Hancock Reports Fourth Quarter 2013 Financial Results

Higher Core Net Interest Income and Lower Operating Expense Largely Offset Declining Purchased Loan Accretion

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| Source: Hancock Holding Company

GULFPORT, Miss., Jan. 23, 2014 (GLOBE NEWSWIRE) -- Hancock Holding Company (Nasdaq:HBHC) today announced its financial results for the fourth quarter of 2013. Operating income for the fourth quarter of 2013 was $45.8 million or $.55 per diluted common share, compared to $46.8 million, or $.56 in the third quarter of 2013. Operating income was $46.6 million, or $.54, in the fourth quarter of 2012. We define our operating income as net income excluding tax-effected securities transactions gains or losses and one-time noninterest expense items. Management believes that operating income provides a useful measure of financial performance that helps investors compare the Company's fundamental operations over time. The financial tables include a reconciliation of net income to operating income.

Highlights of the Company's fourth quarter of 2013 results:

  • Core net interest income (TE) increased approximately $1.5 million and core net interest margin (NIM) improved 3 basis points (bps) linked-quarter (we define our core results as reported results less the impact of net purchase accounting adjustments)
  • Operating expenses declined $4.2 million linked-quarter as the Company remains on track to meet its first quarter of 2014 expense target
  • Approximately $625 million linked-quarter net loan growth, or 22% annualized, and over $900 million, or 8%, year-over-year loan growth (each excluding the FDIC-covered portfolio)
  • Purchase accounting loan accretion declined approximately $8 million, or $.06 per diluted common share after tax
  • Continued improvement in overall asset quality metrics
  • Tax rate declined to 20%, mainly related to benefits from additional investments in New Market Tax Credit projects in the fourth quarter
  • Net income included one-time noninterest expense items of $17.1 million, or $11.1 million after tax ($.14 per diluted common share)

Hancock's return on average assets (ROA) (operating) was 0.97% for the fourth quarter of 2013, down slightly from 0.99% in the third quarter of 2013 and 0.98% in the fourth quarter a year ago.

"I have noted in previous quarters that our performance reflected an improvement in our core results, a trend we expected to build upon in the future," said Hancock's President and Chief Executive Officer Carl J. Chaney. "In the fourth quarter that trend accelerated and has now become more evident in our results. The results reflect the significant progress we are making in replacing the runoff in purchase accounting loan accretion with core operating income. Improvements were noted in many areas such as loan growth and mix, core net interest income and core net interest margin, and a reduction in operating expenses."

Net income in the fourth quarter of 2013 was $34.7 million, or $.41 per diluted common share, compared to $33.2 million, or $.40, in the third quarter of 2013. Net income was $47.0 million, or $.54 per diluted common share, in the fourth quarter of 2012. Return on average assets (ROA) was 0.74% for the fourth quarter of 2013, compared to 0.70% in the third quarter of 2013 and 0.99% in the fourth quarter a year ago. Net income reflected the impact of certain one-time noninterest expenses of $17.1 million in the fourth quarter of 2013 and $20.9 million in the third quarter of 2013.

Loans

Total loans at December 31, 2013 were $12.3 billion, up $590 million from September 30, 2013. Excluding the FDIC-covered portfolio, which declined $33 million during the fourth quarter of 2013, total loans increased approximately $625 million, or 5.5% linked-quarter. 

The largest component of linked-quarter net growth (excluding the FDIC-covered portfolio) was in the commercial and industrial (C&I) portfolio (+10%), followed by increases in the commercial real estate (CRE) (+5%) and residential mortgage (+3%) portfolios.  Many of the markets across the Company's footprint reported net loan growth during the quarter, with the majority of the growth in south Louisiana, Houston and Florida markets. The fourth quarter also included some net growth from seasonal borrowers, and loan paydowns and payoffs returned to a more normal level compared to the third quarter of 2013. For the full year of 2014 management expects period-end loan growth in the mid-single digit range.

A substantial portion of the fourth quarter's net loan growth came toward the latter part of the period, and average loans were up $101 million, or 1%, from the third quarter of 2013. 

Deposits

Total deposits at December 31, 2013 were $15.4 billion, up $306 million, or 2%, from September 30, 2013. Average deposits for the fourth quarter of 2013 were $14.9 billion, down $106 million, or 1%, from the third quarter of 2013. 

Noninterest-bearing demand deposits (DDAs) totaled $5.5 billion at December 31, 2013, up $51 million, or 1%, compared to September 30, 2013. DDAs comprised 36% of total period-end deposits at December 31, 2013. 

Interest bearing transaction and savings deposits totaled $6.2 billion at year-end 2013, up $155 million, or 3%, from September 30, 2013.

Time deposits (CDs) and interest-bearing public fund deposits totaled $3.7 billion at December 31, 2013, up $100 million, or 3%, from September 30, 2013. Public fund deposits typically reflect higher balances toward year-end with subsequent reductions beginning in the first quarter.

Asset Quality

Non-performing assets (NPAs) totaled $186 million at December 31, 2013, down $30 million from September 30, 2013. During the fourth quarter, total non-performing loans declined $21 million, and foreclosed and surplus real estate (ORE) and other foreclosed assets decreased $9 million. Non-performing assets as a percent of total loans, ORE and other foreclosed assets was 1.50% at December 31, 2013, down from 1.83% at September 30, 2013. 

