UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

Commission file number 0-1026

WHITNEY HOLDING CORPORATION

(Exact name of registrant as specified in its charter)

Louisiana	72-6017893
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

228 St. Charles Avenue

New Orleans, Louisiana 70130

(Address of principal executive offices)

(504) 586-7272

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ü No __

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes üNo __

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ü	Accelerated filer __
Non-accelerated filer __	Smaller reporting company __

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __ No ü

As of April 30, 2011, 96,657,361 shares of the registrant’s no par value common stock were outstanding.

WHITNEY HOLDING CORPORATION

TABLE OF CONTENTS

			Page
PART I.	Financial Information

	Item 1.	Financial Statements:
		Consolidated Balance Sheets	1
		Consolidated Statements of Income	2
		Consolidated Statements of Changes in Shareholders’ Equity	3
		Consolidated Statements of Cash Flows	4
		Notes to Consolidated Financial Statements	5
		Selected Financial Data	32

	Item 2.	Management’s Discussion and Analysis of Financial
		Condition and Results of Operations	33

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	58

	Item 4.	Controls and Procedures	58

PART II.	Other Information

	Item 1.	Legal Proceedings	59

	Item 1A.	Risk Factors	59

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62

	Item 3.	Defaults upon Senior Securities	62

	Item 4.	Reserved	62

	Item 5.	Other Information	62

	Item 6.	Exhibits	62


Signature			63

Exhibit Index			64

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q, and other periodic reports filed by Whitney Holding Corporation (“Whitney”) with the SEC, may include “forward-looking statements” within the meaning of the “safe harbor” provided by section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934. These statements are intended to be covered by the safe harbor. Forward-looking statements provide projections of results of operations or of financial condition or state other forward-looking information, such as expectations about future conditions and descriptions of plans and strategies for the future. Forward-looking statements often contain words such as “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “plan,” “predict,” “project” or other words of similar meaning.

Whitney’s ability to accurately project results or predict the effects of plans or strategies is inherently limited. Although Whitney believes that the expectations reflected in its forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements.

Factors that could cause actual results to differ from those expressed in the Company’s forward-looking statements include, but are not limited to:

·	the deterioration of general economic and business conditions in the United States and in the regions and the communities Whitney serves;

·	fluctuations in the market price of Hancock Holding Company (Hancock) common stock and the related effect on the market value of the merger consideration that Whitney common shareholders will receive upon completion of the proposed merger with Hancock;

·	the possibility that the proposed merger with Hancock does not close when expected or at all because required regulatory or other approvals and conditions to closing are not received or satisfied on a timely basis or at all;

·	diversion of Whitney’s management time on merger related issues;

·	further declines in the values of residential and commercial real estate, which may increase Whitney’s credit losses;

·	Whitney’s ability to effectively manage interest rate risk and other market risk, credit risk, operational risk, legal risk, liquidity risk, and regulatory and compliance risk;

·	changes in interest rates that affect the pricing of Whitney’s financial products, the demand for its financial services and the valuation of its financial assets and liabilities;

·	Whitney’s ability to manage fluctuations in the value of its assets and liabilities and off-balance sheet exposure so as to maintain sufficient capital and liquidity to support its business;

·	Whitney’s ability to manage disruptions in the credit and lending markets, including the impact on its business and on the businesses of its customers as well as other financial institutions with which Whitney has commercial relationships;

·	Whitney’s ability to comply with any requirements imposed on the Company and Whitney National Bank (the Bank) by their respective regulators, and the potential negative consequences that may result;

·	the occurrence of natural disasters or acts of war or terrorism that directly or indirectly affect the financial health of Whitney’s customer base;

·	changes in laws and regulations, including increases in regulatory capital requirements, that significantly affect the activities of the banking industry and its competitive position relative to other financial service providers;

·	technological changes affecting the nature or delivery of financial products or services and the cost of providing them;

·	Whitney’s ability to develop competitive new products and services in a timely manner and the acceptance of such products and services by the Bank’s customers;

·	Whitney’s ability to effectively expand into new markets;

·	the cost and other effects of material contingencies, including litigation contingencies;

·	the failure to attract or retain key personnel;

·	the failure to capitalize on growth opportunities and to realize cost savings in connection with business acquisitions;

·	the effectiveness of Whitney’s responses to unexpected changes; and

·	those other factors identified and discussed in this quarterly report on Form 10-Q and in Whitney’s other public filings with the SEC.

You are cautioned not to place undue reliance on these forward-looking statements. Whitney does not intend, and undertakes no obligation, to update or revise any forward-looking statements, whether as a result of differences in actual results, changes in assumptions or changes in other factors affecting such statements, except as required by law.

See also Item 1A, “Risk Factors,” of Part II of this Form 10-Q, and Item 1A of Part I of Whitney’s annual report on Form 10-K for the year ended December 31, 2010.

PART 1. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	March 31			December 31
(dollars in thousands)	2011			2010
	(Unaudited)
ASSETS
Cash and due from financial institutions	$	264,233		$	210,368
Federal funds sold and short-term investments		432,432			445,392
Loans held for sale		68,999			198,351
Investment securities
Securities available for sale		2,008,911			1,968,245
Securities held to maturity, fair values of $675,233 and $638,195, respectively		676,881			641,357
Total investment securities		2,685,792			2,609,602
Loans, net of unearned income		6,993,353			7,234,726
Allowance for loan losses		(214,186	)		(216,843	)
Net loans		6,779,167			7,017,883

Bank premises and equipment		232,591			232,475
Goodwill		435,678			435,678
Other intangible assets		7,976			8,922
Accrued interest receivable		29,022			29,078
Other assets		560,184			611,030
Total assets	$	11,496,074		$	11,798,779

LIABILITIES
Noninterest-bearing demand deposits	$	3,625,043		$	3,523,518
Interest-bearing deposits		5,556,777			5,879,885
Total deposits		9,181,820			9,403,403

Short-term borrowings		468,628			543,492
Long-term debt		219,612			219,571
Accrued interest payable		10,372			9,722
Accrued expenses and other liabilities		77,029			98,257
Total liabilities		9,957,461			10,274,445

SHAREHOLDERS' EQUITY
Preferred stock, no par value
Authorized, 20,000,000 shares; issued and outstanding, 300,000 shares		296,559			296,242
Common stock, no par value
Authorized - 200,000,000 shares
Issued - 97,153,720 and 97,142,069 shares, respectively		2,800			2,800
Capital surplus		621,803			620,547
Retained earnings		640,654			628,546
Accumulated other comprehensive income (loss)		(10,506	)		(11,104	)
Treasury stock at cost - 500,000 shares		(12,697	)		(12,697	)
Total shareholders' equity		1,538,613			1,524,334
Total liabilities and shareholders' equity	$	11,496,074		$	11,798,779
The accompanying notes are an integral part of these financial statements.

WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	Three Months Ended
	March 31
(dollars in thousands, except per share data)	2011		2010
INTEREST INCOME
Interest and fees on loans	$	86,446	$	100,130
Interest and dividends on investment securities
Taxable securities		21,459		18,817
Tax-exempt securities		1,427		1,685
Interest on federal funds sold and short-term investments		233		179
Total interest income		109,565		120,811
INTEREST EXPENSE
Interest on deposits		6,759		11,420
Interest on short-term borrowings		173		276
Interest on long-term debt		2,761		2,486
Total interest expense		9,693		14,182
NET INTEREST INCOME		99,872		106,629
PROVISION FOR CREDIT LOSSES		-		37,500
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES		99,872		69,129
NONINTEREST INCOME
Service charges on deposit accounts		7,962		8,482
Bank card fees		6,553		5,674
Trust service fees		3,055		2,908
Secondary mortgage market operations		1,882		1,882
Other noninterest income		10,986		9,301
Securities transactions		-		-
Total noninterest income		30,438		28,247
NONINTEREST EXPENSE
Employee compensation		40,930		39,044
Employee benefits		10,493		11,051
Total personnel		51,423		50,095
Net occupancy		9,424		9,945
Equipment and data processing		7,433		6,594
Legal and other professional services		7,140		5,232
Deposit insurance and regulatory fees		5,658		6,013
Telecommunication and postage		2,808		3,085
Corporate value and franchise taxes		1,404		1,698
Amortization of intangibles		946		1,495
Provision for valuation losses on foreclosed assets		5,631		3,088
Nonlegal loan collection and other foreclosed asset costs		1,329		3,173
Merger transaction expense		1,166		-
Other noninterest expense		13,766		19,288
Total noninterest expense		108,128		109,706
INCOME (LOSS) BEFORE INCOME TAXES		22,182		(12,330	)
INCOME TAX EXPENSE (BENEFIT)		5,027		(6,050	)
NET INCOME (LOSS)	$	17,155	$	(6,280	)
Preferred stock dividends		4,067		4,067
NET INCOME (LOSS) TO COMMON SHAREHOLDERS	$	13,088	$	(10,347	)
EARNINGS (LOSS) PER COMMON SHARE
Basic	$	.13	$	(.11	)
Diluted		.13		(.11	)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
Basic		96,728,115		96,534,425
Diluted		96,728,115		96,534,425
CASH DIVIDENDS PER COMMON SHARE	$	.01	$	.01
The accompanying notes are an integral part of these financial statements.

WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)

					Common					Accumulated
					Stock and					Other
	Preferred		Common		Capital		Retained			Comprehensive			Treasury
(dollars and shares in thousands, except per share data)	Stock		Shares		Surplus		Earnings			Income (Loss)			Stock			Total
Balance at December 31, 2009	$	294,974		96,447	$	619,838	$	790,481		$	(11,532	)	$	(12,697	)	$	1,681,064
Comprehensive income (loss):
Net loss		-		-		-		(6,280	)		-			-			(6,280	)
Other comprehensive income:
Unrealized net holding gain on securities,
net of reclassifications and tax		-		-		-		-			4,075			-			4,075
Net change in prior service cost or credit and
net actuarial loss on retirement plans, net of tax		-		-		-		-			753			-			753
Total comprehensive income (loss)		-		-		-		(6,280	)		4,828			-			(1,452	)
Common stock dividends, $.01 per share		-		-		-		(976	)		-			-			(976	)
Preferred stock dividend and discount accretion		317		-		-		(4,067	)		-			-			(3,750	)
Common stock issued to dividend reinvestment plan		-		5		49		-			-			-			49
Employee incentive plan common stock activity		-		-		1,296		-			-			-			1,296
Director compensation plan common stock activity		-		8		9		-			-			-			9
Balance at March 31, 2010	$	295,291		96,460	$	621,192	$	779,158		$	(6,704	)	$	(12,697	)	$	1,676,240

Balance at December 31, 2010	$	296,242		96,642	$	623,347	$	628,546		$	(11,104	)	$	(12,697	)	$	1,524,334
Comprehensive income:
Net income		-		-		-		17,155			-			-			17,155
Other comprehensive income:
Unrealized net holding gain on securities,
net of reclassifications and tax		-		-		-		-			218			-			218
Net change in prior service cost or credit and
net actuarial loss on retirement plans, net of tax		-		-		-		-			380			-			380
Total comprehensive income		-		-		-		17,155			598			-			17,753
Common stock dividends, $.01 per share		-		-		-		(980	)		-			-			(980	)
Preferred stock dividend and discount accretion		317		-		-		(4,067	)		-			-			(3,750	)
Common stock issued to dividend reinvestment plan		-		3		42		-			-			-			42
Employee incentive plan common stock activity		-		-		1,208		-			-			-			1,208
Director compensation plan common stock activity		-		9		6		-			-			-			6
Balance at March 31, 2011	$	296,559		96,654	$	624,603	$	640,654		$	(10,506	)	$	(12,697	)	$	1,538,613

The accompanying notes are an integral part of these financial statements.

WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Three Months Ended
	March 31
(dollars in thousands)	2011			2010
OPERATING ACTIVITIES
Net income (loss)	$	17,155		$	(6,280	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of bank premises and equipment		6,024			5,222
Amortization of purchased intangibles		946			1,495
Share-based compensation earned		1,206			1,293
Premium amortization and discount accretion on securities, net		2,424			760
Provision for credit losses and losses on foreclosed assets and loans held for sale		6,870			40,588
Net (gains) losses on asset dispositions		(4,024	)		263
Deferred tax expense (benefit)		6,005			(3,844	)
Net decrease in loans originated and held for sale		28,526			10,803
Net (increase) decrease in interest and other income receivable and prepaid expenses		27,189			(732	)
Net increase (decrease) in interest payable and accrued income taxes and expenses		(11,039	)		2,726
Other, net		(1,163	)		(1,004	)
Net cash provided by operating activities		80,119			51,290
INVESTING ACTIVITIES
Proceeds from maturities of investment securities available for sale		141,802			144,516
Purchases of investment securities available for sale		(183,972	)		(136,319	)
Proceeds from maturities of investment securities held to maturity		14,270			10,265
Purchases of investment securities held to maturity		(50,379	)		-
Net decrease in loans		226,488			275,890
Proceeds from sales and other dispositions of loans reclassified as held for sale		100,459			-
Net (increase) decrease in federal funds sold and short-term investments		12,960			(44,286	)
Proceeds from sales of foreclosed assets and surplus property		10,170			7,273
Purchases of bank premises and equipment		(6,209	)		(8,053	)
Other, net		9,213			(1,238	)
Net cash provided by investing activities		274,802			248,048
FINANCING ACTIVITIES
Net decrease in transaction account and savings account deposits		(156,062	)		(168,790	)
Net decrease in time deposits		(65,521	)		(19,116	)
Net decrease in short-term borrowings		(74,864	)		(124,262	)
Proceeds from issuance of long-term debt		55			77
Repayment of long-term debt		(12	)		(11	)
Proceeds from issuance of common stock		42			49
Purchases of common stock		(2	)		-
Cash dividends on common stock		(946	)		(973	)
Cash dividends on preferred stock		(3,750	)		(3,750	)
Other, net		4			3
Net cash used in financing activities		(301,056	)		(316,773	)
Increase (decrease) in cash and cash equivalents		53,865			(17,435	)
Cash and cash equivalents at beginning of period		210,368			216,347
Cash and cash equivalents at end of period	$	264,233		$	198,912

Cash received during the period for:
Interest income	$	110,512		$	119,224

Cash paid (refund received) during the period for:
Interest expense	$	9,011		$	13,541
Income taxes		(26,780	)		-

Noncash investing activities:
Foreclosed assets received in settlement of loans	$	5,448		$	18,362

The accompanying notes are an integral part of these financial statements.

WHITNEY HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Whitney Holding Corporation and its subsidiaries (the Company or Whitney). The Company’s principal subsidiary is Whitney National Bank (the Bank), which represents virtually all of the Company’s operations and net income. All significant intercompany balances and transactions have been eliminated.

In preparing the consolidated financial statements, the Company is required to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of Whitney’s financial condition, results of operations, changes in shareholders’ equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions.

Pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), some financial information and disclosures have been condensed or omitted in preparing the consolidated financial statements presented in this quarterly report on Form 10-Q. These financial statements should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2010, as amended. Financial information reported in these financial statements is not necessarily indicative of the Company’s financial condition, results of operations or cash flows of any other interim or annual periods.

NOTE 2

PROPOSED MERGER WITH HANCOCK HOLDING COMPANY

On December 22, 2010, Whitney and Hancock Holding Company (Hancock) announced a strategic business combination in which Whitney will merge with and into Hancock. If the merger is completed, holders of Whitney common stock will receive .418 of a share of Hancock common stock in exchange for each share of Whitney common stock held immediately prior to the merger, subject to the payment of cash in lieu of fractional shares. On April 29, 2011, the shareholders of both Whitney and Hancock voted to approve the merger agreement. Consummation of the merger is contingent upon regulatory approvals and other closing conditions.

NOTE 3

INVESTMENT SECURITIES

Summary information about securities available for sale and securities held to maturity follows. Mortgage-backed securities are issued or guaranteed by U.S. government agencies and substantially all are backed by residential mortgage loans.

	Amortized		Unrealized		Unrealized		Fair
(in thousands)	Cost		Gains		Losses		Value
Securities Available for Sale
March 31, 2011
Mortgage-backed securities	$	1,897,847	$	43,028	$	7,836	$	1,933,039
U. S. agency securities		18,566		-		216		18,350
Obligations of states and political subdivisions		4,261		224		-		4,485
Other securities		53,037		-		-		53,037
Total	$	1,973,711	$	43,252	$	8,052	$	2,008,911
December 31, 2010
Mortgage-backed securities	$	1,861,026	$	43,869	$	8,946	$	1,895,949
U. S. agency securities		18,633		-		285		18,348
Obligations of states and political subdivisions		4,895		230		3		5,122
Other securities		48,826		-		-		48,826
Total	$	1,933,380	$	44,099	$	9,234	$	1,968,245
Securities Held to Maturity
March 31, 2011
Mortgage-backed securities	$	433,839	$	41	$	4,202	$	429,678
Obligations of states and political subdivisions		143,042		4,027		84		146,985
Corporate debt securities		100,000		-		1,430		98,570
Total	$	676,881	$	4,068	$	5,716	$	675,233
December 31, 2010
Mortgage-backed securities	$	395,177	$	-	$	5,482	$	389,695
Obligations of states and political subdivisions		146,180		4,029		255		149,954
Corporate debt securities		100,000		-		1,454		98,546
Total	$	641,357	$	4,029	$	7,191	$	638,195

The following summarizes securities with unrealized losses at March 31, 2011 and December 31, 2010 by the period over which the security’s fair value had been continuously less than its amortized cost as of each date.

