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Hancock Holding Company 10-Q 2008

Documents found in this filing:

  1. 10-Q
  2. Ex-31.1
  3. Ex-31.2
  4. Ex-32.1
  5. Ex-32.2
  6. Ex-32.2



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

 

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

For the quarterly period ended March 31, 2008

OR

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

For the transition period from ________________________to________________________

Commission File Number    0-13089

 

 

HANCOCK HOLDING COMPANY


(Exact name of registrant as specified in its charter)


 

 

 

                    Mississippi

 

64-0693170


 


(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)

 

 

 


 

 

 

One Hancock Plaza, P.O. Box 4019, Gulfport, Mississippi

 

39502


 


(Address of principal executive offices)

 

(Zip Code)

 

 

 

(228) 868-4000


(Registrant’s telephone number, including area code)

 

NOT APPLICABLE


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
                                    Yes x  Noo

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

                                    Yes o  No x

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

31,379,371 common shares were outstanding as of April 30, 2008 for financial statement purposes.




Hancock Holding Company

Index

 

 

 

 

 

Page Number

 


Part I. Financial Information

 

 

 

 

ITEM 1.

Financial Statements

 

 

Condensed Consolidated Balance Sheets —
March 31, 2008 (unaudited) and December 31, 2007

1

 

 

 

 

Condensed Consolidated Statements of Income (unaudited) —
Three months ended March 31, 2008 and 2007

2

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity
(unaudited) – Three months ended March 31, 2008 and 2007

3

 

 

 

 

Condensed Consolidated Statements of Cash Flows (unaudited) —
Three months ended March 31, 2008 and 2007

4

 

 

 

 

Notes to Condensed Consolidated Financial Statements (unaudited) —
March 31, 2008

5-20

 

 

 

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21-32

 

 

 

ITEM 3.

Quantitative and Qualitative Disclosures about Market Risk

33

 

 

 

ITEM 4.

Controls and Procedures

34

 

 

 

Part II. Other Information

 

 

 

ITEM 1A.

Risk Factors

35

 

 

 

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

35

 

 

 

ITEM 4.

Submission of Matters to a Vote of Security Holders

36

 

 

 

ITEM 6.

Exhibits

36

 

 

 

Signatures

 

37




Part I. Financial Information

Item 1. Financial Statements

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

 

 

 

 

 

 

 

 

 

 

March 31,
2008
(unaudited)

 

December 31,
2007

 

 

 


 


 

ASSETS

 

 

 

 

 

Cash and due from banks (non-interest bearing)

 

$

189,359

 

$

182,615

 

Interest-bearing time deposits with other banks

 

 

8,722

 

 

8,560

 

Federal funds sold

 

 

358,086

 

 

117,721

 

Trading securities

 

 

2,147

 

 

197,425

 

Securities available for sale, at fair value
(amortized cost of $1,747,451 and $1,479,963)

 

 

1,763,269

 

 

1,480,196

 

Loans held for sale

 

 

22,752

 

 

18,957

 

Loans

 

 

3,653,775

 

 

3,612,883

 

Less: allowance for loan losses

 

 

(53,008

)

 

(47,123

)

unearned income

 

 

(14,715

)

 

(16,326

)

 

 



 



 

Loans, net

 

 

3,586,052

 

 

3,549,434

 

Property and equipment, net of accumulated
depreciation of $90,995 and $87,160

 

 

203,563

 

 

200,566

 

Other real estate, net

 

 

3,425

 

 

2,172

 

Accrued interest receivable

 

 

30,479

 

 

35,117

 

Goodwill, net

 

 

62,277

 

 

62,277

 

Other intangible assets, net

 

 

7,865

 

 

8,298

 

Life insurance contracts

 

 

141,456

 

 

139,421

 

Reinsurance receivables

 

 

31,698

 

 

34,827

 

Deferred tax asset, net

 

 

31

 

 

3,976

 

Other assets

 

 

13,932

 

 

14,417

 

 

 



 



 

Total assets

 

$

6,425,113

 

$

6,055,979

 

 

 



 



 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Non-interest bearing demand

 

$

881,380

 

$

907,874

 

Interest-bearing savings, NOW, money market
and time

 

 

4,262,205

 

 

4,101,660

 

 

 



 



 

Total deposits

 

 

5,143,585

 

 

5,009,534

 

Federal funds purchased

 

 

33,775

 

 

4,100

 

Securities sold under agreements to repurchase

 

 

558,790

 

 

371,604

 

Long-term notes

 

 

756

 

 

793

 

Policy reserves and liabilities

 

 

52,981

 

 

58,489

 

Other liabilities

 

 

57,798

 

 

57,272

 

 

 



 



 

Total liabilities

 

 

5,847,685

 

 

5,501,792

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

Common stock-$3.33 par value per share; 350,000,000
shares authorized, 31,371,901 and 31,294,607 issued
and outstanding, respectively

 

 

104,468

 

 

104,211

 

Capital surplus

 

 

88,347

 

 

87,122

 

Retained earnings

 

 

389,145

 

 

377,481

 

Accumulated other comprehensive loss, net

 

 

(4,532

)

 

(14,627

)

 

 



 



 

Total stockholders’ equity

 

 

577,428

 

 

554,187

 

 

 



 



 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

6,425,113

 

$

6,055,979

 

 

 



 



 

See notes to unaudited condensed consolidated financial statements.

