<PAGE>
August 13, 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 June 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.
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 Commission file number 0-1026
ended June 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 July 31, 1999
----- -----------------------------
Common Stock, no par value 22,893,937
================================================================================
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION
TABLE OF CONTENTS
<S> <C>
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 8
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
- --------------------------------------------------------------------------------------------------------------
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 23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------------------------------------------------------------------------
June 30 December 31
(dollars in thousands) 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Cash and due from financial institutions $ 195,496 $ 214,963
Investment in securities
Securities available for sale 168,837 105,361
Securities held to maturity, fair values of $1,204,259 and $1,253,113, respectively 1,218,095 1,234,717
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment in securities 1,386,932 1,340,078
Federal funds sold and short-term investments 631 151,510
Loans, net of unearned income 3,365,957 3,270,581
Reserve for possible loan losses (41,554) (40,282)
- ------------------------------------------------------------------------------------------------------------------------------------
Net loans 3,324,403 3,230,299
- ------------------------------------------------------------------------------------------------------------------------------------
Bank premises and equipment 176,836 169,724
Accrued interest receivable 32,017 31,070
Other assets 78,722 74,275
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $5,195,037 $5,211,919
====================================================================================================================================
LIABILITIES
Non-interest-bearing demand deposits $1,161,316 $1,240,189
Interest-bearing deposits 3,033,973 3,016,473
- ------------------------------------------------------------------------------------------------------------------------------------
Total deposits 4,195,289 4,256,662
- ------------------------------------------------------------------------------------------------------------------------------------
Federal funds purchased and securities sold under repurchase agreements 404,963 355,322
Accrued interest payable 11,859 12,229
Accrued expenses and other liabilities 26,851 26,745
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 4,638,962 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 142,023 138,848
Retained earnings 442,907 428,880
Accumulated other comprehensive income (2,500) (272)
Treasury stock at cost - 706,993 and 276,703 shares, respectively (22,638) (4,613)
Unearned restricted stock compensation (6,517) (4,682)
- ------------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 556,075 560,961
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $5,195,037 $5,211,919
====================================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
- 1 -
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30 June 30
- ---------------------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share data) 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
<S> <C> <C> <C> <C>
Interest and fees on loans $64,073 $59,795 $126,776 $118,685
Interest and dividends on investments
U.S. Treasury securities 2,550 4,450 5,648 9,538
U.S. agency securities 7,508 7,555 15,038 15,964
Mortgage-backed securities 8,263 7,235 16,035 14,073
Obligations of states and political subdivisions 2,323 1,753 4,550 3,583
Federal Reserve stock and other corporate securities 123 147 311 308
Interest on federal funds sold and short-term investments 1,004 2,350 2,186 3,726
- ---------------------------------------------------------------------------------------------------------------------------
Total interest income 85,844 83,285 170,544 165,877
===========================================================================================================================
INTEREST EXPENSE
Interest on deposits 26,361 26,678 52,340 53,164
Interest on federal funds purchased and
securities sold under repurchase agreements 3,991 3,910 7,957 7,524
- ---------------------------------------------------------------------------------------------------------------------------
Total interest expense 30,352 30,588 60,297 60,688
===========================================================================================================================
NET INTEREST INCOME 55,492 52,697 110,247 105,189
PROVISION FOR POSSIBLE LOAN LOSSES 1,250 - 2,250 73
- ---------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 54,242 52,697 107,997 105,116
===========================================================================================================================
NON-INTEREST INCOME
Service charges on deposit accounts 6,981 5,623 13,593 11,453
Credit card income 3,370 2,477 6,147 4,691
Trust service fees 2,056 1,593 4,104 3,216
Secondary mortgage market operations 1,019 694 2,024 1,269
Other non-interest income 2,604 6,774 5,388 9,562
Securities transactions - - - 8
- ---------------------------------------------------------------------------------------------------------------------------
Total non-interest income 16,030 17,161 31,256 30,199
===========================================================================================================================
NON-INTEREST EXPENSE
Employee compensation 20,272 21,208 40,630 40,291
Employee benefits 3,520 3,071 7,548 6,283
- ---------------------------------------------------------------------------------------------------------------------------
Total personnel expense 23,792 24,279 48,178 46,574
Equipment and data processing expense 5,378 4,523 10,643 8,886
Net occupancy expense 3,878 3,506 7,914 6,907
Credit card processing services 2,417 1,868 4,508 3,520
Postage and communications 1,945 1,713 3,848 3,369
Ad valorem taxes 1,597 1,268 3,118 2,521
Legal and professional fees 1,373 1,842 2,500 2,601
Stationery and supplies 1,095 1,010 2,231 1,990
Other non-interest expense 6,487 7,478 12,868 13,386
- ---------------------------------------------------------------------------------------------------------------------------
Total non-interest expense 47,962 47,487 95,808 89,754
===========================================================================================================================
INCOME BEFORE INCOME TAXES 22,310 22,371 43,445 45,561
INCOME TAX EXPENSE 7,210 7,464 14,049 14,980
- ---------------------------------------------------------------------------------------------------------------------------
NET INCOME $15,100 $14,907 $29,396 $30,581
===========================================================================================================================
EARNINGS PER SHARE
Basic $ .65 $ .64 $ 1.26 $ 1.31
Diluted $ .65 $ .63 $ 1.26 $ 1.30
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic 23,194,136 23,233,261 23,319,057 23,194,674
Diluted 23,278,545 23,502,590 23,398,296 23,477,362
- ---------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
- 2 -
<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 - - 30,581 - - - 30,581
Unrealized net holding gain (loss)
on securities, net of reclassification
adjustments and taxes - - - (23) - - (23)
