Quarterly Report

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of Whitney Holding Corporation and its subsidiaries (the "Company" or "Whitney") and on their results of operations during the third quarters of 2003 and 2002 and during the nine-month periods through September 30 in each year. Virtually all of the Company's operations are contained in its banking subsidiary, Whitney National Bank (the "Bank"). This discussion and analysis is intended to highlight and supplement information presented elsewhere in this quarterly report on Form 10-Q, particularly the consolidated financial statements and related notes in Item 1. This discussion and analysis should be read in conjunction with the Company's 2002 annual report on Form 10-K.
Certain financial information for prior periods has been reclassified to conform to the current presentation.

OVERVIEW
Whitney earned $.69 per basic share, or $27.5 million, in the third quarter of 2003, including the impact of a $4 million pretax negative provision for loan losses ($2.6 million after tax or $.07 per share). These quarterly results represented a 13% increase from the $.61 per basic share, or $24.3 million, earned in the third quarter of 2002. Year-to-date earnings in 2003 of $1.87 per basic share, or $74.7 million, were 6% higher than year-to-date earnings in 2002 on both a per-share and dollar basis.
Selected highlights from the third quarter's results follow:
o Positive developments on several larger problem credit relationships and a favorable direction to overall credit quality during the quarter helped reduce the allowance for loan losses needed at September 30, 2003 to a level $4.8 million below that at June 30, 2003. This reduction led to a $4 million negative provision for loan losses in the third quarter of 2003, compared to no provision in 2003's second quarter and a provision of $1.5 million in the third quarter of 2002.
o Whitney's net interest income (TE) increased 1%, or $.5 million, from the third quarter of 2002, as the favorable impact of 6% growth in earning assets between these periods was largely offset by compression in the net interest margin (TE). The longstanding environment of low market rates continued to exert pressure on the margin in the third quarter of 2003, although an improved mix of funding sources provided some relief.
o Noninterest income, excluding securities transactions, increased 2%, or $.4 million, from the third quarter of 2002. Excluding net gains on dispositions of surplus banking property and foreclosed assets, noninterest income was 8%, or $1.6 million, higher than in the year-earlier quarter. Income from secondary mortgage market operations, which increased 63%, or $1.3 million, was the major contributor. Low rates have stimulated the refinancing of home mortgages and helped sustain demand for new home purchases.
o Noninterest expense increased 5%, or $3.1 million, from the 2002's third quarter. Total personnel expense was up 9%, or $2.9 million, reflecting, in part, higher

levels of incentive pay and a rise in the cost of retirement benefits. Most other major expense categories compared favorably with the third quarter of 2002.

FORWARD-LOOKING STATEMENTS
This discussion contains forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. Such statements include, but may not be limited to, (a) statements of the results of net interest income simulations run by the Company to measure interest rate sensitivity, (b) comments about the performance of Whitney's net interest income and net interest margin assuming certain future conditions, (c) discussion of the settlement of a dispute between Visa USA and merchants and its expected impact on Whitney, (d) comments about possible future levels of income from secondary mortgage market operations, and (e) comments on changes or trends in expense levels for retirement benefits and for equipment and data processing.
Forward-looking statements, which Whitney makes in good faith, are based on numerous assumptions, certain of which may be referred to specifically in connection with a particular statement. Some of the more important assumptions include:
o expectations about overall economic strength and the performance of the economies in Whitney's market area,
o expectations about the movement of interest rates, including actions that may be taken by the Federal Reserve Board in response to changing economic conditions,
o reliance on existing or anticipated changes in laws or regulations affecting the activities of the banking industry and other financial service providers, and
o expectations regarding the nature and level of competition, changes in customer behavior and preferences, and Whitney's ability to execute its plans to respond effectively. Because it is uncertain whether future conditions and events will confirm these assumptions, there is a risk that Whitney's future results will differ materially from what is stated in or implied by such forward-looking statements. Whitney cautions the reader to consider this risk. Whitney undertakes no obligation to update any forward-looking statement included in this discussion, whether as a result of new information, future events or developments, or for any other reason.

FINANCIAL CONDITION

LOANS AND ALLOWANCE FOR LOAN LOSSES
Total loans increased $214 million, or close to 5%, from year-end 2002 to the end of 2003's third quarter, and were up 7%, or $296 million, from the end of 2002's third quarter. Beginning in the latter half of 2002, the commercial loan portfolio has shown some steady growth, with strong support from new customer development. Partly offsetting this growth was a decrease in the residential mortgage loan portfolio, prompted by refinancing activity and management's continuing decision to sell most current production in the secondary market. At the end of 2002, management also decided to market a portfolio of affordable-housing loans, reclassifying this portfolio as held for sale.
Table 2, which is based on regulatory reporting codes, shows loan balances at September 30, 2003 and at the end of the four prior quarters.

