Whitney Holding Corporation

Transcription

1 Whitney Holding Corporation S u m m a r y A n n u a l R e p o r t

2 Company Profile Whitney Holding Corporation (the Company) is a bank holding company headquartered in New Orleans, Louisiana. Our principal subsidiary is Whitney National Bank (the Bank), which has been in continuous operation since The Bank offers a broad range of community banking services to businesses and individuals in the five-state Gulf Coast region stretching from Houston, Texas, across southern Louisiana and the coastal region of Mississippi, to central and south Alabama, FPO the panhandle of Florida, and the Tampa Bay metropolitan area of Florida. Through the Bank, Whitney Securities, L.L.C., and Whitney Community Development Corporation, we offer traditional commercial, retail and international banking services, as well as brokerage, investment, trust and mortgage services. We combine our community banking approach of local decision-making, personal service and lasting customer relationships with modern technology, management and training. We practice our unique approach to banking in markets where we can make a difference, where we can achieve an in-depth knowledge of business activities, customers and potential customers, and truly add value. Throughout our history, we have worked to build long-term relationships with our customers. Many businesses began life as Whitney customers and have flourished. These third and fourth generation familymanaged businesses still bank at Whitney. Many families have also maintained their personal banking relationships at Whitney for generations. Through good times and bad, Whitney Bankers will deliver the personalized service and contemporary products that are so important to our customers. Our Mission Our mission is to deliver extraordinary value and superior results to our customers and shareholders, while providing leadership to our local communities and outstanding career opportunities to our valued employees. We do this within the framework of our three guiding principles: soundness, profitability and growth, in that order of priority. Soundness First, we make certain every decision we make is guided by our commitment to soundness. This ensures our continuity and promotes the trust of our customers, shareholders and communities. Profitability Next, we focus on profitability, since it is not only a gauge of our success, but ensures that we will have access to the capital we need to continue to evolve and improve in the future. Profitability is at the heart of our continued success. Growth Finally, growth will result when we exercise leadership and diligently apply sound, profitable strategies to our local market opportunities. Contents Financial Highlights To Our Shareholders Customer Segment Profiles Condensed Consolidated Financial Statements Directors and Executive Management

3 Financial Highlights (dollars in thousands, except per share data) % Change For the Year Net income $97,137 $98,542 (1)% Earnings per share, basic (4) Earnings per share, diluted (4) Year-end Balances Total assets $8,222,624 $7,754,982 6% Earning assets 7,648,740 7,193,709 6 Loans 5,626,276 4,882, Investment securities 1,991,244 2,281,405 (13) Deposits 6,612,607 6,158,582 7 Shareholders equity 904, ,313 8 Average Balances Total assets $7,890,183 $7,238,022 9% Earning assets 7,327,233 6,717,863 9 Loans 5,179,734 4,595, Investment securities 2,120,594 2,004,245 6 Deposits 6,347,503 5,913,186 7 Shareholders equity 881, ,698 7 Key Ratios Return on average assets 1.23% 1.36% Return on average shareholders equity Net interest margin Efficiency ratio Dividend payout ratio Shareholders equity to total assets Common Share Data Cash dividends per share $ 1.34 $ % Book value per share Closing stock price The efficiency ratio is noninterest expense to total net interest (TE) and noninterest income (excluding securities transactions). Annual Meeting of Shareholders The annual meeting of Whitney s shareholders will be held on Wednesday, April 27, 2005, at 10:30 a.m. CDT. The meeting location is the 11th floor of the Pan-American Life Center at 601 Poydras Street in New Orleans. Common Stock Whitney s common stock trades on The Nasdaq National Market under the symbol WTNY. 1

