Hancock Whitney Corporation - 6 (HWC) 10-Q 2011 Q2 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 June 30, 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 Number 0-13089

HANCOCK HOLDING COMPANY

(Exact name of registrant as specified in its charter)

Mississippi	64-0693170
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

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

(228) 868-4000

(Registrant’s telephone number, including area code)

NOT APPLICABLE

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

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.

84,695,178 common shares were outstanding as of July 30, 2011 for financial statement purposes.

Hancock Holding Company

Index

		Page Number
Part I. Financial Information
ITEM 1.	Financial Statements Condensed Consolidated Balance Sheets — June 30, 2011 (unaudited) and December 31, 2010		1
	Condensed Consolidated Statements of Income (unaudited) — Three months and six months ended ended June 30, 2011 and 2010		2
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) – Six months ended June 30, 2011 and 2010		3
	Condensed Consolidated Statements of Cash Flows (unaudited) — Six months ended June 30, 2011 and 2010		4
	Notes to Condensed Consolidated Financial Statements (unaudited) — June 30, 2011		5-34
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		35-55
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk		55
ITEM 4.	Controls and Procedures		56
Part II. Other Information
ITEM 1A.	Risk Factors		56
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		56
ITEM 3.	Legal Proceedings		56
ITEM 4.	Reserved		56
ITEM 5.	Other Information		56
ITEM 6.	Exhibits		56
Signatures			57

Part I. Financial Information

Item 1. Financial Statements

Hancock Holding Company and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share data)

	June 30, 2011 (unaudited)			December 31, 2010
ASSETS
Cash and due from banks	$	381,333		$	139,687
Interest-bearing deposits with other banks		971,941			364,066
Federal funds sold		5,120			124
Other short-term investments		—			274,974
Securities available for sale, at fair value (amortized cost of $4,520,793 and $1,445,721)		4,573,973			1,488,885
Loans held for sale		67,081			21,866
Loans		11,259,991			4,968,149
Less: allowance for loan losses		(112,407	)		(81,997	)
unearned income		(10,938	)		(10,985	)
Loans, net		11,136,646			4,875,167
Property and equipment, net of accumulated depreciation of $134,416 and $125,383		522,008			209,919
Prepaid expenses		82,808			29,786
Other real estate, net		121,570			32,520
Accrued interest receivable		56,990			30,157
Goodwill and non-amortizing intangibles		629,688			61,631
Other intangible assets, net		222,621			13,204
Life insurance contracts		348,603			159,377
FDIC loss share receivable		282,134			329,136
Deferred tax asset, net		151,714			6,541
Other assets		203,315			101,287
Total assets	$	19,757,545		$	8,138,327
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing demand	$	4,852,440		$	1,127,246
Interest-bearing savings, NOW, money market and time		10,735,469			5,648,473
Total deposits		15,587,909			6,775,719
Federal funds purchased		25,085			—
Securities sold under agreements to repurchase		888,831			364,676
Other short-term borrowings		6,800			—
FHLB borrowings		10,057			10,172
Long-term debt		360,102			376
Accrued interest payable		10,180			4,007
Payable for securities not settled		204,139			—
Other liabilities		278,129			126,829
Total liabilities		17,371,232			7,281,779
Stockholders’ Equity
Common stock - $3.33 par value per share; 350,000,000 shares authorized, 84,694,474 and 36,893,276 issued and outstanding, respectively		282,032			122,855
Capital surplus		1,629,740			263,484
Retained earnings		468,743			470,828
Accumulated other comprehensive gain(loss), net		5,798			(619	)
Total stockholders’ equity		2,386,313			856,548
Total liabilities and stockholders’ equity	$	19,757,545		$	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 June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
Interest income:
Loans, including fees	$	94,591		$	71,487	$	162,592		$	145,653
Securities - taxable		19,212			16,343		32,206			32,772
Securities - tax exempt		1,157			1,460		2,397			2,655
Federal funds sold		1			13		1			28
Other investments		516			438		814			1,011
Total interest income		115,477			89,741		198,010			182,119
Interest expense:
Deposits		13,570			19,400		27,579			42,684
Federal funds purchased and securities sold under agreements to repurchase		1,755			2,451		3,443			4,887
Long-term notes and other interest expense		1,093			17		1,165			97
Total interest expense		16,418			21,868		32,187			47,668
Net interest income		99,059			67,873		165,823			134,451
Provision for loan losses, net		9,144			24,517		17,966			38,343
Net interest income after provision for loan losses		89,915			43,356		147,857			96,108
Noninterest income:
Service charges on deposit accounts		12,343			12,327		21,887			23,816
Other service charges, commissions and fees		22,454			16,961		39,069			32,145
Securities loss, net		(36	)		—		(87	)		—
Other income		11,918			6,005		19,943			10,713
Total noninterest income		46,679			35,293		80,812			66,674
Noninterest expense:
Salaries and employee benefits		57,535			35,379		95,370			70,146
Net occupancy expense		8,760			6,026		14,671			12,169
Equipment rentals, depreciation and maintenance		3,661			2,642		6,515			5,367
Amortization of intangibles		1,621			684		2,235			1,422
Professional services expense		22,886			4,497		28,146			8,005
Other expense		26,903			22,894		47,448			42,834
Total noninterest expense		121,366			72,122		194,385			139,943
Net income before income taxes		15,228			6,527		34,284			22,839
Income tax expense		3,140			27		6,868			2,505
Net income	$	12,088		$	6,500	$	27,416		$	20,334
Basic earnings per share	$	0.22		$	0.17	$	0.59		$	0.55
Diluted earnings per share	$	0.22		$	0.17	$	0.59		$	0.55
Dividends paid per share	$	0.24		$	0.24	$	0.48		$	0.48
Weighted avg. shares outstanding-basic		54,890			36,876		46,160			36,855
Weighted avg. shares outstanding-diluted		55,035			37,078		46,310			37,075

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		Retained			Accumulated Other Comprehensive
	Shares		Amount		Surplus		Earnings			Loss, net			Total
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		—		—		—		20,334			—			20,334
Net change in unfunded accumulated benefit obligation, net of tax		—		—		—		—			794			794
Net change in fair value of securities available for sale, net of tax		—		—		—		—			16,709			16,709
Comprehensive income														37,837
Cash dividends declared ($0.48 per common share)		—		—		—		(17,843	)		—			(17,843	)
Common stock issued, long-term incentive plan, including income tax benefit of $203		37,001		123		1,473		—			—			1,596
Compensation expense, long-term incentive plan		—		—		2,029		—			—			2,029
Balance, June 30, 2010		36,877,454	$	122,802	$	261,145	$	456,834		$	20,501		$	861,282
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		—		—		—		27,416			—			27,416
Net change in unfunded accumulated benefit obligation, net of tax		—		—		—		—			249			249
Net change in fair value of securities available for sale, net of tax		—		—		—		—			6,168			6,168
Comprehensive income														33,833
Cash dividends declared ($0.48 per common share)		—		—		—		(29,501	)		—			(29,501	)
Common stock issued in stock offering		6,958,143		23,170		190,824		—			—			213,994
Common stock issued in connection with Whitney acquisition		40,794,261		135,844		1,171,203		—			—			1,307,048
Common stock issued for long-term incentive plan, including income tax benefit of $151.		48,794		162		1,328		—			—			1,490
Compensation expense, long-term incentive plan		—		—		2,900		—			—			2,900
Balance, June 30, 2011		84,694,474	$	282,032	$	1,629,740	$	468,743		$	5,798		$	2,386,313

See notes to unaudited condensed consolidated financial statements.

3

Hancock Holding Company and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Six Months Ended June 30,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	27,416		$	20,334
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,256			7,051
Provision for loan losses		17,966			38,343
Losses on other real estate owned		969			1,470
Deferred tax expense (benefit)		26,190			(8,342	)
Increase in cash surrender value of life insurance contracts		(5,746	)		(4,101	)
Loss on sales of securities available for sale, net		87			—
Gain on sale or disposal of other assets		(598	)		(295	)
Gain on sale of loans held for sale		(50	)		(1,328	)
Net amortization of securities premium/discount		3,960			2,658
Amortization of intangible assets		2,235			1,487
Stock-based compensation expense		2,900			2,029
Increase (decrease) in other liabilities		193,126			(2,518	)
Decrease (increase) in FDIC Indemnification Asset		47,002			(1,387	)
(Increase) decrease in other assets		(40,431	)		51,620
Proceeds from sale of loans held for sale		192,458			698,245
Originations of loans held for sale		(188,465	)		(692,961	)
Excess tax benefit from share based payments		(151	)		(259	)
Other, net		146			(477	)
Net cash provided by operating activities		288,270			111,569
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase (decrease) in interest-bearing time deposits		107,634			(38,120	)
Proceeds from sales of securities available for sale		323,426			—
Proceeds from maturities of securities available for sale		383,235			218,618
Purchases of securities available for sale		(1,151,041	)		(270,433	)
Net increase in short term investments, excluding amortization		274,974			115,001
Net decrease in federal funds sold		3,154			295
Net decrease in loans		144,707			64,862
Purchases of property and equipment		(38,544	)		(11,416	)
Proceeds from sales of property and equipment		1,912			411
Cash paid for acquisition, net of cash received		(74,653	)		—
Proceeds from sales of other real estate		30,660			7,332
Net cash provided by (used in) investing activities		5,464			86,550
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in deposits		(369,734	)		(235,241	)
Net (decrease) increase in federal funds purchased and securities sold under agreements to repurchase		(7,013	)		18,158
Repayments of long-term notes		14			—
Repayments of short-term notes		(115	)		(183	)
Proceeds from issuance of long-term notes		140,000			—
Dividends paid		(29,501	)		(17,843	)
Proceeds from exercise of stock options		116			—
Proceeds from stock offering		213,994			—
Excess tax benefit from stock option exercises		151			259
Net cash provided by (used in) financing activities		(52,088	)		(234,850	)
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS		241,646			(36,731	)
CASH AND DUE FROM BANKS, BEGINNING		139,687			204,714
CASH AND DUE FROM BANKS, ENDING	$	381,333		$	167,983
SUPPLEMENTAL INFORMATION FOR NON-CASH
INVESTING AND FINANCING ACTIVITIES
Transfers from loans to other real estate	$	40,273		$	39,587
Financed sale of foreclosed property		617			260
Transfers from loans to loans held for sale		—			10,613
Common Stock issued in connection with acquisition		1,307,048			—
Fair value of assets acquired	$	11,235,000		$	—
Liabilities assumed		(10,133,000	)		—
Net identifiable assets acquired		1,102,000			—

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 June 30, 2011 and December 31, 2010, the Company’s Condensed Consolidated Statements of Income for the three and six months ended June 30, 2011 and 2010, the Company’s Condensed Consolidated Statements of Stockholders’ Equity and Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 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 six months ended June 30, 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 purchase accounting, 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. Acquisition of Whitney Holding Corporation

On June 4, 2011, Hancock acquired all of the outstanding common stock of Whitney Holding Corporation (Whitney), a bank holding company based in New Orleans, Louisiana, in a stock and cash transaction. The results of operations acquired in the Whitney transaction have been included in the Company’s financial results since June 4, 2011. Whitney common shareholders received 0.418 shares of Hancock common stock in exchange for each share of Whitney stock, resulting in Hancock issuing 40,794,261 common shares at a fair value of $1.3 billion. The Whitney TARP preferred stock plus warrants of $307.7 million was purchased by the Company as part of the merger transaction. In total, the purchase price was approximately $1.6 billion based on the fair value on the acquisition date of Hancock common stock exchanged and the options to purchase Hancock common stock, and cash paid for the TARP preferred stock and warrant.

The Whitney transaction was accounted for using the purchase acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. Assets acquired totaled $11.7 billion, including $6.5 billion in loans, $2.6 billion of investment securities, and $780 million of intangibles. Liabilities assumed were $10.1 billion, including $9.2 billion of deposits.

Preliminary goodwill of $514 million is calculated as the purchase premium after adjusting for the fair value of net assets acquired and represents the value expected from the synergies created from combining the businesses as well as the economies of scale expected from combining the operations of the two companies.

The following table provides the assets purchased and the liabilities assumed and the adjustments to fair value:

Preliminary Statement of Net Assets Acquired (at fair value) (in millions) June 4,  2011

ASSETS
Cash and cash equivalents	$	957
Loans held for sale		57
Securities		2,635
Loans and leases		6,456
Property and equipment		284
Other intangible assets (1)		266
Other assets		580
Total identifiable assets assets	$	11,235
LIABILITIES
Deposits	$	9,182
Borrowings		776
Other liabilities		175
Total liabilities	$	10,133
Net identifiable assets acquired	$	1,102
Goodwill (2)		514
Net assets acquired	$	1,616
CONSIDERATION:
Hancock Holding Company common shares issued (in millions)		41
Purchase price per share of the Company’s common stock (3)		32.04
Company common stock issued and cash exchanged for fractional shares	$	1,307
Stock options converted		1
Cash paid for TARP preferred stock and warrant		308
Fair value of total consideration transferred	$	1,616

(1) Intangible assets consists of core deposit intangible of $189 million, trade name of $54 million, trust relationships of $11 million, and credit card relationships of $11 million. The amortization is life 12 - 17 years for the CDI intangible asset; 15 years for credit card relationships and 10 years for trust. They will be amortized on an accelerated basis.

(2) No goodwill is expected to be deductible for federal income tax purposes. The goodwill will be primarily allocated to the Whitney Bank segment.

(3) The value of the shares of common stock exchanged with Whitney shareholders was based upon the closing price of the Company’s common stock at June 3, 2011, the last traded day prior to the date of acquisition.

