SECURITIES AND EXCHANGE COMMISSION
 
WASHINGTON, DC.  20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):
October 24, 2011
 
HANCOCK HOLDING COMPANY
 
(Exact name of registrant as specified in its charter)
 
     Mississippi                                                      0-13089                                                     64-0693170
-------------------------------------------------------------    -------------------------------------------------     ----------------------------------------------------
 (State or other jurisdiction of incorporation)              (Commission File Number)                  (I.R.S. Employer Identification Number)

One Hancock Plaza, 2510 14th Street, Gulfport, Mississippi               39501
          --------------------------------------------------------------------------------------                       ---------------------------------------------
                                 (Address of principal executive offices)                                                                 (Zip code)
 
(228) 868-4000
---------------------------------------------------------------
(Registrant's telephone number, including area code)
 
 
 
1

 

 
 
INFORMATION TO BE INCLUDED IN THE REPORT

 
Item 2.02 Results of Operations and Financial Condition.  On October 24, 2011, Hancock Holding Company issued a press release reporting its third quarter earnings for the period ending September 30, 2011. A copy of this press release and the accompanying financial statements are attached hereto as Exhibit 99.1.
 
Item 7.01 Regulation FD Disclosure.  On October 24, 2011, Hancock Holding Company issued a press release reporting its third quarter earnings for the period ending September 30, 2011. A copy of this press release and the accompanying financial statements are attached hereto as Exhibit 99.1. This information is furnished under both Item 2.02 Results of Operations and Financial Condition and Item 7.01 Regulation FD Disclosure.
 
The information in this Form 8-K and Exhibit attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference.

Item 9.01. Financial Statements and Exhibits

    (d)  Exhibits.
 
       Exhibit No.
Description
       99.1
Earnings Release dated October 24, 2011 for Quarter Ended 09/30/11


 
2

 


 SIGNATURE
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Dated:   October 24, 2011   
 
                                                           HANCOCK HOLDING COMPANY    
                                                                  (Registrant)
 
                                                           By:   /s/ Michael M. Achary         
                                                            Michael M. Achary
                                                            Chief Financial Officer
 
 
3
 
 
 


Exhibit 99.1
 
HANCOCK HOLDING COMPANY
 

 

For Immediate Release
October 24, 2011
 
For More Information
Trisha Voltz Carlson, SVP, Investor Relations Manager
504.299.5208
trisha_carlson@hancockbank.com
 
 
Hancock reports third quarter 2011 financial results
Results include full quarter impact of Whitney acquisition
 
GULFPORT, Miss.  (October 24, 2011) — Hancock Holding Company (Nasdaq: HBHC) (the “Company” or “Hancock”) today announced financial results for the third quarter of 2011.  Operating income for the third quarter of 2011 was $45.2 million or $.53 per diluted common share compared to $26.6 million, or $.48, and $14.9 million, or $.40, in the second quarter of 2011 and third quarter of 2010, respectively.  Operating income is defined as net income excluding tax-effected merger costs and securities transactions gains or losses.  Included in the financial tables is a reconciliation of net income to operating income.
 
Hancock's return on average assets, excluding merger related items and securities transactions, was 0.92% for the third quarter of 2011, unchanged from the second quarter of 2011, and an improvement of 22 basis points (bps) over the prior year period.
 
Net income for the third quarter of 2011 was $30.4 million, or $.36 per diluted common share, compared to $12.1 million, or $.22, and $14.9 million, or $.40, in the second quarter of 2011 and third quarter of 2010, respectively.  Included in net income for the third quarter of 2011 were $22.8 million of pre-tax merger-related costs.  Pre-tax merger costs for the second quarter of 2011 totaled $22.2 million.  There were no merger costs in the year ago quarter.
 
The Company's pre-tax, pre-provision profit for the third quarter of 2011 was $73.9 million compared to $49.5 million in the second quarter of 2011.  Pre-tax pre-provision profit is total revenue (TE) less non-interest expense and excludes merger-related costs and securities transactions.  Included in the financial tables is a reconciliation of net income to pre-tax, pre-provision profit.
 
"While opportunities remain to harvest additional cost synergies and continue cultivating revenue prospects, operating results for the third quarter better reflect the long-term earnings potential of this newly combined company,” said Hancock's President and Chief Executive Officer Carl J. Chaney.  “I am proud of what our bankers have accomplished so far in integrating these two well-known organizations, and I look forward to what the future holds for this premiere Gulf Coast franchise.”
 
 
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On June 4, 2011, Hancock completed its acquisition of Whitney Holding Corporation (“Whitney”) headquartered in New Orleans, Louisiana.  The impact of the acquisition is reflected in the Company’s financial information from the acquisition date.  The acquisition added $11.7 billion in assets, $6.5 billion in loans, and $9.2 billion in deposits.
 
Under purchase accounting, the Whitney balance sheet was marked to fair value at acquisition date.  Whitney’s allowance for loan losses of $208 million at acquisition was not carried forward, and the loan portfolio was reduced, or “marked,” $463 million to fair value.  A portion of the mark on the loan portfolio will be accreted into interest income over time.  Goodwill and other intangibles of approximately $780 million were recorded in connection with the Whitney acquisition.
 
On September 16, 2011, the Company completed the sale of seven Whitney Bank branches located on the Mississippi Gulf Coast and one Whitney branch in Bogalusa, Louisiana.  Hancock and Whitney agreed to sell the eight branches to resolve certain branch concentration concerns of the U.S. Department of Justice relating to the merger of Whitney into Hancock.  As part of the divestiture, Hancock sold approximately $47 million in loans and approximately $180 million in deposits.
 
Highlights & Key Operating Items from Hancock's Third Quarter Results
 
Balance Sheet
Total assets at September 30, 2011, were $19.4 billion, compared to $19.8 billion at June 30, 2011.  Approximately half of the decrease was related to the divestiture noted above.
 
