Form 10-Q HANCOCK HOLDING CO For: Jun 30

Form 10-Q HANCOCK HOLDING CO For: Jun 30

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August 7, 2015 7:18 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

¨	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 001-36872

HANCOCK HOLDING COMPANY

(Exact name of registrant as specified in its charter)

Mississippi

64-0693170

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)


One Hancock Plaza, P.O. Box 4019, Gulfport, Mississippi		39502
(Address of principal executive offices)		(Zip Code)

(228) 868-4000

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, address and fiscal year, if changed since last report)

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 78,082,903 common shares were outstanding as of August 3, 2015.

Hancock Holding Company

Index


		Page Number
Part I. Financial Information

ITEM 1.	Financial Statements
	Consolidated Balance Sheets — June 30, 2015 (unaudited) and December 31, 2014		1

	Consolidated Statements of Income (unaudited) — Three and six months ended June 30, 2015 and 2014		2

	Consolidated Statements of Comprehensive Income (unaudited) — Three and six months ended June 30, 2015 and 2014		3

	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) – Three and six months ended June 30, 2015 and 2014		4

	Consolidated Statements of Cash Flows (unaudited) — Six months ended June 30, 2015 and 2014		5

	Notes to Consolidated Financial Statements (unaudited) — June 30, 2015		6-49

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		50-75

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk		75

ITEM 4.	Controls and Procedures		76

Part II. Other Information

ITEM 1.	Legal Proceedings		76

ITEM 1A.	Risk Factors		76

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		77

ITEM 3.	Default on Senior Securities		N/A

ITEM 4.	Mine Safety Disclosures		N/A

ITEM 5.	Other Information		N/A

ITEM 6.	Exhibits		77

Signatures			78

Part I. Financial Information

Item 1. Financial Statements

Hancock Holding Company and Subsidiaries

Consolidated Balance Sheets


(in thousands, except share data)	June 30, 2015			December 31, 2014
	unaudited
ASSETS
Cash and due from banks	$	329,608		$	356,455
Interest-bearing bank deposits		592,131			801,576
Federal funds sold		6,324			1,372
Securities available for sale, at fair value (amortized cost of $2,136,856 and $1,631,761)		2,151,134			1,660,165
Securities held to maturity (fair value of $2,310,103 and $2,186,340)		2,294,318			2,166,289
Loans held for sale		21,304			20,252
Loans		14,344,752			13,895,276
Less: allowance for loan losses		(131,087	)		(128,762	)

Loans, net		14,213,665			13,766,514

Property and equipment, net of accumulated depreciation of $198,595 and $193,527		383,686			398,384
Prepaid expenses		34,375			28,277
Other real estate, net		37,371			58,415
Accrued interest receivable		50,527			47,501
Goodwill		621,193			621,193
Other intangible assets, net		119,256			132,810
Life insurance contracts		431,895			426,617
FDIC loss share receivable		35,074			60,272
Deferred tax asset, net		78,203			74,335
Other assets		138,341			126,839

Total assets	$	21,538,405		$	20,747,266

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	6,180,814		$	5,945,208
Interest-bearing		11,120,974			10,627,623

Total deposits		17,301,788			16,572,831


Short-term borrowings		1,079,193			1,151,573
Long-term debt		507,341			374,371
Accrued interest payable		5,534			4,204
Other liabilities		214,509			171,885

Total liabilities		19,108,365			18,274,864


Stockholders’ equity
Common stock - $3.33 par value per share; 350,000,000 shares authorized, 78,093,729 and 80,426,485 shares outstanding		260,052			267,820
Capital surplus		1,705,531			1,689,291
Treasury shares at cost — 8,721,782 and 7,053,028		(235,239	)		(158,131	)
Retained earnings		759,780			723,496
Accumulated other comprehensive loss, net		(60,084	)		(50,074	)

Total stockholders’ equity		2,430,040			2,472,402

Total liabilities and stockholders’ equity	$	21,538,405		$	20,747,266

See notes to unaudited consolidated financial statements.

Hancock Holding Company and Subsidiaries

Consolidated Statements of Income

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except per share data)	2015			2014			2015			2014

Interest income:
Loans, including fees	$	141,905		$	151,603		$	288,872		$	302,585
Loans held for sale		222			152			318			347
Securities-taxable		21,674			21,069			42,464			43,777
Securities-tax exempt		845			965			1,725			1,992
Federal funds sold and other short term investments		274			212			628			440

Total interest income		164,920			174,001			334,007			349,141


Interest expense:
Deposits		7,621			5,251			14,747			10,603
Short-term borrowings		186			822			358			1,871
Long-term debt and other interest expense		5,322			3,150			8,953			6,327

Total interest expense		13,129			9,223			24,058			18,801


Net interest income		151,791			164,778			309,949			330,340
Provision for loan losses		6,608			6,691			12,762			14,654

Net interest income after provision for loan losses		145,183			158,087			297,187			315,686


Noninterest income:
Service charges on deposit accounts		17,908			19,269			35,223			37,981
Trust fees		11,795			11,499			22,995			21,737
Bank card and ATM fees		11,868			11,596			23,051			22,165
Investment and annuity fees		4,838			5,097			9,888			10,049
Secondary mortgage market operations		3,618			1,758			6,282			3,723
Insurance commissions and fees		2,595			1,888			4,349			5,632
Amortization of FDIC loss share receivable		(1,273	)		(3,321	)		(2,470	)		(7,229	)
Other income		9,525			8,612			17,769			19,039
Securities transactions gains, net		—			—			333			—

Total noninterest income		60,874			56,398			117,420			113,097


Noninterest expense:
Compensation expense		70,550			68,528			135,567			135,693
Employee benefits		12,870			12,588			28,504			26,855

Personnel expense		83,420			81,116			164,071			162,548

Net occupancy expense		11,804			10,869			22,981			22,135
Equipment expense		4,090			4,065			8,025			8,339
Data processing expense		14,012			12,887			27,568			25,306
Professional services expense		8,952			9,179			24,322			15,588
Amortization of intangibles		6,148			6,744			12,466			13,782
Telecommunications and postage		3,471			3,863			7,122			7,446
Deposit insurance and regulatory fees		4,213			2,743			7,808			5,710
Other real estate expense, net		501			84			957			1,861
Other expense		22,306			25,308			37,112			41,125

Total noninterest expense		158,917			156,858			312,432			303,840


Income before income taxes		47,140			57,627			102,175			124,943
Income taxes		12,311			17,665			27,187			35,866

Net income	$	34,829		$	39,962		$	74,988		$	89,077


Earnings per common share-basic	$	0.44		$	0.48		$	0.93		$	1.06
Earnings per common share-diluted	$	0.44		$	0.48		$	0.93		$	1.06
Dividends paid per share	$	0.24		$	0.24		$	0.48		$	0.48
Weighted average shares outstanding-basic		77,951			81,933			78,719			82,099
Weighted average shares outstanding-diluted		78,115			82,174			78,881			82,348

See notes to unaudited consolidated financial statements.

Hancock Holding Company and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2015			2014		2015			2014

Net income	$	34,829		$	39,962	$	74,988		$	89,077
Other comprehensive income:
Net change in unrealized (loss) gain		(18,370	)		10,898		(12,957	)		15,412
Reclassification adjustment for net losses (gains) realized and included in earnings		801			142		1,406			195
Valuation adjustment for employee benefit plans		(5,922	)		2,006		(5,922	)		2,006
Amortization of unrealized net gain on securities transferred to held to maturity		939			906		1,586			1,571

Other comprehensive income, before income taxes		(22,552	)		13,952		(15,887	)		19,184
Income tax (benefit) expense		(8,237	)		5,254		(5,877	)		7,096

Other comprehensive (losses) income net of income taxes		(14,315	)		8,698		(10,010	)		12,088

Comprehensive income	$	20,514		$	48,660	$	64,978		$	101,165

See notes to unaudited consolidated financial statements.

Hancock Holding Company and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)


	Common Stock						Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss), net			Treasury Stock			Total
(in thousands, except share data)	Shares			Amount			Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss), net			Treasury Stock			Total
Balance, January 1, 2014		82,237,162		$	273,850		$	1,647,467	$	628,166		$	(35,379	)	$	(89,035	)	$	2,425,069

Net income		—			—			—		89,077			—			—			89,077
Other comprehensive income		—			—			—		—			12,088			—			12,088

Comprehensive income		—			—			—		89,077			12,088			—			101,165
Cash dividends declared ($0.48 per common share)		—			—			—		(40,301	)		—			—			(40,301	)
Common stock activity, long-term incentive plan		213,359			710			44,582		—			—			(38,643	)		6,649
Purchase of common stock under stock buyback program		(590,222	)		(1,965	)		—		—			—			1,965			—

Balance, June 30, 2014		81,860,299		$	272,595		$	1,692,049	$	676,942		$	(23,291	)	$	(125,713	)	$	2,492,582



Balance, January 1, 2015		80,426,485		$	267,820		$	1,689,291	$	723,496		$	(50,074	)	$	(158,131	)	$	2,472,402

Net income		—			—			—		74,988			—			—			74,988
Other comprehensive income		—			—			—		—			(10,010	)		—			(10,010	)

Comprehensive income		—			—			—		74,988			(10,010	)		—			64,978
Cash dividends declared ($0.48 per common share)		—			—			—		(38,704	)		—			—			(38,704	)
Common stock activity, long-term incentive plan		230,851			769			16,240		—			—			(10,375	)		6,634
Purchase of common stock under stock buyback program		(2,563,607	)		(8,537	)		—		—			—			(66,733	)		(75,270	)

Balance, June 30, 2015		78,093,729		$	260,052		$	1,705,531	$	759,780		$	(60,084	)	$	(235,239	)	$	2,430,040

See notes to unaudited consolidated financial statements.

Hancock Holding Company and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended June 30,
(in thousands)	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	74,988		$	89,077
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		14,399			15,666
Provision for loan losses		12,762			14,654
(Gain) loss on other real estate owned		(374	)		2,133
Deferred tax expense		10,838			21,495
Increase in cash surrender value of life insurance contracts		(5,336	)		(4,601	)
Loss (gain) on disposal of other assets		1,694			(265	)
Net (increase) decrease in loans held for sale		(2,995	)		338
Net amortization of securities premium/discount		9,741			8,543
Amortization of intangible assets		12,466			13,782
Amortization of FDIC indemnification asset		2,470			7,229
Stock-based compensation expense		6,353			7,120
Decrease in interest payable and other liabilities		(6,310	)		(10,085	)
Net payments from FDIC for loss share claims		14,153			—
Decrease in FDIC loss share receivable		5,147			8,730
(Increase) decrease in other assets		(16,925	)		6,260
Other, net		(2,338	)		4,010

Net cash provided by operating activities		130,733			184,086


CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities		9,230			1,301
Proceeds from maturities of securities available for sale		562,162			145,812
Purchases of securities available for sale		(1,083,192	)		(48,404	)
Proceeds from maturities of securities held to maturity		187,864			266,657
Purchases of securities held to maturity		(266,759	)		(1,031	)
Net decrease (increase) in interest-bearing bank deposits		209,445			(172,106	)
Net (increase) decrease in federal funds sold and short-term investments		(4,952	)		258
Net increase in loans		(463,593	)		(581,169	)
Purchases of property and equipment		(13,896	)		(10,881	)
Proceeds from sales of property and equipment		12,168			6,946
Proceeds from sales of other real estate		31,953			29,688
Other, net		(8,656	)		14,873

Net cash used in investing activities		(828,226	)		(348,056	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits		728,957			(115,289	)
Net (decrease) increase in short-term borrowings		(72,380	)		405,704
Repayments of long-term debt		(17,600	)		(17,756	)
Net proceeds from issuance of long-term debt		145,296			6,921
Dividends paid		(38,704	)		(40,301	)
Purchase of common stock under stock buyback program		(75,270	)		—
Proceeds from exercise of stock options		347			860

Net cash provided by financing activities		670,646			240,139

NET (DECREASE) INCREASE IN CASH AND DUE FROM BANKS		(26,847	)		76,169
CASH AND DUE FROM BANKS, BEGINNING		356,455			348,440

CASH AND DUE FROM BANKS, ENDING	$	329,608		$	424,609


SUPPLEMENTAL INFORMATION FOR NON-CASH INVESTING AND FINANCING ACTIVITIES
Assets acquired in settlement of loans	$	10,390		$	15,299

See notes to unaudited consolidated financial statements.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

1.	Basis of Presentation

The consolidated financial statements include the accounts of Hancock Holding Company and all other entities in which it has a controlling interest (the “Company”). The financial statements include all adjustments that are, in the opinion of management, necessary to present fairly the Company’s financial condition, results of operations, changes in stockholders’ equity and cash flows for the interim periods presented. Some financial information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted in this Form 10-Q pursuant to Securities and Exchange Commission rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Financial information reported in these financial statements is not necessarily indicative of the Company’s financial condition, results of operations, or cash flows for any other interim or annual period.

Use of Estimates

The accounting principles the Company follows and the methods for applying these principles conform with GAAP and with those generally practiced within the banking industry. These accounting principles require management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

Critical Accounting Policies and Estimates

There were no material changes or developments with respect to methodologies that the Company uses when applying what management believes are critical accounting policies and developing critical accounting estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

2.	Securities

The amortized cost and fair value of securities classified as available for sale and held to maturity follow.


Securities Available for Sale
(in thousands)	June 30, 2015								December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
US Treasury and government agency securities	$	100,160	$	—	$	1,539	$	98,621	$	300,207	$	372	$	71	$	300,508
Municipal obligations		12,723		177		25		12,875		13,995		186		5		14,176
Mortgage-backed securities		1,802,249		26,146		9,856		1,818,539		1,217,293		31,094		2,823		1,245,564
Collateralized mortgage obligations		215,713		546		1,471		214,788		88,093		—		1,229		86,864
Corporate debt securities		3,500		—		—		3,500		3,500		—		—		3,500
Equity securities		2,511		324		24		2,811		8,673		891		11		9,553

	$	2,136,856	$	27,193	$	12,915	$	2,151,134	$	1,631,761	$	32,543	$	4,139	$	1,660,165


Securities Held to Maturity
(in thousands)	June 30, 2015								December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
US Treasury and government agency securities	$	200,000	$	55	$	770		199,285	$	—	$	—	$	—	$	—
Municipal obligations		186,528		3,074		1,834		187,768		180,615		3,416		1,144		182,887
Mortgage-backed securities		898,638		19,378		150		917,866		899,923		23,897		162		923,658
Collateralized mortgage obligations		1,009,152		5,192		9,160		1,005,184		1,085,751		5,590		11,546		1,079,795

	$	2,294,318	$	27,699	$	11,914	$	2,310,103	$	2,166,289	$	32,903	$	12,852	$	2,186,340

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

2.	Securities (continued)

The following table presents the amortized cost and fair value of debt securities at June 30, 2015 by contractual maturity. Actual maturities will differ from contractual maturities because of rights to call or repay obligations with or without penalties and scheduled and unscheduled principal payments on mortgage-backed securities and collateralized mortgage obligations.


(in thousands)	Amortized Cost		Fair Value
Debt Securities Available for Sale
Due in one year or less	$	140,435	$	138,065
Due after one year through five years		84,499		85,910
Due after five years through ten years		262,769		270,342
Due after ten years		1,646,642		1,654,006

Total available for sale debt securities	$	2,134,345	$	2,148,323


	Amortized Cost		Fair Value

Debt Securities Held to Maturity

Due in one year or less	$	463,052	$	462,421
Due after one year through five years		326,452		322,348
Due after five years through ten years		112,736		111,390
Due after ten years		1,392,078		1,413,944

Total held to maturity securities	$	2,294,318	$	2,310,103

The Company held no securities classified as trading at June 30, 2015 or December 31, 2014.

The details for securities classified as available for sale with unrealized losses for the periods indicated follow.


June 30, 2015	Losses < 12 months				Losses 12 months or >				Total
(in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
US Treasury and government agency securities	$	98,469	$	1,538	$	95	$	1	$	98,564	$	1,539
Municipal obligations		2,975		25		—		—		2,975		25
Mortgage-backed securities		678,428		6,944		117,793		2,912		796,221		9,856
Collateralized mortgage obligations		99,688		628		36,440		843		136,128		1,471
Equity securities		1,518		23		2		1		1,520		24

	$	881,078	$	9,158	$	154,330	$	3,757	$	1,035,408	$	12,915

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

2.	Securities (continued)


December 31, 2014	Losses < 12 months				Losses 12 months or >				Total
(in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
US Treasury and government agency securities	$	99,950	$	70	$	121	$	1	$	100,071	$	71
Municipal obligations		2,995		5		—		—		2,995		5
Mortgage-backed securities		38,955		163		125,641		2,660		164,596		2,823
Collateralized mortgage obligations		—		—		86,864		1,229		86,864		1,229
Equity securities		5,998		10		3		1		6,001		11

	$	147,898	$	248	$	212,629	$	3,891	$	360,527	$	4,139

The details for securities classified as held to maturity with unrealized losses for the periods indicated follow.


June 30, 2015	Losses < 12 months				Losses 12 months or >				Total
(in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
US Treasury and government agency securities	$	149,230	$	770	$	—	$	—	$	149,230	$	770
Municipal obligations		21,058		379		48,219		1,455		69,277		1,834
Mortgage-backed securities		169,049		150		—		—		169,049		150
Collateralized mortgage obligations		134,704		391		456,865		8,769		591,569		9,160

	$	474,041	$	1,690	$	505,084	$	10,224	$	979,125	$	11,914


December 31, 2014	Losses < 12 months				Losses 12 months or >				Total
(in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Municipal obligations	$	4,316	$	12	$	58,105	$	1,132	$	62,421	$	1,144
Mortgage-backed securities		—		—		95,522		162		95,522		162
Collateralized mortgage obligations		119,222		616		540,607		10,930		659,829		11,546

	$	123,538	$	628	$	694,234	$	12,224	$	817,772	$	12,852

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

2.	Securities (continued)

The unrealized losses relate to changes in market rates on fixed-rate debt securities since the respective purchase dates. In all cases, the indicated impairment would be recovered no later than the security’s maturity date or possibly earlier if the market price for the security increases with a reduction in the yield required by the market. None of the unrealized losses relate to the marketability of the securities or the issuer’s ability to meet contractual obligations. The Company believes it has adequate liquidity and, therefore, does not plan to and, more likely than not, will not be required to sell these securities before recovery of the indicated impairment. Accordingly, the unrealized losses on these securities have been determined to be temporary.

Securities with carrying values totaling $3.2 billion at June 30, 2015 and December 31, 2014 were pledged as collateral primarily to secure public deposits or securities sold under agreements to repurchase.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses

Loans, net of unearned income, consisted of the following.


(in thousands)	June 30, 2015		December 31, 2014

Originated loans:
Commercial non-real estate	$	6,058,998	$	5,917,728
Construction and land development		1,100,788		1,073,964
Commercial real estate		2,591,384		2,428,195
Residential mortgages		1,784,730		1,704,770
Consumer		1,854,591		1,685,542

Total originated loans	$	13,390,491	$	12,810,199


Acquired loans:
Commercial non-real estate	$	120,020	$	120,137
Construction and land development		9,064		21,123
Commercial real estate		598,962		688,045
Residential mortgages		1,554		2,378
Consumer		24		985

Total acquired loans	$	729,624	$	832,668


FDIC acquired loans:
Commercial non-real estate	$	6,666	$	6,195
Construction and land development		11,095		11,674
Commercial real estate		22,487		27,808
Residential mortgages		169,553		187,033
Consumer		14,836		19,699

Total FDIC acquired loans	$	224,637	$	252,409


Total loans:
Commercial non-real estate	$	6,185,684	$	6,044,060
Construction and land development		1,120,947		1,106,761
Commercial real estate		3,212,833		3,144,048
Residential mortgages		1,955,837		1,894,181
Consumer		1,869,451		1,706,226

Total loans	$	14,344,752	$	13,895,276

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

The following briefly describes the distinction among originated, acquired and FDIC acquired loans and certain significant accounting policies relevant to each category.

Originated loans

Loans reported as “originated” include both loans and leases originated for investment and acquired-performing loans where the discount (premium) has been fully accreted (amortized). Originated loans are reported at the principal balance outstanding, net of unearned income. Interest on loans and accretion of unearned income, including deferred loan fees, are computed in a manner that approximates a level yield on recorded principal. Interest on loans is recognized in income as earned.

The accrual of interest on an originated loan is discontinued when, in management’s opinion, it is probable that the borrower will be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. When accrual of interest is discontinued on a loan, all unpaid accrued interest is reversed and payments subsequently received are applied first to recover principal. Interest income is recognized for payments received after contractual principal has been satisfied. Loans are returned to accrual status when all the principal and interest contractually due are brought current and future payment performance is reasonably assured.

Acquired loans

Loans reported as “acquired” are those loans that were purchased in the 2011 Whitney Holding Corporation acquisition. These loans were recorded at estimated fair value at the acquisition date with no carryover of the related allowance for loan losses. The Whitney acquired loans were segregated between those considered to be performing (“acquired-performing”) and those with evidence of credit deterioration (“acquired-impaired”) based on such factors as past due status, nonaccrual status and credit risk ratings (rated substandard or worse). The acquired loans were further segregated into loan pools designed to facilitate the development of expected cash flows to be used in estimating fair value for purchase accounting. Acquired-performing loans are accounted for under ASC 310-20 and acquired-impaired loans are accounted for under ASC 310-30.

Acquired-performing loans were segregated into pools based on common risk characteristics such as loan type, credit risk ratings, and contractual interest rate and repayment terms. The major loan types included commercial and industrial loans not secured by real estate, real estate construction and land development loans, commercial real estate loans, residential mortgage loans, and consumer loans, with further segregation within certain loan types as needed. Expected cash flows, both principal and interest, from each pool were estimated based on key assumptions covering such factors as prepayments, default rates, and severity of loss given a default. These assumptions were developed using both historical experience and the portfolio characteristics at acquisition as well as available market research. The fair value for each acquired-performing pool was based on the estimate of expected cash flows from the pool discounted at prevailing market rates.

The difference at the acquisition date between the fair value and the contractual amounts due of an acquired-performing loan pool (the “fair value discount”) is accreted into income over the estimated life of the pool. Acquired-performing loans are placed on nonaccrual status and reported as nonperforming or past due using the same criteria applied to the originated portfolio.

The acquired-impaired loans were segregated into pools by identifying loans with common credit risk profiles and were based primarily on characteristics such as loan type and market area in which originated. The major loan types included commercial

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

and industrial loans not secured by real estate, real estate construction and land development loans, commercial real estate loans, and residential mortgage loans, with further segregation within certain loan types as needed. The acquired-impaired loans were further disaggregated by geographic region in recognition of the differences in general economic conditions affecting borrowers in certain states. The fair value estimate for each pool of acquired-impaired loans was based on the estimate of expected cash flows from the pool discounted at prevailing market rates.

The excess of estimated cash flows expected to be collected from an acquired-impaired loan pool over the pool’s carrying value is referred to as the accretable yield and is recognized in interest income using an effective yield method over the expected life of the loan pool. Each pool of acquired-impaired loans is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Acquired-impaired loans in pools with an accretable yield and expected cash flows that are reasonably estimable are considered to be accruing and performing even though collection of contractual payments on loans within the pool may be in doubt, because the pool is the unit of accounting. Acquired-impaired loans are generally not subject to individual evaluation for impairment and are not reported with impaired loans or troubled debt restructurings even if they would otherwise qualify for such treatment.

FDIC acquired loans and the related loss share receivable

Loans reported as “FDIC acquired” are loans purchased in the 2009 acquisition of Peoples First Community Bank (“Peoples First”) that were covered by two loss share agreements between the FDIC and the Company. These loans are accounted for as acquired-impaired loans as described above in the section on acquired loans. The Company treated all loans for the Peoples First acquisition as impaired based on the significant amount of deteriorating and nonperforming loans, comprised mainly of adjustable rate mortgages and home equity loans, located in Florida. The loss share receivable is measured separately from the related covered loans as it is not contractually embedded in the loans and is not transferrable should the loans be sold. The fair value of the loss share receivable at acquisition was estimated by discounting expected reimbursements for losses from the loans covered by the loss share agreements, including appropriate consideration of possible true-up payments to the FDIC at the expiration of the agreements.

The loss share receivable is reviewed and updated prospectively as loss estimates related to covered loan pools change. Increases in expected reimbursements under the loss sharing agreement will lead to an increase in the loss share receivable. A decrease in expected reimbursements is reflected first as a reversal of any previously recorded increase in the loss share receivable on the covered loan pool with the remainder reflected as an increase in the loss share receivable’s amortization rate. Increases and decreases in the loss share receivable related to changes in loss estimates result in reductions in or additions to the provision for loan losses, which serves to offset the impact on the provision from impairments or impairment reversals recognized on the underlying covered loan pool. The excess (or shortfall) of expected claims compared to the carrying value of the loss share receivable is accreted (amortized) into noninterest income over the shorter of the remaining life of the covered loan pool or the life of the loss share agreement. The impact on operations of an increase in the loss share receivable’s amortization rate is associated with an increase in the accretable yield on the underlying loan pool. The loss share receivable is reduced as cash is received from the FDIC related to losses incurred on covered assets.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

The following schedule shows activity in the loss share receivable for the six months ended June 30, 2015 and 2014.


