<PAGE>
November 13, 2000
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, 2000.
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 September 30, 2000 Commission file number 0-1026
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, 2000
-------------------------- -------------------------------
Common Stock, no par value 22,703,911
================================================================================
<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
Selected Financial Data 9
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
--------------------------------------------------------------------------------
PART II. Other Information
Item 1: Legal Proceedings 26
Item 2: Changes in Securities and Use of Proceeds 26
Item 3: Defaults upon Senior Securities 26
Item 4: Submission of Matters to a Vote of Security Holders 26
Item 5: Other Information 26
Item 6: Exhibits and Reports on Form 8-K 27
<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) 2000 1999
----------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Cash and due from financial institutions $ 183,368 $ 230,690
Investment in securities
Securities available for sale 436,991 206,932
Securities held to maturity, fair values of $964,655 and $1,060,340, respectively 981,066 1,084,931
----------------------------------------------------------------------------------------------------------------------------
Total investment in securities 1,418,057 1,291,863
Federal funds sold and short-term investments 44,512 18,691
Loans, net of unearned income 4,111,382 3,673,047
Reserve for possible loan losses (53,197) (44,466)
----------------------------------------------------------------------------------------------------------------------------
Net loans 4,058,185 3,628,581
============================================================================================================================
Bank premises and equipment 167,560 169,715
Intangible assets 73,546 33,317
Accrued interest receivable 41,074 30,694
Other assets 56,202 50,837
----------------------------------------------------------------------------------------------------------------------------
Total assets $ 6,042,504 $ 5,454,388
============================================================================================================================
LIABILITIES
Non-interest-bearing demand deposits $ 1,263,148 $ 1,230,509
Interest-bearing deposits 3,329,596 3,078,889
----------------------------------------------------------------------------------------------------------------------------
Total deposits 4,592,744 4,309,398
============================================================================================================================
Short-term borrowings 798,802 541,357
Accrued interest payable 18,799 12,389
Accrued expenses and other liabilities 44,767 34,141
----------------------------------------------------------------------------------------------------------------------------
Total liabilities 5,455,112 4,897,285
============================================================================================================================
SHAREHOLDERS' EQUITY
Common stock, no par value
Authorized - 100,000,000 shares
Issued - 23,745,512 shares 2,800 2,800
Capital surplus 141,407 141,512
Retained earnings 486,814 461,025
Accumulated other comprehensive income (1,633) (3,483)
Treasury stock at cost - 1,061,554 and 1,171,458 shares, respectively (36,896) (40,678)
Unearned restricted stock compensation (5,100) (4,073)
----------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 587,392 557,103
============================================================================================================================
Total liabilities and shareholders' equity $ 6,042,504 $ 5,454,388
============================================================================================================================
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 Nine Months Ended
September 30 September 30
---------------------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share data) 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
<S> <C> <C> <C> <C>
Interest and fees on loans $ 86,666 $ 68,151 $242,608 $194,927
Interest and dividends on investments
U.S. Treasury securities 1,834 2,208 5,665 7,856
U.S. agency securities 9,468 7,002 26,171 22,040
Mortgage-backed securities 7,545 8,227 22,662 24,262
Obligations of states and political subdivisions 2,114 2,338 6,775 6,888
Federal Reserve stock and other corporate securities 238 114 506 425
Interest on federal funds sold and short-term investments 220 198 990 2,384
---------------------------------------------------------------------------------------------------------------------------
Total interest income 108,085 88,238 305,377 258,782
===========================================================================================================================
INTEREST EXPENSE
Interest on deposits 34,955 26,681 96,591 79,021
Interest on short-term borrowings 11,193 4,605 24,894 12,562
---------------------------------------------------------------------------------------------------------------------------
Total interest expense 46,148 31,286 121,485 91,583
===========================================================================================================================
NET INTEREST INCOME 61,937 56,952 183,892 167,199
PROVISION FOR POSSIBLE LOAN LOSSES 2,500 2,000 7,500 4,250
---------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 59,437 54,952 176,392 162,949
===========================================================================================================================
NON-INTEREST INCOME
Service charges on deposit accounts 7,304 7,133 21,320 20,726
Credit card income 3,746 3,324 11,348 9,471
Trust service fees 2,342 2,133 6,783 6,237
Secondary mortgage market operations 520 726 1,384 2,716
Other non-interest income 4,124 3,864 11,859 9,410
Securities transactions - - - -
---------------------------------------------------------------------------------------------------------------------------
Total non-interest income 18,036 17,180 52,694 48,560
===========================================================================================================================
NON-INTEREST EXPENSE
Employee compensation 22,720 20,405 65,588 61,035
Employee benefits 3,307 3,569 11,521 11,117
---------------------------------------------------------------------------------------------------------------------------
Total personnel expense 26,027 23,974 77,109 72,152
Equipment and data processing expense 5,396 5,670 16,465 16,313
Net occupancy expense 4,380 4,062 12,925 11,976
Credit card processing services 2,458 2,379 7,787 6,887
Postage and communications 2,076 1,986 6,095 5,834
Ad valorem taxes 1,673 1,604 5,028 4,722
Amortization of intangibles 1,568 961 4,296 2,901
Legal and professional fees 1,674 922 3,946 3,422
Other non-interest expense 7,004 6,429 20,797 19,712
---------------------------------------------------------------------------------------------------------------------------
Total non-interest expense 52,256 47,987 154,448 143,919
===========================================================================================================================
INCOME BEFORE INCOME TAXES 25,217 24,145 74,638 67,590
INCOME TAX EXPENSE 8,166 7,810 24,384 21,859
===========================================================================================================================
NET INCOME $ 17,051 $ 16,335 $ 50,254 $ 45,731
===========================================================================================================================
EARNINGS PER SHARE
Basic $ .75 $ .72 $ 2.22 $ 1.98
Diluted $ .75 $ .71 $ 2.21 $ 1.97
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic 22,710,276 22,827,599 22,649,529 23,153,438
Diluted 22,772,895 22,903,782 22,710,907 23,231,647
===========================================================================================================================
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, 1998 $ 2,800 $ 138,848 $ 428,880 $ (272) $ (4,613) $ (4,682) $ 560,961
=================================================================================================================================
Comprehensive income:
Net income - - 45,731 - - - 45,731
Other comprehensive income:
Unrealized net holding 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
under repurchase program - - - - (38,736) - (38,736)
Sales to dividend reinvestment and
employee benefit plans - 1,444 - - 593 - 2,037
Exercise of stock options - 589 - - 245 - 834
Director stock grants - 22 - - 96 - 118
Restricted stock grant 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
=================================================================================================================================
=================================================================================================================================
Balance at December 31, 1999 $ 2,800 $ 141,512 $ 461,025 $ (3,483) $ (40,678) $ (4,073) $ 557,103
=================================================================================================================================
Comprehensive income:
Net income - - 50,254 - - - 50,254
Other comprehensive income:
Unrealized net holding gain on securities,
net of reclassification adjustments
and taxes - - - 1,850 - - 1,850
---------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income - - 50,254 1,850 - - 52,104
---------------------------------------------------------------------------------------------------------------------------------
Cash dividends declared, $1.08 per share - - (24,465) - - - (24,465)
Sales to dividend reinvestment and
employee benefit plans - 31 - - 2,288 - 2,319
Exercise of stock options - (288) - - 498 - 210
Director stock grants - (1) - - 94 - 93
Restricted stock grant and other activity, net - 153 - - 902 (1,027) 28
---------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 2000 $ 2,800 $ 141,407 $ 486,814 $ (1,633) $ (36,896) $ (5,100) $ 587,392
=================================================================================================================================
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
============================================================================================================================
Nine Months Ended
September 30
============================================================================================================================
(dollars in thousands) 2000 1999
----------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 50,254 $ 45,731
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 16,822 18,161
Amortization of intangibles 4,296 2,901
Provision for possible loan losses 7,500 4,250
Deferred tax benefit (5,167) (1,511)
Net gains on sales and other dispositions of surplus property (1,043) (1,023)
Net gains on sales and other dispositions of foreclosed assets (324) (380)
Provision for losses on foreclosed assets 89 179
Increase in accrued income taxes 4,119 1,236
Increase in accrued interest receivable and prepaid expenses (10,692) (2,437)
Increase in accrued interest payable and other accrued expenses 11,895 545
----------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 77,749 67,652
============================================================================================================================
INVESTING ACTIVITIES
Proceeds from maturities of investment securities held to maturity 117,750 334,057
Purchases of investment securities held to maturity (14,456) (226,019)
Proceeds from maturities of investment securities available for sale 30,325 49,607
Purchases of investment securities available for sale (137,243) (129,792)
Net increase in loans (394,997) (218,642)
Net (increase) decrease in federal funds sold and short-term investments (25,821) 150,975
Proceeds from sales of surplus property 4,029 3,327
Proceeds from sales and other dispositions of foreclosed assets 1,438 1,457
Purchases of bank premises and equipment (9,552) (19,218)
Net cash paid in business acquisition (50,399) -
Other, net (2,360) (5,943)
----------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (481,286) (60,191)
============================================================================================================================
FINANCING ACTIVITIES
Net decrease in demand deposits, NOW, money market and savings deposits (138,308) (93,141)
Net increase in time deposits 259,936 34,723
Net increase in short-term borrowings 257,445 88,014
Proceeds from issuance of stock 2,510 2,589
Purchases of treasury stock (1,622) (39,909)
Cash dividends (23,746) (22,383)
----------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 356,215 (30,107)
============================================================================================================================
DECREASE IN CASH AND CASH EQUIVALENTS (47,322) (22,646)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 230,690 214,963
============================================================================================================================
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 183,368 $ 192,317
============================================================================================================================
Cash received during the period for:
Interest income $ 297,118 $ 256,419
Cash paid during the period for:
Interest expense $ 115,337 $ 91,974
Income taxes $ 25,114 $ 21,650
============================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
- 4 -
<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. 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. These
adjustments 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 1999 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 Nine Months Ended
September 30 September 30
---------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share data) 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------
Numerator:
<S> <C> <C> <C> <C>
Net income $17,051 $16,335 $50,254 $45,731
Effect of dilutive securities - - - -
---------------------------------------------------------------------------------------------------------------
Numerator for diluted earnings per share $17,051 $16,335 $50,254 $45,731
---------------------------------------------------------------------------------------------------------------
Denominator:
Weighted average shares outstanding 22,710,276 22,827,599 22,649,529 23,153,438
Effect of dilutive stock options 62,619 76,183 61,378 78,209
---------------------------------------------------------------------------------------------------------------
Denominator for diluted earnings per share 22,772,895 22,903,782 22,710,907 23,231,647
---------------------------------------------------------------------------------------------------------------
Earnings per share:
Basic $.75 $.72 $2.22 $1.98
Diluted $.75 $.71 $2.21 $1.97
---------------------------------------------------------------------------------------------------------------
Antidilutive stock options 680,875 507,500 558,763 450,727
===============================================================================================================
</TABLE>
- 5 -
<PAGE>
NOTE 3 - MERGERS AND ACQUISITIONS
On November 2, 2000, the Company purchased First Ascension Bancorp, Inc.,
whose principal subsidiary is First National Bank of Gonzales, Louisiana. First
National Bank of Gonzales has approximately $90 million in total assets,
including $60 million of loans, and $77 million in total deposits in its four
locations in Ascension Parish. The Company issued approximately 647,000 shares
of common stock in this transaction which is valued at approximately $22.8
million, and recorded goodwill and deposit intangibles of approximately $13
million, which will be amortized over twenty years and approximately nine years,
respectively.