6

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

2. Acquisition of Whitney Holding Corporation (continued)

The following table provides a reconciliation of goodwill and other non-amortizing intangibles:

	June 30, 2011
Goodwill and non-amortizing intangibles at December 31, 2010	$	61,631
Additions:
Goodwill Whitney acquisition		513,917
Trade Name Whitney acquisition		54,140
Goodwill and non-amortizing intangibles at June 30, 2011	$	629,688

The operating results of the Company for the period ended June 30, 2011 include the operating results of the acquired assets and assumed liabilities for the 26 days subsequent to the acquisition date of June 4, 2011. The operations of Whitney provided $37.7 million in revenue, net of interest expense, and $4.4 million in net income for the period from the acquisition and is included in the consolidated financial statements. Whitney’s results of operations prior to the acquisition are not included in Hancock’s consolidated statement of income.

Merger related charges of $22.2 million are recorded in the consolidated statement of income and include incremental costs to integrate the operations of the Company and Whitney. Such expenses were for professional services and other temporary help fees associated with the conversion of systems and integration of operations; costs related to branch and office consolidations, costs related to termination of existing contractual arrangements for various services, marketing and promotion expenses, retention and severance and incentive compensation costs, travel costs, and printing, supplies and other costs.

The following unaudited pro forma information presents the results of operations for three months ended and six months ended June 30, 2011 and 2010, as if the acquisition had occurred January 1 of each year. These adjustments include the impact of certain purchase accounting adjustments such as intangible assets amortization, fixed assets depreciation and reversal of Whitney’s provision. In addition, the $22.2 million in merger expenses discussed above are included in each year. Additionally, the Company expects to achieve further operating cost savings and other business synergies as a result of the acquisition which are not reflected in the pro forma amounts. These unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the combined company that would have been achieved had the acquisition occurred at the beginning of each period presented, nor are they intended to represent or be indicative of future results of operations.

	Three Months Ended				Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
(In millions)
Total revenues, net of interest expense	$	197	$	243	$	463	$	498
Net Income		20		19	$	36	$	70

In many cases, determining the fair value of the acquired assets and assumed liabilities required the Company to estimate cash flows expected to result from those assets and liabilities and to discount those cash flows at appropriate rates of interest. The most significant of those determinations related to the fair valuation of acquired loans. For such loans, the excess of cash flows expected at acquisition over the estimated fair value is recognized as interest income over the remaining lives of the loans. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition reflects the impact of estimated credit losses and other factors, such as prepayments. In accordance with GAAP, there was no carry-over of Whitney’s previously established allowance for credit losses.

The acquired loans were divided into loans with evidence of credit quality deterioration which are accounted for under ASC 310-30 (acquired impaired) and loans that do not meet this criteria, which are accounted for under ASC 310-20 (acquired performing). In addition, the loans are further categorized into different loan pools per loan types. The Company determined expected cash flows on the acquired loans based on the best available information at the date of acquisition. If new information is obtained about facts and circumstances about expected cash flows that existed as of the acquisition date, management will adjust accordingly in accordance with accounting for business combinations.

7

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

2. Acquisition of Whitney Holding Corporation (continued)

Loans at the acquisition date of June 4, 2011 are presented in the following table.

	Acquired Impaired		Acquired Performing		Total Acquired Loans
	(In thousands)
Commercial non-real estate	$	131,729	$	2,328,082	$	2,459,811
Commercial real estate owner-occupied		90,231		951,661		1,041,892
Construction and land development		161,478		566,597		728,075
Commercial real estate non-owner occupied		85,015		842,622		927,637
Total commercial/real estate		468,453		4,688,962		5,157,415
Residential mortgage		68,380		788,999		857,379
Consumer		—		441,228		441,228
Total	$	536,833	$	5,919,189	$	6,456,022

The following table presents (in thousands) the acquired impaired loans receivable at the acquisition date.

Contractually required principal and interest payments	$	879,385
Nonaccretable difference		247,819
Cash flows expected to be collected		631,566
Accretable difference		94,733
Fair value of loans acquired with a deterioration of credit quality	$	536,833

The fair value of the acquired performing receivables at June 4, 2011, was $5.9 billion. The gross contractually required principal and interest payments receivable for acquired performing loans was $6.8 billion. The best estimate of contractual cash flows not expected to be collected is $0.4 million.

The fair value of net assets acquired includes certain contingent liabilities that were recorded as of the acquisition date. Whitney has been named as a defendant in various pending legal actions and proceedings arising in connection with its activities as a financial services institution. Some of these legal actions and proceedings include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Whitney is also involved in investigations and/or proceedings by governmental and self-regulatory agencies. Due to the number of variables and assumptions involved in assessing the possible outcome of these legal actions, sufficient information did not exist to reasonably estimate the fair value of these contingent liabilities. As such, these contingences have been measured in accordance with accounting guidance on contingencies which states that a loss is recognized when it is probable of occurring and the loss amount can be reasonably estimated.

In connection with the Whitney acquisition, on June 4, 2011, the Company recorded a liability for contingent payments to certain employees for arrangements that were in existence prior to acquisition. The fair value of this liability was $59.6 million. The Company also recorded a liability with a fair value of $14.0 million for a contractual contingency assumed in connection with Whitney’s obligations under contracts for a systems conversion and replacement initiative. This initiative was suspended in anticipation of the acquisition. Substantially all of these liabilities are expected to be paid within one year from acquisition date.

8

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

3. Long-Term Debt

Long-term debt consisted of the following:

	June 30, 2011		December 31, 2011
Subordinated notes payable	$	150,000	$	—
Term note payable		140,000
Subordinated debentures		16,812		—
Other long-term debt		53,290		376
Total long-term debt	$	360,102	$	376

As part of the merger, the Company assumed Whitney National Bank’s $150 million par value subordinated notes which carry an interest rate of 5.875% and mature April 1, 2017. These notes qualify as capital for the calculation of the regulatory ratio of total capital to risk-weighted assets, subject to certain limitations as they approach maturity.

During the second quarter, the Company entered into a $140 million par value term loan facility and borrowed the full amount which matures on June 3, 2013. The variable interest rate is LIBOR plus 2.00% per annum. The note is pre-payable at any time and the Company is subject to covenants customary in financings of this nature and are not expected to impact the operations of the Company. The Company must maintain the following financial covenants: maximum ratio of consolidated non-performing assets to consolidated total loans and OREO excluding covered loans of 4.0% through June 2012 and 3.5% thereafter; consolidated net worth of $2.1 billion which will increase each subsequent quarter by 50% of consolidated net income but will not decrease for any losses and will increase by 100% for issuance of common stock. The Company must maintain Tier 1 leverage ratio of greater than or equal to 7%; Tier 1 risk based capital ratio of greater than or equal to 9.5%; and total risk based capital ratio of greater than or equal to 11.5%. The Company was in compliance with the covenants as of June 30, 2011.

In the merger with Whitney, the Company also assumed obligations under subordinated debentures payable to unconsolidated trusts that issued trust preferred securities. The weighted-average yield was approximately 4% at June 30, 2011, and December 31, 2010. The debentures have maturities from 2031 through 2034, but they are currently callable with prior regulatory approval. Subject to certain adjustments, these debentures currently qualify as capital for the calculation of regulatory capital ratios. The Company has received regulatory approval to redeem these securities and expects to redeem them at the next redemption period.

Substantially all of the other long-term debt consists of borrowings associated with tax credit fund activities. These borrowings mature at various dates beginning in 2015 through 2017.

4. Derivatives

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to certain variable rate borrowings and fixed rate assets. The Company also has interest rate derivatives that result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company manages in order to minimize its net risk exposure resulting from such transactions.

9

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

4. Derivatives (continued)

Fair Values of Derivative Instruments on the Balance Sheet

The table below presents the fair value (in thousands) of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of June 30, 2011 and December 31, 2010.

	Tabular Disclosure of Fair Values of Derivative Instruments
		Asset Derivatives								Liability Derivatives
	As of June 30, 2011			As of December 31, 2010				As of June 30, 2011				As of December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Derivatives designated as hedging instruments
Interest rate products	Other assets	$	158		Other assets	$	—		Other liabilities	$	—		Other liabilities	$	—
Total derivatives designated as hedging instruments		$	158			$	—			$	—			$	—
Derivatives not designated as hedging instruments
Interest rate products	Other assets	$	8,481		Other assets	$	2,952		Other liabilities	$	8,716		Other liabilities	$	2,952
Total derivatives not designated as hedging instruments		$	8,481			$	2,952			$	8,716			$	2,952

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. For hedges of the Company’s variable-rate borrowings, interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed payments. As of June 30, 2011, the Company had one interest rate swap with an aggregate notional amount of $140.0 million that was designated as a cash flow hedge associated with the Company’s variable-rate borrowing.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2011, such derivatives were used to hedge the forecasted variable cash outflows associated with existing term loan agreements beginning June 2012. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. No hedge ineffectiveness was recognized during the three and six months ended June 30, 2011. The Company did not have any cash flow hedges outstanding at June 30, 2010. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate liabilities. During the next twelve months, the Company estimates that $22,296 will be reclassified as a decrease to interest expense.

10

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

4. Derivatives (continued)

Non-designated Hedges

Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate derivatives with commercial banking customers to facilitate their respective risk management strategies. Those interest rate derivatives are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. As of June 30, 2011, the Company had interest rate derivatives with an aggregate notional amount of $448.3 million related to this program.

Effect of Derivative Instruments on the Income Statement

The tables below present the effect of the Company’s derivative financial instruments (in thousands) on the Income Statement for the three and six months ended June 30, 2011.

Derivatives in FASB ASC 815 Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)								Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)								Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
	Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010			2011		2010		2011		2010			2011		2010		2011		2010
Interest Rate Products	$	158	$	—	$	158	$	—	Interest income Other non-interest income	$	—	$	—	$	—	$	—	Other non-interest income	$	—	$	—	$	—	$	—
Total	$	158	$	—	$	158	$	—		$	—	$	—	$	—	$	—		$	—	$	—	$	—	$	—

		Amount of Gain or (Loss) Recognized in Income on Derivative
		Three Months Ended June 30,				Six Months Ended June 30,
Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivative	2011		2010		2011		2010
Interest Rate Products	Other non-interest income	$	36	$	—	$	36	$	—
Total		$	36	$	—	$	36	$	—

Credit-risk-related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

The Company has agreements with its derivative counterparties that contain provisions that require the Company’s debt to maintain an investment grade credit rating from each of the major credit rating agencies. If the Company’s credit rating is reduced below investment grade then the Company could be forced to terminate its derivatives at the then current fair value.

11

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

4. Derivatives (continued)

The Company has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well / adequate capitalized institution as well as maintain multiple capital ratios, then the Company could be forced to terminate its derivatives at the then current fair value.

As of June 30, 2011 the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $6.0 million. The Company has been required to post no collateral at this time against its obligations under these agreements. If the Company had breached any of these provisions at June 30, 2011, it could have been required to settle its obligations under the agreements at the termination value.

5. 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, and collateralized mortgage obligations that are agency securities, 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 non-rated obligations of Mississippi, Louisiana, Texas, Florida or Alabama counties, parishes and municipalities. There were no transfers between levels.

The fair value of interest rate swaps is obtained from a third-party pricing service that uses an industry-standard discounted cash flow model that relies on inputs, such as interest rate futures, observable in the marketplace. To comply with the accounting guidance, credit valuation adjustments are incorporated in the fair values to appropriately reflect nonperformance risk for both the Company and the counterparties. Although the Company has determined that the majority of the inputs used to value the derivative instruments fall within level 2 of the fair value hierarchy, the credit value adjustments utilize level 3 inputs, such as estimates of current credit spreads. The Company has determined that the impact of the credit valuation adjustments is not significant to the overall valuation of these derivatives. As a result, the Company has classified its derivative valuations in their entirety in level 2 of the fair value hierarchy.

12

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

5. Fair Value (continued)

The following tables present for each of the fair value hierarchy levels the Company’s financial assets that are measured at fair value (in thousands) on a recurring basis at June 30, 2011 and December 31, 2010.

	As of June 30, 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	$	436,331	$	—	$	436,331
Debt securities issued by states of the United States and political subdivisions of the states		—		318,836		318,836
Corporate debt securities		18,884		—		18,884
Residential mortgage-backed securities		—		2,285,127		2,285,127
Collateralized mortgage obligations		—		1,509,725		1,509,725
Equity securities		5,070		—		5,070
Derivative financial instruments - assets		—		8,639		8,639
Total assets	$	460,285	$	4,122,327	$	4,582,612
Liabilities
Derivative financial instruments - liabilities	$	—	$	8,716	$	8,716
Total Liabilities	$	—	$	8,716	$	8,716
	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				180,443		180,443
States and political subdivisions of the states				—		—
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
Derivative financial instruments assets		—		2,952		2,952
Total assets	$	411,679	$	1,355,132	$	1,766,811
Liabilities
Derivative financial instruments liabilities	$	—	$	2,952	$	2,952
Total Liabilities	$	—	$	2,952	$	2,952

13

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

5. Fair Value (continued)

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 June 30, 2011 and December 31, 2010.

	As of June 30, 2011
	Level 1		Level 2		Net Balance
Assets
Impaired loans	$	—	$	84,485	$	84,485
Other real estate owned		—		121,570		121,570
Total assets		—	$	206,055	$	206,055
	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

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

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.

