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 ~~June~~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.

~~84,742,940~~85,180,800 common shares were outstanding as of ~~August 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) – ~~June~~September 30, 2017 ~~(unaudited)~~ and December 31, 2016		5
	Consolidated Statements of Income (unaudited) – Three and ~~Six months ended June~~Nine Months Ended September 30, 2017 and 2016		6
	Consolidated Statements of Comprehensive Income (unaudited) – Three and ~~Six months ended June~~Nine Months Ended September 30, 2017 and 2016		7
	Consolidated Statements of Changes in Stockholders’ Equity - (unaudited) – ~~Six months ended June~~Nine Months Ended September 30, 2017 and 2016		8
	Consolidated Statements of Cash Flows (unaudited) - ~~Six months ended June~~Nine Months Ended September 30, 2017 and 2016		9
	Notes to Consolidated Financial Statements (unaudited) – ~~June~~September 30, 2017		10
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		38 35
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk		60 58
ITEM 4.	Controls and Procedures		61 59
Part II. Other Information
ITEM 1.	Legal Proceedings		61 59
ITEM 1A.	Risk Factors		61 59
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		61 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		62 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

Table of Contents

~~SEC~~ ~~– U.S. Securities and Exchange Commission~~

Securities Act – Securities Act of 1933, as amended

te – 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)



	June 30,		December 31,		September 30,		December 31,
(in thousands, except share data)	2017		2016
(in thousands, except per share data)					2017		2016
ASSETS
Cash and due from banks	$	365,225	$	372,689	$	333,775	$	372,689
Interest-bearing bank deposits		125,577		77,235		105,428		77,235
Federal funds sold		851		942		6,297		942
Securities available for sale, at fair value (amortized cost of $2,824,787 and $2,562,000)		2,794,382		2,516,908
Securities held to maturity (fair value of $2,866,529 and $2,470,117)		2,874,454		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		26,787		34,064		23,236		34,064
Loans		18,473,841		16,752,151		18,786,285		16,752,151
Less: allowance for loan losses		(221,865)		(229,418)		(223,122)		(229,418)
Loans, net		18,251,976		16,522,733		18,563,163		16,522,733
Property and equipment, net of accumulated depreciation of $237,304 and $231,127		365,345		361,612
Property and equipment, net of accumulated depreciation of $226,410 and $231,127						365,145		361,612
Prepaid expenses		24,985		18,038		25,084		18,038
Other real estate, net		17,996		18,884		21,154		18,884
Accrued interest receivable		75,787		65,887		78,011		65,887
Goodwill		740,265		621,193		739,403		621,193
Other intangible assets, net		101,694		87,757		96,525		87,757
Life insurance contracts		536,912		480,406		539,232		480,406
FDIC loss share receivable		3,234		16,219		—		16,219
Deferred tax asset, net		89,882		104,435		83,615		104,435
Other assets		235,217		176,080		212,135		176,080
Total assets	$	26,630,569	$	23,975,302	$	26,816,755	$	23,975,302
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing	$	7,887,867	$	7,658,203	$	7,896,384	$	7,658,203
Interest-bearing		13,554,948		11,766,063		13,637,475		11,766,063
Total deposits		21,442,815		19,424,266		21,533,859		19,424,266
Short-term borrowings		1,810,907		1,225,406		1,737,151		1,225,406
Long-term debt		407,876		436,280		331,179		436,280
Accrued interest payable		8,024		9,574		9,014		9,574
Other liabilities		146,985		160,008		342,277		160,008
Total liabilities		23,816,607		21,255,534		23,953,480		21,255,534
Stockholders' equity
Common stock		291,358		291,358		291,358		291,358
Capital surplus		1,716,584		1,698,253		1,721,477		1,698,253
Retained earnings		910,459		850,689		948,591		850,689
Accumulated other comprehensive loss, net		(104,439)		(120,532)		(98,151)		(120,532)
Total stockholders' equity		2,813,962		2,719,768		2,863,275		2,719,768
Total liabilities and stockholders' equity	$	26,630,569	$	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		84,738		84,235		84,767		84,235



	Three months ended				Six months ended
	June 30,				June 30,				Three Months Ended				Nine Months Ended
									September 30,				September 30,
(in thousands, except per share data)	2017		2016		2017		2016		2017		2016		2017		2016
Interest income:
Loans, including fees	$	194,180	$	156,717	$	366,961	$	310,830	$	199,702	$	155,761	$	566,663	$	466,591
Loans held for sale		236		249		453		408		216		323		669		731
Securities-taxable		24,402		23,049		47,769		47,006		26,616		21,782		74,385		68,788
Securities-tax exempt		5,628		3,011		11,035		4,813		5,608		3,780		16,643		8,593
Short-term investments		1,731		480		2,474		1,090		574		507		3,048		1,597
Total interest income		226,177		183,506		428,692		364,147		232,716		182,153		661,408		546,300
Interest expense:
Deposits		18,364		12,603		31,183		24,336		21,789		12,590		52,972		36,926
Short-term borrowings		4,232		909		7,173		1,902		4,425		1,040		11,598		2,942
Long-term debt		3,864		5,025		8,928		10,104		3,645		5,010		12,573		15,114
Total interest expense		26,460		18,537		47,284		36,342		29,859		18,640		77,143		54,982
Net interest income		199,717		164,969		381,408		327,805		202,857		163,513		584,265		491,318
Provision for loan losses		14,951		17,196		30,942		77,232		13,040		18,972		43,982		96,204
Net interest income after provision for loan losses		184,766		147,773		350,466		250,573		189,817		144,541		540,283		395,114
Noninterest income:
Service charges on deposit accounts		20,061		18,394		39,267		36,777		21,444		18,716		60,711		55,493
Trust fees		11,506		12,089		22,717		23,313		10,742		11,512		33,459		34,825
Bank card and ATM fees		13,687		11,954		26,155		23,302		13,390		11,808		39,545		35,110
Investment and annuity fees		5,271		5,043		9,870		9,976		5,570		4,289		15,440		14,265
Secondary mortgage market operations		4,241		4,176		7,808		7,088		4,157		4,917		11,965		12,005
Insurance commissions and fees		1,174		1,240		1,839		2,547		660		1,088		2,499		3,635
Amortization of FDIC loss share receivable		(1,327)		(1,526)		(2,427)		(3,139)		—		(1,539)		(2,427)		(4,678)
Other income		12,874		11,556		25,749		20,902		11,152		11,866		36,901		32,768
Securities transactions		—		768		—		1,114		—		351		—		1,465
Total noninterest income		67,487		63,694		130,978		121,880		67,115		63,008		198,093		184,888
Noninterest expense:
Compensation expense		82,145		70,233		155,244		143,234		82,242		70,290		237,486		213,524
Employee benefits		15,500		14,004		31,520		29,718		12,499		12,873		44,019		42,591
Personnel expense		97,645		84,237		186,764		172,952		94,741		83,163		281,505		256,115
Net occupancy expense		13,080		10,394		23,837		20,750		12,448		10,068		36,285		30,818
Equipment expense		3,964		3,080		7,678		6,854		3,779		3,349		11,457		10,203
Data processing expense		16,798		14,370		32,195		28,577		16,798		14,590		48,993		43,167
Professional services expense		10,353		7,712		21,629		15,333		10,062		6,584		31,691		21,917
Amortization of intangibles		5,757		5,005		10,462		10,129		6,070		4,886		16,532		15,015
Telecommunications and postage		3,738		3,272		7,205		6,633		3,876		3,284		11,081		9,917
Deposit insurance and regulatory fees		6,983		6,049		13,473		11,446		7,883		5,969		21,356		17,415
Other real estate (income) expense, net		(2,515)		350		(2,528)		1,118		199		(5,214)		(2,329)		(4,096)
Other expense		27,667		16,473		46,297		33,182		21,760		22,379		68,057		55,561
Total noninterest expense		183,470		150,942		347,012		306,974		177,616		149,058		524,628		456,032
Income before income taxes		68,783		60,525		134,432		65,479		79,316		58,491		213,748		123,970
Income taxes		16,516		13,618		33,151		14,733		20,414		11,772		53,565		26,505
Net income	$	52,267	$	46,907	$	101,281	$	50,746	$	58,902	$	46,719	$	160,183	$	97,465
Earnings per common share-basic	$	0.60	$	0.59	$	1.17	$	0.64	$	0.68	$	0.59	$	1.85	$	1.23
Earnings per common share-diluted	$	0.60	$	0.59	$	1.17	$	0.64	$	0.68	$	0.59	$	1.85	$	1.23
Dividends paid per share	$	0.24	$	0.24	$	0.48	$	0.48	$	0.24	$	0.24	$	0.72	$	0.72
Weighted average shares outstanding-basic		84,614		77,523		84,489		77,512		84,749		77,550		84,577		77,525
Weighted average shares outstanding-diluted		84,867		77,680		84,755		77,676		84,980		77,677		84,818		77,653



