Following is a summary of the information used in the computation of earnings per common share (in thousands).
There were no anti-dilutive shares outstanding for the three and six months ended June 30, 2005 and 2004.
The following tables present selected comparative financial data. All share and per share data have been restated to reflect the 100% stock dividend made March 18, 2004.
(dollar amounts in thousands)
Three Months Ended Six Months Ended
----------------------------- -----------------------------
6/30/2005 6/30/2004 6/30/2005 6/30/2004
----------------------------- -----------------------------
Performance Ratios
Return on average assets 1.52% 1.49% 1.42% 1.41%
Return on average common equity 15.27% 14.97% 14.31% 13.99%
Earning asset yield (Tax Equivalent ("TE")) 6.08% 5.83% 5.99% 5.83%
Total cost of funds 1.66% 1.43% 1.61% 1.42%
Net interest margin (TE) 4.42% 4.40% 4.39% 4.41%
Average common equity as a percent of average total assets 9.94% 9.95% 9.94% 10.09%
Leverage ratio (period end) 8.83% 8.76% 8.83% 8.76%
FTE Headcount 1,813 1,754 1,813 1,754
Asset Quality Information
Non-accrual loans $7,493 $10,134 $7,493 $10,134
Foreclosed assets $2,567 $4,270 $2,567 $4,270
Total non-performing assets $10,060 $14,404 $10,060 $14,404
Non-performing assets as a percent of loans and
foreclosed assets 0.35% 0.55% 0.35% 0.55%
Accruing loans 90 days past due $3,914 $3,701 $3,914 $3,701
Accruing loans 90 days past due as a percent of loans 0.14% 0.14% 0.14% 0.14%
Non-performing assets + accruing loans 90 days past due
to loans and foreclosed assets 0.49% 0.69% 0.49% 0.69%
Net charge-offs $1,691 $3,017 $3,951 $5,803
Net charge-offs as a percent of average loans 0.24% 0.47% 0.28% 0.46%
Allowance for loan losses $41,382 $38,300 $41,382 $38,300
Allowance for loan losses as a percent of period end loans 1.45% 1.47% 1.45% 1.47%
Allowance for loan losses to NPAs + accruing loans
90 days past due 296.14% 211.55% 296.14% 211.55%
Provision for loan losses $1,891 $3,817 $4,651 $7,353
Provision for loan losses to net charge-offs 111.83% 126.52% 117.72% 126.71%
Average Balance Sheet
Total loans $2,835,506 $2,563,910 $2,806,031 $2,520,941
Securities 1,449,554 1,404,701 1,400,303 1,346,094
Short-term investments 47,260 29,530 89,685 52,420
Earning assets 4,332,320 3,998,141 4,296,020 3,919,455
Allowance for loan losses (41,185) (37,869) (40,938) (37,398)
Other assets 490,668 460,512 501,357 464,147
Total assets $4,781,803 $4,420,784 $4,756,440 $4,346,204
Non-interest bearing deposits $730,570 $651,324 $715,938 $636,798
Interest bearing transaction deposits 1,319,606 1,362,105 1,325,845 1,355,109
Interest bearing public fund deposits 683,665 602,405 697,649 598,858
Time deposits 1,116,973 1,039,876 1,103,246 1,003,045
Total interest bearing deposits 3,120,245 3,004,385 3,126,740 2,957,012
Total deposits 3,850,815 3,655,709 3,842,679 3,593,810
Other borrowed funds 304,637 243,094 288,147 237,351
Other liabilities 151,217 82,009 152,999 71,916
Preferred stock - - - 4,504
Common stockholders' equity 475,134 439,972 472,615 438,622
Total liabilities & common stockholders' equity $4,781,803 $4,420,784 $4,756,440 $4,346,204
Page 16 of 34
(dollar amounts in thousands)
Three Months Ended Six Months Ended
---------------------------- ----------------------------
6/30/2005 6/30/2004 6/30/2005 6/30/2004
---------------------------- ----------------------------
Period end Balance Sheet
Commercial/real estate loans $1,539,576 $1,384,913 $1,539,576 $1,384,913
Mortgage loans 424,725 400,333 424,725 400,333
Direct consumer loans 504,119 481,815 504,119 481,815
Indirect consumer loans 329,535 287,070 329,535 287,070
Finance company loans 63,450 59,450 63,450 59,450
Total loans 2,861,405 2,613,581 2,861,405 2,613,581
Securities 1,387,477 1,372,728 1,387,477 1,372,728
Short-term investments 84,453 8,318 84,453 8,318
Earning assets 4,333,334 3,994,627 4,333,334 3,994,627
Allowance for loan losses (41,382) (38,300) (41,382) (38,300)
Other assets 497,113 508,611 497,113 508,611
Total assets $4,789,065 $4,464,937 $4,789,065 $4,464,937
Non-interest bearing deposits $728,001 $644,941 $728,001 $644,941
Interest bearing transaction deposits 1,303,152 1,339,428 1,303,152 1,339,428
Interest bearing public funds deposits 702,099 580,318 702,099 580,318
Time deposits 1,119,761 1,038,574 1,119,761 1,038,574
Total interest bearing deposits 3,125,012 2,958,319 3,125,012 2,958,319
Total deposits 3,853,013 3,603,260 3,853,013 3,603,260
Other borrowed funds 301,004 305,173 301,004 305,173
Other liabilities 154,608 122,996 154,608 122,996
Common stockholders' equity 480,440 433,507 480,440 433,507
Total liabilities & common stockholders' equity $4,789,065 $4,464,937 $4,789,065 $4,464,937
Net Charge-Off Information
Net charge-offs (recoveries):
Commercial/real estate loans $202 $788 $972 $1,947
Mortgage loans (5) (26) 63 (27)
Direct consumer loans 491 1,182 992 1,818
Indirect consumer loans 538 572 1,078 1,015
Finance company loans 465 501 846 1,050
---------------------------- ----------------------------
Total net charge-offs $1,691 $3,017 $3,951 $5,803
============================ ============================
Net charge-offs to average loans:
Commercial/real estate loans 0.05% 0.23% 0.13% 0.30%
Mortgage loans 0.00% -0.03% 0.03% -0.01%
Direct consumer loans 0.39% 0.98% 0.39% 0.75%
Indirect consumer loans 0.67% 0.82% 0.68% 0.75%