Loans
Total loans at September 30, 2011 were $11.1 billion, down $147 million, or 1%, from June 30, 2011.  The linked-quarter decline included approximately $47 million from the sale of the eight Whitney branches noted above, and approximately $26 million was from the portfolio covered by a loss share agreement with the FDIC related to the 2009 acquisition of Peoples First.  Approximately $60 million, with about half from the Texas market, was related to resolution of problem credits.  The remaining decline reflected payoffs and paydowns in excess of new originations during the quarter, mainly in the Texas market.
 
The Company continues to experience limited loan demand throughout its operating region.  Many commercial customers are holding excess liquidity and are choosing to pay down debt in light of the overall economic environment.
 
Despite the overall decline in loans, several markets, including the Mississippi Gulf Coast, Baton Rouge and south central Louisiana, Tampa and Jacksonville, reported net loan growth for the quarter.
 
 
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For the quarter ended September 30, 2011, Hancock's average total loans were $11.2 billion compared to $6.7 billion in the second quarter of 2011.  The increase in average loans mainly reflects a full quarter impact of the Whitney acquisition.
 
Deposits
Total deposits at September 30, 2011 were $15.3 billion, down $296 million, or 2%, from June 30, 2011.  The linked-quarter decline included approximately $180 million from the sale of the eight Whitney branches noted above, $73 million from the anticipated runoff in the Peoples First time deposit portfolio and $160 million of seasonal public funds outflows.
 
Time deposits (CDs) totaled $3.1 billion at September 30, 2011, down $298 million compared to $3.4 billion at June 30, 2011.  During the third quarter, approximately $900 million of time deposits matured at 94bps, of which approximately 60% renewed at 33bps.  In the current low rate environment, customers will be motivated to hold funds in no or low-cost transaction accounts until rates begin to rise.
 
Noninterest-bearing demand deposits (DDAs) totaled $5.1 billion at September 30, 2011, up $198 million compared to June 30, 2011.  Noninterest-bearing demand deposits comprised 33% of total period-end deposits at September 30, 2011, compared to 31% at June 30, 2011.
 
Average deposits for the third quarter of 2011 were $15.5 billion compared to $9.2 billion in the second quarter of 2011.  The increase in average deposits mainly reflects a full quarter impact of the Whitney acquisition.
 
Asset Quality
The Company's allowance for loan losses was $118.1 million at September 30, 2011, compared to $112.4 million at June 30, 2011.  The ratio of the allowance for loan losses to period-end loans was 1.06% at September 30, 2011, compared to 1.00% at June 30, 2011.  Excluding the acquired and covered portfolios, which did not carry forward a reserve under purchase accounting rules, the allowance for loan losses as a percent of period-end loans was 1.86% at September 30, 2011, compared to 1.99% at June 30, 2011.
 
Net charge-offs for the third quarter of 2011 were $7.8 million, or 0.28% of average loans on an annualized basis, compared to $8.2 million, or 0.49% of average loans, for the second quarter of 2011.
 
Hancock recorded a total provision for loan losses for the third quarter of 2011 of $9.3 million compared to $9.1 million in the second quarter of 2011.  The third quarter total provision included approximately $0.2 million, net, related to the Peoples First covered portfolio.  During the third quarter of 2011 the Company recorded a $4.5 million increase in the allowance for losses related to impairment of certain pools of covered loans.  The allowance increase was mostly offset (95%) by a $4.3 million increase in the Company’s FDIC loss share indemnification asset.
 
 
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Non-performing assets totaled $231 million at September 30, 2011, compared to $258 million at June 30, 2011.  The decrease from the previous period is mainly in the legacy Hancock portfolio and is related to payoffs and paydowns on non-performing loans along with net sales/reductions of ORE.  Whitney’s acquired credit-impaired loan portfolio was recorded at estimated fair value at acquisition and is not included in non-performing assets.  Non-performing assets as a percent of total loans and foreclosed assets was 2.06% at September 30, 2011, compared to 2.27% at June 30, 2011.
 
Additional asset quality metrics for the acquired (Whitney), covered (Peoples First) and originated (Hancock legacy plus newly originated loans) portfolios are included in the financial tables.
 
Net Interest Income
Net interest income (TE) for the third quarter of 2011 was $180.2 million, compared to $101.9 million in the second quarter of 2011.  The increase was mainly related to the full quarter impact of the Whitney acquisition.
 
Average earning assets were $16.6 billion in the third quarter of 2011 compared to $9.9 billion in the second quarter of 2011.
 
The net interest margin (TE) was 4.32% for the third quarter of 2011, compared to 4.11% for the second quarter of 2011.  Net purchase accounting adjustments for the Whitney transaction added approximately 24bps and 8bps to the third quarter and second quarter net interest margins, respectively.  The Company’s $400 million deployment of excess liquidity at the end of the second quarter favorably impacted the third quarter margin by approximately 6bps.
 
The margin continued to be favorably impacted by a shift in funding sources and a decline in funding costs, offset by a less favorable shift in the mix of earning assets and a decline in investment portfolio yields.
 
Non-interest Income
Non-interest income totaled $65.0 million for the third quarter of 2011 compared to $46.7 million in the second quarter of 2011.  The increase was mainly related to the full quarter impact of the Whitney acquisition.  There were no significant changes to recurring sources of income during the third quarter.
 
Management continues to expect that the new interchange rates related to the Durbin amendment implemented in the fourth quarter of 2011 could result in approximately $2 million to $3 million of lower fee income for the remainder of 2011 and approximately $15 million to $18 million of lower fee income in 2012.
 
 
7

 
Non-interest Expense & Taxes
Non-interest expense for the third quarter of 2011 totaled $194.0 million compared to $121.4 million in the second quarter of 2011.  The majority of the increase was related to the full quarter impact of the Whitney acquisition.  Non-interest expense included $22.8 million and $22.2 million of merger-related expenses for the third and second quarters of 2011, respectively.
 
The efficiency ratio, which excludes merger costs, was 66.98% for the third quarter of 2011 compared to 65.62% for the second quarter of 2011.
 
