November 14, 1996
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 September 30, 1996.
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 September 30, 1996
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 17,165,056 shares were
outstanding on September 30, 1996.
An exhibit index appears on page 18.
Page 1 of 29 Pages
<PAGE>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
Page
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 6. Exhibits and Reports on Form 8-K..................................20
Signature.....................................................................22
Page 2 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands) September 30, December 31,
ASSETS 1996 1995
(unaudited)
-----------------------------
<S> <C> <C>
Cash and due from financial institutions........................................................ $210,320 $226,356
Investment in securities:
Securities available for sale (at fair value).............................................. 124,497 190,092
Securities held to maturity (fair value of $1,249,230 in 1996 and $1,268,518 in 1995)...... 1,249,120 1,250,802
Federal funds sold.............................................................................. 300 21,160
Loans........................................................................................... 1,795,725 1,586,861
Less reserve for possible loan losses........................................................... 43,198 39,305
------------- -------------
Loans, net................................................................................... 1,752,527 1,547,556
Bank premises and equipment, net................................................................ 101,575 81,442
Other real estate owned, net.................................................................... 2,837 4,824
Accrued income receivable....................................................................... 28,917 29,380
Other assets.................................................................................... 45,196 42,609
------------- -------------
TOTAL ASSETS.......................................................................... $3,515,289 $3,394,221
============= =============
LIABILITIES
Deposits:
Non-interest-bearing demand deposits....................................................... $878,690 $888,382
Interest-bearing deposits.................................................................. 1,817,816 1,887,407
------------- -------------
Total deposits......................................................................... 2,696,506 2,775,789
Federal funds purchased and securities sold under repurchase agreements......................... 404,696 227,094
Dividends payable............................................................................... 4,291 3,273
Other liabilities............................................................................... 25,331 23,193
------------- -------------
TOTAL LIABILITIES..................................................................... $3,130,824 $3,029,349
------------- -------------
SHAREHOLDERS' EQUITY
Common stock.................................................................................... $2,800 $2,800
Capital surplus................................................................................. 67,628 62,635
Retained earnings............................................................................... 322,305 306,075
Net unrealized gain (loss) on securities available for sale or transferred to held to
maturity, net of tax effect of $89 in 1996 and ($605) in 1995............................... (165) 1,137
------------- -------------
Total................................................................................. 392,568 372,647
Treasury stock at cost and unearned restricted stock compensation............................... 8,103 7,775
------------- -------------
TOTAL SHAREHOLDERS' EQUITY............................................................ $384,465 $364,872
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY............................................................ $3,515,289 $3,394,221
============= =============
The accompanying notes are an intergral part of these financial statements.
</TABLE>
Page 3 of 29 Pages
<PAGE>
<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 9 MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
1996 1995 1996 1995
----------------------- -----------------------
INTEREST INCOME
<S> <C> <C> <C> <C>
Interest and fees on loans.................................................... $38,470 $32,426 $108,883 $89,257
Interest and dividends on investments-
U.S. Treasury and agency securities..................................... 14,706 16,081 45,813 50,161
Mortgage-backed securities.............................................. 3,865 2,628 11,727 8,143
Obligations of states and political subdivisions........................ 1,750 1,715 5,303 5,200
Federal Reserve and corporate securities................................ 59 177 191 921
Interest on federal funds sold................................................ 166 1,451 990 2,546
----------------------- -----------------------
TOTAL............................................................. $59,016 $54,478 $172,907 $156,228
----------------------- -----------------------
INTEREST EXPENSE
Interest on deposits.......................................................... $17,004 $16,122 $51,441 $45,280
Interest on federal funds purchased and securities
sold under repurchase agreement......................................... 4,291 2,454 12,172 7,323
----------------------- -----------------------
TOTAL............................................................. $21,295 $18,576 $63,613 $52,603
----------------------- -----------------------
Net interest income........................................................... $37,721 $35,902 $109,294 $103,625
Provision (Reduction in reserve) for possible loan losses..................... - (9,900) - (9,750)
----------------------- -----------------------
Net interest income after provision for possible loan losses.................. $37,721 $45,802 $109,294 $113,375
----------------------- -----------------------
NON-INTEREST INCOME
Gain on sales of securities................................................... $ - $ - $7 $ -
Other non-interest income..................................................... 9,342 8,020 27,225 25,083
----------------------- -----------------------
TOTAL............................................................. $9,342 $8,020 $27,232 $25,083
----------------------- -----------------------
NON-INTEREST EXPENSE
Salaries and employee benefits................................................ $16,593 $16,206 $49,074 $45,963
Occupancy of bank premises, net............................................... 2,690 2,074 7,123 5,854
Other non-interest expenses................................................... 12,536 11,495 38,833 36,803
----------------------- -----------------------
TOTAL............................................................. $31,819 $29,775 $95,030 $88,620
----------------------- -----------------------
Income before income taxes.................................................... $15,244 $24,047 $41,496 $49,838
Income tax expense............................................................ 4,796 7,916 12,984 15,765
----------------------- -----------------------
Net income.................................................................... $10,448 $16,131 $28,512 $34,073
======================= =======================
Earnings per share:
Primary $0.61 $0.95 $1.66 $2.02
======================= =======================
Fully diluted $0.61 $0.95 $1.66 $2.00
======================= =======================
Weighted average actual number of
shares outstanding......................................................... 17,138,624 16,845,646 17,045,536 16,793,048
======================= =======================
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 4 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
For the 9 Months Ended
September 30,
1996 1995
--------------------------------
Cash flows from operating activities:
<S> <C> <C>
Net income............................................................................. $ 28,512 $ 34,073
