<PAGE>
November 15, 1999
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, 1999.
This filing is being effected by direct transmission to the
Commission's EDGAR System.
Sincerely,
/s/ Thomas L. Callicutt, Jr.
---------------------------------------------
Thomas L. Callicutt, Jr.
Executive Vice President and
Chief Financial Officer
(504) 552-4591
TLC/drm
<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
- --------------------------------------------------------------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended Commission file number 0-1026
September 30, 1999
WHITNEY HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
Louisiana 72-6017893
(State of incorporation) (I.R.S. Employer
Identification No. )
228 St. Charles Avenue
New Orleans, Louisiana 70130
(Address of principal executive offices)
(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 12 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 1999
----- -------------------------------
Common Stock, no par value 22,581,039
================================================================================
<PAGE>
WHITNEY HOLDING CORPORATION
TABLE OF CONTENTS
Page
- --------------------------------------------------------------------------------
PART I. Financial Information
Item 1: Financial Statements:
Consolidated Balance Sheets 1
Consolidated Statements of Operations 2
Consolidated Statements of Changes in
Shareholders' Equity 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5
Financial Highlights 7
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
- --------------------------------------------------------------------------------
PART II. Other Information
Item 1: Legal Proceedings 22
Item 2: Changes in Securities and Use of Proceeds 22
Item 3: Defaults Upon Senior Securities 22
Item 4: Submission of Matters to a Vote of Security Holders 22
Item 5: Other Information 22
Item 6: Exhibits and Reports on Form 8-K 22
<PAGE>
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
====================================================================================================================================
September 30 December 31
(dollars in thousands) 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Cash and due from financial institutions $ 192,317 $ 214,963
Investment in securities
Securities available for sale 181,917 105,361
Securities held to maturity, fair values of $1,110,952 and $1,253,113, respectively 1,125,690 1,234,717
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment in securities 1,307,607 1,340,078
Federal funds sold and short-term investments 535 151,510
Loans, net of unearned income 3,488,000 3,270,581
Reserve for possible loan losses (43,738) (40,282)
- ------------------------------------------------------------------------------------------------------------------------------------
Net loans 3,444,262 3,230,299
====================================================================================================================================
Bank premises and equipment 172,456 169,724
Accrued interest receivable 33,433 31,070
Other assets 83,538 74,275
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 5,234,148 $ 5,211,919
====================================================================================================================================
LIABILITIES
Non-interest-bearing demand deposits $ 1,167,045 $ 1,240,189
Interest-bearing deposits 3,031,199 3,016,473
- ------------------------------------------------------------------------------------------------------------------------------------
Total deposits 4,198,244 4,256,662
====================================================================================================================================
Federal funds purchased and securities sold under repurchase agreements 443,336 355,322
Accrued interest payable 11,838 12,229
Accrued expenses and other liabilities 33,226 26,745
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 4,686,644 4,650,958
====================================================================================================================================
SHAREHOLDERS' EQUITY
Common stock, no par value
Authorized - 100,000,000 shares
Issued - 23,745,512 and 23,669,700 shares, respectively 2,800 2,800
Capital surplus 141,692 138,848
Retained earnings 451,779 428,880
Accumulated other comprehensive income (2,514) (272)
Treasury stock at cost - 1,183,675 and 276,703 shares, respectively (41,064) (4,613)
Unearned restricted stock compensation (5,189) (4,682)
- ------------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 547,504 560,961
====================================================================================================================================
Total liabilities and shareholders' equity $ 5,234,148 $ 5,211,919
====================================================================================================================================
The accompanying notes are an integral part of these financial statements.
- 1 -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
=========================================================================================================================
Three Months Ended Nine Months Ended
September 30 September 30
- -------------------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share data) 1999 1998 1999 1998
- -------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
<S> <C> <C> <C> <C>
Interest and fees on loans $ 68,151 $ 62,824 $194,927 $181,509
Interest and dividends on investments
U.S. Treasury securities 2,208 4,041 7,856 13,579
U.S. agency securities 7,002 6,210 22,040 22,174
Mortgage-backed securities 8,227 7,204 24,262 21,277
Obligations of states and political subdivisions 2,338 1,844 6,888 5,427
Federal Reserve stock and other corporate securities 114 132 425 440
Interest on federal funds sold and short-term investments 198 1,847 2,384 5,573
- -------------------------------------------------------------------------------------------------------------------------
Total interest income 88,238 84,102 258,782 249,979
=========================================================================================================================
INTEREST EXPENSE
Interest on deposits 26,681 27,201 79,021 80,365
Interest on federal funds purchased and
securities sold under repurchase agreements 4,605 3,963 12,562 11,487
- -------------------------------------------------------------------------------------------------------------------------
Total interest expense 31,286 31,164 91,583 91,852
=========================================================================================================================
NET INTEREST INCOME 56,952 52,938 167,199 158,127
PROVISION FOR POSSIBLE LOAN LOSSES 2,000 - 4,250 73
- -------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 54,952 52,938 162,949 158,054
=========================================================================================================================
NON-INTEREST INCOME
Service charges on deposit accounts 7,133 5,839 20,726 17,292
Credit card income 3,324 2,529 9,471 7,220
Trust service fees 2,133 1,642 6,237 4,858
Secondary mortgage market operations 739 593 2,763 1,862
Other non-interest income 3,942 2,805 9,330 12,367
Securities transactions - 833 - 841
- -------------------------------------------------------------------------------------------------------------------------
Total non-interest income 17,271 14,241 48,527 44,440
=========================================================================================================================
NON-INTEREST EXPENSE
Employee compensation 20,405 21,655 61,035 61,946
Employee benefits 3,569 4,442 11,117 10,725
- -------------------------------------------------------------------------------------------------------------------------
Total personnel expense 23,974 26,097 72,152 72,671
Equipment and data processing expense 5,670 5,163 16,313 14,049
Net occupancy expense 4,062 3,894 11,976 10,801
Credit card processing services 2,379 1,824 6,887 5,344
Postage and communications 1,986 1,851 5,834 5,220
Ad valorem taxes 1,604 1,257 4,722 3,778
Legal and professional fees 922 2,620 3,422 5,221
Stationery and supplies 1,028 1,193 3,259 3,183
Other non-interest expense 6,453 7,409 19,321 20,795
- -------------------------------------------------------------------------------------------------------------------------
Total non-interest expense 48,078 51,308 143,886 141,062
=========================================================================================================================
INCOME BEFORE INCOME TAXES 24,145 15,871 67,590 61,432
INCOME TAX EXPENSE 7,810 5,216 21,859 20,196
=========================================================================================================================
NET INCOME $ 16,335 $ 10,655 $ 45,731 $ 41,236
=========================================================================================================================
EARNINGS PER SHARE
Basic $ .72 $ .46 $ 1.98 $ 1.77
Diluted $ .71 $ .45 $ 1.97 $ 1.76
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic 22,827,599 23,346,820 23,153,438 23,245,947
Diluted 22,903,782 23,520,962 23,231,647 23,492,055
=========================================================================================================================
The accompanying notes are an integral part of these financial statements.
- 2 -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Accumulated Unearned
Other Restricted
Common Capital Retained Comprehensive Treasury Stock
(dollars in thousands, except per share data) Stock Surplus Earnings Income Stock Compensation Total
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 $ 2,800 $ 127,316 $ 403,892 $ 373 $ (3,685) $ (5,560) $ 525,136
===========================================================================================================================
Comprehensive income:
Net income - - 41,236 - - - 41,236
Unrealized net holding gain (loss)
on securities, net of reclassification
adjustments and taxes - - - (168) - - (168)
- ---------------------------------------------------------------------------------------------------------------------------
Total comprehensive income - - 41,236 (168) - - 41,068
- ---------------------------------------------------------------------------------------------------------------------------
Cash dividends declared, $.90 per share - - (20,027) - - - (20,027)
Cash dividends declared, merged entities - - (650) - - - (650)
Exercise of stock options - 1,671 - - 69 - 1,740
Sales to employee benefit and
dividend reinvestment plans - 4,926 - - 44 - 4,970
Director stock grants - 167 - - - - 167
Restricted stock grants and other activity, net - 3,754 - - (693) (901) 2,160
- ---------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 1998 $ 2,800 $ 137,834 $ 424,451 $ 205 $ (4,265) $ (6,461) $ 554,564
===========================================================================================================================
===========================================================================================================================
Balance at December 31, 1998 $ 2,800 $ 138,848 $ 428,880 $ (272) $ (4,613) $ (4,682) $ 560,961
===========================================================================================================================
Comprehensive income:
Net income - - 45,731 - - - 45,731
Unrealized net holding gain (loss)
on securities, net of reclassification
adjustments and taxes - - - (2,242) - - (2,242)
- ---------------------------------------------------------------------------------------------------------------------------
Total comprehensive income - - 45,731 (2,242) - - 43,489
- ---------------------------------------------------------------------------------------------------------------------------
Cash dividends declared, $.99 per share - - (22,832) - - - (22,832)
Purchases of treasury stock - - - - (38,736) - (38,736)
Exercise of stock options - 589 - - 245 - 834
Sales to employee benefit and
dividend reinvestment plans - 1,444 - - 593 - 2,037
Director stock grants - 22 - - 96 - 118
Restricted stock grants and other activity, net - 789 - - 1,351 (507) 1,633
- ---------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 1999 $ 2,800 $ 141,692 $ 451,779 $(2,514) $(41,064) $ (5,189) $ 547,504
===========================================================================================================================
The accompanying notes are an integral part of these financial statements.
