Hancock Whitney Corporation - 6 (HWC) 10-Q 2011 Q1 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 March 31, 2011

OR

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

For the transition period from            to            

Commission File Number0-13089

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  ¨

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

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

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

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

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

43,896,212 common shares were outstanding as of April 30, 2011 for financial statement purposes.

Hancock Holding Company

Index

		Page Number
Part I. Financial Information
ITEM 1.	Financial Statements
	Condensed Consolidated Balance Sheets — March 31, 2011 (unaudited) and December 31, 2010		1
	Condensed Consolidated Statements of Income (unaudited) — Three months ended March 31, 2011 and 2010		2
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) —Three months ended March 31, 2011 and 2010		3
	Condensed Consolidated Statements of Cash Flows (unaudited) — Three months ended March 31, 2011 and 2010		4
	Notes to Condensed Consolidated Financial Statements (unaudited) — March 31, 2011		5-25
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		26-40
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk		41
ITEM 4.	Controls and Procedures		41
Part II. Other Information
ITEM 1A.	Risk Factors		42
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		42
ITEM 4.	Reserved		42
ITEM 5.	Other Information		42
ITEM 6.	Exhibits		43
Signatures			44

Part I. Financial Information

Item 1. Financial Statements

Hancock Holding Company and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share data)

	March 31, 2011 (unaudited)			December 31, 2010
ASSETS
Cash and due from banks	$	163,381		$	139,687
Interest-bearing deposits with other banks		474,529			364,066
Federal funds sold		119			124
Other short-term investments		284,996			274,974
Securities available for sale, at fair value (amortized cost of $1,545,730 and $1,445,721)		1,593,511			1,488,885
Loans held for sale		7,468			21,866
Loans		4,851,305			4,968,149
Less: allowance for loan losses		(94,356	)		(81,997	)
unearned income		(10,330	)		(10,985	)
Loans, net		4,746,619			4,875,167
Property and equipment, net of accumulated depreciation of $128,384 and $125,383		239,425			209,919
Other real estate, net		41,175			32,520
Accrued interest receivable		28,033			30,157
Goodwill		61,631			61,631
Other intangible assets, net		12,591			13,204
Life insurance contracts		162,845			159,377
FDIC loss share receivable		343,261			329,136
Deferred tax asset, net		6,904			6,541
Other assets		144,546			131,073
Total assets	$	8,311,034		$	8,138,327
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing demand	$	1,186,852		$	1,127,246
Interest-bearing savings, NOW, money market and time		5,510,458			5,648,473
Total deposits		6,697,310			6,775,719
Federal funds purchased		1,475			—
Securities sold under agreements to repurchase		414,690			364,676
FHLB borrowings		10,114			10,172
Long-term notes		365			376
Other liabilities		129,381			130,836
Total liabilities		7,253,335			7,281,779
Stockholders’ Equity
Common stock - $3.33 par value per share; 350,000,000 shares authorized, 43,138,607 and 36,893,276 issued and outstanding, respectively		143,652			122,855
Capital surplus		434,845			263,484
Retained earnings		477,195			470,828
Accumulated other comprehensive gain(loss), net		2,007			(619	)
Total stockholders’ equity		1,057,699			856,548
Total liabilities and stockholders’ equity	$	8,311,034		$	8,138,327

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 March 31,
	2011			2010
Interest income:
Loans, including fees	$	68,001		$	74,166
Securities - taxable		12,994			16,429
Securities - tax exempt		1,239			1,195
Federal funds sold		—			15
Other investments		299			574
Total interest income		82,533			92,379
Interest expense:
Deposits		14,009			23,284
Federal funds purchased and securities sold under agreements to repurchase		1,688			2,436
Long-term notes and other interest expense		72			80
Total interest expense		15,769			25,800
Net interest income		66,764			66,579
Provision for loan losses, net		8,822			13,826
Net interest income after provision for loan losses		57,942			52,753
Noninterest income:
Service charges on deposit accounts		9,544			11,490
Other service charges, commissions and fees		16,614			15,183
Securities loss, net		(51	)		—
Other income		8,025			4,708
Total noninterest income		34,132			31,381
Noninterest expense:
Salaries and employee benefits		37,835			34,767
Net occupancy expense		5,911			6,143
Equipment rentals, depreciation and maintenance		2,854			2,724
Amortization of intangibles		614			738
Other expense		25,805			23,450
Total noninterest expense		73,019			67,822
Net income before income taxes		19,055			16,312
Income tax expense		3,727			2,478
Net income	$	15,328		$	13,834
Basic earnings per share	$	0.41		$	0.37
Diluted earnings per share	$	0.41		$	0.37
Dividends paid per share	$	0.24		$	0.24
Weighted avg. shares outstanding-basic		37,333			36,868
Weighted avg. shares outstanding-diluted		37,521			37,105

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)

	Common Stock				Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Loss, net			Total
	Shares		Amount
Balance, January 1, 2010		36,840,453	$	122,679	$	257,643	$	454,343		$	2,998		$	837,663
Comprehensive income
Net income per consolidated statements of income		—		—		—		13,834			—			13,834
Net change in unfunded accumulated benefit obligation, net of tax		—		—		—		—			397			397
Net change in fair value of securities available for sale, net of tax		—		—		—		—			5,510			5,510
Comprehensive income														19,741
Cash dividends declared ($0.24 per common share)		—		—		—		(8,917	)		—			(8,917	)
Common stock issued, long-term incentive plan, including income tax benefit of $203		64,841		216		1,063		—			—			1,279
Compensation expense, long-term incentive plan		—		—		1,037		—			—			1,037
Balance, March 31, 2010		36,905,294	$	122,895	$	259,743	$	459,260		$	8,905		$	850,803
Balance, January 1, 2011		36,893,276	$	122,855	$	263,484	$	470,828		$	(619	)	$	856,548
Comprehensive income
Net income per consolidated statements of income		—		—		—		15,328			—			15,328
Net change in unfunded accumulated benefit obligation, net of tax		—		—		—		—			(316	)		(316	)
Net change in fair value of securities available for sale, net of tax		—		—		—		—			2,942			2,942
Comprehensive income														17,954
Cash dividends declared ($0.24 per common share)		—		—		—		(8,961	)		—			(8,961	)
Common stock issued, long-term incentive plan, including excess tax benefit on stock options of $74.		6,245,331		20,797		170,267		—			—			191,064
Compensation expense, long-term incentive plan		—		—		1,094		—			—			1,094
Balance, March 31, 2011		43,138,607	$	143,652	$	434,845	$	477,195		$	2,007		$	1,057,699

See notes to unaudited condensed consolidated financial statements.

3

Hancock Holding Company and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Three Months Ended March, 31
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	15,328		$	13,834
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,196			3,572
Provision for loan losses		8,822			13,826
Losses on other real estate owned		473			144
Deferred tax benefit		(1,851	)		(2,808	)
Increase in cash surrender value of life insurance contracts		(3,468	)		(2,232	)
Gain on sale or disposal of other assets		(597	)		(127	)
Gain on sale of loans held for sale		(27	)		(716	)
Net amortization of securities premium/discount		1,767			1,185
Amortization of intangible assets		620			770
Stock-based compensation expense		1,094			1,037
Decrease in other liabilities		(1,621	)		(1,396	)
Decrease in interest payable		(949	)		(653	)
Increase in FDIC Indemnification Asset		(14,125	)		(207	)
Decrease (increase) in other assets		(11,164	)		45,002
Proceeds from sale of loans held for sale		73,059			90,518
Originations of loans held for sale		(66,420	)		(75,900	)
Excess tax benefit from share based payments		(74	)		(203	)
Other, net		(26	)		(14	)
Net cash provided by operating activities		4,037			85,632
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase (decrease) in interest-bearing time deposits		(110,463	)		33,025
Proceeds from maturities of securities available for sale		98,488			126,076
Purchases of securities available for sale		(200,334	)		(268,554	)
Proceeds from maturities of short term investments		1,325,000			155,000
Purchase of short term investments		(1,334,951	)		(80,000	)
Net decrease in federal funds sold		5			393
Net decrease in loans		114,748			73,614
Purchases of property and equipment		(33,197	)		(4,001	)
Proceeds from sales of property and equipment		1,612			178
Proceeds from sales of other real estate		3,635			1,711
Net cash provided by (used in) investing activities		(135,457	)		37,442
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in deposits		(78,409	)		(189,895	)
Net increase in federal funds purchased and securities sold under agreements to repurchase		51,489			51,020
Repayments of short-term notes		(58	)		(96	)
Repayments of long-term notes		(11	)		—
Dividends paid		(8,961	)		(8,917	)
Proceeds from stock offering		190,990			1,076
Excess tax benefit from stock option exercises		74			203
Net cash provided by (used in) financing activities		155,114			(146,609	)
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS		23,694			(23,535	)
CASH AND DUE FROM BANKS, BEGINNING		139,687			204,714
CASH AND DUE FROM BANKS, ENDING	$	163,381		$	181,179
SUPPLEMENTAL INFORMATION:
Restricted stock issued to employees of Hancock	$	697		$	319
SUPPLEMENTAL INFORMATION FOR NON-CASH
INVESTING AND FINANCING ACTIVITIES
Transfers from loans to other real estate	$	13,086		$	17,858
Financed sale of foreclosed property		322			260

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 March 31, 2011 and December 31, 2010, the Company’s Condensed Consolidated Statements of Income for the three months ended March 31, 2011 and 2010, the Company’s Condensed Consolidated Statements of Stockholders’ Equity and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. 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 2010 Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2011 are not necessarily indicative of the results expected for the full year.

Use of Estimates

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles. The accounting principles the Company follows and the methods for applying these principles conform with accounting principles generally accepted in the United States of America and with general practices followed by the banking industry which requires management to make estimates and assumptions about future events. 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 not readily apparent from other sources. On an ongoing basis, the Company evaluates its estimates, including those related to the allowance for loan losses, intangible assets and goodwill, income taxes, pension and postretirement benefit plans and contingent liabilities. These estimates and assumptions are based on the Company’s best estimates and judgments. The Company evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, rising unemployment levels and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. Allowance for loan losses, deferred income taxes, and goodwill are potentially subject to material changes in the near term. Actual results could differ significantly 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.

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, 2010.

5

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

2. Fair Value

The Financial Accounting Standards Board (FASB) issued authoritative guidance that 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.The guidance 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 invests only in high quality securities of investment grade quality with a target duration, for the overall portfolio, generally between two to five years. The Company 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. There were no transfers between levels.

Fair Value of Assets and Liabilities Measured on a Recurring Basis

The following tables present for each of the fair value hierarchy levels the March 31, 2011 and December 31, 2010.

