<PAGE>
August 13, 1997
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,
1997.
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, 1997
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 20,748,780 shares were
outstanding on July 31, 1997.
An exhibit index appears on page 19.
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION
TABLE OF CONTENTS
Page
- ----------------------------------------------------------------------------------------------------------------------
PART I. Financial Information
<S> <C>
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.................................................................9
- ----------------------------------------------------------------------------------------------------------------------
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
- ----------------------------------------------------------------------------------------------------------------------
Signatures.................................................................................................21
Page 2 of 30 Pages
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM 1. Financial Statements
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands) June 30 December 31,
ASSETS 1997 1996
---------------------------
<S> <C> <C>
Cash and due from financial institutions............................................. $ 256,364 $ 245,260
Investment in securities:
Securities available for sale .................................................. 126,069 210,073
Securities held to maturity (fair value of $1,258,979 in 1997 and $1,272,425 in
1996)........................................................................ 1,251,675 1,264,126
Federal funds sold and short-term deposits........................................... 4,135 55,693
Loans................................................................................ 2,393,854 2,277,584
Less reserve for possible loan losses................................................ 42,698 42,410
---------- ----------
Loans, net........................................................................ 2,351,156 2,235,174
Bank premises and equipment, net..................................................... 127,167 118,833
Other real estate owned, net......................................................... 4,094 4,367
Accrued income receivable............................................................ 32,583 33,619
Other assets......................................................................... 49,141 50,888
---------- ----------
TOTAL ASSETS............................................................... $4,202,384 $4,218,033
========== ==========
LIABILITIES
Deposits:
Non-interest-bearing demand deposits............................................ $1,005,188 $1,000,877
Interest-bearing deposits....................................................... 2,282,987 2,261,409
---------- ----------
Total deposits.............................................................. 3,288,175 3,262,286
Federal funds purchased and securities sold under repurchase agreements.............. 424,871 484,045
Dividends payable.................................................................... 5,800 4,870
Other liabilities.................................................................... 26,572 26,295
---------- ----------
TOTAL LIABILITIES.......................................................... $3,745,418 $3,777,496
---------- ----------
SHAREHOLDERS' EQUITY
Common stock......................................................................... $2,800 $2,800
Capital surplus...................................................................... 115,630 109,743
Retained earnings.................................................................... 350,290 336,630
Net unrealized gain (loss) on securities available for sale, net of tax effect of
$518 in 1997 and $465 in 1996.................................................... (987) (864)
---------- ----------
Total...................................................................... 467,733 448,310
Treasury stock at cost, 373,068 shares in 1997 and 493,780
shares in 1996, and unearned restricted stock compensation........................ 10,767 7,774
---------- ----------
TOTAL SHAREHOLDERS' EQUITY................................................. $456,966 $440,536
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY................................................. $4,202,384 $4,218,033
========== ==========
The accompanying notes are an intergral 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 share and per-share amounts) FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1997 1996 1997 1996
------- ------- -------- --------
INTEREST INCOME
<S> <C> <C> <C> <C>
Interest and fees on loans................................................. $49,966 $41,275 $ 97,571 $ 82,243
Interest and dividends on investments:
U.S. Treasury and agency securities.................................. 15,314 17,786 30,528 35,909
Mortgage-backed securities........................................... 4,619 4,409 9,069 8,697
Obligations of states and political subdivisions..................... 1,852 1,801 3,785 3,689
Federal Reserve stock and other securities........................... 99 84 164 202
Interest on federal funds sold and short-term securities................... 304 750 1,119 1,710
--------------------- ----------------------
TOTAL.......................................................... $72,154 $66,105 $142,236 $132,450
--------------------- ----------------------
INTEREST EXPENSE
Interest on deposits....................................................... $21,432 $21,120 $ 42,090 $ 42,370
Interest on federal funds purchased and securities
sold under repurchase agreement...................................... 5,462 3,972 10,909 7,912
--------------------- ----------------------
TOTAL.......................................................... $26,894 $25,092 $ 52,999 $ 50,282
--------------------- ----------------------
Net interest income........................................................ $45,260 $41,013 $ 89,237 $ 82,168
Provision for possible loan losses......................................... - 110 188 185
--------------------- ----------------------
Net interest income after provision for possible loan losses............... $45,260 $40,903 $ 89,049 $ 81,983
--------------------- ----------------------
NON-INTEREST INCOME
Gain on sale of securities................................................. $ 0 $ - $ - $ 15
Other non-interest income.................................................. 14,491 10,549 25,299 20,424
--------------------- ----------------------
TOTAL.......................................................... $14,491 $10,549 $ 25,299 $ 20,439
--------------------- ----------------------
NON-INTEREST EXPENSE
Salaries and employee benefits............................................. $20,379 $17,899 $ 39,921 $ 36,955
Occupancy of bank premises, net............................................ 3,058 2,654 6,051 5,105
Other non-interest expenses................................................ 15,524 14,149 31,503 29,925
--------------------- ----------------------
TOTAL.......................................................... $38,961 $34,702 $ 77,475 $ 71,985
--------------------- ----------------------
Income before income taxes................................................. $20,790 $16,750 $ 36,873 $ 30,437
Income tax expense......................................................... 6,638 5,329 11,934 9,609
--------------------- ----------------------
Net income................................................................. $14,152 $11,421 $ 24,939 $ 20,828
===================== ======================
Earnings per share:
Primary................................................................. $ 0.68 $ 0.56 $ 1.20 $ 1.02
Fully-diluted........................................................... $ 0.68 $ 0.56 $ 1.20 $ 1.02
Weighted average shares outstanding for calculation:
Primary................................................................. 20,855,450 20,495,450 20,721,561 20,465,735
Fully - diluted......................................................... 20,876,602 20,495,420 20,812,578 20,465,789
The accompanying notes are an intergral 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)
For the Six Months Ended
June 30,
1997 1996
--------------------------------
Cash flows from operating activities:
<S> <C> <C>
Net income................................................................... $ 24,939 $ 20,828
Adjustments to reconcile net income to cash provided by (used in)
operating activities:
Depreciation.............................................................. 6,348 5,375
Provision for possible loan losses........................................ 188 185
Provision for losses on OREO and other problem assets..................... 75 65
Amortization of intangible assets and unearned restricted stock
compensation........................................................... 1,985 1,766
Amortization of premiums and discounts on investment securities, net...... 1,841 4,556
Net gains on sales of OREO and other property............................. (2,115) (1,112)
Net gains on sales of investment securities............................... (11)
Deferred tax expense (benefit)............................................ (1,292) (805)
Increase (Decrease) in accrued income taxes............................... 1,900 (476)
(Increase) Decrease in accrued income receivable and other assets......... 243 (3,377)
Increase (Decrease) in accrued expenses and other liabilities............. 764 (145)
--------------------------------
Net cash provided by operating activities................................. $ 34,876 $ 26,849
--------------------------------
Cash flows from investing activities:
Proceeds from maturities of investment securities held to maturity........... $ 393,780 $ 214,219
Proceeds from maturities of investment securities available for sale......... 67,184 34,883
Proceeds from sales of investment securities available for sale.............. 68,580
Purchases of investment securities held to maturity.......................... (355,159) (224,163)
Purchases of investment securities available for sale........................ (11,984) (53,374)
Net (increase) decrease in loans............................................. (116,724) (109,332)
Net (increase) decrease in federal funds sold and short-term deposits........ 51,558 30,345
Proceeds from sales of OREO and other property............................... 3,451 2,596
Capital expenditures......................................................... (15,261) (19,350)
Other........................................................................ 95 (137)
--------------------------------
Net cash provided by (used in) investing activities.......................... $ 16,940 $ (55,733)
--------------------------------
Cash flows from financing activities:
Net increase (decrease) in non-interest-bearing demand deposits.............. $ 4,311 $ (61,755)
Net increase (decrease) in interest-bearing deposits other than
certificates of deposit and other time deposits........................... (4,705) (44,424)
Net increase (decrease) in certificates of deposit and other time deposits... 26,283 25,787
Net increase (decrease) in federal funds purchased and securities sold
under repurchase agreements............................................... (59,174) 78,894
Repurchase of common stock for treasury...................................... 499
Sale of common stock under employee savings plan and dividend
reinvestment plan......................................................... 1,964 937
Exercise of stock options.................................................... 460 1,310
Stock issued by pooled entities, pre-merger.................................. 239
Dividends paid............................................................... (9,848) (7,018)
Dividends paid, pooled entities.............................................. (502) (603)
--------------------------------
Net cash provided by (used in) financing activities.......................... $ (40,712)$ (6,633)
--------------------------------
Net increase (decrease) in cash and cash equivalents............................ $ 11,104 $ (35,517)
Cash and cash equivalents at the beginning of the period........................ 245,260 259,312
--------------------------------
Cash and cash equivalents at the end of the period.............................. $ 256,364 $ 223,795
================================
Interest income received........................................................ $ 143,258 $ 131,398
================================
Interest expense paid........................................................... $ 53,230 $ 49,939
================================
Net federal income taxes paid................................................... $ 10,836 $ 9,776
================================
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. 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, 1996.