The Company's total allowance for loan losses was $133.6 million at December 31, 2013, down from $138.2 million at September 30, 2013.  The ratio of the allowance to period-end loans was 1.08%, compared to 1.18% at September 30, 2013. The decline in the allowance during the fourth quarter was primarily related to a $7.2 million reversal of a previous impairment on FDIC covered loans. The allowance maintained on the non-covered portion of the loan portfolio increased $2.6 million linked-quarter, totaling $80.5 million at December 31, 2013. 

Net charge-offs from the non-covered loan portfolio were $5.2 million, or 0.17% of average total loans on an annualized basis in the fourth quarter of 2013, virtually unchanged from $5.4 million, or 0.18% of average total loans in the third quarter of 2013. 

During the fourth quarter of 2013, Hancock recorded a total provision for loan losses of $7.3 million, down slightly from $7.6 million in the third quarter of 2013. The provision for non-covered loans was $7.9 million in the fourth quarter of 2013, compared to $6.5 million in the third quarter of 2013. The net provision from the covered portfolio was a credit of $0.5 million for the fourth quarter of 2013 compared to a provision of $1.0 million in the third quarter of 2013. This decline was driven by the reversal of impairment noted above.

Net Interest Income

Net interest income (TE) for the fourth quarter of 2013 was $168.5 million, down $5.6 million from the third quarter of 2013. Average earning assets were $16.4 billion, virtually unchanged from the third quarter of 2013. The reported net interest margin (TE) was 4.09% for the fourth quarter of 2013, down 14 basis points (bps) from the third quarter of 2013. 

The linked-quarter decrease in both net interest income and net interest margin was primarily related to a decline of approximately $8 million in total purchase accounting loan accretion. As discussed in previous quarters, loan accretion can be volatile due in part to excess cash recoveries on acquired-impaired loan pools. During the fourth quarter of 2013, there were no excess cash recoveries above expected amounts included in the purchase accounting income total. The slide presentation referenced below includes detailed information on expected loan accretion and excess cash recoveries. 

The core margin (reported net interest income (TE) excluding total net purchase accounting adjustments, annualized, as a percent of average earning assets) expanded 3 bps to 3.40% during the fourth quarter of 2013. A slight decline in the core loan yield (-3 bps) was offset by an improved earning asset mix, higher yields on investment securities (+19 bps) and a slight decline in the cost of funds (-1 bp). 

Noninterest Income

Noninterest income totaled $59.0 million for the fourth quarter of 2013, down $4.1 million from the third quarter of 2013. 

Service charges on deposits totaled $19.6 million for the fourth quarter of 2013, down $0.9 million, or 4%, from the third quarter of 2013. Bankcard and ATM fees totaled $11.3 million, down approximately $1.0 million, or 8%, from the third quarter of 2013. 

Trust, investment and annuity, and insurance fees totaled $18.1 million, down $0.2 million, or 1%, from the third quarter of 2013. During the fourth quarter, an increase of $0.7 million, or 8%, in trust fees was offset by declines in investment and annuity, and insurance fees. 

Fees from secondary mortgage operations totaled $1.6 million for the fourth quarter of 2013, down $0.9 million, or 37%, linked-quarter. The decline mainly reflects a continued slowdown in mortgage loan activity, reflecting mainly the impact of increased longer-term interest rates on originations. The fourth quarter's activity also reflects a continued higher level of portfolio loan production compared to secondary market loan production.

Other noninterest income totaled $8.3 million for the fourth quarter of 2013, down $1.2 million, or 12%, linked-quarter. The decline mainly reflects a lower level of expected future losses on covered loans, which resulted in an increase of $1.1 million in the amortization of the indemnification asset.

Noninterest Expense & Taxes

Noninterest expense for the fourth quarter of 2013 totaled $174.2 million, including $17.1 million of one-time costs related to the expense and efficiency initiative. Excluding these costs, noninterest expense (or operating expense) totaled $157.1 million, down $4.2 million, or 3%, from the comparable operating expense total for the third quarter of 2013. 

Excluding one-time costs, total personnel expense, the largest component of the Company's expense base, was $84.9 million in the fourth quarter of 2013, down $1.9 million, or 2%, from the third quarter of 2013. Occupancy and equipment expense totaled $16.3 million in the fourth quarter of 2013, down $1.2 million, or 7%, from the third quarter of 2013. The reduction in the personnel, occupancy and equipment expense categories reflect in part a full quarter's impact from the closing of 26 branch locations across the Company's five-state footprint in August 2013.

The sale of 7 Houston area branches was completed on November 8, 2013, and the sale of 3 Alexandria, Louisiana area branches was completed on January 10, 2014. Additionally, at year-end, the Company closed the remaining two branches that were part of the previously announced ongoing branch rationalization process.

ORE expense totaled $1.5 million in the fourth quarter of 2013, down $0.9 million from the third quarter, while other operating expense was essentially unchanged at $47.2 million. 

The effective income tax rate for the fourth quarter of 2013 was 20%, down from 26% in the third quarter of 2013. The decline in the tax rate is primarily related to several additional New Market Tax Credit investments that were closed during the fourth quarter of 2013. Management expects the effective tax rate to approximate 25-27% in 2014. The effective income tax rate continues to be less than the statutory rate of 35% due primarily to tax-exempt income and tax credits. 