	As of March 31, 2011
	Level 1		Level 2		Net Balance
Assets
Available for sale securities:
Debt securities issued by the U.S. Treasury and other government corporations and agencies	$	317,904	$	—	$	317,904
Debt securities issued by states of the United States and political subdivisions of the states		—		178,438		178,438
Corporate debt securities		14,643		—		14,643
Residential mortgage-backed securities		—		730,242		730,242
Collateralized mortgage obligations		—		347,191		347,191
Equity securities		5,093		—		5,093
Short-term investments		284,996		—		284,996
Loans carried at fair value		—		35,133		35,133
Total assets	$	622,636	$	1,291,004	$	1,913,640
Liabilities
Swaps	$	—	$	2,515	$	2,515
Total Liabilities	$	—	$	2,515	$	2,515

6

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

2.Fair Value(continued)

	As of December 31, 2010
	Level 1		Level 2		Net Balance
Assets
Available for sale securities:
Debt securities issued by the U.S. Treasury and other government corporations and agencies	$	117,435	$	—	$	117,435
Debt securities issued by states of the United States and political subdivisions of the states				180,443		180,443
Corporate debt securities		15,285		—		15,285
Residential mortgage-backed securities		—		799,686		799,686
Collateralized mortgage obligations		—		372,051		372,051
Equity securities		3,985		—		3,985
Short-term investments		274,974		—		274,974
Loans carried at fair value		—		35,934		35,934
Total assets	$	411,679	$	1,388,114	$	1,799,793
Liabilities
Swaps	$	—	$	2,952	$	2,952
Total Liabilities	$	—	$	2,952	$	2,952

Fair Value of Assets Measured on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis and, therefore, are not included in the above table. Impaired loans are level 2 assets measured using appraisals from external parties of the collateral less any prior liens or based on recent sales activity for similar assets in the property’s market. Other real estate owned are level 2 properties recorded at the balance of the loan or at estimated fair value less estimated selling costs, whichever is less, at the date acquired. Fair values are determined by sales agreement or appraisal. Inputs include appraisal values on the properties or recent sales activity for similar assets in the property’s market. The following table presents for each of the fair value hierarchy levels the Company’s financial assets that are measured at fair value (in thousands) on a nonrecurring basis at March 31, 2011 and December 31, 2010.

	As of March 31, 2011
	Level 1		Level 2		Net Balance
Assets
Impaired loans	$	—	$	91,479	$	91,479
Other real estate owned		—		41,175		41,175
Total assets		—	$	132,654	$	132,654
	As of December 31, 2010
	Level 1		Level 2		Net Balance
Assets
Impaired loans	$	—	$	95,787	$	95,787
Other real estate owned		—		32,520		32,520
Total assets	$	—	$	128,307	$	128,307

7

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

2.Fair Value(continued)

The following methods and assumptions were used to estimate the fair value regarding disclosures about fair value of financial instruments of each class of financial instruments for which it is practicable to estimate:

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

Securities –Estimated fair values for securities are based on quoted market prices where available. If quoted market prices are not available, estimated fair values are based on market prices of comparable instruments.

Loans, Net of Unearned Income –The fair value of loans is estimated by discounting the future cash flows using the current rates for similar loans with the same remaining maturities.

Accrued Interest Receivable and Accrued Interest Payable –The carrying amounts are a reasonable estimate of their fair values.

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

Federal Funds Purchased –For these short-term liabilities, the carrying amount is a reasonable estimate of fair value.

Securities Sold under Agreements to Repurchase, FHLB Borrowings and Federal Funds Purchased – For these short-term liabilities, the carrying amount is a reasonable estimate of fair value.

Long-Term Notes – Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate fair value. The fair value is estimated by discounting the future contractual cash flows using current market rates at which similar notes over the same remaining term could be obtained.

The estimated fair values of the Company’s financial instruments were as follows (in thousands):

	March 31, 2011				December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash, interest-bearing deposits, federal funds sold, and short-term investments	$	923,025	$	923,025	$	778,851	$	778,851
Securities		1,593,511		1,593,511		1,488,885		1,488,885
Loans, net of unearned income		4,848,443		4,891,716		4,979,030		5,085,925
Accrued interest receivable		28,033		28,033		30,157		30,157
Financial liabilities:
Deposits	$	6,697,310	$	6,907,231	$	6,775,719	$	6,787,931
Federal funds purchased		1,475		1,475		—		—
Securities sold under agreements to repurchase		414,690		414,690		364,676		364,676
FHLB Borrowings		10,114		10,114		10,172		10,172
Long-term notes		365		365		376		376
Accrued interest payable		3,058		3,058		4,007		4,007

8

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

3. Securities

The amortized cost and fair value of securities classified as available for sale follow (in thousands):

	March 31, 2011								December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury	$	10,800	$	44	$	—	$	10,844	$	10,797	$	52	$	5		10,844
U.S. government agencies		305,889		1,683		511		307,061		106,054		971		434		106,591
Municipal obligations		174,152		6,337		2,051		178,438		181,747		4,107		5,411		180,443
Mortgage-backed securities		694,178		36,120		57		730,241		761,704		38,032		50		799,686
CMOs		342,312		6,872		1,993		347,191		367,662		6,880		2,491		372,051
Other debt securities		13,843		841		41		14,643		14,329		999		43		15,285
Other equity securities		4,556		635		98		5,093		3,428		660		103		3,985
	$	1,545,730	$	52,532	$	4,751	$	1,593,511	$	1,445,721	$	51,701	$	8,537	$	1,488,885

The amortized cost and fair value of securities classified as available for sale at March 31, 2011, by contractual maturity, (expected maturities will differ from contractual maturities because of rights to call or repay obligations with or without penalties (in thousands):

	Amortized Cost		Fair Value
Due in one year or less	$	327,765	$	329,142
Due after one year through five years		185,090		186,516
Due after five years through ten years		208,104		217,363
Due after ten years		820,215		855,397
Equity securities		4,556		5,093
Total available for sale securities	$	1,545,730	$	1,593,511

The Company held no securities classified as held to maturity or trading at March 31, 2011 or December 31, 2010.

The details concerning securities classified as available for sale with unrealized losses as of March 31, 2011 follow (in thousands):

	Losses < 12 months				Losses 12 months or >				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
U.S. Treasury	$	—	$	—	$	—	$	—	$	—	$	—
U.S. government agencies		—		—		74,489		511		74,489		511
Municipal obligations		—		—		54,940		2,051		54,940		2,051
Mortgage-backed securities		22		1		1,324		56		1,346		57
CMOs		—		—		119,139		1,993		119,139		1,993
Other debt securities		—		—		524		41		524		41
Equity securities		—		—		2,566		98		2,566		98
	$	22	$	1	$	252,982	$	4,750	$	253,004	$	4,751

9

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

3. Securities (continued)

The details concerning securities classified as available for sale with unrealized losses as of December 31, 2010 follow (in thousands):

	Losses < 12 months				Losses 12 months or >				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
U.S. Treasury	$	9,980	$	5	$	—	$	—	$	9,980	$	5
U.S. government agencies		—		—		74,566		434		74,566		434
Municipal obligations		—		—		77,583		5,411		77,583		5,411
Mortgage-backed securities		—		—		1,462		50		1,462		50
CMOs		—		—		122,312		2,491		122,312		2,491
Other debt securities		—		—		838		43		838		43
Equity securities		—		—		2,563		103		2,563		103
	$	9,980	$	5	$	279,324	$	8,532	$	289,304	$	8,537

The unrealized losses relate to fixed-rate debt securities that have incurred fair value reductions due to higher market interest rates since the respective purchase date. The unrealized losses are not likely to reverse unless and until market interest rates decline to the levels that existed when the securities were purchased. Since none of the unrealized losses relate to the marketability of the securities or the issuer’s ability to honor redemption obligations, none of the securities are deemed to be other than temporarily impaired.

As of March 31, 2011, the securities portfolio totaled $1.5 billion and as of December 31, 2010, the securities portfolio totaled $1.4 billion. Of the total portfolio, $253.0 million of securities were in an unrealized loss position of $4.8 million. Management and the Asset/Liability Committee continually monitor the securities portfolio and management is able to effectively measure and monitor the unrealized loss position on these securities. The Company has adequate liquidity and therefore does not plan to sell and is more likely than not, not to be required to sell these securities before recovery. Accordingly, the unrealized loss of these securities has been determined to be temporary.

Securities with a carrying value of approximately $1.5 billion at March 31, 2011 and $1.3 billion at December 31, 2010 were pledged primarily to secure public deposits and securities sold under agreements to repurchase.

Short-term Investments

The Company held $ 285.0 million at March 31, 2011 and $275.0 million at December 31, 2010 in U.S. government agency discount notes as securities available for sale at amortized cost. The short-term investments all mature in less than 1 year. As the amortized cost is a reasonable estimate for fair value of these short-term investments, there were no gross unrealized losses to evaluate for impairment at March 31, 2011 or at December 31, 2010.

10

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

4. Loans and Allowance for Loan Losses

Loans, net of unearned income, totaled $4.8 billion at March 31, 2011 compared to $5.0 billion at December 31, 2010. Covered loans totaled $777.1 million at March 31, 2011 compared to $809.2 million at December 31, 2010. Covered loans refer to loans we acquired in the Peoples First FDIC-assisted transaction that are subject to loss-sharing agreements with the FDIC.

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

	March 31, 2011		December 31, 2010
	(In thousands)
Commercial loans:
Commercial	$	506,450	$	524,653
Commercial - covered		40,041		34,650
Total commercial		546,491		559,303
Construction		481,753		495,590
Construction - covered		141,590		157,267
Total construction		623,343		652,857
Real estate		1,228,178		1,231,414
Real estate - covered		180,532		181,873
Total real estate		1,408,710		1,413,287
Municipal loans		460,897		471,057
Municipal loans - covered		504		540
Total municipal loans		461,401		471,597
Lease financing		49,420		50,721
Total commercial loans		2,726,698		2,773,435
Total commercial loans - covered		362,667		374,330
Total commercial loans		3,089,365		3,147,765
Residential mortgage loans		360,051		366,183
Residential mortgage loans - covered		270,041		293,506
Total residential mortgage loans		630,092		659,689
Indirect consumer loans		292,941		309,454
Direct consumer loans		588,787		597,947
Direct consumer loans - covered		144,386		141,315
Total direct consumer loans		733,173		739,262
Finance company loans		95,404		100,994
Total covered loans		777,094		809,151
Total loans	$	4,840,975	$	4,957,164

11

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

4. Loans and Allowance for Loan Losses (continued)

Changes in the carrying amount of covered acquired loans and accretable yield for loans receivable at March 31, 2011 are presented in the following table (in thousands):

	Three Months Ended March 31, 2011
	Carrying Amount of Loans *			Net Accretable Discount
	(In thousands)
Balance at beginning of period	$	809,459		$	107,638
Payments received, net		(46,269	)		—
Accretion		13,067			(13,067	)
Balance at end of period	$	776,257		$	94,571

* Excludes covered credit card loans and mortgage loans held for sale

The carrying value of loans receivable with deterioration of credit quality accounted for using the cost recovery method was $44.1 million at March 31, 2011, and $45.3 million at December 31, 2010. Each of these loans is on nonaccrual status. Loans with deterioration of credit quality that have an accretable difference are not included in nonperforming balances even though the customer may be contractually past due. These loans will accrete interest income over the remaining life of the loan. The Company also recorded $10.9 million for losses that have arisen since acquisition of covered loans with a corresponding increase for 95% coverage in our FDIC loss share receivable, which resulted in a net provision increase of $0.5 million in the provision for covered loans during the three months ended March 31, 2011.

