NEW ORLEANS, Jan. 28, 2009 (GLOBE NEWSWIRE) -- Whitney Holding Corporation's (Nasdaq:WTNY) net income available to common shareholders totaled $8.2 million in the quarter ended December 31, 2008, compared with $7.0 million for the third quarter of 2008 and $30.2 million for 2007's fourth quarter. Earnings were $.12 per diluted common share for the fourth quarter of 2008, $.11 for the current year's third quarter and $.45 for the fourth quarter of 2007. For the year ended December 31, 2008, net income available to common shareholders totaled $58.0 million, or $.89 per diluted share, compared with earnings of $151.1 million for 2007, or $2.23 per diluted share.
"Results for the fourth quarter were similar to the results we reported for the past two quarters, with high credit costs and some worsening in credit quality metrics, mainly in our Tampa market," said John C. Hope, III, Chairman and CEO. "However, once again, we were able to pay for credit costs out of earnings, report a profit and -- just as important -- still make loans."
Loans increased $1 billion during the quarter and deposits increased $1.2 billion. Approximately $605 million of the increase in loans and $635 million of the increase in deposits was related to the acquisition of Parish National Corporation (Parish), which was first announced on June 9, 2008. This transaction, which closed on November 7, 2008, was valued at approximately $158 million, with $97 million paid to Parish's shareholders in cash and the remainder in Whitney stock totaling 3.33 million shares.
"Whitney is and has always been a fundamentally good bank," said Hope. "The additional funds received through our issuance of preferred stock to the U.S. Treasury strengthens our ability to continue providing both lending and deposit services to customers and communities across our footprint as we and the entire nation face the challenges that have and will come from these unprecedented economic times."
Whitney completed its $300 million preferred stock sale under the Treasury's Capital Purchase Program on December 19, 2008.
HIGHLIGHTS OF FOURTH QUARTER FINANCIAL RESULTS
Loans and Earning Assets
The organic loan growth of 5%, or $399 million, during the fourth quarter of 2008 was supported by demand from most markets within Whitney's footprint, led by 10% growth in the Texas portfolio and 7% growth in the portfolio for metropolitan New Orleans. Approximately three-quarters of the organic growth in the quarter was from commercial and industrial (C&I) customers. Economic conditions will likely restrain loan demand and the rate of portfolio growth moving into 2009.
Earning assets for the fourth quarter of 2008 increased 8%, or $828 million, on average compared to the third quarter of 2008. Average loans increased $698 million between these periods, with approximately $360 million from Parish.
Deposits and Funding
Deposits at December 31, 2008 were up 15%, or $1.2 billion, from September 30, 2008, and average deposits in the fourth quarter of 2008 increased $416 million from the third quarter of 2008. Year-end deposit balances include some seasonal inflows. Deposits associated with Parish accounted for approximately $635 million of the period-end increase and $380 million of the increase in average deposits.
Noninterest-bearing deposits for the current quarter were up 7% on average and 15%, or $424 million, on an end-of-period basis from the third quarter of 2008. Parish's demand deposits totaled approximately $164 million at December 31, 2008.
Demand deposits comprised 34% of total average deposits and funded approximately 28% of average earning assets for the fourth quarter of 2008 and the percentage of funding from all noninterest-bearing sources totaled 31%, the same as in 2008's third quarter. Higher-cost interest-bearing funds, which include time deposits and borrowings, funded 39% of average earning assets in 2008's fourth quarter, up from 37% in the third quarter of 2008.
Net Interest Income
Net interest income (TE) for the fourth quarter of 2008 increased 7%, or $8.3 million, compared to the third quarter of 2008. Average earning assets grew 8% between these periods, while the net interest margin (TE) compressed by only 4 basis points. Net interest income in the fourth quarter of 2008 benefited from abnormally wide spreads between Libor rates and other benchmark rates used to reset variable-rate loans. The rates on approximately 28% of the loan portfolio at December 31, 2008 vary based on Libor benchmarks.
Provision for Credit Losses and Credit Quality
Whitney provided $45.0 million for credit losses in the fourth quarter of 2008, compared to $40.0 million in 2008's third quarter. Net loan charge-offs in 2008's fourth quarter were $19.7 million or .91% of average loans on an annualized basis, compared to $24.5 million in the third quarter of 2008. The allowance for loan losses increased $35.7 million during the current quarter and represented 1.77% of total loans at December 31, 2008, up from 1.55% at the end of 2008's third quarter.
