Hancock Whitney Corporation - 6 (HWC) 10-Q 2008 Q3 Quarterly report

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 September 30, 2008

OR

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

For the transition period from _____________________ to ________________________

Commission File Number 0-13089

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 o

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

Large accelerated filer x Accelerated filer o Non-accelerated filer o

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

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

31,740,660 common shares were outstanding as of October 31, 2008 for financial statement purposes.

Hancock Holding Company

Index

		Page Number
Part I. Financial Information
ITEM 1.	Financial Statements
	Condensed Consolidated Balance Sheets — September 30, 2008 (unaudited) and December 31, 2007	1
	Condensed Consolidated Statements of Income (unaudited) — Three and nine months ended September 30, 2008 and 2007	2
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) – Nine months ended September 30, 2008 and 2007	3
	Condensed Consolidated Statements of Cash Flows (unaudited) — Nine months ended September 30, 2008 and 2007	4
	Notes to Condensed Consolidated Financial Statements (unaudited) — September 30, 2008	5-22
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23-36
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	37
ITEM 4.	Controls and Procedures	37
Part II. Other Information
ITEM 1A.	Risk Factors	38
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
ITEM 4.	Submission of Matters to a Vote of Security Holders	38
ITEM 6.	Exhibits	38
Signatures		39

Part I. Financial Information

Item 1. Financial Statements

Hancock Holding Company and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share data)

	September 30, 2008 (unaudited)			December 31, 2007
ASSETS
Cash and due from banks (non-interest bearing)	$	170,336		$	182,615
Interest-bearing time deposits with other banks		10,721			8,560
Federal funds sold		162,876			117,721
Other short-term investments		133,270			—
Trading securities		2,505			197,425
Securities available for sale, at fair value (amortized cost of $1,656,875 and $1,472,550)		1,656,918			1,472,783
Loans held for sale		16,565			18,957
Loans		4,087,175			3,612,883
Less: allowance for loan losses		(57,200	)		(47,123	)
unearned income		(14,231	)		(16,326	)
Loans, net		4,015,744			3,549,434
Property and equipment, net of accumulated depreciation of $97,720 and $87,160		206,151			200,566
Other real estate, net		1,998			2,172
Accrued interest receivable		30,364			35,117
Goodwill, net		62,277			62,277
Other intangible assets, net		6,759			8,298
Life insurance contracts		144,814			139,421
Reinsurance receivables		28,409			34,827
Deferred tax asset, net		6,952			3,976
Other assets		88,103			21,830
Total assets	$	6,744,762		$	6,055,979
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing demand	$	866,414		$	907,874
Interest-bearing savings, NOW, money market and time		4,548,381			4,101,660
Total deposits		5,414,795			5,009,534
Federal funds purchased		1,475			4,100
Securities sold under agreements to repurchase		621,424			371,604
Long-term notes		678			793
Policy reserves and liabilities		48,679			58,489
Other liabilities		56,876			57,272
Total liabilities		6,143,927			5,501,792
Stockholders’ Equity
Common stock - $3.33 par value per share; 350,000,000 shares authorized, 31,702,106 and 31,294,607 issued and outstanding, respectively		105,568			104,211
Capital surplus		98,589			87,122
Retained earnings		410,936			377,481
Accumulated other comprehensive loss, net		(14,258	)		(14,627	)
Total stockholders’ equity		600,835			554,187
Total liabilities and stockholders’ equity	$	6,744,762		$	6,055,979

See notes to unaudited condensed consolidated financial statements.

1

Hancock Holding Company and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008		2007
Interest income:
Loans, including fees	$	62,353		$	65,911		$	184,376	$	189,965
Securities - taxable		20,493			18,771			60,508		58,405
Securities - tax exempt		1,203			1,538			3,902		4,736
Federal funds sold		52			1,376			1,759		4,964
Other investments		31			13			91		96
Total interest income		84,132			87,609			250,636		258,166
Interest expense:
Deposits		25,523			34,729			81,654		99,452
Federal funds purchased and securities sold under agreements to repurchase		3,772			1,866			11,531		5,550
Long-term notes and other interest expense		62			(128	)		89		(833	)
Total interest expense		29,357			36,467			93,274		104,169
Net interest income		54,775			51,142			157,362		153,997
Provision for loan losses, net		8,064			1,554			19,669		4,002
Net interest income after provision for loan losses		46,711			49,588			137,693		149,995
Noninterest income:
Service charges on deposit accounts		11,108			11,085			32,777		30,747
Other service charges, commissions and fees		15,093			14,536			46,851		43,466
Securities gains (losses), net		(79	)		34			5,999		74
Other income		3,993			5,577			12,747		14,241
Total noninterest income		30,115			31,232			98,374		88,528
Noninterest expense:
Salaries and employee benefits		28,664			28,531			81,326		79,932
Net occupancy expense		5,188			4,731			14,491		13,273
Equipment rentals, depreciation and maintenance		2,711			2,814			8,405		7,855
Amortization of intangibles		360			412			1,089		1,219
Other expense		18,560			19,369			52,495		55,660
Total noninterest expense		55,483			55,857			157,806		157,939
Net income before income taxes		21,343			24,963			78,261		80,584
Income tax expense		5,338			7,224			21,215		23,292
Net income	$	16,005		$	17,739		$	57,046	$	57,292
Basic earnings per share	$	0.51		$	0.55		$	1.82	$	1.77
Diluted earnings per share	$	0.50		$	0.55		$	1.79	$	1.74
Dividends paid per share	$	0.240		$	0.240		$	0.720	$	0.720
Weighted avg. shares outstanding-basic		31,471			32,005			31,402		32,299
Weighted avg. shares outstanding-diluted		31,905			32,492			31,826		32,847

See notes to unaudited condensed consolidated financial statements.

2

Hancock Holding Company and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except share and per share data)

													Accumulated Other Comprehensive Loss, net
	Common Stock						Capital Surplus			Retained Earnings
	Shares			Amount												Total
Balance, January 1, 2007		32,666,052		$	108,778		$	139,099		$	334,546		$	(24,013	)	$	558,410
Comprehensive income
Net income per consolidated statements of income		—			—			—			57,292			—			57,292
Net change in unfunded accumulated benefit obligation, net of tax		—			—			—			—			626			626
Net change in fair value of securities available for sale, net of tax		—			—			—			—			2,273			2,273
Comprehensive income																	60,191
Cash dividends declared ($0.72 per common share)		—			—			—			(23,388	)		—			(23,388	)
Common stock issued, long-term incentive plan, including income tax benefit of $169		123,629			412			1,048			—			—			1,460
Compensation expense, long-term incentive plan		—			—			1,664			—			—			1,664
Repurchase/retirement of common stock		(1,003,939	)		(3,343	)		(37,019	)		—			—			(40,362	)
Balance, September 30, 2007		31,785,742		$	105,847		$	104,792		$	368,450		$	(21,114	)	$	557,975
Balance, January 1, 2008		31,294,607		$	104,211		$	87,122		$	377,481		$	(14,627	)	$	554,187
Comprehensive income
Net income per consolidated statements of income		—			—			—			57,046			—			57,046
Net change in unfunded accumulated benefit obligation, net of tax		—			—			—			—			639			639
Net change in fair value of securities available for sale, net of tax		—			—			—			—			(270	)		(270	)
Comprehensive income																	57,415
SFAS 158, change in measurement date		—			—			—			(815	)		—			(815	)
Cash dividends declared ($0.72 per common share)		—			—			—			(22,776	)		—			(22,776	)
Common stock issued, long-term incentive plan, including income tax benefit of $3,795		407,499			1,357			9,481			—			—			10,838
Compensation expense, long-term incentive plan		—			—			1,986			—			—			1,986
Balance, September 30, 2008		31,702,106		$	105,568		$	98,589		$	410,936		$	(14,258	)	$	600,835

See notes to unaudited condensed consolidated financial statements.

3

Hancock Holding Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

	Nine Months Ended September 30,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	57,046		$	57,292
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		11,851			9,484
Provision for loan losses		19,669			4,002
Loss/(gain) in connection with other real estate owned		103			(727	)
Deferred tax benefit		(3,437	)		(2,334	)
Increase in cash surrender value of life insurance contracts		(5,393	)		(3,889	)
Gain on sales/paydowns of securities available for sale, net		(2,646	)		(57	)
Loss/(gain) on disposal of other assets		(677	)		62
Gain on sale of loans held for sale		(474	)		(508	)
Loss/(gain) on trading securities		(3,353	)		137
Amortization/(accretion) of securities premium/discount, net		1,407			(2,025	)
Amortization of mortgage servicing rights		161			264
Amortization of intangible assets		1,089			1,219
Stock-based compensation expense		1,986			1,664
Decrease (increase) in accrued interest receivable		4,753			(263	)
Increase in accrued expenses		6,435			227
Increase (decrease) in other liabilities		1,537			(721	)
Increase (decrease) in interest payable		(3,135	)		143
Decrease in policy reserves and liabilities		(9,810	)		(16,793	)
Decrease in reinsurance receivable		6,418			4,704
Increase in other assets		(5,017	)		(4,000	)
Proceeds from sale of loans held for sale		159,076			200,595
Originations of loans held for sale		(156,209	)		(200,839	)
Purchase of trading securities, net		—			(10	)
Proceeds from paydowns of securities held for trading		7,635			—
Excess tax benefit from share based payments		(3,795	)		(169	)
Other, net		(197	)		336
Net cash provided by operating activities		85,023			47,794
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in interest-bearing time deposits		(2,161	)		(1,701	)
Proceeds from sales of securities available for sale		3,326			8,985
Proceeds from maturities of securities available for sale		800,357			978,181
Purchases of securities available for sale		(857,164	)		(759,068	)
Purchase of short term investments		(133,270	)		—
Net decrease (increase) in federal funds sold		(45,155	)		124,964
Net increase in loans		(490,582	)		(269,876	)
Purchases of property and equipment		(19,580	)		(56,217	)
Proceeds from sales of property and equipment		1,851			55
Proceeds from sales of other real estate		4,673			1,460
Net cash (used in) provided by investing activities		(737,705	)		26,783
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits		405,261			(31,442	)
Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase		247,195			(15,428	)
Repayments of long-term notes		(115	)		(7	)
Dividends paid		(22,776	)		(23,388	)
Proceeds from exercise of stock options		7,043			1,291
Repurchase/retirement of common stock		—			(40,362	)
Excess tax benefit from stock option exercises		3,795			169
Net cash (used in) provided by financing activities		640,403			(109,167	)
NET DECREASE IN CASH AND DUE FROM BANKS		(12,279	)		(34,590	)
CASH AND DUE FROM BANKS, BEGINNING		182,615			190,114
CASH AND DUE FROM BANKS, ENDING	$	170,336		$	155,524
SUPPLEMENTAL INFORMATION:
Income taxes paid	$	15,089		$	23,478
Interest paid, including capitalized interest of $59 and $872, respectively		96,408			104,026
Restricted stock issued to employees of Hancock		560			251
SUPPLEMENTAL INFORMATION FOR NON-CASH
INVESTING AND FINANCING ACTIVITIES
Transfers from loans to other real estate	$	5,002		$	1,348
Financed sale of foreclosed property		400			—
Transfers from trading securities to available for sale securities		190,802			—
Due from broker for sale of securities		(61,259	)		—

See notes to unaudited condensed consolidated financial statements.