On September 20, 2000, the Company announced a definitive agreement to
acquire American Bank in Houston, Texas ("American"). American has six locations
in the Houston area with approximately $280 million in total assets, $250
million in total deposits and shareholders' equity of $18 million. The
acquisition is structured as a tax-free exchange of American stock for 1,815,000
million shares of Company common stock. Earlier, in August 2000, the Company
announced an agreement to acquire Prattville Financial Services Corporation
("PFSC"), whose principal subsidiary is Bank of Prattville. Bank of Prattville
operates threee branches in the metropolitan area of Montgomery, Alabama, and
has approximately $170 million in total assets, $142 million in deposits and $22
million of shareholders' equity. The Company will issue stock with a value of
approximately $40.5 million in connection with this tax-free transaction. The
Company anticipates accounting for each of these transactions as a pooling of
interests. The acquisitions are subject to certain conditions, including
approval by PFSC's or American's shareholders and appropriate regulatory
agencies. The PFSC transaction may close in either the fourth quarter of 2000 or
the first quarter of 2001, and the American transaction in the first quarter of
2001.
In February 2000, the Company completed its acquisition of Bank of Houston
for cash of $58 million. At the acquisition date, Bank of Houston had $180
million in total assets, including $44 million in loans, and $162 million in
deposits in two locations in the Houston, Texas metropolitan area. Applying
purchase accounting to this transaction, the Company recorded $44 million in
intangible assets, with $8 million assigned to the value of deposit
relationships with a nine-year estimated life and $36 million to goodwill with
an estimated life of twenty years.
Bank of Houston's operating results since the acquisition date are included
in the Company's financial statements. The pro forma impact of this acquisition
on the Company's results of operations is insignificant. Effective October 6,
2000, Bank of Houston was merged into Whitney National Bank.
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 2000,
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 77,500 $2,872 201,125 $37.19
Directors' compensation plan 4,200 $ 145 14,000 $34.44
===========================================================================================================
</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
- 6 -
<PAGE>
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.
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 Nine Months
Ended Ended
September 30 September 30
-------------------------------------------------------------------------------------------------------------
(dollars in thousands) 2000 1999 2000 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $ 17,051 $ 16,535 $ 50,254 $ 45,731
Other comprehensive income:
Unrealized holding gain (loss) on securities,
net of tax 2,360 (39) 1,785 (2,314)
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 16 25 65 72
-------------------------------------------------------------------------------------------------------------
Comprehensive income $ 19,427 $ 16,321 $ 52,104 $ 43,489
-------------------------------------------------------------------------------------------------------------
</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.
NOTE 7 - ACCOUNTING PRONOUNCEMENTS
The Securities and Exchange Commission ("SEC") issued Staff Accounting
Bulletin ("SAB") 101 in December 1999. SAB 101 presented the SEC staff's views
on and guidance in applying generally accepted accounting principles to revenue
recognition in financial statements. In June 2000, the SEC further delayed the
date when the Company must be in compliance with this guidance until December
31, 2000. The Company has determined that its existing revenue recognition
practices comply in all material respects with the guidance in SAB 101.
The provisions of Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities," as amended by
SFAS No. 138, are effective as of January 1, 2001 for the Company. These
statements provide a comprehensive and consistent standard for the recognition
and measurement of derivatives and hedging activities, in which the Company does
not presently participate. Upon adoption, the Company may transfer any security
held to maturity into the available for sale category without calling into
question the Company's intent to hold other debt securities to maturity. The
Company has not determined what transfers, if any, would be made in accordance
with this provision. If the Company chooses to transfer all held-to-maturity
securities to the available for sale category, the pro forma effect as of
September 30, 2000 would be to reduce shareholders' equity by approximately $11
million and to reduce the
- 7 -
<PAGE>
ratio of shareholders' equity to total assets to 9.56%. There would be no effect
on regulatory capital. Other than for the effects of any such transfers, the
adoption of this accounting standard is not expected to have a material effect
on the Company's financial position or results of operations.
- 8 -
<PAGE>
<TABLE>
<CAPTION>
WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA
====================================================================================================================================
2000 1999
------------------------------------------------ --------------------------------
(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 $6,042,504 $5,901,319 $5,688,179 $5,454,388 $5,234,148
Earning assets 5,573,951 5,391,752 5,192,034 4,983,601 4,796,142
Loans 4,111,382 3,976,513 3,765,725 3,673,047 3,488,000
Investment in securities 1,418,057 1,406,912 1,395,710 1,291,863 1,307,607
Deposits 4,592,744 4,545,730 4,585,808 4,309,398 4,198,244
Shareholders' equity 587,392 575,030 564,313 557,103 547,504
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE BALANCE SHEET DATA
Total assets $5,943,706 $5,772,055 $5,559,059 $5,310,400 $5,232,588
Earning assets 5,462,982 5,289,319 5,089,265 4,869,097 4,793,980
Loans 4,033,625 3,863,079 3,715,427 3,560,119 3,419,433
Investment in securities 1,416,769 1,401,203 1,347,835 1,298,451 1,359,601
Deposits 4,529,676 4,557,066 4,417,950 4,213,370 4,196,385
Shareholders' equity 582,464 571,220 564,010 554,529 554,920
------------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT DATA
Interest income $ 108,085 $ 101,711 $ 95,581 $ 91,031 $ 88,238
Interest expense 46,148 39,755 35,582 32,482 31,286
Net interest income 61,937 61,956 59,999 58,549 56,952
Net interest income (TE) 63,275 63,361 61,553 60,048 58,418
Provision for possible loan losses 2,500 2,500 2,500 1,750 2,000
Non-interest income (exclusive of securities
transactions) 18,036 17,365 17,293 18,023 17,180
Securities transactions - - - - -
Non-interest expense 52,256 51,960 50,232 50,164 47,987
Net income 17,051 16,640 16,563 16,689 16,335
------------------------------------------------------------------------------------------------------------------------------------
KEY RATIOS
Return on average assets 1.14% 1.16% 1.20% 1.25% 1.24%
Return on average shareholders' equity 11.65% 11.72% 11.81% 11.94% 11.68%
Net interest margin 4.62% 4.81% 4.85% 4.91% 4.85%
Average loans to average deposits 89.05% 84.77% 84.10% 84.50% 81.49%
Efficiency ratio 64.27% 64.37% 63.71% 64.25% 63.48%
Reserve for possible loan losses to loans 1.29% 1.27% 1.29% 1.21% 1.25%
Non-performing assets to loans plus foreclosed assets
and surplus property .55% .62% .72% .46% .37%
Reserve for possible loan losses to non-performing loans 249.10% 213.43% 187.80% 291.87% 370.13%
Average shareholders' equity to average assets 9.80% 9.90% 10.15% 10.44% 10.61%
Shareholders' equity to total assets 9.72% 9.74% 9.92% 10.21% 10.46%
Leverage ratio 8.78% 8.85% 8.99% 9.99% 9.92%
Tier 1 capital ratio 11.19% 11.47% 11.65% 12.75% 12.95%
Total capital ratio 12.34% 12.62% 12.80% 13.83% 14.05%
------------------------------------------------------------------------------------------------------------------------------------
SELECTED COMMON SHARE DATA
Earnings Per Share
Basic $.75 $.74 $.73 $.74 $.72
Diluted $.75 $.73 $.73 $.74 $.71
Dividends
Cash dividends per share $.36 $.36 $.36 $.33 $.33
Dividend payout ratio 47.91% 49.04% 49.12% 44.60% 45.69%
Book Value Per Share
Book value $25.89 $25.36 $25.01 $24.68 $24.27
Tangible book value $22.65 $22.06 $21.62 $23.20 $22.75
Trading Data
High stock price $37.19 $39.13 $36.66 $39.25 $39.75
Low stock price $33.38 $31.75 $31.50 $33.50 $33.25
Closing stock price $36.31 $34.19 $32.63 $37.06 $34.38
Trading volume 1,306,004 1,609,130 2,237,876 2,068,524 1,866,193
Average Shares Outstanding
Basic 22,710,276 22,626,874 22,610,768 22,598,930 22,827,599
Diluted 22,772,895 22,690,015 22,669,130 22,674,065 22,903,782
====================================================================================================================================
Note: Certain information for prior periods has been reclassified to conform to the current presentation.
</TABLE>
- 9 -
<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 2000 and 1999 and during the nine month periods through
September 30 in each year. The operations of the Company's principal subsidiary,
Whitney National 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
1999 Annual Report on Form 10-K.
Certain financial information for prior periods has been reclassified to
conform to the current presentation.
OVERVIEW
Whitney earned $.75 per share, or $17.1 million, in the third quarter of
2000, a 4% increase over the $.72 per share, or $16.3 million, reported for the
third quarter of 1999. Through the first nine months of 2000, earnings were
$2.22 per share, or $50.3 million, which represents a 12% increase over the
$1.98 per share, or $45.7 million, earned for the comparable period in 1999.
Effective October 6, 2000, Bank of Houston, which was acquired in February 2000,
merged into Whitney National Bank. The third quarter results for 2000 include
non-interest expenses of approximately $.6 million associated with converting
Bank of Houston's information and operating systems. Non-interest income for
this quarterly period includes approximately $.5 million of net gains on
dispositions of banking facilities and pre-1933 assets. Similar net gains
totaled $1.0 million in 1999's third quarter. Return on average assets was 1.14%
for the third quarter of 2000, and return on average shareholders' equity was
11.65%. For the third quarter of 1999, these returns were 1.24% and 11.68%,
respectively.
Excluding the after-tax effect of the amortization of purchased intangibles
acquired with Bank of Houston and in previous transactions, Whitney earned $.80
per share in the third quarter of 2000, compared to $.74 per share in 1999's
third quarter. Bank of Houston's earnings, which are included in Whitney's
results since the purchase date, were not significant for purposes of presenting
pro forma financial information with respect to this acquisition.
Selected highlights from the third quarter's results follow:
o Net interest income (TE) increased 8%, or $4.9 million, from the third
quarter of 1999, or 6% excluding Bank of Houston, largely driven by
continued loan growth. The net interest margin was 4.62% for the third
quarter of 2000, a 23 basis point decrease from the 4.85% margin for
the year-earlier quarter. This decrease reflects both upward pressure
on the cost of interest-bearing funds from higher market rates and a
gradual increase in the proportion of higher-cost sources of funds
supporting the growth in earning assets.
- 10 -
<PAGE>
o Excluding the net gains mentioned earlier, non-interest income in the
third quarter of 2000 was 8%, or $1.3 million, higher than the same
quarter in 1999, and 1% above 2000's second quarter. The year-over-
year increase was 5%, or $.8 million, without Bank of Houston.