4 To Our Shareholders 2 William L. Marks - Chairman of the Board and Chief Executive Officer We believe that this one-to-one relationship between the customer and the Whitney Banker has created enduring value over Whitney s 121-year history and continues to do so today as more and more potential clients realize It takes a Whitney Banker. After almost three years in an environment of sustained low interest rates and resulting margin compression, short-term rates began to increase in late June of 2004 and had risen by 125 basis points by year end. Despite continued margin pressure, Whitney began to reap the benefits of its asset sensitivity in the latter part of the year and once again performed well, earning $97.1 million, or $2.38 per basic share, in After two years without an acquisition, Whitney completed two acquisitions in 2004 and announced a third scheduled for the first half of Earnings in 2004 were fueled by earning asset growth, funded primarily by deposits. Both commercial lending and commercial real estate lending have grown steadily since the latter half of Average loans during 2004 were up 13%, or $584 million, of which only $72 million was attributable to acquisitions. This good net growth came despite the second year of significant payoffs by borrowers who were able to obtain longterm permanent financing in the low interest rate environment. Whitney s securities portfolio grew 6%, or $116 million, on average as a result of a strategy executed in late 2003 to invest in advance of paydowns expected in the first half of Average deposits grew 7%, or $434 million, during 2004, of which $71 million was from acquisitions. The majority of the increase in average deposits was in lower-cost deposits from continued pricing strategies that emphasized lower-cost products. Noninterestbearing demand deposits were up 12% on average from 2003, which represents about half of the growth in average total deposits. Growth in noninterest-bearing demand deposits is a key component of Whitney s relationship banking philosophy and is an important element of profitability. Growth in earning assets coupled with rising interest rates led to a $25.5 million, or 9%, increase in net interest income. Whitney s net interest margin for 2004 was a healthy 4.45%, essentially flat with the previous year. Our pricing discipline on both sides of the balance sheet is reflected in this stable net interest margin, which remains well above the margins reported by many other institutions. Whitney s unwavering commitment to soundness resulted in credit quality that remained strong and generally improved from year-end 2003 to year-end Nonperforming assets, representing only.46% of loans plus foreclosed assets and surplus property at year end, decreased $4.3 million, or 14%, from The total of loans criticized through Whitney s internal risk classification process decreased by $14 million to $173 million at the end of While net charge-offs increased from seven basis points of average loans in 2003 to 19 basis points in 2004, gross charge-offs were actually down one basis point to a low.27% in Growth in the loan portfolio, offset by decreases in required loss allowances for criticized loans, resulted in a provision for loan losses of $2 million for 2004, compared to a negative provision for loan losses of $3.5 million in As expected, noninterest income decreased $7 million, or 8%, to $82.5 million in Income from secondary mortgage market operations fell $6.3 million as the rate environment for home loans during 2004, though still low from a historical perspective, was unable to stimulate refinancing activity at the levels seen in recent years. The earnings credit allowed against service charges on certain business deposit accounts has increased with rising short-term interest rates, contributing to a $1.2 million decrease in deposit service charge income compared to Bank card fees, both credit and debit cards, increased $1.1 million, or 12%, compared to 2003, reflecting higher transaction volumes. Trust service fees increased $.8 million, or 10%, from the previous year from new business and some improvement in equity market valuations relative to Noninterest expense increased $17.4 million, or 7%, from Of that increase, incremental costs from acquired bank operations totaled $2.7 million. Personnel

