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Whitney Reports Annual and Fourth Quarter 2006 Earnings.

Article Excerpt
NEW ORLEANS, Jan. 25 /PRNewswire-FirstCall/ -- Whitney Holding Corporation earned $145 million for the year ended December 31, 2006, compared with annual net income of $102 million for 2005. Per share earnings were $2.24 per basic share and $2.20 per diluted share in 2006, compared to $1.65 and $1.63, respectively, in 2005. Whitney saw a rapid build-up of deposits following the late-summer hurricanes of 2005 that impacted parts of Whitney's market area, and the funds retained from these deposits during 2006 were a major factor behind the significant growth in average earning assets and net interest income compared to 2005. Annual average deposits in 2006 were up 17%, or $1.3 billion, from 2005. The results for 2006 included approximately $16 million in expenses associated with the storms. This total included both the cost to implement initiatives that reduced the exposure of the Company's operations to future disasters and improved operational resilience as well as certain increased operating costs and additional expenditures and charges directly related to the 2005 storms. Approximately $5 million of storm-related expenses were recognized in 2005. Management's initial assessment of the storms' impact on credit quality was the main factor in the $38 million annual provision for loan losses in 2005.

Whitney earned $33.9 million in the quarter ended December 31, 2006, compared with net income of $35.1 million for the fourth quarter of 2005. Per share earnings were $.52 per basic share and $.51 per diluted share in 2006's fourth quarter, compared to $.56 and $.55, respectively, for the year-earlier period. The results for the fourth quarter of 2006 included approximately $4.9 million in expenses associated with the 2005 hurricanes. The components of these expenses are discussed in more detail below. The current quarter's results were also affected by a reduction in average earning assets and deposits relative to the third quarter of 2006, as discussed below. The storms' impact on earnings for the fourth quarter of 2005 was mainly reflected in a $3.3 million charge for disaster-response costs and losses, the loss of certain revenue and the recognition of a $1.9 million Federal income tax credit available to businesses in the storm-affected areas.

HIGHLIGHTS OF FOURTH QUARTER FINANCIAL RESULTS * Whitney's net interest income (TE) for the fourth quarter of 2006 increased $10.6 million, or 10%, compared to the fourth quarter of 2005, on a 7% increase in average earning assets and a wider net interest margin. The net interest margin (TE) was 5.14% for the fourth quarter of 2006, up 11 basis points from the year-earlier period. The overall yield on earning assets increased 78 basis points from the fourth quarter of 2005. The main factor behind this yield improvement was the rise in benchmark rates for the large variable- rate segment of Whitney's loan portfolio plus higher yields on investment securities and short-term liquidity-management investments. The cost of funds increased 67 basis points between the fourth quarters of 2005 and 2006. This increase was driven by higher competitive market rates as well as a shift in the funding mix to higher-cost sources which stemmed in part from the anticipated reduction in and reallocation of some...