Major contributors included fees from credit and debit card activity,
which rose 13% from the third quarter of 1999 on increased transaction
volumes, and investment service income, which grew 62% with the help of
brokerage activity at Whitney Securities. Trust service fees also
improved, by 10%, over the third quarter of 1999.
o The impact of ongoing expense-control efforts was again evident in the
performance of non-interest expenses for the third quarter of 2000.
Excluding Bank of Houston, non-interest expense was up a moderate 4%,
or $2.0 million, compared to 1999's third quarter. Before consideration
of the conversion expenses mentioned above, the year-over-year increase
would have been only 3%, or $1.4 million. On this same basis,
non-interest expense in the third quarter was slightly lower than the
second quarter of 2000.
o Whitney provided $2.5 million for possible loan losses in the third
quarter of 2000, the same as in each of the first two quarters of 2000.
This compares to a $2.0 million provision in 1999's third quarter. The
growth in loans and an increase in non-performing assets continue to be
important factors behind the higher loss provisions in 2000.
Non-performing assets were $22.6 million at September 30, 2000, or .55%
of loans plus foreclosed assets and surplus bank property, down from
$24.8 million, or .62% at June 30, 2000, but still above the total of
$13.0 million, or .37%, at the end of 1999's third quarter. There was
a small net recovery in the third quarter of 2000, similar to that
reported for the year-earlier quarter. The reserve for possible loan
losses was 1.29% of total loans at September 30, 2000 and 1.25% at
September 30, 1999.
As discussed in note 3 to the consolidated financial statements, on
November 2, 2000, the Company purchased First Ascension Bancorp, Inc, whose
subsidiary, First National Bank of Gonzales, has approximately $90 million in
total assets in its four locations in Ascension Parish, Louisiana. With this
acquisition, Whitney doubled its market share in this fast growing parish. The
Company issued approximately 647,000 shares of common stock to First Ascension
shareholders, and, applying purchase accounting, recorded goodwill and deposit
intangibles of approximately $13 million. The acquired bank's results of
operations of will be included in the Company's results from the purchase date.
One-time merger and conversion expenses in the fourth quarter of 2000 are
anticipated to be approximately $2 million.
During the third quarter, the Company announced agreements to acquire
American Bank in Houston, Texas, and Prattville Financial Services Corporation
and its principal subsidiary, Bank of Prattville, Alabama. These acquisitions
will expand the Company's presence in two growing market areas. The combined
assets of these entities total approximately $450 million. American shareholders
will receive 1,815,000 shares of Company common stock and Prattville
shareholders will receive Company common stock with a value of approximately
$40.5 million. The Company anticipates accounting for each of these transactions
as a pooling of interests.
FORWARD-LOOKING STATEMENTS
Certain statements in this quarterly report may be regarded as
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E
- 11 -
<PAGE>
of the Securities Exchange Act of 1934, as amended. These forward-looking
statements, made in good faith by the Company, are based on a number of
assumptions about the future. Some of the more important assumptions are
outlined in the Company's 1999 Annual Report on Form 10-K. Because it is
uncertain whether future conditions and events will confirm the Company's
assumptions, there is a risk that the Company's future results will differ
materially from what is stated in or implied by such forward-looking statements.
The Company cautions the reader to consider this risk.
- 12 -
<PAGE>
FINANCIAL CONDITION
LOANS AND RESERVE FOR POSSIBLE LOAN LOSSES
Average loans for the third quarter of 2000 were $4.03 billion, a $615
million, or 18%, increase compared to $3.42 billion in the third quarter of 1999
and a $171 million, or 4%, increase from 2000's second quarter. Bank of Houston
contributed approximately $45 million to the year-over-year increase.
Average loan growth continues to be broad-based, with the most significant
increases in commercial lending of all types. Commercial real estate lending,
which includes loans secured by properties used in commercial or industrial
operations, supplied approximately $54 million of the increase over the second
quarter of 2000, as this portfolio category grew 4% on average. Growth in this
category in recent years has come from a variety of sources, including hotel
construction in the New Orleans area, apartment and condominium projects largely
in the eastern Gulf Coast region, and retail, small office and commercial
facilities throughout the Company's market area. There was no significant shift
in the concentration mix of this portfolio from year-end 1999, although the
regional distribution continued to show increasing balance.
Commercial loans other than those secured by real property increased
approximately $60 million, or 4%, on average over 2000's second quarter. As with
commercial real estate loans, the concentration mix of this portfolio has been
relatively stable since year-end 1999.
Average retail loans, including both retail mortgage loans and other loans
to individuals, increased approximately $55 million, or 5%, from second quarter
2000. Retail mortgage lending contributed virtually all of this increase. Growth
came primarily from the Company's home equity loan product and from
adjustable-rate mortgage loans that the Company holds in its loan portfolio. The
origination of adjustable-rate mortgage loans increased in the current year with
rising market rates and attractive product design, although a shift in favor of
fixed-rate loan products for sale in the secondary market began in the third
quarter as rates moderated and the Company refocused its sales efforts. The
initial rate adjustment on most of the new portfolio loans occurs after seven
years.
Table 1 shows loan balances at September 30, 2000 and at the end of the
four prior quarters. The period-end changes are consistent with the growth in
average loans. The decline in the commercial category from year-end 1999 to
March 31, 2000 is related to seasonal factors.
<TABLE>
<CAPTION>
TABLE 1. LOANS
-----------------------------------------------------------------------------------------------------------------
2000 1999
---------------------------------------------------------------------------------- ------------------------------
(dollars in thousands) September 30 June 30 March 31 December 31 September 30
=================================================================================================================
<S> <C> <C> <C> <C> <C>
Commercial, financial and
agricultural loans $ 1,565,881 $ 1,521,826 $ 1,448,637 $ 1,466,018 $ 1,354,178
Real estate loans - commercial
and other 1,388,082 1,343,439 1,276,930 1,213,465 1,167,954
Real estate loans - retail mortgage 841,701 800,506 733,342 700,311 674,546
Loans to individuals 315,635 310,525 306,443 292,680 290,507
Lease financing 83 217 373 573 815
-----------------------------------------------------------------------------------------------------------------
Total loans $ 4,111,382 $ 3,976,513 $ 3,765,725 $ 3,673,047 $ 3,488,000
=================================================================================================================
</TABLE>
- 13 -
<PAGE>
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 compares third quarter 2000 activity in the reserve
with 2000's second quarter and the third quarter of 1999 and also compares
nine-month activity for each year.
<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) 2000 2000 1999 2000 1999
===================================================================================================================
<S> <C> <C> <C> <C> <C>
Balance at the beginning of period $50,359 $48,552 $41,554 $44,466 $40,282
Reserves acquired in bank purchase - - - 1,461 -
Provision for possible loan losses 2,500 2,500 2,000 7,500 4,250
Loans charged to the reserve:
Commercial, financial and agricultural 712 1,498 541 2,804 4,102
Real estate (primarily commercial) 341 656 491 1,191 1,084
Loans to individuals 605 579 739 1,845 1,938
Lease financing 1 12 48 31 89
-------------------------------------------------------------------------------------------------------------------
Total charge-offs 1,659 2,745 1,819 5,871 7,213
-------------------------------------------------------------------------------------------------------------------
Recoveries of loans previously charged off:
Commercial, financial and agricultural
loans 754 705 1,307 2,202 3,784
Real estate (primarily commercial) 749 1,104 414 2,240 1,119
Loans to individuals 494 243 282 1,199 1,516
Lease financing - - - - -
-------------------------------------------------------------------------------------------------------------------
Total recoveries 1,997 2,052 2,003 5,641 6,419
-------------------------------------------------------------------------------------------------------------------
Net charge-offs (recoveries) (338) 693 (184) 230 794
-------------------------------------------------------------------------------------------------------------------
Balance at the end of period $53,197 $50,359 $43,738 $53,197 $43,738
===================================================================================================================
Ratios:
Net annualized charge-offs (recoveries)
to average loans (.03)% .07 % (.02)% .01 % .03 %
Gross annualized charge-offs to
average loans .16 % .28 % .21 % .20 % .29 %
Recoveries to gross charge-offs 120.37 % 74.75 % 110.12 % 96.08 % 88.99 %
Reserve for possible loan losses to loans
at period end 1.29 % 1.27 % 1.25 % 1.29 % 1.25 %
===================================================================================================================
</TABLE>
Table 3 shows total non-performing loans at September 30, 2000 and at the
end of the preceding four quarters. Non-performing loans decreased $2 million,
or 9%, from June 30, 2000, but are $6 million, or 40%, higher than year-end
1999. The $11 million increase in the first quarter of 2000 resulted from the
placement of a substantial portion of a commercial credit relationship on
non-accrual status because of negative earnings trends, even though the credit
was performing.
- 14 -
<PAGE>
<TABLE>
<CAPTION>
TABLE 3. NON-PERFORMING ASSETS
=======================================================================================================================
2000 1999
=======================================================================================================================
(dollars in thousands) September June March December September
30 30 31 31 30
=======================================================================================================================
<S> <C> <C> <C> <C> <C>
Loans accounted for on a non-accrual basis $ 20,879 $ 23,105 $ 25,348 $ 13,601 $ 10,095
Restructured loans 477 490 507 1,634 1,722
-----------------------------------------------------------------------------------------------------------------------
Total non-performing loans 21,356 23,595 25,855 15,235 11,817
Foreclosed assets 1,242 1,209 1,401 1,831 1,178
-----------------------------------------------------------------------------------------------------------------------
Total non-performing assets $ 22,598 $ 24,804 $ 27,256 $ 17,066 $ 12,995
=======================================================================================================================
Loans 90 days past due still accruing $ 10,059 $ 2,587 $ 2,922 $ 2,617 $ 2,249
=======================================================================================================================
Ratios:
Non-performing assets to loans
plus foreclosed assets .55 % .62 % .72 % .46 % .37 %
Reserve for possible loan losses to
non-performing loans 249.10 % 213.43 % 187.79 % 291.87 % 370.13 %
Loans 90 days past due still accruing to loans .24 % .07 % .08 % .07 % .06 %
========================================================================================================================
</TABLE>
At September 30, 2000, the total of loans internally classified as having
above normal credit risk represented approximately 6% of total loans. This is up
from approximately 5% at December 31, 1999. The September 30, 2000 total of $262
million is $66 million above year-end 1999's total and $37 million above the
total at June 30, 2000. The increase during 2000 has come mainly from several
unrelated loans that were classified as warranting special attention because of
risk characteristics that indicate potential weaknesses. This classification
category is up $42 million from year-end 1999 to a total of $146 million at
quarter end. Loans classified as having well-defined weaknesses that, if not
corrected, would likely result in some loss decreased in the third quarter, by
$4 million, to a total of $100 million. Loans for which full repayment is
doubtful also decreased, by $2 million, to a total of $16 million. This total
is still $9 million higher than at the end of 1999, reflecting mainly the impact
of the first quarter increase in non-accrual loans mentioned above. The growth
in the total of loans that have been internally identified as having above
normal credit risk was an important factor in the increase in the reserve for
possible loan losses from year-end 1999. Management continually reviews the
loan portfolio to identify potentially weak or deteriorating credits.