- 3 -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30
===================================================================================================================
(dollars in thousands) 1999 1998
- -------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 45,731 $ 41,236
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 18,161 14,538
Amortization of intangibles 2,901 1,801
Deferred tax expense (benefit) (1,511) 630
Net gains on sales of investment securities - (841)
Provision for possible loan losses 4,250 73
Provision for losses on foreclosed assets 179 77
Net gains on sales and other dispositions of foreclosed assets (380) (2,169)
Net gains on sales of bank premises and equipment (1,023) -
Increase (decrease) in accrued income taxes 1,236 (353)
(Increase) decrease in accrued interest receivable and prepaid expenses (2,437) 250
Increase in accrued interest payable and other accrued expenses 545 2,701
- -------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 67,652 57,943
===================================================================================================================
INVESTING ACTIVITIES
Proceeds from maturities of investment securities held to maturity 334,057 441,121
Purchases of investment securities held to maturity (226,019) (235,879)
Proceeds from maturities of investment securities available for sale 49,607 85,107
Proceeds from sales of investment securities available for sale - 858
Purchases of investment securities available for sale (129,792) (4,516)
Net increase in loans (218,642) (271,780)
Net (increase) decrease in federal funds sold and short-term investments 150,975 (61,526)
Proceeds from sales and other dispositions of foreclosed assets 1,457 4,126
Proceeds from sales of bank premises and equipment 3,327 1,058
Purchases of bank premises and equipment (19,218) (25,934)
Net cash acquired in branch purchase - 84,059
Other, net (5,943) 1,496
- -------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (60,191) 18,190
===================================================================================================================
FINANCING ACTIVITIES
Net decrease in demand deposits, NOW, money market and savings deposits (93,141) (25,716)
Net increase (decrease) in time deposits 34,723 (70,308)
Net increase in federal funds purchased and securities sold under
repurchase agreements 88,014 32,449
Proceeds from issuance of stock 2,589 6,757
Purchases of treasury stock (39,909) (536)
Cash dividends (22,383) (19,439)
- -------------------------------------------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES (30,107) (76,793)
===================================================================================================================
DECREASE IN CASH AND CASH EQUIVALENTS (22,646) (660)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 214,963 238,058
===================================================================================================================
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 192,317 $ 237,398
===================================================================================================================
Cash received during the period for:
Interest income $ 256,419 $ 252,133
Cash paid during the period for:
Interest expense $ 91,974 $ 91,217
Income taxes $ 21,650 $ 19,755
===================================================================================================================
The accompanying notes are an integral part of these financial statements.
- 4 -
</TABLE>
<PAGE>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Whitney
Holding Corporation and its subsidiaries ("the Company"). All significant
intercompany balances and transactions have been eliminated. Prior period
financial information has been restated to reflect subsequent business
combinations, if any, accounted for as poolings-of-interests. The Company
reports the balances and results of operations from business combinations
accounted for as purchases from the respective dates of acquisition. Certain
financial information for prior periods has been reclassified to conform to the
current presentation.
In preparing the consolidated financial statements, the Company is required
to make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. Actual results could
differ from those estimates. The consolidated financial statements reflect all
adjustments which are, in the opinion of management, necessary for a fair
presentation of the financial condition, results of operations, changes in
shareholders' equity and cash flows for the interim periods presented.
Adjustments included therein are of a normal recurring nature and include
appropriate estimated provisions. 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.
These financial statements should be read in conjunction with the Company's
1998 Annual Report on Form 10-K.
NOTE 2 - EARNINGS PER SHARE
The components used to calculate basic and diluted earnings per share are as
follows:
<TABLE>
<CAPTION>
=================================================================================================================
Three Months Ended September 30 Nine Months Ended September 30
- -----------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share data) 1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------
Numerator:
<S> <C> <C> <C> <C>
Net income $16,335 $10,655 $45,731 $41,236
Effect of dilutive securities - - - -
- -----------------------------------------------------------------------------------------------------------------
Numerator for diluted earnings per share $16,335 $10,655 $45,731 $41,236
- -----------------------------------------------------------------------------------------------------------------
Denominator:
Weighted average shares outstanding 22,827,599 23,346,820 23,153,438 23,245,947
Effect of dilutive stock options 76,183 174,142 78,209 246,108
- -----------------------------------------------------------------------------------------------------------------
Denominator for diluted earnings per share 22,903,782 23,520,962 23,231,647 23,492,055
- -----------------------------------------------------------------------------------------------------------------
Earnings per share:
Basic $.72 $.46 $1.98 $1.77
Diluted $.71 $.45 $1.97 $1.76
- -----------------------------------------------------------------------------------------------------------------
Antidilutive stock options 507,500 163,750 450,727 55,183
=================================================================================================================
</TABLE>
- 5 -
<PAGE>
NOTE 3 - STOCK REPURCHASE PROGRAM
During the third quarter of 1999, the Company repurchased 470,000 shares of
its common stock, completing the stock repurchase program announced in the first
quarter. Under this program, the Board of Directors had authorized the Company
to repurchase up to one million shares, or approximately 4.3%, of its common
stock. The Company purchased the one million shares at a weighted-average price
of $38.74 per share. There are no specific plans for using the repurchased
shares, except for reissuances in connection with employee stock option
exercises or other employee stock plans.
NOTE 4-COMPREHENSIVE INCOME
Comprehensive income for a period encompasses net income and all other
changes in a company's equity other than from transactions with its owners. The
Company's comprehensive income was as follows:
<TABLE>
<CAPTION>
==================================================================================================================
Three Months Ended Nine Months Ended
September 30 September 30
- ------------------------------------------------------------------------------------------------------------------
(dollars in thousands) 1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $ 16,335 $ 10,655 $ 45,731 $ 41,236
Other comprehensive income:
Unrealized holding gain (loss) on
securities, net of tax (39) 361 (2,314) 270
Reclassification adjustment, net of tax, for
realized gain on sale of securities
available for sale included in net income - (541) - (541)
Reclassification adjustment, net of tax, for
amortization of unrealized holding gain
(loss)on securities transferred from
available for sale to held to maturity
included in net income 25 35 72 103
- ------------------------------------------------------------------------------------------------------------------
Comprehensive income $ 16,321 $ 10,510 $ 43,489 $ 41,068
==================================================================================================================
</TABLE>
NOTE 5- CONTINGENCIES
The Company and its subsidiaries are parties to various legal proceedings
arising in the ordinary course of business. After reviewing pending and
threatened actions with legal counsel, management believes that the ultimate
resolution of these actions will not have a material effect on the Company's
financial condition or results of operations.
- 6 -
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
============================================================================================================================
1999 1998
------------------------------------------ ----------------------------
(dollars in thousands, except per share data) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
- ----------------------------------------------------------------------------------------------------------------------------
QUARTER-END BALANCE SHEET DATA
<S> <C> <C> <C> <C> <C>
Total assets $5,234,148 $5,195,037 $5,219,955 $5,211,919 $4,907,720
Earning assets 4,796,142 4,753,520 4,740,511 4,762,169 4,440,366
Investment in securities 1,307,607 1,386,932 1,406,550 1,340,078 1,183,617
Loans 3,488,000 3,365,957 3,193,257 3,270,581 3,171,422
Deposits 4,198,244 4,195,289 4,198,358 4,256,662 3,988,766
Shareholders' equity 547,504 556,075 569,479 560,961 554,564
- ----------------------------------------------------------------------------------------------------------------------------
AVERAGE BALANCE SHEET DATA
Total assets $5,232,588 $5,236,898 $5,192,831 $5,079,486 $4,812,321
Earning assets 4,793,980 4,782,107 4,728,438 4,622,708 4,392,199
Investment in securities 1,359,601 1,409,089 1,387,704 1,201,386 1,239,946
Loans 3,419,433 3,287,766 3,239,464 3,197,192 3,023,046
Deposits 4,196,385 4,233,337 4,183,433 4,093,579 3,885,729
Shareholders' equity 554,920 564,147 567,651 560,425 555,462
- ----------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT DATA
Interest income $ 88,238 $ 85,844 $ 84,700 $ 86,134 $ 84,102
Interest expense 31,286 30,352 29,945 31,129 31,164
Net interest income 56,952 55,492 54,755 55,005 52,938
Net interest income (TE) 58,418 56,899 56,120 56,245 54,118
Provision for possible loan losses 2,000 1,250 1,000 - -
Non-interest income (exclusive of securities transactions)17,271 16,030 15,226 14,839 13,408
Securities transactions - - - (2) 833
Non-interest expense 48,078 47,962 47,846 53,437 51,308
Net income 16,335 15,100 14,296 11,443 10,655
Net income, before tax-effected merger-related expenses 16,335 15,100 14,296 12,283 11,647
- ----------------------------------------------------------------------------------------------------------------------------
KEY RATIOS
Return on average assets 1.24% 1.16% 1.12% .89% .88%
Return on average shareholders' equity 11.68% 10.74% 10.21% 8.10% 7.61%
Net interest margin 4.85% 4.77% 4.79% 4.83% 4.90%
Tier 1 capital ratio 12.95% 13.32% 14.00% 13.81% 14.33%
Total capital ratio 14.05% 14.37% 15.07% 14.87% 15.49%
Leverage ratio 9.92% 10.06% 10.35% 10.39% 10.80%
Average shareholders' equity to average assets 10.61% 10.77% 10.93% 11.03% 11.54%
Shareholders' equity to total assets 10.46% 10.70% 10.91% 10.76% 11.30%
Average loans to average deposits 81.49% 77.66% 77.44% 78.10% 77.80%
Reserve for possible loan losses to loans 1.25% 1.23% 1.28% 1.23% 1.31%
Non-performing assets to loans plus foreclosed assets .37% .38% .48% .49% .52%
Reserve for possible loan losses to non-performing loans 370.13% 365.92% 301.15% 284.54% 289.99%
- ----------------------------------------------------------------------------------------------------------------------------
SELECTED COMMON SHARE DATA
Earnings Per Share
Basic $ .72 $ .65 $ .61 $ .49 $ .46
Basic, before tax-effected merger-related expenses $ .72 $ .65 $ .61 $ .53 $ .50
Diluted $ .71 $ .65 $ .61 $ .49 $ .45
Diluted, before tax-effected merger-related expenses$ .71 $ .65 $ .61 $ .52 $ .50
Dividends
Cash dividends per share $ .33 $ .33 $ .33 $ .30 $ .30
Dividend payout ratio 45.69% 50.52% 54.15% 61.30% 65.73%
Book Value Per Share $ 24.27 $ 24.14 $ 24.28 $ 23.98 $ 23.75
Trading Data
High stock price $ 39.75 $ 41.75 $ 38.25 $ 41.88 $ 51.25
Low stock price $ 33.25 $ 35.63 $ 32.19 $ 35.75 $ 36.63
Closing stock price $ 34.38 $ 39.75 $ 36.91 $ 37.50 $ 41.75
Trading volume 1,866,193 2,625,862 2,809,867 1,922,621 2,093,098
Average Shares Outstanding
Basic 22,827,599 23,194,136 23,445,367 23,394,769 23,346,820
Diluted 22,903,782 23,278,545 23,519,378 23,522,159 23,520,962
============================================================================================================================
</TABLE>
- 7 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The purpose of this discussion and analysis is to focus on significant
changes in the financial condition of Whitney Holding Corporation("the Company"
or "Whitney") and its subsidiaries and on their results of operations
during the third quarters of 1999 and 1998 and during the nine-month periods
through September 30 in each year. The operations of the Company's principal
subsidiary, Whitney National Bank ("the Bank,") constitute virtually all of the
Company's consolidated operations. This discussion and analysis highlights
and supplements information contained elsewhere in this Quarterly Report on
Form 10-Q, particularly the preceding consolidated financial statements,
notes and selected financial data. This discussion and analysis should be read
in conjunction with the Company's 1998 Annual Report on Form 10-K.