Continuing weaknesses in residential-related real estate markets, primarily in the Tampa, Florida area, accounted for approximately $25 million of the provision, mainly related to loans for residential development or for rental operations. Loans for commercial real estate development or investment with identified weaknesses accounted for approximately $9 million of the provision, again concentrated in the Tampa area. Problem C&I credits added approximately $7 million to the provision for the fourth quarter of 2008, with no significant regional concentration. Management added approximately $3 million to the allowance and provision based on its regular assessment of current economic conditions and other qualitative factors.
The total of loans criticized through the Company's credit risk-rating process was $770 million at December 31, 2008, which represented 8.5% of total loans and a net increase of $184 million from September 30, 2008. Criticized loans from the Parish acquisition accounted for approximately $55 million of the increase. Over half of the remaining increase came from loans for residential development or investment, the majority of which were from the Tampa market.
Noninterest Income
Noninterest income for 2008's fourth quarter increased 6%, or $1.6 million, from the third quarter of 2008, with approximately $1.2 million from Parish's operations. Deposit service charge income in the fourth quarter of 2008 was up 11%, or $.9 million, including approximately $.4 million from Parish. The remaining increase reflected higher commercial account fees mainly driven by a reduction in the earnings credit allowance in response to a sharp drop in benchmark market interest rates.
Fee income from Whitney's secondary mortgage market operations increased 26%, but would have been flat without Parish's contribution, reflecting difficult financial and housing market conditions. The categories comprising other noninterest income increased a combined $.5 million compared to the third quarter of 2008, with $.2 million related to Parish and the remainder primarily from nonrecurring revenue sources.
Noninterest Expense
The Parish acquisition added approximately $6.8 million to noninterest expense for the fourth quarter of 2008, including approximately $1.8 million to integrate Parish's customers, employees and operating systems, and $.7 million for the amortization of intangible assets acquired. Excluding the costs associated with Parish, total noninterest expense decreased approximately $4.3 million, or 5%, from the third quarter of 2008. The following discusses some of the more significant changes in individual expense categories compared to the third quarter of 2008 excluding Parish's impact:
* Employee compensation was down $7.0 million, excluding $2.2 million associated with Parish. Essentially all of the decrease was associated with updated performance estimates under management and sales-based incentive plans. Employee benefits expense was down $2.7 million from the third quarter of 2008, excluding $.4 million for Parish. The main factor was a reduction in expense for the defined benefit pension plan during the fourth quarter. * Legal and other professional fees increased $1.6 million, before the $1.3 million of Parish costs mainly associated with the conversion. Projects primarily associated with process improvements and technology enhancements added approximately $1.0 million in professional services expense, while legal expense was impacted by higher costs associated with problem loan collection efforts and services related to Whitney's participation in the Treasury's Capital Purchase Program. * Other noninterest expense increased approximately $3.7 million compared to the third quarter of 2008, excluding approximately $1.0 million for Parish. Costs associated with problem loan collections and foreclosed asset management increased approximately $1.0 million. Expenses associated with investments in projects that generate tax credits increased $1.2 million on expanded activities. Whitney also took a $1.9 million charge during the fourth quarter related to the planned closure of certain branch facilities in early 2009 that was approved as part of the ongoing implementation of Whitney's strategic plan. Other noninterest expense in the third quarter of 2008 included $2.1 million for uninsured casualty losses and expenses arising from Hurricanes Gustav and Ike.
Capital
Regulatory capital ratios have been and remain well above those required for the Company and Whitney National Bank to be considered well-capitalized institutions. The $300 million of equity raised through the preferred stock issue to the Treasury added to these well-capitalized positions as of December 31, 2008. The Company's tangible equity ratio was 8.95% at the end of 2008's fourth quarter, up from 7.89% at September 30, 2008. Whitney's regulatory leverage ratio was 9.87% at December 31, 2008 compared to 8.14% at the end of the third quarter of 2008.
Conference Call and Additional Financial Information
Management will host a conference call today at 3:30 p.m. CST to review fourth quarter 2008 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 (800) 811-0667 or (913) 312-1272. 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 February 3, 2009 by dialing (888) 203-1112 or (719) 457-0820, passcode 6427557.
