NEW YORK - (Business Wire) Fitch Ratings has affirmed Whitney Holding Corp.'s (WTNY) long- and short-term Issuer Default Ratings (IDRs) at 'BBB+/F2'. The affirmations reflect relative stability of the core banking franchise despite some weakness in profitability and asset quality metrics. The Rating Outlook is Stable.
Fitch has taken the following rating actions:
Whitney Holding Corporation
--Long-term IDR affirmed at 'BBB+'
--Short-term IDR affirmed at 'F2'
--Individual Rating affirmed at 'B/C'
--Support affirmed at '5'
--Support Floor affirmed at 'NF'
Whitney National Bank
--Long-term IDR affirmed at 'BBB+'
--Long-term Deposits affirmed at 'A-'
--Subordinated Debt affirmed at 'BBB'
--Short-Term IDR affirmed at 'F2'
--Short-Term Deposits affirmed at 'F2'
--Individual Rating affirmed at 'B/C'
--Support affirmed at '5'
--Support Floor affirmed at 'NF'
The ratings are supported by WTNY's sound core banking franchise, solid capital levels and adequate liquidity profile. While the trend of profitability has been affected by escalating credit costs and compression of the net interest margin (NIM), the level of the NIM continues to compare favorably with peers. Nonperforming assets and net charge-offs have increased notably over the last 18 months. Two factors influencing the negative trend are WTNY's exposure to Florida and coastal-Alabama residential real estate development and a less than optimal level of granularity in its commercial loan book. In response to the asset quality trend, WTNY significantly increased provisions to its reserve for loan losses. In Fitch's view, housing values will remain under pressure into 2009. This makes the prospect of elevated provisions more likely, and in turn, places continued pressure on profitability for the remainder of 2008. Nevertheless, the company's historically conservative underwriting and capital ratios will help WTNY through the challenging operating environment.
The Stable Outlook reflects Fitch's expectation of continued stability in its core banking franchise, a reversal of declining capital trends and the likelihood of continued, yet measured, pressure in profitability and asset quality. Further deterioration in either metric may result in a review of WTNY's ratings. Fitch remains cognizant of the negative trend that has developed with capital levels over the last 12 months driven by a low level of earnings retention and higher credit costs. If this trend continues, especially in the face of increased credit costs, it may result in downward pressure of the company's ratings or rating outlook.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Fitch Ratings
Eric Newell, +1-212-908-0769
John Mackerey, +1-212-908-0366
Cindy Stoller, +1-212-908-0526 (Media Relations)