4

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Basis of Presentation

          The condensed consolidated financial statements of Hancock Holding Company and all majority-owned subsidiaries (the “Company”) included herein are unaudited; however, they include all adjustments all of which are of a normal recurring nature which, in the opinion of management, are necessary to present fairly the Company’s Condensed Consolidated Balance Sheets at September 30, 2008 and December 31, 2007, the Company’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2008 and 2007, the Company’s Condensed Consolidated Statements of Stockholders’ Equity and Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2008 and 2007. Although the Company believes the disclosures in these financial statements are adequate to make the interim information presented not misleading, certain information relating to the Company’s organization and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles 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 2007 Annual Report on Form 10-K. The results of operations for the nine months ended September 30, 2008 are not necessarily indicative of the results expected for the full year.

          The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and disclosure of contingent liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to allowance for loan losses, investments, intangible assets and goodwill, property and equipment, income taxes, insurance, employment benefits and contingent liabilities. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

          Certain reclassifications have been made to conform prior year financial information to the current period presentation. These reclassifications had no material impact on the unaudited condensed consolidated financial statements. For the periods presented, these reclassifications include the Company’s investment in the stock of the Federal Home Loan Bank (FHLB), that has been reclassed from investment securities to other assets since these equity securities are restricted and do not have a readily determinable fair value. The balance of FHLB stock as of December 31, 2007, was $2.3 million. The Company has also reclassed its investment in an equity method investment from investment securities into other assets. The balance of the equity method investment as of December 31, 2007, was $5.0 million. The dividend income on the FHLB stock has also been reclassed from other investments to other income. The dividend income on FHLB stock for the three and nine months ended September 31, 2007 was $52 thousand and $141 thousand, respectively.

Critical Accounting Policies

          There have been no material changes or developments in the Company’s evaluation of accounting estimates and underlying assumptions or methodologies that the Company believes to be Critical Accounting Policies and Estimates as disclosed in our Form 10-K, for the year ended December 31, 2007.

5

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

2. Fair Value of Assets

          The Company adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (“SFAS No. 157”), on January 1, 2008. SFAS No. 157 establishes a framework for measuring fair value under generally accepted accounting principles (GAAP), clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. SFAS No. 157 defines 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 (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. Available for sale securities classified as Level 1 within the valuation hierarchy include U.S. Treasury securities, obligations of U.S. Government-sponsored agencies, and other debt and equity securities. Level 2 classified available for sale securities include mortgage-backed debt securities, collateralized mortgage obligations, and state and municipal bonds.

          The Company adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment SFAS No. 115 (“SFAS No. 159”), on January 1, 2008. The Company did not elect to fair value any additional items under SFAS No. 159. The Company, in accordance with Financial Accounting Standards Board Staff Position No. 157-2 “The Effective Date of FASB Statement No. 157”, will defer application of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities until January 1, 2009.

     Fair Value of Assets Measured on a Recurring Basis

          The following table presents for each of the fair-value hierarchy levels the Company’s financial assets and liabilities that are measured at fair value (in thousands) on a recurring basis at September 30, 2008.

	Level 1		Level 2			Net Balance
Assets
Available for sale securities	$	369,176	$	1,287,742		$	1,656,918
Trading securities		2,505		—			2,505
Swaps		—		(1,295	)		(1,295	)
Loans carried at fair value		—		24,125			24,125
Total assets	$	371,681	$	1,310,572		$	1,682,253

     Fair Value of Assets Measured on a Nonrecurring Basis

          Certain assets and liabilities are measured at fair value on a non-recurring basis and therefore are not included in the table above. Impaired loans are level 2 assets measured using appraisals from external parties of the collateral less any prior liens. As of September 30, 2008, the fair value of impaired loans was $33.3 million.

6

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

3. Securities

          Available for Sale Securities

          For the nine months ended September 30, 2008, the Company sold securities for a net gain of $2.6 million. Included in the net gain was a $2.8 million gross gain for the sale of securities as a result of the VISA IPO that occurred in the first quarter of 2008. This was offset by gross losses of $1.1 million and gross gains of $0.9 million that occurred in the second quarter and third quarter of 2008 due to the sale of certain investments which experienced a deterioration of credit quality. For the nine months ended September 30, 2007, Magna Insurance Company, sold thirty available for sale securities out of its portfolio to provide liquidity for surrenders of annuities for Magna Insurance Company. These securities had a gross loss of $37,164.

          Trading Securities

          For the nine months ended September 30, 2008, the Company recognized $3.4 million in net gains, including a net gain of $3.2 million for the fair value adjustment at the date of the transfer of trading securities from trading to available for sale in the first quarter of 2008 because the Company intends to hold them for a longer period of time. There were no trading gains or losses in the first nine months of 2007.

4. Loans and Allowance for Loan Losses

          Loans, net of unearned income, totaled $4.0 billion at September 30, 2008 and $3.6 billion at December 31, 2007. The Company also held $16.6 million and $19.0 million in loans held for sale at September 30, 2008 and December 31, 2007, respectively, carried at lower of cost or fair value. These loans are originated on a best-efforts basis, whereby a commitment by a third party to purchase the loan has been received concurrent with the Banks’ commitment to the borrower to originate the loan.

          In some instances, loans are placed on nonaccrual status. All accrued but uncollected interest related to the loan is deducted from income in the period the loan is assigned a nonaccrual status. For such period as a loan is in nonaccrual status, any cash receipts are applied first to principal, second to expenses incurred to cause payment to be made and lastly to the recovery of any reversed interest income and interest that would be due and owing subsequent to the loan being placed on nonaccrual status. Nonaccrual loans and foreclosed assets, which make up total non-performing assets, amounted to approximately 0.59% and 0.43% of total loans at September 30, 2008 and December 31, 2007, respectively. The amount of interest that would have been recognized on nonaccrual loans for the three and nine months ended September 30, 2008 was approximately $555,000 and $890,000, respectively. The amount of interest that would have been recognized on nonaccrual loans for the three and nine months ended September 30, 2007 was approximately $241,000 and $332,000, respectively.

          The Company’s investments in impaired loans at September 30, 2008 and December 31, 2007 were $48.4 million and $43.5 million, respectively.

7

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

4. Loans and Allowance for Loan Losses (continued)

          The following table sets forth, for the periods indicated, allowance for loan losses, amounts charged-off and recoveries of loans previously charged-off (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
Balance of allowance for loan losses at beginning of period	$	53,300	$	46,227	$	47,123	$	46,772
Provision for loan losses, net		8,064		1,554		19,669		4,002
Loans charged-off:
Commercial, real estate and mortgage		1,821		602		3,838		2,083
Direct and indirect consumer		1,522		921		4,192		3,315
Finance company		1,100		917		3,297		2,198
Demand deposit accounts		690		1,170		1,972		2,611
Total charge-offs		5,133		3,610		13,299		10,207
Recoveries of loans previously charged-off:
Commercial, real estate and mortgage		86		659		608		2,034
Direct and indirect consumer		375		422		1,329		1,351
Finance company		188		158		626		425
Demand deposit accounts		320		491		1,144		1,524
Total recoveries		969		1,730		3,707		5,334
Net charge-offs		4,164		1,880		9,592		4,873
Balance of allowance for loan losses at end of period	$	57,200	$	45,901	$	57,200	$	45,901

          The following table presents the makeup of allowance for loan losses by:

	September 30, 2008		December 31, 2007
	(In thousands)
Balance of allowance for loan losses
Non-impaired	$	42,075	$	38,146
Impaired		15,125		8,977
Total allowance for loan losses	$	57,200	$	47,123

          As of September 30, 2008 and December 31, 2007, the Company had $24.1 million and $18.8 million, respectively, in loans carried at fair value.

8

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

4. Loans and Allowance for Loan Losses (continued)

          The following table sets forth, for the periods indicated, certain ratios related to the Company’s charge-offs, allowance for loan losses and outstanding loans:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Ratios:
Net charge-offs to average net loans (annualized)		0.42	%		0.21	%		0.34	%		0.19	%
Net charge-offs to period-end net loans (annualized)		0.41	%		0.21	%		0.31	%		0.18	%
Allowance for loan losses to average net loans		1.45	%		1.32	%		1.52	%		1.36	%
Allowance for loan losses to period-end net loans		1.40	%		1.31	%		1.40	%		1.31	%

5. Goodwill and Other Intangible Assets

          Goodwill represents costs in excess of the fair value of net assets acquired in connection with purchase business combinations. In accordance with the provisions of SFAS No. 142 Goodwill and Other Intangibles (“SFAS No. 142”), the Company tests its goodwill for impairment annually. No impairment charges were recognized as of September 30, 2008. The carrying amount of goodwill was $62.3 million as of September 30, 2008 and December 31, 2007.