	Six Months Ended
(in thousands)	June 30, 2015			June 30, 2014
Balance, January 1	$	60,272		$	113,834
Amortization		(2,470	)		(7,229	)
Charge-offs, write-downs and other recoveries		(4,667	)		(1,048	)
External expenses qualifying under loss share agreement		482			2,841
Changes due to changes in cash flow projections		(2,536	)		(7,875	)
Settlement of disallowed loss claims		(1,854	)		(10,268	)
Net payments from FDIC		(14,153	)		—

Ending balance	$	35,074		$	90,255

The loss share agreement covering the non-single family FDIC acquired portfolio expired in December 2014. The loss share agreement covering the single family portfolio expires in December 2019.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

The following schedule shows activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2015 and 2014 as well as the corresponding recorded investment in loans at the end of each period.


(in thousands)	Commercial non-real estate			Construction and land development			Commercial real estate			Residential mortgages			Consumer			Total
	Six Months Ended June 30, 2015
Originated loans
Allowance for loan losses:
Beginning balance	$	50,258		$	5,413		$	16,544		$	8,051		$	17,435		$	97,701
Charge-offs		(2,215	)		(828	)		(525	)		(1,292	)		(6,729	)		(11,589	)
Recoveries		2,051			1,308			426			449			2,491			6,725
Net provision for loan losses		9,586			(982	)		1,217			62			4,091			13,974

Ending balance	$	59,680		$	4,911		$	17,662		$	7,270		$	17,288		$	106,811


Ending balance:
Individually evaluated for impairment	$	2,903		$	73		$	2,203		$	163		$	6		$	5,348
Collectively evaluated for impairment		56,777			4,838			15,459			7,107			17,282			101,463

Loans:
Ending balance:	$	6,058,998		$	1,100,788		$	2,591,384		$	1,784,730		$	1,854,591		$	13,390,491
Individually evaluated for impairment		32,379			4,360			31,840			1,369			116			70,064
Collectively evaluated for impairment		6,026,619			1,096,428			2,559,544			1,783,361			1,854,475			13,320,427


Acquired loans
Allowance for loan losses:
Beginning balance	$	—		$	—		$	477		$	—		$	—		$	477
Charge-offs		—			—			—			—			—			—
Recoveries		—			—			—			—			—			—
Net provision for loan losses		—			—			(263	)		—			—			(263	)

Ending balance	$	—		$	—		$	214		$	—		$	—		$	214


Ending balance:
Individually evaluated for impairment	$	—		$	—		$	214		$	—		$	—		$	214
Amounts related to acquired-impaired loans		—			—			—			—			—			—
Collectively evaluated for impairment		—			—			—			—			—			—

Loans:
Ending balance:	$	120,020		$	9,064		$	598,962		$	1,554		$	24		$	729,624
Individually evaluated for impairment		—			—			2,543			—			—			2,543
Acquired-impaired loans		7,001			8,370			17,851			1,554			24			34,800
Collectively evaluated for impairment		113,019			694			578,568			—			—			692,281

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)


(in thousands)	Commercial non-real estate			Construction and land development			Commercial real estate			Residential mortgages			Consumer			Total
	Six Months Ended June 30, 2015
FDIC acquired loans
Allowance for loan losses:
Beginning balance	$	911		$	1,008		$	4,061		$	20,609		$	3,995		$	30,584
Charge-offs		(1,099	)		(285	)		(2,368	)		(168	)		(140	)		(4,060	)
Recoveries		14			406			465			2			136			1,023
Net provision for loan losses		242			(211	)		(78	)		(682	)		(220	)		(949	)
Increase (decrease) in FDIC loss share receivable		575			(528	)		532			(2,342	)		(773	)		(2,536	)

Ending balance	$	643		$	390		$	2,612		$	17,419		$	2,998		$	24,062


Ending balance:
Individually evaluated for impairment	$	—		$	—		$	—		$	—		$	—		$	—
Amounts related to acquired-impaired loans		643			390			2,612			17,419			2,998			24,062
Collectively evaluated for impairment		—			—			—			—			—			—

Loans:
Ending balance:	$	6,666		$	11,095		$	22,487		$	169,553		$	14,836		$	224,637
Individually evaluated for impairment		—			—			—			—			—			—
Acquired-impaired loans		6,666			11,095			22,487			169,553			14,836			224,637
Collectively evaluated for impairment		—			—			—			—			—			—


Total loans
Allowance for loan losses:
Beginning balance	$	51,169		$	6,421		$	21,082		$	28,660		$	21,430		$	128,762
Charge-offs		(3,314	)		(1,113	)		(2,893	)		(1,460	)		(6,869	)		(15,649	)
Recoveries		2,065			1,714			891			451			2,627			7,748
Net provision for loan losses		9,828			(1,193	)		876			(620	)		3,871			12,762
Increase (decrease) in FDIC loss share receivable		575			(528	)		532			(2,342	)		(773	)		(2,536	)

Ending balance	$	60,323		$	5,301		$	20,488		$	24,689		$	20,286		$	131,087


Ending balance:
Individually evaluated for impairment	$	2,903		$	73		$	2,417		$	163		$	6		$	5,562
Amounts related to acquired-impaired loans		643			390			2,612			17,419			2,998			24,062
Collectively evaluated for impairment		56,777			4,838			15,459			7,107			17,282			101,463

Loans:
Ending balance:	$	6,185,684		$	1,120,947		$	3,212,833		$	1,955,837		$	1,869,451		$	14,344,752
Individually evaluated for impairment		32,379			4,360			34,383			1,369			116			72,607
Acquired-impaired loans		13,667			19,465			40,338			171,107			14,860			259,437
Collectively evaluated for impairment		6,139,638			1,097,122			3,138,112			1,783,361			1,854,475			14,012,708

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)


	Commercial non-real estate			Construction and land development			Commercial real estate			Residential mortgages			Consumer			Total
(In thousands)	Six Months Ended June 30, 2014
Originated loans
Allowance for loan losses:
Beginning balance	$	33,091		$	6,180		$	20,649		$	6,892		$	12,073		$	78,885
Charge-offs		(3,658	)		(1,041	)		(1,373	)		(1,097	)		(7,622	)		(14,791	)
Recoveries		1,411			1,064			1,057			363			2,854			6,749
Net provision for loan losses		5,937			699			(5,060	)		772			5,381			7,729

Ending balance	$	36,781		$	6,902		$	15,273		$	6,930		$	12,686		$	78,572


Ending balance:
Individually evaluated for impairment	$	640		$	259		$	116		$	532		$	—		$	1,547
Collectively evaluated for impairment		36,141			6,643			15,157			6,398			12,686			77,025

Loans:
Ending balance:	$	4,610,696		$	903,610		$	2,173,006		$	1,469,977		$	1,501,163		$	10,658,452
Individually evaluated for impairment		6,765			6,702			11,198			2,532			—			27,197
Collectively evaluated for impairment		4,603,931			896,908			2,161,808			1,467,445			1,501,163			10,631,255


Acquired loans
Allowance for loan losses:
Beginning balance	$	1,603		$	10		$	34		$	—		$	—		$	1,647
Charge-offs		—			—			—			—			—			—
Recoveries		—			—			—			—			—			—
Net provision for loan losses		6,135			210			630			14			311			7,300

Ending balance	$	7,738		$	220		$	664		$	14		$	311		$	8,947


Ending balance:
Individually evaluated for impairment	$	65		$	24		$	188		$	—		$	—		$	277
Amounts related to acquired-impaired loans		—			—			—			—			—			—
Collectively evaluated for impairment		7,673			196			476			14			311			8,670

Loans:
Ending balance:	$	769,159		$	119,847		$	836,646		$	111,724		$	84,403		$	1,921,779
Individually evaluated for impairment		1,957			739			2,280			—			—			4,976
Acquired-impaired loans		17,410			18,976			27,993			4,547			1,057			69,983
Collectively evaluated for impairment		749,792			100,132			806,373			107,177			83,346			1,846,820

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)


	Commercial non-real estate			Construction and land development			Commercial real estate			Residential mortgages			Consumer			Total
(In thousands)	Six Months Ended June 30, 2014
FDIC acquired loans
Allowance for loan losses:
Beginning balance	$	2,323		$	2,655		$	10,929		$	27,989		$	9,198		$	53,094
Charge-offs		(70	)		(624	)		(4,022	)		(730	)		(1,130	)		(6,576	)
Recoveries		451			896			1,371			19			148			2,885
Net provision for loan losses		(57	)		(73	)		30			(173	)		(102	)		(375	)
(Decrease) increase in FDIC loss share receivable		(1,099	)		(1,302	)		225			(3,442	)		(2,257	)		(7,875	)

Ending balance	$	1,548		$	1,552		$	8,533		$	23,663		$	5,857		$	41,153


Ending balance:
Individually evaluated for impairment	$	—		$	—		$	—		$	—		$	—		$	—
Amounts related to acquired-impaired loans		1,548			1,552			8,533			23,663			5,857			41,153
Collectively evaluated for impairment		—			—			—			—			—			—

Loans:
Ending balance:	$	13,836		$	17,199		$	46,611		$	189,570		$	36,609		$	303,825
Individually evaluated for impairment		—			—			—			—			—			—
Acquired-impaired loans		13,836			17,199			46,611			189,570			36,609			303,825
Collectively evaluated for impairment		—			—			—			—			—			—


Total loans
Allowance for loan losses:
Beginning balance	$	37,017		$	8,845		$	31,612		$	34,881		$	21,271		$	133,626
Charge-offs		(3,728	)		(1,665	)		(5,395	)		(1,827	)		(8,752	)		(21,367	)
Recoveries		1,862			1,960			2,428			382			3,002			9,634
Net provision for loan losses		12,015			836			(4,400	)		613			5,590			14,654
(Decrease) increase in FDIC loss share receivable		(1,099	)		(1,302	)		225			(3,442	)		(2,257	)		(7,875	)

Ending balance	$	46,067		$	8,674		$	24,470		$	30,607		$	18,854		$	128,672


Ending balance:
Individually evaluated for impairment	$	705		$	283		$	304		$	532		$	—		$	1,824
Amounts related to acquired-impaired loans		1,548			1,552			8,533			23,663			5,857			41,153
Collectively evaluated for impairment		43,814			6,839			15,633			6,412			12,997			85,695

Loans:
Ending balance:	$	5,393,691		$	1,040,656		$	3,056,263		$	1,771,271		$	1,622,175		$	12,884,056
Individually evaluated for impairment		8,722			7,441			13,478			2,532			—			32,173
Acquired-impaired loans		31,246			36,175			74,604			194,117			37,666			373,808
Collectively evaluated for impairment		5,353,723			997,040			2,968,181			1,574,622			1,584,509			12,478,075

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

The following table shows the composition of nonaccrual loans by portfolio segment and class. Acquired-impaired and certain FDIC acquired loans are considered to be performing due to the application of the accretion method and are excluded from the table. FDIC acquired loans accounted for using the cost recovery method do not have an accretable yield and are included below as nonaccrual loans. Acquired-performing loans that have subsequently been placed on nonaccrual status are also included below.


(in thousands)	June 30, 2015		December 31, 2014

Originated loans:
Commercial non-real estate	$	42,454	$	15,511
Construction and land development		5,285		6,462
Commercial real estate		38,152		22,047
Residential mortgages		20,709		21,702
Consumer		4,855		5,574

Total originated loans	$	111,455	$	71,296


Acquired loans:
Commercial non-real estate	$	—	$	—
Construction and land development		—		—
Commercial real estate		5,401		6,139
Residential mortgages		—		—
Consumer		—		—

Total acquired loans	$	5,401	$	6,139


FDIC acquired loans:
Commercial non-real estate	$	—	$	—
Construction and land development		1,156		1,103
Commercial real estate		433		433
Residential mortgages		—		392
Consumer		—		174

Total FDIC acquired loans	$	1,589	$	2,102


Total loans:
Commercial non-real estate	$	42,454	$	15,511
Construction and land development		6,441		7,565
Commercial real estate		43,986		28,619
Residential mortgages		20,709		22,094
Consumer		4,855		5,748

Total loans	$	118,445	$	79,537

The estimated amount of interest that would have been recorded on nonaccrual loans had the loans not been classified as nonaccrual in the six months ended June 30, 2015 was approximately $1.8 million. Interest actually received and recorded as income on nonaccrual loans during that period was approximately $0.6 million.

Nonaccrual loans include loans modified in troubled debt restructurings (“TDRs”) of $4.9 million and $7.0 million at June 30, 2015 and December 31, 2014, respectively. Total TDRs, both accruing and nonaccruing, were $12.8 million as of June 30, 2015 and $16.0 million at December 31, 2014.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

The table below details TDRs that were modified during the six months ended June 30, 2015 and June 30, 2014 by portfolio segment.


	Six Months Ended
(in thousands)	June 30, 2015						June 30, 2014
Troubled Debt Restructurings:	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment

Originated loans:
Commercial non-real estate		—	$	—	$	—		—	$	—	$	—
Construction and land development		—		—		—		—		—		—
Commercial real estate		1		482		482		1		963		918
Residential mortgages		2		68		68		2		773		507
Consumer		1		20		20		—		—		—

Total originated loans		4	$	570	$	570		3	$	1,736	$	1,425


Acquired loans:
Commercial non-real estate		—	$	—	$	—		—	$	—	$	—
Construction and land development		—		—		—		—		—		—
Commercial real estate		—		—		—		—		—		—
Residential mortgages		—		—		—		—		—		—
Consumer		—		—		—		—		—		—

Total acquired loans		—	$	—	$	—		—	$	—	$	—


FDIC acquired loans:
Commercial non-real estate		—	$	—	$	—		—	$	—	$	—
Construction and land development		—		—		—		—		—		—
Commercial real estate		—		—		—		—		—		—
Residential mortgages		—		—		—		—		—		—
Consumer		—		—		—		—		—		—

Total FDIC acquired loans		—	$	—	$	—		—	$	—	$	—


Total loans:
Commercial non-real estate		—	$	—	$	—		—	$	—	$	—
Construction and land development		—		—		—		—		—		—
Commercial real estate		1		482		482		1		963		918
Residential mortgages		2		68		68		2		773		507
Consumer		1		20		20		—		—		—

Total loans		4	$	570	$	570		3	$	1,736	$	1,425

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

The table below details TDRs that subsequently defaulted within twelve months of modification.


	Six Months Ended
(in thousands)	June 30, 2015				June 30, 2014
Troubled Debt Restructurings:	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment

Originated loans:
Commercial non-real estate		—	$	—		1	$	909
Construction and land development		—		—		—		—
Commercial real estate		—		—		2		1,025
Residential mortgages		—		—		—		—
Consumer		—		—		—		—

Total originated loans		—	$	—		3	$	1,934


Acquired loans:
Commercial non-real estate		—	$	—		—	$	—
Construction and land development		—		—		—		—
Commercial real estate		—		—		—		—
Residential mortgages		—		—		—		—
Consumer		—		—		—		—

Total acquired loans		—	$	—		—	$	—


FDIC acquired loans:
Commercial non-real estate		—	$	—		—	$	—
Construction and land development		—		—		—		—
Commercial real estate		—		—		—		—
Residential mortgages		—		—		—		—
Consumer		—		—		—		—

Total FDIC acquired loans		—	$	—		—	$	—


Total loans:
Commercial non-real estate		—	$	—		1	$	909
Construction and land development		—		—		—		—
Commercial real estate		—		—		2		1,025
Residential mortgages		—		—		—		—
Consumer		—		—		—		—

Total loans		—	$	—		3	$	1,934

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

The tables below present loans that are individually evaluated for impairment disaggregated by class at June 30, 2015 and December 31, 2014. Loans individually evaluated for impairment include TDRs and loans that are determined to be impaired and have aggregate relationship balances of $1 million or more.


June 30, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized

(in thousands)

Originated loans:
With no related allowance recorded:
Commercial non-real estate	$	12,192	$	12,696	$	—	$	8,861	$	—
Construction and land development		57		57		—		1,295		—
Commercial real estate		12,001		14,005		—		10,376		20
Residential mortgages		—		—		—		345		2
Consumer		98		98		—		66		—

		24,348		26,856		—		20,943		22
With an allowance recorded:
Commercial non-real estate	$	20,187	$	20,949	$	2,903	$	8,116		3
Construction and land development		4,303		6,522		73		4,369		59
Commercial real estate		19,839		19,840		2,203		10,014		44
Residential mortgages		1,369		1,880		163		1,804		18
Consumer		18		18		6		15		3

		45,716		49,209		5,348		24,318		127
Total:
Commercial non-real estate		32,379		33,645		2,903	$	16,977		3
Construction and land development		4,360		6,579		73		5,664		59
Commercial real estate		31,840		33,845		2,203		20,390		64
Residential mortgages		1,369		1,880		163		2,149		20
Consumer		116		116		6		81		3

Total originated loans	$	70,064	$	76,065	$	5,348	$	45,261	$	149


Acquired loans:
With no related allowance recorded:
Commercial non-real estate	$	—	$	—	$	—	$	—	$	—
Construction and land development		—		—		—		—		—
Commercial real estate		—		—		—		—		—
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

		—		—		—		—		—
With an allowance recorded:
Commercial non-real estate		—		—		—	$	—		—
Construction and land development		—		—		—		—		—
Commercial real estate		2,543		2,563		214		2,604		—
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

		2,543		2,563		214		2,604		—
Total:
Commercial non-real estate		—		—		—	$	—		—
Construction and land development		—		—		—		—		—
Commercial real estate		2,543		2,563		214		2,604		—
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

Total acquired loans	$	2,543	$	2,563	$	214	$	2,604	$	—

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)


June 30, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized

(in thousands)
Total loans:
With no related allowance recorded:
Commercial non-real estate	$	12,192	$	12,696	$	—	$	8,861	$	—
Construction and land development		57		57		—		1,295		—
Commercial real estate		12,001		14,005		—		10,376		20
Residential mortgages		—		—		—		345		2
Consumer		98		98		—		66		—

		24,348		26,856		—		20,943		22
With an allowance recorded:
Commercial non-real estate		20,187		20,949		2,903	$	8,116		3
Construction and land development		4,303		6,522		73		4,369		59
Commercial real estate		22,382		22,403		2,417		12,618		44
Residential mortgages		1,369		1,880		163		1,804		18
Consumer		18		18		6		15		3

		48,259		51,772		5,562		26,922		127
Total:
Commercial non-real estate		32,379		33,645		2,903	$	16,977		3
Construction and land development		4,360		6,579		73		5,664		59
Commercial real estate		34,383		36,408		2,417		22,995		64
Residential mortgages		1,369		1,880		163		2,149		20
Consumer		116		116		6		81		3

Total loans	$	72,607	$	78,628	$	5,562	$	47,866	$	149

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)


December 31, 2014	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized

(in thousands)

Originated loans:
With no related allowance recorded:
Commercial non-real estate	$	3,003	$	3,646	$	—	$	1,209	$	51
Construction and land development		3,345		6,486		—		3,330		142
Commercial real estate		8,467		10,575		—		8,461		331
Residential mortgages		—		—		—		88		3
Consumer		—		—		—		—		—

		14,815		20,707		—		13,088		527
With an allowance recorded:
Commercial non-real estate		984		984		14		5,522		99
Construction and land development		4,905		4,906		19		6,660		137
Commercial real estate		3,654		3,654		11		7,500		109
Residential mortgages		2,656		3,311		330		2,204		50
Consumer		6		6		3		1		—

		12,205		12,861		377		21,887		395
Total:
Commercial non-real estate		3,987		4,630		14		6,732		150
Construction and land development		8,250		11,392		19		9,990		279
Commercial real estate		12,121		14,229		11		15,961		439
Residential mortgages		2,656		3,311		330		2,292		53
Consumer		6		6		3		1		—

Total originated loans	$	27,020	$	33,568	$	377	$	34,976	$	921


Acquired loans:
With no related allowance recorded:
Commercial non-real estate	$	—	$	—	$	—	$	357	$	—
Construction and land development		—		—		—		121		—
Commercial real estate		—		—		—		311		—
Residential mortgages		—		—		—		88		—
Consumer		—		—		—		—		—

		—		—		—		877		—
With an allowance recorded:
Commercial non-real estate		—		—		—		1,059		122
Construction and land development		—		—		—		1,037		56
Commercial real estate		2,691		2,720		477		1,357		75
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

		2,691		2,720		477		3,453		253
Total:
Commercial non-real estate		—		—		—		1,416		122
Construction and land development		—		—		—		1,158		56
Commercial real estate		2,691		2,720		477		1,668		75
Residential mortgages		—		—		—		88		—
Consumer		—		—		—		—		—

Total acquired loans	$	2,691	$	2,720	$	477	$	4,330	$	253

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)


December 31, 2014	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized

(in thousands)
Total loans:
With no related allowance recorded:
Commercial non-real estate	$	3,003	$	3,646	$	—	$	1,566	$	51
Construction and land development		3,345		6,486		—		3,451		142
Commercial real estate		8,467		10,575		—		8,772		331
Residential mortgages		—		—		—		176		3
Consumer		—		—		—		—		—

		14,815		20,707		—		13,965		527
With an allowance recorded:
Commercial non-real estate		984		984		14		6,581		221
Construction and land development		4,905		4,906		19		7,697		193
Commercial real estate		6,345		6,374		488		8,857		184
Residential mortgages		2,656		3,311		330		2,204		50
Consumer		6		6		3		1		—

		14,896		15,581		854		25,340		648
Total:
Commercial non-real estate		3,987		4,630		14		8,147		272
Construction and land development		8,250		11,392		19		11,148		335
Commercial real estate		14,812		16,949		488		17,629		515
Residential mortgages		2,656		3,311		330		2,380		53
Consumer		6		6		3		1		—

Total loans	$	29,711	$	36,288	$	854	$	39,305	$	1,175

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

The tables below present the age analysis of past due loans at June 30, 2015 and December 31, 2014. FDIC acquired and acquired-impaired loans accounted for in pools with an accretable yield are considered to be current.


