Whitney Holding Corp., one of the Gulf Coast banking companies affected by last year's hurricanes, said storm-related loan and deposit growth boosted its second-quarter earnings, and so did an acquisition.
The $10.6 billion-asset New Orleans company said Thursday that profits jumped 34% from a year earlier, to $39.4 million, or 60 cents a share, which beat the average estimate of analysts by 2 cents, according to Thomson Financial.
In April, Whitney paid $116 million in cash and stock for the $380 million-asset First National Bancshares Inc. of Bradenton, Fla., whose 1st National Bank and Trust had $286 million of loans and $319 million of deposits.
Another Gulf Coast holding company, Iberiabank Bancorp Inc. of Lafayette, La., said Thursday that it was buying Pocahontas Bancorp Inc., the holding company for First Community Bank of Jonesboro, Ark., for $76.3 million in stock. (See story
Whitney's loans rose 9.2% from a year earlier, to $6.8 billion; deposits rose 20.3%, to $8.6 billion. The quarterly average loan total rose 11.3%, to $6.8 billion, with about $252 million, or 4 percentage points of that growth, associated with the purchase of First National. The deposit average rose 24%, to $8.8 billion, and First National contributed roughly 4 percentage points of that growth.
The net interest margin expanded by 34 basis points from a year earlier and 7 from the first quarter, to 5.09%.
Thomas L. Callicutt Jr., Whitney's chief financial officer, said Thursday in an interview that his company was pleased with its quarterly results, particularly as its asset quality "continues to hold up very well - despite the storm."
Net chargeoffs surged to $12.4 million, compared with $400,000 a year earlier. Whitney said that one large commercial credit that was affected by Hurricane Katrina, a credit it had previously identified as problematic, was mostly to blame.
However, Kevin Fitzsimmons, an analyst at Sandler O'Neill & Partners LP, said he was "less enthused," since deposits declined 0.7% from the first quarter, among other issues. "We've been kind of expecting that the margin and core deposit mix was peaking in terms of the benefit from the hurricane," he said. "On the one hand, the stock is doing well, because they beat" the average earnings estimate. "On the other hand, … we just have questions on the quality or the sustainability of a lot of the positive trends."
Whitney's shares rose 1.1%.
Mr. Callicutt acknowledged the organic deposit decline from the first quarter. "My guess is people who accumulated money … are now using some of it," he said. "Other banks that have been in this situation before have seen that the deposits are kind of sticky for a while, but how that plays out long term, I don't think anyone knows."
But Brent Christ, an analyst at Fox-Pitt, Kelton Inc., said Whitney's loan growth in the quarter was "encouraging," given that "the rebuilding activity to date in New Orleans really hasn't taken off yet."