14

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

5. Fair Value (continued)

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, Federal Funds Purchased, and Short-term Borrowings - 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):

	June 30, 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	$	1,358,394	$	1,358,394	$	778,851	$	778,851
Securities		4,573,973		4,573,973		1,488,885		1,488,885
Loans, net		11,136,646	$	11,474,407		4,875,167		4,753,537
Loans held for sale		67,081		67,081		21,866		21,866
Accrued interest receivable		56,990		56,990		30,157		30,157
Financial liabilities:
Deposits	$	15,587,909	$	15,617,448	$	6,775,719	$	6,787,931
Federal funds purchased		25,085		25,085		—		—
Securities sold under agreements to repurchase		888,831		888,831		364,676		364,676
Other short-term borrowings		6,800		6,800		—		—
FHLB Borrowings		10,057		10,057		10,172		10,172
Long-term notes		360,102		360,102		376		376
Accrued interest payable		10,180		10,180		4,007		4,007

6. Securities

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

	June 30, 2011								December 31, 2010
			Gross		Gross						Gross		Gross
	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
U.S. Treasury	$	10,804	$	47	$	—	$	10,851	$	10,797	$	52	$	5		10,844
U.S. government agencies		424,141		2,141		802		425,480		106,054		971		434		106,591
Municipal obligations		311,316		8,055		535		318,836		181,747		4,107		5,411		180,443
Mortgage-backed securities		2,248,990		42,452		6,315		2,285,127		761,704		38,032		50		799,686
CMOs		1,503,096		8,849		2,220		1,509,725		367,662		6,880		2,491		372,051
Other debt securities		17,950		957		23		18,884		14,329		999		43		15,285
Other equity securities		4,496		672		98		5,070		3,428		660		103		3,985
	$	4,520,793	$	63,173	$	9,993	$	4,573,973	$	1,445,721	$	51,701	$	8,537	$	1,488,885

15

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

6. Securities (continued)

The amortized cost and fair value of securities classified as available for sale at June 30, 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		Fair
	Cost		Value
Securities Available for Sale
Due in one year or less	$	460,313	$	461,814
Due after one year through five years		914,213		917,332
Due after five years through ten years		462,327		474,997
Due after ten years		2,679,444		2,714,760
Equity securities		4,496		5,070
Total available for sale securities	$	4,520,793	$	4,573,973

The Company held no securities classified as held to maturity or trading at June 30, 2011 or December 31, 2010.

The details concerning securities classified as available for sale with unrealized losses as of June 30, 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		117,917		802		—		—		117,917		802
Municipal obligations		75,975		210		12,515		325		88,490		535
Mortgage-backed securities		1,508,442		6,253		1,253		61		1,509,695		6,314
CMOs		518,953		2,220		—		—		518,953		2,220
Other debt securities		56		1		316		23		372		24
Equity securities		2,425		78		14		20		2,439		98
	$	2,223,768	$	9,564	$	14,098	$	429	$	2,237,866	$	9,993

16

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

6. 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
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury	$	9,980	$	5	$	—	$	—	$	9,980	$	5
U.S. government agencies		74,566		434		—		—		74,566		434
Municipal obligations		57,713		3,092		19,870		2,319		77,583		5,411
Mortgage-backed securities		122		1		1,340		49		1,462		50
CMOs		122,312		2,491		—		—		122,312		2,491
Other debt securities		379		6		459		37		838		43
Equity securities		2,552		87		11		16		2,563		103
	$	267,624	$	6,116	$	21,680	$	2,421	$	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 June 30, 2011, the securities portfolio totaled $4.6 billion and as of December 31, 2010, the securities portfolio totaled $1.4 billion. Of the total portfolio, $2.2 billion of securities were in an unrealized loss position of $10 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 not been determined to be other than temporary.

Securities with a carrying value of approximately $2.7 billion at June 30, 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 no short-term investments at June 30, 2011 and $275.0 million at December 31, 2010 in U.S. government agency discount notes as securities available for sale at amortized cost. 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 December 31, 2010.

7. Loans and Allowance for Loan Losses

Loans, net of unearned income, totaled $11.2 billion at June 30, 2011 compared to $5.0 billion at December 31, 2010. The increase reflects the addition of loans from the Whitney acquisition. Covered loans totaled $747.8 million at June 30, 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.

17

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

7. Loans and Allowance for Loan Losses (continued)

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

	June 30,		December 31,
	2011		2010
	( In thousands)
Commercial loans:
Commercial - originated	$	605,885	$	524,653
Commercial - acquired		2,424,887		—
Commercial - covered		45,959		34,650
Total commercial		3,076,731		559,303
Construction - originated		476,711		495,590
Construction - acquired		741,151		—
Construction - covered		153,489		157,267
Total construction		1,371,351		652,857
Real estate - originated		1,232,144		1,231,414
Real estate - acquired		1,861,373		—
Real estate - covered		147,520		181,873
Total real estate		3,241,037		1,413,287
Municipal loans - originated		485,233		471,057
Municipal loans - acquired		12,712		—
Municipal loans - covered		473		540
Total municipal loans		498,418		471,597
Lease financing - originated		45,982		50,721
Total commercial loans - originated		2,845,955		2,773,435
Total commercial loans - acquired		5,040,123		—
Total commercial loans - covered		347,441		374,330
Total commercial loans		8,233,519		3,147,765
Residential mortgage loans - originated		365,661		366,183
Residential mortgage loans - acquired		830,667		—
Residential mortgage loans - covered		247,489		293,506
Total residential mortgage loans		1,443,817		659,689
Indirect consumer loans - originated		278,261		309,454
Direct consumer loans - originated		597,593		597,947
Direct consumer loans - acquired		447,096		—
Direct consumer loans - covered		152,879		141,315
Total direct consumer loans		1,197,568		739,262
Finance Company loans - originated		95,888		100,994
Total originated loans		4,183,358		4,148,013
Total acquired loans		6,317,886		—
Total covered loans		747,809		809,151
Total loans	$	11,249,053	$	4,957,164

Originated - Loans which have been originated in the normal course of business.

Acquired - Loans which have been acquired and no allowance brought forward in accordance with acquisition accounting.

Covered - Loans which are covered by loss sharing agreements with the FDIC providing considerable protection against credit risk.

18

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

7. Loans and Allowance for Loan Losses (continued)

Changes in the carrying amount of acquired loans and accretable yield for loans receivable at June 30, 2011 are presented in the following table (in thousands):

	June 30, 2011												June 30, 2010
	Covered						Non-covered						Covered						Non-covered
	Carrying			Net			Carrying			Net			Carrying			Net			Carrying		Net
	Amount			Accretable			Amount			Accretable			Amount			Accretable			Amount		Accretable
	of Loans *			Discount			of Loans *			Discount			of Loans *			Discount			of Loans *		Discount
Six Months Ended
(In thousands)
Balance at beginning of period	$	809,459		$	107,638		$	—		$	—		$	950,430		$	315,782		$	—	$	—
Additions								536,833			94,733			—			—			—		—
Payments received, net		(87,736	)		—			(23,778	)					(112,894	)		—			—		—
Accretion		26,834			(26,834	)		3,140			(3,140	)		30,107			(30,107	)		—		—
Balance at end of period	$	748,557		$	80,804		$	516,195		$	91,593		$	867,643		$	285,675		$	—	$	—

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

The carrying value of acquired impaired loans with deterioration of credit quality accounted for using the cost recovery method was $39.5 million at June 30, 2011, and $45.3 million at December 31, 2010. Each of these loans is on nonaccrual status. Acquired impaired 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 a $28.9 million allowance for additional expected 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 for loan loss of $1.4 million during the six months ended June 30, 2011.

The unpaid principal balance for acquired impaired loans was $1,922 million and $1,193 million at June 30, 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. 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. Consumer loans are generally charged down to the fair value of the collateral less cost to sell when 120 days past due. Loans deemed uncollectible are charged off against the allowance account with subsequent recoveries added back to the allowance when collected.

19

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

7. 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)	June 30, 2011
Allowance for loan losses:
Beginning balance	$	56,859		$	4,626		$	2,918		$	9,322		$	8,272		$	81,997
Charge-offs		(13,664	)		(2,332	)		(921	)		(3,069	)		(2,086	)		(22,072	)
Recoveries		4,274			960			519			686			575			7,014
Net Provision for loan losses (a)		11,884			6,449			92			(1,758	)		1,299			17,966
Increase in indemnification asset (a)		19,378			3,864			—			4,260			—			27,502
Ending balance	$	78,731		$	13,567		$	2,608		$	9,441		$	8,060		$	112,407
Ending balance:
Individually evaluated for impairment	$	9,468		$	1,420		$	—		$	—		$	—		$	10,888
Ending balance:
Collectively evaluated for impairment	$	69,263		$	12,147		$	2,608		$	9,441		$	8,060		$	101,519
Ending balance:
Covered loans with deteriorated credit quality	$	20,398		$	4,485		$	—		$	4,364		$	—		$	29,247
Loans:
Ending balance:	$	8,233,519		$	1,443,817		$	278,261		$	1,197,568		$	95,888		$	11,249,053
Ending balance:
Individually evaluated for impairment	$	48,182		$	7,677		$	—		$	—		$	—		$	55,859
Ending balance:
Collectively evaluated for impairment	$	7,837,896		$	1,188,651		$	278,261		$	1,044,689		$	95,888		$	10,445,385
Ending balance:
Covered loans	$	347,441		$	247,489		$	—		$	152,879		$	—		$	747,809
Ending balance:
Acquired loans (b)	$	5,040,123		$	830,667		$	—		$	447,096		$	—		$	6,317,886

(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 $28,948, and the impairment ($1,446) on those covered loans.

(b) Acquired loans are recorded at fair value with no allowance brought forward in accordance with acquisition accounting.

				Residential			Indirect			Direct			Finance
	Commercial			mortgages			consumer			consumer			Company			Total
(In thousands)	June 30, 2010
Allowance for loan losses:
Beginning balance	$	42,484		$	4,782		$	3,826		$	7,145		$	7,813		$	66,050
Charge-offs		(21,886	)		(1,322	)		(1,594	)		(2,538	)		(2,818	)		(30,158	)
Recoveries		1,111			145			537			689			504			2,986
Net Provision for loan losses		32,322			1,453			483			1,334			2,751			38,343
Ending balance	$	54,031		$	5,058		$	3,252		$	6,630		$	8,250		$	77,221
Ending balance:
Individually evaluated for impairment	$	11,145		$	828		$	—		$	—		$	—		$	11,973
Ending balance:
Collectively evaluated for impairment	$	42,886		$	4,230		$	3,252		$	6,630		$	8,250		$	65,248
Ending balance:
Covered loans with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—
Loans:
Ending balance:	$	3,042,654		$	751,259		$	329,658		$	743,118		$	105,513		$	4,972,202
Ending balance:
Individually evaluated for impairment	$	69,771		$	4,722		$	—		$	—		$	—		$	74,493
Ending balance:
Collectively evaluated for impairment	$	2,604,343		$	442,643		$	329,658		$	558,785		$	105,513		$	4,040,942
Ending balance:
Covered loans	$	368,540		$	303,894		$	—		$	184,333		$	—		$	856,767

20

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

7. 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. Covered and acquired loans accounted for in accordance with ASC 310-30 are considered to be performing due to the application of the accretion method. These loans are excluded from the table due to their performing status. Certain covered loans accounted for using the cost recovery method or in accordance with ASC 310-20 are disclosed as non-accrual loans below. A reserve is recorded when estimated losses are in excess of the net purchase accounting marks. Loans under ASC 310-20 have accretable interest income over the life based on contractual payments receivable. The following table shows the composition of non-accrual loans by portfolio segment:

	June 30,		December 31,
	2011		2010
	(In thousands)
Commercial - originated	$	37,597	$	41,667
Commercial - restructured		8,410		8,712
Commercial - covered		33,869		41,917
Residential mortgages - originated		27,412		18,699
Residential mortgages - covered		2,710		3,199
Indirect consumer - originated		—		—
Direct consumer - originated		1,937		4,862
Direct consumer - acquired		1,504		—
Direct consumer - covered		2,935		170
Finance Company - originated		1,271		1,759
Total	$	117,645	$	120,985

Included in nonaccrual loans is $8.4 million in restructured commercial loans. Total troubled debt restructurings as of June 30, 2011 were $18.6 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 June 30, 2011 and December 31, 2010 were $95.4 million and $107.7 million, respectively. The amount of interest that would have been recognized on nonaccrual loans for the three and six months ended June 30, 2011 was approximately $1.5 million and $2.9 million, respectively. Interest recovered on nonaccrual loans that were recorded in net income for the three and six months ended June 30, 2011 was $0.2 million and $0.7 million, respectively.