March 31, 2011	Less than 12 Months				12 Months or Longer
	Fair		Unrealized		Fair		Unrealized
(in thousands)	Value		Losses		Value		Losses
Securities Available for Sale
Mortgage-backed securities	$	471,848	$	7,836	$	-	$	-
U.S. agency securities		18,350		216		-		-
Total	$	490,198	$	8,052	$	-	$	-
Securities Held to Maturity
Mortgage-backed securities	$	391,730	$	4,202	$	-	$	-
Obligations of states and political subdivisions		4,294		84		-		-
Corporate debt securities		98,570		1,430		-		-
Total	$	494,594	$	5,716	$	-	$	-

December 31, 2010	Less than 12 Months				12 Months or Longer
	Fair		Unrealized		Fair		Unrealized
(in thousands)	Value		Losses		Value		Losses
Securities Available for Sale
Mortgage-backed securities	$	409,483	$	8,946	$	-	$	-
U.S. agency securities		18,348		285		-		-
Obligations of states and political subdivisions		300		2		206		1
Total	$	428,131	$	9,233	$	206	$	1
Securities Held to Maturity
Mortgage-backed securities	$	389,696	$	5,482	$	-	$	-
Obligations of states and political subdivisions		6,187		255		-		-
Corporate debt securities		83,546		1,454		-		-
Total	$	479,429	$	7,191	$	-	$	-

Management evaluates whether unrealized losses on securities represent impairment that is other than temporary. If such impairment is identified, the carrying amount of the security is reduced with a charge to operations or other comprehensive income. In making this evaluation, management first considers the reasons for the indicated impairment. These could include changes in market rates relative to those available when the security was acquired, changes in market expectations about the timing of cash flows from securities that can be prepaid, and changes in the market’s perception of the issuer’s financial health and the security’s credit quality. Management then considers the likelihood of a recovery in fair value sufficient to eliminate the indicated impairment and the length of time over which an anticipated recovery would occur, which could extend to the security’s maturity. Finally, management determines whether there is both the ability and the intent to hold the impaired security until an anticipated recovery, in which case the impairment would be considered temporary. In making this assessment, management considers whether the security continues to be a suitable holding from the perspective of the Company’s overall portfolio and asset/liability management strategies and whether there are other circumstances that would more likely than not require the sale of the security.

Substantially all the unrealized losses at March 31, 2011 resulted from increases in market interest rates over the yields available at the time the underlying securities were purchased. Management identified no impairment related to credit quality. In all cases, the indicated impairment would be recovered by the security’s maturity or repricing date or possibly earlier if the market price for the security increases with a reduction in the yield required by the market. At March 31, 2011, management had both the intent and ability to hold these securities until the market-based impairment is recovered.

The following table shows the amortized cost and estimated fair value of debt securities available for sale and held to maturity grouped by contractual maturity as of March 31, 2011. Debt securities with scheduled repayments, such as mortgage-backed securities, are presented in separate totals. The expected maturity of a security, in particular certain U.S. agency securities and obligations of states and political subdivisions, may differ from its contractual maturity because of the exercise of call options.

	Amortized		Fair
(in thousands)	Cost		Value
Securities Available for Sale
Within one year	$	749	$	756
One to five years		6,208		6,354
Five to ten years		19,620		19,475
After ten years		-		-
Debt securities with single maturities		26,577		26,585
Mortgage-backed securities		1,897,847		1,933,039
Total debt securities	$	1,924,424	$	1,959,624
Securities Held to Maturity
Within one year	$	15,377	$	15,487
One to five years		161,217		161,795
Five to ten years		46,714		48,056
After ten years		19,734		20,217
Debt securities with single maturities		243,042		245,555
Mortgage-backed securities		433,839		429,678
Total debt securities	$	676,881	$	675,233

Securities with carrying values of $1.17 billion at March 31, 2011 and $1.42 billion at December 31, 2010 were sold under repurchase agreements, pledged to secure public deposits or pledged for other purposes.

NOTE 4

LOANS HELD FOR SALE

Loans held for sale consisted of the following.

	March 31	December 31
(in thousands)	2011	2010
Residential mortgage loans originated for sale	$ 11,780	$ 40,306
Nonperforming loans reclassified as held for sale	57,219	158,045
Total loans held for sale	$68,999	$198,351

Residential mortgage loans originated for sale are carried at the lower of either cost or estimated fair value. Substantially all of these loans are originated under individual purchase commitments from investors.

During the fourth quarter of 2010, the Bank implemented a strategy to accelerate the disposition of problem assets and, as a result, reclassified approximately $303 million of nonperforming loans as held for sale. The Bank recorded $139 million of charge-offs in the fourth quarter of 2010 to record these loans at the lower of cost or estimated fair value. In January 2011, the Company closed on a bulk sale of $83 million in carrying value of nonperforming loans held for sale in addition to various individual sales and other dispositions. No additional nonperforming loans were reclassified as held for sale during the first quarter of 2011.

NOTE 5

LOANS

The composition of the Company’s loan portfolio follows.

	March 31 December 31
(in thousands)	2011				2010
Commercial & industrial	$	2,644,404	38	%	$	2,789,193	38	%
Owner-occupied real estate		1,061,905	15			1,003,162	14
Total commercial & industrial		3,706,309	53			3,792,355	52
Construction, land & land development		879,590	13			945,896	13
Other commercial real estate		1,016,812	14			1,122,950	16
Total commercial real estate		1,896,402	27			2,068,846	29
Residential mortgage		978,793	14			952,847	13
Consumer		411,849	6			420,678	6
Total	$	6,993,353	100	%	$	7,234,726	100	%

NOTE 6

CREDIT RISK MANAGEMENT, ALLOWANCE FOR LOAN LOSSES AND RESERVE FOR LOSSES ON UNFUNDED CREDIT COMMITMENTS, AND CREDIT QUALITY INDICATORS

Credit Risk Management

Whitney manages credit risk mainly through adherence to underwriting and loan administration standards established by the Bank’s Credit Policy Committee and through the efforts of the credit administration function to ensure consistent application and monitoring of standards throughout the Company. Written credit policies define underwriting criteria, concentration guidelines, and lending approval processes that cover individual authority as well as the involvement of senior and regional credit officers and the senior loan committee. The senior loan committee includes select commercial lending executives, senior officers in Credit Administration, the Chief Credit Officer, the President and the Chief Executive Officer.

Commercial and industrial (C&I) credits and commercial real estate (CRE) loans are underwritten principally based upon cash flow coverage, but additional support is regularly obtained through collateralization and guarantees. C&I loans are typically relationship-based rather than transaction-driven. Loan concentrations are monitored monthly by management and the Board of Directors. Consumer loans, including most residential mortgages and other consumer borrowings, are centrally underwritten with reference to the customer’s debt capacity and with the support of automated credit scoring tools, including appropriate secondary review procedures.

Lending officers are primarily responsible for ongoing monitoring and the assignment of risk ratings to individual loans based on established guidelines. An independent credit review function, which reports to the Audit Committee of the Board of Directors, assesses the accuracy of officer ratings and the timeliness of rating changes and performs reviews of the underwriting processes. Once a problem relationship over a certain size threshold is identified, a monthly watch committee process is initiated. The watch committee, composed of senior lending and credit administration management as well as the Chief Executive Officer and Chief Risk Officer, must approve any substantive changes to identified problem credits and will assign relationships to a special credits department when appropriate.

Allowance for Loan Losses and Reserve for Losses on Unfunded Commitments

Management’s evaluation of credit risk in the loan portfolio is reflected in the estimate of probable losses inherent in the portfolio that is reported in the Company’s financial statements as the allowance for loan losses. Changes in this evaluation over time are reflected in the provision for credit losses charged to expense. As actual loan losses are incurred, they are charged against the allowance. Subsequent recoveries are added back to the allowance when collected. The methodology for determining the allowance involves significant judgment, and important factors that influence this judgment are re-evaluated by management quarterly to respond to changing conditions.

A summary analysis of changes in the allowance for loan losses by loan portfolio class follows. Information on loan balances excludes loans reclassified as held for sale (see Note 4).