Prior period financial information has been restated to
reflect subsequent business combinations accounted for as poolings-of-interests,
if any. The Company reports the balances and results of operations from
business combinations accounted for as purchases from the respective dates of
acquisition. Certain financial information for prior periods has been
reclassified to conform to the current presentation.
OVERVIEW
Whitney earned $16.3 million, or $.72 per share, in the third quarter
of 1999, compared to $15.1 million, or $.65 per share in the second quarter and
$11.6 million, or $.50 per share, in last year's third quarter, before
tax-effected merger-related expenses. Return on average assets was 1.24%, and
return on average shareholders' equity was 11.68% for the current quarter. These
compare with a 1.16% return on average assets and a 10.74% return on average
equity for the second quarter and returns of .96% and 8.32%, respectively, for
the third quarter in 1998, all before merger-related expenses. The following key
items impacted the current quarter's results:
o Net interest income (TE) increased 8% from the third quarter of
1998 and 3% from the second quarter of 1999. The increase in net
interest income resulted from changes in asset mix from loan
growth coupled with effective liability cost management. The net
interest margin was 4.85% for the quarter, eight basis points
higher than the second quarter of 1999 and only five basis points
lower than 1998's third quarter.
o Non-interest income, excluding securities transactions, continued
to grow, increasing 29% from the third quarter of 1998 and 8% from
the previous quarter. Service charges on deposit accounts
increased 22% from the third quarter of 1998 and 2% from 1999's
second quarter. Credit card income increased 31% from the same
period in 1998 and was essentially unchanged from the previous
quarter. Trust service fees improved 30% from the third quarter of
1998 and 4% from the second quarter of 1999. Non-interest income
includes gains on sales of banking properties and pre-1933 assets
of $1,074,000 in the third quarter of 1999, $52,000 in the
previous quarter and $651,000 in the third quarter of 1998.
- 8 -
<PAGE>
o Non-interest expense again showed the positive effects of expense
control programs established in late 1998, increasing less than 1%
from the previous two quarters. Non-interest expense was $48.1
million in the third quarter, down over $4 million from $52.2
million in the fourth quarter of 1998, excluding conversion and
other merger-related expenses. Non-interest expense was $49.9
million in the third quarter of 1998 on the same basis.
o Sustained loan growth continued to be the primary factor behind
quarterly provisions for possible loan losses. Although Whitney
recorded $184,000 in net recoveries in the third quarter, the
quarterly provision was increased to $2 million, compared to $1.25
million in the second quarter of 1999 and $1 million in 1999's
first quarter. No provision was made in 1998's third quarter.
FORWARD-LOOKING STATEMENTS
To the extent that this Quarterly Report on Form 10-Q contains
statements that are not historical facts, they should be considered
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements, made in good
faith by the Company, are based on a number of assumptions about future events
the realization of which are subject to various risks and uncertainties. Such
risks and uncertainties include, but are not limited to, those outlined in the
Company's 1998 Annual Report on Form 10-K. Actual results could differ
materially from those referred to in such forward-looking statements.
- 9 -
<PAGE>
FINANCIAL CONDITION
LOANS AND RESERVE FOR POSSIBLE LOAN LOSSES
Total loans of $3.5 billion at September 30, 1999 have increased 7%
from $3.3 billion at December 31, 1998. Average loans for the third quarter of
1999 were $3.4 billion, a 13% increase compared to $3.0 billion in the third
quarter of 1998 and a 4% increase from 1999's second quarter. Loan growth
continues to be broad-based, with the most significant increases in commercial
lending of all types.
<TABLE>
<CAPTION>
TABLE 1. LOANS
=====================================================================================================================
1999 1998
- ------------------------------------------------------------------------------------ --------------------------------
(dollars in thousands) September 30 June 30 March 31 December 31 September 30
=====================================================================================================================
Commercial, financial
<S> <C> <C> <C> <C> <C>
and agricultural $ 1,354,178 $ 1,279,149 $ 1,197,818 $ 1,299,243 $ 1,260,079
Real estate loans - commercial
and other 1,167,954 1,136,864 1,067,039 1,036,547 975,444
Real estate loans - retail
mortgage 674,546 654,327 636,970 640,214 632,455
Loans to individuals 290,507 294,416 289,760 292,336 300,515
Lease financing 815 1,201 1,670 2,241 2,929
- ---------------------------------------------------------------------------------------------------------------------
Total loans $ 3,488,000 $ 3,365,957 $ 3,193,257 $ 3,270,581 $ 3,171,422
=====================================================================================================================
</TABLE>
Each loan carries a degree of credit risk. Management's evaluation of
this risk is ultimately reflected in the Company's financial statements by the
size of the reserve for possible loan losses, and changes in this ongoing
evaluation over time are reflected in the provision for possible loan losses
charged to operating expense. Table 2 on the following page compares third
quarter activity in the reserve for possible loan losses with 1999's second
quarter and the third quarter of 1998 and also compares nine-month activity for
each year.
At both September 30, 1999 and December 31, 1998, the total of loans
internally classified as having above normal credit risk represented
approximately 5% of total loans. Throughout most of 1998 this percentage had
been at an historical low of 3%. The September 30, 1999 total of $172 million is
$15 million above the year-end balance, an increase primarily related to changes
in classifications of three large commercial credits. Since the end of 1998,
loans for which full repayment is doubtful decreased $1 million. Substandard
loans with well-defined weaknesses that, if not corrected, would likely result
in some loss increased $14 million over this same period. Loans warranting
special attention because of risk characteristics that indicate potential
weaknesses also increased by approximately $2 million. Management continually
reviews the loan portfolio to identify potentially weak or deteriorating
credits.
Table 3 shows that total non-performing loans have decreased moderately
during 1999 from the prior year. With the increase in performing loans
classified as substandard or as warranting special attention discussed above,
however, it would not be unexpected to see an increase in non-performing loans
in the fourth quarter and into 2000 from the current low level.
