<PAGE>
November 12, 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 September
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 September 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 20,763,840 shares were
outstanding on October 31, 1997.
An exhibit index appears on page 20.
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION
TABLE OF CONTENTS
Page
- ----------------------------------------------------------------------------------------------------------------------
PART I. Financial Information
Item 1: Financial Statements:
<S> <C>
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 6: Exhibits and Reports on Form 8-K..................................................................20
- ----------------------------------------------------------------------------------------------------------------------
Signatures.................................................................................................22
Page 2 of 22 Pages
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM 1. Financial Statements
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands) September 30, December 31,
ASSETS 1997 1996
-----------------------------
<S> <C> <C>
Cash and due from financial institutions.............................. $215,888 $245,260
Investment in securities:
Securities available for sale ................................... 117,815 210,073
Securities held to maturity (fair value of $1,190,142 in 1997 and
$1,272,425 in 1996)............................................ 1,176,870 1,264,126
Federal funds sold and short-term deposits............................ 28,200 55,693
Loans................................................................. 2,495,651 2,277,584
Less reserve for possible loan losses................................. 42,077 42,410
------------- -------------
Loans, net......................................................... 2,453,574 2,235,174
Bank premises and equipment, net...................................... 131,277 118,833
Other real estate owned, net.......................................... 3,119 4,367
Accrued income receivable............................................. 34,680 33,619
Other assets.......................................................... 46,250 50,888
------------- -------------
TOTAL ASSETS................................................ $4,207,673 $4,218,033
============= =============
LIABILITIES
Deposits:
Non-interest-bearing demand deposits............................. $980,220 $1,000,877
Interest-bearing deposits........................................ 2,346,834 2,261,409
------------- -------------
Total deposits............................................... 3,327,054 3,262,286
Federal funds purchased and securities sold under repurchase
agreements.......................................................... 375,900 484,045
Dividends payable..................................................... 5,810 4,870
Other liabilities..................................................... 31,046 26,295
------------- -------------
TOTAL LIABILITIES........................................... $3,739,810 $3,777,496
------------- -------------
SHAREHOLDERS' EQUITY
Common stock.......................................................... $2,800 $2,800
Capital surplus....................................................... 117,300 109,743
Retained earnings..................................................... 358,132 336,630
Net unrealized gain (loss) on securities available for sale, net of
tax effect of $224 in 1997 and $465 in 1996......................... (428) (864)
------------- -------------
Total....................................................... 477,804 448,310
Treasury stock at cost, 364,491 shares in 1997 and 493,780
shares in 1996, and unearned restricted stock compensation......... 9,941 7,774
------------- -------------
TOTAL SHAREHOLDERS' EQUITY.................................. $467,863 $440,536
------------- -------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY.................................. $4,207,673 $4,218,033
============= =============
The accompanying notes are an intergral part of these financial statements.
Page 3 of 22 Pages
</TABLE>
<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 NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
1997 1996 1997 1996
---------------------- ----------------------
INTEREST INCOME
<S> <C> <C> <C> <C>
Interest and fees on loans.......................................... $53,298 $44,561 $150,923 $126,802
Interest and dividends on investments:
U.S. Treasury and agency securities........................... 14,384 16,865 44,912 52,774
Mortgage-backed securities.................................... 4,583 4,509 13,651 13,206
Obligations of states and political subdivisions.............. 1,802 1,811 5,533 5,502
Federal Reserve stock and other corporate securities.......... 120 71 284 273
Interest on federal funds sold and short-term securities............ 386 444 1,505 2,154
---------------------- ----------------------
TOTAL................................................... $74,572 $68,261 $216,808 $200,711
---------------------- ----------------------
INTEREST EXPENSE
Interest on deposits................................................ $21,801 $20,910 $63,891 $63,281
Interest on federal funds purchased and securities
sold under repurchase agreements.............................. 5,315 4,315 16,224 12,226
---------------------- ----------------------
TOTAL................................................... $27,116 $25,225 $80,115 $75,507
---------------------- ----------------------
Net interest income................................................. $47,456 $43,036 $136,693 $125,204
Provision (Reduction in reserve) for possible loan losses........... (3,000) 190 (2,812) 375
---------------------- ----------------------
Net interest income after provision for possible loan losses........ $50,456 $42,846 $139,505 $124,829
---------------------- ----------------------
NON-INTEREST INCOME
Gain on sale of securities.......................................... $ - $ 1 $ - $ 16
Other non-interest income........................................... 12,527 10,720 37,826 31,144
---------------------- ----------------------
TOTAL................................................... $12,527 $10,721 $37,826 $31,160
---------------------- ----------------------
NON-INTEREST EXPENSE
Salaries and employee benefits...................................... $20,612 $18,872 $60,532 $55,828
Occupancy of bank premises, net..................................... 3,079 3,057 9,129 8,161
Other non-interest expenses......................................... 17,537 14,265 49,043 44,190
---------------------- ----------------------
TOTAL................................................... $41,228 $36,194 $118,704 $108,179
---------------------- ----------------------
Income before income taxes.......................................... $21,755 $17,373 $58,627 $47,810
Income tax expense.................................................. 8,102 5,506 20,036 15,115
---------------------- ----------------------
Net income.......................................................... $13,653 $11,867 $38,591 $32,695
====================== ======================
Earnings per share:
Primary.......................................................... $0.65 $0.58 $1.85 $1.59
Fully-diluted.................................................... $0.65 $0.58 $1.85 $1.59
Weighted average shares outstanding for calculation:
Primary.......................................................... 20,899,660 20,578,505 20,825,892 20,503,546
Fully - diluted.................................................. 20,935,992 20,594,274 20,868,554 20,517,395
The accompanying notes are an intergral part of these financial statements.