- ---------------------------------------------------------------------------------------------------------------------------
Total comprehensive income - - 30,581 (23) - - 30,558
- ---------------------------------------------------------------------------------------------------------------------------
Cash dividends declared, $.60 per share - - (13,024) - - - (13,024)
Cash dividends declared, merged entities (650) (650)
Exercise of stock options - 993 - - (319) - 674
Sales to employee benefit and
dividend reinvestment plans - 3,651 - - - - 3,651
Director stock grants - 167 - - - - 167
Restricted stock grants and other activity, net - 3,617 - - (536) (1,769) 1,312
- ---------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 1998 $ 2,800 $ 135,744 $ 420,799 $ 350 $ (4,540) $ (7,329) $ 547,824
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998 $ 2,800 $ 138,848 $ 428,880 $ (272) $ (4,613) $ (4,682) $ 560,961
- ---------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net income - - 29,396 - - - 29,396
Unrealized net holding gain (loss)
on securities, net of reclassification
adjustments and taxes - - - (2,228) - - (2,228)
- ---------------------------------------------------------------------------------------------------------------------------
Total comprehensive income - - 29,396 (2,228) - - 27,168
- ---------------------------------------------------------------------------------------------------------------------------
Cash dividends declared, $.66 per share - - (15,369) - - - (15,369)
Purchases of treasury stock - - - - (20,884) (20,884)
Exercise of stock options - 589 - - 240 - 829
Sales to employee benefit and
dividend reinvestment plans - 1,330 - - - - 1,330
Director stock grants - 22 - - 96 - 118
Restricted stock grants and other activity, net - 1,234 - - 2,523 (1,835) 1,922
- ---------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 1999 $ 2,800 $ 142,023 $ 442,907 $ (2,500) $ (22,638) $ (6,517) $ 556,075
==========================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
- 3 -
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------------------------------
Six Months Ended
June 30
- ------------------------------------------------------------------------------------------------------------------
(dollars in thousands) 1999 1998
- ------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 29,396 $ 30,581
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 11,939 9,670
Amortization of intangibles 1,939 1,201
Deferred tax expense (benefit) (1,367) 2,294
Net gains on sales of investment securities - (8)
Provision for possible loan losses 2,250 73
Provision for losses on foreclosed assets 101 62
Net gains on sales and other dispositions of foreclosed assets (180) (1,503)
Net gains on sales of bank premises and equipment (118) (180)
Increase in accrued income taxes 999 3,248
Increase in accrued interest receivable and prepaid expenses (2,254) (911)
Decrease in accrued interest payable and other accrued expenses (1,862) (1,482)
- ------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 40,843 43,045
==================================================================================================================
INVESTING ACTIVITIES
Proceeds from maturities of investment securities held to maturity 241,924 293,617
Purchases of investment securities held to maturity (225,991) (169,628)
Proceeds from maturities of investment securities available for sale 43,045 50,796
Purchases of investment securities available for sale (110,062) (4,928)
Net increase in loans (96,464) (51,151)
Net (increase) decrease in federal funds sold and short term investments 150,879 (56,111)
Proceeds from sales and other dispositions of foreclosed assets 884 2,744
Proceeds from sales of bank premises and equipment 815 437
Purchases of bank premises and equipment (16,925) (15,284)
Other, net (2,921) (2,634)
- ------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (14,816) 47,858
==================================================================================================================
FINANCING ACTIVITIES
Net decrease in demand deposits, NOW, money market and savings deposits (78,121) (39,161)
Net increase (decrease) in time deposits 16,748 (51,510)
Net increase in federal funds purchased and securities sold under
repurchase agreements 49,641 20,289
Proceeds from issuance of stock 1,879 4,372
Purchases of treasury stock (20,884) (536)
Cash dividends (14,757) (12,963)
- ------------------------------------------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES (45,494) (79,509)
==================================================================================================================
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (19,467) 11,394
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 214,963 238,058
- ------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 195,496 $ 249,452
==================================================================================================================
Cash received during the period for:
Interest income $ 169,597 $ 168,027
Cash paid during the period for:
Interest expense $ 60,667 $ 61,203
Income taxes $ 14,100 $ 12,696
=================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<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 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 herein 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 June 30 Six Months Ended June 30
- ---------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share data) 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------
Numerator:
<S> <C> <C> <C> <C>
Net income $15,100 $14,907 $29,396 $30,581
Effect of dilutive securities
- - - -
- ---------------------------------------------------------------------------------------------------------
Numerator for diluted earnings per share $15,100 $14,907 $29,396 $30,581
- ---------------------------------------------------------------------------------------------------------
Denominator:
Weighted average shares outstanding 23,194,136 23,233,261 23,319,057 23,194,674
Effect of dilutive stock options 84,409 269,329 79,239 282,688
- ---------------------------------------------------------------------------------------------------------
Denominator for diluted earnings per 23,278,545 23,502,590 23,398,296 23,477,362
share
- ---------------------------------------------------------------------------------------------------------
Earnings per share:
Basic $.65 $.64 $1.26 $1.31
Diluted $.65 $.63 $1.26 $1.30
- ---------------------------------------------------------------------------------------------------------
Antidilutive stock options 511,000 - 421,870 -
- ---------------------------------------------------------------------------------------------------------
</TABLE>
- 5 -
<PAGE>
NOTE 3 - STOCK REPURCHASE PROGRAM
In March 1999, the Company announced that its Board of Directors had
authorized a program to repurchase up to one million shares, or approximately
4.3%, of its common stock. The stock will be purchased from time to time through
open market transactions or in negotiated private transactions. The timing and
ultimate number of shares to be repurchased will be based upon such factors as
the stock price, market and general economic conditions. There is no set time
limit in which to complete the repurchases, and there are no specific plans for
use of the shares which might be repurchased, except for reissuances in
connection with employee stock option exercises or other employee stock plans.
As of June 30, 1999, the Company had purchased 530,000 shares at a
weighted-average price of $39.40 per share.