- 10 -
<PAGE>
<TABLE>
<CAPTION>
TABLE 2. SUMMARY OF ACTIVITY IN THE RESERVE FOR POSSIBLE LOAN LOSSES
============================================================================================================================
Third Second Third Nine Months Ended
Quarter Quarter Quarter September 30
- -------------------------------------------------------------------------------------------- -----------------------------
(dollars in thousands) 1999 1999 1998 1999 1998
============================================================================================================================
<S> <C> <C> <C> <C> <C>
Balance at the beginning of period $41,554 $40,981 $43,377 $40,282 $44,543
Provision for possible loan losses
charged to operations 2,000 1,250 - 4,250 73
Loans charged to the reserve:
Commercial, financial and agricultural 541 2,109 1,975 4,102 5,339
Real estate 491 394 242 1,084 404
Loans to individuals 739 628 463 1,938 1,712
Lease financing 48 3 176 89 525
- ----------------------------------------------------------------------------------------------------------------------------
Total charge-offs 1,819 3,134 2,856 7,213 7,980
- ----------------------------------------------------------------------------------------------------------------------------
Recoveries of loans previously charged off:
Commercial, financial and agricultural loans 1,307 1,279 325 3,784 1,704
Real estate 414 333 315 1,119 1,976
Loans to individuals 282 845 531 1,516 1,376
Lease financing - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
Total recoveries 2,003 2,457 1,171 6,419 5,056
- ----------------------------------------------------------------------------------------------------------------------------
Net charge-offs (recoveries) (184) 677 1,685 794 2,924
- ----------------------------------------------------------------------------------------------------------------------------
Balance at the end of period $43,738 $41,554 $41,692 $43,738 $41,692
============================================================================================================================
Ratios:
Net annualized charge-offs (recoveries)
to average loans (.02)% .08 % .22 % .03 % .13 %
Gross annualized charge-offs to average loans .21 % .38 % .38 % .29 % .37 %
Recoveries to gross charge-off 110.12 % 78.40 % 41.00 % 88.99 % 63.36 %
Reserve for possible loan losses to loans
at quarter end 1.25 % 1.23 % 1.31 % 1.25 % 1.31 %
============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
TABLE 3. NON-PERFORMING ASSETS
============================================================================================================================
1999 1998
- -------------------------------------------------------------------------------------------- -----------------------------
(dollars in thousands) September 30 June 30 March 31 December 31 September 30
============================================================================================================================
<S> <C> <C> <C> <C> <C>
Loans accounted for on a non-accrual basis $ 10,095 $ 9,608 $11,591 $ 11,497 $ 11,691
Restructured loans 1,722 1,748 2,017 2,660 2,686
- ----------------------------------------------------------------------------------------------------------------------------
Total non-performing loans 11,817 11,356 13,608 14,157 14,377
Foreclosed assets 1,178 1,299 1,805 2,004 2,135
- ----------------------------------------------------------------------------------------------------------------------------
Total non-performing assets $ 12,995 $12,655 $15,413 $ 16,161 $ 16,512
- ----------------------------------------------------------------------------------------------------------------------------
Loans 90 days past due still accruing $ 2,249 $ 2,481 $ 3,543 $ 3,765 $ 5,767
- ----------------------------------------------------------------------------------------------------------------------------
Ratios:
Non-performing assets to loans
plus foreclosed assets .37% .38% .48% .49% .52%
Reserve for possible loan losses to
non-performing loans 370.13% 365.92% 301.15% 284.54% 289.99%
Loans 90 days past due still accruing to loans .06% .07% .11% .12% .18%
============================================================================================================================
</TABLE>
- 11 -
<PAGE>
INVESTMENT IN SECURITIES
At September 30, 1999, total securities were $1.31 billion, compared to
$1.34 billion at December 31, 1998 and $1.18 billion at September 30, 1998.
Average investment in securities increased $120 million, or 10%, in the third
quarter of 1999 compared to the same period in 1998. Between these same periods,
average federal funds sold and other short-term liquidity management investments
decreased $114 million. This shift away from short-term investments and into
longer-term investments took place as the yield difference between these types
of investments increased.
DEPOSITS AND SHORT-TERM BORROWINGS
At September 30, 1999, total deposits were $4.20 billion, compared to
$4.26 billion at December 31, 1998 and $3.99 billion on September 30, 1998.
Average deposits for the third quarter were $4.20 billion, 8% over 1998's third
quarter and a 1% decrease from the second quarter of 1999. Year-to-year deposit
growth was primarily related to the introduction of a new product, "Whitney
SELECT", which includes, in most cases, a premium money market account. Deposits
in total money market accounts grew $178 million on average for the third
quarter compared to the same period in 1998. The deposits assumed with the Lake
Charles branch acquisition in September 1998, which totaled approximately $148
million, were also a factor in the year-to-year average deposit growth.
Short-term borrowings were $443 million at September 30, 1999, a 25%
increase over year-end 1998. The increase is largely the result of an increase
in the Bank's sweep repurchase product, which grew 28% during this period.
Average borrowings in the third quarter were $440 million, compared to $329
million for the same period in 1998, an increase also largely attributable to
the sweep repurchase product.
LIQUIDITY
The object of liquidity management is to ensure that funds are
available to meet cash flow requirements of depositors and borrowers, while at
the same time meeting the cash flow needs of the Company and the Bank. Liquidity
is provided by a stable base of funding sources, including low cost core
deposits, and an adequate level of maturing assets. The Company models liquidity
needs on a periodic basis to determine the best strategy of investments and
borrowings to meet those needs.
The Bank had $1.6 billion in unfunded loan commitments outstanding at
September 30, 1999, a 16% increase from 1998's year-end. Because commitments and
unused lines of credit may, and many times do, expire without being drawn upon,
unfunded balances do not represent actual future liquidity requirements.
In order to ensure adequate liquidity, the Company has developed an
investment strategy, which plans a level of investment maturities that
management considers adequate to meet funding needs. In addition, the Company
and the Bank have access to external funding sources in the financial markets
and the Bank has developed the ability to gather deposits at a nationwide level.
During 1999, the Bank also began building its investment in securities
classified as available for sale. This process will further increase liquidity
management flexibility.
The Company's efforts to mitigate risks associated with the Year 2000
situation are discussed below in the section on "Year 2000 Remediation." One of
the uncertainties inherent in preparing for the millennium date change is the
potential increase in currency demand. Consumers
- 12 -
<PAGE>
and businesses may react in diverse and unpredictable ways to real or
perceived Year 2000 problems, and part of that reaction could include the demand
for increased amounts of cash. Although the Bank will continue to proactively
inform customers of its and the industry's readiness for Year 2000, it has also
taken steps to forecast and prepare for increased cash demands from its
customers and has developed plans to obtain and distribute any additional cash
supplies that may be needed. The costs of implementing these plans include the
opportunity costs of holding cash reserves above normal levels and the direct
costs of increased distribution and security services. These costs are expected
to be incurred during the fourth quarter of 1999 and into early 2000 but are not
currently expected to be material.
ASSET/LIABILITY MANAGEMENT
As stated in the Company's 1998 Annual Report on Form 10-K, the
objective of the Company's asset/liability management is to implement strategies
for the funding and deployment of its financial resources that are expected to
maximize soundness and profitability over time at acceptable levels of risk.
Interest rate sensitivity is the potential impact of changing rate
environments on both net interest income and cash flows. The Company and the
Bank use a number of methods to measure rate sensitivity, including gap
analysis, net interest income simulations and monitoring the economic value of
equity.
The Company continues to do modeling and run simulations that test its
sensitivity to various economic conditions. The results of simulations done
during the third quarter of 1999 show that the Company was within acceptable
limits, considering established guidelines.
CAPITAL ADEQUACY
The Company's capital amounts and ratios are presented in the following
table:
TABLE 4. RISK-BASED CAPITAL AND CAPITAL RATIOS
======================================================================
September 30 December 31
- ----------------------------------------------------------------------
(dollars in thousands) 1999 1998
- ----------------------------------------------------------------------
Tier 1 capital $ 515,819 $ 524,028
Tier 2 capital 43,738 40,282
- ----------------------------------------------------------------------
Total capital $ 559,557 $ 564,310
- ----------------------------------------------------------------------
Risk-weighted assets $ 3,982,176 $ 3,794,290
- ----------------------------------------------------------------------
Ratios:
Leverage ratio 9.92% 10.39%
Tier 1 capital 12.95% 13.81%
Total capital 14.05% 14.87%
Equity ratio 10.46% 10.76%
- ----------------------------------------------------------------------
During the third quarter, the Company declared a $.33 per share
dividend on its common stock, the same as in the first two quarters of the year.
This represents a $.03 per share, or 10%, increase over the dividend declared in
each of the first three quarters in 1998. Also during the third quarter, the
Company repurchased 470,000 shares of its common stock for a total of $18
million under the stock repurchase program announced in March 1999. This brought
the total number of shares repurchased up to the authorized limit of one million
at a total price of almost $39 million. The stock repurchase program contributed
to the decrease in regulatory capital and regulatory capital ratios from
December 31, 1998 as shown in Table 4.
- 13 -
<PAGE>
Year 2000 Remediation
The Year 2000 problem arose because many existing computer programs
used only two digits to identify a year in the date field. These programs were
designed and developed without considering the impact of the upcoming change in
the century. The Year 2000 problem poses various risks to the Company. There is
the possibility of financial loss if data processing and other systems do not
operate as expected. Company operations could be adversely affected by
malfunctions within the Company's internal communications and other processing
systems or by disruptions in the businesses of key third-party vendors and
service providers whose systems may not be Year 2000 compliant. Disruptions in
the operations of significant banking customers related to the Year 2000 problem
could create credit quality issues. Year 2000 concerns could lead to abnormal
demand for cash by customers during late 1999 and early 2000, placing pressure
on the Company's liquidity. In addition, the pervasive impact that the Year 2000
situation could have on overall social and economic conditions may create other
business and economic risks.
In response to these risks, a company-wide task force developed a plan
to review and test the Company's systems and other business operations for their
ability to operate with dates from the next millennium, i.e., for "Year 2000
compliance." The task force identified where remedial steps needed to be taken,
and the Company has made all necessary system revisions and/or upgrades. This
process also covered non-information systems that employ embedded information
technology, such as facilities control systems.
By the end of the second quarter of 1999, all mission-critical systems
had been tested for Year 2000 compliance and had been returned to production.