	Three months ended				Six months ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
(in thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Net income	$	52,267	$	46,907	$	101,281	$	50,746	$	58,902	$	46,719	$	160,183	$	97,465
Other comprehensive income:
Net change in unrealized gain on securities available for sale and hedges		12,661		16,629		13,845		45,601
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		1,718		711		3,105		1,802		1,374		1,158		4,479		2,960
Valuation adjustment for pension plan amendment		17,315		—		17,315		—		—		—		17,315		—
Other valuation adjustments for employee benefit plan		(10,782)		—		(10,782)		—
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		1,099		830		1,749		1,628		977		1,108		2,726		2,736
Other comprehensive income before income taxes		22,011		18,170		25,232		49,031
Income tax expense		7,938		6,645		9,139		17,977
Other comprehensive income net of income taxes		14,073		11,525		16,093		31,054
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	$	66,340	$	58,432	$	117,374	$	81,800	$	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	—		—		—		50,746		—		50,746	—		—		—		97,465		—		97,465
Other comprehensive income	—		—		—		—		31,054		31,054	—		—		—		—		24,906		24,906
Comprehensive income	—		—		—		50,746		31,054		81,800	—		—		—		97,465		24,906		122,371
Cash dividends declared ($0.48 per common share)	—		—		—		(38,238)		—		(38,238)
Cash dividends declared ($0.72 per common share)												—		—		—		(57,349)		—		(57,349)
Common stock activity, long-term incentive plan	—		—		6,624		—		—		6,624	2		6		10,135		—		—		10,141
Issuance of stock from dividend reinvestment	—		—		36		—		—		36	—		—		821		—		—		821
Balance, June 30, 2016	87,491	$	291,346	$	1,431,108	$	790,452	$	(49,541)	$	2,463,365
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	—		—		—		101,281		—		101,281	—		—		—		160,183		—		160,183
Other comprehensive income	—		—		—		—		16,093		16,093	—		—		—		—		22,381		22,381
Comprehensive income	—		—		—		101,281		16,093		117,374	—		—		—		160,183		22,381		182,564
Cash dividends declared ($0.48 per common share)	—		—		—		(41,594)		—		(41,594)
Cash dividends declared ($0.72 per common share)												—		—		—		(62,400)		—		(62,400)
Common stock activity, long-term incentive plan	—		—		16,801		83		—		16,884	—		—		20,910		119		—		21,029
Issuance of stock from dividend reinvestment and stock purchase plan	—		—		1,530		—		—		1,530	—		—		2,314		—		—		2,314
Balance, June 30, 2017	87,495	$	291,358	$	1,716,584	$	910,459	$	(104,439)	$	2,813,962
Balance, September 30, 2017												87,495	$	291,358	$	1,721,477	$	948,591	$	(98,151)	$	2,863,275



	Six months ended				Nine Months Ended
	June 30,				September 30,
(in thousands)	2017		2016		2017		2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	101,281	$	50,746	$	160,183	$	97,465
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13,960		14,344		20,942		21,350
Provision for loan losses		30,942		77,232		43,982		96,204
(Gain) loss on other real estate owned		(2,408)		127
Gain on other real estate owned						(1,865)		(5,145)
Deferred tax expense (benefit)		5,415		(10,663)		8,072		(14,713)
Increase in cash surrender value of life insurance contracts		(7,430)		(5,384)		(10,855)		(8,807)
Loss (gain) on disposal of other assets		1,455		(4,690)
Net decrease (increase) in loans held for sale		8,177		(21,170)
(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		14,944		12,905		24,119		20,836
Amortization of intangible assets		10,462		10,129		16,532		15,015
Amortization of FDIC indemnification asset		2,427		3,139		2,427		4,678
Stock-based compensation expense		8,360		7,164		12,370		10,555
Decrease in interest payable and other liabilities		(24,405)		(2,683)
Net payments to FDIC for loss share claims		(935)		(159)
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		8,613		7,426		8,613		3,487
Increase in payable to FDIC for loan servicing						180,882		—
Decrease in other assets		8,259		37,117		11,446		40,693
Other, net		3,595		2,525		17,723		6,572
Net cash provided by operating activities		182,712		178,105		505,078		268,988
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale		213,877		102,335		213,877		141,716
Proceeds from maturities of securities available for sale		157,290		186,790		249,270		298,810
Purchases of securities available for sale		(425,096)		(461,139)		(578,690)		(720,241)
Proceeds from maturities of securities held to maturity		174,662		190,721		276,073		307,633
Purchases of securities held to maturity		(554,442)		(282,190)		(554,442)		(371,657)
Net decrease in short-term investments		317,042		412,396		331,746		436,635
Proceeds from sales of loans		—		106,660		—		166,922
Net increase in loans		(385,823)		(470,732)		(725,228)		(591,696)
Purchase of life insurance contracts		(50,000)		(40,000)		(50,000)		(40,000)
Purchases of property and equipment		(12,649)		(3,950)		(16,086)		(10,817)
Proceeds from sales of property and equipment		16		671		389		677
Proceeds from sales of other real estate		12,311		8,995		15,357		20,709
Net cash paid for FNBC I acquisition		(322,708)		—		(322,708)		—
Net cash received for FNBC II acquisition		798,367		—		799,509		—
Other, net		(38,414)		2,989		(28,976)		(3,651)
Net cash used in investing activities		(115,567)		(246,454)		(389,909)		(364,960)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits		90,040		467,973		181,084		536,581
Net decrease in short-term borrowings		(11,134)		(328,537)		(84,890)		(347,688)
Repayments of long-term debt		(121,837)		(28,836)		(198,690)		(16,796)
Net proceeds from issuance of long-term debt		83		5,885		124		6,796
Dividends paid		(41,594)		(38,238)		(62,400)		(57,349)
Cash paid for taxes with forfeited shares of stock		(3,124)		(380)
Taxes paid related to net share settlement of equity awards						(3,235)		(444)
Proceeds from exercise of stock options		11,427		36		11,610		49
Proceeds from dividend reinvestment and stock purchase plan		1,530		—		2,314		821
Net cash (used in) provided by financing activities		(74,609)		77,903
Net cash provided by (used in) financing activities						(154,083)		121,970
NET (DECREASE) INCREASE IN CASH AND DUE FROM BANKS		(7,464)		9,554		(38,914)		25,998
CASH AND DUE FROM BANKS, BEGINNING		372,689		303,874		372,689		303,874
CASH AND DUE FROM BANKS, ENDING	$	365,225	$	313,428	$	333,775	$	329,872
SUPPLEMENTAL INFORMATION FOR NON-CASH
INVESTING AND FINANCING ACTIVITIES
Assets acquired in settlement of loans	$	2,855	$	10,526	$	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. 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. 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”), referred to as the 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 ~~signed~~entered into a purchase and assumption agreement with the FDIC, ~~to acquire certain additional assets and liabilities of FNBC,~~ 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 ~~operations of FNBC’s~~to operate its 29 branch locations (24 in Louisiana and five in Florida) ~~and acquired select assets and assumed select liabilities, including substantially all of~~. Whitney also had the transaction and savings deposits. Whitney paid a premium of $35 million to the FDIC for the earnings stream acquired and received $798 million in cash ($640 million in preliminary settlements for the net liabilities assumed and $158 million in branch cash acquired).

~~Under the FNBC II purchase and assumption agreement, Whitney had an~~ 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, subject to FDIC approval.~~transaction. This option was exercised for seven ~~branches and will add additional acquired assets from this transaction in the third quarter~~branch locations. Whitney paid a premium of ~~2017. A final cash settlement with~~$35 million to the FDIC ~~is expected to occur~~for the earnings stream acquired and received approximately $800 million in cash ($642 million from the ~~second half of 2017.~~FDIC for the net liabilities assumed and $158 million in branch cash acquired).

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

Table of Contents

The following table sets forth the preliminary acquisition date ~~preliminary~~ fair value of the assets acquired and liabilities 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.


		FNBC I		FNBC II				FNBC I		FNBC II
(in thousands)		March 10, 2017		April 28, 2017		Total		March 10, 2017		April 28, 2017		Total
ASSETS
Cash and due from banks	$	2,856	$	157,932	$	160,788	$	2,856	$	157,932	$	160,788
Interest-bearing time deposits with other banks		—		382,622		382,622		—		382,622		382,622
Fed funds sold and other short-term investments		—		148		148		—		148		148
Securities		—		213,877		213,877		—		213,877		213,877
Total loans		1,211,523		165,577		1,377,100		1,211,523		165,577		1,377,100
Property and equipment		11,837		500		12,337		11,837		8,988		20,825
Accrued interest receivable		2,969		885		3,854		2,969		885		3,854
Identifiable intangible assets		3,900		20,500		24,400		3,900		21,400		25,300
Other assets		63		4,097		4,160		63		4,150		4,213
Total identifiable assets		1,233,148		946,138		2,179,286		1,233,148		955,579		2,188,727

LIABILITIES
Deposits		398,171		1,530,338		1,928,509		398,171		1,530,338		1,928,509
Short-term borrowings		510,749		85,886		596,635		510,749		85,886		596,635
Long-term debt		93,120		—		93,120		93,120		—		93,120
Other liabilities		1,607		3,079		4,686		1,607		3,079		4,686
Total liabilities		1,003,647		1,619,303		2,622,950		1,003,647		1,619,303		2,622,950
Net identifiable assets acquired (liabilities assumed)		229,501		(673,165)		(443,664)		229,501		(663,724)		(434,223)
Consideration
Cash (paid) received		(325,564)		640,435		314,871
Unsettled net consideration receivable from FDIC		—		9,721		9,721
Total consideration		(325,564)		650,156		324,592

Consideration (Paid) Received								(325,564)		641,577		316,013
Goodwill	$	96,063	$	23,009	$	119,072	$	96,063	$	22,147	$	118,210

The loans acquired were recorded at estimated fair value at the acquisition 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 ~~approximately $47.6~~$31.7 million is not expected to be collected. The difference at the acquisition dates between the fair value and the contractual amounts due (the “fair value discount”) of ~~$57.5~~$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 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 ~~$24.4~~$25.3 million that are being amortized using sum of years’ digits over the asset’s life of eight years for the FNBC I transaction and ~~nine~~eleven years for the FNBC II transaction. Goodwill totaling ~~$119~~$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 ~~net~~ 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.

Goodwill for the FNBC I transaction was adjusted by $495,000 in the second quarter of 2017 related to changes to a property valuation. The Company expects to adjust goodwill for the FNBC II transaction as we finalize purchase accounting and complete the final settlement with the FDIC.