The effective income tax rate for the third quarter of 2011 was 22%, up slightly from 21% in the second quarter of 2011.  The low tax rate is impacted by tax-exempt interest income and the utilization of tax credits.  The source of the tax credits resulted from investments in New Market Tax Credits, Qualified Bond Credits and Work Opportunity Tax Credits.
 
Integration Update
The integration of Whitney into Hancock continues to progress as scheduled.  The main systems conversion remains on track and is scheduled for the first quarter of 2012.  Systems important to internal operations, such as payroll and general ledger, converted in recent weeks.
 
Merger costs incurred to-date totaled approximately $47 million.  Management continues to expect a total of approximately $125 million in pre-tax merger costs related to the Whitney acquisition.
 
The Company realized approximately $15 million in merger-related cost saves during the third quarter of 2011 compared to proforma 2010 expense levels, or 45% of its projected target.  Management remains confident it will meet its total projected annual cost saves of $134 million by the beginning of 2013.
 
Capital
Hancock continues to remain well capitalized, with total equity of $2.4 billion at September 30, 2011.  The Company's tangible common equity ratio improved to 8.56% at September 30, 2011, up 45bps from 8.11% at June 30, 2011.  Additional capital ratios are included in the financial tables.
 
Conference Call
Management will host a conference call for analysts and investors at 4:00 p.m. Central Daylight Time today to review the results.  A live listen-only webcast of the call will be available under the Investor Relations section of Hancock’s website at www.hancockbank.com.
 
To participate in the Q&A portion of the call, dial (877) 564-1219 or (973) 638-3429.  An audio archive of the conference call will be available under the Investor Relations section of Hancock’s website.  A replay of the call will also be available through October 31, 2011, by dialing (855) 859-2056 or (404) 537-3406, passcode 14767673.
 
 
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About Hancock Holding Company
Hancock Holding Company, the parent company of Hancock Bank and Whitney Bank, operates a combined total of nearly 300 full-service bank branches and almost 400 ATMs across a Gulf south corridor comprising South Mississippi; southern and central Alabama; southern Louisiana; the northern, central, and Panhandle regions of Florida; and Houston, Texas.
 
The Hancock Holding Company financial services family also includes Hancock Investment Services, Inc.; Hancock Insurance Agency and its divisions of J. Everett Eaves and Ross King Walker; Magna Insurance Company; Southern Coastal Insurance Agency, Inc.; corporate trust offices in Gulfport and Jackson, Miss., New Orleans and Baton Rouge, LA and Orlando, FL; and Harrison Finance Company.
 
Investors and customers can access more information about Hancock Holding Company, Hancock Bank, and e-banking at www.hancockbank.com.  Details about Whitney Bank and online banking are available at www.whitneybank.com.
 
Forward-Looking Statements
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Congress passed the Private Securities Litigation Act of 1995 in an effort to encourage corporations to provide information about companies' anticipated future financial performance. This act provides a safe harbor for such disclosure, which protects the companies from unwarranted litigation if actual results are different from management expectations. This news release contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, and we intend such forward-looking statements to be covered by the safe harbor provisions therein and are including this statement for purposes of invoking these safe-harbor provisions.  Forward-looking statements reflect management’s current views and provide projections of results of operations or of financial condition or state other forward-looking information, such as expectations about future conditions and descriptions of plans and strategies for the future.  The forward-looking statements made in this release include, but may not be limited to, comments with respect to, future profitability, the timing, merger costs, cost synergies, profitability and long-term success of the Hancock/Whitney integration and the financial impact of regulatory requirements such as the Durbin amendment.
 
Hancock’s ability to accurately project results or predict the effects of future plans or strategies is inherently limited.  Although Hancock believes that the expectations reflected in its forward-looking statements are based on reasonable assumptions, actual results and performance in future periods could differ materially from those set forth in the forward-looking statements.  Factors that could cause Hancock’s actual results to differ from those expressed in Hancock’s forward-looking statements include, but are not limited to, those risk factors outlined in Hancock’s public filings with the Securities and Exchange Commission, which are available at the SEC’s internet site (http://www.sec.gov), the anticipated benefits from the Whitney acquisition  such as it being accretive to earnings, expanding our geographic presence and synergies are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations (including changes to capital requirements) and their enforcement, and the degree of competition in the geographic and business areas in which the companies operate; the ability to promptly and effectively integrate the businesses of Whitney and Hancock; reputational risks and the reaction of the company’s customers to the transaction; unanticipated losses related to the integration of, and accounting for, acquired business and assets, current market volatility and diversion of management time on merger-related issues.
 
You are cautioned not to place undue reliance on these forward-looking statements.  Hancock does not intend, and undertakes no obligation, to update or revise any forward-looking statements, whether as a result of differences in actual results, changes in assumptions or changes in other factors affecting such statements, except as required by law.


 
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Hancock Holding Company
         
 Financial Highlights
         
 (amounts in thousands, except per share data and FTE headcount)
         
 (unaudited)
           
             
 
 
Three Months Ended
Nine  Months Ended
   
9/30/2011
6/30/2011
9/30/2010
9/30/2011
9/30/2010
Per Common Share Data
         
Earnings per share:
           
    Basic
 
$0.36
$0.22
$0.40
$0.97
$0.95
    Diluted
 
$0.36
$0.22
$0.40
$0.97
$0.94
Operating earnings per share: (a)
           
Basic
 
$0.53
$0.48
$0.40
$1.48
$1.01
Diluted
 
$0.53
$0.48
$0.40
$1.48
$1.01
Cash dividends per share
 
$0.24
$0.24
$0.24
$0.72
$0.72
Book value per share (period-end)
 
$28.65
$28.18
$23.48
$28.65
$23.48
Tangible book value per share (period-end)
 
$18.78
$18.06
$21.42
$18.78
$21.42
Weighted average number of shares:
           
    Basic
 
             84,699
            54,890
             36,880
             59,149
             36,864
    Diluted
 
             84,985
            55,035
             36,995
             59,442
             37,052
Period-end number of shares
 