	Commercial			Commercial			Residential
(in thousands)	& Industrial			Real Estate			Mortgage			Consumer			Unallocated			Total
Three months ended March 31, 2011
Beginning allowance	$	73,656		$	103,172		$	20,833		$	14,182		$	5,000		$	216,843
Provision for credit losses		10,900			(11,617	)		4,007			1,710			(5,000	)		-
Loans charged off		(4,392	)		(6,994	)		(3,062	)		(1,659	)		-			(16,107	)
Recoveries		4,308			8,451			415			276			-			13,450
Net (charge-offs) recoveries		(84	)		1,457			(2,647	)		(1,383	)		-			(2,657	)
Ending allowance	$	84,472		$	93,012		$	22,193		$	14,509		$	-		$	214,186

Allowance at end of period:
Loans individually evaluated
for impairment	$	1,432		$	1,162		$	905		$	-					$	3,499
Loans collectively evaluated
for impairment		83,040			91,850			21,288			14,509						210,687

Loans at end of period:
Loans individually evaluated
for impairment	$	31,611		$	56,985		$	9,974		$	337					$	98,907
Loans collectively evaluated
for impairment		3,674,698			1,839,417			968,819			411,512						6,894,446
Total loans	$	3,706,309		$	1,896,402		$	978,793		$	411,849					$	6,993,353
Three months ended March 31, 2010
Beginning allowance	$	71,971		$	113,829		$	27,550		$	10,321		$	-		$	223,671
Provision for credit losses		6,617			22,414			4,727			3,542			-			37,300
Loans charged off		(13,136	)		(21,218	)		(4,129	)		(1,504	)		-			(39,987	)
Recoveries		1,252			1,186			253			215			-			2,906
Net charge-offs		(11,884	)		(20,032	)		(3,876	)		(1,289	)		-			(37,081	)
Ending allowance	$	66,704		$	116,211		$	28,401		$	12,574		$	-		$	223,890

Allowance at end of period:
Loans individually evaluated
for impairment	$	9,352		$	33,691		$	4,252		$	392					$	47,687
Loans collectively evaluated
for impairment		57,352			82,520			24,149			12,182						176,203

Loans at end of period:
Loans individually evaluated
for impairment	$	60,933		$	262,103		$	38,606		$	1,295					$	362,937
Loans collectively evaluated
for impairment		3,877,464			2,433,832			976,376			422,889						7,710,561
Total loans	$	3,938,397		$	2,695,935		$	1,014,982		$	424,184					$	8,073,498

The process for determining the recorded allowance involves three key elements: (1) establishing specific allowances as needed for loans evaluated for impairment; (2) developing loss factors based on historical loss experience for nonimpaired commercial loans grouped by geography, loan product type and internal risk rating and for homogeneous groups of residential and consumer loans; and (3) determining appropriate adjustments to historical loss factors based on management’s assessment of current economic conditions and other qualitative risk factors both internal and external to the Company.

The historical loss factors for commercial loans are determined with reference to the results of migration analysis, which analyzes the charge-off experience over time for loans within each grouping. The historical loss factors for homogeneous loan groups are based on average historical charge-off information. Management adjusts historical loss factors based on its assessment of whether current conditions, both internal and external, would be adequately reflected in these factors. Internally, management must consider such matters as whether trends have been identified in the quality of underwriting and loan administration as well as in the timely identification of credit quality issues. Management also monitors shifts in portfolio concentrations and other changes in portfolio characteristics that indicate levels of risk not fully captured in the loss factors. External factors include local and national economic trends, as well as changes in the economic fundamentals of specific industries that are well-represented in Whitney’s customer base. Applying the adjusted loss factors to the corresponding loan groups yields an allowance that represents management’s best estimate of probable losses. Management has established policies and procedures to help ensure a consistent approach to this inherently judgmental process.

A loan is considered impaired when it is probable that all contractual amounts will not be collected as they come due. Specific allowances are determined for impaired loans based on the present value of expected future cash flows discounted at the loan’s contractual interest rate, the fair value of the collateral if the loan is collateral dependent, or, when available, the loan’s observable market price. As an administrative matter, this process is applied only to impaired loans or relationships in excess of $1 million. The most probable source of repayment for the majority of the Company’s impaired loans at March 31, 2011 and December 31, 2010 was from liquidation of the underlying real estate collateral, and such loans have been deemed to be collateral dependent.

Third-party property appraisals are obtained prior to the origination of loans secured by real estate. Updated appraisals are obtained when certain events occur, such as the refinancing of the loan, the renewal of the loan or if the credit quality of the loan deteriorates. Changes in collateral value can affect a loan’s risk rating or its impairment evaluation and thereby impact the allowance for credit losses. Whitney’s policy is to recognize a loan charge-off promptly when the collection of the loan is sufficiently questionable based on the current assessment of the present and future cash flow potential available to liquidate the debt. The Bank generally uses a third-party appraisal when assessing collateral value for the purpose of determining the need for and amount of a charge-off. At foreclosure, a new appraisal is obtained and the foreclosed property is recorded at the new valuation less estimated selling costs.

The type of valuation methodology used to support the value of the collateral is based on property-specific facts and circumstances, including the nature of the real estate and the disposition strategy being employed. In all cases, an “as-is” value is determined; however, other valuation methodologies may also be used. For example, “upon completion” value or “upon

stabilization” value may be used when a borrower has funds available to complete construction of a project, whereas an “as-is” value would be used for partially developed property for which a borrower has insufficient funds to complete the project. “As-is” values are generally used for nonperforming and impaired loans. Retail value may be used for a completed single-family home, but a discounted retail valuation would be used for a multi-lot subdivision with sales extending over a period of time. Appraisals representing a bulk sale of multiple parcels or condominiums that reflect a discount may be used when individual retail sales are not anticipated in the near term.

While appraisals are obtained annually for problem credits, Whitney monitors factors that can positively or negatively impact property values until updated appraisals are received, such as the date of the last valuation, the volatility of property values in specific markets, changes in the value of similar properties and changes in the characteristics of individual properties. As property values declined in recent years, especially for real estate serving as collateral for land, land development and construction loans in some of Whitney’s market areas, appraisals have generally been discounted for impairment analysis purposes based on how recently the appraisal was completed. In determining the discounts applied, Whitney considered market-based information, including actual changes in real property values indicated by new appraisals received on loan collateral and on real property obtained through foreclosure, market intelligence obtained by lending officers and foreclosed property managers and market statistics monitored by credit review personnel. Appraisals less than six months old were discounted 10%, primarily reflecting estimated selling costs. A 20% discount was applied to appraisals greater than six months old but less than one year old. These discounts were consistently applied to properties in Whitney’s Florida and Alabama markets, but were reduced for certain properties in other markets based on property-specific circumstances.

The monitoring of credit risk also extends to unfunded credit commitments, such as unused commercial credit lines and letters of credit, and management establishes reserves as needed for its estimate of probable losses on such commitments.

A summary analysis of changes in the reserve for losses on unfunded credit commitments follows. The reserve is reported with accrued expenses and other liabilities in the consolidated balance sheets.

	Three Months Ended
	March 31
(in thousands)	2011		2010
Reserve at beginning of period	$	1,600	$	2,200
Provision for credit losses		-		200
Reserve at end of period	$	1,600	$	2,400

Credit Quality Statistics

Past Due and Nonaccrual Loans and Loans Individually Evaluated for Impairment

A loan is considered past due or delinquent when a contractual principal or interest payment is not received by the due date. The following tables provides an aging of past due loans by class of loan as of March 31, 2011 and December 31, 2010.

March 31, 2011	Past Due												Over 90
		30-59		60-89	Over						Total		days and
(in thousands)	days		days		90 days		Total		Current		Loans		accruing
Commercial & industrial	$	4,749	$	1,919	$	9,148	$	15,816	$	2,628,588	$	2,644,404	$	2,483
Owner-occupied real estate		3,344		8,983		15,790		28,117		1,033,788		1,061,905		989
Total commercial & industrial		8,093		10,902		24,938		43,933		3,662,376		3,706,309		3,472
Construction, land &
land development		8,382		3,880		25,904		38,166		841,424		879,590		1,049
Other commercial real estate		5,390		5,825		14,832		26,047		990,765		1,016,812		3,613
Total commercial real estate		13,772		9,705		40,736		64,213		1,832,189		1,896,402		4,662
Residential mortgage		15,714		5,750		18,124		39,588		939,205		978,793		883
Consumer		1,244		709		1,610		3,563		408,286		411,849		1,218
Total	$	38,823	$	27,066	$	85,408	$	151,297	$	6,842,056	$	6,993,353	$	10,235

December 31, 2010	Past Due												Over 90
		30-59		60-89	Over						Total		days and
(in thousands)	days		days		90 days		Total		Current		Loans		accruing
Commercial & industrial	$	4,474	$	3,855	$	11,079	$	19,408	$	2,769,785	$	2,789,193	$	6,210
Owner-occupied real estate		15,225		7,379		11,280		33,884		969,278		1,003,162		1,798
Total commercial & industrial		19,699		11,234		22,359		53,292		3,739,063		3,792,355		8,008
Construction, land &
land development		5,249		2,243		24,326		31,818		914,078		945,896		1,635
Other commercial real estate		12,729		3,792		5,255		21,776		1,101,174		1,122,950		1,016
Total commercial real estate		17,978		6,035		29,581		53,594		2,015,252		2,068,846		2,651
Residential mortgage		14,568		9,342		17,260		41,170		911,677		952,847		1,282
Consumer		2,078		769		2,523		5,370		415,308		420,678		2,342
Total	$	54,323	$	27,380	$	71,723	$	153,426	$	7,081,300	$	7,234,726	$	14,283

The Company stops accruing interest on a loan when the borrower’s ability to meet contractual payments is in doubt. For commercial and real estate loans, a loan is placed on nonaccrual status generally when it is ninety days past due as to principal or interest and the loan is not otherwise both well secured and in the process of collection. A loan may, however, be placed on nonaccrual status regardless of its past due status. A loan on nonaccrual status may be reinstated to accrual status when full payment of contractual principal and interest is expected and this expectation is supported by current sustained performance.

