<PAGE>


                                 March 26, 1998


Securities and Exchange Commission
450 Fifth St., N.W.
Judiciary Plaza
Washington, D.C.  20549-1004

Via Edgar Electronic Filing System

                                                      In Re:  File Number 0-1026
                                                              ------------------

Gentlemen:

         Pursuant to  regulations  of the  Securities  and Exchange  Commission,
submitted  herewith  for filing on behalf of Whitney  Holding  Corporation  (the
"Company") is the Company's  Report on Form 10-K for the period  ended  December
31, 1997.

         This  filing  is  being   effected  by  direct   transmission   to  the
Commission's EDGAR System.

                                                     Sincerely,




                                                      /s/ Edward B. Grimball
                                                      --------------------------
                                                      Edward B. Grimball
                                                      Executive Vice President &
                                                      Chief Financial Officer
                                                      (504) 586-7570

EBG/drm




<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

[ X ] Annual report pursuant to Section 13 or 15 (d) of the Securities  Exchange
      Act of 1934

For the fiscal year ended December 31, 1997
     
                                  OR

[   ] Transition  report  pursuant  to  Section  13  or 15 (d) of the Securities
      Exchange Act of 1934

For the transition period from                      to
                               ---------------------  --------------------------
Commission file number 0-1026
                           WHITNEY HOLDING CORPORATION
Incorporated in Louisiana                         I.R.S. Employer Identification
                                                        No. 72-6017893

              228 St. Charles Avenue, New Orleans, Louisiana 70130

Registrant's telephone number, including area code (504) 586-7272

Securities registered pursuant to Section 12(b) of the Act:
                                      None
Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock, no par value

         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 [ X ] No [ ]

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in  Part  III of the  Form  10-K or any
amendment to this Form 10-K. [ ]

         State the  aggregate  market  value of the   voting   stock   held   by
nonaffiliates  of the Registrant as   of   February    26,   1998
                          Approximately $1,146,053,123*

         Indicate the number of shares  outstanding of each of the  Registrant's
classes of common stock, as of the latest practicable date.

         Common  Stock,  no  par  value,  20,831,513  shares  outstanding  as of
February 26, 1998.

                       Documents Incorporated by Reference

         Definitive Proxy Statement dated March 18, 1998, Part III.

         An Exhibit Index appears on page 60.


* For the purposes of this computation,  shares owned by directors and executive
officers of the  Registrant,  even though all such persons may not be affiliates
as defined in SEC Rule 405, have been excluded.


<PAGE>



                                                                            Page
--------------------------------------------------------------------------------
PART I
         Item 1:  Business                                                     3
         Item 2:  Properties                                                   3
         Item 3:  Legal Proceedings                                            4
         Item 4:  Submission of Matters to a Vote of Security Holders          4
         Item 4a: Executive Officers of the Registrant                         4

--------------------------------------------------------------------------------
PART II
         Item 5:  Market for the Registrant's Common Stock and
                  Related Shareholder Matters                                  5
         Item 6:  Selected Financial Data                                      6
         Item 7:  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                          7
         Item 8:  Financial Statements and Supplementary Data                 29
         Item 9:  Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure                      59

--------------------------------------------------------------------------------
PART III
         Item 10: Directors and Executive Officers of the Registrant          59
         Item 11: Executive Compensation                                      59
         Item 12: Security Ownership of Certain Beneficial Owners
                  and Management                                              59
         Item 13: Certain Relationships and Related Transactions              59

--------------------------------------------------------------------------------
PART IV
         Item 14: Exhibits, Financial Statement Schedules and
                  Reports on Form 8-K                                         60


--------------------------------------------------------------------------------
         Signatures                                                           62

                               Page 2 of 64 Pages

<PAGE>



                                     PART I

Item 1:  BUSINESS

         Whitney Holding Corporation (the "Company") is a Louisiana bank holding
company registered pursuant to the Bank Holding Company Act of 1956. The Company
began  operations in 1962 as the parent of Whitney National Bank, which has been
in continuous  operation  since 1883.  Beginning in 1994 and continuing  through
1997, the Company operated as a multi-bank  holding company,  having established
in connection  with business  acquisitions  the Whitney Bank of Alabama in 1995,
the Whitney  National  Bank of Florida in 1996 and the Whitney  National Bank of
Mississippi  in 1997.  In January  1998,  the Company  merged all of its banking
operations into Whitney National Bank. Throughout this annual report, references
to the "Bank" will cover all former subsidiary  banks.  During 1995, the Company
established the Whitney Community  Development  Corporation  ("WCDC"),  which is
authorized  to make  equity and debt  investments  in  corporations  or projects
designed  primarily  to  promote  community  welfare,   including  the  economic
rehabilitation  and  development  of  low-income  areas  by  providing  housing,
services,  or jobs for residents,  or promoting  small  businesses  that service
low-income areas.

         The Company, through its banking subsidiary,  engages in commercial and
retail  banking and in trust  business,  including  the taking of deposits,  the
making of secured and unsecured loans, the financing of commercial transactions,
the issuance of credit cards,  the delivery of  corporate,  pension and personal
trust services,  and certain limited investment services. The Bank renders these
services  throughout its market areas in south Louisiana,  south Alabama,  along
the  Mississippi  Gulf Coast,  in the  Pensacola,  Florida  area,  and through a
foreign branch on Grand Cayman in the British West Indies.

         There is significant competition within the financial services industry
in general as well as with respect to the particular financial services provided
by the Bank.  Within its market  areas,  the Bank  competes  directly with major
banking  institutions of comparable or larger size and resources as well as with
various other smaller banking  organizations  and local and national  "non-bank"
competitors,  including savings and loans,  credit unions,  mortgage  companies,
personal and commercial  finance  companies,  investment  brokerage  firms,  and
registered investment companies.

         In recent years there has been a significant  consolidation  within the
financial  services  industry,  particularly  with  respect to the  banking  and
savings and loan segments of this industry.  This  consolidation has been driven
more recently by general competitive  pressures.  All of the Bank's major direct
banking   competitors   have  been  relatively   active  in  expansion   through
acquisition.  Since  1994  the  Company  has  acquired  seven  separate  banking
operations involving  approximately $975 million of assets and will complete two
additional  bank mergers in the second quarter of 1998  involving  approximately
$338 million of assets.  The trend toward industry  consolidation is expected to
continue in the near term. At the end of 1997, the Company and the Bank employed
a total of 1,958 employees.

         All material  funds of the Company are  invested in the Bank.  The Bank
has a large number of customer  relationships  which have been  developed over a
period of many years and is not dependent upon any single customer or upon a few
customers.  The loss of any single  customer or a few customers would not have a
material adverse effect on the Bank or the Company.  The Bank has customers in a
number of foreign  countries,  but the  portion of  revenue  derived  from these
foreign customers is not a material portion of its overall revenues.

         The Company and the Bank and their  related  operations  are subject to
federal, state and local laws applicable to banks and bank holding companies and
to the regulations of the Board of Governors of the Federal Reserve System,  the
Office  of the  Comptroller  of  Currency,  and the  Federal  Deposit  Insurance
Corporation.


Item 2:  PROPERTIES

         The Company  owns no real  estate in its own name.  The  Company's  and
Whitney National Bank's executive offices are located in downtown New Orleans in
the Bank's main office facilities, which it owns. A portion of these facilities,
as well as portions of certain other  facilities  in Louisiana and  Mississippi,
are available for lease to third parties,  although such leasing activity is not
material  to the  Company's  overall  operations.  The Bank  owns  approximately
seventy  percent of the total number of branch banking  facilities  currently in
operation.  The remaining branch facilities are subject to leases, each of which
management considers

                               Page 3 of 64 Pages

<PAGE>



to be reasonable and appropriate to its location. All facilities,  whether owned
or leased,  are being  maintained in a manner so as to ensure that they continue
to be suitable for their intended banking operations.

         In 1998,  the Company plans to open or begin  construction  on fourteen
additional  branch  locations  throughout  the market  areas of the Bank.  Total
capital expenditures for these new facilities are estimated at $25 million.

         The Bank holds a variety of  property  interests  acquired  through the
years in  settlement  of  loans.  Reference  is made to Note 8 to the  financial
statements  included in Item 8 for further  information  regarding such property
interests as of December 31, 1997.

Item 3:  LEGAL PROCEEDINGS

         There are no material  pending  legal  proceedings,  other than routine
litigation  incidental to the business, to which the Company or its subsidiaries
is a party or to which any of their property is subject.

Item 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

Item 4a: EXECUTIVE OFFICERS OF THE REGISTRANT

         William L. Marks, 54, Chairman of the Board and Chief Executive Officer
of the Company and the Bank since February, 1990.

         R. King Milling,  57, Director since 1979, President of the Company and
the Bank since December, 1984.

         G. Blair Ferguson, 54, Executive Vice President of the Company  and the
Bank since July, 1993.  Former Executive Vice President and Regional Director of
First City, Dallas, Texas.

         Edward B. Grimball,  53, Chief Financial Officer of the Company and the
Bank since October, 1990.

         Kenneth A. Lawder, Jr., 57, Executive Vice President of the Company and
the Bank since December, 1991.

         Joseph W. May, 52, Executive Vice President of the Company and the Bank
since December,  1993.  Former  Executive Vice President and Chief Credit Policy
Officer,  Comerica,  Inc., then a $27 billion bank holding company headquartered
in Detroit, Michigan.

         John C. Hope, III, 49,  Executive Vice President of the Company and the
Bank since October,  1994 and the Bank since January 1998.  Former  Chairman and
Chief Executive  Officer of the Whitney Bank of Alabama.  Former  Executive Vice
President and Manager, Southern Area of AmSouth Bank of Alabama.

         Robert C. Baird,  Jr., 47,  Executive Vice President of the Company and
the Bank since July, 1995. Former Chairman of the Board, Chief Executive Officer
and President of Union Bank and Trust, then a $500 million bank headquartered in
Montgomery, Alabama.

         Rodney D. Chard, 55, Executive Vice President  of  the  Company and the
Bank since July 1996.  Former Consultant, EDS  Management Consulting Services in
Toronto,  Ontario,  Canada.  Former  Independent  Consultant,  Chard  Consulting
Limited  in Toronto, Ontario, Canada.



                               Page 4 of 64 Pages

<PAGE>



                                     PART II

Item 5:  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
         MATTERS

         a)       The  Company's   stock  price  is  reported  on  the  National
                  Association of Securities Dealers Automated Quotation (NASDAQ)
                  system under the symbol WTNY.  The  following  table shows the
                  range  of  closing  prices  of the  Company's  stock  for each
                  calendar  quarter of 1997 and 1996 as  reported  on the NASDAQ
                  National Market System.

                                          1997                1996
                                    ----------------    ---------------
                  1st Quarter       34 3/4 - 40 1/4     29 3/4 - 31 3/4
                  2nd Quarter       35 1/4 - 43         29 3/4 - 31 3/4
                  3rd Quarter       40     - 47 1/4     29 1/2 - 32 3/4
                  4th Quarter       46 1/8 - 59 3/4     31 3/4 - 35 7/8

         b) The approximate number of shareholders of record of the Company,  as
of February 26, 1998, is as follows:

          Title of Class                              Shareholders of Record
    --------------------------                        ----------------------
    Common Stock, no par value                                5,698

         c) During 1997 and 1996, the Company declared dividends as follows:

                                           1997              1996
                                    -----------      ------------
                  1st Quarter       $      0.28      $       0.22
                  2nd Quarter              0.28              0.25
                  3rd Quarter              0.28              0.25
                  4th Quarter              0.28              0.25



                               Page 5 of 64 Pages

<PAGE>
<TABLE>
<CAPTION>
Item 6: SELECTED FINANCIAL DATA

                                                              YEAR ENDED DECEMBER 31,

                                                                     1997        1996        1995        1994        1993
                                                               -----------------------------------------------------------
BALANCE SHEET DATA                                                    (dollars in thousands, except per-share data)
<S>                                                            <C>         <C>         <C>         <C>         <C>  
AT YEAR-END:
     Total assets............................................  $4,312,987  $4,218,033  $3,920,216  $3,606,812  $3,684,753
     Total investment in securities..........................   1,268,288   1,474,198   1,631,738   1,792,878   1,904,843
     Total loans.............................................   2,647,578   2,277,584   1,835,439   1,405,900   1,285,186
     Total earning assets....................................   3,916,366   3,807,475   3,518,469   3,240,662   3,340,829
     Total deposits..........................................   3,510,723   3,262,286   3,253,022   3,035,444   3,128,074
     Total shareholders' equity..............................     478,728     440,536     409,135     358,336     312,549

AVERAGE BALANCE:                                             
     Total assets............................................  $4,180,226  $3,993,855  $3,691,463  $3,657,259  $3,557,547
     Total investment in securities..........................   1,374,531   1,600,912   1,698,578   1,891,813   1,813,940
     Total loans.............................................   2,395,496   1,973,236   1,560,108   1,305,265   1,253,909
     Total earning assets....................................   3,806,450   3,625,756   3,338,755   3,305,898   3,212,117
     Total deposits..........................................   3,277,880   3,170,092   3,084,421   3,060,702   2,999,821
     Total shareholders' equity..............................     458,958     423,927     379,811     323,958     262,107

INCOME DATA                                                  
Interest income..............................................    $291,409    $270,620    $249,980    $224,414    $215,414
Interest expense.............................................    (106,947)   (102,052)    (87,797)    (69,160)    (65,839)
                                                               -----------------------------------------------------------
Net interest income..........................................     184,462     168,568     162,183     155,254     149,575
Reduction in reserve for possible loan losses................       2,812       4,435       8,960      25,793      58,847
Gains (Loss) on sale of securities...........................          10          19           6        (931)         58
Non-interest income..........................................      51,025      41,798      38,188      38,590      37,503
Non-interest expense.........................................    (159,630)   (149,187)   (137,005)   (130,105)   (124,544)
                                                               -----------------------------------------------------------
Income before income tax and effect of accounting changes....     $78,679     $65,633     $72,332     $88,601    $121,439
Income tax expense ..........................................      26,461      21,139      22,819      23,672      38,047
                                                               -----------------------------------------------------------
Income before effect of accounting changes...................     $52,218     $44,494     $49,513     $64,929     $83,392
Cumulative effect of accounting changes, net.................           -           -           -           -         685
                                                               -----------------------------------------------------------
Net income...................................................     $52,218     $44,494     $49,513     $64,929     $84,077
                                                               ===========================================================
Net income before tax-effected merger-related expenses.......     $54,618     $47,913           -           -           -
                                                               ===========================================================
                                                                                                              
COMMON STOCK DATA
Earnings per share(1)........................................       $2.52       $2.18       $2.46       $3.27       $4.27
Earnings per share, assuming dilution(1).....................       $2.50       $2.17       $2.44       $3.25       $4.27
Earnings per share before merger related expenses............       $2.64       $2.35           -           -           -
Dividends per share, historical Whitney Holding Corporation..       $1.12       $0.97       $0.82       $0.64       $0.43
Dividend payout ratio, including pooled entries..............          44%         41%         28%         17%          9%
Book value per share, end of period..........................      $23.01      $21.45      $20.21      $16.19      $15.77
Weighted average number of shares outstanding................  20,706,359  20,419,752  20,107,564  19,875,692  19,678,561

SELECTED RATIOS                                              
Return on average assets ....................................        1.25%       1.11%       1.34%       1.78%       2.36%
Return on average shareholders' equity ......................       11.38%      10.50%      13.04%      20.04%      32.08%
Net interest margin, taxable-equivalent......................        4.97%       4.78%       4.98%       4.81%       4.76%
Tier 1 risk-based capital ratio..............................       14.84%      14.96%      17.25%      20.54%      18.84%
Total risk-based capital ratio...............................       16.10%      16.21%      18.51%      21.81%      20.12%
Tier 1 leverage capital ratio................................       10.72%      10.01%       9.87%       9.65%       8.08%
Average shareholders' equity to average assets...............       10.98%      10.61%      10.29%       8.86%       7.37%
Shareholders' equity to total assets, end of period..........       11.10%      10.44%      10.44%       9.93%       8.48%
                                                             
(1) Earnings per share has been prepared in accordance with SFAS No. 128, and
basic and diluted EPS have replaced primary and fully diluted EPS.

Note: All share and per-share figures give effect to the three-for-two stock splits effective
February 22, 1993 and November 29, 1993.
</TABLE>

                               Page 6 of 64 Pages

<PAGE>



Item 7:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SUMMARY

         Whitney Holding  Corporation earned $52.2 million in 1997, or $2.52 per
share.  These results  include $3.3 million of  merger-related  expenses,  which
represent an after-tax reduction in earnings of $2.4 million or $0.12 per share.
For 1996,  the Company  earned $44.5 million or $2.18 per share,  including $4.2
million of merger-related  expenses,  which represent an after-tax  reduction in
earnings of $3.4 million or $0.17 per share.

         Taxable-equivalent  net interest income increased $15.9 million or 9.2%
between 1996 and 1997.  Non-interest  income  increased $9.2 million or 22% from
1996 to 1997,  with gains shown in most of the income  categories.  Non-interest
expense  was $11.4  million or 7.9% higher in 1997  compared to 1996,  excluding
merger-related expenses of $3.3 million in 1997 and $4.2 million in 1996.

         Average earning assets  increased $181 million or 5.0% to $3.81 billion
in 1997  compared  with $3.63  billion in 1996.  Average  loans  increased  $422
million in 1997 or 21% to $2.40  billion from $1.97  billion in 1996.  This loan
growth is attributable  to strengthened  demand for both commercial and consumer
credit in the Company's market areas and to more aggressive  solicitation of the
Bank's  customers.  The increase in loan activity was funded in part by maturing
investment  securities and other short term investments  which together declined
$242 million or 15% in 1997. At December 31, 1997, total loans  outstanding were
$2.65  billion,  an increase of $370 million or 16% over the $2.28 billion total
at the end of 1996.

         Average total deposits  increased $108 million or 3.4% to $3.28 billion
in 1997 from $3.17 billion in 1996 . This growth is  attributable in part to the
introduction  of new products and services in the Company's  market areas. As of
December 31, 1997,  total deposits were $3.51 billion  compared to $3.26 billion
at the end of 1996.

         Non-performing  assets  continued their steady decrease of recent years
in 1997. At December 31, 1997,  non-performing  assets were $13.3 million,  down
$2.7 million or 17% from $16.0  million at December  31,  1996.  The reserve for
possible  loan losses was $42.8  million on December 31,  1997,  an amount which
represented 475% of nonaccruing loans and 1.6% of total loans. At year end 1996,
the reserve coverage was 467% of nonaccruing loans and 1.9% of total loans.

         Whitney  Holding  Corporation  declared  quarterly  dividends  in  1997
totalling  $1.12 per share compared with $0.97 per share in 1996, an increase of
$0.15 per share or 15%.

RECENT MERGER & ACQUISITION ACTIVITY

         Over the past three years,  the Company has expanded  strategically  in
the Gulf Coast region,  acquiring  banking  operations  in southeast  Louisiana,
Mississippi,  Alabama and Florida.  This section  describes  the results of this
expansion  activity.  With the exception of the Alabama acquisition in 1995, all
of the business combinations  discussed below have been or will be accounted for
using the pooling-of-interests method.

         The Company  expects to complete  two mergers in the second  quarter of
1998,  one  with  Meritrust  Federal  Savings  Bank  ("Meritrust")  and one with
Louisiana National Security Bank ("LNSB").  Meritrust, which is headquartered in
Terrebonne Parish, operates eight banking offices in southeast Louisiana and has
total  assets of  approximately  $233  million.  This  transaction  is priced at
approximately  $60.5  million.  LNSB operates  three  banking  offices in nearby
Ascension Parish,  Louisiana and has total assets of approximately $105 million.
This  transaction  is priced at  approximately  $32  million.  The  Company  had
previously established a presence in Terrebonne Parish in February 1997, when it
completed a merger with First  National  Bankshares,  Inc.,  the parent of First
National  Bank  of  Houma  ("FNBH").  FNBH  operated  five  banking  offices  in
Terrebonne Parish, Louisiana and had total assets of approximately $235 million.
The price of this transaction was $41 million.  Also strengthening the Company's
market presence in southeast Louisiana was its merger, in March 1996, with First
Citizens  BancStock,  Inc.,  the parent of The First  National  Bank in St. Mary
Parish,  which had ten banking locations and total assets of approximately  $243
million  at the  closing.  This  transaction  was  valued at  approximately  $63
million.


                               Page 7 of 64 Pages

<PAGE>



         The Company  entered the  Mississippi  Gulf Coast  market in April 1997
when it completed  its merger with  Merchants  Bancshares,  Inc.,  the parent of
Merchants Bank and Trust Company.  As a result of this acquisition,  the Company
operates  twelve  banking  locations  in this market  area with total  assets of
approximately  $208 million.  This transaction was priced at  approximately  $52
million.

         The  Company  had  entered  the  Alabama  market in early  1995 when it
purchased the Mobile area operations of The Peoples Bank,  Elba,  Alabama.  This
purchase  and  assumption   transaction  involved  five  banking  locations  and
approximately  $90 million of assets,  including  $47 million in loans,  and $90
million of  deposits.  Since the purchase the Company has added five new service
locations, including a branch office in Montgomery, and has several locations in
various  stages of planning or  construction.  The Alabama  operations  included
approximately $290 million in loans at year end 1997.

         In late 1996, the Company  established a market presence in the western
Florida panhandle by merging with two banking  operations in the Pensacola area,
Liberty  Holding  Corporation,  the parent of Liberty Bank,  and American Bank &
Trust.  With these two mergers,  the Company acquired five banking locations and
approximately  $105  million  in  assets.  The  combined  value of these  merger
transactions was approximately $24 million.




                               Page 8 of 64 Pages

<PAGE>
<TABLE>
<CAPTION>



AVERAGE BALANCE SHEETS
---------------------------------------------------------------------------------------------------------
(in thousands)

AVERAGE ASSETS                                                   1997              1996              1995
                                                        -------------------------------------------------
<S>                                                        <C>               <C>               <C>       
Cash and due from financial institutions...............    $  202,418        $  210,660        $  212,505
U.S. Treasury and agency securities....................       932,737         1,178,772         1,354,857
Mortgage-backed securities.............................       296,606           277,678           186,306
State and municipal securities.........................       138,384           138,120           134,347
Federal Reserve stock and other corporate
  securities...........................................         6,804             6,342            23,068
Federal funds sold and short-term deposits.............        36,423            51,608            80,069
Loans, net of reserve for possible loan
 losses of $42,853 in 1997, $45,926 in
 1996 and $44,109 in 1995..............................     2,352,643         1,927,310         1,515,999
Bank premises and equipment, net.......................       127,743           108,272            86,812
All other assets.......................................        86,468            95,093            97,500
                                                        -------------------------------------------------
         Total assets..................................    $4,180,226        $3,993,855        $3,691,463
                                                        =================================================
AVERAGE LIABILITIES
Deposits:
   Non-interest-bearing demand deposits................    $  955,407        $  905,327        $  892,593
   Savings deposits, NOW account
      and money market account deposits................     1,283,747         1,235,571         1,270,759
   Time deposits.......................................     1,038,726         1,029,194           921,069
                                                        -------------------------------------------------
         Total deposits................................    $3,277,880        $3,170,092        $3,084,421
Federal funds purchased and securities sold
   under repurchase agreements.........................       408,757           367,528           196,122
Other liabilities......................................        34,631            32,308            31,109
                                                        -------------------------------------------------
         Total liabilities.............................    $3,721,268        $3,569,928        $3,311,652
AVERAGE SHAREHOLDERS' EQUITY
Total capital accounts.................................       458,958           423,927           379,811
                                                        -------------------------------------------------
         Total liabilities and shareholders'
          equity.......................................    $4,180,226        $3,993,855        $3,691,463
                                                        =================================================
</TABLE>


FINANCIAL CONDITION

Loans

         In 1997 the Company's average loans outstanding  increased $422 million
or 21% as compared to 1996.  Since 1995, the Company  achieved growth in average
loans  outstanding  of $835 million or 54%,  from $1.56 billion in 1995 to $2.40
billion in 1997.  The loan growth over this period  reflects  both the Company's
expansion  into  Gulf  Coast  markets  and  the  continued   favorable  economic
conditions in the Company's  overall  market area,  which  includes the southern
portions  of  Louisiana,  Mississippi  and  Alabama,  and  the  western  Florida
panhandle,  as well as the impact of a focused  effort to market  the  Company's
retail and commercial loan products.