Capital

Common shareholders' equity at year-end 2013 totaled $2.4 billion. The tangible common equity (TCE) ratio was 9.00% at December 31, 2013, up 32 bps from September 30, 2013. Management continues to review a full range of the strategic options presented by Hancock's strong capital position, including additional stock buybacks, organic growth, acquisitions or increased dividends. Additional capital ratios are included in the financial tables.

Conference Call and Slide Presentation

Management will host a conference call for analysts and investors at 8:00 a.m. Central Time on Friday, January 24, 2014 to review the results. A live listen-only webcast of the call will be available under the Investor Relations section of Hancock's website at www.hancockbank.com. A slide presentation related to fourth quarter results is also posted as part of the webcast link. To participate in the Q&A portion of the call, dial (877) 564-1219 or (973) 638-3429. An audio archive of the conference call will be available under the Investor Relations section of our website. A replay of the call will also be available through January 30, 2014 by dialing (855) 859-2056 or (404) 537-3406, passcode 30587330. 

About Hancock Holding Company

Hancock Holding Company is the parent company of Hancock Bank and Whitney Bank. The Company operates as Hancock Bank in south Mississippi, southern and central Alabama, and the northern, central, and panhandle regions of Florida; and as Whitney Bank in south Louisiana and Houston, Texas. The Hancock Holding Company family of financial services companies also includes Hancock Investment Services, Inc.; Hancock Insurance Agency and Whitney Insurance Agency, Inc.; corporate trust offices in Gulfport and Jackson, Mississippi, New Orleans and Baton Rouge, Louisiana, and Orlando, Florida; and Harrison Finance Company. Additional information is available at www.hancockbank.com and www.whitneybank.com.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, and we intend such forward-looking statements to be covered by the safe harbor provisions therein and are including this statement for purposes of invoking these safe-harbor provisions.  Forward-looking statements provide projections of results of operations or of financial condition or state other forward-looking information, such as expectations about future conditions and descriptions of plans and strategies for the future.  

Forward-looking statements that we may make include, but may not be limited to, comments with respect to future levels of economic activity in our markets,  loan growth, deposit trends, credit quality trends, future sales of nonperforming assets, net interest margin trends, future expense levels and the ability to achieve reductions in non-interest expense or other cost savings, projected tax rates, future profitability, improvements in expense to revenue (efficiency) ratio, purchase accounting impacts such as accretion levels, the impact of the branch rationalization process, and the financial impact of regulatory requirements.

Hancock's ability to accurately project results or predict the effects of future plans or strategies is inherently limited.  Although Hancock believes that the expectations reflected in its forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements.  Factors that could cause actual results to differ from those expressed in Hancock's forward-looking statements include, but are not limited to, those risk factors outlined in Hancock's public filings with the Securities and Exchange Commission, which are available at the SEC's internet site (http://www.sec.gov).

You are cautioned not to place undue reliance on these forward-looking statements.  Hancock does not intend, and undertakes no obligation, to update or revise any forward-looking statements, whether as a result of differences in actual results, changes in assumptions or changes in other factors affecting such statements, except as required by law.

 
 Hancock Holding Company 
 Financial Highlights 
 (amounts in thousands, except per share data and FTE headcount) 
 (unaudited) 
           
   Three Months Ended   Twelve Months Ended 
  12/31/2013 9/30/2013 12/31/2012 12/31/2013 12/31/2012
Common Share Data          
           
Earnings per share:          
 Basic $0.41 $0.40 $0.55 $1.93 $1.77
 Diluted $0.41 $0.40 $0.54 $1.93 $1.75
Operating earnings per share: (a)          
 Basic $0.55 $0.56 $0.54 $2.22 $2.15
 Diluted $0.55 $0.56 $0.54 $2.22 $2.13
Cash dividends per share  $0.24 $0.24 $0.24 $0.96 $0.96
Book value per share (period-end) $29.49 $28.70 $28.91 $29.49 $28.91
Tangible book value per share (period-end) $19.94 $19.04 $19.27 $19.94 $19.27
Weighted average number of shares:          
 Basic  82,085  82,091  84,798  83,066  84,767
 Diluted  82,220  82,205  85,777  83,167  85,588
Period-end number of shares  82,237  82,107  84,848  82,237  84,848
Market data:          
 High sales price $37.12 $33.85 $32.50 $37.12 $36.73
 Low sales price $30.09 $29.00 $29.47 $25.00 $27.96
 Period end closing price  $36.68 $31.38 $31.73 $36.68 $31.73
 Trading volume  27,816  29,711  20,910  122,496  119,519
           
           
Other Period-end Data          
           
FTE headcount  3,978 4,068 4,235  3,978 4,235
Tangible common equity $1,639,524 $1,563,542 $1,634,833 $1,639,524 $1,634,833
Tier I capital $1,682,782 $1,656,497 $1,668,809 $1,682,782 $1,668,809
Goodwill  $625,675 $625,675 $628,877 $625,675 $628,877
Amortizing intangibles $159,773 $167,116 $189,409 $159,773 $189,409
           