The totals for loans on nonaccrual status by class of loan were as follows.

	March 31		December 31
(in thousands)	2011		2010
Commercial & industrial	$	23,299	$	20,859
Owner-occupied real estate		24,760		20,533
Total commercial & industrial		48,059		41,392
Construction, land & land development		54,471		42,631
Other commercial real estate		28,606		18,364
Total commercial real estate		83,077		60,995
Residential mortgage		42,147		36,807
Consumer		1,201		1,325
Total nonaccrual loans	$	174,484	$	140,519

Information on loans individually evaluated for possible impairment loss at March 31, 2011 and December 31, 2010 follows. Substantially all of the impaired loans summarized below are included in the nonaccrual loan totals presented above. No interest has been recognized on impaired loans in nonaccrual status. The recorded investment in impaired loans at March 31, 2011 also included $7.2 million for a loan in accrual status that had been subject to a troubled debt restructuring. The interest recognized on this loan during the first quarter of 2011 was insignificant. Overall, the total for restructured troubled loans held for investment was not material at either March 31, 2011 or December 30, 2010.

	Unpaid		Recorded		Recorded
	Contractual		Investment		Investment		Total
	Principal		with no		with an		Recorded		Related
(in thousands)	Balance		Allowance		Allowance		Investment		Allowance
March 31, 2011
Commercial & industrial	$	12,675	$	8,176	$	4,499	$	12,675	$	1,432
Owner-occupied real estate		18,936		10,324		8,612		18,936		-
Total commercial & industrial		31,611		18,500		13,111		31,611		1,432
Construction, land &
land development		40,916		30,022		4,909		34,931		473
Other commercial real estate		26,535		19,754		2,300		22,054		689
Total commercial real estate		67,451		49,776		7,209		56,985		1,162
Residential mortgage		10,135		6,225		3,749		9,974		905
Consumer		734		337		-		337		-
Total	$	109,931	$	74,838	$	24,069	$	98,907	$	3,499
December 31, 2010
Commercial & industrial	$	10,027	$	9,682	$	345	$	10,027	$	25
Owner-occupied real estate		11,435		9,299		2,136		11,435		128
Total commercial & industrial		21,462		18,981		2,481		21,462		153
Construction, land &
land development		27,112		15,524		6,874		22,398		824
Other commercial real estate		19,735		12,442		1,829		14,271		817
Total commercial real estate		46,847		27,966		8,703		36,669		1,641
Residential mortgage		5,300		4,555		-		4,555		-
Consumer		645		429		-		429		-
Total	$	74,254	$	51,931	$	11,184	$	63,115	$	1,794

The average recorded investment in loans individually evaluated for impairment loss for the three months ended March 31, 2011 and 2010 was as follows.

	Three Months Ended
	March 31
(in thousands)	2011		2010
Commercial & industrial	$	11,351	$	29,966
Owner-occupied real estate		15,185		33,840
Total commercial & industrial		26,536		63,806
Construction, land &
land development		28,664		169,567
Other commercial real estate		18,163		81,154
Total commercial real estate		46,827		250,721
Residential mortgage		7,265		38,307
Consumer		383		1,132
Total	$	81,011	$	353,966

Credit Quality Indicators

As part of the credit risk management process, management monitors trends in certain credit quality indicators with primary emphasis on risk rating grades for C&I and CRE loans, and loan delinquencies for residential mortgage and consumer loans (see above for details).

The risk rating system is utilized to monitor borrower and portfolio quality trends and provides a basis for aggregating loans to analyze historical losses in calculating the allowance for loan losses. The rating reflects the level of risk posed by both the borrower’s expected performance and the transaction’s structure. All C&I and CRE loans are assigned a risk rating at loan inception and renewal, the occurrence of any significant event or at least annually. A description of the general characteristics of the Company’s risk rating grades is as follows:

Pass credits – These ratings range from high quality credits to marginal credits. High quality credits include loans to borrowers with investment grade corporate debt ratings, loans collateralized by liquid assets and loans with above average credit risk exhibiting debt service coverage well above policy criteria. Most of the Company’s C&I and CRE loans are rated satisfactory and have acceptable credit quality with debt capacity or debt service coverage that meets policy criteria and covenants and collateral that provide adequate protection from loss. Marginal credits may exhibit positive debt capacity or debt service coverage that are below loan policy criteria or are subject to fluctuations due to cyclical economic factors.

Special Mention credits – This rating is used for loans that have potential weaknesses that may result in loss if uncorrected. For example, borrowers may be experiencing negative operating trends due to adverse economic or market conditions. While loans in this category pose a higher risk of default than pass credits, default is not imminent.

·	Classified credits – This category includes substandard, doubtful and loss rated loans. Substandard loans have well-defined weaknesses that will likely result in loss if not corrected. Borrowers may have currently unprofitable operations, inadequate debt

service coverage, inadequate liquidity or marginal capitalization. Repayment may depend on collateral or other secondary sources. Full collection of principal and interest for some substandard loans may be in doubt and such loans are placed on nonaccrual status. Doubtful loans have all the weaknesses inherent in substandard loans and their full collection is highly questionable and improbable. Loss credits are loans that have been determined to be uncollectible. Both doubtful and loss loans are placed on nonaccrual status.

The following table summarizes C&I and CRE loans by risk rating at March 31, 2011 and December 31, 2010.

	Commercial &				Owner-occupied				Construction, Land &				Other Commercial
	Industrial				Real Estate				Land Development				Real Estate
	March 31		December 31		March 31		December 31		March 31		December 31		March 31		December 31
(in thousands)	2011		2010		2011		2010		2011		2010		2011		2010
Pass	$	2,367,333	$	2,510,851	$	902,905	$	834,587	$	549,648	$	615,803	$	774,024	$	869,113
Special Mention		62,528		79,432		13,975		32,211		52,292		57,980		107,521		105,544
Substandard		211,214		196,535		144,324		135,368		276,617		270,340		134,451		148,139
Doubtful		3,329		2,375		701		996		1,033		1,773		816		154
Total	$	2,644,404	$	2,789,193	$	1,061,905	$	1,003,162	$	879,590	$	945,896	$	1,016,812	$	1,122,950

NOTE 7

DEPOSITS

The composition of deposits was as follows.

	March 31		December 31
(in thousands)	2011		2010
Noninterest-bearing demand deposits	$	3,625,043	$	3,523,518
Interest-bearing deposits:
NOW account deposits		1,162,885		1,309,738
Money market deposits		1,786,266		1,913,224
Savings deposits		919,526		903,302
Other time deposits		648,847		689,301
Time deposits $100,000 and over		1,039,253		1,064,320
Total interest-bearing deposits		5,556,777		5,879,885
Total deposits	$	9,181,820	$	9,403,403

Time deposits of $100,000 or more include balances in treasury-management deposit products for commercial and certain other larger deposit customers. Balances maintained in such products totaled $227 million at March 31, 2011 and $188 million at December 31, 2010. Most of these deposits mature on a daily basis.

NOTE 8

SHORT-TERM BORROWINGS

Short-term borrowings consisted of the following.

	March 31		December 31
(in thousands)	2011		2010
Securities sold under agreements to repurchase	$	445,149	$	523,324
Federal funds purchased		16,579		13,968
Treasury Investment Program		6,900		6,200
Total short-term borrowings	$	468,628	$	543,492

The Bank borrows funds on a secured basis by selling securities under agreements to repurchase, mainly in connection with treasury-management services offered to its deposit customers. Repurchase agreements generally mature daily.

Federal funds purchased are unsecured borrowings from other banks, generally on an overnight basis.

Under the Treasury Investment Program, temporary excess U.S. Treasury receipts are loaned to participating financial institutions at 25 basis points under the federal funds rate. Repayment of these borrowed funds can be demanded at any time, and the Bank pledges securities as collateral.

From time to time, the Bank uses advances from the Federal Home Loan Bank (FHLB) as an additional source of short-term funds, although no advances were outstanding at March 31, 2011 or December 31, 2010. FHLB advances are secured by a blanket lien on Bank loans secured by real estate.

NOTE 9

OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES

The more significant components of other assets and accrued expenses and other liabilities were as follows.