5 expense was up 6%, or $8.0 million, including $1.2 million for the acquired operations. Base pay and compensation earned under salesbased and other employee incentive programs increased a combined 3%, or $2.9 million. Compensation expense under management incentive programs was up 25%, or $2.8 million, with stock-based compensation driving this increase. Stock-based compensation will vary with changes in Whitney s stock price, which was up 10% at the end of 2004 from a year earlier. The rising cost of providing retirement and health benefits accounted for approximately $1.8 million of the 8%, or $2.3 million, rise in employee benefits costs. A number of factors contributed to the $9.4 million increase in other noninterest expense. Whitney relocated certain of its Houston operations from office space that is subject to noncancelable leases and recognized a loss of $1.6 million in the third quarter of 2004 related to its remaining lease obligations. This move is expected to reduce costs in the long term and enhance productivity. Also in the third quarter, Whitney recognized a $.6 million casualty loss for property damage from Hurricane Ivan that struck at the Florida Alabama coastal border during that quarter. Storm-related disruptions to banking operations were minimal. There were also factors of a recurring nature behind the increase in other noninterest expense. These factors included an increase in marketing activities and the amortization of expanded affordable housing investments. Tax credits associated with the affordable housing investments helped lower the effective tax rate compared to During 2004, after two years of limited activity, we began to see attractive acquisition opportunities that fit Whitney s acquisition parameters, and we were able once again to expand Whitney s geographic franchise. In the second quarter, we completed the acquisition of two branches in the Fort Walton Beach, Florida area that complemented our existing operations there. We were excited to be able to enter the Tampa Bay, Florida metropolitan area through the acquisition of Madison Bancshares, Inc. in the third quarter of In the fourth quarter, Whitney announced its pending purchase of Destin Bancshares, Inc., which will be Whitney s largest acquisition to date and grows Whitney s franchise significantly in the Florida Panhandle. We are pleased to welcome our new shareholders and employees, who are important additions to the Whitney family. As 2005 unfolds, we hope to be able to take advantage of similar opportunities with the right partners to expand in markets where we can make a difference profitably. To focus on our clients and their changing needs, we have organized our planning around five critical customer segments: Business Banking, Corporate Banking, Private Client Services, Trust & Wealth Management and Retail Banking. Unlike most other large financial companies, however, we deliver services in our local markets through a unified organization of Whitney Bankers reporting to a city or market executive. We believe that this one-to-one relationship between the customer and the Whitney Banker has created enduring value over Whitney s 121-year history and continues to do so today as more and more potential clients realize It takes a Whitney Banker. The section that follows this letter explores some of our goals and accomplishments in each of these customer segments. We always work to merit your trust. On behalf of Whitney s Board of Directors, management and employees, we thank you for your support and confidence. Sincerely, William L. Marks Chairman of the Board and Chief Executive Officer AVERAGE ASSETS ($ millions) $7,890 $7,238 $7,017 $6,832 $6, AVERAGE SHAREHOLDERS EQUITY ($ millions) $824 $761 $698 $ NET INCOME ($ millions) $73 $76 $95 $99 $ NET INCOME PER SHARE (basic) $1.89 $1.92 $2.39 $2.47 $881 $

6 Business Banking Winston Labbé - Business Banking Manager The small business sector is important business at Whitney. With this segment of the market continuously growing, we have accomplished several important goals in 2004 that are designed to add more value to the bankerclient relationship. Whitney Business Bankers are now backed by a more defined corporate support system, including improved sales guidance, enhanced product management and clear performance standards. As the Business Banking line increases its client base, these enhancements have improved our level of service and positioned Whitney for continued success. A Whitney Business Banking client has a variety of competitively priced products to choose from, including various levels of Whitney Edge deposit products, loans and lines of credit, merchant services and treasury management options. Of course, there is no one size fits all for financial services, but Whitney s business products allow our bankers the flexibility to counsel each client into the right product mix. Part of our strategy in Business Banking includes a greater emphasis on deepening the customer relationship to obtain a greater share of wallet through the sale of Merchant Services, Whitney Leasing, Whitney Business Online, Trust & Wealth Management Services, Whitney Business BillPay and in 2005, the Whitney E-Z Pay Card. 4 This broad mix of products is fully supported by our multiple delivery channels, most notably our online banking and bill pay services, which offer cutting-edge products and the 24/7 access that small business owners require. In fact, our Business Banking suite of online services rivals those offered by larger banks. For Business Banking at Whitney, 2005 will be a pivotal year, with more products and services on the way and a host of Whitney Bankers poised and ready to serve.

7 Corporate Banking Whitney National Bank was built on the strength and reputation of Corporate Banking. As the cornerstone of the Bank, Corporate Banking maintains its reputation by combining exceptional service with distinctive, tailored products, and 2004 was certainly not a year for Corporate Banking to rest on its laurels. With our competition in commercial banking ranging from financial powerhouses to smaller boutique banks, it has become more important than ever that our Whitney Bankers act as client relationship managers. Backed by the support of our expert teams throughout the Bank, our Whitney Bankers can work as value-minded, strategic partners for all our clients. Today s Whitney Corporate Banking offers a broad array of financing options to fit all of our clients. From international business to treasury management, from traditional loans to sophisticated capital markets products and trust and wealth management services, Whitney Bankers can recommend a comprehensive range of solutions that complement the needs of any business. By aligning our clients strategies and goals with the proper financing options, Whitney Bankers can help businesses grow and prosper, while becoming indispensable to the clients we serve. Our goal in Corporate Banking is ambitious to become a leading provider of integrated financial solutions within our geographic footprint, always incorporating change and new technologies along the way. To do that, Whitney Bankers have to think the way our clients think as businesspeople, continually anticipating future needs and exploring new growth initiatives. We always have to be available with a solution, able to answer the question, How do we grow in uncertain times? The industries we serve health care, manufacturing, communications, construction, energy, transportation, infrastructure and equipment, as well as many others have these concerns and need the input of a knowledgeable, involved banker in order to prosper. Through the expertise of Whitney Bankers, our clients will always be provided overall financing guidance and products to help manage risk and strengthen their bottom lines. Joseph S. Exnicios - Executive Vice, New Orleans Corporate Banking 5