Finance company loans 3.00% 3.48% 2.78% 3.73%
Total net charge-offs to average net loans 0.24% 0.47% 0.28% 0.46%
Page 17 of 34
(dollar amounts in thousands)
Three Months Ended Six Months Ended
---------------------------- ----------------------------
6/30/2005 6/30/2004 6/30/2005 6/30/2004
---------------------------- ----------------------------
Average Balance Sheet Composition
Percentage of earning assets/funding sources:
Loans 65.45% 64.13% 65.32% 64.32%
Securities 33.46% 35.13% 32.60% 34.34%
Short-term investments 1.09% 0.74% 2.09% 1.34%
Earning assets 100.00% 100.00% 100.00% 100.00%
Non-interest bearing deposits 16.86% 16.29% 16.67% 16.25%
Interest bearing transaction deposits 30.46% 34.07% 30.86% 34.57%
Interest bearing public funds deposits 15.78% 15.07% 16.24% 15.28%
Time deposits 25.78% 26.01% 25.68% 25.59%
Total deposits 88.89% 91.44% 89.45% 91.69%
Other borrowed funds 7.03% 6.08% 6.71% 6.06%
Other net interest-free funding sources 4.08% 2.48% 3.85% 2.25%
Total funding sources 100.00% 100.00% 100.00% 100.00%
Loan mix:
Commercial/real estate loans 53.72% 52.75% 53.72% 52.60%
Mortgage loans 14.72% 15.26% 14.69% 15.05%
Direct consumer loans 17.97% 18.84% 18.06% 19.25%
Indirect consumer loans 11.39% 10.89% 11.35% 10.86%
Finance company loans 2.19% 2.26% 2.19% 2.25%
Total loans 100.00% 100.00% 100.00% 100.00%
Average dollars
Loans $2,835,506 $2,563,910 $2,806,031 $2,520,941
Securities 1,449,554 1,404,701 1,400,303 1,346,094
Short-term investments 47,260 29,530 89,685 52,420
---------------------------- ----------------------------
Earning assets $4,332,320 $3,998,141 $4,296,020 $3,919,455
============================ ============================
Non-interest bearing deposits $730,570 $651,324 $715,938 $636,798
Interest bearing transaction deposits 1,319,606 1,362,105 1,325,845 1,355,109
Interest bearing public funds deposits 683,665 602,405 697,649 598,858
Time deposits 1,116,973 1,039,876 1,103,246 1,003,045
---------------------------- ----------------------------
Total deposits 3,850,815 3,655,709 3,842,679 3,593,810
Other borrowed funds 304,637 243,094 288,147 237,351
Other net interest-free funding sources 176,868 99,338 165,194 88,294
---------------------------- ----------------------------
Total funding sources $4,332,320 $3,998,141 $4,296,020 $3,919,455
============================ ============================
Loans:
Commercial/real estate loans $1,523,348 $1,352,432 $1,507,267 $1,325,916
Mortgage loans 417,307 391,270 412,310 379,295
Direct consumer loans 509,628 483,150 506,681 485,301
Indirect consumer loans 323,100 279,230 318,347 273,770
Finance company loans 62,124 57,829 61,426 56,659
---------------------------- ----------------------------
Total average loans $2,835,506 $2,563,910 $2,806,031 $2,520,941
============================ ============================
Page 18 of 34
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion provides management’s analysis of certain factors that have affected the Company’s consolidated financial condition and operating results during the periods included in the accompanying unaudited condensed consolidated financial statements. Hancock Holding Company (the Company), organized in 1984 as a bank holding company registered under the Bank Holding Company Act of 1956, as amended, is headquartered in Gulfport, Mississippi. At June 30, 2005, the Company operated more than 100 banking offices and more than 140 automated teller machines (ATMs) in the states of Mississippi, Louisiana and Florida through three wholly-owned bank subsidiaries, Hancock Bank, Gulfport, Mississippi (Hancock Bank MS), Hancock Bank of Louisiana, Baton Rouge, Louisiana (Hancock Bank LA) and Hancock Bank of Florida, Tallahassee, Florida (Hancock Bank FL). Hancock Bank MS also operates a loan production office in the State of Alabama. Hancock Bank MS, Hancock Bank LA, and Hancock Bank FL are referred to collectively as the “Banks”.
The Banks are community oriented and focus primarily on offering commercial, consumer and mortgage loans and deposit services to individuals and small to middle market businesses in their respective market areas. The Company’s operating strategy is to provide its customers with the financial sophistication and breadth of products of a regional bank, while successfully retaining the local appeal and level of service of a community bank. At June 30, 2005, the Company had total assets of $4.8 billion and employed on a full-time equivalent basis 1,290 persons in Mississippi, 489 persons in Louisiana and 34 persons in Florida.
CRITICAL ACCOUNTING POLICIESCertain critical accounting policies affect the more significant judgments and estimates used in the preparation of the consolidated financial statements. The Company’s single most critical accounting policy relates to its allowance for loan losses, which reflects the estimated losses resulting from the inability of its borrowers to make loan payments. If the financial condition of its borrowers were to deteriorate, resulting in an impairment of their ability to make payments, its estimates would be updated, and additional provisions for loan losses may be required.
CHANGES IN FINANCIAL CONDITION
LiquidityThe Company manages liquidity through traditional funding sources of core deposits, federal funds, and maturities of loans and securities held to maturity and sales and maturities of securities available for sale.