The operating results of the Company for the three and ~~six~~nine months ended ~~June~~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 ~~six~~nine months ended ~~June~~September 30, 2017 for both the FNBC I and FNBC II transactions combined. The Company ~~expects~~does not expect to incur any additional merger-related ~~expense~~costs related to the FNBC transactions in ~~the third quarter of 2017.~~any subsequent period.


(in thousands)		Three months ended June 30, 2017		Six months ended June 30, 2017		Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
Personnel expense	$	1,435	$	1,542	$	2,120	$	3,662
Net occupancy and equipment expense		276		277		500		777
Professional services expense		2,200		6,827		2,854		9,681
Data processing expense						929		974
Other real estate		(1,511)		(1,511)		-		(1,511)
Advertising expense		901		1,031		358		1,389
Other expense		713		2,311		2,132		4,398
Total merger-related expenses	$	4,014	$	10,477	$	8,893	$	19,370

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)		June 30, 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
U.S. Treasury and government agency securities		$	76,146	$	—	$	1,306	$	74,840	$	56,751	$	—	$	1,923	$	54,828		$	75,019	$	29	$	1,606	$	73,442	$	56,751	$	—	$	1,923	$	54,828
Municipal obligations			250,598		499		5,941		245,156		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			1,860,644		9,765		16,310		1,854,099		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			449,912		463		17,277		433,098		425,750		—		23,159		402,591			584,503		569		16,719		568,353		425,750		—		23,159		402,591
Collateralized mortgage obligations			183,987		254		552		183,689		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
		$	2,824,787	$	10,981	$	41,386	$	2,794,382	$	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 ~~June~~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
Debt Securities Available for Sale	Amortized		Fair		Cost		Value
(in thousands)	Cost		Value
Due in one year or less	$	7,945	$	7,970	$	5,392	$	5,425
Due after one year through five years		38,273		38,767		46,852		47,394
Due after five years through ten years		997,109		980,311		1,097,850		1,082,709
Due after ten years		1,781,460		1,767,334		1,729,249		1,719,750
Total available for sale debt securities	$	2,824,787	$	2,794,382	$	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	$	9,995	$	10,058	$	10,081	$	10,123
Due after one year through five years		108,634		109,069		108,164		108,726
Due after five years through ten years		851,644		845,017		837,353		833,465
Due after ten years		1,904,181		1,902,385		1,813,676		1,815,834
Total held to maturity securities	$	2,874,454	$	2,866,529
Total held to maturity debt securities					$	2,769,274	$	2,768,148

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

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



Available for Sale
June 30, 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
U.S. Treasury and government agency securities	$	74,308		1,306	$	—	$	—	$	74,308	$	1,306	$	52,866		1,606	$	—	$	—	$	52,866	$	1,606
Municipal obligations		213,557		5,941		—		—		213,557		5,941		145,441		2,286		66,640		2,375		212,081		4,661
Residential mortgage-backed securities		1,315,878		16,245		2,539		65		1,318,417		16,310		1,255,266		11,514		5,360		158		1,260,626		11,672
Commercial mortgage-backed securities		407,937		17,277		—		—		407,937		17,277		465,596		15,366		30,151		1,353		495,747		16,719
Collateralized mortgage obligations		74,282		552		—		—		74,282		552		66,149		201		5,565		153		71,714		354
Equity securities		—		—		—		—		—		—
	$	2,085,962	$	41,321	$	2,539	$	65	$	2,088,501	$	41,386	$	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
U.S. Treasury and government agency securities	$	54,788	$	1,923	$	—	$	—	$	54,788	$	1,923	$	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
Corporate debt securities		—		—		—		—		—
	$	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 fair value and gross unrealized losses for securities classified as held to maturity with unrealized losses for the periods indicated follow.



Held to maturity
June 30, 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
U.S. Treasury and government agency securities	$	49,936	$	64	$	—	$	—	$	49,936	$	64	$	49,938	$	63	$	—	$	—	$	49,938	$	63
Municipal obligations		432,877		9,311		7,204		303		440,081		9,614		275,874		2,975		98,976		4,421		374,850		7,396
Residential mortgage-backed securities		268,110		1,315		—		—		268,110		1,315		254,743		776		—		—		254,743		776
Commercial mortgage-backed securities		73,068		2,637		—		—		73,068		2,637		73,096		2,592		—		—		73,096		2,592
Collateralized mortgage obligations		842,667		7,113		134,129		3,479		976,796		10,592		559,859		3,852		232,697		5,496		792,556		9,348
	$	1,666,658	$	20,440	$	141,333	$	3,782	$	1,807,991	$	24,222	$	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 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.

Proceeds from the sales of securities were approximately $213.9 million with no gross gain or loss and ~~$102.3~~$141.7 million with a gross gain of ~~$1.1~~$1.5 million and no loss for the ~~six~~nine months ended ~~June~~September 30, 2017 and 2016, respectively.

Securities with carrying values totaling $3.6 billion and $3.8 billion at ~~June~~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 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



	June 30,		December 31,		September 30,		December 31,
(in thousands)	2017		2016		2017		2016
Commercial non-real estate	$	8,093,104	$	7,613,917	$	8,129,429	$	7,613,917
Commercial real estate - owner occupied		2,078,332		1,906,821		2,076,014		1,906,821
Total commercial & industrial		10,171,436		9,520,738		10,205,443		9,520,738
Commercial real estate - income producing		2,401,673		2,013,890		2,511,808		2,013,890
Construction and land development		1,313,522		1,010,879		1,373,048		1,010,879
Residential mortgages		2,493,923		2,146,713		2,596,692		2,146,713
Consumer		2,093,287		2,059,931		2,099,294		2,059,931
Total loans	$	18,473,841	$	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 ~~six~~nine months ended ~~June~~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
	Six months ended June 30, 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		—		—		—		—		(58)		(86)		(153)		(297)		—		—		—		—		(77)		(102)		(153)		(332)
Recoveries		2		93		95		—		39		19		71		224		5		110		115		—		49		23		72		259
Net provision for loan losses		(46)		(245)		(291)		(61)		(148)		(10)		(112)		(622)		(27)		(220)		(247)		(54)		(124)		175		(192)		(442)
Decrease in FDIC loss share receivable		(47)		—		(47)		—		—		(2,344)		(135)		(2,526)		(47)		—		(47)		—		—		(2,344)		(135)		(2,526)
Non-purchased credit impaired activity:
Charge-offs		(26,218)		(517)		(26,735)		(160)		(114)		(690)		(15,107)		(42,806)		(35,247)		(527)		(35,774)		(160)		(593)		(2,383)		(22,691)		(61,601)
Recoveries		1,816		243		2,059		398		716		262		3,475		6,910		6,437		337		6,774		655		1,001		316		5,176		13,922
Net provision for loan losses		14,804		1,441		16,245		(146)		343		868		14,254		31,564		15,922		2,776		18,698		540		54		3,988		21,144		44,424
Ending balance	$	137,363	$	12,098	$	149,461	$	13,540	$	7,049	$	23,380	$	28,435	$	221,865	$	134,095	$	13,559	$	147,654	$	14,490	$	6,581	$	25,034	$	29,363	$	223,122
Ending balance:
Allowance:
Individually evaluated for impairment	$	22,758	$	280	$	23,038	$	1,402	$	1	$	172	$	283	$	24,896	$	20,880	$	477	$	21,357	$	1,321	$	1	$	406	$	405	$	23,490
Amounts related to purchased credit impaired loans		395		742		1,137		192		239		12,622		942		15,132		417		784		1,201		199		254		12,795		863		15,312
Collectively evaluated for impairment		114,210		11,076		125,286		11,946		6,809		10,586		27,210		181,837		112,798		12,298		125,096		12,970		6,326		11,833		28,095		184,320
Total allowance	$	137,363	$	12,098	$	149,461	$	13,540	$	7,049	$	23,380	$	28,435	$	221,865	$	134,095	$	13,559	$	147,654	$	14,490	$	6,581	$	25,034	$	29,363	$	223,122
Loans:
Individually evaluated for impairment	$	250,256	$	7,480	$	257,736	$	14,913	$	847	$	3,466	$	1,053	$	278,015	$	271,024	$	6,351	$	277,375	$	14,295	$	480	$	8,942	$	1,306	$	302,397
Purchased credit impaired loans		5,422		9,848		15,270		6,247		4,160		129,198		8,280		163,155		20,186		13,021		33,207		5,353		6,670		123,244		7,637		176,111
Collectively evaluated for impairment		7,837,426		2,061,004		9,898,430		2,380,513		1,308,515		2,361,259		2,083,954		18,032,671		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	$	8,093,104	$	2,078,332	$	10,171,436	$	2,401,673	$	1,313,522	$	2,493,923	$	2,093,287	$	18,473,841	$	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

Six months ended June 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)

(23)

(8)

(78)
Recoveries

8

120

128

2

53

3

106

292
Net provision for loan losses

79

(170)

(91)

26

(117)

1,165

(1,290)

(307)
Decrease in FDIC loss share receivable

39

—

39

—

—

(3,378)

(98)

(3,437)
Non-purchased credit impaired activity:

Charge-offs

(22,212)

(1,199)

(23,411)

(191)

(592)

(592)

(11,268)

(36,054)
Recoveries

1,802

238

2,040

268

1,125

480

3,039

6,952
Net provision for loan losses

61,628

1,857

63,485

6,654

(1,087)

466

8,021

77,539
Ending balance

$
150,772

$
10,676

$
161,448

$
12,799

$
5,006

$
23,474

$
23,359

$
226,086
Ending balance:

Allowance:

Individually evaluated for impairment

$
12,885

$
183

$
13,068

$
72

$
1

$
167

$
41

$
13,349
Amounts related to purchased credit impaired loans

572

1,015

1,587

741

575

15,430

1,257

19,590
Collectively evaluated for impairment

137,315

9,478

146,793

11,986

4,430

7,877

22,061

193,147
Total allowance

$
150,772

$
10,676

$
161,448

$
12,799

$
5,006

$
23,474

$
23,359

$
226,086
Loans:

Individually evaluated for impairment

$
232,785

$
5,898

$
238,683

$
7,803

$
1,247

$
1,068

$
166

$
248,967
Purchased credit impaired loans

10,483

15,428

25,911

10,752

8,761

151,674

12,826

209,924
Collectively evaluated for impairment

6,889,251

1,894,874

8,784,125

2,005,916

870,580

1,864,908

2,051,376

15,576,905
Total loans

$
7,132,519

$
1,916,200

$
9,048,719

$
2,024,471

$
880,588

$
2,017,650

$
2,064,368

$
16,035,796

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.