         All categories of loans  experienced  growth from year end 1996 to year
end 1997.  Commercial  loans other than those  secured by real estate  increased
$165 million or 16% in 1997. This increase was well  distributed  among entities
involved  in   manufacturing,   wholesaling,   retailing  and  natural  resource
exploration and  development.  Loans secured by commercial and other  non-retail
residential  mortgage loans increased $117 million or 18%. This growth came both
from loans on income producing properties as well as from loans secured by other
real  estate used in  commercial  operations.  In 1997,  retail  mortgage  loans
increased $84 million or 24%,  largely as a result of the  continued  successful
marketing of retail loan products  that have been  introduced in recent years as
an  alternative  to the  conventional  mortgage  loan  products that the Company
originates for sale in the secondary market.  Emphasis on the promotion of these
mortgage products is a result of the Company's interest in developing long

                               Page 9 of 64 Pages

<PAGE>



term  customer  relationships.  Loans  to  individuals,  which  include  various
consumer  installment  and credit line loan  products,  increased $10 million or
4.8% in 1997.
<TABLE>
<CAPTION>

LOAN PORTFOLIO BALANCES AT DECEMBER 31
----------------------------------------------------------------------------------------------------------------------------
(in thousands)
                                                 1997              1996              1995             1994              1993
                                    ----------------------------------------------------------------------------------------
<S>                                       <C>               <C>               <C>             <C>               <C>
Commercial, financial,
 and agricultural loans.............      $ 1,191,649       $ 1,026,862       $   865,944     $    692,653      $    689,634
Real estate loans -
 commercial and other...............          786,975           669,683           509,824          379,834           328,210
Real estate loans - retail
 mortgage...........................          435,628           351,868           256,007          160,127           126,607
Loans to individuals................          227,360           216,893           190,058          163,557           132,439
Lease financing receivables.........            5,966            12,278            13,606            9,729             8,296
                                     ---------------------------------------------------------------------------------------
         Total loans................      $ 2,647,578       $ 2,277,584       $ 1,835,439      $ 1,405,900       $ 1,285,186
                                     =======================================================================================
</TABLE>


         The  accompanying  table  of  loan  maturities   reflects   contractual
maturities,  unadjusted  for  scheduled  principal  reductions  or  prepayments.
Approximately 85% of the loans with maturities  greater than one year bear fixed
rates of interest.
<TABLE>
<CAPTION>

LOAN MATURITIES AT DECEMBER 31, 1997
-------------------------------------------------------------------------------------------------------------
(in thousands)
                                                                  ONE
                                                ONE YEAR         THROUGH         MORE THAN
                                                 OR LESS       FIVE  YEARS      FIVE  YEARS          TOTAL
                                             ----------------------------------------------------------------
<S>                                          <C>               <C>               <C>              <C>
Commercial, financial,
 and agricultural loans.............         $    729,280      $  349,610        $  112,759       $ 1,191,649
Real estate loans -
 commercial and other...............              197,773         385,683           203,519           786,975
Real estate loans - retail
 mortgage...........................               63,479         136,439           235,710           435,628
Loans to individuals................               84,368          86,766            56,226           227,360
Lease financing receivables.........                4,074           1,476               416             5,966
                                             ----------------------------------------------------------------
         Total loans................         $  1,078,974     $   959,974        $  608,630       $ 2,647,578
                                             ================================================================
</TABLE>


Deposits and Short-Term Borrowings

         The Company's average deposits  increased $108 million or 3.4% to $3.28
billion in 1997 from $3.17 billion in 1996.

         As shown in the table of average balance  sheets,  non-interest-bearing
demand deposits  increased $50.0 million or 5.5% between 1996 and 1997.  Factors
that  contributed to this increase include the design and promotion of new small
business  and personal  checking  account  products and the new branch  openings
during 1996 and 1997.

         The  table  of  average   balance   sheets  also  shows  that   average
interest-bearing  deposits  have  increased $58 million or 2.5% between 1996 and
1997. Average savings, NOW and money market account deposits increased a net $48
million  or 3.9%  between  1996 and 1997.  The  success of recent  campaigns  to
promote a premium money market  product  first  introduced in 1996 was primarily
responsible for this deposit growth. Total average money market account deposits
grew $75  million or 26% in 1997 as  compared  to 1996.  Between  1996 and 1997,
average  regular  savings  deposits  decreased $14 million or 2.8%.  Average NOW
account  deposits  were  also  lower in 1997 as  compared  to  1996,  decreasing
approximately $12 million or 2.6%. A portion of the decreases in regular savings
and NOW account  deposits is  attributable  to funds moving to the premium money
market product.

         The time  deposit  category,  which  includes  both core  deposits  and
certificates  of deposit  and other time  deposits  of  $100,000  and over,  has
remained  relatively  stable between 1996 and 1997,  increasing  $9.5 million or
0.9%. Within this category,

                               Page 10 of 64 Pages

<PAGE>



core deposits  decreased $41 million or 6.9% in 1997 when compared to 1996 while
non-core deposits increased $51 million or 11.6%.

         The  Company's  short-term  borrowings  consist of purchases of federal
funds and sales of securities under repurchase  agreements.  Such borrowings are
both a source of funding for certain  short-term  lending  activity as well as a
part of the Company's services to correspondent  banks and other customers.  The
Company's  average  short-term  borrowings  increased $41 million or 11% between
1996  and  1997.  The  Company  has  used  short-term  borrowings,  particularly
repurchase  agreements,  to  provide  funds to  support  the  growth in the loan
portfolio.  The rise in short-term borrowings is also partly attributable to the
use of repurchase  agreements  in connection  with an expansion of the Company's
cash management  services.  The Company's average short-term borrowing position,
net of short-term  funds sold, was  approximately  $372 million in 1997 and $316
million in 1996, an increase of $56 million or 18%.

Investment in Securities

         At December 31, 1997, the Company's total  investment in securities was
$1.27  billion,  a decrease of $206  million or 14% from the  December  31, 1996
total of $1.47 billion.

         The average  total  investment  portfolio  outstanding  decreased  $226
million or 14%  between  1996 and 1997.  Funds from  investment  maturities,  in
particular  U.S.  Treasury  securities,  have  been  used to  partially  satisfy
increased loan demand in recent years. In both 1997 and 1996, maturities of U.S.
Treasury securities have also been reinvested in higher-yielding U.S. government
agency securities and mortgage-backed issues.

         The weighted  average  maturity of the overall  portfolio of securities
was 62 months at year end 1997 as  compared  to 42 months at year end 1996.  The
weighted  average  taxable-equivalent  portfolio yield was 6.68% at December 31,
1997, an increase of 36 basis points from 6.32% at December 31, 1996.

         Securities  classified as available for sale constituted  approximately
8.1% of the total  investment  portfolio at year end 1997 and 14% as of year end
1996.  These  securities  are  reported  at their  estimated  fair values in the
consolidated  statements of condition.  The net unrealized gain on available for
sale securities was $0.3 million at year end 1997 compared to an unrealized loss
of $0.2 million at 1996's year end. These gains and losses are reported,  net of
tax,  as a separate  component  of  shareholders'  equity for each  period.  The
remaining  portfolio  securities  are  classified  as held to  maturity  and are
reported  at  amortized  cost.   The  Company  maintains  no  securities trading
portfolio.

         At December 31, 1997, the Company held no investment in securities of a
single issuer,  other than U.S.  Treasury and U. S. government agency securities
and  mortgage-backed  securities  issued  or  guaranteed  by  U.  S.  government
agencies,  that exceeded 10% of its shareholders'  equity. The Company maintains
no material  investment or participation in financial  instruments or agreements
whose value is linked to or derived from changes in the value of some underlying
asset  or  index.  Such  instruments  or  agreements  include  futures,  forward
contracts, option contracts,  interest-rate swap agreements, and other financial
arrangements  with  similar  characteristics,  and are  commonly  referred to as
derivatives.



                               Page 11 of 64 Pages

<PAGE>

<TABLE>
<CAPTION>


INVESTMENT IN SECURITIES
(dollars in thousands)

Book Value at December 31                         1997                 1996               1995
                                             -------------------------------------------------
U S. Treasury securities:
<S>                                         <C>                  <C>                <C>       
 Held to maturity...........................$  300,260           $  565,584         $  815,588
 Available for sale.........................     3,992                9,519             19,828
Securities of U.S. government agencies:
 Held to maturity...........................   427,390              401,023            323,513
 Available for sale.........................    18,028               55,005             89,513
Mortgage-backed securities:
 Held to maturity...........................   299,612              146,295             58,321
 Available for sale.........................    81,233              143,405            177,403
State and municipal securities:
 Held to maturity...........................   131,818              146,237            138,765
 Available for sale.........................         -                1,072              1,074
Federal Reserve stock and other
  corporate securities......................     5,955                6,058              7,733
                                            --------------------------------------------------
         Total..............................$1,268,288           $1,474,198         $1,631,738
                                            ==================================================

</TABLE>

<TABLE>
<CAPTION>

DISTRIBUTION OF INVESTMENT MATURITIES AT DECEMBER 31, 1997
------------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands)

                                                          Over One         Over Five
                                        One Year          Through           Through               Over
                                        and Less         Five Years        Ten Years            Ten Years              Total
------------------------------------------------------------------------------------------------------------------------------------
                                     Amount   Yield    Amount   Yield    Amount   Yield    Amount     Yield        Amount     Yield
------------------------------------------------------------------------------------------------------------------------------------
Securities held to maturity:
<S>                                 <C>       <C>     <C>       <C>     <C>       <C>     <C>         <C>         <C>         <C>   
U.S. Treasury securities............$180,232  6.21 %  $120,028  6.82 %  $      -     - %  $      -       - %      $300,260    6.45 %
U.S. government agency
 securities.........................  34,386  5.88     302,230  6.46      87,751  6.75       3,023    4.52         427,390    6.46
Mortgage-backed securities(2).......   2,109  6.91      58,899  6.42     133,885  6.64     104,719    6.70         299,612    6.62
State and municipal
  securities(1).....................  13,946  7.77      58,275  7.97      45,672  8.23      13,925    8.06         131,818    8.05
Equity securities(3)................       -     -           -     -           -     -       5,955       -           5,955       -

Securities available for sale:(4)
U.S. Treasury securities............   3,000  5.43         992  5.82           -     -           -       -           3,992    5.53
U.S. government agency
 securities.........................   3,494  4.69       1,657  6.99       2,803  7.98      10,074    7.28          18,028    6.86
Mortgage-backed securities(2).......  11,919  5.24      48,821  6.61       1,043  6.09      19,450    6.59          81,233    6.40

<FN>
(1) Tax exempt yields are expressed on a fully taxable equivalent basis.
(2) Distributed by contractual maturity without regard to repayment schedules or
    projected  prepayments.
(3) These  securities  have no  stated  maturities  or guaranteed dividends.
(4) These securities are  classified  as  available  for  sale  before maturity.
    The  actual  timing  of any such sales, however, is not determinable at year
    end.
</FN>
</TABLE>


                               Page 12 of 64 Pages

<PAGE>



Asset Quality

         Overall asset quality has shown  significant  improvement over the past
five years. Non-performing assets totalled $13.3 million at December 31, 1997, a
decrease of $2.7 million or 17% from $16.0 million at year end 1996. In the five
years since 1992 non-performing assets have fallen a total of approximately $161
million or 88%.  Over this same period,  loans  internally  classified as having
above-normal  credit risk  decreased  approximately  $161  million or 66% to $81
million or 3.1% of total  loans at year end 1997.  At  December  31,  1997,  the
classification  totals  were as  follows:  loans as to which  there are  serious
doubts as to full repayment,  $6.4 million;  substandard loans with well-defined
weaknesses  that,  if not  corrected,  would likely  result in some loss,  $44.4
million;  and loans with risk characteristics that indicate a potential weakness
and that warrant special attention, $30.2 million.

         The Company recovered $11.4 million of previously  charged-off loans in
1997 and $10.8 million in 1996. In 1997, the Company  identified $8.2 million of
loans to be charged off as uncollectible  against the reserve for possible  loan
losses as compared to $7.3 million of  charge-offs  in 1996.  In each period the
Company was in a net recovery position in excess of $3 million.  The increase in
charge-offs in each of these periods as compared with the two previous years can
be  attributed  mainly to certain  credit  quality  issues that  developed  with
respect to a segment of the  portfolio  acquired  in the merger  with one of the
pooled  institutions  as well as to the  downgrade in the credit rating of a few
isolated commercial customers. Management has addressed the issues identified in
the acquired  portfolio and has assessed the potential for additional  losses in
this  portfolio and with the troubled  commercial  customers in  evaluating  the
adequacy of the reserve for possible loan losses.

         The reserve for possible loan losses is maintained at a level  believed
by management to be adequate to absorb potential losses in the portfolio. In the
early 1990s,  the economic  conditions  in the  Company's  primary  market areas
stabilized and began to improve after a period of severe decline, and management
began  implementing a program to strengthen its policies and procedures  related
to the measurement  and control of credit risk in its loan  portfolio.  In 1993,
the improvement in the economy and the success of management's  program led to a
dramatic  reduction  in the  Company's  measures of overall loan credit risk and
allowed  management  to  authorize  a $59 million  reduction  in the reserve for
possible loan losses. With continued economic strength,  continued  improvements
in overall  measures of asset  quality,  and  significant  net recoveries in the
following  years,  the  Company was able to return $26 million of the reserve to
income in 1994, $9.0 million in 1995 and $4.4 million in 1996.

         A portion of the $2.8 million net reserve  reduction in 1997  reflected
the reversal of excess reserves that had previously been  established to cover a
potential  settlement  of claims by the U. S.  Department  of Education  ("DOE")
stemming from the Company's  participation in guaranteed  student loan programs.
As discussed  below, a tentative  settlement  with the DOE has been reached.  An
increase in non-interest expense related to this settlement substantially offset
the earnings impact of the reserve reduction.

         The reserve for possible  loan losses  represented  475% of  nonaccrual
loans at December  31,  1997 and 1.6% of total  loans on that date.  At year end
1996 this reserve coverage was 467% of nonaccrual loans and 1.9% of total loans.

         During 1997, the Company  disposed of OREO  properties  with a carrying
value at the time of sale  totalling  approximately  $2.3 million.  The value of
properties  acquired  in  settlement  of loan  claims  during  the year was $0.8
million.


                               Page 13 of 64 Pages

<PAGE>


<TABLE>
<CAPTION>

NON-PERFORMING ASSETS AT DECEMBER 31
----------------------------------------------------------------------------------------------------------------
(in thousands)
                                            1997          1996           1995             1994              1993
                                    ----------------------------------------------------------------------------
<S>                                 <C>              <C>            <C>              <C>              <C>   
Loans accounted for on
 a nonaccrual basis.................$      9,005     $   9,079      $  11,495        $  18,544        $   36,953
Restructured loans..................       1,560         2,375          2,101            2,444               877
                                    ----------------------------------------------------------------------------
    Total non-performing loans......      10,565        11,454         13,596           20,988            37,830
Other real estate owned.............       2,661         4,584          7,829            7,746            19,005
Other foreclosed assets.............          49             -              -                6               174
                                    ----------------------------------------------------------------------------
     Total non-performing assets....$     13,275     $  16,038      $  21,425        $  28,740        $   57,009
                                    ============================================================================
Loans 90 days past due still
 accruing...........................$      1,394     $   2,464      $   1,077        $   1,015        $    2,268
                                    ============================================================================
Non-performing assets as a
 percentage of:
     Total assets..................         0.3%          0.4%           0.5%             0.8%              1.5%
     Total loans and
        foreclosed assets..........         0.5%          0.7%           1.2%             2.0%              4.4%
</TABLE>


         Whitney  National  Bank  has  several  property  interests  which  were
acquired through routine banking transactions  generally prior to 1933 and which
are recorded in its financial records at a nominal value. Management continually
investigates ways to maximize the return on these assets.  Operating income from
these property  interests,  primarily from oil and gas royalties and real estate
operations,  was $3.0 million in 1997, including approximately $2.6 million from
sales of land near Berwick,  Louisiana and in Livingston Parish, Louisiana. This
compares with $0.9 million of operating income in 1996 and $0.1 million in 1995.
Future dispositions may result in the recognition of substantial gains.

         The Company has not extended any credit in  connection  with what would
be defined under regulatory guidelines as highly leveraged transactions, nor has
it acquired  any  investment  securities  arising  from such  transactions.  The
Company's  foreign  lending and investing  activities are currently  immaterial.
Note 4 to the consolidated  financial statements discusses credit concentrations
in the loan portfolio.



                                                Page 14 of 64 Pages

<PAGE>

<TABLE>
<CAPTION>


SUMMARY OF ACTIVITY IN THE RESERVE FOR POSSIBLE LOAN LOSSES
----------------------------------------------------------------------------------------------------------------
(dollars in thousands)
                                      1997             1996              1995             1994              1993
                                --------------------------------------------------------------------------------
<S>                                <C>              <C>               <C>              <C>              <C>    
Reserve for possible loan
   losses at beginning of
         period                    $42,411          $43,341           $41,024          $50,965          $104,745

Reserves provided through
   acquisitions                          -                -             1,772                -                 -

Loans charged off during period:
   Commercial, financial, and
    agricultural loans              $4,687           $3,931            $3,324           $2,426            $5,768
   Real estate loans                   408               73               151              639               934
   Loans to individuals              2,022            1,417             1,440            1,777             1,731
   Lease financing receivables       1,085            1,849               200              132               301
                                --------------------------------------------------------------------------------
      Total                         $8,202           $7,270            $5,115           $4,974            $8,734
                                --------------------------------------------------------------------------------

Recoveries of loans previously
   charged off:
   Commercial, financial, and
    agricultural loans             $6,005            $3,771            $5,064           $5,317            $8,120
   Real estate loans                3,409             5,423             6,937           12,245             3,958
   Loans to individuals             1,994             1,558             2,561            3,194             1,579
   Lease financing receivables          -                23                58               70               144
                                --------------------------------------------------------------------------------
      Total                       $11,408           $10,775           $14,620          $20,826           $13,801
                                --------------------------------------------------------------------------------

Net loans recovered (charged off)
 during period                     $3,206            $3,505            $9,505          $15,852            $5,067

Additions to (reduction in)
 reserve for possible loan
 losses charged (credited)
 to operations                     (2,812)           (4,435)           (8,960)         (25,793)          (58,847)
                                --------------------------------------------------------------------------------

Reserve for possible loan
 losses at end of period          $42,805           $42,411           $43,341          $41,024           $50,965
                                ================================================================================

Reserve as a percentage of:
  Nonaccrual loans                    475%              467%              377%             221%              138%
  Total non-performing loans          405%              370%              319%             195%              135%
  Total loans                         1.6%              1.9%              2.4%             2.9%              4.0%

Ratio of net  recoveries
   to average loans outstanding       0.1%              0.2%              0.6%             1.2%              0.4%
</TABLE>


                               Page 15 of 64 Pages

<PAGE>
<TABLE>
<CAPTION>



ALLOCATION OF THE RESERVE FOR POSSIBLE LOAN LOSSES
----------------------------------------------------------------------------------------------------------------

                              1997             1996             1995             1994                 1993
                        ----------------------------------------------------------------------------------------
                                  % of             % of              % of              % of                % of
                         % of     Total    % of    Total    % of     Total    % of     Total      % of     Total
                       Allowance  Loans Allowance  Loans  Allowance  Loans  Allowance  Loans    Allowance  Loans
                       ----------------------------------------------------------------------------------------- 
<S>                      <C>      <C>     <C>      <C>      <C>      <C>      <C>      <C>        <C>      <C>
Commercial,
    financial and
    agricultural
    loans                42.7%    45.0%   43.2%    45.1%    42.1%    47.2%    45.5%    49.3%      45.2%    53.7%
 Real estate
    loans -
    commercial
    and other            28.5%    29.7%   27.0%    29.4%    23.5%    27.8%    27.7%    27.0%      22.5%    25.5%
 Real estate
    loans - retail
     mortgage            15.2%    16.5%   13.5%    15.5%    10.9%    13.9%     9.7%    11.4%       6.0%     9.9%
 Loans to
     individuals          8.5%     8.6%    6.3%     9.5%     7.5%    10.4%     9.1%    11.6%       5.9%    10.3%
 Lease financing
    receivables           0.7%     0.2%    2.5%     0.5%     2.0%     0.7%     0.5%     0.7%       0.4%     0.6%
 Unallocated              4.4%       -     7.5%       -     14.0%       -      7.5%       -       20.0%       -
                       -----------------------------------------------------------------------------------------
 Total                  100.0%   100.0%  100.0%   100.0%   100.0%   100.0%   100.0%   100.0%     100.0%   100.0%
                       =========================================================================================
</TABLE>


Bank Premises and Equipment

         The net  investment in bank premises and equipment at December 31, 1997
of $138 million  represents a $19 million or 16% increase from the level at year
end 1996.  This follows a $24 million or 25% increase  between year end 1995 and
1996. Beginning in 1995 and continuing in 1996 and 1997, the Company accelerated
the  expansion  of  its  branch  and  automated  teller  machine  networks,  the
renovation or replacement of existing branch facilities,  and the enhancement of
its facilities for its support operations.  Over the last two years, the Company
has completed or begun construction on thirteen new branch locations  throughout
its market area,  including a new  administrative  headquarters  for the Alabama
region,  and  opened a new  operations  center.  During  1997 the  Company  also
substantially completed the upgrade of its branch delivery system and its office
automation systems.

 Capital Adequacy

         The Company's  risk-based  regulatory  capital ratios decreased between
December 31, 1996 and December 31, 1997,  although all ratios  remained  well in
excess of the minimum requirements. The decreases are consistent with the growth
between these periods in total risk-weighted assets. Loan growth that was partly
funded by maturities of generally lower risk-weighted  investment securities was
the main factor contributing to the rise in total risk-weighted assets.

         The  regulatory  capital  ratios for the Company  and Whitney  National
Bank, its only significant banking subsidiary,  are shown as follows compared to
the minimums  that are  currently  required  under  capital  adequacy  standards
imposed by their regulators and those that the Bank must maintain to be eligible
for a "well  capitalized"  classification  under the  prompt  corrective  action
framework.  Whitney  National Bank has been classified as "well  capitalized" in
the most recent  classification  notice received from its regulatory agency. The
merger of the Company's  multi-state banking  subsidiaries into Whitney National
Bank in January 1998 should not cause a change in this classification.

         Regulatory  banking  agencies  assess  an  institution's   exposure  to
interest  rate risk as part of the overall  procedures  performed to evaluate an
institution's  capital adequacy,  but these agencies have not yet incorporated a
specific measure of interest rate risk into an  institution's  required level of
regulatory  capital.  Management  believes  that  implementation  of a  specific
capital charge for interest rate risk will not have a significant  impact on the
Company's or the Bank's regulatory capital requirements.

                               Page 16 of 64 Pages

<PAGE>
<TABLE>
<CAPTION>



REGULATORY CAPITAL RATIOS AND RISK-WEIGHTED ASSETS
------------------------------------------------------------------------------------------------------
(dollars in thousands)
                                            December 31,            Minimum            Minimum For
                                                                 Capital Adequacy   "Well-Capitalized"
                                             1997        1996       Standard          Classification
------------------------------------------------------------------------------------------------------

<S>                                    <C>         <C>                <C>               <C>                
Tier 1 risk-based capital:
 Company...............................    14.84%      14.96%         4.00%                n/a
 Whitney National Bank.................    14.07%      14.39%         4.00%              6.00%
Total risk-based capital:
 Company...............................    16.10%      16.21%         8.00%                n/a
 Whitney National Bank.................    15.32%      15.64%         8.00%             10.00%
Tier 1 leverage capital:
 Company...............................    10.72%      10.01%         4.00%                n/a
 Whitney National Bank.................     9.76%       9.31%         4.00%              5.00%

Total risk-weighted assets:
 Company...............................$3,099,425  $2,808,272
 Whitney National Bank.................$2,645,708  $2,404,424
</TABLE>

RESULTS OF OPERATIONS

Net Interest Income

         Taxable-equivalent  net interest income increased $15.9 million or 9.2%
in 1997 as compared to 1996, and the net interest margin increased to 4.97% from
4.78%. In 1996 net interest  income  increased $6.9 million or 4.1% over 1995 as
the net  interest  margin  decreased  to 4.78% from  4.98%.  The  factors  which
contributed  to these  changes are detailed in the  following  tables  analyzing
changes in interest income and expense.