Performance Ratios          
           
Return on average assets 0.74% 0.70% 0.99% 0.86% 0.80%
Return on average assets (operating) (a) 0.97% 0.99% 0.98% 0.99% 0.97%
Return on average common equity  5.85% 5.63% 7.67% 6.84% 6.32%
Return on average common equity (operating) (a) 7.71% 7.93% 7.60% 7.88% 7.66%
Return on average tangible common equity 8.79% 8.54% 11.58% 10.30% 9.72%
Return on average tangible common equity (operating) (a) 11.59% 12.03% 11.48% 11.85% 11.78%
Tangible common equity ratio  9.00% 8.68% 8.77% 9.00% 8.77%
Earning asset yield (TE) 4.32% 4.47% 4.76% 4.45% 4.80%
Total cost of funds 0.23% 0.24% 0.28% 0.25% 0.32%
Net interest margin (TE) 4.09% 4.23% 4.48% 4.20% 4.48%
Efficiency ratio (b) 65.94% 64.95% 60.78% 65.17% 64.63%
Allowance for loan losses as a percent of period-end loans 1.08% 1.18% 1.18% 1.08% 1.18%
Allowance for loan losses to non-performing loans + accruing loans           
 90 days past due 111.97% 94.69% 81.40% 111.97% 81.40%
Average loan/deposit ratio 79.93% 78.70% 76.29% 77.56% 74.68%
Noninterest income excluding securities transactions as a percent of total revenue (TE) 25.90% 26.59% 26.02% 26.25% 25.88%
(a) Excludes tax-effected securities transactions and one-time noninterest expense items. Management believes that operating income provides a useful measure of financial performance that helps investors compare the Company's fundamental operations over time.
(b) Efficiency ratio is defined as noninterest expense as a percent of total revenue (TE) before amortization of purchased intangibles, one-time noninterest expense items, and securities transactions.
           
 
 Hancock Holding Company 
 Financial Highlights 
 (amounts in thousands) 
 (unaudited) 
           
   Three Months Ended   Twelve Months Ended 
  12/31/2013 9/30/2013 12/31/2012 12/31/2013 12/31/2012
Income Statement          
           
Interest income  $175,650 $181,639 $191,140 $722,210 $762,549
Interest income (TE) 178,109 184,221 194,075 732,620 774,134
Interest expense 9,643 10,109 11,275 41,479 51,682
Net interest income (TE) 168,466 174,112 182,800 691,141 722,452
Provision for loan losses 7,331 7,569 28,051 32,734 54,192
Noninterest income excluding securities transactions  58,894 63,057 64,308 246,038 252,195
Securities transactions gains 105  -- 623 105 1,552
Noninterest expense  174,213 182,205 157,920 678,274 713,067
Income before income taxes 43,462 44,813 58,825 215,866 197,355
Income tax expense 8,746 11,611 11,866 52,510 45,613
Net income $34,716 $33,202 $46,959 $163,356 $151,742
           
Adjustments from net to operating income          
Securities transactions gains 105  -- 623 105 1,552
One-time noninterest expense items          
Merger-related expenses   --  --  --  -- 45,789
Sub-debt early redemption costs  --  --  --  -- 5,336
Expense & efficiency initiative and other items 17,116 20,887  -- 38,003  --
Total one-time noninterest expense items 17,116 20,887  -- 38,003 51,125
Taxes on adjustments at 35% 5,954 7,310  (218) 13,264 17,350
Total adjustments (net of taxes) 11,057 13,577  (405) 24,634 32,223
Operating income (c) $45,773 $46,779 $46,554 $187,990 $183,965
           
Noninterest Income and Noninterest Expense          
           
Service charges on deposit accounts $19,605 $20,519 $20,232 $79,000 $78,246
Trust fees 10,214 9,477 8,273 38,186 32,736
Bank card and ATM fees 11,261 12,221 11,526 45,939 49,112
Investment & annuity fees 4,619 5,186 4,743 19,574 18,033
Secondary mortgage market operations 1,554 2,467 5,160 12,543 16,488
Insurance fees 3,304 3,661 3,588 15,804 15,692
Other income 8,337 9,526 10,786 34,992 41,888
Noninterest income excluding securities transactions 58,894 63,057 64,308 246,038 252,195
Securities transactions gains 105  -- 623 105 1,552
Total noninterest income including securities transactions $58,999 $63,057 $64,931 $246,143 $253,747
           
Personnel expense $84,912 $86,850 $87,358 $347,266 $356,734
Occupancy expense (net) 11,613 12,369 12,683 48,713 53,856
Equipment expense 4,679 5,120 5,051 20,019 21,862
Other real estate owned expense (net) 1,535 2,439 2,236 8,036 12,250
Other operating expense 47,180 47,234 42,862 186,767 185,173
Amortization of intangibles 7,178 7,306 7,730 29,470 32,067
Total operating expense 157,097 161,318 157,920 640,271 661,942
One-time noninterest expense items 17,116 20,887  -- 38,003 51,125
Total noninterest expense  $174,213 $182,205 $157,920 $678,274 $713,067
           
