UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


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

For the quarterly period ended ~~March 31,~~September 30, 2017


☐	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: 001-36827

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 No.)

One Hancock Plaza, 2510 14th Street, Gulfport, Mississippi	39501
(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 ☐ 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 ☐ No

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


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

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

~~84,519,088~~85,180,800 common shares were outstanding as of ~~May 1,~~November 3, 2017.

Table of Contents

Hancock Holding Company

Index


Part I. Financial Information		Page Number
ITEM 1.	Financial Statements
	Consolidated Balance Sheets (unaudited) – ~~March 31,~~September 30, 2017 ~~(unaudited)~~ and December 31, 2016		5
	Consolidated Statements of Income (unaudited) -– Three ~~months ended March 31,~~and Nine Months Ended September 30, 2017 and 2016		6
	Consolidated Statements of Comprehensive Income (unaudited) – Three ~~months ended March 31,~~and Nine Months Ended September 30, 2017 and 2016		7
	Consolidated Statements of Changes in Stockholders’ Equity - (unaudited) – ~~Three months ended March 31,~~Nine Months Ended September 30, 2017 and 2016		8
	Consolidated Statements of Cash Flows (unaudited) - ~~Three months ended March 31,~~Nine Months Ended September 30, 2017 and 2016		9
	Notes to Consolidated Financial Statements (unaudited) – ~~March 31,~~September 30, 2017		10
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		36 35
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk		58
ITEM 4.	Controls and Procedures		58 59
Part II. Other Information
ITEM 1.	Legal Proceedings		59
ITEM 1A.	Risk Factors		59
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		59
ITEM 3.	Default on Senior Securities		N/A
ITEM 4.	Mine Safety Disclosures		N/A
ITEM 5.	Other Information		N/A
ITEM 6.	Exhibits		59 60
Signatures

Table of Contents

Hancock Holding Company

Glossary of Defined Terms

AFS – available for sale securities

AOCI – accumulated other comprehensive income

~~ALLL~~ ~~– allowance for loan and lease losses~~

ASC – Accounting Standards Codification

ASU – Accounting Standards Update

ATM - automatic teller machine

Bank – Whitney Bank

Basel II - Basel Committee's 2004 Regulatory Capital Framework (Second Accord)

Basel III - Basel Committee's 2010 Regulatory Capital Framework (Third Accord)

Basel Committee - Basel Committee on Banking Supervision

Beige Book - Federal Reserve’s Summary of Commentary on Current Economic Conditions

bp(s) – basis point(s)

C&I – commercial and industrial loans

CD – certificate of deposit

CDE – Community Development Entity

CMO – Collateralized Mortgage Obligation

Company – Hancock Holding Company and its wholly-owned subsidiaries

CRE – commercial real estate

Dodd-Frank Act – The Dodd-Frank Wall Street Reform and Consumer Protection Act

FASB – Financial Accounting Standards Board

FDIC – Federal Deposit Insurance Corporation

Federal Reserve Bank – The 12 banks that are the operating arms of the U.S. central bank. They implement the

policies of the Federal Reserve Board and also conduct economic research.

Federal Reserve Board – The 7-member Board of Governors that oversees the Federal Reserve System, establishes

monetary policy (interest rates, credit, etc.), and monitors the economic health of the country. Its members are appointed

by the President subject to Senate confirmation, and serve 14-year terms.

Federal Reserve System – The 12 Federal Reserve Banks, with each one serving member banks in its own district.

This system, supervised by the Federal Reserve Board, has broad regulatory powers over the money supply and the

credit structure.

FHLB – Federal Home Loan Bank

FNBC – First NBC Bank

FNBC I – acquired selected assets and liabilities from FNBC under agreement dated March 10, 2017

FNBC II – acquired selected assets and liabilities from the FDIC as receiver for FNBC under agreement dated April 28, 2017

GAAP – Generally Accepted Accounting Principles in the United States of America

Hancock – Hancock Holding Company

Hancock Bank – Whitney Bank does business as Hancock Bank in Mississippi, Alabama, and Florida

HTM – held to maturity securities

LIBOR – London Interbank Offered Rate

LIHTC – Low Income Housing Tax Credit

MD&A – management’s discussion and analysis of financial condition and results of operations

NAICS – North American Industry Classification System

n/m – not meaningful

OCI – other comprehensive income

OFI – Louisiana Office of Financial Institutions

ORE – other real estate defined as foreclosed and surplus real estate

Parent Company – Hancock Holding Company

PCI – purchased credit impaired loans

Repos – securities sold under agreements to repurchase

SEC – U.S. Securities and Exchange Commission

~~Securities Act~~ ~~– Securities Act of 1933, as amended~~

Table of Contents

Securities Act – Securities Act of 1933, as amended

te – ~~tax~~taxable equivalent adjustment

TDR – troubled debt restructuring (as defined in ASC 310-40)

TSR – total shareholder return

U.S. Treasury – The United States Department of the Treasury

Whitney Bank – wholly-owned subsidiary of Hancock Holding Company, through which Hancock conducts its banking operations

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

Hancock Holding Company and Subsidiaries

Consolidated Balance Sheets

(Unaudited)



	March 31,		December 31,		September 30,		December 31,
(in thousands, except share data)	2017		2016
(in thousands, except per share data)					2017		2016
ASSETS		unaudited
Cash and due from banks	$	333,314	$	372,689	$	333,775	$	372,689
Interest-bearing bank deposits		50,452		77,235		105,428		77,235
Federal funds sold		821		942		6,297		942
Securities available for sale, at fair value (amortized cost of $2,541,535 and $2,562,000)		2,498,761		2,516,908
Securities held to maturity (fair value of $2,477,420 and $2,470,117)		2,502,512		2,500,220
Securities available for sale, at fair value (amortized cost of $2,879,343 and $2,562,000)						2,855,278		2,516,908
Securities held to maturity (fair value of $2,768,148 and $2,470,117)						2,769,274		2,500,220
Loans held for sale		20,883		34,064		23,236		34,064
Loans		18,204,868		16,752,151		18,786,285		16,752,151
Less: allowance for loan losses		(213,550)		(229,418)		(223,122)		(229,418)
Loans, net		17,991,318		16,522,733		18,563,163		16,522,733
Property and equipment, net of accumulated depreciation of $236,166 and $231,127		374,112		361,612
Property and equipment, net of accumulated depreciation of $226,410 and $231,127						365,145		361,612
Prepaid expenses		22,033		18,038		25,084		18,038
Other real estate, net		17,068		18,884		21,154		18,884
Accrued interest receivable		70,975		65,887		78,011		65,887
Goodwill		716,761		621,193		739,403		621,193
Other intangible assets, net		86,952		87,757		96,525		87,757
Life insurance contracts		484,042		480,406		539,232		480,406
FDIC loss share receivable		13,320		16,219		—		16,219
Deferred tax asset, net		96,078		104,435		83,615		104,435
Other assets		205,624		176,080		212,135		176,080
Total assets	$	25,485,026	$	23,975,302	$	26,816,755	$	23,975,302
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Liabilities
Deposits
Noninterest-bearing	$	7,722,279	$	7,658,203	$	7,896,384	$	7,658,203
Interest-bearing		12,199,741		11,766,063		13,637,475		11,766,063
Total deposits		19,922,020		19,424,266		21,533,859		19,424,266
Short-term borrowings		2,121,932		1,225,406		1,737,151		1,225,406
Long-term debt		525,082		436,280		331,179		436,280
Accrued interest payable		10,476		9,574		9,014		9,574
Other liabilities		141,894		160,008		342,277		160,008
Total liabilities		22,721,404		21,255,534		23,953,480		21,255,534
Stockholders' equity
Common stock		291,358		291,358		291,358		291,358
Capital surplus		1,711,823		1,698,253		1,721,477		1,698,253
Retained earnings		878,953		850,689		948,591		850,689
Accumulated other comprehensive loss, net		(118,512)		(120,532)		(98,151)		(120,532)
Total stockholders' equity		2,763,622		2,719,768		2,863,275		2,719,768
Total liabilities and stockholders' equity	$	25,485,026	$	23,975,302	$	26,816,755	$	23,975,302
Common shares authorized (par value of $3.33 per share)		350,000		350,000		350,000		350,000
Common shares issued		87,495		87,495		87,495		87,495
Common shares outstanding		84,517		84,235		84,767		84,235



	Three months Ended
	March 31,				Three Months Ended				Nine Months Ended
					September 30,				September 30,
(in thousands, except per share data)	2017		2016		2017		2016		2017		2016
Interest income:
Loans, including fees	$	172,781	$	154,113	$	199,702	$	155,761	$	566,663	$	466,591
Loans held for sale		217		159		216		323		669		731
Securities-taxable		23,367		23,957		26,616		21,782		74,385		68,788
Securities-tax exempt		5,407		1,802		5,608		3,780		16,643		8,593
Short-term investments		743		610		574		507		3,048		1,597
Total interest income		202,515		180,641		232,716		182,153		661,408		546,300
Interest expense:
Deposits		12,819		11,733		21,789		12,590		52,972		36,926
Short-term borrowings		2,941		993		4,425		1,040		11,598		2,942
Long-term debt		5,064		5,079		3,645		5,010		12,573		15,114
Total interest expense		20,824		17,805		29,859		18,640		77,143		54,982
Net interest income		181,691		162,836		202,857		163,513		584,265		491,318
Provision for loan losses		15,991		60,036		13,040		18,972		43,982		96,204
Net interest income after provision for loan losses		165,700		102,800		189,817		144,541		540,283		395,114
Noninterest income:
Service charges on deposit accounts		19,206		18,383		21,444		18,716		60,711		55,493
Trust fees		11,211		11,224		10,742		11,512		33,459		34,825
Bank card and ATM fees		12,468		11,348		13,390		11,808		39,545		35,110
Investment and annuity fees		4,599		4,933		5,570		4,289		15,440		14,265
Secondary mortgage market operations		3,567		2,912		4,157		4,917		11,965		12,005
Insurance commissions and fees		665		1,307		660		1,088		2,499		3,635
Amortization of FDIC loss share receivable		(1,100)		(1,613)		—		(1,539)		(2,427)		(4,678)
Other income		12,875		9,346		11,152		11,866		36,901		32,768
Securities transactions		—		346		—		351		—		1,465
Total noninterest income		63,491		58,186		67,115		63,008		198,093		184,888
Noninterest expense:
Compensation expense		73,099		73,001		82,242		70,290		237,486		213,524
Employee benefits		16,020		15,714		12,499		12,873		44,019		42,591
Personnel expense		89,119		88,715		94,741		83,163		281,505		256,115
Net occupancy expense		10,757		10,356		12,448		10,068		36,285		30,818
Equipment expense		3,714		3,774		3,779		3,349		11,457		10,203
Data processing expense		15,397		14,207		16,798		14,590		48,993		43,167
Professional services expense		11,276		7,621		10,062		6,584		31,691		21,917
Amortization of intangibles		4,705		5,124		6,070		4,886		16,532		15,015
Telecommunications and postage		3,467		3,361		3,876		3,284		11,081		9,917
Deposit insurance and regulatory fees		6,490		5,397		7,883		5,969		21,356		17,415
Other real estate expense, net		(13)		768
Other real estate (income) expense, net						199		(5,214)		(2,329)		(4,096)
Other expense		18,630		16,709		21,760		22,379		68,057		55,561
Total noninterest expense		163,542		156,032		177,616		149,058		524,628		456,032
Income before income taxes		65,649		4,954		79,316		58,491		213,748		123,970
Income taxes		16,635		1,115		20,414		11,772		53,565		26,505
Net income	$	49,014	$	3,839	$	58,902	$	46,719	$	160,183	$	97,465
Earnings per common share-basic	$	0.57	$	0.05	$	0.68	$	0.59	$	1.85	$	1.23
Earnings per common share-diluted	$	0.57	$	0.05	$	0.68	$	0.59	$	1.85	$	1.23
Dividends paid per share	$	0.24	$	0.24	$	0.24	$	0.24	$	0.72	$	0.72
Weighted average shares outstanding-basic		84,365		77,501		84,749		77,550		84,577		77,525
Weighted average shares outstanding-diluted		84,624		77,672		84,980		77,677		84,818		77,653



	Three months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
(in thousands)	2017		2016		2017		2016		2017		2016
Net income	$	49,014	$	3,839	$	58,902	$	46,719	$	160,183	$	97,465
Other comprehensive income:
Net change in unrealized gain on securities available for sale and hedges		1,184		28,972
Net change in unrealized gain/loss on securities available for sale and hedges						5,949		(5,604)		19,794		39,997
Reclassification of net losses realized and included in earnings		1,387		1,091		1,374		1,158		4,479		2,960
Amortization of unrealized net gain on securities transferred to held to maturity		650		798
Other comprehensive income before income taxes		3,221		30,861
Income tax expense		1,201		11,332
Other comprehensive income net of income taxes		2,020		19,529
Valuation adjustment for pension plan amendment						—		—		17,315		—
Other valuation adjustments for employee benefit plans						1,597		(6,347)		(9,185)		(6,347)
Amortization of unrealized net loss on securities transferred to held to maturity						977		1,108		2,726		2,736
Other comprehensive income/loss before income taxes						9,897		(9,685)		35,129		39,346
Income tax expense (benefit)						3,609		(3,537)		12,748		14,440
Other comprehensive income/loss net of income taxes						6,288		(6,148)		22,381		24,906
Comprehensive income	$	51,034	$	23,368	$	65,190	$	40,571	$	182,564	$	122,371



								Accumulated											Accumulated
								Other											Other
								Comprehensive											Comprehensive
	Common Stock			Capital		Retained		Income (Loss),				Common Stock			Capital		Retained		Income (Loss),
(in thousands, except per share data)	Shares issued	Amount		Surplus		Earnings		net		Total		Shares Issued	Amount		Surplus		Earnings		net			Total
Balance, December 31, 2015	87,491	$	291,346	$	1,424,448	$	777,944	$	(80,595)	$	2,413,143	87,491	$	291,346	$	1,424,448	$	777,944	$	(80,595)	$	2,413,143
Net income	—		—		—		3,839		—		3,839	—		—		—		97,465		—		97,465
Other comprehensive income	—		—		—		—		19,529		19,529	—		—		—		—		24,906		24,906
Comprehensive income	—		—		—		3,839		19,529		23,368	—		—		—		97,465		24,906		122,371
Cash dividends declared ($0.24 per common share)	—		—		—		(19,131)		—		(19,131)
Cash dividends declared ($0.72 per common share)												—		—		—		(57,349)		—		(57,349)
Common stock activity, long-term incentive plan	—		—		3,660		—		—		3,660	2		6		10,135		—		—		10,141
Balance, March 31, 2016	87,491	$	291,346	$	1,428,108	$	762,652	$	(61,066)	$	2,421,040
Issuance of stock from dividend reinvestment												—		—		821		—		—		821
Balance, September 30, 2016												87,493	$	291,352	$	1,435,404	$	818,060	$	(55,689)	$	2,489,127

Balance, December 31, 2016	87,495	$	291,358	$	1,698,253	$	850,689	$	(120,532)	$	2,719,768	87,495	$	291,358	$	1,698,253	$	850,689	$	(120,532)	$	2,719,768
Net income	—		—		—		49,014		—		49,014	—		—		—		160,183		—		160,183
Other comprehensive income	—		—		—		—		2,020		2,020	—		—		—		—		22,381		22,381
Comprehensive income	—		—		—		49,014		2,020		51,034	—		—		—		160,183		22,381		182,564
Cash dividends declared ($0.24 per common share)	—		—		—		(20,793)		—		(20,793)
Cash dividends declared ($0.72 per common share)												—		—		—		(62,400)		—		(62,400)
Common stock activity, long-term incentive plan	—		—		12,815		43		—		12,858	—		—		20,910		119		—		21,029
Issuance of stock from dividend reinvestment and stock purchase plan	—		—		755		—		—		755	—		—		2,314		—		—		2,314
Balance, March 31, 2017	87,495	$	291,358	$	1,711,823	$	878,953	$	(118,512)	$	2,763,622
Balance, September 30, 2017												87,495	$	291,358	$	1,721,477	$	948,591	$	(98,151)	$	2,863,275



	Three months Ended				Nine Months Ended
	March 31,				September 30,
(in thousands)	2017		2016		2017		2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	49,014	$	3,839	$	160,183	$	97,465
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,915		7,199		20,942		21,350
Provision for loan losses		15,991		60,036		43,982		96,204
(Gain) loss on other real estate owned		(54)		416
Gain on other real estate owned						(1,865)		(5,145)
Deferred tax expense (benefit)		7,156		(8,041)		8,072		(14,713)
Increase in cash surrender value of life insurance contracts		(3,636)		(1,208)		(10,855)		(8,807)
Loss (gain) on disposal of other assets		229		(2,111)
Net decrease (increase) in loans held for sale		13,966		(3,308)
(Gain) loss on disposal of other assets						1,662		(6,014)
Net (increase) decrease in loans held for sale						11,583		(21,698)
Net amortization of securities premium/discount		7,323		5,799		24,119		20,836
Amortization of intangible assets		4,705		5,124		16,532		15,015
Amortization of FDIC indemnification asset		1,100		1,613		2,427		4,678
Stock-based compensation expense		4,209		4,050		12,370		10,555
Decrease in interest payable and other liabilities		(33,323)		(8,438)
Net payments to FDIC for loss share claims		(1,131)		(302)
Increase (decrease) in interest payable and other liabilities						(5,038)		8,946
Net cash receipts from (payments to) FDIC for loss share claims						2,300		(436)
Decrease in FDIC loss share receivable		902		557		8,613		3,487
Increase in payable to FDIC for loan servicing						180,882		—
Decrease in other assets		21,362		27,488		11,446		40,693
Other, net		1,600		143		17,723		6,572
Net cash provided by operating activities		96,328		92,856		505,078		268,988
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale		—		47,774		213,877		141,716
Proceeds from maturities of securities available for sale		81,116		86,966		249,270		298,810
Purchases of securities available for sale		(60,484)		(167,419)		(578,690)		(720,241)
Proceeds from maturities of securities held to maturity		92,684		86,632		276,073		307,633
Purchases of securities held to maturity		(87,847)		(236,117)		(554,442)		(371,657)
Net decrease in short-term investments		9,428		414,004		331,746		436,635
Proceeds from sales of loans						—		166,922
Net increase in loans		(273,466)		(289,324)		(725,228)		(591,696)
Purchase of life insurance contracts						(50,000)		(40,000)
Purchases of property and equipment		(7,329)		(1,550)		(16,086)		(10,817)
Proceeds from sales of property and equipment		17		—		389		677
Proceeds from sales of other real estate		3,099		4,316		15,357		20,709
Cash paid for acquisition, net of cash received		(322,708)		—
Net cash paid for FNBC I acquisition						(322,708)		—
Net cash received for FNBC II acquisition						799,509		—
Other, net		(39,588)		3,567		(28,976)		(3,651)
Net cash used in investing activities		(605,078)		(51,151)		(389,909)		(364,960)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits		99,583		307,254		181,084		536,581
Net increase (decrease) in short-term borrowings		385,777		(322,857)
Net decrease in short-term borrowings						(84,890)		(347,688)
Repayments of long-term debt		(4,475)		(19,551)		(198,690)		(16,796)
Net proceeds from issuance of long-term debt		41		66		124		6,796
Dividends paid		(20,793)		(19,131)		(62,400)		(57,349)
Cash paid for taxes with forfeited shares of stock		(163)		(127)
Taxes paid related to net share settlement of equity awards						(3,235)		(444)
Proceeds from exercise of stock options		8,650		—		11,610		49
Proceeds from dividend reinvestment and stock purchase plan		755		—		2,314		821
Other, net		—		(134)
Net cash provided (used in) by financing activities		469,375		(54,480)
NET DECREASE IN CASH AND DUE FROM BANKS		(39,375)		(12,775)
Net cash provided by (used in) financing activities						(154,083)		121,970
NET (DECREASE) INCREASE IN CASH AND DUE FROM BANKS						(38,914)		25,998
CASH AND DUE FROM BANKS, BEGINNING		372,689		303,874		372,689		303,874
CASH AND DUE FROM BANKS, ENDING	$	333,314	$	291,099	$	333,775	$	329,872
SUPPLEMENTAL INFORMATION FOR NON-CASH
INVESTING AND FINANCING ACTIVITIES
Assets acquired in settlement of loans	$	1,031	$	1,662	$	4,770	$	12,012

Table of Contents

HANCOCK HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The consolidated financial statements include the accounts of Hancock Holding Company and all other entities in which it has a controlling interest (the “Company”). The financial statements include all adjustments that are, in the opinion of management, necessary to ~~present~~ fairly state the Company’s financial condition, results of operations, changes in stockholders’ equity and cash flows for the interim periods presented. The Company has also evaluated all subsequent events for potential recognition and disclosure through the date of the filing of this Quarterly Report on Form 10-Q. Some financial information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted in this Quarterly Report on 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 Annual Report on Form 10-K for the year ended December 31, 2016. Financial information reported in these financial statements is not necessarily indicative of the Company’s financial condition, results of operations, or cash flows for any other interim or annual period.

Certain prior period amounts have been reclassified to conform to the current period presentation. ~~The presentation of loan disclosures has been modified from prior filings as discussed in Note 4 – Loans and Allowance for Loan Losses.~~ Select Stockholders’ Equity line items in the Consolidated Balance Sheets and Statements of Changes in Stockholders’ Equity have been modified to simplify the presentation as discussed in Note 7 – Stockholders’ Equity. Presentation of derivatives contracts cleared through a central clearing counterparty has been revised prospectively to reflect netting of variation margin as settlements to the derivative assets and liabilities rather than collateral, effective January 3, 2017, as discussed in Note 6 – Derivatives. These changes in presentation did not have a material impact on the Company’s financial condition or operating results.

Use of Estimates

The accounting principles the Company follows and the methods for applying these principles conform ~~with~~to GAAP and ~~with~~ general practices followed by the banking industry. These accounting principles require management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

Critical Accounting Policies and Estimates

There were no material changes or developments during the reporting period with respect to methodologies that the Company uses when applying what management believes are critical accounting policies and developing critical accounting estimates as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2016. Refer to Note 14 – Recent Accounting Pronouncements for a discussion of accounting standards adopted in 2017.

2. ~~Acquisition~~Acquisitions

On March 10, 2017, the Company, through its banking subsidiary, Whitney Bank (“Whitney”), completed the acquisition of certain assets and liabilities, including nine branches, from First NBC Bank (“FNBC”)~~. This in-market transaction strengthens our position in~~, referred to as the ~~Greater New Orleans area.~~FNBC I transaction. Whitney paid approximately $323 million in cash consideration ($326 million cash paid net of $3 million in branch cash acquired), including a $41.6 million transaction premium for the earnings stream acquired.

On April 28, 2017, the Louisiana Office of Financial Institutions (“OFI”) closed FNBC and appointed the FDIC as receiver. Whitney entered into a purchase and assumption agreement with the FDIC, referred to as the FNBC II transaction. Pursuant to the agreement, Whitney acquired selected assets and liabilities of the former FNBC, including substantially all of the transaction and savings deposits, and continued to operate its 29 branch locations (24 in Louisiana and five in Florida). Whitney also had the option to purchase (or assume the leases for) the branch and non-branch locations, including furniture, fixtures, and equipment subsequent to the date of the transaction. This option was exercised for seven branch locations. Whitney paid a premium of $35 million to the FDIC for the earnings stream acquired and received approximately $800 million in cash ($642 million from the FDIC for the net liabilities assumed and $158 million in branch cash acquired).

The ~~transaction was~~FNBC I and FNBC II transactions were accounted for as a business ~~combination~~combinations and therefore, assets acquired and liabilities assumed were recorded at estimated fair values on the acquisition ~~date.~~dates.

Table of Contents

The following table ~~provides~~sets forth the preliminary acquisition date fair value of the assets ~~purchased~~acquired and liabilities ~~assumed.~~assumed, the consideration paid or received, and the resulting goodwill recorded in each of the FNBC I and FNBC II transactions, and in the aggregate. The Company recorded certain purchase accounting adjustments and a cash settlement with the FDIC during the third quarter of 2017. The Company expects to finalize acquisition date fair values and the resulting goodwill in the fourth quarter of 2017.

~~Fair value of net assets acquired at date of acquisition - March 10, 2017~~


~~(in thousands)~~
~~ASSETS~~
~~Cash and due from banks~~	$	~~2,856~~
~~Total loans~~		~~1,211,523~~
~~Property and equipment~~		~~12,332~~
~~Accrued interest receivable~~		~~2,969~~
~~Identifiable intangible assets~~		~~3,900~~
~~Other assets~~		63
~~Total identifiable assets~~	$	~~1,233,643~~

~~LIABILITIES~~
~~Deposits~~	$	~~398,171~~
~~Short-term borrowings~~		~~510,749~~
~~Long-term debt~~		~~93,120~~
~~Other liabilities~~		~~1,607~~
~~Total liabilities~~	$	~~1,003,647~~
~~Net identifiable assets acquired~~		~~229,996~~
~~Goodwill~~		~~95,568~~
~~Net assets acquired~~	$	~~325,564~~


		FNBC I		FNBC II
(in thousands)		March 10, 2017		April 28, 2017		Total
ASSETS
Cash and due from banks	$	2,856	$	157,932	$	160,788
Interest-bearing time deposits with other banks		—		382,622		382,622
Fed funds sold and other short-term investments		—		148		148
Securities		—		213,877		213,877
Total loans		1,211,523		165,577		1,377,100
Property and equipment		11,837		8,988		20,825
Accrued interest receivable		2,969		885		3,854
Identifiable intangible assets		3,900		21,400		25,300
Other assets		63		4,150		4,213
Total identifiable assets		1,233,148		955,579		2,188,727

LIABILITIES
Deposits		398,171		1,530,338		1,928,509
Short-term borrowings		510,749		85,886		596,635
Long-term debt		93,120		—		93,120
Other liabilities		1,607		3,079		4,686
Total liabilities		1,003,647		1,619,303		2,622,950
Net identifiable assets acquired (liabilities assumed)		229,501		(663,724)		(434,223)

Consideration (Paid) Received		(325,564)		641,577		316,013
Goodwill	$	96,063	$	22,147	$	118,210

The loans acquired were recorded at estimated fair value at the acquisition ~~date~~dates with no carryover of the related allowance for loan losses. ~~The~~Substantially all of the loans acquired ~~loans~~ were considered to be performing (“purchased credit performing”) based on such factors as past due status and nonaccrual status, and ~~are~~were accounted for under Accounting Standards Codification (“ASC”) 310-20. The unpaid principal balance of the performing loans acquired totaled $1.4 billion, of which $31.7 million is not expected to be collected. The difference at the acquisition ~~date~~dates between the fair value and the contractual amounts due (the “fair value discount”) of ~~$52.7~~$41.0 million will be accreted into income over the estimated lives of the loan pools established in the valuation. Loans with an unpaid principal balance of $39.9 million and a fair value of $23.4 million were considered to be purchased credit impaired and were accounted for under ASC 310-30 using the cost recovery method; as such, the related fair value discount of $16.5 million will not be accreted into income.

The Company assumed approximately $604 million of borrowings in the ~~acquisition,~~FNBC I transaction, consisting of both short-term and long-term Federal Home Loan Bank (“FHLB”) borrowings. The short-term borrowings ~~consist~~consisted of $460 million in ~~variable-rate~~variable rate term ~~notes;~~notes, of which $200 million ~~matures~~mature in 2025 and $260 million ~~matures~~mature in 2026. These notes ~~re-price~~reprice quarterly and may be ~~re-paid~~repaid at the Company’s option, either in ~~whole~~full or ~~in-part,~~in part, on any quarterly ~~re-pricing~~repricing date. Also included in short-term borrowings are $51 million in ~~fixed-rate~~fixed rate term ~~notes that mature in 2017.~~notes. The long-term borrowings include $93.1 million in ~~fixed-rate~~fixed rate term ~~notes:~~notes, of which $88 million ~~that~~ mature in 2018, $3.2 million ~~that~~ mature in 2019, and $1.9 million ~~that~~ mature in 2023. Short-term borrowings assumed in the FNBC II transaction consisted of securities sold under repurchase agreements. No long-term borrowings were assumed in the FNBC II transaction.

Identifiable intangible assets consist of core deposit intangibles totaling ~~$3.9~~$25.3 million that ~~will be~~are being amortized using sum of years’ digits over the asset’s life of eight ~~years.~~years for the FNBC I transaction and eleven years for the FNBC II transaction. Goodwill totaling ~~$95.6~~$118 million represents the excess of the consideration paid over the fair value of the net assets acquired, or the excess of the fair value of the net liabilities assumed over the consideration received. It is comprised of estimated future economic benefits arising from these transactions that cannot not be individually identified or do not qualify for separate recognition. These benefits include increased market share in the Greater New Orleans and Florida Panhandle market areas, expected earnings streams, and operational efficiencies that the Company believes will result from these business combinations. The tax basis of the goodwill generated from these transactions is expected to be deductible for federal income tax purposes. ~~There were no other changes to goodwill during the reporting period.~~

The operating results of the Company for the three months ended March 31, 2017 include the results from the operations acquired in the FNBC transaction since March 10, 2017. FNBC’s operations contributed approximately $5.1 million in revenue, net of interest expense, and an estimated $2.9 million in net income for the period from the acquisition date, excluding the impact of merger related expense noted below.