21

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

7. Loans and Allowance for Loan Losses (continued)

The following table presents impaired loans disaggregated by class at June 30, 2011 and December 31, 2010:

June 30, 2011	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
			(In thousands)
With no related allowance recorded:
Commercial - originated	$	12,959	$	12,959	$	—	$	18,048	$	70
Residential mortgages - originated		962		962		—		1,075		—
Residential mortgages - covered		2,710		2,710		—		2,974		—
Direct consumer - covered		2,935		2,935		—		2,189		—
		19,566		19,566		—		24,286		70
With an allowance recorded:
Commercial - originated		35,223		35,223		9,468		34,656		400
Commercial - covered		33,869		33,869		10,900		37,792		—
Residential mortgages - originated		6,715		6,715		1,420		5,443		59
		75,807		75,807		21,788		77,891		459
Total:
Commercial - originated		48,182		48,182		9,468		52,704		470
Commercial - covered		33,869		33,869		10,900		37,792		—
Residential mortgages - originated		7,677		7,677		1,420		6,518		59
Residential mortgages - covered		2,710		2,710		—		2,974		—
Direct consumer - covered		2,935		2,935		—		2,189		—
Total	$	95,373	$	95,373	$	21,788	$	102,177	$	529
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

22

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

7. Loans and Allowance for Loan Losses (continued)

Accruing loans 90 days past due as a percent of loans was 0.04% and 0.03% at June 30, 2011 and December 31, 2010, respectively. Loans for the acquired portfolio are now accounted for under acquisition accounting and are considered performing. Covered and required loans accounted for in accordance with ASC 310-30 are considered to be performing due to the application of the accretion method. These loans are excluded from the table due to their performing status. Certain covered loans accounted for using the cost recovery method or acquired loans accounted for in accordance with ASC 310-20 are disclosed as non-current loans below. The following table presents the age analysis of past due loans at June 30, 2011 and December 31, 2010:

June 30, 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 - originated	$	12,600	$	39,506	$	52,106	$	2,775,243	$	2,827,349	$	1,909
Commercial - restructured		—		8,410		8,410		10,196		18,606		—
Commercial - acquired		—		—		—		5,040,123		5,040,123		—
Commercial - covered		—		33,869		33,869		313,572		347,441		—
Residential mortgages - originated		21,481		27,942		49,423		316,238		365,661		530
Residential mortgages - acquired		—		—		—		830,667		830,667		—
Residential mortgages - covered		—		2,710		2,710		244,779		247,489		—
Indirect consumer - originated		—		—		—		278,261		278,261		—
Direct consumer - originated		2,311		2,002		4,313		593,280		597,593		65
Direct consumer - acquired		1,776		3,057		4,833		442,263		447,096		1,553
Direct consumer - covered		—		2,935		2,935		149,944		152,879		—
Finance Company		2,740		1,271		4,011		91,877		95,888		—
Total	$	40,908	$	121,702	$	162,610	$	11,086,443	$	11,249,053	$	4,057
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

23

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

7. Loans and Allowance for Loan Losses (continued)

The following table presents the credit quality indicators of the Company’s various classes of loans at June 30, 2011 and December 31, 2010:

Commercial credit exposure

Credit risk profile by creditworthiness category

	June 30, 2011								December 31, 2010
	Commercial - originated		Commercial - acquired		Commercial - covered		Total commercial		Commercial - originated		Commercial - covered		Total commercial
	(In thousands)								(In thousands)
Grade:
Pass	$	2,419,097	$	4,205,394	$	37,910	$	6,662,401	$	2,332,952	$	45,609	$	2,378,561
Pass-Watch		102,524		—		24,998		127,522		138,839		35,289		174,128
Special Mention		15,887		145,666		14,265		175,818		26,216		21,031		47,247
Substandard		245,407		685,878		134,788		1,066,073		265,180		254,033		519,213
Doubtful		63,040		3,185		135,480		201,705		10,247		18,369		28,616
Loss		—		—		—		—		—		—		—
Total	$	2,845,955	$	5,040,123	$	347,441	$	8,233,519	$	2,773,434	$	374,331	$	3,147,765

Residential mortgage credit exposure

Credit risk profile by internally assigned grade

	June 30, 2011								December 31, 2010
	Residential mortgages - originated		Residential mortgages - acquired		Residential mortgages - covered		Total residential mortgages		Residential mortgages - originated		Residential mortgages - covered		Total residential mortgages
	(In thousands)								(In thousands)
Grade:
Pass	$	277,441	$	745,537	$	112,434	$	1,135,412	$	284,712	$	159,885	$	444,597
Pass-Watch		6,010		—		21,699		27,709		7,857		29,673		37,530
Special Mention		546		9,856		8,156		18,558		—		15,220		15,220
Substandard		81,664		73,419		96,375		251,458		73,615		87,636		161,251
Doubtful		—		1,824		8,825		10,649		—		1,091		1,091
Loss		—		31		—		31		—		—		—
Total	$	365,661	$	830,667	$	247,489	$	1,443,817	$	366,184	$	293,505	$	659,689

Consumer credit exposure

Credit risk profile based on payment activity

	June 30, 2011
	Direct consumer - originated		Direct consumer - acquired		Direct consumer - covered		Total direct consumer		Indirect consumer		Finance company
	(In thousands)
Performing	$	595,656	$	445,592	$	149,944	$	1,191,192	$	278,261	$	94,617
Nonperforming		1,937		1,504		2,935		6,376		—		1,271
Total	$	597,593	$	447,096	$	152,879	$	1,197,568	$	278,261	$	95,888

	December 31, 2010
	Direct consumer - originated		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

24

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

7. Loans and Allowance for Loan Losses (continued)

All loans are reviewed periodically over the course of the year. Lending officers are primarily responsible for ongoing monitoring and the assignment of risk ratings to individual loans based on established guidelines. An independent credit review function assesses the accuracy of officer ratings and the timeliness of rating changes and performs reviews of the underwriting processes.

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.

• 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.

The Company held $67.1 million and $21.9 million in loans held for sale at June 30, 2011 and December 31, 2010, respectively, carried at lower of cost or fair value. Of the $67.1 million, $35.9 million are problem commercial loans held for sale. The remainder of $31.2 million is mortgage loans for sale. Gain on the sale of loans totaled $0.05 million and $1.0 million for the six months ended June 30, 2011 and 2010, respectively. Mortgage loans held for sale 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.

25

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

8. 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 June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Numerator:
Net income to common shareholders	$	12,088	$	6,500	$	27,416	$	20,334
Net income allocated to participating securities - basic and diluted		77		58		151		115
Net income allocated to common shareholders - basic and diluted	$	12,011	$	6,442	$	27,265	$	20,219
Denominator:
Weighted-average common shares - basic		54,890		36,876		46,160		36,855
Dilutive potential common shares		145		202		150		220
Weighted average common shares - diluted		55,035		37,078		46,310		37,075
Earnings per common share:
Basic	$	0.22	$	0.17	$	0.59	$	0.55
Diluted	$	0.22	$	0.17	$	0.59	$	0.55

The converted Whitney options of 775,261 were anti-dilutive share-based incentives outstanding for the three and six months ended June 30, 2011.

There were no other anti-dilutive share-based incentives outstanding for the three and six months ended June 30, 2011 and June 30, 2010.

9. 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 six months of 2011.

Whitney’s outstanding stock options were converted and remain outstanding at the date of acquisition. These options will expire at the earlier of (1) their expiration date (which is generally ten years after the grant date), except for grants made in 2005, which will expire six months following the Merger or (2) a date following termination of employment, as set forth in the merger document. These options have no intrinsic value.

26

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

9. Share-Based Payment Arrangements (continued)

A summary of option activity under the plans for the three months ended June 30, 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
Whitney Bank options at acquisition date		775,261		$	62.64		1.8
Granted		—		$	—
Exercised		(5,194	)	$	22.07			$	—
Forfeited or expired		(66,400	)	$	43.78
Outstanding at June 30, 2011		1,833,187		$	46.45		3.5	$	1,197
Exercisable at June 30, 2011		1,415,195		$	49.48		2.9	$	1,197
Share options expected to vest		417,992		$	36.19		8.5	$	—

The total intrinsic value of options exercised during the three months ended June 30, 2011 and 2010 was $0.1 million and $0.6 million, respectively.

A summary of the status of the Company’s nonvested shares as of June 30, 2011, and changes during the six months ended June 30, 2011, is presented below:

	Number of Shares			Weighted- Average Grant-Date Fair Value ($)
Nonvested at January 1, 2011		855,873		$	23.93
Granted		519,162		$	32.17
Vested		(84,654	)	$	26.00
Forfeited		(11,792	)	$	28.18
Nonvested at June 30 , 2011		1,278,589		$	27.10

As of June 30, 2011, there was $28.8 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 3.4 years. The total fair value of shares which vested during the six months ended June 30, 2011 and 2010 was $2.2 million and $1.6 million, respectively.

27

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

10. Retirement Plans

Net periodic benefits cost includes the following components for the three and six months ended June 30, 2011 and 2010:

	Pension Benefits						Other Post-retirement Benefits
	Three Months Ended June 30,
	2011			2010			2011			2010
	(In thousands)
Service cost	$	1,172		$	875		$	35		$	31
Interest cost		1,363			1,308			152			139
Expected return on plan assets		(1,373	)		(1,161	)		—			—
Amortization of prior service cost		—			—			(13	)		(13	)
Amortization of net loss		586			570			134			76
Amortization of transition obligation		—			—			2			1
Net periodic benefit cost	$	1,748		$	1,592		$	310		$	234

	Pension Benefits						Other Post-retirement Benefits
	Six Months Ended June 30,
	2011			2010			2011			2010
	(In thousands)
Service cost	$	2,344		$	1,750		$	69		$	62
Interest cost		2,726			2,617			305			278
Expected return on plan assets		(2,745	)		(2,323	)		—			—
Amortization of prior service cost		—			—			(27	)		(26	)
Amortization of net loss		1,172			1,140			269			151
Amortization of transition obligation		—			—			3			2
Net periodic benefit cost	$	3,497		$	3,184		$	619		$	467

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 six months of 2011, the Company contributed approximately $5.7 million to its pension plan and approximately $0.7 million for post-retirement benefits.

28

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

10. Retirement Plans (continued)

The Company is in the process of transitioning the legacy Whitney employees to the Company’s benefit plans. The Whitney pension plan has been closed to new participants since 2008 and remains closed. The other Whitney plans continue to operate as before and will admit new participants if those participants meet the eligibility conditions and perform services at a legacy Whitney location. The merger document requires the defined benefit plan to remain in place for a period of 12 to 18 months post-merger. The Company continues to evaluate these plans for future changes and to make a determination regarding the final benefit structure.

Certain legacy Whitney employees are covered by a noncontributory qualified defined benefit pension plan. The benefits were based on an employee’s total years of service and his or her highest consecutive five-year level of compensation during the final ten years of employment. Contributions were made in amounts sufficient to meet funding requirements set forth in federal employee benefit and tax laws plus such additional amounts as the Company determined to be appropriate. Whitney also had an unfunded nonqualifed defined benefit pension plan that provided retirement benefits to designated executive officers. These benefits were calculated using the qualified plan’s formula, but without applying the restrictions imposed on qualified plans by certain provisions of the Internal Revenue Code. Benefits that become payable under the nonqualifed plan supplement amounts paid from the qualified plan.

Legacy Whitney sponsored an employee savings plan under Section 401(k) of the Internal Revenue Code that covered substantially all full-time employees. Tax law imposed limits on total annual participant savings. Participants were fully vested in their savings and in the matching Company contribution at all times. Concurrent with the defined-benefit plan amendments in late 2008, the Board also approved amendments to the employee savings plan. These amendments authorized the Company to make discretionary profit sharing contributions, beginning in 2009, on behalf of participants in the savings plan who are either (a) ineligible to participate in the qualified defined-benefit plan or (b) subject to the freeze in benefit accruals under the defined-benefit plan. The discretionary profit sharing contribution for a plan year was up to 4% of the participants’ eligible compensation for such year and was allocated only to participants who were employed on the first day of the plan year and at year end. Participants must have completed three years of service to become vested in the Company’s contributions subject to earlier vesting in the case of retirement, death or disability. The Whitney board amended the plan shortly prior to the merger to provide that Whitney employees terminated in connection with the merger would also be vested in any unvested Company contributions.

Net periodic benefits cost for the Whitney sponsored plan includes the following components for the month ended June 30, 2011:

	Pension Benefits			Other Post-retirement Benefits
	Month Ended June 30, 2011
	(In thousands)
Service cost	$	536		$	4
Interest cost		952			63
Expected return on plan assets		(1,375	)		—
Net periodic benefit cost	$	113		$	67

The retirement and restoration plans’ project benefit obligation (PBO) at acquisition were $217.0 million and $14.4 million respectively. These were calculated based on a discount rate of 5.35% at June 4, 2011. Plan assets for these obligations amount to $223.5 million for the retirement plan and $0 for the restoration plan at June 4, 2011.

29

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

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

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(In thousands)				(In thousands)
Trust fees	$	5,301	$	4,408	$	9,292	$	8,254
Debit card merchant discount fees		5,968		3,928		9,478		7,524
Income from insurance operations		4,628		3,641		7,878		7,153
Investment and annuity fees		3,267		2,663		6,400		4,942
ATM fees		3,290		2,321		6,021		4,272
Total other service charges, commissions and fees	$	22,454	$	16,961	$	39,069	$	32,145

Components of other income are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(In thousands)				(In thousands)
Secondary mortgage market operations	$	1,877	$	1,529	$	3,444	$	3,169
Income from bank owned life insurance		1,902		1,402		3,249		2,676
Safety deposit box income		285		180		536		425
Letter of credit fees		758		370		1,104		632
Gain/loss on sale of assets		11		156		606		282
Accretion of indemnification asset		5,450		1,290		8,494		1,290
Other		1,635		1078		2510		2239
Total other income	$	11,918	$	6,005	$	19,943	$	10,713

12. Other Expense

Components of other expense are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(In thousands)				(In thousands)
Data processing expense	$	7,106	$	6,382	$	12,251	$	12,520
Insurance expense		652		498		1,154		989
Ad valorem and franchise taxes		1,557		1,049		2,594		2,030
Deposit insurance and regulatory fees		3,232		2,904		6,344		5,538
Postage and communications		3,642		2,651		6,402		5,223
Stationery and supplies		1,512		773		2,085		1,357
Advertising		2,127		2,193		4,176		3,538
Training expenses		208		163		408		333
Other fees		955		876		1,813		1,877
Travel expense		677		658		1,065		1,072
Other real estate owned expense, net		1,860		2,027		3,301		2,708
Other expense		3,375		2,720		5,855		5,649
Total other expense	$	26,903	$	22,894	$	47,448	$	42,834

30

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

13. Income Taxes

In determining the effective tax rate and tax expense for the three months and six months ended June 30, 2011, the Company referred to the actual results for the current interim periods rather than projected results for the full year. Projections for pretax income for the full year vary widely primarily due to difficulty in estimating the timing and amount of integration costs for our acquisition of Whitney. Changes in these estimates cause significant volatility in a projected tax rate.

