NEW ORLEANS, Oct. 19, 2009 (GLOBE NEWSWIRE) -- Whitney Holding Corporation (Nasdaq:WTNY) (the "Company") recorded a net loss of $30.0 million for the third quarter of 2009 compared to a net loss of $21.3 million for the second quarter of 2009. Including dividends on preferred stock, the loss to common shareholders was $34.1 million, or $.50 per diluted common share, for the third quarter of 2009 compared to $25.4 million, or $.38 per diluted share, for the second quarter of 2009. The Company earned $7.0 million, or $.11 per diluted common share, for the third quarter of 2008.
"Whitney is a strong franchise that continues to report a stable core deposit base and a top ranked net interest margin," said John C. Hope, III, Chairman and CEO. "Our loan portfolio outside of Florida is performing in line with our expectations despite increasing levels of stress from the overall economic environment and we are managing all problem areas aggressively. While addressing credit issues is currently our top priority, we remain committed to our Strategic Plan with the goal of creating long-term value for our shareholders."
The impact of the acquisition of Parish National Corporation (Parish) is reflected in the Company's financial information from the November 7, 2008 acquisition date.
KEY COMPONENTS OF THIRD QUARTER FINANCIAL RESULTS
Loans and Earning Assets
Total loans at the end of the third quarter of 2009 were down $315 million from June 30, 2009, with reductions in most sectors of the loan portfolio and across our regional markets. Commercial and industrial (C&I) loans, including commercial real estate (CRE) loans secured by properties used in the borrower's business, were down $215 million, construction land and land development loans were down $76 million and other CRE loans were down $15 million. Included in the quarter's decline were charge-offs of $63.5 million, foreclosures of approximately $16 million and larger problem loan resolutions of $16 million.
Average loans for the third quarter of 2009 were down $284 million, or 3%, compared to the second quarter of 2009. Earning assets were also down approximately 3% on average compared to the second quarter.
Our largest industry exposure is to the oil & gas sector and loans outstanding to those customers represent $962 million, or approximately 11% of loans at September 30, 2009. The shared national credits portfolio totaled $681 million at September 30, 2009, down $102 million from June 30, 2009. Approximately $282 million of the total shared national credit portfolio is related to the oil & gas sector.
Deposits and Funding
Average deposits in the third quarter of 2009 were down 1.5%, or $137 million, compared to the second quarter of 2009. Period-end deposits were down approximately $264 million or 3% compared to June 30, 2009, reflecting mainly declines in competitively bid public fund deposits and deposits held in treasury-management sweep products used by corporate customers.
Noninterest-bearing demand deposits were stable to slightly higher in the third quarter of 2009 and comprised 34% of total average deposits and funded approximately 29% of average earning assets for the period. The percentage of funding from all noninterest-bearing sources totaled 34%. Higher-cost interest-bearing funds, which include time deposits and borrowings, funded 31% of average earning assets in the third quarter of 2009, compared to 33% in the second quarter of 2009.
Net Interest Income
Net interest income (TE) for the third quarter of 2009 decreased less than 1%, or $.8 million, compared to the second quarter of 2009. Although average earning assets were down 3% between these periods, the net interest margin (TE) improved 6 basis points to 4.11% from 4.05%. The margin expansion reflected both a small increase in earning asset yields and a further reduction in the cost of funds. Asset yields benefited from an improved asset mix, while the reduction in cost of funds was driven mainly by the maturity or renewal of higher-cost certificates of deposit in the current low interest rate environment. Certificates of deposit from a special campaign a year earlier matured or renewed in September 2009. The start of scheduled rate reductions on deposits from a special money market campaign offered during the second quarter of 2009 also benefited the cost of funds in the third quarter of 2009.
The lost interest on nonaccruing loans reduced the net interest margin by approximately 20 basis points in both the third and second quarters of 2009. The rates on approximately 28% and 27% of the loan portfolio at September 30, 2009 vary based on LIBOR and prime rate benchmarks, respectively. The Bank has increased the use of rate floors on its loan products and approximately 58% of our LIBOR/prime-based loans currently have rate floors.
Provision for Credit Losses and Credit Quality
Whitney provided $80.5 million for credit losses in the third quarter of 2009, compared to $74.0 million in the second quarter of 2009. Provisions related to impaired loans accounted for more than half of the quarter's total provision for credit losses. Over $30 million of the impaired loan provisions came from the Tampa, Florida market reflecting in part the continued declines in appraised real estate values. The remainder of the quarter's provision for credit losses was related to a net increase in total criticized loans for the third quarter of 2009 of $131 million, smaller consumer charge-offs and qualitative adjustments. Approximately $100 million of the increase in criticized loans came from oil & gas industry credits and commercial construction, land and land development loans serviced from our Texas market.
