993 Form
10-Q
Exhibit 10.6 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and G. Blair Ferguson,
incorporated by reference to the Company's September 30, 1993
From 10-Q
Exhibit 10.7 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and Joseph W. May,
effective December 13, 1993, incorporated by reference to the
Company's 1993 Form 10-K
Exhibit 10.8 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and John C. Hope, III,
effective October 28, 1994, incorporated by reference to the
Company's 1994 Form 10-K
Exhibit 10.9 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and Robert C. Baird, Jr.,
effective July 26, 1995
Exhibit 10.10 - Long-term incentive program, incorporated by
reference to the Company's 1991 Form 10-K
Exhibit 10.11 - Executive compensation plan, incorporated by
reference to the Company's 1991 Form 10-K
Exhibit 10.12 - Form of restricted stock agreement between
Whitney Holding Corporation and certain of its officers,
incorporated by reference to the Company's June 30, 1992 Form
10-Q
Exhibit 10.13 - Form of stock option agreement between Whitney
Holding Corporation and certain of its officers, incorporated
by reference to the Company's June 30, 1992 Form 10-Q
Exhibit 10.14 - Directors' Compensation Plan, incorporated by
reference to the Company's Proxy Statement dated March 24,
1994
Exhibit 27 - Financial Data Schedule
(b) No report on Form 8-K was required to be filed by the Registrant during the
second quarter of 1995.
Page 20 of 30 Pages
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of
1934 the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
WHITNEY HOLDING CORPORATION
(Registrant)
Date: August 14, 1995 By: /s/ Edward B. Grimball
------------------------- -------------------------------------
Edward B. Grimball
Executive Vice President &
Chief Financial Officer
Page 21 of 30 Pages
<PAGE>
Exhibit 3.2
BY-LAWS
OF
WHITNEY HOLDING CORPORATION
Section 1. Meetings of the Board of Directors of this corporation may be held
by means of conference telephone or similar communications equipment.
Section 2. A. Without limiting in any way the indemnification by the corporation
of persons as provided in its charter and the existing applicable law, the
corporation shall have authority to indemnify persons in accordance with
Louisiana Revised Statutes 12:83 as it may from time to time become amended,
supplemented or replaced.
B. The corporation shall have authority to procure or maintain insurance or
other similar arrangement in accordance with Louisiana Revised Statutes
12:83(F) and (G) as they may from time to time become amended, supplemented or
replaced.
Section 3. The Company may issue stock certificates signed by the Chief
Executive Officer and Secretary of the Company. In addition to the Chief
Executive Officer and Secretary of the Company, the President, any Vice
President and any Assistant Secretary, respectively, of the Company may sign the
Company's stock certificates. The company may issue stock certificates bearing
the facsimile signatures of the Company's Chief Executive Officer and Secretary,
provided such certificates are countersigned by Whitney National Bank, Trust
Department, as transfer agent for the Company's stock.
Section 4. There shall be a standing committee of this Corporation, appointed by
the Board, to be known as the Executive Committee, consisting of the Chairman of
the Board, the President, and such other Directors as may be appointed from time
to time, each to serve a 12 month term, four (4) members of which shall
constitute a quorum for the transaction of business. This committee shall have
power to direct and transact all business of the Corporation, which properly
might come before the Board of Directors, except such as the Board only, by law,
is authorized to perform. The Executive Committee shall report its actions in
writing at each regular meeting of the Board of Directors, which shall approve
or disapprove the report and record such action in the minutes of the meeting.
Page 22 of 30 Pages
<PAGE>
Exhibit 10.9
WHITNEY HOLDING CORPORATION
and
WHITNEY NATIONAL BANK
EXECUTIVE AGREEMENT
THIS AGREEMENT (the "Agreement") is made by and between WHITNEY HOLDING
CORPORATION, a corporation organized and existing under the laws of the State of
Louisiana (the "Holding Corporation"), WHITNEY NATIONAL BANK, a financial
institution organized and existing under the laws of the United States (the
"Bank"), and ROBERT C. BAIRD, JR. (the "Executive").
WHEREAS, the Executive is presently employed by each of the Holding
Corporation and the Bank as a EXECUTIVE VICE PRESIDENT.