         Taxable-equivalent  loan interest income increased $31.8 million or 18%
in 1997 as compared to 1996. This increase was driven by the $422 million growth
in average  loans  outstanding  between 1996 and 1997.  The increase in interest
income from loan growth was  partially  offset by the impact of a 23 basis point
decrease in effective loan yields  between these periods,  from 8.80% in 1996 to
8.57% in 1997. The decrease in the effective loan yield reflects in part a lower
level of  recoveries  of  prior-period  interest  recognized  as  income in 1997
compared to 1996.  Market interest rates were relatively  stable during 1996 and
into 1997,  moderating  somewhat toward the end of 1997. This rate  environment,
coupled with a decline in the market rates for credit extensions to high-quality
corporate  borrowers  during the past year, also  contributed to the decrease in
effective loan yields.

         Comparing  1996  and  1995,  taxable-equivalent  loan  interest  income
increased  $25.6  million or 17%, an  increase  that was also the result of loan
growth  which on average  totalled  $413 million  between  these  periods.  This
growth-driven  increase  in income  was again  partly  offset by the impact of a
decline in effective  loan yields which  decreased 69 basis points between these
periods,  from 9.49% to 8.80%. Much of this decrease resulted from the repricing
of variable and  short-term  fixed rate loans and the addition of new credits as
well as the expansion of existing  lending  facilities in a moderating  interest
rate environment  that prevailed  throughout 1995 and early 1996. Cash basis and
cost-recovery interest income recognized in 1996 from nonaccrual loans and loans
previously in workout  status was also lower than that  recognized in 1995.  The
competitive  market also placed some pressure on the pricing of loans to new and
existing customers.

         In 1997  taxable-equivalent  interest  income on investment  securities
decreased  $10.2  million  or 10.3% when  compared  with  1996.  This  follows a
decrease in  investment  income of $2.5  million or 2.5% in 1996  compared  with
1995.  These decreases are consistent with reductions in the average  investment
in  securities  over this period,  which  totalled $226 million or 14.1% between
1996 and 1997 and $98 million or 5.7% between 1995 and 1996. The effective yield
on the  investment  portfolio  increased  27 basis  points in 1997 to 6.44% from
6.17% in 1996. The 1996 effective yield was 21 basis points above the 1995 yield
of  5.96%.   These  increases  are  primarily   the  result  of  higher   yields

                               Page 17 of 64 Pages

<PAGE>



obtained   on   reinvestment    and   a  shift   in  the  portfolio  mix  toward
mortgage-backed  issues,  U. S.  government  agency  securities  and  state  and
municipal obligations and away from U. S. Treasury securities.  After moderating
in 1995 and into 1996,  market interest rates have been relatively  stable.  The
Company, however, has structured the maturities of its investment portfolio in a
way that reduces the immediate  sensitivity  of its effective  yield to changing
market interest rates.

         The net increase in total  taxable-equivalent  interest  income between
1997 and 1996 was $20.8  million  or 7.6% on growth in total  earning  assets of
$181  million  or  5.0%.  The  overall  effective  earning-asset  yield  in 1997
increased 19 basis points to 7.78% from 7.59% in 1996. Total  taxable-equivalent
interest  income in 1996 was $21.1 million or 8.3% higher than in 1995, as total
earning  assets grew $287 million or 8.6%. The overall  effective  earning-asset
yield in 1996 was 7.59%, almost unchanged from 7.61% in 1995.

         Interest expense  increased $4.9 million or 4.8% in 1997 as compared to
1996.  This increase  reflects  mainly the impact of the growth in average total
interest-bearing liabilities, including both deposits and short-term borrowings,
between these periods.  Average short-term  borrowings  increased $41 million or
11% in 1997 as compared to 1996.  The cost of these  borrowed funds was 4.99% in
1997, an increase of 7 basis points over 1996. The higher cost of these funds in
1997  reflects in part the 25 basis point  increase in the federal funds rate at
the end of 1997's first quarter.

         Growth in average interest-bearing deposits of $58 million or 2.5% also
contributed  to the overall  increase in interest  expense in 1997. As discussed
earlier,  this growth was primarily a function of the success of a premium money
market account product.  Despite this growth, the overall cost of funds rate for
interest-bearing  deposits  of 3.73% in 1997 was little  changed  from the 3.71%
rate in 1996.

          Interest expense increased  approximately $14.3 million or 16% in 1996
as  compared  to  1995.  Approximately  $13  million  of  this  increase  can be
attributed to the $244 million increase in average interest-bearing liabilities,
in  particular  short-term  borrowings,  between  these  periods.  The remaining
increase  reflects  mainly  the impact of the  greater  emphasis  on  short-term
borrowings as a funding  source in 1996 and a moderate  shift in the deposit mix
toward  time  deposits.  The  overall  cost of  funds  rate on  interest-bearing
liabilities was 3.88% in 1996 and 3.68% in 1995, an increase of 20 basis points.

                               Page 18 of 64 Pages

<PAGE>
<TABLE>
<CAPTION>
ANALYSIS OF CHANGES IN INTEREST INCOME AND INTEREST EXPENSE
YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE INTEREST-BEARINGS LIABILITIES
----------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands)
                                   1997                              1996                             1995
                               ---------------------------------------------------------------------------------------------------
                                 Average      Income/   Yield/     Average     Income/   Yield/     Average     Income/   Yield/
                                 Balance      Expense    Rate      Balance     Expense    Rate      Balance     Expense    Rate
                               ---------------------------------------------------------------------------------------------------
<S>                             <C>           <C>         <C>     <C>          <C>         <C>     <C>          <C>         <C>
ASSETS
Loans
  (tax equivalent) (1),(2)....  $2,395,496    $205,412    8.57 %  $1,973,236   $173,636    8.80 %  $1,560,108   $148,027    9.49 %
                               ---------------------------------------------------------------------------------------------------
U. S. Treasury securities.....    $472,566     $28,347    6.00 %    $719,068    $40,752    5.67 %    $952,606    $52,681    5.53 %
U.S. government agency
  securities..................     460,171      29,346    6.38 %     459,704     28,346    6.17 %     402,251     23,859    5.93 %
Mortgage-backed securities ...     296,606      19,079    6.43 %     277,678     17,864    6.43 %     186,306     12,346    6.63 %
State and municipal securities
  (tax equivalent)  (1).......     138,384      11,413    8.25 %     138,120     11,375    8.24 %     134,347     11,048    8.22 %
Federal reserve stock and
  other corporate securities..       6,804         391    5.75 %       6,342        389    6.13 %      23,068      1,296    5.62 %
                               ---------------------------------------------------------------------------------------------------
  Total investment in
    securities (1),(3)........  $1,374,531     $88,576    6.44 %  $1,600,912    $98,726    6.17 %  $1,698,578   $101,230    5.96 %
                               ---------------------------------------------------------------------------------------------------
                                                                              
Federal funds sold and
  short-term deposits.........      36,423       2,040    5.60 %      51,608      2,869    5.56 %      80,069      4,834    6.04 %
                               ---------------------------------------------------------------------------------------------------
  Total interest-earning
    assets....................  $3,806,450    $296,028    7.78 %  $3,625,756   $275,231    7.59 %  $3,338,755   $254,091    7.61 %
                               ---------------------------------------------------------------------------------------------------
                              
Cash and due from financial
  institutions................     202,418                           210,660                          212,505
Bank premises and
  equipment, net..............     127,743                           108,272                           86,812
Other real estate owned, net..       3,863                             6,076                            7,859
Other assets..................      82,605                            89,017                           89,641
Reserve for possible
  loan losses.................     (42,853)                          (45,926)                         (44,109)
                               ------------                      ------------                     ------------
  Total assets................  $4,180,226                        $3,993,855                       $3,691,463
                               ============                      ============                     ============
                                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
Savings deposits..............    $480,625     $12,628    2.63 %    $494,590    $13,311    2.69 %    $534,352    $14,530    2.72 %
NOW account and MMDA deposits.     803,122      20,721    2.58 %     740,981     16,849    2.27 %     736,407     17,111    2.32 %
Time deposits.................   1,038,726      53,214    5.12 %   1,029,194     53,802    5.23 %     921,069     46,055    5.00 %
                               ---------------------------------------------------------------------------------------------------
  Total interest-bearing
    deposits..................  $2,322,473     $86,563    3.73 %  $2,264,765    $83,962    3.71 %  $2,191,828    $77,696    3.54 %
                               ---------------------------------------------------------------------------------------------------

Federal funds purchased and
  securities sold under
  repurchase agreements.......     408,757      20,384    4.99 %     367,528     18,090    4.92 %     196,122     10,101    5.15 %
                               ---------------------------------------------------------------------------------------------------
  Total interest-bearing
  liabilities.................  $2,731,230    $106,947    3.92 %  $2,632,293   $102,052    3.88 %  $2,387,950    $87,797    3.68 %
                               ---------------------------------------------------------------------------------------------------
                                                        
Demand deposits,
  non-interest-bearing........     955,407                           905,327                         $892,593
Other liabilities.............      34,631                            32,308                           31,109
Shareholders' equity..........     458,958                           423,927                          379,811
                               -----------                       -----------                      -----------
  Total liabilities and
  shareholders' equity........  $4,180,226                        $3,993,855                       $3,691,463
                               ===========                       ===========                      ===========
                              
  Net interest income/margin
    (tax equivalent)  (1).....                $189,081    4.97 %               $173,179    4.78 %               $166,294    4.98 %
                                             =========    ======              =========    ======              =========    ======

 (1)  Tax equivalent amounts are calculated using a marginal federal income tax rate of 35% for all years.
 (2)  Average balance includes nonaccruing loans $8,858 ,$10,548 and $15,614, respectively, in 1997, 1996 and 1995.
 (3)  Average balance excludes unrealized gain or loss on securities available for sale.
</TABLE>

                               Page 19 of 64 Pages

<PAGE>
<TABLE>
<CAPTION>
ANALYSIS OF CHANGES IN INTEREST INCOME AND INTEREST EXPENSE
VOLUME AND YIELD/RATE VARIANCE
------------------------------------------------------------------------------------------------------------------------
(in thousands)

                                                     1997 COMPARED TO 1996                 1996 COMPARED TO 1995
                                               -------------------------------------------------------------------------
                                                         CHANGE  DUE TO                        CHANGE DUE TO

                                                              YIELD/                                YIELD/
                                                  VOLUME       RATE        NET          VOLUME       RATE        NET
                                               -------------------------------------------------------------------------
INTEREST EARNED ON
<S>                                            <C>         <C>         <C>           <C>         <C>         <C>       
Loans (tax equivalent) (1)(2)................  $   36,080  $   (4,304) $   31,776    $   35,286  $   (9,677) $   25,609
                                             
U.S. Treasury securities.....................  $  (14,954) $    2,549  $  (12,405)   $  (13,271) $    1,342  $  (11,929)
U.S. government agency securities............          29         971       1,000         3,513         974       4,487
Mortgage-backed securities ..................       1,218          (3)      1,215         5,867        (349)      5,518
State and municipal                          
      securities (tax equivalent) (1)........          22          16          38           311          16         327
Federal Reserve stock and                    
     other corporate securities..............          15         (13)          2        (1,038)        131        (907)
                                               -------------------------------------------------------------------------
  Total investment in securities.............  $  (13,670) $    3,520  $  (10,150)   $   (4,618) $    2,114  $   (2,504)
                                               -------------------------------------------------------------------------
                                             
Federal funds sold and short-term deposits...        (851)         22        (829)       (1,607)       (358)     (1,965)
                                               -------------------------------------------------------------------------
  Total interest-earning assets..............  $   21,559  $     (762) $   20,797    $   29,061  $   (7,921) $   21,140
                                               -------------------------------------------------------------------------
                                                                                                              
                                             
INTEREST ACCRUED ON                          
Savings account deposits.....................  $     (371)       (312) $     (683)   $   (1,071) $     (148) $   (1,219)
NOW account and MMDA deposits................       1,486       2,386       3,872           107        (369)       (262)
Time deposits................................         507      (1,095)       (588)        5,584       2,163       7,747
                                               -------------------------------------------------------------------------
  Total interest-bearing deposits............  $    1,622  $      979  $    2,601    $    4,620  $    1,646  $    6,266
                                               -------------------------------------------------------------------------

Federal funds purchased and securities sold  
    repurchase agreements....................       2,053         241       2,294         8,416        (427)      7,989
                                               -------------------------------------------------------------------------
  Total interest-bearing liabilities.........  $    3,675  $    1,220  $    4,895    $   13,036  $    1,219  $   14,255
                                               -------------------------------------------------------------------------
                                                                                                              
                                             
  Net interest income (tax equivalent) (1)...  $   17,884  $   (1,982) $   15,902    $   16,025  $   (9,140) $    6,885
                                               =========================================================================
                                                                                                              
<FN>
(1)  Tax equivalent amounts are calculated using a marginal federal income tax rate of 35% for all years.
(2) Interest recognized  on a cash basis on nonaccruing loans and prior cost recovery interest
currently recognized on nonaccruing and certain accruing  loans was $1,645, $3,729, and $6,505 in 1997,
1996 and 1995 respectively.
</FN>
</TABLE>
                                        
                               Page 20 of 64 Pages

<PAGE>

Other Income and Expense

         Non-interest  income  increased  $9.2  million  or 22.0%  in 1997  when
compared to 1996. Net gains on sales or other  dispositions of foreclosed assets
totalled $6.2 million in 1997 and $2.8 million in 1996.  Excluding  this income,
non-interest  income  was $44.8  million in 1997 and $39.0  million in 1996,  an
increase of $5.8 million or 14.8%.  Between 1995 and 1996,  non-interest income,
again  adjusted  to exclude net gains from  foreclosed  assets,  increased  $2.1
million or 5.73% from $36.9 million in 1995.

         Income from service charges on deposits  accounts,  which accounted for
approximately  half of  recurring  non-interest  income in 1997,  1996 and 1995,
increased 8.1% in 1997 compared to 1996. This increase can be attributed  mainly
to changes in the rate schedule for certain  deposit  services.  Deposit  growth
from the  introduction  of new  products  also  contributed  to the  increase in
deposit  service  charge income in 1997.  Between 1995 and 1996 there was little
change in this income category.

         Fee income from credit card related operations  increased 25.9% in 1997
compared  to 1996,  after  increasing  12.5%  in 1996  compared  to 1995.  These
improvements  reflect both economic  conditions as well as successful  marketing
efforts.   The  impact  of  successful   marketing  is  also  reflected  in  the
year-to-year  increases in trust  services  income of 17.8% in 1997 and 10.1% in
1996.  Trust services  income has also benefited from the strong  performance of
the financial markets in recent years.

         The Company has been expanding its automated teller network for several
years now,  through both remote  placements as well as installations at existing
and newly  constructed  branch  facilities  and the facilities of merged banking
operations.  Fees generated from ATM operations  registered  solid  increases of
29.1% in 1997 and  51.2% in 1996.  During  1997,  the  Company  also  recognized
approximately  $0.5  million of income from the  purchase  of its  interest in a
regional ATM network service that was acquired by another  service.  This income
is  included  with  other  operating  income  in  the   accompanying   table  of
non-interest income.

         Non-interest  operating expenses,  excluding  merger-related  expenses,
were $156  million in 1997,  an  increase  of $11.4  million or 7.9% over 1996's
total of $145  million.  Between  1995 and 1996,  the  increase in  non-interest
expenses before  merger-related costs was $8.0 million or 5.8% from $137 million
in 1995.

         As is shown in the table of non-interest expense, salaries and employee
benefits  expense  increased  $6.3  million or 8.5% in 1997 as compared to 1996.
Approximately  $0.9 million of this  increase is related to the cost of staffing
the additional  banking locations opened in 1996 and 1997.  Executive  incentive
compensation  increased  approximately  $1.9  million in 1997  compared to 1996,
primarily  as a result  of a $1.3  million  increase  in  stock-based  incentive
compensation.  The total value of 1997 employee restricted stock grants was $4.6
million,  including a first time grant to non-executive employees valued at $2.1
million,  compared to a total grant value of $1.6 million in 1996.  The increase
in stock-based  compensation  expense in 1997 was also  influenced by an earlier
restricted  stock  grant date for  executives  in 1997 and a  shortening  of the
restriction period and corresponding  amortization period beginning in 1996. The
remaining  increase  in  salaries  and  employee  benefits  expense  in  1997 of
approximately  $3.5 million or 4.8% is attributable to regular merit  increases,
other  staff  additions  and to the net change in the cost of  various  employee
benefit and incentive programs.

         In 1996,  salaries and benefits expense  increased $3.2 million or 4.5%
as compared to 1995.  Approximately $0.4 million of this increase was related to
the Alabama bank acquisition in 1995. Merit raises,  staff additions and changes
in the net periodic  expense of benefit programs all factored into the remaining
increase of $2.8 million or 3.9%.

         Occupancy  expense  increased  $0.9 million or 8.1% in 1997 compared to
1996  following  an increase of $1.9  million or 20.2% in 1996.  The increase in
expense over this period was  primarily  the result of both the expansion of the
Company's  branch network and the ongoing  program to upgrade the appearance and
functionality  of  its  administrative  offices,  operations  facilities,  and a
significant number of the Company's  existing  branches.  Since the beginning of
1996 the company opened or began  construction on thirteen new branch locations,
including a regional  administrative  headquarters,  completed the renovation of
several  additional branch locations as well as the main office branch facility,
and moved into its new operations center in suburban New Orleans.

                               Page 21 of 64 Pages

<PAGE>



         The expansion of the Company's branch and administrative facilities and
the opening of the new operations center also contributed to the increase in the
expense of furnishings and equipment,  including data processing systems,  since
1995.  This expense  category  increased  $1.4 million or 10.5% in 1997 and $2.1
million  or  17.8%  in  1996.   These   increases   were  also  related  to  the
implementation  of various  enhancements  in the Company's  data  processing and
communications  systems,  which in 1997 included an investment of  approximately
$11  million  to  replace  and  upgrade  the  branch   delivery  system  and  to
substantially  complete the  installation  of a standardized  office  automation
network.  Certain additional phases to these projects will be completed in 1998.
These enhancements impact both customer service capabilities as well as internal
bank  operations.  An  additional  factor  behind the  increases in this expense
category is the  continuing  expansion of the Company's  ATM network,  which has
grown from fewer than ten locations in 1990 to well over one hundred today. Also
contributing  to  the  increase  in  1996  was  approximately  $0.2  million  in
non-recurring  data processing  equipment expense associated with the relocation
to the new operations facility.

         The costs of operating  the Company's  growing  branch and ATM networks
and to establish  and maintain  communication  links  throughout  the  Company's
expanded  service  area are  reflected in  increases  in various  other  expense
categories  during 1997 and 1996.  These  include  security and other  services,
telecommunications and postage, and stationery and supplies.

         Credit card operating expenses for 1997 and 1996 grew at rates that are
generally  consistent  with the  growth in  revenue  from  these  operations  as
discussed above.

         Fluctuations in taxes and insurance expense, other than on real estate,
in recent years have mainly  followed the  fluctuations  in the state ad valorem
tax assessment  that is based on a calculated  estimate of the Company's  value.
Changes  in the  level of prior  year  earnings  and  equity  and in the  market
conditions  for  bank  stocks  in  general  all  impact  the  annual  assessment
calculations.

         Legal and other  professional  services  decreased  $1.5 million or 29%
between  1996 and 1997  after  increasing  approximately  $0.8  million or 18.0%
between 1995 and 1996. These fluctuations reflect the general level of corporate
legal activity in each of these periods and are not indicative of any particular
trend in this expense category.

         Advertising  expense  increased  $0.6  million or 21.9% in 1997 after a
small  rise  of 2.3%  in  1996.  These  increases  were  the  result  of  higher
advertising  and promotional  costs  associated with recent mergers and with the
introduction of certain new deposit products.

         During 1995 the FDIC dramatically  reduced the premium rate charged for
deposit  insurance.  This led to a reduction  in this  expense  category of $3.5
million or 81.2% in 1996 as compared to 1995. The increase in deposit  insurance
expense in 1997  related  mainly to the  introduction  of an  assessment  on all
insured  institutions to finance  government bonds issued in connection with the
bailout of the savings and loan industry.

         As  disclosed  in  the  1996  annual  report,  the  Company,  in  1992,
discovered  and reported to the United States  Department  of Education  ("DOE")
that in earlier  years Whitney  National Bank had not in all cases  followed the
collections  procedures  required by the guaranteed  student loan program.  Upon
discovery, adequate reserves were established to cover any potential settlement,
and  internal  procedures  were  revised to assure  future  compliance  with the
program. In 1997 the Company reached a tentative  settlement  agreement with the
DOE and expensed  approximately  $1.2 million as a provision for losses on other
problem assets and recorded related income tax effects which were  substantially
offset by the reversal of excess  reserves for possible loan losses also related
to this  settlement,  as was  discussed  earlier.  As a  result,  the  impact of
recording this tentative settlement was not material.

         The Company and its merger candidates incur various non-recurring costs
to complete merger  transactions and to consolidate  operations  subsequent to a
merger. Such merger-related  costs, which are expensed for business combinations
accounted for as  poolings-of-interests,  include change in control payments and
severance  or  retention  bonuses for  management  and  employees  of the merged
entity,   investment  banker  fees,  fees  for  various  professional  services,
including legal, audit and system conversion consulting services,  and losses on
the  disposition of obsolete  facilities and equipment and the  cancellation  of
contracts. Total merger-related expenses will vary with each transaction.


                               Page 22 of 64 Pages

<PAGE>



         Non-interest expense in 1997 includes costs incurred in connection with
the  Company's  efforts to ensure  that its  operations  will not be  materially
affected by the use of the year 2000 in its  computer  systems or in the systems
of its  suppliers  and  customers.  The Company  expects to  continue  incurring
expenses related to this project in 1998. These costs have not been material and
are not expected to be material in the future. In 1997 a company-wide task force
was  established  to review  all  Company  operations  and  manage its year 2000
issues.  The  task  force's  plan is to have  year  2000  issues  satisfactorily
addressed  and  substantially  complete by the end of 1998.  This date meets all
current regulatory  guidelines  established for this project.  In addition,  the
Company is discussing  year 2000 issues and their  potential  impact on business
operations with many of its suppliers and customers.