Processes and procedures are in place to ensure that all new projects undertaken
deliver Year 2000 compliant solutions, all future third party hardware and
software acquisitions are Year 2000 compliant, and all commercial third-party
service providers are queried regarding their Year 2000 compliance plans.
Although the Company believes its efforts to date and through the end of 1999
will mitigate its exposure to the identified risks to an acceptable level,
specific contingency plans have been developed in the event that the efforts to
remediate the Company's systems is not fully successful or future steps in the
compliance plan cannot be executed in accordance with current expectations. The
contingency plans are designed to safeguard the Company under various Year 2000
scenarios and are an addition to the Company's existing business resumption
plans.
There were no significant costs associated with this process during the
third quarter of 1999, either internal costs or costs from using outside
vendors. During 1999, internal costs have totaled approximately $1 million and
outside vendor costs have totaled approximately $600,000. Future costs
associated with executing the Company's Year 2000 system compliance plan are
also not expected to be significant. The majority of the costs to remediate the
Company's systems have been borne by third party vendors who supply the software
under annual maintenance fees.
The Bank began working with certain of its borrowing customers in early
1998 relative to understanding and assessing the customers' progress concerning
the Year 2000 problem. These customers represent most of the Bank's investment
in commercial loans, and they have asserted that they are Year 2000 compliant.
The very small number of customers who do not have adequate plans to assure
compliance with Year 2000 needs are receiving extra attention. This attention
includes internal training of the Bank's account officers on methods to assist
customers
- 14 -
<PAGE>
as well as protect the Bank's interest and counseling directly with
customers to assist them in avoiding disruption to their businesses.
The Company is also dependent upon customers and others for deposits
and other funding sources to fund its assets. In a process similar to that used
for borrowing customers, the Company sent assessment questionnaires to major
depositors and investment counter-parties. These responses have been used to
assess the possible impact of Year 2000 problems on the Company's ability to
secure funding to support its operations and have been included in its
asset/liability and liquidity modeling and planning. In planning for the
possibility that deposit outflows and draws on outstanding loan commitments
could exceed the Bank's normal sources of liquidity, the Company has
substantially increased its secured credit line at the discount window of its
Federal Reserve Bank and has developed substantial new capacity to broker
certificates of deposit at a nationwide level.
The Company has also initiated formal communications with its
significant suppliers to determine the extent to which it is vulnerable to those
third parties' failures to remediate their own Year 2000 issues. However, there
can be no assurance that the systems of other organizations upon which the
Company's operations rely, including essential utilities and telecommunications
providers, will be made Year 2000 compliant in a timely manner, and no assurance
that such a failure to become compliant, or the use of a remedial solution that
is incompatible with the Company's systems, would not have a material adverse
effect on the Company.
Because there is no generally accepted definition of "Year 2000
Compliant" and the ability of any organization's system to operate reliably
after midnight on December 31, 1999 is dependent upon factors that may be
outside the control of, or unknown to, that organization, no business is able to
certify or guarantee its compliance. While there can be no assurance that the
Company will not be materially adversely affected by Year 2000 problems, it is
committed to ensuring that it is fully Year 2000 compliant and believes its
plans adequately address the above-mentioned risks.
- 15 -
<PAGE>
RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income (TE) for the third quarter of 1999 was $58.4
million, 8% higher than the third quarter of 1998 and 3% higher than 1999's
second quarter. The higher net interest income is primarily the result of
average loan growth. Compared to the prior year's quarter, average loans grew
13%, while average earning assets rose 9%, resulting in a more favorable mix of
earning assets. As a percent of earning assets, average loans increased to 71%
in the current quarter, compared to 69% in 1998's third quarter. Increases in
deposits and short-term borrowings primarily funded loan growth. The growth in
deposits mainly reflected an increase in money market deposits and transaction
accounts, although the deposits assumed with the Lake Charles branch acquisition
in September 1998 were also a factor.
The net interest margin was 4.85% this quarter, compared to 4.90% in
the third quarter of 1998 and 4.77% in 1999's second quarter. The decline from
1998 was primarily the result of a 40 basis point decline in the average prime
lending rate between these periods. With the recent tightening by the Federal
Reserve, the prime lending rate stood at 8.25% at September 30, 1999 compared to
8.50% at September 30, 1998. Average loan yields decreased 33 basis points
between the third quarters of 1998 and 1999, while the total earning asset yield
fell 28 basis points. Between these periods, the rates paid on interest-bearing
liabilities declined 36 basis points.
For the first nine months of 1999, net interest income (TE) was $171.4
million, a 6% increase over the same period in 1998. The net interest margin was
4.80% for the 1999 period and 4.95% for the prior year's period. Essentially the
same factors impacted the quarterly and year-to-date changes in net interest
income and the net interest margin between 1998 and 1999.
Table 5 presents average balance sheets, net interest income (TE) and
interest rates for the third and second quarters of 1999, the third quarter of
1998 and the nine-month period in each year. Table 6 analyzes the components of
changes in net interest income between these periods.
- 16 -
<PAGE>
<TABLE>
<CAPTION>
TABLE 5. SUMMARY OF AVERAGE BALANCE SHEETS, NET INTEREST INCOME(TE)(1) AND INTEREST RATES
====================================================================================================================================
(dollars in thousands) Third Quarter 1999 Second Quarter 1999 Third Quarter 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Average Average Average
Balance Interest Rate Balance Interest Rate Balance Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
EARNING ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans (tax-equivalent)(1) (2) $3,419,433 $ 68,359 7.94% $3,287,766 $ 64,232 7.83% $3,023,046 $ 63,018 8.27%
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury securities 145,773 2,208 6.01 163,737 2,550 6.25 248,617 4,041 6.45
U.S. agency securities 472,316 7,002 5.93 503,701 7,508 5.96 382,362 6,210 6.50
Mortgage-backed securities 542,146 8,227 6.07 547,048 8,263 6.04 458,668 7,204 6.28
Obligations of states and political
subdivisions (tax-equivalent) (1) 191,491 3,596 7.51 186,396 3,571 7.66 140,566 2,830 8.06
Federal Reserve stock and other corporate
securities 7,875 114 5.74 8,207 123 5.95 9,733 132 5.42
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment in securities(3) 1,359,601 21,147 6.22 1,409,089 22,015 6.25 1,239,946 20,417 6.58
- ------------------------------------------------------------------------------------------------------------------------------------
Federal funds sold and short-term investments 14,946 198 5.23 85,252 1,004 4.73 129,207 1,847 5.67
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 4,793,980 89,704 7.44% 4,782,107 $ 87,251 7.31% 4,392,199 $ 85,282 7.72%
- ------------------------------------------------------------------------------------------------------------------------------------
NON-EARNING ASSETS
Other assets 481,054 496,134 462,910
Reserve for possible loan losses (42,446) (41,343) (42,788)
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $5,232,588 $5,236,898 $4,812,321
====================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES
NOW account deposits $ 466,409 $ 1,559 1.33% $ 484,735 $ 1,602 1.33% $ 451,636 $ 1,913 1.68%
Money market deposits 772,250 7,027 3.61 752,672 6,722 3.58 594,732 5,840 3.90
Savings deposits 478,867 2,428 2.01 490,015 2,426 1.99 507,742 3,121 2.44
Other time deposits 736,747 8,524 4.59 745,236 8,690 4.68 735,875 9,337 5.03
Time deposits $100,000 and over 595,072 7,143 4.76 591,975 6,921 4.69 536,509 6,990 5.17
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 3,049,345 26,681 3.47 3,064,633 26,361 3.45 2,826,494 27,201 3.82
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 439,569 4,605 4.16 401,263 3,991 3.99 329,457 3,963 4.77
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing
liabilities 3,488,914 $ 31,286 3.56% 3,465,896 $ 30,352 3.51% 3,155,951 $ 31,164 3.92%
- ------------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST-BEARING DEPOSITS
AND SHAREHOLDERS' EQUITY
Demand deposits 1,147,040 1,168,704 1,059,235
Other liabilities 41,714 38,151 41,673
Shareholders' equity 554,920 564,147 555,462
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders'
equity $5,232,588 $5,236,898 $4,812,321
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest income and margin
(tax-equivalent) (1) $ 58,418 4.85% $ 56,899 4.77% $ 54,118 4.90%
- ------------------------------------------------------------------------------------------------------------------------------------
Net earning assets and spread $1,305,066 3.88% $1,316,211 3.80% $1,236,248 3.80%
====================================================================================================================================
<FN>
(1) Tax-equivalent (TE) amounts are calculated using a marginal federal income tax rate of 35%.
(2) Average balance includes non-accruing loans of $10,167, $10,440 and $11,721 respectively, in the third and second
quarters of 1999 and the third quarter of 1998.
(3) Average balance excludes unrealized gain or loss on securities available for sale.