TABLE 2.  LOANS
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                                                      2003                                   2002
------------------------------------------------------------------------------  -------------------------------
(dollars in thousands)            September 30       June 30         March 31       December 31   September 30
---------------------------------------------------------------------------------------------------------------
Commercial, financial and
    agricultural loans             $2,041,629      $2,022,159      $1,957,036        $1,917,859     $1,813,474
Real estate loans -
    commercial and other            1,705,289       1,667,838       1,617,929         1,584,099      1,562,303
Real estate loans -
    retail mortgage                   610,795         615,742         630,519           638,703        683,669
Loans to individuals                  311,823         322,989         319,952           314,751        313,880
---------------------------------------------------------------------------------------------------------------
    Total loans                    $4,669,536      $4,628,728      $4,525,436        $4,455,412     $4,373,326
---------------------------------------------------------------------------------------------------------------

The portfolio of commercial loans, other than those secured by real property, was up 6%, or $124 million, at September 30, 2003, compared to year-end 2002, and has grown 13%, or $228 million, from the end of the year-earlier quarter. Overall the portfolio remained well-diversified, with customers in a wide range of industries, including oil and gas exploration and production, marine transportation, wholesale and retail trade in and manufacture of various durable and nondurable products, financial services, and professional services. There have been no major trends or changes in the concentration mix of this portfolio category from year-end 2002. Outstanding loans to oil and gas industry customers were approximately 9% of total loans at the end of 2003's third quarter, the same as at year-end 2002. Whitney's customer base in this industry mainly provides transportation and other services and products to support exploration and production activities, but the Bank has seen increased lending opportunities in the exploration and production sector during 2003.
Outstanding balances under participations in larger shared-credit loan commitments totaled $329 million at the end of 2003's third quarter compared to approximately $300 million at year-end 2002, including approximately $139 million and $118 million, respectively, related to the oil and gas industry. Substantially all such shared credits are with customers operating in Whitney's market area.
The commercial real estate portfolio, which includes loans secured by properties used in commercial or industrial operations, grew 8%, or $121 million, from December 31, 2002, and has increased 9%, or $143 million, since the end of the third quarter of 2002. Whitney has been able to develop new business in this highly competitive market, including increased activity at its

Houston operations. The growth achieved through new business development has in part been offset by expected paydowns on and permanent takeouts of seasoned projects.
The impact of refinancings and the continuing policy of selling most retail mortgage production was evident in the 11%, or $73 million, decrease in the retail mortgage loan portfolio from September 30, 2002. Increased promotion of tailored mortgage products that are held in the portfolio helped limit the decrease in this portfolio segment to $28 million from year-end 2002.

TABLE 3.  SUMMARY OF ACTIVITY IN THE ALLOWANCE FOR LOAN LOSSES
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                                                          Three Months Ended           Nine Months Ended
                                                             September 30                 September 30
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(dollars in thousands)                                    2003           2002          2003          2002
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Balance at the beginning of period                      $66,243        $71,667       $66,115       $71,633
Provision for loan losses charged to operations          (4,000)         1,500        (3,500)        7,000
Loans charged to the allowance:
     Commercial, financial and agricultural              (1,241)          (644)       (6,059)       (5,267)
     Real estate - commercial and other                    (396)        (3,927)         (694)       (5,022)
     Real estate - retail mortgage                         (209)        (1,038)         (532)       (1,573)
     Individuals                                           (582)          (682)       (1,999)       (2,464)
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         Total charge-offs                               (2,428)        (6,291)       (9,284)      (14,326)
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Recoveries of loans previously charged off:
     Commercial, financial and agricultural                 429            737         1,563         1,930
     Real estate - commercial and other                     652             87         3,291           381
     Real estate - retail mortgage                           33             99         1,780           274
     Individuals                                            472            441         1,436         1,348
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         Total recoveries                                 1,586          1,364         8,070         3,933
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Net charge-offs                                            (842)        (4,927)       (1,214)      (10,393)
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Balance at the end of period                            $61,401        $68,240       $61,401       $68,240
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Ratios:
     Net annualized charge-offs to average loans            .07%           .46%          .04%          .32%
     Gross annualized charge-offs to average loans          .21            .58           .27           .44
     Recoveries to gross charge-offs                      65.32          21.68         86.92         27.45
     Allowance for loan losses to loans at period end      1.31           1.56          1.31          1.56
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Each loan carries a degree of credit risk. Management's evaluation of this risk is ultimately reflected in its estimate of probable loan losses which is reported in the Company's financial statements as the allowance for loan losses. Changes in this ongoing evaluation over time are reflected in the provision for loan losses charged to expense. Positive developments on several larger problem credit relationships and a favorable direction to overall credit quality during the quarter helped reduce the allowance for loan losses needed at September 30, 2003 to a level $4.8 million below that at June 30, 2003 and $4.7 million below the level at December 31, 2002. Table 3 above compares third quarter 2003 activity in the allowance for loan losses with the third quarter of 2002 and also compares nine-month activity for each year.
Net charge-offs were a moderate $.8 million in the third quarter of 2003 following a small net recovery in 2003's second quarter. For the first nine months of 2003, net charge-offs totaled only $1.2 million. In 2002, net charge-offs totaled $4.9 million in the third quarter and $10.4 million for the year-to-date period.