Merger-related charges of $6.5 million associated with the FNBC acquisition are included in noninterest expense for 2017. These expenses were primarily for professional fees, totaling $4.6 million, and $1.5 million in costs related to branch and office consolidations, in addition to marketing and promotion expenses, and retention and severance costs. The Company expects to incur additional merger-related expense in the second quarter of 2017 with branch consolidation and operations conversion.
Goodwill balance at December 31, 2016	$	621,193
Additions:
Initial goodwill recorded in FNBC I transaction		95,568
Measurement period adjustments - FNBC I transaction		495
Initial goodwill recorded in FNBC II transaction		23,009
Measurement period adjustments - FNBC II transaction		(862)
Goodwill balance at September 30, 2017	$	739,403

Table of Contents

The operating results of the Company for the three and nine months ended September 30, 2017 include the results from the operations acquired in the FNBC transactions since the respective acquisition dates. Estimating reliable historical financial information is impracticable as only selected components of the businesses, as historically operated, were acquired. A number of post-acquisition events, including the consolidation of certain branch locations and the integration of operations, cash and investments acquired make quantifying discrete earnings contributions of the businesses acquired impracticable. As such, neither supplemental pro forma financial information of the combined entity, nor revenue and earnings contributed by the businesses acquired since the dates of acquisition are presented.

The Company incurred merger-related costs in connection with the FNBC I and FNBC II transactions. The following table reflects the merger-related costs for the three and nine months ended September 30, 2017 for both the FNBC I and FNBC II transactions combined. The Company does not expect to incur any additional merger-related costs related to the FNBC transactions in any subsequent period.


(in thousands)		Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
Personnel expense	$	2,120	$	3,662
Net occupancy and equipment expense		500		777
Professional services expense		2,854		9,681
Data processing expense		929		974
Other real estate		-		(1,511)
Advertising expense		358		1,389
Other expense		2,132		4,398
Total merger-related expenses	$	8,893	$	19,370

3. Securities

The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available for sale and held to maturity follow.



Securities Available for Sale	Securities Available for Sale																	Securities Available for Sale
(in thousands)		March 31, 2017								December 31, 2016									September 30, 2017								December 31, 2016
				Gross		Gross						Gross		Gross							Gross		Gross						Gross		Gross
		Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair			Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
		Cost		Gains		Losses		Value		Cost		Gains		Losses		Value			Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
US Treasury and government agency securities		$	76,049	$	—	$	1,553	$	74,496	$	56,751	$	—	$	1,923	$	54,828
U.S. Treasury and government agency securities																			$	75,019	$	29	$	1,606	$	73,442	$	56,751	$	—	$	1,923	$	54,828
Municipal obligations			251,416		157		10,537		241,036		253,228		113		11,186		242,155			246,805		534		4,661		242,678		253,228		113		11,186		242,155
Residential mortgage-backed securities			1,568,001		10,377		18,961		1,559,417		1,620,191		10,592		19,428		1,611,355			1,795,397		9,701		11,672		1,793,426		1,620,191		10,592		19,428		1,611,355
Commercial mortgage-backed securities			450,197		211		22,360		428,048		425,750		—		23,159		402,591			584,503		569		16,719		568,353		425,750		—		23,159		402,591
Collateralized mortgage obligations			192,372		491		599		192,264		202,580		490		591		202,479			174,119		114		354		173,879		202,580		490		591		202,479
Corporate debt securities			3,500		—		—		3,500		3,500		—		—		3,500			3,500		—		—		3,500		3,500		—		—		3,500
		$	2,541,535	$	11,236	$	54,010	$	2,498,761	$	2,562,000	$	11,195	$	56,287	$	2,516,908		$	2,879,343	$	10,947	$	35,012	$	2,855,278	$	2,562,000	$	11,195	$	56,287	$	2,516,908

The following table presents the amortized cost and estimated fair value of debt securities available for sale and held to maturity at ~~March 31,~~September 30, 2017 by contractual maturity. Actual maturities will differ from contractual maturities because of rights to call or repay obligations with or without penalties and scheduled and unscheduled principal payments on mortgage-backed securities and collateralized mortgage obligations.



(in thousands)	Amortized		Fair		Amortized		Fair
Debt Securities Available for Sale	Cost		Value		Cost		Value
Due in one year or less	$	4,711	$	4,735	$	5,392	$	5,425
Due after one year through five years		40,658		41,205		46,852		47,394
Due after five years through ten years		1,025,204		999,011		1,097,850		1,082,709
Due after ten years		1,470,962		1,453,810		1,729,249		1,719,750
Total available for sale debt securities	$	2,541,535	$	2,498,761	$	2,879,343	$	2,855,278

	Amortized		Fair		Amortized		Fair
Debt Securities Held to Maturity	Cost		Value		Cost		Value
Due in one year or less	$	10,520	$	10,624	$	10,081	$	10,123
Due after one year through five years		124,250		125,558		108,164		108,726
Due after five years through ten years		838,244		817,979		837,353		833,465
Due after ten years		1,529,498		1,523,259		1,813,676		1,815,834
Total held to maturity securities	$	2,502,512	$	2,477,420
Total held to maturity debt securities					$	2,769,274	$	2,768,148

The Company held no securities classified as trading at ~~March 31,~~September 30, 2017 or December 31, 2016.

The ~~details~~fair value and gross unrealized losses for securities classified as available for sale with unrealized losses for the periods indicated follow.



Available for Sale
March 31, 2017	Losses < 12 months				Losses 12 months or >				Total
September 30, 2017													Losses < 12 months				Losses 12 months or >				Total
			Gross				Gross				Gross				Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	Value		Losses		Value		Losses		Value		Losses		Value		Losses		Value		Losses		Value		Losses
US Treasury and government agency securities	$	74,460		1,553	$	—	$	—	$	74,460	$	1,553
U.S. Treasury and government agency securities													$	52,866		1,606	$	—	$	—	$	52,866	$	1,606
Municipal obligations		228,433		10,537		—		—		228,433		10,537		145,441		2,286		66,640		2,375		212,081		4,661
Residential mortgage-backed securities		1,051,706		18,885		3,110		76		1,054,816		18,961		1,255,266		11,514		5,360		158		1,260,626		11,672
Commercial mortgage-backed securities		403,123		22,360		—		—		403,123		22,360		465,596		15,366		30,151		1,353		495,747		16,719
Collateralized mortgage obligations		78,217		599		—		—		78,217		599		66,149		201		5,565		153		71,714		354
	$	1,835,939	$	53,934	$	3,110	$	76	$	1,839,049	$	54,010	$	1,985,318	$	30,973	$	107,716	$	4,039	$	2,093,034	$	35,012



Available for Sale
December 31, 2016	Losses < 12 months				Losses 12 months or >				Total				Losses < 12 months				Losses 12 months or >				Total
			Gross				Gross				Gross				Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	Value		Losses		Value		Losses		Value		Losses		Value		Losses		Value		Losses		Value		Losses
US Treasury and government agency securities	$	54,788	$	1,923	$	—	$	—	$	54,788	$	1,923
U.S. Treasury and government agency securities													$	54,788	$	1,923	$	—	$	—	$	54,788	$	1,923
Municipal obligations		228,588		11,186		—		—		228,588		11,186		228,588		11,186		—		—		228,588		11,186
Residential mortgage-backed securities		1,087,644		19,359		3,738		69		1,091,382		19,428		1,087,644		19,359		3,738		69		1,091,382		19,428
Commercial mortgage-backed securities		402,591		23,159		—		—		402,591		23,159		402,591		23,159		—		—		402,591		23,159
Collateralized mortgage obligations		83,701		591		—		—		83,701		591		83,701		591		—		—		83,701		591
	$	1,857,312	$	56,218	$	3,738	$	69	$	1,861,050	$	56,287	$	1,857,312	$	56,218	$	3,738	$	69	$	1,861,050	$	56,287

The ~~details~~fair value and gross unrealized losses for securities classified as held to maturity with unrealized losses for the periods indicated follow.



Held to maturity
March 31, 2017	Losses < 12 months				Losses 12 months or >				Total
September 30, 2017													Losses < 12 months				Losses 12 months or >				Total
			Gross				Gross				Gross				Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	Value		Losses		Value		Losses		Value		Losses		Value		Losses		Value		Losses		Value		Losses
US Treasury and government agency securities	$	49,946	$	55	$	—	$	—	$	49,946	$	55
U.S. Treasury and government agency securities													$	49,938	$	63	$	—	$	—	$	49,938	$	63
Municipal obligations		454,266		17,331		7,269		273		461,535		17,604		275,874		2,975		98,976		4,421		374,850		7,396
Residential mortgage-backed securities		279,443		1,980		—		—		279,443		1,980		254,743		776		—		—		254,743		776
Commercial mortgage-backed securities		71,373		4,348		—		—		71,373		4,348		73,096		2,592		—		—		73,096		2,592
Collateralized mortgage obligations		506,593		6,343		104,011		3,176		610,604		9,519		559,859		3,852		232,697		5,496		792,556		9,348
	$	1,361,621	$	30,057	$	111,280	$	3,449	$	1,472,901	$	33,506	$	1,213,510	$	10,258	$	331,673	$	9,917	$	1,545,183	$	20,175

The unrealized losses primarily relate to changes in market rates on ~~fixed-rate~~fixed rate debt securities since the respective purchase dates. In all cases, the indicated impairment on these debt securities would be recovered no later than the security’s maturity date or possibly earlier if the market price for the security increases with a reduction in the yield required by the market. None of the unrealized losses relate to the marketability of the securities or the ~~issuer’s ability~~issuers’ abilities to meet contractual obligations. The Company believes it has adequate liquidity and, therefore, does not plan to and, more likely than not, will not be required to sell these securities before recovery of the indicated impairment. Accordingly, the unrealized losses on these securities have been determined to be temporary.

~~There were no sales of securities for the three months ended March 31, 2017.~~ Proceeds from the sales of securities were approximately ~~$47.8~~$213.9 million with no gross gain or loss and $141.7 million with a gross gain of ~~$0.3~~$1.5 million and no loss for the ~~three~~nine months ended ~~March 31,~~September 30, 2017 and 2016, respectively.

Securities with carrying values totaling ~~$4.0~~$3.6 billion ~~at March 31, 2017~~ and $3.8 billion at September 30, 2017 and December 31, 2016, respectively, were pledged as collateral primarily to secure public deposits or securities sold under agreements to repurchase.

The presentation of loan disclosures has been modified from prior filings to eliminate segmentation of Acquired (2011 Whitney Holding Corporation transaction) and FDIC Acquired (2009 Peoples First Community Bank transaction) due to the significantly reduced size of these portfolios. The revised presentation reflects purchased credit impaired (“PCI”) loan information in select tables. PCI loans include the total FDIC Acquired portfolio and the portion of the Acquired portfolio deemed credit impaired at acquisition. In addition, the revised presentation includes further segmentation of the commercial real estate portfolio between owner occupied and income producing loans due to the significant differences in risk characteristics of these loans and to conform more closely to regulatory concentration segments and general industry practices. All prior period information has been reclassified to conform to the current period presentation.

The Company generally makes loans in its market areas of south Mississippi, southern and central Alabama, south Louisiana, the Houston, Texas ~~areas~~area and the northern, central and panhandle regions of Florida. Loans, net of unearned income, by portfolio are



	March 31,		December 31,		September 30,		December 31,
(in thousands)	2017		2016		2017		2016

Commercial non-real estate	$	8,074,287	$	7,613,917	$	8,129,429	$	7,613,917
Commercial real estate - owner occupied		2,047,451		1,906,821		2,076,014		1,906,821
Total commercial & industrial		10,121,738		9,520,738		10,205,443		9,520,738
Commercial real estate - income producing		2,505,104		2,013,890		2,511,808		2,013,890
Construction and land development		1,252,667		1,010,879		1,373,048		1,010,879
Residential mortgages		2,266,263		2,146,713		2,596,692		2,146,713
Consumer		2,059,096		2,059,931		2,099,294		2,059,931
Total loans	$	18,204,868	$	16,752,151	$	18,786,285	$	16,752,151

Commercial and industrial loans are made available to businesses for working capital (including financing of inventory and receivables), business expansion, to facilitate the acquisition of a business, and the purchase of equipment and machinery, including equipment leasing. These loans are primarily made based on the identified cash flows of the borrower and, when secured, have the added strength of the underlying collateral.

Commercial non-real estate loans may be secured by the assets being financed or other business assets such as accounts receivable, inventory, ownership or commodity interests, and may incorporate a personal or corporate guarantee; however, some short-term loans may be made on an unsecured basis, including a small portfolio of corporate credit cards, generally issued as a part of overall customer relationships.

Commercial real estate – owner occupied loans consist of commercial mortgages on properties where repayment is generally dependent on the cash flow from the ongoing operations and activities of the borrower. Like commercial non-real estate, these loans are primarily made based on the identified cash flows of the borrower, but also have the added strength of the value of underlying real estate collateral.

Commercial real estate – income producing loans consist of loans secured by commercial mortgages on properties where the loan is made to real estate developers or investors and repayment is dependent on the sale, refinance, or income generated from the operation of the property. Properties financed include retail, office, multifamily, senior housing, hotel/motel, skilled nursing facilities and other commercial properties.

Construction and land development loans are made to facilitate the acquisition, development, improvement and construction of both commercial and residential-purpose properties. Such loans are made to builders and investors where repayment is expected to be made from the sale, refinance or operation of the property or to businesses to be used in their business operations. This portfolio also includes a small amount of residential construction loans and loans secured by raw land not yet under development.

Residential mortgages consist of closed-end loans secured by first liens on 1- 4 family residential properties. The portfolio includes both fixed and adjustable rate loans, although most ~~longer-term, fixed-rate~~longer term, fixed rate loans originated are sold in the secondary mortgage market.

Consumer loans include second lien mortgage home loans, home equity lines of credit and nonresidential consumer purpose loans. Nonresidential consumer loans include both direct and indirect loans. Direct nonresidential consumer loans are made to finance the purchase of personal property, including automobiles, recreational vehicles and boats, and for other personal purposes (secured and unsecured), and deposit account secured loans. Indirect nonresidential consumer loans include automobile financing provided to the consumer through an agreement with automobile dealerships. Consumer loans also include a small portfolio of credit card receivables issued on the basis of applications received through referrals from the Bank’s branches, online and other marketing efforts.

The following schedule shows activity in the allowance for loan losses by portfolio class for the ~~three~~nine months ended ~~March 31,~~September 30, 2017 and 2016, as well as the corresponding recorded investment in loans at the end of each period.



			Commercial				Commercial												Commercial				Commercial
	Commercial		real estate-		Total		real estate-		Construction								Commercial		real estate-		Total		real estate-		Construction
		non-real	owner		commercial &		income		and land		Residential							non-real	owner		commercial &		income		and land		Residential
(in thousands)	estate		occupied		industrial		producing		development		mortgages		Consumer		Total		estate		occupied		industrial		producing		development		mortgages		Consumer		Total
	Three months ended March 31, 2017
																	Nine Months Ended September 30, 2017
Allowance for loan losses:
Beginning balance	$	147,052	$	11,083	$	158,135	$	13,509	$	6,271	$	25,361	$	26,142	$	229,418	$	147,052	$	11,083	$	158,135	$	13,509	$	6,271	$	25,361	$	26,142	$	229,418
Purchased credit impaired activity:
Charge-offs		—		—		—		—		(54)		(59)		(139)		(252)		—		—		—		—		(77)		(102)		(153)		(332)
Recoveries		2		75		77		—		23		5		29		134		5		110		115		—		49		23		72		259
Net provision for loan losses		(46)		(182)		(228)		(40)		(92)		(7)		(39)		(406)		(27)		(220)		(247)		(54)		(124)		175		(192)		(442)
Decrease in FDIC loss share receivable		(31)		—		(31)		—		—		(1,696)		(103)		(1,830)		(47)		—		(47)		—		—		(2,344)		(135)		(2,526)
Non-purchased credit impaired activity:
Charge-offs		(24,791)		(29)		(24,820)		(7)		(37)		(289)		(8,539)		(33,692)		(35,247)		(527)		(35,774)		(160)		(593)		(2,383)		(22,691)		(61,601)
Recoveries		936		200		1,136		375		448		108		1,714		3,781		6,437		337		6,774		655		1,001		316		5,176		13,922
Net provision for loan losses		8,147		375		8,522		(226)		161		383		7,557		16,397		15,922		2,776		18,698		540		54		3,988		21,144		44,424
Ending balance	$	131,269	$	11,522	$	142,791	$	13,611	$	6,720	$	23,806	$	26,622	$	213,550	$	134,095	$	13,559	$	147,654	$	14,490	$	6,581	$	25,034	$	29,363	$	223,122
Ending balance:
Allowance:
Individually evaluated for impairment	$	15,017	$	76	$	15,093	$	1,114	$	1	$	94	$	199	$	16,501	$	20,880	$	477	$	21,357	$	1,321	$	1	$	406	$	405	$	23,490
Amounts related to purchased credit impaired loans		411		787		1,198		213		283		13,286		1,019		15,999		417		784		1,201		199		254		12,795		863		15,312
Collectively evaluated for impairment		115,841		10,659		126,500		12,284		6,436		10,426		25,404		181,050		112,798		12,298		125,096		12,970		6,326		11,833		28,095		184,320
Total allowance	$	131,269	$	11,522	$	142,791	$	13,611	$	6,720	$	23,806	$	26,622	$	213,550	$	134,095	$	13,559	$	147,654	$	14,490	$	6,581	$	25,034	$	29,363	$	223,122
Loans:
Individually evaluated for impairment	$	231,988	$	3,894	$	235,882	$	13,599	$	1,592	$	3,236	$	2,149	$	256,458	$	271,024	$	6,351	$	277,375	$	14,295	$	480	$	8,942	$	1,306	$	302,397
Purchased credit impaired loans		6,693		12,468		19,161		7,669		4,326		138,260		9,951		179,367		20,186		13,021		33,207		5,353		6,670		123,244		7,637		176,111
Collectively evaluated for impairment		7,835,606		2,031,089		9,866,695		2,483,836		1,246,749		2,124,767		2,046,996		17,769,043		7,838,219		2,056,642		9,894,861		2,492,160		1,365,898		2,464,506		2,090,351		18,307,777
Total loans	$	8,074,287	$	2,047,451	$	10,121,738	$	2,505,104	$	1,252,667	$	2,266,263	$	2,059,096	$	18,204,868	$	8,129,429	$	2,076,014	$	10,205,443	$	2,511,808	$	1,373,048	$	2,596,692	$	2,099,294	$	18,786,285



			Commercial				Commercial
	Commercial		real estate-		Total		real estate-		Construction
	non-real		owner		commercial &		income		and land		Residential
(in thousands)	estate		occupied		industrial		producing		development		mortgages		Consumer		Total
	Nine Months Ended September 30, 2016
Allowance for loan losses:
Beginning balance	$	109,428	$	9,858	$	119,286	$	6,041	$	5,642	$	25,353	$	24,857	$	181,179
Purchased credit impaired activity:
Charge-offs		—		(28)		(28)		(1)		(18)		(91)		(8)		(146)
Recoveries		76		163		239		2		98		33		112		484
Net provision for loan losses		54		(140)		(86)		(436)		(253)		1,685		(1,633)		(723)
(Decrease) increase in FDIC loss share receivable		(2)		—		(2)		—		—		(3,341)		316		(3,027)
Non-purchased credit impaired activity:
Charge-offs		(27,504)		(1,660)		(29,164)		(191)		(827)		(908)		(17,403)		(48,493)
Recoveries		2,709		287		2,996		673		1,422		497		4,272		9,860
Net provision for loan losses		74,500		2,303		76,803		4,862		(216)		964		14,514		96,927
Ending balance	$	159,261	$	10,783	$	170,044	$	10,950	$	5,848	$	24,192	$	25,027	$	236,061
Ending balance:
Allowance:
Individually evaluated for impairment	$	20,665	$	223	$	20,888	$	57	$	6	$	94	$	85	$	21,130
Amounts related to purchased credit impaired loans		574		1,088		1,662		279		484		15,949		1,334		19,708
Collectively evaluated for impairment		138,022		9,472		147,494		10,614		5,358		8,149		23,608		195,223
Total allowance	$	159,261	$	10,783	$	170,044	$	10,950	$	5,848	$	24,192	$	25,027	$	236,061
Loans:
Individually evaluated for impairment	$	235,039	$	6,458	$	241,497	$	7,655	$	2,062	$	3,864	$	1,485	$	256,563
Purchased credit impaired loans		11,534		16,417		27,951		8,087		8,436		145,273		12,045		201,792
Collectively evaluated for impairment		6,887,355		1,878,950		8,766,305		1,974,567		936,094		1,888,025		2,047,475		15,612,466
Total loans	$	7,133,928	$	1,901,825	$	9,035,753	$	1,990,309	$	946,592	$	2,037,162	$	2,061,005	$	16,070,821

Commercial

Commercial

Commercial

real estate-

Total

real estate-

Construction

non-real

owner

commercial &

income

and land

Residential

(in thousands)

estate

occupied

industrial

producing

development

mortgages

Consumer

Total

Three months ended March 31, 2016

Allowance for loan losses:

Beginning balance

$
109,428

$
9,858

$
119,286

$
6,041

$
5,642

$
25,353

$
24,857

$
181,179
Purchased credit impaired activity:

Charge-offs

—

(28)

(28)

(1)

(18)

—

—

(47)
Recoveries

3

35

38

1

35

1

39

114
Net provision for loan losses

7

(194)

(187)

(109)

(151)

1,130

(1,179)

(496)
Decrease in FDIC loss share receivable

(17)

—

(17)

—

—

(2,153)

(19)

(2,189)
Non-purchased credit impaired activity:

Charge-offs

(17,667)

(783)

(18,450)

(115)

(110)

(175)

(5,843)

(24,693)
Recoveries

809

41

850

144

605

301

1,494

3,394
Net provision for loan losses

52,096

5,667

57,763

1,632

(1,627)

235

2,529

60,532
Ending balance

$
144,659

$
14,596

$
159,255

$
7,593

$
4,376

$
24,692

$
21,878

$
217,794
Ending balance:

Allowance:

Individually evaluated for impairment

$
26,502

$
67

$
26,569

$
1,272

$
185

$
125

$
16

$
28,167
Amounts related to purchased credit impaired loans

439

906

1,345

605

523

16,641

1,388

20,502
Collectively evaluated for impairment

117,718

13,623

131,341

5,716

3,668

7,926

20,474

169,125
Total allowance

$
144,659

$
14,596

$
159,255

$
7,593

$
4,376

$
24,692

$
21,878

$
217,794
Loans:

Individually evaluated for impairment

$
201,029

$
6,018

$
207,047

$
8,681

$
14,072

$
883

$
58

$
230,741
Purchased credit impaired loans

12,659

15,864

28,523

11,185

8,930

161,078

12,177

221,893
Collectively evaluated for impairment

6,931,718

1,901,465

8,833,183

1,732,879

1,072,412

1,839,006

2,048,010

15,525,490
Total loans

$
7,145,406

$
1,923,347

$
9,068,753

$
1,752,745

$
1,095,414

$
2,000,967

$
2,060,245

$
15,978,124

The following table shows the composition of nonaccrual loans by portfolio class. Purchased credit impaired loans accounted for in pools with an accretable yield are considered to be performing and are excluded from the table.



	March 31,		December 31,		September 30,		December 31,
(in thousands)	2017		2016		2017		2016
Commercial non-real estate	$	198,137	$	249,037	$	188,982	$	249,037
Commercial real estate - owner occupied		11,167		14,413		14,305		14,413
Total commercial & industrial		209,304		263,450		203,287		263,450
Commercial real estate - income producing		13,348		13,954		14,360		13,954
Construction and land development		3,561		4,550		3,292		4,550
Residential mortgages		23,012		23,665		34,674		23,665
Consumer		13,424		12,351		14,063		12,351
Total loans	$	262,649	$	317,970	$	269,676	$	317,970

Nonaccrual loans include nonaccruing loans modified in troubled debt restructurings (“TDRs”) of ~~$112.6~~$119.3 million and $81.9 million at ~~March 31,~~September 30, 2017 and December 31, 2016, respectively. Total TDRs, both accruing and nonaccruing, were ~~$159.9~~$216.0 million as of ~~March 31,~~September 30, 2017 and $121.7 million at December 31, 2016. All TDRs are individually evaluated for impairment.

The table below details by portfolio class TDRs that were modified during the ~~three~~nine months ended ~~March 31,~~September 30, 2017 and ~~March 31, 2016 by portfolio class.~~2016.



	Three months Ended												Nine Months Ended
($ in thousands)		March 31, 2017						March 31, 2016						September 30, 2017						September 30, 2016
			Pre-Modification		Post-Modification				Pre-Modification		Post-Modification				Pre-Modification		Post-Modification				Pre-Modification		Post-Modification
			Outstanding		Outstanding				Outstanding		Outstanding				Outstanding		Outstanding				Outstanding		Outstanding
		Number of	Recorded		Recorded			Number of	Recorded		Recorded			Number of	Recorded		Recorded			Number of	Recorded		Recorded
Troubled Debt Restructurings:		Contracts	Investment		Investment		Contracts		Investment		Investment			Contracts	Investment		Investment		Contracts		Investment		Investment
Commercial non-real estate		9	$	38,659	$	38,659		11	$	51,246	$	51,246		50	$	135,926	$	135,926		17	$	57,915	$	57,915
Commercial real estate - owner occupied		1		656		656		—		—		—		4		3,734		3,734		—		—		—
Total commercial & industrial		10		39,315		39,315		11		51,246		51,246		54		139,660		139,660		17		57,915		57,915
Commercial real estate - income producing		2		5,527		5,527		—		—		—		5		5,684		5,684		—		—		—
Construction and land development		—		—		—		—		—		—		—		—		—		—		—		—
Residential mortgages		1		250		250		—		—		—		13		2,068		2,068		6		532		532
Consumer		—		—		—		—		—		—		1		40		42		—		—		—
Total loans		13	$	45,092	$	45,092		11	$	51,246	$	51,246		73	$	147,452	$	147,454		23	$	58,447	$	58,447

The TDRs modified during the ~~three~~nine months ended ~~March 31,~~September 30, 2017 reflected in the table above include ~~$27.4~~$96.1 million of loans with extended amortization terms or other payment concessions, ~~$10.7~~$50.1 million of loans with significant covenant waivers and ~~$6.9~~$1.3 million with other modifications. The TDRs modified during the ~~three~~nine months ended ~~March 31,~~September 30, 2016 include ~~$26.8~~$43.4 million of loans with extended amortization terms or other payment concessions, $14.7 million of loans with significant covenant waivers and ~~$24.6~~$0.4 million of other modifications.

No TDRs ~~that~~recorded during the nine months ended September 30, 2017 and 2016 subsequently defaulted within twelve months of ~~modification were recorded in the three months ended March 31, 2017 or 2016.~~ modification.

The tables below present loans that are individually evaluated for impairment disaggregated by portfolio class at ~~March 31,~~September 30, 2017 and December 31, 2016. Loans individually evaluated for impairment include TDRs and loans that are determined to be impaired and have aggregate relationship balances of $1 million or more.



	March 31, 2017								September 30, 2017
		Recorded investment		Recorded investment		Unpaid				Recorded investment		Recorded investment		Unpaid
(in thousands)		without an allowance		with an allowance		principal balance		Related allowance		without an allowance		with an allowance		principal balance		Related allowance
Commercial non-real estate	$	120,166	$	111,822	$	244,153	$	15,017	$	92,583	$	178,441	$	276,879	$	20,880
Commercial real estate - owner occupied		2,801		1,093		4,265		76		3,599		2,752		6,353		477
Total commercial & industrial		122,967		112,915		248,418		15,093		96,182		181,193		283,232		21,357
Commercial real estate - income producing		5,740		7,859		13,934		1,114		5,160		9,135		14,451		1,321
Construction and land development		1,576		16		2,556		1		464		16		1,445		1
Residential mortgages		2,158		1,078		3,761		94		6,311		2,630		11,961		406
Consumer		1,243		906		2,149		199		1		1,305		1,308		405
Total loans	$	133,684	$	122,774	$	270,818	$	16,501	$	108,118	$	194,279	$	312,397	$	23,490


	December 31, 2016
		Recorded investment		Recorded investment		Unpaid
(in thousands)		without an allowance		with an allowance		principal balance		Related allowance
Commercial non-real estate	$	150,650	$	120,612	$	295,445	$	28,187
Commercial real estate - owner occupied		4,261		2,007		6,646		246
Total commercial & industrial		154,911		122,619		302,091		28,433
Commercial real estate - income producing		10,447		4,929		15,708		466
Construction and land development		1,106		832		2,903		38
Residential mortgages		2,877		1,470		4,865		91
Consumer		—		2,154		2,155		267
Total loans	$	169,341	$	132,004	$	327,722	$	29,295

The tables below present the average balances and interest income for total impaired loans for the three and nine months ended September 30, 2017 and 2016. Interest income recognized represents interest on accruing loans modified in a TDR.