          The following tables present information regarding the components of the Company’s identifiable intangible assets, and related amortization for the dates indicated (in thousands):

	As of September 30, 2008						As of December 31, 2007
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Amortizable intangible assets:
Core deposit intangibles	$	14,137	$	9,348	$	4,789	$	14,137	$	8,500	$	5,637
Value of insurance business acquired		2,752		1,223		1,529		3,757		1,807		1,950
Non-compete agreements		322		273		49		368		252		116
Trade name		100		65		35		100		50		50
Total	$	17,311	$	10,909	$	6,402	$	18,362	$	10,609	$	7,753

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
Aggregate amortization expense for:
Core deposit intangibles	$	283	$	302	$	848	$	907
Value of insurance businesses acquired		65		87		205		242
Non-compete agreements		7		18		21		55
Trade name		5		5		15		15
Total	$	360	$	412	$	1,089	$	1,219

9

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

5. Goodwill and Other Intangible Assets (continued)

          The amortization period used for core deposit intangibles and value of insurance business acquired is 10 years. The amortization period used for non-compete agreements and trade name intangibles is 5 years. The following table shows estimated amortization expense of other intangible assets for the remainder of 2008, four succeeding years and thereafter, calculated based on current amortization schedules (in thousands):

	2008	$	361
	2009		1,435
	2010		1,400
	2011		1,161
	2012		946
Thereafter			1,099
			6,402

6. Mortgage Banking (including Mortgage Servicing Rights)

          The Company adopted SFAS No. 156, Accounting for Servicing of Financial Assets (“SFAS No. 156”) on January 1, 2007 without material impact. SFAS No. 156 requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable, and permits an entity to subsequently measure those servicing assets and servicing liabilities at fair value. Under SFAS No. 156, the Company decided to continue to use the amortization method instead of adopting the fair value measurement method. Management has determined that it has one class of servicing rights – mortgage servicing rights – which are based on the type of loan. The following are the risk characteristics of the underlying financial assets used to stratify servicing assets for purposes of measuring impairment: interest rate, type of product (fixed versus variable), duration and asset quality. The fair values of the mortgage servicing rights were $1.7 million and $1.8 million as of September 30, 2008 and December 31, 2007, respectively. The fair value was based upon Bloomberg prepayment speeds for the performing portion of the portfolio and actual prepayment speeds for the watch list portion of the portfolio. The following table shows the amounts (in thousands) of contractually specified fees for the three and nine months ended September 30, 2008 and 2007, respectively:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008			2007		2008		2007
Servicing fees	$	133	$	152	$	413	$	478
Late fees		11		18		33		51
Ancillary fees		2		4		6		15
Total	$	146	$	174	$	452	$	544

          The gross carrying amount of mortgage servicing rights is equal to the net carrying amount. There were no valuation allowances on the mortgage servicing rights portfolio as of September 30, 2008 or December 31, 2007.

10

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

6. Mortgage Banking (including Mortgage Servicing Rights) (continued)

          The changes in the carrying amounts of mortgage servicing rights as of September 30, 2008 and as of December 31, 2007 are as follows (in thousands):

	Net Carrying Amount
Balance as of December 31, 2006	$	941
Additions		9
Disposals		(60	)
Amortization		(345	)
Balance as of December 31, 2007		545
Additions		1
Disposals		(28	)
Amortization		(161	)
Balance as of September 30, 2008	$	357

          The following table shows estimated amortization expense of mortgage servicing rights for the remainder of 2008, the four succeeding years and thereafter, calculated based on current amortization schedules (in thousands):

	2008	$	50
	2009		143
	2010		93
	2011		49
	2012		15
Thereafter			7
		$	357

7. Earnings Per Share

         Following is a summary of the information used in the computation of earnings per common share (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
Net income - used in computation of earnings per share	$	16,005	$	17,739	$	57,046	$	57,292
Weighted average number of shares outstanding - used in computation of basic earnings per share		31,471		32,005		31,402		32,299
Effect of dilutive securities Stock options and restricted stock awards		434		487		424		548
Weighted average number of shares outstanding plus effect of dilutive securities - used in computation of diluted earnings per share		31,905		32,492		31,826		32,847

There were no anti-dilutive share-based incentives outstanding for the three and nine months ended September 30, 2008. There were 0 and 49,852 anti-dilutive share-based incentives outstanding for the three and nine months ended September 30, 2007, respectively.

11

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

8. Share-Based Payment Arrangements

Stock Option Plans

          At September 30, 2008, the Company had two stock option plans. The 1996 Hancock Holding Company Long-Term Incentive Plan (the “1996 Plan”) that was approved by the Company’s shareholders in 1996 was designed to provide annual incentive stock awards. Awards as defined in the 1996 Plan include, with limitations, stock options (including restricted stock options), restricted and performance shares, and performance stock awards, all on a stand-alone, combination or tandem basis. A total of fifteen million (15,000,000) common shares can be granted under the 1996 Plan with an annual grant maximum of two percent (2%) of the Company’s outstanding common stock as reported for the fiscal year ending immediately prior to such plan year. Grants of restricted stock awards are limited to one-third of the grant totals.

          The exercise price is equal to the market price on the date of grant, except for certain of those granted to major stockholders where the option price is 110% of the market price. Option awards generally vest based on five years of continuous service and have ten-year contractual terms. The Company’s policy is to issue new shares upon share option exercise and upon restricted stock award vesting. The 1996 Long-Term Incentive Plan expired in 2006 and no additional awards may be granted under the 1996 Plan.

          In March of 2005, the stockholders of the Company approved Hancock Holding Company’s 2005 Long-Term Incentive Plan (the “2005 Plan”). The 2005 Plan is designed to enable employees and directors to obtain a proprietary interest in the Company and to attract and retain outstanding personnel. The 2005 Plan provides that awards for up to an aggregate of five million (5,000,000) shares of the Company’s common stock may be granted during the term of the 2005 Plan. The 2005 Plan limits the number of shares for which awards may be granted during any calendar year to two percent (2%) of the outstanding Company’s common stock as reported for the fiscal year ending immediately prior to such plan year.

          The fair value of each option award is estimated on the date of grant using Black-Scholes-Merton option valuation model that uses the assumptions noted in the following table. Expected volatilities are based on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock and other factors. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

	Nine Months Ended September 30, 2008
Expected volatility	29.53	%
Expected dividends	2.60	%
Expected term (in years)	6.42
Risk-free rates	3.32	%

12

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

8. Share-Based Payment Arrangements (continued)

          A summary of option activity under the plans for the nine months ended September 30, 2008, and changes during the nine months then ended 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, 2008		1,345,333		$	29.04		6.1
Granted		4,289		$	36.88
Exercised		(401,019	)	$	23.05			$	10,804
Forfeited or expired		(15,348	)	$	37.07
Outstanding at September 30, 2008		933,255		$	31.52		5.9	$	18,181
Exercisable at September 30, 2008		653,332		$	27.67		5.1	$	15,245
Share options expected to vest		235,329		$	40.44		8.0	$	2,485

          The total intrinsic value of options exercised during the nine months ended September 30, 2008 and 2007 was $10.8 million and $4.0 million, respectively.

          A summary of the status of the Company’s nonvested shares as of September 30, 2008, and changes during the nine months ended September 30, 2008, is presented below:

	Number of Shares			Weighted- Average Grant-Date Fair Value ($)
Nonvested at January 1, 2008		589,090		$	21.74
Granted		20,620		$	30.65
Vested		(100,968	)	$	16.90
Forfeited		(12,586	)	$	24.15
Nonvested at September 30, 2008		496,156		$	23.04

          As of September 30, 2008, there was $6.4 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a weighted-average period of 2.59 years. The total fair value of shares which vested during the nine months ended September 30, 2008 and 2007 was $1.7 million and $1.3 million, respectively.

13

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

9. Retirement Plans

          Net periodic benefits cost includes the following components for the three and nine months ended September 30, 2008 and 2007:

	Pension Benefits						Other Post-retirement Benefits
	Three Months Ended September 30,
	2008			2007			2008			2007
Service cost	$	656,542		$	663,956		$	40,500		$	68,500
Interest cost		1,129,247			958,450			122,500			102,000
Expected return on plan assets		(1,207,550	)		(1,051,435	)		—			—
Amortization of prior service cost		—			—			(13,250	)		(13,250	)
Amortization of net loss		236,869			284,636			36,500			19,550
Amortization of transition obligation		—			—			1,250			1,250
Net periodic benefit cost	$	815,108		$	855,607		$	187,500		$	178,050

	Pension Benefits						Other Post-retirement Benefits
	Nine Months Ended September 30,
	2008			2007			2008			2007
Service cost	$	1,969,626		$	1,991,869		$	121,500		$	205,500
Interest cost		3,387,741			2,875,350			367,500			306,000
Expected return on plan assets		(3,622,650	)		(3,154,305	)		—			—
Amortization of prior service cost		—			—			(39,750	)		(39,750	)
Amortization of net loss		710,607			845,734			109,500			187,701
Amortization of transition obligation		—			—			3,750			3,750
Net periodic benefit cost	$	2,445,324		$	2,558,648		$	562,500		$	663,201

          The Company anticipates that it will contribute $4.6 million to its pension plan and approximately $612,000 to its post-retirement benefits in 2008. During the first nine months of 2008, the Company contributed approximately $3.0 million to its pension plan and approximately $459,000 for post-retirement benefits.

14

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

10. Other Service Charges, Commission and Fees, and Other Income

          Components of other service charges, commission and fees are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
	(In thousands)
Trust fees	$	4,330	$	3,892	$	13,080	$	11,708
Credit card merchant discount fees		2,805		2,571		8,229		7,480
Income from insurance operations		3,819		4,270		12,419		13,672
Investment and annuity fees		2,421		2,253		7,957		6,249
ATM fees		1,718		1,550		5,166		4,357
Total other service charges, commissions and fees	$	15,093	$	14,536	$	46,851	$	43,466

          Components of other income are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
	(In thousands)
Secondary mortgage market operations	$	817	$	935	$	2,347	$	2,962
Income from bank owned life insurance		1,472		1,246		4,414		3,665
Outsourced check income		28		550		263		1,839
Other		1,676		2,846		5,723		5,775
Total other income	$	3,993	$	5,577	$	12,747	$	14,241

11. Other Expense

          Components of other expense are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
	(In thousands)
Data processing expense	$	4,709	$	5,171	$	13,547	$	14,102
Postage and communications		2,396		2,616		6,995		7,564
Ad valorem and franchise taxes		622		1,016		2,746		2,664
Legal and professional services		3,447		3,482		9,275		11,572
Stationery and supplies		366		483		1,344		1,614
Advertising		2,187		1,796		5,437		5,390
Deposit insurance and regulatory fees		880		257		1,895		766
Training expenses		123		112		476		447
Other fees		1,017		1,068		2,999		2,444
Annuity expense		231		420		1,345		1,222
Claims paid		292		447		946		1,345
Other expense		2,290		2,501		5,490		6,530
Total other expense	$	18,560	$	19,369	$	52,495	$	55,660

15

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

12. Income Taxes

          The Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, An Interpretation of FASB Statement No. 109 (“FIN 48”), on January 1, 2007 and determined that there was no need to make an adjustment to retained earnings due to the adoption of this Interpretation. There were no material uncertain tax positions as of September 30, 2008 and December 31, 2007. The Company does not expect that unrecognized tax benefits will significantly increase or decrease within the next 12 months.

          It is the Company’s policy to recognize interest and penalties accrued relative to unrecognized tax benefits in income tax expense. The interest accrual is considered immaterial to the Company’s consolidated balance sheet as of September 30, 2008 and December 31, 2007.

          The Company and its subsidiaries, except for its wholly owned subsidiary Magna, file a consolidated U.S. federal income tax return, as well as filing various returns in the states where its banking offices are located. Its filed income tax returns are no longer subject to examination by taxing authorities for years before 2004.