TABLE 4.  NONPERFORMING ASSETS
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                                                                2003                           2002
------------------------------------------------------------------------------------- ------------------------
                                                   September     June        March       December   September
(dollars in thousands)                                30          30           31           31         30
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Loans accounted for on a nonaccrual basis          $30,533      $35,622     $41,050      $37,959     $38,663
Restructured loans                                     215          224         243          336         347
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   Total nonperforming loans                        30,748       35,846      41,293       38,295      39,010
Foreclosed assets and surplus property               3,255        4,556       3,283        3,854       2,543
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   Total nonperforming assets                      $34,003      $40,402     $44,576      $42,149     $41,553
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Loans 90 days past due still accruing               $2,725       $3,445      $3,926       $5,817      $9,532
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Ratios:
   Nonperforming assets to loans
     plus foreclosed assets and surplus property       .73%         .87%        .98%         .95%        .95%
   Allowance for loan losses to
     nonperforming loans                            199.69       184.80      159.54       172.65      174.93
   Loans 90 days past due still accruing to
     loans                                             .06          .07         .09          .13         .22
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Table 4 above shows total nonperforming assets at September 30, 2003 and at the end of the preceding four quarters. The payoff of a larger credit previously categorized as impaired was a major factor in the $5 million reduction in total nonperforming loans from the end of 2003's second quarter. Nonperforming loans, which are included in the criticized loan total discussed below and encompass substantially all loans separately evaluated for impairment, decreased $7.5 million from the end of 2002. The allowance required for impaired loans at September 30, 2003, was $1.5 million below the level determined at June 30, 2003 and $2.8 million below the level at December 31, 2002.
The payoff of a larger impaired loan mentioned earlier and improved outlooks for several other larger credits contributed to an $18 million reduction, to $114 million, in the total of loans internally classified as having well-defined weaknesses or doubtful prospects for full repayment from the end of the second quarter of 2003. Such loans were down $20 million from the end of 2002. Criticized loans at September 30, 2003 included $85 million of loans warranting special attention, $104 million of loans identified as having well-defined weaknesses that would likely result in some loss if not corrected, and $10 million of loans whose full repayment is in doubt. The total of criticized loans at September 30, 2003 was up slightly from June 30, 2003 and $6 million higher than the level at year-end 2002. There have been no significant trends relating to industries or markets underlying the changes in nonperforming and criticized loans.

INVESTMENT IN SECURITIES
At September 30, 2003, total securities were $1.97 billion, compared to $1.98 billion at December 31, 2002 and $1.85 billion at September 30, 2002. During 2002, management directed excess liquidity from strong deposit flows and restrained loan demand to the investment portfolio. With continued demand for deposit products and some more recent steady growth in the loan portfolio, the investment portfolio has been maintained at a fairly stable level during 2003. Short-term liquidity investments, including federal funds sold, totaled $73 million at the end of 2003's third quarter, compared to $171 million at September 30, 2002.
Securities available for sale constituted 90% of the total investment portfolio at September 30, 2003. The quarter-end net unrealized gain on this portfolio segment totaled $22 million, or 1.3% of amortized cost, compared to a gain of $46 million, or 2.7% of amortized cost, at year-end 2002. The reduction in the net unrealized gain is consistent with some recent upward movement in market interest rates and the corresponding decline in fixed-income security prices.
During the third quarter of 2003, Whitney sold $276 million in mortgage-backed securities experiencing accelerated prepayments and repositioned the proceeds in other mortgage-backed issues with a higher and more stable yield and duration more consistent with overall investment and asset/liability management strategies.
The Company does not normally maintain a trading portfolio, although the Bank holds generally immaterial balances of trading account securities for short periods while buying and selling securities for customers. Such securities are included in other assets in the consolidated balance sheets.

DEPOSITS AND BORROWINGS
At September 30, 2003, deposits were 3%, or $181 million, above the level at December 31, 2002. Many of the factors that prompted the increased availability of deposit funds in 2001 and 2002 have continued to influence customer behavior throughout 2003. Compared to the year-earlier quarter, average deposits were up 6%, or $315 million, in the third quarter of 2003. Short-term and other borrowings, the major part of which represents liabilities under repurchase agreements with customers, were little changed from year-end 2002, but were up 12%, or $47 million, on average in the third quarter of 2003 compared to the year-earlier quarter.
Deposit pricing strategies implemented during 2002 and sustained demand for deposit products helped improve the mix of deposits throughout that year, and these improvements have been preserved in 2003. Higher-cost time deposits for the third quarter of 2003 were 7%, or $105 million, below 2002's third quarter on average, with some funds flowing to other deposit products. Total lower-cost deposits increased 10%, or $420 million, on average, between these periods, with noninterest-bearing demand deposits up 13%, or $206 million, and deposits in lower-cost interest-bearing products up 9%, or $214 million.
Average money market deposits grew 8%, or $100 million, compared to 2002's third quarter; and regular savings deposits were also up 8%, or $42 million, at least temporarily continuing the reversal of a trend away from this more traditional deposit product. NOW account deposits increased 11%, or $71 million, on average.

SHAREHOLDERS' EQUITY AND CAPITAL ADEQUACY
At September 30, 2003, shareholders' equity totaled $831 million compared to $800 million at year-end 2002. The main factors in this net increase were earnings, net of dividends declared, of approximately $38 million, and a $16 million decrease in the tax-effected net unrealized holding gain on securities available for sale. The reduction in the net unrealized securities gain in the third quarter of 2003 led to an overall decrease in average shareholders' equity in that period compared to the 2003's second quarter. Whitney's dividend payout ratio of 49% for the first nine months of 2003 was up slightly from 47% for the full year in 2002.
The ratios in Table 5 indicate that the Company remained strongly capitalized at September 30, 2003. The increase in risk-weighted assets since year-end 2002 mainly reflects loan growth.