The following liquidity ratios at June 30, 2005, March 31, 2005 and December 31, 2004 compare certain assets and liabilities to total deposits or total assets:
June 30, March 31, December 31,
2005 2005 2004
------------------ ----------------- ------------------
Total securities to total deposits 36.01% 36.38% 34.29%
Total loans (net of unearned
income) to total deposits 74.26% 71.82% 72.37%
Interest-earning assets
to total assets 90.48% 90.18% 90.06%
Interest-bearing deposits
to total deposits 81.11% 81.37% 81.64%
Page 19 of 34
Capital ResourcesThe Company continues to maintain an adequate capital position. The ratios as of June 30, 2005, March 31, 2005 and December 31, 2004 are as follows:
June 30, March 31, December 31,
2005 2005 2004
----------------- ----------------- -----------------
Average equity to average assets 9.94% 9.94% 10.11%
Regulatory ratios:
Average equity to average assets (1) 10.05% 10.02% 10.17%
Total capital to risk-weighted assets (2) 13.58% 13.49% 13.58%
Tier 1 capital to risk-weighted
assets (3) 12.41% 12.30% 12.39%
Leverage capital to average total assets (4) 8.83% 8.75% 8.97%
(1) Equity capital, for regulatory purposes, consists of stockholders' equity (excluding unrealized gains/(losses)).
(2) Total capital consists of equity capital less intangible assets plus a limited amount of allowance for loan
losses. Risk-weighted assets represent the assigned risk portion of all on and off-balance-sheet assets. Based
on Federal Reserve Board guidelines, assets are assigned a risk factor percentage from 0% to 100%. A minimum
ratio of total capital to risk-weighted assets of 8% is required.
(3) Tier 1 capital consists of equity capital less intangible assets. A minimum ratio of tier 1 capital to
risk-weighted assets of 4% is required.
(4) Leverage capital consists of equity capital less goodwill and core deposit intangibles. Regulations require a
minimum 3% leverage capital ratio for an entity to be considered adequately capitalized.
RESULTS OF OPERATIONS
Net EarningsNet earnings for the first half of 2005 totaled $33.5 million, compared to $30.5 million reported for the first half of 2004, an increase of $3.0 million, or 10%. Net earnings increased $1.7 million, or 11%, to $18.1 million for the second quarter of 2005 compared to $16.4 million in second quarter of 2004. The following is selected information for quarterly and year-to-date comparison:
Page 20 of 34
Three Months Ended June 30, Six Months Ended June 30,
------------------------------- -------------------------------
2005 2004 2005 2004
--------------- -------------- -------------- ---------------
Results of Operations:
Return on average assets 1.52 % 1.49 % 1.42 % 1.41 %
Return on average equity 15.27 % 14.97 % 14.31 % 13.99 %
Net Interest Income:
Yield on average interest-earning assets (TE) 6.08 % 5.83 % 5.99 % 5.83 %
Cost of average interest-bearing funds 2.10 % 1.76 % 2.02 % 1.74 %
--------------- -------------- -------------- ---------------
Net interest spread (TE) 3.98 % 4.07 % 3.97 % 4.08 %
=============== ============== ============== ===============
Net interest margin (TE)
(net interest income on a tax-equivalent basis
divided by average interest-earning assets) 4.42 % 4.40 % 4.39 % 4.41 %
=============== ============== ============== ===============
NET INTEREST INCOMENet interest income (te) for the second quarter of 2005 increased $3.9 million, or 9%, from the second quarter of 2004 and was $1.8 million, or 4%, higher than the first quarter of 2005. The Company’s net interest margin (te) was 4.42% in the second quarter of 2005, 2 basis points wider than the same quarter a year ago, and 7 basis points wider than the previous quarter.
Compared to the same quarter a year ago, the primary driver of the $3.9 million increase in net interest income (te) was a $334 million, or 8%, increase in average earning assets, mainly from average loan growth of $272 million, or 11%. Average deposit growth of $195 million, or 5%, along with an increase in customer repurchase agreements of $56 million, or 32%, funded the Company’s loan growth and related increase in earning assets. The overall improvement in the earning asset mix enabled the Company to improve its loan to deposit ratio to approximately 74% in the second quarter of 2005. In addition, loans now comprise 65% of the Company’s earning asset base, as compared to 64% for the same quarter a year ago. The net interest margin (te) widened 2 basis points as the increase in the earning asset yield (25 basis points) more than offset the increase in the total funding costs (23 basis points).
The higher level of net interest income (te) (up $1.8 million, or 4%) and the widened net interest margin (up 7 basis points) as compared to the previous quarter were primarily due to a larger earning asset base (average earning assets were up $73 million from the prior quarter) and a higher yield on average earning assets (up 18 basis points). Average loans grew $59 million, or 2%, from the previous quarter and were funded largely through a decrease in short-term investments. Average deposits were up $16 million, or 0.4%, from the previous quarter primarily due to a $29 million increase in noninterest-bearing deposits. The yield on the Company’s $1.45 billion securities portfolio improved 6 basis points to 4.54%. Even though short-term interest rates (fed funds rate) were up an average of 48 basis points from the first to the second quarter of 2005, the Company’s overall funding costs increased by only 11 basis points from the prior quarter. The majority of this increase was due to a 45 basis point increase in the cost of the Company’s nearly $700 million public fund deposit base, most of which is indexed to short-term rates.
Page 21 of 34
The following tables detail the components of the Company's net interest spread and net interest margin.