CONSOLIDATION
The consolidated financial statements of the Company include the
accounts of Whitney Holding Corporation and its wholly-owned subsidiaries,
Whitney National Bank, First National Bank of Houma (Louisiana), Whitney Bank of
Alabama, Whitney National Bank of Mississippi, Whitney National Bank of Florida
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 mergers
completed in February 1997 and April 1997 which have been accounted for as
poolings of interests. Certain balances in prior periods have been reclassified
to conform with this period's financial presentation.
USE OF ESTIMATES
To prepare financial statements in conformity with generally accepted
accounting principles, management is required to develop estimates that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the amounts
of revenues and expenses to be reported for the periods presented in the
financial statements. Actual results could differ from those estimates.
EARNINGS PER SHARE
Earnings per share ("EPS"), both primary and fully-diluted, is
currently calculated using the weighted-average number of shares outstanding
during each period presented plus an adjustment for the dilutive effect of
common stock equivalents. For the Company, common stock equivalents consist of
stock options which have been granted to certain officers and directors. The
number of shares assumed outstanding for the EPS calculations with respect to
these stock options is determined using the treasury stock method.
Page 6 of 30 Pages
<PAGE>
In February 1997, the Financial Accounting Standards Board ("FASB")
issued a statement that revised and simplified the standards for the calculation
of earnings per share. Under these standards, which are effective for periods
ending after December 15, 1997, the Company will report two measures of EPS,
"basic" and "diluted." Basic EPS is calculated by dividing income available to
common shareholders by the weighted-average number of common shares outstanding
for the applicable period, without adjustment for potential common shares
outstanding in the form of options, warrants, convertible securities or
contingent stock agreements. For the calculation of diluted EPS, the number of
common shares outstanding will be increased by the number of additional common
shares that would have been outstanding if the dilutive potential common shares
had been issued as determined using the treasury stock method where appropriate.
Assuming that there are no changes in the Company's present capital structure,
the calculation of diluted EPS will yield a result essentially the same as the
current calculation of primary EPS. Although early application of this new
accounting standard is not permitted, the following pro forma disclosure of the
Company's basic and diluted EPS is allowed.
For the Periods
Ended June 30,
1997 1996
------------- -------------
Pro forma basic EPS:
For the quarter $ 0.68 $ 0.56
Year to date $ 1.21 $ 1.02
Pro forma diluted EPS:
For the quarter $ 0.68 $ 0.56
Year to date $ 1.20 $ 1.02
RECENT PRONOUNCEMENTS
In June 1997, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income," and SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information." SFAS No.
130 establishes standards for the reporting and display of comprehensive income
as part of a full set of financial statements. Comprehensive income for a period
encompasses net income and all other changes in a company's equity other than
from transactions with the company's owners. SFAS No. 131 establishes standards
for reporting information about a company's operating segments and requires that
reportable segments be identified based on how management organizes the
company's operations and related financial information for decision-making
purposes and performance assessment. The provisions of SFAS Nos. 130 and 131
are effective for 1998. Adoption of these standards will result in some
changes in the financial statement presentation to reflect comprehensive income,
but will not have an effect on the Company's financial position or results of
operations.
2) MERGERS AND ACQUISITIONS
On April 18, 1997, the Company completed its merger with Merchants
Bancshares, Inc., the parent of Merchants Bank & Trust Company ("MB&T") of
Gulfport, Mississippi. MB&T, with operations along the Mississippi Gulf Coast,
had total assets of approximately $200 million, deposits of $182 million and
shareholders' equity of $18 million. MB&T was merged into a newly-chartered
wholly-owned subsidiary of the Company, Whitney National Bank of Mississippi.
The transaction was priced at approximately $52 million. The Merchants
Bancshares shareholders received approximately 1.45 million shares of Company
common stock at the closing. The Company has accounted for this merger as a
pooling of interests.
Page 7 of 30 Pages
<PAGE>
On February 28, 1997, the Company completed a merger with First
National Bankshares, Inc. ("FNB"), the parent of First National Bank of Houma
("FNBH"). FNBH operates five banking offices in Terrebonne Parish, Louisiana,
and had total assets of approximately $235 million, $126 million in loans, total
deposits of $210 million and shareholders' equity of $18 million. The price of
this transaction was $41 million. FNBH shareholders received approximately 1.13
million shares of Whitney Holding Corporation common stock at the closing. This
merger was accounted for as a pooling of interests.
Page 8 of 30 Pages
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SUMMARY
Whitney Holding Corporation earned $14.2 million for the second quarter
of 1997 or $0.68 per share. For the second quarter of 1996, the Company earned
$11.4 million or $0.56 per share. Year to date through June 30, 1997, the
Company earned $24.9 million compared to $20.4 million for the same period in
1996. Excluding the after-tax effect of merger related expenses in each period,
earnings for the second quarters were $14.4 million or $0.69 per share in 1997
and $11.4 million or $0.56 per share in 1996, and earnings for the year-to-date
periods were $26.0 million or $1.26 per share in 1997 and $23.1 million or $1.13
per share in 1996.
Taxable-equivalent net interest income increased $4.2 million or 10.0%
between the second quarters of 1996 and 1997, and the taxable-equivalent net
interest margin increased to 4.91% from 4.69% between these periods.
Non-interest income improved by $3.9 million or 37.4% in the second quarter of
1997 from the same period in 1996, while non-interest expense increased $4.3
million or 12.3% between these periods.
For the first six months of 1997, taxable-equivalent net interest
income increased $7.0 million or 8.3% from the comparable prior-year period. The
year-to-date taxable-equivalent net interest margin also increased, from 4.71%
in 1996 to 4.88% in 1997. Non-interest income for the six months ended June 30,
1997 increased $4.9 million or 23.8% over the same period in 1996. Year-to-date
non-interest expense for 1997 increased $5.5 million or 7.6% over 1996.
The following compares the Company's annualized return on average total
assets and return on average shareholders' equity for the three month and six
month periods ended June 30, 1997 and 1996.
1997 1996
-------- ------
Return on average assets:
Second quarter -
Total return 1.36% 1.15%
Return before merger expenses 1.39% 1.15%
Year to date -
Total return 1.21% 1.05%
Return before merger expenses 1.26% 1.17%
Return on average shareholders' equity:
Second quarter -
Total return 12.52% 10.95%
Return before merger expenses 12.74% 10.95%
Year to date -
Total return 11.19% 10.05%
Return before merger expenses 11.68% 11.15%
For the second quarter of 1997, average earning assets were $3.79
billion, a net increase of $185 million or 5.1% from $3.60 billion in the second
quarter of 1996. For the six months ended June 30, 1997, average earning assets
grew to $3.78 billion from $3.60 billion for the same period in 1996, also a net
increase of $185 million or 5.1%. Average loans outstanding grew $424 million or
22% between the second quarters of 1996 and 1997 and $422 million or 22% between
the year-to-date periods. The growth in the loan portfolio was partly funded by
maturities of investment
Page 9 of 30 Pages
<PAGE>
securities and the total average investment in securities in 1997 decreased
$210 million for the second quarter and $220 million for the year-to-date
period as compared to 1996. At June 30, 1997, earning assets totalled $3.78
billion compared to $3.75 billion at December 31, 1996.
Average total deposits increased $53 million or 1.7% to $3.25 billion
in the second quarter of 1997 compared to $3.20 billion in the second quarter of
1996. For the year-to-date period, average deposits grew $41 million or 1.3% in
1997 compared to the same period in 1996. Total deposits at June 30, 1997 were
$3.29 billion, a small increase from the $3.26 billion balance at year end 1996.
Short-term funds obtained through purchases of federal funds and sales of
securities under repurchase agreements, net of short-term funds used in sales of
federal funds, increased on average by $128 million or 46% for the second
quarter of 1997 and $133 million or 51%for the year-to-date period when compared
to 1996. The increases in average total deposits and average short-term
borrowings from 1996 to 1997 both supported the growth in average loans between
these same periods.
Non-performing assets increased $0.6 million in the first six months of
1997 from year end 1996 to $16.4 million at June 30, 1997. The quarter-end total
was $2.0 million or 11% below the level of non-performing assets at June 30,
1996. The reserve for possible loan losses was $42.7 million on June 30, 1997,
an amount which represented 350% of total non-performing loans and 1.8% of total
loans. At year end 1996, the reserve coverage was 369% of non-performing loans
and 1.9% of total loans.