Page 4 of 22 Pages
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Nine Months Ended
September 30, 1997
1997 1996
--------------------------------
Cash flows from operating activities:
<S> <C> <C>
Net income........................................................................ $ 38,591 $ 32,695
Adjustments to reconcile net income to cash provided by (used in)
operating activities:
Depreciation................................................................... 9,755 8,428
Provision (reductions in reserve) for possible loan losses..................... (2,812) 375
Provision for losses on OREO and other problem assets.......................... 101 312
Amortization of intangible assets and unearned restricted stock
compensation................................................................ 3,247 2,727
Amortization of premiums and discounts on investment securities, net........... 2,079 5,972
Net gains on sales of OREO and other property.................................. (3,140) (2,171)
Net gains on sales of investment securities.................................... (16)
Deferred tax expense (benefit)................................................. 1,253 (2,147)
Increase (Decrease) in accrued income taxes.................................... 1,568 3,213
(Increase) Decrease in accrued income receivable and other assets.............. (983) (768)
Increase (Decrease) in accrued expenses and other liabilities.................. 5,655 1,046
--------------------------------
Net cash provided by operating activities...................................... $ 55,314 $ 49,666
--------------------------------
Cash flows from investing activities:
Proceeds from maturities of investment securities held to maturity................ $ 323,592 $ 303,044
Proceeds from maturities of investment securities available for sale.............. 76,424 41,551
Proceeds from sales of investment securities available for sale................... 68,580
Purchases of investment securities held to maturity............................... (209,364) (292,355)
Purchases of investment securities available for sale............................. (11,974) (53,355)
Net (increase) decrease in loans.................................................. (216,365) (223,173)
Net (increase) decrease in federal funds sold and short-term deposits............. 27,493 17,592
Proceeds from sales of OREO and other property.................................... 5,188 5,292
Capital expenditures.............................................................. (23,347) (28,127)
Other............................................................................. (387) (1,920)
--------------------------------
Net cash provided by (used in) investing activities............................... $ (28,740)$ (162,871)
--------------------------------
Cash flows from financing activities:
Net increase (decrease) in non-interest-bearing demand deposits................... $ (20,657)$ (8,498)
Net increase (decrease) in interest-bearing deposits other than
time deposits.................................................................. 24,721 (68,672)
Net increase (decrease) in time deposits.......................................... 60,704 (5,205)
Net increase (decrease) in federal funds purchased and securities sold
under repurchase agreements.................................................... (108,145) 183,052
Sale of common stock under employee savings plan and dividend
reinvestment plan.............................................................. 2,913 2,097
Exercise of stock options......................................................... 669 1,375
Stock issued by pooled entities, pre-merger - 310
Dividends paid.................................................................... (15,571) (11,284)
Dividends paid, pooled entities................................................... (580) (905)
--------------------------------
Net cash provided by (used in) financing activities............................... $ (55,946)$ 92,270
--------------------------------
Net increase (decrease) in cash and cash equivalents................................. $ (29,372)$ (20,935)
Cash and cash equivalents at the beginning of the period............................. 245,260 259,312
--------------------------------
Cash and cash equivalents at the end of the period................................... $ 215,888 $ 238,377
================================
Interest income received............................................................. $ 215,748 $ 200,377
================================
Interest expense paid................................................................ $ 79,462 $ 75,204
================================
Net federal income taxes paid........................................................ $ 16,146 $ 13,141
================================
The accompanying notes are an integral part of these financial statements.
Page 5 of 22 Pages
</TABLE>
<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 (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 October 1996, 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.
Page 6 of 22 Pages
<PAGE>
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.
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 September 30,
1997 1996
------------- -------------
Pro forma basic EPS:
For the quarter $ 0.66 $ 0.58
Year to date $ 1.87 $ 1.60
Pro forma diluted EPS:
For the quarter $ 0.65 $ 0.58
Year to date $ 1.85 $ 1.59
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 (primarily
with respect to changes in market value of available for sale investment
securities), but will not have an effect on the Company's financial position or
results of operations.
Page 7 of 22 Pages
<PAGE>
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.
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. On August 15, 1997, FNBH was
merged into Whitney National Bank (Louisiana).