	June 30,		December 31,		September 30,		December 31,
(in thousands)	2017		2016		2017		2016
Commercial non-real estate	$	167,710	$	249,037	$	188,982	$	249,037
Commercial real estate - owner occupied		11,750		14,413		14,305		14,413
Total commercial & industrial		179,460		263,450		203,287		263,450
Commercial real estate - income producing		13,438		13,954		14,360		13,954
Construction and land development		2,821		4,550		3,292		4,550
Residential mortgages		28,158		23,665		34,674		23,665
Consumer		14,342		12,351		14,063		12,351
Total loans	$	238,219	$	317,970	$	269,676	$	317,970

Nonaccrual loans include nonaccruing loans modified in troubled debt restructurings (“TDRs”) of ~~$96.3~~$119.3 million and $81.9 million at ~~June~~September 30, 2017 and December 31, 2016, respectively. Total TDRs, both accruing and nonaccruing, were ~~$186.8~~$216.0 million as of ~~June~~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 ~~six~~nine months ended ~~June~~September 30, 2017 and ~~June 30, 2016 by portfolio class.~~2016.



	Six months ended												Nine Months Ended
($ in thousands)		June 30, 2017						June 30, 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		37	$	92,976	$	92,976		17	$	57,915	$	57,915		50	$	135,926	$	135,926		17	$	57,915	$	57,915
Commercial real estate - owner occupied		4		3,734		3,734		—		—		—		4		3,734		3,734		—		—		—
Total commercial & industrial		41		96,710		96,710		17		57,915		57,915		54		139,660		139,660		17		57,915		57,915
Commercial real estate - income producing		5		6,486		6,486		—		—		—		5		5,684		5,684		—		—		—
Construction and land development		—		—		—		—		—		—		—		—		—		—		—		—
Residential mortgages		6		1,098		1,098		4		432		432		13		2,068		2,068		6		532		532
Consumer		1		40		42		—		—		—		1		40		42		—		—		—
Total loans		53	$	104,334	$	104,336		21	$	58,347	$	58,347		73	$	147,452	$	147,454		23	$	58,447	$	58,447

The TDRs modified during the ~~six~~nine months ended ~~June~~September 30, 2017 reflected in the table above include ~~$28.4~~$96.1 million of loans with extended amortization terms or other payment concessions, ~~$40.2~~$50.1 million of loans with significant covenant waivers and ~~$35.7~~$1.3 million with other modifications. The TDRs modified during the ~~six~~nine months ended ~~June~~September 30, 2016 include ~~$31.0~~$43.4 million of loans with extended amortization terms or other payment concessions, $14.7 million of loans with significant covenant waivers and ~~$27.3~~$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 six months ended June 30, 2017 or 2016.~~ modification.

The tables below present loans that are individually evaluated for impairment disaggregated by portfolio class at ~~June~~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.



	June 30, 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	$	107,555	$	142,701	$	260,544	$	22,758	$	92,583	$	178,441	$	276,879	$	20,880
Commercial real estate - owner occupied		3,514		3,966		7,570		280		3,599		2,752		6,353		477
Total commercial & industrial		111,069		146,667		268,114		23,038		96,182		181,193		283,232		21,357
Commercial real estate - income producing		5,678		9,235		15,349		1,402		5,160		9,135		14,451		1,321
Construction and land development		831		16		1,820		1		464		16		1,445		1
Residential mortgages		2,338		1,128		3,984		172		6,311		2,630		11,961		406
Consumer		1		1,052		1,055		283		1		1,305		1,308		405
Total loans	$	119,917	$	158,098	$	290,322	$	24,896	$	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 ~~six~~nine months ended ~~June~~September 30, 2017 and 2016. Interest income recognized represents interest on accruing loans modified in a TDR.



	Three months ended								Three Months Ended
	June 30, 2017				June 30, 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	$	241,122	$	597	$	216,907	$	493	$	260,640	$	872	$	233,913	$	155
Commercial real estate - owner occupied		5,687		18		5,959		14		6,916		24		6,374		10
Total commercial & industrial		246,809		615		222,866		507		267,556		896		240,287		165
Commercial real estate - income producing		14,257		34		8,242		22		14,604		35		7,729		24
Construction and land development		1,219		—		7,660		—		663		1		1,655		—
Residential mortgages		3,352		3		976		2		6,204		7		2,466		3
Consumer		1,601		3		112		1		1,179		4		826		2
Total loans	$	267,238	$	655	$	239,856	$	532	$	290,206	$	943	$	252,963	$	194

The tables below present the age analysis of past due loans by portfolio class at ~~June~~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
June 30, 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	$	27,751	$	27,974	$	91,987	$	147,712	$	7,945,392	$	8,093,104	$	13,088	$	31,634	$	3,880	$	104,334	$	139,848	$	7,989,581	$	8,129,429	$	24,400
Commercial real estate - owner occupied		4,532		1,189		6,321		12,042		2,066,290		2,078,332		424		18,579		303		8,950		27,832		2,048,182		2,076,014		767
Total commercial & industrial		32,283		29,163		98,308		159,754		10,011,682		10,171,436		13,512		50,213		4,183		113,284		167,680		10,037,763		10,205,443		25,167
Commercial real estate - income producing		3,369		2,319		5,040		10,728		2,390,945		2,401,673		1,989		1,540		3,731		5,676		10,947		2,500,861		2,511,808		2,907
Construction and land development		6,250		619		1,980		8,849		1,304,673		1,313,522		—		5,018		1,031		2,861		8,910		1,364,138		1,373,048		417
Residential mortgages		25,433		12,208		22,088		59,729		2,434,194		2,493,923		2,801		39,081		10,575		24,415		74,071		2,522,621		2,596,692		41
Consumer		15,764		5,843		7,600		29,207		2,064,080		2,093,287		88		15,574		7,426		7,710		30,710		2,068,584		2,099,294		318
Total	$	83,099	$	50,152	$	135,016	$	268,267	$	18,205,574	$	18,473,841	$	18,390	$	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 ~~June~~September 30, 2017 and December 31, 2016.



	June 30, 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	$	6,897,989	$	1,859,185	$	8,757,174	$	2,214,329	$	1,233,082	$	12,204,585	$	6,941,591	$	1,840,553	$	8,782,144	$	2,327,685	$	1,278,648	$	12,388,477
Pass-Watch		298,254		55,146		353,400		117,247		58,024		528,671		345,073		83,808		428,881		107,568		73,538		609,987
Special Mention		215,373		43,219		258,592		13,840		7,591		280,023		122,023		41,270		163,293		12,802		7,484		183,579
Substandard		678,032		120,782		798,814		56,247		14,825		869,886		717,436		110,383		827,819		63,744		13,378		904,941
Doubtful		3,456		—		3,456		10		—		3,466		3,306		—		3,306		9		—		3,315
Loss		—		—		—		—		—		—
Total	$	8,093,104	$	2,078,332	$	10,171,436	$	2,401,673	$	1,313,522	$	13,886,631	$	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
Loss		—		—		—		—		—		—
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

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



	June 30, 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		(36,950)		(6,258)		(55,194)		(11,024)		(51,040)		(6,651)		(55,194)		(11,024)
Accretion		9,190		(9,190)		20,271		(20,271)		12,805		(12,805)		20,271		(20,271)
Increase in expected cash flows based on actual cash flows and changes in cash flow assumptions		—		4,405		—		5,358		—		4,149		—		5,358
Net transfers from nonaccretable difference to accretable yield		—		5,183		—		10,135		—		8,095		—		10,135
Balance at end of period	$	163,155	$	107,826	$	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 ~~second~~third quarter of 2017, the Company ~~reached an agreement~~terminated the agreements with the FDIC ~~to terminate the agreements~~ on the remaining covered loan balances totaling $154 million at June 30, 2017. The ~~Company wrote down the~~ indemnification asset ~~by $6.6 million~~was written down to the final settlement amount of $3.2 million in the second quarter of ~~2017, with~~2017. The final cash settlement was received from the ~~final payment to occur~~FDIC in ~~the third quarter~~July 2017.

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




	June 30,		June 30,		September 30,		September 30,
(in thousands)	2017		2016		2017		2016
Beginning Balance	$	16,219	$	29,868	$	16,219	$	29,868
Amortization		(2,427)		(3,139)		(2,427)		(4,678)
Charge-offs, write-downs and other recoveries		(2,442)		(2,683)		(2,442)		(5,569)
External expenses qualifying under loss share agreement		79		307
External expenses qualifying under loss share agreements						79		1,000
Adjustment due to changes in cash flow projections		(2,526)		(3,437)		(2,526)		(3,027)
Net payments to FDIC		934		159		934		436
Write-down for termination of loss share agreement		(6,603)		—
Write-down for termination of loss share agreements						(6,603)		—
Cash received from FDIC for final settlement of agreements						(3,234)		—
Ending balance	$	3,234	$	21,075	$	—	$	18,030

Included in loans are ~~$4.2~~$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 ~~June~~September 30, 2017 and December 31, 2016, respectively. 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 ~~$2.7~~$2.5 million and $3.1 million of foreclosed single family residential properties in other real estate owned as of ~~June~~September 30, 2017 and December 31, 2016, respectively.