The unpaid principal balance for purchased loans was $1,124 million and $1,193 million at March 31, 2011, and December 31, 2010, respectively.

It is the policy of Hancock to promptly charge off commercial, construction, and real estate loans and lease financings, or portions of these loans and leases, when available information reasonably confirms that they are uncollectible, generally after 90 days. Prior to recognizing a loss, asset value is established by determining the value of the collateral securing the loan, the borrower’s and the guarantor’s ability and willingness to pay and the status of the account in bankruptcy court, if applicable. Consumer loans are generally charged down to the fair value of the collateral less cost to sell when 120 days past due unless the loan is clearly both well secured and in the process of collection. Loans deemed uncollectible are charged off against the allowance account with subsequent recoveries added back to the allowance when collected.

12

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:

	Commercial			Residential mortgages			Indirect consumer			Direct consumer			Finance Company			Total
(In thousands)	March 31, 2011
Allowance for loan losses:
Beginning balance	$	56,859		$	4,626		$	2,918		$	9,322		$	8,272		$	81,997
Charge-offs		(4,754	)		(1,142	)		(466	)		(1,634	)		(1,083	)		(9,079	)
Recoveries		574			771			242			346			329			2,262
Net provision for loan losses (a)		6,837			687			67			678			553			8,822
Increase in indemnification asset (a)		10,354			—			—			—			—			10,354
Ending balance	$	69,870		$	4,942		$	2,761		$	8,712		$	8,071		$	94,356
Ending balance:
Individually evaluated for impairment	$	10,627		$	1,310		$	—		$	—		$	—		$	11,937
Ending balance:
Collectively evaluated for impairment	$	59,243		$	3,632		$	2,761		$	8,712		$	8,071		$	82,419
Ending balance:
Covered loans with deteriorated credit quality	$	10,899		$	—		$	—		$	—		$	—		$	10,899
Loans:
Ending balance:	$	3,089,365		$	630,092		$	292,941		$	733,173		$	95,404		$	4,840,975
Ending balance:
Individually evaluated for impairment	$	53,093		$	6,258		$	—		$	—		$	—		$	59,351
Ending balance:
Collectively evaluated for impairment	$	2,673,605		$	353,793		$	292,941		$	588,787		$	95,404		$	4,004,530
Ending balance:
Covered loans	$	362,667		$	270,041		$	—		$	144,386		$	—		$	777,094

(a) The provision for loan losses is shown “net” after coverage provided by FDIC loss share agreements on covered loans. This results in an increase in the indemnification asset, which is the difference between the provision for loan losses on covered loans of $10,899, and the impairment ($545) on those covered loans.

	Commercial			Residential mortgages			Indirect consumer			Direct consumer			Finance Company			Total
(In thousands)	March 31, 2010
Allowance for loan losses:
Beginning balance	$	42,484		$	4,782		$	3,826		$	7,145		$	7,813		$	66,050
Charge-offs		(11,097	)		(739	)		(897	)		(985	)		(1,442	)		(15,160	)
Recoveries		859			131			289			377			253			1,909
Net provision for loan losses		7,066			736			734			3,322			1,968			13,826
Ending balance	$	39,312		$	4,910		$	3,952		$	9,859		$	8,592		$	66,625
Ending balance:
Individually evaluated for impairment	$	7,715		$	797		$	—		$	—		$	—		$	8,512
Ending balance:
Collectively evaluated for impairment	$	31,597		$	4,113		$	3,952		$	9,859		$	8,592		$	58,113
Ending balance:
Covered loans with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—
Loans:
Ending balance:	$	3,120,584		$	718,333		$	346,160		$	719,071		$	107,542		$	5,011,690
Ending balance:
Individually evaluated for impairment	$	57,347		$	14,106		$	—		$	—		$	—		$	71,453
Ending balance:
Collectively evaluated for impairment	$	2,606,231		$	376,736		$	346,160		$	607,777		$	107,542		$	4,044,446
Ending balance:
Covered loans	$	457,006		$	327,491		$	—		$	111,294		$	—		$	895,791

13

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

4. Loans and Allowance for Loan Losses (continued)

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 for all classes of financing receivables. The following table shows the composition of non-accrual loans by portfolio segment:

	March 31, 2011		December 31, 2010
	(In thousands)
Commercial	$	36,828	$	41,667
Commercial - restructured		10,283		8,712
Commercial - covered		37,591		41,917
Residential mortgages		17,427		18,699
Residential mortgages - covered		3,012		3,199
Indirect consumer		—		—
Direct consumer		1,102		4,862
Direct consumer - covered		3,461		170
Finance Company		1,297		1,759
Total	$	111,001	$	120,985

Included in nonaccrual loans is $10.3 million in restructured commercial loans. Total troubled debt restructurings as of March 31, 2011 were $19.8 million. Loan restructurings occur when a borrower is experiencing, or is expected to experience, financial difficulties in the near-term and, consequently, a modification that would otherwise not be considered is granted to the borrower. The concessions involve paying interest only for a period of 6 to 12 months. Hancock does not typically lower the interest rate or forgive principal or interest as part of the loan modification. There have been no commitments to lend additional funds to any borrowers whose loans have been restructured. Troubled debt restructurings can involve loans remaining on nonaccrual, moving to nonaccrual, or continuing to accrue, depending on the individual facts and circumstances of the borrower. The evaluation of the borrower’s financial condition and prospects include consideration of the borrower’s sustained historical repayment performance for a reasonable period prior to the date on which the loan is returned to accrual status. A sustained period of repayment performance generally would be a minimum of six months and would involve payments of cash or cash equivalents. If the borrower’s ability to meet the revised payment schedule is not reasonably assured, the loan remains classified as a nonaccrual loan.

The Company’s investments in impaired loans at March 31, 2011 and December 31, 2010 were $103.4 million and $107.7 million, respectively. The amount of interest that would have been recognized on nonaccrual loans for the three months ended March 31, 2011 was approximately $1.5 million. Interest recovered on nonaccrual loans that were recorded in net income for the three months ended March 31, 2011 was $0.5 million.

14

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

4. Loans and Allowance for Loan Losses (continued)

The following table presents impaired loans disaggregated by class at March 31, 2011 and December 31, 2010:

March 31, 2011	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance recorded:
Commercial	$	18,544	$	18,544	$	—	$	20,593	$	27
Commercial - covered		37,591		37,591		—		39,754		—
Residential mortgages		1,000		1,000		—		1,132		—
Residential mortgages - covered		3,012		3,012		—		3,106		—
Direct consumer - covered		3,461		3,461		—		1,816		—
		63,608		63,608		—		66,401		27
With an allowance recorded:
Commercial		34,550		34,550		10,627		34,372		375
Residential mortgages		5,258		5,258		1,310		4,807		26
		39,808		39,808		11,937		39,179		401
Total:
Commercial		53,094		53,094		10,627		54,965		402
Commercial - covered		37,591		37,591		—		39,754		—
Residential mortgages		6,258		6,258		1,310		5,939		26
Residential mortgages - covered		3,012		3,012		—		3,106		—
Direct consumer - covered		3,461		3,461		—		1,816		—
Total	$	103,416	$	103,416	$	11,937	$	105,580	$	428
December 31, 2010	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance recorded:
Commercial	$	22,641	$	22,641	$	—	$	26,472	$	224
Commercial - covered		41,917		41,917		—		49,070		—
Residential mortgages		1,263		1,263		—		1,601		26
Residential mortgages - covered		3,199		3,199		—		3,631		—
Direct consumer - covered		170		170		—		184		—
		69,190		69,190		—		80,958		250
With an allowance recorded:
Commercial		34,194		34,194		10,648		36,650		523
Residential mortgages		4,355		4,355		1,304		4,358		88
		38,549		38,549		11,952		41,008		611
Total:
Commercial		56,835		56,835		10,648		63,122		747
Commercial - covered		41,917		41,917		—		49,070		—
Residential mortgages		5,618		5,618		1,304		5,959		114
Residential mortgages - covered		3,199		3,199		—		3,631		—
Direct consumer - covered		170		170		—		184		—
Total	$	107,739	$	107,739	$	11,952	$	121,966	$	861

15

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

4. Loans and Allowance for Loan Losses (continued)

Accruing loans 90 days past due as a percent of loans was 0.01% and 0.03% at March 31, 2011 and December 31, 2010, respectively. The following table presents the age analysis of past due loans at March 31, 2011 and December 31, 2010:

March 31, 2011	30-89 days past due		Greater than 90 days past due		Total past due		Current		Total Loans		Recorded investment > 90 days and accruing
					(In thousands)
Commercial	$	14,093	$	37,114	$	51,207	$	2,655,734	$	2,706,941	$	286
Commercial – restructured		—		10,283		10,283		9,474		19,757		—
Commercial – covered		—		37,591		37,591		325,076		362,667		—
Residential mortgages		18,326		17,640		35,966		324,085		360,051		213
Residential mortgages – covered		—		3,012		3,012		267,029		270,041		—
Indirect consumer		—		—		—		292,941		292,941		—
Direct consumer		3,267		1,294		4,561		584,226		588,787		192
Direct consumer – covered		—		3,461		3,461		140,925		144,386		—
Finance Company		1,357		1,297		2,654		92,750		95,404		—
Total	$	37,043	$	111,692	$	148,735	$	4,692,240	$	4,840,975	$	691
December 31, 2010	30-89 days past due		Greater than 90 days past due		Total past due		Current		Total Loans		Recorded investment > 90 days and accruing
					(In thousands)
Commercial	$	12,463	$	41,967	$	54,430	$	2,706,363	$	2,760,793	$	300
Commercial - restructured		—		8,712		8,712		3,929		12,641		—
Commercial - covered		—		41,917		41,917		332,414		374,331		—
Residential mortgages		22,109		19,573		41,682		324,502		366,184		874
Residential mortgages – covered		—		3,199		3,199		290,306		293,505		—
Indirect consumer		—		—		—		309,454		309,454		—
Direct consumer		4,488		5,180		9,668		588,279		597,947		318
Direct consumer - covered		—		170		170		141,145		141,315		—
Finance Company		2,011		1,759		3,770		97,224		100,994		—
Total	$	41,071	$	122,477	$	163,548	$	4,793,616	$	4,957,164	$	1,492