<TABLE>
<CAPTION>
NON-INTEREST INCOME

                                                          1997   % Change           1996   % Change           1995
                                                     -------------------------------------------------------------
<S>                                                  <C>            <C>       <C>             <C>         <C>     
Service charges on deposit accounts...............   $  22,244      8.1%      $   20,585      0.9%        $ 20,400
Credit card income................................       7,412     25.9            5,888     12.5            5,233
Trust service fees................................       4,910     17.8            4,168     10.1            3,787
International services income.....................       1,821     (0.3)           1,826     (5.9)           1,941
Investment services income........................       1,035     (4.2)           1,080     16.5              927
ATM fees..........................................       2,939     29.1            2,277     51.2            1,506
Other fees and charges............................       2,266      1.2            2,239     (6.2)           2,388
Net gains on sales and other
 dispositions of foreclosed assets................       6,213    123.9            2,775    117.3            1,277
Other operating income............................       2,185    127.6              960     31.7              729
                                                     -------------------------------------------------------------
Total other non-interest income...................   $  51,025     22.1%      $   41,798      9.5%      $   38,188
Gain on sale of securities........................          10    (47.4)              19    216.7                6
                                                     -------------------------------------------------------------
 Total non-interest income........................   $  51,035     22.0%      $   41,817      9.5%      $   38,194
                                                     =============================================================
</TABLE>

<TABLE>
<CAPTION>
NON-INTEREST EXPENSE

                                                           1997  % Change           1996   % Change           1995
                                                     -------------------------------------------------------------
<S>                                                  <C>            <C>       <C>             <C>       <C>       
Salaries and benefits.............................   $  80,576      8.5%      $   74,261      4.5%      $   71,097
Occupancy of bank premises, net...................      12,285      8.1           11,368     20.2            9,458
Furnishings and equipment, including
 data processing systems..........................      15,256     10.5           13,811     17.8           11,726
Security and other outside services...............       5,589      8.2            5,164     23.1            4,195
Credit card processing services...................       5,476     26.3            4,337     14.2            3,797
Communications and postage........................       5,448     13.1            4,817     20.7            3,991
Taxes and insurance, other than real estate.......       5,097      1.9            5,000     (2.6)           5,134
Stationery and supplies...........................       3,809      3.4            3,684     17.7            3,129
Legal and other professional services.............       3,598    (29.0)           5,064     18.0            4,291
Advertising.......................................       3,199     21.9            2,625      2.3            2,565
Amortization of intangible assets.................       2,348    (16.2)           2,802     (3.0)           2,888
Deposit insurance and regulatory fees.............         994     24.4              799    (81.2)           4,259
OREO maintenance and operations, net..............         228    (71.4)             798    138.9              334
Provision for losses on OREO
  and other problem assets........................       1,474    282.9              385    342.5               87
Other operating expense...........................      10,983      9.3           10,046     (0.1)          10,054
                                                     -------------------------------------------------------------
Non-interest expense before
    merger-related expenses.......................   $ 156,360      7.9%      $  144,961      5.8%      $  137,005
Merger-related expenses...........................       3,270    (22.6)           4,226        -                -
                                                     -------------------------------------------------------------
Total non-interest expense........................   $ 159,630      7.0%      $  149,187      8.9%      $  137,005
                                                     =============================================================
</TABLE>




                                                Page 23 of 64 Pages

<PAGE>



Income Taxes

         The Company  provided for income taxes at an overall  effective rate of
33.6%  in 1997,  up from a 32.2%  rate in 1996  and a 31.6%  rate in  1995.  The
effective  rates in each period differ from the statutory  rate of 35% primarily
because of the tax exempt  income earned on  investments  in state and municipal
bonds.  The higher  effective rates in 1997 and 1996 as compared to 1995 reflect
mainly the impact of  non-deductible  merger-related  expenses and, in 1997, the
impact  of the  adjustment  related  to the  tentative  settlement  with the DOE
discussed above.

Accounting Changes

         During 1997 the FASB issued a statement that revised and simplified the
standards  for the  calculation  of  earnings  per share  ("EPS").  Under  these
standards,  which became  effective for the period ended  December 31, 1997, the
Company reports two measures of EPS. The more basic EPS measure is calculated by
dividing income available to common shareholders by the weighted-average  number
of common shares outstanding for the applicable  period,  without adjustment for
potential  common  shares   outstanding  in  the  form  of  options,   warrants,
convertible securities or contingent stock agreements. The second measure of EPS
incorporates  the dilutive  effect of potential  common shares by increasing the
number of common shares  outstanding for the basic  calculation by the number of
additional  shares that would have been  outstanding  if the dilutive  potential
common shares had been issued, all as determined using the treasury stock method
where appropriate. The new standards have been applied to the calculation of EPS
for all periods presented.

         In June 1997,  the FASB issued SFAS No. 130,  "Reporting  Comprehensive
Income." and SFAS No. 131,  "Disclosures  About  Segments of an  Enterprise  and
Related  Information." SFAS No. 130 establishes  standards for the reporting and
display of  comprehensive  income,  which  encompasses  net income and all other
changes in a company's  equity other than from  transactions  with the company's
owners.  SFAS No. 131 establishes  standards for reporting  information  about a
company's operating segments and requires that reportable segments be identified
based on how management organizes the company's operations and related financial
information  for  decision-making  purposes  and  performance  assessment.   The
provisions  of SFAS No. 130 and 131 are  effective  for 1998.  Adoption of these
standards will result in some changes in the financial statement presentation to
reflect  comprehensive  income,  but will not have an  effect  on the  Company's
financial position or results of operations.

         SFAS No. 125,  "Accounting  for  Transfers  and  Servicing of Financial
Assets and  Extinguishments  of Liabilities," was issued in June 1996, mainly to
provide consistent  standards for  distinguishing  transfers of financial assets
that are sales from  transfers that are secured  borrowings,  and it established
measurement,  reporting and disclosure  standards with respect to the assets and
liabilities  that are obtained or incurred in such  transfers.  SFAS No. 125 was
generally effective for transfers, servicing and extinguishments occurring after
December 31, 1996,  although  application of certain provisions of the statement
have been  delayed to 1998.  Adoption  of SFAS No. 125 with  respect to transfer
transactions or servicing activities currently engaged in by the Company did not
result in a material impact on its financial position or results of operations.

Forward Looking Statements

         Certain  statements  in this annual  report to  shareholders  regarding
future expectations may be regarded as  "forward-looking  statements" within the
meaning of the Securities  Litigation  Reform Act. Although the Company believes
that its  expectations  are  based  on  reasonable  assumptions,  it can give no
assurance  that its goals will be achieved.  Important  factors that could cause
actual  results  to differ  materially  from  those  forward-looking  statements
include  the  timing  and  extent of  changes  in  interest  rates,  actions  of
government regulators and other economic factors.

ASSET/LIABILITY MANAGEMENT

         The asset/liability management process has as its focus the development
and  implementation of strategies in the funding and deployment of the Company's
financial  resources which are expected to maximize  soundness and profitability
over time.  These  strategies  reflect  the goals set by the Company for capital
adequacy,  liquidity,  and the acceptable  levels of risk established in Company
policies.

                               Page 24 of 64 Pages

<PAGE>




Interest Rate Risk/Interest Rate Sensitivity

         The Company's financial assets and liabilities are subject to scheduled
and unscheduled repricing  opportunities over time. Both the Company's potential
for  generating  net  interest  income  and the  current  market  values  of its
financial  assets and liabilities  depend in part upon the prevailing  levels of
market interest rates when these repricing  opportunities  arise.  Interest rate
risk is a measure of this potential change in earnings ability and market values
as interest rates change. As part of the asset/liability  management process the
Company uses a variety of tools,  including  an earnings  simulation  model,  to
measure  interest  rate risk and to evaluate  the impact of possible  changes in
rates on its internal strategies.

         The interest rate  sensitivity  gap analysis shown in the  accompanying
table compares the volume of repricing assets against repricing liabilities over
time. This analysis is a relatively  straightforward tool which is useful mainly
in highlighting  significant  short-term repricing volume mismatches.  The table
presents the rate  sensitivity  gap analysis at December 31, 1997.  The interest
rates on a substantial  portion of the  outstanding  commercial  loans vary with
changes  in the  Banks'  prime  lending  rates or the  prime  rates  of  certain
money-center banks. These loans are assigned to the earliest repricing period in
the rate sensitivity  analysis. A sizable portion of loans shown in the analysis
as repricing after one year is made up of fixed-rate real estate loans.

         Certain  interest-bearing deposit funding sources, such as savings, NOW
and money market account deposits,  have characteristics of both demand deposits
and deposits made for investment  return  purposes.  Although these deposits are
technically  subject  to  immediate  repricing,   historical  customer  behavior
indicates that their  rate-sensitivity  is significantly  less. In preparing the
analysis,  these deposits are allocated among the repricing  periods in a manner
that  reflects  expected  customer  behavior so as to present a more  meaningful
point-in-time estimate of short-term  asset/liability  repricing mismatches.  In
the  twelve-month  period from  December 31, 1997,  the analysis  shows that the
Company is in a moderately asset-sensitive position on a cumulative basis, which
indicates that the Company's net interest  margin would benefit  somewhat from a
near-term  increase  in market  interest  rates but would  suffer  somewhat in a
declining interest rate market.

         Recognizing  the  limitations  of  the  static  rate   sensitivity  gap
analysis,  the Company uses the  earnings  simulation  model to more  accurately
forecast how its net interest  income and net income would change in response to
changes in market interest rates. The simulation model incorporates management's
expectations  regarding loan demand,  deposit product  preferences,  pricing and
funds availability,  prepayment rates, and the spread of rates between different
financial  instruments,  among other factors.  Interest rate change scenarios of
plus and minus 100,  200 and 300 basis  points are run in the model  against the
Company's  balance sheet and the results of these simulations show the impact on
the Company's  future  earnings and on the discounted  cash value of its balance
sheet.  Management has  established  policy limits which are used to monitor the
results of these tests.  Should  these  simulations  yield  changes that are not
within limits,  management  would evaluate the desirability of altering the loan
and deposit  portfolios  of the  Company or of taking  other steps to return the
Company to policy limits. The simulations run at December 31, 1997 yield results
that were all within policy limits and showed no material  impact on earnings or
net asset values.  These simulated results also did not indicate any significant
negative impact on the Company's liquidity position.




                               Page 25 of 64 Pages

<PAGE>


<TABLE>
<CAPTION>

INTEREST RATE SENSITIVITY
December 31, 1997
(dollars in millions)

                                                    TIME TO MATURITY OR NEXT REPRICING
                                --------------------------------------------------------------------------------
                                    0-30      31-90    91-180    181-365     1 THROUGH      OVER 5
                                    DAYS       DAYS      DAYS       DAYS       5 YEARS       YEARS         TOTAL
                                --------------------------------------------------------------------------------

<S>                              <C>        <C>        <C>        <C>          <C>        <C>           <C>
ASSETS
   Securities held
      to maturity...............$     36    $    67    $   86     $   155      $   641    $   180       $  1,165
   Securities  available
      for sale..................       2          5         5          21           43         27            103
   Loans........................   1,023         82        73         143          838        489          2,648
   Federal funds sold
     and short-term deposits....       1          -         -           -            -          -              1
                                --------------------------------------------------------------------------------
     Total earning  assets......$  1,062   $    154    $  164     $   319      $ 1,522    $   696       $  3,917

SOURCES OF FUNDS
   Demand deposits..............$     27   $      1    $   38     $    41      $   954    $     -       $  1,061
   Savings deposits.............      17         33         6          10          392          -            458
   Money market
     account deposits...........       2          9        31          28          384          -            454
   NOW account deposits.........      11          2        27          17          401          -            458
   Eurodollar deposits..........      14          -         -           -            -          -             14
   Certificates of deposit......     262        247       252         173          131          -          1,065
   Funds purchased and
    repurchase agreements.......     290          -         -           -            -          -            290
                                --------------------------------------------------------------------------------
     Total funding liabilities..$    623    $    292   $  354     $   269      $ 2,262    $     -       $  3,800

INTEREST RATE
   SENSITIVITY GAP..............$    439    $   (138)  $ (190)    $    50      $  (740)   $   696       $    117

CUMULATIVE INTEREST
   RATE SENSITIVITY
   GAP..........................$    439    $    301   $  111     $   161      $  (579)   $   117

CUMULATIVE INTEREST
  RATE SENSITIVITY GAP
  AS A  PERCENT OF
  TOTAL EARNING
   ASSETS.......................   11.2%        7.7%     2.8%        4.1%        14.8%       3.0%

</TABLE>


                               Page 26 of 64 Pages

<PAGE>



LIQUIDITY AND OTHER MATTERS

         The Company and the Bank manage  their  liquidity  positions  to ensure
their  ability  to  satisfy   customer  demand  for  credit,   to  fund  deposit
withdrawals,  to meet  operating and other  corporate  obligations,  and to take
advantage  of  investment  opportunities,  all in a  timely  and  cost-effective
manner.  Traditionally  these  liquidity  needs have been met by  maintaining  a
strong base of core deposits and by carefully managing the maturity structure of
the  investment  portfolios.  The  funds  provided  by  current  operations  and
forecasts of loan  repayments  are also  considered in the liquidity  management
process.

         The Bank enter into  short-term  borrowing  arrangements  by purchasing
federal funds and selling  securities  under  repurchase  agreements,  both as a
source of funding for certain short-term lending facilities and as part of their
services to correspondent banks and certain other customers. Neither the Company
nor the  Bank  have  accessed  long-term  debt  markets  as  part  of  liquidity
management.

         The consolidated statements of cash flows provides a summarized view of
the Company's  uses and sources of liquidity  over the  three-year  period ended
December  31,  1997.  The  funding  of loan  growth  was by far the major use of
liquidity in 1997, requiring a total of $368 million. Unreinvested proceeds from
maturities  and sales of  investment  securities  during 1997 and a reduction in
short-term  cash management  investments  provided $259 million of the liquidity
needed to fund this loan growth. The net cash flow used in investing  activities
for 1997  totalled  $130  million,  including  capital  expenditures  for retail
network expansion,  technological  enhancements and other purposes totalling $35
million.

         The Company  financed this investment in part through a net increase in
total deposits and short-term  borrowings of $54 million,  which is discussed in
more detail below. The Company generated $68 million in liquid funds during 1997
from operations and paid total dividends, including those of pooled entities, of
approximately  $22 million during the year. The Company also reduced its average
required  reserve  balance with the Federal  Reserve Bank by  approximately  $27
million  through  the  introduction  of  computer-based  techniques  to minimize
reservable liabilities.

         The accompanying  tables present  information  concerning  deposits and
short-term  borrowings for the years 1997, 1996 and 1995. Average core deposits,
defined  as all  deposits  other  than  time  deposits  of  $100,000,  increased
approximately $58 million between 1996 and 1997 to approximately  $2.77 billion.
Growth in average  non-interest-bearing  demand  deposits  of $50 million and in
money  market  deposits of $75 million  were  partially  offset by a $67 million
decrease in  interest-bearing  checking,  savings  deposit and core time deposit
products.  Non-core time  deposits grew on average by $51 million  between these
periods.

         Approximately 81% of core and 94% of non-core time deposits at December
31, 1997 mature within one year. Although these time deposits, in particular the
non-core  time  deposits,  are more volatile  than the  transaction  and savings
deposit  products,  management  does not  anticipate any  significant  near-term
negative impact on liquidity from maturities.

         At December 31, 1997, $290 million in short-term borrowings was related
to  cash  management   services  provided  by  the  Banks  to  their  downstream
correspondents and other customers.

         As of  December  31,  1997,  approximately  $344  million or 30% of the
portfolio of  investment  securities  held to maturity  was  scheduled to mature
within one year.  An  additional  $103  million  of  investment  securities  was
classified  as  available  for  sale at the end of 1997,  although  management's
assignment  of  this   classification   is  not  based  primarily  on  liquidity
considerations.

         The Bank had  approximately  $1.2 billion in unfunded loan  commitments
outstanding  at December 31, 1997, an increase of $147 million from the level at
December 31, 1996. Contingent  obligations under letters of credit and financial
guarantees decreased by approximately $34 million between these dates to a total
of $104 million at December 31, 1997.  Available  credit card and related  lines
were $103  million at December  31,  1997,  and  increase  of $25  million  from
December 31, 1996.  Because  commitments  and unused  credit lines may, and many
times do, expire  without being drawn upon,  unfunded  balances do not represent
actual  future  liquidity   requirements.   Draws  by  customers  against  these
commitments  should  not place any  unusual  strain on the  Company's  liquidity
position.

                               Page 27 of 64 Pages

<PAGE>



         In 1998,  the Company plans to open or begin  construction  on fourteen
additional  branch  locations  throughout  the market  areas of the Bank.  Total
capital expenditures for these new facilities are estimated at $25 million.

<TABLE>
<CAPTION>

DEPOSITS
-----------------------------------------------------------------------------------------------------------------
(in thousands)
                                                                              1997          1996             1995
                                                                       ------------------------------------------
<S>                                                                    <C>           <C>              <C>        
Average non-interest-bearing demand deposits in domestic bank offices..$   955,407   $   905,327      $   892,593
Average NOW account deposits in domestic offices.......................    434,685       446,493          428,240
Average savings and money market account deposits in domestic bank
   offices.............................................................    849,062       789,078          842,519
Average time deposits in domestic bank offices.........................  1,025,020     1,017,188          914,148
Average time deposits in foreign banking offices.......................     13,706        12,006            6,921

Remaining  maturity  of time  deposits  of  $100,000  or more issued
   by domestic offices as of December 31, 1997:
   3 months or less....................................................$   344,569
   Over 3 through 12 months............................................    157,330
   Over 12 months......................................................     29,761
                                                                       -----------
     Total time deposits of $100,000 or more...........................$   531,660
                                                                       -----------

Remaining  maturity of time  deposits of less than  $100,000  issued
   by domestic offices as of December 31, 1997:
   3 months or less....................................................$   165,539
   Over 3 through 12 months............................................    264,886
   Over 12 months......................................................    103,016
                                                                       -----------
     Total time deposits of less than $100,000.........................$   533,441
                                                                       -----------
     Total time deposits in domestic offices...........................$ 1,065,101
                                                                       ===========
</TABLE>                                


<TABLE>
<CAPTION>

FEDERAL FUNDS PURCHASED AND BORROWINGS UNDER REPURCHASE AGREEMENTS
------------------------------------------------------------------------------------------------------------------------
(in thousands)
                                                                                 1997             1996              1995
                                                                       -------------------------------------------------
<S>                                                                    <C>                <C>               <C>         
Amount outstanding at year end.........................................$      289,603     $    484,045      $    228,591
Weighted average interest rate at year end.............................          5.06%            5.03%             5.15%

Average outstanding during the year....................................$      408,757     $    367,528      $    196,122
Weighted average interest rate for the year............................          4.99%            4.92%             5.15%

Maximum amount outstanding at any month end............................$      512,353     $    484,045      $    234,558
</TABLE>
                               Page 28 of 64 Pages

<PAGE>

<TABLE>
<CAPTION>
   Item 8: FINANCIAL STATEMENT AND SUPPLEMENTAL DATA 
  
                W H I T N E Y  H O L D I N G  C O R P O R A T I O N  A N D  S U B S I D I A R I E S
                                   C O N S O L I D A T E D  B A L A N C E  S H E E T S


   (dollars in thousands)                                                                                  December 31,
                                                                                                        1997         1996
                                                                                                    ------------------------ 
   ASSETS
   <S>                                                                                              <C>          <C>     
   Cash and due from financial institutions.......................................................  $   221,318  $   245,261
   Investment in securities:
        Securities available for sale.............................................................      103,253      209,001
        Securities held to maturity (fair value of $1,179,631 in 1997 and $1,273,532 in 1996).....    1,165,035    1,265,197
   Federal funds sold and short-term deposits.....................................................          500       55,693
   Loans..........................................................................................    2,647,578    2,277,584
   Less reserve for possible loan losses..........................................................       42,805       42,411
                                                                                                    ------------------------
        Loans, net................................................................................    2,604,773    2,235,173
   Bank premises and equipment, net...............................................................      138,164      118,833
   Other real estate owned, net...................................................................        2,661        4,584
   Accrued income receivable......................................................................       32,562       33,616
   Other assets...................................................................................       44,721       50,675
                                                                                                    ------------------------
             TOTAL ASSETS.........................................................................  $ 4,312,987  $ 4,218,033
                                                                                                    ========================
                                                                                                  
                                                                                                    
   LIABILITIES                                                                                    
   Deposits:                                                                                      
        Non-interest-bearing demand deposits......................................................  $ 1,060,793  $ 1,000,877
        Interest-bearing deposits.................................................................    2,449,930    2,261,409
                                                                                                    ------------------------
            Total deposits........................................................................    3,510,723    3,262,286
   Federal funds purchased and securities sold under repurchase agreements........................      289,603      484,045
   Dividends payable..............................................................................        5,820        4,870
   Other liabilities..............................................................................       28,113       26,296
                                                                                                     -----------------------
             TOTAL LIABILITIES....................................................................   $3,834,259   $3,777,497
                                                                                                     -----------------------
                                                                                                  
   SHAREHOLDER'S EQUITY                                                                           
   Common stock, no par value: 40,000,000 shares authorized,                                      
        21,150,519 shares issued and 20,804,175 shares outstanding in 1997,
        21,029,821 shares issued and 20,536,041 shares outstanding in 1996,
        after deduction of treasury stock.........................................................  $     2,800  $     2,800
   Capital surplus................................................................................      119,600      109,743
   Retained earnings..............................................................................      365,939      336,631
   Net unrealized gain (loss) on securities available for sale or transferred to  held to
        maturity, net of tax effect of $192 in 1997 and $437 in 1996..............................         (366)        (864)
                                                                                                    ------------------------
             Total................................................................................      487,973      448,310
                                                                                                  
   Treasury stock at cost, 346,344 shares in 1997 and 493,780 shares                              
        in 1996, and unearned restricted stock compensation.......................................        9,245        7,774
                                                                                                    ------------------------     
             TOTAL SHAREHOLDERS' EQUITY...........................................................  $   478,728  $   440,536
                                                                                                    ------------------------
             TOTAL LIABILITIES AND                                                                
                   SHAREHOLDERS' EQUITY...........................................................  $ 4,312,987  $ 4,218,033
                                                                                                    ========================
                                                                                                     
   The accompanying notes are an integral part of these financial statements                      
</TABLE>

                               Page 29 of 64 Pages

<PAGE>
<TABLE>
<CAPTION>
            W H I T N E Y  H O L D I N G  C O R P O R A T I O N  A N D  S U B S I D I A R I E S

                  C O N S O L I D A T E D  S T A T E M E N T S  O F  O P E R A T I O N S


(in thousands, except per-share amounts)                                            Year Ended December 31,
                                                                              1997           1996           1995
                                                                         ------------------------------------------

INTEREST INCOME
<S>                                                                      <C>            <C>            <C>         
Interest and fees on loans.............................................. $    204,885   $    173,122   $    147,762
Interest and dividends on investments:                                  
      U.S. Treasury and agency securities...............................       57,693         69,098         77,103
      Mortgage-backed securities........................................       19,079         17,864         11,986
      Obligations of states and political subdivisions..................        7,321          7,278          7,203
      Federal Reserve and corporate securities..........................          391            389          1,093
Interest on federal funds sold and short-term deposits..................        2,040          2,869          4,833
                                                                         ------------------------------------------
            TOTAL....................................................... $    291,409   $    270,620   $    249,980
                                                                         ------------------------------------------
                                                                                         
INTEREST EXPENSE                                                                         
Interest on deposits.................................................... $     86,563   $     83,963   $     77,704
Interest on federal funds purchased and securities sold under
      repurchase agreements.............................................       20,384         18,089         10,093
                                                                         ------------------------------------------
            TOTAL....................................................... $    106,947   $    102,052   $     87,797
                                                                         ------------------------------------------
Net interest income..................................................... $    184,462   $    168,568   $    162,183
Reduction of reserve for possible loan losses...........................        2,812          4,435          8,960
                                                                         ------------------------------------------
Net interest income after reduction of reserve for possible loan losses. $    187,274   $    173,003   $    171,143
                                                                                         
NON-INTEREST INCOME                                                     
Gain on sale of securities.............................................. $         10   $         19   $          6
Other non-interest income...............................................       51,025         41,798         38,188
                                                                         ------------------------------------------
            TOTAL....................................................... $     51,035   $     41,817   $     38,194
                                                                         ------------------------------------------
                                                                                        
NON-INTEREST EXPENSE                                                    
Salaries and employee benefits.......................................... $     81,057   $     75,071   $     71,097
Occupancy of bank premises, net.........................................       12,285         11,368          9,458
Other non-interest expenses.............................................       66,288         62,748         56,450
                                                                         ------------------------------------------
            TOTAL....................................................... $    159,630   $    149,187   $    137,005
                                                                         ------------------------------------------
Income before income taxes.............................................. $     78,679   $     65,633   $     72,332
Income tax expense......................................................       26,461         21,139         22,819
                                                                         ------------------------------------------
Net Income.............................................................. $     52,218   $     44,494   $     49,513
                                                                         ==========================================
                                                                        