Included in short-term borrowings are customer securities sold under agreements to repurchase (“repurchase agreements”) that mature daily and are secured by U.S. agency securities totaling ~~$482.1~~$512.0 million and $358.1 million at ~~June~~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 also 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 ~~June~~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.





					June 30, 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	$	750,000	$	18	$	7,619	$	1,100,000	$	—	$	7,787	Cash Flow	$	875,000	$	—	$	7,924	$	1,100,000	$	—	$	7,787
Interest rate swaps	Fair Value		363,000		—		518		—		—		—	Fair Value		363,000		—		823		—		—		—
		$	1,113,000	$	18	$	8,137	$	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	$	1,130,367	$	17,536	$	18,011	$	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		111,667		39		117		84,732		50		105	N/A		109,556		34		108		84,732		50		105
Forward commitments to sell residential mortgage loans	N/A		87,204		7		825		75,676		900		221	N/A		93,809		91		669		75,676		900		221
Interest rate-lock commitments on residential mortgage loans	N/A		66,483		563		5		46,840		189		228	N/A		71,786		534		71		46,840		189		228
Foreign exchange forward contracts	N/A		56,016		1,606		1,562		56,152		771		729	N/A		55,081		2,465		2,423		56,152		771		729
			1,451,737		19,751		20,520		1,242,791		20,315		19,645			1,502,984		19,979		20,691		1,242,791		20,315		19,645
Total derivatives		$	2,564,737	$	19,769	$	28,657	$	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)					(2,894)		(16,444)				—		—					(2,780)		(16,747)				—		—
Total derivative assets/liabilities				$	16,875	$	12,213			$	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 ~~June~~September 30, 2017 expire as follows: ~~notional amount of~~ $250 million ~~expire~~ in 2019; $200 million ~~expire~~ in 2020; and ~~$300~~$425 million ~~expire~~ in 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 derivatives recognized directly in earnings during the three or ~~six~~nine months ended ~~June~~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 directly in earnings.

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 ~~$2.7~~$1.3 million and ~~$3.1~~$4.4 million for the three and ~~six~~nine months ended ~~June~~September 30, 2017, respectively, and ~~$0.5~~$1.3 million and ~~$0.4~~$1.7 million for the three and ~~six~~nine months ended ~~June~~September 30, 2016, respectively. The impact to interest income from cash flow hedges was ($~~0.2)~~0.1) million and ($~~0.1)~~0.2) million for the three and ~~six~~nine months ended ~~June~~September 30, 2017, respectively and $0.7 million and ~~$1.0~~$1.7 million for the three and ~~six~~nine months ended ~~June~~September 30, 2016, respectively. For the ~~six~~three and nine months ended ~~June~~September 30, 2017, the fair value hedges entered into during the period reduced interest expense on deposits by ~~$0.4~~$0.2 million and ~~reduced~~$0.6 million, respectively, and had minimal impact on noninterest income ~~by $0.1 million~~ 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 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 ~~June~~September 30, 2017, the aggregate fair value of derivative instruments with credit risk-related contingent features that were in a net liability position was ~~$16.8~~$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 ~~June~~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 June 30, 2017
As of September 30, 2017
Derivative Assets	$	5,308	$	(3,963)	$	1,345	$	1,345	$	—	$	—	$	5,271	$	(3,942)	$	1,329	$	1,329	$	—	$	—

Derivative Liabilities	$	22,155	$	(16,392)	$	5,763	$	1,345	$	7,099	$	(2,681)	$	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 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 ~~stockholders’ equity~~Stockholders’ Equity in order to simplify the presentation. Additional information on treasury stock is reflected in the common shares outstanding section below.

~~Shares~~Common shares outstanding ~~exclude~~excludes treasury shares of 1.0 million and 1.3 million at ~~June~~September 30, 2017 and December 31, 2016, respectively, with a first-in-first-out cost basis of $17.6 million and $24.1 million at ~~June~~September 30, 2017 and December 31, 2016, respectively. Shares outstanding also ~~exclude~~excludes unvested restricted share awards of 1.7 million and 2.0 million at ~~June~~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								Available		HTM Securities
	for Sale		Transferred		Employee		Cash				for Sale		Transferred		Employee		Cash
(in thousands)	Securities		from AFS		Benefit Plans		Flow Hedges		Total		Securities		from AFS		Benefit Plans		Flow Hedges		Total
Balance, December 31, 2015	$	4,268	$	(16,795)	$	(67,890)	$	(178)	$	(80,595)	$	4,268	$	(16,795)	$	(67,890)	$	(178)	$	(80,595)
Other comprehensive income (loss) before income taxes:
Net change in unrealized gain		41,990		—		—		3,611		45,601		38,835		—		—		1,162		39,997
Reclassification of net (gain) loss realized and included in earnings		(1,114)		—		2,916		—		1,802		(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		—		1,628		—		—		1,628		—		2,736		—		—		2,736
Income tax expense		14,970		625		1,066		1,316		17,977
Balance, June 30, 2016	$	30,174	$	(15,792)	$	(66,040)	$	2,117	$	(49,541)
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)	$	(28,679)	$	(14,392)	$	(72,501)	$	(4,960)	$	(120,532)
Other comprehensive income (loss) before income taxes:
Net change in unrealized gain (loss)		14,687		—		—		(842)		13,845		21,026		—		—		(1,232)		19,794
Reclassification of net losses realized and included in earnings		—		—		3,105		—		3,105		—		—		4,144		335		4,479
Valuation adjustment for pension plan amendment (a)		—		—		17,315		—		17,315		—		—		17,315		—		17,315
Other valuation adjustments for employee benefit plan		—		—		(10,782)		—		(10,782)		—		—		(9,185)		—		(9,185)
Amortization of unrealized net loss on securities transferred to HTM		—		1,749		—		—		1,749		—		2,726		—		—		2,726
Income tax expense (benefit)		5,333		657		3,458		(309)		9,139		7,649		1,012		4,416		(329)		12,748
Balance, June 30, 2017	$	(19,325)	$	(13,300)	$	(66,321)	$	(5,493)	$	(104,439)
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.



	Six months ended					Nine Months Ended
Amount reclassified from AOCI (a)	June 30,				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	$	—	$	1,114	Securities transactions	$	—	$	1,435	Securities transactions
Tax effect		—		(390)	Income taxes		—		(502)	Income taxes
Net of tax		—		724	Net income		—		933	Net income
Amortization of unrealized net loss on securities transferred to HTM		(1,749)		(1,628)	Interest income		(2,726)		(2,736)	Interest income
Tax effect		657		625	Income taxes		1,012		1,029	Income taxes
Net of tax		(1,092)		(1,003)	Net income		(1,714)		(1,707)	Net income
Amortization of defined benefit pension and post-retirement items		(3,105)		(2,916)	Employee benefits expense (b)		(4,144)		(4,395)	Employee benefits expense (b)
Tax effect		1,114		1,066	Income taxes		1,491		1,538	Income taxes
Net of tax		(1,991)		(1,850)	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	$	(3,083)	$	(2,129)	Net income	$	(4,579)	$	(3,631)	Net income



	Three months ended				Six months ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
(in thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Income from bank-owned life insurance	$	2,883	$	4,501	$	5,535	$	7,051	$	3,097	$	4,097	$	8,632	$	11,148
Credit related fees		2,898		2,267		5,776		4,624		2,521		2,685		8,297		7,309
Derivative income		2,680		533		3,145		394		1,339		1,347		4,484		1,741
Net (loss) gain on sale of assets		(60)		1,801		4,065		3,566
Net gain on sale of assets										400		991		4,465		4,557
Safety deposit box income		391		413		840		891		424		424		1,264		1,315
Other miscellaneous		4,082		2,041		6,388		4,376		3,371		2,322		9,759		6,698
Total other noninterest income	$	12,874	$	11,556	$	25,749	$	20,902	$	11,152	$	11,866	$	36,901	$	32,768



	Three months ended				Six months ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
(in thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Advertising	$	4,984	$	2,693	$	8,061	$	5,050	$	3,910	$	2,859	$	11,971	$	7,909
Ad valorem and franchise taxes		3,519		2,340		6,555		4,643		3,387		2,268		9,942		6,911
Printing and supplies		1,330		1,065		2,508		2,176		1,421		1,134		3,929		3,310
Insurance expense		807		829		1,624		1,664		671		803		2,295		2,467
Travel expense		1,350		1,079		2,409		2,028		1,226		1,022		3,635		3,050
Entertainment and contributions		1,982		2,001		3,765		3,633		2,322		1,686		6,087		5,319
Tax credit investment amortization		1,213		1,833		2,425		3,576		1,212		861		3,637		4,437
Write-down for termination of FDIC loss share agreement		6,603		—		6,603		—
Loss share termination										—		—		6,603		—
Other miscellaneous		5,879		4,633		12,347		10,412		7,611		11,746		19,958		22,158
Total other noninterest expense	$	27,667	$	16,473	$	46,297	$	33,182	$	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				Six months ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
(in thousands, except per share data)	2017		2016		2017		2016		2017		2016		2017		2016
Numerator:
Net income to common shareholders	$	52,267	$	46,907	$	101,281	$	50,746	$	58,902	$	46,719	$	160,183	$	97,465
Net income allocated to participating securities - basic and diluted		1,166		1,136		2,322		1,233		1,244		1,101		3,566		2,334
Net income allocated to common shareholders - basic and diluted	$	51,101	$	45,771	$	98,959	$	49,513	$	57,658	$	45,618	$	156,617	$	95,131
Denominator:
Weighted-average common shares - basic	$	84,614	$	77,523	$	84,489	$	77,512	$	84,749	$	77,550	$	84,577	$	77,525
Dilutive potential common shares		253		157		266		164		231		127		241		128
Weighted-average common shares - diluted	$	84,867	$	77,680	$	84,755	$	77,676	$	84,980	$	77,677	$	84,818	$	77,653
Earnings per common share:
Basic	$	0.60	$	0.59	$	1.17	$	0.64	$	0.68	$	0.59	$	1.85	$	1.23
Diluted	$	0.60	$	0.59	$	1.17	$	0.64	$	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~~Weighted average anti-dilutive potential common shares totaled ~~19,397~~1,380 and ~~17,701,~~11,057, respectively, for the three and ~~six~~nine months ended ~~June~~September 30, 2017. Weighted-average anti-dilutive potential common shares totaled ~~548,821~~317,893 and ~~602,809,~~578,863, respectively, for the three and ~~six~~nine months ended ~~June~~September 30, 2016.