June 30, 2015	30-59 days past due		60-89 days past due		Greater than 90 days past due		Total past due		Current		Total Loans		Recorded investment > 90 days and still accruing
(in thousands)

Originated loans:
Commercial non-real estate	$	5,215	$	3,090	$	10,250	$	18,555	$	6,040,443	$	6,058,998	$	826
Construction and land development		2,411		2,128		4,278		8,817		1,091,971		1,100,788		80
Commercial real estate		3,180		1,450		14,267		18,897		2,572,487		2,591,384		279
Residential mortgages		1,094		3,493		8,227		12,814		1,771,916		1,784,730		946
Consumer		10,414		3,286		3,228		16,928		1,837,663		1,854,591		1,347

Total	$	22,314	$	13,447	$	40,250	$	76,011	$	13,314,480	$	13,390,491	$	3,478


Acquired loans:
Commercial non-real estate	$	—	$	—	$	—	$	—	$	120,020	$	120,020	$	—
Construction and land development		—		—		—		—		9,064		9,064		—
Commercial real estate		1,954		138		2,032		4,124		594,838		598,962		—
Residential mortgages		—		—		—		—		1,554		1,554		—
Consumer		—		—		—		—		24		24		—

Total	$	1,954	$	138	$	2,032	$	4,124	$	725,500	$	729,624	$	—


FDIC acquired loans:
Commercial non-real estate	$	—	$	—	$	—	$	—	$	6,666	$	6,666	$	—
Construction and land development		—		—		1,156		1,156		9,939		11,095		—
Commercial real estate		—		—		433		433		22,054		22,487		—
Residential mortgages		—		—		—		—		169,553		169,553		—
Consumer		—		—		—		—		14,836		14,836		—

Total	$	—	$	—	$	1,589	$	1,589	$	223,048	$	224,637	$	—


Total loans:
Commercial non-real estate	$	5,215	$	3,090	$	10,250	$	18,555	$	6,167,129	$	6,185,684	$	826
Construction and land development		2,411		2,128		5,434		9,973		1,110,974		1,120,947		80
Commercial real estate		5,134		1,588		16,732		23,454		3,189,379		3,212,833		279
Residential mortgages		1,094		3,493		8,227		12,814		1,943,023		1,955,837		946
Consumer		10,414		3,286		3,228		16,928		1,852,523		1,869,451		1,347

Total	$	24,268	$	13,585	$	43,871	$	81,724	$	14,263,028	$	14,344,752	$	3,478

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)


December 31, 2014	30-59 days past due		60-89 days past due		Greater than 90 days past due		Total past due		Current		Total Loans		Recorded investment > 90 days and still accruing
(in thousands)

Originated loans:
Commercial non-real estate	$	4,380	$	1,742	$	8,560	$	14,682	$	5,903,046	$	5,917,728	$	630
Construction and land development		6,620		1,532		4,453		12,605		1,061,359		1,073,964		142
Commercial real estate		6,527		2,964		13,234		22,725		2,405,470		2,428,195		696
Residential mortgages		14,730		3,261		11,208		29,199		1,675,571		1,704,770		1,199
Consumer		8,422		2,450		4,365		15,237		1,670,305		1,685,542		1,897

Total	$	40,679	$	11,949	$	41,820	$	94,448	$	12,715,751	$	12,810,199	$	4,564


Acquired loans:
Commercial non-real estate	$	—	$	—	$	—	$	—	$	120,137	$	120,137	$	—
Construction and land development		111		—		—		111		21,012		21,123		—
Commercial real estate		3,861		282		1,591		5,734		682,311		688,045		261
Residential mortgages		—		—		—		—		2,378		2,378		—
Consumer		—		—		—		—		985		985		—

Total	$	3,972	$	282	$	1,591	$	5,845	$	826,823	$	832,668	$	261


FDIC acquired loans:
Commercial non-real estate	$	—	$	—	$	—	$	—	$	6,195	$	6,195	$	—
Construction and land development		—		—		1,103		1,103		10,571		11,674		—
Commercial real estate		—		—		433		433		27,375		27,808		—
Residential mortgages		—		272		—		272		186,761		187,033		—
Consumer		1		—		34		35		19,664		19,699		—

Total	$	1	$	272	$	1,570	$	1,843	$	250,566	$	252,409	$	—


Total loans:
Commercial non-real estate	$	4,380	$	1,742	$	8,560	$	14,682	$	6,029,378	$	6,044,060	$	630
Construction and land development		6,731		1,532		5,556		13,819		1,092,942		1,106,761		142
Commercial real estate		10,388		3,246		15,258		28,892		3,115,156		3,144,048		957
Residential mortgages		14,730		3,533		11,208		29,471		1,864,710		1,894,181		1,199
Consumer		8,423		2,450		4,399		15,272		1,690,954		1,706,226		1,897

Total	$	44,652	$	12,503	$	44,981	$	102,136	$	13,793,140	$	13,895,276	$	4,825

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

The following tables present the credit quality indicators of the Company’s various classes of loans at June 30, 2015 and December 31, 2014.

Commercial Non-Real Estate Credit Exposure

Credit Risk Profile by Internally Assigned Grade


(in thousands)	June 30, 2015								December 31, 2014
	Originated		Acquired		FDIC acquired		Total		Originated		Acquired		FDIC acquired		Total

Grade:
Pass	$	5,522,236	$	113,200	$	2,648	$	5,638,084	$	5,577,827	$	111,847	$	2,027	$	5,691,701
Pass-Watch		142,837		101		988		143,926		174,742		715		1,120		176,577
Special Mention		209,716		282		—		209,998		52,962		350		—		53,312
Substandard		184,178		6,437		3,001		193,616		112,153		7,225		3,017		122,395
Doubtful		31		—		29		60		44		—		31		75

Total	$	6,058,998	$	120,020	$	6,666	$	6,185,684	$	5,917,728	$	120,137	$	6,195	$	6,044,060

Construction Credit Exposure

Credit Risk Profile by Internally Assigned Grade


(in thousands)	June 30, 2015								December 31, 2014
	Originated		Acquired		FDIC acquired		Total		Originated		Acquired		FDIC acquired		Total

Grade:
Pass	$	1,048,380	$	1,743	$	2,789	$	1,052,912	$	1,012,128	$	14,377	$	2,468	$	1,028,973
Pass-Watch		7,471		2,275		519		10,265		21,516		432		532		22,480
Special Mention		4,920		—		313		5,233		7,097		129		319		7,545
Substandard		40,017		5,046		7,474		52,537		33,223		6,185		8,355		47,763

Total	$	1,100,788	$	9,064	$	11,095	$	1,120,947	$	1,073,964	$	21,123	$	11,674	$	1,106,761

Commercial Real Estate Credit Exposure

Credit Risk Profile by Internally Assigned Grade


(in thousands)	June 30, 2015								December 31, 2014
	Originated		Acquired		FDIC acquired		Total		Originated		Acquired		FDIC acquired		Total

Grade:
Pass	$	2,430,696	$	565,820	$	5,017	$	3,001,533	$	2,241,391	$	641,966	$	4,139	$	2,887,496
Pass-Watch		33,185		10,974		2,807		46,966		61,589		11,142		4,547		77,278
Special Mention		25,974		5,798		1,609		33,381		21,543		8,113		1,319		30,975
Substandard		101,512		16,370		13,054		130,936		103,651		26,824		17,803		148,278
Doubtful		17		—		—		17		21		—		—		21

Total	$	2,591,384	$	598,962	$	22,487	$	3,212,833	$	2,428,195	$	688,045	$	27,808	$	3,144,048

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

Residential Mortgage Credit Exposure

Credit Risk Profile Based on Payment Activity and Accrual Status


(in thousands)	June 30, 2015								December 31, 2014
	Originated		Acquired		FDIC acquired		Total		Originated		Acquired		FDIC acquired		Total

Performing	$	1,763,075	$	1,554	$	169,553	$	1,934,182	$	1,681,868	$	2,378	$	186,641	$	1,870,887
Nonperforming		21,655		—		—		21,655		22,902		—		392		23,294

Total	$	1,784,730	$	1,554	$	169,553	$	1,955,837	$	1,704,770	$	2,378	$	187,033	$	1,894,181

Consumer Credit Exposure

Credit Risk Profile Based on Payment Activity and Accrual Status


(in thousands)	June 30, 2015								December 31, 2014
	Originated		Acquired		FDIC acquired		Total		Originated		Acquired		FDIC acquired		Total

Performing	$	1,848,389	$	24	$	14,836	$	1,863,249	$	1,678,069	$	985	$	19,525	$	1,698,579
Nonperforming		6,202		—		—		6,202		7,473		—		174		7,647

Total	$	1,854,591	$	24	$	14,836	$	1,869,451	$	1,685,542	$	985	$	19,699	$	1,706,226

Loan review uses a risk-focused continuous monitoring program that provides for an independent, objective and timely review of credit risk within the Company. Below are the definitions of the Company’s internally assigned grades.

Commercial:

•

Pass - loans properly approved, documented, collateralized, and performing which do not reflect an abnormal credit risk.

•

Pass - Watch - credits in this category are of sufficient risk to cause concern. This category is reserved for credits that display negative performance trends. The “Watch” grade should be regarded as a transition category.

•

Special Mention – a criticized asset category defined as having potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the credit or the institution’s credit position. Special mention credits are not considered part of the Classified credit categories and do not expose an institution to sufficient risk to warrant adverse classification.

•

Substandard – an asset that is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

3.	Loans and Allowance for Loan Losses (continued)

•

Doubtful – an asset that has all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make collection nor liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

•

Loss – credits classified as Loss are considered uncollectable and are charged off promptly once so classified.

Residential and Consumer:

•

Performing – loans on which payments of principal and interest are less than 90 days past due.

•

Nonperforming – a nonperforming loan is a loan that is in default or close to being in default and there are good reasons to doubt that payments will be made in full. All loans rated as nonaccrual loans are also classified as nonperforming.

Changes in the carrying amount of acquired-impaired loans and accretable yield are presented in the following table for the six months ended June 30, 2015 and the year ended December 31, 2014.


(in thousands)	June 30, 2015												December 31, 2014
	FDIC acquired						Acquired						FDIC acquired						Acquired
	Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield

Balance at beginning of period	$	252,409		$	112,788		$	61,276		$	74,668		$	358,666		$	122,715		$	68,075		$	131,370
Payments received, net		(34,649	)		(359	)		(35,640	)		(12,284	)		(125,388	)		(1,071	)		(50,178	)		(32,855	)
Accretion		6,877			(6,877	)		9,163			(9,163	)		19,131			(19,131	)		43,379			(43,379	)
(Decrease) in expected cash flows based on actual cash flows and changes in cash flow assumptions		—			(3,918	)		—			(219	)		—			(1,137	)		—			(203	)
Net transfers from nonaccretable difference to accretable yield		—			(2,878	)		—			(2,104	)		—			11,412			—			19,735

Balance at end of period	$	224,637		$	98,756		$	34,799		$	50,898		$	252,409		$	112,788		$	61,276		$	74,668

Included in loans are $7.0 million and $13.7 million of consumer loans secured by single family residential mortgage real estate that are in process of foreclosure as of June 30, 2015 and December 31, 2014, respectively. Of these loans, $6.2 million and $8.1 million, respectively, are covered by an FDIC loss share agreement that provides significant protection against losses. Loans in process of foreclosure include those for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction. In addition to the single family residential real estate loans in process of foreclosure, the Company also held $9.9 million and $12.7 million of foreclosed single family residential properties in other real estate owned as of June 30, 2015 and December 31, 2014, respectively. Of these foreclosed properties, $4.2 million and $8.2 million as of June 30, 2015 and December 31, 2014, respectively, are also covered by the FDIC loss share agreement.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

4.	Securities Sold under Agreements to Repurchase

Included in short term borrowings at June 30, 2015 was $466.3 million of customer securities sold under agreements to repurchase (“repurchase agreements”) that mature daily and were secured by agency securities. The Company borrows funds on a secured basis by selling securities under agreements to repurchase, mainly in connection with treasury-management services offered to its deposit customers. As the Company maintains effective control over assets sold under agreements to repurchase, the securities continue to be carried on the consolidated statements of financial condition. Repurchase agreements mature daily and the Company acts as a borrower transferring assets to the counterparty. As such, the Company’s risk is very limited.

5.	Long-Term Debt

Long-term debt consisted of the following.


	June 30,		December 31,
(in thousands)	2015		2014
Subordinated notes payable, maturing June 2045	$	150,000	$	—
Subordinated notes payable, maturing April 2017		98,011		98,011
Term note payable, maturing December 2015		132,000		149,600
Other long-term debt		127,330		126,760

Total long-term debt	$	507,341	$	374,371

On March 9, 2015, the Company completed the issuance of subordinated notes payable with an aggregate principal amount of $150 million. The notes mature on June 15, 2045 and accrue interest at a rate of 5.95% per annum. Quarterly interest payments began in June. Subject to prior approval by the Federal Reserve, the Company may redeem the notes in whole or in part on any interest payment date on or after June 15, 2020. This debt qualifies as Tier 2 capital in the calculation of certain regulatory capital ratios.

The 5.875% fixed-rate subordinated notes maturing April 2017 had been issued by Whitney National Bank and were assumed by Hancock in the Whitney acquisition. As of June 30, 2015, 20% of the balance of these notes qualifies as capital in the calculation of certain regulatory capital ratios. The notes will no longer qualify as capital as of April 1, 2016.

On December 21, 2012, the Company entered into a three-year term loan agreement that provides for a $220 million term loan facility, all of which was borrowed on the closing date. The agreement also provides for up to $50 million in additional borrowings under the loan facility, subject to obtaining additional commitments from existing or new lenders and satisfaction of certain other conditions. Amounts borrowed under the loan facility bear interest at a variable rate based on LIBOR plus 1.875% per annum. The loan agreement requires quarterly principal payments of $8.8 million, and outstanding borrowings may be prepaid in whole or in part at any time prior to the December 21, 2015 maturity date without premium or penalty.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

5.	Long-Term Debt (continued)

The Company and the Bank must satisfy certain financial covenants in the term loan agreement and are subject to other restrictions customary in financings of this nature, none of which are expected to adversely impact our operations. The financial covenants cover, among other things, the maintenance of minimum levels for regulatory capital ratios, consolidated net worth, consolidated return on assets, and holding company liquidity and dividend capacity, and specify a maximum ratio of consolidated nonperforming assets to consolidated total loans and other real estate, calculated without FDIC acquired assets. The Company was in compliance with all covenants as of June 30, 2015 and December 31, 2014.

Substantially all of the other long-term debt consists of borrowings associated with tax credit fund activities. Although these borrowings have indicated maturities through 2052, they are expected to be paid off at the end of their seven-year compliance period.

6.	Fair Value

The Financial Accounting Standards Board (“FASB”) defines fair value as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The FASB’s guidance also established a fair value hierarchy that prioritizes the inputs to these valuation techniques used to measure fair value, giving preference to quoted prices in active markets for identical assets or liabilities (“level 1”) and the lowest priority to unobservable inputs such as a reporting entity’s own data (“level 3”). Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in markets that are not active, observable inputs other than quoted prices, such as interest rates and yield curves, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

6.	Fair Value (continued)

Fair Value of Assets and Liabilities Measured on a Recurring Basis

The following tables present for each of the fair value hierarchy levels the Company’s assets and liabilities that are measured at fair value on a recurring basis in the consolidated balance sheets.


	June 30, 2015
(in thousands)	Level 1		Level 2		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	98,621	$	98,621
Municipal obligations		—		12,875		12,875
Corporate debt securities		—		3,500		3,500
Mortgage-backed securities		—		1,818,539		1,818,539
Collateralized mortgage obligations		—		214,788		214,788
Equity securities		2,811		—		2,811

Total available for sale securities		2,811		2,148,323		2,151,134

Derivative assets (1)		—		24,096		24,096

Total recurring fair value measurements - assets	$	2,811	$	2,172,419	$	2,175,230


Liabilities
Derivative liabilities (1)	$	—	$	22,157	$	22,157

Total recurring fair value measurements - liabilities	$	—	$	22,157	$	22,157

(1)	For further disaggregation of derivative assets and liabilities, see Note 7 - Derivatives.


	December 31, 2014
(in thousands)	Level 1		Level 2		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	300,508	$	300,508
Municipal obligations		—		14,176		14,176
Corporate debt securities		—		3,500		3,500
Mortgage-backed securities		—		1,245,564		1,245,564
Collateralized mortgage obligations		—		86,864		86,864
Equity securities		9,553		—		9,553

Total available for sale securities		9,553		1,650,612		1,660,165

Derivative assets (1)		—		19,432		19,432

Total recurring fair value measurements - assets	$	9,553	$	1,670,044	$	1,679,597


Liabilities
Derivative liabilities (1)	$	—	$	20,860	$	20,860

Total recurring fair value measurements - liabilities	$	—	$	20,860	$	20,860

(1)	For further disaggregation of derivative assets and liabilities, see Note 7 - Derivatives.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

6.	Fair Value (continued)

Securities classified as level 1 within the valuation hierarchy include U.S. Treasury securities and certain other debt and equity securities. Level 2 classified securities include obligations of U.S. Government agencies and U.S. Government-sponsored agencies, residential mortgage-backed securities and collateralized mortgage obligations that are issued or guaranteed by U.S. government agencies, and state and municipal bonds. The level 2 fair value measurements for investment securities are obtained quarterly from a third-party pricing service that uses industry-standard pricing models. Substantially all of the model inputs are observable in the marketplace or can be supported by observable data.

The Company invests only in high quality securities of investment grade quality with a targeted duration, for the overall portfolio, generally between two and five. Company policies generally limit investments to agency securities and municipal securities determined to be investment grade according to an internally generated score which generally includes a rating of not less than “Baa” or its equivalent by a nationally recognized statistical rating agency. There were no transfers between valuation hierarchy levels during the periods shown.

The fair value of derivative financial instruments, which are predominantly customer interest rate swaps, is obtained from a third-party pricing service that uses an industry-standard discounted cash flow model that relies on inputs, LIBOR swap curves and Overnight Index swap rate curves, observable in the marketplace. To comply with the accounting guidance, credit valuation adjustments are incorporated in the fair values to appropriately reflect nonperformance risk for both the Company and the counterparties. Although the Company has determined that the majority of the inputs used to value the derivative instruments fall within level 2 of the fair value hierarchy, the credit value adjustments utilize level 3 inputs, such as estimates of current credit spreads. The Company has determined that the impact of the credit valuation adjustments is not significant to the overall valuation of these derivatives. As a result, the Company has classified its derivative valuations in their entirety in level 2 of the fair value hierarchy. The Company’s policy is to measure counterparty credit risk quarterly for all derivative instruments, including those subject to master netting arrangements consistent with how market participants would price the net risk exposure at the measurement date.

The Company also has certain derivative instruments associated with the Bank’s mortgage-banking activities. These derivative instruments include interest rate lock commitments on prospective residential mortgage loans and forward commitments to sell these loans to investors on a best efforts delivery basis. The fair value of these derivative instruments is measured using observable market prices for similar instruments and is classified as a level 2 measurement.

Fair Value of Assets Measured on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis. Collateral-dependent impaired loans are level 2 assets measured at the fair value of the underlying collateral based on independent third-party appraisals that take into consideration market-based information such as recent sales activity for similar assets in the property’s market.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

6.	Fair Value (continued)

Other real estate owned, including both foreclosed property and surplus banking property, are level 3 assets that are adjusted to fair value, less estimated selling costs, upon transfer to other real estate owned. Subsequently, other real estate owned is carried at the lower of carrying value or fair value less estimated selling costs. Fair values are determined by sales agreement or third-party appraisals as discounted for estimated selling costs, information from comparable sales, and marketability of the property.

The fair value information presented below is not as of the period-end, rather it was as of the date the fair value adjustment was recorded during the twelve months ended June 30, 2015, and excludes nonrecurring fair value measurements of assets no longer on the balance sheet.

The following tables present the Company’s financial assets that are measured at fair value on a nonrecurring basis for each of the fair value hierarchy levels.


	June 30, 2015
(in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent impaired loans	$	—	$	60,165	$	—	$	60,165
Other real estate owned		—		—		21,289		21,289

Total nonrecurring fair value measurements	$	—	$	60,165	$	21,289	$	81,484


	December 31, 2014
(in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent impaired loans	$	—	$	30,204	$	—	$	30,204
Other real estate owned		—		—		29,715		29,715

Total nonrecurring fair value measurements	$	—	$	30,204	$	29,715	$	59,919

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

Cash, Short-Term Investments and Federal Funds Sold - For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Securities – The fair value measurement for securities available for sale was discussed earlier in the note. The same measurement techniques were applied to the valuation of securities held to maturity.

Loans, Net - The fair value measurement for certain impaired loans was discussed earlier in the note. For the remaining portfolio, fair values were generally determined by discounting scheduled cash flows using discount rates determined with reference to current market rates at which loans with similar terms would be made to borrowers of similar credit quality.

Loans Held for Sale – These loans are recorded at fair value and carried at the lower of cost or market. The carrying amount is considered a reasonable estimate of fair value.

Deposits - The accounting guidance requires that the fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, interest-bearing checking and savings accounts, be assigned fair values equal to amounts payable upon demand (“carrying amounts”). The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

6.	Fair Value (continued)

Securities Sold under Agreements to Repurchase, Federal Funds Purchased, and Federal Home Loan Bank (“FHLB”) Borrowings - For these short-term liabilities, the carrying amount is a reasonable estimate of fair value.

Long-Term Debt - The fair value is estimated by discounting the future contractual cash flows using current market rates at which debt with similar terms could be obtained.

Derivative Financial Instruments – The fair value measurement for derivative financial instruments was discussed earlier in the note.

The following tables present the estimated fair values of the Company’s financial instruments by fair value hierarchy levels and the corresponding carrying amount at June 30, 2015 and December 31, 2014.


	June 30, 2015
							Total		Carrying
(in thousands)	Level 1		Level 2		Level 3		Fair Value		Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	928,063	$	—	$	—	$	928,063	$	928,063
Available for sale securities		2,811		2,148,323		—		2,151,134		2,151,134
Held to maturity securities		—		2,310,103		—		2,310,103		2,294,318
Loans, net		—		60,165		14,133,549		14,193,714		14,213,665
Loans held for sale		—		21,304		—		21,304		21,304
Derivative financial instruments		—		24,096		—		24,096		24,096

Financial liabilities:
Deposits	$	—	$	—	$	17,282,802	$	17,282,802	$	17,301,788
Federal funds purchased		12,850		—		—		12,850		12,850
Securities sold under agreements to repurchase		466,343		—		—		466,343		466,343
FHLB borrowings		600,000		—		—		600,000		600,000
Long-term debt		—		511,424		—		511,424		507,341
Derivative financial instruments		—		22,157		—		22,157		22,157

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

6.	Fair Value (continued)


	December 31, 2014
							Total		Carrying
(in thousands)	Level 1		Level 2		Level 3		Fair Value		Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	1,159,403	$	—	$	—	$	1,159,403	$	1,159,403
Available for sale securities		9,553		1,650,612		—		1,660,165		1,660,165
Held to maturity securities		—		2,186,340		—		2,186,340		2,166,289
Loans, net		—		30,204		13,672,427		13,702,631		13,766,514
Loans held for sale		—		20,252		—		20,252		20,252
Derivative financial instruments		—		19,432		—		19,432		19,432

Financial liabilities:
Deposits	$	—	$	—	$	16,398,878	$	16,398,878	$	16,572,831
Federal funds purchased		12,000		—		—		12,000		12,000
Securities sold under agreements to repurchase		624,573		—		—		624,573		624,573
FHLB borrowings		515,000		—		—		515,000		515,000
Long-term debt		—		346,379		—		346,379		374,371
Derivative financial instruments		—		20,860		—		20,860		20,860

7.	Derivatives

Risk Management Objective of Using Derivatives

The Company enters into derivative financial instruments to manage risks related to differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments, currently related to our variable rate borrowing. The Bank has also entered into interest rate derivative agreements as a service to certain qualifying customers. The Bank manages a matched book with respect to these customer derivatives in order to minimize their net risk exposure resulting from such agreements. The Bank also enters into risk participation agreements under which they may either sell or buy credit risk associated with a customer’s performance under certain interest rate derivative contracts related to loans in which participation interests have been sold to or purchased from other banks.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

7.	Derivatives (continued)

Fair Values of Derivative Instruments on the Balance Sheet

The table below presents the notional amounts and fair values of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of June 30, 2015 and December 31, 2014.


								Fair Values (1)
		Notional Amounts				Assets				Liabilities
(in thousands)	Type of Hedge	June 30, 2015		December 31, 2014		June 30, 2015		December 31, 2014		June 30, 2015		December 31, 2014
Derivatives designated as hedging instruments:
Interest rate swaps	Cash Flow	$	500,000	$	300,000	$	413	$	—	$	—	$	592

		$	500,000	$	300,000	$	413	$	—	$	—	$	592


Derivatives not designated as hedging instruments:
Interest rate swaps (2)	N/A	$	731,843	$	747,754	$	17,916	$	17,806	$	18,170	$	18,419
Risk participation agreements	N/A		87,901		80,438		82		125		168		208
Forward commitments to sell residential mortgage loans	N/A		67,942		52,238		2,069		80		215		250
Interest rate-lock commitments on residential mortgage loans	N/A		46,184		33,068		143		111		157		44
Foreign exchange forward contracts	N/A		68,361		89,432		3,473		1,310		3,447		1,347

		$	1,002,231	$	1,002,930	$	23,683	$	19,432	$	22,157	$	20,268

(1)	Derivative assets and liabilities are reported with other assets or other liabilities, respectively, in the consolidated balance sheets.

(2)	The notional amount represents both the customer accommodation agreements and offsetting agreements with unrelated financial institutions.

Cash Flow Hedges of Interest Rate Risk

The Company is party to two interest rate swap agreements – one with a notional amount of $300 million and the second with a notional amount of $200 million. For both agreements, the Company receives interest at a fixed rate and pays at a variable rate. The derivative instrument represented by these swap agreements was designated as and qualifies as cash flow hedges of the Company’s forecasted variable cash flows for a pool of variable rate loans. The $300 million swap agreement expires in January, 2017 and the $200 million swap agreement expires in June, 2017.

During the terms of the swap agreements, the effective portion of changes in the fair value of the derivative instruments are recorded in accumulated other comprehensive income (“AOCI”) and subsequently reclassified into earnings in the periods that the hedged forecasted variable-rate interest payments affects earnings. The impact on AOCI was insignificant in the second quarter and for the six months ended 2015. There was no ineffective portion of the change in fair value of the derivative recognized directly in earnings.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

7.	Derivatives (continued)

Derivatives Not Designated as Hedges

Customer interest rate derivative program

The Bank enters into interest rate derivative agreements, primarily rate swaps, with commercial banking customers to facilitate their risk management strategies. The Bank enters into offsetting agreements with unrelated financial institutions, thereby mitigating its net risk exposure resulting from such transactions. Because the interest rate derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

Risk participation agreements

The Bank also enters into risk participation agreements under which it may either assume or sell credit risk associated with a borrower’s performance under certain interest rate derivative contracts. In those instances where the Bank has assumed credit risk, it is not a direct counterparty to the derivative contract with the borrower and has entered into the risk participation agreement because it is a party to the related loan agreement with the borrower. In those instances in which the Bank has sold credit risk, it is the sole counterparty to the derivative contract with the borrower and has entered into the risk participation agreement because other banks participate in the related loan agreement. The Bank manages their credit risk under risk participation agreements by monitoring the creditworthiness of the borrower, based on its normal credit review process.