On April 18, 1997, the Company completed its merger with Merchants
Bancshares, Inc., the parent of Merchants Bank & Trust Company ("MB&T"). MB&T,
with operations along the Mississippi Gulf Coast, had total assets of
approximately $200 million, deposits of $182 million and shareholders' equity of
$18 million. On February 28, 1997, the Company completed a merger with First
National Bankshares, Inc. ("FNB"), the parent of First National Bank of Houma
("FNBH"). FNBH operates five banking offices in Terrebonne Parish, Louisiana and
had total assets of approximately $235 million, $126 million in loans, total
deposits of $210 million and shareholders' equity of $18 million. Each of these
mergers has been accounted for as a pooling of interests and prior period
information has been restated to present the combined financial results. See the
Notes to the Financial Statements herein for additional information concerning
these mergers.
On May 28, 1997 the Company declared a second quarter dividend of $0.28
per share of common stock, payable July 1, 1997. Year-to-date the Company has
declared dividends of $0.56 per share of common stock. This is a 19% increase
over the year-to-date dividends declared by the Company in the first six months
of 1996.
FINANCIAL CONDITION
Loans
The Company continued to increase its loans outstanding in the second
quarter of 1997. Average loans grew to $2.34 billion in 1997 or an increase of
$424 million or 22% over the $1.91 billion outstanding in the same period of
1996. Year to date, average loans increased $422 million or 22% in 1997 compared
to the average for the first six months of 1996. Total loans outstanding of
$2.40 billion at June 30, 1997 were $116 million above the total at year end
1996. 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 and the western Florida panhandle, as well as a focused
effort to market the subsidiary banks' retail and commercial loan products.
All categories of loans experienced growth from the second quarter of
1996 to the second quarter of 1997. Commercial loans other than those secured by
real estate increased approximately $229 million or 27% between 1996 and 1997.
Loans secured by commercial real estate and non-retail residential mortgage
loans together increased approximately $112 million or 19%. The overall increase
in commercial loans was well distributed over a number of different industries,
including loans to entities involved in manufacturing, wholesaling, retailing,
and natural resource exploration and development. Retail mortgages grew by
approximately $90 million or 30% between these periods,
Page 10 of 30 Pages
<PAGE>
largely as a result of the continued successful marketing of retail loan
products that have been introduced in recent years as an alternative to the
conventional mortgage loan products that the Company originates for sale in the
secondary market. Loans to individuals, which include various consumer
installment and credit line loan products, increased $16 million or
approximately 8%.
Deposits and Short-Term Borrowings
The Company's average deposits increased $53 million or 1.7% in the
second quarter of 1997 and $41 million or 1.3% for the first six months of 1997
when compared to the same periods in 1996. As is shown in Table 1 on page 17,
average non-interest-bearing demand deposits increased $34 million or 3.8% for
both the second quarter and year-to-date periods in 1997 when compared to the
same periods in 1996. Factors that contributed to this increase include the
design and promotion of new small business and personal checking account
products and the new branch openings during 1996 and 1997.
Table 1 also shows that average interest-bearing deposits have
increased $19 million or 0.8% between the second quarter of 1996 and 1997 and $7
million or 0.3% between the year-to-date periods. Second quarter average
savings, NOW and money market account deposits increased a net $33 million or
2.6% between 1996 and 1997. For the first six months of 1997, the net increase
in these deposit categories from their 1996 levels was $20 million or 1.6%. The
success of recent campaigns to promote a premium money market product first
introduced in 1996 was primarily responsible for this deposit growth. Total
money market account deposits grew $52 million or 18% in 1997's second quarter
and $49 million or 17% year to date as compared to 1996. Between 1996 and 1997,
average regular savings deposits decreased $6.6 million or 1.3% for the second
quarter and $16 million or 3.2% for the year-to-date period. Average NOW account
deposits were also lower in 1997 as compared to 1996, decreasing approximately
$13 million or 2.8% for both the second quarter and year-to-date periods. A
portion of the year-to-year decreases in regular savings and NOW account
deposits is attributable to funds moving to the premium money market product.
The time deposit category, which includes both core time deposits of
under $100,000 and time deposits of $100,000 and over, also showed a net
decrease on average, totalling approximately $14 million or 1.3%, between both
the second quarter and year-to-date periods of 1996 and 1997. Within this
category, core deposits decreased $34 million for the quarter and $42 million
year to date while non-core deposits had a quarterly increase of $20 million and
a year-to-date increase of $28 million.
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 short-term liquidity and part of the Company's services to
correspondent banks and certain other customers. Average short-term borrowings
increased $99 million or 30% for the second quarter of 1997 and $116 million or
36% year to date compared to the same periods in 1996. The Company has used
short-term borrowings, particularly repurchase agreements, to provide funds to
support the growth in the loan portfolio, and the rise in short-term borrowings
is also partly attributable to an increase in repurchase agreements related to
an expansion of the Company's cash management services. The Company's average
short-term borrowing position, net of federal funds sold and short-term
investments, increased $128 million for the second quarter and $133 million year
to date in 1997 compared to the same periods in 1996.
Investment in Securities
The Company's total investment in securities decreased $96 million to
$1.38 billion at June 30, 1997 compared to $1.47 billion at December 31, 1996.
The average total investment securities portfolio decreased $210 million or
12.8% between the second quarter of 1996 and the second quarter of 1997 and $220
million or 13.3% between the year-to-date periods. Funds provided by maturing
investment securities, in particular U. S. Treasury securities, were used to
satisfy increased loan demand between these periods. In both 1997 and 1996,
maturities of U. S. Treasury securities were also reinvested in higher-yielding
mortgage-backed issues, obligations of states and municipalities, and U. S.
government agency securities.
Page 11 of 30 Pages
<PAGE>
The weighted-average maturity of the overall portfolio of securities
was 42 months at June 30, 1997 as compared to 40 months at June 30, 1996. As is
shown in Table 1, the weighted-average taxable-equivalent portfolio yield
increased 28 basis points to 6.40% for the second quarter of 1997 and 25 basis
points to 6.35% for the year-to-date period when compared to the same periods in
1996.
Securities classified as available for sale constituted approximately
9% of the total investment portfolio at June 30, 1997 compared to 14% at year
end 1996. These securities are reported at their estimated fair values in the
consolidated statements of condition. The net unrealized loss on available for
sale securities was $0.5 million at June 30, 1997 compared to $0.2 million at
year end 1996. These losses are 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. During 1996 and 1997, securities
that had been classified by various pooled entities as available for sale were
transferred to the held to maturity category in accordance with the investment
policies and practices of the Company. These transfers were recorded at fair
value. The unrealized gains and losses at the transfer dates, which are included
net of tax as a component of shareholders' equity, were insignificant.
Bank Premises and Equipment
The net investment in bank premises and equipment at June 30, 1997 of
$127 million represents an $8.3 million or 7.0% increase from the level at year
end 1996 and a $18 million or 17% increase from June 30, 1996. Beginning in 1995
and continuing in 1996 and 1997, the Company has accelerated the expansion of
its branch and automated teller machine networks, the renovation or replacement
of existing branch facilities, and the enhancement of facilities for its support
operations. Between June 30, 1996 and June 30, 1997, the Company completed or
began construction on eight new branch locations throughout its market area and
opened a new operations center. During 1997, the Company also began and will
complete the upgrade of its branch delivery system and its office automation
systems.
Asset Quality
As is shown in Table 2 on page 18, for the second quarter of 1997 total
non-performing assets increased slightly to $16.4 million at June 30, 1997 from
$15.8 million on December 31, 1996. The quarter-end total is $2.0 million or 11%
below the level of non-performing assets at June 30, 1996. The Company recovered
$2.6 million of previously charged-off loans in the second quarter of 1997 and
$4.8 million year to date through June 30, 1997. As is shown in Table 3 on page
18, over the same periods the Company identified $1.7 million and $4.7 million,
respectively, of loans to be charged off as uncollectible against the reserve
for possible loan losses, resulting in a small net recovery for both the second
quarter and year-to-date periods in 1997. In 1996, the Company had a net
charge-off of $1.6 million in the second quarter but a small net recovery year
to date.
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 for possible loan losses was required in the second quarter of 1997
and a small provision of $0.2 million was made by pooled entities prior to the
mergers in 1997. The reserve for possible loan losses represented 350% of
non-performing loans at June 30, 1997 and 452% of nonaccruing loans on that
date. At year end 1996 this reserve coverage was 369% of non-performing loans
and 422% of nonaccruing loans. The reserve for possible loan losses represented
1.78% of total loans at June 30, 1997 and 1.85% at December 31, 1996.
Whitney National Bank has several property interests which were
acquired through routine banking transactions generally prior to 1933 and which
are carried in its financial records at a nominal value. Management continually
investigates ways to maximize the return on these assets. Operating income from
these property interests, primarily from oil and gas royalties and real estate
operations, was approximately $390 thousand for the first six months of 1997,
including approximately $164 thousand in the second quarter, compared to $276
thousand for the first six months of 1996. Future dispositions of these assets
may result in the recognition of substantial gains.