During the second quarter of 2017, the Company 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)~~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 ~~benefit~~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 assets and the benefit obligations were ~~re-measured.~~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 impact of the amendment to the benefit obligation was a reduction of $17.3~~ 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 compensation, based on the participant’s age and 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 that was frozen as of December 31, 2012 and no future benefits are accrued under this plan.

The Company 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 June 30,	2017		2016		2017		2016
Three months Ended September 30, 2017									2017		2016		2017		2016
Service cost	$	4,093	$	3,611	$	47	$	45	$	3,769	$	3,611	$	17	$	45
Interest cost		4,291		4,023		179		203		4,056		4,022		155		204
Expected return on plan assets		(9,576)		(8,554)		—		—		(9,652)		(8,554)		—		—
Amortization of net loss		1,766		1,426		(48)		53
Net periodic benefit cost	$	574	$	506	$	178	$	301
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

Six months ended June 30, 2017
Nine months ended September 30, 2017
Service cost	$	7,843	$	6,876	$	95	$	74	$	11,612	$	10,487	$	112	$	119
Interest cost		8,414		9,011		359		409		12,470		13,033		514		613
Expected return on plan assets		(18,326)		(17,445)		—		—		(27,978)		(25,999)		—		—
Amortization of net loss		3,201		2,894		(96)		22
Amortization of net loss and prior service costs										4,368		4,320		(224)		75
Net periodic benefit cost	$	1,132	$	1,336	$	358	$	505	$	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.

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 ~~six~~nine months ended ~~June~~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	(330,644)		34.56			4,065	(335,758)		34.58	—		4,111
Cancelled/Forfeited	(538)		32.09			6	(538)		32.09	—		6
Expired	(2,570)		64.74				(16,675)		68.18	—		—
Outstanding at June 30, 2017	122,506	$	38.98	2.80	$	1,507
Exercisable at June 30, 2017	122,506	$	38.98	2.80	$	1,507
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 ~~six~~nine months ended ~~June~~September 30, 2017 was $4.1 million. There was ~~no total~~minimal intrinsic value of options exercised for the ~~six~~nine months ended ~~June~~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 ~~June~~September 30, 2017 and changes during the ~~six~~nine months ended ~~June~~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	$	32.15	2,152,119	$	32.15
Granted	61,099		42.09	63,127		42.16
Vested	(201,137)		30.18	(209,440)		30.23
Forfeited	(38,670)		32.37	(54,493)		32.36
Nonvested at June 30, 2017	1,973,411	$	32.65
Nonvested at September 30, 2017				1,951,313	$	32.67

As of ~~June~~September 30, 2017, there was ~~$43.8~~$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 ~~3.2~~3 years. The total fair value of shares which vested during the ~~six~~nine months ended ~~June~~September 30, 2017 and 2016 was ~~$10.0~~$10.1 million and ~~$2.0~~$2.2 million, respectively.

During the ~~six~~nine months ended ~~June~~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.



	June 30, 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	$	—	$	74,840	$	—	$	74,840	$	—	$	73,442	$	—	$	73,442
Municipal obligations		—		245,156		—		245,156		—		242,678		—		242,678
Corporate debt securities		—		3,500		—		3,500		—		3,500		—		3,500
Residential mortgage-backed securities		—		1,854,099		—		1,854,099		—		1,793,426		—		1,793,426
Commercial mortgage-backed securities		—		433,098		—		433,098		—		568,353		—		568,353
Collateralized mortgage obligations		—		183,689		—		183,689		—		173,879		—		173,879
Total available for sale securities		—		2,794,382		—		2,794,382		—		2,855,278		—		2,855,278
Derivative assets (1)		—		16,875		—		16,875		—		17,199		—		17,199
Total recurring fair value measurements - assets	$	—	$	2,811,257	$	—	$	2,811,257	$	—	$	2,872,477	$	—	$	2,872,477
Liabilities
Derivative liabilities (1)	$	—	$	12,213	$	—	$	12,213	$	—	$	12,691	$	—	$	12,691
Total recurring fair value measurements - liabilities	$	—	$	12,213	$	—	$	12,213	$	—	$	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.



	June 30, 2017								September 30, 2017
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Collateral-dependent impaired loans	$	—	$	137,653	$	—	$	137,653	$	—	$	129,230	$	—	$	129,230
Other real estate owned		—		—		8,447		8,447		—		—		6,810		6,810
Total nonrecurring fair value measurements	$	—	$	137,653	$	8,447	$	146,100	$	—	$	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 ~~June~~September 30, 2017 and December 31, 2016.



	June 30, 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	$	491,653	$	—	$	—	$	491,653	$	491,653	$	445,500	$	—	$	—	$	445,500	$	445,500
Available for sale securities		—		2,794,382		—		2,794,382		2,794,382		—		2,855,278		—		2,855,278		2,855,278
Held to maturity securities		—		2,866,529		—		2,866,529		2,874,454		—		2,768,148		—		2,768,148		2,769,274
Loans, net		—		137,653		17,954,752		18,092,405		18,251,976		—		129,230		18,300,747		18,429,977		18,563,163
Loans held for sale		—		26,787		—		26,787		26,787		—		23,236		—		23,236		23,236
Derivative financial instruments		—		16,875		—		16,875		16,875		—		17,199		—		17,199		17,199
Financial liabilities:
Deposits	$	—	$	—	$	21,432,877	$	21,432,877	$	21,442,815	$	—	$	—	$	21,523,649	$	21,523,649	$	21,533,859
Federal funds purchased		76,798		—		—		76,798		76,798		1,150		—		—		1,150		1,150
Securities sold under agreements to repurchase		482,109		—		—		482,109		482,109		512,001		—		—		512,001		512,001
FHLB short-term borrowings		1,252,000		—		—		1,252,000		1,252,000		1,224,000		—		—		1,224,000		1,224,000
Long-term debt		—		407,409		—		407,409		407,876		—		330,909		—		330,909		331,179
Derivative financial instruments		—		12,213		—		12,213		12,213		—		12,691		—		12,691		12,691

In March 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 ~~period~~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,” 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 price.

In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” with the 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 qualifying hedging relationships and the presentation of hedge results. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted in any interim period 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 of adoption. The Company is currently assessing all potential impacts of adoption of this update and is considering early adoption 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 yet been issued. The Company ~~is currently assessing~~does not expect the adoption of this ~~pronouncement and the impact of adoption, but it is not expected~~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 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) 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 the~~not expected to have a material impact ~~of adoption~~ on the Company’s financial condition ~~and~~or results of 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 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 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 ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial 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 contracts with customers and does not plan to early adopt the guidance. The Company~~ plans to use the modified retrospective ~~approach~~approach. The Company has inventoried its contracts with customers and has evaluated a material portion of those contracts for ~~reporting and make a cumulative effect adjustment~~compliance with the standard. The Company has not yet identified any material changes to the ~~beginning balance~~timing of ~~retained earnings. The preliminary~~revenue recognition. Based on the analysis ~~suggests~~performed to date, adoption of 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.

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.~~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,~~growth; the provision for ~~loans~~loan losses, loan growth expectations, management’s predictions about charge-offs for loans, including ~~energy-related~~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,~~region; the impact of the First NBC transactions on our performance and financial condition, including our ability to successfully integrate the ~~business,~~business; deposit ~~trends,~~trends; credit quality ~~trends,~~trends; net interest margin ~~trends,~~trends; future expense ~~levels,~~levels; success of revenue-generating ~~initiatives,~~initiatives; the effectiveness of derivative financial instruments and hedging activities to manage risk; projected tax ~~rates,~~rates; future ~~profitability,~~profitability; improvements in expense to revenue (efficiency) ~~ratio,~~ratio; purchase accounting impacts such as accretion ~~levels,~~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 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 a transaction with First NBC Bank (“FNBC”), whereby ~~the Company~~Whitney acquired approximately $1.2 billion in loans (net of fair value discount or “loan mark”), nine branch locations with $398 million in deposits, and assumed $604 million in FHLB borrowings. The operational conversion of the branch locations occurred in the second quarter of

2017, along with the simultaneous closure of 10 overlapping branches. This transaction is referred to as the FNBC I transaction throughout this document.

On April 28, 2017, ~~the Company~~Whitney 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 closure of FNBC. This transaction is referred to as the FNBC II transaction throughout this document. Pursuant to the Agreement, Whitney ~~Bank~~ acquired selected assets and liabilities of FNBC from the FDIC and continued to operate the 29 former FNBC branch locations ~~(24~~until systems conversion, which occurred in ~~Louisiana~~July 2017. In the third quarter of 2017, Whitney exercised its option to acquire seven former FNBC locations and ~~five in Florida). This transaction is referred to as the FNBC II transaction throughout this document.~~ 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:

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 First NBC Bank Holding Company.