1



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

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

 

 


 


 

Interest income:

 

 

 

 

 

 

 

Loans, including fees

 

$

62,494

 

$

60,851

 

Securities - taxable

 

 

18,864

 

 

19,404

 

Securities - tax exempt

 

 

1,394

 

 

1,647

 

Federal funds sold

 

 

1,445

 

 

2,867

 

Other investments

 

 

616

 

 

939

 

 

 



 



 

Total interest income

 

 

84,813

 

 

85,708

 

 

 



 



 

 

Interest expense:

 

 

 

 

 

 

 

Deposits

 

 

30,599

 

 

32,816

 

Federal funds purchased and securities sold under agreements to repurchase

 

 

3,762

 

 

1,857

 

Long-term notes and other interest expense

 

 

29

 

 

25

 

Capitalized interest

 

 

(46

)

 

(390

)

 

 



 



 

Total interest expense

 

 

34,344

 

 

34,308

 

 

 



 



 

 

Net interest income

 

 

50,469

 

 

51,400

 

Provision for loan losses, net

 

 

8,818

 

 

1,211

 

 

 



 



 

Net interest income after provision for loan losses

 

 

41,651

 

 

50,189

 

 

 



 



 

 

Noninterest income:

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

10,790

 

 

9,190

 

Other service charges, commissions and fees

 

 

15,556

 

 

13,711

 

Securities gains, net

 

 

5,652

 

 

6

 

Other income

 

 

4,382

 

 

3,556

 

 

 



 



 

Total noninterest income

 

 

36,380

 

 

26,463

 

 

 



 



 

 

Noninterest expense:

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

25,631

 

 

26,563

 

Net occupancy expense

 

 

4,601

 

 

4,073

 

Equipment rentals, depreciation and maintenance

 

 

2,909

 

 

2,272

 

Amortization of intangibles

 

 

365

 

 

423

 

Other expense

 

 

16,628

 

 

16,377

 

 

 



 



 

Total noninterest expense

 

 

50,134

 

 

49,708

 

 

 



 



 

 

Net income before income taxes

 

 

27,897

 

 

26,944

 

Income tax expense

 

 

7,840

 

 

7,715

 

 

 



 



 

Net income

 

$

20,057

 

$

19,229

 

 

 



 



 

Basic earnings per share

 

$

0.64

 

$

0.59

 

 

 



 



 

Diluted earnings per share

 

$

0.63

 

$

0.58

 

 

 



 



 

Dividends paid per share

 

$

0.240

 

$

0.240

 

 

 



 



 

Weighted avg. shares outstanding-basic

 

 

31,346

 

 

32,665

 

 

 



 



 

Weighted avg. shares outstanding-diluted

 

 

31,790

 

 

33,299

 

 

 



 



 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital
Surplus

 

Retained
Earnings

 

Accumulated
Other
Comprehensive
Loss, net

 

Total

 

 

 

Common Stock

 

 

 

 

 

 

 

Shares

 

Amount

 

 

 

 

 

 

 


 


 


 


 


 


 

Balance, January 1, 2007

 

 

32,666,052

 

$

108,778

 

$

139,099

 

$

334,546

 

$

(24,013

)

$

558,410

 

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per consolidated statements of income

 

 

 

 

 

 

 

 

19,229

 

 

 

 

19,229

 

Net change in fair value of securities available for sale, net of tax

 

 

 

 

 

 

 

 

 

 

960

 

 

960

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,189

 

Cash dividends paid ($0.240 per common share)

 

 

 

 

 

 

 

 

(7,905

)

 

 

 

(7,905

)

Common stock issued, long-term incentive plan, including income tax benefit of $64

 

 

79,561

 

 

265

 

 

159

 

 

 

 

 

 

424

 

Compensation expense, long-term incentive plan

 

 

 

 

 

 

494

 

 

 

 

 

 

494

 

Repurchase/retirement of common stock

 

 

(228,000

)

 

(759

)

 

(9,245

)

 

 

 

 

 

(10,004

)

 

 



 



 



 



 



 



 

Balance, March 31, 2007

 

 

32,517,613

 

$

108,284

 

$

130,507

 

$

345,870

 

$

(23,053

)