The following table presents the credit quality indicators of the Company’s various classes of loans at March 31, 2011 and December 31, 2010:

Commercial Credit Exposure

Credit Risk Profile by Creditworthiness Category

	March 31, 2011						December 31, 2010
	Commercial		Commercial - Covered		Total Commercial		Commercial		Commercial - Covered		Total Commercial
			(In thousands)						(In thousands)
Grade:
Pass	$	2,286,068	$	41,553	$	2,327,621	$	2,332,952	$	45,609	$	2,378,561
Pass-Watch		116,974		28,283		145,257		138,839		35,289		174,128
Special Mention		23,061		14,351		37,412		26,216		21,031		47,247
Substandard		230,197		135,603		365,800		265,180		254,033		519,213
Doubtful		70,398		142,877		213,275		10,247		18,369		28,616
Loss		—		—		—		—		—		—
Total	$	2,726,698	$	362,667	$	3,089,365	$	2,773,434	$	374,331	$	3,147,765

16

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

4. Loans and Allowance for Loan Losses (continued)

Residential Mortgage Credit Exposure

Credit Risk Profile by Internally Assigned Grade

	March 31, 2011						December 31, 2010
	Residential Mortgages		Residential Mortgages - Covered		Total Residential Mortgages		Residential Mortgages		Residential Mortgages - Covered		Total Residential Mortgages
			(In thousands)						(In thousands)
Grade:
Pass	$	272,755	$	145,704	$	418,459	$	284,712	$	159,885	$	444,597
Pass-Watch		10,064		27,062		37,126		7,857		29,673		37,530
Special Mention		130		14,554		14,684		—		15,220		15,220
Substandard		77,102		77,787		154,889		73,615		87,636		161,251
Doubtful		—		4,934		4,934		—		1,091		1,091
Loss		—		—		—		—		—		—
Total	$	360,051	$	270,041	$	630,092	$	366,184	$	293,505	$	659,689

Consumer Credit Exposure

Credit Risk Profile Based on Payment Activity

	March 31, 2011
	Direct Consumer		Direct Consumer - Covered		Total Direct Consumer		Indirect Consumer		Finance Company
	(In thousands)
Performing	$	587,685	$	140,925	$	728,610	$	292,941	$	94,107
Nonperforming		1,102		3,461		4,563		—		1,297
Total	$	588,787	$	144,386	$	733,173	$	292,941	$	95,404
	December 31, 2010
	Direct Consumer		Direct Consumer - Covered		Total Direct Consumer		Indirect Consumer		Finance Company
	(In thousands)
Performing	$	593,085	$	141,145	$	734,230	$	309,454	$	99,235
Nonperforming		4,862		170		5,032		—		1,759
Total	$	597,947	$	141,315	$	739,262	$	309,454	$	100,994

All loans are reviewed periodically over the course of the year. Each Bank’s portfolio of loan relationships aggregating $500,000 or more is reviewed every 12 to 18 months by the Bank’s Loan Review staff with other loans also periodically reviewed.

Below are the definitions of the Company’s internally assigned grades:

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

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

17

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

4. Loans and Allowance for Loan Losses (continued)

• Special Mention - These credits exhibit some signs of “Watch”, but to a greater magnitude. These credits constitute an undue and unwarranted credit risk, but not to a point of justifying a classification of “Substandard”. They have weaknesses that, if not checked or corrected, weaken the asset or inadequately protect the bank.

• Substandard - These credits constitute an unacceptable risk to the bank. They have recognized credit weaknesses that jeopardize the repayment of the debt. Repayment sources are marginal or unclear. Credits that have debt service coverage less than one-to-one (1:1) or are collateral dependent will almost always be accorded this grade.

• Doubtful - A Doubtful credit has all of the weaknesses inherent in one classified “Substandard” with the added characteristic that weaknesses make collection or liquidation in full questionable or improbable. The possibility of a loss is extremely high.

• Loss - Credits classified as Loss are considered uncollectable and should be charged off promptly once so classified.

• Performing - Loans on which payments of principal and interest are less than 90 days past due.

• Non-performing - A non-performing loan is a loan that is in default or close to being in default and there are good reasons to doubt that payments will be made in full. All loans rated as non-accrual are also non-performing.

As of March 31, 2011 and December 31, 2010, the Company had $35.1 million and $35.9 million, respectively, in loans carried at fair value.

The Company held $7.5 million and $21.9 million in loans held for sale at March 31, 2011 and December 31, 2010, respectively, carried at lower of cost or fair value. Gain on the sale of loans totaled $0.03 million and $0.7 million as of March 31, 2011 and 2010, respectively. 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.

18

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

5. Earnings Per Share

The Company adopted the FASB’s authoritative guidance regarding the determination of whether instruments granted in share-based payment transactions are participating securities. This guidance 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. This guidance was effective January 1, 2010.

Following is a summary of the information used in the computation of earnings per common share (in thousands), using the two-class method:

	Three Months Ended March 31,
	2011		2010
Numerator:
Net income to common shareholders	$	15,328	$	13,834
Net income allocated to participating securities — basic and diluted		74		56
Net income allocated to common shareholders - basic and diluted	$	15,254	$	13,778
Denominator:
Weighted-average common shares - basic		37,333		36,868
Dilutive potential common shares		188		237
Weighted average common shares - diluted		37,521		37,105
Earnings per common share:
Basic	$	0.41	$	0.37
Diluted	$	0.41	$	0.37

There were no anti-dilutive share-based incentives outstanding for the three and nine months ended March 31, 2011 and March 31, 2010.

19

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

6. Share-Based Payment Arrangements

Stock Option Plans

Hancock maintains incentive compensation plans that incorporate share-based compensation. These plans have been approved by the Company’s shareholders. Detailed descriptions of these plans were included in note 11 to the consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2010. No options were granted in the first three months of 2011.

A summary of option activity under the plans for the three months ended March 31, 2011, and changes during the three 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, 2011		1,129,520		$	35.08		6.3
Granted		—		$	—
Exercised		(3,130	)	$	19.26			$	—
Forfeited or expired		(300	)	$	22.36
Outstanding at March 31, 2011		1,126,090		$	35.13		6.0	$	1,947
Exercisable at March 31, 2011		702,534		$	34.48		4.4	$	1,806
Share options expected to vest		423,556		$	36.19		8.7	$	—

The total intrinsic value of options exercised during the three months ended March 31, 2011 and 2010 was $1.2 million and $0.5 million, respectively.

A summary of the status of the Company’s nonvested shares as of March 31, 2011, and changes during the

three months ended March 31, 2011, is presented below:

	Number of Shares			Weighted- Average Grant-Date Fair Value ($)
Nonvested at January 1, 2011		859,342		$	24.01
Granted		35,514		$	34.31
Vested		(83,707	)	$	25.99
Forfeited		(1,360	)	$	42.29
Nonvested at March 31, 2011		809,789		$	24.23

As of March 31, 2011, there was $14.4 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 3.6 years. The total fair value of shares which vested during the three months ended March 31, 2011 and 2010 was $0.7 million and $1.5 million, respectively.

20

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

7. Retirement Plans

Net periodic benefits cost includes the following components for the three months ended March 31, 2011 and 2010:

	Pension Benefits						Other Post-retirement Benefits
	Three Months Ended March 31,
	2011			2010			2011			2010
	(In thousands)
Service cost	$	1,172		$	875		$	34		$	31
Interest cost		1,363			1,308			153			139
Expected return on plan assets		(1,372	)		(1,161	)		—			—
Amortization of prior service cost		—			—			(14	)		(13	)
Amortization of net loss		586			570			135			76
Amortization of transition obligation		—			—			1			1
Net periodic benefit cost	$	1,749		$	1,592		$	309		$	234

The Company anticipates that it will contribute $10.0 million to its pension plan and approximately $1.8 million to its post-retirement benefits in 2011. During the first three months of 2011, the Company contributed approximately $3.6 million to its pension plan and approximately $0.4 million for post-retirement benefits.

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

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

	Three Months Ended March 31,
	2011		2010
	(In thousands)
Trust fees	$	3,991	$	3,846
Credit card merchant discount fees		3,510		3,596
Income from insurance operations		3,249		3,511
Investment and annuity fees		3,133		2,279
ATM fees		2,731		1,951
Total other service charges, commissions and fees	$	16,614	$	15,183

21

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

8. Other Service Charges, Commission and Fees, and Other Income (continued)

Components of other income are as follows:

	Three Months Ended March 31,
	2011		2010
	(In thousands)
Secondary mortgage market operations	$	1,567	$	1,640
Income from bank owned life insurance		1,321		1,249
Safety deposit box income		251		245
Appraisal fee income		198		164
Letter of credit fees		346		263
Gain on sale of property and equipment		597		127
Accretion of indemnification asset		3,044		—
Other		701		1,020
Total other income	$	8,025	$	4,708

9. Other Expense

Components of other expense are as follows:

	Three Months Ended March 31,
	2011		2010
	(In thousands)
Data processing expense	$	5,145	$	6,137
Postage and communications		2,760		2,572
Ad valorem and franchise taxes		1,036		981
Legal and professional services		5,260		3,507
Stationery and supplies		573		584
Advertising		2,049		1,345
Deposit insurance and regulatory fees		3,112		2,635
Training expenses		200		170
Other fees		858		1,001
Annuity expense		95		200
Claims paid		200		336
Insurance expense		502		491
ORE expense		1,441		681
Other expense		2,574		2,810
Total other expense	$	25,805	$	23,450

22

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

10. Income Taxes

There were no material uncertain tax positions as of March 31, 2011 and December 31, 2010. 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 financial statements as of March 31, 2011 and December 31, 2010.

The Company and its subsidiaries 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 2007.