Net loan charge-offs in the third quarter of 2009 were $61.9 million, or 2.86%, of average loans on an annualized basis, compared to $46.7 million or 2.09% of average loans in the second quarter of 2009. The majority of total gross charge-offs, approximately 76%, came from credits in the Florida market and was heavily concentrated in residential-related real estate loans.
The provision for loan losses exceeded net charge-offs by $19.1 million during the third quarter which further strengthened the allowance for loan losses to 2.81% of total loans at September 30, 2009, up from 2.50% at June 30, 2009 and 1.55% at September 30, 2008.
Nonperforming loans totaled $406 million at September 30, 2009, a decrease of $7.3 million from June 30, 2009. At September 30, 2009 loans past due 90 days or more and still accruing totaled $15 million, down from $20 million at June 30, 2009. Loans past due 30-89 days totaled approximately $87 million, reflecting a $10 million increase from June 30, 2009.
Noninterest Income
Noninterest income for the third quarter of 2009 decreased 10%, or $3.2 million, from the second quarter of 2009. Fee income from Whitney's secondary mortgage market operations declined 27%, or $.8 million, on a slowdown in refinancing activity. The other noninterest income category declined a total of $2.9 million from the second quarter of 2009 which included a $1.8 million distribution from an investment in a local small business investment company and an additional $.5 million of revenue from the Company's grandfathered foreclosed assets. Part of the decline in other noninterest income for the third quarter of 2009 was offset by the increase in bankcard fees that reflected a change in the reporting of certain transactions by a new processor.
Noninterest Expense
Total noninterest expense for the third quarter of 2009 decreased $8.2 million, or 7%, from the second quarter of 2009. The second quarter of 2009 included a $5.5 million special deposit insurance assessment that was imposed industry-wide by the FDIC. The provision for valuation allowances on foreclosed property decreased $3.0 million in the third quarter of 2009. Loan collection costs and foreclosed asset management expenses were stable during the third quarter, although they remain at elevated levels.
Total personnel expense for the third quarter of 2009 decreased $.8 million, or 1.5%, from the second quarter of 2009. There was a $.5 million decrease in share-based compensation that reflected the lower cost of the 2009 award relative to the cost of prior awards that vested in the second quarter of 2009. Sales-based incentive plan compensation was also lower in the third quarter. No management cash bonus has been accrued year-to-date in 2009.
Capital
Regulatory capital ratios remain above those required for the Company and Whitney National Bank to be considered well-capitalized institutions. The Company's tangible common equity ratio was 6.42% at the end of the third quarter of 2009, unchanged from June 30, 2009. The Company's regulatory leverage, tier 1 and total capital ratios at September 30, 2009 were 8.99%, 10.55% and 13.37% respectively.
"Based on what we know today, management believes that the current capital levels of the Company and the Bank are adequate to absorb further credit losses during this difficult economic cycle," said John Hope.
Conference Call and Additional Financial Information
Management will host a conference call today at 4:30 p.m. CT to review third quarter 2009 results. Analysts and investors may dial in and participate in the question/answer session. A live listen-only webcast of the call will be available under the "Investor Relations" section of our website at http://www.whitneybank.com. To participate in the Q&A portion of the call, dial (877) 627-6544 or (719) 325-4819. An audio archive of the conference call will be available under the Investor Relations section of our website. A replay of the call will also be available through October 26, 2009 by dialing (888) 203-1112 or (719) 457-0820, passcode 6114697.
This earnings release, including additional financial tables and a slide presentation related to third quarter 2009 results, is posted in the Investor Relations section of the Company's web site at http://investor.whitneybank.com/releases.cfm?ReleasesType=Earnings&Year=2009.
Whitney Holding Corporation, through its banking subsidiary Whitney National Bank, serves the five-state Gulf Coast region stretching from Houston, Texas; across southern Louisiana and the coastal region of Mississippi; to central and south Alabama; the panhandle of Florida; and the Tampa Bay metropolitan area of Florida.
The Whitney Holding Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5777
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, and we intend such forward-looking statements to be covered by the safe harbor provisions therein and are including this statement for purposes of invoking these safe-harbor provisions. Forward-looking statements provide projections of results of operations or of financial condition or state other forward-looking information, such as expectations about future conditions and descriptions of plans and strategies for the future. The forward-looking statements made in this release include, but may not be limited to, expectations regarding future loan demand, capital strength and credit quality trends in the overall loan portfolio, stress test results, and specific industry or geographic segments within the portfolio.
Whitney's ability to accurately project results or predict the effects of future plans or strategies is inherently limited. Although Whitney believes that the expectations reflected in its forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ from those expressed in Whitney's forward-looking statements include, but are not limited to, those risk factors outlined in Whitney's public filings with the Securities and Exchange Commission, which are available at the SEC's internet site (http://www.sec.gov).