Adjustments to reconcile net income to cash provided by (used in)
operating activities:
Depreciation........................................................................ 7,154 5,950
Provision for (reduction of) reserves for possible loan losses...................... - (9,750)
Provision for losses on OREO and other problem assets............................... 312 56
Amortization of intangible assets and unearned restricted stock
compensation..................................................................... 2,727 2,604
Amortization of premiums and discounts on investment securities, net................ 5,972 10,100
Net gains on sales of OREO and other property....................................... (2,174) (787)
Net gains on sales of investment securities......................................... (7) -
Deferred tax expense (benefit)...................................................... (2,990) 1,443
Increase (Decrease) in accrued income taxes......................................... 3,050 2,430
(Increase) Decrease in accrued income receivable and other assets................... (1,280) 1,358
Increase (Decrease) in accrued expenses and other liabilities....................... 819 436
--------------------------------
Net cash provided by operating activities........................................... $ 42,095 $ 47,913
--------------------------------
Cash flows from investing activities:
Proceeds from maturities of investment securities held to maturity..................... $ 300,954 $ 251,095
Proceeds from maturities of investment securities available for sale................... 19,559 19,446
Proceeds from sales of investment securities available for sale........................ 31,515 -
Purchases of investment securities held to maturity.................................... (292,355) (79,302)
Purchases of investment securities available for sale.................................. - (15,353)
Net (increase) decrease in loans....................................................... (204,694) (159,452)
Net (increase) decrease in federal funds sold.......................................... 20,860 16,676
Proceeds from sales of OREO and other property......................................... 4,486 2,696
Capital expenditures................................................................... (27,287) (9,400)
Net cash (paid) received in business acquisition....................................... - (3,695)
Other.................................................................................. (1,676) 674
--------------------------------
Net cash provided by (used in) investing activities.................................... $ (148,638)$ 23,385
--------------------------------
Cash flows from financing activities:
Net increase (decrease) in non-interest-bearing demand deposits........................ $ (9,692)$ 14,558
Net increase (decrease) in interest-bearing deposits other than
certificates of deposit............................................................. (62,386) (137,009)
Net increase (decrease) in certificates of deposit..................................... (7,205) 56,489
Net increase (decrease) in federal funds purchased and securities sold
under repurchase agreements......................................................... 177,602 (21,920)
Exercise of stock options.............................................................. 1,375 59
Sale of common stock under employee savings plan and dividend
reinvestment plan................................................................... 2,097 3,694
Dividends paid......................................................................... (11,284) (8,880)
--------------------------------
Net cash provided by (used in) financing activities.................................... $ 90,507 $ (93,009)
--------------------------------
Net increase (decrease) in cash and cash equivalents...................................... $ (16,036)$ (21,711)
Cash and cash equivalents at the beginning of the period.................................. 226,356 204,608
--------------------------------
Cash and cash equivalents at the end of the period........................................ $ 210,320 $ 182,897
================================
Interest income received.................................................................. $ 172,742 $ 158,941
================================
Interest expense paid..................................................................... $ 63,233 $ 50,892
================================
Net federal income taxes paid............................................................. $ 12,240 $ 12,307
================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 5 of 29 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. 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-KA for the year ended December 31, 1995.
CONSOLIDATION
The consolidated financial statements of the Company include the accounts of
Whitney Holding Corporation and its wholly-owned subsidiaries, Whitney National
Bank, Whitney Bank of Alabama and Whitney Community Development Corporation. All
adjustments have been made which, in the opinion of management, are necessary to
fairly state the financial results for the interim periods presented.
RESTATEMENT AND RECLASSIFICATION
Prior period information has been restated to give effect to a merger
completed in March 1996 which has been accounted for as a pooling of interests.
Certain balances in prior periods have been reclassified to conform with this
period's financial presentation.
(2) MERGERS AND ACQUISITIONS
On March 8, 1996, Whitney Holding Corporation completed its merger with
First Citizens BancStock, Inc. ("FCB"), the parent of The First National Bank in
St. Mary Parish ("FNB St. Mary"). FNB St. Mary, which was merged into Whitney
National Bank, had total assets of approximately $243 million, including $147
million in loans, and total deposits of $214 million at the closing date. FCB
shareholders received 2.03 million shares of Whitney Holding Corporation common
stock with a market value at the time of approximately $63 million. Holders of
FCB stock options as of the closing received options to buy approximately
192,000 shares of Company common stock at a weighted-averaged exercise price of
$11.64. The merger has been accounted for as a pooling of interests.
On February 17, 1995, Whitney Bank of Alabama, a then 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 beginning
in the first quarter of 1995.
On October 25, 1996, the Company completed a merger with the American Bank &
Trust ("AB&T") of Pensacola, Florida and with Liberty Holding Company ("LHC"),
the parent of Liberty Bank, also of Pensacola, Florida. AB&T, with assets of $57
million, and Liberty Bank, with assets of $48 million, were merged into a
newly-chartered wholly-owned banking subsidiary of the Company, Whitney National
Bank of Florida. Shareholders of AB&T received 318 thousand shares of Whitney
Holding Corporation
Page 6 of 29 Pages
<PAGE>
common stock with a market value at the time of approximately $10.3 million. LHC
shareholders received 436 thousand shares of Company stock with an approximate
value of $14.1 million. The financial information presented in this Form 10-Q
for the quarter ended September 30, 1996 does not reflect these mergers. In
subsequent reporting periods, each of these mergers will be accounted for as as
a pooling of interests.
During October 1996, the Company entered into an agreement and plan of
merger with First National Bankshares, Inc., the parent company of First
National Bank of Houma ("FNB Houma"). FNB Houma, which will merge into WNB,
operates five banking locations in south Louisiana, all in Terrebone Parish. FNB
Houma has total assets of approximately $210 million, $111 million in loans,
total deposits of $189 million and shareholders' equity of $17 million. The
merger is intended to qualify as a tax-free reorganization and to be accounted
for as a pooling of interests. Shareholders of First National Bankshares will
receive Whitney Holding Corporation common stock with a value of approximately
$41 million. Consummation of the transaction is subject to approval by First
National Bankshares' shareholders, approval from appropriate regulatory
agencies, and other customary conditions to closing. The merger is expected to
be completed during the first quarter of 1997.