11. Segment Reporting

The Company’s primary segments are divided into the Mississippi (MS), Louisiana (LA), Alabama (AL), and Other. Effective January 1, 2010, the Company’s Florida segment was merged into Mississippi. The activity and assets of Peoples First acquired in December 2009 are included in Mississippi. 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, Lighthouse Services Corp., Invest-Sure, Inc., Peoples First Transportation, Inc., Community First and subsidiaries, and three real estate corporations owning land and buildings that house bank branches and other facilities.

23

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

11. Segment Reporting (continued)

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

	Three Months Ended March 31, 2011
	MS			LA		AL			Other		Eliminations			Consolidated
Interest income	$	45,330		$	31,127	$	2,300		$	4,949	$	(1,173	)	$	82,533
Interest expense		11,261			4,197		359			1,010		(1,058	)		15,769
Net interest income		34,069			26,930		1,941			3,939		(115	)		66,764
Provision for loan losses		6,886			672		690			574		—			8,822
Noninterest income		17,279			9,695		546			6,670		(7	)		34,183
Depreciation and amortization		2,266			642		80			207		—			3,195
Other noninterest expense		38,036			21,956		1,765			8,090		(23	)		69,824
Securities transactions		(51	)		—		—			—		—			(51	)
Net income before income taxes		4,109			13,355		(48	)		1,738		(99	)		19,055
Income tax expense (benefit)		(560	)		3,715		(54	)		626		—			3,727
Net income (loss)	$	4,669		$	9,640	$	6		$	1,112	$	(99	)	$	15,328
Total assets	$	5,259,587		$	2,844,867	$	196,206		$	1,277,584	$	(1,267,210	)	$	8,311,034
Total interest income from affiliates	$	1,164		$	7	$	2		$	—	$	(1,173	)	$	—
Total interest income from external customers	$	44,166		$	31,120	$	2,298		$	4,949	$	—		$	82,533

	Three Months Ended March 31, 2010
	MS			LA		AL			Other			Eliminations			Consolidated
Interest income	$	52,213		$	33,348	$	2,146		$	5,967		$	(1,295	)	$	92,379
Interest expense		19,172			6,080		592			1,136			(1,180	)		25,800
Net interest income		33,041			27,268		1,554			4,831			(115	)		66,579
Provision for loan losses		10,694			257		907			1,968			—			13,826
Noninterest income		14,593			10,176		400			6,240			(28	)		31,381
Depreciation and amortization		2,438			846		81			208			—			3,573
Other noninterest expense		34,509			19,969		1,454			8,361			(44	)		64,249
Net income before income taxes		(7	)		16,372		(488	)		534			(99	)		16,312
Income tax expense (benefit)		(1,866	)		4,719		(192	)		(183	)		—			2,478
Net income (loss)	$	1,859		$	11,653	$	(296	)	$	717		$	(99	)	$	13,834
Total assets	$	5,523,441		$	2,863,792	$	190,125		$	1,127,512		$	(1,139,390	)	$	8,565,480
Total interest income from affiliates	$	1,287		$	8	$	—		$	—		$	(1,295	)	$	—
Total interest income from external customers	$	50,926		$	33,340	$	2,146		$	5,967		$	—		$	92,379

24

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

12. New Accounting Pronouncements

In April 2011, the Financial Accounting Standards Board (FASB) issued updated guidance for receivables regarding a creditor’s determination of whether a restructuring is a troubled debt restructuring (TDR). The final standard does not change the long-standing guidance that a restructuring of a debt constitutes a TDR “if the creditor for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider”. The update clarifies which loan modifications constitute troubled debt restructurings and is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings. The new guidance is effective for interim and annual periods beginning on June 15, 2011, and should be applied retrospectively to restructurings occurring on or after the beginning of the fiscal year of adoption. The adoption of this guidance is not expected to have a material impact on the company’s financial condition or results of operations.

In April 2011, FASB issued an update on reconsideration of effective control for repurchase agreements. The guidance is intended to improved the accounting for repurchase agreements (“repos”) and other similar agreements. Specifically, the guidance modifies the criteria for determining when these transactions would be accounted for as financings (secured borrowings/lending agreements) as opposed to sales (purchases) with commitments to repurchase (resell). Currently, when assessing effective control, one of the conditions a transferor has to meet is the ability to repurchase or redeem the financial assets even in the event of default of the transferee. The update removes from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in default by the transferee. The FASB’s action makes the level of cash collateral received by the transferor in a repo or other similar agreement irrelevant in determining if it should be accounted for as a sale. The guidance is effective prospectively for new transfers and existing transactions that are modified in the first interim or annual period beginning on or after December 15, 2011. The adoption of this guidance is not expected to have a material impact on the company’s financial condition or results of operations.

25

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 2010 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 180 banking and financial services offices and more than 160 automated teller machines (ATMs) in the states of Mississippi, Louisiana, Florida and Alabama through three wholly-owned bank subsidiaries, Hancock Bank, Gulfport, Mississippi (Hancock Bank MS), Hancock Bank of Louisiana, Baton Rouge, Louisiana (Hancock Bank LA) and Hancock Bank of Alabama, Mobile, Alabama (Hancock Bank AL). Hancock Bank MS, Hancock Bank LA, and Hancock Bank AL are referred to collectively as the “Banks.” Hancock Bank subsidiaries include Hancock Investment Services, Hancock Insurance Agency, and Harrison Finance Company.

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 March 31, 2011, we had total assets of $8.3 billion and employed 2,299 persons on a full-time equivalent basis.

RESULTS OF OPERATIONS OVERVIEW

For the quarter ended March 31, 2011, net income was $15.3 million with fully diluted earnings per share of $0.41. This compares to net income of $13.8 million with fully diluted earnings per share of $0.37 at March 31, 2010 and net income of $17.0 million with fully diluted earnings per share of $0.46 at December 31, 2010. This quarter’s earnings per share includes the impact of our recent common stock offering described below. Return on average assets was 0.75% compared to 0.65% at March 31, 2010 and 0.83% at December 31, 2010.

On December 21, 2010, we entered into a definitive agreement with Whitney Holding Corporation (“Whitney”), parent company of New Orleans-based Whitney Bank, for Whitney to merge into Hancock. The combined company will have approximately $20.0 billion in assets and operate more than 300 branches across the Gulf South. The transaction is expected to be completed in the second quarter of 2011, subject to customary closing conditions and regulatory approval. In the first quarter, we incurred $1.6 million in merger-related expenses associated with the proposed combination with Whitney.

On March 25, 2011, we closed a common stock offering. In connection with the offering, we issued 6,201,500 shares of common stock at a price of $32.25 per share. Net proceeds were approximately $191.0 million. The proceeds of the offering are intended to be used for general corporate purposes, including the enhancement of our capital position and the repurchase of Whitney Holding Corporation’s TARP preferred stock and warrants upon closing of the proposed merger. Our tangible common equity ratio stood at 11.94% at March 31, 2011. On April 26, 2011, we announced that the underwriters exercised the overallotment option granted to them in connection with the March 2011 stock offering and purchased 756,643 shares of common stock. Completion of the public offering and overallotment resulted in total net proceeds of approximately $214.0 million.

The principal driver of our improved 2011 first quarter earnings from the prior year’s first quarter was the continued improvement in our overall asset quality. We recorded a significantly lower provision for loan losses, down $5.0 million, or 36.2% compared to the prior year’s first quarter and down $2.6 million, or 22.6% from the fourth quarter of 2010. Net

26

charge-offs of $6.8 million decreased $6.4 million, or 48.6%, from the 2010 first quarter and decreased $2.9 million, or 30.1% from the prior quarter. Net charge-offs were 0.57% of average loans, down 49 basis points from the first quarter of 2010 and down 21 basis points, compared with the preceding fourth quarter. Loans 90 days past due or greater (accruing) as a percent of period-end loans decreased 2 basis points from December 31, 2010, to 0.01% at March 31, 2011 and decreased 26 basis points compared to March 31, 2010.

Total assets at March 31, 2011, were $8.3 billion, up $172.7 million, or 2.1%, from $8.1 billion at December 31, 2010. Compared to March 31, 2010, total assets decreased $254.4 million, or 3.0%. We continue to remain well capitalized with total equity of $1.1 billion at March 31, 2011, up $206.9 million, or 24.3 percent, from March 31, 2010 and up $201.2 million, or 23.5 percent from December 31, 2010, due to the common stock offering in March of this year. The company’s tangible common equity ratio stood at 11.94% at March 31, 2011 compared to 9.69% at December 31, 2010 and 9.10% at March 31, 2010.

Net Interest Income

Net interest income (taxable equivalent or te) for the first quarter increased a slight $0.04 million, or 0.1%, from March 31, 2010, and decreased $2.2 million, or 3.0 percent, from the prior quarter. The net interest margin of 3.97% was 22 basis points wider than the same quarter a year ago but was 9 basis points narrower than the prior quarter. Average earning assets grew $31.2 million compared to prior quarter but declined $399.2 million, or 5.3%, compared with the same quarter a year ago. The $399.2 million decrease was caused by a decrease in loans ($200.8 million), securities ($128.0 million), and short-term investments ($70.4 million).

The company’s loan yield decreased 27 basis points over the prior year’s first quarter, while the yield on securities decreased 52 basis points, pushing the yield on average earning assets down 28 basis points. However, total funding costs over the same quarter a year ago were down 50 basis points.

Provision for Loan Losses

The amount of the allowance for loan losses equals the cumulative total of the provision 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 incurred losses associated with our loan portfolio. In order to adjust the allowance to the level dictated by our reserving methodologies, we recorded a provision for loan losses of $8.8 million in the first quarter of 2011. The provision of $8.3 million on non-covered loans was primarily related to specific credits partially offset by a reduction of $1.5 million in the specific reserve for the Gulf Oil Spill. We continue to monitor the impact the Gulf Oil Spill is having on our affected markets. We also recorded $10.9 million for losses on our acquired covered loans with a corresponding increase for 95% coverage in our FDIC loss share receivable, which resulted in a net provision increase of $0.5 million in the provision for covered loans.

Allowance for Loan Losses and Asset Quality

At March 31, 2011, the allowance for loan losses was $94.4 million compared with $82.0 million at December 31, 2010, an increase of $12.4 million. The increase in the allowance for loan losses through the first three months of 2011 is primarily attributed to an increased estimated provision of $4.9 million for specific reserve analysis for those loans considered impaired under ASC 310 and a $10.9 million allowance on covered loans. The increases were offset by a $1.6 million reduction for loans that are considered non-impaired under ASC 450, a $1.5 million reduction in the specific Gulf Oil Spill reserve and a $0.4 million reduction in the covered credit card allowance. We do not offer subprime home mortgage loans, and therefore, our increased reserve is not associated with those high risk loans. The only higher risk loans we offer are through our finance company but those loans are immaterial to our loan portfolio. Management utilizes quantitative methodologies and modeling to determine the adequacy of the allowance for loan and lease losses. Within the allowance for loan losses modeling, adequate segregation of geographic and specific loan types are documented and analyzed for

27

appropriate risk metrics. We maintain a continuous credit quality policy that establishes acceptable loan-to-value thresholds on the front end underwriting process. Residential home values are continuously monitored by each market. A detailed description of our methodology was included in our annual report on Form 10-K for the year ended December 31, 2010. Management believes the March 31, 2011 allowance level is adequate.