TABLE 5.  RISK-BASED CAPITAL AND CAPITAL RATIOS
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                                                     September 30          December 31
(dollars in thousands)                                  2003                  2002
--------------------------------------------------------------------------------------------
Tier 1 regulatory capital                              $722,660              $672,408
Tier 2 regulatory capital                                61,401                66,115
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Total regulatory capital                               $784,061              $738,523
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Risk-weighted assets                                 $5,536,831            $5,301,764
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Ratios
   Leverage (Tier 1 capital to average assets)            10.04%                 9.76%
   Tier 1 capital to risk-weighted assets                 13.05                 12.68
   Total capital to risk-weighted assets                  14.16                 13.93
   Shareholders' equity to total assets                   11.37                 11.28
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The regulatory capital ratios for Whitney National Bank exceed the minimum required ratios, and the Bank has been categorized as "well-capitalized" in the most recent notice received from its regulatory agency.

LIQUIDITY
The object of liquidity management is to ensure that funds are available to meet cash flow requirements of depositors and borrowers, while at the same time meeting the operating, capital and strategic cash flow needs of the Company and the Bank. Whitney develops its liquidity management strategies and measures and monitors liquidity risk as part of its overall asset/liability management process.
On the liability side, liquidity management focuses on growing the base of more stable core deposits at competitive rates, including the use of treasury-management products for commercial customers, while at the same time ensuring access to economical wholesale funding sources. The section above on Deposits and Borrowings discusses changes in these liability funding sources in the third quarter of 2003. Liquidity management on the asset side primarily addresses the composition and maturity structure of the loan and investment securities portfolios and their impact on the Company's ability to generate cash flows.
Cash generated from operations is another important source of funds to meet liquidity needs. The consolidated statements of cash flows present operating cash flows and summarize all significant sources and uses of funds for the first nine months of 2003 and 2002.
The Bank had over $1.7 billion in unfunded loan commitments, excluding personal credit lines, outstanding at September 30, 2003, an increase of $228 million from 2002's year-end. Note

5 details these and other unfunded commitments at September 30, 2003 and December 31, 2002. Because loan commitments may, and many times do, expire without being drawn upon, unfunded balances should not be used as a projection of actual future liquidity requirements.

ASSET/LIABILITY MANAGEMENT
The objective of the Company's asset/liability management is to implement strategies for the funding and deployment of its financial resources that are expected to maximize soundness and profitability over time at acceptable levels of risk.
Interest rate sensitivity is the potential impact of changing rate environments on both net interest income and cash flows. The Company measures interest rate sensitivity primarily by running net interest income simulations. The net interest income simulations run at the end of 2003's third quarter indicated that Whitney continued to be moderately asset sensitive over the near term, similar to its position at year-end 2002 and throughout that year. Based on these simulations, annual net interest income (TE) would be expected to increase $18 million, or 5.8%, and decrease a comparable amount and percentage, if interest rates instantaneously increased or decreased, respectively, from current rates by 100 basis points. These changes are measured against the results of a base simulation run that uses current growth forecasts and assumes a stable rate environment and structure. The comparable simulation run at year-end 2002 produced results that ranged from a positive impact on net interest income (TE) of $13 million, or 4.3%, to a negative impact of $15 million, or 4.9%. The actual impact of changing interest rates on net interest income is dependent on many factors. These include Whitney's ability to achieve growth in earning assets and maintain a desired mix of earning assets and interest-bearing liabilities, the actual timing of repricing of assets and liabilities, the magnitude of interest rate changes, interest rate spreads and the level of success of asset/liability management strategies implemented.
To be able to accommodate the maturity/rate preferences of certain potential borrowers, in the third quarter of 2003 the Bank began to employ interest rate swaps to bring the market risk associated with these longer-duration fixed-rate loans in line with Whitney's asset/liability management objectives. At September 30, 2003, only one swap with a notional amount of $22 million had been executed, essentially converting the related fixed-rate commercial loan into a floating-rate loan. The swap has been structured to be a highly effective hedge against changes in the loan's fair value, and there was no ineffectiveness to be recognized in earnings during the quarter.