</FN>
</TABLE>
- 17 -
<PAGE>
<TABLE>
<CAPTION>
TABLE 5. SUMMARY OF AVERAGE BALANCE SHEETS, NET INTEREST INCOME(TE)(1) AND INTEREST RATES (continued)
====================================================================================================================================
Nine Months Ended Nine Months Ended
(dollars in thousands) September 30, 1999 September 30, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Average Average
Balance Interest Rate Balance Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
EARNING ASSETS
<S> <C> <C> <C> <C> <C> <C>
Loans (tax-equivalent)(1) (2) $3,316,213 $ 195,460 7.88% $2,896,997 $ 182,092 8.40%
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury securities 168,633 7,856 6.23 280,336 13,579 6.48
U.S. agency securities 489,439 22,040 6.00 456,854 22,174 6.47
Mortgage-backed securities 534,042 24,262 6.06 450,744 21,277 6.29
Obligations of states and political
subdivisions (tax-equivalent) (1) 185,100 10,593 7.63 136,181 8,329 8.16
Federal Reserve stock and other corporate securities 8,149 425 6.95 10,672 440 5.50
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment in securities(3) 1,385,363 65,176 6.27 1,334,787 65,799 6.58
- ------------------------------------------------------------------------------------------------------------------------------------
Federal funds sold and short-term investments 66,840 2,384 4.77 132,779 5,573 5.61
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 4,768,416 $ 263,020 7.37% 4,364,563 $ 253,464 7.76%
- ------------------------------------------------------------------------------------------------------------------------------------
NON-EARNING ASSETS
Other assets 494,018 461,259
Reserve for possible loan losses (41,516) (43,681)
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $5,220,918 $4,782,141
====================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES
NOW account deposits $ 491,842 $ 4,993 1.36% $ 460,572 $ 5,925 1.72%
Money market deposits 741,304 19,875 3.58 554,070 15,896 3.84
Savings deposits 486,023 7,263 2.00 511,162 9,382 2.45
Other time deposits 746,098 26,226 4.70 734,969 27,751 5.05
Time deposits $100,000 and over 582,027 20,664 4.75 550,069 21,411 5.20
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 3,047,294 79,021 3.47 2,810,842 80,365 3.82
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 414,294 12,562 4.05 322,316 11,487 4.77
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities $3,461,588 $ 91,583 3.54% $3,133,158 $ 91,852 3.92%
- ------------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST-BEARING DEPOSITS
AND SHAREHOLDERS' EQUITY
Demand deposits 1,157,137 1,064,327
Other liabilities 40,001 39,766
Shareholders' equity 562,192 544,890
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $5,220,918 $4,782,141
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest income and margin (tax-equivalent) (1) $ 171,437 4.80% $ 161,612 4.95%
- ------------------------------------------------------------------------------------------------------------------------------------
Net earning assets and spread $1,306,828 3.83% $1,231,405 3.84%
====================================================================================================================================
<FN>
(1) Tax-equivalent (TE) amounts are calculated using a marginal federal income tax rate of 35%.
(2) Average balance includes non-accruing loans of $10,430 and $10,507 respectively, in the first nine months of 1999 and
1998.
(3) Average balance excludes unrealized gain or loss on securities available for sale.
</FN>
</TABLE>
- 18 -
<PAGE>
<TABLE>
<CAPTION>
TABLE 6. SUMMARY OF CHANGES IN NET INTEREST INCOME(TE)(1)
====================================================================================================================================
(dollars in thousands) Third Quarter 1999 Compared to: Nine Months Ended September 30,
Second Quarter 1999 Third Quarter 1998 1999 Compared to 1998
------------------------------------------------------- ------------------------------
Due To Total Due To Total Due To Total
Change In Increase Change In Increase Change In Increase
--------------- ----------------- -------------------
Volume Rate (Decrease) Volume Rate (Decrease) Volume Rate (Decrease)
====================================================================================================================================
INTEREST INCOME(TE)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans (tax-equivalent)(1) $3,121 $1,006 $4,127 $7,948 $(2,607) $5,341 $25,203 $(11,835) $13,368
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury securities (254) (88) (342) (1,574) (259) (1,833) (5,222) (501) (5,723)
U.S. agency securities (465) (41) (506) 1,375 (583) 792 1,525 (1,659) (134)
Mortgage-backed securities (74) 38 (36) 1,277 (254) 1,023 3,809 (824) 2,985
Obligations of states and political
subdivisions (tax-equivalent) (1) 96 (71) 25 973 (207) 766 2,829 (565) 2,264
Federal Reserve stock and other
corporate securities (5) (4) (9) (26) 8 (18) (117) 102 (15)
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment in securities (702) (166) (868) 2,025 (1,295) 730 2,824 (3,447) (623)
- ------------------------------------------------------------------------------------------------------------------------------------
Federal funds sold and
short-term investments (902) 96 (806) (1,514) (135) (1,649) (2,448) (741) (3,189)
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest income (tax-
equivalent) (1) 1,517 936 2,453 8,459 (4,037) 4,422 25,579 (16,023) 9,556
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
NOW account deposits (44) 1 (43) 61 (415) (354) 382 (1,314) (932)
Money market deposits 235 70 305 1,645 (458) 1,187 5,077 (1,098) 3,979
Savings deposits (39) 41 2 (170) (523) (693) (443) (1,676) (2,119)
Other time deposits (63) (103) (166) 11 (824) (813) 415 (1,940) (1,525)
Time deposits $100,000 and over 56 166 222 728 (575) 153 1,200 (1,947) (747)
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 145 175 320 2,275 (2,795) (520) 6,631 (7,975) (1,344)
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 427 187 614 1,201 (559) 642 2,957 (1,882) 1,075
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest expense 572 362 934 3,476 (3,354) 122 9,588 (9,857) (269)
- ------------------------------------------------------------------------------------------------------------------------------------
Change in net interest income
(tax-equivalent)(1) $ 945 $ 574 $1,519 $4,983 $ (683) $4,300 $15,991 $ (6,166) $ 9,825
====================================================================================================================================
(1) Tax-equivalent (TE) amounts are calculated using a marginal federal income tax rate of 35%.
</TABLE>
- 19 -
<PAGE>
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses was $2.0 million for the third
quarter of 1999, $1.25 million in 1999's second quarter and $1.0 million in the
first quarter of this year. For the first nine months of 1998, there was a
nominal provision from a pooled acquisition in the first quarter of that year.
The 1999 provisions have exceeded net charge-offs by $3.46 million. This
reflects management's consideration, among other factors, of sustained strong
loan growth and an increase in performing loans internally classified as having
above normal credit risk.
NON-INTEREST INCOME
Non-interest income, excluding securities transactions, was $17.3
million in the third quarter, compared to $13.4 million in the same quarter of
1998. Excluding one-time gains recognized in each period, non-interest income
totaled $16.2 million in 1999 compared to $12.8 million in 1998. This represents
an increase of $3.4 million, or 27%. Service charges on deposit accounts rose
$1.3 million, or 22%, to $7.1 million in 1999, with approximately $.3 million of
this increase related to deposits associated with the Lake Charles branches
purchased in September 1998. Credit card fee income rose $.8 million, or 31%, to
$3.3 million, reflecting increased volumes in merchant accounts. Trust service
fee income rose to $2.1 million, an increase of 30% over the same quarter last
year. This increase is mainly the result of new business derived from more
aggressive marketing of trust services and an expanding market area. Fee income
from secondary mortgage market operations increased to $.7 million, or 25% over
the same period last year. This increase is due, in part, to additional business
from marketing of these products by the Bank and to a favorable interest rate
environment, although the recent upswing in market rates slowed the year-to-year
improvement in this income category for the third quarter.
Late in the second quarter of 1999, the Company opened a new parking
facility next to its main office. The operating revenue from this new facility
represents approximately a third of the 33% improvement in other non-interest
income, excluding one-time gains, in the third quarter of 1999 compared to the
same quarter in 1998. Other income categories also contributed to this
improvement, with ATM fee income increasing 12%, international services income
up 22% and investment services income rising 23%. During the third quarter,
Whitney Securities, the Company's new broker-dealer operation, opened for
business, but had little impact on financial results for the period.
For the nine-month period, non-interest income, exclusive of both
securities transactions and one-time gains, was $47.4 million, 23% higher than
the $38.5 million in 1998. Year-to-date percentage increases by category were
generally consistent with the quarterly increases. Service charges on deposit
accounts were up $3.4 million, or 20%. Credit card fee income was up $2.2
million, or 31%. Trust services income was up $1.4 million, or 28%. Income from
secondary mortgage market operations was up $.9 million, or 48%.
Management evaluates its banking facilities on an ongoing basis to
identify possible under-utilization and to determine the need for functional
improvements, relocations or possible sales. Several sales transactions closed
during the third quarter of 1999, generating gains of approximately $1 million.
Early in the fourth quarter, the Bank completed the sale of an additional
facility and recognized a gain of $1.3 million which will be reported with
fourth quarter results.
- 20 -
<PAGE>
NON-INTEREST EXPENSE
Non-interest expense was $48.1 million for the third quarter of 1999.
This is a decrease of $1.8 million, or 4%, from the third quarter of 1998,
excluding merger-related expenses.
Personnel expense decreased by $1.9 million, or 7%, to $24.0 million
for the quarter, despite an increase of approximately $.5 million related to
branch expansion, including the eight locations purchased in Lake Charles,
Louisiana in September of 1998. Health benefits expense in 1998's third quarter
included approximately $1.0 million related to self-insured claims that had been
underestimated earlier in that year as the Company experienced processing delays
in the transition to a new claims administrator. For 1999, the Company has
contracted with outside providers for all of its health insurance programs.
There was also a net reduction of approximately $.7 million in executive
incentive compensation expense between the third quarters of 1998 and 1999. The
increases from branch expansion, merit raises and employee incentive and other
benefit programs between these quarterly periods have been offset by net staff
reductions.
Equipment and data processing expense increased $.5 million, or 10%.
The prior year's quarter includes a special charge of approximately $.4 million
related to the upgrade of the Company's mainframe central processing unit.