Three Months Ended June 30, Three Months Ended June 30,
----------------------------------- ------------------------------------
2005 2004
----------------------------------- --------------------------------------
(dollars in thousands) Interest Volume Rate Interest Volume Rate
----------------------------------- --------------------------------------
Average Earning Assets
Commercial & real estate loans (TE) $23,775 $1,523,348 6.26% $18,611 $1,352,432 5.53%
Mortgage loans 5,886 417,307 5.64% 5,590 391,270 5.71%
Consumer loans 17,018 894,852 7.63% 15,650 820,208 7.67%
Loan fees & late charges 2,348 - 0.00% 2,413 - 0.00%
------------------------------------ ------------------------------------
Total loans (TE) 49,028 2,835,506 6.93% 42,263 2,563,910 6.62%
US treasury securities 61 11,076 2.20% 115 11,056 4.17%
US agency securities 4,977 484,119 4.11% 4,711 455,212 4.14%
CMOs 2,608 262,799 3.97% 3,004 311,844 3.85%
Mortgage backed securities 5,170 468,239 4.42% 4,294 403,969 4.25%
Municipals (TE) 2,841 162,467 6.99% 3,101 174,213 7.12%
Other securities 785 60,853 5.16% 564 48,406 4.66%
------------------------------------ ------------------------------------
Total securities (TE) 16,441 1,449,554 4.54% 15,788 1,404,701 4.50%
Fed funds sold 283 39,055 2.91% 53 21,573 0.98%
Cds with banks 15 8,205 0.74% 11 7,956 0.57%
------------------------------------ ------------------------------------
Total short-term investments 299 47,260 2.53% 64 29,530 0.87%
Average earning assets yield (TE) $65,767 $4,332,320 6.08% $58,115 $3,998,141 5.83%
Interest-Bearing Liabilities
Interest-bearing transaction deposits $2,129 $1,319,606 0.65% $2,011 $1,362,105 0.59%
Time deposits 9,570 1,116,973 3.44% 8,908 1,039,876 3.45%
Public Funds 4,408 683,665 2.59% 2,315 602,405 1.55%
------------------------------------ ------------------------------------
Total interest bearing deposits 16,106 3,120,245 2.07% 13,234 3,004,385 1.77%
Customer repos 1,095 231,456 1.90% 316 175,142 0.73%
Other borrowings 759 73,181 4.16% 668 67,952 3.96%
------------------------------------ ------------------------------------
Total borrowings 1,854 304,637 2.44% 985 243,094 1.63%
Total interest bearing liability cost $17,961 $3,424,882 2.10% $14,218 $3,247,479 1.76%
Noninterest-bearing deposits 730,570 651,324
Other net interest-free funding sources 176,868 99,338
Total Cost of Funds $17,961 $4,332,320 1.66% $14,218 $3,998,141 1.43%
Net Interest Spread (TE) $47,807 3.98% $43,897 4.07%
Net Interest Margin (TE) $47,807 $4,332,320 4.42% $43,897 $3,998,141 4.40%
Page 22 of 34
Six Months Ended June 30, Six Months Ended June 30,
---------------------------------- ---------------------------------------
2005 2004
---------------------------------- ---------------------------------------
(dollars in thousands) Interest Volume Rate Interest Volume Rate
---------------------------------- ---------------------------------------
Average Earning Assets
Commercial & real estate loans (TE) $46,078 $1,507,267 6.16% $36,536 $1,325,916 5.54%
Mortgage loans 11,583 412,310 5.62% 10,786 379,295 5.69%
Consumer loans 33,427 886,454 7.60% 31,466 815,730 7.76%
Loan fees & late charges 4,327 - 0.00% 4,576 - 0.00%
----------------------------------- -------------------------------------
Total loans (TE) 95,415 2,806,031 6.85% 83,363 2,520,941 6.64%
US treasury securities 121 11,067 2.20% 163 10,587 3.10%
US agency securities 9,262 457,412 4.05% 8,494 413,430 4.11%
CMOs 5,294 264,906 4.00% 6,042 315,880 3.83%
Mortgage backed securities 9,717 440,560 4.41% 8,194 385,777 4.25%
Municipals (TE) 5,712 163,002 7.01% 6,386 179,091 7.13%
Other securities 1,456 63,356 4.60% 931 41,329 4.51%
----------------------------------- --------------------------------------
Total securities (TE) 31,563 1,400,303 4.51% 30,210 1,346,094 4.49%
Fed funds sold 995 78,559 2.55% 206 42,883 0.96%
Cds with banks 64 8,283 1.56% 19 6,791 0.56%
Other short-term investments 32 2,843 2.26% 13 2,747 0.97%
----------------------------------- --------------------------------------
Total short-term investments 1,091 89,685 2.45% 238 52,420 0.91%
Average earning assets yield (TE) $128,069 $4,296,020 5.99% $113,811 $3,919,455 5.83%
Interest-Bearing Liabilities
Interest-bearing transaction deposits $4,050 $1,325,845 0.62% $4,085 $1,355,109 0.61%
Time deposits 18,929 1,103,247 3.46% 17,075 1,003,045 3.42%
Public Funds 8,160 697,648 2.36% 4,513 598,858 1.52%
----------------------------------- --------------------------------------
Total interest bearing deposits 31,139 3,126,740 2.01% 25,673 2,957,012 1.75%
Customer repos 1,759 223,213 1.59% 654 172,486 0.76%
Other borrowings 1,352 64,934 4.20% 1,361 64,865 4.22%
----------------------------------- --------------------------------------
Total borrowings 3,111 288,147 2.18% 2,015 237,351 1.71%
Total interest bearing liability cost $34,249 $3,414,887 2.02% $27,688 $3,194,364 1.74%
Noninterest-bearing deposits 715,938 636,798
Other net interest-free funding sources 165,194 88,294
Total Cost of Funds $34,249 $4,296,020 1.61% $27,688 $3,919,455 1.42%
Net Interest Spread (TE) $93,820 3.97% $86,123 4.08%
Net Interest Margin (TE) $93,820 $4,296,020 4.39% $86,123 $3,919,455 4.41%
Page 23 of 34
PROVISION FOR LOAN LOSSESThe amount of the allowance for loan losses equals the cumulative total of the provisions for loan losses, reduced by actual loan charge-offs, and increased by allowances acquired in acquisitions and recoveries of loans previously charged-off. Provisions are made to the allowance to reflect the currently perceived risks of loss associated with the bank’s loan portfolio. A specific loan is charged-off when management believes, after considering, among other things, the borrower’s financial condition and the value of any collateral, that collection of the loan is unlikely.
The following information is useful in determining the adequacy of the loan loss allowance and loan loss provision. The ratios are calculated using average loan balances. (Dollar amounts shown are in thousands.)