Mortgage banking derivatives

The Bank also enters into certain derivative agreements as part of its mortgage banking activities. These agreements include interest rate lock commitments on prospective residential mortgage loans and forward commitments to sell these loans to investors on a best efforts delivery basis.

Customer foreign exchange forward contract derivatives

The Bank enters into foreign exchange forward derivative agreements, primarily forward currency contracts, with commercial banking customers to facilitate its risk management strategies. The Bank manages its risk exposure from such transactions by entering into offsetting agreements with unrelated financial institutions. Because the foreign exchange forward contract derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

Effect of Derivative Instruments on the Income Statement

The effect of the Company’s derivative financial instruments on the income statement was immaterial for the three-month and six-month periods ended June 30, 2015 and 2014.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

7.	Derivatives (continued)

Credit risk-related Contingent Features

Certain of the Bank’s derivative instruments contain provisions allowing the financial institution counterparty to terminate the contracts in certain circumstances, such as the downgrade of the Bank’s credit ratings below specified levels, a default by the Bank on its indebtedness, or the failure of the Bank to maintain specified minimum regulatory capital ratios or its regulatory status as a well-capitalized institution. These derivative agreements also contain provisions regarding the posting of collateral by each party. As of June 30, 2015, the aggregate fair value of derivative instruments with credit risk-related contingent features that were in a net liability position was $7.9 million, for which the Bank had posted collateral of $20.6 million.

Offsetting Assets and Liabilities

Offsetting information in regards to derivative assets and liabilities subject to master netting agreements at June 30, 2015 and December 31, 2014 is presented in the following tables.


			Gross Amounts Offset in		Net Amounts Presented in		Gross Amounts Not Offset in the Statement of Financial Position
(in thousands)	Gross Amounts Recognized		the Statement of Financial Position		the Statement of Financial Position		Financial Instruments		Cash Collateral		Net Amount
As of June 30, 2015
Derivative Assets	$	17,998	$	—	$	17,998	$	474	$	—	$	17,524

Total	$	17,998	$	—	$	17,998	$	474	$	—	$	17,524


Derivative Liabilities	$	18,338	$	—	$	18,338	$	474	$	20,121	$	(2,257	)

Total	$	18,338	$	—	$	18,338	$	474	$	20,121	$	(2,257	)


			Gross Amounts Offset in the		Net Amounts Presented in the		Gross Amounts Not Offset in the Statement of Financial Position
Description	Gross Amounts Recognized		Statement of Financial Position		Statement of Financial Position		Financial Instruments		Cash Collateral		Net Amount
As of December 31, 2014
Derivative Assets	$	17,931	$	—	$	17,931	$	936	$	—	$	16,995

Total	$	17,931	$	—	$	17,931	$	936	$	—	$	16,995


Derivative Liabilities	$	18,627	$	—	$	18,627	$	936	$	17,343	$	348

Total	$	18,627	$	—	$	18,627	$	936	$	17,343	$	348

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

8.	Stockholders’ Equity

Stock Repurchase Program

In March 2015, the Company completed the stock repurchase program approved by the Company’s board of directors on July 16, 2014 which authorized the repurchase of up to 5%, or approximately 4.1 million shares, of its outstanding common stock. The approved plan allowed the Company to repurchase its common shares either in the open market in compliance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, or in privately negotiated transactions with non-affiliated sellers or as otherwise determined by the Company. Under this plan, the Company repurchased a total of 4.1 million shares of our common stock at an average price of $30.02 per share.

Accumulated Other Comprehensive Income (Loss)

AOCI is reported as a component of stockholders’ equity. AOCI can include, among other items, unrealized holding gains and losses on securities available for sale (“AFS”), gains and losses associated with pension or other post retirement benefits that are not recognized immediately as a component of net periodic benefit cost, and gains and losses on derivative instruments that are designated as, and qualify as, cash flow hedges. Net unrealized gains/losses on AFS securities reclassified as securities held to maturity (“HTM”) also continue to be reported as a component of AOCI and will be amortized over the estimated remaining life of the securities as an adjustment to interest income. The components of AOCI are reported net of related tax effects.

The components of AOCI and changes in those components are presented in the following table.


(in thousands)	Available for Sale Securities			HTM Securities Transferred from AFS			Employee Benefit Plans			Loss on Effective Cash Flow Hedges			Total
Balance, December 31, 2013	$	8,263		$	(21,189	)	$	(22,453	)	$	—		$	(35,379	)


Other comprehensive income before income taxes:
Net change in unrealized gain		15,412			—			—			—			15,412
Reclassification of net losses realized and included in earnings		—			—			195			—			195
Valuation adjustment for employee benefit plans		—			—			2,006			—			2,006
Amortization of unrealized net loss on securities transferred to HTM		—			1,571			—			—			1,571
Income tax expense		5,637			554			905			—			7,096

Balance, June 30, 2014	$	18,038		$	(20,172	)	$	(21,157	)	$	—		$	(23,291	)



Balance, December 31, 2014	$	18,001		$	(19,074	)	$	(48,626	)	$	(375	)	$	(50,074	)


Other comprehensive income before income taxes:
Net change in unrealized (loss) gain		(13,962	)		—			—			1,005			(12,957	)
Reclassification of net (gain) losses realized and included in earnings		(165	)		—			1,571			—			1,406
Valuation adjustment for employee benefit plans		—			—			(5,922	)					(5,922	)
Amortization of unrealized net loss on securities transferred to HTM		—			1,586			—			—			1,586
Income tax (benefit) expense		(5,249	)		580			(1,574	)		366			(5,877	)

Balance, June 30, 2015	$	9,123		$	(18,068	)	$	(51,403	)	$	264		$	(60,084	)

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

8.	Stockholders’ Equity (continued)

The following table shows the line items in the consolidated income statements affected by amounts reclassified from accumulated other comprehensive income.


Amount reclassified from AOCI (a)	Six Months Ended June 30,						Affected line item on the income statement
(in thousands)	2015			2014			Affected line item on the income statement
Gain on sale of AFS securities	$	165		$	—		Securities gains (losses)
Tax effect		(58	)		—		Income taxes

Net of tax		107			—		Net income

Amortization of unrealized net loss on securities transferred to HTM	$	(1,586	)	$	(1,571	)	Interest income
Tax effect		580			554		Income taxes

Net of tax		(1,006	)		(1,017	)	Net income

Amortization of defined benefit pension and post-retirement items		(1,571	)		(195	)	Employee benefits expense (b)
Tax effect		550			68		Income taxes

Net of tax		(1,021	)		(127	)	Net income

Total reclassifications, net of tax	$	(1,920	)	$	(1,144	)	Net income

(a)	Amounts in parenthesis indicate reduction in net income.

(b)	These accumulated other comprehensive income components are included in the computation of net periodic pension and post-retirement cost that is reported with employee benefits expense (see Note 11 for additional details).

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

9.	Earnings Per Share

Hancock calculates earnings per share using the two-class method. The two-class method allocates net income to each class of common stock and participating security according to common dividends declared and participation rights in undistributed earnings. Participating securities consist of unvested stock-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents.

A summary of the information used in the computation of earnings per common share follows.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2015		2014		2015		2014

*Numerator:*
Net income to common shareholders	$	34,829	$	39,962	$	74,988	$	89,077
Net income allocated to participating securities - basic and diluted		766		819		1,701		1,900


Net income allocated to common shareholders - basic and diluted	$	34,063	$	39,143	$	73,287	$	87,177


*Denominator:*
Weighted-average common shares - basic		77,951		81,933		78,719		82,099
Dilutive potential common shares		164		241		162		249

Weighted-average common shares - diluted		78,115		82,174		78,881		82,348


Earnings per common share:
Basic	$	0.44	$	0.48	$	0.93	$	1.06
Diluted	$	0.44	$	0.48	$	0.93	$	1.06

Potential common shares consist of employee and director stock options. These potential common shares do not enter into the calculation of diluted earnings per share if the impact would be anti-dilutive, i.e., increase earnings per share or reduce a loss per share. Weighted-average anti-dilutive potential common shares totaled 574,037 and 843,544, respectively, for the three and six months ended June 30, 2015 and 660,778 and 675,108, respectively, for the three and six months ended June 30, 2014.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

10.

Share-Based Payment Arrangements

Hancock maintains incentive compensation plans that provide for awards of share-based compensation to employees and directors. These plans have been approved by the Company’s shareholders. Detailed descriptions of these plans were included in Note 12 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

A summary of option activity for the six months ended June 30, 2014 is presented below.


Options	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2015		933,750		$	37.03
Exercised		(11,577	)		29.94
Cancelled/Forfeited		(51,110	)		35.43
Expired		(109,147	)		34.15

Outstanding at June 30, 2015		761,916		$	37.65		4.1	$	480

Exercisable at June 30, 2015		643,454		$	39.01		3.7	$	284

The total intrinsic value of options exercised was $0.2 million for both the six months ended June 30, 2015 and 2014.

The restricted and performance shares in the table below are subject to service requirements. A summary of the status of the Company’s nonvested restricted and performance shares as of June 30, 2015 and changes during the six months ended June 30, 2015, is presented in the following table.


	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015		2,040,299		$	32.27
Granted		97,906			27.28
Vested		(235,987	)		31.96
Forfeited		(123,621	)		32.74

Nonvested at June 30, 2015		1,778,597		$	32.01

As of June 30, 2015, there were $35.6 million of total unrecognized compensation expense related to nonvested restricted and performance shares expected to vest. This compensation is expected to be recognized in expense over a weighted average period of 3.3 years. The total fair value of shares which vested during the six months ended June 30, 2015 and 2014 was $7.5 million and $8.9 million, respectively.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

10.

Share-Based Payment Arrangements (continued)

During the six months ended June 30, 2015, the Company granted 59,312 performance shares with a grant date fair value of $25.77 per share to key members of executive and senior management. The number of 2015 performance shares that ultimately vest at the end of the three-year required service period, if any, will be based on the relative rank of Hancock’s three-year total shareholder return (“TSR”) among the TSRs of a peer group of fifty regional banks. The maximum number of performance shares that could vest is 200% of the target award. The fair value of the performance awards at the grant date was determined using a Monte Carlo simulation method. Compensation expense for these performance shares is recognized on a straight-line basis over the service period.

11.

Retirement Plans

The Company has a qualified defined benefit pension plan covering all eligible employees. Eligibility is based on minimum age-related and service-related requirements as well as job classification. Accrued benefits under a nonqualified plan covering certain legacy Whitney employees were frozen as of December 31, 2012 and no future benefits will be accrued under this plan.

The Company also sponsors defined benefit postretirement plans for both legacy Hancock and legacy Whitney employees that provide health care and life insurance benefits. Benefits under the Hancock plan are not available to employees hired on or after January 1, 2000. Benefits under the Whitney plan are restricted to retirees who were already receiving benefits at the time of plan amendments in 2007 or active participants who were eligible to receive benefits as of December 31, 2007.

The following tables show the components of net periodic benefits cost included in expense for the plans for the periods indicated.


(in thousands)	Pension benefits						Other Post- retirement Benefits
Three Months Ended June 30,	2015			2014			2015			2014

Service cost	$	3,382		$	3,035		$	22		$	26
Interest cost		4,672			4,817			174			232
Expected return on plan assets		(8,206	)		(8,050	)		—			—
Amortization of net loss		842			5			(40	)		25

Net periodic benefit cost	$	690		$	(193	)	$	156		$	283


Six Months Ended June 30,
Service cost	$	6,745		$	6,460			72		$	63
Interest cost		9,291			9,626			543			570
Expected return on plan assets		(16,419	)		(16,111	)		—			—
Amortization of net loss		1,486			13			85			182

Net periodic benefit cost	$	1,103		$	(12	)	$	700		$	815

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

11.

Retirement Plans (continued)

Hancock contributed $10 million to the pension plan during the first quarter of 2015. Based on currently available information, the Company does not anticipate making any further contribution during the remainder of 2015.

The Company also provides a defined contribution 401(k) retirement benefit plan. Under the plan, the Company matches 100% of the first 1% of compensation saved by a participant, and 50% of the next 5% of compensation saved.

12.

Other Noninterest Income

Components of other noninterest income are as follows.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2015			2014			2015			2014

Income from bank-owned life insurance	$	2,671		$	2,357		$	5,337		$	4,671
Credit related fees		2,611			2,834			5,068			5,566
Income from derivatives		1,464			481			1,412			1,240
Net (loss) gain on sale of assets		(62	)		(217	)		(55	)		1,465
Safety deposit box income		429			443			915			956
Other miscellaneous		2,412			2,714			5,092			5,141

Total other noninterest income	$	9,525		$	8,612		$	17,769		$	19,039

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

13.

Other Noninterest Expense

Components of other noninterest expense are as follows.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2015		2014		2015		2014

Advertising	$	2,133	$	2,179	$	4,298	$	3,938
Ad valorem and franchise taxes		2,736		2,638		5,451		5,299
Printing and supplies		1,158		949		2,375		2,278
Insurance expense		928		1,018		1,850		2,058
Travel expense		1,308		1,061		2,527		1,957
Entertainment and contributions		1,736		1,529		3,375		2,941
Tax credit investment amortization		2,096		2,198		4,191		4,370
Other miscellaneous		10,211		13,736		13,045		18,284

Total other noninterest expense	$	22,306	$	25,308	$	37,112	$	41,125

Included in other miscellaneous expense in the table above were nonoperating expenses totaling $5.0 million in the second quarter of 2015 and $7.3 million in the second quarter of 2014. For the first half of 2015 and 2014, respectively, included in other miscellaneous expense were nonoperating expenses of $2.7 million and $7.3 million. In 2015, these nonoperating expenses primarily include the net impact from branch sales and closings and the resolution of FDIC denied claims. Other nonoperating expenses in 2014 included expenses related to the FDIC settlement, sale of certain insurance business lines, branch closures and fees related to the early termination of reverse purchase obligations.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

14.

New Accounting Pronouncements

In May 2015, the FASB issued an Accounting Standard Update (“ASU”) to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient and remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The adoption of this guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

In April 2015, the FASB issued an ASU to provide guidance to customers about how to account for a cloud computing arrangement depending on whether or not it includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted for all entities. The adoption of this guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

In April 2015, the FASB issued an ASU to simplify presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2015. Early adoption of the amendments in this update is permitted for financial statements that have not been previously issued. The adoption of this guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

In February 2015, the FASB issued an ASU to change the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The amendments in this ASU (1) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (2) eliminate the presumption that a general partner should consolidate a limited partnership; (3) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (4) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The adoption of this guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

In January 2015, the FASB issued an ASU to address the elimination of the concept of extraordinary items. The standard is the first in the FASB’s simplification initiative that is aimed at reducing the cost and complexity of financial reporting while improving or maintaining the usefulness of information reported to investors. The amendments in this update are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted but adoption must occur at the beginning of the year. The Company adopted this guidance in January 2015 and it did not have a material impact on the Company’s financial condition or results of operations.

Hancock Holding Company and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

14.

New Accounting Pronouncements (continued)

In August 2014, the FASB issued an ASU to address the diversity in practice regarding the classification and measurement of foreclosed loans which were part of a government-sponsored loan guarantee program. The ASU outlines certain criteria that, if met, the loan (residential or commercial) should be derecognized and a separate other receivable should be recorded upon foreclosure at the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. This ASU was effective for annual reporting periods beginning after December 15, 2014, including interim periods within that reporting period. The Company adopted this guidance in January 2015 and it did not have a material impact on the Company’s financial condition or results of operations.

In June 2014, the FASB issued an ASU regarding repurchase-to-maturity transactions, repurchase financings, and disclosures. Under the new standard, repurchase-to-maturity transactions will be reported as secured borrowings, and transferors will no longer apply the current “linked” accounting model to repurchase agreements executed contemporaneously with the initial transfer of the underlying financial asset with the same counterparty. Public business entities are generally required to apply the accounting changes and comply with the enhanced disclosure requirements for periods beginning after December 15, 2014 and interim periods beginning after March 15, 2015. A public business entity may not early adopt the standard’s provisions. The Company adopted the accounting guidance in January 2015 and it did not have a material impact on the Company’s financial condition or results of operations. The new disclosure requirements are included in Note 4 – Securities Sold Under Agreements to Repurchase.

In May 2014, the FASB issued an ASU regarding revenue from contracts with customers affecting any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of this standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will be effective for the Company for annual reporting periods beginning after December 15, 2017. The Company is currently assessing this pronouncement and adoption of this guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

In January 2014, the FASB issued an ASU on reclassification of residential real estate collateralized consumer mortgage loans upon foreclosure. The new ASU clarifies when an in substance repossession or foreclosure occurs – that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The new ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. The ASU is effective for interim and annual reporting periods beginning after December 15, 2014. The Company adopted this guidance in January 2015 and it did not have a material impact on the Company’s financial condition or results of operations. The new disclosure requirements are included at the end of Note 3 – Loans and Allowance for Loan Losses.

In January 2014, the FASB issued an ASU in order to provide guidance on accounting for investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for low-income housing tax credit (“LIHTC”). Through the Company’s investments in these entities, the Company receives tax credits and/or tax deductions from operating losses, which are allowable on the Company’s filed income tax returns over the life of the project beginning with the first year the tax credits are earned. The Company adopted this guidance in January 2015 and it did not have a material impact on the Company’s financial condition or results of operations.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

NON-GAAP FINANCIAL MEASURES

Throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations, management uses several non-GAAP financial measures including Operating Income, Core Net Interest Income and Core Net Interest Margin. These measures are provided to assist the reader with better understanding the Company’s financial condition and results of operations.

We define Operating Income as net income less tax-effected nonoperating expense items and securities gains/losses. Management believes this is a useful financial measure as it enables investors to assess ongoing operations and compare the Company’s fundamental operational performance from period to period. A reconciliation of Net Income to Operating Income is included in Selected Financial Data. The components of nonoperating expense are further discussed in the Noninterest Expense section of this item.

We define Core Net Interest Income as reported taxable equivalent (te) net interest income excluding net purchase accounting adjustments. We define Core Net Interest Margin as Core Net Interest Income expressed as a percentage of average earning assets. A reconciliation of Reported Net Interest Income to Core Net Interest Income and Reported Net Interest Margin to Core Net Interest Margin is included in the Net Interest Income section of this item. Management believes that Core Net Interest Income and Core Net Interest Margin provide a useful measure to investors regarding the Company’s performance period over period as well as providing investors with assistance in understanding the success management has experienced in executing its strategic initiatives.

Recent Economic and Industry Developments

The Federal Reserve publishes its Summary of Commentary on Current Economic Conditions (the “Beige Book”) eight times a year, most recently on July 15, 2015. The Beige Book includes summaries from all 12 Banks in the Federal Reserve System. Reports from the Atlanta Bank and the Dallas Bank indicate continued improvement of economic activity throughout most of Hancock’s market area. However, activity among energy-related businesses operating mainly in Hancock’s south Louisiana and Houston, Texas market areas continued to decline. The travel and tourism industry, which is important within several of the Company’s market areas, saw an increase in activity with many hotels and resorts reporting high occupancy levels and an increase in consumer spending compared to prior year. Outlooks for the next three months were optimistic. Auto sales continued to experience increases in sales activity. Reports on manufacturing activity were mixed; however, they were generally positive, with almost half of purchasing managers polled expecting higher production over the next three to six months.

The real estate markets for residential properties were mostly positive, with most brokers indicating that sales met their expectations; however, the Texas market noted some decrease in activity due to severe weather conditions. Most of Hancock’s market areas reported growth in activity. Inventory levels remained stable or declined slightly year-over-year. The demand for apartments increased, keeping occupancy rates at high levels. The outlook for home sales is positive, with brokers expecting to see an increase in sales over the next three months. New home sales and construction activity are flat to slightly ahead of prior-year levels and expected to improve modestly.

The commercial real estate market continues to improve, with growing demand for office and industrial space in certain market areas. Commercial construction activity has increased in these sectors. Continued improvement is expected in the commercial real estate market.

Loan demand across most of the markets that Hancock serves has increased slightly since the last Beige Book report, but competition for quality borrowers remains stiff. Consumer lending and business outside the oil and gas industry increased, while commercial real estate held steady. The outlook for increased growth improved slightly since the last report.

The overall U.S. economy continued to expand, with almost all regions showing modest to moderate growth rates. Confidence in the prospect of a higher rate of sustained growth is improving for businesses and consumers alike, although uncertainties remain about such matters as the health of the international economy and the implications of pending or proposed changes in U.S. fiscal and tax policies and regulations.

Highlights of Second Quarter 2015 Financial Results

Net income in the second quarter of 2015 was $34.8 million, or $0.44 per diluted common share, compared to $40.2 million, or $0.49 per diluted common share, in the first quarter of 2015. Net income was $40.0 million, or $0.48 per diluted common share, in the second quarter of 2014. Net income for the second quarter of 2015 and first quarter of 2015 reflect the negative impact of nonoperating items totaling $8.9 million and $7.3 million, respectively. The second quarter of 2014 impact of nonoperating items was $12.1 million. Net income for the six months ended June 30, 2015 was $75.0 million, or $0.93 per diluted common share, compared to $89.1 million, or $1.06 per diluted common share, for the six months ended June 30, 2014. Included in net income for the six months ended June 30, 2015 and 2014 was the negative impact from nonoperating items totaling $16.2 and $12.1 million, respectively.

Operating income for the second quarter of 2015 was $40.6 million or $0.51 per diluted common share, compared to $44.7 million, or $0.55 per diluted common share in the first quarter of 2015. Operating income was $49.6 million, or $0.59 per diluted common share, in the second quarter of 2014. For the six months ended June 30, 2015, operating income was $85.3 million, or $1.06 per diluted common share, down $13.4 million from the same period in 2014. As discussed further in the Results of Operations section below, the primary driver for the decrease in operating income for both the quarter and six-month period ended June 30, 2015, compared to similar prior periods, was the reduction in income from purchase accounting adjustments.

Over the past several quarters the Company has disclosed its focus on strategic initiatives that are designed to replace declining levels of purchase accounting income from acquisitions with improvement in core income, which the Company defines as operating income excluding tax-effected purchase accounting adjustments. As of this quarter, the impact to the Company’s bottom line from net purchase accounting items has substantially diminished, and core results are now substantially equal to operating results.

Highlights of the Company’s second quarter of 2015 results:

•

Net purchase accounting income declined approximately $7.5 million, or $0.06 per fully diluted common share, linked-quarter

•

Operating earnings, excluding the tax-effected impact of net purchase accounting items and nonoperating items, increased $0.8 million, or 2% linked-quarter

•

Operating E.P.S., excluding the tax-effected impact of net purchase accounting items and nonoperating items, increased 4% linked-quarter to $0.51 per diluted common share

•

Loans increased $420 million, or 12% linked-quarter annualized (“LQA”), funded by an increase in deposits of $441 million, or 10% LQA

•

Total assets of $21.5 billion increased $814 million or 4% from March 31, 2015

•

Fee income increased approximately $5 million, or 8%, from the first quarter of 2015

•

Net interest margin decreased 25 bps linked-quarter to 3.30% reflecting the expected drop in accretion income, the full quarter impact of the subordinated debt issuance in March 2015 and a drop in the overall yield of the securities portfolio

The total allowance for loan losses was $131 million at June 30, 2015, up $2.7 million from March 31, 2015. The ratio of the allowance for loan losses to period-end loans was 0.91% at June 30, 2015, virtually unchanged from March 31, 2015. The allowance maintained on the non-FDIC acquired portion of the loan portfolio increased $6.3 million linked-quarter, totaling $107 million, and the impaired reserve on the FDIC acquired loan portfolio declined $3.6 million linked-quarter.

The increase in the non-FDIC portion allowance was primarily driven by a $10.6 million increase in the reserve related to the energy portfolio. This increase resulted from downward pressure on energy related loan risk ratings as pricing pressure on oil continued during the second quarter plus updates to the qualitative factors related to energy. During the second quarter, the Company’s balance of commercial criticized loans increased $207 million, or 50%, primarily from risk rating downgrades in the energy portfolio. Management believes that if further risk rating downgrades occur in the energy portfolio, they could lead to additional loan loss provisions, but not translate to significant losses. The impact and severity of risk rating migration, associated provision and net charge-offs will depend on the overall oil price reduction and the duration of the cycle.