Management analyzed the deferred tax assets and liabilities of the Company after the merger with Whitney in order to determine if as valuation allowance was warranted against any deferred tax assets. As a result of the Whitney merger, federal and state net operating loss carryforwards and tax credits were acquired that will be able to be utilized by the Company going forward, subject to certain limitations. Based on the current projections for the Company, and considering the appropriate limitations, the entire federal net operating loss is expected to be fully utilized within the next few years. Based on the Company’s history of sustained profitability, combined with income projections and the full utilization of the material tax attributes obtained in the merger, no additional valuation allowances against deferred tax assets were deemed to be necessary.

Louisiana-sourced income of commercial banks is not subject to state income taxes. Rather, a bank in Louisiana pays a tax based on the value of its capital stock in lieu of income and franchise taxes. The Company’s corporate value tax, related to our Whitney Bank subsidiary headquartered in Louisiana, is included in noninterest expense. This expense will fluctuate in part based on changes in the Whitney Bank’s equity and earnings and in part based on market valuation trends for the banking industry.

There were no material uncertain tax positions as of June 30, 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 June 30, 2011 and December 31, 2010.

The Company and its subsidiaries file a consolidated U.S. federal income tax return and 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.

14. Segment Reporting

The Company’s primary segments are divided into the Hancock, Whitney, and Other. Effective January 1, 2010, the Company’s Florida segment was merged into Hancock, which was previously referred to as Mississippi. On June 4, 2011, we completed the acquisition of Whitney Holding Corporation. Whitney National Bank was merged into Hancock Bank of Louisiana and renamed Whitney Bank. Prior to the merger the segment now called Whitney Bank was Hancock Bank Louisiana, labeled “LA” on the prior period table. As part of the merger, Hancock Bank of Alabama was merged into Whitney Bank. Subsequently, the assets and liabilities of the former Hancock Bank of Alabama were then transferred to Hancock Bank. Prior periods report the segment formerly called Alabama in the Mississippi segment. As a result, Hancock Holding Company is now the parent company of two wholly-owned bank subsidiaries, Hancock Bank, Gulfport, Mississippi (Hancock Bank) and Whitney Bank, New Orleans, Louisiana (Whitney Bank). 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, Whitney Securities LLC, Berwick LLC, Key Investment Securities, Inc., and Southern Coastal Insurance Agency, and subsidiaries, and three real estate corporations owning land and buildings that house bank branches and other facilities.

31

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

14. Segment Reporting (continued)

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

	Three Months Ended June 30, 2011
	Hancock			Whitney			Other			Eliminations			Consolidated
Interest income	$	47,371		$	62,731		$	4,684		$	691		$	115,477
Interest expense		8,422			5,872			1,318			806			16,418
Net interest income		38,949			56,859			3,366			(115	)		99,059
Provision for loan losses		(3,388	)		(5,030	)		(726	)		—			(9,144	)
Noninterest income		26,255			18,192			2,280			(12	)		46,715
Depreciation and amortization		(2,162	)		(1,848	)		(148	)		—			(4,158	)
Other noninterest expense		(44,984	)		(68,155	)		(4,096	)		(27	)		(117,208	)
Securities transactions		—			20			(56	)		—			(36	)
Net income before income taxes		14,670			38			620			(100	)		15,228
Income tax expense (benefit)		3,183			(263	)		220			—			3,140
Net income (loss)	$	11,487		$	301		$	400		$	(100	)	$	12,088
Goodwill	$	23,386		$	601,820		$	4,482		$	—		$	629,688
Total assets	$	5,810,757		$	14,419,232		$	2,770,204		$	(3,242,648	)	$	19,757,545
Total interest income from affiliates	$	866		$	197		$	—		$	(1,063	)	$	—
Total interest income from external customers	$	46,505		$	62,534		$	4,684		$	1,754		$	115,477
	Three Months Ended June 30, 2010
	Hancock			LA			Other			Eliminations			Consolidated
Interest income	$	52,313		$	33,354		$	5,334		$	(1,260	)	$	89,741
Interest expense		16,176			5,743			1,094			(1,145	)		21,868
Net interest income		36,137			27,611			4,240			(115	)		67,873
Provision for loan losses		(14,252	)		(9,481	)		(784	)		—			(24,517	)
Noninterest income		17,647			10,914			6,751			(19	)		35,293
Depreciation and amortization		(2,441	)		(833	)		(206	)		—			(3,480	)
Other noninterest expense		(39,797	)		(20,488	)		(8,392	)		35			(68,642	)
Net income before income taxes		(2,706	)		7,723			1,609			(99	)		6,527
Income tax expense (benefit)		(1,898	)		1,740			185			—			27
Net income (loss)	$	(808	)	$	5,983		$	1,424		$	(99	)	$	6,500
Goodwill	$	23,386		$	33,763		$	4,482		$	—		$	61,631
Total assets	$	5,628,215		$	2,862,112		$	1,143,616		$	(1,133,925	)	$	8,500,018
Total interest income from affiliates	$	1,253		$	1		$	6		$	(1,260	)	$	—
Total interest income from external customers	$	51,060		$	33,353		$	5,328		$	—		$	89,741

32

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

14. Segment Reporting (continued)

	Six Months Ended June 30, 2011
	Hancock			Whitney			Other			Eliminations			Consolidated
Interest income	$	95,001		$	93,858		$	9,633		$	(482	)	$	198,010
Interest expense		20,042			10,069			2,328			(252	)		32,187
Net interest income		74,959			83,789			7,305			(230	)		165,823
Provision for loan losses		(10,964	)		(5,702	)		(1,300	)		—			(17,966	)
Noninterest income		44,081			27,887			8,950			(19	)		80,899
Depreciation and amortization		(4,508	)		(2,490	)		(355	)		—			(7,353	)
Other noninterest expense		(84,786	)		(90,111	)		(12,185	)		50			(187,032	)
Securities transactions gain/(loss)		(51	)		20			(56	)		—			(87	)
Net income before income taxes		18,731			13,393			2,359			(199	)		34,284
Income tax expense (benefit)		2,570			3,452			846			—			6,868
Net income (loss)	$	16,161		$	9,941		$	1,513		$	(199	)	$	27,416
Goodwill	$	23,386		$	601,820		$	4,482		$	—		$	629,688
Total assets	$	5,810,757		$	14,419,232		$	2,770,204		$	(3,242,648	)	$	19,757,545
Total interest income from affiliates	$	2,032		$	204		$	—		$	(2,236	)	$	—
Total interest income from external customers	$	92,969		$	93,654		$	9,633		$	1,754		$	198,010

	Six Months Ended June 30, 2010
	Hancock			LA			Other			Eliminations			Consolidated
Interest income	$	106,672		$	66,702		$	11,300		$	(2,555	)	$	182,119
Interest expense		35,940			11,823			2,230			(2,325	)		47,668
Net interest income		70,732			54,879			9,070			(230	)		134,451
Provision for loan losses		(25,853	)		(9,738	)		(2,752	)		—			(38,343	)
Noninterest income		32,640			21,090			12,991			(47	)		66,674
Depreciation and amortization		(4,960	)		(1,679	)		(414	)		—			(7,053	)
Other noninterest expense		(75,760	)		(40,457	)		(16,752	)		79			(132,890	)
Net income before income taxes		(3,201	)		24,095			2,143			(198	)		22,839
Income tax expense (benefit)		(3,956	)		6,459			2			—			2,505
Net income (loss)	$	755		$	17,636		$	2,141		$	(198	)	$	20,334
Goodwill	$	23,386		$	33,763		$	4,482		$	—		$	61,631
Total assets	$	5,628,215		$	2,862,112		$	1,143,616		$	(1,133,925	)	$	8,500,018
Total interest income from affiliates	$	2,535		$	9		$	11		$	(2,555	)	$	—
Total interest income from external customers	$	104,137		$	66,693		$	11,289		$	—		$	182,119

33

Hancock Holding Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements – (Continued)

(Unaudited)

15. New Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued guidance eliminating the option to present the components of other comprehensive income as part of the statement of changes to stockholder’s equity. The final standard allows an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This amendment does not change the items that must be reported in other comprehensive income or when an item in other comprehensive income must be reclassified to net income. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively. The adoption of this guidance will change presentation only and will not have a material impact on the company’s financial condition or results of operations.

In May 2011, the FASB issued amendments to achieve common fair value measurement and disclosure requirements in U.S. generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) resulting in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term “fair value”. The Boards have concluded the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRS. The guidance is to be applied prospectively and is effective during interim and annual periods beginning 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.

In April 2011, 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 improve 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.

34

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. On June 4, 2011, we completed the acquisition of Whitney Holding Corporation. Whitney National Bank was merged into Hancock Bank of Louisiana and renamed Whitney Bank. As part of the merger, Hancock Bank of Alabama was merged into Whitney Bank. The assets and liabilities of the former Hancock Bank of Alabama were then transferred to Hancock Bank. As a result, Hancock Holding Company is now the parent company of two wholly-owned bank subsidiaries, Hancock Bank, Gulfport, Mississippi (Hancock Bank) and Whitney Bank, New Orleans, Louisiana (Whitney Bank). Hancock Bank and Whitney Bank are referred to collectively as the “Banks.” Hancock Bank subsidiaries include Hancock Investment Services, Hancock Insurance Agency, and Harrison Finance Company. Whitney Bank subsidiaries include Whitney Securities LLC, Berwick LLC, Key Investment Securities, Inc., and Southern Coastal Insurance Agency. We currently operate nearly 300 banking and financial services offices and almost 400 automated teller machines (ATMs) in the states of Mississippi, Louisiana, Florida, Alabama, and Texas.

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 June 30, 2011, we had total assets of $19.8 billion and employed 4,892 persons on a full-time equivalent basis.

RESULTS OF OPERATIONS OVERVIEW

For the quarter ended June 30, 2011, net income was $12.1 million with fully diluted earnings per share of $0.22 compared to net income of $6.5 million with fully diluted earnings per share of $0.17 at June 30, 2010. This quarter’s earnings per share includes the impact our recent common stock offering that occurred in the first quarter and additional shares issued in the acquisition of Whitney Holding Company discussed below. Net income for the second quarter was significantly impacted by $22.2 million in merger-related expenses related to the acquisition of Whitney Holding Company. Operating income for the second quarter of 2011 was $26.6 million or $0.48 per diluted common share compared to $16.4 million or $0.44 and $7.7 million or $0.43 in the first quarter of 2011 and second quarter of 2010, respectively. Operating income is defined as net income excluding tax-adjusted merger costs and securities transactions gains or losses. See selected financial data for a reconciliation of net income to operating income. Return on average assets was 0.42% compared to 0.31% at June 30, 2010.

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. 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 proceeds of the offering were used for general corporate purposes, including the enhancement of our capital position and the repurchase of Whitney Holding Corporation’s TARP preferred stock and warrant upon closing of the acquisition. Our tangible common equity ratio stood at 8.09% at June 30, 2011.

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On June 4, 2011, Hancock completed its acquisition of Whitney Holding Corporation (“Whitney”) headquartered in New Orleans, Louisiana. The impact of the acquisition is reflected in the Company’s financial information from the acquisition date. Whitney common shareholders received 0.418 shares of Hancock common stock in exchange for each share of Whitney stock, resulting in Hancock issuing 40,794,261 common shares at a fair value of $1.3 billion. The Whitney TARP preferred stock plus warrant of $307.7 million was purchased by the Company as part of the merger transaction. In total, the purchase price was approximately $1.6 billion based on the fair value on the acquisition date of Hancock common stock exchanged, the options to purchase Hancock common stock, and cash paid for the TARP preferred stock and warrant. Assets acquired totaled $11.7 billion, including $6.5 billion in loans, $2.6 billion of investment securities, and $780 million of intangibles. Liabilities assumed were $10.1 billion, including $9.2 billion of deposits.

The following chart summarizes the acquired balance sheet at fair value:

Preliminary Statement of Net Assets Acquired

As of June 4, 2011

(dollars in millions)

Cash and short-term investments	$	957
Loans held for sale		57
Securities		2,635
Loans and leases		6,456
Property and equipment		284
Other intangibles		266
Other Assets		580
Total Assets		11,235
Deposits	$	9,182
Borrowings		776
Other liabilities		175
Total Liabilities Acquired		10,133
Net identifiable Asset Acquired	$	1,102
Goodwill		514
Net Assets Acquired	$	1,616

Total assets at June 30, 2011, were $19.8 billion, compared to $8.3 billion at March 31, 2011 and $8.1 billion at December 31, 2010. The increase from the prior periods mainly reflects the $11.7 billion in assets acquired in the Whitney merger.

Hancock continues to remain well capitalized, with total equity of $2.4 billion at June 30, 2011 compared to $1.1 billion at March 31, 2011 and $856.5 million at December 31, 2010. The increase in the second quarter 2011 from the prior period mainly reflects the addition of equity from the Whitney acquisition. The company’s tangible common equity ratio was 8.09% at June 30, 2011 compared to 11.94% at March 31, 2011 and 9.69% at December 31, 2010. The decline from the first quarter reflects the impact of the Whitney acquisition.