Page 12 of 30 Pages
<PAGE>
Capital Adequacy
The regulatory capital ratios for the Company and its significant
banking subsidiaries are compared in the accompanying table to the minimums that
are currently required under capital adequacy standards imposed by their
regulators and those that banks must maintain to be eligible for a "well
capitalized" classification under the prompt corrective action regulatory
framework. The Company's risk-based capital ratios increased slightly between
December 31, 1996 and June 30, 1997, and all ratios continued well in excess
of the minimum requirements. The increases between these dates are the result
of growth in regulatory capital through retained earnings and moderate growth in
total risk-weighted assets.
<TABLE>
<CAPTION>
Minimum Minimum for
June 30, December 31, Capital Adequacy "Well Capitalized"
1997 1996 Standard Classification
--------------------------------------------------------------
(dollars in thousands)
Tier 1 risk-based capital ratio:
<S> <C> <C> <C> <C>
Company 15.15% 14.92% 4.00% n/a
Whitney National Bank 14.35% 14.42% 4.00% 6.00%
Total risk-based capital ratio:
Company 16.40% 16.17% 8.00% n/a
Whitney National Bank 15.61% 15.67% 8.00% 10.00%
Tier 1 leverage capital ratio:
Company 10.47% 9.98% 4.00% n/a
Whitney National Bank 9.56% 9.42% 4.00% 5.00%
Total risk-weighted assets:
Company $2,890,000 $2,808,000
Whitney National Bank $2,344,000 $2,273,000
</TABLE>
Page 13 of 30 Pages
<PAGE>
RESULTS OF OPERATIONS
Net Interest Income
Taxable-equivalent net interest income in 1997 increased $4.2 million
or 10.0% for the second quarter and $7.0 million or 8.3% year to date when
compared to the same periods in 1996. The net interest margin increased to 4.91%
for the second quarter and 4.88% for the first six months in 1997 compared to
4.69% for the second quarter and 4.71% year to date in 1996. A combination of
factors contributed to these changes, the components of which are detailed in
Table 1 on page 17.
Taxable-equivalent loan interest income increased $8.7 million or 20.9%
for the second quarter and $15.3 million or 18.5% for the first six months of
1997 when compared to 1996. These increases were the result of the growth in
average loans outstanding between 1996 and 1997, growth which totalled $424
million for the second quarter and $422 million year to date. The increase in
interest income from loan growth was partially offset by the impact of a
decrease in the effective loan yields in 1997 as compared to 1996. For the
second quarter, the effective yield decreased 9 basis points to 8.60% in 1997
from 8.69% in 1996. For the year-to-date period, the effective yield decreased
24 basis points to 8.57% in 1997 from 8.81% in 1996. The decrease in the
effective loan yield reflects a lower level of recoveries of prior-period
interest recognized as income in 1997 compared to 1996, lower average effective
lending rates in 1997, and a decline in the market rates for credit extensions
to high-quality borrowers during the past year.
Taxable-equivalent interest income on investments securities for 1997's
second quarter decreased $2.2 million or 8.8% from the second quarter of 1996.
For the first six months of 1997, the decrease in investment income was $5.0
million or 9.8%. These decreases are consistent with the reductions in the
average investment in securities between 1996 and 1997, which totalled $210
million for the second quarter and $220 million for the year-to-date period. The
effective investment portfolio yield increased 28 basis points to 6.40% for the
second quarter of 1997 and 25 basis points to 6.35% for the first six months
when compared to the same periods in 1996. These increases are primarily the
result of the modest shift in the portfolio mix toward mortgage-backed issues,
state and municipal obligations, and U.S. government agency securities and away
from U.S. Treasury securities. Market interest rates were relatively stable
during 1996 and into 1997, although the Company has structured the maturities of
its investment portfolio in a way that reduces the immediate sensitivity of its
effective yield to changing market conditions.
The net increase in taxable-equivalent interest income between 1996 and
1997 was $6.0 million or 8.9% for the second quarter and $9.7 million or 7.2%
for the first six months. The overall effective earning-asset yield in the
second quarter of 1997 was 7.76% or 27 basis points above the 7.49% yield in
1996, and the year-to-date effective yield in 1997 was 7.70%, up 19 basis points
from 1996's yield of 7.51%.
Interest expense increased $1.8 million or 7.2% in the second quarter
of 1997 and $2.7 million or 5.4% year-to-date in 1997 as compared to the same
periods in 1996. These increases reflect mainly the impact of the growth in
average total interest-bearing liabilities, particularly short-term borrowings,
between these periods. Average short-term borrowings increased $99 million or
30% for the second quarter of 1997 and $116 million or 36% year to date compared
to 1996. The cost of these borrowed funds was 5.10% in the second quarter of
1997 and 5.00% year-to-date, which represent increases of 27 basis points and 10
basis points, respectively, over the cost of funds rate in the comparable
periods in 1996. The higher cost of these funds in 1997 largely reflects the 25
basis point increase in the federal funds rate at the end of 1997's first
quarter.
Growth in interest-bearing deposits also contributed to the overall
increase in interest expense in 1997. As discussed earlier, this growth was
primarily a function of the success of a premium money market account product.
Despite this growth, the overall cost of funds rate for interest-bearing
deposits of 3.73% for the second quarter of 1997 and 3.69% for the first six
months, as shown in Table 1, was little changed from the rate for the comparable
period in 1996. The overall cost of funds rate on total interest-bearing
liabilities in 1997 was 3.94% for the second quarter and 3.90% for the
year-to-date period. These rates represent increases of 10 basis points and 4
basis points, respectively, when compared to the same periods in 1996.
Page 14 of 30 Pages
<PAGE>
Other Income and Expense
Non-interest income increased $3.9 million or 37.4% for the second
quarter and $4.9 million or 23.9% year-to-date in 1997 when compared to the same
periods in 1996. Net gains on sales of foreclosed assets and other revenue from
these assets totalled approximately $3.4 million for the second quarter of 1997
and $1.0 million in the comparable period in 1996. Year to date, this income
totalled approximately $4.1 million in 1997 and $1.4 million in 1996. Excluding
this income, second quarter non-interest income was $10.9 million in 1997 and
$9.5 million in 1996, an increase of $1.4 million or 14.6%. Adjusted
non-interest income was $21.2 million for the first six months of 1997, an
increase of $2.2 million or 11.5% over 1996's total of $19.0 million.
Income from service charges on deposit accounts, which accounted for
approximately half of adjusted non-interest income in each of these periods,
increased $0.3 million or 6.3% in the second quarter of 1997 as compared to 1996
and $0.5 million or 4.9% for the year-to-date period.
The Company continued to expand its automated teller facilities during
1996 and into the first six months of 1997. Fees generated from ATM operations
in 1997 increased $0.2 million or 44% for the second quarter and $0.5 million or
44% for the year-to-date period. Fee income from credit card transaction
operations also increased between these periods, by approximately $0.4 million
or 25% for the quarter and $0.6 million or 23% year to date, reflecting economic
conditions as well as successful marketing efforts.
Non-interest operating expenses were $39.0 million for the second
quarter of 1997 and $77.5 million for the year-to-date period, which represent
increases over 1996 of $4.3 million or 12.3% for the quarter and $5.5 million or
7.6% for the year-to-date period. Included in operating expenses are
merger-related expenses totalling $0.3 million for the second quarter of 1997
and $1.3 million year to date through June 30, 1997. In 1996, no merger expenses
were incurred in the second quarter, but year to date these expenses totalled
$2.8 million. Excluding merger expenses, quarterly non-interest operating
expenses increased $3.9 million or 11.4% between 1996 and 1997 and year-to-date
expenses increased $7.0 million or 10.2%.
Salaries and employee benefits expense totalled $20.4 million for the
second quarter of 1997 and $39.9 million for the year-to-date period. These
amounts represent increases of $2.5 million or 13.9% for the quarter and $3.0
million or 8.0% year to date when compared to the same periods in 1996.
Excluding merger- related expenses, the quarterly increase in 1997 was $2.3
million or 13.1% and the year-to-date increase was $3.4 million or 9.4%.
Approximately $0.6 million of the year-to-date increase relates to the cost of
staffing the additional banking locations opened in 1996 and 1997. In addition,
year-to-date executive incentive compensation increased approximately $1.0
million in 1997 compared to 1996, primarily because of a change in estimated
executive compensation that was recorded in the second quarter of 1996, a
stock-based incentive grant that occurred earlier in 1997 than in 1996, and a
shortening of the restriction period and corresponding amortization period for
certain stock-based incentives. The remaining year-to-date increase of
approximately $1.8 million or 5.0% is attributable to regular merit increases
and other staff additions and to the net change in the cost of various employee
benefit and incentive programs.
Non-interest expenses other than personnel-related expenses increased
$1.8 million or 10.6% between the second quarter of 1996 and the second quarter
of 1997. Year to date, these expenses increased $2.5 million or 7.2% between
1996 and 1997. Excluding merger expenses incurred in both years, the quarterly
increase in 1997 was $1.6 million or 9.5% and the year-to-date increase was $3.6
million or 11.0%.
