NEW ORLEANS, April 27, 2010 (GLOBE NEWSWIRE) -- Whitney Holding Corporation (Nasdaq:WTNY) (the "Company") reported a net loss of $6.3 million for the first quarter of 2010 compared to net income of $318,000 in the fourth quarter of 2009 and a net loss of $11.1 million in the first quarter of 2009. Including the $4.1 million dividend paid each quarter to the U.S. Treasury on the preferred stock issued under TARP, the loss per diluted common share was $.11 for the first quarter of 2010 and $.04 and $.22 for the fourth quarter and first quarter of 2009, respectively.
"The results for the first quarter were in line with our expectations," said John C. Hope, III, Chairman and CEO. "Credit metrics, while still showing signs of stress in some areas, did support our view that credit likely turned the corner last quarter, and we now expect the loan portfolio to perform as it typically would in a historical recessionary environment. The most severe real estate-related issues in Florida, which have impacted credit for over a year now, appear to be subsiding as does the need for outsized loan loss provisions. The Company's revenue results for this quarter reflect the reduced level of economic activity in our markets that we, along with others in the industry, noted last quarter. Overall demand for credit remains weak, which led to a decline in both our loans outstanding and net interest income. While we continue to focus on credit issues, we remain equally as focused on revenue generation and have recently made several strategic hires and have successfully introduced some updated products to our customers. We remain encouraged by the prospect of an improving economy, the strong foundation we are creating and the traction we are gaining from our strategic initiatives. We hope to soon see a return to consistent quarterly profitability."
HIGHLIGHTS OF FIRST QUARTER FINANCIAL RESULTS
Loans and Earning Assets
Total loans at the end of the first quarter of 2010 were $8.1 billion, down $330 million, or 4%, from December 31, 2009. Included in the quarter's decline were charge-offs of $40 million, foreclosures of approximately $19 million and problem loan sales of approximately $5 million. In addition, $65 million of criticized oil and gas industry credits paid off during the first quarter of 2010. There were also approximately $50 million of repayments on some seasonal commercial and industrial (C&I) credits during the quarter. The remainder of the decline reflects scheduled repayments and the impact of weak loan demand.
Average loans for the first quarter of 2010 totaled $8.2 billion, down $224 million, or 3%, compared to the fourth quarter of 2009. Average earning assets of $10.5 billion were down almost 1.5% compared to the fourth quarter of 2009.
Management continues to believe economic conditions will restrain loan demand through the first half of 2010, with slow growth expectations for the second half of 2010 as the economy begins to recover and strengthen.
Deposits and Funding
Average deposits in the first quarter of 2010 were $9.0 billion, relatively unchanged from the fourth quarter of 2009. Total period-end deposits at March 31, 2010 of $9.0 billion were down $188 million, or 2%, compared to December 31, 2009. Year-end balances included seasonal commercial and public fund deposit inflows.
Noninterest-bearing deposits of $3.3 billion at March 31, 2010 were unchanged from year-end 2009. Noninterest-bearing demand deposits comprised 36% of total average deposits and funded 31% of average earning assets for the quarter. The percentage of funding from all noninterest-bearing sources totaled 37%. Higher-cost interest-bearing funds, which include time deposits and borrowings, funded 26% of average earning assets in the first quarter of 2010 compared to 28% in the fourth quarter of 2009.
Net Interest Income
The lower level of earning assets, largely a result of weak loan demand, was the main factor behind a decrease of $4.8 million, or 4%, in net interest income (TE) for the first quarter of 2010 compared to the fourth quarter of 2009, although having fewer days in the current quarter accounted for almost $2 million of the decrease. The net interest margin (TE) of 4.15% contracted 5 basis points from the fourth quarter reflecting mainly the reduced level of loans in the earning asset mix. Funding costs and loan yields were relatively stable between the quarters. The rates on approximately 56% of the loan portfolio at March 31, 2010 varied based on LIBOR (28%) and prime (28%) rate benchmarks. The Bank has increased the use of rate floors on its loan products, and at the end of the first quarter of 2010 approximately 62% of its LIBOR/prime-based loans have rate floors.
Provision for Credit Losses and Credit Quality
Whitney provided $37.5 million for credit losses in the first quarter of 2010, down $2.0 million, or 5%, from $39.5 million in the fourth quarter of 2009, and down $27.5 million, or 42%, from the first quarter of 2009. As was the case throughout 2009, the majority of this quarter's provision, approximately $30 million, or 80%, came from the Florida and Alabama portfolios and was predominantly real estate-related. As previously noted, the Louisiana and Texas portfolios are performing as expected in a recessionary environment and, while remaining under stress, have not had as significant an impact on the Company's overall provision and charge-offs.
Net loan charge-offs in the first quarter of 2010 were $37.1 million, or 1.81% of average loans on an annualized basis, compared to $54.5 million, or 2.59% of average loans, in the fourth quarter of 2009. Approximately 80% of total gross charge-offs came from real estate-related credits from Florida and Alabama markets.