8 Private Client Services Kevin Rafferty - Commercial Lending Manager Private clients are individuals who have complex financial needs requiring the attention of specialists in a number of financial disciplines. This complexity exists because these clients have substantial income or wealth and wish to preserve, expand, manage or transfer it in the most intelligent way possible. Serving these clients in a highly personalized way has been one of Whitney s unique strengths for more than 120 years. The Whitney Private Client Services (PCS) initiative outperforms our competition by concentrating on the needs of clients who have achieved high net worth, providing integrated advice in several key areas: personal banking and credit, mortgage, wealth management, and trust and estate planning. During the past year, in addition to launching a number of new PCS products, we initiated a successful continuing education program to ensure that our Whitney Bankers remain prepared to assist their clients appropriately. In addition, working closely with Trust & Wealth Management, we developed and put in place Client Relationship Review, a protocol that allows us to regularly assemble our entire team of financial specialists to review individual client situations. The result is an in-depth plan that guides our various interactions with each PCS client. The goals of PCS in 2004 were to increase our product offerings through client-focused development and strategic alliances within the Bank, as well as create initiatives designed to deepen relationships with existing clients and to acquire new ones. These goals have been met. As we move into 2005, Private Client Services will continue to grow and extend its product options to accommodate the most complex client issues. 6

9 Trust & Wealth Management For Trust & Wealth Management, 2004 was a year marked by substantial progress in our mission to become the primary financial advisor and provider of wealth management services to clients throughout Whitney s franchise. Our greatest competitive advantage continues to be our people caring professionals who develop lasting relationships with clients by taking the time to fully understand their needs and craft wealth management solutions that address their unique circumstances. Significant progress has been made through augmenting the array of products and tools available to our staff to serve our client base more effectively. Enhanced investment options, more sophisticated portfolio and financial planning tools, additional online capabilities, and staff expansion in our investment management team and in our regional markets helped to grow our client base across the franchise. While 2004 has been a year of average absolute returns from the financial markets, many of our customers have reaped the benefits of our strengthened staff and the application of our sophisticated investment management systems. Our composite equity portfolios have produced returns superior to the benchmark S&P 500, and in the top quartile of core equity managers. The key to our success in 2004 and beyond lies in the strong working relationship developed between our professional staff and Whitney Bankers throughout the company. The services we provide to the Bank s Corporate Banking and Business Banking clients, such as investment management, retirement plans, or capital transaction assistance, are designed to support the competitiveness, growth, and stability of our customers. For our Retail Banking clients, the focus is on providing advice and financial products that match needs identified through a consultative interview and analysis, such as educational funding, retirement planning and investments. With Private Clients, more complex issues such as event and estate planning, legacy planning, and trust services are addressed to provide them with the appropriate platform needed to effectively manage their wealth. Kim Austin - Trust Relationship Manager 7