	March 31		December 31
(in thousands)	2011		2010
Other Assets
Cash surrender value of life insurance	$	182,172	$	180,329
Net deferred income tax asset		144,112		150,199
Foreclosed assets and surplus property		78,155		87,696
Prepaid FDIC insurance assessments		44,553		49,360
Recoverable income taxes		29,047		55,827
Prepaid pension asset		15,949		14,609
Other prepaid expenses		14,151		10,393
Low-income housing tax credit fund investments		6,192		6,822
Miscellaneous investments, receivables and other assets		45,853		55,795
Total other assets	$	560,184	$	611,030
Accrued Expenses and Other Liabilities
Accrued taxes and other expenses	$	20,504	$	30,302
Dividend payable		883		850
Liability for pension benefits		14,549		14,465
Liability for postretirement benefits other than pensions		15,705		15,819
Reserve for losses on unfunded credit commitments		1,600		1,600
Reserve for losses on loan repurchase obligations		250		1,750
Miscellaneous payables, deferred income and other liabilities		23,538		33,471
Total accrued expenses and other liabilities	$	77,029	$	98,257

See Note 17 for a discussion of the Company’s process for evaluating the realizability of deferred tax assets. The reserve for losses on mortgage loan repurchase obligations is discussed in Note 15.

Life insurance policies purchased under a bank-owned life insurance program are carried at their cash surrender value, which represents the amount that could be realized as of the reporting date. Earnings on these policies are reported in noninterest income and are not taxable.

The total for miscellaneous investments, receivables and other assets at March 31, 2011 and December 31, 2010 included approximately $7 million and $17 million, respectively, of investments in auction rate securities (ARS), which are investment grade securities with underlying holdings of municipal securities. The ARS were purchased at par from brokerage customers to provide a source of liquidity. Disruptions in the broader credit markets led to failed auctions in the ARS market and a resulting period of illiquidity. While management believes the ARS will be redeemed at par, the actual timing of redemptions is uncertain. These investments are carried at their estimated fair values.

NOTE 10

OTHER NONINTEREST INCOME

The components of other noninterest income were as follows.

	Three Months Ended
	March 31
(in thousands)	2011			2010
Investment services income	$	1,719		$	1,540
Credit-related fees		1,877			1,685
ATM fees		1,184			1,128
Other fees and charges		1,083			1,279
Earnings from bank-owned life insurance program		1,707			1,629
Other operating income		1,348			1,458
Net gains on sales and other revenue from foreclosed assets		2,070			588
Net gains (losses) on disposals of surplus property		(2	)		(6	)
Total	$	10,986		$	9,301

NOTE 11

OTHER NONINTEREST EXPENSE

The components of other noninterest expense were as follows.

	Three Months Ended
	March 31
(in thousands)	2011			2010
Security and other outsourced services	$	4,915		$	4,767
Bank card processing services		1,847			1,540
Advertising and promotion		1,274			1,571
Operating supplies		931			838
Loss on mortgage loan repurchase obligations		-			4,500
Valuation losses on loans held for sale, net gains on sales		(1,504	)		-
Miscellaneous operating losses		411			257
Other operating expenses		5,892			5,815
Total	$	13,766		$	19,288

The loss on mortgage loan repurchase obligations is discussed below in Note 15.

NOTE 12

EMPLOYEE RETIREMENT BENEFIT PLANS

Retirement Income Plans

Whitney has a noncontributory qualified defined-benefit pension plan. In 2008, the qualified plan was amended (a) to limit eligibility to those employees who were employed on December 31, 2008 and (b) to freeze benefit accruals for all participants other than those who were fully vested and whose age and years of benefit service combined equaled at least fifty as of December 31, 2008. Whitney also has an unfunded nonqualified defined-benefit pension plan that provides retirement benefits to designated executive officers.

The Company has contributed $2.1 million to the qualified plan in 2011 through the end of the first quarter and, based on currently available information, anticipates making no additional contributions for the remainder of the year.

The components of net periodic pension expense were as follows for the combined qualified and nonqualified plans.

	Three Months Ended
	March 31
(in thousands)	2011			2010
Service cost for benefits in period	$	2,182		$	1,789
Interest cost on benefit obligation		3,031			3,064
Expected return on plan assets		(4,135	)		(3,244	)
Amortization of:
Net actuarial loss		704			1,061
Prior service cost		78			80
Net periodic pension expense	$	1,860		$	2,750

The actuarial gains or losses and prior service costs or credits with respect to a retirement benefit plan that arise in a period but are not immediately recognized as components of net periodic pension expense are recognized, net of tax, as a component of other comprehensive income. The amounts included in accumulated other comprehensive income are adjusted as they are recognized as components of net periodic pension expense in subsequent periods.

Health and Welfare Plans

Whitney has offered health care and life insurance benefit plans for retirees and their eligible dependents. The Company funds its obligations under these plans as contractual payments come due to health care organizations and insurance companies. Currently, these plans restrict eligibility for postretirement health benefits to retirees already receiving benefits as of the plan amendments in 2007 and to those active participants who were eligible to receive benefits as of December 31, 2007. Life insurance benefits are currently only available to employees who retired before December 31, 2007. The net periodic expense for postretirement benefits was immaterial in both 2011 and 2010.

NOTE 13

SHARE-BASED COMPENSATION

Whitney maintains incentive compensation plans that incorporate share-based compensation. The plans for both employees and directors have been approved by the Company’s shareholders. Descriptions of these plans, including the terms of awards and the number of Whitney shares authorized for issuance, were included in Note 16 to the consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2010. No share-based compensation awards were made during the first quarter of 2011.

The Company recognized share-based compensation expense of $1.2 million ($.8 million after-tax) in the first quarter of 2011 and $1.3 million ($.8 million after-tax) in the first quarter of 2010.

NOTE 14

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is tested for impairment at least annually. The impairment test compares the estimated fair value of a reporting unit with its net book value. Whitney has assigned all goodwill to one reporting unit that represents the overall banking operations. The fair value of the reporting unit is based on valuation techniques that market participants would use in the acquisition of the whole unit, such as estimated discounted cash flows, the quoted market price of Whitney’s common stock including an estimated control premium, and observable average price-to-earnings and price-to-book multiples of our competitors. No indication of goodwill impairment was identified in the annual assessment as of September 30, 2010 or in an updated assessment as of December 31, 2010. Additional support for the fair value of the reporting unit was provided by the price indicated in the pending merger with Hancock.

NOTE 15

CONTINGENCIES

Legal Proceedings

The Company and its subsidiaries are parties to various legal proceedings arising in the ordinary course of business. After reviewing pending and threatened actions with legal counsel, management believes that the ultimate resolution of these actions will not have a material effect on Whitney’s financial condition, results of operations or cash flows.

On January 7, 2011, a purported shareholder of Whitney filed a lawsuit in the Civil District Court for the Parish of Orleans of the State of Louisiana captioned De LaPouyade v. Whitney Holding Corporation, et al., No. 11-189, naming Whitney and members of Whitney’s board of directors as defendants. This lawsuit is purportedly brought on behalf of a putative class of Whitney’s common shareholders and seeks a declaration that it is properly maintainable as a class action. The lawsuit alleges that Whitney’s directors breached their fiduciary duties and/or violated Louisiana state law and that Whitney aided and abetted those alleged breaches of fiduciary duty by, among other things, (a) agreeing to consideration that undervalues Whitney, (b) agreeing to deal protection devices that preclude a fair sales process, (c) engaging in self-dealing, and (d) failing to protect against conflicts of interest. Among other relief, the plaintiff seeks to enjoin the merger. The parties have reached a settlement in principle.

On February 17, 2011, a complaint in intervention was filed by the Louisiana Municipal Police Employees Retirement System (“MPERS”) in the De LaPouyade case. The MPERS complaint is substantially identical to and seeks to join in the De LaPouyade complaint. The parties have reached a settlement in principle.

On February 7, 2011, another putative shareholder class action lawsuit, Realistic Partners v. Whitney Holding Corporation, et al., Case No. 2:11-cv-00256, was filed in the United States District Court for the Eastern District of Louisiana against Whitney, members of Whitney’s board of directors, and Hancock asserting violations of Section 14(a) of the Securities Exchange Act of 1934, breach of fiduciary duty under Louisiana state law, and aiding and abetting breach of fiduciary duty by, among other things, (a) making material misstatements or omissions in the proxy statement, (b) agreeing to consideration that undervalues Whitney, (c) agreeing to deal protection devices that preclude a fair sales process, (d) engaging in self-dealing, and (e) failing to protect against conflicts of interest. Among other relief, the plaintiff seeks to enjoin the merger. On February 24, 2011, the plaintiff moved for class certification. The parties have reached a settlement in principle.

On April 11, 2011, another putative shareholder class action lawsuit, Jane Doe v. Whitney Holding Corporation, et al., Case No. 2:11-cv-00794-ILRL-JCW, was filed in the United States District Court for the Eastern District of Louisiana against Whitney, members of Whitney’s board of directors, and the defendants’ insurance carrier asserting breach of fiduciary duty under Louisiana state law by, among other things, (a) agreeing to consideration that undervalues Whitney, (b) agreeing to deal protection devices that preclude a fair sales process, (c) engaging in self-dealing, and (d) failing to protect against conflicts of interest. Among other relief, the plaintiff seeks to enjoin the merger. On April 20, 2011, this case was consolidated with the Realistic Partners case. The parties have reached a settlement in principle.