Page 8 of 22 Pages
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SUMMARY
Whitney Holding Corporation earned $13.7 million for the third quarter
of 1997 or $0.65 per share. For the third quarter of 1996, the Company earned
$11.9 million or $0.58 per share. Year to date through September 30, 1997, the
Company earned $38.6 million or $1.85 per share compared to $32.7 million or
$1.59 per share for the same period in 1996. Excluding the after-tax effect of
merger related expenses in each period, earnings for the third quarters were
$14.4 million or $0.69 per share in 1997 and $11.9 million or $0.58 per share in
1996, and earnings for the year-to-date periods were $40.4 million or $1.94 per
share in 1997 and $35.0 million or $1.71 per share in 1996.
Taxable-equivalent net interest income increased $4.4 million or 10.0%
between the third quarters of 1996 and 1997, and the taxable-equivalent net
interest margin increased to 5.06% from 4.90% between these periods. Noninterest
income improved by $1.8 million or 16.8% in the third quarter of 1997 from the
same period in 1996, while non-interest expense, including all merger related
expenses, increased $5.0 million or 13.9% between these periods.
For the first nine months of 1997, taxable-equivalent net interest
income increased $11.5 million or 9.0% from the comparable prior-year period.
The year-to-date taxable-equivalent net interest margin also increased, from
4.77% in 1996 to 4.94% in 1997. Non-interest income for the nine months ended
September 30, 1997 increased $6.7 million or 21.4% over the same period in 1996.
Year-to-date non-interest expense, including all merger related expenses,
increased $10.5 million or 9.7% in 1997 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 nine
month periods ended September 30, 1997 and 1996.
1997 1996
-------- --------
Return on average assets:
Third quarter -
Total return 1.30% 1.19%
Return before merger expenses 1.37% 1.19%
Year to date -
Total return 1.24% 1.10%
Return before merger expenses 1.30% 1.18%
Return on average shareholders' equity:
Third quarter -
Total return 11.69% 10.99%
Return before merger expenses 12.34% 10.99%
Year to date -
Total return 11.36% 10.37%
Return before merger expenses 11.91% 11.09%
For the third quarter of 1997, average earning assets were $3.81
billion, a net increase of $232 million or 6.5% from $3.58 billion in the third
quarter of 1996. For the nine months ended September 30, 1997, average earning
assets grew to $3.79 billion from $3.59 billion for the same period in 1996, a
net increase of $200 million or 5.6%. Average loans outstanding grew $459
million or 23% between the third quarters of 1996 and 1997 and $435 million or
23%
Page 9 of 22 Pages
<PAGE>
between the year-to-date periods. The growth in the loan portfolio was partly
funded by maturities of investment securities and the total average investment
in securities in 1997 decreased $222 million for the third quarter and $221
million for the year-to-date period as compared to 1996. At September 30, 1997,
earning assets totalled $3.82 billion compared to $3.81 billion at December 31,
1996.
Average total deposits increased $126 million or 4.0% to $3.26 billion
in the third quarter of 1997 compared to $3.14 billion in the third quarter of
1996. For the year-to-date period, average deposits grew $69 million or 2.2% in
1997 compared to the same period in 1996. Total deposits at September 30, 1997
were $3.33 billion, a moderate 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 $70 million or 22% for the third
quarter of 1997 and $112 million or 40%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 decreased $3.5 million in the first nine months
of 1997 from year end 1996 to $12.3 million at September 30, 1997. The
quarter-end total was $4.5 million or 27% below the level of non-performing
assets at September 30, 1996. The reserve for possible loan losses was $42.1
million on September 30, 1997, an amount which represented 454% of total
non-performing loans, including restructured loans, and 1.7% of total loans. At
year end 1996, the reserve coverage was 369% of non-performing loans and 1.9% of
total loans.
On August 27, 1997 the Company declared a third quarter dividend of
$0.28 per share of common stock, payable October 1, 1997. Year-to-date the
Company has declared dividends of $0.84 per share of common stock. This is a 17%
increase over the year-to-date dividends declared by the Company in the first
nine months of 1996.
FINANCIAL CONDITION
Loans
The Company continued to increase its loans outstanding in the third
quarter of 1997. Average loans grew to $2.45 billion in 1997 or an increase of
$459 million or 23% over the $1.99 billion outstanding in the same period of
1996. Year to date, average loans increased $435 million or 23% in 1997 compared
to the average for the first nine months of 1996. Total loans outstanding of
$2.50 billion at September 30, 1997 were $218 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 third quarter of
1996 to the third quarter of 1997. Commercial loans other than those secured by
real estate increased approximately $209 million or 24% between 1996 and 1997.
Loans secured by commercial real estate and non-retail residential mortgage
loans together increased approximately $130 million or 21%. 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 $76 million or 23% between these periods, 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 $24 million or approximately 12%.