Occupancy expense increased $0.4 million or 15.2% for the second
quarter of 1997 and $0.9 million or 18.5% for the year-to-date period in 1997,
primarily as a result of both the expansion of the Company's branch and ATM
networks 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. Since June 30, 1996, the Company has opened
six new branches, renovated ten additional branch locations and its main
banking offices, and moved into the new operations center.
The remaining net increase in non-personnel-related expenses of
approximately $1.2 million or 8.5% for the second quarter of 1997 and $2.7
million or 9.6% year-to-date was largely the result of costs to furnish, equip
and service the new banking facilities, to establish and maintain voice and data
communication links throughout the Company's expanded service area, and to
introduce a standardized technology to all the banks in the Whitney system.
Advertising and promotions related to the recent mergers and to the introduction
of certain new deposit products also contributed to the increase in second
quarter and year-to-date 1997 operating expenses.
Page 15 of 30 Pages
<PAGE>
Income Taxes
The Company provided for income taxes at an overall effective rate of
31.9% for the second quarter and 32.4% year-to-date in 1997 compared to 31.8%
and 31.6% for the same periods in 1996. 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 subsidiary 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 expected
from future loan repayments are also considered in the liquidity management
process.
The subsidiary 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 assets and as part of its
services to correspondent banks and certain other customers. Neither the Company
nor the subsidiary banks have accessed long-term debt markets as part of
liquidity management.
The consolidated statements of cash flows on page 5 provide a
summarized view of the Company's uses and sources of liquidity for the six-month
periods ended June 30, 1997 and 1996. The Company generated $35 million in
liquid funds from operations for the first six months of 1997 and paid total
dividends, including those of pooled entities, of $10 million. A major source of
liquid funds during the first half of 1997 was unreinvested maturities of
investment securities totalling $94 million. Total deposits, which are discussed
in more detail below, were relatively stable during the first six months of
1997, providing $26 million of funds during this period.
These funds were used to support net loan growth in the first six
months of 1997 of $117 million and to finance $15 million in capital
expenditures related to the retail network expansion and other projects as
discussed earlier. The $59.2 million decrease in short-term borrowings made
through federal funds purchases and sales of securities under repurchase
agreements year-to-date through June 30, 1997 was substantially offset by a
decrease of $51.5 million in federal funds sold and other short-term
investments.
Average core deposits, defined as all deposits other than time deposits
of $100,000 or more, were little changed between the first six months of 1997
and 1996, increasing approximately $12 million. Growth in year-to-date average
non-interest-bearing demand deposits of $34 million in 1997 and net growth of
$20 million in average interest-bearing checking, savings and money market
account deposits for the same period was offset by a $42 million decrease in
core time deposits. Non-core time deposits increased on average by $28 million
year-to-date in 1997 as compared to 1996.
As of June 30, 1997, approximately $334 million or 27% of the portfolio
of investment securities held to maturity was scheduled to mature within one
year. An additional $126 million of investment securities was classified as
available for sale at the end of 1997's second quarter, although management's
determination of this classification does not derive primarily from liquidity
considerations.
The subsidiary banks had approximately $1.1 billion in unfunded loan
commitments outstanding at June 30, 1997, an increase of $137 million from the
level at December 31, 1996. Contingent obligations under letters of credit and
financial guarantees increased $33 million between these dates to a total of
$102 million at June 30, 1997. Available credit card lines were $92 million at
June 30, 1997, an increase of $14 million from year end 1996. Because
commitments and unused credit lines may, and many times do, expire without being
drawn upon, unfunded balances do not represent actual future liquidity
requirements. Draws by customers against these commitments are not expected to
place any unusual strain on the Company's liquidity position.
Page 16 of 30 Pages
<PAGE>
<TABLE>
<CAPTION>
TABLE 1
WHITNEY HOLDING CORPORATION
ANALYSIS OF CHANGES IN INTEREST INCOME AND INTEREST EXPENSE
(dollars in thousands, unaudited)
SECOND QUARTER ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1997 1996 1997 1996
--------------------------------------------------------------------------------------------------------------------
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).......$2,336,423 $50,091 8.60 % $1,911,965 $41,431 8.69%% $2,300,826 $97,833 8.57%% $1,878,648 $82,558 8.81%%
--------------------------------------------------------------------------------------------------------------------
U. S. Treasury
securities.... $520,381 $7,716 5.95 % $730,672 $10,271 5.64 % $537,106 $15,706 5.90 % $770,676 $21,603 5.62 %
U.S. government
agency
securities.... 477,422 7,598 6.37 493,562 7,515 6.09 468,746 14,822 6.32 472,847 14,306 6.05
Mortgage-backed
securities.... 286,366 4,619 6.45 274,264 4,409 6.43 284,014 9,069 6.39 270,619 8,697 6.43
State and
municipal
securities
(tax
equivalent)
(1)........... 138,317 2,817 8.15 134,703 2,769 8.22 141,567 5,759 8.14 136,945 5,676 8.29
Corporate bonds
and other
securities.... 6,598 99 6.00 6,148 84 5.47 6,268 164 5.23 6,956 202 5.81
--------------------------------------------------------------------------------------------------------------------
Total
investment in
securities
(1,3)........ $1,429,084 $22,849 6.40 % $1,639,349 $25,048 6.12 % $1,437,701 $45,520 6.35 % $1,658,043 $50,484 6.10 %
--------------------------------------------------------------------------------------------------------------------
Federal funds
sold and
short term
deposits...... 21,546 304 5.66 % 50,272 750 5.98%% 43,421 1,119 5.20%% 60,749 1,710 5.65%%
--------------------------------------------------------------------------------------------------------------------
Total
interest-
earning
assets......$3,787,053 $73,244 7.76 % $3,601,586 $67,229 7.49%% $3,781,948 $144,472 7.70%% $3,597,440 $134,752 7.51%%
--------------------------------------------------------------------------------------------------------------------
Cash and due
from financial
institutions.. 207,012 214,637 208,558 217,469
Bank premises
and equipment,
net........... 125,020 105,583 123,006 101,882
Other real
estate owned,
net........... 4,085 6,983 4,206 7,182
Other assets.... 84,596 92,806 84,797 90,136
Reserve for
possible
loan losses... (42,194) (45,146) (42,441) (44,916)
---------- ---------- ---------- ----------
Total assets..$4,165,572 $3,976,449 $4,160,074 $3,969,193
========== ========== ========== ==========
LIABILITIES
Savings
deposits...... $491,480 $3,299 2.69 % $498,065 $3,323 2.68 % $488,895 $6,504 2.68 % $505,147 $6,752 2.68 %
NOW and MMDA
deposits...... 781,838 4,909 2.52 742,639 4,135 2.23 783,100 9,515 2.45 746,370 8,279 2.22
Time deposits... 1,032,976 13,224 5.13 1,046,804 13,662 5.23 1,026,325 26,071 5.12 1,040,090 27,339 5.27
--------------------------------------------------------------------------------------------------------------------
Total
interest-
bearing
deposits....$2,306,294 $21,432 3.73 % $2,287,508 $21,120 3.70 % $2,298,320 $42,090 3.69 % $2,291,607 $42,370 3.71 %
--------------------------------------------------------------------------------------------------------------------
Federal funds
purchased and
repurchase
agreements.... 429,555 5,462 5.10 % 330,136 3,972 4.83 % 439,919 10,909 5.00 % 324,090 7,912 4.90 %
--------------------------------------------------------------------------------------------------------------------
Total
interest-
bearing
liabilities.$2,735,849 $26,894 3.94 % $2,617,644 $25,092 3.84 % $2,738,239 $52,999 3.90 % $2,615,697 $50,282 3.86 %
--------------------------------------------------------------------------------------------------------------------
Demand deposits,
non-interest
bearing....... 942,568 908,292 939,844 905,721
Other
liabilities... 33,630 32,186 32,656 32,098
Shareholders'
equity........ 453,525 418,327 449,335 415,677
---------- ---------- ---------- ----------
Total
liabilities
and
shareholders'
equity......$4,165,572 $3,976,449 $4,160,074 $3,969,193
========== ========== ========== ==========
Net interest
income/margin
(tax
equivalent)
(1)......... $46,350 4.91 % $42,137 4.69 % $91,473 4.88 % $84,470 4.71 %
======= ====== ======= ====== ======= ====== ======= ======
<FN>
(1) Tax equivalent amounts are calculated using a marginal federal income tax rate of 35%.
(2) Average balance includes nonaccruing loans of $9,534 and $11,035 for the second quarters and $9,450 and $11,324 for the
year-to-date periods in 1997 and 1996, respectively.
(3) Average balance excludes unrealized gain or loss on securities available for sale.
</FN>
</TABLE>
Page 17 of 30 Pages
<PAGE>
<TABLE>
<CAPTION>
TABLE 2.