RESULTS OF OPERATIONS

Net Interest Income

Net interest income (te) for the second quarter of 2015 was $154.9 million, down $6.2 million from the first quarter of 2015. During the second quarter, net interest income from purchase accounting adjustments declined $7.6 million compared to the first quarter. This was partially offset by the impact of one additional day of interest accruals in the second quarter of 2015 compared to the first quarter of 2015. Excluding the impact of purchase accounting adjustments and the number of days in the quarter, net interest income (te) was virtually flat as additional interest income generated from a $465 million linked quarter increase in average earning assets was offset by additional interest expense related to the full quarter impact of the $150 million, 5.95% subordinated debt issued March 9, 2015. For analytical purposes, management adjusts net interest income to a taxable equivalent basis using a 35% federal tax rate on tax exempt items (primarily interest on municipal securities and loans).

Net interest income (te) for the second quarter of 2015 was down $12.4 million, or 7%, compared to the second quarter of 2014. This decrease is primarily the result of a $19 million reduction in total purchase accounting accretion partially offset by net interest earned on a $2.0 billion increase in average earning assets.

Net interest income (te) for the first six months of 2015 totaled $316.0 million, a $19.5 million, or 6%, decrease from the first half of 2014. Excluding a $31.9 million decrease in purchase accounting accretion, net interest income was down $12.4 million for the first six months of 2015 compared to the same period of 2014. A 15 bps decrease in the core loan yield and a 4 bps increase in the cost of funds were partially offset by a $1.8 billion, or 11%, increase in average earning assets. The increase in the cost of funds was attributable to the 2015 subordinated debt issuance and the impact from several deposit initiatives implemented during the second half of 2014 and early 2015 designed to generate deposit growth in an amount sufficient to fund loan growth.

The reported net interest margin was 3.30% for the second quarter of 2015, down 25 bps from the first quarter of 2015, and down 69 bps from the second quarter of 2014. Approximately 18 bps of the linked quarter decline was related to the decline in purchase accounting adjustments noted above. The current quarter’s core net interest margin of 3.14% declined 7 bps compared to the first quarter of 2015 and 21 bps compared to the second quarter of 2014. The primary driver for the reduction in the net interest margin in both periods was the decline in the loan yield. Additionally contributing to the linked quarter decline in the core net interest margin was a 13 bps decrease in the investment portfolio yield and a 40 bps increase in borrowing costs related to the subordinated debt previously discussed. The linked-quarter decrease in the investment portfolio yield is primarily attributable to purchasing new securities at current market rates to replace normal monthly repayments and maturities of higher-yielding securities.

The reported net interest margin for the first six months of 2015 was 3.43% compared to 4.03% in 2014, while the core margin declined to 3.17% in 2015 compared to 3.36% in 2014. Changes in net interest income (te) and the net interest margin between the year-to-date periods reflected, for the most part, the same factors that affected the quarterly comparisons.

The overall reported yield on earning assets was 3.58% in the second quarter of 2015, declining 21 bps from the first quarter of 2015 and 63 bps from the second quarter of 2014. This decrease was primarily a result of the lower yields on the loan portfolio due to the impact of the decline in purchase accounting adjustments, as well as lower yields in the investment securities portfolio noted above. The reported loan portfolio yield of 4.10% for the current quarter was

down 26 bps from the first quarter of 2015 and 76 bps from the second quarter of 2014. Excluding purchase-accounting accretion, the loan yield of 3.85% in the current quarter was down 3 bps from the first quarter of 2015 and 12 bps from a year earlier.

The cost of funding earning assets was 0.28% in the second quarter of 2015, up 4 bps from the first quarter of 2015. This increase was attributable to the issuance of $150 million in subordinated debt and a slight increase in deposit rates related to the Company’s deposit initiatives.

The cost of funding earning assets increased 6 bps from the second quarter of 2014. The 82 bps increase in the rate paid on long-term debt and a 6 bps increase in overall rate paid on interest-bearing deposits were offset by the effect of the early redemption in the second quarter of 2014 of $115 million in fixed rate reverse repurchase obligations with an average rate of 3.43%. This early redemption resulted in a 26 bps reduction in the average rate paid on short-term borrowings compared to the second quarter of 2014. The increase in deposit rates reflects the initiatives implemented during the second quarter of 2014 to increase deposits in an effort to support the funding for loan growth.

The following tables detail the components of our net interest income and net interest margin.


	Three Months Ended
	June 30, 2015							March 31, 2015							June 30, 2014
(dollars in millions)	Volume		Interest		Rate			Volume		Interest		Rate			Volume		Interest		Rate
Average earning assets
Commercial & real estate loans (te) (a) (b)	$	10,398.5	$	101.6		3.92	%	$	10,235.2	$	106.8		4.23	%	$	9,355.2	$	108.2		4.64	%
Mortgage loans		1,930.6		19.9		4.13			1,902.9		20.4		4.30			1,744.3		21.0		4.83
Consumer loans		1,809.8		23.0		5.10			1,731.3		21.9		5.13			1,581.4		23.6		5.99
Loan fees & late charges		—		—					—		0.3					—		0.8

Total loans (te)		14,138.9		144.5		4.10			13,869.4		149.4		4.36			12,680.9		153.6		4.86


Loans held for sale		22.9		0.2		3.88			15.6		0.1		2.45			14.7		0.1		4.14

US Treasury and agency securities		300.0		1.2		1.54			275.0		1.1		1.58			—		—		0.00
Mortgage-backed securities and CMOs		3,641.6		19.6		2.15			3,290.5		18.6		2.26			3,490.9		20.1		2.30
Municipals (te) (a)		195.5		2.2		4.54			195.8		2.3		4.61			205.8		2.4		4.63
Other securities		6.0		—		1.61			11.6		0.1		4.47			19.8		0.1		1.19

Total securities (te) (c)		4,143.1		23.0		2.22			3,772.9		22.1		2.35			3,716.5		22.6		2.43

Total short-term investments		475.9		0.3		0.23			657.9		0.4		0.22			379.6		0.2		0.22

Average earning assets (te)	$	18,780.8	$	168.0		3.58	%	$	18,315.8	$	172.0		3.79	%	$	16,791.7	$	176.5		4.21	%


Average interest-bearing liabilities
Interest-bearing transaction and savings deposits	$	6,656.9	$	2.5		0.15	%	$	6,506.8	$	2.2		0.14	%	$	6,078.1	$	1.5		0.10	%
Time deposits		2,206.9		3.8		0.69			2,238.8		3.7		0.67			2,026.4		3.0		0.60
Public funds		1,890.4		1.3		0.28			1,815.4		1.2		0.27			1,450.3		0.7		0.21

Total interest-bearing deposits		10,754.2		7.6		0.28			10,561.0		7.1		0.27			9,554.8		5.2		0.22

Short-term borrowings		896.0		0.2		0.08			920.5		0.2		0.08			957.4		0.9		0.34
Long-term debt		516.0		5.3		4.14			412.9		3.6		3.57			380.2		3.1		3.32

Total borrowings		1,412.0		5.5		1.56			1,333.4		3.8		1.16			1,337.6		4.0		1.19

Total interest-bearing liabilities		12,166.2		13.1		0.43	%		11,894.4		10.9		0.37	%		10,892.4		9.2		0.34	%

Net interest-free funding sources		6,614.6							6,421.4							5,899.3

Total cost of funds	$	18,780.8	$	13.1		0.28	%	$	18,315.8	$	10.9		0.24	%	$	16,791.7	$	9.2		0.22	%


Net interest spread (te)			$	154.9		3.15	%			$	161.1		3.42	%			$	167.3		3.87	%

Net interest margin	$	18,780.8	$	154.9		3.30	%	$	18,315.8	$	161.1		3.55	%	$	16,791.7	$	167.3		3.99	%

(a)	Tax equivalent (te) amounts are calculated using a marginal federal income tax rate of 35%.

(b)	Includes nonaccrual loans.

(c)	Average securities do not include unrealized holding gains/losses on available for sale securities.


	Six Months Ended
	June 30, 2015							June 30, 2014
(dollars in millions)	Volume		Interest		Rate			Volume		Interest		Rate
Average earning assets
Commercial & real estate loans (te) (a) (b)	$	10,317.3	$	208.4		4.07	%	$	9,226.1	$	216.1		4.72	%
Mortgage loans		1,916.8		40.4		4.21			1,732.5		42.4		4.89
Consumer loans		1,770.7		44.9		5.12			1,572.3		46.8		6.00
Loan fees & late charges		—		0.3					—		1.4

Total loans (te)		14,004.8		294.0		4.23			12,530.9		306.7		4.93


Loans held for sale		19.2		0.3		3.30			16.9		0.3		4.10

US Treasury and agency securities		287.6		2.2		1.56			46.5		0.5		2.26
Mortgage-backed securities and CMOs		3,467.1		38.2		2.21			3,551.5		41.3		2.32
Municipals (te) (a)		195.7		4.5		4.58			211.4		4.9		4.59
Other securities		8.8		0.2		3.51			16.1		0.2		2.22

Total securities (te) (c)		3,959.2		45.1		2.28			3,825.5		46.9		2.45

Total short-term investments		566.4		0.7		0.22			392.9		0.4		0.23

Average earning assets (te)	$	18,549.6	$	340.1		3.69	%	$	16,766.2	$	354.3		4.25	%


Average interest-bearing liabilities
Interest-bearing transaction and savings deposits	$	6,582.3	$	4.7		0.14	%	$	6,075.1	$	3.0		0.10	%
Time deposits		2,222.8		7.5		0.68			2,098.0		6.1		0.59
Public funds		1,853.1		2.5		0.28			1,488.3		1.5		0.20

Total interest-bearing deposits		10,658.2		14.7		0.28			9,661.4		10.6		0.22

Short-term borrowings		908.2		0.4		0.08			871.7		1.9		0.43
Long-term debt		464.7		9.0		3.88			383.1		6.3		3.33

Total borrowings		1,372.9		9.4		1.37			1,254.8		8.2		1.32

Total interest-bearing liabilities		12,031.1		24.1		0.40	%		10,916.2		18.8		0.35	%

Net interest-free funding sources		6,518.5							5,850.0

Total cost of funds	$	18,549.6	$	24.1		0.26	%	$	16,766.2	$	18.8		0.22	%


Net interest spread (te)			$	316.0		3.29	%			$	335.5		3.90	%

Net interest margin	$	18,549.6	$	316.0		3.43	%	$	16,766.2	$	335.5		4.03	%

(a)	Tax equivalent (te) amounts are calculated using a marginal federal income tax rate of 35%.

(b)	Includes nonaccrual loans.

(c)	Average securities do not include unrealized holding gains/losses on available for sale securities.

Due to the significant, unsustainable contribution from purchase accounting accretion, management believes that core net interest income and core net interest margin provide meaningful financial measures to investors of the Company’s performance over time. The following table provides a reconciliation of reported and core net interest income and reported and core net interest margin.

Reconciliation of Reported Net Interest Income and Margin to Core Net interest Income and Margin


	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(dollars in millions)	2015			2015			2014			2015			2014
Net interest income (te) (a)	$	154.9		$	161.1		$	167.3		$	316.0		$	335.5
Purchase accounting adjustments
Loan discount accretion		8.7			16.4			28.0			25.1			57.8
Bond premium amortization		(1.0	)		(1.1	)		(1.4	)		(2.1	)		(3.0	)
CD premium accretion		—			—			0.1			—			0.1

Total net purchase accounting accretion		7.7			15.3			26.7			23.0			54.9

Net interest income (te) - core	$	147.2		$	145.8		$	140.6		$	293.0		$	280.6


Average earning assets	$	18,780.8		$	18,315.8		$	16,791.7		$	18,549.6		$	16,766.2
Net interest margin - reported		3.30	%		3.55	%		3.99	%		3.43	%		4.03	%
Net purchase accounting adjustments		0.16	%		0.34	%		0.64	%		0.26	%		0.67	%

Net interest margin - core		3.14	%		3.21	%		3.35	%		3.17	%		3.36	%

(a)	Tax equivalent (te) amounts are calculated using a marginal federal income tax rate of 35%.

Provision for Loan Losses

During the second quarter of 2015, Hancock recorded a total provision for loan losses of $6.6 million, up $0.4 million from the first quarter of 2015 and virtually flat with the second quarter of 2014. The linked-quarter increase reflects additional build for the energy portfolio as discussed more fully in the “Allowance for Loan Losses and Asset Quality” section of this document. The provision for the FDIC acquired portfolio was a credit of $0.9 million for the three months ended June 30, 2015 and a small credit for each of the three-month periods ended March 31, 2015 and June 30, 2014. For the first six months of 2015, the total provision for loans losses was $12.8 million, down from $14.7 million for the same period in 2014.

The section on “Allowance for Loan Losses and Asset Quality” provides additional information on changes in the allowance for loan losses and general credit quality. Certain differences in the determination of the allowance for loan losses for originated loans and for acquired-performing loans and acquired-impaired loans (which includes all FDIC acquired loans) are described in Note 3 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Noninterest Income

Noninterest income totaled $60.9 million for the second quarter of 2015, a $4.3 million, or 8%, increase compared to the first quarter of 2015, and up $4.5 million, or 8%, from the second quarter of 2014. Seasonal trust fees related to tax preparation, increased fees from secondary mortgage market operations resulting from higher mortgage production and an increase in income from derivatives were the primary factors for this increase. In addition, fee income from several other noninterest income segments also increased. Noninterest income totaled $117.4 million for the first six months of 2015, up $4.3 million, or 4%, from the first six months of 2014.

Service charges on deposits totaled $17.9 million for the second quarter of 2015, up $0.6 million, or 3%, from the first quarter of 2015, and down $1.4 million, or 7%, from the second quarter of 2014. The linked quarter increase is primarily due to the impact of three additional working days in the current quarter compared to the first quarter of 2015. The year-over-year decrease in service charges is primarily related to a decrease in charges resulting from a decline in overdraft/nonsufficient funds occurrences. This decline is attributable, in part, to an increase in average balances per account in the consumer noninterest-bearing checking portfolio, a reduction in the number of consumer accounts, mostly attributable to branch closings and sales, and higher customer usage of our overdraft protection product.

Trust fees totaled $11.8 million for the quarter ended June 30, 2015, up $0.6 million, or 5%, from the first quarter of 2015, primarily due to the $0.4 million of seasonal fees as mentioned above. Trust fees increased $0.3 million, or 3%, compared to the second quarter of 2014, as a result of increased retirement services and corporate trust business.

Bank card and ATM fees totaled $11.9 million in the second quarter of 2015, up $0.7 million, or 6%, from the first quarter of 2015, and up $0.3 million, or 2%, compared to the second quarter of 2014. Included in bank card and ATM fees are fees from credit card, debit card and ATM transactions, and merchant service fees. The increase in credit card fees resulted from various strategic initiatives during 2014 to increase card usage, including specific commercial card enhancements. ATM fee income in the second quarter of 2015 compared to the second quarter of 2014 was down $0.1 million, or 5%, due in part to the closing and sale of branches during 2014 and 2015 as part of the Company’s branch rationalization program.

Fees from the secondary mortgage operations totaling $3.6 million in the second quarter of 2015 were up $1.0 million, or 36%, compared to the first quarter of 2015. These fees more than doubled compared to the second quarter of 2014. The Company typically sells its longer-term fixed-rate loans in the secondary market while retaining in the portfolio the majority of its adjustable rate loans. We also retain loans generated through certain programs to support customer relationships including programs for high net worth individuals and non-builder construction loans. The increase in fee income during the second quarter of 2015 compared to the first quarter of 2015 was primarily due to seasonality. Through the first six months of 2015, fees from secondary mortgage operations increased $2.6 million, or 69%, compared to the first six months of 2014 as the Company has originated a higher percentage of loans for sale in the secondary market. Management expects this trend to continue through 2015.

Amortization of the FDIC loss share receivable totaled $1.3 million in the second quarter of 2015 compared to $1.2 million in the first quarter of 2015 and $3.3 million in the second quarter of 2014. For the first six months of 2015, amortization of the FDIC loss share receivable totaled $2.5 million, compared to $7.2 million for the same period in 2014. The amortization reflects a reduction in the amount of expected reimbursements under the loss share agreements due to lower loss projections for the related FDIC acquired loan pools. The non-single family loss share agreement expired in December of 2014, which is the primary reason for the decrease in the amortization in the first six months of 2015 compared to 2014. Beginning in 2015, the FDIC loss share receivable and the related amortization relates to the single family loss share agreement which will expire in December of 2019.

Income from derivatives totaled $1.5 million for the quarter ended June 30, 2015 compared to a negative $0.1 million for the three months ended March 31, 2015 and $0.5 million for the three months ended June 30, 2014. This income is volatile in nature and is primarily related to our customer interest rate derivative program as describe fully in Note 5 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The components of noninterest income are presented in the following table for the indicated periods.


	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,
(in thousands)	2015			2015			2014			2015			2014

Service charges on deposit accounts	$	17,908		$	17,315		$	19,269		$	35,223		$	37,981
Trust fees		11,795			11,200			11,499			22,995			21,737
Bank card and ATM fees		11,868			11,183			11,596			23,051			22,165
Investment and annuity fees		4,838			5,050			5,097			9,888			10,049
Secondary mortgage market operations		3,618			2,664			1,758			6,282			3,723
Insurance commissions and fees		2,595			1,754			1,888			4,349			5,632
Amortization of FDIC loss share receivable		(1,273	)		(1,197	)		(3,321	)		(2,470	)		(7,229	)
Income from bank-owned life insurance		2,671			2,666			2,357			5,337			4,671
Credit related fees		2,611			2,457			2,834			5,068			5,566
Income from derivatives		1,464			(52	)		481			1,412			1,240
Gain (loss) on sale of assets		(62	)		7			(217	)		(55	)		1,465
Safety deposit box income		429			486			443			915			956
Other miscellaneous		2,412			2,680			2,714			5,092			5,141
Securities transactions gains, net		—			333			—			333			—

Total noninterest income	$	60,874		$	56,546		$	56,398		$	117,420		$	113,097

Noninterest Expense

Noninterest expense for the second quarter of 2015 was $158.9 million, a $5.4 million, or 4%, increase from the first quarter of 2015, and a $2.1 million, or 1%, increase from the second quarter of 2014. Excluding nonoperating expense items, operating expense for the second quarter of 2015 totaled $150.0 million, which was up $3.8 million, or 3%, from the first quarter of 2015 and $5.3 million, or 4%, from the same period in 2014. Operating expense for the first six months of 2015 totaled $296.2 million, up $4.5 million, or 2%, compared to the first six months of 2014.

Nonoperating expense totaled $8.9 million in the second quarter of 2015, $7.3 million in the first quarter of 2015 and $12.1 million in the second quarter of 2014. Nonoperating expense for the second quarter of 2015 included approximately $4.7 million related to branch closings and asset dispositions as part of the Company’s ongoing branch rationalization process, $1.9 million related to the resolution of FDIC denied loss share claims and $2.3 million of consulting and professional fees related to investments in technology to enhance the Company’s risk management processes. The first quarter of 2015 primarily consisted of consulting and professional fees related to technology enhancements for the Company’s risk management process as well as a net premium related to the sale of four Houston branches.

Nonoperating expense in the second quarter of 2014 included $10.3 million for the settlement of an assessment by the FDIC related to a targeted review of certain previously paid claims under the loss share agreements, $7.5 million related to the Company’s expense and efficiency initiative including $3.5 million for the closure of certain branch locations as part of the ongoing branch rationalization process, and $3.5 million related to the early termination of reverse repurchase obligations. These expenses were partially offset by the $9.1 million gain from the divestiture of certain insurance business lines, net of costs related to discontinuing the operations.

Total personnel expense, excluding $0.9 million in nonoperating expense, totaled $82.5 million for the second quarter of 2015, up $2.4 million, or 3%, from the first quarter of 2015. The increase reflects additional incentive pay in the second quarter, partially offset by a seasonal decrease in benefits. Total personnel expense was up $3.0 million, or 4%, compared to the second quarter of 2014. Total personnel expense for the first six months of 2015 was up $1.7 million, or 1%, compared to the first six months of 2014.

Occupancy and equipment expenses totaled $15.8 million for the second quarter of 2015, up $0.7 million, or 5%, from the first quarter of 2015 and $0.9 million, or 6%, from the second quarter of 2014. Occupancy and equipment expenses totaled $30.9 million for the first six months of 2015, compared to $30.4 million in the first six months in 2014. The second quarter of 2015 included an increase of $0.4 million in equipment maintenance and $0.3 million in general facilities maintenance.

Other real estate (“ORE”) expense in the second quarter of 2015 was $0.5 million, virtually unchanged from the first quarter of 2015, and up $0.4 million from the second quarter of 2014. ORE expense for the first six months of 2015 totaled $1.0 million compared to $1.9 million in the first half of 2014.

All other expenses, excluding amortization of intangibles and nonoperating expense items, totaled $45.0 million for the second quarter of 2015, up $0.7 million, or 2%, from the first quarter of 2015 and up $1.4 million, or 3%, from the second quarter of 2014. For the first six months of 2015 compared to the first six months of 2014, all other expenses increased $4.5 million, or 5%. The primary factors in the increases from prior periods are increased data processing expense from the implementation of various strategic initiatives and increased deposit insurance and regulatory fees primarily as a result of asset growth.

The components of noninterest expense are presented in the following table for the indicated periods.


	Three Months Ended							Six Months Ended
	June 30,		March 31,		June 30,			June 30,		June 30,
(in thousands)	2015		2015		2014			2015		2014

Operating expense
Compensation expense	$	69,771	$	64,547	$	66,948		$	134,318	$	134,113
Employee benefits		12,762		15,570		12,558			28,332		26,825

Personnel expense		82,533		80,117		79,506			162,650		160,938

Net occupancy expense		11,765		11,162		10,840			22,927		22,106
Equipment expense		4,079		3,933		4,059			8,012		8,333
Data processing expense		13,926		13,536		12,828			27,462		25,247
Professional services expense		6,091		6,320		6,421			12,411		12,830
Amortization of intangibles		6,148		6,318		6,744			12,466		13,782
Telecommunications and postage		3,470		3,651		3,835			7,121		7,418
Deposit insurance and regulatory fees		4,213		3,595		2,743			7,808		5,710
Other real estate expense, net		501		456		84			957		1,861
Advertising		2,127		2,157		2,006			4,284		3,765
Ad valorem and franchise taxes		2,736		2,715		2,638			5,451		5,299
Printing and supplies		1,158		1,217		792			2,375		2,121
Insurance expense		928		922		1,018			1,850		2,058
Travel expense		1,307		1,219		1,059			2,525		1,955
Entertainment and contributions		1,736		1,639		1,529			3,375		2,941
Tax credit investment amortization		2,096		2,095		2,198			4,191		4,370
Other miscellaneous		5,176		5,149		6,427			10,326		10,975

Total operating expense	$	149,990	$	146,201	$	144,727		$	296,191	$	291,709


Nonoperating expense items
Impact of insurance business line divestiture	$	—	$	—	$	(9,101	)	$	—	$	(9,101	)
FDIC resolution of denied claims		1,854		—		10,268			1,854		10,268
Expense and efficiency initiatives and other items		7,073		7,314		7,503			14,387		7,503

Total nonoperating expense items	$	8,927	$	7,314	$	12,131		$	16,241	$	12,131



Total noninterest expense	$	158,917	$	153,515	$	156,858		$	312,432	$	303,840

Income Taxes

The effective income tax rate for the second quarter of 2015 was approximately 26% compared to 27% in the first quarter of 2015 and 31% in the second quarter of 2014. Management expects the effective tax rate for the remainder of 2015 will approximate 25% to 27%. Hancock’s effective tax rates have varied from the 35% federal statutory rate primarily because of tax-exempt income and the use of tax credits. Interest income on bonds issued by or loans to state and municipal governments and authorities, and earnings from the bank-owned life insurance program are the major components of tax-exempt income. The main source of tax credits has been investments in tax-advantaged securities and tax credit projects. These investments are made primarily in the markets the Company serves and are directed at tax credits issued under the Qualified Zone Academy Bonds (“QZAB”), Qualified School Construction Bonds (“QSCB”), Federal and State New Market Tax Credit (“NMTC”) and Low-Income Housing Tax Credit (“LIHTC”) programs. The investments generate tax credits, which reduce current and future taxes and are recognized when earned as a benefit in the provision for income taxes.

The Company invests in Federal and State NMTC projects related to tax credit allocations that have been awarded to its wholly-owned Community Development Entity (“CDE”) as well as projects that utilize credits awarded to unrelated CDEs. From 2008 through 2014, the Company’s CDE was awarded three allocations totaling $148 million. These awards are expected to generate tax credits totaling $57.7 million over their respective seven-year compliance periods.

The Company intends to continue making investments in tax credit projects, though its ability to access new credits will depend upon, among other factors, federal and state tax policies and the level of competition for such credits. Based on tax credit investments that have been made, the Company expects to realize tax credits over the next three years of $10.0 million, $8.8 million and $7.4 million for 2016, 2017 and 2018, respectively.

The following table reconciles reported income tax expense to that computed at the statutory federal tax rate for the periods indicated.