Excluding this item, the year-to-year increase would be $.9 million, or 19%. A
portion of this increase, approximately $.5 million, is the result of an
increase in depreciation expense from technology upgrades and assets purchased
in association with new locations.
In the third quarter of 1998, the Company incurred approximately $.2
million in expenses for unscheduled mechanical system and other building repairs
at several major facilities. Ignoring these items, net occupancy expense
increased $.4 million, or 18%, in 1999's third quarter over the prior year
period, primarily as a result of the new branch locations and, to a lesser
degree, the new parking facility. Credit card transaction processing services
expense increased $.6 million, or 30%, consistent with the related growth in
revenue mentioned earlier. Before merger-related expenses, legal and other
professional services were $.9 million in the third quarter of 1999 and $1.7
million in 1998's third quarter, a decrease of $.8 million, or 47%. The expense
total for 1998 includes $.5 million in consulting fees for the preliminary phase
of a project to establish a state-of-the-art customer call center.
Other non-interest expenses, before merger-related costs, decreased $.7
million, or 9%, to $6.5 million in the third quarter of 1999 from $7.1 million
in 1998's third quarter. This decrease reflects in large part the cost of the
system-wide retail sales automation and sales culture training program that the
Company conducted in 1998. The amortization of intangible assets acquired in the
Lake Charles purchase transaction increased other non-interest expense by $.4
million in 1999's third quarter compared to 1998.
For the nine-month period, non-interest expense, excluding
merger-related expenses, increased $7.7 million, or 6%, in 1999 compared to
1998. Personnel expense increased only $.8 million or 1.2%, as the impact of
branch expansion was offset by reductions in the expense of health benefits and
executive incentive compensation. The percentage increases or decreases in other
major non-interest expense categories between the first nine months of 1998 and
1999 were generally consistent with the quarter-to-quarter changes, after
adjusting for the special charges in 1998's third quarter noted above, and were
mainly the result of the same factors cited in the discussion of quarterly
results above.
- 21 -
<PAGE>
PART II. OTHER INFORMATION
- --------------------------
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a)(3) Exhibits:
Exhibit 3.1 - Copy of Composite Charter (filed as Exhibit 3.1 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 3.3 - Copy of Bylaws, as amended July 1998 (filed as Exhibit
3.3 to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998 (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).
- 22 -
<PAGE>
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 10.5 - 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).
- 23 -
<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 - 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 10.16 - 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 10.17 - Form of Amendment to Section 2.1e of the Executive
agreements filed as Exhibits 10.2 through 10.9 and Exhibit 10.16 herein
(filed as Exhibit 10.18 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 10.18 - 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 10.19 - Form of Amendment adding subsection 2.1g to the
Executive Agreements set forth as Exhibits 10.2 through 10.9, Exhibit
10.16 and Exhibit 10.18 herein (filed as Exhibit 10.19 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998
(Commission file number 0-0126) and incorporated by reference).
- 24 -
<PAGE>
Exhibit 10.20 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and Thomas L. Callicutt, Jr. dated
October 28, 1999.
Exhibit 21 - Subsidiaries
Whitney Holding Corporation owns 100% of the capital stock of Whitney
National Bank, successor by merger in early January 1998 to 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
- 25 -
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WHITNEY HOLDING CORPORATION
(Registrant)
By:/s/ Thomas L. Callicutt, Jr.
----------------------------------
Thomas L. Callicutt, Jr.
Executive Vice President and Chief
Financial Officer (Principal
Accounting Officer)
November 15, 1999
----------------------------------
Date
- 26 -
<PAGE>
Exhibit 10.20
WHITNEY HOLDING CORPORATION
and
WHITNEY NATIONAL BANK
EXECUTIVE AGREEMENT
-------------------
THIS AGREEMENT (the "Agreement") is made by and between WHITNEY HOLDING
CORPORATION, a corporation organized and existing under the laws of the State of
Louisiana (the "Holding Corporation"), WHITNEY NATIONAL BANK, a financial
institution organized and existing under the laws of the United States (the
"Bank"), and Thomas L. Callicutt Jr. (the "Executive").
WHEREAS, the Executive is presently employed by each of the Holding
Corporation and the Bank as an Executive Vice President;
NOW, THEREFORE, effective October 28, 1999, the Holding Corporation,
the Bank and the Executive agree as follows:
SECTION I
---------
DEFINITIONS
-----------
1.1 "Change in Duties" means the occurrence of one of the
following events in connection with a Change in Control:
a. A diminution in the nature or scope of the Executive's
authorities or duties, a change in his reporting
responsibilities or titles or the assignment of the Executive
to any duties or responsibilities that are inconsistent with
his position, duties, responsibilities or status immediately
preceding such assignment;
b. A reduction in the Executive's compensation during the Covered
Period. For this purpose, "compensation" means the fair market
value of all remuneration paid to the Executive by the
Employer during the immediately preceding calendar year,
including, without limitation, deferred compensation, stock
options and other forms of incentive compensation awards,
coverage under any employee benefit plan (such as a pension,
thrift, medical, dental, life insurance or long-term
disability plan) and other perquisites;
c. The transfer of the Executive to a location requiring a change
in his residence or a material increase in the amount of
travel ordinarily required of the Executive in the performance
of his duties; or
d. A good faith determination by the Executive that his position,
duties, responsibilities or status has been affected, whether
directly or indirectly, in any manner which prohibits the
effective discharge of any such duties or responsibilities.
- 27 -
<PAGE>
1.2 "Change in Control" means and shall be deemed to have occurred
if:
a. Any "person," including any "group," determined in accordance
with Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, becomes the beneficial owner, directly or
indirectly, of securities of the Holding Corporation
representing 20% or more of the combined voting power of the
Holding Corporation's then outstanding securities, without the
approval, recommendation, or support of the Board of Directors
of the Holding Corporation as constituted immediately prior to
such acquisition;
b. The Federal Deposit Insurance Corporation or any other
regulatory agency negotiates and implements a plan for the
merger, transfer of assets and liabilities, reorganization,
and/or liquidation of the Bank;
c. Either of the Holding Corporation or the Bank is merged into
another corporate entity or consolidated with one or more
corporations, other than a wholly-owned subsidiary of the
Holding Corporation;
d. A change in the members of the Board of Directors of the
Holding Corporation which results in the exclusion of a
majority of the "continuing Board." For this purpose, the term
"continuing Board" means the members of the Board of Directors
of the Holding Corporation, determined as of the date on which
this Agreement is executed and subsequent members of such
Board who are elected by or on the recommendation of a
majority of such "continuing Board"; or
e. The sale or other disposition of all or substantially all of
the stock or the assets of the Bank or the Holding Corporation
(or any successor corporation thereto).
1.3 "Company" means the Holding Corporation and the Bank.
1.4 "Covered Period" means the one-year period immediately preceding
and the three-year period immediately following the occurrence of a Change in
Control.
1.5 "Employer" means the Holding Corporation or the Bank or both,
as the case may be.
1.6 "Severance Amount" means 300% of the Executive's "annual salary."
For this purpose, "annual salary" means the average of all compensation paid to
the Executive by the Company which is includable in the Executive's gross income
for the highest 3 of the 5 calendar years immediately preceding the calendar
year in which a Change in Control occurs, including the amount of any
compensation which the Executive elected to defer under any plan or arrangement
of the Company with respect to such years. If the Executive has been employed
less than 5 years prior to the calendar year in which a Change in Control
occurs, "annual salary" shall be determined by averaging the compensation (as
defined in the preceding sentence) for the Executive's actual period of
employment. Further, if the Executive has been employed less than
2
- 28 -
<PAGE>
12 months prior to the occurrence of a Change in Control, the actual
compensation of the Executive shall be annualized for purposes of this Section
1.6. In the event of dispute between the Executive and the Company, the
determination of the "annual salary" shall be made by an independent public
accounting firm agreed upon by the Executive and the Company.
1.7 "Termination" or "Terminated" means (a) termination of the
employment of the Executive with the Employer for any reason, other than cause,
or (b) the resignation of the Executive following a Change in Duties. In no
event, however, shall the Executive's voluntary separation from service with the
Employer on account of death, disability, or resignation on or after the
attainment of the normal retirement age specified in any qualified employee
benefit plan maintained by the Employer constitute a Termination. For purposes
of determining whether a Termination has occurred, "cause" means fraud,
misappropriation of or intentional material damage to the property or business
of the Employer or the commission of a felony by the Executive.