$

561,608

 

 

 



 



 



 



 



 



 

 

Balance, January 1, 2008

 

 

31,294,607

 

$

104,211

 

$

87,122

 

$

377,481

 

$

(14,627

)

$

554,187

 

SFAS 158, change in measurement date

 

 

 

 

 

 

 

 

(815

)

 

 

 

(815

)

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per consolidated statements of income

 

 

 

 

 

 

 

 

20,057

 

 

 

 

20,057

 

Net change in unfunded accumulated benefit obligation, net of tax

 

 

 

 

 

 

 

 

 

 

312

 

 

312

 

Net change in fair value of securities available for sale, net of tax

 

 

 

 

 

 

 

 

 

 

9,783

 

 

9,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,152

 

Cash dividends paid ($0.240 per common share)

 

 

 

 

 

 

 

 

(7,578

)

 

 

 

(7,578

)

Common stock issued, long-term incentive plan, including income tax benefit of $92

 

 

77,294

 

 

257

 

 

580

 

 

 

 

 

 

837

 

Compensation expense, long-term incentive plan

 

 

 

 

 

 

645

 

 

 

 

 

 

645

 

 

 



 



 



 



 



 



 

Balance, March 31, 2008

 

 

31,371,901

 

$

104,468

 

$

88,347

 

$

389,145

 

$

(4,532

)

$

577,428

 

 

 



 



 



 



 



 



 

See notes to unaudited condensed consolidated financial statements.

3



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

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

 

 


 


 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income

 

$

20,057

 

$

19,229

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,006

 

 

2,826

 

Provision for loan losses, net

 

 

8,818

 

 

1,211

 

Provision for losses on other real estate owned, net

 

 

2

 

 

26

 

Gain on sales of other real estate owned, net

 

 

(17

)

 

(795

)

Deferred tax benefit

 

 

(2,044

)

 

(757

)

Increase in cash surrender value of life insurance contracts

 

 

(2,035

)

 

(1,192

)

Gain on sales/paydowns of securities available for sale, net

 

 

(2,792

)

 

(6

)

Loss/(gain) on disposal of other assets

 

 

(231

)

 

(48

)

Gain on sale of loans held for sale

 

 

(120

)

 

(116

)

Gain on trading securities

 

 

(2,860

)

 

 

Amortization/(accretion) of securities premium/discount, net

 

 

106

 

 

(1,700

)

Amortization of mortgage servicing rights

 

 

57

 

 

92

 

Amortization of intangible assets

 

 

365

 

 

423

 

Stock-based compensation expense

 

 

645

 

 

494

 

Decrease (increase) in accrued interest receivable

 

 

4,638

 

 

(1,220

)

Increase (decrease) in accrued expenses

 

 

4,544

 

 

(3,088

)

Increase (decrease) in other liabilities

 

 

(1,731

)

 

479

 

Decrease in interest payable

 

 

(2,013

)

 

(1,786

)

Decrease in policy reserves and liabilities

 

 

(5,508

)

 

(6,619

)

Decrease in reinsurance receivable

 

 

3,129

 

 

1,728

 

Decrease in other assets

 

 

485

 

 

649

 

Proceeds from sale of loans held for sale

 

 

49,942

 

 

57,760

 

Originations of loans held for sale

 

 

(53,617

)

 

(62,045

)

Excess tax benefit from share based payments

 

 

(92

)

 

(64

)

Other, net

 

 

(5

)

 

26

 

 

 



 



 

Net cash provided by operating activities

 

 

23,729

 

 

5,507

 

 

 



 



 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Net increase in interest-bearing time deposits

 

 

(162

)

 

(1,665

)

Proceeds from sales of securities available for sale

 

 

2,789

 

 

2,293

 

Proceeds from paydowns of securities held for trading

 

 

7,257

 

 

 

Proceeds from maturities of securities available for sale

 

 

585,918

 

 

385,919

 

Purchases of securities available for sale

 

 

(662,612

)

 

(302,643

)

Net decrease (increase) in federal funds sold

 

 

(240,365

)

 

89,180

 

Net increase in loans

 

 

(47,744

)

 

(50,670

)

Purchases of property and equipment

 

 

(7,514

)

 

(14,422

)

Proceeds from sales of property and equipment

 

 

243

 

 

85

 

Proceeds from sales of other real estate

 

 

1,071

 

 

857

 

 

 



 



 

Net cash (used in) provided by investing activities

 

 

(361,119

)

 

108,934

 

 

 



 



 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Net increase (decrease) in deposits

 

 

134,051

 

 

(107,228

)

Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase

 

 

216,861

 

 

(4,405

)

Repayments of long-term notes

 

 

(37

)

 

(2

)

Dividends paid

 

 

(7,578

)

 

(7,905

)