Net Interest Income

Net interest income (taxable equivalent or te) for the second quarter increased $31.0 million, or 43.7%, from June 30, 2010, and increased $32.3 million, or 46.4%, from the prior quarter. The net interest margin (te) of 4.11% was 24 basis points wider than the same quarter a year ago and was 14 basis points wider than the prior quarter. Average earning assets grew $2.6 billion compared to prior quarter and $2.9 billion compared with the same quarter a year ago due to the acquisition of Whitney. The increase in the margin of 14 basis points reflected a favorable shift in funding sources and a decline in funding costs, offset by a less favorable shift in the mix of earning assets and a decline in investment portfolio yields. These changes are mainly related to the acquisition of Whitney.

The Company’s loan yield was unchanged from the first quarter of 2011, while the yield on securities decreased 35 basis points, resulting in a decline in the yield on average earning assets of 10 basis points. Total funding costs were down 24 basis points from the first quarter.

36

Provision for Loan Losses

Provisions are made to the allowance to reflect incurred losses associated with our loan portfolio. Hancock recorded a total provision for loan losses for the second quarter of 2011 of $9.1 million compared to $8.8 million in the first quarter of 2011 and to $24.5 million in the second quarter of 2010. During the second quarter Hancock reversed the remaining $2.7 million of allowance established to cover estimated losses from the BP oil spill, and increased the unallocated portion of the reserve for loan losses by $1.2 million.

During the second quarter of 2011 the company recorded an $18.0 million increase in the allowance for losses due to impairment on certain pools of covered loans since the December 2009 acquisition of Peoples First, which was mostly offset by an increase in the Company’s FDIC loss share receivable for the 95% loss coverage. This resulted in a net provision for the second quarter of $0.9 million on the covered loans.

37

Noninterest Income

Noninterest income for the second quarter of 2011 was up $11.4 million, or 32%, compared to the same quarter a year ago, largely due to the $4.2 million increase in accretion on the FDIC indemnification asset from our fourth quarter 2009 acquisition of Peoples First. Income from insurance operations was up $1.0 million, or 27%, compared to the second quarter of 2010 due to insurance renewals. The remainder of the increase was related to the impact of the Whitney acquisition

The components of noninterest income for the three and six months ended June 30, 2011 and 2010 are presented in the following table:

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
	(In thousands)					(In thousands)
Service charges on deposit accounts	$	12,343		$	12,327	$	21,887		$	23,816
Trust fees		5,301			4,408		9,292			8,254
Debit card merchant discount fees		5,968			3,928		9,478			7,524
Income from insurance operations		4,628			3,641		7,878			7,153
Investment and annuity fees		3,267			2,663		6,400			4,942
ATM fees		3,290			2,321		6,021			4,272
Secondary mortgage market operations		1,877			1,529		3,444			3,169
Income from bank owned life insurance		1,842			1,343		3,164			2,591
Letter of credit fees		758			370		1,104			632
Gain/loss on sale of assets		11			156		606			282
Accretion of indemnification asset		5,450			1,290		8,494			1,290
Other income		1980			1317		3131			2749
Securities transactions loss, net		(36	)		—		(87	)		—
Total noninterest income	$	46,679		$	35,293	$	80,812		$	66,674

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Noninterest Expense

Operating expenses for the second quarter of 2011 were $49.2 million, or 68%, higher compared to the same quarter a year ago. Included in operating expenses for the second quarter of 2011 are total merger-related and integration costs of $22.2 million related to the acquisition of Whitney.

Total personnel expense increased $22.2 million, or 63%, compared to the same quarter last year. The increase is mainly due to additional full time equivalent employees, additional incentive expense, and salary increases associated with the Whitney acquisition. Included in this amount is $4.0 million in merger-related retention and severance costs. 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 $18.4 million, or 409%, compared to the second quarter of 2010, mostly due to merger-related services for the acquisition of Whitney in the amount of $17.2 million.

The remainder of the increase in noninterest expense was due to increased activity related to the Whitney acquisition. Other merger-related and integration costs are $0.2 million in advertising, $0.4 million in stationary and supplies, and $0.1 million in postage and communications.

The following table presents the components of noninterest expense for the three months ended June 30, 2011 and 2010.

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(In thousands)				(In thousands)
Employee compensation	$	46,970	$	27,803	$	76,379	$	54,770
Employee benefits		10,565		7,576		18,991		15,376
Total personnel expense		57,535		35,379		95,370		70,146
Equipment and data processing expense		10,767		9,024		18,766		17,887
Net occupancy expense		8,760		6,026		14,671		12,169
Postage and communications		3,642		2,651		6,402		5,223
Ad valorem and franchise taxes		1,557		1,049		2,594		2,030
Legal and professional services		22,886		4,497		28,146		8,005
Stationery and supplies		1,512		773		2,085		1,357
Amortization of intangible assets		1,621		684		2,235		1,422
Advertising		2,127		2,193		4,176		3,538
Deposit insurance and regulatory fees		3,232		2,904		6,344		5,538
Training expenses		208		163		408		333
Other real estate owned expense, net		1,860		2,027		3,301		2,708
Insurance expense		652		498		1,154		989
Other fees		955		876		1,813		1,877
Non loan charge-offs		277		308		471		513
Other expense		3,775		3,070		6,449		6,208
Total noninterest expense	$	121,366	$	72,122	$	194,385	$	139,943

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Income Taxes

For the six months ended June 30, 2011 and 2010, the effective income tax rates were approximately 20% and 11%, respectively. In determining the effective tax rate and tax expense for the three and six months ended June 30, 2011, the Company referred to the actual results for the current interim periods rather than projected results for the full year. Projections for the full year vary widely primarily due to difficulty in estimating the timing and amount of integration costs for our acquisition of Whitney. Changes in these estimates cause significant volatility in a projected effective tax rate. The Company’s effective tax rates have varied from the 35% federal statutory rate primarily because of tax-exempt income and the availability of tax credits. Interest income from the financing of state and local governments and earnings from the bank-owned life insurance program are the major components of tax-exempt income. 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. Tax-exempt income and tax credits tend to decrease the effective tax benefit rate from the statutory rate in profitable periods and to increase the effective tax expense rate in loss periods.

Selected Financial Data

The following tables contain selected financial data comparing our consolidated results of operations for the three and six months ended June 30, 2011 and 2010.

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(In thousands, except per share data)				(In thousands, except per share data)
Per Common Share Data
Earnings per share:
Basic	$	0.22	$	0.17	$	0.59	$	0.55
Diluted	$	0.22	$	0.17	$	0.59	$	0.55
Cash dividends per share	$	0.24	$	0.24	$	0.48	$	0.48
Book value per share (period-end)	$	28.18	$	23.36	$	28.18	$	23.36
Weighted average number of shares:
Basic		54,890		36,876		46,160		36,855
Diluted (1)		55,035		37,078		46,310		37,075
Period-end number of shares		84,694		36,877		84,694		36,877
Market data:
High price	$	34.57	$	43.90	$	35.68	$	45.86
Low price	$	30.04	$	33.27	$	30.04	$	33.27
Period-end closing price	$	30.98	$	33.36	$	30.98	$	33.36
Trading volume (2)		32,122		12,443		58,064		22,055

(1) The converted Whitney options of 775,261 were anti-dilutive share-based incentives outstanding for the three and six months ended June 30, 2011. There were no anti-dilutive share-based incentives outstanding for the three and six months ended June 30, 2010.

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

Reconciliation of Net Income to Operating Income:
Net income	$	12,088		$	6,500	$	27,416		$	20,334
Merger-related expenses		22,219			1,718		23,808			3,167
Securities transactions gains/(losses)		(36	)		—		(87	)		—
Taxes on adjustments		7,789			621		8,364			1,146
Operating income (a)	$	26,554		$	7,597	$	42,947		$	22,355

(a) Net income less tax-effected merger costs and securities gains/losses. Management believes that this is a useful financial measure measure because it enables investors to assess ongoing operations.

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	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
	(dollar amounts in thousands)						(dollar amounts in thousands)
Performance Ratios
Return on average assets		0.42	%		0.31	%		0.56	%		0.48	%
Return on average common equity		3.32	%		3.03	%		4.72	%		4.78	%
Earning asset yield (tax equivalent (“TE”))		4.77	%		5.06	%		4.81	%		5.11	%
Total cost of funds		0.66	%		1.19	%		0.76	%		1.30	%
Net interest margin (TE)		4.11	%		3.87	%		4.05	%		3.81	%
Common equity (period-end) as a percent of total assets (period-end)		12.08	%		10.13	%		12.08	%		10.13	%
Leverage ratio (period-end) (a)		13.50	%		9.06	%		13.50	%		9.06	%
FTE headcount		4,892			2,278			4,892			2,278
Asset Quality Information
Non-accrual loans	$	109,234		$	150,127		$	109,234		$	150,127
Restructured loans (b)		18,606						18,606			—
Foreclosed assets		130,320			44,901			130,320			44,901
Total non-performing assets	$	258,160		$	195,028		$	258,160		$	195,028
Non-performing assets as a percent of loans and foreclosed assets		2.27	%		3.89	%		2.27	%		3.89	%
Accruing loans 90 days past due (c)	$	4,057		$	8,002		$	4,057		$	8,002
Accruing loans 90 days past due as a percent of loans		0.04	%		0.16	%		0.04	%		0.16	%
Non-performing assets + accruing loans 90 days past due to loans and foreclosed assets		2.30	%		4.05	%		2.30	%		4.05	%
Net charge-offs	$	8,241		$	13,921		$	15,058		$	27,172
Net charge-offs as a percent of average loans		0.49	%		1.11	%		0.52	%		1.09	%
Allowance for loan losses	$	112,407		$	77,221		$	112,407		$	77,221
Allowance for loan losses as a percent of period-end loans		1.00	%		1.55	%		1.00	%		1.55	%
Allowance for loan losses to non-performing loans + accruing loans 90 days past due		85.22	%		48.84	%		85.22	%		48.84	%
Provision for loan losses	$	9,144		$	24,517		$	17,966		$	38,343
Supplemental Asset Quality Information (excluding covered assets and acquired loans)1
Non-accrual loans (2) (3)	$	68,216		$	95,600		$	68,216		$	95,600
Restructured loans		18,606			—			18,606			—
Total non-performing loans		86,822		$	95,600			86,822		$	95,600
Foreclosed assets (4)		104,975			18,357			104,975			18,357
Total non-performing assets	$	191,797		$	113,957		$	191,797		$	113,957
Non-performing assets as a percent of loans and foreclosed assets		4.47	%		2.76	%		4.47	%		2.76	%
Accruing loans 90 days past due	$	2,504		$	8,002		$	2,504		$	8,002
Accruing loans 90 days past due as a percent of loans		0.06	%		0.19	%		0.06	%		0.19	%
Non-performing assets + accruing loans 90 days past due to loans and foreclosed assets		4.53	%		2.95	%		4.53	%		2.95	%
Allowance for loan losses (5)	$	83,160		$	77,221		$	83,160		$	77,221
Allowance for loan losses as a percent of period-end loans		1.99	%		1.88	%		1.99	%		1.88	%
Allowance for loan losses to nonperforming loans + accruing loans 90 days past due		93.10	%		74.54	%		93.10	%		74.54	%

(1) Covered and acquired loans are considered to be performing due to the application of the accretion method under acquisition accounting. Acquired loans are recorded at fair value with no allowance brought forward in accordance with acquisition accounting. Certain covered loans and foreclosed assets are also covered under FDIC loss sharing agreements, which provide considerable protection against credit risk. Due to the protection of loss sharing agreements and impact of acquisition accounting, management has excluded acquired loans and covered assets from this table to provide for improved comparability to prior periods and better perspective into asset quality trends.

(2) Excludes acquired covered loans not accounted for under the accretion method of $39,514, $44,064, and $54,527.

(3) Excludes non-covered acquired loans at fair value not accounted for under the accretion method of $1,504 for the period ended 6/30/2011. There were no amounts in prior periods.

(4) Excludes covered foreclosed assets of $25,345, $22,821, and $26,544. On June 4, 2011, Hancock acquired $81,195 of foreclosed assets in the Whitney merger.

(5) Excludes impairment recorded on covered acquired loans of $29,247, $11,196 and $0.

Average Balance Sheet
Total loans	$	6,678,840		$	5,008,838		$	5,788,242		$	5,048,469
Securities		2,224,665			1,646,418			1,836,923			1,609,853
Short-term investments		1,028,067			688,648			886,203			750,541
Earning assets		9,931,572			7,343,904			8,511,368			7,408,863
Allowance for loan losses		(95,313	)		(67,901	)		(89,070	)		(67,041	)
Other assets		1,752,563			1,235,552			1,500,056			1,240,759
Total assets	$	11,588,822		$	8,511,555		$	9,922,354		$	8,582,581
Noninterest bearing deposits	$	2,231,775		$	1,069,795		$	1,691,126		$	1,044,470
Interest bearing transaction deposits		3,139,872			1,920,797			2,587,856			1,907,968
Interest bearing public fund deposits		1,283,183			1,173,579			1,255,606			1,224,110
Time deposits		2,556,502			2,828,846			2,454,106			2,880,682
Total interest bearing deposits		6,979,557			5,923,222			6,297,568			6,012,760
Total deposits		9,211,332			6,993,017			7,988,694			7,057,230
Other borrowed funds		761,438			527,808			631,952			535,515
Other liabilities		157,500			129,595			130,914			132,687
Common stockholders’ equity		1,458,552			861,135			1,170,794			857,149
Total liabilities & common stockholders’ equity	$	11,588,822		$	8,511,555		$	9,922,354		$	8,582,581

(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, net goodwill, core deposit and 10% net mortgage servicing rights. Average total assets is reduced by net goodwill, core deposits and 10% net mortgage servicing rights.

