Whitney Holding Corp. is promising stability as it goes through a leadership transition. Its outgoing and incoming CEOs pledge to keep the bank headquartered in New Orleans and continue expansion into growth markets.
That’s music to the ears of shareholders who over the past 15 years have averaged an 18 percent annual return on investment. Analysts say it’s one of the few banks nationally with a net interest profit margin higher than 5 percent on loans.
William Marks, 64, who came to Whitney from AmSouth Bank in 1990, will step down as chairman in March 2008 and is grooming John Hope III, head of the bank’s Gulf Coast operations, to lead the company. Hope was promoted to chief operating officer and will eventually become CEO.
Marks took over Whitney in the wake of banking and energy sector collapses in Louisiana and built it from a New Orleans-rooted institution with $2.5 billion in assets into a five-state franchise with assets exceeding $10 billion.
According to Federal Deposit Insurance Corp. filings from June 30, 2006, about $6 billion of Whitney’s $7.8 billion in deposits comes from Louisiana, with Florida providing the next largest share at $612 million.
Marks said the strong Louisiana deposit base and Whitney’s long-standing Crescent City ties will keep it headquartered in New Orleans despite many other companies reducing their risk exposure after Hurricane Katrina.
Marks said Whitney has not fielded any buyout offers, adding its stock price might ward off some potential suitors. Whitney shares have held above $30 on the Nasdaq exchange since early 2006, peaking at $37.26 in June after dropping to $24 immediately after Katrina.
Brent Christ, an analyst with Fox-Pitt, Kelton in New York, said Whitney’s heavy Louisiana funding base keeps it from being considered a hot acquisition target.
Hope said Whitney plans to take a more active role in the regional recovery plans but did not go into specifics, saying the involvement would be evident on community and business levels.
Bain Slack, an analyst with Atlanta-based Keefe, Bruyette & Woods, said Whitney is poised to make a material investment in New Orleans’ recovery using conservative standards to minimize loan risk post-Katrina.
“They’ve done a good job of getting their hands around the impacted portfolio and making sure they’re going to get paid back on those loans,” said Slack.
“In my mind, that’s setting up for a good future,” he said. “If you’ve got clients who aren’t shaky on a credit quality basis and have a liquid balance sheet, that means they’re ready to take care of any growth or rebuild opportunities that come their way.
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