Proceeds from exercise of stock options

 

 

745

 

 

360

 

Repurchase/retirement of common stock

 

 

 

 

(10,004

)

Excess tax benefit from stock option exercises

 

 

92

 

 

64

 

 

 



 



 

Net cash (used in) provided by financing activities

 

 

344,134

 

 

(129,120

)

 

 



 



 

NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS

 

 

6,744

 

 

(14,679

)

CASH AND DUE FROM BANKS, BEGINNING

 

 

182,615

 

 

190,114

 

 

 



 



 

CASH AND DUE FROM BANKS, ENDING

 

$

189,359

 

$

175,435

 

 

 



 



 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

 

Income taxes paid

 

$

737,500

 

$

9,077

 

Interest paid, including capitalized interest of $46 and $390, respectively

 

 

36,357

 

 

36,094

 

Restricted stock issued to employees of Hancock

 

 

417

 

 

2

 

SUPPLEMENTAL INFORMATION FOR NON-CASH

 

 

 

 

 

 

 

INVESTING AND FINANCING ACTIVITIES

 

 

 

 

 

 

 

Transfers from loans to other real estate

 

$

2,308

 

$

166

 

Transfers from trading securities to available for sale securities

 

 

187,641

 

 

 

See notes to unaudited condensed consolidated financial statements.

4



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

1. Basis of Presentation

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

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

          Certain reclassifications have been made to conform prior year financial information to the current period presentation. These reclassifications had no material impact on the unaudited condensed consolidated financial statements.

Critical Accounting Policies

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

5



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

2. Fair Value of Assets

          The Company adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (“SFAS No. 157”), on January 1, 2008. SFAS No. 157 establishes a framework for measuring fair value under generally accepted accounting principles (GAAP), clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. SFAS No. 157 defines a fair value hierarchy that prioritizes the inputs to these valuation techniques used to measure fair value giving preference to quoted prices in active markets (level 1) and the lowest priority to unobservable inputs such as a reporting entity’s own data (level 3). Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in markets that are not active, observable inputs other than quoted prices, such as interest rates and yield curves, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. In addition, the Company adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment SFAS No. 115 (“SFAS No. 159”), on January 1, 2008. The Company did not elect to fair value any additional items under SFAS No. 159. The Company, in accordance with Financial Accounting Standards Board Staff Position No. 157-2 “The Effective Date of FASB Statement No. 157”, will defer application of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities until January 1, 2009.

          Fair Value of Assets Measured on a Recurring Basis

          The following table presents for each of the fair-value hierarchy levels the Company’s financial assets and liabilities that are measured at fair value (in thousands) on a recurring basis at March 31, 2008.

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Net Balance

 









Assets

 

 

 

 

 

 

 

 

 

 

Securities available for sale

 

$

1,576,246

 

$

 

$

1,576,246

 

Municipal bonds available for sale

 

 

 

 

187,023

 

 

187,023

 

Trading securities

 

 

2,147

 

 

 

 

2,147

 

Swaps

 

 

 

 

(2,086

)

 

(2,086

)

Loans carried at fair value

 

 

 

 

24,547

 

 

24,547

 

Interest rate lock commitments

 

 

 

 

15

 

 

15

 












Total assets

 

$

1,578,393

 

$

209,499

 

$

1,787,892

 












          Fair Value of Assets Measured on a Nonrecurring Basis

          Certain assets and liabilities are measured at fair value on a non-recurring basis and therefore are not included in the table above. Impaired loans are level 2 assets measured using quoted appraisals from external parties of the collateral less any prior liens. As of March 31, 2008, the fair value of impaired loans was $32.9 million.

6



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

3. Securities

          Available for Sale Securities

          In the first quarter of 2008, as part of VISA’s initial public offering, VISA redeemed 37.5% of Hancock’s membership shares to cover pending litigation resulting in proceeds of $2.8 million in a realized security gain. During the quarter ended March 31, 2007, a subsidiary of the Company, Magna Insurance Company, sold three available for sale securities out of its portfolio to provide liquidity for surrenders of annuities for Magna Insurance Company. These three securities had a gross loss of $4,160.

          Trading Securities

          During the first quarter of 2008, the Company reclassified $187.6 million in certain securities from Trading to Available for Sale because it intends to hold them for a longer period of time. The Company recognized a $3.2 million gain in the income statement for the fair value adjustment on trading securities up to the point in time of the transfer. There were no trading gains or losses in the first quarter of 2007.

4. Loans and Allowance for Loan Losses

          Loans, net of unearned income, totaled $3.6 billion at March 31, 2008 and December 31, 2007. The Company also held $22.8 million and $19.0 million in loans held for sale at March 31, 2008 and December 31, 2007, respectively, carried at lower of cost or fair value. These loans are originated on a best-efforts basis, whereby a commitment by a third party to purchase the loan has been received concurrent with the Banks’ commitment to the borrower to originate the loan.