Page 10 of 22 Pages
<PAGE>
Deposits and Short-Term Borrowings
The Company's average deposits increased $126 million or 4.0% in the
third quarter of 1997 and $69 million or 2.2% for the first nine months of 1997
when compared to the same periods in 1996. As is shown in Table 1 on page 18,
average non-interest-bearing demand deposits increased $52 million or 5.8% for
the third quarter and $40 million or 4.4% year-to-date 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 $74 million or 3.3% between the third quarter of 1996 and 1997 and $29
million or 1.3% between the year-to-date periods. Third quarter average savings,
NOW and money market account deposits increased a net $62 million or 5.1%
between 1996 and 1997. For the first nine months of 1997, the net increase in
these deposit categories from their 1996 levels was $35 million or 2.8%. 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 $86 million or 30% in 1997's third quarter
and $62 million or 21% year to date as compared to 1996. Between 1996 and 1997,
average regular savings deposits decreased $7.9 million or 1.6% for the third
quarter and $13 million or 2.7% for the year-to-date period. Average NOW account
deposits were also lower in 1997 as compared to 1996, decreasing approximately
$16 million or 3.6% for the third quarter and $14 million or 3.0% for the
year-to-date period. 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, showed a net increase of
approximately $12 million or 1.2% for the third quarter of 1997. Year to date
this category decreased approximately $5 million or 0.5% when compared to the
same period in 1996. Within this category, core deposits decreased $37 million
for the quarter and $41 million year to date while non-core deposits had a
quarterly increase of $49 million and a year-to-date increase of $36 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 $65 million or 18% for the third quarter of 1997 and $99 million or
30% 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 a portion of 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 short-term funds,
increased $70 million for the third quarter and $112 million year to date in
1997 compared to the same periods in 1996.
Investment in Securities
The Company's total investment in securities decreased $180 million to
$1.29 billion at September 30, 1997 compared to $1.47 billion at December 31,
1996. The average total investment securities portfolio decreased $222 million
or 14.2% between the third quarter of 1996 and the third quarter of 1997 and
$221 million or 13.6% 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.
The weighted-average maturity of the overall portfolio of securities
was 42 months at September 30, 1997 as compared to 42 months at September 30,
1996. As is shown in Table 1, the weighted-average taxable-equivalent portfolio
yield increased 34 basis points to 6.53% for the third quarter of 1997 and 28
basis points to 6.41% for the year-to-date period when compared to the same
periods in 1996.
Page 11 of 22 Pages
<PAGE>
Securities classified as available for sale constituted approximately
9% of the total investment portfolio at September 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 gain on available
for sale securities was $0.3 million at September 30, 1997 compared to an
unrealized loss of $0.2 million at year end 1996. These gains or 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 September 30, 1997
of $131 million represents a $12 million or 10% increase from the level at year
end 1996 and a $17 million or 14% increase from September 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 September 30, 1996 and September 30, 1997, the
Company completed or began construction on twelve new branch locations
throughout its market area and opened a new operations center. During 1997, the
Company also began and will substantially complete the upgrade of its branch
delivery system and its office automation systems.
Asset Quality
As is shown in Table 2 on page 19, total non-performing assets
decreased to $12.3 million at September 30, 1997 from $15.8 million on December
31, 1996. The 1997 quarter-end total is $4.5 million or 27% below the level of
non-performing assets at September 30, 1996. The Company recovered $3.8 million
of previously charged-off loans in the third quarter of 1997 and $8.6 million
year to date through September 30, 1997. As is shown in Table 3 on page 19, over
the same periods the Company identified $1.4 million and $6.1 million,
respectively, of loans to be charged off as uncollectible against the reserve
for possible loan losses, resulting in a net recovery for the third quarter of
$2.4 million and a year-to-date net recovery of $2.5 million. In 1996, the
Company had a net recovery of $2.8 million in the third quarter and $3.3 million
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. During
1997, a $3.0 million reserve reduction was made in the third quarter and a small
provision of $0.2 million was made by pooled entities prior to the mergers in
1997. A portion of the reserve reduction reflects the reversal of excess
reserves that had previously been established to cover a potential settlement of
claims by the U. S. Department of Education ("DOE") stemming from the Company's
participation in guaranteed student loan programs. As discussed below, a
tentative settlement with the DOE has been reached. An increase in non-interest
expense related to this settlement substantially offset the earnings impact of
the reserve reduction. The reserve for possible loan losses represented 454% of
non-performing loans at September 30, 1997 and 600% of nonaccruing loans on that
date. At year end 1996 this reserve coverage was 369% of non-performing loans
and 462% of nonaccruing loans. The reserve for possible loan losses represented
1.69% of total loans at September 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 $1.5 million for the first nine months of 1997,
including approximately $1.1 million in the third quarter, compared to $774
thousand for the first nine months of 1996. Third quarter 1997 income is almost
entirely comprised of net gains on sales of acreage near Berwick, Louisiana and
Page 12 of 22 Pages
<PAGE>
in Livingston Parish, Louisiana. Future dispositions of these assets may result
in the recognition of substantial gains.
Capital Adequacy
The regulatory capital ratios for the Company and its significant
banking subsidiary 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 September 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 partially
offset by moderate growth in total risk-weighted assets.