This earnings release, including additional financial tables related to fourth quarter 2008 results, is posted in the Investor Relations section of the Company's web site at http://investor.whitneybank.com/releases.cfm?ReleasesType=Earnings&Year=2008.
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. 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 adequacy and capital ratios, and credit quality trends.
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 the Company's forward-looking statements include, but are not limited to, those 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)
--------------------------------------------------------------------- WHITNEY HOLDING CORPORATION AND SUBSIDIARIES --------------------------------------------------------------------- FINANCIAL HIGHLIGHTS --------------------------------------------------------------------- Fourth Fourth Year Ended (dollars in thousands, Quarter Quarter December 31 except per share data) 2008 2007 2008 2007 --------------------------------------------------------------------- INCOME DATA Net interest income $119,540 $116,336 $455,645 $464,791 Net interest income (tax-equivalent) 120,902 117,782 460,662 470,868 Provision for credit losses 45,000 10,000 134,000 17,000 Noninterest income 27,050 24,080 107,172 126,681 Net securities gains in noninterest income -- -- 67 (1) Noninterest expense 92,026 85,774 351,094 349,108 Net income 8,808 30,244 58,585 151,054 Net income available to common shareholders 8,220 30,244 57,997 151,054 --------------------------------------------------------------------- QUARTER-END BALANCE SHEET DATA Loans $9,081,850 $7,585,701 $9,081,850 $7,585,701 Investment securities 1,939,355 1,985,237 1,939,355 1,985,237 Earning assets 11,209,246 10,122,071 11,209,246 10,122,071 Total assets 12,380,501 11,027,264 12,380,501 11,027,264 Noninterest-bearing deposits 3,233,550 2,740,019 3,233,550 2,740,019 Total deposits 9,261,594 8,583,789 9,261,594 8,583,789 Shareholders' equity 1,525,478 1,228,736 1,525,478 1,228,736 --------------------------------------------------------------------- AVERAGE BALANCE SHEET DATA Loans $8,700,317 $7,542,040 $8,066,639 $7,344,889 Investment securities 1,876,338 1,979,044 1,967,375 1,893,866 Earning assets 10,719,892 9,857,897 10,122,620 9,636,586 Total assets 11,777,922 10,716,391 11,080,342 10,512,422 Noninterest-bearing deposits 2,975,869 2,679,261 2,786,003 2,708,353 Total deposits 8,646,612 8,406,547 8,368,937 8,397,778 Shareholders' equity 1,264,714 1,257,220 1,225,177 1,209,923 --------------------------------------------------------------------- COMMON SHARE DATA Earnings per share Basic $.12 $.45 $.90 $2.26 Diluted .12 .45 .89 2.23 Cash dividends per share $.20 $.29 $1.13 $1.16 Book value per share, end of period $18.29 $18.67 $18.29 $18.67 Tangible book value per share, end of period $11.48 $13.37 $11.48 $13.37 Trading data High sales price $26.37 $28.35 $33.02 $33.26 Low sales price 14.14 22.46 13.96 22.46 End-of-period closing price 15.99 26.15 15.99 26.15 Trading volume 42,771,277 30,514,264 214,317,545 88,480,468 --------------------------------------------------------------------- RATIOS Return on average assets .30% 1.12% .53% 1.44% Return on average common equity 2.67 9.54 4.77 12.48 Net interest margin 4.49 4.75 4.55 4.89 Common dividend payout ratio 166.07 64.16 127.37 52.05 Average loans to average deposits 100.62 89.72 96.39 87.46 Efficiency ratio 62.20 60.46 61.84 58.42 Allowance for loan losses to loans, end of period 1.77 1.16 1.77 1.16 Annualized net charge-offs to average loans .91 .21 .88 .11 Nonperforming assets to loans plus foreclosed assets and surplus property, end of period 3.61 1.64 3.61 1.64 Average shareholders' equity to average total assets 10.74 11.73 11.06 11.51 Tangible equity to tangible assets, end of period 8.95 8.24 8.95 8.24 Leverage ratio, end of period 9.87 