Page 7 of 29 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY
Whitney Holding Corporation earned $10.4 million for the third quarter of
1996 or $0.61 per share. For the third quarter of 1995, the Company earned $16.1
million or $0.95 per share which included the effect of a $9.9 million net
reduction in the reserve for possible loan losses. Excluding the after-tax
effect of this reserve reduction, the Company earned $9.7 million or $0.57 for
1995's third quarter. Year-to-date through September 30, 1996, the Company
earned $28.5 million or $1.66 per share, including the effect of $2.3 million in
after-tax expenses related to a merger completed in March 1996. Before deducting
the tax-effected merger expenses, the Company earned $30.8 million or $1.79 per
share for the nine months ended September 30, 1996. For the first nine months of
1995, the Company earned $34.1 million or $2.00 per share on a fully-diluted
basis. Before adding the after-tax effect of the year-to-date net reserve
reduction, earnings were $27.7 million or $1.63 per fully-diluted share through
September 30, 1995.
Taxable-equivalent net interest income increased $1.9 million or 5.1%
between the third quarters of 1995 and 1996, despite a decline in the
taxable-equivalent net interest margin from 5.05% to 4.97%. Non-interest income
improved by $1.3 million or 16.5% in the third quarter of 1996 from the same
period in 1995, while non-interest expense increased $2.0 million or 6.9%
between these periods.
For the first nine months of 1996, taxable-equivalent net interest income
increased $6.0 million or 5.7%. Between these periods the taxable-equivalent net
interest margin declined from 4.99% to 4.81%. Non-interest income for the nine
months ended September 30, 1996 increased $2.1 million or 8.6% over the same
period in 1995. Year-to-date non-interest expense for 1996, which includes
completed merger expenses of approximately $2.8 million, increased $6.4 million
or 7.2% over 1995.
The following compares the annualized return on average total assets and the
return on average shareholders' equity for the three-month and nine-month
periods ended September 30, 1996 and 1995.
1996 1995
----- -----
Return on average assets:
Third quarter-
Total return 1.21% 1.40%
Return, before reserve reduction 1.21% 1.19%
Year to date -
Total return 1.10% 1.37%
Return, before merger related expenses
and reserve reduction 1.19% 1.17%
Return on average shareholders' equity:
Third quarter-
Total return 10.84% 12.95%
Return, before reserve reduction 10.84% 11.06%
Year to date -
Total return 10.14% 12.91%
Return, before merger related expenses
and reserve reduction 10.94% 10.98%
Page 8 of 29 Pages
<PAGE>
Non-performing assets decreased $1.9 million in the first nine months of
1996 from year end 1995 to $12.6 million at September 30, 1996. This total is
$2.1 million or 14% below the level of non-performing assets at September 30,
1995. The reserve for possible loan losses was $43.2 million on September 30,
1996, an amount which represented 444% of total non-performing loans and 2.4% of
total loans. At year end 1995, the reserve coverage was 405% of non-performing
loans and 2.5% of total loans.
For the third quarter of 1996, average earning assets were $3.11 billion, a
net increase of $218 million or 7.5% from $2.90 billion in the third quarter of
1995. For the nine months ended September 30, 1996, average earning assets grew
to $3.12 billion from $2.86 billion for the same period in 1995, an increase of
$268 million or 9.4%. Average loans outstanding grew $387 million or 29% between
the third quarters of 1995 and 1996 and $389 million or 31% between the
year-to-date periods. The growth in the loan portfolio was partly funded by
maturities of investment securities and the total average investment in
securities in 1996 decreased $84 million for the third quarter and $88 million
for the year-to-date period as compared to 1995. At September 30, 1996 earning
assets totaled $3.17 billion compared to $3.05 billion at December 31, 1995.
Average total deposits increased $29 million or 1.1% in the third quarter of
1996 to $2.67 billion when compared to the total of $2.65 billion in 1995's
third quarter. For the year-to-date period, average deposits grew $95 million or
3.6% in 1996 compared to the same period in 1995. Total deposits at September
30, 1996 were $2.70 billion, a moderate decrease from $2.78 million at year end
1995. Short term funds obtained through purchases of federal funds and sales of
securities under repurchase agreements, net of federal funds sold, increased on
average by $251 million or 294% for the third quarter of 1996 and $180 million
for the year-to-date period when compared to 1995. The increases in average
total deposits and average short-term borrowings from 1995 to 1996 both
supported the growth in average loans between these same periods.
On March 8, 1996, the Company completed its merger with First Citizens
BancStock, the parent of The First National Bank in St. Mary Parish ("FNB St.
Mary"). FNB St. Mary, which was merged into Whitney National Bank, had total
assets of approximately $243 million, including $147 million in loans, and total
deposits of $214 million at the closing date. The merger has been accounted for
as a pooling of interests and prior period information has been restated to
present the combined financial results.
On October 25, 1996, the Company completed a merger with the American Bank &
Trust ("AB&T") of Pensacola, Florida and with Liberty Holding Company ("LHC"),
the parent of Liberty Bank, also of Pensacola, Florida. AB&T, with assets of $57
million, and Liberty Bank, with assets of $48 million, were merged into a
newly-chartered wholly-owned banking subsidiary of the Company, Whitney National
Bank of Florida. Each of these mergers will be accounted for as a pooling of
interest.
During October 1996, the Company entered into a merger agreement with First
National Bankshares, Inc., the parent company of First National Bank of Houma
("FNB Houma"). FNB Houma, which will be merged into Whitney National Bank, has
total assets of approximately $210 million, $111 million in loans, total
deposits of $189 million and shareholders' equity of $17 million. Shareholders
of First National Bankshares will receive Whitney Holding Corporation common
stock with a value of approximately $41 million. The merger will be accounted
for as a pooling of interests. Consummation of the transaction is subject to
approval by First National Bankshares' shareholders, approval from appropriate
regulatory agencies, and other customary conditions to closing. The merger is
expected to be completed during the first quarter of 1997.