	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(in thousands)	2015			2015			2014			2015			2014
Taxes computed at statutory rate	$	16,499		$	19,262		$	20,170		$	35,761		$	43,730
Tax credits:
QZAB/QSCB		(730	)		(730	)		(769	)		(1,460	)		(1,538	)
NMTC - Federal and State		(1,829	)		(2,573	)		(3,173	)		(4,402	)		(6,606	)
LIHTC		(25	)		(24	)		(113	)		(49	)		(226	)

Total tax credits		(2,584	)		(3,327	)		(4,055	)		(5,911	)		(8,370	)
State income taxes, net of federal income tax benefit		742			728			1,043			1,470			2,716
Tax-exempt interest		(1,783	)		(1,710	)		(1,530	)		(3,493	)		(3,114	)
Bank owned life insurance		(948	)		(919	)		(825	)		(1,867	)		(1,635	)
Goodwill - writeoff		—			—			1,112			—			1,112
Other, net		385			842			1,750			1,227			1,427

Income tax expense	$	12,311		$	14,876		$	17,665		$	27,187		$	35,866

Selected Financial Data

The following tables contain selected financial data as of the dates and for the periods indicated.


	Three Months Ended						Six Months Ended
	June 30,		March 31,		June 30,		June 30,		June 30,
	2015		2015		2014		2015		2014
Common Share Data
Earnings per share:
Basic	$	0.44	$	0.49	$	0.48	$	0.93	$	1.06
Diluted	$	0.44	$	0.49	$	0.48	$	0.93	$	1.06
Operating earnings per share: (a)
Basic	$	0.51	$	0.55	$	0.59	$	1.06	$	1.18
Diluted	$	0.51	$	0.55	$	0.59	$	1.06	$	1.17

Cash dividends paid	$	0.24	$	0.24	$	0.24	$	0.48	$	0.48
Book value per share (period-end)	$	31.12	$	31.14	$	30.45	$	31.12	$	30.45
Tangible book value per share (period-end)	$	21.63	$	21.55	$	21.08	$	21.63	$	21.08
Weighted average number of shares (000s):
Basic		77,951		79,496		81,933		78,719		82,099
Diluted		78,115		79,661		82,174		78,881		82,348
Period-end number of shares (000s)		78,094		77,886		81,860		78,094		81,860
Market data:
High sales price	$	32.98	$	31.13	$	37.86	$	32.98	$	38.50
Low sales price	$	28.02	$	24.96	$	32.02	$	24.96	$	32.02
Period-end closing price	$	31.91	$	29.86	$	35.32	$	31.91	$	35.32
Trading volume (000s) (b)		40,162		51,866		27,432		92,029		58,760

(a)	Net income less tax-effected securities transactions and nonoperating expense items. Management believes that operating income provides a useful measure of financial performance that helps investors compare the Company’s fundamental operations over time.

(b)	Trading volume is based on the total volume as determined by NASDAQ on the last day of the quarter.


	Three Months Ended							Six Months Ended
	June 30,		March 31,			June 30,		June 30,
(in thousands)	2015		2015			2014		2015			2014

Income Statement:
Interest income	$	164,920	$	169,087		$	174,001	$	334,007		$	349,141
Interest income (te) (a)		168,008		172,043			176,555		340,051			354,331
Interest expense		13,129		10,929			9,223		24,058			18,801

Net interest income (te)		154,879		161,114			167,332		315,993			335,530
Provision for loan losses		6,608		6,154			6,691		12,762			14,654
Noninterest income excluding securities transactions		60,874		56,213			56,398		117,087			113,097
Securities transactions gains, net		—		333			—		333			—
Noninterest expense (excluding amortization of intangibles)		152,769		147,197			150,114		299,966			290,058
Amortization of intangibles		6,148		6,318			6,744		12,466			13,782

Income before income taxes		47,140		55,035			57,627		102,175			124,943
Income tax expense		12,311		14,876			17,665		27,187			35,866

Net income	$	34,829	$	40,159		$	39,962	$	74,988		$	89,077


Securities transactions gains, net	$	—	$	(333	)	$	—	$	(333	)	$	—
Total nonoperating expense items		8,927		7,314			12,131		16,241			12,131
Taxes on adjustments at marginal tax rate		3,125		2,443			2,518		5,568			2,518

Total adjustments, net of taxes		5,802		4,538			9,613		10,340			9,613

Operating income (b)	$	40,631	$	44,697		$	49,575	$	85,328		$	98,690

(a)	For analytical purposes, management adjusts net interest income to a “taxable equivalent” basis using a 35% federal tax rate on tax exempt items (primarily interest on municipal securities and loans).

(b)	Net income less tax-effected securities transactions and nonoperating expense items. Management believes that operating income provides a useful measure of financial performance that helps investors compare the Company’s fundamental operations over time.


	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(in thousands)	2015			2015			2014			2015			2014
Performance Ratios
Return on average assets		0.67	%		0.80	%		0.84	%		0.73	%		0.94	%
Return on average assets — operating (a)		0.78	%		0.89	%		1.04	%		0.83	%		1.04	%
Return on average common equity		5.75	%		6.65	%		6.51	%		6.20	%		7.33	%
Return on average common equity — operating (a)		6.70	%		7.41	%		8.07	%		7.05	%		8.12	%
Return on average tangible common equity		8.28	%		9.60	%		9.47	%		8.94	%		10.73	%
Return on average tangible common equity — operating (a)		9.66	%		10.68	%		11.75	%		10.17	%		11.89	%
Earning asset yield (te)		3.58	%		3.79	%		4.21	%		3.69	%		4.25	%
Total cost of funds		0.28	%		0.24	%		0.22	%		0.26	%		0.22	%
Net interest margin (te)		3.30	%		3.55	%		3.99	%		3.43	%		4.03	%
Noninterest income excluding securities transactions to total revenue (te)		28.21	%		25.87	%		25.21	%		27.04	%		25.21	%
Efficiency ratio (b)		66.67	%		64.36	%		61.67	%		65.51	%		61.95	%
Average loan/deposit ratio		83.85	%		84.13	%		84.20	%		83.99	%		82.63	%
FTE employees (period-end)		3,825			3,785			3,901			3,825			3,901

Capital Ratios
Common stockholders’ equity to total assets		11.28	%		11.70	%		12.88	%		11.28	%		12.88	%
Tangible common equity ratio		8.12	%		8.40	%		9.29	%		8.12	%		9.29	%

(a)	Excludes tax-effected securities transactions and nonoperating expense items. Management believes that this is a useful financial measure that helps investors compare the Company’s fundamental operations over time.

(b)	Noninterest expense as a percent of total revenue (te) before amortization of purchased intangibles, securities transactions, and nonoperating expense items.


	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(in thousands)	2015			2015			2014			2015			2014
Asset Quality Information
Nonaccrual loans (a)	$	118,445		$	90,821		$	89,901		$	118,445		$	89,901
Restructured loans - still accruing		7,966			7,564			7,868			7,966			7,868

Total nonperforming loans		126,411			98,385			97,769			126,411			97,769
Other real estate (ORE) and foreclosed assets		38,630			42,956			59,732			38,630			59,732

Total nonperforming assets	$	165,041		$	141,341		$	157,501		$	165,041		$	157,501

Accruing loans 90 days past due (a)		3,478			5,872			4,142			3,478			4,142
Net charge-offs - non-FDIC acquired		1,210			3,654			4,064			4,864			8,042
Net charge-offs - FDIC acquired		582			2,455			1,181			3,037			3,691
Allowance for loan losses		131,087			128,386			128,672			131,087			128,672
Provision for loan losses		6,608			6,154			6,691			12,762			14,654
Nonperforming assets to loans, ORE and foreclosed assets		1.15	%		1.01	%		1.22	%		1.15	%		1.22	%
Accruing loans 90 days past due to loans		0.02	%		0.04	%		0.03	%		0.02	%		0.03	%
Nonperforming assets + accruing loans 90 days past due to loans, ORE and foreclosed assets		1.17	%		1.05	%		1.25	%		1.17	%		1.25	%
Net charge-offs - non-FDIC acquired to average loans		0.03	%		0.11	%		0.13	%		0.07	%		0.13	%
Allowance for loan losses to period-end loans		0.91	%		0.92	%		1.00	%		0.91	%		1.00	%
Allowance for loan losses to nonperforming loans + accruing loans 90 days past due		100.92	%		123.14	%		126.26	%		100.92	%		126.26	%

(a)	Nonaccrual loans and accruing loans past due 90 days or more do not include acquired-impaired loans with an accretable yield. Included in nonaccrual loans are $4.9 million, $5.0 million, and $11.5 million in restructured loans at June 30, 2015, March 31, 2015, and June 30, 2014, respectively.


Supplemental Asset Quality Information	Originated		Acquired (a)			FDIC acquired (b)			Total
(in thousands)	June 30, 2015
Nonaccrual loans (c)	$	111,455	$	5,401		$	1,589		$	118,445
Restructured loans - still accruing		7,966		—			—			7,966

Total nonperforming loans		119,421		5,401			1,589			126,411
ORE and foreclosed assets (d)		25,768		—			12,862			38,630

Total nonperforming assets	$	145,189	$	5,401		$	14,451		$	165,041

Accruing loans 90 days past due		3,478		—			—			3,478
Allowance for loan losses		106,811		214			24,062			131,087


	March 31, 2015
Nonaccrual loans	$	83,412	$	5,820		$	1,589		$	90,821
Restructured loans - still accruing		7,564		—			—			7,564

Total nonperforming loans		90,976		5,820			1,589			98,385
ORE and foreclosed assets		29,380		—			13,576			42,956

Total nonperforming assets	$	120,356	$	5,820		$	15,165		$	141,341

Accruing loans 90 days past due		5,659		213			—			5,872

Allowance for loan losses		100,494		254			27,638			128,386


Loans Outstanding	Originated		Acquired (a)			FDIC acquired (b)			Total
(in thousands)	June 30, 2015
Commercial non-real estate loans	$	6,058,998	$	120,020		$	6,666		$	6,185,684
Construction and land development loans		1,100,788		9,064			11,095			1,120,947
Commercial real estate loans		2,591,384		598,962			22,487			3,212,833
Residential mortgage loans		1,784,730		1,554			169,553			1,955,837
Consumer loans		1,854,591		24			14,836			1,869,451

Total loans	$	13,390,491	$	729,624		$	224,637		$	14,344,752

Change in loan balance from previous quarter		469,961		(35,700	)		(13,895	)		420,366


	March 31, 2015
Commercial non-real estate loans	$	5,861,887	$	118,260		$	6,937		$	5,987,084
Construction and land development loans		1,087,449		14,579			11,482			1,113,510
Commercial real estate loans		2,492,351		629,975			27,777			3,150,103
Residential mortgage loans		1,736,033		2,485			175,367			1,913,885
Consumer loans		1,742,810		25			16,969			1,759,804

Total loans	$	12,920,530	$	765,324		$	238,532		$	13,924,386

Change in loan balance from previous quarter		110,331		(67,344	)		(13,877	)		29,110

(a)	Loans which have been acquired and no allowance brought forward in accordance with acquisition accounting. Acquired-performing loans in pools with fully accreted purchase fair value discounts are reported as originated loans, resulting in changes in classification between periods.

(b)

Loans acquired in an FDIC-assisted transaction. Non-single family loss share agreement expired on December 31, 2014. $179.0 million in loans and $3.5 million in ORE remain covered by the FDIC single family loss share agreement as of June 30, 2015, providing considerable protection against credit risk. As of March 31, 2015 $186.1 million in loans and $6.0 million in ORE remained covered by the FDIC single family loss share agreement.

(c)	Included in nonaccrual loans are $4.9 million and $5.0 million of nonaccruing restructured loans at June 30, 2015 and March 31, 2015, respectively.

(d)	ORE received in settlement of acquired loans is no longer subject to purchase accounting guidance and has been included with ORE from originated loans. ORE received in settlement of FDIC acquired loans remains covered under the FDIC loss share agreement.


	Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
(in thousands)	2015			2015			2014			2014			2014
Period-End Balance Sheet
Total loans, net of unearned income (a)	$	14,344,752		$	13,924,386		$	13,895,276		$	13,348,574		$	12,884,056
Loans held for sale		21,304			19,950			20,252			15,098			22,017
Securities		4,445,452			4,107,904			3,826,454			3,913,370			3,677,229
Short-term investments		598,455			515,797			802,948			471,558			440,688

Earning assets		19,409,963			18,568,037			18,544,930			17,748,600			17,023,990
Allowance for loan losses		(131,087	)		(128,386	)		(128,762	)		(125,572	)		(128,672	)
Goodwill		621,193			621,193			621,193			621,193			621,193
Other intangible assets, net		119,256			125,404			132,810			139,256			145,825
Other assets		1,519,080			1,538,263			1,577,095			1,602,473			1,687,095

Total assets	$	21,538,405		$	20,724,511		$	20,747,266		$	19,985,950		$	19,349,431


Noninterest-bearing deposits	$	6,180,814		$	6,201,403		$	5,945,208		$	5,866,255		$	5,723,663

Interest-bearing transaction and savings deposits		6,994,603			6,576,658			6,531,628			6,325,671			6,079,837
Interest-bearing public funds deposits		1,962,589			1,828,559			1,982,616			1,534,678			1,484,188
Time deposits		2,163,782			2,253,865			2,113,379			2,010,090			1,957,539

Total interest-bearing deposits		11,120,974			10,659,082			10,627,623			9,870,439			9,521,564

Total deposits		17,301,788			16,860,485			16,572,831			15,736,694			15,245,227
Short-term borrowings		1,079,193			755,250			1,151,573			1,171,809			1,063,664
Long-term debt		507,341			516,007			374,371			376,452			374,991
Other liabilities		220,043			167,671			176,089			191,653			172,967
Stockholders’ equity		2,430,040			2,425,098			2,472,402			2,509,342			2,492,582

Total liabilities & stockholders’ equity	$	21,538,405		$	20,724,511		$	20,747,266		$	19,985,950		$	19,349,431


	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(in thousands)	2015			2015			2014			2015			2014
Average Balance Sheet
Total loans, net of unearned income (a)	$	14,138,904		$	13,869,397		$	12,680,861		$	14,004,895		$	12,530,922
Loans held for sale		22,883			15,567			14,681			19,245			16,932
Securities (b)		4,143,097			3,772,997			3,716,563			3,959,069			3,825,484
Short-term investments		475,887			657,878			379,639			566,380			392,853

Earning assets		18,780,771			18,315,839			16,791,744			18,549,589			16,766,191
Allowance for loan losses		(130,124	)		(130,217	)		(126,887	)		(130,170	)		(130,757	)
Goodwill and other intangible assets		743,435			750,705			770,294			747,050			775,833
Other assets		1,481,008			1,507,532			1,604,113			1,494,197			1,635,875

Total assets	$	20,875,090		$	20,443,859		$	19,039,264		$	20,660,666		$	19,047,142


Noninterest-bearing deposits	$	6,107,900		$	5,924,196		$	5,505,735		$	6,016,623		$	5,502,878

Interest-bearing transaction and savings deposits		6,656,911			6,506,812			6,078,115			6,582,277			6,075,131
Interest-bearing public fund deposits		1,890,364			1,815,445			1,450,312			1,853,111			1,488,251
Time deposits		2,206,913			2,238,806			2,026,419			2,222,771			2,098,025

Total interest-bearing deposits		10,754,188			10,561,063			9,554,846			10,658,159			9,661,407

Total deposits		16,862,088			16,485,259			15,060,581			16,674,782			15,164,285
Short-term borrowings		896,014			920,436			957,386			908,158			871,701
Long-term debt		515,997			412,938			380,151			464,752			383,073
Other liabilities		170,281			177,356			177,761			173,732			178,325
Stockholders’ equity		2,430,710			2,447,870			2,463,385			2,439,242			2,449,758

Total liabilities & stockholders’ equity	$	20,875,090		$	20,443,859		$	19,039,264		$	20,660,666		$	19,047,142

(a)	Includes nonaccrual loans.

(b)	Average securities does not include unrealized holding gains/losses on available for sale securities.

LIQUIDITY

Liquidity management is focused on ensuring that funds are available to meet the cash flow requirements of our depositors and borrowers, while also meeting the operating, capital and strategic cash flow needs of the Company, the Bank and other subsidiaries. Hancock develops its liquidity management strategies and measures and monitors liquidity risk as part of its overall asset/liability management process.

The asset portion of the balance sheet provides liquidity primarily through loan principal repayments, as well as maturities and repayments of investment securities. Short-term investments such as federal funds sold, securities purchased under agreements to resell and interest-bearing deposits with the Federal Reserve Bank or with other commercial banks are additional sources of liquidity to meet cash flow requirements. Free securities represent unpledged securities that can be sold or used as collateral for borrowings, and include unpledged securities assigned to short-term dealer repurchase agreements or to the Federal Reserve Bank discount window. Management has established a 15% minimum target for the ratio of free securities to total securities although management will allow the ratio to be less than 15% on a temporary basis if it believes there are sufficient securities available to meet the Company’s projected funding needs. As shown in the table below, our ratio of free securities to total securities was 27.37% at June 30, 2015, compared to 27.06% at March 31, 2015 and 20.00% at June 30, 2014. The increase compared to year-end was due in part to the reduction in securities required to collateralize public funds deposits as discussed below in the section on “Deposits.”


Liquidity Metrics
	June 30,			March 31,			December 31,			September 30,			June 30,
	2015			2015			2014			2014			2014
Free securities / total securities		27.37	%		27.06	%		14.04	%		23.00	%		20.00	%
Core deposits / total deposits		93.56			93.08			93.95			94.57			94.36
Wholesale funds / core deposits		9.80			8.10			9.80			10.40			10.00
Quarter-to-date average loans /quarter-to-date average deposits		83.85			84.13			85.44			85.24			84.20

The liability portion of the balance sheet provides liquidity mainly through the Company’s ability to use cash sourced from various customers’ interest-bearing and noninterest-bearing deposit and sweep accounts. Core deposits consist of total deposits less certificates of deposits (“CDs”) of $250,000 or more, brokered CDs, and balances in sweep time deposit products used by commercial customers. The ratio of core deposits to total deposits was a healthy 93.56% at June 30, 2015, up 48 bps from March 31, 2015 and down 80 bps from June 30, 2014. Brokered CDs totaled $217 million as of June 30, 2015, as $45 million of brokered CDs outstanding at March 31, 2015 matured during the second quarter. There were no brokered CDs outstanding at December 31, 2014 or June 30, 2014. The Company will occasionally use brokered deposits as a funding source, subject to very strict parameters regarding the maturity and interest rate.

Purchases of federal funds, securities sold under agreements to repurchase and other short-term borrowings provide additional sources of liquidity to meet short-term funding requirements. Besides funding from customer sources, our short-term borrowing capacity includes an approved line of credit with the FHLB of $3.4 billion and borrowing capacity at the Federal Reserve’s discount window of $1.8 billion at June 30, 2015. Wholesale funds, which are comprised of short-term borrowings and long-term debt, were 9.80% of core deposits at June 30, 2015, compared to 8.10% at March 31, 2015 and 10.00% at June 30, 2014. The increase from March 31, 2015 reflects the greater utilization of the FHLB line as a source for funding loans and investment securities. At June 30, 2015, the Company had borrowings from the FHLB totaling $600 million compared to $200 million at March 31, 2015, and $415 million a year earlier. No amounts had been borrowed at the Federal Reserve’s discount window in any period. See the discussion on “Deposits” for more information.

Another key measure the Company uses to monitor its liquidity position is the loan to deposit ratio (average loans outstanding for the reporting period divided by average deposits outstanding). The loan to deposit ratio measures the amount of funds the Company lends out for each dollar of deposits on hand. The Company’s loan to deposit ratio for the second quarter of 2015 was 83.85%, a slight decrease from both for the first quarter of 2015, and the second quarter of 2014. The Company has established an internal loan to deposit ratio target of 85.00%.

Cash generated from operations is another important source of funds to meet liquidity needs. The consolidated statements of cash flows present operating cash flows and summarize all significant sources and uses of funds for the six months ended June 30, 2015 and 2014.

Dividends received from the Bank have been the primary source of funds available to the Company for the payment of dividends to our stockholders, stock buybacks, and for servicing debt issued by the parent company. The liquidity management process takes into account the various regulatory provisions that can limit the amount of dividends the Bank can distribute to the Company. The Company maintains cash and other liquid assets at the parent company to provide liquidity sufficient to fund six quarters of anticipated common stockholder dividends.

CAPITAL RESOURCES

Stockholders’ equity totaled $2.4 billion at June 30, 2015, up $4.9 million from March 31, 2015. The tangible common equity ratio decreased to 8.12% at June 30, 2015 from 8.40% at March 31, 2015. This decline mainly reflects $814 million in asset growth.

The Board of Directors authorized a common stock buyback program in July 2014 for up to 5%, or approximately 4.1 million shares, of the Company’s common stock issued and outstanding. Under the program, the shares could be repurchased in the open market or in privately negotiated transactions from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations of the Securities and Exchange Commission. During the first quarter of 2015, the Company completed this buyback authorization by repurchasing 2,563,607 shares of its common stock at an average price of $29.36 per share. The Company repurchased a total of 4,093,149 shares at an average price of $30.02 per share.

On March 9, 2015, the Company issued $150 million aggregate principal amount of subordinated debt at an annual interest rate of 5.95% maturing on June 15, 2045. Subject to prior approval by the Federal Reserve, the Company may redeem the notes in whole or in part on any interest payment date on or after June 15, 2020. The debt qualifies as Tier 2 Capital under regulatory guidelines. A portion of the proceeds from the subordinated debt issuance was used to repurchase the Company’s common stock as noted above with the remainder available for general corporate purposes.

On July 2, 2013 the Federal Reserve Board finalized its rule implementing the Basel III regulatory capital framework and related Dodd-Frank Act changes. The final rule became effective January 1, 2015 with transition periods for certain changes. The final rule strengthens the definition of regulatory capital, increases risk-based capital requirements, and makes selected changes to the calculation of risk-weighted assets. The rule sets the Basel III minimum regulatory capital requirements for all organizations. Under the final rule, the primary quantitative measures that regulators use to gauge capital adequacy are the ratios of Total, Tier 1 and Common Equity Tier 1 regulatory capital to risk-weighted assets (risk-based capital ratios) and the ratio of Tier 1 capital to average total assets (“leverage ratio”). Both the Company and its bank subsidiary are currently required to maintain minimum risk-based capital ratios of 8.0% total regulatory capital, 6.0% Tier 1 capital and 4.5% Common Equity Tier 1 capital. Additionally the final rule establishes a new conservation buffer of 2.5% of risk-weighted assets when fully phased in on January 1, 2019.

At June 30, 2015, the regulatory capital ratios of the Company and the Bank were well in excess of current regulatory minimum requirements, as indicated in the table below. The Company and the Bank have been categorized as “well-capitalized” in the most recent notices received from our regulators and both currently exceed all capital requirements of the new rule, including the fully phased-in conservation buffer.

The following table shows the regulatory capital ratios for the Company and the Bank as calculated under current rules for the indicated periods.


	June 30,			March 31,			December 31,			September 30,			June 30,
	2015			2015			2014			2014			2014

Total capital (to risk weighted assets)
Hancock Holding Company		12.54	%		12.77	%		12.30	%		12.66	%		12.96	%
Whitney Bank		12.05	%		12.17	%		12.20	%		12.40	%		12.72	%

Tier 1 common equity capital (to risk weighted assets)
Hancock Holding Company		10.77	%		10.86	%		11.23	%		11.59	%		11.83	%
Whitney Bank		11.16	%		11.16	%		11.13	%		11.32	%		11.58	%

Tier 1 capital (to risk weighted assets)
Hancock Holding Company		10.77	%		10.86	%		11.23	%		11.59	%		11.83	%
Whitney Bank		11.16	%		11.16	%		11.13	%		11.32	%		11.58	%

Tier 1 leverage capital
Hancock Holding Company		9.07	%		9.17	%		9.17	%		9.48	%		9.61	%
Whitney Bank		9.42	%		9.45	%		9.13	%		9.31	%		9.44	%

Regulatory definitions:

(1)	Tier 1 common equity capital generally includes common equity and retained earnings, reduced by goodwill and other disallowed intangibles, disallowed deferred tax assets and certain other assets.

(2)	Tier 1 capital consists of Tier 1 common equity capital plus non-controlling interest in equity of consolidated subsidiaries and a limited amount of qualifying perpetual preferred stock.

(3)	Total capital consists of Tier 1 capital plus perpetual preferred stock not qualifying as Tier 1 capital, mandatory convertible securities, certain types of subordinated debt and a limited amount of allowances for credit losses.

(4)	The risk-weighted asset base is equal to the sum of the aggregate value of assets and credit-converted off-balance sheet items in each risk category as specified in regulatory guidelines, multiplied by the weight assigned by the guidelines to that category.