<TABLE>
<CAPTION>
Minimum Minimum for
September 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 15.48% 14.96% 4.00% n/a
Whitney National Bank 14.37% 14.39% 4.00% 6.00%
Total risk-based capital ratio:
Company 16.73% 16.21% 8.00% n/a
Whitney National Bank 15.62% 15.64% 8.00% 10.00%
Tier 1 leverage capital ratio:
Company 10.71% 10.01% 4.00% n/a
Whitney National Bank 9.77% 9.31% 4.00% 5.00%
Total risk-weighted assets:
Company $2,899,000 $2,808,000
Whitney National Bank $2,535,000 $2,404,000
</TABLE>
Page 13 of 22 Pages
<PAGE>
RESULTS OF OPERATIONS
Net Interest Income
Taxable-equivalent net interest income in 1997 increased $4.4 million
or 10.0% for the third quarter and $11.5 million or 9.0% year to date when
compared to the same periods in 1996. The net interest margin increased to 5.06%
for the third quarter and 4.94% for the first nine months in 1997 compared to
4.90% for the third quarter and 4.77% year to date in 1996. A combination of
factors contributed to these changes, the components of which are detailed in
Table 1 on page 18.
Taxable-equivalent loan interest income increased $8.7 million or 19.5%
for the third quarter and $24.0 million or 18.9% for the first nine months of
1997 when compared to 1996. These increases were the result of the growth in
average loans outstanding, growth which totalled $459 million for the third
quarter of 1997 compared with the third quarter of 1996 and $435 million for the
first nine months of 1997 when compared with the same period in 1996. 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
third quarter, the effective yield decreased 26 basis points to 8.67% in 1997
from 8.93% in 1996. For the year-to-date period, the effective yield decreased
24 basis points to 8.61% in 1997 from 8.85% 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
third quarter decreased $2.4 million or 9.7% from the third quarter of 1996. For
the first nine months of 1997, the decrease in investment income was $7.3
million or 9.7%. These decreases are consistent with the reductions in the
average investment in securities between 1996 and 1997, which totalled $222
million for the third quarter and $221 million for the year-to-date period. The
effective investment portfolio average yield increased 34 basis points to 6.53%
for the third quarter of 1997 and 28 basis points to 6.41% for the first nine
months when compared to the same periods in 1996. These increases are primarily
the result of higher yields obtained on reinvestments and a 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 total taxable-equivalent interest income between
1996 and 1997 was $6.3 million or 9.1% for the third quarter and $16.1 million
or 7.9% for the first nine months. The overall effective earning-asset yield in
the third quarter of 1997 was 7.88% or 19 basis points above the 7.69% yield in
1996, and the year-to-date effective yield in 1997 was 7.77%, up 20 basis points
from 1996's yield of 7.57%.
Interest expense increased $1.9 million or 7.5% in the third quarter of
1997 and $4.6 million or 6.1% 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 $65 million or
18% for the third quarter of 1997 and $99 million or 30% year to date compared
to 1996. The cost of these borrowed funds was 5.06% in the third quarter of 1997
and 5.02% year-to-date, which represent increases of 19 basis points and 13
basis points, respectively, over the effective rate on short-term borrowed funds
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 third quarter of 1997 and 3.71% for the first nine
months, as shown in Table 1, was little changed from the rate for the comparable
periods in 1996. The overall cost of funds rate on total interest-bearing
liabilities in 1997 was 3.93% for the third quarter and 3.91% for the
year-to-date period. These rates represent increases of 7 basis points and 5
basis points, respectively, when compared to the same periods in 1996.
Page 14 of 22 Pages
<PAGE>
Other Income and Expense
Non-interest income increased $1.8 million or 16.8% for the third
quarter and $6.7 million or 21.4% 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 totaled approximately $1.2 million for the third quarter of 1997
and $1.0 million in the comparable period in 1996. Year to date, this income
totaled approximately $5.2 million in 1997 and $2.4 million in 1996. Excluding
this income, third quarter non-interest income was $11.3 million in 1997 and
$9.7 million in 1996, an increase of $1.6 million or 17.3%. Non-interest income,
excluding gains on and revenue from foreclosed assets, was $32.6 million for the
first nine months of 1997, an increase of $3.9 million or 13.5% over 1996's
total of $28.7 million.
Income from service charges on deposit accounts, which accounted for
approximately half of recurring non-interest income in each of these periods,
increased $0.6 million or 10.6% in the third quarter of 1997 as compared to 1996
and $1.1 million or 6.9% for the year-to-date period.
The Company continued to expand its automated teller facilities during
1996 and into the first nine months of 1997. Fees generated from ATM operations
in 1997 increased $0.2 million or 24% for the third quarter and $0.6 million or
37% for the year-to-date period. Fee income from credit card transaction
operations also increased between these periods, by approximately $0.4 million
or 29% for the quarter and $1.0 million or 25% year to date, reflecting economic
conditions as well as successful marketing efforts.