10 Retail Banking Sylvia Castillo - Branch Manager During 2004, we launched several new Internet banking services on whitneybank.com, including E-Statements, Alerts, Instant Checks, and Funds Transfers. Now our clients can elect to have their bank statements, including images of checks, delivered and stored for two years online. They can also set up a variety of alerts to notify them of important events affecting their accounts, such as when an account balance falls to a certain level, or when a specific check clears. Our expertise at developing ways to make banking easier for our clients has paid off handsomely, as our 2004 Client Satisfaction Survey produced scores well above industry benchmarks. While our clients enjoy all of our technology-based conveniences like Internet banking, ATMs, and our Call Center, the centerpiece of our delivery strategy is the Whitney Banker. Our clients value the relationships they build with their Banker, and we continue to provide our Bankers with the tools required to exceed client expectations. During 2004, we launched our intranet, the Whitney Information Network (WIN), which provides browser-based access to the information a contemporary Whitney Banker needs to satisfy today s banking client. We also focused on the relationships between Whitney Bankers and their clients in our successful mass media advertising campaign. 8 During 2004, we continued to make progress in creating value through offering our clients additional banking products and services that fit their individual profiles. In 2005, we will refine our management practices through daily tracking of results on WIN and a greater emphasis on key, high-value product lines, such as those represented by our Whitney Securities, L.L.C. unit.

11 Our expertise at developing ways to make banking easier for our clients has paid off handsomely, as our 2004 Client Satisfaction Survey produced scores well above industry benchmarks. 9

12 Management s Report on Internal Control Over Financial Reporting The management of Whitney Holding Corporation is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Management used the framework of criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission to conduct an evaluation of the effectiveness of internal control over financial reporting. Based on that evaluation, management concluded that internal control over financial reporting for the Company as of December 31, 2004 was effective. Management s assessment of the effectiveness of the Company s internal control over financial reporting as of December 31, 2004 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears herein. 10 Report of Independent Registered Public Accounting Firm To Shareholders and Board of Directors of Whitney Holding Corporation: We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of Whitney Holding Corporation as of December 31, 2004 and December 31, 2003, and for each of the three years in the period ended December 31, 2004, management s assessment of the effectiveness of the Company s internal control over financial reporting as of December 31, 2004 and the effectiveness of the Company s internal control over financial reporting as of December 31, 2004; and in our report dated March 15, 2005, we expressed unqualified opinions thereon. The consolidated financial statements (not presented herein) referred to above appear in the Company s Annual Report on Form 10-K for the year ended December 31, Condensed Consolidated Financial Statements In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. Internal Control Over Financial Reporting Also, in our opinion, management s assessment, included in the accompanying Management s Report on Internal Control Over Financial Reporting, that the Company maintained effective internal control over financial reporting as of December 31, 2004 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control - Integrated Framework issued by the COSO. The Company s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management s assessment and on the effectiveness of the Company s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions. A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. PricewaterhouseCoopers LLP New Orleans, Louisiana March 15, 2005

13 Condensed Consolidated Statements of Income Years Ended December 31 (dollars in thousands, except per share data) Interest income $360,772 $338,069 $370,909 Interest expense 40,682 43,509 75,701 Net interest income 320, , ,208 Provision for loan losses 2,000 (3,500) 7,500 Net interest income after provision for loan losses 318, , ,708 Noninterest income 82,523 89,504 85,185 Noninterest expense 260, , ,926 Income before income taxes 140, , ,967 Income tax expense 43,198 46,099 46,644 Net income $ 97,137 $ 98,542 $ 95,323 Earnings per share Basic $2.38 $2.47 $2.39 Diluted Cash dividends per share Condensed Consolidated Balance Sheets December 31 (dollars in thousands) Assets Cash and due from financial institutions $ 213,751 $ 270,387 $ 326,124 Short-term investments 22,424 14,385 4,327 Loans held for sale 8,796 15,309 65,572 Investment securities 1,991,244 2,281,405 1,975,698 Loans 5,626,276 4,882,610 4,455,412 Allowance for loan losses (54,345) (59,475) (66,115) Net loans 5,571,931 4,823,135 4,389,297 Other assets 414, , ,863 Total assets $8,222,624 $7,754,982 $7,097,881 Liabilities and Shareholders Equity Noninterest-bearing deposits $2,111,703 $1,943,248 $1,692,939 Interest-bearing deposits 4,500,904 4,215,334 4,089,940 Total deposits 6,612,607 6,158,582 5,782,879 Short-term and other borrowings 634, , ,415 Other liabilities 70, ,034 61,104 Total liabilities 7,317,859 6,914,669 6,297,398 Shareholders equity 904, , ,483 Total liabilities and shareholders equity $8,222,624 $7,754,982 $7,097,881 11