8.79 9.87 8.79 --------------------------------------------------------------------- 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). --------------------------------------------------------------------- WHITNEY HOLDING CORPORATION AND SUBSIDIARIES --------------------------------------------------------------------- QUARTERLY TRENDS --------------------------------------------------------------------- (dollars in thousands, Fourth Third Second First Fourth except per Quarter Quarter Quarter Quarter Quarter share data) 2008 2008 2008 2008 2007 --------------------------------------------------------------------- INCOME DATA Net interest income $119,540 $111,435 $111,125 $113,545 $116,336 Net interest income (tax- equivalent) 120,902 112,601 112,344 114,815 117,782 Provision for credit losses 45,000 40,000 35,000 14,000 10,000 Noninterest income 27,050 25,472 26,174 28,476 24,080 Net securities gains in noninterest income -- 67 -- -- -- Noninterest expense 92,026 89,549 85,590 83,929 85,774 Net income 8,808 7,048 12,874 29,855 30,244 Net income available to common shareholders 8,220 7,048 12,874 29,855 30,244 --------------------------------------------------------------------- QUARTER-END BALANCE SHEET DATA Loans $9,081,850 $8,077,775 $7,962,543 $7,723,508 $7,585,701 Investment securities 1,939,355 1,812,025 1,955,692 2,131,446 1,985,237 Earning assets 11,209,246 9,943,868 9,955,091 9,882,369 10,122,071 Total assets 12,380,501 10,987,447 11,016,323 10,781,912 11,027,264 Noninterest- bearing deposits 3,233,550 2,809,923 2,773,086 2,724,396 2,740,019 Total deposits 9,261,594 8,054,431 8,266,880 8,295,298 8,583,789 Shareholders' equity 1,525,478 1,183,001 1,183,078 1,214,425 1,228,736 --------------------------------------------------------------------- AVERAGE BALANCE SHEET DATA Loans $8,700,317 $8,007,507 $7,866,942 $7,685,478 $7,542,040 Investment securities 1,876,338 1,853,581 2,025,397 2,116,433 1,979,044 Earning assets 10,719,892 9,892,165 9,929,683 9,944,709 9,857,897 Total assets 11,777,922 10,902,329 10,838,912 10,796,496 10,716,391 Noninterest- bearing deposits 2,975,869 2,771,101 2,747,125 2,647,995 2,679,261 Total deposits 8,646,612 8,230,249 8,220,223 8,377,141 8,406,547 Shareholders' equity 1,264,714 1,192,535 1,213,461 1,229,921 1,257,220 --------------------------------------------------------------------- COMMON SHARE DATA Earnings per share Basic $.12 $.11 $.20 $.46 $.45 Diluted .12 .11 .20 .45 .45 Cash dividends per share $.20 $.31 $.31 $.31 $.29 Book value per share, end of period $18.29 $18.49 $18.51 $18.90 $18.67 Tangible book value per share, end of period $11.48 $13.13 $13.12 $13.51 $13.37 Trading data High sales price $26.37 $33.02 $26.32 $27.49 $28.35 Low sales price 14.14 13.96 17.85 21.12 22.46 End-of-period closing price 15.99 24.25 18.30 24.79 26.15 Trading volume 42,771,277 72,540,716 53,522,061 45,483,491 30,514,264 --------------------------------------------------------------------- RATIOS Return on average assets .30% .26% .48% 1.11% 1.12% Return on average common equity 2.67 2.35 4.27 9.76 9.54 Net interest margin 4.49 4.53 4.54 4.64 4.75 Common dividend payout ratio 166.07 285.63 155.49 67.23 64.16 Average loans to average deposits 100.62 97.29 95.70 91.74 89.72 Efficiency ratio 62.20 64.89 61.79 58.57 60.46 Allowance for loan losses to loans, end of period 1.77 1.55 1.38 1.19 1.16 Annualized net charge-offs to average loans .91 1.22 .86 .53 .21 Nonperforming assets to loans plus foreclosed assets and surplus property, end of period 3.61 3.15 2.03 1.96 1.64 Average shareholders' equity to average total assets 10.74 10.94 11.20 11.39 11.73 Tangible equity to tangible assets, end of period 8.95 7.89 7.86 8.32 8.24 Leverage ratio, end of period 9.87 8.14 8.27 8.45 8.79 --------------------------------------------------------------------- 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).