Non-interest operating expenses were $41.2 million for the third
quarter of 1997 and $118.7 million for the year-to-date period, which represent
increases over 1996 of $5.0 million or 13.9% for the quarter and $10.5 million
or 9.7% for the year-to-date period. Included in operating expenses are
merger-related expenses totalling $1.2 million for the third quarter of 1997 and
$2.4 million year to date through September 30, 1997. In 1996, no merger
expenses were incurred in the third quarter, but year to date these expenses
totalled $2.8 million. Excluding merger expenses, quarterly non-interest
operating expenses increased $3.9 million or 10.7% between 1996 and 1997 and
year-to-date expenses increased $10.9 million or 10.4%.
Salaries and employee benefits expense totalled $20.6 million for the
third quarter of 1997 and $60.5 million for the year-to-date period. These
amounts represent increases of $1.7 million or 9.2% for the quarter and $4.7
million or 8.5% year to date when compared to the same periods in 1996.
Excluding merger-related expenses, the quarterly increase in 1997 remained at
$1.7 million or 9.2% and the year-to-date increase to $5.0 million or 9.2%.
Approximately $0.7 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 $1.9
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 a corresponding
grant 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 $2.4 million or 4.3% 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
$3.2 million or 19.0% between the third quarter of 1996 and the third quarter of
1997. Year to date, these expenses increased $5.8 million or 11.1% between 1996
and 1997. Excluding merger expenses incurred in both years, the quarterly
increase in 1997 was $2.2 million or 12.9% and the year-to-date increase was
$5.9 million or 11.7%.
Occupancy expense was essentially unchanged for the third quarter of
1997 as compared to 1996, as expenses related to new branches and other new
facilities were offset by year-to-year reductions in the cost of operations of
certain other facilities. Occupancy expense increased $1.0 million or 11.9% 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
the beginning of 1996 the Company has opened or begun construction on twelve new
branch locations, has continued its renovation program and has moved into its
new operations center.
The remaining net increases in non-personnel-related expenses were
approximately $2.2 million or 15.5% for the third quarter of 1997 and $4.9
million or 11.6% year to date. There were several factors contributing to these
year-to-year increases: (1) the Company recorded $1.2 million of expense in
1997's third quarter related to the student loan settlement discussed below; (2)
in the third quarter of 1996 the Company recovered approximately $0.7 million in
collection costs as part of a legal settlement; (3) additional costs have been
incurred in 1997 to furnish, equip and service
Page 15 of 22 Pages
<PAGE>
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 teller and electronic office system; and (4) quarterly
and year-to-date expenses in 1997 include higher advertising and promotional
costs related to the recent mergers and to the introduction of certain new
deposit products.
As previously disclosed in its annual report on Form 10-K for the year
ended December 31, 1996, the Company, in 1992, discovered and reported to the
United States Department of Education ("DOE") that in earlier years Whitney
National Bank had not in all cases followed the collection procedures required
by the guaranteed student program. Upon discovery, adequate reserves were
established to cover any potential settlement, and internal procedures were
revised to assure future compliance with the program. The Company has reached a
tentative settlement agreement with the DOE and has recorded certain expenses
and income tax effects which were substantially offset by the reversal of excess
reserves for possible loan losses also related to this settlement, as was
discussed earlier. As a result, this tentative settlement agreement did not have
a material impact on net income for the quarter or year-to-date periods ended
September 30, 1997.
Income Taxes
Excluding the adjustment related to the tentative settlement with the
DOE discussed above, the Company provided for income taxes at an overall
effective rate of 32.4% for both the third quarter and year-to-date periods in
1997 compared to 31.7% 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 their
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
nine-month periods ended September 30, 1997 and 1996. The Company generated $55
million in liquid funds from operations for the first nine months of 1997 and
paid total dividends, including those of pooled entities, of $16 million. A
major source of liquid funds during the first nine months of 1997 was
unreinvested maturities of investment securities totalling $ 178 million. Total
deposits, which are discussed in more detail below, increased slightly during
the first nine months of 1997, providing $65 million of funds during this
period. The Company also implemented certain procedures during 1997 designed to
reduce the level of currency and coin or non-interest-bearing balances with the
Federal Reserve Bank that the banks are required to hold to meet reserve
requirements. This reduction has totaled approximately $20 million on average.
These funds were used to support net loan growth in the first nine
months of 1997 of $216 million and to finance $23 million in capital
expenditures related to the retail network expansion and other projects as
discussed earlier. The $108 million decrease in short-term borrowings made
through federal funds purchases and sales of securities under repurchase
agreements year-to-date through September 30, 1997 was partially offset by a
decrease of $27.5 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, increased by $34 million between the first nine months of
1997 and 1996. Growth in year-to-date average non-interest-bearing demand
deposits of $40 million in 1997 and net growth of $34 million in average
interest-bearing checking, savings and money market account deposits for the
same period was offset by a $41 million decrease in core time deposits. Non-core
time deposits increased on average by $35 million year-to-date in 1997 as
compared to 1996.
Page 16 of 22 Pages
<PAGE>
As of September 30, 1997, approximately $410 million or 35% of the
portfolio of investment securities held to maturity was scheduled to mature
within one year. An additional $118 million of investment securities was
classified as available for sale at the end of 1997's third quarter, although
management's determination of this classification does not derive primarily from
liquidity considerations.