13. Segment Reporting

          The Company’s primary segments are geographically divided into the Mississippi (MS), Louisiana (LA), Florida (FL) and Alabama (AL) markets. Each segment offers the same products and services but is managed separately due to different pricing, product demand, and consumer markets. Each segment offers commercial, consumer and mortgage loans and deposit services. In the following tables, the column “Other” includes additional consolidated subsidiaries of the Company: Hancock Investment Services, Inc. and subsidiaries, Hancock Insurance Agency, Inc. and subsidiaries, Harrison Finance Company, Magna Insurance Company and subsidiary and three real estate corporations owning land and buildings that house bank branches and other facilities.

16

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

13. Segment Reporting (continued)

          Following is selected information for the Company’s segments (in thousands):

	Three Months Ended September 30, 2008
	MS		LA		FL			AL			Other		Eliminations			Consolidated
Interest income	$	39,458	$	37,316	$	2,384		$	1,473		$	6,574	$	(3,073	)	$	84,132
Interest expense		17,474		11,731		1,196			675			1,239		(2,958	)		29,357
Net interest income		21,984		25,585		1,188			798			5,335		(115	)		54,775
Provision for loan losses		1,732		3,686		1,285			355			1,006		—			8,064
Noninterest income		14,551		9,660		320			176			5,417		(9	)		30,115
Depreciation and amortization		2,714		881		133			78			144		—			3,950
Other noninterest expense		23,649		18,055		1,917			1,247			6,690		(25	)		51,533
Net income before income taxes		8,440		12,623		(1,827	)		(706	)		2,912		(99	)		21,343
Income tax expense (benefit)		1,964		3,331		(713	)		(261	)		1,017		—			5,338
Net income (loss)	$	6,476	$	9,292	$	(1,114	)	$	(445	)	$	1,895	$	(99	)	$	16,005
Total assets	$	3,676,308	$	2,875,801	$	229,917		$	130,568		$	849,616	$	(1,017,448	)	$	6,744,762
Total interest income from affiliates	$	3,070	$	—	$	—		$	—		$	3	$	(3,073	)	$	—
Total interest income from external customers	$	36,388	$	37,316	$	2,384		$	1,473		$	6,571	$	—		$	84,132

	Three Months Ended September 30, 2007
	MS			LA		FL			AL			Other		Eliminations			Consolidated
Interest income	$	45,260		$	37,904	$	2,380		$	237		$	6,723	$	(4,895	)	$	87,609
Interest expense		20,186			17,703		1,277			151			1,930		(4,780	)		36,467
Net interest income		25,074			20,201		1,103			86			4,793		(115	)		51,142
Provision for (reversal of) loan losses		(1,043	)		518		889			103			1,087		—			1,554
Noninterest income		14,527			9,818		247			17			6,633		(10	)		31,232
Depreciation and amortization		2,322			873		119			19			117		—			3,450
Other noninterest expense		24,064			17,822		1,471			388			8,714		(52	)		52,407
Net income before income taxes		14,258			10,806		(1,129	)		(407	)		1,508		(73	)		24,963
Income tax expense (benefit)		4,013			2,854		(382	)		(126	)		865		—			7,224
Net income	$	10,245		$	7,952	$	(747	)	$	(281	)	$	643	$	(73	)	$	17,739
Total assets	$	3,227,798		$	2,594,664	$	158,669		$	28,111		$	818,740	$	(921,929	)	$	5,906,053
Total interest income from affiliates	$	4,895		$	—	$	—		$	—		$	—	$	(4,895	)	$	—
Total interest income from external customers	$	40,365		$	37,904	$	2,380		$	237		$	6,723	$	—		$	87,609

17

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

13. Segment Reporting (continued)

	Nine Months Ended September 30, 2008
	MS		LA		FL			AL			Other		Eliminations			Consolidated
Interest income	$	120,392	$	108,577	$	6,826		$	3,311		$	19,979	$	(8,449	)	$	250,636
Interest expense		54,604		37,334		3,596			1,649			4,195		(8,104	)		93,274
Net interest income		65,788		71,243		3,230			1,662			15,784		(345	)		157,362
Provision for loan losses		6,628		7,666		1,556			1,002			2,817		—			19,669
Noninterest income		41,855		35,280		883			481			19,900		(25	)		98,374
Depreciation and amortization		8,072		2,687		358			299			435		—			11,851
Other noninterest expense		65,186		49,921		5,031			3,447			22,461		(91	)		145,955
Net income before income taxes		27,757		46,249		(2,832	)		(2,605	)		9,971		(279	)		78,261
Income tax expense (benefit)		6,844		12,954		(1,391	)		(950	)		3,758		—			21,215
Net income (loss)	$	20,913	$	33,295	$	(1,441	)	$	(1,655	)	$	6,213	$	(279	)	$	57,046
Total assets	$	3,676,308	$	2,875,801	$	229,917		$	130,568		$	849,616	$	(1,017,448	)	$	6,744,762
Total interest income from affiliates	$	8,389	$	8	$	4		$	—		$	48	$	(8,449	)	$	—
Total interest income from external customers	$	112,003	$	108,569	$	6,822		$	3,311		$	19,931	$	—		$	250,636

	Nine Months Ended September 30, 2007
	MS			LA		FL			AL			Other		Eliminations			Consolidated
Interest income	$	135,691		$	110,702	$	7,228		$	671		$	19,056	$	(15,182	)	$	258,166
Interest expense		59,143			50,204		3,771			177			5,711		(14,837	)		104,169
Net interest income		76,548			60,498		3,457			494			13,345		(345	)		153,997
Provision for (reversal of) loan losses		(552	)		1,565		566			224			2,199		—			4,002
Noninterest income		39,862			27,539		647			18			20,495		(33	)		88,528
Depreciation and amortization		6,458			2,337		323			25			341		—			9,484
Other noninterest expense		67,694			51,130		4,188			791			25,015		(363	)		148,455
Net income before income taxes		42,810			33,005		(973	)		(528	)		6,285		(15	)		80,584
Income tax expense (benefit)		12,496			8,743		(469	)		(172	)		2,694		—			23,292
Net income	$	30,314		$	24,262	$	(504	)	$	(356	)	$	3,591	$	(15	)	$	57,292
Total assets	$	3,227,798		$	2,594,664	$	158,669		$	28,111		$	818,740	$	(921,929	)	$	5,906,053
Total interest income from affiliates	$	15,133		$	—	$	—		$	49		$	—	$	(15,182	)	$	—
Total interest income from external customers	$	120,558		$	110,702	$	7,228		$	622		$	19,056	$	—		$	258,166

18

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

14. New Accounting Pronouncements

          In October 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (FSP) 157-3, Determining the Fair Value of a Financial Asset in a Market That is Not Active, which clarifies the application of Statement of Financial Accounting Standard (SFAS) No. 157, Fair Value Measurements, in an inactive market. Application issues clarified include: how management’s internal assumptions should be considered when measuring fair value when relevant observable data do not exist; how observable market information in a market that is not active should be considered when measuring fair value; and how the use of market quotes should be considered when assessing the relevance of observable and unobservable data available to measure fair value. FSP 157-3 is effective immediately and did not have a material impact on the Company’s financial condition or results of operations.

          In June 2008, the FASB issued Emerging Issues Task Force (“EITF”) 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities which provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and should be included in the computation of earnings per share pursuant to the two-class method. EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Upon adoption, a company is required to retrospectively adjust its earnings per share data including any amounts related to interim periods, summaries of earnings and selected financial data. The Company is assessing the impact of adopting EITF 03-6-1, but does not expect the impact to be material to the Company’s financial condition or results of operations.

          In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Principles (“SFAS No. 162”) which is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles for nongovernmental entities. SFAS No. 162 will be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board (PCAOB) amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company will adopt the provisions of SFAS No. 162, when required, but does not expect the impact to be material to the Company’s financial condition or results of operations.

          In April 2008, the FASB issued FSP 142-3, Determination of the Useful Life of Intangible Asset, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS No. 142.”) The intent of the FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141R and other U.S. generally accepted accounting principles. This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company is assessing the impact of FSP 142-3, but does not expect the impact to be material to the Company’s financial condition or results of operations.

          In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities – an Amendment of FASB 133 (“SFAS No. 161”) which enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how: (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities; and (c) derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008. The Company is assessing the impact of

19

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

14. New Accounting Pronouncements (continued)

SFAS No. 161, but does not expect the impact to be material to the Company’s financial condition or results of operations.

          In December 2007, the FASB issued SFAS No. 141R, Business Combinations (“SFAS No. 141R”) which applies to all business combinations. The statement requires most identifiable assets, liabilities, noncontrolling interests, and goodwill acquired in a business combination to be recorded at “full fair value.” All business combinations will be accounted for by applying the acquisition method (previously referred to as the purchase method.) Companies will have to identify the acquirer; determine the acquisition date and purchase price; recognize at their acquisition-date fair values of the identifiable assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree, and recognize goodwill or, in the case of a bargain purchase, a gain. SFAS No. 141R is effective for periods beginning on or after December 15, 2008, and early adoption is prohibited. It will be applied to business combinations occurring after the effective date. The Company will adopt the provisions of SFAS No. 141R in the first quarter of 2009, as required, and the impact on the Company’s financial condition or results of operations is dependent on the extent of future business combinations.

          In November 2007, the SEC issued Staff Accounting Bulletin No. 109, Written Loan Commitments Recorded at Fair Value Through Earnings (“SAB No. 109”). SAB No. 109 rescinds SAB No. 105’s prohibition on inclusion of expected net future cash flows related to loan servicing activities in the fair value measurement of a written loan commitment. SAB No. 109 also applies to any loan commitments for which fair value accounting is elected under SFAS No. 159. SAB No. 109 is effective prospectively for derivative loan commitments issued or modified in fiscal quarters beginning after December 15, 2007. The adoption of SAB No. 109 during the first quarter of 2008 did not have a material impact on the Company’s results of operations and financial position.

          In June 2007, the FASB ratified EITF No. 06-11, Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards. The objective of this issue is to determine the accounting for the income tax benefits of dividend or dividend equivalents when the dividends or dividend equivalents are: (a) linked to equity-classified nonvested shares or share units or equity-classified outstanding share options and (b) charged to retained earnings under FASB Statement No. 123 (Revised 2004), Share-Based Payment. The Task Force reached a consensus that EITF No. 06-11 should be applied prospectively to the income tax benefits of dividends on equity-classified employee share-based payment awards that are declared in fiscal years beginning after September 15, 2007. The adoption of EITF No. 06-11 during the first quarter of 2008 did not have a material impact on the Company’s results of operations and financial position.