NOTE 4 - STOCK-BASED INCENTIVE COMPENSATION PLANS
The Company maintains a long-term incentive plan for key employees and a
directors' compensation plan, each of which allows for the awarding of stock
grants, stock options and other stock-based compensation. During June 1999,
awards were made under each of these plans as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Stock Grant Stock Option Award
- ----------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share data) Shares Market Value Shares Exercise Price
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-term incentive plan for key employees 88,000 $3,579 165,250 $40.66
Directors' compensation plan 5,100 $ 200 17,000 $39.13
- ----------------------------------------------------------------------------------------------------------
</TABLE>
The stock grant awarded to employees is subject to forfeiture if the
recipient's employment is terminated within three years of the grant date and
any disposition of the shares received is restricted during this period. The
employee grants can be adjusted based on the financial performance of the
Company in relation to that of a designated peer group over the restriction
period. The ultimate number of shares awarded can range from 0% to 200% of the
initial grant. Compensation expense, initially measured as the market value of
the restricted shares on the grant date, is recognized ratably over the
restriction period. Periodic adjustments are made to reflect changes in the
expected performance adjustment and in the market value of the Company's stock.
- 6 -
<PAGE>
NOTE 5-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 June 30 Six Months Ended June 30
- --------------------------------------------------------------------------------------------------------------
(dollars in thousands) 1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $ 15,100 $ 14,907 $ 29,396 $ 30,581
Other comprehensive income:
Unrealized net holding gain (loss) on
securities, net of tax (2,127) (177) (2,275) (91)
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 23 34 47 68
- --------------------------------------------------------------------------------------------------------------
Comprehensive income $ 12,996 $ 14,764 $ 27,168 $ 30,558
- --------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 6- 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.
- 7 -
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------------------------------
1999 1998
- ----------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share data) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter
- ----------------------------------------------------------------------------------------------------------------------------------
QUARTER-END BALANCE SHEET DATA
<S> <C> <C> <C> <C> <C>
Total assets $ 5,195,037 $ 5,219,955 $ 5,211,919 $ 4,907,720 $ 4,742,488
Earning assets 4,753,520 4,740,511 4,762,169 4,440,366 4,295,170
Investment in securities 1,386,932 1,406,550 1,340,078 1,183,617 1,300,609
Loans 3,365,957 3,193,257 3,270,581 3,171,422 2,914,649
Deposits 4,195,289 4,198,358 4,256,662 3,988,766 3,845,198
Shareholders' equity 556,075 569,479 560,961 554,564 547,823
- ----------------------------------------------------------------------------------------------------------------------------------
AVERAGE BALANCE SHEET DATA
Total assets $ 5,236,898 $ 5,192,831 $ 5,079,486 $ 4,812,321 $ 4,789,152
Earning assets 4,782,107 4,728,438 4,622,708 4,392,199 4,374,009
Investment in securities 1,409,089 1,387,704 1,201,386 1,239,946 1,343,548
Loans 3,287,766 3,239,464 3,197,192 3,023,046 2,862,037
Deposits 4,233,337 4,183,433 4,093,579 3,885,729 3,878,803
Shareholders' equity 564,147 567,651 560,425 555,462 546,233
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT DATA
Interest income $ 85,844 $ 84,700 $ 86,134 $ 84,102 $ 83,285
Interest expense 30,352 29,945 31,129 31,164 30,588
Net interest income 55,492 54,755 55,005 52,938 52,697
Net interest income (TE) 56,899 56,120 56,245 54,118 53,824
Provision for possible loan losses 1,250 1,000 - - -
Non-interest income (exclusive of securities transactions)16,030 15,226 14,839 13,407 17,161
Securities transactions - - (2) 833 -
Non-interest expense 47,962 47,846 53,437 51,307 47,487
Net income 15,100 14,296 11,443 10,655 14,907
Net income, before tax-effected merger-related expenses 15,100 14,296 12,283 11,647 17,547
- ----------------------------------------------------------------------------------------------------------------------------------
KEY RATIOS
Return on average assets 1.16% 1.12% .89% .88% 1.25%
Return on average shareholders' equity 10.74% 10.21% 8.10% 7.61% 10.95%
Net interest margin 4.77% 4.79% 4.83% 4.89% 4.93%
Tier 1 capital ratio 13.32% 14.00% 13.81% 14.33% 15.74%
Total capital ratio 14.37% 15.07% 14.87% 15.49% 16.98%
Leverage ratio 10.06% 10.35% 10.39% 10.59% 11.10%
Average shareholders' equity to average assets 10.77% 10.93% 11.03% 11.54% 11.41%
Shareholders' equity to total assets 10.70% 10.91% 10.76% 11.30% 11.55%
Average loans to average deposits 77.66% 77.44% 78.10% 77.80% 73.79%
Reserve for possible loan losses to loans 1.23% 1.28% 1.23% 1.31% 1.49%
Non-performing assets to loans plus foreclosed assets .38% .48% .49% .52% .55%
Reserve for possible loan losses to non-performing loans 365.92% 301.15% 284.54% 289.99% 322.82%
- ----------------------------------------------------------------------------------------------------------------------------------
SELECTED COMMON SHARE DATA
Earnings Per Share
Basic $ .65 $ .61 $ .49 $ .46 $ .64
Basic, before tax-effected merger-related expenses $ .65 $ .61 $ .53 $ .50 $ .76
Diluted $ .65 $ .61 $ .49 $ .45 $ .63
Diluted, before tax-effected merger-related
expenses $ .65 $ .61 $ .52 $ .50 $ .75
Dividends
Cash dividends per share $ .33 $ .33 $ .30 $ .30 $ .30
Dividend payout ratio 50.52% 54.15% 61.30% 65.73% 46.53%
Book Value Per Share $ 24.14 $ 24.28 $ 23.98 $ 23.75 $ 23.54
Trading Data
High stock price $ 41.75 $ 38.25 $ 41.88 $ 51.25 $ 62.38
Low stock price $ 35.63 $ 32.19 $ 35.75 $ 36.63 $ 50.00
Closing stock price $ 39.75 $ 36.91 $ 37.50 $ 41.75 $ 50.75
Trading volume 2,625,862 2,809,867 1,922,621 2,093,098 1,410,536
Average Shares Outstanding
Basic 23,194,136 23,445,367 23,394,769 23,346,820 23,233,261
Diluted 23,278,545 23,519,378 23,522,159 23,520,962 23,502,590
==================================================================================================================================
</TABLE>
- 8 -
<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
second quarters of 1999 and 1998 and during the six month periods through June
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 Annual Report on Form 10-K.