             84,698
            84,694
             36,883
             84,698
             36,883
Market data:
           
    High sales price
 
$33.25
$34.57
$35.40
$35.68
$45.86
    Low sales price
 
$25.61
$30.04
$26.82
$25.61
$26.82
    Period end closing price
 
$26.81
$30.98
$30.07
$26.81
$30.07
    Trading volume
 
             38,205
            32,122
             14,318
             96,269
             36,388
             
             
Other Period-end Data
         
FTE headcount
 
4,742
4,892
2,235
4,742
2,235
Tangible common equity
 
$1,590,264
$1,533,973
$790,040
$1,590,264
$790,040
Tier I capital
 
$1,549,465
$1,468,175
$772,247
$1,549,465
$772,247
Goodwill and indefinite lived assets
 
$629,688
$629,688
$61,631
$629,688
$61,631
Amortizing intangibles
 
$206,424
$222,621
$13,860
$206,424
$13,860
             
Performance Ratios
         
Return on average assets
 
0.62%
0.42%
0.70%
0.59%
0.55%
Return on average assets (operating) (a)
 
0.92%
0.92%
0.70%
0.89%
0.59%
Return on average common equity
 
4.98%
3.32%
6.75%
4.85%
5.45%
Return on average common equity (operating) (a)
 
7.40%
7.30%
6.75%
7.40%
5.77%
Tangible common equity ratio
 
8.56%
8.11%
9.68%
8.56%
9.68%
Earning asset yield (TE)
 
4.82%
4.77%
4.87%
4.81%
5.03%
Total cost of funds
 
0.50%
0.66%
1.02%
0.63%
1.21%
Net interest margin (TE)
 
4.32%
4.11%
3.85%
4.18%
3.82%
Noninterest expense as a percent of total revenue (TE)
           
    before amortization of purchased intangibles
           
    and securities transactions and merger expenses
 
66.98%
65.62%
64.25%
66.81%
64.96%
Net charge-offs as a percent of average loans
 
0.28%
0.49%
1.10%
0.40%
1.09%
Allowance for loan losses as a percent of period-end loans
 
1.06%
1.00%
1.62%
1.06%
1.62%
Allowance for loan losses to non-performing loans + accruing              
    loans 90 days past due
 
107.90%
85.22%
52.84%
107.90%
52.84%
Average loan/deposit ratio
 
72.76%
72.51%
72.78%
72.60%
71.95%
Noninterest income excluding
           
    securities transactions as a percent of
           
    total revenue (TE)
26.49%
31.43%
33.56%
29.30%
32.64%
             
             
(a) Excludes tax-effected merger related expenses and securities transactions
           

 
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Hancock Holding Company
         
 Financial Highlights
         
 (amounts in thousands)
         
 (unaudited)
           
   
Three Months Ended
Nine  Months Ended
   
9/30/2011
6/30/2011
9/30/2010
9/30/2011
9/30/2010
Asset Quality Information
         
Non-accrual loans (a)
 
$93,775
$109,234
$132,834
$93,775
$132,834
Restructured loans (b)
14,048
18,606
10,740
14,048
10,740
Total non-performing loans
 
107,823
127,840
143,574
107,823
143,574
Foreclosed assets
 
123,140
130,320
31,879
123,140
31,879
Total non-performing assets
$230,963
$258,160
$175,453
$230,963
$175,453
Non-performing assets as a percent of loans and foreclosed assets
 
2.06%
2.27%
3.55%
2.06%
3.55%
Accruing loans 90 days past due (a)
 
$1,638
$4,057
$7,292
$1,638
$7,292
Accruing loans 90 days past due as a percent of loans
 
0.01%
0.04%
0.15%
0.01%
0.15%
Non-performing assets + accruing loans 90 days past due
           
    to loans and foreclosed assets
 
2.07%
2.30%
3.70%
2.07%
3.70%
             
Net charge-offs
 
$7,825
$8,241
$13,754
$22,882
$40,926
Net charge-offs as a percent of average loans
 
0.28%
0.49%
1.10%
0.40%
1.09%
             
Allowance for loan losses
 
$118,113
$112,407
$79,725
$118,113
$79,725
Allowance for loan losses as a percent of period-end loans
 
1.06%
1.00%
1.62%
1.06%
1.62%
Allowance for loan losses to non-performing loans + accruing loans 90 days past due
 
107.90%
85.22%
52.84%
107.90%
52.84%
             
Provision for loan losses
 
$9,256
$9,144
$16,258
$27,221
$54,601
             
(a) Non-accrual loans and accruing loans past due 90 days or more do not include purchased impaired loans which were written down to fair value upon acquisition and accrete interest income over the remaining life of the loan.
 
             
(b) Included in restructured loans are $4.4 million and $8.4 million in non-accrual loans at 9/30/2011 and 6/30/2011, respectively.  Total excludes acquired credit impaired loans.
 
             
Allowance for Loan Losses
         
Beginning Balance
 
$112,407
$94,356
$77,221
$81,997
$66,050
     Provision for loan losses before FDIC benefit - covered loans
 
4,500
18,049
-
33,448
-
     Benefit attributable to FDIC loss share agreement
 
 (4,275)
(17,148)
-
 (31,777)
-
     Provision for loan losses - non-covered loans
 
9,031
8,243
16,258
25,550
54,601
Net provision for loan losses
9,256
9,144
16,258
27,221
54,601
Increase in indemnification asset
 
4,275
17,148
-
31,777
-
Charge-offs
 
14,530
12,993
16,486
36,602
46,644
Recoveries
 
6,705
4,752
2,732
13,720
5,718
Net charge-offs
 
7,825
8,241
13,754
22,882
40,926
Ending Balance
$118,113
$112,407
$79,725
$118,113
$79,725
             
Net Charge-off Information
         
Net charge-offs:
           