	Three Months Ended								Nine Months Ended
	March 31, 2017				March 31, 2016				September 30, 2017				September 30, 2016
	Average		Interest		Average			Interest	Average		Interest		Average			Interest
	recorded		income		recorded			income	recorded		income		recorded			income
(in thousands)	investment		recognized		investment			recognized	investment		recognized		investment			recognized
Commercial non-real estate	$	251,625	$	337	$	141,326	$	182	$	251,129	$	1,806	$	197,382	$	1,002
Commercial real estate - owner occupied		5,081		4		5,713		14		5,895		46		6,015		39
Total commercial & industrial		256,706		341		147,039		196		257,024		1,852		203,397		1,041
Commercial real estate - income producing		14,487		43		9,902		22		14,449		112		8,624		67
Construction and land development		1,766		—		14,149		—		1,216		1		7,821		—
Residential mortgages		3,792		2		889		2		4,449		12		1,444		7
Consumer		2,152		2		105		1		1,644		9		348		4
Total loans	$	278,903	$	388	$	172,084	$	221	$	278,782	$	1,986	$	221,634	$	1,119

The tables below present the age analysis of past due loans by portfolio class at ~~March 31,~~September 30, 2017 and December 31, 2016. Purchased credit impaired loans accounted for in pools with an accretable yield are considered to be current.



													Recorded														Recorded
					Greater than								investment						Greater than								investment
	30-59 days		60-89 days		90 days		Total				Total		> 90 days and		30-59 days		60-89 days		90 days		Total				Total		> 90 days and
March 31, 2017	past due		past due		past due		past due		Current		Loans		still accruing
September 30, 2017															past due		past due		past due		past due		Current		Loans		still accruing
(in thousands)
Commercial non-real estate	$	52,677	$	15,530	$	60,536	$	128,743	$	7,945,544	$	8,074,287	$	245	$	31,634	$	3,880	$	104,334	$	139,848	$	7,989,581	$	8,129,429	$	24,400
Commercial real estate - owner occupied		3,907		1,726		5,578		11,211		2,036,240		2,047,451		35		18,579		303		8,950		27,832		2,048,182		2,076,014		767
Total commercial & industrial		56,584		17,256		66,114		139,954		9,981,784		10,121,738		280		50,213		4,183		113,284		167,680		10,037,763		10,205,443		25,167
Commercial real estate - income producing		4,365		1,688		4,814		10,867		2,494,237		2,505,104		185		1,540		3,731		5,676		10,947		2,500,861		2,511,808		2,907
Construction and land development		14,845		343		2,944		18,132		1,234,535		1,252,667		25		5,018		1,031		2,861		8,910		1,364,138		1,373,048		417
Residential mortgages		18,104		5,104		15,655		38,863		2,227,400		2,266,263		—		39,081		10,575		24,415		74,071		2,522,621		2,596,692		41
Consumer		16,446		5,537		7,736		29,719		2,029,377		2,059,096		100		15,574		7,426		7,710		30,710		2,068,584		2,099,294		318
Total	$	110,344	$	29,928	$	97,263	$	237,535	$	17,967,333	$	18,204,868	$	590	$	111,426	$	26,946	$	153,946	$	292,318	$	18,493,967	$	18,786,285	$	28,850

The following tables present the credit quality indicators by segments and portfolio class of loans at ~~March 31,~~September 30, 2017 and December 31, 2016.



	March 31, 2017												September 30, 2017
(in thousands)	Commercial non-real estate		Commercial real estate - owner-occupied		Total commercial & industrial		Commercial real estate - income producing		Construction and land development		Total commercial		Commercial non-real estate		Commercial real estate - owner-occupied		Total commercial & industrial		Commercial real estate - income producing		Construction and land development		Total commercial
Grade:
Pass	$	6,839,049	$	1,840,799	$	8,679,848	$	2,292,057	$	1,139,772	$	12,111,677	$	6,941,591	$	1,840,553	$	8,782,144	$	2,327,685	$	1,278,648	$	12,388,477
Pass-Watch		296,914		46,048		342,962		141,063		93,309		577,334		345,073		83,808		428,881		107,568		73,538		609,987
Special Mention		182,128		55,919		238,047		30,360		8,311		276,718		122,023		41,270		163,293		12,802		7,484		183,579
Substandard		744,326		104,685		849,011		41,614		11,275		901,900		717,436		110,383		827,819		63,744		13,378		904,941
Doubtful		11,870		—		11,870		10		—		11,880		3,306		—		3,306		9		—		3,315
Total	$	8,074,287	$	2,047,451	$	10,121,738	$	2,505,104	$	1,252,667	$	13,879,509	$	8,129,429	$	2,076,014	$	10,205,443	$	2,511,808	$	1,373,048	$	14,090,299

	December 31, 2016												December 31, 2016
(in thousands)	Commercial non-real estate		Commercial real estate - owner-occupied		Total commercial & industrial		Commercial real estate - income producing		Construction and land development		Total commercial		Commercial non-real estate		Commercial real estate - owner-occupied		Total commercial & industrial		Commercial real estate - income producing		Construction and land development		Total commercial
Grade:
Pass	$	6,364,348	$	1,719,114	$	8,083,462	$	1,873,644	$	968,505	$	10,925,611	$	6,364,348	$	1,719,114	$	8,083,462	$	1,873,644	$	968,505	$	10,925,611
Pass-Watch		203,311		47,676		250,987		78,309		22,592		351,888		203,311		47,676		250,987		78,309		22,592		351,888
Special Mention		181,763		40,299		222,062		22,492		4,142		248,696		181,763		40,299		222,062		22,492		4,142		248,696
Substandard		846,793		99,732		946,525		39,434		15,640		1,001,599		846,793		99,732		946,525		39,434		15,640		1,001,599
Doubtful		17,702		—		17,702		11		—		17,713		17,702		—		17,702		11		—		17,713
Total	$	7,613,917	$	1,906,821	$	9,520,738	$	2,013,890	$	1,010,879	$	12,545,507	$	7,613,917	$	1,906,821	$	9,520,738	$	2,013,890	$	1,010,879	$	12,545,507



	March 31, 2017						December 31, 2016						September 30, 2017						December 31, 2016
(in thousands)	Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total
Performing	$	2,243,251	$	2,045,572	$	4,288,823	$	2,123,048	$	2,046,757	$	4,169,805	$	2,561,977	$	2,084,913	$	4,646,890	$	2,123,048	$	2,046,757	$	4,169,805
Nonperforming		23,012		13,524		36,536		23,665		13,174		36,839		34,715		14,381		49,096		23,665		13,174		36,839
Total	$	2,266,263	$	2,059,096	$	4,325,359	$	2,146,713	$	2,059,931	$	4,206,644	$	2,596,692	$	2,099,294	$	4,695,986	$	2,146,713	$	2,059,931	$	4,206,644

Changes in the carrying amount of purchased credit impaired loans and related accretable yield are presented in the following table for the ~~three~~nine months ended ~~March 31,~~September 30, 2017 and the year ended December 31, 2016.



	March 31, 2017				December 31, 2016				September 30, 2017				December 31, 2016
	Carrying				Carrying				Carrying				Carrying
	Amount		Accretable		Amount		Accretable		Amount		Accretable		Amount		Accretable
(in thousands)	of Loans		Yield		of Loans		Yield		of Loans		Yield		of Loans		Yield
Balance at beginning of period	$	190,915	$	113,686	$	225,838	$	129,488	$	190,915	$	113,686	$	225,838	$	129,488
Addition of cost recovery loans										23,431		—		—		—
Payments received, net		(16,422)		(1,477)		(55,194)		(11,024)		(51,040)		(6,651)		(55,194)		(11,024)
Accretion		4,874		(4,874)		20,271		(20,271)		12,805		(12,805)		20,271		(20,271)
Increase (decrease) in expected cash flows based on actual cash flows and changes in cash flow assumptions		—		4,318		—		5,358
Net transfers to (from) nonaccretable difference to accretable yield		—		3,422		—		10,135
Increase in expected cash flows based on actual cash flows and changes in cash flow assumptions										—		4,149		—		5,358
Net transfers from nonaccretable difference to accretable yield										—		8,095		—		10,135
Balance at end of period	$	179,367	$	115,075	$	190,915	$	113,686	$	176,111	$	106,474	$	190,915	$	113,686

Loans Acquired in an FDIC-Assisted Transaction and the Related FDIC Loss Share Receivable

Loans purchased in the 2009 acquisition of Peoples First Community Bank were covered by two loss share agreements between the FDIC and the Company. In the third quarter of 2017, the Company terminated the agreements with the FDIC on the remaining covered loan balances totaling $154 million at June 30, 2017. The ~~loss share agreement covering~~indemnification asset was written down to the ~~non-single family portfolio expired~~final settlement amount of $3.2 million in ~~December 2014 and is now~~the second quarter of 2017. The final cash settlement was received from the FDIC in aJuly 2017.

three-year recovery period where 80% of recoveries on reimbursed losses are due to the FDIC. The loss share agreement covering the single family portfolio expires in December 2019. As of March 31, 2017 and March 31, 2016, loans totaling $143.8 million and $168.1 million, respectively, were covered by the single family loss share agreement, providing considerable protection against credit risk.

The receivable arising from the loss share agreements (referred to as the “FDIC loss share receivable” on our consolidated statements of financial condition) is measured separately from the covered loans because the agreements are not contractually part of the loans and are not transferable should the Company choose to dispose of the loans.

The following schedule shows activity in the FDIC loss share receivable for the ~~three~~nine months ended ~~March 31,~~September 30, 2017 and 2016.



	Three months Ended
	March 31,		March 31,		September 30,		September 30,
(in thousands)	2017		2016		2017		2016
Beginning Balance	$	16,219	$	29,868	$	16,219	$	29,868
Amortization		(1,100)		(1,613)		(2,427)		(4,678)
Charge-offs, write-downs and other recoveries		(1,231)		(1,005)		(2,442)		(5,569)
External expenses qualifying under loss share agreement		131		465
Changes due to changes in cash flow projections		(1,830)		(2,189)
External expenses qualifying under loss share agreements						79		1,000
Adjustment due to changes in cash flow projections						(2,526)		(3,027)
Net payments to FDIC		1,131		302		934		436
Write-down for termination of loss share agreements						(6,603)		—
Cash received from FDIC for final settlement of agreements						(3,234)		—
Ending balance	$	13,320	$	25,828	$	—	$	18,030

Included in loans are ~~$7.5~~$8.0 million and $10.1 million of consumer loans secured by single family residential real estate that are in process of foreclosure as of ~~March 31,~~September 30, 2017 and December 31, 2016, respectively. ~~Of these loans, $3.7 million and $4.9 million, respectively, are covered by the FDIC loss share agreement.~~ Loans in process of foreclosure include those for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction. In addition to the single family residential real estate loans in process of ~~foreclosure,~~forecislosure, the Company also held $2.5 million and $3.1 million of foreclosed single family residential properties in other real estate owned as of ~~March 31, 2017 and December 31, 2016. Of these foreclosed properties, $0.7 million and $0.9 million as of March 31,~~September 30, 2017 and December 31, 2016, ~~respectively, are also covered by the FDIC loss share agreement.~~respectively.

Included in short-term borrowings ~~at March 31, 2017 was $444.8 million of~~are customer securities sold under agreements to repurchase (“repurchase agreements”) that mature daily and ~~were~~are secured by U.S. agency ~~securities.~~securities totaling $512.0 million and $358.1 million at September 30, 2017 and December 31, 2016, respectively. The Company borrows funds on a secured basis by selling securities under agreements to repurchase, mainly in connection with treasury management services offered to its deposit customers. As the Company maintains effective control over assets sold under agreements to repurchase, the securities continue to be carried on the consolidated statements of financial condition. Because the Company acts as borrower transferring assets to the counterparty, and the agreements mature daily, the Company’s risk is limited.

The Company enters into derivative financial instruments to manage risks related to differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments, currently related to select pools of variable rate loans and ~~fixed-rate~~fixed rate brokered deposits. The Bank ~~has~~ also ~~entered~~enters into interest rate derivative agreements as a service to certain qualifying customers. The Bank manages a matched book with respect to these customer derivatives in order to minimize its net risk exposure resulting from such agreements. The Bank also enters into risk participation agreements under which it may either sell or buy credit risk associated with a customer’s performance under certain interest rate derivative contracts related to loans in which participation interests have been sold to or purchased from other banks.

The table below presents the notional or contractual amounts and fair values of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of ~~March 31,~~September 30, 2017 and December 31, 2016. Effective January 3, 2017, the Company’s central clearing counterparty amended its rulebook to legally characterize variation margin accounts as settlements, rather than being reflected separately as collateral. As a result of that change, the Company began prospectively reflecting derivative assets

and liabilities net of the central clearing counterparty derivative margin account.





			March 31, 2017					December 31, 2016
																September 30, 2017					December 31, 2016
				Derivative (1)						Derivative (1)							Derivative (1)						Derivative (1)
(in thousands)	Type of Hedge		Notional or Contractual Amount	Assets		Liabilities		Notional or Contractual Amount		Assets		Liabilities		Type of Hedge		Notional or Contractual Amount	Assets		Liabilities		Notional or Contractual Amount		Assets		Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps	Cash Flow	$	850,000	$	37	$	8,958	$	1,100,000	$	—	$	7,787	Cash Flow	$	875,000	$	—	$	7,924	$	1,100,000	$	—	$	7,787
Interest rate swaps	Fair Value		138,000		—		397		—		—		—	Fair Value		363,000		—		823		—		—		—
		$	988,000	$	37	$	9,355	$	1,100,000	$	—	$	7,787		$	1,238,000	$	—	$	8,747	$	1,100,000	$	—	$	7,787
Derivatives not designated as hedging instruments:
Interest rate swaps (2)	N/A	$	970,658	$	16,679	$	16,901	$	979,391	$	18,405	$	18,362	N/A	$	1,172,752	$	16,855	$	17,420	$	979,391	$	18,405	$	18,362
Risk participation agreements	N/A		100,777		41		105		84,732		50		105	N/A		109,556		34		108		84,732		50		105
Forward commitments to sell residential mortgage loans	N/A		78,398		207		1,183		75,676		900		221	N/A		93,809		91		669		75,676		900		221
Interest rate-lock commitments on residential mortgage loans	N/A		61,655		1,020		188		46,840		189		228	N/A		71,786		534		71		46,840		189		228
Foreign exchange forward contracts	N/A		54,666		651		610		56,152		771		729	N/A		55,081		2,465		2,423		56,152		771		729
		$	1,266,154	$	18,598	$	18,987	$	1,242,791	$	20,315	$	19,645			1,502,984		19,979		20,691		1,242,791		20,315		19,645
Total derivatives		$	2,254,154	$	18,635	$	28,342	$	2,342,791	$	20,315	$	27,432		$	2,740,984	$	19,979	$	29,438	$	2,342,791	$	20,315	$	27,432
Less: netting adjustment (3)					(3,676)		(15,465)				—		—					(2,780)		(16,747)				—		—
Total derivative assets/liabilities				$	14,959	$	12,877			$	20,315	$	27,432				$	17,199	$	12,691			$	20,315	$	27,432

The Company is party to various interest rate swap agreements designated and qualifying as cash flow hedges of the Company’s forecasted variable cash flows for pools of variable rate loans. For each agreement, the Company receives interest at a fixed rate and pays at a variable rate. The notional amounts of the swap agreements at September 30, 2017 expire as follows: ~~notional amount of~~$250 million in 2019; $200 million ~~expires~~ in ~~2017; $200~~2020; and $425 million ~~expire~~ in ~~2018; $250 million expire in 2019; and $200 million expires in 2020.~~2022.

During the terms of the swap agreements, the effective portion of changes in the fair value of the derivative instruments are recorded in Accumulated Other Comprehensive Income (“AOCI”) and subsequently reclassified into earnings in the periods that the hedged forecasted ~~variable-rate~~variable rate interest payments affect earnings. The impact on AOCI is reflected in Note 7.7- Shareholders’ Equity. There was virtually no ineffective portion of the change in fair value of the ~~derivative~~derivatives recognized directly in ~~earnings.~~earnings during the three or nine months ended September 30, 2017 and 2016.

During 2017, the Company entered into interest rate swap agreements that modify the Company’s exposure to interest rate risk by effectively converting a portion of the Company’s brokered certificates of deposit from fixed rates to variable rates. The maturities and call features of these interest rate swaps match the features of the hedged deposits. As interest rates fall, the decline in the value of the certificates of deposit is offset by the increase in the value of the interest rate swaps. Conversely, as interest rates rise, the value of the underlying hedged deposits ~~increase,~~increases, but the value of the interest rate swaps ~~decrease,~~decreases, resulting in no impact on earnings. Interest expense is adjusted by the difference between the fixed and floating rates for the period the swaps are in effect. Hedge ineffectiveness on these transactions results in an increase or decrease ofin noninterest income.

The Bank enters into interest rate derivative agreements, primarily rate swaps, with commercial banking customers to facilitate their risk management strategies. The Bank enters into offsetting agreements with unrelated financial institutions, thereby mitigating its net risk exposure resulting from such transactions. Because the interest rate derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized

The Bank also enters into risk participation agreements under which it may either assume or sell credit risk associated with a borrower’s performance under certain interest rate derivative contracts. In those instances where the Bank has assumed credit risk, it is not a direct counterparty to the derivative contract with the borrower and has entered into the risk participation agreement because it is a party to the related loan agreement with the borrower. In those instances in which the Bank has sold credit risk, it is the sole counterparty to the derivative contract with the borrower and has entered into the risk participation agreement because other banks participate in the related loan agreement. The Bank manages its credit risk under risk participation agreements by monitoring the creditworthiness of the borrower, based on the Bank’s normal credit review process.

The Bank also enters into certain derivative agreements as part of ~~their~~its mortgage banking activities. These agreements include interest rate lock commitments on prospective residential mortgage loans and forward commitments to sell these loans to investors on a best efforts delivery basis.

The Bank enters into foreign exchange forward derivative agreements, primarily forward foreign currency contracts, with commercial banking customers to facilitate their risk management strategies. The Bank manages its risk exposure from such transactions by entering into offsetting agreements with unrelated financial institutions. Because the foreign exchange forward contract derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

Derivative instrument income consisting primarily of customer interest rate swap fees, net of fair value adjustments, is reflected in the income statement in other noninterest income, totaling ~~$0.5~~$1.3 million and ~~($0.1)~~$4.4 million for the three and nine months ended ~~March 31,~~September 30, 2017, respectively, and $1.3 million and $1.7 million for the three and nine months ended September 30, 2016, respectively. The impact to interest income from cash flow hedges was ~~$0.1~~($0.1) million and ~~$0.3~~($0.2) million for the three and nine months ended ~~March 31,~~September 30, 2017, respectively and $0.7 million and $1.7 million for the three and nine months ended September 30, 2016, respectively. ~~The~~For the three and nine months ended September 30, 2017, the fair value ~~hedge~~hedges entered into during the period reduced interest expense on deposits by ~~$141,000~~$0.2 million and ~~reduced~~$0.6 million, respectively, and had minimal impact on noninterest income ~~by $15,000~~ due to ineffectiveness.

Certain of the Bank’s derivative instruments contain provisions allowing the financial institution counterparty to terminate the contracts in certain circumstances, such as ~~the~~a downgrade of the Bank’s credit ratings below specified levels, a default by the Bank on its indebtedness, or the failure of the Bank to maintain specified minimum regulatory capital ratios or its regulatory status as a well-capitalized institution. These derivative agreements also contain provisions regarding the posting of collateral by each party. As of ~~March 31,~~September 30, 2017, the aggregate fair value of derivative instruments with credit risk-related contingent features that were in a net liability position was ~~$21.2~~$16.6 million.

The Bank’s derivative instruments towith certain counterparties contain legally enforceable netting provisions that allow for net settlement of multiple transactions to a single amount, which may be positive, negative, or zero. Agreements with certain bilateral counterparties require both parties to maintain collateral in the event that the fair values of derivative instruments exceed established exposure thresholds. For centrally cleared derivatives, the Company is subject to initial margin posting and daily variation margin exchange with the central clearinghouses. As noted above, effective January 3, 2017, the Company began to reflect its derivative assets and liabilities net of the central clearing party variation margin account in the ~~statement~~Statement of ~~financial position.~~Income. Offsetting information in regards to all derivative assets and liabilities, including accrued interest, subject to these master netting agreements at ~~March 31,~~September 30, 2017 and December 31, 2016 is presented in the following tables.



(in thousands)			Gross Amounts Offset in		Net Amounts Presented in		Gross Amounts Not Offset in the Statement of Financial Position								Gross Amounts		Net Amounts		Gross Amounts Not Offset in the Statement of Income
Description	Gross Amounts Recognized		the Statement of Financial Position		the Statement of Financial Position		Financial Instruments		Cash Collateral		Net Amount		Gross Amounts Recognized		Offset in the Statement of Income		Presented in the Statement of Income		Financial Instruments		Cash Collateral		Net Amount
As of March 31, 2017
As of September 30, 2017
Derivative Assets	$	5,498	$	(3,639)	$	1,859	$	1,859	$	—	$	—	$	5,271	$	(3,942)	$	1,329	$	1,329	$	—	$	—

Derivative Liabilities	$	21,162	$	(15,499)	$	5,663	$	1,859	$	5,620	$	(1,816)	$	21,889	$	(16,322)	$	5,567	$	1,329	$	7,318	$	(3,080)



(in thousands)			Gross Amounts Offset in		Net Amounts Presented in		Gross Amounts Not Offset in the Statement of Financial Position							��	Gross Amounts		Net Amounts		Gross Amounts Not Offset in the Statement of Income
Description	Gross Amounts Recognized		the Statement of Financial Position		the Statement of Financial Position		Financial Instruments		Cash Collateral		Net Amount		Gross Amounts Recognized		Offset in the Statement of Income		Presented in the Statement of Income		Financial Instruments		Cash Collateral		Net Amount
As of December 31, 2016
Derivative Assets	$	4,788	$	—	$	4,788��	$	4,788	$	—	$	—	$	4,788	$	—	$	4,788	$	4,788	$	—	$	—

Derivative Liabilities	$	26,846	$	—	$	26,846	$	4,788	$	19,095	$	2,963	$	26,846	$	—	$	26,846	$	4,788	$	19,095	$	2,963

The Company has excess collateral compared to total exposure due to initial margin requirements for day-to-day rate volatility.

The presentation of the components of ~~shareholders’~~stockholders’ equity was modified from prior filings to consolidate treasury stock into surplus in the ~~consolidated balance sheets~~Consolidated Balance Sheets and ~~statements~~Statements of ~~changes~~Changes in ~~shareholders’ equity~~Stockholders’ Equity in order to simplify the presentation. Additional information on treasury stock is reflected in the ~~commons~~common shares outstanding section below.

~~Shares~~Common shares outstanding ~~exclude~~excludes treasury shares of 1.0 million and 1.3 million at ~~March 31,~~September 30, 2017 and December 31, 2016, respectively, with a first-in-first-out cost basis of ~~$17.3~~$17.6 million and $24.1 million at ~~March 31,~~September 30, 2017 and December 31, 2016, respectively. Shares outstanding also ~~exclude~~excludes unvested restricted share awards of ~~1.9~~1.7 million and 2.0 million at ~~March 31,~~September 30, 2017 and December 31, 2016, respectively.

The components of AOCI and changes in those components are presented in the following table.



	Available		HTM Securities
	for Sale		Transferred		Employee		Cash
(in thousands)	Securities		from AFS		Benefit Plans		Flow Hedges		Total
Balance, December 31, 2015	$	4,268	$	(16,795)	$	(67,890)	$	(178)	$	(80,595)
Other comprehensive income (loss) before income taxes:
Net change in unrealized gain		38,835		—		—		1,162		39,997
Reclassification of net (gain) loss realized and included in earnings		(1,435)		—		4,395		—		2,960
Valuation adjustment for employee benefit plans		—		—		(6,347)		—		(6,347)
Amortization of unrealized net loss on securities transferred to HTM		—		2,736		—		—		2,736
Income tax expense (benefit)		13,701		1,029		(714)		424		14,440
Balance, September 30, 2016	$	27,967	$	(15,088)	$	(69,128)	$	560	$	(55,689)
Balance, December 31, 2016	$	(28,679)	$	(14,392)	$	(72,501)	$	(4,960)	$	(120,532)
Other comprehensive income (loss) before income taxes:
Net change in unrealized gain (loss)		21,026		—		—		(1,232)		19,794
Reclassification of net losses realized and included in earnings		—		—		4,144		335		4,479
Valuation adjustment for pension plan amendment (a)		—		—		17,315		—		17,315
Other valuation adjustments for employee benefit plan		—		—		(9,185)		—		(9,185)
Amortization of unrealized net loss on securities transferred to HTM		—		2,726		—		—		2,726
Income tax expense (benefit)		7,649		1,012		4,416		(329)		12,748
Balance, September 30, 2017	$	(15,302)	$	(12,678)	$	(64,643)	$	(5,528)	$	(98,151)

AOCI is reported as a component of stockholders’ equity. AOCI can include, among other items, unrealized holding gains and losses on securities available for sale (“AFS”), gains and losses associated with pension or other post-retirement benefits that are not recognized immediately as a component of net periodic benefit cost, and gains and losses on derivative instruments that are designated as, and qualify as, cash flow hedges. Net unrealized gains/losses on AFS securities reclassified as securities held to maturity (“HTM”) also continue to be reported as a component of AOCI and will be amortized over the estimated remaining life of the securities as an adjustment to interest income. Subject to certain thresholds, unrealized losses on employee benefit plans will be reclassified into income as pension and post-retirement costs are recognized over the remaining service period of plan participants. Accumulated gains/losses on the cash flow hedge of the ~~variable-rate~~variable rate loans described in Note 6 will be reclassified into income over the life of the hedge. Gains (losses) in AOCI are net of deferred income taxes.

The following table shows the line items inof the consolidated statements of income ~~statements~~ affected by amounts reclassified from AOCI.



	Three months ended					Nine Months Ended
Amount reclassified from AOCI (a)	March 31,				Affected line item on	September 30,				Affected line item on
(in thousands)		2017		2016	the income statement		2017		2016	the statement of income
Gain on sale of AFS securities	$	—	$	346	Securities transactions	$	—	$	1,435	Securities transactions
Tax effect		—		(127)	Income taxes		—		(502)	Income taxes
Net of tax		—		219	Net income		—		933	Net income
Amortization of unrealized net loss on securities transferred to HTM		(650)		(798)	Interest income		(2,726)		(2,736)	Interest income
Tax effect		266		292	Income taxes		1,012		1,029	Income taxes
Net of tax		(384)		(506)	Net income		(1,714)		(1,707)	Net income
Amortization of defined benefit pension and post-retirement items		(1,387)		(1,437)	Employee benefits expense (b)		(4,144)		(4,395)	Employee benefits expense (b)
Tax effect		504		525	Income taxes		1,491		1,538	Income taxes
Net of tax		(883)		(912)	Net income		(2,653)		(2,857)	Net income
Amortization of loss on terminated cash flow hedges							(335)		—	Interest income
Tax effect							123		—	Income taxes
Net of tax							(212)		—	Net income
Total reclassifications, net of tax	$	(1,267)	$	(1,199)	Net income	$	(4,579)	$	(3,631)	Net income



	Three months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
(in thousands)	2017		2016		2017		2016		2017		2016
Income from bank-owned life insurance	$	2,652	$	2,550	$	3,097	$	4,097	$	8,632	$	11,148
Credit related fees		2,878		2,357		2,521		2,685		8,297		7,309
Derivative income		465		(139)		1,339		1,347		4,484		1,741
Net gain on sale of assets		4,125		1,766		400		991		4,465		4,557
Safety deposit box income		449		478		424		424		1,264		1,315
Other miscellaneous		2,306		2,334		3,371		2,322		9,759		6,698
Total other noninterest income	$	12,875	$	9,346	$	11,152	$	11,866	$	36,901	$	32,768



	Three months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
(in thousands)	2017		2016		2017		2016		2017		2016
Advertising	$	3,077	$	2,357	$	3,910	$	2,859	$	11,971	$	7,909
Ad valorem and franchise taxes		3,036		2,303		3,387		2,268		9,942		6,911
Printing and supplies		1,178		1,111		1,421		1,134		3,929		3,310
Insurance expense		817		835		671		803		2,295		2,467
Travel expense		1,059		949		1,226		1,022		3,635		3,050
Entertainment and contributions		1,783		1,632		2,322		1,686		6,087		5,319
Tax credit investment amortization		1,212		1,743		1,212		861		3,637		4,437
Loss share termination						—		—		6,603		—
Other miscellaneous		6,468		5,779		7,611		11,746		19,958		22,158
Total other noninterest expense	$	18,630	$	16,709	$	21,760	$	22,379	$	68,057	$	55,561

~~Hancock~~The Company calculates earnings per share using the two-class method. The two-class method allocates net income to each class of common stock and participating security according to common dividends declared and participation rights in undistributed earnings. Participating securities consist of unvested ~~stock-based~~stock based payment awards that contain nonforfeitable rights to dividends or dividend equivalents.

A summary of the information used in the computation of earnings per common share follows.