Page 9 of 29 Pages
<PAGE>
In the third quarter of 1996, the Company declared a dividend of $0.25 per
share, the same as for the previous quarter and a 13.6% increase over the first
quarter 1996 dividend of $0.22 per share. The third quarter 1996 dividend
represents a 25% increase over the $0.20 per share dividend declared in each of
1995's first three quarters.
FINANCIAL CONDITION
Loans
The Company achieved growth in average loans outstanding of $387 million or
29% for the third quarter of 1996 and $389 million or 31% for the year-to-date
period when compared to the same periods in 1995. Total loans outstanding of
$1.80 billion at September 30, 1996 were $209 million above the total
outstanding at year end 1995. The Company's loan growth reflects both the
continued favorable economic conditions in the Company's market area, which is
primarily southern Louisiana, Mississippi and Alabama, as well as a focused
effort to market the Banks' retail and commercial loan products.
All categories of loans experienced solid growth from the third quarter of
1995 to the third quarter of 1996. Commercial loans, other than those secured by
real estate, increased approximately $162 million or 26% between 1995 and 1996.
Loans secured by commercial real estate and non-retail residential mortgage
loans together increased approximately $105 million or 24%. The overall increase
was well distributed over diverse industries, including loans to entities
involved in manufacturing, wholesaling, retailing, and natural resource
exploration and development. Retail mortgages grew by approximately $114 million
or 65% between these periods, largely as a result of the successful promotion of
new retail loan products, while loans to individuals, which include various
consumer installment and credit line loan products, increased $14 million or
approximately 13%.
Deposits and Short-Term Borrowings
The Company's average deposits increased $29 million or 1.1% for the third
quarter of 1996 and $95 million or 3.6% for the first nine months of 1996 when
compared to the same periods in 1995. As is shown in Table 1, average
non-interest-bearing demand deposits have been relatively stable between 1995
and 1996, decreasing $13 million or 1.6% in the third quarter of 1996 and
increasing $16 million or 1.9% for the year-to-date period in 1996. This table
also shows that average time deposits, which includes both core deposits and
certificates of deposit and other time deposits of $100,000 and over, increased
$86 million or 11.3% between the third quarters of 1995 and 1996 and $131
million or 18.3% between the year-to-date periods. The growth within the time
deposit category came both from core deposits of under $100,000, which increased
$12 million for the quarter and $41 million year to date, and from time of
deposit of $100,000 and over, which had a quarterly increase of $74 million and
a year-to-date increase of $90 million. All of the Company's market areas
experienced increases in the time deposit category.
Third quarter average savings, NOW and money market account deposits
decreased $44 million or 4.1% between 1995 and 1996. For the first nine months
of 1996 the decrease in these deposit categories from their 1995 levels was $52
million or 4.8%. Despite a moderate decline in market interest rates during
1995, higher-rate investment alternatives have been available to these
lower-cost depositors during the past year which has fostered disintermediation
of some deposit funds.
Page 10 of 29 Pages
<PAGE>
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 certain other customers. For the
third quarter of 1996, average short-term borrowings increased $166 million
compared to the same period in 1995. Year to date in 1996, the increase in
average short-term borrowings was $146 million. The Company has used short-term
borrowings, particularly repurchase agreements, to provide funds to support the
growth in the loan portfolio. The rise in short-term borrowings is also partly
attributable to the promotion of repurchase agreements in connection with an
expansion of the Banks' cash management services. The Company's average
short-term borrowing position, net of federal funds sold, was $337 million for
the third quarter and $308 million year to date in 1996 compared to $86 million
and $128 million, respectively, in 1995.
Investment in Securities
The Company's total investment in securities was $1.37 billion at September
30, 1996, a decrease of approximately $67 million or 4.7% from the December 31,
1995 total of $1.44 billion. The average total investment securities portfolio
outstanding decreased $84 million or 5.7% between the third quarter of 1995 and
the third quarter of 1996 and $88 million or 5.8% between the year-to-date
periods. Funds from unreinvested investment maturities have been used to satisfy
increased loan demand between these periods.
The mix of average investments has remained relatively stable, with U. S.
Treasury and government agency securities, excluding mortgage-backed issues,
representing between 73% and 79% of the totals and mortgage-backed issues
representing between 11% and 17% of total securities. The weighted-average
maturity of the overall portfolio of securities was 32 months at September 30,
1996 as compared with 24 months at September 30, 1995. As is shown in Table 1,
the weighted-average taxable-equivalent portfolio yields were 6.17% for the
third quarter of 1996 and 6.11% for the year-to-date period. These yields
represent increases of 31 and 24 basis points, respectively, over the yields
realized during the comparable periods in 1995.
Securities classified as available for sale constituted approximately 9% of
the total investment portfolio at September 30, 1996 compared to 14% at year end
1995. These securities are reported at their estimated fair values in the
consolidated statements of condition with the unrealized gain or loss reported,
net of tax, as a separate component of shareholders' equity. The remaining
portfolio securities are classified as held to maturity and are reported at
amortized cost. In the second quarter of 1996, approximately $12 million of
securities that had been classified by FNB St. Mary as available for sale were
transferred to the held to maturity category in accordance with the investment
policies and practices of the combined institution after FNB was merged into
Whitney National Bank in March 1996. This transfer was recorded at fair value.
The unrealized gains and losses at the transfer date, which are included net of
tax as a component of shareholders' equity, were insignificant. The Company
maintains no trading portfolio.
Bank Premises and Equipment
The net investment in bank premises and equipment at September 30, 1996 of
$102 million represents a $20 million or 25% increase from the level at year end
1995. Beginning in 1995 and continuing in 1996, the Company has accelerated the
expansion of its branch network, including automated teller machines, the
renovation or replacement of existing branch facilities, and the enhancement of
its facilities
Page 11 of 29 Pages
<PAGE>
for its support operations. During 1996, the Company has completed or begun
construction on thirteen new branch locations throughout its market area and
recently opened a new operations center.