          In some instances, loans are placed on nonaccrual status. All accrued but uncollected interest related to the loan is deducted from income in the period the loan is assigned a nonaccrual status. For such period as a loan is in nonaccrual status, any cash receipts are applied first to principal, second to expenses incurred to cause payment to be made and lastly to the recovery of any reversed interest income and interest that would be due and owing subsequent to the loan being placed on nonaccrual status.

          The Company’s investments in impaired loans at March 31, 2008 and December 31, 2007 were $41.2 million and $43.5 million, respectively. The amount of interest that was not recognized on nonaccrual loans would not have had a material effect on earnings for the three months ended March 31, 2008 and March 31, 2007.

          Nonaccrual loans and foreclosed assets, which make up total non-performing assets, amounted to approximately 0.46% and 0.43% of total loans at March 31, 2008 and December 31, 2007, respectively. Interest recognized on nonaccrual loans is immaterial to the Company’s operating results.

7



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

4. Loans and Allowance for Loan Losses (continued)

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

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

 

 


 


 

 

 

 

 

 

 

Balance of allowance for loan losses at beginning of period

 

$

47,123

 

$

46,772

 

Provision for loan losses, net

 

 

8,818

 

 

1,211

 

Loans charged-off:

 

 

 

 

 

 

 

Commercial, real estate and mortgage

 

 

1,035

 

 

503

 

Direct and indirect consumer

 

 

1,309

 

 

1,215

 

Finance company

 

 

1,252

 

 

633

 

Demand deposit accounts

 

 

601

 

 

725

 

 

 



 



 

Total charge-offs

 

 

4,197

 

 

3,076

 

 

 



 



 

Recoveries of loans previously charged-off:

 

 

 

 

 

 

 

Commercial, real estate and mortgage

 

 

201

 

 

312

 

Direct and indirect consumer

 

 

410

 

 

546

 

Finance company

 

 

204

 

 

144

 

Demand deposit accounts

 

 

449

 

 

609

 

 

 



 



 

Total recoveries

 

 

1,264

 

 

1,611

 

 

 



 



 

Net charge-offs

 

 

2,933

 

 

1,465

 

 

 



 



 

Balance of allowance for loan losses at end of period

 

$

53,008

 

$

46,518

 

 

 



 



 

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

 

 

 

 

 

 

 

 

 

 

March 31, 2008

 

December 31, 2007

 

 

 


 


 

 

 

(In thousands)

 

Balance of allowance for loan losses

 

 

 

 

 

 

 

Non-impaired

 

$

44,249

 

$

38,146

 

Impaired

 

 

8,759

 

 

8,977

 

 

 



 



 

Total allowance for loan losses

 

$

53,008

 

$

47,123

 

 

 



 



 

          As of March 31, 2008 and December 31, 2007, the Company had $24.5 million and $18.8 million, respectively, in loans carried at fair value.

8



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

4. Loans and Allowance for Loan Losses (continued)

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

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

 

 


 


 

Ratios:

 

 

 

 

 

 

 

Net charge-offs to average net loans (annualized)

 

 

0.32

%

 

0.18

%

Net charge-offs to period-end net loans (annualized)

 

 

0.32

%

 

0.18

%

Allowance for loan losses to average net loans

 

 

1.46

%

 

1.41

%

Allowance for loan losses to period-end net loans

 

 

1.46

%

 

1.41

%

Net charge-offs to loan loss allowance

 

 

5.53

%

 

3.15

%

Provision for loan losses to net charge-offs

 

 

300.65

%

 

82.66

%

5. Goodwill and Other Intangible Assets

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of
March 31, 2008

 

As of
December 31, 2007

 

 

 


 


 

 

 

Gross Carrying
Amount

 

Accumulated
Amortization

 

Net

 

Gross Carrying
Amount

 

Accumulated
Amortization

 

Net

 

 

 


 


 


 


 


 


 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core deposit intangibles

 

$

14,137

 

$

8,782

 

$

5,355

 

$

14,137

 

$

8,500

 

$

5,637

 

Value of insurance business acquired

 

 

2,968

 

 

1,081

 

 

1,887

 

 

3,757

 

 

1,807

 

 

1,950

 

Non-compete agreements

 

 

368

 

 

267

 

 

101

 

 

368

 

 

252

 

 

116

 

Trade name

 

 

100

 

 

55

 

 

45

 

 

100

 

 

50

 

 

50

 

 

 



 



 



 



 



 



 

Total

 

$

17,573

 

$

10,185

 

$

7,388

 

$

18,362

 

$

10,609

 

$

7,753

 

 

 



 



 



 



 



 



 


 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

 

 


 


 

Aggregate amortization expense for:

 

 

 

 

 

 

 

Core deposit intangibles

 

$

283

 

$

274

 

Value of insurance businesses acquired

 

 

62

 

 

126

 

Non-compete agreements

 

 

15

 

 

18

 

Trade name

 

 

5

 

 

5

 

 

 



 



 

Total

 

$

365

 

$

423

 

 

 



 



 

9



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

5. Goodwill and Other Intangible Assets (continued)

          The remaining amortization expense for the core deposit intangibles in 2008 is estimated to be approximately $0.849 million. The amortization expense for core deposit intangibles is estimated to be approximately $1.132 million in 2009, $1.132 million in 2010, $0.928 million in 2011, $0.723 million in 2012 and the remainder of $0.591 million thereafter. The amortization of the value of business acquired, non-compete agreements and trade name are expected to approximate $0.303 million for the remainder of 2008, $0.370 million in 2009, $0.311 million in 2010, $0.268 million in 2011, $0.248 million in 2012 and the remainder of $0.533 million thereafter. The weighted-average amortization period used for intangibles is 10 years.

6. Mortgage Banking (including Mortgage Servicing Rights)

          The Company adopted SFAS No. 156, Accounting for Servicing of Financial Assets (“SFAS No. 156”) on January 1, 2007 without material impact. SFAS No. 156 requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable, and permits an entity to subsequently measure those servicing assets and servicing liabilities at fair value. Under SFAS No. 156, the Company decided to continue to use the amortization method instead of adopting the fair value measurement method. Management has determined that it has one class of servicing rights – mortgage servicing rights – which are based on the type of loan. The following are the risk characteristics of the underlying financial assets used to stratify servicing assets for purposes of measuring impairment: interest rate, type of product (fixed versus variable), duration and asset quality. The fair values of the mortgage servicing rights were $1.6 million and $1.8 million as of March 31, 2008 and December 31, 2007, respectively. The fair value was based upon Bloomberg prepayment speeds for the performing portion of the portfolio and actual prepayment speeds for the watch list portion of the portfolio. The following table shows the amounts (in thousands) of contractually specified fees for the three months ended March 31, 2008 and 2007, respectively:

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

 

 


 


 

 

 

 

 

 

 

Servicing fees

 

$

143

 

$

167

 

Late fees

 

 

11

 

 

17

 

Ancillary fees

 

 

2

 

 

8

 

 

 



 



 

Total

 

$

156

 

$

192

 

 

 



 



 

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

10



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

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

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

 

 

 

 

 

 

 

Net Carrying
Amount

 

 

 


 

Balance as of December 31, 2006

 

$

941

 

Additions

 

 

9

 

Disposals

 

 

(60

)

Amortization

 

 

(345

)

 

 



 

Balance as of December 31, 2007

 

 

545

 

Disposals

 

 

(11

)

Amortization

 

 

(57

)

 

 



 

Balance as of March 31, 2008

 

$

477

 

 

 



 

          Amortization of servicing rights is estimated to be approximately $158,000 for the remainder of 2008, $149,000 in 2009, $97,000 in 2010, $51,000 in 2011, $15,000 in 2012, and the remainder of $7,000 thereafter.

7. Earnings Per Share

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

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

 

 


 


 

 

 

 

 

 

 

Net income - used in computation of earnings per share

 

$

20,057

 

$

19,229

 

 

 



 



 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding - used in computation of basic earnings per share

 

 

31,346

 

 

32,665

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of dilutive securities Stock options and restricted stock awards

 

 

444

 

 

634

 

 

 



 



 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding plus effect of dilutive securities - used in computation of diluted earnings per share

 

 

31,790

 

 

33,299

 

 

 



 



 


 

 

 

There were no anti-dilutive share-based incentives outstanding for the three months ended March 31, 2008 and March 31, 2007.

11



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

8. Stock-Based Payment Arrangements

Stock Option Plans

          At March 31, 2008, the Company had two stock option plans. The 1996 Hancock Holding Company Long-Term Incentive Plan (the “1996 Plan”) that was approved by the Company’s shareholders in 1996 was designed to provide annual incentive stock awards. Awards as defined in the 1996 Plan include, with limitations, stock options (including restricted stock options), restricted and performance shares, and performance stock awards, all on a stand-alone, combination or tandem basis. A total of fifteen million (15,000,000) common shares can be granted under the 1996 Plan with an annual grant maximum of two percent (2%) of the Company’s outstanding common stock as reported for the fiscal year ending immediately prior to such plan year. Grants of restricted stock awards are limited to one-third of the grant totals.