You are cautioned not to place undue reliance on these forward-looking statements. Whitney does not intend, and undertakes no obligation, to update or revise any forward-looking statements, whether as a result of differences in actual results, changes in assumptions or changes in other factors affecting such statements, except as required by law.
(WTNY-E)
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WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
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FINANCIAL HIGHLIGHTS
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(dollars in
thousands, Third Second Third Nine Months Ended
except per Quarter Quarter Quarter September 30
share data) 2009 2009 2008 2009 2008
---------------------------------------------------------------------
INCOME DATA
Net
interest
income $109,854 $110,572 $111,435 $332,041 $336,105
Net
interest
income
(tax-
equivalent) 110,975 111,820 112,600 335,719 339,760
Provision
for credit
losses 80,500 74,000 40,000 219,500 89,000
Noninterest
income 29,227 32,431 25,472 90,924 80,122
Net
securi-
ties
gains in
non-
interest
income 195 -- 67 195 67
Noninterest
expense 103,596 111,807 89,549 312,251 259,068
Net income
(loss) (30,024) (21,301) 7,048 (62,464) 49,777
Net income
(loss) to
common
share-
holders (34,091) (25,368) 7,048 (74,623) 49,777
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QUARTER-END
BALANCE
SHEET DATA
Loans $8,476,989 $8,791,840 $8,077,775 $8,476,989 $8,077,775
Investment
securities 2,005,881 1,942,365 1,812,025 2,005,881 1,812,025
Earning
assets 10,561,425 10,861,061 9,943,868 10,561,425 9,943,868
Total
assets 11,656,468 11,975,082 10,987,447 11,656,468 10,987,447
Non-
interest-
bearing
deposits 3,130,426 3,081,617 2,809,923 3,130,426 2,809,923
Total
deposits 8,880,377 9,144,041 8,054,431 8,880,377 8,054,431
Share-
holders'
equity 1,465,431 1,487,994 1,183,001 1,465,431 1,183,001
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AVERAGE
BALANCE
SHEET DATA
Loans $8,661,806 $8,945,911 $8,007,507 $8,890,667 $7,853,872
Investment
securities 1,966,020 1,906,932 1,853,581 1,919,666 1,997,942
Earning
assets 10,723,215 11,062,643 9,892,165 10,945,607 9,922,077
Total
assets 11,796,108 12,140,311 10,902,329 12,030,560 10,846,118
Non-
interest-
bearing
deposits 3,083,404 3,082,248 2,771,101 3,105,176 2,722,253
Total
deposits 9,076,350 9,212,882 8,230,249 9,135,921 8,275,705
Share-
holders'
equity 1,485,525 1,520,609 1,192,535 1,512,967 1,211,902
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COMMON SHARE
DATA
Earnings
(loss) per
share
Basic $(.50) $(.38) $.11 $(1.10) $.77
Diluted (.50) (.38) .11 (1.10) .76
Cash divi-
dends per
share $.01 $.01 $.31 $.03 $.93
Book value
per share,
end of
period $17.30 $17.63 $18.49 $17.30 $18.49
Tangible
book value
per share,
end of
period $10.63 $10.93 $13.13 $10.63 $13.13
Trading
data
High sales
price $11.27 $15.33 $33.02 $16.16 $33.02
Low sales
price 7.94 8.33 13.96 7.94 13.96
End-of-
period
closing
price 9.54 9.16 24.25 9.54 24.25
Trading
volume 49,059,850 62,308,611 72,540,716 160,264,736 171,546,268
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RATIOS
Return on
average
assets (1.01)% (.70)% .26% (.69)% .61%
Return on
average
common
equity (11.36) (8.30) 2.35 (8.19) 5.49
Net
interest
margin
(TE) 4.11 4.05 4.53 4.10 4.57
Average
loans to
average
deposits 95.43 97.10 97.29 97.32 94.90
Efficiency
ratio 73.99 77.51 64.89 73.22 61.71
Annualized
expenses
to average
assets 3.51 3.68 3.29 3.46 3.18
Allowance
for loan
losses to
loans, end
of period 2.81 2.50 1.55 2.81 1.55
Annualized
net
charge-
offs to
average
loans 2.86 2.09 1.22 2.11 .87
Nonper-
forming
assets to
loans plus
foreclosed
assets and
surplus
property,
end of
period 5.34 5.17 3.15 5.34 3.15
Average
share-
holders'
equity to
average
total
assets 12.59 12.53 10.94 12.58 11.17
Tangible
common
equity to
tangible
assets,
end of
period 6.42 6.42 7.89 6.42 7.89
Leverage
ratio, end
of period 8.99 9.21 8.17 8.99 8.17
---------------------------------------------------------------------
Tax-equivalent (TE) amounts are calculated using a federal income tax
rate of 35%.