Prior period financial information has been restated to reflect
subsequent business combinations 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.
OVERVIEW
Whitney earned $15.1 million, or $.65 per share, in the second quarter
of 1999, compared to $14.3 million, or $.61 per share in the first quarter and
$14.9 million, or $.64 per share, in last year's second quarter. Return on
average assets was 1.16%, and return on average shareholders' equity was 10.74%
for the current quarter. These compare with a 1.12% return on average assets and
a 10.21% return on average equity for the first quarter and returns of 1.25% and
10.95%, respectively, for the second quarter in 1998. The following key items
impacted the current quarter's results:
o Net interest income (TE) increased 6% from the second quarter of
1998 and 1% from the first quarter of 1999. The net interest
margin was 4.77% for the quarter compared to 4.93% for 1998's
second quarter and 4.79% for the first quarter of 1999.
o Non-interest income growth remained strong. Non-interest income
was 25% higher than in the second quarter of last year, excluding
approximately $4.4 million of one-time gains recognized in the
earlier period, and 5% higher than in the first quarter of 1999.
Service charges on deposit accounts increased 24% from the second
quarter of 1998 and 6% from 1999's first quarter. Credit card
income increased 36% and 21%, respectively, from the same two
periods. Trust service fees improved 29% from the second quarter
of 1998 and were comparable with the first quarter of 1999.
o Non-interest expense continued to show the positive effects of
expense control programs established in late 1998. Non-interest
expense was $48.0 million in the second quarter, compared to $47.8
million in the first quarter, both of which were 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 $44.1 million in the second quarter of
1998 on the same basis. Contributing to the year to year increase
were investments in additional key personnel and expenses related
to the operation of newly constructed branches and the branches
acquired in Lake Charles, Louisiana in September 1998.
- 9 -
<PAGE>
o The provision for possible loan losses was $1.25 million during
the second quarter, compared to $1 million in the first quarter of
1999. The return to provisions in 1999 had been expected based on
anticipated loan growth and a recent moderate upward trend in net
charge-offs. No provision was made in 1998's second 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 statements.
- 10 -
<PAGE>
FINANCIAL CONDITION
LOANS AND RESERVE FOR POSSIBLE LOAN LOSSES
Total loans of $3.4 billion at June 30, 1999 have increased 3% from
$3.3 billion at December 31, 1998 after a seasonal decrease from year-end 1998
to March 31, 1999. Average loans for the second quarter of 1999 were $3.3
billion, a 15% increase compared to $2.9 billion in the second quarter of 1998
and a 1% increase from 1999's first quarter. Loan growth continues to be
broad-based, with the most significant increases in commercial lending of all
types.
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. The following table compares second quarter
activity in the reserve for possible loan losses with 1999's first quarter and
the second quarter of 1998 and also compares six-month activity for each year.
<TABLE>
<CAPTION>
TABLE 1. SUMMARY OF ACTIVITY IN THE RESERVE FOR POSSIBLE LOAN LOSSES
- ---------------------------------------------------------------------------------------------------------------------
Second First Second Six Months Ended
Quarter Quarter Quarter June 30
- ---------------------------------------------------------------------------------------------------------------------
( dollars in thousands) 1999 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at the beginning of quarter $40,981 $40,282 $43,275 $40,282 $44,543
Provision for possible loan losses
Charged to operations 1,250 1,000 - 2,250 73
Loans charged to the reserve:
Commercial, financial and agricultural 2,109 1,452 1,193 3,561 3,364
Real estate 394 199 136 593 162
Loans to individuals 628 571 597 1,199 1,249
Lease financing 3 38 165 41 349
- ---------------------------------------------------------------------------------------------------------------------
Total charge-offs 3,134 2,260 2,091 5,394 5,124
- ---------------------------------------------------------------------------------------------------------------------
Recoveries of loans previously charged off:
Commercial, financial and agricultural loans 1,279 1,198 554 2,477 1,379
Real estate 333 372 1,300 705 1,661
Loans to individuals 845 389 339 1,234 845
Lease financing - - - - -
- ---------------------------------------------------------------------------------------------------------------------
Total recoveries 2,457 1,959 2,193 4,416 3,885
- ---------------------------------------------------------------------------------------------------------------------
Net charge-offs (recoveries) 677 301 (102) 978 1,239
- ---------------------------------------------------------------------------------------------------------------------
Balance at the end of quarter $41,554 $40,981 $43,377 $41,554 $43,377
=====================================================================================================================
Ratios:
Gross annualized charge-offs to average loans .38 % .28 % .29 % .33 % .36 %
Recoveries to gross charge-offs 78.40 % 86.68 % 104.88 % 81.87 % 75.82 %
Net annualized charge-offs (recoveries)
to average loans .08 % .04 % (.01)% .06 % .09 %
Reserve for possible loan losses to loans
at quarter end 1.23 % 1.28 % 1.49 % 1.23 % 1.49 %
=====================================================================================================================
</TABLE>
- 11 -
<PAGE>
Net charge-offs showed a small increase the second quarter of 1999 from
the previous quarter. There was a small net recovery in the second quarter of
1998. Although the Company continues to experience good asset quality, there
have been signs of a modest upward trend in net charge-offs. As discussed below,
during the fourth quarter of 1998 and continuing through the second quarter of
1999, there has been an increase in performing loans internally identified and
classified as having above normal credit risk. Management has considered these
factors, among others, and the continued loan growth in providing $1.25 million
for possible loan losses during the second quarter after the $1.0 million
provision in 1999's first quarter. Management anticipates a need for additional
loss provisions in 1999.
The following table shows that non-performing loans and foreclosed
assets have declined in the first and second quarters of 1999 from year-end
1998.