The subsidiary banks had approximately $1.2 billion in unfunded loan
commitments outstanding at September 30, 1997, an increase of $174 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 September 30, 1997. Available credit card lines were $98 million
at September 30, 1997, an increase of $20 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.
FORWARD - LOOKING STATEMENTS
Certain statements in this form 10-Q regarding future expectations may
be regarded as "forward-looking statements" within the meaning of the Securities
Litigation Reform Act. Although the Company believes that its expectations are
based on reasonable assumptions, it can give no assurance that its goals will be
achieved. Important factors that could cause actual results to differ materially
from those forward-looking statements include the timing and extent of changes
in interest rates, actions of government regulators and other economic factors.
Page 17 of 22 Pages
<PAGE>
<TABLE>
<CAPTION>
TABLE 1
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
ANALYSIS OF CHANGES IN INTEREST INCOME AND INTEREST EXPENSE
(dollars in thousands)
THIRD QUARTER ENDED JUNE 30, NINE 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).......$2,445,290 $53,431 8.67 % $1,986,038 $44,710 8.93 % $2,349,510 $151,298 8.61 % $1,914,706 $127,267 8.85 %
--------------------------------------------------------------------------------------------------------------------
U. S. Treasury
securities.... $452,697 $6,868 6.02 % $699,605 $9,980 5.66 % $508,661 $22,575 5.93 % $746,812 $31,583 5.63 %
U.S. government
agency
securities.... 463,934 7,516 6.48 441,615 6,885 6.24 467,124 22,337 6.38 462,361 21,191 6.11
Mortgage-backed
securities.... 277,625 4,583 6.60 276,355 4,509 6.53 281,861 13,651 6.46 272,545 13,206 6.46
State and
municipal
securities
(tax
equivalent)
(1)........... 136,083 2,791 8.20 136,839 2,787 8.15 139,719 8,615 8.22 136,909 8,464 8.24
Federal Reserve
stock and
and other
corporate
securities.... 7,363 120 6.52 5,673 71 5.01 6,637 284 5.71 6,525 273 5.58
--------------------------------------------------------------------------------------------------------------------
Total
investment in
securities
(1)(3)....... $1,337,702 $21,878 6.53 % $1,560,087 $24,232 6.19 % $1,404,002 $67,462 6.41 % $1,625,152 $74,717 6.13 %
--------------------------------------------------------------------------------------------------------------------
Federal funds
sold and
short term
deposits...... 27,100 386 5.65 % 31,861 444 5.53 % 37,921 1,505 5.31 % 51,050 2,154 5.62 %
--------------------------------------------------------------------------------------------------------------------
Total
interest-
earning
assets......$3,810,092 $75,695 7.88 % $3,577,986 $69,386 7.69 % $3,791,433 $220,265 7.77 % $3,590,908 $204,138 7.57 %
--------------------------------------------------------------------------------------------------------------------
Cash and due
from financial
institutions.. 194,905 210,644 203,957 215,177
Bank premises
and equipment,
net........... 129,211 112,351 125,097 105,397
Other real
estate owned,
net........... 4,069 5,271 4,160 6,540
Other assets.... 83,276 88,645 84,283 89,636
Reserve for
possible
loan losses... (43,807) (46,599) (42,091) (45,481)
---------- ---------- ---------- ----------
Total assets..$4,177,746 $3,948,298 $4,166,029 $3,962,177
========== ========== ========== ==========
LIABILITIES
Savings
deposits...... $479,652 $3,115 2.58 % $487,586 $3,305 2.69 % $485,780 $9,619 2.65 % $499,250 $10,058 2.68 %
NOW and MMDA
deposits...... 795,708 5,194 2.59 725,470 4,164 2.28 787,349 14,709 2.50 739,353 12,443 2.24
Time deposits... 1,042,823 13,492 5.13 1,030,844 13,441 5.17 1,031,884 39,564 5.13 1,036,986 40,780 5.24
--------------------------------------------------------------------------------------------------------------------
Total
interest-
bearing
deposits....$2,318,183 $21,801 3.73 % $2,243,900 $20,910 3.70 % $2,305,013 $63,892 3.71 % $2,275,589 $63,281 3.70 %
--------------------------------------------------------------------------------------------------------------------
Federal funds
purchased and
repurchase
agreements.... 417,086 5,315 5.06 % 351,713 4,315 4.87 % 432,224 16,223 5.02 % 333,365 12,226 4.89 %
--------------------------------------------------------------------------------------------------------------------
Total
interest-
bearing
liabilities.$2,735,269 $27,116 3.93 % $2,595,613 $25,225 3.86 % $2,737,237 $80,115 3.91 % $2,608,954 $75,507 3.86 %
--------------------------------------------------------------------------------------------------------------------
Demand deposits,
non-interest
bearing....... 943,994 892,250 941,243 901,198
Other
liabilities... 35,066 31,845 33,468 32,013
Shareholders'
equity........ 463,417 428,590 454,081 420,012
---------- ---------- ---------- ----------
Total
liabilities
and
shareholders'
equity......$4,177,746 $3,948,298 $4,166,029 $3,962,177
========== ========== ========== ==========
Net interest
income/margin
(tax
equivalent)
(1)......... $48,579 5.06 % $44,161 4.90 % $140,150 4.94 % $128,631 4.77 %
======= ====== ======= ====== ======== ====== ======== ======
(1) Tax equivalent amounts are calculated using a marginal federal income tax rate of 35%.