INVESTMENT IN SECURITIES
At September 30, 2000, total securities were $1.42 billion, compared to
$1.29 billion at December 31, 1999 and $1.31 billion at September 30, 1999. The
Company acquired an investment securities portfolio totaling $122 million with
Bank of Houston in early 2000. The impact of this acquisition coupled with the
use of some investment maturity proceeds to fund loan growth, resulted in an
increase in the average investment in securities in the third quarter of 2000 of
$57 million, or 4%, from the same period in 1999.
Third quarter average investment in securities is up slightly from 2000's
second quarter, but this was offset by a similar decrease in liquidity
management investments. Average loan growth during the third quarter of 2000 was
primarily funded by short-term borrowings.
During 1999, the Company began building its investment in securities
classified as available for sale, primarily to increase liquidity management
flexibility. At September 30, 2000, such
- 15 -
<PAGE>
securities constituted 31% of the investment portfolio, compared to 16% at
year-end 1999 and 14% at September 30, 1999. The net unrealized loss on
available for sale securities was $1.4 million at September 30, 2000 and $4.8
million at December 31, 1999.
DEPOSITS AND SHORT-TERM BORROWINGS
Average deposits and short-term borrowings increased $666 million, or 14%,
over the third quarter of 1999, including $174 million from Bank of Houston.
Compared to the second quarter of 2000, average deposits and borrowings are up
$154 million, or 3%. These funds supported the growth in average loans between
these periods.
At September 30, 2000, total deposits were $4.59 billion, compared to $4.31
billion at year-end 1999 and $4.20 billion on September 30, 1999. Average
deposits for the third quarter were $4.53 billion, which represents an increase
of 8% over 1999's third quarter, and a decrease of less than 1% below the second
quarter of 2000. The Bank of Houston acquisition contributed approximately half
of the year-over-year increase.
Non-interest-bearing demand deposits grew 5%, or $61 million, on average
over the third quarter of 1999, excluding Bank of Houston, with both commercial
and consumer accounts contributing to this growth. Average demand deposits in
the third quarter were 2%, or $28 million, lower than 2000's second quarter,
partly reflecting seasonal factors.
Average money market deposits decreased 3%, or $20 million, from the third
quarter of 1999 and 1% from 2000's second quarter. Excluding Bank of Houston,
this deposit category would have decreased 8%, or $58 million, from the prior
year's quarter. At the same time, average core time deposits of less than $100
thousand, excluding Bank of Houston, rose $140 million, or 19%, compared to the
third quarter of 1999 and are up $45 million, or 5%, from 2000's second quarter.
The increases in time deposits reflect the Company's strategy of responding to
rising short-term market rates with competitively structured time deposit
products.
Average time deposits over $100 thousand are also up strongly in the third
quarter of 2000, by $92 million, or 15%, over the third quarter of 1999,
excluding Bank of Houston. Compared to the second quarter of 2000, these time
deposits are up $9 million, or 1%. Close to half of the year-over-year growth
has come from certain wholesale customers and may be volatile.
Total average short-term borrowings increased $333 million in the third
quarter of 2000 compared to last year's third quarter. To leverage its loan
growth, the Company has made greater use of available wholesale short-term
funding sources in 2000. Also contributing to this increase was the $36 million,
or 11%, growth in average funds flowing to the Company's sweep repurchase
product, which in turn reflects the growth in commercial relationships.
Short-term borrowings totaled $799 million at September 30, 2000 and $541
million at December 31, 1999.
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 subsidiary banks. 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 Company and the subsidiary banks have access to external funding
sources in the financial markets, and Whitney National Bank has developed the
ability to gather deposits at a nationwide
- 16 -
<PAGE>
level. During 1999, and continuing into 2000, the Company also began building
investment in securities classified as available for sale, further increasing
liquidity management flexibility. During the third quarter of 2000, Whitney
National Bank became a member of the Federal Home Loan Bank system. This
membership provides access to a variety of Federal Home Loan Bank advance
products as an alternative source of funds.
The subsidiary banks had close to $1.2 billion in unfunded loan commitments
outstanding at September 30, 2000, a 6% decrease from 1999'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.
ASSET/LIABILITY MANAGEMENT
As stated in the Company's 1999 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
Banks obtain measures of their interest rate sensitivity by running net interest
income simulations, monitoring the economic value of equity, and preparing gap
analyses. The actual impact of changing interest rates on net interest income is
dependent on many factors including the growth of earning assets, the mix of
earning assets and interest-bearing liabilities, the timing of repricing of
assets and liabilities, the magnitude of interest rate changes, interest rate
spreads and the level of success of asset/liability management strategies
implemented.
CAPITAL ADEQUACY
The Company's capital amounts and ratios are presented in Table 4:
TABLE 4. RISK-BASED CAPITAL AND CAPITAL RATIOS
--------------------------------------------------------------------------------
September 30 December 31
(dollars in thousands) 2000 1999
--------------------------------------------------------------------------------
Tier 1 regulatory capital $ 515,418 $ 527,206
Tier 2 regulatory capital 53,197 44,466
--------------------------------------------------------------------------------
Total regulatory capital $ 568,615 $ 571,672
--------------------------------------------------------------------------------
Risk-weighted assets $4,606,743 $4,134,623
--------------------------------------------------------------------------------
Ratios
Leverage (Tier 1 capital to average assets) 8.78 % 9.99 %
Tier 1 capital to risk-weighted assets 11.19 % 12.75 %
Total capital to risk-weighted assets 12.34 % 13.83 %
Shareholders' equity to total assets 9.72 % 10.21 %
Tangible equity to total assets 8.50 % 9.60 %
--------------------------------------------------------------------------------
The Company remained strongly capitalized at September 30, 2000. Whitney
National Bank's regulatory capital ratios far exceed the minimum required
ratios, and the Bank has been categorized as "well-capitalized" in the most
recent notice received from its regulatory agency. The acquisition
- 17 -
<PAGE>
of First Ascension Bancorp, Inc. will not have a significant impact on the
Company's regulatory capital ratios.
The reduction in regulatory capital levels and ratios since year-end 1999
mainly reflects the impact of the acquisition of Bank of Houston. In this
transaction, the Company acquired $44 million of intangible assets that are
deducted in determining regulatory capital. Bank of Houston also contributed
approximately $60 million to the overall increase in risk-weighted assets.
In each of the first three quarters of 2000, the Company declared a $.36 per
share dividend on its common stock. This represents a $.03 per share, or 9%,
increase over the quarterly dividend declared throughout 1999.
Year 2000 Remediation
For over two years the Company and others within and outside the banking
industry worked diligently to address the risks posed by the Year 2000 date
change to both information processing systems and non-information systems that
employ embedded information technology. The success of these efforts was widely
publicized. When the Company began processing in the new century it experienced
only a few date-related problems and suffered no disruptions to its operations.
Critical outside services were all available. This was also true with major
customers and suppliers.
Costs associated with the Company's Year 2000 remediation efforts included
both internal costs, primarily personnel-related, and costs from using outside
consultants. Such costs were insignificant in the third quarter of 1999. For the
first nine months of 1999, non-interest expense included approximately $1.0
million of internal costs and of $.6 million of external costs. There were no
significant costs during the first nine months of 2000, and none are anticipated
for the remainder of the year.
- 18 -
<PAGE>
RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income (TE) for the third quarter of 2000 was $63.3 million, a
$4.9 million, or 8%, improvement over the third quarter of 1999, with Bank of
Houston contributing approximately $1.1 million to the increase. Loan growth was
the major factor behind the year-over-year improvement. The net interest margin,
which is net interest income (TE) as a percent of average earning assets, was
4.62% this quarter, compared to 4.85% in the third quarter of 1999 and 4.81% in
2000's second quarter. The recent compression in the margin reflects both the
pressure from higher market rates on the cost of interest-bearing funds and the
gradual increase in the proportion of higher-cost sources of funds supporting
the growth in earning assets. Tables 5 and 6 show the factors contributing to
these changes and the components of these changes.
Compared to the prior year's quarter, average loans grew 18% in 2000's
third quarter, while other average earning assets increased 4%, resulting in a
more favorable mix of earning assets. As a percent of earning assets, average
loans increased to 74% in the current quarter, compared to 71% in 1999's third
quarter. The improved asset mix as well as a 63 basis point increase in loan
yields (TE) led to a 54 basis point increase in the yield (TE) on total earning
assets. Loans yields increased with the rise in market rates as reflected by the
140 basis point increase in the average prime rate for the third quarter of 2000
compared to 1999's third quarter. The earning asset yield also showed a 15 basis
point increase from the second quarter of 2000.
The percent of earning assets funded by interest-bearing sources increased
to approximately 74% in the third quarter of 2000 from 73% in both the
year-earlier quarter and 2000's second quarter. In addition, higher-cost sources
of funds, in particular short-term wholesale borrowings, grew to 37% of average
interest-bearing funds in the third quarter of 2000, up from 30% in 1999's third
quarter and 33% in the second quarter of 2000. These changes coupled with the
impact of rising short-term market rates led to an increase in the total cost of
funding earning assets of 77 basis points over 1999's third quarter and 34 basis
points over the second quarter of 2000.
For the first nine months of 2000, net interest income (TE) was $188
million, a 10% increase over the same period in 1999. The net interest margin
was 4.76% for the 2000 period and 4.80% 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 1999 and 2000.
