DBRS Places Whitney Holding Corporation – Senior at BBB (high); Ratings Under Review Negative

DBRS has today placed the long - and short-term ratings of Whitney Holding Corporation (Whitney or the Company) and its related entities, including its Issuer & Senior Debt rating of BBB (high) Under Review with Negative Implications.

The review reflects DBRS’s concerns that Whitney’s asset quality deterioration continues to worsen, in light of pressured earnings capacity, and DBRS’s expectation of sustained elevated credit costs and expenses going forward. Although credit costs and asset quality erosion had been manageable up through Q4 2008, 2009 has evidenced material increases in credit costs and expenses, which resulted in two consecutive quarterly losses. Credit deterioration, especially commercial real estate within the Company’s Florida and coastal Alabama markets along with credit erosion in its Louisiana and Texas footprints have led to higher levels of provisioning for loan loss reserves. DBRS’s concern is that there exists considerable loss content in Whitney’s loan portfolio, as reflected in its higher amounts of criticized loans, especially within its nonaccruals. DBRS comments that Whitney’s reserves to non-performing assets remain fairly moderate at 48% and will need to be augmented to keep pace with charge-offs. Although Whitney has a solid capital position from which to absorb loan losses, steepening credit costs are expected to sustain pressure on the Company.

DBRS’s review will focus on Whitney’s asset quality, stability of income before provisions and taxes, capital adequacy and franchise strength. In addition, the review will also consider the Company’s prospective financial performance in the near term. DBRS expects to conclude the review within 90 days.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are Rating Banks and Bank Holding Companies Operating in the United States and Enhanced Methodology for Bank Ratings – Intrinsic and Support Assessments, which can be found on our website under Methodologies.

This is a Corporate (Financial Institutions) rating.