~~Systems conversions and consolidation of the FNBC II operations occurred in July 2017.~~ 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 induring the ~~latter part of the second~~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~~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 is expected to decline slightly by the end of 2017, and demand for oilfield services ~~improved with~~is softening outside of the ~~increase in rig count; however, there is concern that~~Permian Basin. However, six-month outlooks for 2018 were optimistic relative to the ~~current pace of growth may not be sustainable. While overall oil~~last reporting period, and ~~gas outlooks are positive, continued volatility in the sector is expected.~~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.~~market in 2018.

The residential real estate market ~~experienced slow but steady~~has a varied outlook, with new home starts and closings expected to be behind schedule for the remainder of the year in our Houston market due to Hurricane Harvey. Residential real estate contracts signaled modest growth across our footprint, with construction activity up year-over-year. Home prices increased modestly, with buyers remaining price sensitive. Apartment demand was strong in all markets. Leasing activity improved in Houston, as the market conditions are beginning to stabilize. New home sales and construction activity ~~are~~was slightly up from the year-ago level in the rest of our markets. Builders expect homes sales to be flat over the next three months, while brokers anticipate slightly higher sales. Construction activity is expected to ~~remain flat~~match or ~~improve slightly in~~marginally surpass the ~~near term in all of our markets, with many builders focusing on bringing modestly-priced homes to~~current pace over the ~~market.~~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 declined throughout the Company’s footprint, possibly~~elevated from replacement activity due to ~~lenders tightening credit restrictions amid increasing delinquencies.~~the hurricanes. Employment ~~increased at a moderate pace~~growth was steady, with challenges continuing in filling construction, information technology, finance, transportation and nursing positions. Wage growth remained steady, with the exception of wage pressures for highly skilled positions and rising wages in the construction industry. Due to the impact of Hurricane Harvey, finding and hiring workers may be more difficult over the ~~reporting period, while wage increases remained steady as compared to~~next six months in the ~~last reporting period. Energy companies indicated that hiring had tightened during the second quarter, citing upward wage pressure, especially for experienced personnel.~~Houston market.

Loan demand across the geographic markets that Hancock serves improved. Loan volumes increased primarily in residential with commercial and industrial loans and real estate (commercial and residential) loan growth slowing. Economic outlooks were mostly optimistic; however, several contacts expressed concern about the regulatory environment. Overall, the economic outlook remains

Overall economic reports indicate that loan demand continued to increase, however at a more sluggish pace than during the prior period with growth in commercial real estate loans, but with decreases in demand for residential real estate loans and consumer loans. While we experienced loan growth across the our markets compared to the prior quarter, with loan volume increases primarily in commercial real estate and mortgage loans, maintaining that level of growth will be challenging with the slow down of demand in our markets. Overall, the economic outlook remains positive, as most businesses expect activity to increase over the next year.

Net income for the third quarter of 2017 was $58.9 million, or $.68 per diluted common share (EPS), compared to $52.3 million, or $.60 EPS in the second quarter of 2017 ~~was $52.3~~and $46.7 million, or ~~$0.60 per diluted common share, compared to $49.0 million, or $0.57 per diluted common share,~~$.59 EPS, in the ~~first quarter of 2017 and $46.9 million, or $0.59 per diluted common share, in the second~~third quarter of 2016. The ~~second~~third quarter of 2017 includes nonoperating expenses ~~related to the FNBC I and II transactions~~ of approximately ~~$4.0~~$11.4 million ($~~0.03~~.08 per ~~share)~~share impact), ~~and a $6.6 million ($0.05 per share) expense related to~~while the ~~termination of Hancock’s loss share agreements with the FDIC for its Peoples First acquisition in December 2009. The first~~second quarter of 2017 included ~~$2.1~~$10.6 million of nonoperating ~~items~~expenses ($~~0.01~~.08 per share) ~~and there~~. The nonoperating expenses in both quarters were mainly related to the two previously disclosed FNBC transactions. There were no nonoperating ~~items in the second quarter of 2016. The Company expects to have additional nonoperating items related to the FNBC II transaction~~expenses in the third quarter of ~~2017.~~ 2016.

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

The FNBC I and II transactions ~~have~~continue to positively ~~impacted~~impact our franchise by expanding our customer base and ~~we expect to generate additional value as we move into~~strengthening the ~~second half of 2017. The two~~market position in our footprint. As noted in the prior quarter, these transactions ~~however,~~ also temporarily added cost. In addition to merger-related costs identified as nonoperating items, second quarter results also ~~include~~included other nonpermanent costs estimated at $7 million, or $0.05 per share, ~~in the second quarter. These nonpermanent expenses include costs of operating~~to separately operate the 29 branches FNBC had ~~when closed by~~at the ~~OFI, and maintaining FNBC’s separate operations to keep customers served, and to process work for the FDIC.~~time of its closure. These expenses were ~~temporarily elevated as we worked~~eliminated during the third quarter through systems conversions and the consolidation of overlapping ~~branches.~~branches, resulting in a more normalized expense level for the current quarter.

The active hurricane season brought severe weather to several areas in our footprint, with Harvey impacting Texas and 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 loan portfolio as a result of the 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 a natural progression of our business that allows the simplification of certain operations and sets the stage for continued growth across all the 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 ~~these nonpermanent operating~~to incur additional costs ~~to decrease in~~for re-branding during the ~~third quarter~~first and second quarters of ~~2017 and be eliminated by the fourth quarter of this year.~~

~~The total allowance~~2018, including capital expenditures for ~~loan losses was $221.9 million at June 30, 2017, up $8.3 million from March 31, 2017 and down $4.2 million from June 30, 2016. The ratio of the allowance~~new signage for loan losses to period-end loans was 1.20% at June 30, 2017, up from 1.17% at March 31, 2017, and down from 1.41% at June 30, 2016. There is no allowance for loan losses on the loans purchased in FNBC I or FNBC II transactions; however, a $58 million loan mark was applied to these loans at acquisition. The allowance for credits in the energy portfolio totaled $83.4 million, or 6.8% of energy loans, at June 30, 2017, down from $83.7 million, or 6.5% of energy loans, at March 31, 2017 and $111.1 million, or 7.5% of energy loans, at June 30, 2016. There were no energy charge-offs in the current quarter.our financial centers.

Net interest income (te) for the ~~second~~third quarter of 2017 was ~~$208.3~~$211.4 million, ~~an $18.3~~a $3.2 million, or ~~10%~~2% increase from the ~~first~~second quarter of 2017. Core net interest income was up ~~$14.5~~$4.2 million. Net interest income (te) for the ~~second~~third quarter of 2017 increased ~~$37.1~~$41.1 million, or ~~22%~~24%, compared to the ~~second~~third quarter of 2016, while core net interest income was up ~~$34.0~~$38.4 million, or ~~20%~~23%. The linked quarter increase is primarily attributable to a full quarter impact from the ~~FNBC I transaction loan portfolio acquisition, as well as a full quarter impact from the March~~June 2017 Federal Reserve rate ~~increase. Net~~increase partially offset by an approximately $1.4 million increase, or 2 bps on NIM, of interest income was also impacted by the approximately $1.5 billion of higher cost deposits acquired in the FNBC II transaction, which were at an average cost of just under 1%. Most of the funds received in the FNBC II transaction were deployed to pay down FHLB borrowings and to bolster the investment securities portfolio.

The reported net interest margin was ~~3.43%~~3.44% for the ~~second~~third quarter of 2017, up ~~6 bps~~1 bp from the ~~first~~second quarter of 2017. The core net interest margin for the ~~second~~third quarter of 2017 was ~~3.29%~~3.32%, ~~unchanged~~up 3 bps from the ~~first~~second quarter of 2017. The core loan yield, excluding purchase accounting adjustments, was up 135 bps. ~~Partially offsetting~~Offsetting this improvement was a 74 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, offset in part by lower long-term debt rates with the payoff of a matured subordinated note on April 1, 2017 totaling $95.5 million.~~transaction.

Compared to the ~~second~~third quarter of 2016, the net interest margin increased 1824 bps and the core margin was up 1420 bps. The major factors in these increases are largely the same as for the comparison to the ~~first~~second quarter of 2017, primarily the impact of the FNBC transactions and the ~~four~~three Federal Reserve interest rate hikes. ~~The securities yield was up 14 bps due to a more favorable mix of higher-yielding securities.~~

Net interest income (te) for the ~~first six~~nine months ofended September 30, 2017 totaled ~~$398.3~~$609.7 million, a ~~$59~~$100.1 million, or ~~17%~~20%, increase from the ~~first half of~~

same period in 2016. Core net interest income was up ~~$56.9~~$95.3 million. Interest earned on loans, excluding purchase accounting accretion, increased

~~$56.6~~ $98.8 million as average total loans grew ~~$1.9~~$2.1 billion, or ~~12%~~13%, due to both organic loan growth and the addition of the portfolios acquired in the FNBC ~~transactions and organic loan growth.~~transactions. A ~~$552~~$693.7 million, or ~~12%~~15%, increase in average investment securities and a 1514 bps increase in the yield resulted in ~~a $10.3~~an $18 million increase in interest earned on investment securities. Higher-yielding municipal securities comprised ~~almost 19%~~approximately 18% of the investment securities ~~portfolio, nearly double the percentage in 2016.~~portfolio.