NOW, THEREFORE, effective July 26, 1995, the Holding Corporation, the
Bank and the Executive agree as follows:
SECTION I
DEFINITIONS
1.1 "Change in Duties" means the occurrence of one of the following
events in connection with a Change in Control:
a. A diminution in the nature or scope of the Executive's
authorities or duties, a change in his reporting
responsibilities or titles or the assignment of the Executive to
any duties or responsibilities that are inconsistent with his
position, duties, responsibilities or status immediately
preceding such assignment;
b. A reduction in the Executive's compensation during the Covered
Period. For this purpose, "compensation" means the fair market
value of all remuneration paid to the Executive by the Employer
during the immediately preceding calendar year, including,
without limitation, deferred compensation, stock options and
other forms of incentive compensation awards, coverage under any
employee benefit plan (such as a pension, thrift, medical,
dental, life insurance or long-term disability plan) and other
perquisites;
c. The transfer of the Executive to a location requiring a change
in his residence or a material increase in the amount of travel
ordinarily required of the Executive in the performance of his
duties; or
Page 23 of 30 Pages
<PAGE>
d. A good faith determination by the Executive that his position,
duties, responsibilities or status has been affected, whether
directly or indirectly, in any manner which prohibits the
effective discharge of any such duties or responsibilities.
1.2 "Change in Control" means and shall be deemed to have occurred
if:
a. Any "person," including any "group," determined in accordance
with Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, becomes the beneficial owner, directly or indirectly,
of securities of the Holding Corporation representing 20% or
more of the combined voting power of the Holding Corporation's
then outstanding securities, without the approval,
recommendation, or support of the Board of Directors of the
Holding Corporation as constituted immediately prior to such
acquisition;
b. The Federal Deposit Insurance Corporation or any other
regulatory agency negotiates and implements a plan for the
merger, transfer of assets and liabilities, reorganization, and/
or liquidation of the Bank;
c. Either of the Holding Corporation or the Bank is merged into
another corporate entity or consolidated with one or more
corporations, other than a wholly-owned subsidiary of the
Holding Corporation;
d. A change in the members of the Board of Directors of the Holding
Corporation which results in the exclusion of a majority of the
"continuing board." For this purpose, the term "continuing
board" means the members of the Board of Directors of the
Holding Corporation, determined as of the date on which this
Agreement is executed and subsequent members of such board who
are elected by or on the recommendation of a majority of such
"continuing board"; or
e. The sale or other disposition of all or substantially all of the
stock or the assets of the Bank or the Holding Corporation (or
any successor corporation thereto).
1.3 "Company" means the Holding Corporation and the Bank.
1.4 "Covered Period" means the one-year period immediately preceding and
the three-year period immediately following the occurrence of a Change in
Control.
1.5 "Employer" means the Holding Corporation or the Bank or both, as
the case may be.
-2-
Page 24 of 30 Pages
<PAGE>
1.6 "Severance Amount" means 300% of the Executive's "annual salary."
For this purpose, "annual salary" means the average of all compensation paid to
the Executive by the Company which is includable in the Executive's gross income
for the highest 3 of the 5 calendar years immediately preceding the calendar
year in which a Change in Control occurs, including the amount of any
compensation which the Executive elected to defer under any plan or arrangement
of the Company with respect to such years. If the Executive has been employed
less than 5 years prior to the calendar year in which a Change in Control
occurs, "annual salary" shall be determined by averaging the compensation (as
defined in the preceding sentence) for the Executive's actual period of
employment. Further, if the Executive has been employed less than 12 months
prior to the occurrence of a Change in Control, the actual compensation of the
Executive shall be annualized for purposes of this Section 1.6. In the event of
dispute between the Executive and the Company, the determination of the "annual
salary" shall be made by an independent public accounting firm agreed upon by
the Executive and the Company.
1.7 "Termination" or "Terminated" means (a) termination of the
employment of the Executive with the Employer for any reason, other than cause,
or (b) the resignation of the Executive following a Change in Duties. In no
event, however, shall the Executive's voluntary separation from service with the
Employer on account of death, disability, or resignation on or after the
attainment of the normal retirement age specified in any qualified employee
benefit plan maintained by the Employer constitute a Termination. For purposes
of determining whether a Termination has occurred, "cause" means fraud,
misappropriation of or intentional material damage to the property or business
of the Employer or the commission of a felony by the Executive.