          In March 2007, the FASB ratified EITF No. 06-10, Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements. One objective of EITF No. 06-10 is to determine whether a liability for future benefits under a collateral assignment split-dollar life insurance arrangement that provides a benefit to an employee that extends into postretirement periods should be recognized in accordance with SFAS No. 106 or APB Opinion 12, as appropriate, based on the substantive agreement with the employee. Another objective of EITF No. 06-10 is to determine how the asset arising from a collateral assignment split-dollar life insurance arrangement should be recognized and measured. EITF No. 06-10 is effective for fiscal years beginning after December 15, 2007. The adoption of EITF No. 06-10 during the first quarter of 2008 did not have a material impact on the Company’s results of operations and financial position.

          In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment SFAS No. 115 (“SFAS No. 159”) which permits an entity to choose to measure many financial instruments and certain other items at fair value. Most of the provisions in SFAS No. 159 are elective. The FASB’s stated objective in issuing this standard is as follows: “to improve financial reporting by

20

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

14. New Accounting Pronouncements (continued)

providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.” The fair value option established by SFAS No. 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity will report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. The adoption of SFAS No. 159 during the first quarter of 2008 did not have a material impact on the Company’s results of operations and financial position.

          In September 2006, the FASB issued Statement No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – An Amendment of FASB Statements No. 87, 88, 106, and 132(R) (“SFAS No. 158”). This pronouncement requires an employer to recognize the over funded or under funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability on its balance sheet. SFAS No. 158 also requires an employer to recognize changes in that funded status in the year in which the changes occur through comprehensive income effective for fiscal years ending after December 15, 2006. In addition, this statement requires an employer to measure the funded status of a plan as of its year-end balance sheet date effective for fiscal years ending after December 15, 2008. The Company adopted the requirement to recognize the funded status of the benefit plans and related disclosure requirements as of December 31, 2006. In the first quarter of 2008, the Company changed the measurement date of the funded status of the pension plan from September 30 to December 31. With the change in measurement date, the Company recorded an $815,107 adjustment to decrease beginning retained earnings and increase liabilities.

          In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”) which defines fair value, establishes a framework for measuring fair value under accounting principles generally accepted in the United States of America, and expands disclosures about fair value measurements. SFAS No. 157 applies to other accounting pronouncements that require or permit fair value measurements. This Statement is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The disclosure provisions of SFAS No. 157 are included in Note 2. The adoption of SFAS No. 157 during the first quarter of 2008 did not have a material impact on the Company’s results of operations and financial position.

15. VISA IPO and Litigation

          In the fourth quarter of 2007, the Company recorded a $2.5 million pretax charge pursuant to FASB Interpretation No. 45 “Guarantors Accounting and Disclosure Requirements, Including Indirect Guarantees of Indebtedness of Others” (“FIN No. 45”) for liabilities related to VISA USA’s antitrust settlement with American Express and other pending VISA litigation (reflecting its share as a VISA member.) In the first quarter of 2008 as part of VISA’s initial public offering, VISA redeemed 37.5% of shares held by the Company resulting in proceeds of $2.8 million in a realized security gain. The remaining 62.5% of the Class B shares are restricted and must be held for the longer period of 3 years or until all settlements are complete. At that time, the Company can keep the Class B shares or convert them to Class A publicly tradeable shares at a conversion rate to be determined. These shares are recorded at historical cost. The realized securities gain is included in the securities gain line of the noninterest income section of the Condensed Consolidated Statements of Income and the cash received is recorded in cash and due from banks in the assets section of the Condensed Consolidated Balance Sheets. In addition, VISA lowered its estimate of pending litigation settlements. Consequently, $1.3 million of the $2.5

21

Hancock Holding Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements – (Continued)
(Unaudited)

15. VISA IPO and Litigation (continued)

million FIN No. 45 liability that was recorded in the fourth quarter was reversed in the first quarter of 2008. The reduction in the litigation liability is recorded in the other liabilities section of the Condensed Consolidated Balance Sheets and the reduction in litigation expense is recorded in the other expense line of the noninterest expense section of the Condensed Consolidated Statements of Income.

          In October 28, 2008, VISA, Discover Financial Services Inc., and MasterCard Inc. announced that they have settled the antitrust lawsuit and that they are working on the specific terms on the settlement. The settlement did not have a material impact on the Company’s results of operations or financial position.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

          General

          The following discussion should be read in conjunction with our financial statements included with this report and our financial statements and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2007 Annual Report on Form 10-K. Our discussion includes various forward-looking statements about our markets, the demand for our products and services and our future results. These statements are based on certain assumptions we consider reasonable. For information about these assumptions, you should refer to the section below entitled “Forward-Looking Statements.”

           We were organized in 1984 as a bank holding company registered under the Bank Holding Company Act of 1956, as amended, and are headquartered in Gulfport, Mississippi. We currently operate more than 160 banking and financial services offices and more than 130 automated teller machines (ATMs) in the states of Mississippi, Louisiana, Florida and Alabama through four wholly-owned bank subsidiaries, Hancock Bank, Gulfport, Mississippi (Hancock Bank MS), Hancock Bank of Louisiana, Baton Rouge, Louisiana (Hancock Bank LA), Hancock Bank of Florida, Tallahassee, Florida (Hancock Bank FL) and Hancock Bank of Alabama, Mobile, Alabama (Hancock Bank AL). Hancock Bank MS, Hancock Bank LA, Hancock Bank FL and Hancock Bank AL 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. Our operating strategy is to provide our 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 September 30, 2008, we had total assets of $6.7 billion and employed on a full-time equivalent basis 1,291 persons in Mississippi, 553 persons in Louisiana, 59 persons in Florida and 38 persons in Alabama.

RESULTS OF OPERATIONS

          Net income for the third quarter of 2008 totaled $16.0 million, a decrease of $1.7 million, or 9.8%, from the third quarter of 2007. Diluted earnings per share for the third quarter of 2008 were $0.50, a decrease of $0.05 from the same quarter a year ago. Return on average assets for the third quarter of 2008 was 1.00% compared to 1.21% for the third quarter of 2007. Return on average common equity was 10.90% compared to 12.58% for the same quarter a year ago. Net income for the first nine months of 2008 was $57.0 million, a decrease of $246 thousand, or 0.4%, from the first nine months of 2007. Diluted earnings per share were $1.79 for the first nine months of 2008, an increase of $0.05 compared to the prior year.

          Hurricane Gustav made landfall on the southeastern Louisiana coast on Monday, September 1, 2008 and significantly impacted Hancock’s markets in Baton Rouge and Alexandria, Louisiana. By Tuesday, September 2, Hancock was the first bank to open in Louisiana with over 25 percent of the Company’s Louisiana branch offices open. By Saturday, September 6, Hancock had 100 percent of the Company’s 50 Louisiana branch offices open. In dealing with Hurricane Gustav, the Company incurred $560 thousand in operating expenses (clean up and repair costs, fuel, lodging and other miscellaneous costs) and also rebated to customers $294 thousand in return item fees and other service charges. The Company incurred no major damage to any of our facilities and will not be filing a property and casualty insurance claim. The total pretax impact of the costs and fees rebated was $854 thousand, or approximately $0.02 per diluted share.

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Net Interest Income

          Net interest income (te) for the third quarter increased $3.9 million, or 7.3%, from the third quarter of 2007. The net interest margin (te) of 3.99% was 7 basis points narrower than the same quarter a year ago. Growth in average earning asset levels were strong compared to the same quarter a year ago with an increase of $495.9 million, or 9.4%, mostly reflected in higher average loans (up $483.0 million, or 13.9%). With short-term interest rates down significantly from a year ago, the Company’s loan yield fell 124 basis points, with the yield on average earning assets down 80 basis points. Total funding costs were down 9 basis points compared to the previous quarter with rates on time deposits down 33 basis points. The higher levels of net interest income (te) from the prior quarter and wider net interest margin were due, in part, to the continued re-pricing of the Company’s CD book ($411 million of maturing time deposits were re-priced into lower costing CDs) as well as $241.2 million in average loan growth. The quarter’s loan growth was funded by a combination of higher deposits and maturing securities.

Provision for Loan Losses

          The 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 recoveries of loans previously charged-off. 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. Provisions are made to the allowance to reflect the currently perceived risks of loss associated with our loan portfolio. The Company recorded a provision for loan losses of $8.1 million in the third quarter of 2008 compared to $1.6 million in the third quarter of 2007 due to growth in our loan portfolio and a weakening in the local real estate markets.

Allowance for Loan Losses and Asset Quality

          At September 30, 2008, the allowance for loan losses was $57.2 million compared with $47.1 million at December 31, 2007, an increase of $10.1 million. The increase in the allowance for loan losses through the first nine months of 2008 is attributed to increases in delinquency and non-accrual balances primarily within the real estate segment across all markets and an increase in specific commercial and real estate credits as measured within our SFAS No. 114 analysis across each market. Management utilizes quantitative methodologies and modeling to determine the adequacy of the allowance for loan and lease losses. Management believes the September 30, 2008 allowance level is adequate.

          Net charge-offs, as a percent of average loans, were 0.42% for the third quarter of 2008, compared to 0.21% in the third quarter of 2007. For the nine months ended September 30, 2008, net charge-offs, as a percent of average loans, were 0.34%, compared to 0.19% for the nine months ended September 30, 2007. The majority of the increase in net charge-offs, as compared to the same time last year, was caused by the weakening local real estate markets mostly in commercial real estate loans.

          Non-accrual loans were $21.9 million at September 30, 2008, an increase of $13.4 million, from $8.5 million at September 30, 2007. This increase is due to the weakening real estate markets and approximately half of the increase is related to two separate real estate relationships in our Louisiana and Tallahassee markets. Management believes the relationships in question were adequately reserved at September 30, 2008.

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          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 (amounts in thousands).

	At and for the
	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Net charge-offs to average loans (annualized)		0.42	%		0.21	%		0.34	%		0.19	%
Provision for loan losses to average loans (annualized)		0.81	%		0.18	%		0.70	%		0.16	%
Allowance for loan losses to average loans		1.45	%		1.33	%		1.52	%		1.38	%
Gross charge-offs	$	5,133		$	3,610		$	13,299		$	10,207
Gross recoveries	$	969		$	1,730		$	3,707		$	5,334
Non-accrual loans	$	21,875		$	8,500		$	21,875		$	8,500
Accruing loans 90 days or more past due	$	6,082		$	3,819		$	6,082		$	3,819

Noninterest Income

          Noninterest income (excluding securities transactions) for the third quarter of 2008 was down $1.0 million, or 3%, compared to the same quarter a year ago. The primary factors impacting the lower levels of noninterest income (excluding securities transactions) as compared to the same quarter a year ago, were lower levels of insurance fees (down $0.5 million, or 11%) and other income that consisted of mainly other miscellaneous income (down $0.9 million, or 29%) and noninterest loan fees (down $0.5 million, or 57%). Included in the lower level of service charges for the third quarter were $294 thousand in customer rebates related to Hurricane Gustav. Increases to noninterest income for the third quarter of 2008 were in trust fees (up $0.4 million, or 11%), debit card and merchant fees (up $0.2 million, or 9%) and ATM fees (up $0.2 million, or 11%).