Net charge-offs, as a percent of average loans, were 0.57% for the first quarter of 2011, compared to 1.06% in the first quarter of 2010. Of the overall decrease in net charge-offs of $6.4 million, $6.1 million was reflected in commercial/real estate loans, $0.4 million in finance company loans and $0.2 million in mortgage loans with an offsetting increase in consumer loans of $0.3 million.

Non-accrual loans were $111.0 million at March 31, 2011, an increase of $18.2 million over $92.8 million at March 31, 2010. The increase is mainly due to continued deterioration in our legacy loan portfolio, mostly related to the continued decline in real estate values and overall duration of the current economic recession. Included in non-accrual loans is $10.3 million in restructured commercial loans. Total troubled debt restructurings for the period were $19.8 million. Loan restructurings occur when a borrower is experiencing, or is expected to experience, financial difficulties in the near-term and, consequently, a modification that would otherwise not be considered is granted to the borrower. Troubled debt restructurings can involve loans remaining on nonaccrual, moving to nonaccrual, or continuing to accrue, depending on the individual facts and circumstances of the borrower.

Foreclosed assets are comprised of other real estate (ORE) and other repossessed assets. Foreclosed assets were $41.4 million at March 31, 2011 compared to $30.2 million at March 31, 2010, an increase of $11.2 million. Approximately $8.6 million of the $11.2 million increase in foreclosed assets are covered assets under FDIC loss share agreements. The increases in foreclosed assets are mainly due to the on-going national recession and weakness in residential development.

The following table sets forth, for the periods indicated, average net loans outstanding, allowance for loan losses, amounts charged off and recoveries of loans previously charged - off:

	March 31, 2011			March 31, 2010
	(In thousands)
Net loans outstanding at end of period	$	4,840,975		$	5,011,690
Average net loans outstanding	$	4,887,749		$	5,088,539
Balance of allowance for loan losses at beginning of period	$	81,997		$	66,050
Loans charged-off:
Commercial		4,412			10,681
Construction		—			—
Real estate		328			393
Lease financing		14			23
Municipal		—			—
Total commercial		4,754			11,097
Residential mortgage		1,142			739
Direct consumer		1,634			985
Indirect consumer		466			897
Finance Company		1,083			1,442
Total charge-offs		9,079			15,160
Recoveries of loans previously
Charged-off:
Commercial		403			843
Construction		—			—
Real estate		75			14
Lease financing		96			2
Municipal		—			—
Total commercial		574			859
Residential mortgage		771			131
Direct consumer		346			377
Indirect consumer		242			289
Finance Company		329			253
Total recoveries		2,262			1,909
Net charge-offs		6,817			13,251
Provision for (reversal of ) loan losses, net (a)		8,822			13,826
Increase in indemnification asset (a)		10,354			—
Balance of allowance for loan losses at end of period	$	94,356		$	66,625
Ratios
Gross charge-offs to average loans		0.19	%		0.30	%
Recoveries to average loans		0.05	%		0.04	%
Net charge-offs to average loans		0.14	%		0.26	%
Allowance for loan losses to year end loans		1.95	%		1.33	%
Net charge-offs to period-end net loans		0.14	%		0.26	%
Allowance for loan losses to average net loans		1.93	%		1.31	%
Net charge-offs to loan loss allowance		7.22	%		19.89	%

(a) The provision for loan losses is shown “net” after coverage provided by FDIC loss share agreements on covered loans. This results in an increase in the indemnification asset, which is the difference between the provision for loan losses on covered loans of $10,899, and the impairment ($545) on those covered loans.

An allocation of the loan loss allowance by major loan category is set forth in the following table:

	March 31, 2011				December 31, 2010
	Allowance for Loan Losses		% of Loans to Total Loans		Allowance for Loan Losses		% of Loans to Total Loans
	(In thousands)
Commercial	$	69,870		63.81	$	56,859		63.50
Residential mortgages		4,942		13.02		4,626		13.31
Indirect consumer		2,761		6.05		2,918		6.24
Direct consumer		8,712		15.15		9,322		14.91
Finance Company		8,071		1.97		8,272		2.04
	$	94,356		100.00	$	81,997		100.00

28

Noninterest Income

Noninterest income for the first quarter of 2011 was up $2.8 million, or 9%, compared to the same quarter a year ago, largely due to the $3.0 million accretion on the FDIC indemnification asset from our fourth quarter 2009 acquisition of People First.

Investment and annuity fees were up $0.9 million, or 37%, compared to the first quarter of 2010 mainly because the first quarter of 2010 presented a large decrease in production due to poor market conditions.

ATM fees increased $0.8 million, or 40%, compared to the first quarter of 2010 due to increased activity in our Florida, Mississippi and Louisiana markets and a $0.10 increase in transaction fees.

Compared to the first quarter of 2010, gain on sale of property and equipment increased $0.5 million mainly due to gains on sale of a building in Florida and timberland in Mississippi.

Offsetting the increases in noninterest income was a $1.9 million, or 17% decrease in service charges on deposit accounts compared to the same quarter a year ago. Service charges on deposit accounts were down mainly because of lower overdraft and NSF item counts due to new Federal Reserve consumer protection regulations. Service charges include periodic account maintenance fees for both commercial and personal customers, charges for specific transactions or services, such as processing return items or wire transfers, and other revenue associated with deposit accounts, such as commissions on check sales.

Income from insurance operations was down $0.3 million, or 7%, compared to the first quarter of 2010 due to lower production of Credit Life and A&H and runoff of annuity business.

The components of noninterest income for the three months ended March 31, 2011 and 2010 are presented in the following table:

	Three Months Ended March 31,
	2011			2010
	(In thousands)
Service charges on deposit accounts	$	9,544		$	11,490
Trust fees		3,991			3,846
Credit card merchant discount fees		3,510			3,596
Income from insurance operations		3,249			3,511
Investment and annuity fees		3,133			2,279
ATM fees		2,731			1,951
Secondary mortgage market operations		1,567			1,640
Income from bank owned life insurance		1,321			1,249
Outsourced check income/(loss)		(49	)		(47	)
Letter of credit fees		346			263
Gain on sale of property and equipment		597			127
Accretion of indemnification asset		3,044			—
Other income		1,199			1,476
Securities transactions loss, net		(51	)		—
Total noninterest income	$	34,132		$	31,381

29

Noninterest Expense

Operating expenses for the first quarter of 2011 were $5.2 million, or 8%, higher compared to the same quarter a year ago.

Total personnel expense increased $3.1 million, or 9%, compared to the same quarter last year. The increase is mainly due to additional full time equivalent employees, additional incentive expense, and salary increases. Total personnel expense consists of employee compensation and employee benefits. Employee compensation includes base salaries and contract labor costs, compensation earned under sales-based and other employee incentive programs, and compensation expense under management incentive plans. Employee benefits, in addition to payroll taxes, are the cost of providing health benefits for active and retired employees and the cost of providing pension benefits through both the defined-benefit plans and a 401(k) employee savings plan.

Legal and professional services increased $1.8 million, or 50%, compared to the first quarter of 2010, mostly due to professional services related to the upcoming merger with Whitney National Bank.

Other real estate owned expense increased $0.8 million compared to the first quarter of 2010 due to loss share expenses associated with loans acquired from Peoples First.

Advertising expense increased $0.7 million, or 52%, compared to the first quarter of 2010 mostly due to increased radio and direct mail activity related to our home equity line of credit (HELOC) promotion.

Equipment and data processing expense was down $0.9 million, or 10%, compared to the first quarter of last year mainly due to increased operating activity and the system conversion project associated with Peoples First during 2010.

Net occupancy expense decreased $0.2 million, or 4%, compared to the same quarter a year ago mainly due to the closing of some facilities that were acquired from Peoples First. Decreased expenses related mainly to building rent, utilities, property taxes and building insurance.

The following table presents the components of noninterest expense for the three months ended March 31, 2011 and 2010.

	Three Months Ended March 31,
	2011		2010
	(In thousands)
Employee compensation	$	29,408	$	26,967
Employee benefits		8,427		7,800
Total personnel expense		37,835		34,767
Equipment and data processing expense		7,999		8,861
Net occupancy expense		5,911		6,143
Postage and communications		2,760		2,572
Ad valorem and franchise taxes		1,036		981
Legal and professional services		5,260		3,507
Stationery and supplies		573		584
Amortization of intangible assets		614		738
Advertising		2,049		1,345
Deposit insurance and regulatory fees		3,112		2,635
Training expenses		200		170
Other real estate owned expense, net		1,441		681
Insurance expense		502		491
Other fees		858		1,001
Non loan charge-offs		195		205
Other expense		2,674		3,141
Total noninterest expense	$	73,019	$	67,822

30

Income Taxes

For the three months ended March 31, 2011 and 2010, the effective income tax rates were approximately 20% and 15%, respectively. Because of the increased level of pretax income in 2011, the tax exempt interest income and the utilization of tax credits had less of an impact on the effective tax rate. The source of the tax credits for 2011 and 2010 resulted from investments in New Market Tax Credits, Qualified Bond Credits and Work Opportunity Tax Credits.

Selected Financial Data

The following tables contain selected financial data comparing our consolidated results of operations for the three and nine months ended March 31, 2011 and 2010.

	Three Months Ended March 31,
	2011		2010
	(In thousands, except per share data)
Per Common Share Data
Earnings per share:
Basic	$	0.41	$	0.37
Diluted	$	0.41	$	0.37
Cash dividends per share	$	0.24	$	0.24
Book value per share (period-end)	$	24.52	$	23.05
Weighted average number of shares:
Basic		37,333		36,868
Diluted (1)		37,521		37,105
Period-end number of shares		43,139		36,905
Market data:
High price	$	35.68	$	45.86
Low price	$	30.67	$	38.23
Period-end closing price	$	32.84	$	41.81
Trading volume (2)		25,942		9,612

(1) There were no anti-dilutive share-based incentives outstanding for the three and nine months ended March 31, 2011 and March 31, 2010.