RESULTS OF OPERATIONS

NET INTEREST INCOME
Whitney's net interest income (TE) increased 1%, or $.5 million, from the third quarter of 2002. The favorable impact of 6% growth in earning assets was largely offset by compression in the net interest margin (TE) between these periods. Third quarter net interest income (TE) in 2003 was up slightly from the second quarter of 2003.
As discussed earlier, Whitney is moderately asset sensitive, which implies that its net interest margin would tend to compress in a declining rate environment, holding other factors constant, but tend to widen in a rising rate environment. The net interest margin is net interest income (TE) as a percent of average earning assets. Whitney's net interest margin (TE) remained a healthy 4.45% in 2003's third quarter, but this was down 24 basis points from the year-earlier quarter and little changed from the second quarter of 2003. Tables 6 and 7 show the components of changes in the Company's net interest income and net interest margin.
The longstanding environment of low market interest rates prevailed again in 2003's third quarter, although there was some upward movement for longer maturities. In this environment, both funding costs and asset yields have trended lower during 2003 as they did throughout 2002. Funding costs decreased 55 basis points between the third quarters of 2002 and 2003, as Whitney implemented deposit pricing strategies in response to market conditions and the mix of funds shifted in favor of noninterest-bearing and lower-cost interest-bearing sources. The rate on interest-bearing deposits other than time deposits decreased by 66 basis points from the third quarter of 2002. Because of their maturity structure, the average rate on time deposits decreased further, falling 94 basis points below the rate in 2002's third quarter.
The overall yield on average earning assets in the third quarter of 2003 was 79 basis points lower than in 2002's third quarter. The gradual repricing of fixed-rate instruments during this sustained period of low interest rates impacted both loan and investment yields. Pricing discipline on loans helped to limit the decline in loan yields to 87 basis points in the current year's third quarter as compared to the same period in 2002. Low market rates have also stimulated home mortgage refinancing activity leading to significant prepayments and additional repricing opportunities on mortgage-backed securities. The 107 basis point decline in the yield on mortgage-backed securities was the major factor behind the overall 84 basis point decrease in the yield on the investment portfolio. As noted earlier, Whitney sold certain mortgage-backed securities with accelerated prepayments in the third quarter of 2003 and reinvested the proceeds in other mortgage-backed issues with a higher and more stable yield and duration more consistent with overall investment and asset/liability management strategies. The sale generated a gain of approximately $.9 million.
No significant shift in asset mix accompanied the 6% overall growth in average earning assets compared to the third quarter of 2002. Average loans, including loans held for sale, grew to 69% of earning assets from 68% in the third quarter of 2002. Investment securities held steady at 29% of average earning assets.

TABLE 6.  SUMMARY OF AVERAGE BALANCE SHEETS, NET INTEREST INCOME(TE)(a) AND INTEREST RATES
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(dollars in thousands)                      Third Quarter 2003              Second Quarter 2003            Third Quarter 2002
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                                         Average                         Average                       Average
                                         Balance    Interest  Rate       Balance   Interest  Rate      Balance    Interest    Rate
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ASSETS
EARNING ASSETS
Loans (TE)(b),(c)                      $4,697,344   $63,360   5.35%    $4,615,620   $63,844  5.55%    $4,341,830   $68,066    6.22%
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Mortgage-backed securities              1,061,425    11,382   4.29      1,198,002    12,417  4.15      1,063,983    14,258    5.36
U.S. agency securities                    460,044     4,449   3.87        368,823     3,722  4.04        428,373     5,209    4.86
U.S. Treasury securities                  209,897     1,980   3.74        197,629     1,872  3.80        156,779     1,588    4.02
Obligations of states and political
     subdivisions (TE)                    201,740     3,425   6.79        186,749     3,147  6.74        144,542     2,496    6.91
Other securities                           41,124       414   4.03         45,887       486  4.24         56,066       620    4.42
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      Total investment in securities    1,974,230    21,650   4.38      1,997,090    21,644  4.34      1,849,743    24,171    5.22
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Federal funds sold and
     short-term investments               100,764       259   1.02         74,007       232  1.25        182,225       789    1.72
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      Total earning assets              6,772,338   $85,269   5.01%     6,686,717   $85,720  5.14%     6,373,798   $93,026    5.80%
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NONEARNING ASSETS
Other assets                              587,646                         571,934                        582,789
Allowance for loan losses                 (66,591)                        (67,407)                       (72,624)
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      Total assets                     $7,293,393                      $7,191,244                     $6,883,963
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LIABILITIES AND
         SHAREHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES
NOW account deposits                    $ 706,851    $  544    .31%    $  698,456    $  820   .47%    $  635,576   $ 1,179     .74%
Money market deposits                   1,416,716     2,299    .64      1,403,139     3,143   .90      1,316,705     4,854    1.46
Savings deposits                          560,469       380    .27        553,511       655   .47        518,199     1,074     .82
Other time deposits                       790,238     3,236   1.62        813,893     3,793  1.87        890,595     5,865    2.61
Time deposits $100,000 and over           694,675     2,416   1.38        689,112     2,740  1.60        699,707     3,960    2.24
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      Total interest-bearing deposits   4,168,949     8,875    .84      4,158,111    11,151  1.08      4,060,782    16,932    1.65
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Short-term and other borrowings           457,508       698    .61        408,410       712   .70        410,108       932     .90
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      Total interest-bearing
        liabilities                     4,626,457    $9,573    .82%     4,566,521   $11,863  1.04%     4,470,890   $17,864    1.59%
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NONINTEREST-BEARING
      LIABILITIES AND
      SHAREHOLDERS' EQUITY
Demand deposits                         1,780,429                       1,740,108                      1,574,049
Other liabilities                          63,829                          60,031                         65,698
Shareholders' equity                      822,678                         824,584                        773,326
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      Total liabilities and
           shareholders' equity        $7,293,393                      $7,191,244                     $6,883,963
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Net interest income and margin (TE)                 $75,696    4.45%                $73,857  4.43%                 $75,162    4.69%
Net earning assets and spread          $2,145,881              4.19%   $2,120,196            4.10%    $1,902,908              4.21%
Interest cost of funding earning assets                         .56%                          .71%                            1.11%
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   (a) Tax-equivalent (TE) amounts are calculated using a marginal federal income tax rate of 35%.
   (b) Includes loans held for sale.
   (c) Average balance includes nonaccruing loans of $32,360, $39,189 and $36,984 respectively, in the third and second
       quarters of 2003 and the third quarter of 2002.