SECTION II
TERMINATION RIGHTS AND OBLIGATIONS
2.1 Severance Awards. If the Executive's employment is Terminated during
the Covered Period, then no later than 30 days after the later of (a) the date
of such Termination, or (b) the occurrence of a Change in Control, the Company
shall:
a. Pay to the Executive the Severance Amount;
b. Transfer to the Executive the ownership of all club memberships,
automobiles and other perquisites which were assigned to the
Executive as of the day immediately preceding such Termination;
-3-
Page 25 of 30 Pages
<PAGE>
c. In accordance with Section 2.2 hereof, provide for the benefit
of the Executive, his spouse, and his dependents, if any,
coverage under the plans, policies or programs (as the same may
be amended from time to time) maintained by the Company for the
purpose of providing medical benefits and life insurance to
other executives of the Company with comparable duties;
provided, however, that in no event shall the coverage provided
under this paragraph be substantially less than the coverage
provided to the Executive as of the date immediately preceding a
Termination;
d. Pay to the Executive an amount equal to the contributions by the
Company to the Whitney National Bank of New Orleans Thrift
Incentive Plan, or a successor arrangement, that would have been
made for the lesser of (i) 3 years following the date of
Termination, or (ii) the number of years until the Executive's
normal retirement age under such plan;
e. Pay to the Executive an amount equal to the present value of the
additional retirement benefit which would have accrued under the
Whitney National Bank of New Orleans Retirement Plan, or a
successor arrangement, that would have been made for the lesser
of (i) 3 years following the date of Termination, or (ii) the
number of years until the Executive's normal retirement age
under such plan; and
f. Pay to the Executive the amount to which the Executive would be
entitled under the 1991 Executive Compensation Plan, or a
successor thereto, for the calendar year in which a Change in
Control occurs, determined as if all performance goals
applicable to the Company and the Executive were achieved.
2.2 Special Rules Governing Group Benefits. Coverage under Section 2.1c,
hereof, shall (a) commence as of the later of the date of Termination or the
occurrence of a Change in Control, and (b) end as of the earlier of the
Executive's coverage under Medicare Part B or the date on which the Executive is
covered under group plans providing substantially similar benefits maintained by
another employer. For this purpose, the Company shall provide coverage during
any period in which the payment of benefits is limited by any form of
pre-existing condition clause.
Coverage under Section 2.1c, hereof, may be provided under a group
policy or program maintained by the Company or the Company, in its sole
discretion, may acquire or adopt an individual plan, policy or program providing
coverage solely for the benefit of the Executive, his spouse, and his
dependents, if any.
-4-
Page 26 of 30 Pages
<PAGE>
If coverage commences as of a Change in Control, the Company shall (a)
retroactively reinstate the Executive, his spouse, and dependents, if any, as of
the date of Termination, and (b) reimburse to the Executive his cost of
obtaining similar coverage for the period commencing on the date of Termination
and ending on the occurrence of a Change in Control. As to medical claims
incurred during such period, any coverage actually obtained by the Executive
shall be designated as the Executive's primary coverage, and the reinstated
coverage shall operate as secondary coverage.
2.3 Other Plans and Agreements. To the maximum extent permitted by law
and not withstanding any provision to the contrary contained in any plan, grant,
program, contract or other arrangement under which the Executive and the
Employer are parties, if the Executive's employment is Terminated during the
Covered Period, then any vesting schedule or other restriction on the ownership
of any benefits payable to the Executive under the terms of any such plan,
grant, contract, or arrangement shall be accelerated or lapse, as the case may
be.
Notwithstanding any provision to the contrary contained in any plan,
grant, program, contract, or arrangement under which the Executive and the
Employer are parties, in the event the Executive has elected to defer the
payment of any benefit under any such plan, grant, contract, or arrangement, the
payment of such benefit shall be accelerated and paid to the Executive in the
form of a single-sum no later than 30 days after the Executive's Termination
during the Covered Period.
2.4 Taxes. The Executive shall be responsible for applicable income tax
and the Company shall have the right to withhold from any payment made under
this Agreement, or to collect as a condition of any payment, any income taxes
required by law to be withheld.
Notwithstanding the preceding paragraph, the Company shall pay any
excise tax or similar penalty imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") or any comparable successor provision, on
the Executive as a consequence of any "excess parachute payment" within the
meaning of Section 280(g) of the Code (or a comparable successor provision)
payable under this Agreement or any plan, grant, program, contract or other
arrangement under which the Executive and the Employer are parties.