Earnings per share...................................................... $       2.52   $       2.18   $       2.46
Earnings per share, assuming dilution................................... $       2.50   $       2.17   $       2.44
Weighted-average shares outstanding.....................................   20,706,359     20,419,752     20,107,564
Weighted-average shares, assuming dilution..............................   20,866,169     20,539,159     20,268,477


The accompanying notes are an integral part of these financial statements.
</TABLE>

                               Page 30 of 64 Pages

<PAGE>
<TABLE>
<CAPTION>
                   W H I T N E Y  H O L D I N G  C O R P O R A T I O N  A N D  S U B S I D I A R I E S
                          C O N S O L I D A T E D  S T A T E M E N T S  O F  C H A N G E S  I N
                                        S H A R E H O L D E R S '  E Q U I T Y
(in thousands, except share and per-share amounts)
                                                                                    Net
                                                                                 Unrealized              Unearned
                                                                                 Gain(Loss)on           Restricted
                                                                                 Securities                Stock
                                                     Common   Capital   Retained Available    Treasury    Compen-
                                                     Stock    Surplus   Earnings  For Sale      Stock      sation     Total
                                                     ------------------------------------------------------------------------
<S>                                                  <C>      <C>      <C>        <C>         <C>       <C>          <C>

Balance at December 31, 1994......................   $2,800   $97,461  $274,580   ($8,764)    ($5,662)  ($2,079)     $358,336

     Net income for 1995..........................                       49,513                                        49,513
     Cash dividends declared, $0.82 per share.....                      (12,158)                                      (12,158)
     Cash dividends declared by pooled            
       entities, pre-merger.......................                       (1,671)                                       (1,671)
     Common stock issued:                         
     Employee savings plan, 148,177 shares........               3,764                                                  3,764
     Dividend reinvestment plan, 50,291 shares....               1,325                                                  1,325
     Employee stock grants, net of forfeitures....                 766                            360    (1,126)            -
     Director stock grants........................                  56                                                     56
     Stock options exercised......................                  41                             45                      86
     Pooled entries, pre-merger...................                  15                                                     15
     Amortization of unearned restricted
        stock compensation........................                                                          687           687
     Change in net unrealized gain (loss) 
        on securities ............................                                  9,182                               9,182
                                                      -----------------------------------------------------------------------
Balance at December 31, 1995......................    $2,800  $103,428 $310,264      $418     ($5,257)  ($2,518)     $409,135
                                                      -----------------------------------------------------------------------
     Net income for 1996..........................                       44,494                                        44,494
     Cash dividends declared, $0.97 per share.....                      (16,796)                                      (16,796)
     Cash dividends declared by pooled            
       entities, pre-merger.......................                       (1,331)                                       (1,331)
     Common stock issued:                         
     Employee savings plan, 26,604 shares.........                 828                                                    828
     Dividend reinvestment plan, 59,285 shares....               1,857                                                  1,857
     Employee stock grants, net of forfeitures....               1,107                             354   (1,461)            -
     Director stock grants........................                  59                                                     59
     Stock options exercised, including tax
        benefit from non-qualified options
        exercised.................................               2,154                             210                  2,364
     Pooled entries, pre-merger...................                 310                                                    310
     Amortization of unearned restricted
        stock compensation........................                                                          898           898
     Change in net unrealized gain (loss) 
        on securities ............................                                 (1,282)                             (1,282)
                                                      -----------------------------------------------------------------------
Balance at December 31, 1996......................    $2,800  $109,743 $336,631     ($864)    ($4,693)  ($3,081)     $440,536
                                                      -----------------------------------------------------------------------
     Net income for 1997..........................                       52,218                                        52,218
     Cash dividends declared, $1.12 per share.....                      (22,790)                                      (22,790)
     Cash dividends declared by pooled            
       entities, pre-merger.......................                         (120)                                         (120)
     Common stock issued:                         
     Employee savings plan, 53,685 shares.........               2,394                            123                   2,517
     Dividend reinvestment plan, 62,600 shares....               2,528                                                  2,528
     Employee stock grants, net of forfeitures
          and 13,272 shares repurchased to fund       
          recipient tax liabilities...............               3,560                            590    (4,647)         (497)
     Tax benefit upon lapse of stock restrictions.                 361                                                    361
     Director stock grants........................                 153                                                    153
     Stock options exercised, including tax
        benefit from non-qualified options
        exercised.................................                 861                            295                   1,156
     Amortization of unearned restricted          
        stock compensation........................                                                        2,168         2,168
     Change in net unrealized gain (loss) 
        on securities ............................                                    498                                 498
                                                      -----------------------------------------------------------------------
Balance at December 31, 1997......................    $2,800  $119,600 $365,939     ($366)    ($3,685)  ($5,560)     $478,728
                                                      =======================================================================
                                                  

The accompanying notes are an integral part of these financial statements.
</TABLE>

                               Page 31 of 64 Pages

<PAGE>
<TABLE>
<CAPTION>
                                    WHITNEY HOLDING CORPORATION AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

                                                                                       Year Ended December 31,
                                                                                       1997        1996        1995
                                                                                  -----------------------------------
<S>                                                                               <C>        <C>         <C>   
Cash flows from operating activities:
   Net income...................................................................  $   52,218 $    44,494 $    49,513
   Adjustments to reconcile net income to cash provided by (used in) operating
      activities:
      Depreciation..............................................................      13,354      11,395       9,355
      Reduction in reserve for possible loan losses.............................      (2,812)     (4,435)     (8,960)
      Provision for losses on OREO and other problem assets.....................         243         385          87
      Amortization of intangible assets and unearned restricted
        stock compensation......................................................       4,516       3,700       3,486
      Amortization of premiums and discounts on investment securities, net......       2,621       7,380      12,291
      Net gains on sales of OREO and other property.............................      (6,213)     (2,775)     (1,277)
      Net gains on sales of investment securities...............................         (10)        (19)         (6)
      Deferred tax expense (benefit)............................................         317        (262)      3,178
      Increase (Decrease) in accrued income taxes...............................         629         (80)          6
      (Increase) Decrease in accrued income receivable and other assets.........       1,460          11       4,023
      Increase (Decrease) in accrued expenses and other liabilities.............       2,108          10       1,178
                                                                                  -----------------------------------
      Net cash provided by operating activities.................................  $   68,431 $    59,804 $    72,874
                                                                                  -----------------------------------
Cash flows from investing activities:                                             
   Proceeds from maturities of investment securities held to maturity...........  $  725,035 $   423,550 $   380,840
   Proceeds from maturities of investment securities available for sale.........      90,639      50,393      42,066
   Proceeds from sales of investment securities available for sale..............           -      76,778       3,262
   Purchases of investment securities held to maturity..........................    (599,652)   (342,145)   (199,380)
   Purchases of investment securities available for sale........................     (11,974)    (61,660)    (50,522)
   Net (increase) decrease in loans.............................................    (367,630)   (438,183)   (378,629)
   Net (increase) decrease in federal funds sold and short-term deposits........      55,193      (4,401)     16,298
   Proceeds from sales of OREO and other property...............................      10,538       6,977       4,364
   Capital expenditures.........................................................     (35,193)    (35,283)    (18,301)
   Net cash (paid) received in business acquisition.............................           -           -      (3,695)
   Other........................................................................       3,231      (2,264)     (3,981)
                                                                                  -----------------------------------
   Net cash provided by (used in) investing activities..........................  $ (129,813)$  (326,238)$  (207,678)
                                                                                  -----------------------------------
Cash flows from financing activities:                                             
   Net increase (decrease) in non-interest-bearing demand deposits..............  $   59,916 $    32,256 $    75,915
   Net increase (decrease) in interest-bearing deposits other than
     certificates of deposits...................................................      79,161       1,727    (109,777)
   Net increase (decrease) in certificates of deposit...........................     109,360     (25,371)    161,932
   Net increase (decrease) in federal funds purchased and securities sold under 
      repurchase agreements.....................................................    (194,442)    256,156      43,151
   Sale of common stock under employee savings plan and dividend                
      reinvestment plan.........................................................       5,045       2,685       5,089
  Exercise of stock options.....................................................         856       1,657          86
  Stock issued by pooled entities, pre-merger...................................           -         310          15
  Stock repurchased for treasury................................................        (497)          -           -
  Dividends paid, including  pooled entities....................................     (21,960)    (17,037)    (13,104)
                                                                                  -----------------------------------
   Net cash provided by (used in) financing activities..........................  $   37,439 $   252,383 $   163,307
                                                                                  -----------------------------------
                                                                                  
Net increase (decrease) in cash and cash equivalents............................  $  (23,943)$   (14,051)$    28,503
Cash and cash equivalents at the beginning of the period........................     245,261     259,312     230,809
                                                                                  -----------------------------------
Cash and cash equivalents at the end of the period..............................  $  221,318 $   245,261 $   259,312
                                                                                  ===================================
Interest income received........................................................  $  292,467 $   270,706 $   246,970
                                                                                  ===================================
Interest expense paid...........................................................  $  106,391 $   102,572 $    83,008
                                                                                  ===================================
Net federal income taxes paid...................................................  $   24,649 $    21,284 $    19,357
                                                                                  ===================================

The accompanying notes are an integral part of these financial statements.
</TABLE>

                               Page 32 of 64 Pages

<PAGE>

Notes To Financial Statements


(1) NATURE OF  BUSINESS

         Whitney Holding Corporation (the "Company") is a Louisiana bank holding
company registered pursuant to the Bank Holding Company Act of 1956. The Company
began  operations in 1962 as the parent of Whitney National Bank, which has been
in continuous  operation  since 1883.  Beginning in 1994 and continuing  through
1997, the Company operated as a multi-bank  holding company,  having established
in connection  with business  acquisitions  the Whitney Bank of Alabama in 1995,
the Whitney  National  Bank of Florida in 1996 and the Whitney  National Bank of
Mississippi  in 1997.  In January  1998,  the Company  merged all of its banking
operations into Whitney National Bank. Throughout this annual report, references
to the "Bank" will cover all former subsidiary  banks.  During 1995, the Company
established the Whitney Community  Development  Corporation  ("WCDC"),  which is
authorized  to make  equity and debt  investments  in  corporations  or projects
designed  primarily  to  promote  community  welfare,   including  the  economic
rehabilitation  and  development  of  low-income  areas  by  providing  housing,
services,  or jobs for residents,  or promoting  small  businesses  that service
low-income areas.

         The Company, through its banking subsidiary,  engages in commercial and
retail  banking and in trust  business,  including  the taking of deposits,  the
making of secured and unsecured loans, the financing of commercial transactions,
the issuance of credit cards,  the delivery of  corporate,  pension and personal
trust services,  and certain limited investment services. The Bank renders these
services  throughout its market areas in south Louisiana,  south Alabama,  along
the  Mississippi  Gulf Coast,  in the  Pensacola,  Florida  area,  and through a
foreign branch on Grand Cayman in the British West Indies.

         There is significant competition within the financial services industry
in general as well as with respect to the particular financial services provided
by the Bank.  Within its market  areas,  the Bank  competes  directly with major
banking  institutions of comparable or larger size and resources as well as with
various other smaller banking  organizations  and local and national  "non-bank"
competitors,  including savings and loans,  credit unions,  mortgage  companies,
personal and commercial  finance  companies,  investment  brokerage  firms,  and
registered investment companies.

         In recent years there has been a significant  consolidation  within the
financial  services  industry,  particularly  with  respect to the  banking  and
savings and loan segments of this industry.  This  consolidation has been driven
more recently by general competitive  pressures.  All of the Bank's major direct
banking   competitors   have  been  relatively   active  in  expansion   through
acquisition.  Since  1994  the  Company  has  acquired  seven  separate  banking
operations involving  approximately $975 million of assets and will complete two
additional  bank mergers in the second quarter of 1998  involving  approximately
$338 million of assets.  The trend toward industry  consolidation is expected to
continue in the near term.

         All material  funds of the Company are  invested in the Bank.  The Bank
has a large number of customer  relationships  which have been  developed over a
period of many years and is not dependent upon any single customer or upon a few
customers.  The loss of any single  customer or a few customers would not have a
material adverse effect on the Bank or the Company.  The Bank has customers in a
number of foreign  countries,  but the  portion of  revenue  derived  from these
foreign customers is not a material portion of its overall revenues.

         The Company and the Bank and their  related  operations  are subject to
federal, state and local laws applicable to banks and bank holding companies and
to the regulations of the Board of Governors of the Federal Reserve System,  the
Office  of the  Comptroller  of  Currency,  and the  Federal  Deposit  Insurance
Corporation.




                               Page 33 of 64 Pages

<PAGE>



(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The accounting and reporting  policies of Whitney  Holding  Corporation
and  its  subsidiaries  follow  generally  accepted  accounting  principles  and
policies  within the banking  industry.  The  following is a summary of the more
significant policies.

CONSOLIDATION

         The  consolidated  financial  statements  of the  Company  include  the
accounts of Whitney Holding Corporation and its wholly-owned subsidiaries, which
at December 31, 1997 included  Whitney  National Bank,  Whitney Bank of Alabama,
Whitney  National  Bank of Florida,  Whitney  National Bank of  Mississippi  and
Whitney Community Development Corporation.

         Certain balances in prior years have been  reclassified to conform with
this year's presentation.

USE OF ESTIMATES

         To prepare financial  statements in conformity with generally  accepted
accounting  principles,  management is required to develop estimates that affect
the reported  amounts of assets and  liabilities  and  disclosure  of contingent
assets and  liabilities at the date of the financial  statements and the amounts
of  revenues  and  expenses  to be reported  for the  periods  presented  in the
financial statements. Actual results could differ from those estimates.

CASH AND DUE FROM FINANCIAL INSTITUTIONS

         The Company  considers  cash on hand and  balances  due from  financial
institutions  as cash and cash  equivalents  for  purposes  of the  consolidated
statement of cash flows.

INVESTMENT IN SECURITIES

         Debt securities  which the Company both positively  intends and has the
ability to hold to maturity are carried at amortized  cost.  These  criteria are
not considered  satisfied when a security is available to be sold in response to
changes in interest rates, prepayment rates, liquidity needs or other reasons as
part of an overall asset/liability management strategy.

         Debt securities and equity  securities with readily  determinable  fair
values that are acquired with the intention of being resold in the near term are
classified as trading  securities and are carried at fair value, with unrealized
holding gains and losses  recognized in current  earnings.  The Company does not
currently hold any securities for trading purposes.

         Securities  not meeting the criteria to be classified as either trading
securities or securities  held to maturity are  classified as available for sale
and  carried  at fair  value.  Unrealized  holding  gains and  losses  for these
securities are recognized,  net of related tax effects,  as a separate component
of shareholders' equity.

         Interest  and  dividend  income  earned on  securities  either  held to
maturity or available  for sale is included in current  earnings,  including the
amortization  of premiums  and the  accretion  of  discounts  using the interest
method.  The gain or loss realized on the sale of a security held to maturity or
available for sale is computed with  reference to its amortized cost and is also
included in current earnings.

LOANS

         Loans are generally carried at the principal amounts outstanding,  less
unearned income and the reserve for possible loan losses.

     Interest  on  loans  is  accrued  and  credited  to  income  based  on  the
outstanding loan principal amounts. The
                     
                               Page 34 of 64 Pages

<PAGE>



accrual of interest on loans is discontinued  when, in  management's  judgement,
there is an  indication  that a  borrower  will be  unable  to meet  contractual
payments  as they  become  due.  For  commercial  and real  estate  loans,  this
generally  occurs  when a loan falls  ninety  days past due as to  principal  or
interest,  and the loan is not otherwise both well secured and in the process of
collection.  Upon  discontinuance,  accrued but uncollected interest is reversed
against current income.  Interest payments received on nonaccrual loans are used
to reduce the reported loan  principal  under the cost recovery  method when the
collectibility of the remaining principal is not reasonably assured;  otherwise,
these payments are recognized as interest income.

         A nonaccrual loan may be reinstated to accrual status when full payment
of  contractual  principal  and  interest is expected  and this  expectation  is
supported by current performance.


RESERVE FOR POSSIBLE LOAN LOSSES

         The reserve for possible loan losses is maintained at a level which, in
management's  judgement,  is  considered  adequate  to absorb  potential  losses
inherent in the loan  portfolio.  The  adequacy of the reserve is  evaluated  by
management on an ongoing basis.  As adjustments to the level of reserves  become
necessary, they are reported in current earnings. The factors considered in this
evaluation  include  the  estimated   potential  losses  from  specific  lending
relationships,  including unused loan commitments and credit guarantees; general
economic conditions; economic conditions affecting specific classes of borrowers
or types of loan collateral;  historical loss experience;  and various trends in
loan  portfolio  characteristics,   such  as  volume,  maturity,  customer  mix,
delinquencies and nonaccruals.

         As actual  losses are incurred,  they are charged  against the reserve.
Recoveries on loans previously charged off are added back to the reserve.

         Effective  January 1, 1995, the Company adopted  Statement of Financial
Accounting  Standards ("SFAS") No. 114,  "Accounting by Creditors for Impairment
of a  Loan,"  as  amended  by SFAS  No.  118.  Under  this  standard,  a loan is
considered impaired when it is probable that all contractual amounts will not be
collected as they become due. The extent of  impairment  is measured  based on a
comparison of the recorded  investment in the loan with either the expected cash
flows  discounted using the loan's original  effective  interest rate or, in the
case of certain  collateral-dependent  loans,  the fair value of the  underlying
collateral.  The measure of  impairment  is included in the reserve for possible
loan losses.

         The  provisions  of SFAS No.  114 are not  applied  by the  Company  to
measure  impairment  included for large groups of similar loans with  relatively
small  balances,  such as consumer  credit line loans and  consumer  installment
loans. As allowed under the standard, these loans are collectively evaluated for
impairment.

         The guidance in SFAS No. 114 did not represent a significant  departure
from  existing  procedures  followed  by the Company in  evaluating  the overall
adequacy of the reserve for possible loan losses.  Furthermore,  loans evaluated
for impairment in most all cases met the criteria  already in use by the Company
to identify loans on which the accrual of interest  should be  discontinued.  As
such,  the  adoption  of this  standard  has had no  significant  impact  on the
Company's financial position or results of operations.

FORECLOSED ASSETS

         Collateral  acquired  through  foreclosure or in settlement of loans is
classified  as either  other real estate  owned  ("OREO") or other assets and is
carried at its fair value,  net of  estimated  costs to sell,  or the  remaining
investment in the loan,  whichever is lower. At  acquisition,  any excess of the
recorded loan value over the estimated  fair value of the  collateral is charged
against the reserve for  possible  loan  losses.  After  acquisition,  valuation
allowances  are  established  with a charge to  current  earnings  to adjust the
reported  value of  foreclosed  assets to reflect  changes in the  estimate of a
property's  fair value or selling costs.  Revenues and expenses  associated with
the  management  of  foreclosed  assets  prior to sale are  included  in current
earnings.



                               Page 35 of 64 Pages

<PAGE>



BANK PREMISES AND EQUIPMENT AND OTHER LONG-LIVED ASSETS

         Bank  premises and equipment  are carried at cost,  net of  accumulated
depreciation and amortization.

         Provisions for depreciation  and amortization  included in non-interest
expenses are computed  primarily on the straight-line  method over the estimated
useful  lives of the  assets.  Estimated  useful  lives  range  from  fifteen to
forty-five  years for buildings and improvements and from three to fifteen years
for furnishings and equipment.

          Management  is  alert  to  indications  that  the  carrying  value  of
long-lived  assets used in  operations,  such as bank  premises  and  equipment,
certain identifiable intangibles,  and any goodwill related to these assets, may
not be fully  recoverable.  When such indications are present,  the Company will
recognize an  impairment  loss if the  undiscounted  cash flows  estimated to be
derived from the use of these assets do not exceed their carrying value.

INCOME TAXES

         The Company  accounts for income taxes using what is known as the asset
and liability  method.  Under this method the expected tax  consequences  of the
temporary  differences that arise between the tax bases of assets or liabilities
and their  reported  amounts in the financial  statements  represent  either tax
liabilities to be settled in the future or tax assets that will be realized as a
reduction  of future  taxes.  Currently  enacted  tax rates and laws are used to
calculate  expected tax  consequences.  The change in net deferred tax assets or
liabilities  between  periods is recognized as a deferred tax expense or benefit
in  the  consolidated   statement  of  operations  or,  for  certain   temporary
differences, reflected directly in shareholders' equity.

RECENT PRONOUNCEMENTS

         In June 1997, the Financial  Accounting Standards Board ("FASB") issued
SFAS No. 130, "Reporting  Comprehensive  Income." and SFAS No. 131, "Disclosures
About  Segments  of  an  Enterprise  and  Related  Information."  SFAS  No.  130
establishes  standards for the reporting and display of comprehensive  income as
part of a full set of financial  statements.  Comprehensive  income for a period
encompasses  net income and all other  changes in a company's  equity other than
from transactions with the company's owners. SFAS No. 131 establishes  standards
for reporting information about a company's operating segments and requires that
reportable  segments  be  identified  based  on  how  management  organizes  the
company's  operations  and related  financial  information  for  decision-making
purposes and performance assessment.  The provisions of SFAS No. 130 and 131 are
effective for 1998.  Adoption of these  standards will result in some changes in
the financial statement  presentation to reflect comprehensive income (primarily
with  respect  to  changes  in market  value of  available  for sale  investment
securities),  but will not have an effect on the Company's financial position or
results of operations.

EARNINGS PER SHARE

         During 1997 the FASB issued a statement that revised and simplified the
standards  for the  calculation  of  earnings  per share  ("EPS").  Under  these
standards,  which became  effective for the period ended  December 31, 1997, the
Company reports two measures of EPS. The more basic EPS measure is calculated by
dividing income available to common shareholders by the weighted-average  number
of common shares outstanding for the applicable  period,  without adjustment for
potential  common  shares   outstanding  in  the  form  of  options,   warrants,
convertible securities or contingent stock agreements. The second measure of EPS
incorporates  the dilutive  effect of potential  common shares by increasing the
number of common shares  outstanding for the basic  calculation by the number of
additional  shares that would have been  outstanding  if the dilutive  potential
common shares had been issued, all as determined using the treasury stock method
where appropriate. The new standards have been applied to the calculation of EPS
for all periods presented.

         In calculating both measures of EPS, the Company's  reported net income
equals income available to common shareholders. The potential common shares that
are factored into the calculation of the weighted-average shares outstanding for
the diluted EPS measurement  consist only of unexercised  stock options that the
Company has granted to employees and directors.