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

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

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

 

 

 

 

 

 

 

Three Months Ended March 31,
2008

 

 

 


 

Expected volatility

 

29.53

%

 

Expected dividends

 

2.60

%

 

Expected term (in years)

 

6.42

 

 

Risk-free rates

 

3.32

%

 

12



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

8. Stock-Based Payment Arrangements (continued)

          A summary of option activity under the plans for the three months ended March 31, 2008, 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, 2008

 

 

1,345,333

 

$

29.04

 

 

6.1

 

 

 

 

Granted

 

 

4,289

 

$

36.88

 

 

 

 

 

 

 

Exercised

 

 

(41,392

)

$

22.65

 

 

 

 

$

662

 

Forfeited or expired

 

 

(6,586

)

$

30.42

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

Outstanding at March 31, 2008

 

 

1,301,644

 

$

29.26

 

 

6.0

 

$

16,861

 

 

 



 



 



 



 

Exercisable at March 31, 2008

 

 

1,016,408

 

$

26.11

 

 

5.6

 

$

16,285

 

 

 



 



 



 



 

Share options expected to vest

 

 

233,102

 

$

40.47

 

 

8.6

 

$

362

 

 

 



 



 



 



 

          The total intrinsic value of options exercised during the three months ended March 31, 2008 and 2007 was $0.7 million and $3.4 million, respectively.

          A summary of the status of the Company’s nonvested shares as of March 31, 2008, and changes during the three months ended March 31, 2008, is presented below:

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

Weighted-
Average
Grant-Date
Fair Value ($)

 

 

 


 


 

 

 

 

 

 

 

 

 

Nonvested at January 1, 2008

 

 

589,090

 

$

23.78

 

Granted

 

 

17,366

 

$

9.11

 

Vested

 

 

(97,559

)

$

25.74

 

Forfeited

 

 

(3,924

)

$

25.58

 

 

 



 

 

 

 

Nonvested at March 31, 2007

 

 

504,973

 

$

22.88

 

 

 



 

 

 

 

          As of March 31, 2008, there was $7.7 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 3.06 years. The total fair value of shares which vested during the three months ended March 31, 2008 and 2007 was $2.5 million and $1.2 million, respectively.

13



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

9. Retirement Plans

          Net periodic benefits cost includes the following components for the three months ended March 31, 2008 and 2007:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits

 

Other Post-retirement Benefits

 

 

 


 


 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 


 


 


 


 

Service cost

 

$

656,542

 

$

663,956

 

$

40,500

 

$

68,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest cost

 

 

1,129,247

 

 

958,450

 

 

122,500

 

 

102,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected return on plan assets

 

 

(1,207,550

)

 

(1,051,435

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of prior service cost

 

 

 

 

 

 

(13,250

)

 

(13,250

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of net loss

 

 

236,869

 

 

280,549

 

 

36,500

 

 

19,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of transition obligation

 

 

 

 

 

 

1,250

 

 

1,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 



 



 



 

Net periodic benefit cost

 

$

815,108

 

$

851,520

 

$

187,500

 

$

177,750

 

 

 



 



 



 



 

          The Company anticipates that it will contribute $4.6 million to its pension plan and approximately $750,000 to its post-retirement benefits in 2008. During the first three months of 2008, the Company contributed approximately $1.0 million to its pension plan and approximately $154,000 for post-retirement benefits.

14



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

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

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

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

 

 


 


 

 

 

(amounts in thousands)

 

 

 

 

 

Trust fees

 

$

4,175

 

$

3,693

 

Credit card merchant discount fees

 

 

2,540

 

 

2,291

 

Income from insurance operations

 

 

4,341

 

 

4,369

 

Investment and annuity fees

 

 

2,809

 

 

1,978

 

ATM fees

 

 

1,691

 

 

1,380

 

 

 



 



 

Total other service charges, commissions and fees

 

$

15,556

 

$

13,711

 

 

 



 



 

          Components of other income are as follows:

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

 

 


 


 

 

 

(amounts in thousands)

 

 

 

 

 

Secondary mortgage market operations

 

$

778

 

$

911

 

Income from bank owned life insurance

 

 

1,444

 

 

1,192

 

Outsourced check income

 

 

182

 

 

653

 

Other

 

 

1,978

 

 

800

 

 

 



 



 

Total other income

 

$

4,382

 

$

3,556

 

 

 



 



 

11. Other Expense

          Components of other expense are as follows:

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2008

 

2007

 

 

 


 


 

 

 

(amounts in thousands)

 

 

 

 

 

 

 

 

 

Data processing expense

 

$

3,507

 

$

3,676

 

Postage and communications

 

 

2,314

 

 

2,260

 

Ad valorem and franchise taxes

 

 

1,114

 

 

822

 

Legal and professional services

 

 

3,442

 

 

4,321

 

Stationery and supplies

 

 

427

 

 

491

 

Advertising

 

 

1,803

 

 

1,562

 

Deposit insurance and regulatory fees

 

 