14 Condensed Consolidated Statements of Changes in Shareholders Equity Years Ended December 31 (dollars in thousands) Balance at beginning of year $840,313 $800,483 $717,888 Net income 97,137 98,542 95,323 Other comprehensive income (loss) (11,401) (21,666) 20,000 Total comprehensive income 85,736 76, ,323 Cash dividends (55,355) (49,582) (44,329) Stock acquired under repurchase program (31,475) - - Stock issued in business combination 41, Long-term incentive plan and other stock activity 23,614 12,536 11,601 Balance at end of year $904,765 $840,313 $800,483 Condensed Consolidated Statements of Cash Flows Years Ended December 31 (dollars in thousands) Operating Activities Net income $ 97,137 $ 98,542 $ 95,323 Net decrease in loans held for sale 6,513 22,802 21,342 Other adjustments to net income 45,768 24,641 32,917 Net cash provided by operating activities 149, , ,582 Investing Activities Net maturities, sales and (purchases) of investment securities 185,107 (245,270) (316,723) Net (increase) in loans (564,403) (403,268) (5,356) Net (increase) decrease in short-term investments (8,039) (10,058) 490,581 Net cash received in branch acquisition and business combination 7, Other, net (13,655) (22,842) (325) Net cash provided by (used in) investing activities (393,626) (681,438) 168,177 Financing Activities Net increase (decrease) in deposits 250, ,703 (167,281) Net increase (decrease) in short-term and other borrowings 9, ,638 (58,102) Issuance (purchase) of common stock, net (15,686) 5,623 5,129 Cash dividends (57,061) (48,248) (42,893) Net cash provided by (used in) financing activities 187, ,716 (263,147) Increase (decrease) in cash and cash equivalents (56,636) (55,737) 54,612 Cash and cash equivalents at beginning of year 270, , ,512 Cash and cash equivalents at end of year $ 213,751 $ 270,387 $ 326,124 12

15 Summary Financial Data Years Ended December 31 (dollars in thousands, except per share data) Income Statement Data Net interest income (TE) $326,237 $300,115 $300,134 $285,161 $273,176 Provision for loan losses 2,000 (3,500) 7,500 19,500 12,690 Noninterest income 82,523 89,504 85,185 91,209 75,120 Noninterest expense 260, , , , ,179 Net income 97,137 98,542 95,323 75,820 72,842 Average Balance Sheet Data Total assets $7,890,183 $7,238,022 $7,016,675 $6,831,564 $6,282,044 Earning assets 7,327,233 6,717,863 6,492,791 6,303,445 5,771,256 Loans 5,179,734 4,595,868 4,372,194 4,475,149 4,228,948 Investment securities 2,120,594 2,004,245 1,816,216 1,525,254 1,478,609 Deposits 6,347,503 5,913,186 5,750,141 5,548,556 4,927,214 Shareholders equity 881, , , , ,814 Key Ratios Return on average assets 1.23% 1.36% 1.36% 1.11% 1.16% Return on average shareholders equity Net interest margin Average loans to average deposits Efficiency ratio Dividend payout ratio Allowance for loan losses to loans Nonperforming asset ratio Net charge-offs to average loans Shareholders equity to total assets Common Share Data Earnings per share Basic $2.38 $2.47 $2.39 $1.92 $1.89 Diluted Cash dividends per share $1.34 $1.23 $1.11 $1.03 $.96 Book value per share $21.85 $20.78 $19.98 $18.10 $16.92 Trading data High stock price $46.24 $41.32 $38.52 $32.56 $27.79 Low stock price Closing stock price Trading volume (000 s) 18,442 22,924 21,927 13,965 10,567 Average shares outstanding (000 s) Basic 40,748 39,929 39,849 39,551 38,476 Diluted 41,389 40,396 40,122 39,836 38,569 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 transactions). The nonperforming asset ratio is nonperforming assets to loans plus foreclosed assets and surplus property. 13