TABLE 6.  SUMMARY OF AVERAGE BALANCE SHEETS, NET INTEREST INCOME(TE)(a) AND INTEREST RATES (continued)
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                                                    Nine Months Ended                              Nine Months Ended
(dollars in thousands)                              September 30, 2003                             September 30, 2002
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                                            Average                                      Average
                                            Balance         Interest        Rate         Balance          Interest         Rate
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ASSETS
EARNING ASSETS
Loans (TE)(b),(c)                         $4,612,010        $191,259        5.54%      $4,374,482         $208,113         6.36%
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Mortgage-backed securities                 1,140,588          37,487        4.38        1,006,021           42,114         5.58
U.S. agency securities                       407,201          12,323        4.04          448,853           17,211         5.11
U.S. Treasury securities                     194,940           5,465        3.75          145,010            4,545         4.19
Obligations of states and political
     subdivisions (TE)                       193,417           9,819        6.77          148,838            7,770         6.96
Other securities                              46,144           1,443        4.17           54,710            1,824         4.45
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      Total investment in securities       1,982,290          66,537        4.48        1,803,432           73,464         5.43
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Federal funds sold and
     short-term investments                   76,293             652        1.14          329,372            4,239         1.72
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      Total earning assets                 6,670,593        $258,448        5.18%       6,507,286         $285,816         5.87%
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NONEARNING ASSETS
Other assets                                 583,351                                      601,930
Allowance for loan losses                    (66,863)                                     (72,670)
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      Total assets                        $7,187,081                                   $7,036,546
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LIABILITIES AND
         SHAREHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES
NOW account deposits                      $  697,697         $ 2,257         .43%      $  701,560         $  4,487          .85%
Money market deposits                      1,400,583           9,041         .86        1,315,815           14,957         1.52
Savings deposits                             550,867           1,777         .43          512,087            3,118          .81
Other time deposits                          812,606          11,414        1.88          934,907           21,322         3.05
Time deposits $100,000 and over              682,221           8,080        1.58          720,261           13,529         2.51
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      Total interest-bearing deposits      4,143,974          32,569        1.05        4,184,630           57,413         1.83
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Short-term and other borrowings              435,354           2,110         .65          442,437            3,027          .91
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      Total interest-bearing liabilities   4,579,328         $34,679        1.01%       4,627,067         $ 60,440         1.75%
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NONINTEREST-BEARING
      LIABILITIES AND
      SHAREHOLDERS' EQUITY
Demand deposits                            1,726,694                                    1,595,638
Other liabilities                             61,481                                       63,754
Shareholders' equity                         819,578                                      750,087
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      Total liabilities and
           shareholders' equity           $7,187,081                                   $7,036,546
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Net interest income and margin (TE)                         $223,769        4.48%                         $225,376         4.63%
Net earning assets and spread             $2,091,265                        4.17%      $1,880,219                          4.12%
Interest cost of funding earning assets                                      .70%                                          1.24%
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   (a)Tax-equivalent (TE) amounts are calculated using a marginal federal income tax rate of 35%.
   (b)Includes loans held for sale.
   (c)Average balance includes nonaccruing loans of $36,512 and $36,849, respectively, in the first nine months of 2003 and 2002.

TABLE 7. SUMMARY OF CHANGES IN NET INTEREST INCOME(TE)(a),(b)
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                                                     Third Quarter 2003 Compared to:              Nine Month Ended September 30,
                                            Second Quarter 2003            Third Quarter 2002          2003 Compared to 2002
                                      ----------------------------------------------------------  -----------------------------
                                            Due To                        Due To                       Due To
                                           Change In         Total      Change In        Total        Change In         Total
                                      -------------------   Increase  ---------------   Increase   ----------------    Increase
(dollars in thousands)                  Volume     Rate    (Decrease) Volume     Rate  (Decrease)   Volume    Rate    (Decrease)
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INTEREST INCOME (TE)
Loans (TE)                              $1,337   $(1,821)  $  (484)   $5,215   $(9,921) $(4,706)   $10,869  $(27,723) $(16,854)
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Mortgage-backed securities              (1,451)      416    (1,035)      (34)   (2,842)  (2,876)     5,169    (9,796)   (4,627)
U.S. agency securities                     887      (160)      727       363    (1,123)    (760)    (1,494)   (3,394)   (4,888)
U.S. Treasury securities                   132       (24)      108       505      (113)     392      1,439      (519)      920
Obligations of states and political
     subdivisions (TE)                     254        24       278       972       (43)     929      2,268      (219)    2,049
Other securities                           (49)      (23)      (72)     (154)      (52)    (206)      (273)     (108)     (381)
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     Total investment in securities       (227)      233         6     1,652    (4,173)  (2,521)     7,109   (14,036)   (6,927)
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Federal funds sold and
     short-term investments                 75       (48)       27      (278)     (252)    (530)    (2,496)   (1,091)   (3,587)
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     Total interest income (TE)          1,185    (1,636)     (451)    6,589   (14,346)  (7,757)    15,482   (42,850)  (27,368)
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INTEREST EXPENSE
NOW account deposits                        10      (286)     (276)      117      (752)    (635)       (25)   (2,205)   (2,230)
Money market deposits                       31      (875)     (844)      337    (2,892)  (2,555)       910    (6,826)   (5,916)
Savings deposits                             8      (283)     (275)       80      (774)    (694)       221    (1,562)   (1,341)
Other time deposits                       (101)     (456)     (557)     (604)   (2,025)  (2,629)    (2,517)   (7,391)   (9,908)
Time deposits $100,000 and over             23      (347)     (324)      (28)   (1,516)  (1,544)      (682)   (4,767)   (5,449)
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     Total interest-bearing deposits       (29)   (2,247)   (2,276)      (98)   (7,959)  (8,057)    (2,093)  (22,751)  (24,844)
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Short-term and other borrowings             84       (98)      (14)       97      (331)    (234)       (48)     (869)     (917)
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     Total interest expense                 55    (2,345)   (2,290)       (1)   (8,290)  (8,291)    (2,141)  (23,620)  (25,761)
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     Change in net interest income(TE)  $1,130   $   709   $ 1,839    $6,590   $(6,056) $   534    $17,623  $(19,230) $ (1,607)
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 (a)   Tax-equivalent (TE) amounts are calculated using a marginal federal income tax rate of 35%.
 (b)   The change in interest shown as due to changes in either volume or rate includes an allocation of the amount that
       reflects the interaction of volume and rate changes. This allocation is based on the absolute dollar amounts of
       change due solely to changes in volume or rate.