326

 

 

256

 

Training expenses

 

 

187

 

 

174

 

Other fees

 

 

1,111

 

 

827

 

Annuity expense

 

 

972

 

 

463

 

Claims paid

 

 

270

 

 

428

 

Other expense

 

 

1,155

 

 

1,097

 

 

 



 



 

Total other expense

 

$

16,628

 

$

16,377

 

 

 



 



 

15



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

12. Income Taxes

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

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

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

13. Segment Reporting

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

16



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

13. Segment Reporting (continued)

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

Three Months Ended March 31, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MS

 

LA

 

FL

 

AL

 

Other

 

Eliminations

 

Consolidated

 

 

 


 


 


 


 


 


 


 

Interest income

 

$

42,252

 

$

35,471

 

$

2,167

 

$

762

 

$

6,812

 

$

(2,651

)

$

84,813

 

Interest expense

 

 

19,759

 

 

13,816

 

 

1,227

 

 

422

 

 

1,656

 

 

(2,536

)

 

34,344

 

 

 



 



 



 



 



 



 



 

Net interest income

 

 

22,493

 

 

21,655

 

 

940

 

 

340

 

 

5,156

 

 

(115

)

 

50,469

 

Provision for loan losses

 

 

4,681

 

 

2,907

 

 

76

 

 

255

 

 

899

 

 

 

 

8,818

 

Noninterest income

 

 

12,739

 

 

15,784

 

 

245

 

 

121

 

 

7,499

 

 

(8

)

 

36,380

 

Depreciation and amortization

 

 

2,732

 

 

898

 

 

103

 

 

129

 

 

143

 

 

 

 

4,005

 

Other noninterest expense

 

 

20,230

 

 

15,146

 

 

1,516

 

 

1,126

 

 

8,154

 

 

(43

)

 

46,129

 

 

 



 



 



 



 



 



 



 

Net income before income taxes

 

 

7,589

 

 

18,488

 

 

(510

)

 

(1,049

)

 

3,459

 

 

(80

)

 

27,897

 

Income tax expense (benefit)

 

 

1,759

 

 

5,462

 

 

(352

)

 

(376

)

 

1,347

 

 

 

 

7,840

 

 

 



 



 



 



 



 



 



 

Net income (loss)

 

$

5,830

 

$

13,026

 

$

(158

)

$

(673

)

$

2,112

 

$

(80

)

$

20,057

 

 

 



 



 



 



 



 



 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,598,477

 

$

2,628,934

 

$

175,335

 

$

73,367

 

$

834,751

 

$

(885,751

)

$

6,425,113

 

 

 



 



 



 



 



 



 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income from affiliates

 

$

2,610

 

$

7

 

$

4

 

$

 

$

30

 

$

(2,651

)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income from external customers

 

$

39,642

 

$

35,464

 

$

2,163

 

$

762

 

$

6,782

 

$

 

$

84,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization & (accretion) of securities

 

$

278

 

$

(285

)

$

1

 

$

 

$

35

 

$

 

$

29

 

Three Months Ended March 31, 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MS

 

LA

 

FL

 

AL

 

Other

 

Eliminations

 

Consolidated

 

 

 


 


 


 


 


 


 


 

Interest income

 

$

46,314

 

$

35,492

 

$

2,501

 

$

119

 

$

5,957

 

$

(4,675

)

$

85,708

 

Interest expense

 

 

19,952

 

 

15,737

 

 

1,234

 

 

3

 

 

1,942

 

 

(4,560

)

 

34,308

 

 

 



 



 



 



 



 



 



 

Net interest income

 

 

26,362

 

 

19,755

 

 

1,267

 

 

116

 

 

4,015

 

 

(115

)

 

51,400

 

Provision for (reversal of) loan losses

 

 

(1,589

)

 

2,208

 

 

(84

)

 

 

 

676

 

 

 

 

1,211

 

Noninterest income

 

 

11,067

 

 

8,156

 

 

170

 

 

 

 

7,082

 

 

(12

)

 

26,463

 

Depreciation and amortization

 

 

1,898

 

 

723

 

 

95

 

 

 

 

110

 

 

 

 

2,826

 

Other noninterest expense

 

 

20,244

 

 

16,872

 

 

1,375

 

 

42

 

 

8,356

 

 

(7

)

 

46,882

 

 

 



 



 



 



 



 



 



 

Net income before income taxes

 

 

16,876

 

 

8,108

 

 

51

 

 

74

 

 

1,956

 

 

(120

)

 

26,944

 

Income tax expense (benefit)

 

 

5,753

 

 

1,892

 

 

(75

)

 

29

 

 

116

 

 

 

 

7,715

 

 

 



 



 



 



 



 



 



 

Net income

 

$

11,123

 

$

6,216

 

$

126

 

$

45