Asset Quality
Overall asset quality exhibited a trend of steady improvement over the past
several years. As is shown in Table 3, for the first nine months in 1996 total
non-performing assets decreased $1.9 million from year end 1995 to $12.6 million
at September 30, 1996. This total is $2.1 million or 14% below the level of
non-performing assets at September 30, 1995. The Company recovered $4.2 million
of previously charged-off loans in the third quarter of 1996 and $8.5 million
year to date through September 30, 1996. As is shown in Table 2, over the same
periods the Company identified $1.2 million and $4.6 million, respectively, of
loans to be charged off as uncollectible against the reserve for possible loan
losses, resulting in a net recovery for the third quarter of $3.0 million and a
year-to-date net recovery of $3.9 million. The Company was in a net recovery
position for each of the comparable periods in 1995 totaling $4.7 million and
$7.7 million, respectively.
The reserve for possible loan losses is maintained at a level believed by
management to be adequate to absorb potential losses in the portfolio. No
provision or reserve reduction was required for the third quarter or year to
date period in 1996. With the significant net recoveries through the first nine
months of 1995 and the continued improvement in overall asset quality, the
Company was able to return to income $9.9 million of the reserve for possible
loan losses in 1995's third quarter. Year to date in 1995, the net reserve
reduction was $9.8 million, which includes some small quarterly provisions
recorded by the pooled entity. The reserve for possible loan losses represented
444% of non-performing loans at September 30, 1996 and 2.4% of total loans on
this date. At year end 1995 this reserve coverage was 405% of non-performing
loans and 2.5% of total loans.
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 net operating
income from these property interests, primarily from oil and gas royalties and
real estate operations, was approximately $775 thousand for the first nine
months of 1996, including $504 thousand in the third quarter of which
approximately $360 thousand relates to the sale of seventy-seven acres of vacant
land to the town of Berwick, Louisiana. For the first nine months of 1995,
operating income derived from these property interests totalled approximately
$137 thousand. Future dispositions of these assets may result in the recognition
of substantial gains.
Page 12 of 29 Pages
<PAGE>
Capital Adequacy
The Company's regulatory risk-based capital ratios declined slightly between
December 31, 1995 and September 30, 1996, while its leverage ratio showed a
small increase. Contributing to the decrease in the risk-based ratios was a
shift in the asset mix to loans which are generally assigned a risk-weighting
higher than for investment securities in the capital ratio calculation.
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 September 30, 1996.
<TABLE>
<CAPTION>
Required for
September 30, December 31, well-capitalized
1996 1995 institution
------------------------------------------------------
<S> <C> <C> <C>
Tier 1 risk-based capital ratio 16.31% 17.26% 6.00%
Total risk-based capital ratio 17.57% 18.52% 10.00%
Tier 1 leverage capital ratio 10.35% 10.08% 5.00%
</TABLE>
Page 13 of 29 Pages
<PAGE>
RESULTS OF OPERATIONS
Net Interest Income
Taxable-equivalent net interest income increased $1.9 million or 5.1%
between the third quarters of 1995 and 1996, despite a decline in the net
interest margin from 5.05% to 4.97%. For the first nine months of 1996,
taxable-equivalent net interest income increased $6.0 million or 5.7%, while the
net interest margin declined from 4.99% to 4.81%. A combination of factors
contributed to these changes, the components of which are detailed in Table 1.
Taxable-equivalent loan interest income increased $6.1 million or 18.8% for
the third quarter and $19.9 million or 22.2% for the first nine months of 1996
when compared to 1995. These increases were driven by the growth in average
loans outstanding between 1995 and 1996, which totalled $387 million for the
third quarter and $389 million year to date. The increase in interest income
from loan growth was partially offset by the impact of a decrease in the
quarterly and year-to-date effective loan yields in 1996 as compared to 1995.
For the third quarter, the effective yield decreased 73 basis points to 8.89% in
1996 from 9.62% in 1995. For the year-to-date period, the yield decreased 62
basis points, to 8.77% in 1996 from 9.39% in 1995.
The decreases in the effective loan yields reflect both the impact of
variable and short-term fixed-rate loans repricing in a moderating interest rate
environment as well as some increase in competitive pressure on the pricing of
loans to new and existing relationships. Market interest rates trended lower
throughout 1995 and early 1996. Over this period, bank prime rates decreased
approximately 75 basis points. Approximately one-third of the Company's loan
portfolio reprices with changes in prime.
Taxable-equivalent interest income on investments securities for 1996's
third quarter decreased $0.2 million or 0.9% from the third quarter of 1995. For
the first nine months of 1996, the decrease in investment income was $1.3
million or 1.9% from 1995. These decreases are consistent with reductions in the
average investment in securities between 1995 and 1996, which totalled $84
million for the quarter and $88 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 or falling
market rates as are its loan yields. Because of this and with the modest shift
in the portfolio mix toward mortgage-backed issues and U. S. government agency
securities and from U. S. Treasury securities, the effective portfolio yield was
6.17% for the third quarter of 1996, an increase of 31 basis points from a yield
of 5.86% for the third quarter of 1995. Year to date, the increase was 24 basis
points, to 6.11% in 1996 from 5.87% in 1995.
The net increase in taxable-equivalent interest income between 1995 and 1996
was $4.6 million or 8.3% for the third quarter and $17.1 million or 10.7% for
the first nine months. The overall effective earning-asset yield in the third
quarter of 1996 was 7.67%, a slight improvement over the 7.59% yield realized in
the same period in 1995. The year-to-date effective yield in 1996 also increased
slightly to 7.52% from 7.45% in 1995.