The allowance for loan losses represented 2.77% of total loans at March 31, 2010, up from 2.66% at December 31, 2009 and 2.17% at March 31, 2009.
The current recessionary environment continues to impact various types of credits across our footprint. The total criticized loan portfolio increased $23 million, net, during the first quarter of 2010. Criticized loans in Louisiana and Florida were up $14 million and $22 million, respectively, while Texas balances declined $13 million. Total criticized construction, land and land development loans increased $70 million, net, during the first quarter, with almost 80% of the increase coming from loans serviced in the Texas market. General economic and market conditions are delaying the successful completion of various retail and other income-producing commercial real estate (CRE) projects and stretching the financial capacity of the developers. These newly criticized credits do not appear to be impacted by the severe declines in collateral values that impacted residential-related real estate credits in Florida and Alabama and do not exhibit other characteristics that led to larger levels of provision expense in 2009. Our bankers have been working proactively with customers to develop strategies to deal with the current difficult conditions and only $23 million of construction and development loans from the Texas market were considered nonperforming at March 31, 2010. Overall, we believe these credits have lower loss expectations and do not require outsized loss provision.
Nonperforming loans, a subset of criticized loans, totaled $437 million at March 31, 2010, a net increase of $23 million from year-end 2009. Approximately 75% of the nonperforming loan total came from Whitney's Florida and Alabama markets. Nonperforming loans individually evaluated for impairment totaled $363 million, and cumulative charge-offs and the current impaired loss allowance on these loans represented approximately 38% of the original contractual principal balances on these credits.
As noted last quarter, some of the Company's credit measures may fluctuate as we continue to work through the credit workout process this year and the economy improves.
Noninterest Income
Noninterest income for the first quarter of 2010 decreased $.8 million, or 3%, from the fourth quarter of 2009.
Deposit service charge income was down 7%, or $.6 million, in the first quarter, primarily from reduced account analysis and NSF/OD activity. We expect NSF/OD fees to trend lower in light of the new consumer protection regulations that will be implemented in the third quarter of 2010.
Secondary mortgage market income was down approximately $.4 million, or 16%, on lower levels of production during the quarter.
There were no significant trends underlying changes in other noninterest income categories.
Noninterest Expense
Total noninterest expense for the first quarter of 2010 increased 5%, or $5.6 million, from the fourth quarter of 2009. The increase is mainly related to an estimated $4.5 million loss resulting from repurchase obligations on certain mortgage loans originated and sold by a recently acquired entity.
Total personnel expense for the first quarter of 2010 increased $.6 million, or 1%, from the fourth quarter of 2009. Employee compensation increased $.7 million during the first quarter mainly as a result of revised estimates to 2009 annual sales-based incentive plan compensation in the fourth quarter of 2009. No management cash bonus was accrued during the first quarter of 2010 or during all of 2009. Employee benefits declined $.1 million during the first quarter.
Loan collection costs, including legal services, and foreclosed asset management expenses and provisions for valuation losses totaled $8.5 million in the first quarter 2010, relatively unchanged from the fourth quarter of 2009.
Capital
The Company's tangible common equity ratio strengthened to 8.38% at March 31, 2010, up from 8.18% at year-end 2009. The Company's leverage ratio at March 31, 2010 was 10.61% compared to 11.05% at December 31, 2009. This decline related to an adjustment in the amount of deferred tax assets disallowed for regulatory capital calculations. Regulatory capital ratios remain above those required for the Company and Whitney National Bank to be considered well-capitalized institutions.
Conference Call and Additional Financial Information
Management will host a conference call today at 3:00 p.m. CST to review first quarter 2010 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/">http://www.whitneybank.com. To participate in the Q&A portion of the call, dial (877) 354-4079 or (408) 427-3700.
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 May 4, 2010 by dialing (800) 642-1687 or (706) 645-9291, passcode 67354266.
This earnings release, including additional financial tables and a slide presentation related to fourth 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=2010.