          The components of noninterest income for the three and nine months ended September 30, 2008 and 2007 are presented in the following table:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2008			2007		2008		2007
	(In thousands)
Service charges on deposit accounts	$	11,108		$	11,085	$	32,777	$	30,747
Trust fees		4,330			3,892		13,080		11,708
Credit card merchant discount fees		2,805			2,571		8,229		7,480
Income from insurance operations		3,819			4,270		12,419		13,672
Investment and annuity fees		2,421			2,253		7,957		6,249
ATM fees		1,718			1,550		5,166		4,357
Secondary mortgage market operations		817			935		2,347		2,962
Other income		3,176			4,642		10,400		11,279
Total other noninterest income		30,194			31,198		92,375		88,454
Securities transactions gains (losses), net		(79	)		34		5,999		74
Total noninterest income	$	30,115		$	31,232	$	98,374	$	88,528

Noninterest Expense

          Operating expenses for the third quarter were $0.4 million, or 0.7%, lower compared to the same quarter a year ago. The decrease from the same quarter a year ago was reflected in lower levels of other expense (down $0.9 million), equipment and data processing expense (down $0.6 million) and ad valorem and franchise taxes (down

25

$0.4 million) which were offset by higher levels of deposit insurance and regulatory fees (up $0.6 million), advertising expense (up $0.4 million) and occupancy expense (up $0.5 million) reflective of our on-going rebuilding efforts in the wake of the storm of 2005 and due to the recent facilities opened in our expansion markets (Mobile, AL, Pensacola, FL and New Orleans, LA). Included in operating expense during the third quarter was approximately $560 thousand of increased expense related to Hurricane Gustav.

          The following table presents the components of noninterest expense for the three and nine months ended September 30, 2008 and 2007.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
	(In thousands)
Employee compensation	$	24,392	$	22,575	$	65,575	$	63,195
Employee benefits		4,272		5,956		15,751		16,737
Total personnel expense		28,664		28,531		81,326		79,932
Equipment and data processing expense		7,420		7,985		21,952		21,956
Net occupancy expense		5,188		4,731		14,491		13,273
Postage and communications		2,396		2,616		6,995		7,564
Ad valorem and franchise taxes		622		1,016		2,746		2,664
Legal and professional services		3,447		3,482		9,275		11,572
Stationery and supplies		366		483		1,344		1,614
Amortization of intangible assets		360		412		1,089		1,219
Advertising		2,187		1,796		5,437		5,390
Deposit insurance and regulatory fees		880		257		1,895		766
Training expenses		123		112		476		447
Other real estate owned expense, net		265		7		397		(633	)
Other expense		3,565		4,429		10,383		12,175
Total noninterest expense	$	55,483	$	55,857	$	157,806	$	157,939

VISA IPO and Litigation

          In the fourth quarter of 2007, we recorded a $2.5 million pretax charge pursuant to FASB Interpretation No. 45 “Guarantors Accounting and Disclosure Requirements, Including Indirect Guarantees of Indebtedness of Others” (“FIN No. 45”) for liabilities related to VISA USA’s antitrust settlement with American Express and other pending VISA litigation (reflecting our share as a VISA member.) In the first quarter of 2008 as part of VISA’s initial public offering, VISA redeemed 37.5% of shares held by us resulting in proceeds of $2.8 million in a realized security gain. The remaining 62.5% of the Class B shares are restricted and must be held for the longer period of 3 years or until all settlements are complete. At that time, we can keep the Class B shares or convert them to Class A publicly tradeable shares at a conversion rate to be determined. These shares are recorded at historical cost. The realized securities gain is included in the securities gain line of the noninterest income section of the Condensed Consolidated Statements of Income and the cash received is recorded in cash and due from banks in the assets section of the Condensed Consolidated Balance Sheets. In addition, VISA lowered its estimate of pending litigation settlements. Consequently, $1.3 million of the $2.5 million FIN No. 45 liability that was recorded in the fourth quarter was reversed in the first quarter of 2008. The reduction in the litigation liability is recorded in the other liabilities section of the Condensed Consolidated Balance Sheets and the reduction in litigation expense is recorded in the other expense line of the noninterest expense section of the Condensed Consolidated Statements of Income.

          In October 28, 2008, VISA, Discover Financial Services Inc., and MasterCard Inc. announced that they have settled the antitrust lawsuit and that they are working on the specific terms on the settlement. The settlement did not have a material impact on the Company’s results of operations or financial position.

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Income Taxes

          Our effective federal income tax rate continues to be less than the statutory rate of 35% due primarily to tax-exempt interest income. For the nine months ended September 30, 2008 and 2007, the effective federal income tax rates were approximately 27% and 29%, respectively. The decrease in the effective rate in 2008 is due to an increase of the Company’s income from jurisdictions with lower tax rates. The total amount of tax-exempt income earned during the first nine months of 2008 was $13.5 million compared to $12.7 million in the comparable period in 2007. Tax-exempt income for the nine months ended September 30, 2008 consisted of $4.4 million from securities and $9.1 million from loans and leases. Tax-exempt income for the first nine months of 2007 consisted of $4.8 million from securities and $7.9 million from loans and leases.

Selected Financial Data

          The following tables contain selected financial data comparing our consolidated results of operations for the three and nine months ended September 30, 2008 and 2007.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
	(In thousands, except per share data)
Per Common Share Data
Earnings per share:
Basic	$	0.51	$	0.55	$	1.82	$	1.77
Diluted	$	0.50	$	0.55	$	1.79	$	1.74
Cash dividends per share	$	0.240	$	0.240	$	0.720	$	0.720
Book value per share (period-end)	$	18.95	$	17.55	$	18.95	$	17.55
Weighted average number of shares:
Basic		31,471		32,005		31,402		32,299
Diluted (1)		31,905		32,492		31,826		32,847
Period-end number of shares		31,702		31,786		31,702		31,786
Market data:
High price	$	68.42	$	43.90	$	68.42	$	54.09
Low price	$	33.34	$	32.78	$	33.34	$	32.78
Period-end closing price	$	51.00	$	40.08	$	51.00	$	40.08
Trading volume		23,562		10,290		55,296		30,485

(1) There were no anti-dilutive share-based incentives outstanding for the three and nine months ended September 30, 2008, respectively. There were 0 and 49,852 anti-dilutive share-based incentives outstanding for the three and nine months ended September 30, 2007, respectively.

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
	(dollar amounts in thousands)
Performance Ratios
Return on average assets		1.00	%		1.21	%		1.22	%		1.31	%
Return on average common equity		10.90	%		12.58	%		13.16	%		13.63	%
Earning asset yield (tax equivalent (“TE”))		6.02	%		6.82	%		6.11	%		6.74	%
Total cost of funds		2.03	%		2.76	%		2.21	%		2.65	%
Net interest margin (TE)		3.99	%		4.06	%		3.90	%		4.09	%
Common equity (period-end) as a percent of total assets (period-end)		8.91	%		9.45	%		8.91	%		9.45	%
Leverage ratio (period-end)		8.66	%		8.82	%		8.66	%		8.82	%
FTE headcount		1,941			1,966			1,941			1,966
Asset Quality Information
Non-accrual loans	$	21,875		$	8,500		$	21,875		$	8,500
Foreclosed assets	$	2,197		$	1,374		$	2,197		$	1,374
Total non-performing assets	$	24,072		$	9,874		$	24,072		$	9,874
Non-performing assets as a percent of loans and foreclosed assets		0.59	%		0.28	%		0.59	%		0.28	%
Accruing loans 90 days past due	$	6,082		$	3,819		$	6,082		$	3,819
Accruing loans 90 days past due as a percent of loans		0.15	%		0.11	%		0.15	%		0.11	%
Non-performing assets + accruing loans 90 days past due to loans and foreclosed assets		0.74	%		0.39	%		0.74	%		0.39	%
Net charge-offs	$	4,164		$	1,880		$	9,592		$	4,873
Net charge-offs as a percent of average loans		0.42	%		0.21	%		0.34	%		0.19	%
Allowance for loan losses	$	57,200		$	45,901		$	57,200		$	45,901
Allowance for loan losses as a percent of period-end loans		1.40	%		1.31	%		1.40	%		1.31	%
Allowance for loan losses to NPAs + accruing loans 90 days past due		189.69	%		335.22	%		189.69	%		335.22	%
Provision for loan losses	$	8,064		$	1,554		$	19,669		$	4,002
Average Balance Sheet
Total loans	$	3,953,235		$	3,470,282		$	3,768,626		$	3,378,789
Securities		1,765,702			1,660,841			1,777,036			1,735,581
Short-term investments		28,161			120,116			94,810			139,323
Earning assets		5,747,098			5,251,239			5,640,472			5,253,693
Allowance for loan losses		(54,786	)		(46,216	)		(51,739	)		(46,475	)
Other assets		682,316			632,004			681,645			618,309
Total assets	$	6,374,628		$	5,837,027		$	6,270,378		$	5,825,527
Noninterest bearing deposits	$	869,881		$	893,455		$	869,655		$	942,360
Interest bearing transaction deposits		1,408,013			1,383,851			1,410,665			1,445,384
Interest bearing public fund deposits		1,062,127			823,316			990,498			806,476
Time deposits		1,763,609			1,837,292			1,766,541			1,730,787
Total interest bearing deposits		4,233,749			4,044,459			4,167,704			3,982,647
Total deposits		5,103,630			4,937,914			5,037,359			4,925,007
Other borrowed funds		587,939			206,072			546,695			203,025
Other liabilities		98,913			133,695			107,460			135,396
Common stockholders’ equity		584,146			559,346			578,864			562,099
Total liabilities & common stockholders’ equity	$	6,374,628		$	5,837,027		$	6,270,378		$	5,825,527