	Three months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
(in thousands, except per share data)	2017		2016		2017		2016		2017		2016
Numerator:
Net income to common shareholders	$	49,014	$	3,839	$	58,902	$	46,719	$	160,183	$	97,465
Net income allocated to participating securities - basic and diluted		1,156		97		1,244		1,101		3,566		2,334
Net income allocated to common shareholders - basic and diluted	$	47,858	$	3,742	$	57,658	$	45,618	$	156,617	$	95,131
Denominator:
Weighted-average common shares - basic	$	84,365	$	77,501	$	84,749	$	77,550	$	84,577	$	77,525
Dilutive potential common shares		259		171		231		127		241		128
Weighted-average common shares - diluted	$	84,624	$	77,672	$	84,980	$	77,677	$	84,818	$	77,653
Earnings per common share:
Basic	$	0.57	$	0.05	$	0.68	$	0.59	$	1.85	$	1.23
Diluted	$	0.57	$	0.05	$	0.68	$	0.59	$	1.85	$	1.23

Potential common shares consist of employee and director stock options. These potential common shares do not enter into the calculation of diluted earnings per share if the impact would be anti-dilutive, i.e., increase earnings per share or reduce a loss per share. Weighted average anti-dilutive potential common shares totaled 1,380 and 11,057, respectively, for the three and nine months ended September 30, 2017. Weighted-average anti-dilutive potential common shares totaled ~~15,986~~317,893 and ~~656,623,~~578,863, respectively, for the three and nine months ended ~~March 31, 2017 and March 31,~~September 30, 2016.

During the second quarter of 2017, the Company ~~has~~amended both the Hancock Holding Company Pension Plan and Trust Agreement (“Pension Plan”), a qualified defined benefit plan, and the Hancock Holding Company 401(k) Savings Plan and Trust Agreement (“401(k) Plan”), a defined contribution plan. The Pension Plan was amended to exclude any individual hired or rehired by the Company after June 30, 2017 from eligibility to participate. The Pension Plan amendment further provides that the accrued benefits of each participant in the Pension Plan whose combined age plus years of service as of January 1, 2018 totals less than 55 will be frozen as of January 1, 2018 and will not thereafter increase. As a result of the plan amendments, pension ~~plan covering all~~assets and the benefit obligations were re-measured as of June 30, 2017. The impact of the amendment to the benefit obligation was a reduction of $17.3 million. As of June 30, 2017, pension assets totaled $537.6 million and the benefit obligation totaled $476.9 million.

The 401(k) Plan was amended for participants whose benefits are frozen under the Pension Plan, to add an enhanced Company contribution beginning January 1, 2018, in the amount of 2%, 4% or 6% of such participant’s eligible ~~employees. Eligibility is~~compensation, based on ~~minimum age-related~~the participant’s age and ~~service-related requirements as well as job classification. Accrued benefits under~~years of service with the Company. The 401(k) Plan’s amendment further provides that the Company will contribute to the benefit of those associates of the Company hired or rehired after June 30, 2017 and those associates of the Company never enrolled in the Pension Plan an additional basic contribution in an amount equal to 2% of the associate’s eligible compensation beginning January 1, 2018. Participants will vest in the new basic and enhanced Company contributions upon completion of three years of service.

The Company also has a nonqualified defined benefit plan covering certain legacy Whitney employees ~~were~~that was frozen as of December 31, 2012 and no future benefits ~~will be~~are accrued under this plan.

The Company ~~also~~ sponsors defined benefit postretirement plans for both legacy Hancock and legacy Whitney employees that provide health care and life insurance benefits. Benefits under the Hancock plan are not available to employees hired on or after January 1, 2000. Benefits under the Whitney plan are restricted to retirees who were already receiving benefits at the time of plan amendments in 2007 or active participants who were eligible to receive benefits as of December 31, 2007.

The following tables show the components of net periodic benefits cost included in expense for the plans for the periods indicated.



					Other Post-								Other Post-
(in thousands)	Pension Benefits				retirement Benefits				Pension Benefits				retirement Benefits
Three Months Ended March 31,	2017		2016		2017		2016
Three months Ended September 30, 2017									2017		2016		2017		2016
Service cost	$	3,750	$	3,265	$	48	$	29	$	3,769	$	3,611	$	17	$	45
Interest cost		4,123		4,988		180		206		4,056		4,022		155		204
Expected return on plan assets		(8,750)		(8,891)		—		—		(9,652)		(8,554)		—		—
Amortization of net loss		1,435		1,468		(48)		(31)
Amortization of net loss and prior service costs										1,167		1,426		(128)		53
Net periodic benefit cost (reduction of cost)									$	(660)	$	505	$	44	$	302

Nine months ended September 30, 2017
Service cost									$	11,612	$	10,487	$	112	$	119
Interest cost										12,470		13,033		514		613
Expected return on plan assets										(27,978)		(25,999)		—		—
Amortization of net loss and prior service costs										4,368		4,320		(224)		75
Net periodic benefit cost	$	558	$	830	$	180	$	204	$	472	$	1,841	$	402	$	807

No contribution to the pension plans is required in 2017 to meet minimum funding requirements, and the Company has no plans to make a contribution in the current year.

~~The Company also provides a defined contribution 401(k) retirement benefit plan. Under the plan, the Company matches 100%~~

Hancock maintains incentive compensation plans that provide for awards of share-based compensation to employees and directors. These plans have been approved by the Company’s shareholders. Detailed descriptions of these plans were included in Note 16 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Effective January 1, 2017, the Company prospectively adopted accounting guidance intended to improve the accounting for employee share-based payments. The Company elected to account for forfeitures as they occur. The adoption of this guidance did not have a material impact on the Company’s financial condition or results of operations.

A summary of option activity for the ~~three~~nine months ended ~~March 31,~~September 30, 2017 is presented ~~below.~~below:



				Weighted						Weighted
				Average						Average
		Weighted		Remaining				Weighted		Remaining
		Average		Contractual	Aggregate			Average		Contractual	Aggregate
	Number of	Exercise		Term	Intrinsic		Number of	Exercise		Term	Intrinsic
Options	Shares	Price		(Years)	Value ($000)		Shares	Price		(Years)	Value ($000)
Outstanding at January 1, 2017	456,258	$	35.91		$	3,734	456,258	$	35.91	—	$	3,734
Exercised/Released	(256,611)		33.71			3,270	(335,758)		34.58	—		4,111
Cancelled/Forfeited	(538)		32.09			6	(538)		32.09	—		6
Expired	(689)		44.91				(16,675)		68.18	—		—
Outstanding at March 31, 2017	198,420	$	38.74	2.91	$	1,728
Exercisable at March 31, 2017	177,151	$	39.83	2.64	$	1,392
Outstanding at September 30, 2017							103,287	$	35.06	2.92	$	1,383
Exercisable at September 30, 2017							103,287	$	35.06	2.92	$	1,383

The total intrinsic value of options exercised for the ~~three~~nine months ended ~~March 31,~~September 30, 2017 was ~~$3.3~~$4.1 million. There was ~~no total~~minimal intrinsic value of options exercised for the ~~three~~nine months ended ~~March 31,~~September 30, 2016.

The restricted and performance shares in the table below are subject to service requirements. A summary of the status of the Company’s nonvested restricted and performance shares as of ~~March 31,~~September 30, 2017 and changes during the ~~three~~nine months ended ~~March 31,~~September 30, 2017, is presented in the following table.



			Weighted			Weighted
			Average			Average
	Number of		Grant Date	Number of		Grant Date
	Shares		Fair Value	Shares		Fair Value
Nonvested at January 1, 2017	2,152,119	$	32.12	2,152,119	$	32.15
Granted	49,558		40.82	63,127		42.16
Vested	(9,607)		31.81	(209,440)		30.23
Forfeited	(20,446)		32.51	(54,493)		32.36
Nonvested at March 31, 2017	2,171,624	$	32.32
Nonvested at September 30, 2017				1,951,313	$	32.67

As of ~~March 31,~~September 30, 2017, there was ~~$52.7~~$40.1 million of total unrecognized compensation expense related to nonvested restricted and performance shares expected to vest. This compensation is expected to be recognized in expense over a weighted average period of ~~3.4~~3 years. The total fair value of shares which vested during the ~~three~~nine months ended ~~March 31,~~September 30, 2017 and 2016 was ~~$0.5~~$10.1 million and ~~$0.9~~$2.2 million, respectively.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2017, the Company granted 23,489 performance shares subject to a total shareholder return (“TSR”) performance metric with a grant date fair value of $42.92 per share and 23,489 performance shares subject to a core earnings per share performance metric with a grant date fair value of $38.26 per share to key members of executive management. The number of performance shares subject to TSR that ultimately vest at the end of the three-year performance period, if any, will be based on the relative rank of the Company’s three-year TSR among the TSRs of a peer group of 44 regional banks. The fair value of the performance shares subject to TSR at the grant date was determined using a Monte Carlo simulation method. The number of performance shares subject to core earnings per share that ultimately vest will be based on the Company’s attainment of certain core earnings per share goals over the two-year performance period. The maximum number of performance shares that could vest is 200% of the target award. Compensation expense for these performance shares is recognized on a ~~straight-line~~straight line basis over the three-year service period.

The Financial Accounting Standards Board (“FASB”) defines fair value as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The FASB’s guidance also ~~established~~establishes 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 for identical assets or liabilities (“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.

The following tables present for each of the fair value hierarchy levels the Company’s assets and liabilities that are measured at fair value on a recurring basis in the consolidated balance sheets.



	March 31, 2017								September 30, 2017
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	74,496	$	—	$	74,496	$	—	$	73,442	$	—	$	73,442
Municipal obligations		—		241,036		—		241,036		—		242,678		—		242,678
Corporate debt securities		—		3,500		—		3,500		—		3,500		—		3,500
Residential mortgage-backed securities		—		1,559,417		—		1,559,417		—		1,793,426		—		1,793,426
Commercial mortgage-backed securities		—		428,048		—		428,048		—		568,353		—		568,353
Collateralized mortgage obligations		—		192,264		—		192,264		—		173,879		—		173,879
Total available for sale securities		—		2,498,761		—		2,498,761		—		2,855,278		—		2,855,278
Derivative assets (1)		—		14,959		—		14,959		—		17,199		—		17,199
Total recurring fair value measurements - assets	$	—	$	2,513,720	$	—	$	2,513,720	$	—	$	2,872,477	$	—	$	2,872,477
Liabilities
Derivative liabilities (1)	$	—	$	12,877	$	—	$	12,877	$	—	$	12,691	$	—	$	12,691
Total recurring fair value measurements - liabilities	$	—	$	12,877	$	—	$	12,877	$	—	$	12,691	$	—	$	12,691

Securities classified as level 2 include obligations of U.S. Government agencies and U.S. Government-sponsored agencies, residential mortgage-backed securities and collateralized mortgage obligations that are issued or guaranteed by U.S. government agencies, and

state and municipal bonds. The level 2 fair value measurements for investment securities are obtained quarterly from a third-party pricing service that uses industry-standard pricing models. Substantially all of the model inputs are observable in the marketplace or can be supported by observable data.

The Company invests only in securities of investment grade quality with a targeted duration, for the overall portfolio, generally between two and five years. Company policies generally limit investments to U.S. agency securities and municipal securities determined to be investment grade according to an internally generated score which generally includes a rating of not less than “Baa” or its equivalent by a nationally recognized statistical rating agency. ~~There were no transfers between valuation hierarchy levels during the periods shown.~~

The fair value of derivative financial instruments, which are predominantly customer interest rate swaps, is obtained from a third-party pricing service that uses an industry-standard discounted cash flow model that relies on inputs, LIBOR swap curves and Overnight Index swap rate curves, 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. The Company’s policy is to measure counterparty credit risk quarterly for all derivative instruments, including those subject to master netting arrangements consistent with how market participants would price the net risk exposure at the measurement date.

The Company also has certain derivative instruments associated with the Bank’s ~~mortgage-banking~~mortgage banking activities. These derivative instruments include interest rate lock commitments on prospective residential mortgage loans and forward commitments to sell these loans to investors on a best efforts delivery basis. The fair value of these derivative instruments is measured using observable market prices for similar instruments and is classified as a level 2 measurement.

The Company’s policy is to recognize transfers between valuation hierarchy levels as of the end of a reporting period. There were no transfers between levels during the periods shown.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. Collateral-dependent impaired loans are level 2 assets measured at the fair value of the underlying collateral based on independent third-party appraisals that take into consideration market-based information such as recent sales activity for similar assets in the property’s market.

Other real estate owned, including both foreclosed property and surplus banking property, are level 3 assets that are adjusted to fair value, less estimated selling costs, upon transfer to other real estate owned. Subsequently, other real estate owned is carried at the lower of carrying value or fair value less estimated selling costs. Fair values are determined by sales agreement or third-party appraisals as discounted for estimated selling costs, information from comparable sales, and marketability of the property.

The fair value information presented below is not as of the period-end, rather it was as of the date the fair value adjustment was recorded during the twelve months for each of the dates presented below, and excludes nonrecurring fair value measurements of assets no longer on the balance sheet.

The following tables present the Company’s financial assets that are measured at fair value on a nonrecurring basis for each of the fair value hierarchy levels.



	March 31, 2017								September 30, 2017
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Collateral-dependent impaired loans	$	—	$	143,327	$	—	$	143,327	$	—	$	129,230	$	—	$	129,230
Other real estate owned		—		—		9,295		9,295		—		—		6,810		6,810
Total nonrecurring fair value measurements	$	—	$	143,327	$	9,295	$	152,622	$	—	$	129,230	$	6,810	$	136,040

Accounting guidance from the FASB requires the disclosure of estimated fair value information about certain on- and off-balance sheet financial instruments, including those financial instruments that are not measured and reported at fair value on a recurring basis. The significant methods and assumptions used by the Company to estimate the fair value of financial instruments are discussed below.

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

Securities – The fair value measurement for securities available for sale was discussed earlier in the note. The same measurement techniques were applied to the valuation of securities held to maturity.

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

Loans Held for Sale – These loans are recorded at fair value and carried at the lower of cost or market. The carrying amount is considered a reasonable estimate of fair value.

Deposits -– The accounting 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~~fixed maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities.

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

Long-Term Debt -– The fair value is estimated by discounting the future contractual cash flows using current market rates at which debt with similar terms could be obtained.

Derivative Financial Instruments – The fair value measurement for derivative financial instruments was discussed earlier in the note.

The following tables present the estimated fair values of the Company’s financial instruments by fair value hierarchy levels and the corresponding carrying amount at ~~March 31,~~September 30, 2017 and December 31, 2016.



	March 31, 2017										September 30, 2017
							Total Fair		Carrying								Total Fair		Carrying
(in thousands)	Level 1		Level 2		Level 3		Value		Amount		Level 1		Level 2		Level 3		Value		Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	384,587	$	—	$	—	$	384,587	$	384,587	$	445,500	$	—	$	—	$	445,500	$	445,500
Available for sale securities		—		2,498,761		—		2,498,761		2,498,761		—		2,855,278		—		2,855,278		2,855,278
Held to maturity securities		—		2,477,420		—		2,477,420		2,502,512		—		2,768,148		—		2,768,148		2,769,274
Loans, net		—		143,327		17,580,123		17,723,450		17,991,318		—		129,230		18,300,747		18,429,977		18,563,163
Loans held for sale		—		20,883		—		20,883		20,883		—		23,236		—		23,236		23,236
Derivative financial instruments		—		14,959		—		14,959		14,959		—		17,199		—		17,199		17,199
Financial liabilities:
Deposits	$	—	$	—	$	19,927,363	$	19,927,363	$	19,922,020	$	—	$	—	$	21,523,649	$	21,523,649	$	21,533,859
Federal funds purchased		16,321		—		—		16,321		16,321		1,150		—		—		1,150		1,150
Securities sold under agreements to repurchase		444,788		—		—		444,788		444,788		512,001		—		—		512,001		512,001
FHLB short-term borrowings		1,660,823		—		—		1,660,823		1,660,823		1,224,000		—		—		1,224,000		1,224,000
Long-term debt		—		524,039		—		524,039		525,082		—		330,909		—		330,909		331,179
Derivative financial instruments		—		12,877		—		12,877		12,877		—		12,691		—		12,691		12,691

In March ~~2016,~~2017, the FASB issued Accounting Standards Update (“ASU”) 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities,” which amends the amortization period for certain purchased callable debt securities held at a premium. The amendments require the premium to be amortized to the earliest call date. The amendments do not, however, require an accounting change for securities held at a discount; instead, the discount continues to be amortized to maturity. The amendments in this ASU more closely align the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities. These amendments are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. The Company early adopted this amendment in the second quarter of 2017 and, in accordance with the standards, the Company began amortizing the premium for certain purchased callable debt securities to the earliest call date. The adoption of this guidance did not have a material impact on the Company’s financial condition or results of operations.

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment ~~Accounting”~~Accounting,” to improve the accounting for employee share-based payments. Several aspects of the accounting for share-based payment award transactions are simplified, including income tax consequences; classification of awards as either equity or liabilities; and classification on the statement of cash flows. The amendments were effective for public business entities for annual periods beginning after December 15, 2016, and interim periods within those annual ~~periods and we~~periods. The Company adopted the guidance effective January 1, 2017. In accordance with the standard, the Company elected to account for forfeitures of stock-based compensation as they occur and will ~~now reclass~~reclassify dividends paid on forfeited shares to compensation expense from retained earnings. Classification of shares forfeited for taxes are reflected in the statement of cash flows as a financing rather than operating activity, with all historical periods restated. In addition, the Company began recognizing excess tax benefits and tax deficiencies during the period toin income (rather than in equity) on a prospective basis. ~~Our adoption~~Adoption of this guidance did not have a material impact on the Company’s financial condition or results of ~~operations,~~operations; however, the prospective change in treatment of excess tax benefits resulted in a reduction in income tax expense of approximately $0.2 million and ~~tax deficiencies~~$2.0 million for the three and nine months periods ended September 30, 2017, respectively, and could result in volatility of future earnings, depending on changes in the Company’s stock ~~prices.~~price.

In ~~March~~August 2017, the FASB issued ASU ~~2017-08, “Receivables – Nonrefundable Fees~~2017-12, “Derivatives and ~~Other Costs (Subtopic 310-20)~~Hedging (Topic 815): ~~Premium Amortization on Purchased Callable Debt Securities,~~Targeted Improvements to Accounting for Hedging Activities,” ~~which amends~~with the ~~amortization period~~objective of improving financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The update provides changes to both the designation and measurement guidance for ~~certain purchased callable debt securities held at a premium. The amendments require~~qualifying hedging relationships and the premium to be amortized to the earliest call date. The amendments do not, however, require an accounting change for securities held at a discount; instead, the discount continues to be amortized to maturity.presentation of hedge results. The amendments in this ~~ASU more closely align the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities. These amendments~~update are effective for ~~fiscal years, and for interim period within those~~ fiscal years beginning after December 15, ~~2018.~~2018, and interim periods within those fiscal years. Early ~~adoption~~application is permitted ~~including adoption~~ in ~~an interim period. If adopted in an~~any interim period ~~any adjustments~~after issuance of the update. All transition requirements and elections are to be applied to hedging relationships existing on the date of adoption, and the effect of the adoption should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retain earnings as of the beginning of the period of adoption. The Company is currently assessing all potential impacts of adoption of this ~~pronouncement~~update and is considering early adoption ~~but it~~effective January 1, 2018.

In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting,” which seeks to provide clarity, reduce diversity in practice, and reduce complexity when applying the guidance regarding a change to the terms of conditions of a share-based payment award. Specifically, an entity is to account for the effects of a modification, unless all of the following are satisfied: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement is used) of the original award immediately before the original award is modified; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or as a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments are effective for annual periods, and for interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for reporting periods for which financial statements have not ~~expected~~yet been issued. The Company does not expect the adoption of this guidance to have a material impact on ~~the Company’s~~its financial condition or results of operations.

In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit ~~Cost”~~Costs,” to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The amendments require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendments also allow only the service cost component to be eligible for capitalization when applicable. These amendments are effective for public business entities for annual periods beginning after December

15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance, meaning early adoption should be within the first interim period if an employer issues interim financial statements. Disclosures of the nature of and reason for the change in accounting principle are required in the first interim and annual periods of adoption. The amendments should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. ~~The Company is currently assessing~~Refer to Note 11 – Retirement Plans – for detail on the components of net periodic pension and post-retirement benefit costs. Application of this ~~pronouncement and the impact of adoption, but it~~guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which simplifies the manner in which an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Under the amendments in this ASU, an entity should (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, ASU No. 2017-04 removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test. This ASU is effective for public business entities that are SEC filers for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The ASU should be applied using a prospective method. ~~The Company is currently assessing~~Application of this ~~pronouncement and is considering early adoption, but it~~guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) – Clarifying the Definition of a Business,” which addresses stakeholders’ concerns that the current definition of a business is applied too broadly and analyzing transactions under the current definition is difficult and costly. Under the amended guidance, a transaction is initially subject to a screening process to determine whether a “set” (i.e. an integrated set of assets and activities) ~~does not qualify~~qualifies as a business. Under the screen, if substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or in a group of similar identifiable assets, the set is deemed not to be a business. Further evaluation is required only if the transferred set does not meet the screen. Under the further evaluation, to be considered a business, a set must include, at a minimum, an input and a substantive process that, together, significantly contribute to the ability to create output. The amendment also narrows the definition of the term “output” so that it is consistent with the manner in which outputs are described in Topic 606, Revenue from Contracts with Customers. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early application is permitted under certain circumstances. The amendments should be applied prospectively on or after the effective date. ~~The Company~~Adoption of this guidance is ~~currently assessing this pronouncement and~~not expected to have a material impact on the ~~impact~~Company’s financial condition or results of ~~adoption.~~operations.

In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory,” which addresses stakeholders’ concerns that the limited amount of authoritative guidance has led to diversity in practice and is a source of complexity in financial reporting and results in an unfaithful representation of the economics of an intra-entity asset transfer. The amendment eliminates the exception to the United States generally accepted accounting principle (“U.S. GAAP”) of comprehensive recognition of current and deferred income taxes that prohibits recognizing current and deferred income tax consequences for an intra-equity asset transfer (excluding the transfer of inventory) until the asset has been sold to an outside party. The amendments are effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption is permitted, including adoption in an interim period. The amendments should be applied using a retrospective transition method to each period presented. ~~The Company is currently assessing this pronouncement and the impact of adoption; however, the adoption~~Adoption of this guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments provide guidance on eight specific cash flow issues, including debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies (including bank-owned), life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments should be applied using a retrospective transition method to each period presented. ~~This~~Adoption of this guidance iswill not ~~expected to~~ have a material impact on the Company’s financial condition or results of ~~operations.~~operations, and the Company does not expect a material impact to the presentation of its Statement of Cash Flows.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credits Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU, more commonly referred to as Current Expected Credit

Losses, or CECL, requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques currently applied ~~today~~ will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. In addition, the ASU amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. The ASU is effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. Early application is permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has begun the process of implementation and currently is not planning to early adopt. The Company expects the guidance will result in an increase in the allowance for loan losses given the change from covering losses inherent in the portfolio to covering losses over the remaining expected life of the portfolio and the nonaccretable difference on purchased credit impaired loans moving to an allowance (offset by an increase in the carrying value of the related loans). The guidance will also result in the establishment of an allowance for credit loss on held to maturity debt securities. The amount of the increase in these allowances will be impacted by the portfolio composition and quality at the adoption date as well as economic conditions and forecasts at that time.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” that provides new lease accounting guidance. Under the guidance, lessees (with the exception of short-term leases) will be required to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged. Lessees will need to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. Lessees will no longer be provided with a source of off-balance sheet financing. Public business entities ~~should~~are required to apply the amendments for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently assessing this pronouncement and the impact of adoption by reviewing its existing lease contracts and service contracts that may include embedded leases. The Company expects a gross-up of its Consolidated Balance Sheets as a result of recognizing lease liabilities and right of use assets; the extent of such is under evaluation. The Company does not expect material changes to ~~the recognition of operating lease expense in~~ its consolidated results of operations.

In January 2016, the FASB issued an ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial ~~Liabilities”~~Liabilities,” that improves the recognition and measurement of financial instruments through targeted changes to existing GAAP. It requires equity investments (except those that are accounted for under the equity method of accounting or result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. It also requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently assessing this pronouncement; however, the adoption of this guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” affecting any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of this standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Most revenue associated with financial instruments, including interest and loan origination fees, is outside the scope of the guidance. Gains and losses on investment securities, derivatives, and sales of financial instruments are also excluded from the scope. Subsequent to issuance of the revenue recognition guidance, the FASB has issued several updates that deferred by one year the effective date for revenue recognition guidance; clarified its guidance for performing the principal-versus-agent analysis; clarified guidance for identifying performance obligations allowing entities to ignore immaterial promised goods and services in the context of a contract with a customer and other clarifying guidance and technical corrections. Entities can elect to adopt the guidance either on a full or modified retrospective basis. Full retrospective adoption will require a cumulative effect adjustment to retained earnings as of the beginning of the earliest comparative period presented. Modified retrospective adoption will require a cumulative effect adjustment to retained earnings as of the beginning of the reporting period in which the entity first applies the new guidance. The standard will be effective for the Company for annual reporting periods beginning after December 15, 2017. The Company ~~is still in process of gathering an inventory~~will adopt this guidance on January 1, 2018 and ~~evaluating all~~plans to use the modified retrospective approach. The Company has inventoried its contracts with customers and ~~does not plan to early adopt~~has evaluated a material portion of those contracts for compliance with the ~~guidance.~~standard. The Company ~~is also in~~has not yet identified any material changes to the ~~process~~timing of ~~evaluating~~revenue recognition. Based on the ~~transition method election and the impact~~analysis performed to date, adoption of ~~the guidance to noninterest income and on presentation and disclosures. The preliminary analysis suggests~~ this guidance is not expected to have a material impact on ~~the Company’s~~its financial condition or results of operations. The Company is continuing to evaluate disaggregation for select categories of revenue in the scope of the guidance. Upon adoption, the Company will provide qualitative disclosures of its performance obligations related to revenue recognition.

On April 28, 2017, the Company announced that its banking subsidiary, Whitney Bank, entered into a purchase and assumption agreement with the FDIC (“Agreement”), which acted as the receiver for the Louisiana Office of Financial Institutions (“OFI”) following the OFI's determination to close FNBC. Pursuant to the Agreement, Whitney Bank acquired selected assets and liabilities of FNBC from the FDIC.

Under the Agreement, Whitney acquired approximately $1.6 billion in deposits, which were primarily in the form of transaction and savings accounts, and purchased approximately $1.0 billion in cash, securities, loans, and other assets, primarily at book value, for a transaction premium of $35 million. The FDIC made a payment to Whitney Bank of $655 million for the net liabilities assumed. These amounts are subject to adjustment based upon final settlement with the FDIC pursuant to the Agreement.

Whitney will continue to operate the former FNBC banking premises for a period of time. Whitney will have the right for a 90-day period to purchase at fair market value any owned FNBC banking premises (and purchase at fair market value certain related assets) and will have the right for a 60-day period to assume the leases for any leased premises (and purchase at fair market value certain related assets).

The terms of the Agreement require the FDIC to indemnify Whitney against certain liabilities of FNBC and its affiliates not assumed or otherwise purchased by Whitney. Neither the Company nor Whitney Bank acquired any assets, common stock, preferred stock or debt, or assumed any other obligations, of FNBC Bank Holding Company or FNBC.

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

This report 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 are intended to be covered by the safe harbor provided therein. Forward looking statements that we may make include statements regarding balance sheet and revenue growth; the provision for loan losses, loan growth expectations, management’s predictions about charge-offs for loans, including energy related credits, the impact of changes in oil and gas prices on our energy portfolio, and the downstream impact on businesses that support the energy sector, especially in the Gulf Coast region; the impact of the First NBC transactions on our performance and financial condition, including our ability to successfully integrate the business; deposit trends; credit quality trends; net interest margin trends; future expense levels; success of revenue-generating initiatives; the effectiveness of derivative financial instruments and hedging activities to manage risk; projected tax rates; future profitability; improvements in expense to revenue (efficiency) ratio; purchase accounting impacts such as accretion levels; and the financial impact of regulatory requirements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “forecast,” “goals,” “targets,” “initiatives,” “focus,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events.

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward looking statements. Additional factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016 and in other periodic reports that we file with the SEC.

Management’s Discussion and Analysis of Financial Condition and Results of Operations include non-GAAP measures used to describe ~~Hancock’s~~our performance. A reconciliation of those measures to GAAP measures are provided within the appropriate ~~section~~sections of this Item. The following is a summary of these non-GAAP measures and an explanation as to why they are deemed useful.

Consistent with Securities and Exchange Commission Industry Guide 3, ~~the Company presents~~we present net interest income, net interest margin and efficiency ratios on a fully taxable equivalent (“te”) basis. The te basis adjusts for the tax-favored status of net interest income from certain loans and investments using a federal tax rate of 35% to increase tax-exempt interest income to a taxable-equivalent basis. ~~The Company believes~~We believe this measure to be the preferred industry measurement of net interest income, and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

Over the past several quarters we have disclosed our focus on strategic initiatives that were designed to replace declining levels of purchase accounting income ~~from acquisitions~~ with improvement in core income, which ~~the Company defines~~we define as income excluding net purchase accounting income. ~~The Company presents~~We present core income non-GAAP measures including core net interest income and core net interest margin, core revenue and core pre-tax, pre-provision ~~profit.~~net revenue. These measures are provided to assist the reader with a better understanding of ~~the Company’s~~our performance period over period as well ~~as providing~~to provide investors with assistance in understanding the success management has experienced in executing its strategic initiatives.