Common Share Data          
           
Earnings per share:          
 Basic $0.41 $0.40 $0.55 $1.93 $1.77
 Diluted $0.41 $0.40 $0.54 $1.93 $1.75
Operating earnings per share:           
 Basic $0.55 $0.56 $0.54 $2.22 $2.15
 Diluted $0.55 $0.56 $0.54 $2.22 $2.13
Cash dividends per share  $0.24 $0.24 $0.24 $0.96 $0.96
Book value per share (period-end) $29.49 $28.70 $28.91 $29.49 $28.91
Tangible book value per share (period-end) $19.94 $19.04 $19.27 $19.94 $19.27
Weighted average number of shares:          
 Basic  82,085  82,091  84,798  83,066  84,767
 Diluted  82,220  82,205  85,777  83,167  85,588
Period-end number of shares  82,237  82,107  84,848  82,237  84,848
Market data:          
 High sales price $37.12 $33.85 $32.50 $37.12 $36.73
 Low sales price $30.09 $29.00 $29.47 $25.00 $27.96
 Period end closing price  $36.68 $31.38 $31.73 $36.68 $31.73
 Trading volume  27,816  29,711  20,910  122,496  119,519
 
(c) Net income less tax-effected securities gains and one-time noninterest expense items. Management believes that operating income provides a useful measure of financial performance that helps investors compare the Company's fundamental operations over time.
 
 Hancock Holding Company 
 Financial Highlights 
 (amounts in thousands) 
 (unaudited) 
           
   Three Months Ended   
  12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012
Period-end Balance Sheet          
           
Commercial non-real estate loans  $5,064,224 $4,625,315 $4,653,342 $4,425,286 $4,433,288
Construction and land development loans  915,541 920,408 966,499 992,820 989,306
Commercial real estate loans  3,042,841 2,914,969 2,872,254 2,873,403 2,923,094
Residential mortgage loans 1,720,614 1,695,197 1,616,093 1,587,519 1,577,944
Consumer loans 1,581,597 1,578,583 1,573,309 1,603,734 1,654,170
Total loans 12,324,817 11,734,472 11,681,497 11,482,762 11,577,802
Loans held for sale 24,515 18,444 20,233 34,813 50,605
Securities 4,033,124 4,124,202 4,303,918 4,662,279 3,716,460
Short-term investments 268,839 462,313 442,917 475,677 1,500,188
Earning assets 16,651,295 16,339,431 16,448,565 16,655,531 16,845,055
Allowance for loan losses (133,626) (138,223) (137,969) (137,777) (136,171)
Other assets 2,491,582 2,600,638 2,623,705 2,546,369 2,755,601
Total assets $19,009,251 $18,801,846 $18,934,301 $19,064,123 $19,464,485
           
Noninterest bearing deposits $5,530,253 $5,479,696 $5,340,177 $5,418,463 $5,624,127
Interest bearing transaction and savings deposits 6,162,959 6,008,042 5,965,372 6,017,735 6,038,003
Interest bearing public fund deposits 1,571,532 1,240,336 1,410,866 1,528,790 1,580,260
Time deposits 2,095,772 2,326,797 2,439,523 2,288,363 2,501,798
Total interest bearing deposits 9,830,263 9,575,175 9,815,761 9,834,888 10,120,061
Total deposits  15,360,516 15,054,871 15,155,938 15,253,351 15,744,188
Short-term borrowings 657,960 782,779 828,107 722,537 639,133
Long-term debt 385,826 376,664 385,122 393,920 396,589
Other liabilities 179,880 231,090 219,794 217,215 231,297
Common shareholders' equity 2,425,069 2,356,442 2,345,340 2,477,100 2,453,278
Total liabilities & shareholders' equity $19,009,251 $18,801,846 $18,934,301 $19,064,123 $19,464,485
           
Capital Ratios          
           
Common shareholders' equity $2,425,069 $2,356,442 $2,345,340 $2,477,100 $2,453,278
Tier 1 capital (d) 1,682,782 1,656,497 1,632,874 1,700,115 1,668,809
Tangible common equity ratio  9.00% 8.68% 8.52% 9.14% 8.77%
Common equity (period-end) as a percent of total assets (period-end) 12.76% 12.53% 12.39% 12.99% 12.60%
Leverage (Tier 1) ratio (d) 9.36% 9.10% 8.96% 9.28% 9.11%
Tier 1 risk-based capital ratio (d) 11.87% 12.07% 12.00% 12.78% 12.64%
Total risk-based capital ratio (d) 13.23% 13.52% 13.45% 14.41% 14.28%
 
(d) Estimated for most recent period-end.
 
 Hancock Holding Company 
 Financial Highlights 
 (amounts in thousands) 
 (unaudited) 
           
   Three Months Ended   Twelve Months Ended 
  12/31/2013 9/30/2013 12/31/2012 12/31/2013 12/31/2012
Average Balance Sheet          
           