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	Nine Months Ended September 30,
	2008			2007
	(dollar amounts in thousands)
Period-end Balance Sheet
Commercial/real estate loans	$	2,549,906		$	2,141,217
Mortgage loans		421,254			381,929
Direct consumer loans		554,374			494,667
Indirect consumer loans		430,414			380,561
Finance company loans		116,995			114,919
Total loans		4,072,943			3,513,293
Loans held for sale		16,565			17,698
Securities		1,659,423			1,674,706
Short-term investments		306,866			99,176
Earning assets		6,055,797			5,304,873
Allowance for loan losses		(57,200	)		(45,901	)
Other assets		746,165			647,081
Total assets	$	6,744,762		$	5,906,053
Noninterest bearing deposits	$	866,414		$	891,842
Interest bearing transaction deposits		1,371,400			1,357,835
Interest bearing public funds deposits		1,231,529			837,073
Time deposits		1,945,452			1,912,799
Total interest bearing deposits		4,548,381			4,107,707
Total deposits		5,414,795			4,999,549
Other borrowed funds		635,069			216,481
Other liabilities		94,063			132,048
Common stockholders’ equity		600,835			557,975
Total liabilities & common stockholders’ equity	$	6,744,762		$	5,906,053
	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
	(dollar amounts in thousands)
Net Charge-Off Information
Net charge-offs:
Commercial/real estate loans	$	1,556		($	58	)	$	2,990		$	47
Mortgage loans		179			—			240			1
Direct consumer loans		650			864			1,680			1,835
Indirect consumer loans		867			314			2,011			1,216
Finance company loans		912			760			2,671			1,774
Total net charge-offs	$	4,164		$	1,880		$	9,592		$	4,873
Net charge-offs to average loans:
Commercial/real estate loans		0.25	%		-0.01	%		0.17	%		0.00	%
Mortgage loans		0.17	%		0.00	%		0.08	%		0.00	%
Direct consumer loans		0.47	%		0.70	%		0.42	%		0.50	%
Indirect consumer loans		0.84	%		0.33	%		0.68	%		0.45	%
Finance company loans		3.12	%		2.74	%		3.12	%		2.35	%
Total net charge-offs to average net loans		0.42	%		0.21	%		0.34	%		0.19	%

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
	(dollar amounts in thousands)
Average Balance Sheet Composition
Percentage of earning assets/funding sources:
Loans		68.79	%		66.08	%		66.81	%		64.31	%
Securities		30.72	%		31.63	%		31.51	%		33.04	%
Short-term investments		0.49	%		2.29	%		1.68	%		2.65	%
Earning assets		100.00	%		100.00	%		100.00	%		100.00	%
Noninterest bearing deposits		15.14	%		17.01	%		15.42	%		17.94	%
Interest bearing transaction deposits		24.50	%		26.36	%		25.01	%		27.51	%
Interest bearing public funds deposits		18.48	%		15.68	%		17.56	%		15.35	%
Time deposits		30.68	%		34.99	%		31.32	%		32.95	%
Total deposits		88.80	%		94.04	%		89.31	%		93.75	%
Other borrowed funds		10.23	%		3.92	%		9.69	%		3.86	%
Other net interest-free funding sources		0.97	%		2.04	%		1.00	%		2.39	%
Total funding sources		100.00	%		100.00	%		100.00	%		100.00	%
Loan mix:
Commercial/real estate loans		62.06	%		60.71	%		61.49	%		60.47	%
Mortgage loans		10.82	%		11.20	%		10.97	%		11.33	%
Direct consumer loans		13.81	%		14.16	%		14.04	%		14.44	%
Indirect consumer loans		10.37	%		10.77	%		10.47	%		10.77	%
Finance company loans		2.94	%		3.16	%		3.03	%		2.99	%
Total loans		100.00	%		100.00	%		100.00	%		100.00	%
Average dollars
Loans	$	3,953,235		$	3,470,282		$	3,768,626		$	3,378,789
Securities		1,765,702			1,660,841			1,777,036			1,735,581
Short-term investments		28,161			120,116			94,810			139,323
Earning assets	$	5,747,098		$	5,251,239		$	5,640,472		$	5,253,693
Noninterest bearing deposits	$	869,881		$	893,455		$	869,655		$	942,360
Interest bearing transaction deposits		1,408,013			1,383,851			1,410,665			1,445,384
Interest bearing public funds deposits		1,062,127			823,316			990,498			806,476
Time deposits		1,763,609			1,837,292			1,766,541			1,730,787
Total deposits		5,103,630			4,937,914			5,037,359			4,925,007
Other borrowed funds		587,939			206,072			546,695			203,025
Other net interest-free funding sources		55,529			107,253			56,418			125,661
Total funding sources	$	5,747,098		$	5,251,239		$	5,640,472		$	5,253,693
Loans:
Commercial/real estate loans	$	2,453,154		$	2,106,778		$	2,317,134		$	2,042,992
Mortgage loans		427,752			388,603			413,453			382,904
Direct consumer loans		546,079			491,417			529,153			487,985
Indirect consumer loans		410,110			373,677			394,610			363,773
Finance company loans		116,140			109,807			114,276			101,135
Total average loans	$	3,953,235		$	3,470,282		$	3,768,626		$	3,378,789

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The following table details the components of our net interest spread and net interest margin.

	Three Months Ended September 30,							Three Months Ended September 30,
	2008							2007
(dollars in thousands)	Interest		Volume		Rate			Interest		Volume		Rate
Average earning assets
Commercial & real estate loans (TE)	$	36,289	$	2,453,154		5.89	%	$	39,555	$	2,106,778		7.45	%
Mortgage loans		6,366		427,752		5.95	%		5,773		388,603		5.94	%
Consumer loans		21,237		1,072,329		7.88	%		21,871		974,901		8.90	%
Loan fees & late charges		455		—		0.00	%		257		—		0.00	%
Total loans (TE)		64,347		3,953,235		6.48	%	$	67,456	$	3,470,282		7.72	%
US treasury securities		53		11,334		1.86	%		128		11,169		4.53	%
US agency securities		3,751		333,434		4.50	%		10,223		801,585		5.10	%
CMOs		1,786		141,355		5.05	%		830		80,989		4.10	%
Mortgage backed securities		13,917		1,066,233		5.22	%		6,557		513,545		5.11	%
Municipals (TE)		2,280		163,796		5.57	%		2,634		195,956		5.38	%
Other securities		557		49,550		4.50	%		765		57,597		5.32	%
Total securities (TE)		22,344		1,765,702		5.06	%		21,137		1,660,841		5.09	%
Total short-term investments		83		28,161		1.18	%		1,389		120,116		4.59	%
Average earning assets yield (TE)	$	86,774	$	5,747,098		6.02	%	$	89,982	$	5,251,239		6.82	%
Interest bearing liabilities
Interest bearing transaction deposits	$	3,193	$	1,408,013		0.90	%	$	4,682	$	1,383,851		1.34	%
Time deposits		15,579		1,763,609		3.51	%		21,295		1,837,292		4.60	%
Public funds		6,750		1,062,127		2.53	%		8,753		823,316		4.22	%
Total interest bearing deposits		25,522		4,233,749		2.40	%	$	34,730	$	4,044,459		3.41	%
Total borrowings		3,835		587,939		2.59	%		1,737		206,072		3.34	%
Total interest bearing liability cost	$	29,357	$	4,821,688		2.42	%	$	36,467	$	4,250,531		3.40	%
Noninterest bearing deposits				869,881							893,455
Other net interest-free funding sources				55,529							107,253
Total Cost of Funds	$	29,357	$	5,747,098		2.03	%	$	36,467	$	5,251,239		2.76	%
Net Interest Spread (TE)	$	57,417				3.60	%	$	53,515				3.41	%
Net Interest Margin (TE)	$	57,417	$	5,747,098		3.99	%	$	53,515	$	5,251,239		4.06	%

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	Nine Months Ended September 30,							Nine Months Ended September 30,
	2008							2007
(dollars in thousands )	Interest		Volume		Rate			Interest		Volume		Rate
Average earning assets
Commercial & real estate loans (TE)	$	107,094	$	2,317,134		6.17	%	$	113,567	$	2,042,992		7.43	%
Mortgage loans		18,451		413,453		5.95	%		16,866		382,904		5.87	%
Consumer loans		63,737		1,038,039		8.20	%		63,045		952,893		8.85	%
Loan fees & late charges		523		—		0.00	%		992		—		0.00	%
Total loans (TE)		189,805		3,768,626		6.73	%	$	194,470	$	3,378,789		7.69	%
US treasury securities		243		11,361		2.86	%		1,278		35,083		4.87	%
US agency securities		13,118		382,046		4.58	%		32,966		869,107		5.06	%
CMOs		5,356		144,882		4.93	%		2,882		93,941		4.09	%
Mortgage backed securities		39,002		1,008,197		5.16	%		17,887		476,077		5.01	%
Municipals (TE)		7,141		179,992		5.29	%		8,148		197,200		5.51	%
Other securities		1,650		50,558		4.35	%		2,530		64,173		5.26	%
Total securities (TE)		66,510		1,777,036		4.99	%		65,691		1,735,581		5.05	%
Total short-term investments		1,850		94,810		2.61	%		5,060		139,323		4.86	%
Average earning assets yield (TE)	$	258,165	$	5,640,472		6.11	%	$	265,221	$	5,253,693		6.74	%
Interest bearing liabilities
Interest bearing transaction deposits	$	10,418	$	1,410,665		0.99	%	$	14,360	$	1,445,384		1.33	%
Time deposits		52,123		1,766,541		3.94	%		58,871		1,730,787		4.55	%
Public funds		19,112		990,498		2.58	%		26,221		806,476		4.35	%
Total interest bearing deposits		81,653		4,167,704		2.62	%	$	99,452	$	3,982,647		3.34	%
Total borrowings		11,621		546,695		2.84	%		4,717		203,025		3.11	%
Total interest bearing liability cost	$	93,274	$	4,714,399		2.64	%	$	104,169	$	4,185,672		3.33	%
Noninterest bearing deposits				869,655							942,360
Other net interest-free funding sources				56,418							125,661
Total Cost of Funds	$	93,274	$	5,640,472		2.21	%	$	104,169	$	5,253,693		2.65	%
Net Interest Spread (TE)	$	164,891				3.47	%	$	161,052				3.41	%
Net Interest Margin (TE)	$	164,891	$	5,640,472		3.90	%	$	161,052	$	5,253,693		4.09	%

LIQUIDITY

Liquidity Management

          Liquidity management encompasses our ability to ensure that funds are available to meet the cash flow requirements of depositors and borrowers, while also ensuring that we have adequate cash flow to meet our various needs, including operating, strategic and capital. In addition, our principal source of liquidity is dividends from our subsidiary banks.

          The asset portion of the balance sheet provides liquidity primarily through loan principal repayments, maturities of investment securities and occasional sales of various assets. Short-term investments such as federal funds sold, securities purchased under agreements to resell and maturing interest-bearing deposits with other banks are additional sources of funding.