                               Page 36 of 64 Pages

<PAGE>



(3) INVESTMENT IN SECURITIES

         Summary  information   regarding  securities  available  for  sale  and
securities held to maturity follows:
<TABLE>
<CAPTION>


(dollars in thousands)                                         SECURITIES AVAILABLE FOR SALE
                                    --------------------------------------------------------------------------
                                      WEIGHTED                            GROSS         GROSS        ESTIMATED
                                       AVERAGE       AMORTIZED       UNREALIZED    UNREALIZED             FAIR
DECEMBER 31, 1997                     MATURITY            COST             GAIN          LOSS            VALUE
                                    --------------------------------------------------------------------------
<S>                                     <C>         <C>              <C>            <C>            <C>         
U.S. Treasury securities............    9 mos.      $    3,992       $        2     $       2      $     3,992
U.S. government agency securities...  123 mos.          17,739              327            38           18,028
Mortgage-backed securities..........   82 mos.          81,211              502           480           81,233
State and municipal securities......        -                -                -             -                -
                                    --------------------------------------------------------------------------
         TOTAL......................   86 mos.      $  102,942       $      831     $     520      $   103,253
                                    ==========================================================================
</TABLE>


<TABLE>
<CAPTION>

DECEMBER 31, 1996

<S>                                    <C>          <C>              <C>            <C>            <C>         
U.S. Treasury securities............   13 mos.      $    9,515       $       25     $      21      $     9,519
U.S. government agency securities...   89 mos.          55,422              175           592           55,005
Mortgage-backed securities..........   88 mos.         143,256              938           789          143,405
State and municipal securities......  110 mos.           1,044               28             -            1,072
                                    --------------------------------------------------------------------------
         TOTAL......................   84 mos.      $  209,237       $    1,166     $   1,402      $   209,001
                                    ==========================================================================
</TABLE>
<TABLE>
<CAPTION>

(dollars in thousands)                                      SECURITIES HELD TO MATURITY
                                    --------------------------------------------------------------------------
                                      WEIGHTED                            GROSS         GROSS        ESTIMATED
                                       AVERAGE       AMORTIZED       UNREALIZED    UNREALIZED             FAIR
DECEMBER 31, 1997                     MATURITY            COST             GAIN          LOSS            VALUE
                                    --------------------------------------------------------------------------
<S>                                     <C>         <C>              <C>            <C>            <C>         
U.S. Treasury securities............   14 mos.      $  300,260       $    3,037     $      15      $   303,282
U.S. government agency securities...   43 mos.         427,390            3,541         1,703          429,228
Mortgage-backed securities..........  132 mos.         299,612              810           632          299,790
State and municipal securities......   60 mos.         131,818            4,313            12          136,119
Federal Reserve stock and other
  corporate securities..............    -                5,955            5,257             -           11,212
                                    --------------------------------------------------------------------------
         TOTAL......................   60 mos.      $1,165,035       $   16,958     $   2,362      $ 1,179,631
                                    ==========================================================================
</TABLE>


<TABLE>
<CAPTION>

DECEMBER 31, 1996

<S>                                    <C>          <C>              <C>            <C>            <C>        
U.S. Treasury securities............   12 mos.      $  565,584       $    3,670     $     851      $   568,403
U.S. government agency securities...   43 mos.         401,023            2,434         2,284          401,173
Mortgage-backed securities..........   72 mos.         146,295              436           868          145,863
State and municipal securities......   66 mos.         146,237            3,999           342          149,894
Federal Reserve stock and other
  corporate securities..............    -                6,058            2,141             -            8,199
                                    --------------------------------------------------------------------------
         TOTAL......................   35 mos.      $1,265,197       $   12,680     $   4,345      $ 1,273,532
                                    ==========================================================================
</TABLE>


         At December  31,  1997 and 1996,  securities  with a carrying  value of
approximately  $827  million  and $909  million,  respectively,  were sold under
repurchase  agreements,  pledged to secure  public  funds and trust  deposits or
pledged for other purposes.

                               Page 37 of 64 Pages

<PAGE>



         During  1997,  approximately  $28 million of  securities  that had been
classified  by pooled  entities as available for sale prior to their merger with
the Company were transferred to the held to maturity category in accordance with
the investment policies and practices of the combined institution.  During 1996,
such transfers totalled approximately $12 million. These transfers were recorded
at fair value. The unrealized gains and losses at the transfer dates,  which are
included net of tax as a component of shareholders' equity, were insignificant.

         The amortized cost and estimated  fair value of securities,  other than
equity securities,  available for sale and held to maturity at December 31, 1997
are shown as follows by contractual  maturity.  The actual maturities of certain
securities, in particular  mortgage-backed  securities and municipal securities,
may  differ  from  contractual  maturities  because of  principal  amortization,
prepayments and the exercise of call options.

                                                 AVAILABLE FOR SALE
                                        -----------------------------------
(in thousands)                                                    ESTIMATED
MATURITY DISTRIBUTION                      AMORTIZED                   FAIR
DECEMBER 31, 1997                               COST                  VALUE
                                        -----------------------------------
One year or less........................$     18,484          $      18,413
One to five years.......................      51,225                 51,470
Five to ten years.......................       3,813                  3,846
Over ten years..........................      29,420                 29,524
                                        -----------------------------------
                                        $    102,942          $     103,253
                                        ===================================




                                                 HELD TO MATURITY
                                        -----------------------------------
(in thousands)                                                    ESTIMATED
MATURITY DISTRIBUTION                      AMORTIZED                   FAIR
DECEMBER 31, 1997                               COST                  VALUE
                                        -----------------------------------
One year or less........................$    230,673          $     232,128
One to five years.......................     539,432                544,402
Five to ten years.......................     267,308                270,051
Over ten years..........................     121,667                121,838
                                        -----------------------------------
                                        $  1,159,080          $   1,168,419
                                        ===================================



(4) LOANS AND RESERVE FOR POSSIBLE LOAN LOSSES

         The  composition  of the Company's  loan portfolio at December 31, 1997
and 1996 was as follows (in thousands):

                                                          1997              1996
                                                 -------------------------------
Commercial, financial and
 agricultural loans..............................$   1,191,649     $   1,026,862
Real estate loans - commercial and other.........      786,975           669,683
Real estate loans - retail mortgage..............      435,628           351,868
Loans to individuals.............................      227,360           216,893
Lease financing receivables......................        5,966            12,278
                                                 -------------------------------
                                                 $   2,647,578     $   2,277,584
                                                 ===============================


         The  Company's  lending  activity,   both  commercial  and  retail,  is
conducted primarily among customers in Louisiana,  Mississippi, southern Alabama
and the western  Florida  panhandle.  In its market area,  the Company  serves a
broad base of commercial customers in diverse industries.

                               Page 38 of 64 Pages

<PAGE>



         The  total of  commercial  and other  real  estate  loans  shown in the
accompanying  table  includes those for which the primary source of repayment is
the  operation or sale of the  underlying  project,  as well as those secured by
real estate employed in other operations of the customer.  Unfunded  commitments
for loans  secured by commercial  or other real estate were  approximately  $214
million at December 31, 1997.  The Company's  portfolio of commercial  and other
real estate loans is diversified as to both the types of collateral property and
the industries in which the properties are employed.

         Within the portfolio of commercial,  financial and agricultural  loans,
the Company maintains a moderate  concentration of outstanding  credits and loan
commitments to customers  involved in the oil and gas industry.  At December 31,
1997,  outstanding loans to this industry totalled  approximately  $173 million,
and  unused  loan   commitments  and  letters  of  credit  and  guarantees  were
approximately $137 million and $37 million, respectively.

         Non-performing  loans at December 31, 1997 and 1996 are  summarized  as
follows (in thousands):

                                                         1997               1996
                                                --------------------------------
Loans accounted for on a nonaccrual basis.......$       9,005      $       9,079
Restructured loans..............................        1,560              2,375
                                                --------------------------------
Total non-performing loans......................$      10,565      $      11,454
                                                ================================


         Information on loans evaluated for possible  impairment  losses follows
(in thousands):
<TABLE>
<CAPTION>

                                                                                1997             1996
                                                                       ------------------------------
<S>                                                                    <C>              <C>          
Impaired loans at year end requiring a loss allowance..................$       4,737    $       4,088
Impaired loans at year end not requiring a loss allowance..............        5,431            7,936
                                                                       ------------------------------
Total recorded investment in impaired loans at year end................$      10,168    $      12,024
                                                                       ==============================
Total impairment loss allowance required at year end...................$       2,152    $       1,934
                                                                       ==============================
Average recorded investment in impaired loans during year..............$      10,576    $      12,716
                                                                       ==============================
</TABLE>

         With respect to certain nonaccrual loans, interest income is recognized
as cash interest payments are received. Interest payments on current or previous
nonaccrual  loans that had been accounted for under the cost recovery method may
also subsequently be recognized as interest income when loan collections  exceed
previous  expectations  or when workout  efforts  result in fully  rehabilitated
credits.  The following compares contractual interest income on nonaccrual loans
and  restructured  loans with both the interest  income reported on a cash basis
with  respect  to such  loans and the prior  cost  recovery  interest  currently
recognized on nonaccrual loans and certain accruing loans (in thousands):

                                      YEAR ENDED DECEMBER 31,
                                1997             1996             1995
                         ---------------------------------------------
Contractual interest.....$     1,111     $      1,242     $      1,792
Interest recognized......      1,645            3,729            6,505
                         ---------------------------------------------
Increase in reported
   interest income.......$       534     $      2,487     $      4,713
                         =============================================



                               Page 39 of 64 Pages

<PAGE>



         Changes in the reserve for possible  loan losses for the three years in
the period ended December 31, 1997, were as follows (in thousands):

                                            1997            1996           1995
                                    --------------------------------------------
Balance at beginning of year........$     42,411     $    43,341    $    41,024
Reserves provided through
   acquisition......................           -               -          1,772
Reduction in reserve................      (2,812)         (4,435)        (8,960)
Recoveries..........................      11,408          10,775         14,620
Loans charged off...................      (8,202)         (7,270)        (5,115)
                                    --------------------------------------------
Balance at end of year..............$     42,805     $    42,411    $    43,341
                                    ============================================

         The  reductions in the reserve for possible  loan losses in 1997,  1996
and 1995  primarily  reflect  improved  asset  quality  coupled with  successful
recovery efforts.

         The Bank has made loans in the  normal  course of  business  to certain
directors  and  executive  officers  of  the  Company  and to  their  associates
("related parties"). The aggregate amount of these loans was $74 million and $97
million at December 31, 1997 and 1996,  respectively.  During 1997, $231 million
of  new  loan  advances  were  made,  and  repayments   totalled  $254  million.
Outstanding  commitments  and letters of credit to related  parties  totaled $86
million  and $64 million at December  31, 1997 and 1996,  respectively.  Related
party loans are made on substantially the same terms,  including  interest rates
and collateral, as those prevailing at the time for comparable transactions with
unrelated   persons,   and  do  not  involve   more  than  the  normal  risk  of
collectibility at the time of the transaction.


(5) INCOME TAXES

         Income tax expense (benefit) consisted of the following  components for
the three years in the period ended December 31, 1997 (in thousands):


Included in net income:                   1997           1996              1995
                                    --------------------------------------------
  Current tax expense...............$   26,144     $   21,401     $      19,641
  Deferred tax expense (benefit)....       317           (262)            3,178
                                    --------------------------------------------
                                    $   26,461     $   21,139     $      22,819
                                    ============================================

Included in shareholders' equity:
  Deferred tax expense (benefit)
     related to the change in the
     net unrealized gain (loss) on
     securities.....................$      245     $     (704)     $      4,932
   Current tax benefit related to
     nonqualified stock options and
     restricted stock...............      (661)          (708)                -
                                    --------------------------------------------
                                    $     (416)    $   (1,412)      $     4,932
                                    ============================================




                               Page 40 of 64 Pages

<PAGE>



         The components of the net deferred income tax asset,  which is included
in other assets on the consolidated  balance sheets, were as follows at December
31, 1997 and 1996 (in thousands):


                                                           1997            1996
                                                     ---------------------------
Deferred tax assets:
         Reserves for losses on loans, OREO, and
           other problem assets......................$   13,979     $    14,160
         Employee benefit plan liabilities...........     4,157           3,525
         Net operating loss carryforward.............     1,364           2,127
         Unrecognized interest income................     1,214             742
         Net unrealized loss on securities
            available for sale or transferred
             to held to maturity.....................       192             437
         Other.......................................     1,255           1,347
                                                     ---------------------------
                  Total deferred tax assets..........$   22,161     $    22,338
                                                     ---------------------------

Deferred tax liabilities:
         Accumulated depreciation and
           amortization..............................$   (4,478)    $    (4,810)
         Other.......................................    (1,522)           (805)
                  Total deferred tax liabilities.....$   (6,000)    $    (5,615)
                                                     ---------------------------

Net deferred tax asset...............................$   16,161     $    16,723
                                                     ===========================

         As of December 31, 1997, the Company had approximately  $3.9 million in
net operating  loss  carryforwards  which had been generated by a pooled entity.
Substantially all of these carryforwards expire in 2004 and 2007.

         The Company is required to establish a valuation  allowance against the
deferred tax asset if, based on all available  evidence,  it is more likely than
not that some or all of the asset will not be realized.  Management  has weighed
the evidence,  including current earnings performance,  taxable income generated
during available  carryback  periods,  and the nature of significant  deductible
temporary differences,  and believes that no valuation reserve is required as of
December  31,  1997.  Rules  issued by  regulatory  agencies  impose  additional
limitations on the amount of the deferred tax asset that may be recognized  when
calculating regulatory capital ratios. The Company's ratio calculations were not
affected by these rules at December 31, 1997.

         The effective tax rate is less than the  statutory  federal  income tax
rate in each of the three years in the period ended December 31, 1997 because of
the following:

                                                          PERCENT OF INCOME
                                                          BEFORE INCOME TAX
                                                    1997        1996       1995
                                                    ----------------------------
Tax at statutory rate...............................35.0%       35.0%      35.0%
Adjustments in rate resulting from:
   Tax exempt income................................(3.8)       (4.5)      (3.8)
   Non-deductible merger-related expenses........... 0.4         1.1          -
   Tentative settlement of contingent liability..... 1.3           -          -
   State income tax................................. 0.3         0.1          -
   Miscellaneous items.............................. 0.4         0.5        0.4
                                                    ----------------------------
Effective tax rate..................................33.6%       32.2%      31.6%
                                                    ============================



                               Page 41 of 64 Pages

<PAGE>



(6) EMPLOYEE BENEFIT PLANS

Retirement Plans

         The Company has a  noncontributory  qualified  defined  benefit pension
plan covering  substantially all of its employees.  The benefits are based on an
employee's  total  years of service and his or her  highest  five-year  level of
compensation during the final ten years of employment. Contributions are made in
amounts  sufficient to meet funding  requirements  set forth in federal employee
benefit and tax laws plus such  additional  amounts as the Company may determine
to be appropriate from time to time.

         The  following  table sets forth the plan's  funded  status and amounts
recognized in the Company's consolidated balance sheets (in thousands):
<TABLE>
<CAPTION>

                                                                                      DECEMBER 31,
                                                                                       1997        1996
                                                                                 -----------------------
Actuarial present value of benefit obligation: Accumulated benefit obligation :
<S>                                                                              <C>         <C>        
         Vested..................................................................$  (49,284) $  (45,681)
         Non-vested..............................................................    (3,963)     (3,675)
                                                                                 -----------------------
         Total accumulated benefit obligation....................................$  (53,247) $  (49,356)
     Benefit obligation related to assumed future pay
         increases...............................................................   (12,286)    (10,464)
                                                                                 -----------------------
     Projected benefit obligation                                                   (65,533)    (59,820)
Plan assets at fair value, primarily U.S. Treasury
    and agency securities and listed stocks......................................$   91,206  $   73,548
                                                                                 -----------------------
Plan assets in excess of projected benefit
 obligations.....................................................................    25,673      13,728
Unrecognized net actuarial gains.................................................   (21,106)     (8,711)
Unrecognized net implementation asset............................................    (2,309)     (2,714)
Unrecognized prior service cost resulting
 from plan amendments............................................................    (1,453)     (1,576)
                                                                                 -----------------------
Prepaid pension cost.............................................................$      805  $      727
                                                                                 =======================
</TABLE>

         The net pension expense (benefit) recognized for 1997, 1996 and 1995 is
comprised of the following components (in thousands):

                                       1997             1996               1995
                                  ----------------------------------------------
Service costs for benefits
 during the period................$   2,019         $  1,669           $  1,635
Interest cost on projected
 benefit obligation...............    4,237            3,797              3,564
Actual (return) loss on
  plan assets.....................  (21,065)          (9,116)           (14,480)
Net amortization and
  deferral........................   14,731            3,175              9,483
                                  ----------------------------------------------
Net pension expense
 (benefit)........................$     (78)        $   (475)          $    202
                                  ==============================================


         The  weighted-average  discount rate used in determining  the actuarial
present value of the projected  benefit  obligation was 7.00% for 1997 and 7.25%
for 1996 and 1995.  For all  periods  presented,  the  Company  assumed  an 8.0%
expected  long-term rate of return on plan assets and an annual rate of increase
in future compensation levels of 4.0%.


                               Page 42 of 64 Pages

<PAGE>



         In 1995,  the  Company  adopted a  nonqualified  defined  benefit  plan
effective  as of January 1, 1995.  This  unfunded  plan  provides to  designated
executive  officers  retirement  benefits  calculated using the qualified plan's
formula,  but without the  restrictions  imposed on  qualified  plans by certain
specified  provisions of the Internal Revenue Code. Benefits that become payable
under the nonqualified  plan would be reduced by amounts paid from the qualified
plan. The Company previously maintained a nonqualified excess benefit retirement
plan  which was  terminated  effective  January  1, 1993 with  accrued  benefits
preserved  for  participants.  Designated  executives  participating  in the new
nonqualified   plan  were  required  to  relinquish  their  benefits  under  the
terminated plan. At December 31, 1997, the actuarial  present value of projected
benefit  obligations under the nonqualified plans was approximately $2.5 million
and the recorded  accrued  pension  liability was $1.9 million.  The net pension
expense was not material in 1997, 1996 or 1995.

         The Company  sponsors an employee  savings plan under Section 401(k) of
the Internal  Revenue  Code.  Under this plan,  which covers  substantially  all
full-time  employees,  the Company matches the savings of each participant up to
3% of his or her  compensation.  Annual  participant  savings are limited by tax
law.  Participants are fully vested in their savings and in the matching Company
contributions at all times. The expense of the Company's matching contributions,
including those made by pooled entities with comparable plans, was approximately
$1.4 million in 1997, $1.3 million in 1996 and $1.1 million in 1995.

Health and Welfare Plans

         The Company  also  maintains  certain  health  care and life  insurance
benefit  plans  for  retirees  and  their   eligible   dependents.   Participant
contributions   are  required  under  the  health  plan,  and  the  Company  has
established  annual and lifetime maximum health care benefit limits. The Company
recognizes   the  expected  cost  of  providing  these  postretirement  benefits
during the period employees are actively working.  The Company continues to fund
its obligations under the  postretirement  benefit plans as the benefit payments
are made.

         At December 31, 1997, the net postretirement benefit liability reported
with other liabilities in the consolidated balance sheets was approximately $6.7
million.  The net periodic  postretirement  benefit expense recognized for 1997,
1996 and 1995 was $0.5 million, $0.4 million and $0.2 million, respectively. The
net periodic benefit expense includes components for the portion of the expected
benefit  obligation   attributed  to  current  service,   for  interest  on  the
accumulated benefit obligation,  and for amortization of unrecognized  actuarial
gains or  losses.  No  component  was  individually  significant  for any period
reported.

         For the actuarial calculation of its postretirement benefit obligations
at December 31, 1997, 1996 and 1995, the Company assumed annual health care cost
increases beginning at 9.0%, 9.50% and 10.0%, respectively, with each decreasing
to a 5.50% rate over a six to ten year period.  Discount  rates of 7.00% in 1997
and  7.25%  in 1996 and 1995  were  used in  determining  the  present  value of
projected  benefits in each period.  A 1.0% rise in the assumed health care cost
trend rates would not materially  impact the accumulated  benefit  obligation or
the periodic net benefit expense.

(7) STOCK-BASED INCENTIVE COMPENSATION PLANS AND OTHER STOCK-BASED
      COMPENSATION

         The Company maintains two stock-based compensation plans. The long-term
incentive plan for key employees is administered by the  Compensation  Committee
of the Board of Directors,  which designates the participants and authorizes the
granting  of any  awards.  Under  this  plan,  which  was  adopted  in 1997 as a
replacement for the previous long-term  incentive  program,  participants may be
awarded stock options,  restricted stock, performance shares, phantom shares and
stock  appreciation  rights.  To date,  only stock options and restricted  stock
grants have been granted under the plan or the  predecessor  incentive  program.
The current directors'  compensation plan, which was adopted in 1994 and amended
in 1996, provides for, among other matters, the annual award of common stock and
of options to purchase the Company's common stock to each director who is not an
employee of the Company or its subsidiaries.


                               Page 43 of 64 Pages

<PAGE>



         The following schedule summarizes the common stock awards granted under
these plans during 1997, 1996 and 1995:
<TABLE>
<CAPTION>

                                                                                        Market Value
                                                                 Shares                  of Award on
                  Year              Plan                        Awarded                   Grant Date
                  ----------------------------------------------------------------------------------  
<S>               <C>                                            <C>            <C>                 
                  1997              Employee                     54,040         $          2,141,000
                                    Employee- performance        62,375         $          2,505,000
                                    Director                      5,400         $            192,000

                  1996              Employee- performance        53,500         $          1,605,000
                                    Director                      5,100         $            156,000

                  1995              Employee                     40,000         $          1,155,000
                                    Director                      2,100         $             56,000
</TABLE>

         Shares  awarded to  employees  in 1997 and 1996 are subject to possible
forfeiture if a recipient's  employment is terminated  within three years of the
grant date and the  transfer or other  disposition  of the shares is  prohibited
during this period. In addition, a portion of the 1997 grant and all of the 1996
grant are subject to  adjustment  based on the  performance  of the Company,  as
measured by its return on assets and return on equity,  in relation to that of a
designated  peer group over the  restriction  period,  with the ultimate  awards
ranging from 0% to 200% of the initial  grants.  The shares granted to employees
in 1995 are subject to  possible  forfeiture  and  transfer  restrictions  for a
five-year period but not to performance-based adjustments. The directors' shares
are awarded  without any  significant  restriction and are not subject to future
adjustment.

         The Company  recognizes  the market value of the shares  awarded on the
grant date as compensation expense ratably over the restriction periods, if any.
Adjustments  are made for forfeitures as they occur.  Subsequent  changes in the
estimate of the  unrestricted  shares to which employees will ultimately  become
entitled  under  performance-based  grants  will be  reflected  in  compensation
expense   prospectively  over  the  remaining  restriction  periods.  The  total
compensation  expense  recognized  during 1997,  1996 and 1995 related to common
stock awards was $2.4 million, $1.0 million and $0.7 million, respectively.

         The  following  table   summarizes  stock  option  activity  under  the
long-term incentive plan for employees and its predecessor incentive program and
under the directors'  compensation plan for the three-year period ended December
31, 1997.  The exercise  price for all options is set at the market price on the
grant date. All options are fully exercisable six months after the date of grant
and expire after ten years.


                               Page 44 of 64 Pages

<PAGE>

<TABLE>
<CAPTION>


                                                   Employees            Directors
                                              ----------------------------------------
                                                        Weighted-            Weighted-
                                                          Average              Average
                                                         Exercise             Exercise
                                              Number        Price    Number      Price
                                              ----------------------------------------
<S>                                           <C>        <C>         <C>      <C>     
Balance, December 31, 1994..................  182,848    $  21.60    12,000   $  26.25
         Options granted....................   82,750       28.88    14,000      26.75
         Options exercised..................   (3,750)      15.70    (1,000)     26.25
         Options forfeited..................   (1,000)      28.00         -          -
                                              ----------------------------------------

Balance, December 31, 1995..................  260,848    $  23.97    25,000   $  26.53
         Options granted....................  103,500       30.00    17,000      30.50
         Options exercised..................  (21,524)      18.98    (1,000)     26.75
         Options forfeited..................   (3,000)      29.00         -          -
                                              ----------------------------------------

Balance, December 31, 1996..................  339,824    $  26.08    41,000   $  28.17
         Options granted....................  150,500       42.44    18,000      42.44
         Options exercised..................  (30,021)      22.69    (1,000)     30.50
         Options forfeited..................        -           -         -          -
                                              ----------------------------------------

Balance, December 31, 1997..................  460,303    $  31.65    58,000   $  32.56
                                              ========================================
</TABLE>



         The following table summarizes  certain  information  about these stock
options outstanding under the plans at December 31, 1997:

       Range of         Number    Weighted-average      Weighted-average
       Exercise   Shares under     Remaining Years              Exercise
         Prices        Option        to Expiration                 Price
------------------------------------------------------------------------
$13.22 - $19.42        74,772                 5.25              $  17.73
$26.25 - $28.88       157,031                 7.24              $  28.22
$30.00 - $30.50       118,000                 8.67              $  30.07
$42.44 - $42.44       168,500                 9.63              $  42.44
                  ------------------------------------------------------
$13.22 - $42.44       518,303                 8.06              $  31.75
                  ======================================================

         In 1990, an executive  officer was granted  options to purchase  33,750
shares of common  stock of the  Company  at a price of $18.11.  If this  officer
terminates his employment with the Company,  the options will be exercisable for
six months after his date of  termination.  The options will also be exercisable
up to one year past the date of his death,  but in no event beyond  February 28,
2000. At December 31, 1997, none of these options had been exercised.