Commercial non-real estate loans  $4,786,680 $4,720,608 $4,316,455 $4,615,973 $4,007,506
Construction and land development loans  931,214 970,411 1,035,401 965,237 1,157,064
Commercial real estate loans  2,915,323 2,891,830 2,910,880 2,899,317 2,897,317
Residential mortgage loans 1,715,716 1,668,201 1,613,919 1,659,324 1,571,465
Consumer loans 1,573,446 1,570,345 1,667,134 1,585,353 1,651,387
Total loans (e) 11,922,379 11,821,395 11,543,789 11,725,204 11,284,739
Securities (f) 4,070,657 4,135,348 3,732,815 4,140,051 4,063,817
Short-term investments 383,551 427,892 969,037 578,613 771,523
Earning assets 16,376,587 16,384,635 16,245,641 16,443,868 16,120,079
Allowance for loan losses (138,708) (137,936) (136,254) (137,897) (136,257)
Other assets 2,501,212 2,549,328 2,855,565 2,623,047 2,951,547
Total assets $18,739,091 $18,796,027 $18,964,952 $18,929,018 $18,935,369
           
Noninterest bearing deposits $5,483,918 $5,415,303 $5,420,081 $5,393,955 $5,251,391
Interest bearing transaction and savings deposits 5,981,110 5,919,709 5,930,964 5,962,114 5,827,370
Interest bearing public fund deposits 1,253,199 1,302,425 1,332,163 1,410,679 1,451,459
Time deposits 2,197,450 2,384,248 2,448,694 2,350,488 2,579,963
Total interest bearing deposits 9,431,759 9,606,382 9,711,821 9,723,281 9,858,792
Total deposits 14,915,677 15,021,685 15,131,902 15,117,236 15,110,183
Short-term borrowings 848,934 820,500 847,058 806,082 843,798
Long-term debt 381,561 385,203 321,713 389,153 338,875
Other liabilities 237,151 229,694 229,100 229,983 241,710
Common shareholders' equity 2,355,768 2,338,945 2,435,179 2,386,564 2,400,803
Total liabilities & shareholders' equity $18,739,091 $18,796,027 $18,964,952 $18,929,018 $18,935,369
 
(e) Includes loans held for sale
(f) Average securities does not include unrealized holding gains/losses on available for sale securities.
 
 Hancock Holding Company 
 Average Balance and Net Interest Margin Summary 
 (amounts in thousands) 
 (unaudited) 
                   
  Three Months Ended
  12/31/2013 9/30/2013 12/31/2012
  Interest Volume Rate Interest Volume Rate Interest Volume Rate
                   
Average Earning Assets                  
Commercial & real estate loans (TE) $104,168 $8,633,217 4.79% $109,450 $8,582,849 5.06% $113,004 $8,262,736 5.44%
Residential mortgage loans  23,612  1,715,716 5.50%  24,968  1,668,201 5.99%  27,998  1,613,919 6.94%
Consumer loans  24,382  1,573,446 6.15%  25,740  1,570,345 6.51%  28,593  1,667,134 6.82%
Loan fees & late charges  1,001  -- 0.00%  689  -- 0.00%  3,098  -- 0.00%
 Total loans (TE)  153,163  11,922,379 5.10%  160,847  11,821,395 5.41%  172,693  11,543,789 5.95%
                   
US Treasury and government agency securities  555  100,150 2.20%  33  5,585 2.34%  51  18,315 1.11%
CMOs  7,804  1,425,839 2.19%  7,278  1,463,403 1.99%  7,204  1,577,165 1.83%
Mortgage backed securities  13,866  2,299,544 2.41%  13,042  2,410,763 2.16%  10,475  1,891,704 2.22%
Municipals (TE)  2,443  235,778 4.14%  2,715  247,140 4.39%  2,942  238,733 4.93%
Other securities  58  9,346 2.49%  53  8,457 2.51%  94  6,898 5.43%
 Total securities (TE) (g)  24,726  4,070,657 2.43%  23,121  4,135,348 2.24%  20,766  3,732,815 2.21%
                   
 Total short-term investments  220  383,551 0.23%  253  427,892 0.23%  616  969,037 0.25%
                   
 Average earning assets yield (TE) $178,109 $16,376,587 4.32% $184,221 $16,384,635 4.47% $194,075 $16,245,641 4.76%
                   
Interest-bearing Liabilities                  
Interest-bearing transaction and savings deposits  $1,399 $5,981,110 0.09% $1,398 $5,919,709 0.09% $1,719 $5,930,964 0.12%
Time deposits  3,328  2,197,450 0.60%  3,687  2,384,248 0.61%  4,507  2,448,694 0.73%
Public funds  663  1,253,199 0.21%  766  1,302,425 0.23%  861  1,332,163 0.26%
 Total interest bearing deposits  5,390  9,431,759 0.23%  5,851  9,606,382 0.24%  7,087  9,711,821 0.29%
                   
Short-term borrowings  1,092  848,934 0.51%  1,074  820,500 0.52%  1,273  847,058 0.60%
Long-term debt  3,161  381,561 3.29%  3,184  385,203 3.28%  2,915  321,713 3.60%
 Total borrowings  4,253  1,230,495 1.37%  4,258  1,205,703 1.40%  4,188  1,168,771 1.43%
                   
 Total interest bearing liabilities cost $9,643 $10,662,254 0.36% $10,109 $10,812,085 0.37% $11,275 $10,880,592 0.41%
                   
Net interest-free funding sources    5,714,333      5,572,550      5,365,049  
                   
Total Cost of Funds $9,643 $16,376,587 0.23% $10,109 $16,384,635 0.24% $11,275 $16,245,641 0.28%
                   
Net Interest Spread (TE) $168,466   3.96% $174,112   4.10% $182,800   4.35%
                   
Net Interest Margin (TE) $168,466 $16,376,587 4.09% $174,112 $16,384,635 4.23% $182,800 $16,245,641 4.48%
 
(g) Average securities does not include unrealized holding gains/losses on available for sale securities.
 