At and for the
-----------------------------------
Three Months Ended June 30, Six Months Ended June 30,
------------------------------------ --------------------------------
2005 2004 2005 2004
--------------- ---------------- ---------------- -----------
Annualized net charge-offs to average loans 0.24% 0.47% 0.28% 0.46%
Annualized provision for loan losses to average
loans 0.27% 0.60% 0.33% 0.58%
Average allowance for loan losses to average loans 1.45% 1.48% 1.46% 1.48%
Gross charge-offs $ 3,539 $ 4,690 $ 7,565 $ 10,385
Gross recoveries $ 1,848 $ 1,673 $ 3,614 $ 4,582
Non-accrual loans $ 7,493 $ 10,134 $ 7,493 $ 10,134
Accruing loans 90 days or more past due $ 3,914 $ 3,701 $ 3,914 $ 3,701
NON-INTEREST INCOMENon-interest income for the second quarter of 2005 was up $3.1 million, or 14%, compared to the same quarter a year ago (excluding the 2004 gain on sale of branches, merchant services and securities transactions). Non-interest income was also up $2.3 million, or 10%, compared to the first quarter of 2005. The primary factors impacting the higher levels of non-interest income as compared to the same quarter a year ago, were higher levels of insurance fees (up $671,000) primarily related to the December 31, 2003 purchase of Magna Insurance Company. In addition, other income was up $978,000, when compared to the same quarter a year ago, and was primarily due to the termination of a contract to provide insurance products to one of Magna’s outlets ($400,000) and the final settlement related to the merchant services partnership with First Data Corporation ($250,000). Driving the higher levels of non-interest income from the prior quarter were increases in service charges on deposit accounts (up $969,000), trust fees (up $318,000) and the aforementioned transactions related to Magna and the merchant services partnership with First Data Corporation.
The components of non-interest income for the three and six months ended June 30, 2005 and 2004 are presented in the following table (amounts in thousands):
Page 24 of 34
Three Months Ended June 30, Six Months Ended June 30,
----------------------------------- -----------------------------------
2005 2004 2005 2004
---------------- ---------------- --------------- ----------------
Service charges on deposit accounts $ 10,459 $ 10,771 $ 19,949 $ 21,001
Trust fees 2,859 2,277 5,399 4,262
Credit card merchant discount fees 1,074 1,042 2,105 1,903
Income from insurance operations 3,499 2,828 7,380 5,312
Investment & annuity fees 1,547 584 2,735 1,276
ATM fees 1,154 1,136 2,526 2,264
Secondary mortgage market operations 676 531 1,174 916
Other income 3,427 2,450 5,853 4,916
---------------- ---------------- --------------- ----------------
Total other non-interest income 24,695 21,619 47,121 41,849
Gain on sale of assets - 3,000 - 5,258
Securities transactions gains (losses), net (15) 11 (8) 161
---------------- ---------------- --------------- ----------------
Total non-interest income $ 24,680 $ 24,630 $ 47,113 $ 47,268
================ ================ =============== ================
NON-INTEREST EXPENSENon-interest expenses for the second quarter of 2005 were $3.1 million higher, or 8%, compared to the same quarter a year ago and were $863,000 higher, or 2%, than the previous quarter. The increase from the prior quarter was reflected in increased personnel expense (up $546,000) and higher advertising expense (up $647,000). While there were also less significant increases in other categories of expense, those increases were more than offset by a $679,000 decrease in professional fees (primarily associated with compliance testing related to the Sarbanes-Oxley Act section 404). The increase from the same quarter a year ago was reflected in higher personnel expense (up $1.8 million), higher advertising expense (up $710,000) and occupancy expense (up $171,000).
The following table presents the components of non-interest expense for the three and six months ended June 30, 2005 and 2004.
Three Months Ended June 30, Six Months Ended June 30,
----------------------------------- -----------------------------------
(dollars in thousands) 2005 2004 2005 2004
---------------- ---------------- --------------- ----------------
Employee compensation $ 18,160 $ 16,707 $ 36,054 $ 33,647
Employee benefits 4,765 4,430 9,250 10,386
---------------- ---------------- --------------- ----------------
Total personnel expense 22,925 21,137 45,304 44,033
---------------- ---------------- --------------- ----------------
Equipment and data processing expense 4,397 4,299 8,692 8,622
Net occupancy expense 2,576 2,405 5,071 4,818
Postage and communications 1,961 2,064 3,667 4,144
Ad valorem and franchise taxes 751 837 1,504 1,650
Legal and professional services 2,612 2,492 5,904 3,876
Stationery and supplies 481 454 950 938
Amortization of intangible assets 578 524 1,162 848
Advertising 1,747 1,037 2,847 2,125
Deposit insurance and regulatory fees 244 213 494 424
Training expenses 109 123 266 251
Other real estate owned expense 15 67 221 298
Other expense 4,109 3,785 8,066 6,672
---------------- ---------------- --------------- ----------------
Total non-interest expense $ 42,505 $ 39,437 $ 84,148 $ 78,699
================ ================ =============== ================
INCOME TAXESThe effective federal income tax rate of the Company continues to be less than the statutory rate of 35%, due primarily to tax-exempt interest income. For the six months ended June 30, 2005 and 2004, the effective federal income tax rate was approximately 31% and 30%, respectively. The amount of tax-exempt income earned during the first six months of 2005 was $6.2 million compared to $6.5 million for the comparable period in 2004.
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OFF-BALANCE SHEET TRANSACTIONSIn the normal course of business, the Company enters into financial instruments, such as commitments to extend credit and letters of credit, to meet the financing needs of its customers. Such instruments are not reflected in the accompanying consolidated financial statements until they are funded and involve, to varying degrees, elements of credit risk not reflected in the consolidated balance sheets. The contract amounts of these instruments reflect the Company’s exposure to credit loss in the event of non-performance by the other party on whose behalf the instrument has been issued. The Company undertakes the same credit evaluation in making commitments and conditional obligations as it does for on-balance-sheet instruments and may require collateral or other credit support for off-balance-sheet financial instruments.
At June 30, 2005, the Company had $577.3 million in unused loan commitments outstanding, of which approximately $355.0 million were at variable rates, with the remainder at fixed rates. A commitment to extend credit is an agreement to lend to a customer as long as the conditions established in the agreement have been satisfied. A commitment to extend credit generally has a fixed expiration date or other termination clauses and may require payment of a fee by the borrower. Since commitments often expire without being fully drawn, the total commitment amounts do not necessarily represent future cash requirements of the Company. The Company continually evaluates each customer’s credit worthiness on a case-by-case basis. Occasionally, a credit evaluation of a customer requesting a commitment to extend credit results in the Company obtaining collateral to support the obligation.
Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing a letter of credit is essentially the same as that involved in extending a loan. At June 30, 2005, the Company had $54.7 million in letters of credit issued and outstanding.
The following table shows the commitments to extend credit and letters of credit at June 30, 2005 according to expiration date.
Expiration Date
(dollars in thousands) Less than 1-3 3-5 More than
Total 1 year years years 5 years
--------------- -------------- ------------ ------------ --------------
Commitments to extend credit $ 577,218 $ 302,657 $ 25,065 $ 43,865 $ 205,631
Letters of credit 54,712 19,298 19,416 15,998 -
--------------- -------------- ------------ ------------ --------------
Total $ 631,930 $ 321,955 $ 44,481 $ 59,863 $ 205,631
=============== ============== ============ ============ ==============
The Company’s liability associated with letters of credit is not material to the Company’s consolidated financial statements.
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSThe following table shows all significant contractual obligations of the Company at June 30, 2005 according to payments due by period.
Payment due by period
--------------------------------------------
(dollars in thousands) Less than 1-3 3-5 More than
Total 1 year years years 5 years
--------------- ------------- ------------- ------------- -------------
Certificates of Deposit $1,314,021 $584,621 $559,775 $169,619 $ 6
Long-Term Debt Obligations 50,272 10 20 50,027 215
Operating Lease Obligations 15,793 2,715 4,180 2,386 6,512
--------------- ------------- ------------- ------------- -------------
Total $1,380,086 $587,346 $563,975 $222,032 $6,733
=============== ============= ============= ============= =============
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RECENT ACCOUNTING PRONOUNCEMENTS
STATEMENT OF POSITION ("SOP") 03-3 - ACCOUNTING FOR LOANS OR CERTAIN DEBT SECURITIES ACQUIRED IN A TRANSFERIn October 2003, the American Institute of Certified Public Accountants (AICPA) issued Statement of Accounting Position (SOP) 03-3, which addresses accounting for differences between contractual cash flows expected to be collected from an investor’s initial investment in loans or debt securities (loans) acquired in a transfer if those differences are attributable, at least in part, to credit quality. It includes such loans acquired in purchase business combinations. This SOP would apply to loans originated by the Company and would limit the yield that may be accreted (accretable yield) to the excess of the investor’s estimate of undiscounted expected principal, interest, and other cash flows (cash flows expected at acquisition to be collected) over the investor’s initial investment in the loan. This SOP requires that the excess of contractual cash flows over cash flows expected to be collected (nonaccretable difference) not be recognized as an adjustment of yield, loss accrual, or valuation allowance. This SOP prohibits investors from displaying accretable yield and nonaccretable difference in the balance sheet. Subsequent increases in cash flows expected to be collected generally would be recognized prospectively through adjustment of the loan’s yield over its remaining life. Decreases in cash flows expected to be collected would be recognized as impairment. This SOP prohibits “carrying over” or creation of valuation allowances in the initial accounting of all loans acquired in a transfer that are within the scope of this SOP. The prohibition of the valuation allowance carryover applies to the purchase of an individual loan, a pool of loans, a group of loans, and loans acquired in a purchase business combination. The Company adopted this SOP during the first quarter as required and its effect on the consolidated financial statements to date has not been material.
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS No.123(R), "SHARE-BASED PAYMENT"On December 16, 2004, the FASB published SFAS No. 123(R), “Share-Based Payment”. This Statement is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and its related implementation guidance. It will provide investors and other users of financial statements with more complete and neutral financial information by requiring that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. This Statement is the result of a two-year effort to respond to requests from investors and many others that the FASB improve the accounting for share-based payment arrangements with employees. Public entities (other than those filing as small business issuers) will be required to apply SFAS No. 123(R) as of the first annual reporting period that begins after June 15, 2005. SFAS No. 123(R) covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. In addition to the accounting standard that sets forth the financial reporting objectives and related accounting principles, SFAS No. 123(R) includes an appendix of implementation guidance that provides expanded guidance on measuring the fair value of share-based payment awards. The Company will adopt SFAS No.123(R) as prescribed. The effect of this statement on the consolidated financial statements is not expected to be material.
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EMERGING ISSUES TASK FORCE ISSUE 03-1, "MEANING OF OTHER THAN TEMPORARY IMPAIRMENT"In March 2004, the Emerging Issues Task Force reached a consensus on Issue 03-1, “Meaning of Other Than Temporary Impairment” (Issue 03-1). The Task Force reached a consensus on an other-than-temporary impairment model for debt and equity securities accounted for under Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities” and cost method investments. In the second quarter of 2004 FSP EITF Issue 03-1-1 was issued, delaying the effective date for the measurement and recognition guidance in paragraphs 10-20 of Issue 03-01. The disclosure requirements continue to be effective. The Company will continue to monitor changes to Issue 03-01, but does not expect it, or the related Staff Position to have a material impact on the Company’s financial position or results of operations.
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS No.123(R), "SHARE-BASED PAYMENT"In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections.” This Statement is a replacement of APB Opinion No. 20, “Accounting Changes,” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statements,” and changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement applies to all voluntary changes in accounting principle and to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. This statement requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine period-specific effects of an accounting change on one or more individual prior periods presented. Then the new accounting principle is applied to the balances of assets and liabilities as of the beginning of the earliest period for which retrospective application is practicable and that a corresponding adjustment be made to the opening balance of retained earning for that period rather that being reported in an income statement. Further, the accounting principle is to be applied prospectively from the earliest date when it is impracticable to determine the effect to all prior periods. The effective date of this statement is for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. Therefore, this Statement is effective for the Company as of January 1, 2006. Adoption of this statement could have an impact if there are future voluntary accounting changes and correction of errors.