         As discussed in Note 17, First  Citizens  BancStock,  Inc.  ("FCB") was
merged with the Company in March 1996.  FCB  maintained  stock  option plans for
certain  employees  and its  directors.  Prior to the merger  date,  none of the
options granted under these plans had been exercised.  Upon the merger,  holders
of FCB stock options received options to buy 88,252 shares of Company stock at a
price of $10.13 per  share,  96,276  shares at a price of $12.78 per share,  and
8,023  shares  at a  price  of  $14.57  per  share.  Of  these  options,  48,587
exercisable  at $10.13  remained  unexercised at December 31, 1996 and 34,502 at
December 31, 1997. These options expire in approximately six years.

         SFAS  No.  123,  "Accounting  for  Stock-Based   Compensation,"  became
effective  for the  Company's  1996 fiscal year.  Among other  provisions,  this
statement  established a fair value based method of accounting  for  stock-based
compensation,  including the award of stock options. As provided for in SFAS No.
123, the Company elected not to

                               Page 45 of 64 Pages

<PAGE>



adopt the fair value based method for measuring stock-based compensation cost to
be included in its results of  operations,  but is  continuing  to follow  prior
generally accepted accounting principles.

         SFAS No. 123 requires the following  disclosure of pro forma net income
and earnings per share  determined  as if the fair value method had been applied
in  measuring  compensation  cost  related  to stock  option  grants in 1995 and
thereafter (in thousands, except per share amounts):

                                        1997              1996              1995
                                    --------------------------------------------
Net income..........................$ 52,218         $  44,494         $  49,513
Pro forma stock-based
     compensation expense,
     net of tax.....................   1,474               770               577
                                    --------------------------------------------
Pro forma net income................$ 50.744         $  43,724         $  48,936
                                    ============================================

Pro forma earnings per share........$   2.45         $    2.14         $    2.43
Pro forma earnings per share,
     assuming dilution..............$   2.43         $    2.13         $    2.41
Weighted-average fair value
     of options granted
      during the year...............$  10.79         $    7.67         $    7.14

         The fair value of the stock options  granted in 1997, 1996 and 1995 was
estimated as of the grant dates using the  Black-Scholes  option-pricing  model.
The Company made the following  significant  assumptions  in applying the option
pricing model:  (a) an expected  annualized  volatility for the Company's common
stock of 18.78 % in 1997 and 17.70% in 1996 and 1995; (b) an average option life
of seven years before  exercise;  (c) an expected annual dividend yield of 2.80%
in 1997  and  2.90%  in 1996  and  1995;  and (d) a  weighted-average  risk-free
interest  rate of 6.50% in 1997,  7.01% in 1996 and 6.77% in 1995.  The  Company
options issued in connection with the merger with FCB, as discussed above,  were
not included in the fair value calculation  because the FCB options exchanged in
the merger transaction had been issued prior to 1995.


(8) BANK PREMISES AND EQUIPMENT

         Bank  premises  and  equipment  at  December  31,  1997  and  1996  are
summarized as follows,  net of accumulated  depreciation  and  amortization  (in
thousands):

                                                  1997                     1996
                                            -----------------------------------
Land........................................$   32,048              $    30,144
Buildings and improvements..................    70,741                   62,485
Furnishings and equipment...................    35,375                   26,204
                                            -----------------------------------
                                            $  138,164              $   118,833
                                            ===================================

Accumulated  depreciation  was $94.4  million in 1997 and $91.0 million in 1996.
Provisions for depreciation and  amortization  included in non-interest  expense
for the three years in the period  ended  December  31, 1997 were as follows (in
thousands):

                                         1997           1996           1995
                                     --------------------------------------
Buildings and improvements...........$  4,272      $   3,752      $   3,155
Furnishings and equipment............   9,082          7,643          6,200
                                     --------------------------------------
                                     $ 13,354      $  11,395      $   9,355
                                     ======================================


                               Page 46 of 64 Pages

<PAGE>



(9) OTHER REAL ESTATE OWNED

         Other real estate owned  ("OREO")  comprises  real property  collateral
acquired  through  foreclosure  or in  settlement  of loans and surplus  banking
property. With the exception of the pre-1933 property interests discussed below,
these  properties are reported at their fair values,  less expected  disposition
costs, or the recorded investment in the related loan, whichever is lower.

         Activity  in the OREO  valuation  reserve  for the  three  years in the
period ended December 31, 1997 was as follows (in thousands):

                                                   1997       1996         1995
                                                 -------------------------------
Balance at beginning of year.....................$  902     $  645     $    958
  Provisions for valuation adjustments...........   217        323           88
  Charge-offs....................................  (668)       (66)        (401)
                                                 -------------------------------
Balance at end of year...........................$  451     $  902     $    645
                                                 ===============================

         The Whitney  National Bank owns a variety of property  interests  which
were acquired  though routine banking  transactions  generally prior to 1933 and
for which there existed no ready market. These were subsequently written down to
a nominal  holding value in  accordance  with general  banking  practice at that
time.  These property  interests  include a few commercial and residential  site
locations  principally in the New Orleans area, ownership interests in scattered
undeveloped acreage and various mineral interests.

         The following  summarizes the revenues and direct  expenses  related to
these  property  interests that are included in the statements of operations (in
thousands):

                                                1997         1996           1995
                                            ------------------------------------
Revenues....................................$  3,026      $   955        $   200
                                            ====================================
Direct expenses.............................$     38      $    58        $    34
                                            ====================================

(10) NON-INTEREST INCOME

         The  components  of  non-interest  income were as follows for the three
years in the period ended December 31, 1997 (in thousands):

                                                 1997       1996        1995
                                              ------------------------------
Service charges on deposit
  accounts....................................$22,244    $20,585     $20,400
Credit card income............................  7,412      5,888       5,233
Trust service fees............................  4,910      4,168       3,787
International services income.................  1,821      1,826       1,941
Investment services income....................  1,035      1,080         927
ATM fees......................................  2,939      2,277       1,506
Other fees and charges........................  2,266      2,239       2,388
Net gains on sales and other
 dispositions of foreclosed assets............  6,213      2,775       1,277
Other operating income........................  2,185        960         729
                                              ------------------------------
Total other non-interest income...............$51,025    $41,798     $38,188
Gain on sale of securities....................     10         19           6
                                              ------------------------------

Total non-interest income.....................$51,035    $41,817     $38,194
                                              ==============================

                               Page 47 of 64 Pages

<PAGE>



(11) NON-INTEREST EXPENSE

         The  components of  non-interest  expense were as follows for the three
years in the period ended December 31, 1997 (in thousands):


                                                  1997       1996       1995
                                              ------------------------------
Salaries and benefits.........................$ 80,576   $ 74,261   $ 71,097
Occupancy of bank premises, net...............  12,285     11,368      9,458
Furnishings and equipment,
 including data processing....................  15,256     13,811     11,726
Security and other outside services...........   5,589      5,164      4,195
Credit card processing services...............   5,476      4,337      3,797
Communications and postage....................   5,448      4,817      3,991
Taxes and insurance, other than real estate...   5,097      5,000      5,134
Stationery and supplies.......................   3,809      3,684      3,129
Legal and other professional services.........   3,598      5,064      4,291
Advertising...................................   3,199      2,625      2,565
Amortization of intangible assets.............   2,348      2,802      2,888
Deposit insurance and regulatory fees.........     994        799      4,259
OREO maintenance and operations, net..........     228        798        334
Provision for losses on OREO
 and other problem assets.....................   1,474        385         87
Other operating expense.......................  10,983     10,046     10,054
                                              ------------------------------
Non-interest expense before
 merger-related expenses......................$156,360   $144,961   $137,005
Merger-related expenses.......................   3,270      4,226          -
                                              ------------------------------
Total non-interest expense....................$159,630   $149,187   $137,005
                                              ==============================


(12) OTHER ASSETS AND OTHER LIABILITIES

         The  significant  components of other assets and other  liabilities  at
December 31, 1997 and 1996 were as follows (in thousands):
                                                          OTHER ASSETS
                                            ------------------------------------
                                                     1997                   1996
                                            ------------------------------------
Net deferred tax asset......................$      16,161           $     16,723
Costs in excess of net
  tangible assets acquired..................       18,988                 21,336
Other.......................................        9,572                 12,833
                                            ------------------------------------
Total other assets..........................$      44,721           $     50,892
                                            ====================================

         Costs in excess of the net  tangible  assets  acquired in prior  years'
business  combinations are being amortized over remaining lives ranging from two
to thirteen  years as of December 31, 1997.  Accumulated  amortization  totalled
approximately $13.3 million at December 31, 1997.

                                                       OTHER LIABILITIES
                                            ------------------------------------
                                                     1997                   1996
                                            ------------------------------------
Accrued interest payable....................$      10,654           $     10,078
Obligation for postretirement
  benefits other than pensions..............        6,660                  6,154
Accrued taxes and expenses..................        6,399                  5,588
Other.......................................        4,400                  4,476
                                            ------------------------------------
Total other liabilities.....................$      28,113           $     26,296
                                            ====================================

                               Page 48 of 64 Pages

<PAGE>




(13) SHORT-TERM BORROWINGS

         Short-term  borrowings  consisted of the following at December 31, 1997
and 1996 (in thousands):

                                              1997                   1996
                                        ---------------------------------
Federal funds purchased.................$   55,065             $   82,545
Securities sold under
 repurchase agreements..................   234,538                401,500
                                        ---------------------------------
Total short-term borrowings.............$  289,603             $  484,045
                                        =================================

         The carrying value and market value of securities sold under repurchase
agreements  at December  31, 1997 are shown below by the term of the  underlying
borrowing agreement (in thousands):

                                                      UP TO          30 TO
                                      OVERNIGHT     30 DAYS        90 DAYS
                                      ------------------------------------
Book value:
U.S. Treasury securities............. $ 16,122     $ 28,576       $      -
U.S. government agency securities....  189,256            -              -
                                      ------------------------------------
Total book value....................  $205,378     $ 28,576       $      -
                                      ====================================

Fair value:
U.S. Treasury securities............  $ 16,173     $ 28,799       $     -
U.S. government agency securities...   190,542            -             -
                                      -----------------------------------
Total fair value......................$206,715     $ 28,799       $     -
                                      ===================================

Outstanding borrowings................$208,858     $ 25,680       $     -
                                      ===================================


(14) ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

         The following disclosure is made in accordance with the requirements of
Statement of Financial  Accounting  Standards No. 107,  "Disclosures  about Fair
Value of Financial  Instruments."  In cases where quoted  market  prices are not
available,  fair  values  have  been  estimated  using  present  value  or other
valuation  techniques.  The results of these  techniques are highly sensitive to
the assumptions  used, such as those concerning  appropriate  discount rates and
estimates  of  future  cash  flows,   which  require   considerable   judgement.
Accordingly,  estimates  presented herein are not necessarily  indicative of the
amounts the Company  could  realize in a current  settlement  of the  underlying
financial  instruments.  SFAS No. 107 excludes certain financial instruments and
all nonfinancial instruments from its disclosure requirements. These disclosures
should not be interpreted as representing an aggregate measure of the underlying
value of the Company.



                               Page 49 of 64 Pages

<PAGE>



         The Company  does not  maintain  any  investment  or  participation  in
financial  instruments or agreements  whose value is linked to, or derived from,
changes in the value of some  underlying  asset or index.  Such  instruments  or
agreements include futures, forward contracts,  option contracts,  interest-rate
swap agreements and other financial  arrangements with similar  characteristics,
and are commonly referred to as derivatives.

         The  following  significant  methods and  assumptions  were used by the
Company in estimating the fair value of financial instruments.
<TABLE>
<CAPTION>

                                       DECEMBER 31, 1997            DECEMBER 31, 1996
                                                       (in thousands)
                                  -------------------------------------------------------
                                    CARRYING      ESTIMATED       CARRYING      ESTIMATED
                                      AMOUNT     FAIR VALUE         AMOUNT     FAIR VALUE
                                  -------------------------------------------------------
ASSETS:
<S>                               <C>            <C>            <C>            <C>
Cash and due from financial
 institutions.....................$  221,318     $  221,318     $  245,261     $  245,261
Federal funds sold and
 short-term deposits..............       500            500         55,693         55,693
Investment in securities.......... 1,268,288      1,282,884      1,474,198      1,482,533
Loans, net........................ 2,604,773      2,600,051      2,235,173      2,230,376
Interest receivable and
 other assets.....................    34,585         34,585         35,204         35,204

LIABILITIES:
Deposits..........................$3,510,723     $3,507,400     $3,262,286     $3,262,088
Federal funds and
 other short-term borrowings......   289,603        289,603        484,045        484,045
Interest payable and
 other liabilities................    24,145         24,145         21,343         21,343
</TABLE>


Cash  and  short-term   investments  -  The  carrying  value  of  highly  liquid
instruments,  such as cash on hand, interest- and non-interest-bearing  deposits
in financial institutions, and federal funds sold provides a reasonable estimate
of their fair value.

Investment securities - Substantially all of the Company's investment securities
are traded in active  markets.  Fair value  estimates for these  securities  are
based on quoted market prices obtained from independent  pricing  services.  The
carrying amount of accrued interest on securities approximates its fair value.

Loans,  net - For loans  with  rates  that are  repriced  in  coordination  with
movements in market rates and with no  significant  change in credit risk,  fair
value  estimates are based on carrying  values.  The fair values for other loans
are estimated  through  discounted  cash flow  analysis,  using current rates at
which loans with  similar  terms would be made to  borrowers  of similar  credit
quality. Appropriate adjustments are made to reflect probable credit losses. The
carrying amount of accrued interest on loans approximates its fair value.

Deposits - SFAS No.  107  specifies  that the fair value of deposit  liabilities
with no defined  maturity is to be disclosed as the amount  payable on demand at
the reporting date, i.e., at their carrying or book value. These deposits, which
include  interest and non-interest  checking,  passbook savings and money market
accounts,  represented  approximately 69% of total deposits at December 31, 1997
and  1996.  The fair  value of fixed  maturity  deposits  is  estimated  using a
discounted cash flow calculation  that applies rates currently  offered for time
deposits  of  similar  remaining  maturities.  The  carrying  amount of  accrued
interest payable on deposits approximates its fair value.

         The economic value attributable to the relationship with depositors who
provide  low-cost funds to the Company is viewed as a separate  intangible asset
and is excluded in SFAS No. 107 from the definition of a financial instrument.

Short-term  borrowings  - The  carrying  amounts  of  federal  funds  purchased,
borrowings  under  repurchase   agreements,   and  other  short-term  borrowings
approximate their fair values.

Off-balance-sheet  instruments - Off-balance-sheet financial instruments include
commitments to extend credit,  letters of credit and other financial guarantees.
The fair value of such instruments is estimated using fees currently charged for

                               Page 50 of 64 Pages

<PAGE>



similar  arrangements  in the  marketplace,  adjusted  for  changes in terms and
credit risk as appropriate.  The estimated fair value for these  instruments was
insignificant at December 31, 1997 and 1996.


(15) FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

         In order to meet the  financing  needs of its  customers,  the  Company
deals in financial  instruments that expose it to off-balance-sheet  risk. These
financial  instruments include commitments to extend credit,  letters of credit,
and other financial  guarantees.  Such instruments  involve, to varying degrees,
elements of credit and interest rate risk in excess of the amount  recognized in
the statements of financial position.

         The Company's exposure to credit loss in the event of nonperformance by
other parties for  commitments  to extend credit and letters of credit and other
financial  guarantees  written is represented by the contractual amount of those
instruments.  The Company follows the same credit policies in making commitments
and conditional obligations as it does for on-balance-sheet instruments.
<TABLE>
<CAPTION>
 
                                                                             CONTRACTUAL AMOUNT
                                                                                 December 31,
                                                                                1997          1996
                                                                          ------------------------
                                                                               (in thousands)
Financial instruments whose contract amounts represent credit risk:
<S>                                                                       <C>           <C>       
         Commitments to extend credit.....................................$1,153,742    $1,007,115
         Letters of credit and
          financial guarantees written....................................   104,091        69,849
         Credit card and related lines....................................   102,948        78,189
</TABLE>

         Commitments  to extend  credit and credit  card and  related  lines are
agreements  to make a loan to a customer as long as there is no violation of any
condition  established in the  commitment or credit line  contract.  Commitments
generally  have fixed  expiration  dates or other  termination  clauses  and may
require  payment of a fee. Since many of the  commitments are expected to expire
without  being drawn upon,  the total  commitment  amount  outstanding  does not
necessarily  represent  total  future  cash  outlay  requirements.  Of the total
commitments  outstanding at December 31, 1997  approximately 45% carried a fixed
rate of interest over their terms.

         The amount of collateral, if any, required by the Company upon issuance
of a commitment  is based on  management's  credit  evaluation  of the borrower.
Required  collateral  varies,  but may include accounts  receivable,  inventory,
property, plant and equipment, and income-producing commercial properties.



                               Page 51 of 64 Pages

<PAGE>



         Letters of credit and  financial  guarantees  written  are  conditional
agreements issued by the Company to guarantee the performance of a customer to a
third party.  These agreements are primarily issued to support commercial trade.
The credit risk involved in issuing letters of credit is essentially the same as
that  involved in extending  loan  facilities  to  customers.  The Company holds
marketable  securities  as  collateral  to support  those  letters of credit and
guarantees  for which  collateral  is deemed  necessary.  Letters  of credit and
financial  guarantees  outstanding at December 31, 1997, range from unsecured to
fully secured.

(16) REGULATORY MATTERS

Regulatory Capital Requirements

         Measures of regulatory capital are an important tool used by regulators
to monitor the financial health of insured financial  institutions.  The primary
quantitative  measures used by the regulators to gauge capital  adequacy are the
ratios of Tier 1 and total regulatory  capital to  risk-weighted  assets and the
ratio of Tier 1  capital  to total  assets,  also  known as the Tier 1  leverage
ratio. For the Company and the Bank, Tier 1 capital is essentially equivalent to
total shareholders' equity less goodwill and other intangible assets acquired in
business combinations, while total regulatory capital represents the sum of Tier
1  capital  and the  reserve  for  possible  loan  losses,  subject  to  certain
limitations.   Risk-weighting   percentages  for  assets  are  assigned  by  the
regulatory  agencies  and are  applied to both  reported  balances as well as to
certain off-balance-sheet items.

         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  capital
adequacy  classification  under  the  uniform  framework,  regulators  must also
consider other subjective and  quantitative  assessments of risk associated with
the  institution,  such as  interest-rate  risk.  Institutions  not judged to be
adequately  capitalized are subject to certain mandatory and possible additional
discretionary   actions  by  regulators   that  could   materially   impact  the
institution's financial position and results of operations.

         Management believes,  as of December 31, 1997, that the Company and the
Bank  meet  all  capital  adequacy  requirements  imposed  by  their  respective
regulatory agencies.  At December 31, 1997, Whitney National Bank, the Company's
only significant banking  subsidiary,  had been classified as "well capitalized"
in the most recent classification notice received from its regulators. There are
no  conditions  or events since the  notification,  including  the merger of the
Company's multi-state banking subsidiaries into Whitney National Bank in January
1998, that management believes would change the classification.



                               Page 52 of 64 Pages

<PAGE>



         The accompanying  table shows the actual regulatory  capital ratios and
amounts for the Company and Whitney  National Bank at December 31, 1997 and 1996
as well as both the minimum capital adequacy standard currently imposed by their
regulators and the minimum  amounts and ratios that the Bank must maintain to be
eligible for a "well  capitalized"  classification  under the prompt  corrective
action framework.
<TABLE>
<CAPTION>
                                                                     Minimum                  Minimum
                                                                 Capital Adequacy      for "Well Capitalized"
                                            Actual                  Standard               Classification
                                    -------------------------------------------------------------------------
                                       Amount    Ratio           Amount    Ratio         Amount       Ratio
(dollars in thousands)              -------------------------------------------------------------------------

December 31, 1997:

Tier 1 risk-based capital:
<S>                                 <C>          <C>           <C>         <C>          <C>          <C>                   
   Company........................  $  460,107   14.84%        $  123,977  4.00%               n/a      n/a
   Whitney National Bank..........  $  372,204   14.07%        $  105,828  4.00%        $  158,742    6.00%
Total risk-based capital:
   Company........................  $  498,900   16.10%        $  247,954  8.00%               n/a      n/a
   Whitney National Bank..........  $  405,356   15.32%        $  211,657  8.00%        $  264,571   10.00%
Tier 1 leverage capital:
   Company........................  $   460,107  10.72%        $  171,748  4.00%               n/a      n/a
   Whitney National Bank..........  $   372,204   9.76%        $  152,554  4.00%        $  190,692    5.00%

December 31, 1996:

Tier 1 risk-based capital:
   Company........................  $  420,064   14.96%        $  112,331  4.00%               n/a     n/a
   Whitney National Bank..........  $  345,910   14.39%        $   96,177  4.00%        $  144,265   6.00%
Total risk-based capital:
   Company........................  $  455,258   16.21%        $  224,662  8.00%               n/a     n/a
   Whitney National Bank..........  $  376,065   15.64%        $  192,354  8.00%        $  240,442  10.00%
Tier 1 leverage capital:
   Company........................  $  420,064   10.01%        $  167,868  4.00%               n/a     n/a
   Whitney National Bank..........  $  345,910    9.31%        $  148,569  4.00%        $  185,711   5.00%

</TABLE>

Other Regulatory Matters

         Dividends  received from the  subsidiary  Bank is the primary source of
funds available to Whitney  Holding  Corporation for the declaration and payment
of dividends to the Company's  shareholders.  There are various  regulatory  and
statutory provisions that limit the amount of dividends that the subsidiary Bank
may distribute to the Company. Without prior regulatory approvals, the Bank will
have available an amount equal to approximately $48 million plus its current net
income to distribute as dividends in 1998.

         Under current Federal Reserve  regulations,  the Bank is limited in the
amounts it may lend to the Whitney  Holding  Corporation  to a maximum of 10% of
its capital and surplus,  as defined in the regulations.  Any such loans must be
collateralized from 100% to 130% of the loan amount,  depending on the nature of
the underlying  collateral.  As of December 31, 1997, the Bank had no such loans
to the Whitney Holding Corporation.

         Banks   are   required   to   maintain   currency   and   coin   or   a
non-interest-bearing  balance  with the  Federal  Reserve  Bank to meet  reserve
requirements. The average balance required to be maintained by the Bank with the
Federal  Reserve Bank in excess of currency  and coin on hand was  approximately
$13 million in 1997 and $40 million in 1996.



                               Page 53 of 64 Pages

<PAGE>



(17) MERGERS AND ACQUISITIONS

         In the second  quarter of 1998,  the Company  expects to  complete  two
mergers,  one with  Meritrust  Federal  Saving Bank  ("Meritrust")  and one with
Louisiana  National  Security Bank  ("LNSB").  Meritrust  operates eight banking
offices  in  southeast  Louisiana  and has total  assets of  approximately  $233
million, $122 million in loans, total deposits of $210 million and shareholders'
equity  of $19  million.  This  transaction  is priced  at  approximately  $60.5
million. LNSB operates three banking offices in Ascension Parish,  Louisiana and
has total assets of  approximately  $105  million,  $52 million in loans,  total
deposits  of  $93  million  and  shareholder's  equity  of  $12  million.   This
transaction  is priced at  approximately  $32 million.  Each of these mergers is
intended to qualify as a tax-free  reorganization and will be accounted for as a
pooling of interests.

         On April 18, 1997, the Company merged with Merchants Bancshares,  Inc.,
the parent of Merchants Bank and Trust Company  ("MB&T").  MB&T, with operations
along the  Mississippi  Gulf  Coast,  had total  assets  of  approximately  $208
million,  deposits of $188 million and shareholders' equity of $17 million. This
transaction  was priced at  approximately  $52  million.  Merchants  Bancshares'
shareholders received  approximately 1.45 million shares of Company common stock
at the closing. The merger was accounted for as a pooling of interests.