Commercial/real estate loans
 
$5,174
$6,382
$9,140
$15,735
$29,915
Residential mortgage loans
 
285
74
1,674
730
2,851
Direct consumer loans
 
1,084
871
1,003
3,222
2,852
Indirect consumer loans
 
367
178
569
769
1,626
Finance Company loans
 
915
736
1,368
2,426
3,682
Total net charge-offs
$7,825
$8,241
$13,754
$22,882
$40,926
             
Average loans:
           
Commercial/real estate loans
 
$8,173,802
$4,565,071
$3,056,578
$5,297,979
$3,097,429
Residential mortgage loans
 
1,495,864
864,601
753,686
1,007,625
744,682
Direct consumer loans
 
1,201,816
869,999
738,036
937,689
734,902
Indirect consumer loans
 
281,884
283,612
324,337
288,972
340,057
Finance Company loans
96,045
95,557
103,297
96,370
106,955
Total average loans
 
$11,249,411
$6,678,840
$4,975,934
$7,628,635
$5,024,025
             
Net charge-offs to average loans:
           
Commercial/real estate loans
 
0.25%
0.56%
1.19%
0.40%
1.29%
Residential mortgage loans
 
0.08%
0.03%
0.88%
0.10%
0.51%
Direct consumer loans
 
0.36%
0.40%
0.54%
0.46%
0.52%
Indirect consumer loans
 
0.52%
0.25%
0.70%
0.36%
0.64%
Finance Company loans
 
3.78%
3.09%
5.25%
3.37%
4.60%
Total net charge-offs to average loans
0.28%
0.49%
1.10%
0.40%
1.09%

 
11

 


Hancock Holding Company
         
 Financial Highlights
         
 (amounts in thousands)
         
 (unaudited)
           
   
Three Months Ended
Nine  Months Ended
   
9/30/2011
6/30/2011
9/30/2010
9/30/2011
9/30/2010
Income Statement
         
Interest income
 
$197,695
$115,477
$85,398
$395,705
$267,517
Interest income (TE)
 
200,835
118,335
88,284
404,676
276,468
Interest expense
20,653
16,418
18,576
52,840
66,244
Net interest income (TE)
 
180,182
101,917
69,708
351,836
210,224
Provision for loan losses
 
9,256
9,144
16,258
27,221
54,601
Noninterest income excluding
           
  securities transactions
 
64,935
46,715
35,208
145,834
101,882
Securities transactions gains/(losses)
 
16
 (36)
-
 (71)
-
Noninterest expense
194,019
121,366
68,060
388,404
208,002
Income before income taxes
 
38,718
15,228
17,712
73,003
40,552
Income tax expense
 
8,342
3,140
2,859
15,210
5,365
Net income
 
$30,376
$12,088
$14,853
$57,793
$35,187
             
Merger-related expenses
 
22,752
22,219
-
46,560
3,167
Securities transactions gains/(losses)
 
16
 (36)
-
 (71)
-
Taxes on adjustments
7,958
7,789
                      -
16,321
1,108
Operating income (c)
$45,154
$26,554
$14,853
$88,103
$37,246
             
Difference between interest income and interest income (te)
 
$3,140
$2,858
$2,886
$8,971
$8,951
Provision for loan losses
 
9,256
9,144
16,258
27,221
54,601
Merger-related expenses
 
22,752
22,219
-
46,560
3,167
Less securities transactions gains/(losses)
 
16
                 (36)
                      -
                   (71)
                      -
Income tax expense
 
8,342
3,140
2,859
15,210
5,365
Pre-tax, pre-provision profit (PTPP) (d)
$73,850
$49,485
$36,856
$155,826
$107,271
             
Noninterest Income and Noninterest Expense
         
Service charges on deposit accounts
 
$16,858
$12,343
$11,331
$38,745
$35,148
Trust fees
 
7,215
5,301
4,138
16,507
12,391
Debit card & merchant fees
 
11,064
5,968
3,649
20,542
11,173
Insurance fees
 
4,357
4,628
3,535
12,234
10,688
Investment & annuity fees
 
4,642
3,267
2,906
11,042
7,848
ATM fees
 
4,126
3,290
2,640
10,148
6,912
Secondary mortgage market operations
 
3,477
1,877
2,569
6,921
5,737
Other income
 
13,196
10,041
4,440
29,696
11,985
Noninterest income excluding
           
  securities transactions
 
$64,935
$46,715
$35,208
$145,835
$101,882
Securities transactions gains/(losses)
16
 (36)
-
 (71)
-
Total noninterest income including
           
 securities transactions
$64,951
$46,679
$35,208
$145,764
$101,882
             
Personnel expense
 
$94,844
$53,511
$35,890
$190,214
$106,036
Occupancy expense (net)
 
14,029
8,760
5,657
28,700
17,827
Equipment expense
 
5,362
3,661
2,496
11,877
7,863
Other operating expense
 
49,935
31,594
23,361
101,721
71,031
Amortization of intangibles
 
7,097
1,621
656
9,332
2,078
Merger-related expenses
 
22,752
22,219
                      -
46,560
3,167
Total noninterest expense
$194,019
$121,366
$68,060
$388,404
$208,002
             
             
(c) Net income less tax-effected merger costs and securities gains/losses. Management believes that this is a useful financial measure because it enables investors to assess ongoing operations.
 
(d)  Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense, merger items, and securities transactions. Management believes that PTPP profit is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle.