FORWARD LOOKING INFORMATIONCongress passed the Private Securities Litigation Act of 1995 in an effort to encourage corporations to provide information about a company’s anticipated future financial performance. This Act provides a safe harbor for such disclosures that protects the companies from unwarranted litigation if the actual results are different from management expectations. This report contains forward-looking statements and reflects management’s current views and estimates of future economic circumstances, industry conditions, company performance and financial results. These forward-looking statements are subject to a number of factors and uncertainties that could cause the Company’s actual results and experience to differ from the anticipated results and expectations expressed in such forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKThe Company’s net earnings are dependent, in part, on its net interest income. Net interest income is susceptible to interest rate risk to the degree that interest-bearing liabilities mature or reprice on a different basis than interest-earning assets. When interest-bearing liabilities mature or reprice more quickly than interest-earning assets in a given period, a significant increase in market rates of interest could adversely affect net interest income. Similarly, when interest-earning assets mature or reprice more quickly than interest-bearing liabilities, falling interest rates could result in a decrease in net interest income.
In an attempt to manage its exposure to changes in interest rates, management monitors the Company’s interest rate risk. The Company’s interest rate management policy is designed to produce a relatively stable net interest margin in periods of interest rate fluctuations. Interest sensitive assets and liabilities are those that are subject to maturity or repricing within a given time period. Management also reviews the Company’s securities portfolio, formulates investment strategies and oversees the timing and implementation of transactions to assure attainment of the Board’s objectives in the most effective manner.
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Notwithstanding the Company’s interest rate risk management activities, the potential for changing interest rates is an uncertainty that can have an adverse effect on net income and the fair value of the Company’s investment securities. As of quarter close, the effective duration of the securities portfolio was 2.41. A rate increase of 100 basis points would move the effective duration to 3.2, while a 200 basis point rise would result in an effective duration of 3.7.
In adjusting the Company’s asset/liability position, the Board and management attempt to manage the Company’s interest rate risk while enhancing net interest margins. At times, depending on the level of general interest rates, the relationship between long and short-term interest rates, market conditions and competitive factors, the Board and management may determine to increase the Company’s interest rate risk position somewhat in order to increase its net interest margin. The Company’s results of operations and net portfolio values are well positioned for a rising interest rate environment. The cumulative gap at 12 months is +6%; indicating the balance sheet is slightly asset sensitive. Exposure to interest rate risk is presented in the following table.
Net Interest Income (te) at Risk
--------------------------------
Change in interest Estimated increase (decrease)
rates (basis points) in net interest income
----------------------------- -----------------------------
- 100 - 5.15%
Stable 0.00%
+ 100 +3.25%
+ 200 +5.78%
+ 300 +7.96%
The Company also controls interest rate risk by emphasizing the core relationship aspects of non-certificate depositor accounts and selected maturity targets for certificate of deposit accounts. As of June 30, 2005, regular savings and club accounts represented $270.0 million and money market accounts and now accounts totaled $1.0 billion. Excluding public fund accounts, this represents 53.8% of total interest bearing deposit accounts.
The Company has controlled the interest rate sensitivity of its depositor accounts through targeted changes in deposit rates that fit the overall rate sensitivity profile of the balance sheet. Excluding public funds, interest-bearing transaction yields have gone up by 3 basis points as compared to the first quarter of 2005. Consumer time deposits have gone up 4 basis points during the quarter. Average interest-bearing transaction deposit balances were down 0.94%, while time deposits increased by 2.53%. During the quarter, the Federal Reserve increased rates by 50 basis points. The Company’s loan-to-deposit ratio was 74% (up 2%), and the average earning asset yield improved 18 basis points. This growth was driven primarily by continued emphasis on variable rate loans that adjusted with the rising rate environment. The impact of these strategies can be seen in the Company’s static gap report as of June 30, 2005.
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Analysis of Interest Sensitivity at June 30, 2005
Within 6 months 1 to 3 > 3 Non-Sensitive
Overnight 6 months to 1 year years years Balance Total
---------- ---------- ----------- ----------- ----------- ----------- -----------
(amounts in thousands)
Assets
Securities $ - $ 205,465 $ 229,155 $ 351,941 $ 600,916 $ - $1,387,477
Federal funds sold & Short-term
investments 84,188 - 264 1 - - 84,453
Loans 42,508 1,344,611 238,715 625,389 568,800 - 2,820,023
Other assets - - - - - 497,112 497,112
---------- ---------- ----------- ----------- ----------- ----------- -----------
Total Assets $ 126,696 $ 1,550,076 $ 468,134 $ 977,331 $ 1,169,716 $ 497,112 $ 4,789,065
========== ========== =========== =========== =========== =========== ===========
Liabilities
Interest bearing transaction
deposits $ - $ 807,866 $ 243,723 $ 690,599 $ 68,803 $ - $1,810,991
Time deposits - 329,148 255,474 559,775 169,624 - 1,314,021
Non-interest bearing deposits - - - - 728,001 - 728,001
Federal funds purchased 250 - - - - - 250
Borrowings 245,602 4 6 20 55,122 - 300,754
Other liabilities - - - - - 154,608 154,608
Shareholders' Equity - - - - - 480,440 480,440
---------- ---------- ----------- ----------- ----------- ----------- -----------
Total Liabilities & Equity $ 245,852 $ 1,137,018 $ 499,203 $ 1,250,394 $1,021,550 $ 635,048 $ 4,789,065
========== ========== =========== =========== =========== =========== ===========
Interest sensitivity gap $ (119,156) $ 413,058 $ (31,069) $ (273,063) $ 148,166 $(137,936)
Cumulative interest rate sensitivity gap $ (119,156) $ 293,902 $ 262,833 $ (10,230) $ 137,936 $ -
Cumulative interest rate
sensitivity gap as a percentage of
total earning assets (3.0)% 7.0 % 6.0 % 0.0 % 3.0 %
Analysis of Interest Sensitivity at December 31, 2004
Within 6 months 1 to 3 > 3 Non-Sensitive
Overnight 6 months to 1 year years years Balance Total
---------- ---------- ----------- ----------- ----------- ----------- -----------
(amounts in thousands)
Assets
Securities $ - $ 216,564 $ 130,944 $ 371,665 $ 583,196 $ - $1,302,369
Federal funds sold & Short-term
investments 142,135 - 8,126 - - - 150,261