(2) Average balance includes nonaccruing loans of $7,986 and $9,978 for the third quarters and $8,957 and $10,872 for the
year-to-date periods in 1997 and 1996, respectively.
(3) Average balance excludes unrealized gain or loss on securities available for sale.
Page 18 of 22 Pages
</TABLE>
<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
---------------------------- --------------------------------------
3rd 2nd 1st 4th 3rd 2nd 1st
---------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Loans accounted for on a nonaccrual basis........... $7.0 $9.4 $9.9 $9.1 $9.7 $10.0 $12.7
Restructured loans.................................. 2.2 2.8 2.4 2.4 2.4 2.2 1.7
---------------------------- --------------------------------------
Total non-performing loans.......................... $9.2 $12.2 $12.3 $11.5 $12.1 $12.2 $14.4
---------------------------- --------------------------------------
Other real estate owned, net........................ 3.1 4.1 4.5 4.3 4.7 6.2 7.3
Other foreclosed assets............................. - 0.1 - - - - -
---------------------------- --------------------------------------
Total non-performing assets......................... $12.3 $16.4 $16.8 $15.8 $16.8 $18.4 $21.7
============================ ======================================
Net gain on sales of OREO........................... $1.1 $0.2 - $0.8 $0.5 $0.4 $0.2
============================ ======================================
Reserve for possible loan losses as a percent of:
Total non-accruing loans......................... 600% 454% 421% 469% 488% 443% 360%
Total non-performing loans....................... 454% 350% 339% 369% 391% 363% 317%
Total loans...................................... 1.69% 1.78% 1.83% 1.85% 2.29% 2.27% 2.48%
Non-performing loans as a percent of
total loans...................................... 0.37% 0.51% 0.54% 0.50% 0.58% 0.62% 0.78%
Non-performing assets as a percent of
total assets..................................... 0.29% 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
---------------------------- --------------------------------------
3rd 2nd 1st 4th 3rd 2nd 1st
---------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Reserve balance, beginning of quarter........... $42.7 $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.................. (3.0) - - (4.9) - - -
Loans charged off............................... (1.4) (1.7) (3.0) (1.7) (1.5) (3.1) (1.0)
Recoveries...................................... 3.8 2.6 2.2 1.8 4.3 1.5 3.1
---------------------------- --------------------------------------
Reserve balance, end of quarter................. $42.1 $42.7 $41.8 $42.4 $47.1 $44.1 $45.6
============================ ======================================
Page 19 of 22 Pages
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
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 (filed as Exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997
(Commission file number 0-1026) and incorporated by reference herein)
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)
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)
Page 20 of 22 Pages
<PAGE>
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)
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 (filed as
Exhibit 10.19 to the Company's Quarterly Report on form 10-Q for the
quarter ended June 30, 1997 (Commission file number 0-1026) and
incorporated by reference)
Exhibit 21 - Subsidiaries
Whitney Holding Corporation owns 100% of the capital stock of Whitney
National Bank, 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
Page 21 of 22 Pages
<PAGE>
(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
November 12, 1997
--------------------------------------
Date
Page 22 of 22 Pages
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<CASH> 215,888
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 28,200
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 117,815
<INVESTMENTS-CARRYING> 1,176,870
<INVESTMENTS-MARKET> 1,190,142
<LOANS> 2,495,651
<ALLOWANCE> 42,077
<TOTAL-ASSETS> 4,207,673
<DEPOSITS> 3,327,054
<SHORT-TERM> 375,900
<LIABILITIES-OTHER> 37,841
<LONG-TERM> 0
<COMMON> 2,800
0
0
<OTHER-SE> 465,063
<TOTAL-LIABILITIES-AND-EQUITY> 4,207,673
<INTEREST-LOAN> 150,923
<INTEREST-INVEST> 64,380
<INTEREST-OTHER> 1,505
<INTEREST-TOTAL> 216,808
<INTEREST-DEPOSIT> 63,891
<INTEREST-EXPENSE> 80,115
<INTEREST-INCOME-NET> 136,693
<LOAN-LOSSES> 2,812
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 118,704
<INCOME-PRETAX> 58,627
<INCOME-PRE-EXTRAORDINARY> 58,627
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,591
<EPS-PRIMARY> 1.85
<EPS-DILUTED> 1.85
<YIELD-ACTUAL> 7.70
<LOANS-NON> 7,007
<LOANS-PAST> 1,644
<LOANS-TROUBLED> 2,235
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 42,411
<CHARGE-OFFS> 6,041
<RECOVERIES> 8,520
<ALLOWANCE-CLOSE> 42,077
<ALLOWANCE-DOMESTIC> 41,156
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 921
</TABLE>