          The liability portion of the balance sheet provides liquidity through various customers’ interest-bearing and non-interest-bearing deposit accounts. Purchases of federal funds, securities sold under agreements to repurchase and other short-term borrowings are additional sources of liquidity and represent our incremental borrowing

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capacity. Our short-term borrowing capacity includes an approved line of credit with the Federal Home Loan Bank of $308 million and borrowing capacity at the Federal Reserve’s Discount Window in excess of $100 million.

          For the nine months ended September 30, 2008, the Company sold securities for a net gain of $2.6 million. Included in the net gain was a $2.8 million gross gain for the sale of securities as a result of the VISA IPO that occurred in the first quarter of 2008. This was offset by gross losses of $1.1 million and gross gains of $0.9 million that occurred in the second quarter and third quarter of 2008 due to the sale of certain investments which experienced a deterioration of credit quality. For the nine months ended September 30, 2007, Magna Insurance Company, sold thirty available for sale securities out of its portfolio to provide liquidity for surrenders of annuities for Magna Insurance Company. These securities had a gross loss of $37,164.

          The following liquidity ratios at September 30, 2008 and December 31, 2007 compare certain assets and liabilities to total deposits or total assets:

	September 30, 2008		December 31, 2007
Total securities to total deposits	30.65	%	33.49	%
Total loans (net of unearned income) to total deposits	75.52	%	72.17	%
Interest-earning assets to total assets	89.79	%	89.49	%
Interest-bearing deposits to total deposits	83.99	%	81.88	%

CONTRACTUAL OBLIGATIONS

          Payments due from us under specified long-term and certain other binding contractual obligations were scheduled in our annual report on Form 10-K for the year ended December 31, 2007. The most significant obligations, other than obligations under deposit contracts and short-term borrowings, were for operating leases for banking facilities. There have been no material changes since year end.

CAPITAL RESOURCES

          We continue to maintain an adequate capital position. The ratios as of September 30, 2008 and December 31, 2007 are as follows:

	September 30, 2008		December 31, 2007
Common equity (period-end) as a percent of total assets (period-end)	8.91	%	9.15	%
Regulatory ratios:
Total capital to risk-weighted assets (1)	11.90	%	12.07	%
Tier 1 capital to risk-weighted assets (2)	10.77	%	11.03	%
Leverage capital to average total assets (3)	8.66	%	8.51	%

(1) 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.

33

(2)	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.
(3)	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.

BALANCE SHEET ANALYSIS

Earnings Assets

          Earning assets serve as the primary revenue streams for the Company and are comprised of securities, loans, federal funds sold, and securities purchased under resale agreements. At September 30, 2008, average earning assets were $5.6 billion, or 90.0% of total assets, compared with $5.3 billion or 90.2% of total assets at September 30, 2007. This increase resulted mostly from modest increases in the loan portfolios.

Securities

          Our investment in securities was $1.7 billion at September 30, 2008, compared to $1.7 billion at December 31, 2007. The vast majority of securities in our portfolio are U.S. Treasury and U.S. government agency securities and mortgage-backed securities issued or guaranteed by U.S. government agencies. We also maintain portfolios of securities consisting of CMOs and tax-exempt obligations of states and political subdivisions. The portfolios are designed to enhance liquidity while providing acceptable rates of return. Therefore, we invest only in high quality securities of investment grade quality and with a target duration, for the overall portfolio, generally between two to five years. Our policies limit investments to securities having a rating of no less than “Baa”, or its equivalent by a Nationally Recognized Statistical Rating Agency, except for certain obligations of Mississippi, Louisiana, Florida or Alabama counties, parishes and municipalities.

Loans

          At September 30, 2008, we held $4.1 billion in loans, compared to $3.6 billion at December 31, 2007.Our primary lending focus is to provide commercial, consumer, commercial leasing and real estate loans to consumers and to small and middle market businesses in their respective market areas. Each loan file is reviewed by the Bank’s loan operations quality assurance function, a component of its loan review system, to ensure proper documentation and asset quality. At September 30, 2008, Hancock’s average total loans were $3.8 billion, compared to $3.4 billion at September 30, 2007. The $390 million, or 11.5%, increase resulted from growth mostly in commercial and real estate loans and due to branch expansions. Commercial and real estate loans comprised 61.5% of the average loan portfolio at September 30, 2008 compared to 60.5% at September 30, 2007. Included in this category are commercial real estate loans, which are secured by properties, used in commercial or industrial operations.

Other Earning Assets

          Federal funds sold, CDs in banks, and other short-term investments averaged $94.8 million at September 30, 2008, compared to $139.3 million at September 30, 2007. We utilize these products as a short-term investment alternative whenever we have excess liquidity.

Interest Bearing Liabilities

          Interest bearing liabilities include our interest bearing deposits as well as borrowings. Deposits represent our primary funding source. We continue our focus on multiple account, core deposit relationships and strategic placement of time deposit campaigns to stimulate overall deposit growth. Borrowings consist primarily of sales of securities under repurchase agreements.

34

Deposits

          Total deposits were $5.4 billion at September 30, 2008 and $5.0 billion at December 31, 2007. Average interest bearing deposits at September 30, 2008 were $4.2 billion, an increase of $189 million over September 30, 2007. The increase was primarily in public fund deposits. We have several programs designed to attract depository accounts offered to consumers and to small and middle market businesses at interest rates generally consistent with market conditions. We traditionally price our deposits to position themselves competitively with the local market. Deposit flows are controlled primarily through pricing, and to a certain extent, through promotional activities.

Borrowings

          Our borrowings consist of federal funds purchased, securities sold under agreements to repurchase, FHLB advances and other borrowings. Total borrowings at September 30, 2008 were $623.6 million compared to $376.5 million at December 31, 2007. The increase was primarily in securities sold under agreements to repurchase.

Off-Balance Sheet Arrangements

Loan Commitments and Letters of Credit

          In the normal course of business, we enter into financial instruments, such as commitments to extend credit and letters of credit, to meet the financing needs of our customers. Such instruments are not reflected in the accompanying condensed consolidated financial statements until they are funded and involve, to varying degrees, elements of credit risk not reflected in the condensed consolidated balance sheets. The contract amounts of these instruments reflect our exposure to credit loss in the event of non-performance by the other party on whose behalf the instrument has been issued. We undertake the same credit evaluation in making commitments and conditional obligations as we do for on-balance-sheet instruments and may require collateral or other credit support for off-balance-sheet financial instruments.

          At September 30, 2008, we had $880.0 million in unused loan commitments outstanding, of which approximately $620.7 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 our future cash requirements. We continually evaluate 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 our obtaining collateral to support the obligation.

          Letters of credit are conditional commitments issued by us 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 September 30, 2008, we had $93.1 million in letters of credit issued and outstanding.

          The following table shows the commitments to extend credit and letters of credit at September 30, 2008 according to expiration date.

	Expiration Date
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(dollars in thousands)
Commitments to extend credit	$	879,998	$	510,802	$	42,825	$	70,381	$	255,990
Letters of credit		93,083		46,048		18,310		28,725		—
Total	$	973,081	$	556,850	$	61,135	$	99,106	$	255,990

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          Our liability associated with letters of credit is not material to our condensed consolidated financial statements.

Critical Accounting Policies and Estimates

          Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements. We prepare these financial statements in conformity with U.S. generally accepted accounting principles. As such, we are required to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience, available information and various other assumptions we believe to be reasonable under the circumstances. On an on-going basis, we evaluate our estimates; however, actual results may differ from these estimates under different assumptions or conditions. There have been no material changes or developments in our evaluation of the accounting estimates and the underlying assumptions or methodologies that we believe to be Critical Accounting Policies and Estimates as disclosed in our Form 10-K for the year ended December 31, 2007.

          We adopted SFAS No. 157, Fair Value Measurements (“SFAS No. 157”), on January 1, 2008. SFAS No. 157 establishes a framework for measuring fair value under generally accepted accounting principles (GAAP), clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. SFAS No. 157 defines 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 (level 1) and the lowest priority to unobservable inputs such as a reporting entity’s own data (level 3). SFAS No. 157 does not require any new fair value measurements. There have been no changes in valuation techniques used to measure fair value as disclosed in our Form 10-K for the year ended December 31, 2007. See Note 2 to our Condensed Consolidated Financial Statements included elsewhere in this report. In addition, we adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment SFAS No. 115 (“SFAS No. 159”) on January 1, 2008. We did not elect to fair value any additional items under SFAS No. 159.

New Accounting Pronouncements

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

Forward Looking Statements

          Congress 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 our actual results and experience to differ from the anticipated results and expectations expressed in such forward-looking statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

          Our net income is dependent, in part, on our 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. Interest rate risk sensitivity is the potential impact of changing rate environments on both net interest income and cash flows. In an attempt to manage our exposure to changes in interest rates, management monitors interest rate risk and administers an interest rate risk management policy designed to produce a relatively stable net interest margin in periods of interest rate fluctuations.

          Notwithstanding our 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 our investment securities. As of September 30, 2008, the effective duration of the securities portfolio was 3.20 years. A rate increase (aged, over 1 year) of 100 basis points would move the effective duration to 3.94 years, while a reduction in rates of 100 basis points would result in an effective duration of 1.70 years.

          In adjusting our asset/liability position, the Board and management attempt to manage our interest rate risk while enhancing net interest margins. This measurement is done primarily by running net interest income simulations. The net interest income simulations run at September 30, 2008 indicate that we are liability sensitive to some extent as compared to the stable rate environment. Exposure to instantaneous changes in interest rate risk for the current quarter is presented in the following table.

Net Interest Income (te) at Risk
Change in interest rate (basis point)	Estimated increase (decrease) in net interest income
-100	-5.70%
Stable	0.00%
+100	0.65%

          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, 2007 included in our 2007 Annual Report on Form 10-K.

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 Officers 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 Officers 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 Officers and Chief Financial Officer, identified no change in our internal control over financial reporting that occurred during the nine month period ended September 30, 2008, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II. OTHER INFORMATION

Item 1A. Risk Factors

          There have been no material changes from the risk factors previously disclosed in our Form 10-K for the year ended December 31, 2007.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

          There were no purchases made by the issuer or any affiliated purchaser of the issuer’s equity securities for the nine months ended September 30, 2008.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 6. Exhibits.

(a) Exhibits:

Exhibit Number	Description
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.

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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/ Carl J. Chaney
		Carl J. Chaney
		Chief Executive Officer
		/s/ John M. Hairston
		John M. Hairston
		Chief Executive Officer
		/s/ Michael M. Achary
		Michael M. Achary
		Chief Financial Officer
Date:  November 5, 2008

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Index to Exhibits

Exhibit Number	Description
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.