Whitney Holding Corp., whose stock has made impressive gains recently., raised its dividend for the second time this year.
Whitney shares were up 75 cents to $37 in late trading on Thursday after the New Orleans-based company said it will increase its quarterly payout to 20 cents per share from 15 cents.
The dividend was restored in January after a two-year omission while the bank dealt with huge losses stemming from a deep and protracted recession in Louisiana.
The stock has advanced 26% so far in the third quarter, making it one of the best performing bank issues. And it is ahead 51% this year on top of the 50% appreciation the stock registered in 1992.
"They're enjoying an excellent year, heading toward $4 [a share] in operating earnings," said Peter W. Tuz, analyst at Morgan Keegan & Co., Memphis. "I expect to see faster than average dividend growth at Whitney as they bring the payout ratio back into the 30% [of earnings] range over the next few years," he said.
Increase |No Surprise'
"A recovery can get momentum very quickly once everything is in place," said Henry J. Coffey Jr., bank analyst at J.C. Bradford & Co., Nashville. Thus, he said, the second dividend increase was "no surprise."
Interest in Whitney was whetted last month when Premier Bancorp of Baton Rouge secured a toehold in New Orleans by acquiring Alerion Corp., an Italian-owned private bank.
Banc One's Approval Assumed
On Wall Street, it was quickly assumed the deal had at least the tacit approval of Banc One Corp., Columbus, Ohio, which owns an option to buy Premier by July 1995.
Analysts reasoned that Banc One, with its goal of being no less than third in any market, might speed up its purchase of Premier and then acquire one of the three large New Orleans banks.
"There is an argument for each one," said Mr. Tuz.
Besides Whitney, with $2.9 billion of assets, the city's major players are First Commerce Corp. and Hibernia Corp.
Investor interest in Whitney was also stirred last February when the bank's biggest share-holder, BIL (Far East Holdings) Ltd., Hong Kong, unloaded its 12% stake, amounting to 835,871 shares.
Whitney once ranked among the most profitable major banks in the South, tallying a peak return on assets of 1.89% in 1982.
It was also the most conservative and old-fashioned, focusing on wholesale banking and affluent clients while eschewing mass-market efforts and advanced technology.
Huge Losses in 1989
But in 1989, problem real estate and energy loans prompted huge losses.
In mid-1992, the nonperforming loans peaked at 14.91 % of total loans and foreclosed real estate. By this June 30, the ratio was down to 6.42%.
Meanwhile, Whitney's business strategy and focus have been broadened by William L Marks, chairman and chief executive officer, who arrived in late 1990 from Amsouth Bancorp, Birmingham, Ala.