Interest expense increased $2.7 million or 14.6% in 1996's third quarter as
compared to the same period in 1995. Year-to-date interest expense through
September 30, 1996 also increased over the comparable 1995 period, by $11.0
million or 20.9%. These increases reflect in part the impact of the growth in
average total interest-bearing liabilities, and particularly short-term
borrowings, between these periods, which totalled $208 million for the third
quarter and $225 million year to date. These increases also reflect the rate
structures of the markets in which the Company has made acquisition since the
beginning of 1995 and a shift in the deposit mix toward time deposits, a shift
which is also partly attributable to recent acquisitions. The overall cost of
funds rate on interest-bearing liabilities was 3.81% for both the third quarter
and first nine months of 1996. This represents increases of 13 and 29 basis
Page 14 of 29 Pages
<PAGE>
points, respectively, compared to rates of 3.68% in 1995's third quarter and
3.52% for the year-to-date period.
Other Income and Expense
Non-interest income, adjusted to exclude net gains from sales of foreclosed
real estate and other foreclosed assets, increased $0.5 million or 5.9% to $8.5
million in the third quarter of 1996 from $8.0 million in the same period of
1995. Year to date, adjusted non-interest income increased $1.2 million or 4.9%
to $25.2 million compared with $24.0 million for 1995.
Income from service charges on deposit accounts, which accounted for
approximately half of adjusted non-interest income in each of these periods, was
virtually unchanged for the third quarter of 1996 as compared to 1995. For the
year-to-date period in 1996, service charge income decreased $0.5 million or
3.6% as compared to 1995. The reduction in the Company's FDIC deposit insurance
premiums, as discussed below, led to a reduction in the deposit insurance
assessment on business accounts and was partly responsible for the decrease in
service charge income.
The Company continued to expand its automated teller facilities during 1995
and the first nine months of 1996. Fees generated from ATM operations increased
$0.2 million or 68% for the third quarter of 1996 and $0.5 million or 57% for
the year-to-date period over the comparable periods in 1995. Fee income from
credit card related operations increased between these periods, reflecting both
economic conditions as well as successful marketing efforts. Income from the
Company's secondary mortgage loan operations also was higher in the third
quarter and first nine months of 1996 reflecting in part a somewhat more
favorable interest rate environment during these periods than during 1995.
Non-interest operating expenses were $31.8 million in the third quarter of
1996, which represents an increase of $2.0 million or 6.9% over 1995's third
quarter total of $29.8 million. For the year-to-date period in 1996, total
non-interest expenses were $95.0 million, including $2.8 million in expenses
related to a completed merger in the first quarter. This is an increase of $6.4
million or 7.2% over the 1995 total of $88.6 million.
Salaries and employee benefits expense totaled $16.6 million for the third
quarter of 1996 compared to $16.2 million for the third quarter of 1995, an
increase of $0.4 million or 2.4%. For the first nine months of 1996, salaries
and employee benefits expense increased $3.1 million or 6.8% to $49.1 million
from $46.0 million in 1995. Approximately $0.8 million of the year-to-date
increase relates to nonrecurring personnel costs incurred in connection with the
merger completed in March 1996. An additional $0.4 million of this comparative
increase was related to the new banking operations opened in Alabama in
mid-February of 1995. The remaining year-to-date increase of $1.9 million or
4.2% and the quarterly increase noted above are attributable to regular merit
increases and staff additions and to the net change in the cost of various
employee and management benefit and incentive programs.
Non-interest expenses other than personnel-related expenses increased $1.7
million or 12.2% between the third quarter of 1995 and the third quarter of
1996. Year to date, these expenses increased $3.3 million or 7.7%. Excluding the
relocation expenses discussed below and approximately $2.0 million in first
quarter 1996 merger expenses, non-personnel-related operating expenses increased
$1.2 million or 8.5% in the third quarter of 1996 as compared to 1995 and
increased $0.8 million or 1.9% for the first nine months of 1996.
Contributing to both the quarterly and year-to-date operating expense
increases in 1996 was approximately $0.5 million in expenses incurred in
connection with the relocation of the Company's data processing and operational
support departments to the newly-opened operations center, which began near the
end of the third quarter of 1996. The costs of completing the relocation and
making this new center
Page 15 of 29 Pages
<PAGE>
fully functional, currently estimated at an additional $0.5 million, will be
expensed in the fourth quarter of 1996.
Occupancy expense increased $0.6 million or 29.7% for the third quarter of
1996 and $1.3 million or 21.7% for the year-to-date period, reflecting both the
expansion of the Company's branch network and the ongoing program to upgrade the
appearance and functionality of its administrative offices, operations
facilities and a significant number of the Company's existing branches. Within
the past year, the Company opened nine new branch locations, renovated two
additional branch locations and its main banking offices, and began its move
into the new operations center. The additions to the branch network, the
continuing expansion of the Company's ATM network and various enhancements to
the Company's data processing systems and automation capabilities during 1995
and 1996, all contributed to an increase of approximately $0.4 million or 17%
for the second quarter and $1.0 million or 13% for the first nine months in the
expense for furnishings and equipment.
The dramatic decrease in the premium charged for FDIC deposit insurance
during the second half of 1995 led to a reduction in the Company's 1996
year-to-date deposit insurance expense of approximately $2.5 million as compared
to 1995. For the third quarter of 1996, there was a small increase in this
expense category as compared to 1995 because of a one-time insurance assessment
that resulted from legislation enacted in September 1996 to recapitalize the
deposit insurance fund for the savings and loan industry.
A net increase of approximately $0.7 million in various other expense
categories for the third quarter of 1996 was fully offset by a recovery of
collection costs as part of a legal settlement during that quarter. The net
increase in various other expense categories for the first nine months of 1996
was approximately $1.0 million, including a $0.5 million net recovery from legal
settlements for the year-to-date period.
Income Taxes
The Company provided for income taxes at an overall effective rate of 31.5%
for the quarter and 31.3% year to date in 1996 as compared to 32.9% and 31.6%,
respectively, for the same periods in 1995. 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.