- 19 -
<PAGE>
<TABLE>
<CAPTION>
TABLE 5. SUMMARY OF AVERAGE BALANCE SHEETS, NET INTEREST INCOME(TE)(a) AND INTEREST RATES
====================================================================================================================================
(dollars in thousands) Third Quarter 2000 Second Quarter 2000 Third Quarter 1999
------------------------------------------------------------------------------------------------------------------------------------
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 (TE)(a),(b) $4,033,625 $ 86,867 8.57% $3,863,079 $ 80,597 8.39% $3,419,433 $68,359 7.94%
------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury securities 119,741 1,834 6.09 126,678 1,930 6.13 145,773 2,208 6.01
U.S. agency securities 617,730 9,468 6.13 598,202 9,186 6.14 472,316 7,002 5.93
Mortgage-backed securities 485,682 7,545 6.21 483,772 7,444 6.15 542,146 8,227 6.07
Obligations of states and political
subdivisions (TE) (a) 177,892 3,251 7.31 183,509 3,415 7.44 191,491 3,596 7.51
Federal Reserve stock and other corporate
securities 15,724 238 6.05 9,042 143 6.33 7,875 114 5.74
------------------------------------------------------------------------------------------------------------------------------------
Total investment in securities(c) 1,416,769 22,336 6.30 1,401,203 22,118 6.32 1,359,601 21,147 6.22
------------------------------------------------------------------------------------------------------------------------------------
Federal funds sold and short-term investments 12,588 220 6.92 25,037 401 6.44 14,946 198 5.23
------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 5,462,982 $109,423 7.98% 5,289,319 $103,116 7.83% 4,793,980 $89,704 7.44%
------------------------------------------------------------------------------------------------------------------------------------
NON-EARNING ASSETS
Other assets 533,268 533,367 481,054
Reserve for possible loan losses (52,544) (50,631) (42,446)
------------------------------------------------------------------------------------------------------------------------------------
Total assets $5,943,706 $5,772,055 $5,232,588
====================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES
NOW account deposits $ 475,381 $ 1,623 1.36% $ 503,556 $ 1,689 1.35% $ 466,409 $ 1,559 1.33%
Money market deposits 752,734 7,977 4.22 758,101 7,548 4.00 772,250 7,027 3.61
Savings deposits 437,434 2,205 2.01 457,083 2,275 2.00 478,867 2,428 2.01
Other time deposits 903,589 12,422 5.47 858,997 10,763 5.04 735,994 8,524 4.59
Time deposits $100,000 and over 713,224 10,728 5.98 704,084 9,825 5.61 595,825 7,143 4.76
------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 3,282,362 34,955 4.24 3,281,821 32,100 3.93 3,049,345 26,681 3.47
------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 772,276 11,193 5.77 590,554 7,655 5.21 439,569 4,605 4.16
------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 4,054,638 $ 46,148 4.53% 3,872,375 $ 39,755 4.13% 3,488,914 $31,286 3.56%
------------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST-BEARING DEPOSITS
AND SHAREHOLDERS' EQUITY
Demand deposits 1,247,314 1,275,245 1,147,040
Other liabilities 59,290 53,215 41,714
Shareholders' equity 582,464 571,220 554,920
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders'
equity $5,943,706 $5,772,055 $5,232,588
------------------------------------------------------------------------------------------------------------------------------------
Net interest income and margin (TE) (a) $ 63,275 4.62% $ 63,361 4.81% $58,418 4.85%
------------------------------------------------------------------------------------------------------------------------------------
Net earning assets and spread $1,408,344 3.45% $1,416,944 3.70% $1,305,066 3.88%
====================================================================================================================================
<FN>
(a) Tax-equivalent (TE) amounts are calculated using a marginal federal income tax rate of 35%.
(b) Average balance includes non-accruing loans of $21,375, $25,084 and $10,167, respectively, in the third and second
quarters of 2000 and the third quarter of 1999.
(c) Average balance excludes unrealized gain or loss on securities available for sale.
</FN>
</TABLE>
- 20 -
<PAGE>
<TABLE>
<CAPTION>
TABLE 5. SUMMARY OF AVERAGE BALANCE SHEETS, NET INTEREST INCOME(TE)(a) AND INTEREST RATES (continued)
=======================================================================================================================
Nine Months Ended Nine Months Ended
(dollars in thousands) September 30, 2000 September 30, 1999
-----------------------------------------------------------------------------------------------------------------------
Average Average
Balance Interest Rate Balance Interest Rate
-----------------------------------------------------------------------------------------------------------------------
ASSETS
EARNING ASSETS
<S> <C> <C> <C> <C> <C> <C>
Loans (tax-equivalent)(a),(b) $ 3,871,305 $243,257 8.39% $3,316,213 $195,460 7.88%
-----------------------------------------------------------------------------------------------------------------------
U.S. Treasury securities 124,212 5,665 6.09 168,633 7,856 6.23
U.S. agency securities 576,760 26,171 6.05 489,439 22,040 6.00
Mortgage-backed securities 492,357 22,662 6.14 534,042 24,262 6.06
Obligations of states and political
subdivisions (tax-equivalent) (a) 184,243 10,423 7.54 185,100 10,593 7.63
Federal Reserve stock and other corporate
securities 11,134 506 6.06 8,149 425 6.95
-----------------------------------------------------------------------------------------------------------------------
Total investment in securities(c) 1,388,706 65,427 6.28 1,385,363 65,176 6.27
-----------------------------------------------------------------------------------------------------------------------
Federal funds sold and short-term investments 21,178 990 6.24 66,840 2,384 4.77
-----------------------------------------------------------------------------------------------------------------------
Total earning assets 5,281,189 $309,674 7.83% 4,768,416 $263,020 7.37%
-----------------------------------------------------------------------------------------------------------------------
NON-EARNING ASSETS
Other assets 527,754 494,018
Reserve for possible loan losses (49,993) (41,516)
-----------------------------------------------------------------------------------------------------------------------
Total assets $ 5,758,950 $5,220,918
-----------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES
NOW account deposits $ 490,820 $ 4,982 1.36% $ 491,842 $ 4,993 1.36%
Money market deposits 755,857 22,699 4.01 741,304 19,875 3.58
Savings deposits 449,450 6,749 2.01 486,023 7,263 2.00
Other time deposits 860,168 32,996 5.12 745,513 26,226 4.70
Time deposits $100,000 and over 690,474 29,165 5.64 582,612 20,664 4.74
-----------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 3,246,769 96,591 3.97 3,047,294 79,021 3.47
-----------------------------------------------------------------------------------------------------------------------
Short-term borrowings 630,770 24,894 5.27 414,294 12,562 4.05
-----------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 3,877,539 $121,485 4.18% 3,461,588 $ 91,583 3.54%
-----------------------------------------------------------------------------------------------------------------------
NON-INTEREST-BEARING DEPOSITS
AND SHAREHOLDERS' EQUITY
Demand deposits 1,254,896 1,157,137
Other liabilities 53,914 40,001
Shareholders' equity 572,601 562,192
-----------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 5,758,950 $5,220,918
-----------------------------------------------------------------------------------------------------------------------
Net interest income and margin (tax-equivalent) (a) $188,189 4.76% $171,437 4.80%
-----------------------------------------------------------------------------------------------------------------------
Net earning assets and spread $ 1,403,650 3.65% $1,306,828 3.83%
-----------------------------------------------------------------------------------------------------------------------
<FN>
(a)Tax-equivalent (TE) amounts are calculated using a marginal federal income tax rate of 35%.
(b)Average balance includes non-accruing loans of $21,473 and $10,430, respectively, in the first nine months of 2000 and
1999.
(c)Average balance excludes unrealized gain or loss on securities available for sale.
</FN>
</TABLE>
- 21 -
<PAGE>
<TABLE>
<CAPTION>
TABLE 6. SUMMARY OF CHANGES IN NET INTEREST INCOME(TE)(a)
====================================================================================================================================
Third Quarter 2000 Compared to: Nine Months Ended September
Second Quarter 2000 Third Quarter 1999 30, 2000 Compared to 1999
------------------------------------------------------------ ----------------------------
Due To Total Due To Total Due To Total
Change In Increase Change In Increase Change In Increase
(dollars in thousands) Volume Rate (Decrease) Volume Rate (Decrease) Volume Rate (Decrease)
------------------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME(TE)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans (TE)(a) $4,200 $ 2,070 $6,270 $12,804 $ 5,704 $18,508 $34,268 $13,529 $47,797
------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury securities (87) (9) (96) (404) 30 (374) (2,029) (162) (2,191)
U.S. agency securities 299 (17) 282 2,222 244 2,466 3,961 170 4,131
Mortgage-backed securities 29 72 101 (876) 194 (682) (1,915) 315 (1,600)
Obligations of states and political
subdivisions (TE) (a) (103) (61) (164) (250) (95) (345) (49) (121) (170)
Federal Reserve stock and other
corporate securities 101 (6) 95 118 6 124 141 (60) 81
------------------------------------------------------------------------------------------------------------------------------------
Total investment in securities 239 (21) 218 810 379 1,189 109 142 251
------------------------------------------------------------------------------------------------------------------------------------
Federal funds sold and
short-term investments (210) 29 (181) (35) 57 22 (1,976) 582 (1,394)
------------------------------------------------------------------------------------------------------------------------------------
Total interest income (TE) (a) 4,229 2,078 6,307 13,579 6,140 19,719 32,401 14,253 46,654
------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
NOW account deposits (79) 13 (66) 28 36 64 (10) (1) (11)
Money market deposits (44) 473 429 (184) 1,134 950 397 2,427 2,824
Savings deposits (75) 5 (70) (215) (8) (223) (549) 35 (514)
Other time deposits 628 1,031 1,659 2,124 1,774 3,898 4,263 2,507 6,770
Time deposits $100,000 and over 148 755 903 1,552 2,033 3,585 4,185 4,316 8,501
------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 578 2,277 2,855 3,305 4,969 8,274 8,286 9,284 17,570
------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 2,632 906 3,538 4,358 2,230 6,588 7,819 4,513 12,332
------------------------------------------------------------------------------------------------------------------------------------
Total interest expense 3,210 3,183 6,393 7,663 7,199 14,862 16,105 13,797 29,902
------------------------------------------------------------------------------------------------------------------------------------
Change in net interest income (TE)(a)$1,019 $(1,105) $ (86) $ 5,916 $(1,059) $ 4,857 $16,296 $ 456 $16,752
====================================================================================================================================
<FN>
(a) Tax-equivalent (TE) amounts are calculated using a marginal federal income tax rate of 35%.
</FN>
</TABLE>
- 22 -
<PAGE>
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses was $2.5 million for the third
quarter of 2000, the same as in each of 2000's first two quarters, and up from a
$2.0 million provision in the third quarter of 1999. The $7.5 million
year-to-date provision in 2000 compares to a $4.3 million provision in 1999. Net
charge-offs were $.2 million for the first nine months of 2000 and $.8 million
for the comparable period in 1999. The higher provisions in 2000 reflect
management's consideration, among other factors, of the increase in
non-performing loans and total loans internally classified as having above
normal credit risk as well as continued strong loan growth.
For a discussion of changes in the reserve for possible loan losses,
non-performing assets and general asset quality, see the earlier section on
Loans and Reserve for Possible Loan Losses.
NON-INTEREST INCOME
Excluding net gains on dispositions of surplus banking property and
pre-1933 assets, non-interest income was $17.5 million in the third quarter, up
8%, or $1.3 million, from the third quarter of 1999. Excluding Bank of Houston,
the year over year increase was 5%, or $.8 million. The Company recognized net
gains of $.5 million in 2000's third quarter and $1.0 million in the third
quarter of 1999.
Credit card fee income rose 13%, or $.4 million, to $3.7 million. This
reflects increased transaction volumes, both from an expanded merchant customer
base and from the growing use of the Company's debit card products by
individuals and businesses. Trust service fee income rose to $2.3 million, an
increase of 10% over the same quarter last year, continuing to show the benefits
of marketing and incentive-based sales efforts in an expanded market area. The
volatility in the equities markets during 2000, however, has tended to moderate
the year-to-year growth rate for this income category.
Quarterly income from service charges on deposit accounts was up 2%, to
$7.3 million, in 2000, but would be down 3%, or approximately $.2 million, if
Bank of Houston income is excluded. This decrease is partly attributable to the
impact of higher short-term market rates which increase the earnings credit
allowed as an offset to service charges on certain business accounts. As
expected, higher market interest rates beginning in the latter part of 1999 also
led to fewer conventional fixed-rate mortgage loan originations, and to a 28%,
or $.2 million, decrease in income from secondary mortgage market operations. As
mentioned earlier, during this same period the Company increased its origination
of adjustable-rate mortgage loans that it holds in its loan portfolio. Mortgage
origination activity began to shift back in favor of fixed-rate products during
the third quarter, helped by recent rate movements and a refocusing of sales
efforts.