 
12

 

Hancock Holding Company
         
 Financial Highlights
         
 (amounts in thousands)
         
 (unaudited)
           
             
   
Three Months Ended
Nine  Months Ended
   
9/30/2011
6/30/2011
9/30/2010
9/30/2011
9/30/2010
Period-end Balance Sheet
         
Commercial/real estate loans
 
$8,075,247
$8,233,519
$3,068,415
$8,075,247
$3,068,415
Residential mortgage loans
 
1,451,506
1,443,817
693,862
1,451,506
693,862
Direct consumer loans
 
1,192,431
1,197,568
721,513
1,192,431
721,513
Indirect consumer loans
 
286,968
278,261
322,501
286,968
322,501
Finance Company loans
96,117
95,888
101,406
96,117
101,406
Total loans
 
11,102,269
11,249,053
4,907,697
11,102,269
4,907,697
Loans held for sale
 
64,545
67,081
54,201
64,545
54,201
Securities
 
4,604,835
4,573,973
1,619,869
4,604,835
1,619,869
Short-term investments
 
895,235
977,060
575,506
895,235
575,506
Earning assets
 
16,666,884
16,867,167
7,157,273
16,666,884
7,157,273
Allowance for loan losses
 
(118,113)
(112,407)
(79,725)
(118,113)
(79,725)
Other assets
 
2,866,918
3,002,785
1,161,814
2,866,918
1,161,814
Total assets
 
$19,415,689
$19,757,545
$8,239,362
$19,415,689
$8,239,362
             
Noninterest bearing deposits
 
$5,050,354
$4,852,440
$1,092,452
$5,050,354
$1,092,452
Interest bearing transaction deposits
 
5,744,234
5,779,322
1,936,146
5,744,234
1,936,146
Interest bearing public fund deposits
 
1,361,860
1,522,002
1,120,559
1,361,860
1,120,559
Time deposits
 
3,135,761
3,434,145
2,559,641
3,135,761
2,559,641
Total interest bearing deposits
10,241,855
10,735,469
5,616,346
10,241,855
5,616,346
Total deposits
 
15,292,209
15,587,909
6,708,798
15,292,209
6,708,798
Other borrowed funds
 
1,278,646
1,310,462
539,394
1,278,646
539,394
Other liabilities
 
418,172
472,861
125,390
418,172
125,390
Common shareholders' equity
 
2,426,662
2,386,313
865,780
2,426,662
865,780
Total liabilities & common equity
$19,415,689
$19,757,545
$8,239,362
$19,415,689
$8,239,362
             
Commercial/Real Estate Loans
         
Commercial non-real estate loans
 
$3,103,220
$3,076,731
$496,235
$3,103,220
$496,235
Construction and land development loans
 
1,345,761
1,371,351
655,606
1,345,761
655,606
Commercial real estate owner occupied
 
1,861,188
2,019,176
681,182
1,861,188
681,182
Commercial real estate non-owner occupied
 
1,214,962
1,221,861
719,226
1,214,962
719,226
Municipal loans
 
506,612
498,418
463,191
506,612
463,191
Lease financing
 
43,504
45,982
52,975
43,504
52,975
Total commercial/real estate loans
$8,075,247
$8,233,519
$3,068,415
$8,075,247
$3,068,415
             
Capital Ratios
         
Common shareholders' equity
 
$2,426,662
$2,386,313
$865,780
$2,426,662
$865,780
Tier 1 capital
 
1,549,465
1,458,102
772,247
1,549,465
772,247
Tangible common equity ratio
 
8.56%
8.11%
9.68%
8.56%
9.68%
Common equity (period-end) as a percent of total assets (period-end)
 
12.50%
12.08%
10.51%
12.50%
10.51%
Leverage (Tier 1) ratio
 
8.28%
13.77%
9.32%
8.28%
9.32%
Tier 1 risk-based capital ratio (e)
 
11.89%
11.05%
15.02%
11.89%
15.02%
Tier 1 common capital ratio (e)
 
11.82%
10.93%
15.02%
11.82%
15.02%
Total risk-based capital ratio (e)
13.95%
12.80%
16.28%
13.95%
16.28%
             
(e) = estimated for most recent period-end
         

 
13

 


Hancock Holding Company
         
 Financial Highlights
         
 (amounts in thousands)
         
 (unaudited)
           
             
   
Three Months Ended
Nine Months Ended
   
9/30/2011
6/30/2011
9/30/2010
9/30/2011
9/30/2010
Average Balance Sheet
         
Commercial/real estate loans
 
$8,173,802
$4,565,071
$3,056,578
$5,297,979
$3,097,429
Residential mortgage loans
 
1,495,864
864,601
753,686
1,007,625
744,682
Direct consumer loans
 
1,201,816
869,999
738,036
937,689
734,902
Indirect consumer loans
 
281,884
283,612
324,337
288,972
340,057
Finance Company loans
96,045
95,557
103,297
96,370
106,955
Total loans
 
11,249,411
6,678,840
4,975,934
7,628,635
5,024,025
Securities
 
4,358,802
2,224,665
1,532,293
2,686,787
1,583,716
Short-term investments
 
983,784
1,028,067
685,873
919,087
728,748
Earning assets
 
16,591,997
9,931,572
7,194,100
11,234,509
7,336,489
Allowance for loan losses
 
(114,304)
(95,313)
(78,232)
(97,574)
(70,812)
Other assets
 
3,077,991
1,752,563
1,248,792
2,031,816
1,243,465
Total assets
 
$19,555,684
$11,588,822
$8,364,660
$13,168,751
$8,509,142
             
Noninterest bearing deposits
 
$4,931,084
$2,231,775
$1,078,227
$2,782,980
$1,055,846
Interest bearing transaction deposits
 
5,840,493
3,139,872
1,955,635
3,683,983
1,924,032
Interest bearing Public Fund deposits
 
1,400,972
1,283,183
1,121,330
1,304,594
1,189,473
Time deposits
 
3,289,155
2,556,502
2,681,434
2,735,515
2,813,536
Total interest bearing deposits
10,530,620
6,979,557
5,758,399
7,724,092
5,927,041
Total deposits
 
15,461,704
9,211,332
6,836,626
10,507,072
6,982,887
Other borrowed funds
 
1,405,815
761,438
526,674
892,741
532,536
Other liabilities
 
268,762
157,500
128,424
177,367
131,250
Common shareholders' equity
 
2,419,403
1,458,552
872,936
1,591,571
862,469
Total liabilities & common equity
$19,555,684
$11,588,822
$8,364,660
$13,168,751
$8,509,142

 
14

 



Hancock Holding Company
             
 Financial Highlights
             
 (amounts in thousands)
             