(5)	The Tier 1 leverage capital ratio is Tier 1 capital divided by average total assets reduced by the deductions for Tier 1 capital noted above.

BALANCE SHEET ANALYSIS

Securities

Investment in securities totaled $4.4 billion at June 30, 2015, up $338 million from March 31, 2015 and $768 million from June 30, 2014. The quarterly increase in securities was funded by a similar increase in short-term borrowings. During the second quarter, the Company purchased approximately $500 million of mortgage-backed securities at an average yield of 2.13%. At June 30, 2015, securities available for sale totaled $2.2 billion and securities held to maturity totaled $2.3 billion.

The securities portfolio consists mainly of residential mortgage-backed securities and collateralized mortgage obligations issued or guaranteed by U.S. government agencies. The portfolio is designed to enhance liquidity while providing an acceptable rate of return. The Company invests only in high quality securities of investment grade quality with a targeted duration for the overall portfolio of

between two and five. At June 30, 2015, the average maturity of the portfolio was 4.51 years with an effective duration of 3.96 and a weighted-average yield of 2.22%. The effective duration increases, under management scenarios, to 4.34 with a 100 basis point increase in the yield curve and to 4.44 with a 200 basis point increase. At year-end 2014, the average maturity of the portfolio was 4.38 years with an effective duration of 3.51 and a weighted-average yield of 2.36%. The 14 bps decrease in the weighted average security portfolio yield between December 31, 2014 and June 30, 2015 is primarily the result of replacing the normal monthly repayments of higher yielding securities with new securities at current interest rates.

Loans

Total loans at June 30, 2015 were $14.3 billion, up $420 million, or 3%, compared to March 31, 2015, and up $449 million, or 3%, compared to December 31, 2014. Net loan growth during the quarter was well-diversified by geography and loan type. See Note 3 to the consolidated financial statements for the composition of originated, acquired and FDIC acquired loans at June 30, 2015 and December 31, 2014.

The Company’s commercial customer base is diversified over a range of industries, including energy, wholesale and retail trade in various durable and nondurable products and the manufacture of such products, marine transportation and maritime construction, financial and professional services, and agricultural production.

At June 30, 2015, loans in the energy segment, which is comprised of credits to both the exploration and production segment and the support services segment, totaled $1.7 billion, or 12% of total loans. The energy portfolio declined approximately $5 million linked-quarter. In light of expected headwinds related to the current energy cycle, no growth or a slight decline is expected for the remainder of 2015. See Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 for a further discussion regarding the Company’s energy portfolio.

The Bank lends mainly to middle-market and smaller commercial entities, although it participates in larger shared-credit loan facilities with familiar businesses operating in the Company’s market areas. Shared national credits funded at June 30, 2015 totaled approximately $1.9 billion, up approximately $88 million from March 31, 2015 and $90 million from December 31, 2014. Approximately $1.0 billion of shared national credits were with energy-related customers at June 30, 2015, up $26 million from year-end and $46 million from March 31, 2015.

Commercial non-real estate loans, construction and land development loans, and commercial real estate loans increased $225 million over the first six months of 2015. Commercial real estate loans include loans on both income-producing properties as well as properties used by borrowers in commercial operations.

Residential mortgages were up $42 million during the second quarter and $62 million over the first six months of 2015. Consumer loans increased by $163 million over the first six months of 2015, as a result of a number of initiatives implemented by management during 2014.

Total FDIC acquired loans at June 30, 2015 were down $14 million from March 31, 2015 and down $28 million from December 31, 2014, reflecting normal repayments, charge-offs and foreclosures.

Allowance for Loan Losses and Asset Quality

The Company’s total allowance for loan losses was $131.1 million at June 30, 2015, compared to $128.4 million at March 31, 2015. The allowance maintained on the non-FDIC acquired portion of the loan portfolio totaled $107 million, a $6.3 million linked-quarter increase, and the impaired reserve on the FDIC acquired loan portfolio declined $3.6 million linked-quarter.

Pricing pressures on oil continued during the second quarter and led to additional downward pressure on risk ratings. The Company’s balance of criticized commercial loans increased $207 million, or approximately 50%, from March 31, 2015, to $626 million at June 30, 2015. Approximately $187 million, or 90%, of the increase was from energy related credits. Based on those changes, plus updates to the qualitative factors related to energy, the reserve for the energy portfolio increased $10.6 million linked-quarter.

The Company has been lending to the energy sector for over 60 years using disciplined underwriting standards. The majority of the Company’s portfolio consists of long-term relationships with customers that have experienced management in place and that have demonstrated the ability to successfully manage through previous economic downturns. The Company’s reserve based lending practices are generally limited to “proved reserves” and our customers are diversified across a number of basins in the United States and Gulf of Mexico. Borrowing base redeterminations are completed twice a year and all borrowing bases were reviewed in the second quarter of 2015. The Company’s loans to the energy support sector are typically made to customers with low to moderate leverage, strong balance sheets and experienced management.

Management continues to closely monitor the potential impact that the decrease in oil prices over the past twelve months will have on the ability of the Company’s energy loan portfolio customers’ to service their debt. Part of the ongoing monitoring includes a review of customers’ balance sheets, leverage ratios, collateral values and other critical lending metrics. As new information becomes available, the Company could have additional risk rating downgrades. Management believes that if further risk rating downgrades occur, they could lead to additional loan loss provisions and allowance for loan losses. The impact and severity will depend on the overall oil price reduction and the duration of the cycle. See Item 7 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 for further discussion of the company’s energy portfolio and its potential impact on the allowance for loan losses.

The $3.6 million linked quarter decline in the allowance related to the FDIC acquired loan portfolio is a direct result of a lower level of expected losses in the portfolio.

The ratio of the allowance to period-end loans was 0.91% at June 30, 2015, virtually unchanged from March 31, 2015. The allowance maintained on the originated portion of the loan portfolio totaled $106.8 million, or 0.80% of related loans, at June 30, 2015, compared to $100.5 million, or 0.78%, at March 31, 2015.

During the second quarter of 2015, Hancock recorded a total provision for loan losses of $6.6 million, up $0.4 million from the first quarter of 2015, and slightly down from $6.7 million for June 30, 2014. See the Provision for Loan Losses section above for further discussion of the provision for loan losses.

Net charge-offs for the three months ended June 30, 2015 from the non-FDIC acquired loan portfolio were $1.2 million, or 0.03% of average total loans on an annualized basis, compared to $3.7 million, or 0.11%, for the three-month period ended March 31, 2015.

The following table sets forth activity in the allowance for loan losses for the periods indicated.


	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,
(in thousands)	2015			2015			2014			2015			2014
Allowance for loan losses at beginning of period	$	128,386		$	128,762		$	128,248		$	128,762		$	133,626

Loans charged-off:
Non-FDIC acquired loans:
Commercial non real estate		518			1,697			1,272			2,215			3,658
Construction and land development		81			747			950			828			1,041
Commercial real estate		274			251			650			525			1,373
Residential mortgages		83			1,209			856			1,292			1,097
Consumer		3,173			3,556			3,581			6,729			7,622

Total non-FDIC acquired charge-offs		4,129			7,460			7,309			11,589			14,791

FDIC acquired loans:
Commercial non real estate		972			127			24			1,099			70
Construction and land development		9			276			166			285			624
Commercial real estate		—			2,368			905			2,368			4,022
Residential mortgages		75			93			422			168			730
Consumer		—			140			1,049			140			1,130

Total FDIC acquired charge-offs		1,056			3,004			2,566			4,060			6,576

Total charge-offs		5,185			10,464			9,875			15,649			21,367

Recoveries of loans previously charged-off:
Non-FDIC acquired loans:
Commercial non real estate		1,070			981			585			2,051			1,411
Construction and land development		65			1,243			413			1,308			1,064
Commercial real estate		429			(3	)		726			426			1,057
Residential mortgages		144			305			269			449			363
Consumer		1,211			1,280			1,252			2,491			2,854

Total non-FDIC acquired recoveries		2,919			3,806			3,245			6,725			6,749

FDIC acquired loans:
Commercial non real estate		—			14			6			14			451
Construction and land development		—			406			39			406			896
Commercial real estate		352			113			1,235			465			1,371
Residential mortgages		2			—			13			2			19
Consumer		120			16			92			136			148

Total FDIC acquired recoveries		474			549			1,385			1,023			2,885

Total recoveries		3,393			4,355			4,630			7,748			9,634

Net charge-offs - non-FDIC acquired		1,210			3,654			4,064			4,864			8,042
Net charge-offs - FDIC acquired		582			2,455			1,181			3,037			3,691

Total net charge-offs		1,792			6,109			5,245			7,901			11,733

Provision for loan losses before FDIC benefit - FDIC acquired loans		(2,994	)		(491	)		(1,095	)		(3,485	)		(8,250	)
Benefit attributable to FDIC loss share agreement		2,115			421			1,022			2,536			7,875
Provision for loan losses non-FDIC acquired loans		7,487			6,224			6,764			13,711			15,029

Provision for loan losses, net		6,608			6,154			6,691			12,762			14,654
(Decrease) Increase in FDIC loss share receivable		(2,115	)		(421	)		(1,022	)		(2,536	)		(7,875	)

Allowance for loan losses at end of period	$	131,087		$	128,386		$	128,672		$	131,087		$	128,672

Ratios:
Gross charge-offs - non-FDIC acquired to average loans		0.12	%		0.22	%		0.23	%		0.17	%		0.24	%
Recoveries - non-FDIC acquired to average loans		0.08	%		0.11	%		0.10	%		0.10	%		0.11	%
Net charge-offs - non-FDIC acquired to average loans		0.03	%		0.11	%		0.13	%		0.07	%		0.13	%
Allowance for loan losses to period-end loans		0.91	%		0.92	%		1.00	%		0.91	%		1.00	%

The following table sets forth nonperforming assets by type for the periods indicated, consisting of nonaccrual loans, troubled debt restructurings and foreclosed and surplus ORE and other foreclosed assets. Loans past due 90 days or more and still accruing are also disclosed.


	June 30,			December 31,
(in thousands)	2015			2014

Loans accounted for on a nonaccrual basis: (a)
Commercial non-real estate loans	$	41,789		$	14,248
Commercial non-real estate loans - restructured		665			1,263

Total commercial non-real estate loans		42,454			15,511


Construction and land development loans		4,820			5,187
Construction and land development loans - restructured		1,621			2,378

Total construction and land development loans		6,441			7,565


Commercial real estate loans		42,151			26,017
Commercial real estate loans - restructured		1,835			2,602

Total commercial real estate loans		43,986			28,619


Residential mortgage loans		19,980			21,348
Residential mortgage loans - restructured		729			746

Total residential mortgage loans		20,709			22,094


Consumer loans		4,855			5,748

Total nonaccrual loans		118,445			79,537


Restructured loans - still accruing:
Commercial non-real estate loans		—			424
Construction and land development loans		2,459			4,905
Commercial real estate loans		5,381			3,580
Residential mortgage loans		108			54
Consumer loans		18			8

Total restructured loans - still accruing		7,966			8,971

ORE and foreclosed assets		38,630			59,569

Total nonperforming assets (b)	$	165,041		$	148,077

Loans 90 days past due still accruing	$	3,478		$	4,825


Ratios:
Nonperforming assets to loans plus ORE and foreclosed assets		1.15	%		1.06	%
Allowance for loan losses to nonperforming loans and accruing loans 90 days past due		100.92	%		137.96	%
Loans 90 days past due still accruing to loans		0.02	%		0.03	%

(a)	Nonaccrual loans and accruing loans past due 90 days or more do not include acquired credit-impaired loans which were written down to fair value upon acquisition and accrete interest income over the remaining life of the loan.

(b)	Includes total nonaccrual loans, total restructured loans - still accruing and ORE and foreclosed assets.

Nonperforming assets totaled $165.0 million at June 30, 2015, up $17.0 million from December 31, 2014. During the first half of 2015, total nonperforming loans increased approximately $38.9 million while ORE and other foreclosed assets decreased approximately $20.9 million. The net increase in nonperforming loans was mainly related to one nondrilling support energy loan which was downgraded during the second quarter of 2015. Nonperforming assets as a percent of total loans, ORE, and other foreclosed assets was 1.15% at June 30, 2015, compared to 1.06% at December 31, 2014.

Short-Term Investments

Short-term liquidity investments, including interest-bearing bank deposits and federal funds sold, increased $83 million from March 31, 2015, but decreased $204 million from December 31, 2014, to a total of $598 million at June 30, 2015. Short-term liquidity assets are held to ensure funds are available to meet the cash flow needs of both borrowers and depositors. Average short-term investments for the second quarter of 2015 were down $182 million, or 28%, compared to the first quarter of 2015, and $5 million, or 1%, compared to the fourth quarter of 2014.

Deposits

Total deposits were $17.3 billion at June 30, 2015, up $441 million, or 3%, from March 31, 2015, and $729 million, or 4%, from December 31, 2014. Average deposits for the second quarter of 2015 were $16.9 billion, up $377 million, or 2% from the first quarter of 2015. The deposit growth is due, in part, to a number of strategic initiatives implemented during 2014 that are aimed at growing deposits.

Noninterest-bearing demand deposits were $6.2 billion, virtually flat with the first quarter, and were up $457 million, or 8%, from June 30, 2014. Noninterest-bearing demand deposits comprised 36% of total period-end deposits at June 30, 2015, slightly down from March 31, 2015 and flat with year-end 2014.

Interest-bearing public fund deposits totaled $2.0 billion at June 30, 2015, up $134 million, or 7%, from March 31, 2015, but down $20 million, or 1%, from December 31, 2014.

Time deposits, other than public funds, totaled $2.2 billion at June 30, 2015, down $90 million, or 4%, from March 31, 2015, but up $50 million, or 2%, from December 31, 2014. CDs decreased $40 million, or 2%, from March 31, 2015, and increased $193 million from December 31, 2014. Both variances are due to changes in the balances of brokered CDs. As discussed in the Liquidity section, the Company will occasionally use brokered deposits, subject to strict parameters regarding maturity and rates, as a short-term funding source. Balances in sweep deposit products decreased $50 million, or 13%, from March 31, 2015 and $143 million, or 30%, from December 31, 2014.

Short-Term Borrowings

At June 30, 2015, short-term borrowings totaled $1.1 billion, down $72 million, or 6%, from December 31, 2014. Securities sold under agreements to repurchase decreased $158 million, or 25%, while FHLB borrowings increased $85 million, or 17%. Securities sold under agreements to repurchase are a major source of short-term borrowings that are offered mainly to commercial customers to assist them with their cash management strategies or to provide a temporary investment vehicle for their excess liquidity pending redeployment for corporate or investment purposes. While customer repurchase agreements provide a recurring source of funds to the Bank, the amounts available over time can be volatile.

OFF-BALANCE SHEET ARRANGEMENTS

Loan Commitments and Letters of Credit

In the normal course of business, the Bank enters into financial instruments, such as commitments to extend credit and letters of credit, to meet the financing needs of their customers. Such instruments are not reflected in the accompanying consolidated financial statements until they are funded, although they expose the Bank to varying degrees of credit risk and interest rate risk in much the same way as funded loans. Under regulatory capital guidelines, the Company must include unfunded commitments meeting certain criteria in its risk-weighted capital calculation.

Commitments to extend credit include revolving commercial credit lines, nonrevolving loan commitments issued mainly to finance the acquisition and development or construction of real property or equipment, and credit card and personal credit lines. The availability of funds under commercial credit lines and loan commitments generally depends on whether the borrower continues to meet credit standards established in the underlying contract and has not violated other contractual conditions. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. Credit card and personal credit lines are generally subject to cancellation if the borrower’s credit quality deteriorates. A number of commercial and personal credit lines are used only partially or, in some cases, not at all before they expire, and the total commitment amounts do not necessarily represent future cash requirements of the Company.

A substantial majority of the letters of credit are standby agreements that obligate the Bank to fulfill a customer’s financial commitments to a third party if the customer is unable to perform. The Bank issues standby letters of credit primarily to provide credit enhancement to its customers’ other commercial or public financing arrangements and to help them demonstrate financial capacity to vendors of essential goods and services.

The contract amounts of these instruments reflect the Company’s exposure to credit risk. The Company undertakes the same credit evaluation in making loan commitments and assuming conditional obligations as it does for on-balance sheet instruments and may require collateral or other credit support.

The following table shows the commitments to extend credit and letters of credit at June 30, 2015 according to expiration date.


			Expiration Date
(in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years

Commitments to extend credit	$	5,698,867	$	2,902,090	$	995,758	$	1,198,618	$	602,401
Letters of credit		384,416		223,683		98,275		62,040		418

Total	$	6,083,283	$	3,125,773	$	1,094,033	$	1,260,658	$	602,819

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and with those generally practiced within the banking industry which require management to make estimates and assumptions about future events. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, and the resulting estimates form the basis for making judgments about the carrying values of certain assets and liabilities not readily apparent from other sources. Actual results could differ significantly from those estimates.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 14 to our Consolidated Financial Statements included elsewhere in this report.

FORWARD-LOOKING STATEMENTS

This report 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 provide projections of results of operations or of financial condition or state other forward-looking information, such as expectations about future conditions and descriptions of plans and strategies for the future.

Forward-looking statements that we may make include, but may not be limited to, comments with respect to future levels of economic activity in our markets, including the impact of volatile or continuing depressed oil and gas prices on our energy portfolio and associated loan loss reserves and the downstream impact on businesses that support the energy sector, especially in the Gulf Coast region, loan growth expectations, deposit trends, credit quality trends, net interest margin trends, future expense levels, success of revenue-generating initiatives, projected tax rates, future profitability, improvements in expense to revenue (efficiency) ratio, purchase accounting impacts such as accretion levels, the impact of the branch rationalization process, and the financial impact of regulatory requirements. Hancock’s ability to accurately project results, predict the effects of future plans or strategies, or predict market or economic developments is inherently limited. Although Hancock believes that the expectations reflected in its forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ from those expressed in 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).

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.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Our net income is materially dependent on our net interest income. Hancock’s primary market risk is interest rate risk that stems from uncertainty with respect to absolute and relative levels of future market interest rates that affect our financial products and services. In an attempt to manage our exposure to interest rate risk, management measures the sensitivity of our net interest income and cash flows under various market interest rate scenarios, establishes interest rate risk management policies and implements asset/liability management strategies designed to produce a relatively stable net interest margin under varying rate environments.

Hancock measures its interest rate sensitivity primarily by running net interest income simulations. Hancock’s balance sheet is asset sensitive over a 2 year period to rising interest rates under various shock scenarios. The model measures annual net interest income sensitivity relative to a base case scenario and incorporates assumptions regarding balance sheet growth and the mix of earning assets and funding sources as well as pricing, re-pricing and maturity characteristics of the existing and projected balance sheet.

The table below presents the results of simulations run as of June 30, 2015 for year 1 and year 2, assuming the indicated instantaneous and sustained parallel shift in the yield curve at the measurement date. These results indicate that we are slightly asset sensitive compared to the stable rate environment assumed for the base case.


Net Interest Income (te) at Risk
Change in interest rate (basis points)		Estimated increase (decrease) in net interest income
Change in interest rate (basis points)		Year 1			Year 2
	+100		1.13	%		1.30	%
	+200		3.42	%		3.81	%
	+300		5.05	%		5.39	%

Note: Decrease in interest rates discontinued in the current rate environment

The foregoing disclosures related to our market risk should be read in conjunction with our audited consolidated financial statements, related notes and management’s discussion and analysis for the year ended December 31, 2014 included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Item 4.

Controls and Procedures

At the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report to timely alert them to material information relating to us (including our consolidated subsidiaries) required to be included in our Exchange Act filings.

Our management, including the Chief Executive Officer and Chief Financial Officer, identified no change in our internal control over financial reporting that occurred during the three-month period ended June 30, 2015, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

The Company, including subsidiaries, is party to various legal proceedings arising in the ordinary course of business. We do not believe that loss contingencies, if any, arising from pending litigation and regulatory matters will have a material adverse effect on our consolidated financial position or liquidity.

Item 1A.

Risk Factors

There were no changes to the risk factors that were previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014. In addition to the risk of vulnerability to certain sectors of the economy related to the real estate portfolio, recent trends in the energy sector point to possible vulnerability.

The risks described may not be the only risks facing us. Additional risks and uncertainties not currently known to us or that are currently considered to not be material also may materially adversely affect our business, financial condition, and/or operating results.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

No shares of common stock or other equity securities were repurchased during the period of this report. In March 2015, the Company completed the stock repurchase program approved by the Company’s board of directors on July 16, 2014 which authorized the repurchase of up to 5%, or approximately 4.1 million shares, of its outstanding common stock.

Item 6.

Exhibits.

(a)

Exhibits:

SIGNATURES

Pursuant to the requirements 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.


Hancock Holding Company

By:		/s/ John M. Hairston
		John M. Hairston
		President & Principal Executive Officer

		/s/ Michael M. Achary
		Michael M. Achary
		Principal Financial Officer

Date:		August 7, 2015


Exhibit Number		Description

3.1		Composite Articles of the Company (filed as Exhibit 2.1 to the Company’s Form 10-K for the year ended December 31, 2014 (file No. 01-36872) filed with the Commission on February 27, 2015.

3.2		Amended and Restated Bylaws, dated November 8, 1990 (filed as Exhibit 3.2 to Hancock’s registration statement on Form S-8 filed with the Commission on September 19, 1996 and incorporated herein by reference.

*10.1		Hancock Holding Company 2014 Long Term Incentive Plan (filed as Exhibit 10.1 to Hancock’s Form 8-K filed with the Commission on April 21, 2014 and incorporated herein by reference).

*10.2		Form of Change in Control Employment Agreement between the Company and its executive officers (filed as Exhibit 10.2 to Hancock’s Form 8-K filed with the Commission on June 20, 2014 and incorporated herein by reference).

*10.3		Addendum to Nonqualified Deferred Compensation Plan describing SERP benefit (filed as Exhibit 10.3 to Hancock’s Form 10-Q filed with the Commission on August 8, 2014 and incorporated herein by reference).

*10.4		Form of 2014 Restricted Stock Award Agreement (filed as Exhibit 10.4 to Hancock’s Form 10-Q filed with the Commission on August 8, 2014 and incorporated herein by reference).

*10.5		Hancock Holding Company 2015 Executive Incentive Plan (filed as Exhibit 10.5 to Hancock’s Form 10-Q filed with the Commission on May 8, 2015 and incorporated herein by reference).

***10.6		Retirement and Restrictive Covenant Agreement, between the Company and Clifton J. Saik, dated June 29, 2015 and effective June 30, 2015.

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		XBRL Interactive Data.

*	Compensatory plan or arrangement

**	Filed with this Form 10-Q

Exhibit 10.6

RETIREMENT AND RESTRICTIVE COVENANT AGREEMENT

This Retirement and Restrictive Covenant Agreement (this “Agreement”) by and between Hancock Holding Company, a Mississippi corporation (the “Company”), and Clifton J. Saik (“Executive”) is dated as of June 30, 2015.

WHEREAS, Executive resigned from the position of Chief Wealth Management Officer and as Executive Vice President of the Company, effective May 8, 2015, and has continued as an employee of the Company in the position of Management Advisor since that date; and

WHEREAS, Executive shall retire from all employment with the Company in whatsoever position, effective June 30, 2015 (the “Termination Date”); and

WHEREAS, the Company and Executive have reached a mutual agreement relating to Executive’s retirement and his agreement to be bound by certain restrictive covenants following his retirement, and they wish to set forth their mutual agreement as to such terms and conditions as set forth herein.

NOW, THEREFORE, the Company and Executive hereby agree as follows:

Retirement.

Effective as of the Termination Date, Executive has resigned and shall cease serving as Chief Wealth Management Officer of the Company and in any other position he then holds as an officer of the Company or of any of the Company’s subsidiaries or affiliates. Executive agrees to execute such documents and take such other actions as the Company may request to reflect such resignations.

Compensation Matters.

Compensation through June 30, 2015. While employed as Chief Wealth Management Officer through the Termination Date, Executive shall continue to receive his current base salary ($386,260) and be eligible to participate in the Company’s employee benefit plans on the same basis as other senior executives of the Company. Executive shall receive payment for all earned but unused vacation.

Compensation Upon Termination/General Release of Claims.

Equity Compensation. Subject to Executive’s continued employment through the Termination Date and the execution and effectiveness of the Release (as defined in Section 4), effective as of the effective date of the Release (as set forth in Paragraph 10 of the Release), the restricted stock awards granted to Executive during fiscal years 2010 through 2014 shall vest on a pro-rata basis as set forth in Schedule A attached hereto. Effective as of the Termination Date, Executive’s outstanding stock options (whether vested or unvested) and performance share awards shall be forfeited and terminate immediately for no consideration and he shall have no further rights with respect thereto.