Other non-interest income, excluding the net gains and Bank of Houston,
increased 22%, or $.6 million, from the third quarter of 1999. Approximately
half of this increase came from investment service fees. Whitney Securities, the
Company's broker-dealer operation, grew rapidly from its inception in the third
quarter of 1999, and was the primary factor behind this improvement. Also
included in this income category is operating revenue from the parking facility
that was opened next to the Company's main office late in the second quarter of
1999. This revenue source contributed approximately $.1 million to the overall
increase.
- 23 -
<PAGE>
For the nine-month period, non-interest income was $52.7 million, 9% higher
than the $48.6 million in the same period of 1999. Excluding Bank of Houston and
net gains on sales of surplus property and pre-1933 assets, year-to-date
non-interest income is up 6% in the current year. Percentage changes by category
were generally consistent with the quarterly changes: credit card fee income was
up 20% year to date; trust services income was up 9%; service charges on deposit
accounts was down 2%, if Bank of Houston is excluded; and secondary mortgage
market income was down 49%. Other non-interest income, excluding the net gains
and Bank of Houston, increased 29% between these periods.
NON-INTEREST EXPENSE
Non-interest expense was $52.3 million in the third quarter of 2000,
including $2.3 million of operating expenses for Bank of Houston and $.6 million
of one-time expenses associated with converting Bank of Houston's information
and operating systems. Excluding these expenses related to Bank of Houston,
third quarter 2000 expense increased 3%, or $1.4 million, over the third quarter
of 1999. On this same basis, non-interest expense in the third quarter was
around $.3 million lower than the second quarter of 2000.
Personnel expense increased by 9%, or $2.1 million, to $26.0 million for
the quarter compared to 1999's third quarter. Excluding Bank of Houston, the
increase was 5%, or $1.2 million, with employee compensation rising 8%, or $1.6
million, and employee benefits decreasing 10%, or $.4 million. Following a 7%
reduction in the Company's full-time equivalent employee base during 1999, there
has been limited employment growth through the first nine months of 2000. The
favorable impact of this net staff reduction on third quarter 2000 employee
compensation was offset by regular merit increases and higher employee sales
incentive compensation, and by a $.6 million net increase in executive incentive
plan compensation. Reductions in retirement plan expense, in particular for the
defined benefit plan, offset an anticipated rise in health plan fees, leading to
the net decrease in employee benefits expense.
Equipment and data processing expense decreased 5% in the third quarter of
2000, and is down 8%, or $.5 million, from the year-earlier period, if Bank of
Houston is excluded. During the first half of 1999, the Company completed the
final phases of the rollout of a new branch delivery system and standardized
office automation network, as well as the automation of certain back-office
functions and other enhancements to data processing and communications systems.
The lack of any significant capital projects since then has helped contain the
growth in this expense category. The elimination of company-owned vehicles in
early 2000 also had a favorable impact.
In early 2000, the Company relocated office facilities for certain of its
Louisiana bank operations to more suitable leased premises. The net increase in
recurring expense from this move and Bank of Houston were the main factors
behind the 8%, or $.3 million, increase in net occupancy expense in the third
quarter of 2000. Excluding Bank of Houston, the year-over-year increase would
have been 4%.
Credit card transaction processing services expense increased in 2000's
third quarter, which is somewhat less than would be expected given the growth in
merchant transaction volumes and revenue discussed earlier. The relationship
between the year-to-date increases in these non-interest expense and income
categories, as noted below, is more indicative of current operations.
- 24 -
<PAGE>
The intangible assets acquired with Bank of Houston will initially generate
$2.7 million in amortization expense on an annual basis. The $.7 million impact
on the third quarter accounted for the increase in amortization expense over
1999's third quarter. The Bank of Houston system conversion costs of $.6 million
make up most of the 82% increase in legal and professional fees expense in the
third quarter of 2000.
Other non-interest expenses increased 9%, or $.6 million, to $7.0 million
in the third quarter of 2000. Excluding Bank of Houston, the increase was 4%, or
$.3 million. During the third quarter, higher expenses were incurred associated
with an increase in marketing campaigns, the industry-wide increase in deposit
insurance rates, and processing services for the brokerage operations. These and
other increased expenses were partly offset by the benefits of expense control
and reduction efforts.
For the nine-month period, non-interest expense increased 7%, or $10.5
million. The year-to-date increase would be 3%, or $4.4 million, if Bank of
Houston intangible amortization of $1.7 million and other non-interest expenses
are excluded as well as the one-time Bank of Houston system conversion expenses.
Personnel expense, excluding Bank of Houston, increased 4%, or $3.0 million,
through the first nine months of 2000. The favorable impact of staff reductions
in 1999 was again offset by regular merit raises and higher costs of employee
incentive programs, and by a net increase of $1.6 million in executive incentive
compensation expense. Credit card transaction processing services expense
increased 13%, consistent with the 20% year-to-date growth in revenues cited
earlier. Legal and professional fees, excluding those related to system
conversions, decreased 8%, or $.3 million, largely reflecting the use of
consultants in early 1999 to complete Year 2000 remediation testing as discussed
earlier. Changes in other major non-interest expense categories between the
first nine months of 1999 and 2000 were generally consistent with the
quarter-to-quarter changes and were mainly the result of the same factors cited
in the discussion of quarterly results above.
- 25 -
<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
- 26 -
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a)(3) Exhibits:
Exhibit 3.1 - Copy of Company's Composite Charter, as amended April 22,
1998.
Exhibit 3.2 - Copy of Company's Bylaws, as amended May 24, 2000.
Exhibit 10.1 - Stock Option Agreement between Whitney Holding
Corporation and William L. Marks (filed as Exhibit 10.2 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1990 (Commission file number 0-1026) and incorporated by reference).
Exhibit 10.2 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and William L. Marks (filed as Exhibit 10.3 to
the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1993 (Commission file number 0-1026) and incorporated by
reference).
Exhibit 10.3 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and R. King Milling (filed as Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1993 (Commission file number 0-1026) and incorporated by reference).
Exhibit 10.4 - Executive agreement between Whitney Holding Corporation,
Whitney National Bank and 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 10.5 - 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 10.6 - 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 10.7 - 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).
- 27 -
<PAGE>
Exhibit 10.8 - 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 10.8a - 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 10.9 - 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 10.10 - 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 10.11 - 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 10.12 - 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 10.12a - 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 10.13 - 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 10.14 - 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).
- 28 -
<PAGE>
Exhibit 10.15 - Form of Amendment to Section 2.1e of the Executive
agreements filed as Exhibits 10.2 through 10.8 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 10.16 - Executive agreement between Whitney National Bank of
Mississippi and Guy C. Billups, Jr. (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 10.17 - Form of Amendment adding subsection 2.1g to the
Executive Agreements set forth as Exhibits 10.2 through 10.8 and
Exhibit 10.15 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 10.18 - Executive agreement between Whitney Holding
Corporation, Whitney National Bank and Thomas L. Callicutt, Jr. (filed
as Exhibit 10.20 to the Company's Quarterly Report on form 10-Q for the
quarter ended September 30, 1999 (Commission file number 0-1026) and
incorporated by reference).
Exhibit 21 - Subsidiaries
Whitney Holding Corporation owns 100% of the capital stock of Whitney
National Bank, successor by merger in early January 1998 to Whitney
Bank of Alabama, Whitney National Bank of Florida and Whitney National
Bank of Mississippi, and successor by merger on October 6, 2000 to Bank
of Houston. Effective November 2, 2000, Whitney Holding Corporation
also owns over 99% of the capital stock of First National Bank of
Gonzales.
All other subsidiaries considered in the aggregate would not constitute
a significant subsidiary.
Exhibit 27 - Financial Data Schedule
- 29 -
<PAGE>
(b) Reports on Form 8-K
None
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
WHITNEY HOLDING CORPORATION
(Registrant)
By:/s/Thomas L. Callicutt, Jr.
---------------------------------
Thomas L. Callicutt, Jr.
Executive Vice President and
Chief Financial Officer
(Principal Accounting Officer)
November 13, 2000
---------------------------------
Date
- 30 -
<PAGE>
Exhibit 3.1
COMPOSITE CHARTER
OF
WHITNEY HOLDING CORPORATION
ARTICLE I
The name of this corporation is: WHITNEY HOLDING CORPORATION.
ARTICLE II
The objects and purposes for which this corporation is organized and
the nature of the business to be carried on by it are hereby declared to be:
(a) To acquire, purchase, construct, buy, lease, improve, develop,
manage and operate property of all kinds, real, personal and mixed wherever
situated, particularly but not exclusively in the State of Louisiana.
(b) To execute, issue, negotiate bills of exchange, promissory notes,
bonds, debentures, and other securities of this corporation from time to time,
and to secure the same by mortgage, pledge, deed of trust or otherwise, and to
exchange, discount, mortgage, pledge or hypothecate the same for any of the
objects or purposes of this corporation.
(c) To acquire all or any part of the good will, rights, assets,
property and business of any person, entity, partnership, association or
corporation, whether heretofore or hereafter engaged in any business similar to
any business which the corporation has power to conduct, or not; to pay for the
same in cash or in stocks, bonds or other obligations of the corporation, or
otherwise; to hold, utilize and in any manner dispose of the whole or any part
of the rights and property so acquired, and to undertake and assume in
connection therewith any liabilities of any such person, entity, partnership,
association or corporation and conduct in any lawful manner the whole or any
part of the business thus acquired.
(d) To purchase, subscribe for, take, acquire, hold for investment or
otherwise, and to enjoy and sell, exchange, deal in, guarantee, mortgage,
hypothecate, or otherwise dispose of, shares of stock, bonds, debentures,
promissory notes, certificates of beneficial interest, obligations and
securities of any person, firm or corporation, including investment companies,
financial institutions, and banks, and, while the owner thereof, to exercise and
enjoy all rights and privileges incident to ownership.
(e) To enter into, make and perform contracts of every kind and
description with any person, firm, association, corporation, municipality,
county, state, body politic or government or colony or dependency thereof.
(f) To have one or more offices in which to carry on all or any part of
its operations and business, and without restriction or limit as to amount to
purchase or otherwise acquire, hold, own, mortgage, sell, convey, or otherwise
dispose of, real and personal property of every class and description.
(g) To loan its uninvested funds and/or surplus from time to time to
such extent as the corporation may deem advisable in call and/or time loans,
upon such security, if any, as the Board of Directors may determine.
(h) To purchase, hold, sell, transfer, reissue or cancel the shares of
its own capital stock or any securities or other obligations of the corporation
in the manner and to the extent now or hereafter permitted by the laws of
Louisiana.
(i) To do everything necessary, proper, advisable or convenient for the
accomplishment of any of the powers herein set forth and to do every other act
and thing incidental thereto or connected therewith, provided the same be not
forbidden by the laws of Louisiana.