<TABLE>
<CAPTION>
TABLE 2. NON-PERFORMING ASSETS
- ---------------------------------------------------------------------------------------------------------------------
1999 1998
- --------------------------------------------------------------------------- -----------------------------------------
(dollars in thousands) June 30 March 31 December 31 September 30 June 30
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans accounted for on a non-accrual basis $ 9,608 $ 11,591 $ 11,497 $ 11,691 $ 11,611
Restructured loans 1,748 2,017 2,660 2,686 1,826
- ---------------------------------------------------------------------------------------------------------------------
Total non-performing loans 11,356 13,608 14,157 14,377 13,437
Foreclosed assets 1,299 1,805 2,004 2,135 2,689
- ---------------------------------------------------------------------------------------------------------------------
Total non-performing assets $ 12,655 $ 15,413 $ 16,161 $ 16,512 $ 16,126
- ---------------------------------------------------------------------------------------------------------------------
Loans 90 days past due still accruing $ 2,481 $ 3,543 $ 3,765 $ 5,767 $ 4,790
- ---------------------------------------------------------------------------------------------------------------------
Ratios:
Non-performing assets to loans
plus foreclosed assets .38% .48% .49% .52% .55%
Reserve for possible loan losses to
non-performing loans 365.92% 301.15% 284.54% 289.99% 322.82%
Loans 90 days past due still accruing to .07% .11% .12% .18% .16%
loans
=====================================================================================================================
</TABLE>
At both June 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 a historical low of 3%. The June 30, 1999 total of $175 million is $18
million above the year-end balance, an increase primarily related to changes in
classifications of three large commercial credits to or from the category of
loans with potential weaknesses that warrant special attention. Management
continually reviews the loan portfolio to identify potentially weak or
deteriorating credits.
INVESTMENT IN SECURITIES
At June 30, 1999, total securities were $1.4 billion, compared to $1.3
billion at both December 31, 1998 and June 30, 1998. Average investment in
securities increased $66 million, or 5%, in the second quarter of 1999 compared
to the same period in 1998. Over this same period, average federal funds sold
and other short-term liquidity management investments decreased $83 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.
- 12 -
<PAGE>
DEPOSITS AND SHORT-TERM BORROWINGS
At June 30, 1999, total deposits were $4.2 billion, compared to $4.3
billion at December 31, 1998 and $3.8 billion on June 30, 1998. As shown in
Table 4, average deposits for the second quarter were $4.2 billion, 9% over
1998's second quarter and a 1% increase from the first quarter of 1999. 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 $191 million on average for the second
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 deposit growth.
Short-term borrowings were $405 million at June 30, 1999, a 14%
increase over year-end 1998. The increase is partly the result of an increase in
the Bank's sweep repurchase product, which grew 9% during this period. Average
borrowings in the second quarter were $401 million, compared to $325 million for
the same period in 1998, an increase also almost entirely attributable to the
sweep repurchase product. Federal funds purchased were relatively unchanged
between these periods.
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 over $1.6 billion in unfunded loan commitments outstanding
at June 30, 1999, a 15% 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 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.
- 13 -
<PAGE>
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 second 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 3. RISK-BASED CAPITAL AND CAPITAL RATIOS
- --------------------------------------------------------
June 30 December 31
- --------------------------------------------------------
(dollars in thousands) 1999 1998
- --------------------------------------------------------
Tier 1 capital $ 523,439 $ 524,028
Tier 2 capital 41,554 40,282
- --------------------------------------------------------
Total capital $ 564,993 $ 564,310
- --------------------------------------------------------
Risk-weighted assets $ 3,930,687 $ 3,794,290
- --------------------------------------------------------
Ratios
Leverage ratio 10.06% 10.39%
Tier 1 capital 13.32% 13.81%
Total capital 14.37% 14.87%
Equity ratio 10.70% 10.76%
- --------------------------------------------------------
During the second quarter, the Company declared a $.33 per share
dividend on its common stock, the same as in the first quarter. This represents
a $.03 per share, or 10%, increase over the dividend declared in each of the
first two quarters in 1998. Also during the second quarter, the Company
repurchased 530,000 shares of its common stock for a total price of $21 million
under the stock repurchase program announced in March 1999.
YEAR 2000 REMEDIATION
The year 2000 situation 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. Inherent risk to the Company with respect to the Year 2000
situation include potential losses related to data processing and other systems
that may not operate as expected, disruption of Company operations resulting
from technological malfunctions from within the Company's internal
communications and other processing systems, business problems associated with
key third party vendors and other external service providers that may not be
Year 2000 system compliant, credit quality issues that may
- 14 -
<PAGE>
arise with respect to significant customers that may not be Year 2000 system
compliant, liquidity issues arising from potential withdrawals of cash by
customers during late 1999 and early 2000, as well as other business and
economic risk that may result from the pervasive impact that the Year 2000
situation could have on overall social and economic conditions.
In response to Year 2000 issues, a company-wide task force developed a
plan to review and test the Company's systems and other business operations in
relation to Year 2000 compliance. To date, the task force has identified
appropriate remediation action steps, and system revisions and/or upgrades are
being made, where appropriate. These remediation action steps also include
non-information technology systems that employ embedded 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 remediation
of 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.
Internal costs associated with this process during the second quarter
of 1999 have been approximately $300,000. Additional amounts paid to outside
vendors during the quarter totaled approximately $200,000. Future costs
associated with executing the Company's Year 2000 system compliance plan are not
expected to be significant. The majority of systems remediation costs have been
borne by third party vendors who supply the software under annual maintenance
fees.
The Bank started working with certain of its borrowing customers in
early 1998 relative to understanding and assessing the customers' progress
concerning the Year 2000 situation. These customers represent most of the Bank's
investment in commercial loans and assert that they are compliant with Year 2000
needs. 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 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 from 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.
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
- 15 -
<PAGE>
telecommunications providers, will be timely converted, or that a failure to
convert by another company, or a conversion that is incompatible with the
Company's systems, would not have a materially 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 effected 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.
RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income (TE) for the second quarter of 1999 was $56.9
million, 6% higher than the second quarter of 1998 and 1% higher than 1999's
first quarter. The higher net interest income is primarily the result of average
loan growth. Compared to the prior year's quarter, average loans grew 15%, 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 69% in the
current quarter, compared to 65% in 1998's second 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 4.77% this quarter, compared to 4.93% in
the second quarter of 1998 and 4.79% in 1999's first quarter. The decline from
1998 was primarily the result of a 75 basis point decline in the prime lending
rate between the periods, although a 25 basis point increase was implemented in
early July following the recent tightening by the Federal Reserve. Average loan
yields decreased 57 basis points between the second quarters of 1998 and 1999,
while the total earning asset yield fell 43 basis points. This decline was
largely matched by a decline of 41 basis points in rates paid on
interest-bearing liabilities.
For the first six months of 1999, net interest income (TE) was $113.0
million, a 5% increase over the same period in 1998. The net interest margin was
4.78% for the 1999 period and 4.97% 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 4 presents average balance sheets, net interest income (TE) and
interest rates for the second and first quarters of 1999, the second quarter of
1998 and the six-month period in each year. Table 5 analyzes the components of
changes in net interest income between these periods.
- 16 -
<PAGE>
<TABLE>
<CAPTION>
TABLE 4. SUMMARY OF AVERAGE BALANCE SHEETS, NET INTEREST INCOME(TE)(1) AND INTEREST RATES
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands) Second Quarter 1999 First Quarter 1999 Second 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) $3,287,766 $ 64,232 7.83% $3,239,464 $ 62,869 7.86% $2,862,037 $59,985 8.40%
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury securities 163,737 2,550 6.25 196,949 3,098 6.38 273,075 4,450 6.54
U.S. agency securities 503,701 7,508 5.96 492,524 7,530 6.12 463,864 7,555 6.51
Mortgage-backed securities 547,048 8,263 6.04 512,607 7,772 6.06 464,718 7,235 6.23
Obligations of states and political
subdivisions (tax-equivalent) (1) 186,396 3,571 7.66 177,256 3,426 7.73 131,012 2,690 8.21
Federal Reserve stock and other corporate
securities 8,207 123 5.99 8,368 188 8.99 10,879 147 5.40
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment in securities(3) 1,409,089 22,015 6.25 1,387,704 22,014 6.36 1,343,548 22,077 6.58
- ------------------------------------------------------------------------------------------------------------------------------------
Federal funds sold and short-term investments 85,252 1,004 4.73 101,270 1,182 4.73 168,424 2,350 5.60
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 4,782,107 $ 87,251 7.31% 4,728,438 $ 86,065 7.36% 4,374,009 $84,412 7.74%
- ------------------------------------------------------------------------------------------------------------------------------------
NON-EARNING ASSETS
Other assets 496,134 505,134 458,884
Reserve for possible loan losses (41,343) (40,741) (43,741)
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $5,236,898 $5,192,831 $4,789,152
====================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES
NOW account deposits $ 484,735 $ 1,602 1.33% $ 525,027 $ 1,834 1.42% $ 453,005 $ 1,917 1.70%
Money market deposits 752,672 6,722 3.58 698,175 6,127 3.56 562,008 5,373 3.84
Savings deposits 490,015 2,426 1.99 489,304 2,408 2.00 515,076 3,160 2.46
Other time deposits 745,236 8,690 4.68 756,533 9,012 4.83 730,965 9,191 5.04
Time deposits $100,000 and over 591,975 6,921 4.69 558,632 6,598 4.79 541,640 7,037 5.21
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 3,064,633 26,361 3.45 3,027,671 25,979 3.48 2,802,694 26,678 3.82
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 401,263 3,991 3.99 401,630 3,966 4.00 325,218 3,910 4.82
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 3,465,896 $ 30,352 3.51% 3,429,301 $ 29,945 3.54% 3,127,912 $30,588 3.92%
- ------------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST-BEARING DEPOSITS
AND SHAREHOLDERS' EQUITY
Demand deposits 1,168,704 1,155,762 1,076,109
Other liabilities 38,151 40,117 38,898
Shareholders' equity 564,147 567,651 546,233
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $5,236,898 $5,192,831 $4,789,152
====================================================================================================================================
Net interest income and margin
(tax-equivalent) (1) $ 56,899 4.77% $ 56,120 4.79% $53,824 4.93%
- ------------------------------------------------------------------------------------------------------------------------------------
Net earning assets and spread $1,316,211 3.80% $1,299,137 3.82% $1,246,097 3.82%
====================================================================================================================================
<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 $10,440, $10,688 and $10,655 respectively, in the second and first
quarters of 1999 and the second quarter of 1998.
(3) Average balance excludes unrealized gain or loss on securities available for sale.