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

31

	Three Months Ended March 31,
	2011			2010
	(dollar amounts in thousands)
Performance Ratios
Return on average assets		0.75	%		0.65	%
Return on average common equity		7.07	%		6.58	%
Earning asset yield (tax equivalent (“TE”))		4.87	%		5.15	%
Total cost of funds		0.90	%		1.40	%
Net interest margin (TE)		3.97	%		3.75	%
Common equity (period-end) as a percent of total assets (period-end)		12.73	%		9.93	%
Leverage ratio (period-end) (a)		12.02	%		8.91	%
FTE headcount		2,299			2,263
Asset Quality Information
Non-accrual loans	$	100,718		$	92,828
Restructured loans (b)		19,757			—
Foreclosed assets		41,380			30,243
Total non-performing assets	$	161,855		$	123,071
Non-performing assets as a percent of loans and foreclosed assets		3.32	%		2.44	%
Accruing loans 90 days past due (c)	$	691		$	13,457
Accruing loans 90 days past due as a percent of loans		0.01	%		0.27	%
Non-performing assets + accruing loans 90 days past due to loans and foreclosed assets		3.33	%		2.71	%
Net charge-offs	$	6,817		$	13,251
Net charge-offs as a percent of average loans		0.57	%		1.06	%
Allowance for loan losses	$	94,356		$	66,625
Allowance for loan losses as a percent of period-end loans		1.95	%		1.33	%
Allowance for loan losses to NPAs + accruing loans 90 days past due		58.05	%		48.80	%
Provision for loan losses	$	8,822		$	13,826
Average Balance Sheet
Total loans	$	4,887,749		$	5,088,539
Securities		1,444,872			1,572,883
Short-term investments		742,761			813,122
Earning assets		7,075,382			7,474,544
Allowance for loan losses		(82,758	)		(66,170	)
Other assets		1,244,747			1,246,022
Total assets	$	8,237,371		$	8,654,396
Noninterest bearing deposits	$	1,144,469		$	1,018,863
Interest bearing transaction deposits		2,029,706			1,894,997
Interest bearing public fund deposits		1,227,723			1,275,202
Time deposits		2,350,572			2,933,094
Total interest bearing deposits		5,608,001			6,103,293
Total deposits		6,752,470			7,122,156
Other borrowed funds		501,028			543,307
Other liabilities		104,035			135,814
Common stockholders’ equity		879,838			853,119
Total liabilities & common stockholders’ equity	$	8,237,371		$	8,654,396

(a) Calculated as Tier 1 capital divided by average total assets. Tier 1 capital is total equity less unrealized gain/loss on AFS securities, unfunded pension liability, unrecognized pension gain/loss, goodwill, core deposit and 10% net mortgage servicing rights.

(b) Included in restructured loans are $10.3 million in non-accrual loans.

(c) Accruing loans past due 90 days or more do not include purchased impaired loans which were written down to their fair value upon acquisition and accrete interest income over the remaining life of the loan.

32

	Three Months Ended March 31,
	2011			2010
	(dollar amounts in thousands)
Period-end Balance Sheet
Commercial/real estate loans	$	3,089,365		$	3,120,584
Mortgage loans		630,092			718,333
Direct consumer loans		733,173			719,071
Indirect consumer loans		292,941			346,160
Finance company loans		95,404			107,542
Total loans		4,840,975			5,011,690
Loans held for sale		7,468			22,210
Securities		1,593,511			1,758,972
Short-term investments		759,644			689,014
Earning assets		7,201,598			7,481,886
Allowance for loan losses		(94,356	)		(66,625	)
Other assets		1,203,792			1,150,219
Total assets	$	8,311,034		$	8,565,480
Noninterest bearing deposits	$	1,186,852		$	1,022,372
Interest bearing transaction deposits		2,051,805			1,931,749
Interest bearing public funds deposits		1,208,334			1,187,410
Time deposits		2,250,319			2,863,196
Total interest bearing deposits		5,510,458			5,982,355
Total deposits		6,697,310			7,004,727
Other borrowed funds		442,294			578,777
Other liabilities		113,731			131,173
Common stockholders’ equity		1,057,699			850,803
Total liabilities & common stockholders’ equity	$	8,311,034		$	8,565,480
	Three Months Ended March 31,
	2011			2010
	(dollar amounts in thousands)
Net Charge-Off Information
Net charge-offs:
Commercial/real estate loans	$	4,159		$	10,238
Mortgage loans		371			608
Direct consumer loans		1,234			608
Indirect consumer loans		278			608
Finance company loans		775			1,189
Total net charge-offs	$	6,817		$	13,251
Net charge-offs to average loans:
Commercial/real estate loans		0.54	%		1.32	%
Mortgage loans		0.23	%		0.34	%
Direct consumer loans		0.71	%		0.33	%
Indirect consumer loans		0.30	%		0.69	%
Finance company loans		3.22	%		4.39	%
Total net charge-offs to average net loans		0.57	%		1.06	%

33

	Three Months Ended March 31,
	2011			2010
	(dollar amounts in thousands)
Average Balance Sheet Composition
Percentage of funding sources/earning assets:
Loans		69.08	%		68.08	%
Securities		20.42	%		21.04	%
Short-term investments		10.50	%		10.88	%
Earning assets		100.00	%		100.00	%
Noninterest bearing deposits		16.18	%		13.63	%
Interest bearing transaction deposits		28.69	%		25.35	%
Interest bearing public funds deposits		17.35	%		17.06	%
Time deposits		33.22	%		39.24	%
Total deposits		95.44	%		95.28	%
Other borrowed funds		7.08	%		7.27	%
Other net interest-free funding sources		-2.52	%		-2.55	%
Total funding sources		100.00	%		100.00	%
Loan mix:
Commercial/real estate loans		63.41	%		61.82	%
Mortgage loans		13.36	%		14.45	%
Direct consumer loans		15.06	%		14.50	%
Indirect consumer loans		6.17	%		7.07	%
Finance company loans		2.00	%		2.16	%
Total loans		100.00	%		100.00	%
Average dollars
Loans	$	4,887,749		$	5,088,539
Securities		1,444,872			1,572,883
Short-term investments		742,761			813,122
Earning assets	$	7,075,382		$	7,474,544
Noninterest bearing deposits	$	1,144,469		$	1,018,863
Interest bearing transaction deposits		2,029,706			1,894,997
Interest bearing public funds deposits		1,227,723			1,275,202
Time deposits		2,350,572			2,933,094
Total deposits		6,752,470			7,122,156
Other borrowed funds		501,028			543,307
Other net interest-free funding sources		(178,116	)		(190,919	)
Total funding sources	$	7,075,382		$	7,474,544
Loans:
Commercial/real estate loans	$	3,099,303		$	3,145,748
Mortgage loans		653,150			735,279
Direct consumer loans		736,133			737,728
Indirect consumer loans		301,638			359,965
Finance company loans		97,525			109,819
Total average loans	$	4,887,749		$	5,088,539

34

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

	Three Months Ended March 31,							Three Months Ended March 31,
	2011							2010
(dollars in thousands)	Interest			Volume		Rate		Interest		Volume			Rate
Average earning assets
Commercial & real estate loans (TE)	$	40,267		$	3,099,303		5.26%	$	42,603	$	3,145,748			5.48%
Mortgage loans		10,824			653,150		6.63%		12,217		735,279			6.65%
Consumer loans		19,175			1,135,296		6.70%		21,491		1,207,512			7.22%
Loan fees & late charges		(59	)		—		0.00%		228		—			0.00%
Total loans (TE)		70,207			4,887,749		5.81%		76,539		5,088,539			6.08%
US treasury securities		12			10,798		0.47%		15		11,838			0.50%
US agency securities		771			172,116		1.79%		1,387		163,132			3.40%
CMOs		3,018			351,224		3.44%		2,063		168,129			4.91%
Mortgage backed securities		8,172			713,783		4.58%		12,051		1,022,288			4.72%
Municipals (TE)		2,678			178,904		5.99%		2,491		192,447			5.18%
Other securities		248			18,047		5.50%		261		15,049			6.94%
Total securities (TE)		14,899			1,444,872		4.12%		18,268		1,572,883			4.65%
Total short-term investments		299			742,761		0.16%		589		813,122			0.29%
Average earning assets yield (TE)	$	85,405		$	7,075,382		4.87%	$	95,396	$	7,474,544			5.15%
Interest bearing liabilities
Interest bearing transaction deposits	$	1,596		$	2,029,706		0.32%	$	2,503	$	1,894,997			0.54%
Time deposits		10,821			2,350,572		1.87%		17,537		2,933,094			2.42%
Public funds		1,593			1,227,723		0.53%		3,243		1,275,202			1.03%
Total interest bearing deposits		14,010			5,608,001		1.01%		23,283		6,103,293			1.55%
Total borrowings		1,759			5,010,028		1.42%		2,517		543,307			1.88%
Total interest bearing liability cost	$	15,769		$	6,109,029		1.05%	$	25,800	$	6,646,600			1.57%
Noninterest bearing deposits											1,018,863
Net interest-free funding sources					966,353						(190,919	)
Total Cost of Funds	$	15,769		$	7,075,382		0.90%	$	25,800	$	7,474,544			1.40%
Net Interest Spread (TE)	$	69,636					3.82%	$	69,596					3.57%
Net Interest Margin (TE)	$	69,636		$	7,075,382		3.97%	$	69,596	$	7,474,544			3.75%

35

LIQUIDITY

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. 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 capacity. Our short-term borrowing capacity includes an approved line of credit with the Federal Home Loan Bank of $467.8 million and borrowing capacity at the Federal Reserve’s Discount Window in excess of $135.6 million. We have FHLB advances of $10.0 million due September 12, 2011 at a fixed rate 3.455%.

We are planning an issuance of debt just prior to the closing of our merger with Whitney. The anticipated proceeds of up to $140.0 million will be used for general corporate purposes. This variable rate term loan will mature two years after the closing of the debt issuance.

The following liquidity ratios at March 31, 2011 and December 31, 2010 compare certain assets and liabilities to total deposits or total assets:

	March 31, 2011			December 31, 2010
Total securities to total deposits		23.79	%		21.97	%
Total loans (net of unearned income) to total deposits		72.28	%		73.16	%
Interest-earning assets to total assets		86.65	%		87.33	%
Interest-bearing deposits to total deposits		82.28	%		83.36	%

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, 2010. 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.