16 Directors Harry J. Blumenthal, Jr. Blumenthal Print Works, Inc. John J. Kelly Chairman of the Board Pan-American Life Insurance Co. Eric J. Nickelsen Real Estate Developer and Part Owner John S. Carr & Co., Inc. Joel B. Bullard, Jr. Joe Bullard Automotive Companies E. James Kock, Jr. Former Bowie Lumber Assoc.; Downmans Assoc.; Jeanerette Lumber & Shingle Co., Ltd.; White Castle Lumber & Shingle Co., Ltd. John G. Phillips Former Chairman of the Board and Chief Executive Officer The Louisiana Land and Exploration Company James M. Cain Former Vice Chairman Entergy Corporation Alfred S. Lippman Co-Manager Lippman, Mahfouz, Tranchina & Thorguson, LLC Carroll W. Suggs Former Chairman National Ocean Industries Association; Former Chairman, Chief Executive Officer and Petroleum Helicopters, Inc. Angus R. Cooper II Chairman of the Board and Chief Executive Officer Cooper/T. Smith Corporation Michael L. Lomax and Chief Executive Officer United Negro College Fund Kathryn M. Sullivan Chief Financial Officer and Senior Vice Blue Cross and Blue Shield Association Richard B. Crowell Attorney Crowell & Owens William L. Marks Chairman of the Board and Chief Executive Officer Whitney Holding Corporation and Whitney National Bank Dean E. Taylor Chairman, and Chief Executive Officer Tidewater, Inc. William A. Hines Chairman of the Board Nassau Holding Corporation R. King Milling Whitney Holding Corporation and Whitney National Bank Thomas D. Westfeldt Westfeldt Brothers Inc. 14

17 Executive Management William L. Marks Chairman of the Board and Chief Executive Officer R. King Milling Robert C. Baird, Jr. Executive Vice Louisiana Banking John C. Hope III Executive Vice Gulf Coast Banking Thomas L. Callicutt, Jr. Executive Vice and Chief Financial Officer Kevin P. Reed Executive Vice Trust & Wealth Management Rodney D. Chard Executive Vice Operations and Technology Lewis P. Rogers Executive Vice Credit Administration Joseph S. Exnicios Executive Vice New Orleans Corporate Banking We always work to merit your trust. On behalf of Whitney s Board of Directors, management and employees, we thank you for your support and confidence. William L. Marks 15

18 16 Corporate Headquarters 228 St. Charles Avenue New Orleans, Louisiana whitneybank.com (502) Company Information This report contains condensed financial statements and other financial information derived from information presented in the Company s Annual Report on Form 10-K filed with the Securities and Exchange Commission. The full report as well as other published financial reports and other information about the Company and its products and services are available through our website at whitneybank.com. Printed copies of the Company s published financial reports, including its reports to the Securities and Exchange Commission on Forms 10-K and 10-Q, are available without cost by sending your request to: Investor Relations Whitney Holding Corporation P.O. Box New Orleans, LA (504) or toll free (800) investor.relations@whitneybank.com Inquiries by analysts, investors and others should be directed to: Thomas L. Callicutt, Jr. Executive Vice and Chief Financial Officer (504) Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP Transfer Agent American Stock Transfer & Trust Company 59 Maiden Lane New York, NY Shareholder address changes or questions about stock certificates or dividend payments should be directed to the transfer agent at: (800) (inside the U.S.) (718) (outside the U.S.) info@amstock.com Dividend Reinvestment and Direct Deposit Through Whitney s Dividend Reinvestment and Stock Purchase Program, shareholders can purchase additional shares directly from the Company using reinvested dividends, optional cash payments, or both. Direct deposit offers registered shareholders a way to have dividends quickly and safely deposited in their financial institution account. For more information or to participate in either of these programs, please call the transfer agent at (800) or write or call the Company s Investor Relations Department as indicated above.

19 Since 1926, the Whitney clock has represented Whitney Bank s rich history and our time-honored tradition of service. Whitney Bankers have always given their customers more than banking expertise we ve offered them our time and attention. And when it comes to your money, that makes all the difference. Made of bronze with copper hoods, cut glass dials and exact reproductions of Westminster Abbey s master chimes in London, England, the first Whitney clocks were installed at the main office and in eight branches operating at the time. Today, the Whitney clock is found on our logo and signs at every Whitney branch, and has become an enduring symbol for the special type of service we offer at Whitney. 17

20 228 St. Charles Avenue New Orleans, Louisiana whitneybank.com