- 31 -
<PAGE>
(j) In general, to carry on and undertake any lawful business which a
corporation may do under the provisions of Chapter 1 of Title 12 of the
Louisiana Revised Statutes of 1950 and all amendments thereof.
(k) The objects, purposes and terms specified in any clause herein
shall be in no manner limited or restricted by reference to or inference from
any other clause, but the objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as independent objects, purposes and
powers and in furtherance and not in limitation of the general powers conferred
by the laws of the State of Louisiana.
ARTICLE III
The duration of this corporation shall be ninety-nine (99) years from
the date hereof.
ARTICLE IV
The location and post-office address of its registered office is - 228
St. Charles Street, New Orleans, Louisiana
ARTICLE V
The full names and post-office addresses of its registered agents are:
Malcolm L. Monroe 1424 Whitney Building
New Orleans, Louisiana
J. Rabun Monroe 1424 Whitney Building
New Orleans, Louisiana
ARTICLE VI
1. The authorized capital stock of this corporation is fixed at one
hundred million (100,000,000) shares of Common Stock, all of one series, without
nominal or par value.
2. On and as of the close of business on February 21, 1984, each and
every share then issued of the no par value Common Stock of this corporation
shall without any other or further action or proceeding by the corporation, or
by the Board of Directors or any shareholder thereof, be reclassified into two
shares of no par value Common Stock, and the allocated value of each share of
Common Stock theretofore issued by this corporation will be divided into two
equal amounts that will be attributed to the two shares of Common Stock into
which each such share shall have been reclassified as aforesaid, so that the
aggregate allocated value of all issued shares of Common Stock immediately after
such reclassification shall be equal to the aggregate allocated value of all
issued shares of Common Stock immediately prior to such reclassification.
3. Every share shall be equal in all respects to every other share. No
transfer of shares shall be binding upon the corporation unless recorded on its
books. All shares shall be fully paid for and non-assessable.
4. Without necessity of action by the shareholders, the authorized
shares of no par value Common Stock of this corporation may be issued by the
corporation, in whole or in part, on one or more occasions, for such
consideration and on such other terms and conditions as may be fixed by the
Board of Directors. Upon payment or delivery of the consideration fixed by the
Board of Directors for newly issued shares, such shares shall be deemed fully
paid for and shall not be liable to any further call of assessment.
ARTICLE VII
- 32 -
<PAGE>
The amount of paid-in capital with which the corporation shall begin
business is hereby fixed at One Thousand ($1,000.00) Dollars, which, at the
execution of these Articles, has been paid in cash.
ARTICLE VIII
1. All powers of the corporation shall be vested in a classified Board
of Directors composed of not less than five (5) nor more than twenty-five (25)
members. The precise number of said Directors shall be fixed solely by the Board
of Directors. In the election of Directors at the 1984 annual meeting of
stockholders, the Directors shall be divided into five classes, as nearly equal
in number as possible, with the term of office of the first class to expire at
the 1985 annual meeting of stockholders, the term of office of the second class
to expire at the 1986 annual meeting of stockholders, the term of office of the
third class to expire at the 1987 annual meeting of stockholders, the term of
office of the fourth class to expire at the 1988 annual meeting of stockholders,
and the term of office of the fifth class to expire at the 1989 annual meeting
of stockholders. At each annual meeting of stockholders following the 1984
annual meeting, Directors equal to the number of the class whose term then
expires shall be elected to hold office until the fifth succeeding annual
meeting of stockholders or until their successors are elected and qualified.
Directors of the corporation shall be stockholders. The annual meeting of
stockholders shall be on such dates as may be fixed by the Board of Directors.
2. A director may be removed from office, with or without cause, only
by the affirmative vote of ninety per cent (90%) of the voting power present at
the special meeting of stockholders called for that purpose for which there is a
quorum (as hereinafter defined). For purposes of the vote required by paragraphs
2 and 5 of this Article VIII, the term "quorum" shall mean the presence, in
person or by proxy, of the holders of ninety per cent (90%) of the total voting
power of the corporation.
3. A person chosen by the Board of Directors to fill a vacancy on the
Board of Directors shall hold office until the next annual meeting of
stockholders.
4. The Board of Directors may adopt, and from time to time repeal,
amend and supplement by-laws containing any provision with respect to the
government of the corporation and the powers of the Directors and shareholders
not prohibited by law and not inconsistent with this Charter. The Board of
Directors at the first meeting following the annual meeting of stockholders
shall elect officers of the corporation, and shall have power in its discretion
to unite one or more offices and to confer the same on any one person.
5. No amendment to the Charter of the corporation shall amend, alter,
change or repeal any of the provisions of this Article VIII, unless the
amendment effecting such amendment, alteration, change or repeal shall receive
the affirmative vote of ninety per cent (90%) of the voting power present at a
shareholders meeting for which there is a quorum (as defined above); provided
that this paragraph 5 shall not apply to, and such ninety per cent (90%) vote
shall not be required for, any amendment, alteration, change or repeal
unanimously recommended to the stockholders by the Board of Directors of the
corporation at a time when no person, corporation or other entity is the
beneficial owner, directly or indirectly, of more than ten per cent (10%) of the
outstanding shares of stock of the corporation entitled to vote in election of
directors, considered for purposes of this Article VIII as one class.
ARTICLE IX
The name and post-office addresses of the first Directors are:
Andrew P. Carter, 1424 Whitney Building, New Orleans, Louisiana.
John L. Glover, 1424 Whitney Building, New Orleans, Louisiana.
Walter J. Suthon, III, 1424 Whitney Building, New Orleans, Louisiana.
ARTICLE X
Until their successors are duly elected and qualified, the following
shall be the officers of the corporation:
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Walter J. Suthon, III - President
Andrew P. Carter - Vice President
John L. Glover - Secretary-Treasurer
ARTICLE XI
The names and post-office addresses of the incorporators and a
statement of the number of shares subscribed by each are as follows:
Andrew P. Carter 1424 Whitney Building 7 shares
New Orleans, Louisiana
John L. Glover 1424 Whitney Building 6 shares
New Orleans, Louisiana
Walter J.Suthon,III 1424 Whitney Building 7 shares
New Orleans, Louisiana
ARTICLE XII
The corporation may purchase and/or redeem its own shares in the manner
and under the conditions provided in Sections 23 and 45 of the Business
Corporation Law. Such shares so purchased (unless it is desired that such shares
shall be cancelled) shall be considered treasury shares, and may be reissued and
disposed of as authorized by law, or may be cancelled and the capital stock
reduced, as the Board of Directors may, from time to time, determine.
ARTICLE XIII
This corporation claims, and shall have the benefit of the provisions
of Section 63 of the Business Corporation Law, being Title 12, Section 63,
Louisiana Revised Statutes of 1950.
ARTICLE XIV
This Charter may be amended and the capital of this corporation may be
increased or decreased in the method and manner provided by law and by vote of
the holders of a majority of the stock.
ARTICLE XV
1. The corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any action, suit or proceeding, whether
civil, criminal, administrative or investigative, including any action by or in
the right of this corporation, by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another business, foreign or non-profit corporation, partnership, joint venture
or other enterprise against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; however, in case of
actions by or in the right of the corporation:
(a) As to persons other than directors and officers, the
aforesaid indemnity shall be limited to expenses, including attorneys' fees and
amounts paid in settlement not exceeding, in the judgment of the board of
directors, the estimated expense of litigating the action to conclusion,
actually and reasonably incurred in connection with the defense or settlement of
such action, but the board of directors is authorized in its discretion to pay
or provide additional indemnity in particular cases; and
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(b) As to directors and officers (including those serving as
such for other entities at the request of the corporation) the aforesaid
indemnity shall be limited as provided in Subparagraph (a) only if it would
permit indemnification of an individual for the results of such individual's (i)
willful or intentional misconduct, (ii) breach of duty of loyalty to the
corporation or to the entity otherwise served by the individual, or (iii)
engaging in a transaction from which the individual derived an improper personal
benefit; and
(c) No indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be liable
for willful or intentional misconduct in the performance of his duty to the
corporation unless and only to the extent that the court shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, he is fairly and reasonably entitled to indemnity for
such expenses which the court shall deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
2. To the extent that a director, officer, employee or agent has been
successful on the merits or otherwise in defense of any such action, suit or
proceeding, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses, including attorneys' fees, actually and reasonably
incurred by him in connection therewith.
3. Any indemnification under Paragraph 1 of this Article (excluding an
advance of expenses as provided in Paragraph 4), unless ordered by the court
shall be made by the corporation only as authorized in a specific case upon a
determination that the applicable standard of conduct has been met. Such
determination shall be made:
(a) By the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding; or
(b) If such a quorum is not obtainable and the board of
directors so directs, by independent legal counsel; or
(c) By the shareholders.
4. Subsequent to the institution of such an action, suit or
proceeding;
(a) As to directors (including officers who are also
directors), expenses actually and reasonably incurred in defending such an
action, suit or proceeding shall be paid by the corporation in advance of the
final disposition thereof, upon receipt of an undertaking by or on behalf of the
director or former director incurring such expenses, to repay such amount if it
shall be finally determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation, as authorized in this Article;
and
(b) As to persons other than directors, expenses actually and
reasonably incurred in defending such an action, suit or proceeding may be paid
by the corporation in advance of the final disposition thereof, if authorized by
the board of directors, upon receipt of an undertaking by or on behalf of such
person to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation, as authorized in this Article.
5. The indemnification and advancement of expenses provided by or
granted pursuant to this Article are subject to any validly applicable
limitations of state or federal law, but they shall not be deemed exclusive of
any other rights to which the person indemnified or obtaining advancement of
expenses is entitled under any applicable law, by-law, agreement, authorization
of shareholders or directors, regardless of whether directors authorizing such
indemnification are beneficiaries thereof, or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and
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shall inure to the benefit of his heirs and legal representative; however, no
such other indemnification measure shall permit indemnification of any person
for the results of such person's willful or intentional misconduct.
6. The corporation shall have full power to procure or maintain
insurance or other similar arrangement, all as provided in Louisiana Revised
Statutes 12:83 (F) & (G), as amended.
7. An officer or director of the Company shall not be personally liable
for monetary damages to the Company or its shareholders for the breach of his
fiduciary duty as an officer or director, except as regards:
(i) any breach of such director's or officer's duty of loyalty to the
Company or its shareholders; (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii) liability
under R.S. 12:92(D); or (iv) any transaction from which the officer or director
derived an improper personal benefit.
No amendment or repeal of this Section 7 shall adversely affect any
elimination or limitation of liability of an officer or director under this
Section with respect to conduct occurring prior to the time of such amendment or
repeal.