(b) Included in restructured loans are $8.4 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.

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	June 30,
	2011			2010
	(dollar amounts in thousands)
Period-end Balance Sheet
Total loans	$	11,249,053		$	4,972,202
Loans held for sale		67,081			42,769
Securities		4,573,973			1,686,671
Short-term investments		977,060			720,314
Earning assets		16,867,167			7,421,956
Allowance for loan losses		(112,407	)		(77,221	)
Other assets		3,002,785			1,155,283
Total assets	$	19,757,545		$	8,500,018
Noninterest bearing deposits	$	4,852,440		$	1,050,118
Interest bearing transaction deposits		5,779,322			1,930,738
Interest bearing public funds deposits		1,522,002			1,205,874
Time deposits		3,434,145			2,773,841
Total interest bearing deposits		10,735,469			5,910,453
Total deposits		15,587,909			6,960,571
Other borrowed funds		1,310,462			546,343
Other liabilities		472,861			131,822
Common stockholders’ equity		2,386,313			861,282
Total liabilities & common stockholders’ equity	$	19,757,545		$	8,500,018

	Three Months Ended June 30,						Six Months Ended June 30,
Net Charge-Off Information	2011			2010			2011			2010
	(dollar amounts in thousands)						(dollar amounts in thousands)
Net charge-offs:
Commercial/real estate loans	$	5,210		$	10,537		$	9,390		$	20,775
Mortgage loans		1,001			569			1,372			1,177
Direct consumer loans		1,116			1,241			2,383			1,849
Indirect consumer loans		178			449			402			1,057
Finance company loans		736			1,125			1,511			2,314
Total net charge-offs	$	8,241		$	13,921		$	15,058		$	27,172
Net charge-offs to average loans:
Commercial/real estate loans		0.46	%		1.37	%		0.49	%		1.34	%
Mortgage loans		0.46	%		0.31	%		0.36	%		0.32	%
Direct consumer loans		0.51	%		0.68	%		0.60	%		0.51	%
Indirect consumer loans		0.25	%		0.54	%		0.28	%		0.61	%
Finance company loans		3.09	%		4.19	%		3.16	%		4.29	%
Total net charge-offs to average net loans		0.49	%		1.11	%		0.52	%		1.09	%

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

	Three Months Ended June 30,							Three Months Ended June 30,
	2011							2010
(dollars in thousands)	Interest		Volume		Rate			Interest		Volume		Rate
Average earning assets
Commercial & real estate loans (TE)	$	60,126	$	4,565,071		5.28	%	$	39,728	$	3,090,655		5.15	%
Mortgage loans		14,839		864,601		6.87	%		11,880		745,019		6.38	%
Consumer loans		21,628		1,249,168		6.94	%		21,882		1,173,164		7.48	%
Loan fees & late charges		234		—		0.00	%		259		—		0.00	%
Total loans (TE)		96,827		6,678,840		5.81	%		73,749		5,008,838		5.90	%
US treasury securities		13		10,802		0.47	%		26		11,843		0.88	%
US agency securities		1,468		315,300		1.86	%		1,407		206,522		2.72	%
CMOs		3,276		398,863		3.29	%		2,795		278,198		4.02	%
Mortgage backed securities		13,233		1,251,564		4.23	%		11,250		942,548		4.77	%
Municipals (TE)		2,728		211,301		5.16	%		2,933		190,936		6.14	%
Other securities		275		36,836		2.99	%		178		16,371		4.36	%
Total securities (TE)		20,993		2,224,666		3.77	%		18,589		1,646,418		4.52	%
Total short-term investments		516		1,028,067		0.20	%		450		688,648		0.26	%
Average earning assets yield (TE)	$	118,336	$	9,931,573		4.77	%	$	92,788	$	7,343,904		5.06	%
Interest bearing liabilities
Interest bearing transaction deposits	$	1,594	$	3,139,872		0.20	%	$	2,599	$	1,920,797		0.54	%
Time deposits		10,568		2,556,502		1.66	%		14,309		2,828,846		2.03	%
Public funds		1,409		1,283,183		0.44	%		2,492		1,173,579		0.85	%
Total interest bearing deposits		13,571		6,979,557		0.78	%		19,400		5,923,222		1.31	%
Total borrowings		2,847		761,438		1.50	%		2,468		527,808		1.88	%
Total interest bearing liability cost	$	16,418	$	7,740,995		0.85	%	$	21,868	$	6,451,030		1.36	%
Noninterest bearing deposits
Net interest-free funding sources				2,190,577							892,874
Total Cost of Funds	$	16,418	$	9,931,572		0.66	%	$	21,868	$	7,343,904		1.19	%
Net Interest Spread (TE)	$	101,917				3.92	%	$	70,920				3.70	%
Net Interest Margin (TE)	$	101,917	$	9,931,572		4.11	%	$	70,920	$	7,343,904		3.87	%

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	Six Months Ended June 30,							Six Months Ended June 30,
	2011							2010
(dollars in thousands)	Interest		Volume		Rate			Interest		Volume		Rate
Average earning assets
Commercial & real estate loans (TE)	$	100,393	$	3,836,235		5.27	%	$	82,331	$	3,118,049		5.32	%
Mortgage loans		25,663		759,460		6.76	%		24,097		740,176		6.51	%
Consumer loans		40,802		1,192,547		6.90	%		43,373		1,190,244		7.35	%
Loan fees & late charges		174		—		0.00	%		487		—		0.00	%
Total loans (TE)		167,032		5,788,242		5.81	%		150,288		5,048,469		5.99	%
US treasury securities		25		10,800		0.47	%		41		11,841		0.69	%
US agency securities		2,238		244,104		1.83	%		2,793		184,947		3.02	%
CMOs		6,294		375,175		3.36	%		4,858		223,468		4.35	%
Mortgage backed securities		21,406		984,159		4.35	%		23,301		982,197		4.74	%
Municipals (TE)		5,407		195,192		5.54	%		5,424		191,687		5.66	%
Other securities		523		27,493		3.81	%		440		15,714		5.59	%
Total securities (TE)		35,893		1,836,923		3.91	%		36,857		1,609,854		4.58	%
Total short-term investments		815		886,203		0.19	%		1,039		750,541		0.28	%
Average earning assets yield (TE)	$	203,740	$	8,511,367		4.81	%	$	188,184	$	7,408,864		5.11	%
Interest bearing liabilities
Interest bearing transaction deposits	$	3,189	$	2,587,856		0.25	%	$	5,102	$	1,907,968		0.54	%
Time deposits		21,388		2,454,106		1.76	%		31,847		2,880,682		2.23	%
Public funds		3,001		1,255,606		0.48	%		5,734		1,224,110		0.94	%
Total interest bearing deposits		27,578		6,297,568		0.88	%		42,683		6,012,760		1.43	%
Total borrowings		4,608		631,952		1.47	%		4,985		535,515		1.88	%
Total interest bearing liability cost	$	32,186	$	6,929,520		0.94	%	$	47,668	$	6,548,275		1.47	%
Net interest-free funding sources				1,581,847							860,588
Total Cost of Funds	$	32,186	$	8,511,368		0.76	%	$	47,668	$	7,408,863		1.30	%
Net Interest Spread (TE)	$	171,553				3.88	%	$	140,516				3.64	%
Net Interest Margin (TE)	$	171,553	$	8,511,368		4.05	%	$	140,516	$	7,408,863		3.81	%

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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 $1.1 billion and borrowing capacity at the Federal Reserve’s Discount Window in excess of $114.3 million. We have FHLB advances of $10.1 million due September 12, 2011 at a fixed rate 3.455%.

During the second quarter, the Company entered into a $140 million par value term loan facility and borrowed the full amount which matures on June 3, 2013. The variable interest rate is LIBOR plus 2.00% per annum. The note is pre-payable at any time and the Company is subject to covenants customary in financings of this nature. The proceeds are being used for general corporate purposes.

The following liquidity ratios at June 30, 2011 and December 31, 2010 compare certain assets and liabilities to total deposits or total assets:

	June 30, 2011			December 31, 2010
Total securities to total deposits		29.34	%		21.97	%
Total loans (net of unearned income) to total deposits		72.17	%		73.16	%
Interest-earning assets to total assets		85.37	%		87.33	%
Interest-bearing deposits to total deposits		68.87	%		83.36	%

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CONTRACTUAL OBLIGATIONS

We have contractual obligations to make future payments on certain debt and lease agreements. The following table summarizes all significant contractual obligations at June 30, 2011, according to payments due by period.

Contractual Obligations

	Payment due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(In thousands)
Certificates of deposit	$	3,572,885	$	3,018,274	$	387,673	$	134,998	$	31,940
Short-term debt obligations		6,800		—		—		—		6,800
Long-term debt obligations		369,602		26,496		140,198		33,108		169,800
Capital lease obligations		185		58		102		12		13
Operating lease obligations		153,201		29,737		35,832		21,262		66,370
Total	$	4,102,673	$	3,074,565	$	563,805	$	189,380	$	274,923

CAPITAL RESOURCES

We continue to be well capitalized. The ratios as of June 30, 2011 and December 31, 2010 are as follows:

	June 30, 2011			December 31, 2010
Common equity (period-end) as a percent of total assets (period-end)		12.08	%		10.52	%
Regulatory ratios:
Total capital to risk-weighted assets (1)		11.15	%		16.60	%
Tier 1 capital to risk-weighted assets (2)		10.56	%		15.34	%
Leverage capital to average total assets (3)		13.69	%		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 June 30, 2011.

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The carrying amount of goodwill was $629.7 million as of June 30, 2011 and $61.6 million as of December 31, 2010. The increase in goodwill is the result of our merger with Whitney. See Note 2 for additional information.

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 June 30, 2011, average earning assets were $8.5 billion, or 85.8% of total assets, compared with $7.3 billion, or 86.2% of total assets at December 31, 2010, and with $7.4 billion or 86.3% of total assets, at June 30, 2010. The $1.1 billion, or 14.9%, increase from prior year quarter resulted from an increase in loans of $739.8 million, an increase in securities of $227.1 million and an increase in short-term investments of $135.7 million. The increase in earnings assets is the result of our merger with Whitney.

Securities

Our investment in securities was $4.6 billion at June 30, 2011 and $1.5 billion at December 31, 2010. The increase is the result of our merger with Whitney. 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 non-rated obligations of Mississippi, Louisiana, Texas, Florida or Alabama counties, parishes and municipalities.

Loans

We held $11.2 billion in loans at June 30, 2011 and $5.0 billion at December 31, 2010.The increase is the result of our merger with Whitney.Commercial and real estate loans comprised 73.2% of the loan portfolio at June 30, 2011 compared to 63.5% at December 31, 2010. The Whitney portfolio we acquired was more heavily weighted to commercial loans at 79.8%. 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. Included in this category are commercial real estate loans, which are secured by properties, used in commercial or industrial operations.

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

	June 30, 2011		December 31, 2010
	( In thousands)
Commercial loans:
Commercial - originated	$	605,885	$	524,653
Commercial - acquired		2,424,887		—
Commercial - covered		45,959		34,650
Total commercial		3,076,731		559,303
Construction - originated		476,711		495,590
Construction - acquired		741,151		—
Construction - covered		153,489		157,267
Total construction		1,371,351		652,857
Real estate - originated		1,232,144		1,231,414
Real estate - acquired		1,861,373		—
Real estate - covered		147,520		181,873
Total real estate		3,241,037		1,413,287
Municipal loans - originated		485,233		471,057
Municipal loans - acquired		12,712		—
Municipal loans - covered		473		540
Total municipal loans		498,418		471,597
Lease financing - originated		45,982		50,721
Total commercial loans - originated		2,845,955		2,773,435
Total commercial loans - acquired		5,040,123		—
Total commercial loans - covered		347,441		374,330
Total commercial loans		8,233,519		3,147,765
Residential mortgage loans - originated		365,661		366,183
Residential mortgage loans - acquired		830,667		—
Residential mortgage loans - covered		247,489		293,506
Total residential mortgage loans		1,443,817		659,689
Indirect consumer loans - originated		278,261		309,454
Direct consumer loans - originated		597,593		597,947
Direct consumer loans - acquired		447,096		—
Direct consumer loans - covered		152,879		141,315
Total direct consumer loans		1,197,568		739,262
Finance Company loans - originated		95,888		100,994
Total originated loans		4,183,358		4,148,013
Total acquired loans		6,317,886		—
Total covered loans		747,809		809,151
Total loans	$	11,249,053	$	4,957,164

Originated - Loans which have been originated in the normal course of business.

Acquired - Loans which have been acquired and no allowance brought forward in accordance with acquisition accounting.

Covered - Loans which are covered by loss sharing agreements with the FDIC providing considerable protection against credit risk.