 (unaudited)
               
                 
Supplemental Asset Quality Information (excluding covered assets and acquired loans) 1
   
9/30/2011
 
6/30/2011
 
9/30/2010
Non-accrual loans (2) (3)
     
$58,608
 
$68,216
 
$78,307
Restructured loans
   
14,048
 
18,606
 
10,740
Total non-performing loans
     
72,656
 
86,822
 
89,047
Foreclosed assets (4)
     
99,834
 
104,975
 
18,578
Total non-performing assets
   
$172,490
 
$191,797
 
$107,625
Non-performing assets as a percent of loans and foreclosed assets
     
3.72%
 
4.47%
 
2.63%
Accruing loans 90 days past due
     
531
 
2,504
 
7,292
Accruing loans 90 days past due as a percent of loans
     
0.01%
 
0.06%
 
0.18%
Non-performing assets + accruing loans 90 days past due
               
  to loans and foreclosed assets
     
3.73%
 
4.53%
 
2.81%
Allowance for loan losses (5)
     
84,366
 
83,160
 
79,725
Allowance for loan losses as a percent of period-end loans
     
1.86%
 
1.99%
 
1.96%
Allowance for loan losses to nonperforming loans + accruing loans
               
    90 days past due
     
115.27%
 
93.10%
 
82.75%
                 
 
(1) Covered and acquired loans are considered to be performing due to the application of the accretion method under acquisition accounting. Acquired loans are recorded at fair value with no allowance brought forward in accordance with acquisition accounting. Certain acquired loans and foreclosed assets are also covered under FDIC loss sharing agreements, which provide considerable protection against credit risk.  Due to the protection of loss sharing agreements and impact of acquisition accounting, management has excluded acquired loans and covered assets from this table to provide for improved comparability to prior periods and better perspective into asset quality trends.
(2) Excludes acquired covered loans not accounted for under the accretion method of $34,106, $39,514, and $54,527.
(3) Excludes non-covered acquired loans at fair value not accounted for under the accretion method of $1,061, $1,504 and $0 .
(4) Excludes covered foreclosed assets of $23,306, $25,345, and $13,301. Includes non-covered acquired foreclosed assets of $78,325, $83,204 and $0.  On June 4, 2011, Hancock acquired $81,195 of foreclosed assets in the Whitney merger.
(5) Excludes impairment recorded on covered acquired loans of $33,747, $29,247 and $0.
 
                 
                 
 
               
   
9/30/2011
   
Originated Loans (1)
 
Acquired Loans (2)
 
Covered Loans (3)
 
Total
Commercial/real estate loans
 
$3,119,291
 
$4,653,996
 
$301,960
 
$8,075,247
Residential mortgage loans
 
412,267
 
776,993
 
262,246
 
1,451,506
Direct consumer loans
 
618,077
 
416,729
 
157,625
 
1,192,431
Indirect consumer loans
 
286,968
 
-
 
-
 
286,968
Finance Company loans
96,117
 
-
 
-
 
96,117
Total loans
 
$4,532,720
 
$5,847,718
 
$721,831
 
$11,102,269
Change in loan balance from previous quarter
 
$349,362
 
($470,168)
 
($25,978)
 
($146,784)
                 
                 
(1) Loans which have been originated in the normal course of business.  Balances include $427 million of newly originated loans from legacy Whitney locations since the acquisition.
(2) Loans which have been acquired and no allowance brought forward in accordance with acquisition accounting.
(3) Loans which are covered by loss sharing agreements with the FDIC providing considerable protection against credit risk.

 
15

 

Hancock Holding Company
                           
 Average Balance and Net Interest Margin Summary
                 
 (amounts in thousands)
                             
 (unaudited)
                               
                                   
     
Three Months Ended
     
09/30/11
06/30/11
09/30/10
     
Interest
 
Volume
 
Rate
Interest
 
Volume
 
Rate
Interest
 
Volume
 
Rate
                                   
Average Earning Assets
                                 
Commercial & real estate loans (TE)
   
$113,111
 
$8,173,802
 
5.49%
$60,126
 
$4,565,071
 
5.28%
$40,557
 
$3,056,578
 
5.27%
Residential mortgage loans
   
26,166
 
1,495,864
 
7.00%
14,839
 
864,601
 
6.87%
10,150
 
753,686
 
5.39%
Consumer loans
   
28,328
 
1,579,745
 
7.11%
21,628
 
1,249,168
 
6.94%
20,927
 
1,165,670
 
7.12%
Loan fees & late charges
886
 
-
 
0.00%
234
 
-
 
0.00%
 (280)
 
-
 
0.00%
  Total loans (TE)
   
$168,491
 
$11,249,411
 
5.95%
$96,827
 
$6,678,840
 
5.81%
$71,354
 
$4,975,934
 
5.68%
     
 
 
 
   
 
 
 
   
 
 
 
   
US treasury securities
   
11
 
10,617
 
0.41%
13
 
10,802
 
0.47%
18
 
11,282
 
0.62%
US agency securities
   
1,851
 
362,689
 
2.04%
1,468
 
315,300
 
1.86%
727
 
134,114
 
2.17%
CMOs
   
7,129
 
1,089,308
 
2.62%
3,276
 
398,863
 
3.29%
2,673
 
310,210
 
3.45%
Mortgage backed securities
   
19,003
 
 2,567,892
 
2.96%
  13,233
 
  1,251,564
 
4.23%
      10,109
 
     870,489
 
4.65%
Municipals (TE)
   
    3,471
 
     306,863
 
4.52%
    2,728
 
     211,301
 
5.16%
  2,808
 
     187,962
 
5.98%
Other securities
       246
 
       21,433
 
4.58%
  275
 
  36,836
 
2.99%
     213
 
       18,236
 
4.66%
  Total securities (TE)
   
  31,711
 
 4,358,802
 
2.91%
  20,993
 
  2,224,666
 
3.77%
      16,548
 
  1,532,293
 
4.32%
     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Total short-term investments
   