</FN>
</TABLE>
- 17 -
<PAGE>
<TABLE>
<CAPTION>
TABLE 4. SUMMARY OF AVERAGE BALANCE SHEETS, NET INTEREST INCOME(TE)(1) AND INTEREST RATES (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Six Months Ended
(dollars in thousands) June 30, 1999 June 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) $ 3,263,747 $127,101 7.85% $ 2,832,927 $119,074 8.47%
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury securities 180,251 5,648 6.32 296,458 9,538 6.49
U.S. agency securities 498,143 15,038 6.04 494,718 15,964 6.45
Mortgage-backed securities 529,922 16,035 6.05 446,716 14,073 6.30
Obligations of states and political
subdivisions (tax-equivalent) (1) 181,851 6,997 7.70 133,952 5,499 8.21
Federal Reserve stock and other corporate securities 8,288 311 7.50 11,150 308 5.52
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment in securities(3) 1,398,455 44,029 6.30 1,382,994 45,382 6.57
- ------------------------------------------------------------------------------------------------------------------------------------
Federal funds sold and short-term investments 93,216 2,186 4.73 134,594 3,726 5.58
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 4,755,418 $173,316 7.33% 4,350,515 $168,182 7.78%
- ------------------------------------------------------------------------------------------------------------------------------------
NON-EARNING ASSETS
Other assets 500,612 460,421
Reserve for possible loan losses (41,044) (44,135)
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 5,214,986 $ 4,766,801
====================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES
NOW account deposits $ 504,769 $ 3,436 1.37% $ 465,115 $ 4,009 1.74%
Money market deposits 725,574 12,849 3.57 533,401 10,056 3.80
Savings deposits 489,661 4,834 1.99 512,902 6,262 2.46
Other time deposits 750,854 17,702 4.75 734,508 18,416 5.06
Time deposits $100,000 and over 575,397 13,519 4.74 556,961 14,421 5.22
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 3,046,255 52,340 3.46 2,802,887 53,164 3.83
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 401,446 7,957 4.00 318,687 7,524 4.76
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 3,447,701 $60,297 3.53% 3,121,574 $ 60,688 3.92%
- ------------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST-BEARING DEPOSITS
AND SHAREHOLDERS' EQUITY
Demand deposits 1,162,269 1,066,916
Other liabilities 39,127 38,795
Shareholders' equity 565,889 539,516
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 5,214,986 $ 4,766,801
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest income and margin (tax-equivalent) (1) $113,019 4.78% $107,494 4.97%
- ------------------------------------------------------------------------------------------------------------------------------------
Net earning assets and spread $ 1,307,717 3.80% $ 1,228,941 3.86%
====================================================================================================================================
<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 $10,563 and $9,890 respectively, in the first six 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 5. SUMMARY OF CHANGES IN NET INTEREST INCOME(TE)(1)
- ------------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands) Second Quarter 1999 Compared to: Six Months Ended June 30,
First Quarter 1999 Second 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) $ 942 $ 421 $1,363 $ 8,507 $(4,260) $4,247 $ 17,211 $(9,184) $ 8,027
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury securities (518) (30) (548) (1,711) (189) (1,900) (3,647) (243) (3,890)
U.S. agency securities 169 (191) (22) 621 (668) (47) 110 (1,036) (926)
Mortgage-backed securities 520 (29) 491 1,249 (221) 1,028 2,536 (574) 1,962
Obligations of states and political
subdivisions (tax-equivalent) (1) 175 (30) 145 1,071 (190) 881 1,861 (363) 1,498
Federal Reserve stock and other
corporate securities (4) (61) (65) (39) 15 (24) (91) 94 3
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment in securities 342 (341) 1 1,191 (1,253) (62) 769 (2,122) (1,353)
- ------------------------------------------------------------------------------------------------------------------------------------
Federal funds sold and
short-term investments (189) 11 (178) (1,024) (322) (1,346) (1,029) (511) (1,540)
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest income (tax-equivalent)
(1) 1,095 91 1,186 8,674 (5,835) 2,839 16,951 (11,817) 5,134
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
NOW account deposits (136) (96) (232) 127 (442) (315) 321 (894) (573)
Money market deposits 485 110 595 1,722 (373) 1,349 3,435 (642) 2,793
Savings deposits 4 14 18 (148) (586) (734) (273) (1,155) (1,428)
Other time deposits (133) (189) (322) 177 (678) (501) 403 (1,117) (714)
Time deposits $100,000 and over 390 (67) 323 622 (738) (116) 466 (1,368) (902)
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 610 (228) 382 2,500 (2,817) (317) 4,352 (5,176) (824)
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings (4) 29 25 823 (742) 81 1,760 (1,327) 433
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest expense 606 (199) 407 3,323 (3,559) (236) 6,112 (6,503) (391)
- ------------------------------------------------------------------------------------------------------------------------------------
Change in net interest income
(tax-equivalent)(1) $ 489 $ 290 $ 779 $5,351 $(2,276) $3,075 $10,839 $(5,314) $5,525
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Tax-equivalent (TE) amounts are calculated using a marginal federal income tax rate of 35%.
</FN>
</TABLE>
- 19 -
<PAGE>
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses was $1.25 million for the second
quarter of 1999 and $1.0 million in 1999's first quarter. For the first six
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
$1.3 million. This reflects management's consideration, among other factors, of
continued strong loan growth, indications of a modest upward trend in net
charge-offs and an increase in performing loans internally classified as having
above normal credit risk.
NON-INTEREST INCOME
Non-interest income, excluding securities transactions, was $16.0
million in the second quarter, compared to $17.2 million in the same quarter of
1998. Excluding one-time gains recognized in each period, non-interest income
totaled $15.9 million in 1999 compared to $12.7 million in 1998. This represents
an increase of $3.2 million, or 25%. Service charges on deposit accounts rose
$1.4 million, or 24%, to $7.0 million in 1999, with approximately $.4 million of
this increase related to deposits associated with the Lake Charles branches
purchased in September 1998. Credit card fee income rose 36% to $3.4 million,
reflecting increased volumes in merchant accounts. Trust service fee income rose
to $2.1 million, an increase of 29% 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 $1.0 million, or 47%, over the
same period last year. This increase is due, in part, to the favorable interest
rate environment and additional business from marketing of these products by the
Bank. Other non-interest income remained stable from the comparable period in
the previous year.
For the six-month period, non-interest income, exclusive of both
securities transactions and one-time gains, was $31.1 million, 21% higher than
the $25.8 million in 1998. Year-to-date percentage increases by category were
consistent with the quarterly increases: service charges on deposit accounts
were up $2.1 million, or 19%: credit card fee income was up $1.5 million, or
31%; trust services income was up $.9 million, or 28%; and income from secondary
mortgage market operations was up $.8 million, or 59%.
Management evaluates its banking facilities on an ongoing basis to
identify possible under-utilization and determine the need for functional
improvements, relocations or possible sales. Management has negotiated and
anticipates closing on several sales transactions during the remainder of 1999
as a result of this ongoing evaluation process. If these transactions proceed to
closing as negotiated, which is not guaranteed, the Company expects to recognize
net gains.
NON-INTEREST EXPENSE
Non-interest expense was $48.0 million for the second quarter of 1999.
This is an increase of $3.9 million, or 9%, over the second quarter of 1998,
excluding merger-related expenses.