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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:

	June 30,			December 31,
	2011			2010
	(In thousands)
Loans accounted for on a non-accrual basis:
Commercial loans - originated	$	38,295		$	42,077
Commercial loans - restructured		7,711			8,302
Subtotal		46,006			50,379
Commercial loans - covered		33,869			41,917
Total Commercial loans		79,875			92,296
Residential mortgage loans - originated		26,713			18,290
Residential mortgage loans - restructured		699			409
Subtotal		27,412			18,699
Residential mortgage loans - covered		2,710			3,199
Total residential mortgage loans		30,122			21,898
Indirect consumer loans		—			—
Direct consumer loans-originated		1,937			4,862
Direct consumer loans-acquired		1,504			—
Direct consumer loans - covered		2,935			170
Finance Company		1,271			1,759
Total direct consumer loans		7,647			6,791
Total non-accrual loans		117,644			120,985
Restructured loans - originated:
Commercial loans - non-accrual		7,711			8,302
Residential mortgage loans - non-accrual		699			409
Total restructured loans - non-accrual		8,410			8,711
Commercial loans - still accruing		9,578			3,301
Residential mortgage loans - still accruing		618			629
Total restructured loans - still accruing		10,196			3,930
Total restructured loans - originated		18,606			12,641
Total non-performing loans**		127,840			124,915
Foreclosed assets - originated		21,771			17,595
Foreclosed assets - acquired		83,204			—
Foreclosed assets - covered		25,345			15,682
Total foreclosed assets		130,320			33,277
Total non-performing assets*	$	258,160		$	158,192
Loans 90 days past due still accruing	$	4,057		$	1,492
Ratios
Non-performing assets to loans plus foreclosed assets		2.27	%		3.17	%
Allowance for loan losses to non-performing loans and accruing loans 90 days past due		85.22	%		64.87	%
Allowance for loan losses to non-performing loans and accruing loans 90 days past due, excluding covered loans and non-covered acquired loans		93.10	%		101.07	%
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.

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

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Allowance for Loan Losses and Asset Quality

At June 30, 2011, the allowance for loan losses was $112.4 million compared with $82.0 million at December 31, 2010, an increase of $30.4 million. The increase in the allowance for loan losses through the first half of 2011 is primarily attributed to a $29.0 million allowance on covered loans. The ratio of the allowance for loan losses as a percent of period-end loans was 1.00% at June 30, 2011 compared to 1.65% at December 31, 2010. The decrease in the allowance ratio is related to the addition of Whitney’s $6.5 billion loan portfolio. The ratio of the allowance for loan losses as a percent of period-end loans, excluding the acquired and covered portfolios, was 1.99% at June 30, 2011 compared to 2.05% at March 31, 2011. Additional asset quality metrics for the acquired (Whitney), covered (Peoples First) and legacy (Hancock plus newly originated) portfolios are included in Selected Financial Data. Whitney’s allowance was not carried forward acquisition.

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 appropriate risk metrics. We maintain a credit quality policy that establishes acceptable loan-to-value thresholds on the front end underwriting process. Residential home values are 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 June 30, 2011 allowance level is adequate. Net charge-offs, as a percent of average loans, were 0.49% for the second quarter of 2011, compared to 1.11% in the second quarter of 2010. Of the overall decrease in net charge-offs of $5.7 million, $5.3 million was reflected in commercial/real estate loans, $0.4 million in Finance Company loans and $0.4 million in consumer loans with an offsetting increase in mortgage loans of $0.4 million.

Non-accrual loans were $117.6 million at June 30, 2011, a decrease of $32.5 million over $150.1 million at June 30, 2010. Covered and acquired loans accounted for in accordance with ASC 310-30 are considered to be performing due to the application of the accretion method. These loans are excluded from the table due to their performing status. Certain covered loans accounted for using the cost recovery method or acquired loans accounted for in accordance with 310-20 are disclosed as non-accrual loans below. Included in non-accrual loans is $8.4 million in restructured commercial loans. Total troubled debt restructurings for the period were $18.6 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.

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Foreclosed assets are comprised of other real estate (ORE) and other repossessed assets. Foreclosed assets were $130.3 million at June 30, 2011 compared to $44.9 million at June 30, 2010, an increase of $85.4 million. The majority of the increase in foreclosed assets is from the $81.2 million acquired from Whitney. The increases excluding Whitney, 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. See supplemental asset quality data excluding covered and acquired loans in Selected Financial Data.

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
	(In thousands)
Net loans outstanding at end of period	$	11,249,053		$	4,972,202		$	11,249,053		$	4,972,202
Average net loans outstanding	$	6,678,840		$	5,008,838		$	5,788,242		$	5,048,468
Balance of allowance for loan losses at beginning of period	$	94,356		$	66,625		$	81,997		$	66,050
Loans charged-off:
Commercial		8,907			10,778			13,647			21,852
Construction		—			—			—			—
Real estate		—			—			—			—
Lease financing		3			11			17			34
Municipal		—			—			—			—
Total commercial		8,910			10,789			13,664			21,886
Residential mortgage		1,190			583			2,332			1,322
Direct consumer		1,456			1,553			3,090			2,538
Indirect consumer		455			697			921			1,594
Finance Company		982			1,376			2,065			2,818
Total charge-offs		12,993			14,998			22,072			30,158
Recoveries of loans previously charged-off:
Commercial		3,691			252			4,169			1,109
Construction		—			—			—			—
Real estate		—			—			—			—
Lease financing		9			—			105			2
Municipal		—			—			—			—
Total commercial		3,700			252			4,274			1,111
Residential mortgage		189			14			960			145
Direct consumer		340			312			686			689
Indirect consumer		277			248			519			537
Finance Company		246			251			575			504
Total recoveries		4,752			1,077			7,014			2,986
Net charge-offs		8,241			13,921			15,058			27,172
Provision for loan losses, net (a)		9,144			24,517			17,966			38,343
Increase in indemnification asset (a)		17,148			—			27,502			—
Balance of allowance for loan losses at end of period	$	112,407		$	77,221		$	112,407		$	77,221
Ratios
Gross charge-offs to average loans		0.78	%		1.20	%		0.77	%		1.20	%
Recoveries to average loans		0.29	%		0.09	%		0.24	%		0.12	%
Net charge-offs to average loans		0.49	%		1.11	%		0.52	%		1.09	%
Allowance for loan losses to period-end net loans		1.00	%		1.55	%		1.00	%		1.55	%
Net charge-offs to period-end net loans		0.29	%		1.12	%		0.27	%		1.10	%
Allowance for loan losses to average net loans		1.68	%		1.54	%		1.94	%		1.53	%
Net charge-offs to loan loss allowance		29.41	%		72.31	%		27.01	%		70.96	%

(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 $18,049, and the impairment ($901) on those covered loans for the three months ended June 30, 2011. This results in an increase in the indemnification asset, which is the difference between the provision for loan losses on covered loans of $28,948, and the impairment ($1,446) on those covered loans for the six months ended June 30, 2011.

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

	June 30, 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	$	87,283		73.19	$	56,859		63.50
Residential mortgages		9,499		12.84		4,626		13.31
Indirect consumer		2,608		2.47		2,918		6.24
Direct consumer		4,957		10.65		9,322		14.91
Finance Company		8,060		0.85		8,272		2.04
	$	112,407		100.00	$	81,997		100.00

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Other Earning Assets

Federal funds sold, interest-bearing deposits in banks, and other short-term investments averaged $886.2 million at June 30, 2011 compared to $750.5 million at June 30, 2010 and $698.0 million at December 31, 2010. The increase of $135.7 million, or 18.1%, from prior year quarter was primarily caused by an increase of $152.4 million other short-term investments that was offset by a decrease of $17.3 million in interest-bearing deposits in banks. 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 $15.6 billion at June 30, 2011 and $6.8 billion at December 31, 2010. The $8.8 billion increase is the result of the merger with Whitney. Interest-bearing deposits comprised 68.9% of total deposits at June 30, 2011 compared to 83.4% at December 31, 2010. The acquired deposits of Whitney were comprised of 60% interest-bearing deposits. We have several programs designed to attract depository accounts offered to consumers and to small and middle market businesses at interest rates generally consistent with market conditions. We traditionally price our deposits to position 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, long-term debt and other borrowings. Total borrowings at June 30, 2011 were $1.3 billion compared to $375.2 million at December 31, 2010. The increase of $890.6 million was primarily in securities sold under agreements to repurchase of $524.2 million and in long-term debt of $359.7 million. The $359.7 million increase resulted from the assumption of debt of $219.7 million in the merger with Whitney. In addition, in June 2011, the Company issued a $140 million variable rate 2 year term loan to use for general corporate purposes. See Note 3 for additional information on long-term debt.

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 June 30, 2011, we had $995.7 million in unused loan commitments outstanding, of which approximately $758.8 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

53

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 June 30, 2011, we had $61.1 million in letters of credit issued and outstanding.

The following table shows the commitments to extend credit and letters of credit at June 30, 2011 according to expiration date.

	Total		Less than 1 year		Expiration Date 1-3 years		3-5 years		More than 5 years
	(dollars in thousands)
Commitments to extend credit	$	995,666	$	613,656	$	66,770	$	54,292	$	260,948
Letters of credit		61,130		41,745		18,257		1,128		—
Total	$	1,056,796	$	655,401	$	85,027	$	55,420	$	260,948

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.

We evaluate our estimates, including those related to purchase accounting, 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 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. As part of the integration process, we evaluated Whitney’s critical accounting policies and found them to be very similar to our policies. Where there were minor differences, the Hancock policy was implemented. See our 2010 10-K for descriptions of our critical accounting policies.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 15 to our Condensed Consolidated Financial Statements included elsewhere in this report.

SEGMENT REPORTING

The Company’s primary segments are divided into the Hancock, Whitney, and Other. Effective January 1, 2010, the Company’s Florida segment was merged into Hancock, which was previously referred to as Mississippi. On June 4, 2011, we completed the acquisition of Whitney Holding Corporation. Whitney National Bank was merged into Hancock Bank of Louisiana and renamed Whitney Bank. Prior to the merger the segment now called Whitney Bank was Hancock Bank Louisiana, labeled “LA” on the prior period table. As part of the merger, Hancock Bank of Alabama was merged into Whitney Bank. Subsequently, the assets and liabilities of the former Hancock Bank of Alabama were then transferred to Hancock Bank. Prior periods report the segment formerly called Alabama in the Mississippi segment. As a result, Hancock Holding Company is now the parent company of two wholly-owned bank subsidiaries, Hancock Bank, Gulfport, Mississippi (Hancock Bank) and Whitney Bank, New Orleans, Louisiana (Whitney Bank). 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, Whitney Securities LLC, Berwick LLC, Key Investment Securities, Inc., and Southern Coastal Insurance Agency, and subsidiaries, and three real estate corporations owning land and buildings that house bank branches and other facilities. See Note 14 for segment detail.

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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.

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 June 30, 2011, the effective duration of the securities portfolio was 2.7 years. A rate increase (aged, over 1 year) of 100 basis points would move the effective duration to 3.5 years, while a reduction in rates of 100 basis points would result in an effective duration of 1.4 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 June 30, 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		1.14	%

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.

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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.

Other than changes required in connection with the ongoing integration of Whitney and Hancock operations, 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 June 30, 2011, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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 June 30, 2011.

Item 3. Legal Proceedings

On January 7, 2011, a purported shareholder of Whitney filed a lawsuit in the Civil District Court for the Parish of Orleans of the State of Louisiana captionedDe LaPouyadev.Whitney Holding Corporation, et al.,No. 11-189, naming Whitney and members of Whitney’s board of directors as defendants. This lawsuit is purportedly brought on behalf of a putative class of Whitney’s common shareholders and seeks a declaration that it is properly maintainable as a class action. The lawsuit alleges that Whitney’s directors breached their fiduciary duties and/or violated Louisiana state law and that Whitney aided and abetted those alleged breaches of fiduciary duty by, among other things, (a) agreeing to consideration that undervalues Whitney, (b) agreeing to deal protection devices that preclude a fair sales process, (c) engaging in self-dealing, and (d) failing to protect against conflicts of interest. Among other relief, the plaintiff seeks to enjoin the merger. The parties have reached a settlement in principle.

On February 17, 2011, a complaint in intervention was filed by the Louisiana Municipal Police Employees Retirement System (��MPERS”) in theDe LaPouyadecase. The MPERS complaint is substantially identical to and seeks to join in theDe LaPouyadecomplaint. The parties have reached a settlement in principle.

On February 7, 2011, another putative shareholder class action lawsuit,Realistic Partners v. Whitney Holding Corporation, et al.,Case No. 2:11-cv-00256, was filed in the United States District Court for the Eastern District of Louisiana against Whitney, members of Whitney’s board of directors, and Hancock asserting violations of Section 14(a) of the Securities Exchange Act of 1934, breach of fiduciary duty under Louisiana state law, and aiding and abetting breach of fiduciary duty by, among other things, (a) making material misstatements or omissions in the proxy statement, (b) agreeing to consideration that undervalues Whitney, (c) agreeing to deal protection devices that preclude a fair sales process, (d) engaging in self-dealing, and (e) failing to protect against conflicts of interest. Among other relief, the plaintiff seeks to enjoin the merger. On February 24, 2011, the plaintiff moved for class certification. The parties have reached a settlement in principle.

On April 11, 2011, another putative shareholder class action lawsuit,Jane Doev.Whitney HoldingCorporation, et al.,Case No. 2:11-cv-00794-ILRL-JCW, was filed in the United States District Court for the Eastern District of Louisiana against Whitney, members of Whitney’s board of directors, and the defendants’ insurance carrier asserting breach of fiduciary duty under Louisiana state law by, among other things, (a) agreeing to consideration that undervalues Whitney, (b) agreeing to deal protection devices that preclude a fair sales process, (c) engaging in self-dealing, and (d) failing to protect against conflicts of interest. Among other relief, the plaintiff seeks to enjoin the merger. On April 20, 2011, this case was consolidated with theRealistic Partnerscase. The parties have reached a settlement in principle.

Item 4. Reserved.

Item 5. Other Information.

Item 6. Exhibits.

(a) Exhibits:

Exhibit Number	Description
10.11	Term Loan Agreement dated as of May 20, 2011, among Hancock Holding Company, certain Lenders from Time to Time, and Suntrust Bank.
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:	August 9, 2011

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Index to Exhibits

Exhibit Number	Description
10.11	Term Loan Agreement dated as of May 20, 2011, among Hancock Holding Company, certain Lenders from time to time, and Suntrust Bank.
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.