The efficiency ratio is noninterest expense to total net interest
(TE) and noninterest income (excluding securities gains and losses).
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WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
---------------------------------------------------------------------
QUARTERLY TRENDS
---------------------------------------------------------------------
(dollars in
thousands, Third Second First Fourth Third
except per Quarter Quarter Quarter Quarter Quarter
share data) 2009 2009 2009 2008 2008
---------------------------------------------------------------------
INCOME DATA
Net
interest
income $109,854 $110,572 $111,615 $119,540 $111,435
Net
interest
income
(tax-
equivalent) 110,975 111,820 112,924 120,902 112,600
Provision
for credit
losses 80,500 74,000 65,000 45,000 40,000
Noninterest
income 29,227 32,431 29,266 27,050 25,472
Net
securities
gains in
non-
interest
income 195 -- -- -- 67
Noninterest
expense 103,596 111,807 96,848 92,026 89,549
Net income
(loss) (30,024) (21,301) (11,139) 8,808 7,048
Net income
(loss) to
common
share-
holders (34,091) (25,368) (15,164) 8,220 7,048
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QUARTER-END
BALANCE
SHEET DATA
Loans $8,476,989 $8,791,840 $8,953,307 $9,081,850 $8,077,775
Investment
securities 2,005,881 1,942,365 1,889,161 1,939,355 1,812,025
Earning
assets 10,561,425 10,861,061 10,908,643 11,209,246 9,943,868
Total
assets 11,656,468 11,975,082 12,020,481 12,380,501 10,987,447
Non-
interest-
bearing
deposits 3,130,426 3,081,617 3,176,783 3,233,550 2,809,923
Total
deposits 8,880,377 9,144,041 9,212,361 9,261,594 8,054,431
Share-
holders'
equity 1,465,431 1,487,994 1,522,085 1,525,478 1,183,001
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AVERAGE
BALANCE
SHEET DATA
Loans $8,661,806 $8,945,911 $9,068,755 $8,700,317 $8,007,507
Investment
securities 1,966,020 1,906,932 1,885,158 1,876,338 1,853,581
Earning
assets 10,723,215 11,062,643 11,054,605 10,719,892 9,892,165
Total
assets 11,796,108 12,140,311 12,159,252 11,777,922 10,902,329
Non-
interest-
bearing
deposits 3,083,404 3,082,248 3,150,615 2,975,869 2,771,101
Total
deposits 9,076,350 9,212,882 9,119,000 8,646,612 8,230,249
Share-
holders'
equity 1,485,525 1,520,609 1,533,293 1,264,714 1,192,535
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COMMON SHARE
DATA
Earnings
(loss) per
share
Basic $(.50) $(.38) $(.22) $.12 $.11
Diluted (.50) (.38) (.22) .12 .11
Cash divi-
dends per
share $.01 $.01 $.01 $.20 $.31
Book value
per share,
end of
period $17.30 $17.63 $18.22 $18.29 $18.49
Tangible
book value
per share,
end of
period $10.63 $10.93 $11.46 $11.48 $13.13
Trading
data
High sales
price $11.27 $15.33 $16.16 $26.37 $33.02
Low sales
price 7.94 8.33 8.17 14.14 13.96
End-of-
period
closing
price 9.54 9.16 11.45 15.99 24.25
Trading
volume 49,059,850 62,308,611 48,896,275 42,771,277 72,540,716
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RATIOS
Return on
average
assets (1.01)% (.70)% (.37)% .30% .26%
Return on
average
common
equity (11.36) (8.30) (4.96) 2.67 2.35
Net
interest
margin (TE) 4.11 4.05 4.13 4.49 4.53
Average
loans to
average
deposits 95.43 97.10 99.45 100.62 97.29
Efficiency
ratio 73.99 77.51 68.11 62.20 64.89
Annualized
expenses
to average
assets 3.51 3.68 3.19 3.13 3.29
Allowance
for loan
losses to
loans, end
of period 2.81 2.50 2.17 1.77 1.55
Annualized
net
charge-
offs to
average
loans 2.86 2.09 1.41 .91 1.22
Non-
performing
assets to
loans plus
foreclosed
assets and
surplus
property,
end of
period 5.34 5.17 4.50 3.61 3.15
Average
share-
holders'
equity to
average
total
assets 12.59 12.53 12.61 10.74 10.94
Tangible
common
equity to
tangible
assets,
end of
period 6.42 6.42 6.68 6.49 7.89
Leverage
ratio, end
of period 8.99 9.21 9.47 9.87 8.17
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Tax-equivalent (TE) amounts are calculated using a federal income tax
rate of 35%.
The efficiency ratio is noninterest expense to total net interest
(TE) and noninterest income (excluding securities gains and losses).