Personnel expense rose a moderate $.7 million, or 3%, to $23.8 million
for the quarter. Increases in personnel expense between these periods included
$.7 million related to the addition of sixteen branch locations, including eight
locations purchased in Lake Charles, Louisiana in September of 1998. In
addition, the Company, which was formerly self-insured for non-HMO health
claims, has now contracted with an outside provider for health insurance. Health
benefits expense in 1999's second quarter increased by $.3 million under the
insured program primarily
- 20 -
<PAGE>
because self-insured claims expense was underestimated in the prior year's
first six months as the Company experienced processing delays in the
transition to a new claims administrator. Offsetting these increases was a net
reduction in executive incentive compensation. Increases from merit raises and
employee incentive programs between these quarterly periods have largely been
offset by net staff reductions.
Equipment and data processing expense increased $.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. Net occupancy expense increased $.4 million,
approximately half as a result of the new branch locations. Credit card
transaction processing services expense increased $.5 million, or 29%,
consistent with the related growth in revenue mentioned earlier. Amortization of
intangible assets acquired in the Lake Charles purchase transaction increased
non-interest expense by $.4 million in 1999's second quarter compared to 1998.
The net growth in the remaining expense categories was mainly reflective of the
growth in the Company's branch and ATM delivery system.
For the six-month period, non-interest expense, excluding
merger-related expenses, increased $9.6 million, or 11%, in 1999 compared to
1998. Personnel expense increased $2.8 million or 6% largely as a result of
branch expansion and the increase in health benefit expense discussed earlier.
The percentage increases in other major non-interest expense categories between
the first six months of 1998 and 1999 were generally consistent with the
quarter-to-quarter increases 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
(a) The annual meeting of the Company's shareholders was held on
April 28, 1999.
(b),(c) Proxies for the meeting were solicited pursuant to Section
14(a) of the Securities and Exchange Act of 1934. There was no
solicitation in opposition to the nominees for election to the
Company's Board for Directors as listed in the proxy
statement.
The nominees for director and the voting results were as follows:
Nominee Elected Withheld/ Broker
as Director For Against Abstain Non-vote
-----------------------------------------------------------------------
Harry J. Blumenthal, Jr. 18,450,454 313,755 None None
Joel B. Bullard, Jr. 18,449,748 314,461 None None
Angus R. Cooper II 18,450,618 313,591 None None
The vote to ratify the selection by the Company's Board of Directors of
Arthur Andersen LLP as independent public accountants was as follows:
Withheld/ Broker
For Against Abstain Non-vote
--------------------------------------------
18,552,151 183,654 28,404 None
Item 5. Other Information
None
- 22 -
<PAGE>
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).
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).
- 23 -
<PAGE>
Exhibit 10.8 - Executive agreement between Whitney Holding Corporation,
Whitney Bank of Alabama and John C. Hope, III (filed as Exhibit 10.8 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (Commission file number 0-1026) and incorporated by
reference).
Exhibit 10.9 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and Robert C. Baird, Jr. (filed as Exhibit 10.9
to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995 (Commission file number 0-1026) and incorporated by
reference).
Exhibit 10.10a - Long-term incentive program (filed as Exhibit 10.7 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1991 (Commission file number 0-1026) and incorporated by
reference).
Exhibit 10.10b - Long-term incentive plan (filed as a Proposal in the
Company's Proxy Statement dated March 18, 1997 (Commission file number
0-1026) and incorporated by reference).
Exhibit 10.11 - Executive compensation plan (filed as Exhibit 10.8 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1991 (Commission file number 0-1026) and incorporated by
reference).
Exhibit 10.12 - Form of restricted stock agreement between Whitney
Holding Corporation and certain of its officers (filed as Exhibit 19.1
to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1992 (Commission file number 0-1026) and incorporated by
reference).
Exhibit 10.13 - Form of stock option agreement between Whitney Holding
Corporation and certain of its officers (filed as Exhibit 19.2 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1992 (Commission file number 0-1026) and incorporated by reference).
Exhibit 10.14 - Directors' Compensation Plan (filed as Exhibit A to the
Company's Proxy Statement dated March 24, 1994 (Commission file number
0-1026) and incorporated by reference).
Exhibit 10.14a - Amendment No. 1 to the Whitney Holding Corporation
Directors' Compensation Plan (filed as Exhibit A to the Company's Proxy
Statement dated March 15, 1996 (Commission file number 0-1026) and
incorporated by reference).
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).
- 24 -
<PAGE>
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).
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.
Senior Vice President and Chief
Financial Officer (Principal
Accounting Officer)
August 13, 1999
-------------------------------
Date
- 26 -
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 195,496
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 631
<TRADING-ASSETS> 2,259
<INVESTMENTS-HELD-FOR-SALE> 168,837
<INVESTMENTS-CARRYING> 1,218,095
<INVESTMENTS-MARKET> 1,204,259
<LOANS> 3,365,957
<ALLOWANCE> 41,554
<TOTAL-ASSETS> 5,195,037
<DEPOSITS> 4,195,289
<SHORT-TERM> 404,963
<LIABILITIES-OTHER> 38,710
<LONG-TERM> 0
<COMMON> 2,800
0
0
<OTHER-SE> 553,275
<TOTAL-LIABILITIES-AND-EQUITY> 5,195,037
<INTEREST-LOAN> 126,776
<INTEREST-INVEST> 41,582
<INTEREST-OTHER> 2,186
<INTEREST-TOTAL> 170,544
<INTEREST-DEPOSIT> 52,340
<INTEREST-EXPENSE> 60,297
<INTEREST-INCOME-NET> 110,247
<LOAN-LOSSES> 2,250
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 95,808
<INCOME-PRETAX> 43,445
<INCOME-PRE-EXTRAORDINARY> 43,445
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,396
<EPS-BASIC><F1> 1.26
<EPS-DILUTED><F1> 1.26
<YIELD-ACTUAL> 4.78
<LOANS-NON> 9,608
<LOANS-PAST> 2,481
<LOANS-TROUBLED> 1,748
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 40,282
<CHARGE-OFFS> 5,394
<RECOVERIES> 4,416
<ALLOWANCE-CLOSE> 41,554
<ALLOWANCE-DOMESTIC> 41,554
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
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