Sustained higher demand for deposit products and the implementation of deposit pricing strategies had a favorable impact on the mix of funding sources in the third quarter of 2003 compared to the year-earlier period.
Noninterest-bearing deposits funded 26% of average earning assets in the third quarter of 2003, up from a healthy 25% in 2002's third quarter, and the percentage of funding from all noninterest-bearing sources rose to 32% from 30% over this same period. Lower-cost interest-bearing deposits supported close to 40% of earning assets, up from 39% in the year-earlier period. Higher-cost sources of funds, which include time deposits and short-term borrowings, declined to less than 29% of average earning assets over this period, from 31% in the third quarter of 2002.
For the first nine months of 2003, net interest income (TE) decreased less than 1%, or $1.6 million, from the same period in 2002, while average earning assets rose somewhat under 3%. The net interest margin (TE) was 4.48% for the 2003 period and 4.63% for the prior year's period. The yield on average earning assets decreased 69 basis points, with the loan portfolio yield down 82 basis points and the rate earned on the investment portfolio down 95 basis points. The total interest cost of funding earning assets declined 54 basis points compared to the first nine months of 2002. The same factors that affected the mix and rates for earning assets and funding sources in the third quarter of 2003 were evident for the year-to-date period.

PROVISION FOR LOAN LOSSES
Whitney recorded a $4 million negative provision for loan losses in the third quarter of 2003, compared to no provision in 2003's second quarter and a provision of $1.5 million in the third quarter of 2002. Net charge-offs were a moderate $.8 million in the third quarter of 2003, following a small net recovery in 2003's second quarter, and for the first nine months of 2003, net charge-offs totaled only $1.2 million. In 2002, net charge-offs totaled $4.9 million in the third quarter and $10.4 million for the year-to-date period.
For a more detailed discussion of changes in the allowance for loans losses, nonperforming assets and general credit quality, see the earlier section on Loans and Allowance for Loan Losses. The future level of the allowance and provisions for loan losses will reflect management's ongoing evaluation of credit risk, based on established internal policies and practices.

NONINTEREST INCOME
Noninterest income, excluding securities transactions, totaled $22.7 million for the third quarter of 2003, an increase of 2%, or $.4 million, from the third quarter of 2002. Excluding net gains on dispositions of surplus banking property and foreclosed assets, which totaled over $1.2 million in 2002's third quarter, noninterest income was 8%, or $1.6 million, higher than in the year-earlier quarter.
The strong results posted by Whitney's mortgage broker activities during the first half of 2003 continued in the third quarter, with income from secondary mortgage market operations up 63%, or $1.3 million, compared to the third quarter of 2002. Low rates have benefited loan production volumes by stimulating homeowners to refinance and by helping sustain demand for new home purchases. Recent rate movements contributed to a slowdown in production toward the end of the third quarter of 2003, and fourth quarter results for secondary mortgage market operations will likely lag those posted in the third quarter of 2003 and 2002's fourth quarter.
Credit card income was up 9%, or $.2 million, compared to 2002's third quarter. This increase does not fully reflect the underlying growth in transaction volumes on bank-issued credit