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
NON-PERFORMING ASSETS AND OTHER SELECTED DATA
(end of quarter, dollars in millions)
1997 1996
------------------- ----------------------------------------
2nd 1st 4th 3rd 2nd 1st
------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Loans accounted for on a nonaccrual basis...................... $ 9.4 $ 9.9 $ 9.1 $ 9.7 $10.0 $12.7
Restructured loans............................................. 2.8 2.4 2.4 2.4 2.2 1.7
------- ------- ------- ------- ------- -------
Total non-performing loans..................................... $12.2 $12.3 $11.5 $12.1 $12.2 $14.4
------- ------- ------- ------- ------- -------
Other real estate owned, net................................... 4.1 4.5 4.3 4.7 6.2 7.3
Other foreclosed assets........................................ 0.1 - - - - -
------------------- ----------------------------------------
Total non-performing assets.................................... $16.4 $16.8 $15.8 $16.8 $18.4 $21.7
=================== ========================================
Net gain on sales of OREO...................................... $ 0.2 - $ 0.8 $ 0.5 $0.4 $0.2
=================== ========================================
Reserve for possible loan losses as a percent of:
Total non-performing loans.................................. 350% 339% 369% 391% 363% 317%
Total loans................................................. 1.78% 1.83% 1.85% 2.29% 2.27% 2.48%
Non-performing loans as a percent of
total loans................................................. 0.51% 0.54% 0.50% 0.58% 0.62% 0.78%
Non-performing assets as a percent of
total assets................................................ 0.39% 0.40% 0.37% 0.41% 0.47% 0.54%
</TABLE>
<TABLE>
<CAPTION>
TABLE 3.
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
RESERVE FOR POSSIBLE LOAN LOSSES
(by quarter, in millions)
1997 1996
------------------- ----------------------------------------
2nd 1st 4th 3rd 2nd 1st
------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Reserve balance, beginning of quarter...................... $41.8 $42.4 $47.1 $44.1 $45.6 $43.4
Provision for possible loan losses:
Expense of providing loss reserves..................... - 0.2 0.1 0.2 0.1 0.1
Reduction of loss reserves............................. - - (4.9) - - -
Loans charged off.......................................... (1.7) (3.0) (1.7) (1.5) (3.1) (1.0)
Recoveries................................................. 2.6 2.2 1.8 4.3 1.5 3.1
------------------- ----------------------------------------
Reserve balance, end of quarter............................ $42.7 $41.8 $42.4 $47.1 $44.1 $45.6
=================== ========================================
</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 23, 1997, for the purpose of electing a board of directors, voting
on adopting the new 1997 Whitney Holding Corporation Long-Term Incentive Plan
and approving the appointment of auditors. Proxies for the meeting were
solicited pursuant to Section 14(a) of the Securities and 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:
Shares
Voted Shares
FOR Withheld
--------------------------------------------
Camille A. Cutrone 14,283,690 88,790
Alfred S. Lippman 14,283,193 89,287
Carroll W. Suggs 14,272,987 99,492
Guy C. Billups, Jr. 14,258,878 113,602
James M. Cain 14,271,005 101,475
Robert H. Crosby, Jr. 14,248,411 124,069
Richard B. Crowell 14,283,193 89,287
John K. Roberts 14,283,805 88,675
The appointment of Arthur Andersen LLP as independent auditor was
approved by the following vote:
Shares Shares
Voted Voted Shares
FOR AGAINST ABSTAINING
-------------------------------------------------------------
14,268,917 44,488 59,075
The adoption of the new 1997 Whitney Holding Corporation Long-Term
Incentive Plan was approved by the following vote:
Shares Shares
Voted Voted Shares Shares
FOR AGAINST ABSTAINING NOT Voted
-----------------------------------------------------------------
11,717,259 645,418 204,103 1,805,700
Item 6. Exhibits and Reports on Form 8-K
(a) (3) Exhibits:
Exhibit 3.1 - Copy of Composite Charter (filed as Exhibit 3(i) to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1993 (Commission file number 0-1026) and incorporated herein by
reference)
Exhibit 3.2 - Copy of Bylaws
Exhibit 10.1 - Stock Option Agreement between Whitney Holding
Corporation and William L. Marks (filed as Exhibit 10.2 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1990 (Commission file number 0- 1026) and incorporated by reference)
Page 19 of 30 Pages
<PAGE>
Exhibit 10.2 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and William L. Marks (filed as Exhibit 10.3 to
the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1993 (Commission file number 0-1026) and incorporated by reference)
Exhibit 10.3 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and R. King Milling (filed as Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1993 (Commission file number 0-1026) and incorporated by reference)
Exhibit 10.4 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and Edward B. Grimball (filed as Exhibit 10.5 to
the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1993 (Commission file number 0-1026) and incorporated by reference)
Exhibit 10.5 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and Kenneth A. Lawder, Jr. (filed as Exhibit 10.6
to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993 (Commission file number 0-1026) and incorporated by
reference)
Exhibit 10.6 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and G. Blair Ferguson (filed as Exhibit 10.7 to
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993 (Commission file number 0-1026) and incorporated by
reference)
Exhibit 10.7 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and Joseph W. May (filed as Exhibit 10.7 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1993 (Commission file number 0-1026) and incorporated by reference)
Exhibit 10.8 - Executive agreement between Whitney Holding Corporation,
Whitney Bank of Alabama and John C. Hope, III (filed as Exhibit 10.8 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (Commission file number 0-1026) and incorporated by reference)
Exhibit 10.9 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and Robert C. Baird, Jr. (filed as Exhibit 10.9
to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995 (Commission file number 0-1026) and incorporated by
reference)
Exhibit 10.10a - Long-term incentive program (filed as Exhibit 10.7 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1991 (Commission file number 0-1026) and incorporated by reference)
Exhibit 10.10b - Long-term incentive plan (filed as a Proposal in the
Company's Proxy Statement dated March 18, 1997 (Commission file number
0- 1026) and incorporated by reference)
Exhibit 10.11 - Executive compensation plan (filed as Exhibit 10.8 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1991 (Commission file number 0-1026) and incorporated by reference)
Exhibit 10.12 - Form of restricted stock agreement between Whitney
Holding Corporation and certain of its officers (filed as Exhibit 19.1
to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1992 (Commission file number 0-1026) and incorporated by
reference)
Exhibit 10.13 - Form of stock option agreement between Whitney Holding
Corporation and certain of its officers (filed as Exhibit 19.2 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1992 (Commission file number 0-1026) and incorporated by reference)
Exhibit 10.14 - Directors' Compensation Plan (filed as Exhibit A to the
Company's Proxy Statement dated March 24, 1994 (Commission file number
0- 1026) and incorporated by reference)
Exhibit 10.14a - Amendment No. 1 to the Whitney Holding Corporation
Directors' Compensation Plan (filed as Exhibit A to the Company's Proxy
Statement dated March 15, 1996 (Commission file number 0-1026) and
incorporated by reference)
Page 20 of 30 Pages
<PAGE>
Exhibit 10.15 - Amended and restated Agreement and Plan of Merger
between Whitney Holding Corporation and First Citizens Bancstock, Inc.,
dated December 15, 1995 (filed as Rider A to the Company's Annual
Report on Form 10-K/A for the year ended December 31, 1995 (Commission
file number 0-1026) and incorporated by reference)
Exhibit 10.16 - Retirement Restoration Plan effective January 1, 1995
(filed as Exhibit 10.16 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 (Commission file number 0-1026) and
incorporated by reference)
Exhibit 10.17 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and Rodney D. Chard (filed as
Exhibit 10.17 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996 (Commission file number 0-1026) and
incorporated by reference)
Exhibit 10.18 - Form of Amendment to the Executive agreements (filed as
Exhibits 10.2 through 10.9 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1996 (Commission file number 0-1026)
and incorporated by reference)
Exhibit 10.19 - Executive agreement between Whitney National Bank of
Mississippi and Guy C. Billups, Jr. dated April 18, 1997
Exhibit 21 - Subsidiaries
Whitney Holding Corporation owns 100% of the capital stock of Whitney
National Bank and First National Bank of Houma, both in Louisiana,
Whitney Bank of Alabama, Whitney National Bank of Florida and Whitney
National Bank of Mississippi. All other subsidiaries considered in the
aggregate would not constitute a significant subsidiary.
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
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)
By:/s/ Edward B. Grimball
-------------------------------
Edward B. Grimball
Executive Vice President and
Chief Financial Officer
August 13, 1997
-------------------------------
Date
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. All stock certificates representing shares of the
Company's stock, whether currently outstanding or that may be issued in the
future, may bear facsimile signatures of the Company's Chief Executive Officer
and Secretary, or other authorized officers, provided such certificates are or
have been countersigned by a transfer agent or registrar other than the Company
itself or an employee of the Company.
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 months' 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 10.19
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of April 18, 1997 between Whitney National Bank of
Mississippi, a national banking association (the "Bank") and Guy C. Billups, Jr.
(the "Employee").