         On  February  28,  1997,  the  Company  completed  a merger  with First
National  Bankshares,  Inc. ("FNB"),  the parent of First National Bank of Houma
("FNBH"). FNBH operated five banking offices in Terrebonne Parish, Louisiana and
had total assets of  approximately  $235 million,  $126 million in loans,  total
deposits of $210 million and shareholders'  equity of $18 million.  The price of
this  transaction was $41 million and FNB  shareholders  received  approximately
1.13 million shares of Company common stock at the closing. This merger was also
accounted for as a pooling of interests.

         Pre-merger net interest income of MB&T and FNB in 1997,  1996, and 1995
totalled  $3.4  million,  $16.6  million and $16.5  million,  respectively,  and
pre-merger net income for the same periods  totalled $0.6 million,  $3.9 million
and $4.0 million.

         In October  1996,  the Company  completed a merger with American Bank &
Trust ("ABT") of Pensacola,  Florida with assets of $57 million and with Liberty
Holding Corporation  ("LHC"), the parent of Liberty Bank, also of Pensacola with
assets of $48 million.  Shareholders  of ABT received  318,000 shares of Whitney
Holding   Corporation   common  stock  with  a  market  value  at  the  time  of
approximately $10.3 million. LHC shareholders received 436,000 shares of Company
stock with an  approximate  value of $14.1  million.  Each of these  mergers was
accounted for as a pooling of interests.

         In March  1996,  the Company  completed  a merger  with First  Citizens
BancStock,  Inc.  ("FCB"),  the parent of The First  National  Bank in St.  Mary
Parish ("FNB").  FNB had total assets of approximately  $243 million,  including
$147 million in loans,  total deposits of $214 million and shareholders'  equity
of $27 million. FCB shareholders  received 2.03 million shares of Company common
stock with a market value at the time of approximately  $63 million.  Holders of
FCB stock  options at the closing  date  received  options to buy  approximately
192,000  shares of the  Company's  common stock at a  weighted-average  exercise
price of $11.64. The merger was accounted for as a pooling of interests.

         In February  1995,  Whitney  Bank of Alabama  purchased  the assets and
assumed the deposit liabilities of the five Mobile branch offices of The Peoples
Bank,  Elba,  Alabama.  The fair value of the tangible assets acquired  totalled
approximately  $90  million,  including  $47 million in loans,  and the deposits
totalled  $90  million.  The  purchase  price  was  approximately  $12  million.
Operating  results  from  this  acquisition  are  included  in the  accompanying
consolidated statements of operations from the date of acquisition.








                               Page 54 of 64 Pages

<PAGE>




(18) COMMITMENTS AND CONTINGENCIES

         In 1992,  the Company  discovered  and  reported  to the United  States
Department  of Education  ("DOE") that in earlier  years it had not in all cases
followed some collection  procedures  related to guaranteed  student loans under
the Federal Family Education Loan Program. At that time, a reserve for potential
settlement  with DOE was  established  and internal  procedures were revised for
future compliance with the Program. During 1997, the Company reached a tentative
settlement  agreement with the DOE and recorded  certain expenses and income tax
effects which were  substantially  offset by the reversal of excess reserves for
possible  loan losses also related to the  settlement.  Management  continues to
believe that the final settlement will not have a material effect on its results
of operations or financial condition in subsequent periods.

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

         Management also does not believe that compliance with existing federal,
state or local  environmental  laws and  regulations  will  impose any  material
financial obligation on the Company or materially affect the realizable value of
its assets.

         Neither the Company nor the Bank have entered into material commitments
under non-cancelable leases for facilities or equipment.

                               Page 55 of 64 Pages

<PAGE>
<TABLE>
<CAPTION>
(19) PARENT COMPANY FINANCIAL STATEMENTS

Summarized parent-company-only financial statements of
Whitney Holding Corporation follow (in thousands):

                                                               December 31,
                                                               1997          1996
                                                         ------------------------
BALANCE SHEETS
<S>                                                      <C>           <C>       
Investment in and advances to banking subsidiaries.....  $  473,194    $  434,063
Other investments in subsidiaries......................       1,032         1,021
Dividends receivable...................................       6,189         4,858
Other assets...........................................       5,405         6,336
                                                         ------------------------
Total assets...........................................  $  485,820    $  446,278
                                                         ========================
                                                       
                                                       
Dividends payable and other liabilities................  $    7,092    $    5,742
Shareholders' equity, net of treasury shares and
   unearned restricted stock compensation..............     478,728       440,536
                                                         ------------------------
Total liabilities and shareholders' equity.............  $  485,820    $  446,278
                                                         ========================
</TABLE>
                                                       
<TABLE>
<CAPTION>
                                                       
                                                              FOR YEAR ENDED DECEMBER 31,
STATEMENT OF OPERATIONS                                        1997          1996          1995
                                                         ---------------------------------------
<S>                                                      <C>           <C>           <C>       
Dividend income from banking subsidiaries..............  $   26,750    $   26,033    $   27,371
Equity in net undistributed earnings of banking
   subsidiaries........................................      26,307        20,085        22,182
Equity in net undistributed earnings of non-bank
   subsidiaries........................................          11            18             2
Other income (expense), net............................        (850)       (1,642)          (42)
                                                         ---------------------------------------
Net income.............................................  $   52,218    $   44,494    $   49,513
                                                         =======================================
                                                       
                                                       
STATEMENT OF CASH FLOWS                                
Cash flows from operating activities:                  
   Net income..........................................  $   52,218    $   44,494    $   49,513
   Adjustment to reconcile net income to net cash
      provided by operating activities:                            
   Equity in undistributed earnings of banking
      subsidiaries.....................................     (26,307)      (20,085)      (22,182)
   Equity in undistributed earnings of non-bank
      subsidiaries.....................................         (11)          (18)           (2)
   (Increase) Decrease in dividends receivable.........      (1,331)       (1,216)         (788)
   Other, net..........................................         118           710          (182)
                                                         ---------------------------------------
Net cash provided by operating activities..............  $   24,687    $   23,885    $   26,359
                                                         ---------------------------------------
                                                       
Cash flows from investing activities:                  
   Investment in and advances to banking subsidiaries..  $   (7,742)   $  (15,015)   $  (12,752)
   Investment in Whitney Community Development
      Corporation......................................           -             -        (1,000)
   Other, net..........................................        (653)        3,248        (4,454)
                                                         ---------------------------------------
   Net cash provided by (used in) investing
      activities.......................................  $   (8,395)   $  (11,767)   $  (18,206)
                                                         ---------------------------------------
                                                       
Cash flows from financing activities:                  
   Dividends paid, including pooled entities...........  $  (21,960)   $  (17,037)   $  (13,104)
   Sale of common stock under employee savings plan and
      dividend reinvestment plan.......................       5,045         2,685         5,089
   Exercise of stock options...........................         856         1,657            86
   Purchase of treasury stock..........................        (497)            -             -
   Stock issued by pooled entities, pre-merger.........           -           310            15
                                                         ---------------------------------------
   Net cash provided by (used in) financing activities.  $  (16,556)   $  (12,385)   $   (7,914)
                                                         ---------------------------------------
                                                       
Net increase (decrease) in cash........................  $     (264)   $     (267)   $      239
Cash at the beginning of the year......................         334           601           362
                                                         ---------------------------------------
Cash at the end of the year............................  $       70    $      334    $      601
                                                         =======================================
</TABLE>

                               Page 56 of 64 Pages

<PAGE>



           MANAGEMENT REPORT ON RESPONSIBILITY FOR FINANCIAL REPORTING

         The management of Whitney  Holding  Corporation is responsible  for the
preparation  of the  financial  statements,  related  financial  data and  other
information  in this annual  report.  The financial  statements  are prepared in
accordance  with generally  accepted  accounting  principles and include amounts
based on  management's  estimates and  judgement  where  appropriate.  Financial
information  appearing  throughout  this annual  report is  consistent  with the
financial statements.

         The Company's financial statements have been audited by Arthur Andersen
LLP,  independent  public  accountants.  Management has made available to Arthur
Andersen LLP all of the Company's financial records and related data, as well as
the minutes of shareholders' and directors'  meetings.  Furthermore,  management
believes that all  representations  made to Arthur Andersen LLP during its audit
were valid and appropriate.

         Management  of the Company has  established  and  maintains a system of
internal  control that  provides  reasonable  assurance as to the  integrity and
reliability  of  the  financial  statements,   the  protection  of  assets  from
unauthorized use or disposition,  and the prevention and detection of fraudulent
financial  reporting.  The system of internal  control  provides for appropriate
division of responsibility  and is documented by written policies and procedures
that are  communicated  to employees  with  significant  roles in the  financial
reporting process and updated as necessary.  Management continually monitors the
system of  internal  control  for  compliance.  The  Company  maintains a strong
internal control auditing program that independently  assesses the effectiveness
of the internal controls and recommends possible  improvements  thereto. As part
of their audit of the Company's 1997 financial  statements,  Arthur Andersen LLP
considered  the Company's  system of internal  control to the extent they deemed
necessary  to  determine  the nature,  timing and extent of their  audit  tests.
Management  has  considered  the  recommendations  of the internal  auditors and
Arthur Andersen LLP concerning the Company's  system of internal control and has
taken  actions  that it believes  are  cost-effective  in the  circumstances  to
respond appropriately to these recommendations.  Management believes that, as of
December  31,  1997,  the  Company's  system of internal  control is adequate to
accomplish the objectives discussed herein.


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF WHITNEY HOLDING CORPORATION:

         We have audited the accompanying consolidated balance sheets of Whitney
Holding  Corporation and  subsidiaries (a Louisiana  corporation) as of December
31,  1997 and 1996,  and the  related  consolidated  statements  of  operations,
shareholders'  equity and cash  flows for each of the three  years in the period
ended December 31, 1997. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects, the consolidated financial position of Whitney
Holding  Corporation and  subsidiaries as of December 31, 1997 and 1996, and the
results  of its  operations  and cash  flows for each of the three  years in the
period ended December 31, 1997, in conformity with generally accepted accounting
principles.

                                                             Arthur Andersen LLP
New Orleans, Louisiana
January 15, 1998


                               Page 57 of 64 Pages

<PAGE>



SUMMARY OF QUARTERLY FINANCIAL INFORMATION
--------------------------------------------------------------------------------
         The following  quarterly  financial  information  is unaudited.  In the
opinion of management,  all normal  recurring  adjustments  necessary to present
fairly the results of operations for such periods are reflected.
<TABLE>
<CAPTION>


                                                                         1997 - UNAUDITED
                                                          (in thousands, except per-share amounts)
                                            ----------------------------------------------------------------------
                                                         4TH             3RD              2ND                  1ST
                                                     QUARTER         QUARTER          QUARTER              QUARTER
                                            ----------------------------------------------------------------------
<S>                                         <C>                 <C>              <C>              <C>             
Interest income.............................$         74,601    $     74,572     $     72,154     $         70,082
Net interest income.........................          47,770          47,456           45,260               43,976
Reduction in reserve (provision)
  for possible loan losses..................               -           3,000                -                 (188)
Income before income taxes..................          20,053          21,755           20,790               16,081
Net income..................................          13,628          13,653           14,152               10,785
Earnings per share..........................$           0.66    $       0.66     $       0.68     $           0.52
Earnings per share, assuming dilution.......$           0.65    $       0.65     $       0.68     $           0.52
Dividends declared per share, historical
     Whitney Holding Corporation............$           0.28    $       0.28     $       0.28     $           0.28
Range of closing stock prices............... 46 1/8 - 59 3/4     40 - 47 1/4      35 1/4 - 43      34 3/4 - 40 1/2

</TABLE>

<TABLE>
<CAPTION>
                                                                         1996 - UNAUDITED
                                                          (in thousands, except per-share amounts)
                                            ----------------------------------------------------------------------
                                                         4TH               3RD            2ND                  1ST
                                                     QUARTER           QUARTER        QUARTER              QUARTER
                                            ----------------------------------------------------------------------
<S>                                         <C>               <C>               <C>               <C>            
Interest income.............................$         69,909  $         68,261  $         66,104  $        66,346
Net interest income.........................          43,364            43,036            41,011           41,157
Reduction in reserve (provision)
  for possible loan losses..................           4,810              (190)             (110)             (75)
Income before income taxes..................          17,823            17,373            16,749           13,688
Net income..................................          11,799            11,867            11,421            9,407
Earnings per share..........................$           0.57  $           0.58  $           0.56  $          0.47
Earnings per share, assuming dilution.......$           0.57  $           0.58  $           0.56  $          0.46
Dividends declared per share, historical
     Whitney Holding Corporation............$           0.25  $           0.25  $           0.25  $          0.22
Range of closing stock prices............... 31 3/4 - 35 7/8   29 1/2 - 32 3/4   29 3/4 - 31 3/4  29 3/4 - 31 3/4
</TABLE>





                               Page 58 of 64 Pages

<PAGE>



Item 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

         None.

                                    PART III

Item 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         In response to this item,  registrant  incorporates  by  reference  the
sections   entitled   "Election  of  Directors,"   "Certain   Transactions"  and
"Compliance with Section 16(a) of the Exchange Act" of its Proxy Statement dated
March 18, 1998.


Item 11: EXECUTIVE COMPENSATION

         In response to this item,  registrant  incorporates  by  reference  the
sections entitled "Compensation of Directors," "Executive  Compensation" and the
sub-sections  entitled  "Long-Term  Incentive  Plan" and "Executive  Agreements"
under the heading of  "Executive  Compensation  Report," of its Proxy  Statement
dated March 18, 1998.


Item 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         In response to this item,  registrant  incorporates  by  reference  the
sections  entitled  "Voting   Securities  and  Principal  Holders  Thereof"  and
"Election of Directors" of its Proxy Statement dated March 18, 1998.


Item 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In response to this item,  registrant  incorporates  by  reference  the
section entitled  "Certain  Transactions" of its Proxy Statement dated March 18,
1998.




                               Page 59 of 64 Pages

<PAGE>



                                     PART IV

Item 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) (1) The following  consolidated  financial statements of the Company and its
subsidiaries are included in Part II Item 8:

                                                                     Page Number
                                                                     -----------
         Consolidated Balance Sheets --
            December 31, 1997 and 1996                                        29

         Consolidated Statements of Operations --
            Years Ended December 31, 1997, 1996, and 1995                     30

         Consolidated Statements of Changes in Shareholders' Equity --
            Years Ended December 31, 1997, 1996, and 1995                     31

         Consolidated Statements of Cash Flows --
            Years Ended December 31, 1997, 1996, and 1995                     32

         Notes to Financial Statements                                        33

         Report of Independent Public Accountants                             57

         Summary of Quarterly Financial Information                           58


(a) (2) All schedules  have been omitted  because they are either not applicable
or the required  information  has been included in the  financial  statements or
notes to the financial statements.

(a)(3) Exhibits:

         Exhibit 3.1 - Copy of Composite  Charter  (filed as Exhibit 3(i) to the
         Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
         1993  (Commission  file  number  0-1026)  and  incorporated  herein  by
         reference)

         Exhibit  3.2 - Copy of Bylaws  (filed as Exhibit  3.2 to the  Company's
         Quarterly  Report  on Form 10-Q for the  quarter  ended  June 30,  1997
         (Commission file number 0-1026) and incorporated by reference herein)

         Exhibit  10.1  -  Stock  Option   Agreement   between  Whitney  Holding
         Corporation  and  William  L.  Marks  (filed  as  Exhibit  10.2  to the
         Company's  Annual  Report on Form 10-K for the year ended  December 31,
         1990 (Commission file number 0-1026) and incorporated by reference)

         Exhibit 10.2 - Executive agreement between Whitney Holding Corporation,
         Whitney  National  Bank and William L. Marks  (filed as Exhibit 10.3 to
         the Company's  Quarterly Report on Form 10-Q for the quarter ended June
         30, 1993 (Commission file number 0-1026) and incorporated by reference)

         Exhibit 10.3 - Executive agreement between Whitney Holding Corporation,
         Whitney National Bank and R. King Milling (filed as Exhibit 10.4 to the
         Company's  Quarterly Report on Form 10-Q for the quarter ended June 30,
         1993 (Commission file number 0-1026) and incorporated by reference)



                               Page 60 of 64 Pages

<PAGE>



         Exhibit 10.4 - Executive agreement between Whitney Holding Corporation,
         Whitney  National Bank and Edward B. Grimball (filed as Exhibit 10.5 to
         the Company's  Quarterly Report on Form 10-Q for the quarter ended June
         30, 1993 (Commission file number 0-1026) and incorporated by reference)

         Exhibit 10.5 - Executive agreement between Whitney Holding Corporation,
         Whitney National Bank and Kenneth A. Lawder, Jr. (filed as Exhibit 10.6
         to  the  Company's  Quarterly Report on Form 10-Q for the quarter ended
         June  30,  1993  (Commission  file  number  0-1026) and incorporated by
         reference)

         Exhibit 10.6 - Executive agreement between Whitney Holding Corporation,
         Whitney  National Bank and G. Blair Ferguson  (filed as Exhibit 10.7 to
         the  Company's  Quarterly  Report  on Form 10-Q for the  quarter  ended
         September 30, 1993  (Commission file number 0-1026) and incorporated by
         reference)

         Exhibit 10.7 - Executive agreement between Whitney Holding Corporation,
         Whitney  National  Bank and Joseph W. May (filed as Exhibit 10.7 to the
         Company's  Annual  Report on Form 10-K for the year ended  December 31,
         1993 (Commission file number 0-1026) and incorporated by reference)

         Exhibit 10.8 - Executive agreement between Whitney Holding Corporation,
         Whitney Bank of Alabama and John C. Hope, III (filed as Exhibit 10.8 to
         the Company's  Annual  Report on Form 10-K for the year ended  December
         31, 1994 (Commission file number 0-1026) and incorporated by reference)

         Exhibit 10.9 - Executive agreement between Whitney Holding Corporation,
         Whitney National Bank  and  Robert C. Baird, Jr. (filed as Exhibit 10.9
         to the Company's  Quarterly  Report on Form 10-Q for the quarter  ended
         June  30,  1995  (Commission  file  number  0-1026) and incorporated by
         reference)

         Exhibit 10.10a - Long-term  incentive program (filed as Exhibit 10.7 to
         the Company's  Annual  Report on Form 10-K for the year ended  December
         31, 1991 (Commission file number 0-1026) and incorporated by reference)

         Exhibit  10.10b - Long-term  incentive plan (filed as a Proposal in the
         Company's Proxy Statement dated March 18, 1997  (Commission file number
         0-1026) and incorporated by reference)

         Exhibit 10.11 - Executive  compensation  plan (filed as Exhibit 10.8 to
         the Company's  Annual  Report on Form 10-K for the year ended  December
         31, 1991 (Commission file number 0-1026) and incorporated by reference)

         Exhibit  10.12 - Form of restricted  stock  agreement  between  Whitney
         Holding  Corporation and certain of its officers (filed as Exhibit 19.1
         to the  Company's  Quarterly  Report on Form 10-Q for the quarter ended
         June 30, 1992  (Commission  file number  0-1026)  and  incorporated  by
         reference)

         Exhibit 10.13 - Form of stock option agreement  between Whitney Holding
         Corporation  and certain of its officers  (filed as Exhibit 19.2 to the
         Company's  Quarterly Report on Form 10-Q for the quarter ended June 30,
         1992 (Commission file number 0-1026) and incorporated by reference)

         Exhibit 10.14 - Directors' Compensation Plan (filed as Exhibit A to the
         Company's Proxy Statement dated March 24, 1994  (Commission file number
         0-1026) and incorporated by reference)

         Exhibit  10.14a - Amendment  No. 1 to the Whitney  Holding  Corporation
         Directors' Compensation Plan (filed as Exhibit A to the Company's Proxy
         Statement  dated  March 15, 1996  (Commission  file number 0- 1026) and
         incorporated by reference)



                               Page 61 of 64 Pages

<PAGE>



         Exhibit 10.15 - Retirement  Restoration Plan effective  January 1, 1995
         (filed as Exhibit 10.16 to the Company's Annual Report on Form 10-K for
         the year ended  December 31, 1995  (Commission  file number 0-1026) and
         incorporated by reference)

         Exhibit   10.16  -  Executive   agreement   between   Whitney   Holding
         Corporation,  Whitney  National  Bank and  Rodney  D.  Chard  (filed as
         Exhibit  10.17 to the Company's  Quarterly  Report on Form 10-Q for the
         quarter ended  September 30, 1996  (Commission  file number 0-1026) and
         incorporated by reference)

         Exhibit 10.17 - Form of Amendment to the Executive agreements (filed as
         Exhibits 10.2 through 10.9 to the Company's  Annual Report on Form 10-K
         for the year ended  December 31, 1996  (Commission  file number 0-1026)
         and incorporated by reference)

         Exhibit 10.18 - Executive  agreement  between Whitney  National Bank of
         Mississippi  and Guy C.  Billups,  Jr.  dated  April 18, 1997 (filed as
         Exhibit  10.19 to the Company's  Quarterly  Report on form 10-Q for the
         quarter  ended  June 30,  1997  (Commission  file  number  0-1026)  and
         incorporated by reference)

         Exhibit 21 - Subsidiaries

         Whitney Holding  Corporation  owns 100% of the capital stock of Whitney
         National  Bank,  successor  by merger in early  January 1998 to Whitney
         Bank of Alabama,  Whitney National Bank of Florida and Whitney National
         Bank of Mississippi.
         All other subsidiaries considered in the aggregate would not constitute
         a significant subsidiary.

         Exhibit 27 - Financial Data Schedule


         Pursuant  to  the  requirements  of  the  Section  13 or  15(d)  of the
Securities  Exchange Act of 1934,  the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                WHITNEY HOLDING CORPORATION
                                        (Registrant)



                             By: /s/ William L. Marks
                                ------------------------------------------------
                                William L. Marks
                                Chairman of the Board and
                                Chief Executive Officer      March 25, 1998
                                                       -------------------------
                                                                  Date

                               Page 62 of 64 Pages

<PAGE>
                  Pursuant to the requirements of the Securities Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the Registrant and in the capacities and on the dates indicated.



/s/ William L. Marks               ,       Chairman of the Board and
-----------------------------------
    William L. Marks                       Chief Executive Officer and
                                           Director               March 25, 1998
                                                   -----------------------------

/s/ R. King Milling                ,       President and Director March 25, 1998
-----------------------------------                              ---------------
    R. King Milling

/s/ Edward B. Grimball             ,        Executive Vice President & C.F.O.
-----------------------------------
    Edward B. Grimball                      (Principal
                                             Accounting
                                             Officer)             March 25, 1998
                                                         -----------------------

/s/ John G. Phillips               ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    John G. Phillips

/s/ W.P. Snyder III                ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    W.P. Snyder III

/s/ Robert H. Crosby, Jr.          ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    Robert H. Crosby, Jr.

                                   ,        Director                           
-----------------------------------                      -----------------------
    Richard B. Crowell

/s/ James M. Cain                  ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    James M. Cain

/s/ Harry J. Blumenthal, Jr.       ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    Harry J. Blumenthal, Jr.

/s/ Robert E. Howson               ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    Robert E. Howson

/s/ Warren K. Watters              ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    Warren K. Watters

/s/ John K. Roberts, Jr.           ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    John K. Roberts, Jr.

/s/ William A. Hines               ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    William A. Hines

/s/ E. James Kock, Jr.             ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    E. James Kock, Jr.

/s/ John J. Kelly                  ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    John J. Kelly

/s/ Angus R. Cooper, III           ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    Angus R. Cooper, III

                                   ,        Director                           
-----------------------------------                      -----------------------
    Joel B. Bullard, Jr.

                               Page 63 of 64 Pages
<PAGE>
                  Pursuant to the requirements of the Securities Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the Registrant and in the capacities and on the dates indicated.



/s/ Camille A. Cutrone             ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    Camille A. Cutrone

/s/ Carroll W. Suggs               ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    Carroll W. Suggs    

/s/ Alfred S. Lippman              ,        Director              March 25, 1998
-----------------------------------                      -----------------------
    Alfred S. Lippman   


                              Page 64 of 64 Pages