 Hancock Holding Company 
 Average Balance and Net Interest Margin Summary 
 (amounts in thousands) 
 (unaudited) 
             
   Twelve Months Ended 
  12/31/2013 12/31/2012
  Interest Volume Rate Interest Volume Rate
             
Average Earning Assets            
Commercial & real estate loans (TE) $430,258 $8,480,527 5.07% $443,360 $8,061,887 5.50%
Residential mortgage loans  101,800  1,659,324 6.14%  111,662  1,571,465 7.11%
Consumer loans  103,157  1,585,353 6.51%  115,470  1,651,387 6.99%
Loan fees & late charges  3,494  -- 0.00%  6,335  -- 0.00%
 Total loans (TE)  638,709  11,725,204 5.45%  676,827  11,284,739 6.00%
             
US Treasury and government agency securities  606  28,063 2.16%  2,104  99,136 2.12%
CMOs  29,627  1,502,867 1.97%  29,790  1,545,531 1.93%
Mortgage backed securities  51,730  2,367,274 2.19%  51,332  2,150,799 2.39%
Municipals (TE)  10,342  233,310 4.43%  11,814  260,488 4.54%
Other securities  208  8,537 2.44%  348  7,863 4.43%
 Total securities (TE) (h)  92,513  4,140,051 2.23%  95,388  4,063,817 2.35%
             
 Total short-term investments  1,398  578,613 0.24%  1,919  771,523 0.25%
             
 Average earning assets yield (TE) $732,620 $16,443,868 4.45% $774,134 $16,120,079 4.80%
             
Interest-Bearing Liabilities            
Interest-bearing transaction deposits  $5,998 $5,962,114 0.10% $7,353 $5,827,370 0.13%
Time deposits  14,896  2,350,488 0.63%  21,242 2,579,963 0.82%
Public funds  3,281  1,410,679 0.23%  4,146 1,451,459 0.29%
 Total interest bearing deposits  24,175  9,723,281 0.25%  32,741  9,858,792 0.33%
             
Short-term borrowings  4,542  806,082 0.56%  6,065  843,798 0.72%
Long-term debt  12,762  389,153 3.28%  12,876  338,875 3.80%
 Total borrowings  17,304  1,195,235 1.45%  18,941  1,182,673 1.60%
             
 Total interest bearing liabilities cost $41,479 $10,918,516 0.38% $51,682 $11,041,465 0.47%
             
Net interest-free funding sources    5,525,352     5,078,614  
             
Total Cost of Funds $41,479 $16,443,868 0.25% $51,682 $16,120,079 0.32%
             
Net Interest Spread (TE) $691,141   4.07% $722,452   4.33%
             
Net Interest Margin (TE) $691,141 $16,443,868 4.20% $722,452 $16,120,079 4.48%
 
(h) Average securities does not include unrealized holding gains/losses on available for sale securities.
           
 
 Hancock Holding Company 
 Financial Highlights 
 (amounts in thousands) 
 (unaudited) 
           
   Three Months Ended   Twelve Months Ended 
  12/31/2013 9/30/2013 12/31/2012 12/31/2013 12/31/2012
Asset Quality Information          
           
Non-accrual loans (i) $84,011 $100,649 $121,837 $84,011 $121,837
Restructured loans (j) 24,947 29,705 32,215 24,947 32,215
Total non-performing loans 108,958 130,354 154,052 108,958 154,052
ORE and foreclosed assets 76,979 85,560 102,072 76,979 102,072
Total non-performing assets $185,937 $215,914 $256,124 $185,937 $256,124
Non-performing assets as a percent of loans, ORE and foreclosed assets 1.50% 1.83% 2.19% 1.50% 2.19%
Accruing loans 90 days past due  $10,387 $15,620 $13,244 $10,387 $13,244
Accruing loans 90 days past due as a percent of loans 0.08% 0.13% 0.11% 0.08% 0.11%
Non-performing assets + accruing loans 90 days past due to loans, ORE and foreclosed assets 1.58% 1.96% 2.31% 1.58% 2.31%
           
Net charge-offs - non-covered $5,216 $5,430 $28,038 $24,309 $55,031
Net charge-offs - covered (3,399) 506 3,230 2,355 26,069
Net charge-offs - non-covered as a percent of average loans 0.17% 0.18% 0.97% 0.21% 0.49%
           
Allowance for loan losses $133,626 $138,233 $136,171 $133,626 $136,171
Allowance for loan losses as a percent of period-end loans 1.08% 1.18% 1.18% 1.08% 1.18%
Allowance for loan losses to non-performing loans + accruing loans         
 90 days past due 111.97% 94.69% 81.40% 111.97% 81.40%
           