We define Core Net Interest Income as net interest income (te) excluding net purchase accounting accretion resulting from the fair market value adjustments related to acquired operations. We define Core Net Interest Margin as reported core net interest income, annualized, expressed as a percentage of average earning assets.

We define Core Revenue as core net interest income and noninterest income less the amortization of the FDIC loss share receivable related to loans acquired in an FDIC assisted transaction and other nonoperating revenues.

We define Core Pre-Provision Net Revenue as core revenue less noninterest expense, excluding intangible amortization and other nonoperating items. Management believes that core pre-tax, pre-provision net revenue is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle.

On March 10, 2017, ~~the Company~~we, through our wholly-owned subsidiary, Whitney Bank (“Whitney”), completed ~~the~~a transaction with ~~FNBC,~~First NBC Bank (“FNBC”), whereby ~~the Company~~Whitney acquired approximately $1.2 billion in loans (net of fair value discount or “loan mark”), 9nine branch locations with $398 million in deposits, and assumed $604 million in FHLB borrowings. ~~This in-market transaction strengthens our position in the Greater New Orleans area.~~ The operational conversion of the branch locations ~~is expected to occur~~occurred in ~~mid-May~~the second quarter of 2017, along with the simultaneous closure of 10 overlapping branches. ~~The~~This transaction ~~was originally announced on December 30, 2016. For additional information on~~is referred to as the FNBC I transaction ~~see Notes to Consolidated Financial Statements – Note 2 Acquisition.~~

On April 28, 2017, ~~the Company announced that its banking subsidiary,~~ Whitney ~~Bank,~~ entered into a purchase and assumption agreement with the FDIC (“Agreement”), which acted as the receiver for the Louisiana Office of Financial Institutions ~~(“OFI”)~~(OFI) following the OFI’s ~~determination~~closure of FNBC. This transaction is referred to ~~close FNBC.~~as the FNBC II transaction throughout this document. Pursuant to the Agreement, Whitney ~~Bank~~ acquired selected assets and liabilities of FNBC from the ~~FDIC. Management believes this in-market transaction is low risk~~FDIC and ~~will be financially compelling, helping us achieve our long term goals.~~ continued to operate the 29 former FNBC branch locations until systems conversion, which occurred in July 2017. In the third quarter of 2017, Whitney exercised its option to acquire seven former FNBC locations and closed and consolidated 25 overlapping branch locations.

Under the Agreement, Whitney received approximately $642 million in cash from the FDIC, and acquired/assumed the following assets and liabilities:

Management believes these low risk in-market transactions strengthen our position in the Greater New Orleans area and are financially compelling, which will help us achieve our long term goals.

For additional information on both transactions, see Notes to Unaudited Consolidated Financial Statements – Note 2 – Acquisitions.

Most of Hancock’s market area ~~reflected~~experienced a modest to moderate expansion in economic activity during the ~~first~~third quarter of 2017, according to the Federal Reserve’s Summary of Commentary on Current Economic Conditions (“Beige Book”). ~~Energy-related~~Energy related businesses operating mainly in Hancock’s south Louisiana and Houston, Texas markets ~~again showed improvement~~continued to expand, but at a slightly slower rate in the ~~current~~third quarter. ~~Demand for oil field services improved with~~Although inventories decreased as a result of Hurricane Harvey, drilling activity has returned to pre-hurricane levels. Overall growth in oil and gas production continued, but oilfield services firms noted weaker demand growth. Drilling activity ~~growing, though activity remains well below third-quarter 2014 levels. There~~ is ~~concern, however, that~~expected to decline slightly by the ~~accelerated pace may not be sustainable. While overall~~end of 2017, and demand for oilfield services is softening outside of the Permian Basin. However, six-month outlooks ~~are positive, continued volatility in~~for 2018 were optimistic relative to the ~~sector is expected.~~last reporting period, and uncertainty has moderated.

The commercial real estate market continued to improve in most of our footprint, with growing demand for ~~office~~multi-family construction. In the Houston market, apartment leasing activity picked up, occupancy rose and ~~industrial space in certain market areas.~~rent concessions diminished following Hurricane Harvey. Commercial construction activity also increased in these sectors. Continued improvement is expected in the commercial real estate ~~market. The Houston~~ market ~~is the exception to this positive outlook with weak demand for office space and construction.~~in 2018.

The residential real estate market ~~experienced slow~~has a varied outlook, with new home starts and ~~steady growth across~~closings expected to be behind schedule for the ~~Company’s footprint outside~~remainder of the year in our Houston area during the quarter, with construction activity up year-over-year. Home prices increased modestly, with buyers remaining price sensitive. Apartment demand was strong in all markets excluding Houston, where rents were flatmarket due to ~~down. New home sales~~Hurricane Harvey. Residential real estate contracts signaled modest growth and construction activity ~~are expected~~was slightly up from the year-ago level in the rest of our markets. Builders expect homes sales to ~~remain~~be flat ~~or improve slightly~~ over the next three months, ~~in all of our markets.~~while brokers anticipate slightly higher sales. Construction activity is expected to match or marginally surpass the current pace over the next three months.

Retail sales activity and consumer spending ~~were mixed with merchants expecting~~outlook was positive. There is an expected increase in building materials in the hurricane impacted areas. In Houston, there is also increased demand for warehouses from building supply companies. Auto sales surged and are expected to remain ~~flat. Auto sales increased throughout~~elevated from replacement activity due to the ~~Company’s footprint~~hurricanes. Employment growth was steady, with challenges continuing in filling construction, information technology, finance, transportation and ~~tourism~~nursing positions. Wage growth remained steady, with the exception of wage pressures for highly skilled positions and ~~hospitality activity was strong. Employment increased~~rising wages in the construction industry. Due to the impact of Hurricane Harvey, finding and hiring workers may be more difficult over the next six months in the Houston market.

Overall economic reports indicate that loan demand continued to increase, however at a ~~moderate~~more sluggish pace ~~over~~than during the ~~reporting~~prior period ~~while wage increases remained steady~~with growth in ~~the 2 to 3 percent range. Energy companies indicated that hiring had picked up~~commercial real estate loans, but with decreases in ~~the first quarter; however, some companies in the exploration~~demand for residential real estate loans and ~~production sector continued to note layoffs.~~

~~Loan demand~~consumer loans. While we experienced loan growth across the ~~geographic~~our markets ~~that Hancock serves improved. Loan volumes increased~~compared to the prior quarter, with loan volume increases primarily in commercial ~~and industrial loans and~~ real estate ~~(commercial~~ and ~~residential)~~mortgage loans, maintaining that level of growth will be challenging with ~~consumer loans decreasing. Outlooks were mostly optimistic, with anticipation~~the slow down of ~~stronger loan~~ demand ~~and business activity six months from now.~~in our markets. Overall, the economic outlook ~~is more~~remains positive, ~~than in previous periods.~~as most businesses expect activity to increase over the next year.

Net income infor the ~~first~~third quarter of 2017 was ~~$49.0~~$58.9 million, or ~~$0.57~~$.68 per diluted common share (EPS), compared to ~~$51.8~~$52.3 million, or ~~$0.64 per diluted common share,~~$.60 EPS in the ~~fourth~~second quarter of ~~2016. Net income was $3.8~~2017 and $46.7 million, or ~~$0.05 per diluted common share,~~$.59 EPS, in the ~~first~~third quarter of 2016. The ~~first~~third quarter of 2017 includes nonoperating expenses of approximately $11.4 million ($.08 per share impact), while the second quarter of 2017 included ~~a full quarter impact of the 6.3 million shares issued in the mid-December 2016 common stock offering ($0.04 per share impact), $6.5~~$10.6 million of ~~acquisition costs~~nonoperating expenses ($.08 per share). The nonoperating expenses in both quarters were mainly related to the two previously disclosed FNBC ~~transaction ($0.05 per share) partially offset by a $4.4 million gain from~~transactions. There were no nonoperating expenses in the ~~sale of selected Hancock Horizon funds ($0.03 per share). The first~~third quarter of ~~2016 included a $60.0 million ($0.49 per share) provision for credit losses primarily related to the recent energy cycle.~~2016.

Highlights of ~~the Company’s first quarter~~Our Third Quarter 2017 ~~results (compared~~Results (Compared to ~~fourth quarter 2016)~~Second Quarter 2017):

The ~~total allowance~~FNBC I and II transactions continue to positively impact our franchise by expanding our customer base and strengthening the market position in our footprint. As noted in the prior quarter, these transactions also temporarily added cost. In addition to merger-related costs identified as nonoperating items, second quarter results also included other nonpermanent costs estimated at $7 million, or $0.05 per share, to separately operate the 29 branches FNBC had at the time of its closure. These expenses were eliminated during the third quarter through systems conversions and the consolidation of overlapping branches, resulting in a more normalized expense level for ~~loan losses was $213.6 million at March 31, 2017, down $15.9 million from December 31, 2016~~the current quarter.

The active hurricane season brought severe weather to several areas in our footprint, with Harvey impacting Texas and ~~$4.2 million from March 31, 2016. The ratio~~Southwest Louisiana, Irma impacting Florida, and Nate impacting coastal Mississippi and Alabama. Despite the widespread coverage of our market, the Company experienced minimal impact to facilities and operations and we do not expect any significant change to the credit quality of the ~~allowance for~~ loan ~~losses to period-end loans was 1.17% at March 31, 2017, down from 1.37% at December 31, 2016, and 1.36% at March 31, 2016, due largely to the addition~~portfolio as a result of the ~~FNBC loans. There~~storms.

The Company recently announced the intent to consolidate the Hancock Bank and Whitney Bank brands during the first half of 2018, subject to regulatory approval. The Company intends to operate as Hancock Whitney Corporation, with the wholly owned bank subsidiary operating as Hancock Whitney Bank. The brand consolidation is ~~no allowance~~a natural progression of our business that allows the simplification of certain operations and sets the stage for ~~loan losses on~~continued growth across all the ~~loans purchased from FNBC; however, a 4% loan mark has been applied~~markets we serve, while honoring the legacies of the iconic brands of Hancock and Whitney that have existed since 1899 and 1883, respectively. We expect to ~~these loans. The allowance~~incur additional costs for ~~credits in~~re-branding during the ~~energy portfolio totaled $83.7 million, or 6.5%~~first and second quarters of ~~energy loans, at March 31, 2017, down from $106.5 million, or 7.5% of energy loans, at December 31, 2016.~~2018, including capital expenditures for new signage for our financial centers.

Net interest income (te) for the ~~first~~third quarter of 2017 was ~~$190.0~~$211.4 million, a ~~$14.7~~$3.2 million, or 8%2% increase from the ~~fourth~~second quarter of ~~2016.~~2017. Core net interest income was up ~~$13.9~~$4.2 million.

Net interest income (te) for the ~~first~~third quarter of 2017 increased ~~$21.8~~$41.1 million, or ~~13%~~24%, compared to the ~~first~~third quarter of 2016, while core net interest income was up ~~$22.9~~$38.4 million, or ~~14%~~23%. The linked quarter increase is primarily attributable to a full quarter impact from the June 2017 Federal Reserve rate increase partially offset by an approximately $1.4 million increase, or 2 bps on NIM, of interest reversals on nonaccrual loans.

The reported net interest margin was 3.44% for the third quarter of 2017, up 1 bp from the second quarter of 2017. The core net interest margin for the third quarter of 2017 was 3.32%, up 3 bps from the second quarter of 2017. The core loan yield, excluding purchase accounting adjustments, was up 5 bps. Offsetting this improvement was a 4 bp increase in the cost of funds. The increase in the cost of funds was primarily related to both the Federal Reserve rate hike in June and higher cost deposits acquired in the FNBC II transaction.

Compared to the third quarter of 2016, the net interest margin increased 24 bps and the core margin was up 20 bps. The major factors in these increases are largely the same as for the comparison to the second quarter of 2017, primarily the impact of the FNBC transactions and the three Federal Reserve interest rate hikes.

Net interest income (te) for the nine months ended September 30, 2017 totaled $609.7 million, a $100.1 million, or 20%, increase from the same period in 2016. Core net interest income was up $95.3 million. Interest earned on ~~earning asset~~loans, excluding purchase accounting accretion, increased $98.8 million as average total loans grew $2.1 billion, or 13%, due to both organic loan growth and ~~improved yields were~~ the ~~primary drivers~~addition of the portfolios acquired in ~~increased~~the FNBC transactions. A $693.7 million, or 15%, increase in average investment securities and a 14 bps increase in the yield resulted in an $18 million increase in interest earned on investment securities. Higher-yielding municipal securities comprised approximately 18% of the investment securities portfolio.

The reported net interest ~~income.~~ margin for the nine months ended September 30, 2017 was 3.41%, up 18 bps from the nine months ended September 30, 2016. Core margin was 3.30%, up 17 bps from the same period in 2016.

The following ~~table details~~tables detail the components of our net interest income and net interest margin.



																				Three months ended

	Three months Ended																			September 30, 2017						June 30, 2017						September 30, 2016
	March 31, 2017						December 31, 2016						March 31, 2016
(dollars in millions)	Volume		Interest		Rate		Volume		Interest		Rate		Volume		Interest		Rate			Volume		Interest		Rate		Volume		Interest		Rate		Volume		Interest		Rate
Average earning assets
Commercial & real estate loans (te) (a)	$	13,058.7	$	130.4	4.04	%	$	12,182.5	$	116.8	3.81	%	$	11,713.2	$	111.7		3.83	%	$	13,945.8	$	151.3	4.31	%	$	13,890.1	$	148.4	4.29	%	$	11,948.1	$	114.4		3.81	%
Residential mortgage loans		2,185.9		21.3	3.90			2,085.1		20.7	3.98			2,058.5		21.3		4.13			2,549.3		25.1	3.94			2,399.4		22.2	3.71			2,019.8		20.2		4.01
Consumer loans		2,058.5		26.6	5.24			2,056.3		26.5	5.13			2,077.1		26.3		5.10			2,096.1		29.4	5.57			2,080.0		29.3	5.64			2,055.6		26.7		5.18
Loan fees & late charges				(0.1)						(0.5)						(0.8)					—		(0.5)	—			—		(0.2)	—			—		(0.8)		—
Total loans (te) (a) (b)		17,303.1		178.2	4.16			16,323.9		163.5	3.99			15,848.8		158.5		4.02			18,591.2		205.3	4.39			18,369.5		199.7	4.36			16,023.5		160.5		3.99
Loans held for sale		21.3		0.2	4.08			32.4		0.3	3.59			14.8		0.2		4.28			21.7		0.2	3.97			22.4		0.2	4.22			38.7		0.3		3.34
US Treasury and government agency securities		116.3		0.6	2.04			97.9		0.5	1.93			50.1		0.2		1.67			125.6		0.7	2.08			125.9		0.7	2.08			60.1		0.3		1.73
Mortgage-backed securities and collateralized mortgage obligations		3,975.2		22.1	2.22			4,017.9		21.0	2.09			4,132.8		22.9		2.21			4,575.0		25.3	2.21			4,068.4		22.8	2.23			3,965.4		20.6		2.08
Municipals (te) (a)		942.1		9.0	3.84			819.3		7.9	3.86			339.1		3.6		4.27			975.4		9.2	3.80			983.0		9.3	3.81			677.1		6.7		3.95
Other securities		3.7		—	1.96			4.1		—	1.79			6.1		—		1.85			3.8		—	1.94			64.4		0.3	1.91			4.6		—		2.51
Total securities (te) (a) (c)		5,037.3		31.7	2.52			4,939.2		29.4	2.38			4,528.1		26.7		2.36			5,679.8		35.2	2.48			5,241.7		33.1	2.52			4,707.2		27.6		2.34
Total short-term investments		408.3		0.7	0.74			166.7		0.2	0.49			519.0		0.6		0.47			194.7		0.6	1.17			704.5		1.7	0.99			428.0		0.5		0.47
Total earning assets (te) (a)	$	22,770.0	$	210.8	3.74	%	$	21,462.2	$	193.4	3.59	%	$	20,910.7	$	186.0		3.57	%	$	24,487.4	$	241.3	3.92	%	$	24,338.1	$	234.7	3.87	%	$	21,197.4	$	188.9		3.55	%
Average interest-bearing liabilities
Interest-bearing transaction and savings deposits	$	6,897.7	$	4.5	0.27	%	$	6,761.9	$	4.3	0.25	%	$	6,815.7	$	4.7		0.28	%	$	8,097.4	$	8.4	0.41	%	$	8,047.4	$	8.1	0.40	%	$	6,732.8	$	4.5		0.27	%
Time deposits		2,340.0		5.1	0.89			2,298.8		5.2	0.90			2,258.9		4.9		0.88			2,711.6		7.7	1.12			2,575.7		6.5	1.01			2,446.3		5.6		0.91
Public funds		2,547.9		3.2	0.50			2,317.0		2.5	0.43			2,173.5		2.1		0.38			2,764.9		5.7	0.82			2,539.5		3.8	0.59			2,253.6		2.5		0.44
Total interest-bearing deposits		11,785.6		12.8	0.44			11,377.7		12.0	0.42			11,248.1		11.7		0.42			13,573.9		21.8	0.64			13,162.6		18.4	0.56			11,432.7		12.6		0.44
Short-term borrowings		2,127.3		2.9	0.56			1,367.5		1.1	0.33			1,564.8		1.0		0.26			1,909.4		4.5	0.92			2,232.8		4.2	0.77			1,366.2		1.0		0.30
Long-term debt		458.0		5.1	4.42			453.1		4.9	4.36			483.3		5.1		4.20			339.5		3.6	4.29			428.3		3.9	3.61			468.1		5.0		4.28
Total borrowings		2,585.3		8.0	1.24			1,820.6		6.0	1.33			2,048.1		6.1		1.19			2,248.9		8.1	1.43			2,661.1		8.1	1.22			1,834.3		6.0		1.32
Total interest-bearing liabilities		14,370.9		20.8	0.59	%		13,198.3		18.0	0.55	%		13,296.2		17.8		0.54	%		15,822.8		29.9	0.75	%		15,823.7		26.5	0.67	%		13,267.0		18.6		0.56	%
Net interest-free funding sources		8,399.1						8,263.9						7,614.5							8,664.6						8,514.4						7,930.4
Total cost of funds	$	22,770.0	$	20.8	0.37	%	$	21,462.2	$	18.0	0.34	%	$	20,910.7	$	17.8		0.34	%	$	24,487.4	$	29.9	0.48	%	$	24,338.1	$	26.5	0.44	%	$	21,197.4	$	18.6		0.35	%
Net interest spread (te) (a)			$	190.0	3.15	%			$	175.4	3.05	%			$	168.2		3.03	%			$	211.4	3.17	%			$	208.2	3.19	%			$	170.3		2.99	%
Net interest margin	$	22,770.0	$	190.0	3.37	%	$	21,462.2	$	175.4	3.26	%	$	20,910.7	$	168.2		3.23	%	$	24,487.4	$	211.4	3.44	%	$	24,338.1	$	208.2	3.43	%	$	21,197.4	$	170.3		3.20	%

The reported net interest margin was 3.37% for the first quarter of 2017, up 11 bps from the fourth quarter of 2016. The core net interest margin for the first quarter of 2017 was 3.29% or 10 bps above the fourth quarter of 2016. The core loan yield, which excludes purchase accounting adjustments, was up 16 bps and the yield on the investment portfolio increased 14 bps, partially offset

by a 3 bp increase in the cost of funds. The increase in loan yields was mainly related to higher-yielding loans acquired in the FNBC transaction, plus the full quarter impact of the increase in market rates by the Federal Reserve in December 2016. The improved yields on investment securities resulted from a decrease in premium amortization as prepayments on mortgage-backed securities slowed. Also, the average balance of higher-yielding municipal bonds in the securities portfolio has increased by over $600 million over the past four quarters, including $123 million in the current quarter. The increase in the cost of funds was primarily related to a $760 million, or 56% increase in short-term borrowings, along with an increase in the rate paid on these borrowings from 33 bps to 56 bps.

Compared to the first quarter of 2016, the net interest margin increased 14 bps and the core margin was up 17 bps. The major factors in these increases are largely the same as for the comparison to the fourth quarter of 2016.

The overall reported yield on earning assets was 3.74% in the first quarter of 2017, up 17 bps from the first quarter of 2016, due to improving yields on loans and investment securities attributable to the same factors as the linked-quarter. The $603 million increase in higher-yielding municipal securities ($123 million in the first quarter) improved the mix of the portfolio.


	Nine Months Ended
		September 30, 2017						September 30, 2016
(dollars in millions)		Volume		Interest	Rate			Volume		Interest	Rate
Average earning assets
Commercial & real estate loans (te) (a)	$	13,634.7	$	430.1	4.22	%	$	11,884.2	$	341.1	3.83	%
Residential mortgage loans		2,379.6		68.7	3.85			2,031.2		62.2	4.09
Consumer loans		2,078.3		85.3	5.49			2,062.1		79.2	5.13
Loan fees & late charges		—		(0.9)	—			—		(2.2)	—
Total loans (te) (a) (b)		18,092.6		583.2	4.31			15,977.5		480.3	4.01
Loans held for sale		21.8		0.7	4.09			27.6		0.7	3.54
US Treasury and government agency securities		122.6		1.9	2.07			53.4		0.7	1.70
Mortgage-backed securities and collateralized mortgage obligations		4,208.4		70.1	2.22			4,053.2		65.4	2.15
Municipals (te) (a)		967.0		27.7	3.82			516.5		15.8	4.08
Other securities		24.0		0.3	1.92			5.2		0.1	2.06
Total securities (te) (a) (c)		5,322.0		100.0	2.50			4,628.3		82.0	2.36
Total short-term investments		435.1		3.0	0.94			452.0		1.6	0.47
Total earning assets (te) (a)	$	23,871.5	$	686.9	3.84	%	$	21,085.4	$	564.6	3.58	%
Average interest-bearing liabilities
Interest-bearing transaction and savings deposits	$	7,685.2	$	21.0	0.37	%	$	6,775.9	$	13.9	0.27	%
Time deposits		2,543.9		19.3	1.01			2,420.7		16.3	0.90
Public funds		2,618.2		12.6	0.64			2,243.1		6.8	0.40
Total interest-bearing deposits		12,847.3		52.9	0.55			11,439.7		37.0	0.43
Short-term borrowings		2,089.0		11.7	0.75			1,427.2		2.9	0.28
Long-term debt		408.2		12.6	4.11			474.4		15.1	4.25
Total borrowings		2,497.2		24.3	1.29			1,901.6		18.0	1.27
Total interest-bearing liabilities		15,344.5		77.2	0.67	%		13,341.3		55.0	0.55	%
Net interest-free funding sources		8,527.0						7,744.1
Total cost of funds	$	23,871.5	$	77.2	0.43	%	$	21,085.4	$	55.0	0.35	%
Net interest spread (te) (a)			$	609.7	3.17	%			$	509.6	3.03	%
Net interest margin	$	23,871.5	$	609.7	3.41	%	$	21,085.4	$	509.6	3.23	%

Due to the significant contribution from purchase accounting accretion related to assets acquired in business combinations, management believes that non-GAAP measures of core net interest income and core net interest margin provide investors with meaningful financial measures of the Company’s performance over time. The following table provides a reconciliation of reported and core net interest income and reported and core net interest margin.



	Three months Ended									Three months ended									Nine months ended
	March 31,			December 31,			March 31,			September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in millions)	2017			2016			2016			2017			2017			2016			2017			2016
Net interest income	$	181.7		$	167.8		$	162.8		$	202.8		$	199.7		$	163.5		$	584.3		$	491.3
Taxable-equivalent adjustment (te) (a)		8.3			7.6			5.4			8.6			8.6			6.8			25.4			18.3
Net interest income (te) (a)		190.0			175.4			168.2			211.4			208.3			170.3			609.7			509.6
Purchase accounting adjustments
Loan discount accretion		5.0			4.3			6.4			7.7			8.8			5.2			21.5			17.4
Bond premium amortization		(0.4)			(0.5)			(0.7)			(0.4)			(0.4)			(0.6)			(1.2)			(1.9)
Net purchase accounting accretion		4.6			3.8			5.7			7.3			8.4			4.6			20.3			15.5
Core net interest income (te) (a)	$	185.4		$	171.6		$	162.5		$	204.1		$	199.9		$	165.7		$	589.4		$	494.1
Average earning assets	$	22,770.0		$	21,462.2		$	20,910.7		$	24,487.4		$	24,338.1		$	21,197.4		$	23,871.5		$	21,085.4
Net interest margin - reported		3.37	%		3.26	%		3.23	%		3.44	%		3.43	%		3.20	%		3.41	%		3.23	%
Net purchase accounting adjustments		0.08	%		0.07	%		0.11	%		0.12	%		0.14	%		0.08	%		0.11	%		0.10	%
Core net interest margin		3.29	%		3.19	%		3.12	%		3.32	%		3.29	%		3.12	%		3.30	%		3.13	%

During the ~~first~~third quarter of 2017, ~~the Company~~we recorded a total provision for loan losses of ~~$16.0~~$13.0 million, ~~up $1.5~~down $1.9 million from the ~~fourth~~second quarter of ~~2016~~2017 and down ~~$44.0~~$5.9 million from the ~~first~~third quarter of 2016. ~~The first quarter~~For the nine months ended September 30, 2017, we recorded a total provision for loan losses of $44.0 million, compared to $96.2 million for the nine months ended September 30, 2016, which included ~~an increase~~$50 million in ~~the~~ provision expense related to the energy portfolio.

Provision for loan losses reflects net charge-offs from the non-purchased credit impaired loan portfolio ~~as discussed more fully~~totaling $11.8 million, which represents 0.25% of average total loans on an annualized basis in ~~“Item~~the third quarter of 2017, compared to $6.0 million, or 0.13% of average total loans in the second quarter of 2017. Net charges-offs from energy credits in the third quarter of 2017 includes gross charges of $7.6 million, net of recoveries totaling $4.0 million. There were no charges-offs related to energy credits in the second quarter of 2017.

Our company conducts business in several markets impacted by recent hurricanes. However, very few of our clients experienced significant flooding, damage or disruption. As a result, our credit quality measures do not include any specific or additional provisionary expenses related to the impact from those storms.

The section in Item 2. ~~Management’s~~“Management's Discussion and Analysis of Financial Condition and Results of Operations – Allowance for Loan Losses and Asset Quality.” The provision for the purchased credit impaired portfolio was a credit of $0.4 million for the three months ended March 31, 2017 as compared to a credit of $0.7 million for the three months ended December 31, 2016 and a credit of $0.5 million for the three months ended March 31, 2016. The credits to provision for the purchased credit impaired portfolio were primarily due to reductions in expected lossesQuality” provides additional information on changes in the ~~remaining portfolio related to the Peoples First Community Bank purchase.~~ allowance for loan losses and general credit quality.

Noninterest income totaled ~~$63.5~~$67.1 million for the third quarter of 2017, down $0.4 million, or 1%, from the second quarter of 2017 and up $4.1 million, or 7%, compared to the third quarter of 2016. Decreases in derivative income, trust fees, insurance commissions and fees, credit related fees and bank card and ATM fees were partially offset by an increase in services charges. Included in the second quarter of 2017 is amortization of $1.3 million related to the FDIC indemnification asset. As a result of the termination of the loss share agreements in the second quarter of 2017, the amortization was eliminated beginning in the third quarter of 2017. Compared to the third quarter of 2016, increases in service charges, bank card and ATM, investment and annuity fees were partially offset by decreases in income from bank-owned life insurance, trust fees, secondary mortgage market operations and gains on sale of assets. Included in the third quarter of 2016 is $1.5 million in amortization related to the FDIC indemnification asset of the loss share agreements. Noninterest income totaled $198.1 million for the first ~~quarter~~nine months of 2017, ~~down $2.4~~up $13.2 million, or 4%7%, from the ~~fourth quarter of 2016 and up $5.3 million, or 9%, compared to the~~ first ~~quarter~~nine months of 2016. Included in the first ~~quarter~~nine months of the 2017 is a $4.4 million gain related to ~~the~~ sale of selected Hancock Horizon funds, classified as nonoperating, while the fourth quarter of 2016 included a $3.3 million gain on the sale of bank property. Besides the impact of these gains, the largest component of the linked-quarter decrease is a $3.0 million decline in derivative income. nonoperating.

The components of noninterest income are presented in the following table for the indicated periods.