The Executive shall submit to the Company the amount to be paid under
this Section 2.4, together with supporting documentation. If the Executive and
the Company disagree as to such amount, an independent public accounting firm
agreed upon by the Executive and the Company shall make such determination.
-5-
Page 27 of 30 Pages
<PAGE>
SECTION III
MISCELLANEOUS
3.1 Notices. Notices and other communication required under this
Agreement shall be made to the Company at 228 St. Charles Avenue, New Orleans,
Louisiana 70130 and to the Executive at 228 St. Charles Avenue, New Orleans,
Louisiana 70130 or, as to each party, at such other address as may be designated
by written notice to the other. All such notices and communications shall be
effective when deposited in the United States mail, postage prepaid, or
delivered to the affected party.
3.2 Employment Rights. The terms of this Agreement shall not be deemed
to confer on the Executive any right to continue in the employ of the Employer
for any period or any right to continue his present or any other rate of
compensation.
3.3 Assignment. The Executive shall not sell, assign, pledge, transfer
or otherwise convey the right to receive any form of payment or benefit provided
under the Agreement, except by will or the laws of intestacy.
3.4 Inurement. This Agreement shall be binding upon and inure to the
benefit of the Holding Corporation, the Bank and the Executive and their
respective heirs, executors, administrators, successors and assigns.
3.5 Payment of Expenses. In the event that it is necessary or desirable
for the Executive to retain legal counsel and/or incur other costs and expenses
in connection with the enforcement of the terms of the Agreement, the Company
shall pay (or the Executive shall be entitled to reimbursement of) reasonable
attorneys' fees, costs, and expenses actually incurred, without regard to the
final outcome, unless there is no reasonable basis for the Executive's action.
3.6 Amendment and Termination. The Agreement shall not be amended or
terminated by any act of the Company, except as may be expressly agreed upon, in
writing, by the Company and the Executive.
3.7 Nature of Obligation. The Company intends that its obligations
hereunder be construed in the nature of severance pay. The Company's obligations
under Section 2 are absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, any right of offset, counterclaim,
recoupment, defense, or other right which the Company may have against the
Executive or others. All amounts payable by the Company hereunder shall be paid
without notice or demand.
3.8 Choice of Law. The Agreement shall be governed and construed in
accordance with the laws of the State of Louisiana.
-6-
Page 28 of 30 Pages
<PAGE>
3.9 No Effect on Other Benefits. Any other compensation paid or benefits
provided to the Executive shall be in addition to and not in lieu of the
benefits provided to such Executive under this Agreement. Except as may be
expressly provided herein, nothing in this Agreement shall be construed as
limiting, varying or reducing the provision of any benefit available to the
Executive (or to such Executive's estate or other beneficiary) pursuant to any
employment agreement, group plan, including any qualified pension or
profit-sharing plan, health, disability or life insurance plan, or any other
form of agreement or arrangement between the Company and the Executive.
3.10 Entire Agreement. This Agreement constitutes the entire agreement
between the Executive and the Holding Corporation and the Bank and is intended
to supersede all prior written or oral understandings with respect to the
subject matter of this Agreement.
3.11 Invalidity. In the event that any one or more provisions of this
Agreement shall, for any reason, be held invalid, illegal or unenforceable in
any manner, such invalidity, illegality or unenforceability shall not affect any
other provision of such Agreement.
3.12 Mitigation. Notwithstanding any provision of this Agreement to the
contrary and to the maximum extent permitted by law, the Executive shall not be
subject to any duty to mitigate the severance awards received hereunder by
seeking other employment. No severance award received under this Agreement shall
be offset by any compensation the Executive receives from future employment, and
the Executive shall not be required to perform any service as a condition of
this Agreement.
EXECUTED in multiple counterparts as of the dates set forth below, each of which
shall be deemed an original, and effective as of the date first set forth above.
EXECUTIVE WHITNEY NATIONAL BANK AND
WHITNEY HOLDING CORPORATION
/s/ Robert C. Baird, Jr. /s/ Robert E. Howson
--------------------------- ------------------------------------
Date: July 26, 1995 By: Robert E. Howson
Title: Director & Chairman
Compensation Committee of the
Board of Directors
Date: July 26, 1995
-7-
Page 29 of 30 Pages
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