LIQUIDITY AND OTHER MATTERS
The Company and the Banks manage liquidity 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, both as a source of
funding for certain short-term lending facilities and as part of its services to
correspondent banks and certain other customers. Neither the Company nor the
Banks have accessed long-term debt markets as part of liquidity management.
Average core deposits, defined as all deposits other than time deposits of
$100,000 or more, decreased $45 million for the third quarter of 1996 and were
essentially unchanged for the year-to-date period
Page 16 of 29 Pages
<PAGE>
compared to the same periods in 1995. Core deposits comprised approximately 86%
of total average deposits for the 1996 periods and 88% of total average deposits
in 1995.
As of September 30, 1996, approximately $363 million or 29% of the portfolio
of investment securities held to maturity was scheduled to mature within one
year. An additional $124 million of investment securities was classified as
available for sale at the end of 1996's third quarter, although management's
determination of this classification does not derive primarily from liquidity
considerations.
The Banks had approximately $1.0 billion in unfunded loan commitments
outstanding at September 30, 1996, an increase of $82 million from the level at
December 31, 1995. Contingent obligations under letters of credit and financial
guarantees decreased slightly between these dates to a total of $76 million at
September 30, 1996. Available credit card lines were $39 million at September
30, 1996, an increase of $8 million from year end 1995. Draws under these
financial commitments should not place any unusual strain on the Company's
liquidity position.
Page 17 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
TABLE 1.
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
ANALYSIS OF CHANGES IN INTEREST INCOME AND INTEREST EXPENSE
(dollars in thousands, unaudited)
THIRD QUARTER ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
1996 1995 1996 1995
--------------------------------------------------------------------------------------------------------------
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate Balance Expense Rate Balance Expense Rate
--------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans (tax
equivalent)
(1),(2)............ $1,725,003 $38,607 8.89% $1,337,940 $32,508 9.62% $1,661,418 $109,397 8.77% $1,271,942 $89,495 9.39%
--------------------------------------------------------------------------------------------------------------
U. S. Treasury
securities......... $677,274 $9,614 5.63% $925,523 $12,611 5.41% $719,051 $30,227 5.60% $966,875 $39,256 5.43%
U.S. government
agency securities.. 322,271 5,092 6.32 233,570 3,470 5.94 339,011 15,586 6.13 245,536 10,905 5.92
Mortgage-backed
securities ........ 240,740 3,865 6.42 159,807 2,628 6.58 243,040 11,727 6.43 162,573 8,143 6.68
State and municipal
securities (tax
equivalent) (1).... 132,145 2,688 8.14 127,128 2,629 8.27 132,171 8,160 8.23 128,556 7,959 8.25
Corporate bonds and
other securities... 4,553 59 5.18 14,653 177 4.83 4,625 191 5.49 22,425 921 5.48
--------------------------------------------------------------------------------------------------------------
Total investment
in securities
(3).............. $1,376,983 $21,318 6.17% $1,460,681 $21,515 5.86% $1,437,898 $65,891 6.11% $1,525,965 $67,184 5.87%
--------------------------------------------------------------------------------------------------------------
Federal funds
sold............... 12,101 166 5.37% 97,579 1,451 5.82% 23,989 990 5.42% 57,519 2,546 5.84%
--------------------------------------------------------------------------------------------------------------
Total interest-
earning assets... $3,114,087 $60,091 7.67% $2,896,200 $55,474 7.59% $3,123,305 $176,278 7.52% $2,855,426 $159,225 7.45%
--------------------------------------------------------------------------------------------------------------
Cash and due from
financial
institutions....... 184,266 184,691 187,845 185,279
Bank premises and
equipment, net..... 9,175 74,708 92,155 73,096
Other real estate
owned, net......... 3,190 6,114 4,184 6,738
Other assets......... 77,672 81,388 77,448 80,860
Reserve for possible
loan losses........ (42,688) (42,298) (41,416) (40,060)
---------- ---------- ---------- ----------
Total assets....... $3,435,702 $3,200,803 $3,443,521 $3,161,339
========== ========== ========== ==========
LIABILITIES
Savings deposits..... $438,386 $2,970 2.69% $476,726 $3,222 2.68% $449,563 $9,047 2.68% $484,196 $9,698 2.68%
NOW and MMDA
deposits........... 578,888 3,097 2.12 584,555 2,982 2.02 588,108 9,163 2.08 605,720 9,059 2.00
Time deposits........ 842,162 10,937 5.15 756,437 9,918 5.20 848,847 33,231 5.22 717,712 26,523 4.94
--------------------------------------------------------------------------------------------------------------
Total interest-
bearing deposits.. $1,859,436 $17,004 3.63% $1,817,718 $16,122 3.52% $1,886,518 $51,441 3.63% $1,807,628 $45,280 3.35%
--------------------------------------------------------------------------------------------------------------
Federal funds
purchased and
repurchase
agreements......... 349,292 4,291 4.81% 183,269 2,454 5.24% 331,909 12,172 4.82% 185,732 7,323 5.20%
--------------------------------------------------------------------------------------------------------------
Total interest-
bearing
liabilities....... $2,208,728 $21,295 3.81% $2,000,987 $18,576 3.68% $2,218,427 $63,613 3.81% $1,993,360 $52,603 3.52%
--------------------------------------------------------------------------------------------------------------
Demand deposits,
non-interest-
bearing............ 815,497 828,399 821,231 805,557
Other liabilities.... 29,209 26,079 29,148 26,619
Shareholders' equity. 382,268 345,338 374,715 335,803
---------- ---------- ---------- ----------
Total liabilities
shareholders'
equity........... $3,435,702 $3,200,803 $3,443,521 $3,161,339
========== ========== ========== ==========
Net interest
income/margin
(tax
equivalent)... $38,796 4.97% $36,898 5.05% $112,665 4.81% $106,622 4.99%
======= ===== ======= ===== ======== ===== ======== =====
<FN>
(1) Tax equivalent amounts are calculated using a marginal federal income tax rate of 35%.