ARTICLE XVI
1. The affirmative vote of ninety per cent (90%) of the voting power
present at a shareholders meeting for which there is a quorum (as hereinafter
defined) shall be required for the adoption, approval or authorization of a
business combination (as hereinafter defined) with any other entity (as
hereinafter defined) if, as of the record date for the determination of
stockholders entitle to notice thereof and to vote thereon, such other entity is
the beneficial owner, directly or indirectly, of more than ten per cent (10%) of
the outstanding shares of stock of the corporation entitled to vote in elections
of directors, considered for the purposes of this Article XVI as one class;
provided that such ninety per cent (90%) voting requirement shall not be
applicable if:
(a) The cash, or fair market value of other consideration, to be
received per share by capital stockholders of the corporation in such business
combination bears the same or a greater percentage relationship to the market
price of the corporation's Common Stock immediately prior to the announcement of
such business combination as the highest per share price (including brokerage
commissions and/or soliciting dealers' fees) which such other entity has
theretofore paid for any of the shares of the corporation's Common Stock already
owned by it bears to the market price of the Common Stock of the corporation
immediately prior to the commencement of acquisition of the corporation's Common
Stock by such other entity;
(b) The cash, or fair market value of other consideration, to be
received per share by capital stockholders of the corporation in such business
combination (i) is not less than the highest per share price (including
brokerage commissions and/or soliciting dealers' fees) paid by such other entity
in acquiring any of its holdings of the Corporation's Common Stock, and (ii) is
not less than the earnings per share of Common Stock of the corporation for the
four full consecutive fiscal quarters immediately preceding the record date for
solicitation of votes on such business combination, multiplied by the then
price/earnings multiple (if any) of such other entity as customarily computed
and reported in the financial community;
(c) After such other entity has acquired a ten per cent (10%) interest
and prior to the consummation of such business combination: (i) such other
entity shall have taken steps to ensure that the corporation's Board of
Directors included at all times representation by continuing director(s) (as
hereinafter defined) proportionate to the stockholdings of the corporation's
public capital stockholders not affiliated with such other entity (with a
continuing director to occupy any resulting fractional board position); (ii)
there shall have been no reduction in the rate of dividends payable on the
corporation's Common Stock except as may have been approved by a unanimous vote
of the directors; (iii) such other entity shall not have acquired any newly
issued shares of stock, directly or indirectly, from the corporation (except
upon conversion of convertible securities acquired by it prior to obtaining a
ten per cent (10%) interest or as a result of a pro rata stock dividend or stock
split); and (iv) such other entity shall not have acquired any additional shares
of the
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corporation's outstanding Common Stock or securities convertible into Common
Stock except as a part of the transaction which results in such other entity
acquiring its ten per cent (10%) interest;
(d) Such other entity shall not have (i) received the benefit, directly
or indirectly (except proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or tax credits provided by the
corporation, or (ii) made any major change in the corporation's business or
equity capital structure without the unanimous approval of the directors, in
either case prior to the consummation of such business combination; and
(e) A proxy statement responsive to the requirements of the Securities
Exchange Act of 1934 shall be mailed to public stockholders of the corporation
for the purpose of soliciting stockholder approval of such business combination
and shall contain at the front thereof, in a prominent place, any
recommendations as to the advisability (or inadvisability) of the business
combination which the continuing directors, or any of them, may choose to state
and, if deemed advisable by a majority of the continuing directors, an opinion
of a reputable investment banking firm as to the fairness (or not) of the terms
of such business combination, from the point of view of the remaining public
stockholders of the corporation (such investment banking firm to be selected by
a majority of the continuing directors and to be paid a reasonable fee for their
services by the corporation upon receipt of such opinion).
The provisions of this Article XVI shall also apply to a business
combination with any other entity which at any time has been the beneficial
owner, directly or indirectly, of more than ten per cent (10%) of the
outstanding shares of stock of the corporation entitled to vote in elections of
directors, considered for the purposes of this Article XVI as one class,
notwithstanding the fact that such other entity has reduced its shareholdings
below ten per cent (10%) if, as of the record date for the determination of
stockholders entitled to notice of and to vote on the business combination, such
other entity is an "affiliate" of the corporation (as hereinafter defined).
2. As used in this Article XVI, (a) the term "other entity" shall
include any corporation, person or other entity and any other entity with which
it or its "affiliate" or "associate" (as defined below) has any agreement,
arrangement or understanding, directly or indirectly, for the purpose of
acquiring, holding, voting or disposing of stock of the corporation, or which is
its "affiliate" or "associate" as those terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 as in
effect on January 1, 1984, together with the successors and assigns of such
persons in any transaction or series of transactions not involving a public
offering of the corporation's stock within the meaning of the Securities Act of
1933; (b) another entity shall be deemed to be the beneficial owner of any
shares of stock of the corporation which the other entity (as defined above) has
the right to acquire pursuant to any agreement, or upon exercise of conversion
rights, warrants or options, or otherwise; (c) the outstanding shares of any
class of stock of the corporation shall include shares deemed owned through
application of clause (b) above but shall not include any other shares which may
be issuable pursuant to any agreement, or upon exercise of conversion rights,
warrants or options, or otherwise; (d) the term "business combination" shall
include any merger or consolidation of the corporation or its principal
subsidiary with or into any other corporation, or the sale or lease of all or
any substantial part of the assets of the corporation or its principal
subsidiary to, or any sale or lease to the corporation or any subsidiary thereof
in exchange for securities of the corporation or its principal subsidiary of any
assets of any other entity; (e) the term "continuing director" shall mean a
person who was a member of the Board of Directors of the corporation elected by
the public stockholders prior to the time that such other entity acquired in
excess of ten per cent (10%) of the stock of the corporation entitled to vote in
elections of directors, or a person recommended to succeed a continuing director
by a majority of continuing directors; (f) for purposes of the vote required by
this Article XVI, the term "quorum" shall mean the presence, in person or by
proxy, of the holders of ninety per cent (90%) of the total voting power of the
corporation; and (g) for the purposes of subparagraphs l(a) and (b) of this
Article XVI the term "other consideration to be received" shall mean Common
Stock of the corporation retained by its existing public stockholders in the
event of a business combination with such other entity in which the corporation
is the surviving corporation.
3. A majority of the continuing directors shall have the power and duty
to determine for the purposes of this Article XVI on the basis of information
known to them whether (a) such other entity beneficially owns more than ten per
cent (10%) of the outstanding shares of stock of the corporation entitled to
vote in elections of directors, (b) an other
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entity is an "affiliate" or "associate" (as defined above) of another or (c) an
other entity has an agreement, arrangement or understanding with another.
4. No amendment to the Charter of the corporation shall amend, alter,
change or repeal any of the provisions of this Article XVI, unless the amendment
effecting such amendment, alteration, change or repeal shall receive the
affirmative vote of ninety per cent (90%) of the total voting power present at a
shareholders meeting for which there is a quorum (as defined above); provided
that this paragraph 4 shall not apply to, and such ninety per cent (90%) vote
shall not be required for, any amendment, alteration, change, or repeal
unanimously recommended to the stockholders by the Board of Directors of the
corporation if all of such directors are persons who would be eligible to serve
as "continuing directors" within the meaning of paragraph 2 of this Article XVI.
5. Nothing contained in this Article XVI shall be construed to
relieve any other entity from any fiduciary obligation imposed by law.
ARTICLE XVII
Shareholders shall not have preemptive rights.
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Exhibit 3.2
BY-LAWS
OF
WHITNEY HOLDING CORPORATION
Section 1.
----------
Meetings of the Board of Directors of this corporation may be held by means
of conference telephone or similar communications equipment.
Section 2.
----------
A. Without limiting in any way the indemnification by the corporation of
persons as provided in its charter and the existing applicable law, the
corporation shall have authority to indemnify persons in accordance with
Louisiana Revised Statutes 12:83 as it may from time to time become amended,
supplemented or replaced.
B. The corporation shall have authority to procure or maintain insurance or
other similar arrangement in accordance with Louisiana Revised Statutes 12:83(F)
and (G) as they may from time to time become amended, supplemented or replaced.
Section 3.
----------
The Company may issue stock certificates signed by the Chief Executive
Officer and Secretary of the Company. In addition to the Chief Executive Officer
and Secretary of the Company, the President, any Vice President and any
Assistant Secretary, respectively, of the Company may sign the Company's stock
certificates. All stock certificates representing shares of the Company's stock,
whether currently outstanding or that may be issued in the future, may bear
facsimile signatures of the Company's Chief Executive Officer and Secretary, or
other authorized officers, provided such certificates are or have been
countersigned by a transfer agent or registrar other than the Company itself or
an employee of the Company.
Section 4.
----------
There shall be a standing committee of this Corporation, appointed by the
Board, to be known as the Executive Committee, consisting of the Chairman of the
Board, the President, and such other Directors as may be appointed from time to
time, each to serve a 12 months' term, four (4) members of which shall
constitute a quorum for the transaction of business. This committee shall have
power to direct and transact all business of the Corporation, which properly
might come before the Board of Directors, except such as the Board only, by law,
is authorized to perform. The Executive Committee shall report its actions in
writing at each regular meeting of the Board of Directors, which shall approve
or disapprove the report and record such action in the minutes of the meeting.
There shall be an Audit Committee of the Whitney Holding Corporation
comprised of at least three members of the Board of Directors. No Audit
Committee members shall be officers of the Whitney Holding Corporation or the
Whitney National Bank. Committee members shall be
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<PAGE>
appointed by the Chairman of the Board and shall be designated each year. In
lieu of making the appointment of all the members of the Committee, the Chairman
of the Board may designate one member of the Board as Chairman of the Audit
Committee and authorize him to select not less than two other members of the
Board to constitute the Committee.
As a part of fulfilling their responsibilities, the Audit Committee shall
have the authority to examine the affairs of the Whitney Holding Corporation and
subsidiaries or shall cause such examination to be made of the Holding
Corporation and subsidiaries by Audit Services. The audit schedule, which is the
product of a formal risk analysis process, is approved by the Committee prior to
the beginning of each calendar year. Audits are to be performed utilizing
programs that are comprehensive and current, and it is expected that
deficiencies are to be addressed timely by management.
The Audit Committee shall report as is appropriate to the Board of
Directors at least once in a six month period.
Section 5.
A. Directors shall retire from the Board of this corporation upon the
earlier occurrence of either of the following events:
1. Upon attainment of the Director's 70th birthday. A Director
shall retire effective the date of the annual meeting
of shareholders following his or her 70th birthday.
2. Upon the Director's resignation or retirement from the
principal business enterprise by which he or she was employed
when he or she became a Director ("principal business
enterprise"). A Director shall retire from the Board effective
the date of the annual meeting of shareholders following the
expiration of a one year period beginning with his or her
resignation or retirement from his or her principal business
enterprise, unless the Director meets both of the following
requirements:
a. He or she has assumed a prominent role in a business or
community organization during the one year period; and
b. Both the Director's role and the organization's status in a
significant Whitney market satisfy this corporation's
customary requirements for the nomination of a new Director.
B. Neither event set forth in Section 5A shall require (i) the retirement
at any time of any Director who, on October 26, 1994, had already achieved the
age of 70 or had already resigned or retired from his or her principal business
enterprise or (ii) the retirement prior to the end of his or her term of any
Director who, on July 22, 1998, had already achieved the age of 70 or had
already resigned or retired from his or her principal business enterprise.
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