Loans 39,370 1,327,083 214,990 583,394 543,041 - 2,707,878
Other assets - - - - - 504,218 504,218
---------- ---------- ----------- ----------- ----------- ----------- -----------
Total Assets $ 181,505 $ 1,543,647 $ 354,060 $ 955,059 $1,126,237 $ 504,218 $ 4,664,726
========== ========== =========== =========== =========== =========== ===========
Liabilities
Interest bearing transaction
deposits $ - $ 867,682 $ 249,596 $ 703,988 $ 68,429 $ - $1,889,695
Time deposits - 418,642 116,162 436,094 239,999 - 1,210,897
Non-interest bearing deposits - - - - 697,353 - 697,353
Federal funds purchased 800 - - - - - 800
Borrowings 200,036 3 3 17 50,250 - 250,309
Other liabilities - - - - - 151,090 151,090
Shareholders' Equity - - - - - 464,582 464,582
---------- ---------- ----------- ----------- ----------- ----------- -----------
Total Liabilities & Equity $ 200,836 $ 1,286,327 $ 365,761 $1,140,099 $1,056,031 $ 615,672 $ 4,664,726
========== ========== =========== =========== =========== =========== ===========
Interest sensitivity gap $ (19,331) $ 257,320 $ (11,701) $(185,040) $ 70,206 $(111,454)
Cumulative interest rate sensitivity gap $ (19,331) $ 237,989 $ 226,288 $ 41,248 $ 111,454 $ -
Cumulative interest rate
sensitivity gap as a percentage of
total earning assets 0.0 % 6.0 % 5.0 % 1.0 % 3.0 %
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Certain assumptions in assessing interest rate risk were employed in preparing data for the Company included in the preceding tables portraying the Company’s interest rate risk sensitivity. These assumptions relate to interest rates, loan and deposit growth, pricing, loan prepayment speeds, deposit decay rates, securities portfolio strategy and market value of certain assets under the various interest rate scenarios. Even if interest rates change in the designated amounts, there can be no assurance that the Company’s assets and liabilities would perform as anticipated. In addition, a change in U.S. Treasury rates in the designated amounts accompanied by a change in the shape of the U.S. Treasury yield curve would cause significantly different changes to the net interest income than indicated above.
As with any method of measuring interest rate risk, certain shortcomings are inherent in the methods of analysis presented. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Certain assets, such as adjustable rate loans, have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Finally, the ability of many borrowers to service their debt may decrease in the event of an interest rate increase. The Company considers all of these factors in monitoring its exposure to interest rate risk.
Even though permissible under the Asset Liability Management Policy approved by the Board of Directors, the Company is not currently engaged in the use of derivatives to control interest rate risk. Management and the Board of Directors review the need for such activities on a regular basis as part of its monthly interest rate risk analysis.
Interest rate risk is the most significant market risk affecting the Company. Other types of market risk, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of the Company’s business activities.
The foregoing disclosures related to the market risk of the Company should be read in conjunction with the Company’s audited consolidated financial statements, related notes and management’s discussion and analysis for the year ended December 31, 2004 included in the Company’s 2004 Annual Report on Form 10-K.
ITEM 4. CONTROLS AND PROCEDURESThe Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2005, (the “Evaluation Date”). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic filings under the Exchange Act.
During the Company’s last fiscal quarter ended June 30, 2005, there have not been any changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSOn February 4, 2004 the Company completed the redemption/conversion of substantially all $37.1 million of the 8% Cumulative Convertible Preferred Stock issued in partial payment for the acquisition of Lamar Capital Corporation in July, 2001. The conversion factor was .6666 shares of Hancock Holding Company common stock for each share of the preferred stock. A total of 7,304 shares of the preferred stock was redeemed for cash at the contract price of $20.00 per share plus pro rated dividends of $0.1511 per share.
In July 2000, the Company announced the execution of a stock buyback program that provides for the repurchase of up to 10 % of the Company’s issued common stock. The program authorizes the repurchase of approximately 3,320,000 shares of the Company’s issued common stock.
On February 26, 2004 the Company’s Board of Directors declared a two-for-one stock split in the form of a 100% common stock dividend. The additional shares were payable March 18, 2004 to shareholders of record at the close of business on March 8, 2004.
All information concerning earnings per share, dividends per share, and number of shares outstanding has been adjusted to give effect to this split.
ISSUER PURCHASES OF EQUITY SECURITIESThe following table provides information with respect to purchases made by the issuer or any affiliated purchaser of the issuer’s equity securities.
(a) (b) (c) (d)
Total number of Maximum number
shares purchased of shares
Total number as a part of publicly that may yet be
of shares or Average Price announced plans purchased under
units purchased Paid per Share or programs (1) Plans or Programs
------------------- ------------------ --------------------- ---------------------
Apr. 1, 2005 - Apr. 30, 2005 97,273 (2) $ 29.6372 96,100 585,201
May 1, 2005 - May 31, 2005 75 (3) 32.6300 - 585,201
Jun. 1, 2005 - Jun. 30, 2005 92,160 (4) 32.9261 - 585,201
------------------- ------------------ ---------------------
Total as of Jun. 30, 2005 189,508 $ 31.1654 96,100
=================== ================== =====================
(1) The Company publicly announced its stock buy-back program on July 18, 2000.
(2) 1,173 shares were purchased on the open market during April in order to satisfy obligations
pursuant to the Company's long term incentive plan that was established in 1996.
(3) 75 shares were purchased on the open market during May in order to satisfy obligations
pursuant to the Company's long term incentive plan that was established in 1996.
(4) 92,160 shares were purchased on the open market during June in order to satisfy obligations
pursuant to the Company's long term incentive plan that was established in 1996.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS
Exhibits:
1. Exhibit 31 - Rule 13a-14(a) / 15d-14(a) Certifications
2. Exhibit 32 - Section 1350 Certifications
Page 33 of 34
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
---------------------------------------------------
Registrant
August 9, 2005 By: /s/ George A. Schloegel
- -------------- ------------------------------------------------
Date George A. Schloegel
Vice-Chairman of the Board &
Chief Executive Officer
August 9, 2005 By: /s/ Carl J. Chaney
- -------------- ------------------------------------------------
Date Carl J. Chaney
Executive Vice President &
Chief Financial Officer
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