       633
 
     983,784
 
0.26%
  516
 
  1,028,067
 
0.20%
     382
 
     685,873
 
0.22%
     
 
       
 
       
 
 
     
  Average earning assets yield (TE)
   
$200,835
 
$16,591,997
 
4.82%
$118,335
 
$9,931,573
 
4.77%
$88,284
 
$7,194,100
 
4.87%
         
 
       
 
     
 
 
   
Interest-bearing Liabilities
                                 
Interest-bearing transaction deposits
   
$2,955
 
$5,840,493
 
0.20%
$1,594
 
$3,139,872
 
0.20%
$2,022
 
$1,955,635
 
0.41%
Time deposits
   
  11,064
 
 3,289,155
 
1.33%
  10,568
 
  2,556,502
 
1.66%
      12,121
 
  2,681,434
 
1.79%
Public Funds
 
    1,119
 
 1,400,972
 
0.32%
    1,409
 
  1,283,183
 
0.44%
  2,004
 
  1,121,330
 
0.71%
   Total interest bearing deposits
   
$15,138
 
$10,530,620
 
0.57%
$13,571
 
$6,979,557
 
0.78%
$16,147
 
$5,758,399
 
1.11%
     
 
 
 
   
 
 
 
   
 
 
 
   
  Total borrowings
   
    5,515
 
 1,405,815
 
1.56%
    2,847
 
     761,438
 
1.50%
  2,429
 
     526,674
 
1.83%
                                   
  Total interest bearing liab cost
   
$20,653
 
$11,936,435
 
0.69%
$16,418
 
$7,740,995
 
0.85%
$18,576
 
$6,285,073
 
1.17%
                                   
Net interest-free funding sources
       
 4,655,562
       
  2,190,577
       
     909,027
   
                                   
Total Cost of Funds
   
$20,653
 
$16,591,997
 
0.50%
$16,418
 
$9,931,572
 
0.66%
$18,576
 
$7,194,100
 
1.02%
         
 
       
 
       
 
   
Net Interest Spread (TE)
   
$180,182
     
4.13%
$101,917
     
3.92%
$69,708
     
3.70%
                                   
Net Interest Margin (TE)
$180,182
 
$16,591,997
 
4.32%
$101,917
 
$9,931,572
 
4.11%
$69,708
 
$7,194,100
 
3.85%

 
16

 
Hancock Holding Company
                           
 Average Balance and Net Interest Margin Summary
                 
 (amounts in thousands)
                             
 (unaudited)

     
 Nine Months Ended
     
9/30/2011
9/30/2010
     
Interest
 
Volume
 
Rate
Interest
 
Volume
 
Rate
                         
Average Earning Assets
                       
Commercial & real estate loans (TE)
   
$213,504
 
$5,297,979
 
5.39%
$122,887
 
$3,097,429
 
5.30%
Residential mortgage loans
   
  51,829
 
  1,007,625
 
6.86%
      34,248
 
     744,682
 
6.13%
Consumer loans
   
  69,130
 
  1,323,031
 
6.99%
      64,300
 
  1,181,914
 
7.27%
Loan fees & late charges
    1,062
 
 -
 
0.00%
     207
 
      -
 
0.00%
  Total loans (TE)
   
      335,525
 
  7,628,635
 
5.88%
    221,642
 
  5,024,025
 
5.89%
     
 
 
 
   
 
 
 
   
US treasury securities
   
    36
 
  10,738
 
0.45%
  58
 
 11,652
 
0.67%
US agency securities
   
    4,089
 
     284,067
 
1.92%
  3,521
 
     167,816
 
2.80%
CMOs
   
  13,422
 
     615,835
 
2.91%
  7,531
 
     252,699
 
3.97%
Mortgage backed securities
   
  40,409
 
  1,517,871
 
3.55%
      33,411
 
     944,552
 
4.72%
Municipals (TE)
   
    8,979
 
     232,825
 
5.14%
  8,232
 
     190,432
 
5.76%
Other securities
  768
 
  25,450
 
4.03%
     652
 
 16,564
 
5.25%
  Total securities (TE)
   
  67,703
 
  2,686,786
 
3.36%
      53,405
 
  1,583,715
 
4.50%
     
 
 
 
   
 
 
 
   
  Total short-term investments
   
    1,448
 
     919,087
 
0.21%
  1,421
 
     728,748
 
0.26%
     
 
 
 
   
 
 
 
   
  Average earning assets yield (TE)
   
$404,676
 
$11,234,508
 
4.81%
$276,468
 
$7,336,488
 
5.03%
     
 
 
 
   
 
       
Interest-Bearing Liabilities
                       
Interest-bearing transaction deposits
   
$6,144
 
$3,683,983
 
0.22%
$7,124
 
$1,924,032
 
0.50%
Time deposits
   
  32,452
 
  2,735,515
 
1.59%
      43,968
 
2,813,536
 
2.09%
Public Funds
 
    4,120
 
  1,304,594
 
0.42%
  7,739
 
1,189,473
 
0.87%
   Total interest bearing deposits
   
$42,716
 
$7,724,092
 
0.74%
$58,831
 
$5,927,041
 
1.33%
     
 
 
 
 
 
 
 
 
 
 
  Total borrowings
   
  10,123
 
     892,741
 
1.52%
  7,413
 
     532,536
 
1.86%
     
 
 
 
   
 
 
 
   
  Total interest bearing liab cost
   
$52,840
 
$8,616,832
 
0.82%
$66,244
 
$6,459,577
 
1.37%
                         
Net interest-free funding sources
       
  2,617,676
       
876,912
   
                         
Total Cost of Funds
   
$52,840
 
$11,234,508
 
0.63%
$66,244
 
$7,336,489
 
1.21%
         
 
       
 
   
Net Interest Spread (TE)
   
$351,836
     
3.99%
$210,224
     
3.66%
                         
Net Interest Margin (TE)
$351,836
 
$11,234,508
 
4.18%
$210,224
 
$7,336,489
 
3.82%

 
17