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 profitability, benefits from implementing our Strategic Plan, loan demand, economic recovery, applicable and new regulations, capital strength and credit quality trends in the overall loan portfolio and specific industry or geographic segments within the loan 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)
| WHITNEY HOLDING CORPORATION AND SUBSIDIARIES | |||||
| QUARTERLY HIGHLIGHTS | |||||
| (dollars in thousands, except per share data) |
First Quarter 2010 |
Fourth Quarter 2009 |
Third Quarter 2009 |
Second Quarter 2009 |
First Quarter 2009 |
| INCOME DATA | |||||
| Net interest income | $106,629 | $111,391 | $109,854 | $110,572 | $111,615 |
| Net interest income (tax-equivalent) | 107,584 | 112,396 | 110,975 | 111,820 | 112,924 |
| Provision for credit losses | 37,500 | 39,500 | 80,500 | 74,000 | 65,000 |
| Noninterest income | 28,247 | 29,026 | 29,227 | 32,431 | 29,266 |
| Net securities gains in noninterest income | -- | 139 | 195 | -- | -- |
| Noninterest expense | 109,706 | 104,143 | 103,596 | 111,807 | 96,848 |
| Net income (loss) | (6,280) | 318 | (30,024) | (21,301) | (11,139) |
| Net income (loss) to common shareholders | (10,347) | (3,749) | (34,091) | (25,368) | (15,164) |
| QUARTER-END BALANCE SHEET DATA | |||||
| Loans | $ 8,073,498 | $ 8,403,443 | $ 8,476,989 | $ 8,791,840 | $ 8,953,307 |
| Investment securities | 2,042,307 | 2,050,440 | 2,005,881 | 1,942,365 | 1,889,161 |
| Earning assets | 10,395,252 | 10,699,847 | 10,561,425 | 10,861,061 | 10,908,643 |
| Total assets | 11,580,806 | 11,892,141 | 11,656,468 | 11,975,082 | 12,020,481 |
| Noninterest-bearing deposits | 3,298,095 | 3,301,354 | 3,130,426 | 3,081,617 | 3,176,783 |
| Total deposits | 8,961,957 | 9,149,894 | 8,880,377 | 9,144,041 | 9,212,361 |
| Shareholders' equity | 1,676,240 | 1,681,064 | 1,465,431 | 1,487,994 | 1,522,085 |
| AVERAGE BALANCE SHEET DATA | |||||
| Loans | $ 8,210,283 | $ 8,434,397 | $ 8,661,806 | $ 8,945,911 | $ 9,068,755 |
| Investment securities | 2,008,095 | 2,025,103 | 1,966,020 | 1,906,932 | 1,885,158 |
| Earning assets | 10,482,211 | 10,635,573 | 10,723,215 | 11,062,643 | 11,054,605 |
| Total assets | 11,656,777 | 11,733,149 | 11,796,108 | 12,140,311 | 12,159,252 |
| Noninterest-bearing deposits | 3,260,794 | 3,222,748 | 3,083,404 | 3,082,248 | 3,150,615 |
| Total deposits | 9,026,703 | 9,017,220 | 9,076,350 | 9,212,882 | 9,119,000 |
| Shareholders' equity | 1,684,537 | 1,629,312 | 1,485,525 | 1,520,609 | 1,533,293 |
| COMMON SHARE DATA | |||||
| Earnings (loss) per share | |||||
| Basic | $( .11) | $( .04) | $( .50) | $( .38) | $( .22) |
| Diluted | ( .11) | ( .04) | ( .50) | ( .38) | ( .22) |
| Cash dividends per share | $ .01 | $ .01 | $ .01 | $ .01 | $ .01 |
| Book value per share, end of period | $14.32 | $14.37 | $17.30 | $17.63 | $18.22 |
| Tangible book value per share, end of period | $9.67 | $9.71 | $10.63 | $10.93 | $11.46 |
| Trading data | |||||
| High sales price | $14.53 | $9.69 | $11.27 | $15.33 | $16.16 |
| Low sales price | 9.05 | 7.78 | 7.94 | 8.33 | 8.17 |
| End-of-period closing price | 13.79 | 9.11 | 9.54 | 9.16 | 11.45 |
| Trading volume | 67,377,896 | 79,863,609 | 49,059,850 | 62,308,611 | 48,896,275 |
| RATIOS | |||||
| Return on average assets | (.22)% | .01 % | (1.01)% | (.70)% | (.37)% |
| Return on average common equity | (3.02) | (1.11) | (11.36) | (8.30) | (4.96) |
| Net interest margin (TE) | 4.15 | 4.20 | 4.11 | 4.05 | 4.13 |
| Average loans to average deposits | 90.96 | 93.54 | 95.43 | 97.10 | 99.45 |
| Efficiency ratio | 80.77 | 73.71 | 73.99 | 77.51 | 68.11 |
| Annualized expenses to average assets | 3.76 | 3.55 | 3.51 | 3.68 | 3.19 |
| Allowance for loan losses to loans, end of period | 2.77 | 2.66 | 2.81 | 2.50 | 2.17 |
| Annualized net charge-offs to average loans | 1.81 | 2.59 | 2.86 | 2.09 | 1.41 |
| Nonperforming assets to loans plus foreclosed assets and surplus property, end of period | 6.12 | 5.52 | 5.34 | 5.17 | 4.50 |
| Average shareholders' equity to average total assets | 14.45 | 13.89 | 12.59 | 12.53 | 12.61 |
| Tangible common equity to tangible assets, end of period | 8.38 | 8.18 | 6.42 | 6.42 | 6.68 |
| Leverage ratio, end of period | 10.61 | 11.05 | 8.99 | 9.21 | 9.47 |
| 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). | |||||
| The tangible common equity to tangible assets ratio is total shareholders' equity less preferred stock and intangible assets divided by total assets less intangible assets. | |||||