Reserve for Losses on Mortgage Loan Repurchase Obligations

During 2010, the Company established a $4.5 million reserve for estimated losses on mortgage loan repurchase obligations associated with certain loans that were originated and sold by an acquired entity. The Bank has received repurchase demands from investors claiming loan defects that are covered by the standard representations and warranties in mortgage loan sale contracts executed by the acquired entity before the date of the acquisition. In determining the loss reserve estimate, management investigated the investor claims and the nature and cause of the underlying defects and evaluated the potential for additional claims associated with the loan origination and sale activities of the acquired entity. The Bank has made payments totaling $4.2 million with respect to investor claims through March 31, 2011, leaving an estimated loss reserve of $.3 million at that date. The Bank has incurred no losses stemming from the representations and warranties it makes in its own secondary mortgage market operations and historically has not maintained a loss reserve for repurchase obligations.

The reserve for losses on mortgage loan repurchase obligations is reported with accrued expenses and other liabilities in the consolidated balance sheets and the corresponding expense is reported with other noninterest expense in the consolidated income statements.

Indemnification Obligation

In 2007, Visa completed restructuring transactions that modified the obligation of members of Visa USA, including Whitney, to indemnify Visa against pending and possible settlements of certain litigation matters. In 2008, Visa completed an initial public offering of its shares and used the proceeds to redeem a portion of Visa USA members’ equity interests and to establish an escrow account that will fund any settlement of the members’ obligations under the indemnification agreement. Visa has made additional cash contributions to the escrow account subsequent to the initial funding. Although the Company remains obligated to indemnify Visa for losses in connection with certain litigation matters whose claims exceed amounts set aside in the escrow account, Whitney’s interest in the escrow balance approximates management’s current estimate of the value of the Company’s indemnification obligation. The amount of offering proceeds and other cash contributions to the escrow account for litigation settlements will reduce the number of shares of Visa stock to which Whitney will ultimately be entitled as a result of the restructuring.

NOTE 16

SHAREHOLDERS’ EQUITY AND REGULATORY MATTERS

Senior Preferred Stock

In December 2008, Whitney issued 300,000 shares of senior preferred stock to the U.S. Department of Treasury (Treasury) under the Capital Purchase Program (CPP) established under the Troubled Asset Relief Program (TARP) that was created as part of the Emergency Economic Stabilization Act of 2008 (EESA). Treasury also received a ten-year warrant to purchase 2,631,579 shares of Whitney common stock at an exercise price of $17.10 per share. The aggregate proceeds were $300 million, and the total capital raised qualifies as Tier 1 regulatory capital and can be used in calculating all regulatory capital ratios.

Whitney may not declare or pay dividends on its common stock or, with certain exceptions, repurchase common stock without first having paid all accrued cumulative preferred dividends that are due to Treasury. For three years from the preferred stock issue date, or until December 19, 2011, the Company also may not increase its common stock dividend rate above a quarterly rate of $.31 per share or repurchase its common shares without Treasury’s consent, unless Treasury has transferred all the preferred shares to third parties or the preferred stock has been redeemed.

Upon consummation of the merger with Hancock, the outstanding warrant issued to the Treasury would be converted into a warrant to purchase Hancock common stock, subject to appropriate adjustments to reflect the merger exchange ratio of .418.

Regulatory Capital Requirements

Measures of regulatory capital are an important tool used by regulators to monitor the financial health of financial institutions. The primary quantitative measures used by regulators to gauge capital adequacy are the ratio of Tier 1 regulatory capital to average total assets, also known as the leverage ratio, and the ratios of Tier 1 and total regulatory capital to risk-weighted assets. The regulators define the components and computation of each of these ratios. The minimum capital ratios for both the Company and the Bank are generally 4% leverage, 4% Tier 1 capital and 8% total capital.

To evaluate capital adequacy, regulators compare an institution’s regulatory capital ratios with their agency guidelines, as well as with the guidelines established as part of the uniform regulatory framework for prompt corrective supervisory action toward insured institutions. In reaching an overall conclusion on capital adequacy or assigning an appropriate classification under the uniform framework, regulators must also consider other subjective and quantitative assessments of risk associated with the institution. Regulators will take certain mandatory as well as possible additional discretionary actions against institutions that they judge to be inadequately capitalized. These actions could materially impact the institution’s financial position and results of operations.

Under the regulatory framework for prompt corrective action, the capital levels of banks are categorized into one of five classifications ranging from well-capitalized to critically under-capitalized. For an institution to be eligible to be classified as well-capitalized, its leverage, Tier 1 and total capital ratios must be at least 5%, 6% and 10%, respectively. If an institution fails to maintain a well-capitalized classification, it will be subject to a series of operating restrictions that increase as the capital condition worsens.

Regulators may, however, set higher capital requirements for an individual institution when particular circumstances warrant. As a result of operating losses during the difficult operating environment in recent years, the Bank has committed to its primary regulator that it will maintain higher capital ratios with a leverage of at least 8%, a Tier 1 regulatory capital ratio of at least 9%, and a total capital ratio of at least 12%. As of March 31, 2011, the Bank’s regulatory capital ratios exceeded the requisite capital levels to both satisfy these target minimums and to be eligible to be classified as well-capitalized, with a leverage ratio of 8.65%, a Tier 1 capital ratio of 11.30% and a total capital ratio of 14.35%.

Bank holding companies must also have at least a 6% Tier 1 capital ratio and a 10% total capital ratio to be considered well-capitalized for various regulatory purposes, and the Company satisfied these criteria at March 31, 2011. As noted above, the capital that was raised through the issuance of preferred stock to Treasury as part of TARP qualifies as Tier 1 regulatory capital and was used in calculating all of the Company’s regulatory capital ratios.

Regulatory Restrictions on Dividends

At March 31, 2011, the Company had approximately $48 million in cash and demand notes from the Bank available to provide liquidity for future dividend payments to its common and preferred shareholders and for other corporate purposes, including making additional capital contributions to the Bank.

Regulatory policy statements provide that generally bank holding companies should only pay dividends out of current operating earnings and that the level of dividends, if any, must be consistent with current and expected capital requirements. The Company must currently obtain regulatory approval before increasing the common dividend rate above the current quarterly level of $.01 per share and must provide prior notice to its primary regulator in advance of declaring dividends on either its common on preferred stock.

Dividends received from the Bank have been the primary source of funds available to the Company for the declaration and payment of dividends to Whitney’s shareholders, both common and preferred. There are various regulatory and statutory provisions that limit the amount of dividends that the Bank can distribute to the Company. Because of recent losses in 2010 and 2009, the Bank currently has no capacity to declare dividends to the Company without prior regulatory approval.

NOTE 17

INCOME TAXES

The Company provided for income tax expense at an effective rate of 22.7% for the first quarter of 2011. For the first quarter of 2010, the Company provided an income tax benefit on the pre-tax loss in that period at an effective rate of 49.1%. Whitney’s effective tax rates have varied from the 35% federal statutory rate primarily because of tax-exempt interest income and the availability of tax credits. Interest income from the financing of state and local governments and earnings from the bank-owned life insurance program are the major components of tax-exempt income. The main source of tax credits has been investments in affordable housing projects and in projects that primarily benefit low-income communities or help the recovery and redevelopment of communities in the Gulf Opportunity Zone. Tax-exempt income and tax credits tend to increase the effective tax benefit rate from the statutory rate in loss periods and to reduce the effective tax expense rate in profitable periods. The impact on the effective rate becomes more pronounced as the pre-tax income or loss becomes smaller, leading to lower expense rates and higher tax benefit rates.

As of March 31, 2011, Whitney had $144 million in net deferred tax assets. Deferred tax assets are subject to an evaluation of whether it is more likely than not that they will be realized. In making such judgments, significant weight is given to evidence that can be objectively verified. Although Whitney generated taxable income in the first quarter of 2011, it still had a three-year cumulative taxable loss as of March 31, 2011 and had net operating loss and tax credit carry forwards. This is considered significant negative evidence when assessing the potential realization of a deferred tax asset. Although realization is not assured, management believes the recorded deferred tax assets are fully recoverable based on the Company’s strong historical taxable income, the taxable income generated in the first quarter of 2011 and the current forecast of taxable income that is sufficient to realize the net deferred tax assets during periods through which losses may be carried forward. The amount of future taxable income required to support the deferred tax asset in the carry forward period, which is currently 19 years, is approximately $495 million. If Whitney is unable to demonstrate that it can continue to generate sufficient taxable income in the near future, then the Company may not be able to conclude it is more likely than not that the benefits of the deferred tax assets will be fully realized and may be required to recognize a valuation allowance against its deferred tax assets with a corresponding increase in income tax expense.

NOTE 18

EARNINGS (LOSS) PER COMMON SHARE

The Financial Accounting Standards Board (FASB) has concluded that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and must be included in the computation of earnings per share using the two-class method. Whitney has awarded share-based payments that are considered participating securities under this guidance. The two-class method allocates net income to each class of common stock and participating security according to common dividends declared and participation rights in undistributed earnings.