	Three months Ended
							Three Months Ended						Nine Months Ended
	March 31,		December 31,		March 31,		September 30,		June 30,		September 30,		September 30,
(in thousands)	2017		2016		2016		2017		2017		2016		2017		2016
Service charges on deposit accounts	$	19,206	$	18,694	$	18,383	$	21,444	$	20,061	$	18,716	$	60,711	$	55,493
Trust fees		11,211		11,764		11,224		10,742		11,506		11,512		33,459		34,825
Bank card and ATM fees		12,468		12,317		11,348		13,390		13,687		11,808		39,545		35,110
Investment and annuity fees		4,599		4,212		4,933		5,570		5,271		4,289		15,440		14,265
Secondary mortgage market operations		3,567		4,277		2,912		4,157		4,241		4,917		11,965		12,005
Insurance commissions and fees		665		866		1,307		660		1,174		1,088		2,499		3,635
Amortization of FDIC loss share receivable		(1,100)		(1,240)		(1,613)		—		(1,327)		(1,539)		(2,427)		(4,678)
Income from bank-owned life insurance		2,652		2,448		2,550		3,097		2,883		4,097		8,632		11,148
Credit related fees		2,878		2,617		2,357		2,521		2,898		2,685		8,297		7,309
Derivative income		465		3,455		(139)		1,339		2,680		1,347		4,484		1,741
Net gain on sale of assets		(227)		3,257		1,766		400		(60)		991		113		4,557
Safety deposit box income		449		381		478		424		391		424		1,264		1,315
Other miscellaneous		2,306		2,556		2,334		3,371		4,082		2,322		9,759		6,698
Securities transactions		—		289		346		—		—		351		—		1,465
Total noninterest operating income	$	59,139	$	65,893	$	58,186	$	67,115	$	67,487	$	63,008	$	193,741	$	184,888
Nonoperating income items		4,352		—		—		—		—		—		4,352		—
Total noninterest income	$	63,491	$	65,893	$	58,186	$	67,115	$	67,487	$	63,008	$	198,093	$	184,888

Service charges on deposits totaled ~~$19.2~~$21.4 million for the ~~first~~third quarter of 2017, up ~~$0.5~~$1.4 million, or 3%7%, from the ~~fourth~~second quarter of ~~2016~~2017 and up ~~$0.8~~$2.7 million, or 4%15%, from the ~~first~~third quarter of 2016. These increases were primarily due to an increase in consumer overdraft fees and new sustained overdraft fees.

Bank card and ATM fees totaled ~~$12.5~~$13.4 million for the ~~quarter ended March 31, 2017, compared to $12.3 million in the fourth~~third quarter of ~~2016.~~2017, down $0.3 million, or 2%, from the second quarter of 2017 due to the waiver of fees for customers in hurricane impacted areas. Compared to the ~~first~~third quarter of 2016, bank card and ATM fees were up ~~$1.1~~$1.6 million, or ~~10%~~13%, due to ~~an increase~~increased activity.

Mortgage loan originations for the third quarter of 2017 totaled $330 million, compared to $361 million in ~~credit card~~the second quarter of 2017 and ~~merchant fees.~~

~~Secondary~~$384 million in the third quarter of 2016. Income from secondary mortgage market operations ~~fee income decreased $0.7~~was relatively flat compared to the second quarter of 2017 and down $0.8 million, or ~~17%~~15%, from the ~~fourth~~third quarter of ~~2016, but were up $0.7~~2016.

Trust fees decreased $0.8 million, or ~~22%~~7%, linked quarter due to seasonal income related to tax preparation fees earned in the second quarter 2017. For the first nine months of 2017, trust fees decreased $1.4 million, or 4%, compared to the first ~~quarter~~nine months of 2016. ~~The linked-quarter decline~~This decrease was due to the higher rate environment, which led to lower production, resulting in a lower percentage of loans sold into the secondary market. The increase over the prior-year quarter resulted from a 50% increase in loan production, partially offset by a lower percentage of loans sold. Mortgage loan originations for the first quarter of 2017 totaled $345 million, compared to $376 million in the fourth quarter of 2016 and $226 million in the first quarter of 2016.

Trust, investment and annuity fees and insurance commissions and fees totaled $16.5 million in the first quarter of 2017, down $0.4 million linked quarter and down $1.0 million compared to the first quarter of 2016. Trust fees decreasedprimarily due to the sale of ~~the~~certain Hancock Horizon ~~funds mentioned above.~~ funds.

Investment and annuity fees ~~were down~~increased $0.3 million, or 6%, compared to second quarter 2017 and increased $1.3 million, or 30%, compared to third quarter 2016. The increases are mainly due to corporate underwriting fees and an overall appreciation in asset value as a ~~change in the mix~~result of products sold. In the current interest rate environment, customer demand for longer-term annuity products has been replaced for shorter duration products which result in lower upfront commissions. Additionally, the Company has shifted its focus more towards recurring products that pay no upfront commissions but generate additional revenue over time. Insurance commissions were down compared to both the fourth and the first quarters of 2016, due to changes in ancillary sales methodology, decreased seasonal demand and residual claims related to major flooding in Louisiana in 2016. favorable market conditions.

Income from bank-owned life insurance increased $0.2 million, or 8%7%, compared to the ~~fourth~~second quarter of ~~2016 and~~2017, but was ~~up $0.1~~down $1.0 million, or 4%24%, compared to the third quarter of 2016. For the first nine months of 2017, income from bank-owned life insurance decreased $2.5 million, or 23%, compared to the first nine months of 2016. The decrease for the first nine months of 2017 compared to the first nine months of 2016 was due to a lower level of gains on death benefit claims, partially offset by an increase in income due to an additional $50 million investment in bank-owned policies in the second quarter of ~~2016, due to increases in the amount of bank-owned policies and the proceeds from death benefit claims.~~2017.

Income on our customer interest rate derivative program resulted in a ~~$0.5~~$1.3 million net gain for the ~~first~~third quarter of 2017 compared to ~~a $3.5~~net gains of $2.7 million ~~net gain~~ in the ~~fourth~~second quarter of ~~2016~~2017 and ~~a $0.1~~$1.3 million ~~net loss in~~for the ~~first~~third quarter of 2016. This income iscan be volatile ~~in nature~~ and is dependent upon both customer sales activity and market value adjustments due to interest rate movement.

Other miscellaneous income totaled $3.4 million in the third quarter of 2017, down $0.7 million linked quarter and up $1.0 million compared to the third quarter of 2016. Other miscellaneous fee income for third quarter 2017 included $0.7 million of income from investments in Small Business Investment Companies. The second quarter 2017 included a $1.1 million co-arranger fee related to a health care credit facility and $0.7 million in additional income from the sale of the investment in a Small Business Investment Company. While this income is part of our normal operations, it can be unpredictable as to timing.

Noninterest expense for the ~~first~~third quarter of 2017 was ~~$163.5~~$177.6 million, ~~up $7.3~~down $5.9 million, or 5%3%, from the ~~fourth~~second quarter of ~~2016,~~2017, and up ~~$7.5~~$28.6 million, or 5%19%, from the ~~first~~third quarter of 2016. For the nine months ended September 30, 2017, noninterest expense was $524.6 million, a $68.6, or 15% increase over the same period in 2016. Excluding nonoperating expense items, noninterest expense for the ~~first three~~nine months ofended September 30, 2017 totaled ~~$157.1~~$496.2 million, ~~an increase of $0.8~~up $45.1 million, or ~~less than 1% linked quarter and up $6.0 million,~~10%, over 2016.

As previously stated, our company conducts business in several markets impacted by recent hurricanes. However, very few of our locations experienced damage or 4%disruption. As a result, our reported results do not include any material expenses related to the impact from ~~the first quarter of 2016.~~those storms.

Nonoperating expenses incurred in ~~the first quarter of~~ 2017 ~~consisted of acquisition~~primarily include merger-related costs associated with the FNBC ~~transaction. There were no nonoperating expenses in the fourth quarter~~transactions and $6.6 million of ~~2016.~~ ~~Nonoperating expenses for the first quarter of 2016 totaling $5.0 million were almost all related to separation costs included in personnel expenses~~expense due to ~~an efficiency initiative and technology enhancements.~~

the second quarter 2017 termination of a FDIC loss share agreements associated with the Peoples First transaction in 2009. The components of noninterest expense and nonoperating expense are presented in the following tables for the indicated periods.



	Three Months Ended						Three months ended						Nine months ended
	March 31,		December 31,		March 31,		September 30,		June 30,		September 30,		September 30,
(in thousands)	2017		2016		2016		2017		2017		2016		2017		2016
Nonoperating expense
Operating expense
Compensation expense							$	80,358	$	80,876	$	70,290	$	234,239	$	209,961
Employee benefits								12,263		15,334		12,873		43,604		42,180
Personnel expense	$	107	$	—	$	3,974		92,621		96,210		83,163		277,843		252,141
Net occupancy expense								12,101		12,969		10,068		35,832		30,818
Equipment expense								3,626		3,799		3,349		11,133		10,203
Data processing expense								15,869		16,755		14,590		48,019		43,167
Professional services expense		4,627		—		181		7,208		8,153		6,584		22,010		21,736
Amortization of intangibles								6,070		5,757		4,886		16,532		15,015
Telecommunications and postage								3,848		3,698		3,284		11,013		9,917
Deposit insurance and regulatory fees								7,563		6,983		5,969		21,036		17,415
Other real estate (income) expense, net								199		(1,004)		(5,214)		(818)		(4,419)
Advertising		130		—		—		3,552		4,083		2,859		10,582		7,909
Other expense		1,599		—		823
Total nonoperating expenses	$	6,463	$	—	$	4,978
Ad valorem and franchise taxes								3,387		3,519		2,268		9,942		6,911
Printing and supplies								1,248		1,324		1,134		3,746		3,310
Insurance expense								671		807		803		2,295		2,467
Travel expense								1,188		1,206		1,022		3,438		3,050
Entertainment and contributions								2,016		1,974		1,686		5,757		5,319
Tax credit investment amortization								1,212		1,213		861		3,637		4,437
Other miscellaneous								3,844		5,407		11,746		14,158		21,658
Total operating expense							$	166,223	$	172,853	$	149,058	$	496,155	$	451,054
Nonoperating expense items								11,393		10,617		—		28,473		4,978
Total noninterest expense							$	177,616	$	183,470	$	149,058	$	524,628	$	456,032

The following discussion of the components of operating expenses excludes nonoperating items for each period.

There were minimal nonpermanent costs related to the FNBC transactions during the third quarter of 2017, while there were approximately $7 million during the second quarter of 2017. As noted earlier, nonpermanent costs included costs of operating former FNBC branches and maintaining separate operations to serve customers following the FNBC II transaction. These expenses were temporarily elevated until we worked through systems conversions and consolidation of overlapping branches early in the third quarter of 2017.

Personnel expense totaled $92.6 million for the third quarter of 2017, down $3.6 million, or 4%, from the previous quarter due to a decrease in the number of former FNBC employees, and lower pension costs. Year over year, personnel expense was up $9.5 million, or 11%, due to additional employees from the FNBC transactions, as well as merit increases.

Occupancy and equipment expenses totaled $15.7 million in the third quarter of 2017, down $1.0 million, or 6%, from the second quarter of 2017 and up $2.3 million, or 17%, compared to the third quarter of 2016 primarily due to the addition of FNBC locations.

~~The following discussion of the components of noninterest expenses excludes nonoperating expenses for each period.~~

~~Personnel~~ORE expense ~~totaled $89.0 million~~ for the ~~first~~third quarter of 2017 ~~up $1.5~~was $0.2 million or 2% linked quarter, primarily due to reset of payroll taxes in the first quarter of each year. Year over year, personnel expense was up $4.3 million, or 5%, due to normal merit increases and increased bonus and incentive compensation.

~~Occupancy and equipment expenses totaled $14.5 million in the first quarter of 2017, up $0.5 million, or 4%, from the fourth quarter of 2016 and up $0.3 million, or 2%,~~ compared to ~~the first quarter of 2016 due, in part, to costs related to acquired branches.~~

~~Net~~net gains on ORE dispositions ~~exceeded ORE expense by $13 thousand compared to $0.6~~of $1.0 million ~~of net expense~~ in the ~~fourth~~linked quarter and $5.2 million in the third quarter of 2016. Management ~~does not expect this~~believes the current quarter reflects a more typical level of ORE ~~expense to be sustainable in future quarters.~~expense.

All other expenses, excluding amortization of intangibles and nonoperating expense items, totaled ~~$48.9~~$51.6 million for the ~~first~~third quarter of 2017, down ~~$0.5~~$3.5 million, or 1%6%, from the ~~fourth~~second quarter of ~~2016. These expenses totaled $46.6~~2017, and down $1.2 million, inor 2% compared to the ~~first~~third quarter of 2016. The ~~major components of~~decreases from the ~~year-over-year increase~~prior quarter were ~~a $1.2 million, or 8%, increase~~primarily seen in the professional services, data processing ~~expense~~and advertising categories as the second quarter included $2.2 million of nonpermanent operating costs related to ~~efficiency initiatives~~FNBC transactions. The increases from the third quarter of 2016 include data processing, regulatory fees, and ~~a $1.1 million increase in deposit insurance~~ad valorem taxes, primarily related to ~~asset growth and an increased level of criticized loans.~~the FNBC transactions.

The effective income tax rate for the ~~first~~third quarter of 2017 was approximately ~~25.3%~~25.7%, compared to ~~22.5%~~24.0% in the ~~first~~second quarter of 2017 and 20.1% in the third quarter of 2016. Management expects the effective tax rate for the fourth quarter of 2017 to be approximately 21% to 22% due to the change in accounting treatment for stock-based compensation and the vesting of awards. The ~~impact~~adoption of the new accounting standard for employee ~~share-based~~stock-based compensation ~~prospectively adopted beginning January 1, 2017, resulted~~results in excess tax benefits from stock-based compensation having a ~~0.6% decrease in the~~direct impact on income tax expense, and therefore lowers our effective tax ~~rate for the first quarter.~~rate. The impact ~~of stock compensation on the~~upon our effective tax rate will vary from quarter to quarter depending upon the Company’s share price and the number of shares vesting ~~or options exercised~~ during the period. ~~Management expects~~For the ~~effective~~third quarter of 2017, excess tax ~~rate for~~benefits from stock-based compensation decreased income tax expense by $0.2 million. The Company currently estimates that vesting of restricted stock awards in the fourth quarter of 2017 will beresult in an additional income tax benefit of approximately $3.6 million, based on the ~~range of 25% to 27%, excluding the impact of employee share-based compensation.~~share price at September 30, 2017.

The Company’s effective tax rate varies from the 35% federal statutory rate primarily because of tax-exempt income and tax ~~credits.~~credits, as well as the impact from employee share based compensation as noted above. Interest income on bonds issued by or loans to state and municipal governments and authorities, and earnings from the BOLI program are the major components of tax-exempt income. The main ~~source~~sources of tax credits ~~has~~have been investments in ~~tax-advantaged~~tax advantaged securities and tax credit projects. These investments are made primarily in the markets the Company serves and are directed at tax credits issued under the Qualified Zone Academy Bonds (“QZAB”), Qualified School Construction Bonds (“QSCB”) and Federal and State New ~~Market~~Markets Tax Credit (“NMTC”) programs. The investments generate tax credits, which reduce current and future taxes and are recognized when earned as a benefit in the provision for income taxes.

The Company has invested in NMTC projects through investments in its own Community Development Entity (“CDE”), as well as, other unrelated CDEs. These investments will generate approximately $104 million in federal and state tax credits. Federal tax credits from NMTC investments are recognized over a seven-year period, while recognition of the benefits from state tax credits varies from three to five years.

The Company intends to continue making investments in tax credit projects and qualified bonds. However, its ability to access new credits will depend upon, among other factors, federal and state tax policies and the level of competition for such credits. Based on tax credit investments that have been made to date, the Company expects to realize benefits from federal and state tax credits totaling $7.8 million, $5.6 million and $3.2 million for 2018, 2019, and 2020, respectively.

The following table reconciles reported income tax expense to that computed at the statutory federal tax rate for the indicated periods.



	Three months Ended						Three months ended						Nine months ended
	March 31,		December 31,		March 31,		September 30,		June 30,		September 30,		September 30,
(in thousands)	2017		2016		2016		2017		2017		2016		2017		2016
Taxes computed at statutory rate	$	22,977	$	22,034	$	1,734	$	27,761	$	24,074	$	20,472	$	74,812	$	43,389
Tax credits:
QZAB/QSCB		(642)		(689)		(697)		(643)		(643)		(689)		(1,928)	��	(2,067)
NMTC - Federal and State		(1,679)		(1,920)		(1,830)		(1,679)		(1,679)		(1,920)		(5,037)		(5,759)
LIHTC		—		6		(12)		—		—		6		—		18
Other		—		(107)		—
Total tax credits		(2,321)		(2,710)		(2,539)		(2,322)		(2,322)		(2,603)		(6,965)		(7,808)
State income taxes, net of federal income tax benefit		843		296		293		1,167		1,133		567		3,143		1,621
Tax-exempt interest		(4,673)		(4,219)		(3,053)		(4,629)		(4,719)		(3,818)		(14,021)		(10,278)
Bank owned life insurance		(947)		(853)		(890)
Bank-owned life insurance								(1,248)		(1,046)		(1,517)		(3,241)		(3,980)
Impact from interim estimated effective tax rate		1,880		(3,035)		5,382		(471)		821		(1,468)		2,230		3,035
Employee share-based compensation		(434)		—		—		(202)		(1,367)		—		(2,003)		—
Other, net		(690)		(391)		188		358		(58)		139		(390)		526
Income tax expense	$	16,635	$	11,122	$	1,115	$	20,414	$	16,516	$	11,772	$	53,565	$	26,505

On November 2, 2017, the House Ways and Means Committee released a 429-page “Tax Cuts and Jobs Act of 2017” (HR 1). The bill proposes to lower business and individual tax rates, modernize US international tax rules, and simplify the tax law, with significant

impacts on numerous sectors of the economy. As disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on From 10-K for the year ended December 31, 2016, future changes in the tax laws could significantly impact our income tax expense, deferred tax asset balance, and the amount of taxes payable. Current proposals to decrease the federal statutory tax rate, if enacted, could result in a decrease to our deferred tax asset with a corresponding non-cash increase to income tax expense or a decrease to capital that could be material. We may also be adversely impacted by modifications or adjustments in the determination of taxable income or utilization of tax credits.

The following tables contain selected financial data as of the dates and for the periods indicated.



	Three Months Ended						Three months ended						Nine months ended
	March 31,		December 31,		March 31,		September 30,		June 30,		September 30,		September 30,
	2017		2016		2016		2017		2017		2016		2017		2016
Common Share Data
Earnings per share:
Basic	$	0.57	$	0.64	$	0.05	$	0.68	$	0.60	$	0.59	$	1.85	$	1.23
Diluted	$	0.57	$	0.64	$	0.05	$	0.68	$	0.60	$	0.59	$	1.85	$	1.23
Cash dividends paid	$	0.24	$	0.24	$	0.24	$	0.24	$	0.24	$	0.24	$	0.72	$	0.72
Book value per share (period-end)	$	32.70	$	32.29	$	31.24	$	33.78	$	33.21	$	32.09	$	33.78	$	32.09
Tangible book value per share (period-end)	$	23.19	$	23.87	$	21.90	$	23.92	$	23.27	$	22.89	$	23.92	$	22.89
Weighted average number of shares (000s):
Basic		84,365		78,820		77,501		84,749		84,614		77,550		84,577		77,525
Diluted		84,624		79,067		77,672		84,980		84,867		77,677		84,818		77,653
Period-end number of shares (000s)		84,517		84,235		77,508		84,767		84,738		77,571		84,767		77,571
Market data:
High sales price	$	49.50	$	45.50	$	25.84	$	50.40	$	52.94	$	32.94	$	52.94	$	32.94
Low sales price	$	41.71	$	31.73	$	20.01	$	41.05	$	42.70	$	24.49	$	41.05	$	20.01
Period-end closing price	$	45.55	$	43.10	$	22.96	$	48.45	$	49.00	$	32.43	$	48.45	$	32.43
Trading volume (000s) (a)		45,119		43,664		56,319		33,243		39,035		42,809		117,397		140,796



	Three months Ended						Three months ended						Nine months ended
	March 31,		December 31,		March 31,		September 30,		June 30,		September 30,		September 30,
(in thousands)	2017		2016		2016		2017		2017		2016		2017		2016
Income Statement:
Interest income	$	202,515	$	185,867	$	180,641	$	232,716	$	226,177	$	182,153	$	661,408	$	546,300
Interest income (te) (a)		210,813		193,383		185,984		241,295		234,741		188,937		686,849		564,623
Interest expense		20,824		18,069		17,805		29,859		26,460		18,640		77,143		54,982
Net interest income (te) (a)		189,989		175,314		168,179		211,436		208,281		170,297		609,706		509,641
Provision for loan losses		15,991		14,455		60,036		13,040		14,951		18,972		43,982		96,204
Noninterest income		63,491		65,893		58,186		67,115		67,487		63,008		198,093		184,888
Noninterest expense (excluding amortization of intangibles)		158,837		151,517		150,908		171,546		177,713		144,172		508,096		441,017
Amortization of intangibles		4,705		4,766		5,124		6,070		5,757		4,886		16,532		15,015
Income before income taxes		65,649		62,953		4,954		79,316		68,783		58,491		213,748		123,970
Income tax expense		16,635		11,122		1,115		20,414		16,516		11,772		53,565		26,505
Net income	$	49,014	$	51,831	$	3,839	$	58,902	$	52,267	$	46,719	$	160,183	$	97,465



	Three Months Ended						Three months ended						Nine months ended
	March 31,		December 31,		March 31,		September 30,		June 30,		September 30,		September 30,
	2017		2016		2016		2017		2017		2016		2017		2016
Performance Ratios
Return on average assets	0.80	%	0.88	%	0.07	%	0.88	%	0.79	%	0.80	%	0.82	%	0.56	%
Return on average common equity	7.27	%	8.19	%	0.64	%	8.23	%	7.52	%	7.52	%	7.69	%	5.33	%
Return on average tangible common equity	9.92	%	11.42	%	0.91	%	11.68	%	10.69	%	10.58	%	10.77	%	7.55	%
Earning asset yield (te) (a)	3.74	%	3.59	%	3.57	%	3.92	%	3.87	%	3.55	%	3.84	%	3.58	%
Total cost of funds	0.37	%	0.34	%	0.34	%	0.48	%	0.44	%	0.35	%	0.43	%	0.35	%
Net interest margin (te) (a)	3.37	%	3.26	%	3.23	%	3.44	%	3.43	%	3.20	%	3.41	%	3.23	%
Noninterest income to total revenue (te) (a)	25.05	%	27.32	%	25.70	%	24.09	%	24.47	%	27.01	%	24.52	%	26.62	%
Efficiency ratio (b)	61.16	%	62.82	%	64.47	%	57.50	%	60.59	%	61.80	%	59.70	%	62.78	%
Average loan/deposit ratio	89.90	%	86.31	%	86.69	%	87.08	%	87.76	%	85.64	%	88.18	%	86.04	%
FTE employees (period-end)	3,819		3,724		3,819		3,979		4,162		3,747		3,979		3,747
Capital Ratios
Common stockholders' equity to total assets	10.84	%	11.34	%	10.61	%	10.68	%	10.57	%	10.77	%	10.68	%	10.77	%
Tangible common equity ratio (c)	7.94	%	8.64	%	7.69	%	7.80	%	7.65	%	7.93	%	7.80	%	7.93	%

(a) Tax equivalent (te) amounts are calculated using a marginal federal income tax rate of 35%.

(b) The efficiency ratio is noninterest expense to total net interest (te) and noninterest income, excluding amortization of purchased intangibles and nonoperating items.

(c) The tangible common equity ratio is common ~~shareholders’~~stockholders’ equity less intangible assets divided by total assets less intangible assets.



	Three Months Ended									Three months ended									Nine months ended
	March 31,			December 31,			March 31,			September 30,			June 30,			September 30,			September 30,			September 30,
($ in thousands)	2017			2016			2016			2017			2017			2016			2017			2016
Asset Quality Information
Nonaccrual loans (a)	$	262,649		$	317,970		$	237,303		$	269,676		$	238,219		$	302,810		$	269,676		$	302,810
Restructured loans - still accruing		47,267			39,818			45,620			96,735			90,502			8,059			96,735			8,059
Total nonperforming loans		309,916			357,788			282,923			366,411			328,721			310,869			366,411			310,869
Other real estate (ORE) and foreclosed assets		17,156			18,943			24,032			21,219			18,049			19,806			21,219			19,806
Total nonperforming assets	$	327,072		$	376,731		$	306,955		$	387,630		$	346,770		$	330,675		$	387,630		$	330,675
Accruing loans 90 days past due (a)	$	590		$	3,039		$	9,226		$	28,850		$	18,390		$	4,933		$	28,850		$	4,933
Net charge-offs - non-purchased credit impaired		29,911			20,424			21,299			11,783			5,985			9,531			47,679			38,633
Net charge-offs - purchased credit impaired		118			(256)			(67)			—			(45)			(124)			73			(338)
Allowance for loan losses		213,550			229,418			217,794			223,122			221,865			236,061			223,122			236,061
Provision for loan losses		15,991			14,455			60,036			13,040			14,951			18,972			43,982			96,204
Ratios:
Nonperforming assets to loans, ORE and foreclosed assets		1.79	%		2.25	%		1.92	%		2.06	%		1.88	%		2.06	%		2.06	%		2.06	%
Accruing loans 90 days past due to loans		0.00	%		0.02	%		0.06	%		0.15	%		0.10	%		0.03	%		0.15	%		0.03	%
Nonperforming assets + accruing loans 90 days past due to loans, ORE and foreclosed assets		1.80	%		2.26	%		1.98	%		2.21	%		1.97	%		2.09	%		2.21	%		2.09	%
Net charge-offs - non-purchased credit impaired to average loans		0.70	%		0.50	%		0.54	%		0.25	%		0.13	%		0.24	%		0.35	%		0.32	%
Allowance for loan losses to period-end loans		1.17	%		1.37	%		1.36	%		1.19	%		1.20	%		1.47	%		1.19	%		1.47	%
Allowance for loan losses to nonperforming loans + accruing loans 90 days past due		68.77	%		63.58	%		74.55	%		56.45	%		63.92	%		74.75	%		56.45	%		74.75	%




	September 30,		June 30,		March 31,		December 31,		September 30,
(in thousands)	2017		2017		2017		2016		2016
Period-End Balance Sheet
Total loans, net of unearned income (a)	$	18,786,285	$	18,473,841	$	18,204,868	$	16,752,151	$	16,070,821
Loans held for sale		23,236		26,787		20,883		34,064		42,545
Securities		5,624,552		5,668,836		5,001,273		5,017,128		4,843,112
Short-term investments		111,725		126,428		51,273		78,177		128,920
Earning assets		24,545,798		24,295,892		23,278,297		21,881,520		21,085,398
Allowance for loan losses		(223,122)		(221,865)		(213,550)		(229,418)		(236,061)
Goodwill		739,403		740,265		716,761		621,193		621,193
Other intangible assets, net		96,525		101,694		86,952		87,757		92,523
Other assets		1,658,151		1,714,583		1,616,566		1,614,250		1,545,677
Total assets	$	26,816,755	$	26,630,569	$	25,485,026	$	23,975,302	$	23,108,730
Noninterest-bearing deposits	$	7,896,384	$	7,887,867	$	7,722,279	$	7,658,203	$	7,543,041
Interest-bearing transaction and savings deposits		7,893,546		8,402,133		7,162,760		6,910,466		6,620,373
Interest-bearing public funds deposits		2,762,048		2,537,030		2,595,263		2,563,758		2,394,148
Time deposits		2,981,881		2,615,785		2,441,718		2,291,839		2,327,915
Total interest-bearing deposits		13,637,475		13,554,948		12,199,741		11,766,063		11,342,436
Total deposits		21,533,859		21,442,815		19,922,020		19,424,266		18,885,477
Short-term borrowings		1,737,151		1,810,907		2,121,932		1,225,406		1,075,956
Long-term debt		331,179		407,876		525,082		436,280		463,710
Other liabilities		351,291		155,009		152,370		169,582		194,460
Stockholders' equity		2,863,275		2,813,962		2,763,622		2,719,768		2,489,127
Total liabilities & stockholders' equity	$	26,816,755	$	26,630,569	$	25,485,026	$	23,975,302	$	23,108,730

March 31,

December 31,

September 30,

June 30,

March 31,
(in thousands)

2017

2016

2016

2016

2016
Period-End Balance Sheet

Total loans, net of unearned income (a)

$
18,204,868

$
16,752,151

$
16,070,821

$
16,035,796

$
15,978,124
Loans held for sale

20,883

34,064

42,545

42,297

24,001
Securities

5,001,273

5,017,128

4,843,112

4,806,370

4,667,837
Short-term investments

51,273

78,177

128,920

153,159

151,551
Earning assets

23,278,297

21,881,520

21,085,398

21,037,622

20,821,513
Allowance for loan losses

(213,550)

(229,418)

(236,061)

(226,086)