and debit cards, because debit transaction rates were reduced beginning in August 2003 under the terms of the settlement between Visa USA and merchants. Revenues under the reduced interchange fee structure, which is effective through the end of 2003, could be as much as 30% less than under the prior fee structure. Whitney's debit interchange revenue totaled $1.1 million in the third quarter of 2003 and $4.4 million for all of 2002. As part of the settlement, VISA USA also agreed to modify its policy requiring merchants who honor its credit cards to also accept its check or debit card product. Although the implementation of this policy in January 2004 is not expected to significantly impact transaction volumes, it will likely lead to lower interchange fees per transaction relative to pre-settlement levels in future years.
Service charges from deposit accounts have been relatively stable between 2002 and 2003, as improved pricing and the addition of new services helped offset the impact of reduced charging opportunities on both commercial and personal accounts. For the third quarter of 2003, service charges were up 2%, or $.2 million, from the year-earlier period. Trust service fees declined 6%, or $.1 million, compared to the third quarter of 2002, but they have begun to stabilize in recent periods with improved capital market valuations.
Excluding net gains on surplus banking property and foreclosed assets, other noninterest income increased 2% between the third quarters of 2002 and 2003, mainly reflecting growth in fees on commercial credit facilities.
Noninterest income, excluding securities transactions, was $67.3 million through the first nine months of this year, an increase of $4.4 million, or 7%, from the comparable period in 2002. Year-to-date changes in individual income categories from the prior year were consistent with the quarterly changes discussed above and were driven by substantially the same factors. Other noninterest income includes net gains on dispositions of surplus banking property and foreclosed assets of $.5 million in 2003 and $1.2 million in 2002. The 2003 total also includes a gain of $1.4 million recognized in the second quarter on the sale of a portfolio of seasoned loans originated under affordable-housing programs.

NONINTEREST EXPENSE
Total noninterest expense of $61.3 million in the third quarter of 2003 was 5%, or $3.1 million, higher than the total for the year-earlier period. Personnel expense increased 9%, or $2.9 million, while most other major expense categories compared favorably with the third quarter of 2002.
Underlying the rise in personnel expense were a 7%, or $1.9 million, increase in employee compensation, and an 18%, or $1.0 million, increase in employee benefits. Base pay increased 3%, or close to $.7 million, but payments under targeted employee incentive programs rose more sharply, driven mainly by the impact of higher loan production volumes on retail mortgage origination incentives. Management incentive plan expense, which includes certain stock-based compensation, increased $.7 million.
A combined increase of $.9 million in defined benefit pension plan expense and the cost of providing health benefits to retirees was the main factor behind the overall rise in employee benefits expense. A weak investment performance by the pension trust fund or a decline in market yields on fixed-income securities will cause the actuarially determined periodic pension expense to increase in following periods, holding other variables constant. Declines in market yields and negative trends in actual benefit outlays will also have an unfavorable impact on actuarial valuation results for postretirement health benefits. All of these conditions were present in

2002. The combined expense of providing these retirement benefits will be up a comparable amount in the fourth quarter of 2003 compared with the year-earlier period, and the annual increase will total $4.1 million. The Company has also experienced an expected increase in the cost of providing current health benefits in 2003.
Benefits from the elimination of underutilized facilities helped reduce occupancy expense by 3% compared to the third quarter of 2002, although several new or replacement branches are scheduled to open through the first half of 2004, including three additional locations to serve the Houston market.
Equipment and data processing expense decreased 1% in the third quarter of 2003, but recent capacity upgrades to the data processing system and new applications and capabilities that have been or will be added to support expanded customer service will likely lead to a moderate year-over-year increase in 2003's fourth quarter. Upgrades to the capacity and functionality of branch communication lines were the main factor behind the 4% increase in the telecommunication and postage expense category.
The expense for legal and professional services was little changed between the third quarters of 2002 and 2003. Legal fees were down 16% aided by the resolution of several relatively significant loan collection efforts in 2003's second and third quarters. This reduction offset higher costs in the current year's quarter for professional assistance with data system enhancements. Corporate value and franchise taxes were down 9% compared to the third quarter of 2002, reflecting in part management's efforts to improve the efficiency of the Bank's capital structure.
The expense categories included in other noninterest expense were up 8% in the third quarter of 2003 on a combined basis. The Company experienced a sharp jump in its insurance premiums when certain coverages were renewed in an insurance market much harder than was present at the beginning of the prior contract, which covered a three-year policy term. The required amortization of new affordable housing project investments was also a factor behind the increase in other noninterest expense in 2003, while the related tax credits reduced income tax expense as noted in the following section. The most significant reduction in other noninterest expense was for advertising, partly associated with the completion in 2002 of a two-year multi-faceted advertising campaign featuring a celebrity spokesperson.
For the nine-month period, noninterest expense totaled $181 million. This was a 5%, or $8.3 million, increase compared to the comparable period of 2002. Similar to the quarterly comparison, total personnel expense was up 11%, or $10.1 million, while most other major expense categories posted favorable results in comparison to the year-earlier period.
Employee compensation rose 7%, or $5.8 million, as the increase in targeted employee incentive compensation exceeded the 3% increase in base pay. Employee benefits increased 26%, or $4.3 million, including the $3.2 million increase in the cost of providing pension and postretirement health benefits.
The changes in other major noninterest expense categories between the first nine months of 2002 and 2003 were generally consistent with the quarter-to-quarter changes and were influenced mainly by the same factors cited in the discussion of quarterly results above.

INCOME TAXES
The Company provided for income tax expense at an effective rate of 32.08% in the third quarter of 2003 compared to a rate of 33.41% in the year-earlier period. Year-to-date, the rate was 32.06% in 2003 and 33.19% in 2002. Whitney's effective tax rates have been lower than the 35% federal statutory rate primarily because of tax-exempt interest income from the financing of state and local governments. Additional investment in projects that generate affordable housing credits helped lower the effective tax rate for the quarterly and year-to-date periods in 2003.