The components used to calculate basic and diluted earnings (loss) per common share under the two-class method are shown in the following table. The net loss was not allocated to participating securities because the securities bear no contractual obligation to fund or otherwise share in losses. Potential common shares consist of employee and director stock options, unvested

restricted stock units awarded to employees without dividend rights, and stock warrants issued to Treasury in December 2008. These potential common shares do not enter into the calculation of diluted earnings per share if the impact would be anti-dilutive, i.e., increase earnings per share or reduce a loss per share.

		Three Months Ended
		March 31
(dollars in thousands, except per share data)		2011		2010
Numerator:
Net income (loss)		$	17,155	$	(6,280	)
Preferred stock dividends			4,067		4,067
Net income (loss) to common shareholders			13,088		(10,347	)
Net income allocated to participating securities – basic and diluted			169		-
Net income (loss) allocated to common shareholders – basic and diluted	A	$	12,919	$	(10,347	)
Denominator:
Weighted-average common shares – basic	B		96,728,115		96,534,425
Dilutive potential common shares			-		-
Weighted-average common shares – diluted	C		96,728,115		96,534,425
Earnings (loss) per common share:
Basic	A/B	$	.13	$	(.11	)
Diluted	A/C		.13		(.11	)
Weighted-average anti-dilutive potential common shares:
Stock options and restricted stock units			1,855,171		2,114,838
Warrants			2,631,579		2,631,579

NOTE 19

OFF-BALANCE SHEET FINANCIAL INSTRUMENTS AND DERIVATIVES

Off-Balance Sheet Financial Instruments

To meet the financing needs of its customers, the Bank issues financial instruments that represent conditional obligations that are not recognized, wholly or in part, in the consolidated balance sheets. These financial instruments include commitments to extend credit under loan facilities and guarantees under standby and other letters of credit. Such instruments expose the Bank to varying degrees of credit and interest rate risk in much the same way as funded loans.

Revolving loan commitments are issued primarily to support commercial activities. The availability of funds under revolving loan commitments generally depends on whether the borrower continues to meet credit standards established in the underlying contract and has not violated other contractual conditions. A number of such commitments are used only partially or, in some cases, not at all before they expire. Nonrevolving loan commitments are issued mainly to provide financing for the acquisition and development or construction of real property, both commercial and residential, although not all are expected to lead to permanent financing by the Bank. Loan commitments generally have fixed expiration dates and may require payment of a fee. Credit card and personal credit lines are generally subject to cancellation if the borrower’s credit quality deteriorates, and many lines remain partly or wholly unused.

Substantially all of the letters of credit are standby agreements that obligate the Bank to fulfill a customer’s financial commitments to a third party if the customer is unable to perform.

The Bank issues standby letters of credit primarily to provide credit enhancement to its customers’ other commercial or public financing arrangements and to help them demonstrate financial capacity to vendors of essential goods and services. Over 90% of the letters of credit outstanding at March 31, 2011 were rated as having average or better credit risk under the Bank’s credit risk rating guidelines. Approximately half of the total obligations under standby letters of credit outstanding at March 31, 2011 have a term of one year or less.

The Bank’s exposure to credit losses from these financial instruments is represented by their contractual amounts. The Bank follows its standard credit policies in approving loan facilities and financial guarantees and requires collateral support if warranted. The required collateral could include cash instruments, marketable securities, accounts receivable, inventory, property, plant and equipment, and income-producing commercial property. See Note 6 for a summary analysis of changes in the reserve for losses on unfunded credit commitments.

A summary of off-balance-sheet financial instruments follows.

	March 31		December 31
(in thousands)	2011		2010
Loan commitments – revolving	$	2,296,687	$	2,418,612
Loan commitments – nonrevolving		248,472		229,094
Credit card and personal credit lines		608,800		585,438
Standby and other letters of credit		321,172		336,226

Derivative Financial Instruments

The Bank offers interest rate swap agreements to commercial banking customers seeking to manage their interest rate risk. For each customer swap agreement, the Bank has entered into an offsetting agreement with an unrelated financial institution. These derivative financial instruments are carried at fair value, with changes in fair value recorded in current period earnings. The aggregate notional amounts of both customer interest rate swap agreements and the offsetting agreements were each $168 million at March 31, 2011 and each $146 million at December 31, 2010. The fair value of these derivatives and the credit risk exposure to the Bank were immaterial at March 31, 2011 and December 31, 2010.

NOTE 20

FAIR VALUE DISCLOSURES

The FASB defines fair value as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This accounting guidance also emphasizes that fair value is a market-based measurement and not an entity-specific measurement and established a hierarchy to prioritize the inputs that can be used in the fair value measurement process. The inputs in the three levels of this hierarchy are described as follows:

Level 1

Quoted prices in active markets for identical assets or liabilities. An active market is one in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2

Observable inputs other than Level 1 prices. This would include quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3

Unobservable inputs, to the extent that observable inputs are unavailable. This allows for situations in which there is little or no market activity for the asset or liability at the measurement date.

The material assets or liabilities measured at fair value by Whitney on a recurring basis are summarized below. Mortgage-backed securities are issued or guaranteed by U.S. government agencies and substantially all are backed by residential mortgages. Nonmarketable equity securities (Federal Reserve Bank and Federal Home Loan Bank stock) that are carried at cost are not included below. These equity securities totaled $49 million at March 31, 2011 and $45 million at December 31, 2010. The Level 2 fair value measurement shown below was obtained from a third-party pricing service that uses industry-standard pricing models. Substantially all the model inputs are observable in the marketplace or can be supported by observable data.

	Fair Value Measurement Using
(in millions)	Level 1		Level 2		Level 3
March 31, 2011
Investment securities available for sale:
Mortgage-backed securities		-	$	1,933		-
U. S. agency securities		-		18		-
Other debt securities		-		8		-
Derivative financial instruments – assets		-		3		-
Derivative financial instruments – liabilities		-		3		-
December 31, 2010
Investment securities available for sale:
Mortgage-backed securities		-	$	1,896		-
U. S. agency securities		-		18		-
Other debt securities		-		9		-
Derivative financial instruments – assets		-		4		-
Derivative financial instruments – liabilities		-		4		-

The fair value of interest rate swaps is obtained from a third-party pricing service that uses an industry-standard discounted cash flow model that relies on inputs, such as interest rate futures, observable in the marketplace. To comply with the accounting guidance, credit valuation adjustments are incorporated in the fair values to appropriately reflect nonperformance risk for both the Company and counterparties. Although the Company has determined that the majority of the inputs used to value derivative instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments utilize Level 3 inputs, such as estimates of current credit spreads. The Company has determined that the impact of the credit valuation adjustments is not significant to the overall valuation of these derivatives. As a result, the Company has classified its derivative valuations in their entirety in Level 2 of the fair value hierarchy.

Certain assets and liabilities may be measured at fair value on a nonrecurring basis; that is, the instruments are not measured and reported at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances. To measure the extent to which a loan is impaired, the relevant accounting principles permit or require the Company to compare the recorded investment in the impaired loans to the fair value of the underlying collateral in certain circumstances. The fair value measurement process uses independent appraisals and other market-based information, but in many cases it also requires significant input based on management’s knowledge of and judgment about current market conditions, specific issues relating to the collateral, and other matters. As a result, substantially all of these fair value measurements fall within Level 3 of the hierarchy discussed above. The net carrying value of impaired loans which reflected a nonrecurring fair value measurement totaled $34 million at March 31, 2011 and $53 million at December 31, 2010. The portion of the allowance for loan losses allocated to these loans totaled $2 million at March 31, 2011 and $1 million at year-end 2010. The valuation allowance on impaired loans and charge-offs factor into the determination of the provision for credit losses.

Accounting guidance from the FASB requires the disclosure of estimated fair value information about certain on- and off-balance sheet financial instruments, including those financial instruments that are not measured and reported at fair value on a recurring basis or nonrecurring basis. The significant methods and assumptions used by the Company to estimate the fair value of financial instruments are discussed below. The aggregate fair value amounts presented do not, and are not intended to, represent an aggregate measure of the underlying fair value of the Company.

Cash, federal funds sold and short-term investments and short-term borrowings – The carrying amounts of these highly liquid or short maturity financial instruments were considered a reasonable estimate of fair value.

Investment in securities available for sale and held to maturity – The fair value measurement for securities available for sale was discussed earlier. The same measurement approach was used for securities held to maturity, which consist of mortgage-backed securities, obligations of states and political subdivisions and corporate debt securities.

Loans – The fair value measurement for certain impaired loans was discussed earlier. For the remaining portfolio, fair values were generally determined by discounting scheduled cash flows by discount rates determined with reference to current market rates at which loans with similar terms would be made to borrowers of similar credit quality, including adjustments that management believes market participants would consider in setting required yields on loans from

WHITNEY HOLDING CORP 10-Q