Provision for loan losses $7,331 $7,569 $28,051 $32,734 $54,192
           
Allowance for Loan Losses          
           
Beginning Balance $138,223 $137,969 $135,591 $136,171 $124,881
 Net provision for loan losses - covered loans  (532) 1,024 199 7,455 2,823
 Provision for loan losses - non-covered loans 7,863 6,545 27,852 25,279 51,369
Net provision for loan losses 7,331 7,569 28,051 32,734 54,192
(Decrease)increase in FDIC loss share receivable   (10,111)  (1,379) 3,797  (8,615) 38,198
Charge-offs - non-covered 11,515 8,698 30,172 42,899 64,760
Recoveries - non-covered  (6,299) (3,268) (2,134) (18,590) (9,729)
Net charge-offs - covered   (3,399) 506 3,230 2,355 26,069
Net charge-offs 1,817 5,936 31,268 26,664 81,100
Ending Balance $133,626 $138,223 $136,171 $133,626 $136,171
           
           
Net Charge-off Information           
           
Net charge-offs - non-covered:          
Commercial/real estate loans $2,183 $1,267 $23,090 $11,684 $36,902
Residential mortgage loans  (197) 541 1,372 361 5,951
Consumer loans 3,230 3,622 3,576 12,264 12,178
Total net charge-offs - non-covered  $5,216 $5,430 $28,038 $24,309 $55,031
           
Average loans:          
Commercial/real estate loans $8,633,217 $8,582,849 $8,262,736 $8,480,527 $8,061,887
Residential mortgage loans 1,715,716 1,668,201 1,613,919 1,659,324 1,571,465
Consumer loans 1,573,446 1,570,345 1,667,134 1,585,353 1,651,387
Total average loans $11,922,379 $11,821,395 $11,543,789 $11,725,204 $11,284,739
           
Net charge-offs - non-covered to average loans:          
Commercial/real estate loans 0.10% 0.06% 1.11% 0.14% 0.46%
Residential mortgage loans (0.05)% 0.13% 0.34% 0.02% 0.38%
Consumer loans 0.81% 0.92% 0.85% 0.77% 0.74%
Total net charge-offs - non-covered to average loans 0.17% 0.18% 0.97% 0.21% 0.49%
 
(i) Non-accrual loans and accruing loans past due 90 days or more do not include non-accrual restructured loans and acquired credit-impaired loans which were written down to fair value upon acquisition and accrete interest income over the remaining life of the loan.
(j) Included in restructured loans are $15.7 million, $19.1 million, and $15.8 million in non-accrual loans at 12/31/2013, 9/30/13, and 12/31/12, respectively. Total excludes acquired credit-impaired loans.
 
 Hancock Holding Company 
 Financial Highlights 
 (amounts in thousands) 
 (unaudited) 
         
Supplemental Asset Quality Information Originated Loans  Acquired Loans (k) Covered Loans (l) Total
  12/31/2013
         
Non-accrual loans $61,887 $18,580 $3,544 $84,011
Restructured loans 21,222 3,725  -- 24,947
Total non-performing loans 83,109 22,305 3,544 108,958
ORE and foreclosed assets 51,240  -- 25,739 76,979
Total non-performing assets (m) $134,349 $22,305 $29,283 $185,937
Accruing loans 90 days past due  $3,298 $7,089  -- $10,387
Allowance for loan losses $78,885 $1,647 $53,094 $133,626
         
  9/30/2013
         
Non-accrual loans $75,663 $19,823 $5,163 $100,649
Restructured loans 25,942 3,763  -- 29,705
Total non-performing loans 101,605 23,586 5,163 130,354
ORE and foreclosed assets 60,187  -- 25,373 85,560
Total non-performing assets $161,792 $23,586 $30,536 $215,914
Accruing loans 90 days past due  $12,512 $3,108  -- $15,620
Allowance for loan losses $77,421 $463 $60,339 $138,223
         
         
Loans Outstanding Originated Loans  Acquired Loans (k) Covered Loans (l) Total
  12/31/2013
         
Commercial non-real estate loans  $4,113,837 $926,997 $23,390 $5,064,224
Construction and land development loans  752,381 142,931 20,229 915,541
Commercial real estate loans  2,022,528 967,148 53,165 3,042,841
Residential mortgage loans 1,196,256 315,340 209,018 1,720,614
Consumer loans 1,409,130 119,603 52,864 1,581,597
Total loans $9,494,132 $2,472,019 $358,666 $12,324,817
Change in loan balance from previous quarter $793,365 ($169,684) ($33,336) $590,345
         
  9/30/2013
         
Commercial non-real estate loans  $3,633,490 $967,485 $24,340 $4,625,315
Construction and land development loans  738,983 158,228 23,197 920,408
Commercial real estate loans  1,816,402 1,038,287 60,280 2,914,969
Residential mortgage loans 1,124,649 347,054 223,494 1,695,197
Consumer loans 1,387,243 130,649 60,691 1,578,583
Total loans $8,700,767 $2,641,703 $392,002 $11,734,472
Change in loan balance from previous quarter $447,012 ($355,328) ($38,709) $52,975
 
(k) Loans which have been acquired and no allowance brought forward in accordance with acquisition accounting.
(l) Acquired loans which are covered by loss sharing agreements with the FDIC providing considerable protection against credit risk.
(m) ORE received in settlement of acquired loans is no longer subject to purchase accounting guidance and has been included with ORE from originated loans. ORE received in settlement of covered loans remains covered under the FDIC loss share agreements.
Trisha Voltz Carlson
SVP, Investor Relations Manager
504.299.5208