36

CAPITAL RESOURCES

On March 25, 2011, we closed a successful common stock offering. In connection with the offering, we issued 6,201,500 shares of common stock at a price of $32.25 per share. Net proceeds were approximately $191.0 million. The proceeds of the offering are intended to be used for general corporate purposes, including the enhancement of our capital position and the repurchase of Whitney Holding Corporation’s TARP preferred stock and warrants upon closing of the proposed merger. On April 26, 2011, we announced that the underwriters exercised the overallotment option granted to them in connection with the March, 2011 stock offering (discussed under Results of Operations Overview) and purchased 756,643 shares of common stock. Completion of the public offering and overallotment resulted in total net proceeds of approximately $214.0 million.

We continue to be well capitalized. The ratios as of March 31, 2011 and December 31, 2010 are as follows:

	March 31, 2011			December 31, 2010
Common equity (period-end) as a percent of total assets (period-end)		12.73	%		10.52	%
Regulatory ratios:
Total capital to risk-weighted assets (1)		17.18	%		16.60	%
Tier 1 capital to risk-weighted assets (2)		15.93	%		15.34	%
Leverage capital to average total assets (3)		12.02	%		9.65	%

(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.

(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

Goodwill

Goodwill represents costs in excess of the fair value of net assets acquired in connection with purchase business combinations. In accordance with FASB authoritative guidance, goodwill is not amortized but tested for impairment on an annual basis, or more often if events or circumstances indicate there may be impairment. Management reviews goodwill for impairment based on our primary reporting segments. We analyze goodwill using market capitalization to book value comparison. The last test was conducted as of September 30, 2010. No impairment charges were recognized as of March 31, 2011. The carrying amount of goodwill was $61.6 million as of March 31, 2011 and as of December 31, 2010.

Earnings Assets

Earning assets serve as the primary revenue streams for us and are comprised of securities, loans, federal funds sold, and other short-term investments. At March 31, 2011, average earning assets were $7.1 billion, or 85.9% of total assets, compared with $7.5 billion or 86.4% of total assets at March 31, 2010. The $399.2 million, or 5.3%, decrease from prior year quarter resulted from a decrease in loans of $200.8 million, a decrease in securities of $128.0 million and a decrease in short-term investments of $70.4 million.

37

Securities

Our investment in securities was $1.6 billion at March 31, 2011 and $1.5 billion at December 31, 2010. 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

We held $4.9 billion in loans at March 31, 2011 and $5.0 billion at December 31, 2010. 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 March 31, 2011, our average total loans were $4.9 billion, compared to $5.1 billion at March 31, 2010. Commercial and real estate loans comprised 63.4% of the average loan portfolio at March 31, 2011 compared to 61.8% at March 31, 2010. Included in this category are commercial real estate loans, which are secured by properties, used in commercial or industrial operations.

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

	March 31, 2011		December 31, 2010
	(In thousands)
Commercial loans:
Commercial	$	506,450	$	524,653
Commercial - covered		40,041		34,650
Total commercial		546,491		559,303
Construction		481,753		495,590
Construction - covered		141,590		157,267
Total Construction		623,343		652,857
Real estate		1,228,178		1,231,414
Real estate - covered		180,532		181,873
Total real estate		1,408,710		1,413,287
Municipal loans		460,897		471,057
Municipal loans - covered		504		540
Total municipal loans		461,401		471,597
Lease financing		49,420		50,721
Total commercial loans		2,726,698		2,773,435
Total commercial loans - covered		362,667		374,330
Total commercial loans		3,089,365		3,147,765
Residential mortgage loans		360,051		366,183
Residential mortgage loans - covered		270,041		293,506
Total residential mortgage loans		630,092		659,689
Indirect consumer loans		292,941		309,454
Direct consumer loans		588,787		597,947
Direct consumer loans - covered		144,386		141,315
Total direct consumer loans		733,173		739,262
Finance company loans		95,404		100,994
Total covered loans		777,094		809,151
Total loans	$	4,840,975	$	4,957,164

The following table sets forth non-performing assets by type for the periods indicated, consisting of non-accrual loans, troubled debt restructurings and other real estate owned. Loans past due 90 days or more and still accruing are also disclosed:

	March 31, 2011			December  31, 2010
	(In thousands)
Loans accounted for on a non-accrual basis:
Commercial loans	$	37,529		$	42,077
Commercial loans-restructured		9,582			8,302
Subtotal		47,111			50,379
Commercial loans - covered		37,591			41,917
Total Commercial loans		84,702			92,296
Residential mortgage loans		16,725			18,290
Residential mortgage loans - restructured		702			409
Subtotal		17,427			18,699
Residential mortgage loans - covered		3,012			3,199
Total residential mortgage loans		20,439			21,898
Indirect consumer loans		—			—
Direct consumer loans		1,102			4,862
Direct consumer loans - covered		3,461			170
Finance Company		1,297			1,759
Total non-accrual loans		111,001			120,985
Restructured loans:
Commercial loans - non-accrual		9,582			8,302
Residential mortgage loans - non-accrual		702			409
Total restructured loans - non-accrual		10,284			8,711
Commercial loans - still accruing		8,849			3,301
Residential mortgage loans - still accruing		625			629
Total restructured loans - still accruing		9,474			3,930
Total restructured loans		19,758			12,641
Foreclosed assets		18,559			17,595
Foreclosed assets - covered		22,821			15,682
Total foreclosed assets		41,380			33,277
Total non-performing assets*	$	161,855		$	158,192
Loans 90 days past due still accruing	$	691		$	1,492
Ratios
Non-performing assets to loans plus other real estate		3.32	%		3.17	%
Allowance for loan losses to non-performing assets and accruing loans 90 days past due		58.05	%		51.35	%
Allowance for loan losses to non-performing assets and accruing loans 90 days past due, excluding covered loans		98.64	%		83.06	%
Loans 90 days past due still accruing to loans		0.04	%		0.03	%

* Includes total non-accrual loans, total restructured loans-still accruing and total foreclosed assets.

Other Earning Assets

Federal funds sold, interest-bearing deposits in banks, and other short-term investments averaged $742.8 million at March 31, 2011 compared to $813.1 million at March 31, 2010. The decrease of $70.4 million, or 8.7%, from prior year quarter was caused by a decrease of $292.9 million in interest-bearing deposits in banks that was offset by an increase of $222.7 million in other short-term investments. 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.

Deposits

Total deposits were $6.7 billion at March 31, 2011 and $6.8 billion at December 31, 2010. Average interest bearing deposits at March 31, 2011 were $5.6 billion compared to $6.1 billion at March 31, 2010. The decrease of $495.3 million, or 8.1%, over March 31, 2010 was primarily attributable to an expected runoff of Peoples First time deposits. Peoples First deposits were priced very aggressively in order to attract deposits and their deposit rates were higher than comparable banks. 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 competitively within 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 March 31, 2011 were $426.6 million compared to $375.2 million at December 31, 2010. The increase of $51.4 million, or 13.7%, was due primarily to a $50.0 million increase in securities sold under agreements to repurchase.

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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 March 31, 2011, we had $934.9 million in unused loan commitments outstanding, of which approximately $769.0 million were at variable rates, with the remainder at fixed rates. A commitment to extend credit is an agreement to lend to a customer as long as the conditions established in the agreement have been satisfied. A commitment to extend credit generally has a fixed expiration date or other termination clauses and may require payment of a fee by the borrower. Since commitments often expire without being fully drawn, the total commitment amounts do not necessarily represent 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 March 31, 2011, we had $65.0 million in letters of credit issued and outstanding.

The following table shows the commitments to extend credit and letters of credit at March 31, 2011 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	$	934,940	$	540,058	$	81,269	$	52,679	$	260,934
Letters of credit		64,988		45,413		18,157		1,418		—
Total	$	999,928	$	585,471	$	99,426	$	54,097	$	260,934

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles. The accounting principles we follow and the methods for applying these principles conform with accounting principles generally accepted in the United States of America and with general practices followed by the banking industry which requires management to make estimates and assumptions about future events. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. On an ongoing basis, we evaluate our estimates, including those related to the allowance for loan losses, intangible assets and goodwill, income taxes, pension and postretirement benefit plans and contingent liabilities. These estimates and assumptions are based on

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our best estimates and judgments. We evaluate estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We adjust such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, rising unemployment levels and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. Allowance for loan losses, deferred income taxes, and goodwill are potentially subject to material changes in the near term. Actual results could differ significantly from those estimates.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 12 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 March 31, 2011, the effective duration of the securities portfolio was 2.4 years. A rate increase (aged, over 1 year) of 100 basis points would move the effective duration to 2.8 years, while a reduction in rates of 100 basis points would result in an effective duration of 1.1 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 March 31, 2011 indicate that we are slightly asset sensitive 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	N/A
Stable	0.00%
+100	2.15%

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, 2010 included in our 2010 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 three month period ended March 31, 2011, 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 other material changes from the risk factors previously disclosed in our Form 10-K for the year ended December 31, 2010. The risks described may not be the only risks facing us. Additional risks and uncertainties not currently known to us or that are currently considered to not be material also may materially adversely affect our business, financial condition, and/or operating results.

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

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 three months ended March 31, 2011.

Item 4. Reserved.

Item 5. Other Information.

A. The Company’s Annual Meeting was held on March 31, 2011.

B. The Directors elected at the Annual Meeting held on March 31, 2011 were:

	For		Votes Cast Withheld
1.      Frank E Bertucci		24,575,360		465,656
2       Carl J Chaney		24,729,243		311,773
3.      Thomas H Olinde		24,879,712		161,304
4.      John H Pace		24,229,182		811,834

C. PricewaterhouseCoopers was approved as the independent public accountants of the Company.

For	Against	Abstained
29,816,751	58,060	74,625

D. (Non-Binding) To approve compensation of the named executive officers set forth under the heading “Compensation of Directors and Executive Officers”

For	Against	Abstained
23,837,161	776,740	429,113

E. (Non-Binding) To approve compensation of the named executive officers of the Company will occur every 1, 2, or 3 years

1 year	2 years	3 years	Abstained
10,652,703	300,270	13,767,187	456,273

F. At a Special Shareholder Meeting April 29, 2011, the votes cast for and against, and those abstaining from voting with respect to the proposal to approve the merger agreement, dated as of December 21, 2010, by and between Hancock Holding Company and Whitney Holding Corporation, as such agreement may be amended from time to time, were as follows:

For	Against	Abstained
28,752,203	439,623	25,579

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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.
101	XBRL Interactive Data.

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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
	President & Chief Executive Officer
	/s/ John M. Hairston
	John M. Hairston
	Chief Executive Officer & Chief Operating Officer
	/s/ Michael M. Achary
	Michael M. Achary
	Chief Financial Officer
Date: May 5, 2011

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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.
101	XBRL Interactive Data.