W I T N E S S E T H :
WHEREAS, the Bank desires to retain the services of the Employee and
the Employee desires to be employed by the Bank upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereto agree as follows:
1. EMPLOYMENT. The Bank hereby employs the Employee, and the Employee
hereby agrees to perform duties for the Bank as the Chairman of the
Advisory Board of the Bank as have been and may be prescribed by the
legal Board of Directors of the Bank. The Employee will not be employed
by any other business or engage in any other business activity that
would materially interfere with his ability to perform his duties or
would constitute a conflict between his personal or financial interests
and the business or financial interests of the Bank during the Term of
Employment (as hereinafter defined).
2. TERM OF EMPLOYMENT. The employment hereunder shall be for the period
(the "Term of Employment') which shall commence on April 18, 1997, (the
"Commencement Date") and shall continue through April 17, 1999,
provided, however, that beginning on April 18, 1999 (the "Renewal
Date") the term of this Agreement shall automatically be extended for
one (1) additional year at the Employee's option. In the event the
Employee elects not to renew this Agreement on the Renewal Date, the
Employee must give written notice of such election not to renew to the
Bank at least sixty (60) days prior to the Renewal Date.
3. COMPENSATION AND BENEFITS.
(a) Base Salary. The Bank shall pay to the Employee as
compensation for all services rendered by the Employee during the term of this
Agreement an annual salary of not less than $100,000 for the first year, $50,000
for the second year and $25,000 for the third year payable in equal semi-monthly
installments.
(b) Annual Bonuses and Stock Options. An annual incentive
bonus and/or stock options may be paid with respect to the services provided by
the Employee, in such amount as may be determined from time to time by the
Compensation Committee. The award of bonuses and stock options by the
Compensation Committee is discretionary and there will be no obligation on the
Bank to award any bonus to the Employee.
178699.4/08316.00079
Page 23 of 30 Pages
<PAGE>
(c) Benefits and Perquisites. The fringe benefits,
perquisites, and other benefits of employment enjoyed by the Employee shall be
those set out in Whitney National Bank's 1996 Employee Benefits booklet, as
limited by Section 5.22 of that certain Agreement and Plan of Merger dated
November 14, 1996 and amended March 12, 1997, between, among others, the Bank
and Merchants Bank & Trust Company.
4. OTHER BENEFITS
(a) Expenses. The Employee will be reimbursed by the Bank for
reasonable out-of-pocket expenses incurred from time to time on behalf of the
Bank in the performance of his duties, in accordance with the standard
procedures of the Bank and upon the presentation of such supporting invoices,
receipts, documents and forms as the Bank reasonably requests.
(b) Facilities; Secretarial Assistance. The Bank will provide
the Employee with the office space currently in use by the Employee, secretarial
assistance by Eileen Cain during the term of employment and such other
facilities and services as shall be suitable to the Employee's position and
adequate for the performance of his duties.
(c) Bank Automobile. The Bank will provide the Employee with
the use of his existing Bank automobile (1996 Lincoln) for his use during the
Term of Employment and will convey to the Employee the title to such automobile
upon the Employee's retirement free and clear of all liens and encumbrances.
(d) Health Insurance. The Bank will continue to provide health
insurance for the Employee and the Employee's dependents under terms and
conditions no less favorable than those existing at the Bank during the year
prior to the execution of this Agreement. Upon retirement, the Bank shall
continue to provide such health insurance with fifty percent (50%) of the cost
of retiree and dependent coverage being paid by the Bank.
(e) Life Insurance. Pursuant to Section 5.23 of the Merger
Agreement, the Bank will assume the premium payment obligations under the life
insurance policies insuring the life of the Employee described in Section 5.23
of the Merger Agreement.
5. TERMINATION OF EMPLOYMENT.
(a) Death. The Employee's status as an employee shall
terminate upon the Employee's death.
2
178699.4/08316.00079
Page 24 of 30 Pages
<PAGE>
(b) Disability. If (i) the Employee is incapable because of
physical or mental illness of satisfactorily discharging his duties for a period
of 90 consecutive days and (ii) a duly qualified physician chosen by the Bank
and acceptable to the Employee or his legal representatives so certifies in
writing, the Bank's Board of Directors may determine that the Employee has
become disabled. If the Bank's Board of Directors makes such a determination,
the Bank will have the right, at any time during the period that such disability
continues to terminate the status of the Employee as an employee by notifying
the Employee, in writing, of such termination. Any such termination shall become
effective 30 days after such notice of termination is given (the "Disability
Effective Date"), unless within such 30-day period the Employee becomes capable
of resuming duties (and a physician chosen by the Bank and acceptable to the
Employee or his legal representatives so certifies in writing) and the Employee
in fact resumes such duties.
(c) By the Bank for Cause. The Bank may terminate the
Employee's status as an employee for Cause by notifying the Employee, in
writing, of such termination. As used herein, "Cause" shall mean (i) the willful
and continuing failure by the Employee to perform his duties (other than any
failure resulting from a certified disability) within a reasonable period of
time after a written demand for substantial performance is delivered to the
Employee by a duly authorized member or representative of the Bank's Board of
Directors which specifically identifies the manner in which it is alleged that
the Employee has not substantially performed such services, (ii) the conviction
of a felony or (iii) the willful engaging by the Employee in gross misconduct
injurious to the Bank. An act or failure to act on the Employee's part shall be
considered "willful" if done or omitted to be done without a reasonable belief
that such action or omission was in, or not opposed to, the best interests of
the Bank. Any act or failure to act by the Employee that is based upon authority
given pursuant to a resolution duly adopted by the Bank's Board of Directors or
based upon the advice of counsel for the Bank shall be presumed to be done or
omitted to be done by the Employee with a reasonable belief that such action was
in, or not opposed to, the best interests of the Bank. Notwithstanding the
foregoing, the Employee's employment may not be terminated for Cause unless and
until there shall have been delivered to the Employee a copy of a resolution
duly adopted by the affirmative vote of not less than three-fourths of the
entire membership of the Bank's Board of Directors (not counting the Employee)
at a meeting of the Bank's Board of Directors held for the purpose (after
reasonable notice to the Employee and an opportunity for the Employee, together
with his counsel, to be heard before the Bank's Board of Directors), finding
that in the good faith opinion of the Bank's Board of Directors the Employee was
guilty of the conduct set forth in clauses (i), (ii) or (iii) of this paragraph
and specifying the particulars thereof.
(d) By the Employee for Good Reason. The Employee may
terminate his status as an employee for Good Reason by notifying the Bank, in
writing, of such termination. The termination by the Employee of his status as
an employee for Good Reason shall be deemed to be a justifiable termination and
shall excuse the Employee from further duties. The term "Good Reason" shall
mean:
3
178699.4/08316.00079
Page 25 of 30 Pages
<PAGE>
(i) diminution in the Employee's duties,
responsibilities or position or the demotion of the Employee;
(ii) requiring the Employee to be based anywhere
other than in Gulfport, except for required travel in the ordinary course of the
Bank's business;
(iii) a reduction in the Employee's annual salary
or a failure to pay to the Employee any installment of his annual salary or to
pay any other amounts required to be paid under these terms of employment,
which failure continues for a period of 30 days after written notice thereof
is given by the Employee to the Bank;
(iv) any purported termination of the Employee's
status as an employee which is not effected pursuant to a Notice of Termination,
or which is not justified as a termination based on Cause; or
(v) any material breach of any of the terms of
employment specified herein by the Bank which has not been cured within 30 days
following the giving of notice by the Employee to the Bank of such breach.
(e) Change of Control.
(i) If a Change in Control of the Bank, as
defined in Section 5(e)(ii), shall occur and the Employee shall:
(1) voluntarily terminate his employment within
twelve (12) months following such Change in
Control and such termination shall be as a
result of the Employee's good faith
determination that as a result of the Change
in Control and a change in circumstances
thereafter significantly affecting his
position, he can no longer adequately
exercise the authorities, powers, functions
or duties attached to his position as
Chairman of the Advisory Board of the Bank;
or
(2) voluntarily terminate his employment within
twelve (12) months following such Change in
Control, and such termination shall be as a
result of the Employee's good faith
determination that he can no longer perform
his duties as Chairman of the Advisory Board
of the Bank by reason of a substantial
diminution in his responsibilities, status
or position; or
4
178699.4/08316.00079
Page 26 of 30 Pages
<PAGE>
(3) have his employment terminated by the Bank
for reasons other than those specified in
Section 5(c) within twelve (12) months
following such Change in Control;
then in any of the above three cases, the Employee shall have, instead of the
further rights described in Section 3(a), the right to immediately terminate
this Agreement and a nonforfeitable right to receive, payable in a lump sum, the
sum of the monthly amounts of his annual salary for a period equal to twelve
(12) months; provided, however, no payments or benefits pursuant to this
Section, together with any other payments to the Employee under this Agreement
or otherwise, shall cause the total of such payments to exceed the maximum
amount allowable as a deduction to the Bank for federal income tax purposes,
as may be determined in the reasonable discretion of the Bank, under any
applicable provision of law or regulations.