(217,794)
Goodwill

716,761

621,193

621,193

621,193

621,193
Other intangible assets, net

86,952

87,757

92,523

97,409

102,414
Other assets

1,616,566

1,614,250

1,545,677

1,533,652

1,482,044
Total assets

$
25,485,026

$
23,975,302

$
23,108,730

$
23,063,790

$
22,809,370
Noninterest-bearing deposits

$
7,722,279

$
7,658,203

$
7,543,041

$
7,151,416

$
7,108,598
Interest-bearing transaction and savings deposits

7,162,760

6,910,466

6,620,373

6,754,513

7,043,484
Interest-bearing public funds deposits

2,595,263

2,563,758

2,394,148

2,354,234

2,152,903
Time deposits

2,441,718

2,291,839

2,327,915

2,556,706

2,351,165
Total interest-bearing deposits

12,199,741

11,766,063

11,342,436

11,665,453

11,547,552
Total deposits

19,922,020

19,424,266

18,885,477

18,816,869

18,656,150
Short-term borrowings

2,121,932

1,225,406

1,075,956

1,095,107

1,100,787
Long-term debt

525,082

436,280

463,710

468,028

471,245
Other liabilities

152,370

169,582

194,460

220,421

160,148
Stockholders' equity

2,763,622

2,719,768

2,489,127

2,463,365

2,421,040
Total liabilities & stockholders' equity

$
25,485,026

$
23,975,302

$
23,108,730

$
23,063,790

$
22,809,370



	Three Months Ended						Three months ended						Nine months ended
	March 31,		December 31,		March 31,		September 30,		June 30,		September 30,		September 30,		September 30,
(in thousands)	2017		2016		2016		2017		2017		2016		2017		2016
Average Balance Sheet
Total loans, net of unearned income (a)	$	17,303,044	$	16,323,897	$	15,848,770	$	18,591,219	$	18,369,446	$	16,023,458	$	18,092,622	$	15,977,526
Loans held for sale		21,328		32,398		14,822		21,723		22,389		38,687		21,815		27,561
Securities (b)		5,037,286		4,939,240		4,528,090		5,679,841		5,241,735		4,707,224		5,321,974		4,628,330
Short-term investments		408,343		166,653		518,986		194,643		704,560		428,037		435,066		452,028
Earning assets		22,770,001		21,462,188		20,910,668		24,487,426		24,338,130		21,197,406		23,871,477		21,085,445
Allowance for loan losses		(226,503)		(237,316)		(183,264)		(224,537)		(216,851)		(228,603)		(222,623)		(210,913)
Goodwill and other intangible assets		729,766		711,255		726,094		837,107		826,097		716,097		798,050		721,056
Other assets		1,483,242		1,501,403		1,479,017		1,577,577		1,578,877		1,517,890		1,546,910		1,496,117
Total assets	$	24,756,506	$	23,437,530	$	22,932,515	$	26,677,573	$	26,526,253	$	23,202,790	$	25,993,814	$	23,091,705
Noninterest-bearing deposits	$	7,462,258	$	7,534,392	$	7,033,680	$	7,775,913	$	7,769,932	$	7,277,568	$	7,670,517	$	7,130,762
Interest-bearing transaction and savings deposits		6,897,660		6,761,923		6,815,703		8,097,370		8,047,426		6,732,815		7,685,213		6,775,870
Interest-bearing public fund deposits		2,547,874		2,316,997		2,173,435		2,764,961		2,539,424		2,253,588		2,618,215		2,243,078
Time deposits		2,340,066		2,298,843		2,258,936		2,711,574		2,575,779		2,446,265		2,543,834		2,420,717
Total interest-bearing deposits		11,785,600		11,377,763		11,248,074		13,573,905		13,162,629		11,432,668		12,847,262		11,439,665
Total deposits		19,247,858		18,912,155		18,281,754		21,349,818		20,932,561		18,710,236		20,517,779		18,570,427
Short-term borrowings		2,127,256		1,367,504		1,564,804		1,909,365		2,232,845		1,366,236		2,089,024		1,427,199
Long-term debt		458,050		453,068		483,348		339,535		428,292		468,100		408,191		474,435
Other liabilities		190,253		187,385		170,862		240,338		145,989		185,820		192,376		174,826
Stockholders' equity		2,733,089		2,517,418		2,431,747		2,838,517		2,786,566		2,472,398		2,786,444		2,444,818
Total liabilities & stockholders' equity	$	24,756,506	$	23,437,530	$	22,932,515	$	26,677,573	$	26,526,253	$	23,202,790	$	25,993,814	$	23,091,705

Reconciliation of reported to core net interest income (te) and core net interest margin


	Three months ended															Three months ended									Nine months ended
		March 31,			December 31,			September 30,			June 30,			March 31,			September 30,			June 30,			September 30,			September 30,			September 30,
($ in thousands)		2017			2016			2016			2016			2016			2017			2017			2016			2017			2016
Net interest income	$	181,691		$	167,798		$	163,513		$	164,969		$	162,836		$	202,857		$	199,717		$	163,513		$	584,265		$	491,318
Tax-equivalent adjustment (te)(a)		8,298			7,516			6,784			6,196			5,343			8,579			8,564			6,784			25,441			18,323
Net interest income (te)	$	189,989		$	175,314		$	170,297		$	171,165		$	168,179		$	211,436		$	208,281		$	170,297		$	609,706		$	509,641
Purchase accounting adjustments
Net loan discount accretion (b)		5,017			4,302			5,206			5,878			6,358			7,711			8,801			5,206			21,529			17,443
Net investment premium amortization (c)		(454)			(524)			(581)			(636)			(720)			(364)			(398)			(581)			(1,216)			(1,936)
Net purchase accounting adjustments		4,563			3,778			4,625			5,242			5,638			7,347			8,403			4,625			20,313			15,507
Net interest income (te) - core	$	185,426		$	171,536		$	165,672		$	165,923		$	162,541		$	204,089		$	199,878		$	165,672		$	589,393		$	494,134
Average earning assets	$	22,770,001		$	21,462,188		$	21,197,406		$	21,147,029		$	20,910,668		$	24,487,426		$	24,338,130		$	21,197,406		$	23,871,477		$	21,085,445
Net interest margin - reported		3.37	%		3.26	%		3.20	%		3.25	%		3.23	%		3.44	%		3.43	%		3.20	%		3.41	%		3.23	%
Net purchase accounting adjustments		0.08	%		0.07	%		0.08	%		0.10	%		0.11	%		0.12	%		0.14	%		0.08	%		0.11	%		0.10	%
Net interest margin - core		3.29	%		3.19	%		3.12	%		3.15	%		3.12	%		3.32	%		3.29	%		3.12	%		3.30	%		3.13	%


	Three months ended										Three months ended						Nine months ended
		March 31,		December 31,		September 30,		June 30,		March 31,		September 30,		June 30,		September 30,			September 30,		September 30,
(in thousands)		2017		2016		2016		2016		2016		2017		2017		2016			2017		2016
Net interest income	$	181,691	$	167,798	$	163,513	$	164,969	$	162,836	$	202,857	$	199,717	$	163,513		$	584,265	$	491,318
Noninterest income		63,491		65,893		63,008		63,694		58,186		67,115		67,487		63,008			198,093		184,888
Total revenue	$	245,182	$	233,691	$	226,521	$	228,663	$	221,022	$	269,972	$	267,204	$	226,521		$	782,358	$	676,206
Tax-equivalent adjustment (a)		8,298		7,516		6,784		6,196		5,343		8,579		8,564		6,784			25,441		18,323
Purchase accounting adjustments - revenue (d)		(3,463)		(2,538)		(3,088)		(3,716)		(4,026)		(7,347)		(7,076)		(3,088)			(17,886)		(10,830)
Nonoperating revenue		(4,352)		—		—		—		—		—		—		—			(4,352)		—
Core revenue (te)	$	245,665	$	238,669	$	230,217	$	231,143	$	222,339	$	271,204	$	268,692	$	230,217		$	785,561	$	683,699
Noninterest expense		(163,542)		(156,283)		(149,058)		(150,942)		(156,032)		(177,616)		(183,470)		(149,058)			(524,628)		(456,032)
Intangible amortization		4,705		4,766		4,886		5,005		5,124		6,070		5,757		4,886			16,532		15,015
Nonoperating items		6,463		—		—		—		4,978
Nonoperating expense												11,393		10,617		—			28,473		4,978
Core pre-tax, pre-provision net revenue (te)	$	93,291	$	87,152	$	86,045	$	85,206	$	76,409	$	111,051	$	101,596	$	86,045		$	305,938	$	247,660

Liquidity management is focused on ensuring that funds are available to meet the cash flow requirements of our depositors and borrowers, while also meeting the operating, capital and strategic cash flow needs of the Company, the Bank and other subsidiaries. Hancock develops its liquidity management strategies and measures and regularly monitors liquidity risk as part of its overall asset/liability management process.

The asset portion of the balance sheet provides liquidity primarily through loan principal repayments, as well as maturities and repayments of investment securities. Short-term investments such as federal funds sold, securities purchased under agreements to

resell and interest-bearing deposits with the Federal Reserve Bank or with other commercial banks are additional sources of liquidity to meet cash flow requirements. Free securities represent unpledged securities that can be sold or used as collateral for borrowings, and include unpledged securities assigned to short-term dealer repurchase agreements or to the Federal Reserve Bank discount window. As shown in the table below, our ratio of free securities to total securities was ~~20.29%~~36.61% at ~~March 31,~~September 30, 2017, compared to ~~23.46%~~33.57% at ~~December 31, 2016~~June 30, 2017 and ~~25.47%~~23.97% at ~~March 31,~~September 30, 2016. The total ~~amount~~ of ~~free~~pledged securities at ~~March 31,~~September 30, 2017 ~~decreased by $156~~was down $203.8 million compared to ~~year-end, while total securities were up slightly. The decrease from March 31, 2016 is mainly attributable to pledging requirements~~June 30, 2017 as collateral related to ~~a $502 million, or 22%, increase in~~seasonal public fund tax deposits ~~resulting from certain deposit growth initiatives implemented in 2015.~~was released. Total securities at September 30, 2017 were $0.8 billion higher than at September 30, 2016.



	March 31,		December 31,		September 30,		June 30,		March 31,		September 30,		June 30,		March 31,		December 31,		September 30,
Liquidity Metrics	2017		2016		2016		2016		2016		2017		2017		2017		2016		2016
Free securities / total securities	20.29	%	23.46	%	23.97	%	28.39	%	25.47	%	36.61	%	33.57	%	20.29	%	23.46	%	23.97	%
Core deposits / total deposits	92.93	%	93.22	%	93.03	%	91.99	%	92.95	%	91.70	%	93.05	%	92.93	%	93.22	%	93.03	%
Wholesale funds / core deposits	14.30	%	9.18	%	8.76	%	9.03	%	9.07	%	10.47	%	11.12	%	14.30	%	9.18	%	8.76	%
Quarter-to-date average loans /quarter-to-date average deposits	89.90	%	86.31	%	85.64	%	85.80	%	86.69	%	87.08	%	87.76	%	89.90	%	86.31	%	85.64	%

The liability portion of the balance sheet provides liquidity mainly through the Company’s ability to use cash sourced from various customers’ interest-bearing and noninterest-bearing deposit and sweep accounts. Core deposits consist of total deposits excluding certificates of deposits (“CDs”) of $250,000 or more and brokered ~~deposits, and balances in sweep time deposit products used by commercial customers.~~deposits. The ratio of core deposits to total deposits was ~~92.93%~~91.70% at ~~March 31,~~September 30, 2017, compared to ~~93.22%~~93.05% at ~~December 31,~~June 30, 2017 and 93.03% at September 30, 2016. Core deposits totaled $19.7 billion at September 30, 2017, a decrease of $0.2 billion from June 30, 2017, and up $2.2 billion from September 30, 2016. The increase from September 30, 2016 ~~and 92.95% at March 31, 2016.~~was primarily due to the FNBC transactions. Brokered deposits totaled ~~$800 million~~$1.1 billion as of ~~March 31,~~September 30, 2017, a ~~$106 million,~~$0.3 billion, or ~~15%~~42%, increase ~~from December 31, 2016, and up $69 million~~ compared to ~~March 31,~~June 30, 2017 and September 30, 2016. The ~~Company~~Company’s use of brokered deposits as a funding source is subject to strict parameters regarding the amount, term and interest rate.

Purchases of federal funds, securities sold under agreements to repurchase and other short-term borrowings from customers provide additional sources of liquidity to meet short-term funding requirements. Besides funding from customer sources, the Bank has a line of credit with the FHLB that is secured by blanket pledges of certain mortgage loans. At ~~March 31,~~September 30, 2017, the Bank had ~~borrowed $1.8~~borrowings of approximately $1.2 billion ~~from the FHLB~~ and had approximately ~~$2.8~~$3.0 billion available under this line. The Bank also has unused borrowing capacity at the Federal Reserve’s discount window of approximately ~~$2.1~~$2.2 billion. The Company did not have ~~any~~ outstanding borrowings with the Federal Reserve at any date in the last 12twelve months.

Wholesale funds, which are comprised of short-term borrowings and long-term debt, were ~~14.30%~~10.47% of core deposits at ~~March 31,~~September 30, 2017, compared to ~~9.18%~~11.12% at ~~December 31, 2016~~June 30, 2017 and ~~9.07%~~8.76% at ~~March 31,~~September 30, 2016. ~~Both the linked-quarter~~The linked quarter decrease primarily related to a $0.2 million decrease in both wholesale funds and ~~year-over-year increases were~~core deposits. The year over year increase was primarily due to an increase in FHLB borrowings. FHLB borrowings totaled ~~$1.8~~$1.2 billion at ~~March 31,~~September 30, 2017 compared to $865 million at December 31, 2016. The Company acquired approximately $600 million in FHLB borrowings as part of the FNBC transaction. FHLB borrowings were $675 million at March 31, 2016. Partially offsetting these increases was growth in core deposits. Core deposits totaled $18.5$1.3 billion at ~~March 31,~~June 30, 2017 ~~compared to $18.1~~and $0.7 billion at ~~December 31, 2016 and $17.3 billion at March 31,~~September 30, 2016. The Company has established an internal target ~~range~~ for wholesale funds to be less than 25% of core deposits.

Another key measure the Company uses to monitor its liquidity position is the loan-to-deposit ratio (average loans outstanding for the reporting period divided by average deposits outstanding). The loan-to-deposit ratio measures the amount of funds the Company lends out for each dollar of deposits on hand. The Company’s loan-to-deposit ratio for the ~~first~~third quarter of 2017 was ~~89.90%~~87.08%, compared to ~~a range between~~87.76% at June 30, 2017 and 85.64% and 86.69% for the prior four quarters. The increase in the loan-to-deposit ratio from prior periods reflects the impact on quarter-to-date averages of the $1.2 billion of loans and $0.4 billion of deposits acquired in the FNBC transaction that closed in first quarter 2017. The increase in the loan-to-deposit ratio was anticipated pursuant to this transaction.at September 30, 2016. The Company has established ~~an internal~~a target range for ~~the~~its loan-to-deposit ratio ~~from~~of 83% to 87% ~~and expects it to be more in-line with its target in the next few quarters.~~.

Cash generated from operations is another important source of funds to meet liquidity needs. The consolidated statements of cash flows present operating cash flows and summarize all significant sources and uses of funds for the ~~three~~nine months ended ~~March 31,~~September 30, 2017 and 2016.

Dividends received from the Bank have been the primary source of funds available to the Parent Company for the payment of dividends to our stockholders and for servicing ~~debt issued by the parent company.~~its debt. The liquidity management process takes into account the various regulatory provisions that can limit the amount of dividends the Bank can distribute to the Parent Company. The Parent Company maintains cash and other liquid assets ~~at the parent company~~ to provide liquidity in an amount sufficient to fund a minimum of at least six quarters of anticipated common stockholder dividends.

The April 28, 2017 FDIC transaction for the acquisition of selected assets and liabilities of FNBC provides additional low cost funding and liquidity for the Company. Whitney Bank assumed approximately $1.6 billion in deposits, primarily transaction and savings accounts, purchased approximately $1.0 billion in cash, securities, loans, and other assets, and received a cash payment of $655 million from the FDIC for the net liabilities assumed. These amounts are subject to adjustments based upon final settlement with the FDIC pursuant to the agreement.

Stockholders’ equity totaled ~~$2.8~~$2.9 billion at ~~March 31,~~September 30, 2017, up ~~$44~~$49 million, or 2% ~~compared to December 31, 2016~~from June 30, 2017 and up ~~$343~~$374 million, or ~~14%~~15%, from ~~the same period prior year.~~September 30, 2016. The tangible common equity ratio was ~~7.94%~~7.80% at ~~March 31,~~September 30, 2017, compared to ~~8.64%~~7.65% at ~~December 31, 2016~~June 30, 2017 and ~~7.69%~~7.93% at ~~March 31,~~September 30, 2016. The increase in the ratio from prior quarter is due to net tangible earnings. The decline in the ratio from ~~year end~~prior periods was due to the effect of the ~~net~~ assets acquired in the FNBC ~~transaction. The year-over-year increase~~transactions, which was ~~due to~~partially offset by the $259 million stock issuance in the fourth quarter of ~~2016, mostly offset by $1.0 billion in organic loan growth in addition to the FNBC asset acquisition.~~2016. The Company has established an internal target for the tangible common equity ratio of at least 8.00%. However, management will allow the Company’s tangible common equity ratio to drop below 8.00% on a temporary basis if it believes that the shortfall can be replenished through normal operations.

~~At March 31, 2017, the~~The regulatory capital ratios of the Company and the Bank as of September 30, 2017 improved from June 30, 2017. While the ratios were lower in the third quarter of 2017 relative to December 31, 2016 as a result the FNBC transactions, all remain well in excess of current regulatory minimum ~~requirements, as indicated in the table below.~~requirements. The Company and the Bank have been categorized as “well-capitalized” in the most recent notices received from our ~~regulators and both~~regulators. Both entities currently exceed all capital requirements of the new Basel III requirements, ~~which were effective January 1, 2015,~~ including the fully phased-in conservation buffer. Bank ratios reflect a $240 million capital contribution in the first quarter of 2017 to support the FNBC ~~acquisition.~~I transaction. See the Supervision and Regulation section in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 for further discussion of the Company’s capital requirements.

The following table shows the regulatory capital ratios for the Company and the Bank as calculated under current rules for the indicated periods.




	Well-		March 31,		December 31,		September 30,		June 30,		March 31,		Well-		September 30,		June 30,		March 31,		December 31,		September 30,
	Capitalized		2017		2016		2016		2016		2016		Capitalized		2017		2017		2017		2016		2016
Total capital (to risk weighted assets)
Hancock Holding Company	10.00	%	11.91	%	13.21	%	12.15	%	11.96	%	11.75	%	10.00	%	11.84	%	11.76	%	11.91	%	13.21	%	12.15	%
Whitney Bank	10.00	%	11.52	%	11.57	%	11.81	%	11.70	%	11.56	%	10.00	%	11.35	%	11.33	%	11.52	%	11.57	%	11.81	%
Tier 1 common equity capital (to risk weighted assets)
Hancock Holding Company	6.50	%	10.16	%	11.26	%	10.09	%	9.94	%	9.69	%	6.50	%	10.10	%	10.01	%	10.16	%	11.26	%	10.09	%
Whitney Bank	6.50	%	10.49	%	10.39	%	10.56	%	10.48	%	10.30	%	6.50	%	10.31	%	10.28	%	10.49	%	10.39	%	10.56	%
Tier 1 capital (to risk weighted assets)
Hancock Holding Company	8.00	%	10.16	%	11.26	%	10.09	%	9.94	%	9.69	%	8.00	%	10.10	%	10.01	%	10.16	%	11.26	%	10.09	%
Whitney Bank	8.00	%	10.49	%	10.39	%	10.56	%	10.48	%	10.30	%	8.00	%	10.31	%	10.28	%	10.49	%	10.39	%	10.56	%
Tier 1 leverage capital
Hancock Holding Company	5.00	%	8.79	%	9.56	%	8.35	%	8.22	%	8.14	%	5.00	%	8.34	%	8.21	%	8.79	%	9.56	%	8.35	%
Whitney Bank	5.00	%	9.09	%	8.83	%	8.76	%	8.69	%	8.68	%	5.00	%	8.53	%	8.44	%	9.09	%	8.83	%	8.76	%

~~Investment~~Investments in securities totaled ~~$5.0~~$5.6 billion at ~~March 31,~~September 30, 2017, ~~down $16~~up $44 million, or 1%, from June 30, 2017 and up $781 million from ~~December 31, 2016 and $333 million from March 31,~~September 30, 2016. ~~During the first quarter of 2017, the Company purchased approximately $131 million of mortgage-backed securities and municipal securities at an average yield of 3.26%.~~ At ~~March 31,~~September 30, 2017, securities available for sale totaled $2.8 billion and securities held to maturity ~~each~~ totaled ~~$2.5~~$2.8 billion.

The securities portfolio consists mainly of residential and commercial mortgage-backed securities and collateralized mortgage obligations issued or guaranteed by U.S. government agencies. The portfolio is designed to enhance liquidity while providing an acceptable rate of return. The Company invests only in high quality ~~securities of~~ investment grade ~~quality~~securities with a targeted effective duration for the overall portfolio of between two and five years. The effective duration calculates the price sensitivity to changes in interest rates. At ~~March 31,~~September 30, 2017, the average maturity of the portfolio was ~~5.80~~5.57 years with an effective duration of ~~5.0~~4.64 years and a nominal weighted-average yield of ~~2.35%~~2.36%. Management simulations indicate that the effective duration would increase to ~~5.13~~4.90 years with a 100 bps increase in the yield curve and to ~~5.19~~5.05 years with a 200 bps increase. At December 31, 2016, the average maturity of the portfolio was 5.79 years with an effective duration of 5.07 years and a nominal weighted-average yield of 2.35%. The average maturity of the portfolio at ~~March 31,~~September 30, 2016 was ~~5.01~~5.06 years, while the duration was ~~3.69~~3.78 years, and the nominal weighted average yield was ~~2.43%~~2.28%.

Total loans at ~~March 31,~~September 30, 2017 were ~~$18.2~~$18.8 billion, up approximately ~~$1.5 billion,~~$312 million, or 9%1.7%, from December 31, 2016, and up $2.2 billion, or 14%, compared to March 31, 2016. The increase includes approximately $1.2 billion from the FNBC transaction (net of the loan mark of 4%). Excluding the impact of FNBC, loans grew $267 million, or 2% linked-quarter.June 30, 2017. Loans to ~~energy-related~~energy related companies decreased ~~$123~~$97 million ~~during the first quarter.~~

as we continue to decrease our concentration. There was commercial loan growth throughout the markets ~~across~~in our footprint and in our mortgage and equipment finance lines of business.

~~The Company’s~~Our commercial customer base is diversified over a range of industries, including energy, healthcare, wholesale and retail trade in various durable and nondurable products and the manufacture of such products, marine transportation and maritime construction, financial and professional services, and agricultural production.

The following tables provide detail of the more significant industry concentrations for our commercial and industrial loan portfolio, which is based on NAICS codes, and property type concentrations of our commercial real estate – income producing portfolios.



	March 31,				December 31,				September 30,				June 30,				March 31,				September				June 30,				March 31,				December 31,				September 30,
	2017				2016				2016				2016				2016				2017				2017 (b)				2017				2016				2016
			Pct of				Pct of				Pct of				Pct of				Pct of				Pct of				Pct of				Pct of				Pct of				Pct of
($ in thousands)	Balance		Total		Balance		Total		Balance		Total		Balance		Total		Balance		Total		Balance		Total		Balance		Total		Balance		Total		Balance		Total		Balance		Total
Commercial & industrial loans:
Real Estate and Rental and Leasing																					$	1,134,451	12	%	$	1,116,117	11	%	$	1,119,937	11	%	$	975,821	10	%	$	980,484	11	%
Mining, Quarrying, and Oil and Gas Extraction (a)	$	1,211,006	12	%	$	1,320,294	14	%	$	1,311,480	15	%	$	1,382,496	15	%	$	1,462,000	16	%		1,074,822	11			1,131,279	11			1,211,006	12			1,320,294	14			1,311,480	15
Health Care and Social Assistance		1,076,164	11			1,010,135	11			953,900	10			900,604	10			885,268	10			1,023,939	10			1,084,644	11			1,076,164	11			1,010,135	11			953,900	10
Real Estate and Rental and Leasing		1,119,937	11			975,821	10			980,484	11			986,502	11			1,017,602	11
Public Administration		839,005	8			796,742	8			717,629	8			686,179	8			641,210	7			832,638	8			848,543	8			839,005	8			796,742	8			717,629	8
Manufacturing (a)		769,118	8			729,926	8			637,194	7			655,493	7			661,242	7			726,339	7			769,161	8			769,118	8			729,926	8			637,194	7
Retail Trade (a)		755,059	8			682,775	7			632,175	7			645,073	7			634,866	7			761,418	7			774,414	8			755,059	8			682,775	7			632,175	7
Finance and Insurance		478,473	5			507,339	5			451,469	5			463,953	5			443,409	5			559,092	5			503,551	5			478,473	5			507,339	5			451,469	5
Wholesale Trade (a)		490,569	5			486,940	5			461,133	5			452,973	5			539,927	6			513,086	5			492,910	5			490,569	5			486,940	5			461,133	5
Construction		519,663	5			478,926	5			447,206	5			441,160	5			433,209	5			564,444	6			521,926	5			519,663	5			478,926	5			447,206	5
Transportation and Warehousing (a)		556,468	5			468,377	5			428,936	5			422,649	5			439,101	5			563,263	6			569,923	6			556,468	5			468,377	5			428,936	5
Educational Services		428,248	4			421,035	4			421,114	5			429,810	5			365,227	4			438,247	4			434,955	4			428,248	4			421,035	4			421,114	5
Professional, Scientific, and Technical Services (a)		362,610	4			340,323	4			339,642	4			320,319	4			337,248	4			356,560	3			371,055	4			362,610	4			340,323	4			339,642	4
Other Services (except Public Administration)		342,155	3			308,802	3			292,669	3			292,482	3			285,867	3			349,711	3			348,080	3			342,155	3			308,802	3			292,669	3
Accommodation and Food Services		338,241	3			270,693	3			295,625	3			294,607	3			290,283	3			340,551	3			305,421	3			338,241	3			270,693	3			295,625	3
Other (a)		835,022	8			722,610	8			665,097	7			674,419	7			632,294	7			966,882	10			899,457	8			835,022	8			722,610	8			665,097	7
Total commercial & industrial loans	$	10,121,738	100	%	$	9,520,738	100	%	$	9,035,753	100	%	$	9,048,719	100	%	$	9,068,753	100	%	$	10,205,443	100	%	$	10,171,436	100	%	$	10,121,738	100	%	$	9,520,738	100	%	$	9,035,753	100	%

(a) The Company's energy related lending portfolio includes certain balances within each of these selected industry categories as the definition is based on source of revenue. The energy related lending portfolio totaled ~~$1.3~~$1.1 billion, $1.2 billion, $1.4 billion, $1.4 billion, ~~$1.5~~and $1.4 billion, ~~and $1.6 billion~~ at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively.

(b) June 30, ~~2016, and March 31, 2016, respectively.~~2017 reflects reclassifications from the previous filing for the FNBC transactions.

At ~~March 31,~~September 30, 2017, commercial and industrial (“C&I”) loans, including both non-real estate and owner occupied real estate secured loans, totaled approximately ~~$10~~$10.2 billion, an increase of ~~$601~~$34.0 million, or 6%0.3%, from ~~December 31, 2016.~~June 30, 2017. Included in C&I are ~~$1.3~~$1.1 billion in ~~energy-related~~energy related loans, which are comprised of credits to both the exploration and production segment and the support services segment. Energy related loans comprised ~~7.1%~~6.0% of total loans at ~~March 31, 2017. The $123 million linked-quarter decrease~~September 30, 2017, down from 12.4% in fourth quarter of 2014, the beginning of the downturn of the energy ~~portfolio resulted from payoffs~~cycle. Payoffs and paydowns of approximately ~~$160~~$142 million and charge-offs of approximately ~~$23~~$8 million were partially offset by approximately ~~$60~~$52 million in ~~net increases.~~draws on existing lines of credit. Management has a strategic target to bring the level of energy loans to total loans to 5%.

The Bank lends mainly to ~~middle-market~~middle market and smaller commercial entities, although it participates in larger ~~shared-credit~~shared credit loan facilities. Shared national credits funded at ~~March 31,~~September 30, 2017 totaling approximately ~~$2.2~~$2.0 billion, or ~~12%~~11% of total loans, were down $5$75 million compared to ~~December 31, 2016~~June 30, 2017 and down ~~$20~~$41 million from ~~March 31,~~September 30, 2016. Approximately ~~$813~~$718 million of shared national credits were with ~~energy-related~~energy related customers at ~~March 31,~~September 30, 2017, down approximately ~~$121~~$72 million from ~~December 31, 2016~~June 30, 2017 and down ~~$162~~$199 million from ~~March 31,~~September 30, 2016.

Commercial real estate – income producing loans totaled approximately $2.5 billion at ~~March 31,~~September 30, 2017, an increase of ~~$491~~$110 million, or ~~24%~~5%, from ~~December 31, 2016.~~June 30, 2017. The majority of the ~~increases~~increase in commercial real estate – income producing loans ~~and construction and land development loans were~~was related to the ~~FNBC transaction.~~hotel/motel and retail property type. The following table details commercial real estate – income producing by property types for the last five quarters.



	September 30,				June 30,				March 31,				December 31,				September 30,
	2017				2017 (a)				2017				2016				2016
			Pct of				Pct of				Pct of				Pct of				Pct of
($ in thousands)	Balance		Total		Balance		Total		Balance		Total		Balance		Total		Balance		Total
Commercial real estate - income producing loans:
Retail	$	550,720	22	%	$	511,708	22	%	$	565,673	23	%	$	466,168	22	%	$	483,026	24	%
Office		472,169	19			481,626	20			482,121	19			371,029	19			382,191	19
Multifamily		339,656	13			347,583	15			444,188	18			346,612	17			314,539	16
Industrial		299,796	12			296,996	12			307,170	12			289,482	14			292,037	15
Hotel/Motel		327,048	13			269,985	11			268,138	11			179,016	9			129,209	6
Other		522,419	21			493,775	21			437,814	17			361,583	19			389,307	20
Total commercial real estate - income producing loans	$	2,511,808	100	%	$	2,401,673	100	%	$	2,505,104	100	%	$	2,013,890	100	%	$	1,990,309	100	%

(a) June 30, 2017 reflects reclassifications from the previous filings for the FNBC transactions.