Nonqualified Deferred Compensation Plan. For purposes of this Section 2(b)(ii), all capitalized terms not otherwise defined in this Section shall have the meaning set forth in the Company’s Nonqualified Deferred Compensation Plan (the “NQDC Plan”). Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and, as such, all payments under the NQDC Plan as a result of Executive’s separation from service on the Termination Date shall be subject to the six-month delay of payment in accordance with the terms of the NQDC Plan. Following the Termination Date, the account balances in Executive’s Deferral Account, Company Contribution Account, Company Restoration Matching Account, and

Supplemental Contribution Account under the NQDC Plan, including the additional amounts contributed by the Company pursuant to Section 2(c) hereof, shall become payable in accordance with the terms of the NQDC Plan. Executive and the Company acknowledge and agree that the balances of such accounts as of the Termination Date will increase or decrease through the payment date or dates based on Executive’s deemed investment elections under the NQDC Plan. Except as set forth in this Section 2(b)(ii), Executive shall have no further rights under the NQDC Plan.

Compensation for Restrictive Covenant. Subject to Executive’s continued employment through the Termination Date and his compliance with the Restrictive Covenants (as defined in Section 3), Executive shall, subject to Section 2(d), be entitled to the following from the Company (the “Covenant Compensation”):

The Company shall credit, as of the Termination Date, to the Company Contribution Account of Executive under the NQDC Plan an amount equal to the estimated compensation Executive would have earned had he remained employed by the Company through February, 2016, i.e., the sum of eight month’s base salary, estimated 2015 bonus, and estimated value of 2015 restricted stock awards that would have pro rata vested ($491,078).

The Company shall fully fund the Supplemental Contribution for 2015 to the NQDC Plan on behalf of Executive by a credit, as of the Termination Date, to Executive’s Supplemental Contribution Account under the NQDC Plan in an amount equal to the estimated contribution that would have been made if he had remained employed by the Company through December 31, 2015 ($204,444).

The amounts credited by the Company to Executive’s accounts under the NQDC Plan pursuant to Section 2(c) shall be subject to all the term and conditions of the NQDC Plan and of Section 2(b)(ii) above and shall become payable and be distributed in accordance with the terms of the NQDC Plan.

Forfeiture and Recoupment Remedies. Notwithstanding anything to the contrary, if Executive violates or threatens to violate the Restrictive Covenants (i) at any time prior to the contribution by the Company of the Covenant Compensation to the NQDC Plan, the Covenant Compensation shall be automatically forfeited and no such contributions will be credited to the accounts of Executive under the NQDC Plan or (ii) at any time following the date payment of the Covenant Compensation has been made from the NQDC Plan to Executive, Executive shall repay the full amount of the Covenant Compensation to the Company within 30 days following Executive’s receipt of written notice from the Company of such violation. In addition, with respect to any incentive compensation paid or payable to Executive under the terms of any of the Company’s plans, the Company shall continue to have any rights and remedies available under the Company’s clawback policy as in effect on the Termination Date. No such forfeiture or recoupment shall occur, however, unless the Company shall first provide Executive (i) notice specifically identifying the action and/or actions of Executive which the Company deems to be a violation or threatened violation of a covenant or covenants hereunder and (ii) an opportunity to cure if such violation or threatened violation can be cured within fifteen (15) days of the date of such notice without adverse consequences, financial or otherwise, to the Company.

Other Vested Benefits. Except as provided in this Agreement, Executive shall not be entitled to any other compensation or benefits from the Company or its subsidiaries or affiliates, other than for vested benefits under the terms of the Company’s retirement and welfare benefit plans of general applicability (excluding for this purpose benefits under any severance plan or policy of, or severance agreement with, the Company to which Executive shall have no entitlement).

Restrictive Covenants. In consideration of the foregoing, including without limitation, the Covenant Compensation, Executive hereby agrees to be bound by the covenants set forth in Sections 3(a) through 3(e), which are referred to herein collectively as the “Restrictive Covenants”).

Confidential Information. At all times during his employment by the Company and thereafter, Executive will not, for or on behalf of himself or any other person or entity, directly or indirectly, (i) use for Executive’s own benefit or the benefit of such other person or entity or to the detriment of the Company or (ii) disclose to any other party

any Trade Secrets or Confidential Information of the Company or any person or entity affiliated with the Company. For purposes of this Agreement, (A) “Confidential Information” means information of the Company or of any person or entity affiliated with the Company which is non-public, proprietary, and confidential in nature but is not a Trade Secret and (B) “Trade Secrets” means information relating to the Company’s business or the business of any person or entity affiliated with the Company which derives economic value, actual or potential, from not being generally known to other persons and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality, including but not limited to, technical or non-technical data, formulae, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data and lists of actual or potential customers or suppliers. The foregoing restrictions shall not apply to Confidential Information and Trade Secrets that (i) come into the public domain through no fault of Executive, (ii) are available to Executive from a source other than the Company or any of its subsidiaries, which source is not known by Executive to be under any obligation of confidentiality to the Company or any such subsidiary, (iii) are compelled to be disclosed pursuant to legal process, but in that event Executive will, if permitted by legal requirements, provide advance notice to the Company of his proposed compliance with such process.

Non-Competition Covenant. While employed by the Company and thereafter until February 28, 2017, Executive is prohibited from, directly or indirectly, owning, managing, being employed by or providing services as an independent contractor, in any capacity, to any enterprise that competes with the Company with respect to the Company Business as conducted in the Geographic Area. For purposes of this Agreement, (i) “Company Business” means all services and activities similar to all services and activities currently conducted by the Company, including without limitation, commercial and branch banking, international banking, brokerage services, institutional and government banking, credit cards, consumer finance, mortgage and personal and corporate trust services and (ii) “Geographic Area” means any parish in the State of Louisiana or county in the State of Mississippi listed in Exhibit A.

Non-Solicitation of Customers and Employees. While employed by the Company and thereafter until February 28, 2017, Executive is prohibited from, directly or indirectly, soliciting or inducing customers, vendors, suppliers, licensors and employees to cease their relationship with the Company, and also from, directly or indirectly, hiring any employee or other person retained by the Company or its subsidiaries or affiliates; provided that this covenant shall apply only to the extent that such solicitation or inducement relates, directly or indirectly, to the Company Business as conducted in the Geographic Area.

Non-Disparagement. At all times during his employment and thereafter, Executive will refrain from publicly making any statement, verbal or otherwise, relating to the Company and its directors, officers, employees, agents, advisors or representatives, Executive’s employment with the Company or Executive’s termination of employment with the Company, including the reasons for or any of the events or circumstances surrounding such termination of employment, that could reasonably be understood as disparaging or damaging the reputation of the Company or its directors, officers, employees, agents, advisors or representatives; provided, however, that the foregoing shall not be deemed to prevent or impair Executive from truthfully testifying in any legal or administrative proceeding or truthfully responding to inquiries or requests for information by any regulator or auditor.

Return of Property and Materials. Upon the earlier of (i) demand by the Company prior to the Termination Date and (ii) the Termination Date, Executive shall immediately return to the Company all property of the Company or any person or entity affiliated with the Company and all materials relating to the Company’s business, the business of any person or entity affiliated with the Company, or Executive’s employment hereunder, including all copies thereof, whether provided by the Company to Executive or prepared or otherwise obtained by Executive, including without limitation all materials containing any Trade Secrets or Confidential Information of the Company or any person or entity affiliated with the Company; any credit cards and security identification passes; all materials relating to the customers of the Company or any person or entity affiliated with the Company; all computers, communication devices or other electronic equipment, hardware, software and storage media provided by the Company or any person or entity affiliated with the Company; all other memoranda, correspondence, records and notes. Nothing stated herein shall prohibit Executive from retaining copies of any and all agreements between himself and the Company, and documents reflecting benefit plans or agreements which he is provided by the Company and any documents reflecting payments made to or from him to the Company.

Reasonableness. Executive acknowledges that the restrictions set forth herein are necessary to prevent the use and disclosure of the Confidential Information and Trade Secrets and to otherwise protect the legitimate business interests and goodwill of the Company. Executive further acknowledges that all of the restrictions in this Agreement are reasonable in all respects, including duration, geographic scope and scope of activity. Executive agrees that the existence of any claim or cause of action by Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and restrictions set forth in this Agreement. Executive agrees that he will be able to earn a livelihood without violating the Restrictive Covenants, including without limitation the non-competition covenant contained in Section 3(b).

Enforcement. Executive acknowledges that his violation of any of the Restrictive Covenants will cause immediate, substantial and irreparable harm to the Company which cannot be adequately redressed by monetary damages alone. If Executive breaches or threatens to breach the Restrictive Covenants, in addition to the forfeiture and recoupment remedies described in Section 2(d), the Company shall be entitled to temporary and permanent injunctive relief from a court of competent jurisdiction, without posting any bond or other security and without the necessity of proof of actual damage, in addition to, and not in lieu of, other such remedies as may be available to the Company for such breach, including the recovery of monetary damages. If any portion of the Restrictive Covenants contained herein, or the application thereof, is construed to be invalid or unenforceable, the other portions of the Restrictive Covenants or the application thereof shall not be affected and shall be given full force and effect without regard to the invalid or unenforceable portions to the fullest extent possible. If any covenant or agreement in the Restrictive Covenants is held to be unenforceable because of the duration or scope or geographic scope thereof, then the court making such determination shall have the power to reduce the duration and limit the duration or scope or geographic scope thereof, and the Restrictive Covenants shall then be enforceable in their reduced form. For purposes of the Restrictive Covenants, references to the Company shall include its affiliates and subsidiaries.

Release of Claims. In consideration of the entering into of this Agreement and the payments and benefits provided for in Section 2, Executive agrees to execute a general release in favor of the Company in the form attached hereto as Exhibit B (the “Release”). Executive must execute the Release, if at all, during the 21-day period after the Termination Date and, if Executive fails to execute the Release within such period (or revokes the Release prior to it becoming effective), Executive’s entitlement to the payments and benefits under this Agreement that are conditioned on the effectiveness of the Release shall be forfeited.

Successors. This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive other than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The “Company” shall mean the Company as hereinbefore defined and any successor to it business and/or assets as aforesaid that assumes this Agreement by operation of law or otherwise.

Amendment. This Agreement may be amended, modified or changed only by a written instrument executed by Executive and the Company.

Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana, without reference to principles of conflict of laws. The Company and Executive hereby irrevocably consent to jurisdiction in the courts of the State of Louisiana for resolution of any claim or dispute arising hereunder, and such shall be the exclusive forum for the resolution of such claim or dispute.

Taxes. Notwithstanding any other provision of this Agreement, the Company may withhold from any amounts payable under this Agreement, or any other benefits received pursuant hereto, any Federal, state and/or local taxes as shall be required to be withheld under any applicable law or regulation, or, as applicable, may impute income for tax purposes with respect to any benefits under this Agreement.

Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

Notices. Any notices required or permitted hereunder shall be addressed to the Company at its corporate headquarters, attention: General Counsel, or to Executive at the address then on record with the Company, as the case may be, and deposited, postage prepaid, in the United States mail. Either party may, by notice to the other given in the manner aforesaid, change his or its address for future notices.

Entire Agreement. This Agreement sets forth the entire agreement of the Company and Executive with respect to the subject matter hereof and shall supersede any other understandings or agreements between the parties with respect to the subject matter hereof.

Severability. If any term or provision of this Agreement is held to be invalid or unenforceable in any respect, the parties agree that they intend for any court so construing this Agreement to reform, modify, or limit such provision temporally, spatially, or otherwise so as to render it valid and enforceable to the fullest extent allowed by law. Any such provision that is not susceptible of such reformation shall be ignored so as to not affect any other term or provision hereof, and the remainder of this Agreement shall not be affected thereby and each such remaining term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.

IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand and, pursuant to the authorization from the Board, the Company has caused these presents to be executed in its name and on its behalf, all as of the day and year first above written.


HANCOCK HOLDING COMPANY

By:		/s/
		Name:
		Title:

/s/ Clifton J. Saik
Clifton J. Saik

SCHEDULE A

RESTRICTED STOCK AWARDS


Grant Date	Restricted Shares Granted & Outstanding		Full Months Elapsed for Proration		Vested Restricted Shares		Forfeited Restricted Shares
December 28, 2010		1,869		54		1,682		187
November 21, 2011		2,582		43		1,850		732
November 15, 2012		2,976		31		1,538		1,438
November 21, 2013		3,007		19		952		2,055
November 20, 2014		2,944		7		343		2,601

A-1

EXHIBIT A

GEOGRAPHIC AREA FOR NON-COMPETITION

AND NON-SOLICITATION COVENANTS

•

Acadia Parish, Louisiana

•

Allen Parish, Louisiana

•

Ascension Parish, Louisiana

•

Assumption Parish, Louisiana

•

Avoyelles Parish, Louisiana

•

Beauregard Parish, Louisiana

•

Bienville Parish, Louisiana

•

Bossier Parish, Louisiana

•

Caddo Parish, Louisiana

•

Calcasieu Parish, Louisiana

•

Caldwell Parish, Louisiana

•

Cameron Parish, Louisiana

•

Catahoula Parish, Louisiana

•

Claiborne Parish, Louisiana

•

Concordia Parish, Louisiana

•

De Soto Parish, Louisiana

•

East Baton Rouge Parish, Louisiana

•

East Carroll Parish, Louisiana

•

East Feliciana Parish, Louisiana

•

Evangeline Parish, Louisiana

•

Franklin Parish, Louisiana

•

Grant Parish, Louisiana

•

Iberia Parish, Louisiana

•

Iberville Parish, Louisiana

•

Jackson Parish, Louisiana

•

Jefferson Davis Parish, Louisiana

•

Jefferson Parish, Louisiana

•

Lafayette Parish, Louisiana

•

Lafourche Parish, Louisiana

•

La Salle Parish, Louisiana

•

Lincoln Parish, Louisiana

•

Livingston Parish, Louisiana

•

Madison Parish, Louisiana

•

Morehouse Parish, Louisiana

•

Natchitoches Parish, Louisiana

•

Orleans Parish, Louisiana

•

Ouachita Parish, Louisiana

•

Plaquemines Parish, Louisiana

•

Pointe Coupee Parish, Louisiana

•

Rapides Parish, Louisiana

•

Red River Parish, Louisiana

•

Richland Parish, Louisiana

•

Sabine Parish, Louisiana

•

St. Bernard Parish, Louisiana

•

St. Charles Parish, Louisiana

•

St. Helena Parish, Louisiana

•

St. James Parish, Louisiana

•

St. John The Baptist Parish, Louisiana

A-2

•

St. Landry Parish, Louisiana

•

St. Martin Parish, Louisiana

•

St. Mary Parish, Louisiana

•

St. Tammany Parish, Louisiana

•

Tangipahoa Parish, Louisiana

•

Tensas Parish, Louisiana

•

Terrebonne Parish, Louisiana

•

Union Parish, Louisiana

•

Vermilion Parish, Louisiana

•

Vernon Parish, Louisiana

•

Washington Parish, Louisiana

•

Webster Parish, Louisiana

•

West Baton Rouge Parish, Louisiana

•

West Carroll Parish, Louisiana

•

West Feliciana Parish, Louisiana

•

Winn Parish, Louisiana

•

Forrest County, Mississippi

•

Hancock County, Mississippi

•

Harrison County, Mississippi

•

Hinds County, Mississippi

•

Jackson County, Mississippi

•

Lamar County, Mississippi

•

Lee County, Mississippi

•

Madison County, Mississippi

•

Pearl River County, Mississippi

A-3

•

Rankin County, Mississippi

•

Stone County, Mississippi

A-4

EXHIBIT B

GENERAL RELEASE OF CLAIMS

1. I, Clifton J. Saik, for and in consideration of certain payments to be made and the benefits to be provided to me under the Retirement and Restrictive Covenant Agreement, dated as of June 30, 2015 (the “Agreement”) with Hancock Holding Company (the “Company”) on the date this general release of claims in favor of the Company (the “General Release”) becomes irrevocable, and conditioned upon such payments and provisions, and subject to the provisions of Paragraphs 2, 3, and 4, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and each of its past or present subsidiaries and affiliates, its and their past or present officers, directors, stockholders, employees and agents, their respective successors and assigns, heirs, executors and administrators, partners, joint ventures, predecessors, insurers, agents, representatives, attorneys, adjustors and independent contractors, the pension and employee benefit plans of the Company, or of its past or present subsidiaries or affiliates, and the past or present trustees, administrators, agents, or employees of the pension and employee benefit plans (hereinafter collectively included within the term the “Company”), acting in any capacity whatsoever, of and from any and all manner of actions and causes of actions, suits, debts, claims and demands whatsoever in law or in equity, whether known or unknown, which I ever had, now have, or hereafter may have, or which my heirs, personal representatives, successors, assigns, attorneys, and executors or administrators hereafter may have, by reason of any matter, cause or thing whatsoever from the beginning of my employment with the Company to the date of these presents and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to my employment relationship and the termination of my employment relationship with the Company, including but not limited to: (a) any and all claims for monetary damages which have been asserted, could have been asserted, or could be asserted now or in the future under the Age Discrimination in Employment Act of 1967 (“ADEA”), as amended, the Older Workers Benefit Protection Act of 1990 (“OWBPA”), Title VII of the Civil Rights Act of 1964, as amended, and the Americans with Disabilities Act of 1990, as amended; (b) any and all claims under any federal, state or local laws, including any claims under the Louisiana Employment Discrimination Law, as amended, the Rehabilitation Act of 1973, 29 USC §§ 701 et seq., as amended, the WARN Act, the Family and Medical Leave Act, and the Employee Retirement Income Security Act of 1974, 29 USC §§ 301 et seq., as amended, and any state human rights act; (c) any and all other claims under any local statutes under which I can waive my rights; (d) any and all claims pursuant to any contracts between the Company and me; (e) any common law claims now or hereafter recognized; (f) all claims for counsel fees and costs; and (g) all claims for incentive compensation awards under any plan or payroll practice, along with any claims under any state wage and hour laws.

2. If any claim is not subject to release, to the extent permitted by law, I waive any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action proceeding, based on such a claim in which the Company is a party.

3. The General Release shall not apply to (a) any entitlements under the terms of the Agreement or under any other plans or programs of the Company in which I participated and under which I have vested benefits to which I am entitled consistent with the terms of the plans, other than under any Company separation or severance plan or programs; (b) rights to indemnification I may have under the charter, bylaws, or similar instruments of the Company or any of its subsidiaries, applicable law, or as an insured under any directors’ and officers’ liability insurance policy now or previously in force; and (c) any right I may have to obtain contribution in the event of the entry of judgment against me as a result of any act or failure to act for which both I and the Company or any of its officers, directors or employees are jointly responsible. Further, notwithstanding the foregoing, this General Release is not intended to interfere with my right to file a charge with an administrative agency in connection with any claim I may have against the Company. However, by executing this Agreement, I hereby waive my right to recover, and agree not to seek any damages, remedies or other relief for myself in any proceeding I may bring before such agency or in any proceeding brought by such agency on my behalf.

4. The foregoing shall in no event apply to any claims that, as a matter of applicable law, are not waivable. The Company and I agree that nothing in this General Release prevents or prohibits me from:

(a) making any disclosure of relevant and necessary information or documents in connection with any charge, action, investigation, or proceeding relating to this General Release or the Agreement, or as required by law or legal process; (b) participating, cooperating, or testifying in any charge, action, investigation, or proceeding with, or providing information to, any self-regulatory organization, governmental agency or legislative body, and/or pursuant to the Sarbanes-Oxley Act or Dodd-Frank Act; (c) filing, testifying, participating in or otherwise assisting in a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud, or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization; (d) challenging the knowing and voluntary nature of the release of ADEA claims pursuant to the OWBPA; or (e) filing in good faith for and receiving any workers’ compensation benefits from the Company’s workers’ compensation carrier for any compensable injuries incurred during my employment. To the extent permitted by law, upon receipt of any subpoena, court order or other legal process compelling the disclosure of any such information or documents, I agree to give prompt written notice to the Company so as to permit the Company to protect its interests in confidentiality to the fullest extent possible. To the fullest extent provided by law, I agree and acknowledge, however, that I am waiving any right to recover monetary damages in connection with any such charge, action, investigation or proceeding. To the extent I receive any monetary relief in connection with any such charge, action, investigation or proceeding, the Company will be entitled to an offset for the benefits made pursuant to this General Release, to the fullest extent provided by law.

5. The Company and I further agree that the Equal Employment Opportunity Commission (“EEOC”) and comparable state or local agencies have the authority to carry out their statutory duties by investigating charges, issuing determinations, and filing lawsuits in Federal or state court in their own name, or taking any action authorized by the EEOC or comparable state or local agencies. I retain the right to participate in any such action and to seek any appropriate non-monetary relief. I retain the right to communicate with the EEOC and comparable state or local agencies and such communication can be initiated by me or in response to the government and such right is not limited by any non-disparagement claims. The Company and I agree that communication with employees plays a critical role in the EEOC’s enforcement process because employees inform the agency of employer practices that might violate the law. For this reason, the right to communicate with the EEOC is a right that is protected by federal law and neither the General Release nor the Agreement prohibit or interfere with those rights. Notwithstanding the foregoing, I agree to waive any right to recover monetary damages in any charge, complaint or lawsuit filed by me or by anyone else on my behalf.

6. Subject to the limitations of Paragraphs 2, 3, and 4, I expressly waive all rights afforded by any statute which expressly limits the effect of a release with respect to unknown claims. I understand the significance of this release of unknown claims and the waiver of statutory protection against a release of unknown claims.

7. I hereby agree and recognize that my employment with the Company was permanently and irrevocably severed on June 30, 2015 (the “Termination Date”) and the Company has no obligation, contractual or otherwise to me to hire, rehire or reemploy me in the future. I acknowledge that the terms of the Agreement provide me with payments and benefits which are in addition to any amounts to which I otherwise would have been entitled.

8. I hereby agree and acknowledge that the payments and benefits provided by the Company are to bring about an amicable resolution of my employment arrangements and are not to be construed as an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by the Company and that the Agreement was, and this General Release is, executed voluntarily to provide an amicable resolution of my employment relationship with the Company.

9. I hereby certify that I have read the terms of this General Release, that I have been advised by the Company to discuss it with my attorney, that I have received the advice of counsel and that I understand its terms and effects. I acknowledge, further, that I am executing this General Release of my own volition with a full understanding of its terms and effects and with the intention of releasing all claims recited herein in exchange for the consideration described in the Agreement, which I acknowledge is adequate and satisfactory to me. None of

the Company or any of its employees, agents, representatives or attorneys has made any representations to me concerning the terms or effects of this General Release other than those contained herein.

10. I hereby acknowledge that I may accept this General Release by signing it and returning it to the Company, care of Rudi Thompson, Chief Human Resources Officer, Hancock Holding Company, One Hancock Plaza, 2510 14th Street, Gulfport, Mississippi 39501, within 21 days of the Termination Date (or receipt of the General Release, if later). After executing this General Release, I hereby acknowledge that I will have seven days to revoke this General Release (the “Revocation Period”) by indicating my desire to do so in writing delivered to Rudi Thompson, Chief Human Resources Officer at the address above (or by electronic mail delivery in “pdf” form to [email protected] or by fax to 228-868-4627 by no later than 5:00 p.m. C.S.T. on the seventh day after the date I sign this General Release. If the last day of the Revocation Period falls on a Saturday, Sunday or holiday, the last day of the Revocation Period will be deemed to be the next business day. In the event that I revoke this General Release, the Company shall not provide me with the payments and benefits described in Section 2 of the Agreement that are conditioned upon the effectiveness of this General Release. The “effective date” of this General Release shall be the eighth day after I sign this General Release.

11. I hereby further acknowledge that the terms of Section 3 of the Agreement shall continue to apply and that I will abide by and fully perform such obligations.

Intending to be legally bound hereby, I execute the foregoing General Release this day of July, 2015.




Witness				Clifton J. Saik

Exhibit 31.1

Certification of Chief Executive Officer

I, John M. Hairston, certify that:

I have reviewed this quarterly report on Form 10-Q of Hancock Holding Company;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 7, 2015

By:		/s/ John M. Hairston
		John M. Hairston
		President & Principal Executive Officer

Exhibit 31.2

Certification of Chief Financial Officer

I, Michael M. Achary, certify that:

I have reviewed this quarterly report on Form 10-Q of Hancock Holding Company;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 7, 2015

By:		/s/ Michael M. Achary
		Michael M. Achary
		Principal Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Hancock Holding Company (the “Company”) on Form 10-Q for the period ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John M. Hairston, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ John M. Hairston
Name:		John M. Hairston
Title:		President & Principal Executive Officer
Date:		August 7, 2015

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Hancock Holding Company (the “Company”) on Form 10-Q for the period ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael M. Achary, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Michael M. Achary
Name:		Michael M. Achary
Title:		Principal Financial Officer
Date:		August 7, 2015

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