(ii) For purposes of this Agreement, a "Change in
Control" shall mean:
(1) the obtaining by any party of fifty percent
(50%) or more of the voting shares of
Whitney Holding Corporation ("Whitney")
pursuant to a "tender offer" for such shares
as provided under Rule 14d-2 promulgated
under the Securities Exchange Act of 1934,
as amended, or any subsequent comparable
federal rule or regulation governing tender
offers; or
(2) individuals who were members of Whitney's
Board of Directors immediately prior to any
particular meeting of Whitney's shareholders
which involves a contest for the election of
directors fail to constitute a majority of
the members of Whitney's Board of Directors
following such election; or
(3) Whitney's consummation of the sale of
substantially all of its assets to a
purchaser which is not a subsidiary; or
(4) Whitney's dissolution or liquidation; or
(5) Whitney's consummation of a merger or
consolidation involving Whitney in which
Whitney is not the surviving corporation or
if, immediately following such merger or
consolidation, less than fifty percent (50%)
of the surviving corporation's outstanding
voting stock is held by persons who are
stockholders of Whitney immediately prior to
such merger or consolidation.
5
178699.4/08316.00079
Page 27 of 30 Pages
<PAGE>
(iii) The provisions of Section 6(d) and this
Section 5(e) are mutually exclusive; provided, however, that if within one
year following commencement of a 6(d) payout there shall be a change of control
as defined in Section 5(e)(ii), then the Employee shall be entitled to the
amount payable to the Employee under Section 5(e) reduced by the amount that the
Employee has received under Section 6(d) up to the date of the change in
control. The triggering of the lump sum payment requirement of this Section 5(e)
shall cause the provisions of Section 6(d) to become inoperative. The triggering
of the continuation of payment provisions of Section 6(d) shall cause the
provisions of Section 5(e) to become inoperative except to the extent provided
in this Section 5(e)(iii).
(f) Notice of Termination. Notice of termination of the
Employee's status as an employee must be communicated in a writing delivered to
the other party (a "Notice of Termination"). Any Notice of Termination that
purports to terminate the Employee's employment for Cause or for Good Reason
shall specify the reasons of the party giving such notice and shall set forth in
reasonable detail the facts and circumstances claimed by such party to provide a
basis for termination of the Employee's employment under the terms of employment
specified herein.
(g) Date of Termination. "Employment Termination Date" means
(i) if Employee's employment is terminated by the Bank for Cause, or by the
Employee for Good Reason, the date of delivery of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Employee's
employment is terminated by the Bank other than for Cause or disability, the
Date of Termination shall be the date on which the Bank notifies the Employee of
such termination and (iii) the if the Employee's employment is terminated by
reason of his death or disability, the Date of Termination shall be the date of
death of the Employee or the Disability Effective Date, as the case may be.
6. DISABILITY/DEATH BENEFIT AND SEVERANCE PAY.
(a) Death. If the Employee's employment is terminated by his
death, in addition to all other death benefits provided by the Bank, the Bank
shall pay to the Employee's spouse or, if he leaves no spouse, to his estate, in
a lump sum in cash within 30 days of the Date of Termination the sum of the pro
rata amount of the Employee's annual base salary earned through the Date of
Termination to the extent due but not paid and any compensation previously
deferred by the Employee (together with any accrued interest thereon) and any
accrued vacation pay, in each case to the extent not previously paid
(collectively, "Accrued Obligations"). The Bank shall also timely pay or provide
to such person any other amounts or compensation required to be furnished to the
Employee under any benefit plan or arrangement ("Other Benefits").
6
178699.4/08316.00079
Page 28 of 30 Pages
<PAGE>
(b) Disability. During any period that the Employee is deemed
to be disabled ("disability period"), the Employee shall continue to receive his
full annual base salary from the Bank at the rate then in effect for such period
until his employment is terminated, provided that payments so made to the
Employee shall be reduced by the sum of the amounts, if any, payable to the
Employee under disability benefit plans of the Bank. Upon termination of the
Employee's employment, the Bank shall pay to the Employee in a lump sum in cash
within 30 days of the Date of Termination all Accrued Obligations and shall
timely furnish to the Employee all Other Benefits.
(c) Cause. If the Employee's employment shall be terminated
for Cause by the Bank, or voluntarily terminated by the Employee other than for
Good Reason, the Bank will have no further obligation to the Employee other than
for Accrued Obligations, which shall be paid in a lump sum in cash within 30
days of the Date of Termination, and for Other Benefits, which the Bank shall
timely furnish to the Employee.
(d) Other than Death, Disability or Cause; Good Reason. If the
Bank shall terminate the Employee's employment, other than for death, disability
or Cause, or the Employee shall terminate his employment for Good Reason, then,
in addition to all amounts or compensation to which he is entitled pursuant to
the Bank's termination policies and plans then in effect, the Employee will at
his option receive as severance pay either:
(i) continuation of his annual salary (at the
rate in effect as of the Date of Termination) for the remainder of his one-year
term of employment, or
(ii) a lump sum payment equal to the then present
value of the aggregate sums described in (i) above, paid by the Bank to the
Employee no later than fifteen days following the Date of Termination.
7. COVENANT NOT TO COMPETE. If the Employee's employment is terminated
by the Bank for Cause or by the Employee other than for Good Reason,
then for the shorter of the remainder of the term of employment or one
year, the Employee shall not directly or indirectly (a) solicit any
customers or employees of the Bank or otherwise disrupt any previously
established relationship existing between a customer or employee and
the Bank or (b) own, manage, operate, control, be employed by,
participate in, or be connected in any manner with the ownership,
management, operation or control of any bank, savings and loan
association, financial institution or any other entity providing
lending or deposit services located in Hancock or Harrison County,
Mississippi; provided, however, that the Employee may own passive
investments of any similar business (but without otherwise
participating in such business) if such securities are listed on a
national or regional securities exchange or quotations of such
securities are published on a national interdealer quotation system, or
are registered under Sections 12(g) or 15(d) of the Securities Exchange
Act of 1934, as amended.
7
178699.4/08316.00079
Page 29 of 30 Pages
<PAGE>
8. ASSIGNMENT. This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interests of Employee
herein may not be sold, transferred, assigned, pledged or hypothecated.
The rights and obligations of the Bank hereunder shall be binding upon
and run in favor of the successors and assigns of the Bank.
9. GOVERNING LAW: CAPTIONS. This Agreement contains the entire agreement
between the parties and shall be governed by the law of the State of
Mississippi. It may not be changed orally, but only by agreement in
writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought, and consented to in
writing by the Bank. Paragraph headings are for convenience of
reference only and shall not be considered a part of this Agreement.
10. NOTICES. Any notice or other communication required or permitted
hereunder shall be sufficiently given if delivered in person or sent by
telex, telecopy or by registered or certified mail, postage prepaid, in
the case of the Employee, addressed as follows: Guy C. Billups, Jr.,
1300 25th Ave., Gulfport, MS 39501, and in the case of the Bank,
addressed to it as follows: Whitney National Bank of Mississippi, 1300
25th Avenue, Gulfport, Mississippi 39501, Attention: Corporate
Secretary, or such other address or number as shall be furnished in
writing by either party to the other, and such notice or communication
shall be deemed to have been given as of the date so delivered, sent by
telecopier, telex or mailed.
IN WITNESS WHEREOF, the Bank has by its appropriate officer signed this
Agreement and the Employee has signed this Agreement, on and as of the day and
year first above written.
WHITNEY NATIONAL BANK OF MISSISSIPPI
By:/s/ R. King Milling
---------------------------------------
R. King Milling
Title: Chairman, CEO & President
/s/ Guy C. Billups, Jr.
----------------------------------------
Guy C. Billups, Jr.
8
Page 30 of 30 Pages
178699.4/08316.00079
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<ARTICLE> 9
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<CASH> 256,329
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<ALLOWANCE> 42,698
<TOTAL-ASSETS> 4,202,384
<DEPOSITS> 3,288,175
<SHORT-TERM> 424,871
<LIABILITIES-OTHER> 33,372
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0
0
<OTHER-SE> 454,166
<TOTAL-LIABILITIES-AND-EQUITY> 4,202,384
<INTEREST-LOAN> 97,571
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<INTEREST-INCOME-NET> 89,237
<LOAN-LOSSES> 188
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 77,475
<INCOME-PRETAX> 36,873
<INCOME-PRE-EXTRAORDINARY> 36,873
<EXTRAORDINARY> 0
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<NET-INCOME> 24,939
<EPS-PRIMARY> 1.20
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<YIELD-ACTUAL> 7.65
<LOANS-NON> 9,449
<LOANS-PAST> 872
<LOANS-TROUBLED> 2,779
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<ALLOWANCE-OPEN> 42,411
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<ALLOWANCE-FOREIGN> 0
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</TABLE>