(2) Average balance includes nonaccruing loans of $7,426 and $10,249 for the third quarters and $8,202 and $12,483 for the year-
to-date periods in 1996 and 1995, respectively.
(3) Average balance includes unrealized gain (loss) on securities available for sale of ($742), and ($50) for the third quarters
and ($1) and ($2,713) for the year-to-date periods in 1996 and 1995, respectively. These amounts, primarily associated with
mortgage-backed securities, are excluded in calculating the yield.
</FN>
</TABLE>
Page 18 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
TABLE 2.
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
RESERVE FOR POSSIBLE LOAN LOSSES
(by quarter, in millions, unaudited)
1996 1995
--------------------- -----------------------------
3rd 2nd 1st 4th 3rd 2nd 1st
--------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Reserve balance, beginning of quarter................................. $40.2 $41.4 $39.3 $36.1 $41.3 $39.4 $36.3
Reserves provided through acquisition................................. - - - - - - 1.8
Provision for possible loan losses:
Expense of providing loss reserves................................ - - - 0.3 - 0.1 0.1
Reduction of loss reserves........................................ - - - - (9.9) - -
Loans charged off..................................................... (1.2) (2.6) (0.8) (0.5) (0.5) (1.1) (1.4)
Recoveries............................................................ 4.2 1.4 2.9 3.4 5.2 2.9 2.6
--------------------- -----------------------------
Reserve balance, end of quarter....................................... $43.2 $40.2 $41.4 $39.3 $36.1 $41.3 $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)
1996 1995
--------------------- -----------------------------
3rd 2nd 1st 4th 3rd 2nd 1st
--------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Loans accounted for on a nonaccrual basis................................. $7.4 $8.1 $10.2 $8.1 $9.3 $13.9 $14.5
Restructured loans........................................................ 2.4 2.2 1.6 1.6 - - -
--------------------- -----------------------------
Total non-performing loans................................................ $9.8 $10.3 $11.8 $9.7 $9.3 $13.9 $14.5
--------------------- -----------------------------
Other real estate owned, net.............................................. 2.8 3.9 4.7 4.8 5.4 6.2 7.2
--------------------- -----------------------------
Total non-performing assets............................................... $12.6 $14.2 $16.5 $14.5 $14.7 $20.1 $21.7
===================== =============================
Net gain on sales of OREO................................................. $0.5 $0.4 $0.2 $0.1 - $0.5 $0.3
===================== =============================
Reserve for possible loan losses as a percent of:
Total non-performing loans............................................. 444% 392% 351% 405% 388% 297% 272%
Total loans............................................................ 2.4% 2.4% 2.6% 2.5% 2.6% 3.1% 3.2%
Non-performing loans as a percent of
total loans............................................................ 0.54% 0.61% 0.74% 0.61% 0.67% 1.04% 1.16%
Non-performing assets as a percent of
total assets........................................................... 0.36% 0.41% 0.47% 0.43% 0.46% 0.63% 0.69%
</TABLE>
Page 19 of 29 Pages
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters
None
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, incorporated by reference to the
Company's Registration Statement on Form S-3 (File No. 33-52983) filed with
the Commission on April 5, 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
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, 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, 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., incorporated by reference to
the Company's June 30, 1995 Form 10-Q
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
Page 20 of 29 Pages
<PAGE>
Exhibit 10.14 - Directors' Compensation Plan, incorporated by reference to
the Company's Proxy Statement dated March 24, 1994
Exhibit 10.14a - Amendment No. 1 to the Whitney Holding Corporation
Directors' Compensation Plan, incorporated by reference to the Company's
Proxy Statement dated March 15, 1996
Exhibit 10.15 - Amended and Restated Agreement and Plan of Merger between
Whitney Holding Corporation and First Citizens BancStock, Inc., dated
December 15, 1995, incorporated by reference to the Company's 1995 Form 10-K
Exhibit 10.16 - Retirement Restoration Plan effective January 1, 1995,
incorporated by reference to the Company's 1995 Form 10-K
Exhibit 10.17 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and Rodney D. Chard
Exhibit 21 - Subsidiaries
Whitney Holding Corporation owns 100% of the capital stock of Whitney
National Bank and Whitney Bank of Alabama. All other subsidiaries considered
in the aggregate would not constitute a significant subsidiary.
Exhibit 27 - Financial Data Schedule
Page 21 of 29 Pages
<PAGE>
(b) Reports on Form 8-K
The Registrant filed the following current reports on Form 8-K during the
quarter for which this report is filed:
None
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: November 14, 1996 By:/s/ Edward B. Grimball
-------------------------- -------------------------------
Edward B. Grimball
Executive Vice President &
Chief Financial Officer
Page 22 of 29 Pages
<PAGE>
Exhibit 10.17
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 Rodney D. Chard (the "Executive").
WHEREAS, the Executive is presently employed by each of the Holding
Corporation and the Bank as an Executive Vice President.
NOW, THEREFORE, effective July 24, 1996, 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
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 -
Page 23 of 29 Pages
<PAGE>
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 29 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;
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;
- 3 -
Page 25 of 29 Pages
<PAGE>
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 1retirement 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.
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.
- 4 -
Page 26 of 29 Pages
<PAGE>
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.
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.
- 5 -
Page 27 of 29 Pages
<PAGE>
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.
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.
- 6 -
Page 28 of 29 Pages
<PAGE>
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/ Rodney D. Chard /s/ Robert E. Howson
- ---------------------------------------- ------------------------------
By: Robert E. Howson
Date: July 26, 1996 Title: Director & Chairman
----------------------------------- Compensation Committee of
Board of Directors
Date: July 25, 1996
----------------------------
- 7 -
Page 29 of 29 Pages
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<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
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<TOTAL-ASSETS> 3,515,289
<DEPOSITS> 2,696,506
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0
0
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