March 31,

December 31,

September 30,

June 30,

March 31,

2017

2016

2016

2016

2016

Pct of

Pct of

Pct of

Pct of

Pct of

($ in thousands)

Balance

Total

Balance

Total

Balance

Total

Balance

Total

Balance

Total

Commercial real estate - income producing loans:

Retail

$
565,673

23
%

$
466,168

23
%

$
483,026

24
%

$
505,146

25
%

$
478,249

27
%
Office

482,121

19

371,029

19

382,191

19

360,677

18

362,755

21

Multifamily

444,188

18

346,612

17

314,539

16

366,608

18

183,868

10

Industrial

307,170

12

289,482

14

292,037

15

285,897

14

264,006

15

Hotel/Motel

268,138

11

179,016

9

129,209

6

131,750

7

96,776

6

Other

437,814

17

361,583

19

389,307

20

374,393

18

367,091

21

Total commercial real estate - income producing loans

$
2,505,104

100
%

$
2,013,890

100
%

$
1,990,309

100
%

$
2,024,471

100
%

$
1,752,745

100
%

Construction and land development loans, totaling approximately ~~$1.3~~$1.4 billion at ~~March 31,~~September 30, 2017, increased approximately ~~$242~~$60 million from ~~December 31, 2016.~~June 30, 2017. Residential mortgages ~~increased $120 million, while~~and consumer loans ~~decreased $0.8~~increased $103 million and $6 million respectively, during the ~~first three months~~third quarter of 2017.

The Company's total allowance for loan losses was ~~$213.6~~$223.1 million at ~~March 31,~~September 30, 2017, compared to ~~$229.4~~$221.9 million at ~~December 31, 2016.~~June 30, 2017. The ~~decrease is due to a net release~~ratio of ~~allowance in~~ the energy segment of $23 million, due primarily to charge-offs, offset by an increase in non-energy allowance of $7 million. Energy prices have remained relatively stable over the last two quarters and criticized levels have declined. There is no allowance for loan losses onto period-end loans decreased 1 bp to 1.19%, compared to 1.20% at June 30, 2017. The increase in allowance is primarily driven by higher non-energy reserves due to continued growth and diversification of that portfolio. Energy prices improved compared the ~~loans purchased from FNBC; however, a 4%~~prior quarter and have remained relatively stable. Energy exposure and criticized loan ~~mark has been applied~~levels continued to ~~those loans. The allowance for credits~~decline in ~~the energy portfolio totaled $83.7 million, or 6.5% of energy loans, at March 31, 2017, down from $106.5 million, or 7.5% of energy loans, at December 31, 2016.~~all portfolios. Management believes the allowance level for the energy portfolio, as built in previous quarters, remains adequate.

The allowance maintained on the non-purchased credit impaired portion of the loan portfolio totaled $197.6 million, a $13.5 million linked-quarter decrease. The ratio of the allowance to period-end loans was 1.17% at March 31, 2017, compared to 1.37% at December 31, 2016. Nearly half of the decline is due to the addition of $1.2 billion loans acquired from FNBC that were accounted for as acquired performing loans under which loans are recorded at fair value with no carryover allowance.

~~During the first quarter of 2017, Hancock recorded a total provision for loan losses of $16.0 million, up $1.5 million from $14.5 million in the fourth quarter of 2016.~~

Net charge-offs from the non-purchased credit impaired loan portfolio were ~~$29.9~~$11.8 million, or ~~0.70%~~0.25%, of average total loans on an annualized basis in the ~~first~~third quarter of 2017, ~~compared to $20~~up from $6.0 million, or ~~0.50%~~0.13%, of average total loans in the ~~fourth~~second quarter of ~~2016. Included~~2017. Net charge-offs to energy credits in the ~~first quarter’s total are approximately $23~~third quarter of 2017 totaled $3.6 million, inconsisting of gross charge-offs of $7.6 million, net of recoveries of $4.0 million. There were no charges-offs related to energy ~~credits. Energy~~credits in the second quarter of 2017. Third quarter residential mortgage charge-offs were ~~approximately $12~~up $1.4 million incompared to second quarter 2017 due largely to a single credit and not necessarily indicative of a portfolio trend. Consumer loan charge-offs also increased $1.1 million compared to second quarter, however, was lower than first and fourth quarters of 2017 and 2016, respectively.

The following table provides a breakout of the ~~fourth quarter~~Company’s allowance for loan loss for the energy portfolio, allocated by sector, as of ~~2016.~~ September 30, 2017.

Management continues to closely monitor the impact that the sustained decrease in oil and natural gas prices will have on the ability of the Company’s ~~energy-related~~energy related customers to service their debt. Part of the ongoing monitoring includes a review of customers’ balance sheets, leverage ratios, collateral values and other critical lending metrics. As previously noted, even with improving oil prices, management ~~expect~~expects a continued lag in the recovery of energy service and support credits. ~~Reserve-based~~Many reserve based lending credits are showing signs of improvement given the stabilization inof oil ~~prices, and we~~prices. We continue to expect lagging improvement in ~~land-based~~the support sector, with the expectation for land based services to recover more quickly than drilling and non-drilling services ~~in the Gulf of Mexico to follow. However, as~~that support offshore production. As new information becomes available, additional risk rating downgrades could occur, which could lead to additional loan loss provisions, a higher allowance for loan losses, and additional charge-offs. Management believes that any additional losses will be manageable and that capital will remain solid. Based upon information currently available, management is maintaining the estimate that net charge-offs from ~~energy-related~~energy related credits could approximate $65 million to $95 million over the duration of the cycle, which started in the fourth quarter of 2014. To date, the Company has recorded approximately ~~$65~~$68 million in ~~energy-related~~energy related net charge-offs since the start of the cycle including ~~$23~~the net charge-off of $3.6 million in the ~~first quarter of 2017.~~current quarter. See Item 7 in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, 2016 for further discussion of ~~the Company’s~~our energy portfolio and its potential impact on the allowance for loan losses.

The following table sets forth activity in the allowance for loan losses for the periods ~~indicated.~~indicated:



	Three months Ended
										Three months ended									Nine months ended
	March 31,			December 31,			March 31,			September 30,			June 30,			September 30,			September 30,
(in thousands)	2017			2016			2016			2017			2017			2016			2017			2016
Allowance for loan losses at beginning of period	$	229,418		$	236,061		$	181,179		$	221,865		$	213,550		$	226,086		$	229,418		$	181,179
Loans charged-off:
Non-purchased credit impaired loans (a):
Commercial non real estate		24,791			15,116			17,667			9,029			1,427			5,292			35,247			27,504
Commercial real estate - owner-occupied		29			159			783			10			488			461			527			1,660
Total commercial & industrial		24,820			15,275			18,450			9,039			1,915			5,753			35,774			29,164
Commercial real estate - income producing		7			155			115			—			153			—			160			191
Construction and land development		37			137			110			479			77			235			593			827
Residential mortgages		289			132			175			1,693			401			316			2,383			908
Consumer		8,539			8,696			5,843			7,584			6,568			6,135			22,691			17,403
Total non-purchased credit impaired charge-offs		33,692			24,395			24,693			18,795			9,114			12,439			61,601			48,493
Purchased credit impaired loans:
Commercial non real estate		—			—			—			—			—			—			—			—
Commercial real estate - owner-occupied		—			—			28			—			—			—			—			28
Total commercial & industrial		—			—			28			—			—			—			—			28
Commercial real estate - income producing		—			—			1			—			—			—			—			1
Construction and land development		54			—			18			19			4			—			77			18
Residential mortgages		59			232			—			16			27			68			102			91
Consumer		139			—			—			—			14			—			153			8
Total purchased credit impaired charge-offs		252			232			47			35			45			68			332			146
Total charge-offs		33,944			24,627			24,740			18,830			9,159			12,507			61,933			48,639
Recoveries of loans previously charged-off:
Non-purchased credit impaired loans (a):
Commercial non real estate		936			1,260			809			4,621			880			907			6,437			2,709
Commercial real estate - owner-occupied		200			193			41			94			43			49			337			287
Total commercial & industrial		1,136			1,453			850			4,715			923			956			6,774			2,996
Commercial real estate - income producing		375			316			144			257			23			405			655			673
Construction and land development		448			303			605			285			268			297			1,001			1,422
Residential mortgages		108			362			301			54			154			17			316			497
Consumer		1,714			1,537			1,494			1,701			1,761			1,233			5,176			4,272
Total non-purchased credit impaired recoveries		3,781			3,971			3,394			7,012			3,129			2,908			13,922			9,860
Purchased credit impaired loans:
Commercial non real estate		2			39			3			3			—			68			5			76
Commercial real estate - owner-occupied		75			106			35			17			18			43			110			163
Total commercial & industrial		77			145			38			20			18			111			115			239
Commercial real estate - income producing		—			—			1			—			—			—			—			2
Construction and land development		23			263			35			10			16			45			49			98
Residential mortgages		5			3			1			4			14			30			23			33
Consumer		29			77			39			1			42			6			72			112
Total purchased credit impaired recoveries		134			488			114			35			90			192			259			484
Total recoveries		3,915			4,459			3,508			7,047			3,219			3,100			14,181			10,344
Net charge-offs - non-purchased credit impaired loans		29,911			20,424			21,299			11,783			5,985			9,531			47,679			38,633
Net charge-offs - purchased credit impaired loans		118			(256)			(67)			—			(45)			(124)			73			(338)
Total net charge-offs		30,029			20,168			21,232			11,783			5,940			9,407			47,752			38,295
Provision for loan losses before FDIC benefit - purchased credit impaired loans		(2,236)			(1,611)			(2,685)			180			(912)			(6)			(2,968)			(3,750)
Benefit attributable to FDIC loss share agreement		1,830			930			2,189			—			696			(410)			2,526			3,027
Provision for loan losses non-purchased credit impaired loans		16,397			15,136			60,532			12,860			15,167			19,388			44,424			96,927
Provision for loan losses, net		15,991			14,455			60,036			13,040			14,951			18,972			43,982			96,204
Increase (decrease) in FDIC loss share receivable		(1,830)			(930)			(2,189)			—			(696)			410			(2,526)			(3,027)
Allowance for loan losses at end of period	$	213,550		$	229,418		$	217,794		$	223,122		$	221,865		$	236,061		$	223,122		$	236,061
Ratios:
Gross charge-offs - non-purchased credit impaired to average loans		0.79	%		0.59	%		0.62	%		0.40	%		0.20	%		0.31	%		0.46	%		0.41
Recoveries - non-purchased credit impaired to average loans		0.09	%		0.10	%		0.09	%		0.15	%		0.07	%		0.07	%		0.10	%		0.08
Net charge-offs - non-purchased credit impaired to average loans		0.70	%		0.50	%		0.54	%		0.25	%		0.13	%		0.24	%		0.35	%		0.32
Allowance for loan losses to period-end loans		1.17	%		1.37	%		1.36	%		1.19	%		1.20	%		1.47	%		1.19	%		1.47

The following table sets forth nonperforming assets by type for the periods indicated, consisting of nonaccrual loans, troubled debt restructurings and foreclosed and surplus ORE and other foreclosed assets. Loans past due 90 days or more and still accruing are also disclosed.



	March 31,			December 31,			September 30,			December 31,
(in thousands)	2017			2016			2017			2016
Loans accounted for on a nonaccrual basis: (a)
Commercial non-real estate	$	94,725		$	170,703		$	76,933		$	170,703
Commercial non-real estate - restructured		103,412			78,334			112,049			78,334
Total commercial non-real estate		198,137			249,037			188,982			249,037
Commercial real estate - owner occupied		9,587			13,432			13,704			13,432
Commercial real estate - owner-occupied - restructured		1,580			981			601			981
Total commercial real estate - owner-occupied		11,167			14,413			14,305			14,413
Total commercial & industrial		209,304			263,450			203,287			263,450
Commercial real estate - income producing		7,159			13,147			8,766			13,147
Commercial real estate - income producing - restructured		6,189			807			5,594			807
Total commercial real estate - income producing		13,348			13,954			14,360			13,954
Construction and land development		3,009			3,652			3,137			3,652
Construction and land development - restructured		552			898			155			898
Total construction and land development		3,561			4,550			3,292			4,550
Residential mortgage		22,171			22,814			33,495			22,814
Residential mortgage - restructured		841			851			1,179			851
Total residential mortgage		23,012			23,665			34,674			23,665
Consumer		13,390			12,351			13,946			12,351
Consumer - restructured		34			—			117			—
Total consumer		13,424			12,351			14,063			12,351
Total nonaccrual loans	$	262,649		$	317,970		$	269,676		$	317,970
Restructured loans - still accruing:
Commercial non-real estate	$	42,757		$	32,887		$	89,913		$	32,887
Commercial real estate - owner occupied		146			493			1,600			493
Total commercial & industrial		42,903			33,380			91,513			33,380
Commercial real estate - income producing		3,926			5,939			3,864			5,939
Construction and land development		—			—			—			—
Residential mortgage		237			259			971			259
Consumer		201			240			387			240
Total restructured loans - still accruing		47,267			39,818			96,735			39,818
Total nonperforming loans		309,916			357,788			366,411			357,788
ORE and foreclosed assets		17,156			18,943			21,219			18,943
Total nonperforming assets (b)	$	327,072		$	376,731		$	387,630		$	376,731
Loans 90 days past due still accruing	$	590		$	3,039		$	28,850		$	3,039
Total restructured loans	$	159,875		$	121,689		$	216,430		$	121,689
Ratios:
Nonperforming assets to loans plus ORE and foreclosed assets		1.79	%		2.25	%		2.06	%		2.25	%
Allowance for loan losses to nonperforming loans and accruing loans 90 days past due		68.77	%		63.58	%		56.45	%		63.58	%
Loans 90 days past due still accruing to loans		0.00	%		0.02	%		0.15	%		0.02	%

Nonperforming assets totaled ~~$327~~$388 million at ~~March 31,~~September 30, 2017, ~~down $50~~up $11 million, or 3%, from December 31, 2016, up $41 million, or 12%, from June 30, 2017 and up ~~$20~~$57 million from ~~March 31,~~September 30, 2016. During the ~~first~~third quarter of 2017, total nonperforming loans ~~decreased~~increased approximately ~~$48~~$38 million, ~~while foreclosed~~ and ~~surplus real estate (“ORE”)~~up $9 million compared to December 31, 2016. Most of the increase in nonperforming loans linked quarter was in nonenergy commercial, with approximately $13 million of the increase in the energy portfolio. ORE and other foreclosed assets ~~decreased~~increased approximately ~~$2 million.~~$3 million in the third quarter of 2017, due mostly to the transfer of consolidated bank-owned facilities. Nonperforming assets as a percent of total loans, ORE and other foreclosed assets was ~~1.79%~~2.06% at ~~March 31,~~September 30, 2017, ~~down 46~~up 18 bps from June 30, 2017. This ratio was at 2.25% at December 31, 2016 and ~~down 13 bps from March 31,~~2.06% at September 30, 2016.

Short-term liquidity assets are held to ensure funds are available to meet the cash flow needs of both borrowers and depositors. Short-term liquidity investments, including interest-bearing bank deposits and federal funds sold, were ~~$51~~$112 million at ~~March 31,~~September 30, 2017. This ~~total was down $27~~represents a decrease of $15 million and $17 million from ~~the prior quarter~~June 30, 2017 and ~~down $100 million from March 31, 2016.~~September 30, 2016, respectively. These assets are highly volatile on a daily basis depending upon movement in customer loan and deposit accounts. Average short-term investments of ~~$408~~$195 million for the ~~first~~third quarter of 2017 were ~~up $242~~down $510 million compared to the ~~fourth~~second quarter of ~~2016, but~~2017, and down ~~$111~~$233 million compared to the ~~first~~third quarter of 2016. Year-to-date average short-term investments were $435 million, a decrease of $17 million from the same period in 2016. See the Liquidity section above for further discussion regarding the Company’s management of its short-term investment portfolio and ~~its~~the impact ~~on the Company’s~~upon its liquidity in general.

Total deposits were ~~$19.9~~$21.5 billion at ~~March 31,~~September 30, 2017, up ~~$498~~$91 million, or 3%less than 1% from ~~December 31, 2016,~~June 30, 2017, and up ~~$1.3~~$2.6 billion, or 7%14%, from ~~March 31,~~September 30, 2016. Average deposits for the ~~first~~third quarter of 2017 were ~~$19.2~~$21.3 billion, up ~~$336~~$417 million, or 2%, from the ~~fourth~~second quarter of ~~2016~~2017 and up ~~$1.0~~$2.6 billion, or 5%14%, from the ~~first~~third quarter of 2016. The deposits assumed in the FNBC ~~transaction added $398 million to deposits during the first quarter and approximately $90 million to the quarter-to-date average. The FNBC transaction and greater utilization~~transactions made up $1.6 billion of the ~~Company’s brokered~~increase in both deposits ~~program accounted for most of~~and average deposits over the ~~growth in deposits compared to year end. Because of seasonality throughout the year, year-over-year comparisons of deposit levels are more useful than those compared to the prior~~third quarter especially at year end when deposits level are typically higher, due in part to public fund deposits of tax collections. Deposit growth initiatives that were implemented during 2015 continue to have a positive impact on deposit levels.2016.

Noninterest-bearing demand deposits were ~~$7.7~~$7.9 billion at ~~March 31,~~September 30, 2017, up ~~$64~~$9 million, or less than 1%, linked quarter, and ~~were up $614~~$353 million, ~~year-over-year.~~or 5%, year over year. The FNBC ~~transaction~~transactions added ~~$46.2 million in~~ noninterest-bearing demand deposits inof $259 million, compared to the ~~first~~third quarter of ~~2017.~~2016. Noninterest-bearing demand deposits comprised ~~38.8%~~37% of total deposits at ~~March 31,~~September 30, 2017 ~~compared to 39.4%~~and June 30, 2017, and 40% at ~~December 31, 2016, and 38.1% at March 31,~~September 30, 2016. ~~Net active noninterest-bearing accounts increased by almost 3,000 in the first quarter of 2017 compared to less than 1,000 in the first quarter of 2016.~~

Interest-bearing transaction and savings accounts of ~~$7.2~~$7.9 billion at ~~March 31,~~September 30, 2017 ~~increased $252~~decreased $509 million, or 4%6%, compared to June 30, 2017 and $1.3 billion, or 19%, compared to September 30, 2016. The majority of the ~~fourth~~increase over the third quarter of ~~2016. Deposits assumed in~~2016 was related to the FNBC ~~transaction added $330 million to this category, while the first quarter saw some declines in commercial money market balances.~~ transactions.

Interest-bearing public fund deposits totaled ~~$2.6~~$2.8 billion at ~~March 31,~~September 30, 2017, ~~up slightly from December 31, 2016. This category was up $442~~down $225 million, or ~~21%~~9% from June 30, 2017 and up $368 million, or 15% compared to ~~March 31,~~September 30, 2016. Time deposits other than public funds totaled ~~$2.4~~$3.0 billion at ~~March 31, 2017. The $150~~September 30, 2017 up $366 million ~~increase~~ from ~~December 31, 2016 was primarily due to~~June 30, 2017, which includes an increase in brokered ~~CDs.~~CD’s of $317 million.

At ~~March 31,~~September 30, 2017, short-term borrowings totaled ~~$2.1~~$1.7 billion, ~~up $897~~down $74 million from ~~December 31, 2016,~~June 30, 2017, as FHLB borrowings ~~increased $796~~decreased $28 million, and securities sold under agreements to repurchase increased ~~$87 million, or 24%. Year over year, short-term~~$30 million. Short-term borrowings increased ~~$1.0 billion, primarily~~$661 million from September 30, 2016, due to both an increase in the Company’s FHLB ~~borrowings.~~ borrowings and the assumption of $511 million in short-term FHLB borrowings as part of the FNBC I transaction. The Company used a portion of the excess liquidity acquired in the FNBC II transaction to pay down FHLB debt.

Average quarter-to-date short-term borrowings of ~~$2.1~~$1.9 billion in the ~~first~~third quarter of 2017 were ~~up $760~~down $323 million, or ~~56%~~14% compared to the ~~fourth~~second quarter of ~~2016,~~2017, and up ~~$562~~$543 million, or ~~36%~~40% compared to the ~~first~~third quarter of 2016. ~~The increased borrowings reflect the funding needs related to the loans acquired in the FNBC transaction and organic growth in the loan portfolio.~~ Customer repurchase agreements and FHLB borrowings are the major sources of short-term borrowings. Customer repurchase agreements are offered mainly to commercial customers to assist them with their cash management strategies or to provide a temporary investment vehicle for their excess liquidity pending redeployment for corporate or investment purposes. While customer repurchase agreements provide a recurring source of funds to the Bank, the amounts available over time can be volatile. FHLB borrowings are funds from the Federal Home Loan Bank that are collateralized by single family and commercial real estate loans included in the ~~bank’s~~Bank’s loan portfolio, subject to specific criteria.

At September 30, 2017, long-term debt totaled $331 million, down $77 million from June 30, 2017. The Company was in compliance with all contractual covenants, as amended, related to long-term debt as of September 30, 2017.

In the normal course of business, the Bank enters into financial instruments, such as commitments to extend credit and letters of credit, to meet the financing needs of their customers. Such instruments are not reflected in the accompanying consolidated financial statements until they are funded, although they expose the Bank to varying degrees of credit risk and interest rate risk in much the same way as funded loans. Under regulatory capital guidelines, the Company must include unfunded commitments meeting certain criteria in its risk-weighted capital calculation.

Commitments to extend credit include revolving commercial credit lines, nonrevolving loan commitments issued mainly to finance the acquisition and development or construction of real property or equipment, and credit card and personal credit lines. The availability of funds under commercial credit lines and loan commitments generally depends on whether the borrower continues to

meet credit standards established in the underlying contract and has not violated other contractual conditions. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. Credit card and personal credit lines are generally subject to cancellation if the borrower’s credit quality deteriorates. A number of commercial and personal credit lines are used only partially or, in some cases, not at all before they expire, and the total commitment amounts do not necessarily represent future cash requirements of the Company.

A substantial majority of the letters of credit are standby agreements that obligate the Bank to fulfill a customer’s financial commitments to a third party if the customer is unable to perform. The Bank issues standby letters of credit primarily to provide credit enhancement to its customers’ other commercial or public financing arrangements and to help them demonstrate financial capacity to vendors of essential goods and services.

The contract amounts of these instruments reflect the Company's exposure to credit risk. The Company undertakes the same credit evaluation in making loan commitments and assuming conditional obligations as it does for on-balance sheet instruments and may require collateral or other credit support.

The following table shows the commitments to extend credit and letters of credit at ~~March 31,~~September 30, 2017 according to expiration date.



													Expiration Date
			Expiration Date
			Less than		1-3		3-5		More than				Less than		1-3		3-5		More than
(in thousands)	Total		1 year		years		years		5 years		Total		1 year		years		years		5 years
Commitments to extend credit	$	6,294,528	$	2,836,701	$	1,679,376	$	895,677	$	882,774	$	6,651,407	$	2,991,344	$	1,571,652	$	1,177,179	$	911,232
Letters of credit		352,001		255,405		77,356		19,240		—		356,374		310,052		35,539		10,651		132
Total	$	6,646,529	$	3,092,106	$	1,756,732	$	914,917	$	882,774	$	7,007,781	$	3,301,396	$	1,607,191	$	1,187,830	$	911,364

There were no material changes or developments with respect to methodologies that the Company uses when applying what management believes are critical accounting policies and developing critical accounting estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and with those generally practiced within the banking industry which require 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, and the resulting estimates form the basis for making judgments about the carrying values of certain assets and liabilities not readily apparent from other sources. Actual results could differ significantly from those estimates.

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

This report 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. Forward looking statements that we may make include statements regarding balance sheet and revenue growth, the provision for loans losses, loan growth expectations, management’s predictions about charge-offs for loans, including energy-related credits, the impact of changes in oil and gas prices on our energy portfolio, and the downstream impact on businesses that support the energy sector, especially in the Gulf Coast region, the impact of the FNBC transaction on our performance and financial condition, deposit trends, credit quality trends, net interest margin trends, future expense levels, success of revenue-generating initiatives, projected tax rates, future profitability, improvements in expense to revenue (efficiency) ratio, purchase accounting impacts such as accretion levels, possible repurchases of shares under stock buyback

programs, and the financial impact of regulatory requirements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “forecast,” “goals,” “targets,” “initiatives,” “focus,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events.

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward looking statements. Additional factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016 and in other periodic reports that we file with the SEC.

Our net income is materially dependent on net interest income. The Company’s primary market risk is interest rate risk which stems from uncertainty with respect to absolute and relative levels of future market interest rates that affect our financial products and services. In order to manage the exposures to interest rate risk, management measures the sensitivity of net interest income and cash flows under various market interest rate scenarios, establishes interest rate risk management policies and implements asset/liability management strategies designed to produce a relatively stable net interest margin under varying rate environments.

The Company measures its interest rate sensitivity primarily by running various net interest income simulations. The Company’s balance sheet is asset sensitive over a two-year period due to a larger volume of rate sensitive assets than rate sensitive liabilities. The model measures annual net interest income sensitivity relative to a base case scenario and incorporates assumptions regarding balance sheet growth and the mix of earning assets and funding sources as well as pricing, ~~re-pricing~~repricing and maturity characteristics of the existing and projected balance sheet.

The table below presents the results of simulations run as of ~~March 31,~~September 30, 2017 for year 1 and year 2, assuming the indicated instantaneous and sustained parallel shift in the yield curve at the measurement date. The results demonstrate an increase in net interest income as rates rise and a decline should rates fall as compared to the stable rate environment assumed for the base case.

Note: Decrease in interest rates limited to 50100 basis points in the current rate environment

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, 2016 included in our Annual Report on Form 10-K for the year ended December 31, 2016.

In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~March 31,~~September 30, 2017, the Company’s disclosure controls and procedures were effective.

Our management, including the Chief Executive Officer and Chief Financial Officer, identified no change in our internal control over financial reporting that occurred during the ~~three-month~~three month period ended ~~March 31,~~September 30, 2017, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

The Company, including subsidiaries, is party to various legal proceedings arising in the ordinary course of business. We do not believe that loss contingencies, if any, arising from pending litigation and regulatory matters will have a material adverse effect on our consolidated financial position or liquidity.

There were no changes to the risk factors that were previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.

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.~~Proceeds

~~There were no purchases made by the issuer or any affiliated purchaser of the issuer’s equity securities for the three months ended March 31, 2017.~~None.

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.



Securities Held to Maturity
(in thousands)	March 31, 2017								December 31, 2016
			Gross		Gross						Gross		Gross
	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
US Treasury and government agency securities	$	50,000	$	—	$	55	$	49,945	$	50,000	$	—	$	44	$	49,956
Municipal obligations		734,075		3,345		17,604		719,816		648,093		2,147		20,175		630,065
Residential mortgage-backed securities		830,522		3,481		1,980		832,023		862,162		4,329		3,068		863,423
Commercial mortgage-backed securities		75,722		—		4,348		71,374		75,739		—		4,038		71,701
Collateralized mortgage obligations		812,193		1,588		9,519		804,262		864,226		1,420		10,674		854,972
	$	2,502,512	$	8,414	$	33,506	$	2,477,420	$	2,500,220	$	7,896	$	37,999	$	2,470,117

The following table provides a breakout of the Company’s allowance for loan losses for the energy portfolio, allocated by sector at March 31, 2017.

(in millions)	Outstanding Balance		Allocated Allowance for Loan and Lease Losses		Allowance for Loan and Lease Losses as a % of Loans
Upstream (reserve-based lending)	$	425	$	21.2		5.0	%
Midstream		81		2.7		3.3
Support - drilling		166		14.4		8.6
Support - nondrilling		617		45.4		7.4
Total	$	1,289	$	83.7		6.5	%



Net Interest Income (te) at Risk
	Estimated
Change in	increase (decrease)
interest rate	in net interest income (te)
(basis points)	Year 1		Year 2
(50)	(0.63)	%	(1.33)	%
+100	2.69	%	2.70	%
+200	5.36	%	5.09	%
+300	7.52	%	6.72	%



Exhibit		Filed	Incorporated by Reference
Number	Description	Herewith	Form	Exhibit	Filing Date
2.1	Purchase Agreement by and between Whitney Bank and First NBC Bank		8-K	1.1	1/1/2017
3.1	Composite Articles of the Company		10-K	3.1	2/24/2017
3.2	Amended and Restated Bylaws		10-K	3.2	2/24/2017
10.1	First Amendment to Credit Agreement and Waiver		10-Q	10.4	5/9/2016
10.2	Form of Performance Stock Award Agreement (TSR) (approved in 2017)	X
10.3	Form of Performance Stock Award Agreement (EPS) (approved in 2017)	X
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101	XBRL Interactive Data.	X


	Hancock Holding Company

	By:	/s/ John M. Hairston
		John M. Hairston
		President & Chief Executive Officer
		(Principal Executive Officer)

		/s/ Michael M. Achary
		Michael M. Achary
		Chief Financial Officer
		(Principal Financial Officer)

	Date:	~~May 5,~~November 7, 2017