SECTION II
----------
TERMINATION RIGHTS AND OBLIGATIONS
----------------------------------
2.1 Severance Awards. If the Executive's employment is Terminated
during the Covered Period, then no later than 30 days after the later of (a) the
date of such Termination, or (b) the occurrence of a Change in Control, the
Company shall:
a. Pay to the Executive the Severance Amount;
b. Transfer to the Executive the ownership of all club
memberships, automobiles and other perquisites which were
assigned to the Executive as of the day immediately preceding
such Termination;
c. In accordance with Section 2.2 hereof, provide for the benefit
of the Executive, his spouse, and his dependents, if any,
coverage under the plans, policies or programs (as the same
may be amended from time to time) maintained by the Company
for the purpose of providing medical benefits and life
insurance to other executives of the Company with comparable
duties; provided, however, that in no event shall the coverage
provided under this paragraph be substantially less than the
coverage provided to the Executive as of the date immediately
preceding a Termination;
d. Pay to the Executive an amount equal to the contributions by
the Company to the Whitney National Bank of New Orleans Thrift
Incentive Plan, or a successor arrangement, that would have
been made for the lesser of (i) 3 years following the date of
Termination, or (ii) the number of years until the Executive's
normal retirement age under such plan;
3
- 29 -
<PAGE>
e. Pay to the Executive an amount equal to the present value of
the additional benefits which would have accrued under the
Whitney National Bank Retirement Plan and the Whitney Holding
Corporation Retirement Restoration Plan, or any successors
thereto, that would have been made for the lesser of (i) three
years following the Date of Termination, or (ii) the number of
years until the Executive's normal retirement age under such
plans; and
f. Pay to the Executive the amount to which the Executive would
be entitled under the 1991 Executive Compensation Plan, or a
successor thereto, for the calendar year in which a Change in
Control occurs, determined as if all performance goals
applicable to the Company and the Executive were achieved.
g. Pay to the Executive an amount equal to the present value of
any benefit accrued under either the Whitney National Bank
Retirement Plan or the Whitney Holding Corporation Retirement
Restoration Plan, or any successors thereto, that would have
been payable under the terms of such plans, including any
additional accrual provided under Section 2.1e hereto, but was
forfeited on account of the application of the vesting
provisions contained in such plans.
2.2 Special Rules Governing Group Benefits. Coverage under Section
2.1c, hereof, shall (a) commence as of the later of the date of Termination or
the occurrence of a Change in Control, and (b) end as of the earlier of the
Executive's coverage under Medicare Part B or the date on which the Executive is
covered under group plans providing substantially similar benefits maintained by
another employer. For this purpose, the Company shall provide coverage during
any period in which the payment of benefits is limited by any form of
pre-existing condition clause.
Coverage under Section 2.1c, hereof, may be provided under a group
policy or program maintained by the Company or the Company, in its sole
discretion, may acquire or adopt an individual plan, policy or program providing
coverage solely for the benefit of the Executive, his spouse, and his
dependents, if any.
If coverage commences as of a Change in Control, the Company shall (a)
retroactively reinstate the Executive, his spouse, and dependents, if any, as of
the date of Termination, and (b) reimburse to the Executive his cost of
obtaining similar coverage for the period commencing on the date of Termination
and ending on the occurrence of a Change in Control. As to medical claims
incurred during such period, any coverage actually obtained by the Executive
shall be designated as the Executive's primary coverage, and the reinstated
coverage shall operate as secondary coverage.
4
- 30 -
<PAGE>
2.3 Other Plans and Agreements. To the maximum extent permitted by law
and not withstanding any provision to the contrary contained in any plan, grant,
program, contract or other arrangement under which the Executive and the
Employer are parties, if the Executive's employment is Terminated during the
Covered Period, then any vesting schedule or other restriction on the ownership
of any benefits payable to the Executive under the terms of any such plan,
grant, contract, or arrangement shall be accelerated or lapse, as the case may
be.
Notwithstanding any provision to the contrary contained in any plan,
grant, program, contract, or arrangement under which the Executive and the
Employer are parties, in the event the Executive has elected to defer the
payment of any benefit under any such plan, grant, contract, or arrangement, the
payment of such benefit shall be accelerated and paid to the Executive in the
form of a single-sum no later than 30 days after the Executive's Termination
during the Covered Period.
2.4 Taxes. The Executive shall be responsible for applicable income tax
and the Company shall have the right to withhold from any payment made under
this Agreement, or to collect as a condition of any payment, any income taxes
required by law to be withheld.
Notwithstanding the preceding paragraph, the Company shall pay any
excise tax or similar penalty imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") or any comparable successor provision, on
the Executive as a consequence of any "excess parachute payment" within the
meaning of Section 280G of the Code (or a comparable successor provision)
payable under this Agreement or any plan, grant, program, contract or other
arrangement under which the Executive and the Employer are parties.
The Executive shall submit to the Company the calculation of the amount
to be paid by the Company under this Section 2.4, together with supporting
documentation. If the Executive and the Company disagree as to such amount, an
independent public accounting firm agreed upon by the Executive and the Company
shall make such determination.
SECTION III
-----------
MISCELLANEOUS
-------------
3.1 Notices. Notices and other communication required under this
Agreement shall be made to the Company at 228 St. Charles Avenue, New Orleans,
Louisiana 70130 and to the Executive at 228 St. Charles Avenue, New Orleans,
Louisiana 70130 or, as to each party, at such other address as may be designated
by written notice to the other. All such notices and communications shall be
effective when deposited in the United States mail, postage prepaid, or
delivered to the affected party.
3.2 Employment Rights. The terms of this Agreement shall not be deemed
to confer on the Executive any right to continue in the employ of the Employer
for any period or any right to continue his present or any other rate of
compensation.
5
- 31 -
<PAGE>
3.3 Assignment. The Executive shall not sell, assign, pledge, transfer
or otherwise convey the right to receive any form of payment or benefit provided
under the Agreement, except by will or the laws of intestacy.
3.4 Inurement. This Agreement shall be binding upon and inure to the
benefit of the Holding Corporation, the Bank and the Executive and their
respective heirs, executors, administrators, successors and assigns.
3.5 Payment of Expenses. In the event that it is necessary or desirable
for the Executive to retain legal counsel and/or incur other costs and expenses
in connection with the enforcement of the terms of the Agreement, the Company
shall pay (or the Executive shall be entitled to reimbursement of) reasonable
attorneys' fees, costs, and expenses actually incurred, without regard to the
final outcome, unless there is no reasonable basis for the Executive's action.
3.6 Amendment and Termination. This Agreement shall not be amended or
terminated by any act of the Company, except as may be expressly agreed upon, in
writing, by the Company and the Executive.
3.7 Nature of Obligation. The Company intends that its obligations
hereunder be construed in the nature of severance pay. The Company's obligations
under Section 2 are absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, any right of offset, counterclaim,
recoupment, defense, or other right which the Company may have against the
Executive or others. All amounts payable by the Company hereunder shall be paid
without notice or demand.
3.8 Choice of Law. The Agreement shall be governed and construed in
accordance with the laws of the State of Louisiana.
3.9 No Effect on Other Benefits. Any other compensation paid or
benefits provided to the Executive shall be in addition to and not in lieu of
the benefits provided to such Executive under this Agreement. Except as may be
expressly provided herein, nothing in this Agreement shall be construed as
limiting, varying or reducing the provision of any benefit available to the
Executive (or to such Executive's estate or other beneficiary) pursuant to any
employment agreement, group plan, including any qualified pension or
profit-sharing plan, health, disability or life insurance plan, or any other
form of agreement or arrangement between the Company and the Executive.
3.10 Entire Agreement. This Agreement constitutes the entire agreement
between the Executive and the Holding Corporation and the Bank and is intended
to supersede all prior written or oral understandings with respect to the
subject matter of this Agreement.
3.11 Invalidity. In the event that any one or more provisions of this
Agreement shall, for any reason, be held invalid, illegal or unenforceable in
any manner, such invalidity, illegality or unenforceability shall not affect any
other provision of such Agreement.
6
- 32 -
<PAGE>
3.12 Mitigation. Notwithstanding any provision of this Agreement to the
contrary and to the maximum extent permitted by law, the Executive shall not be
subject to any duty to mitigate the severance awards received hereunder by
seeking other employment. No severance award received under this Agreement shall
be offset by any compensation the Executive receives from future employment, and
the Executive shall not be required to perform any service as a condition of
this Agreement.
EXECUTED in multiple counterparts as of the dates set forth below, each
of which shall be deemed an original, and effective as of the date first set
forth above.
EXECUTIVE WHITNEY NATIONAL BANK AND
WHITNEY HOLDING CORPORATION
/s/ Thomas L. Callicutt, Jr. /s/ William L. Marks
- ----------------------------------- ---------------------------
By: William L. Marks
Title: Chairman and CEO
Date: November 3, 1999 Date: November 11, 1999
------------------------------ ----------------------
7
- 33 -
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 192,317
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 535
<TRADING-ASSETS> 1,567
<INVESTMENTS-HELD-FOR-SALE> 181,917
<INVESTMENTS-CARRYING> 1,125,690
<INVESTMENTS-MARKET> 1,110,952
<LOANS> 3,488,000
<ALLOWANCE> 43,738
<TOTAL-ASSETS> 5,234,148
<DEPOSITS> 4,198,244
<SHORT-TERM> 443,336
<LIABILITIES-OTHER> 45,064
<LONG-TERM> 0
<COMMON> 2,800
0
0
<OTHER-SE> 544,704
<TOTAL-LIABILITIES-AND-EQUITY> 5,234,148
<INTEREST-LOAN> 194,927
<INTEREST-INVEST> 61,471
<INTEREST-OTHER> 2,384
<INTEREST-TOTAL> 258,782
<INTEREST-DEPOSIT> 79,021
<INTEREST-EXPENSE> 91,583
<INTEREST-INCOME-NET> 167,199
<LOAN-LOSSES> 4,250
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 143,886
<INCOME-PRETAX> 67,590
<INCOME-PRE-EXTRAORDINARY> 67,590
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 45,731
<EPS-BASIC><F1> 1.98
<EPS-DILUTED><F1> 1.97
<YIELD-ACTUAL> 4.83
<LOANS-NON> 10,095
<LOANS-PAST> 2,249
<LOANS-TROUBLED> 1,722
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 40,282
<CHARGE-OFFS> 7,213
<RECOVERIES> 6,419
<ALLOWANCE-CLOSE> 43,738
<ALLOWANCE-DOMESTIC> 43,738
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