The reported net interest margin for the ~~first six~~nine months ofended September 30, 2017 was ~~3.40%~~3.41%, up 1618 bps from the nine months ended September 30, 2016. Core margin was 3.30%, up 17 bps from the same period in 2016. ~~Core margin was 3.29%, up 15 bps from the six months ended June 30, 2016.~~

The following 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
	June 30, 2017						March 31, 2017						June 30, 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)	$	13,890.1	$	148.4	4.29	%	$	13,058.7	$	130.4	4.04	%	$	11,990.7	$	115.0		3.86	%	$	13,945.8	$	151.3	4.31	%	$	13,890.1	$	148.4	4.29	%	$	11,948.1	$	114.4		3.81	%
Residential mortgage loans		2,399.4		22.3	3.71			2,185.9		21.3	3.90			2,015.3		20.7		4.12			2,549.3		25.1	3.94			2,399.4		22.2	3.71			2,019.8		20.2		4.01
Consumer loans		2,080.0		29.3	5.64			2,058.5		26.6	5.24			2,053.9		26.2		5.12			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				(0.2)						(0.1)						(0.6)					—		(0.5)	—			—		(0.2)	—			—		(0.8)		—
Total loans (te) (a) (b)		18,369.5		199.8	4.36			17,303.1		178.2	4.16			16,059.9		161.3		4.03			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		22.4		0.2	4.22			21.3		0.2	4.08			29.1		0.2		3.43			21.7		0.2	3.97			22.4		0.2	4.22			38.7		0.3		3.34
US Treasury and government agency securities		125.9		0.7	2.08			116.3		0.6	2.04			50.0		0.2		1.68			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		4,068.4		22.8	2.23			3,975.2		22.1	2.22			4,062.3		22.0		2.16			4,575.0		25.3	2.21			4,068.4		22.8	2.23			3,965.4		20.6		2.08
Municipals (te) (a)		983.0		9.3	3.81			942.1		9.0	3.84			531.4		5.5		4.13			975.4		9.2	3.80			983.0		9.3	3.81			677.1		6.7		3.95
Other securities		64.4		0.3	1.91			3.7		—	1.96			5.0		—		1.89			3.8		—	1.94			64.4		0.3	1.91			4.6		—		2.51
Total securities (te) (a) (c)		5,241.7		33.1	2.52			5,037.3		31.7	2.52			4,648.7		27.7		2.38			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		704.5		1.7	0.99			408.3		0.7	0.74			409.3		0.5		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)	$	24,338.1	$	234.8	3.87	%	$	22,770.0	$	210.8	3.74	%	$	21,147.0	$	189.7		3.60	%	$	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	$	8,047.4	$	8.1	0.40	%	$	6,897.7	$	4.5	0.27	%	$	6,779.6	$	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		2,575.7		6.5	1.01			2,340.0		5.1	0.89			2,556.7		5.7		0.90			2,711.6		7.7	1.12			2,575.7		6.5	1.01			2,446.3		5.6		0.91
Public funds		2,539.5		3.8	0.59			2,547.9		3.2	0.50			2,302.1		2.2		0.39			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		13,162.6		18.4	0.56			11,785.6		12.8	0.44			11,638.4		12.6		0.44			13,573.9		21.8	0.64			13,162.6		18.4	0.56			11,432.7		12.6		0.44
Short-term borrowings		2,232.8		4.2	0.77			2,127.3		2.9	0.56			1,351.2		0.9		0.27			1,909.4		4.5	0.92			2,232.8		4.2	0.77			1,366.2		1.0		0.30
Long-term debt		428.3		3.9	3.61			458.0		5.1	4.42			471.9		5.0		4.26			339.5		3.6	4.29			428.3		3.9	3.61			468.1		5.0		4.28
Total borrowings		2,661.1		8.1	1.22			2,585.3		8.0	1.24			1,823.1		5.9		1.30			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		15,823.7		26.5	0.67	%		14,370.9		20.8	0.59	%		13,461.5		18.5		0.55	%		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		8,514.4						8,399.1						7,685.5							8,664.6						8,514.4						7,930.4
Total cost of funds	$	24,338.1	$	26.5	0.44	%	$	22,770.0	$	20.8	0.37	%	$	21,147.0	$	18.5		0.35	%	$	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)			$	208.3	3.19	%			$	190.0	3.15	%			$	171.2		3.05	%			$	211.4	3.17	%			$	208.2	3.19	%			$	170.3		2.99	%
Net interest margin	$	24,338.1	$	208.3	3.43	%	$	22,770.0	$	190.0	3.37	%	$	21,147.0	$	171.2		3.25	%	$	24,487.4	$	211.4	3.44	%	$	24,338.1	$	208.2	3.43	%	$	21,197.4	$	170.3		3.20	%


	Six months ended												Nine Months Ended
		June 30, 2017						June 30, 2016						September 30, 2017						September 30, 2016
(dollars in millions)		Volume		Interest	Rate			Volume		Interest	Rate			Volume		Interest	Rate			Volume		Interest	Rate
Average earning assets
Commercial & real estate loans (te) (a)	$	13,476.6	$	278.8	4.17	%	$	11,851.9	$	226.7	3.84	%	$	13,634.7	$	430.1	4.22	%	$	11,884.2	$	341.1	3.83	%
Residential mortgage loans		2,293.3		43.6	3.80			2,036.9		42.0	4.12			2,379.6		68.7	3.85			2,031.2		62.2	4.09
Consumer loans		2,069.3		55.8	5.44			2,065.5		52.5	5.11			2,078.3		85.3	5.49			2,062.1		79.2	5.13
Loan fees & late charges				(0.3)						(1.4)				—		(0.9)	—			—		(2.2)	—
Total loans (te) (a) (b)		17,839.2		377.9	4.26			15,954.3		319.8	4.03			18,092.6		583.2	4.31			15,977.5		480.3	4.01
Loans held for sale		21.9		0.5	4.15			21.9		0.4	3.72			21.8		0.7	4.09			27.6		0.7	3.54
US Treasury and government agency securities		121.1		1.2	2.06			50.0		0.4	1.68			122.6		1.9	2.07			53.4		0.7	1.70
Mortgage-backed securities and collateralized mortgage obligations		4,022.0		44.8	2.23			4,097.6		44.8	2.19			4,208.4		70.1	2.22			4,053.2		65.4	2.15
Municipals (te) (a)		962.7		18.4	3.83			435.3		9.1	4.18			967.0		27.7	3.82			516.5		15.8	4.08
Other securities		34.2		0.3	1.90			5.6		0.1	1.87			24.0		0.3	1.92			5.2		0.1	2.06
Total securities (te) (a) (c)		5,140.0		64.7	2.52			4,588.5		54.4	2.37			5,322.0		100.0	2.50			4,628.3		82.0	2.36
Total short-term investments		557.3		2.5	0.90			464.2		1.1	0.47			435.1		3.0	0.94			452.0		1.6	0.47
Total earning assets (te) (a)	$	23,558.4	$	445.6	3.80	%	$	21,028.9	$	375.7	3.59	%	$	23,871.5	$	686.9	3.84	%	$	21,085.4	$	564.6	3.58	%
Average interest-bearing liabilities
Interest-bearing transaction and savings deposits	$	7,475.7	$	12.6	0.34	%	$	6,797.6	$	9.4	0.28	%	$	7,685.2	$	21.0	0.37	%	$	6,775.9	$	13.9	0.27	%
Time deposits		2,458.6		11.6	0.96			2,407.8		10.7	0.89			2,543.9		19.3	1.01			2,420.7		16.3	0.90
Public funds		2,543.6		6.9	0.55			2,237.8		4.3	0.38			2,618.2		12.6	0.64			2,243.1		6.8	0.40
Total interest-bearing deposits		12,477.9		31.1	0.50			11,443.2		24.4	0.43			12,847.3		52.9	0.55			11,439.7		37.0	0.43
Short-term borrowings		2,180.3		7.3	0.67			1,458.0		1.9	0.26			2,089.0		11.7	0.75			1,427.2		2.9	0.28
Long-term debt		443.1		8.9	4.03			477.6		10.1	4.23			408.2		12.6	4.11			474.4		15.1	4.25
Total borrowings		2,623.4		16.2	1.23			1,935.6		12.0	1.24			2,497.2		24.3	1.29			1,901.6		18.0	1.27
Total interest-bearing liabilities		15,101.3		47.3	0.63	%		13,378.8		36.4	0.55	%		15,344.5		77.2	0.67	%		13,341.3		55.0	0.55	%
Net interest-free funding sources		8,457.1						7,650.1						8,527.0						7,744.1
Total cost of funds	$	23,558.4	$	47.3	0.40	%	$	21,028.9	$	36.4	0.35	%	$	23,871.5	$	77.2	0.43	%	$	21,085.4	$	55.0	0.35	%
Net interest spread (te) (a)				398.3	3.17	%				339.3	3.04	%			$	609.7	3.17	%			$	509.6	3.03	%
Net interest margin	$	23,558.4	$	398.3	3.40	%	$	21,028.9	$	339.3	3.24	%	$	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									Six months ended						Three months ended									Nine months ended
	June 30,			March 31,			June 30,			June 30,			June 30,			September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in millions)	2017			2017			2016			2017			2016			2017			2017			2016			2017			2016
Net interest income	$	199.7		$	181.7		$	165.0		$	381.4		$	327.8		$	202.8		$	199.7		$	163.5		$	584.3		$	491.3
Taxable-equivalent adjustment (te) (a)		8.6			8.3			6.2			16.9			11.5			8.6			8.6			6.8			25.4			18.3
Net interest income (te) (a)		208.3			190.0			171.2			398.3			339.3			211.4			208.3			170.3			609.7			509.6
Purchase accounting adjustments
Loan discount accretion		8.8			5.0			5.9			13.8			12.3			7.7			8.8			5.2			21.5			17.4
Bond premium amortization		(0.4)			(0.4)			(0.6)			(0.8)			(1.4)			(0.4)			(0.4)			(0.6)			(1.2)			(1.9)
Net purchase accounting accretion		8.4			4.6			5.3			13.0			10.9			7.3			8.4			4.6			20.3			15.5
Core net interest income (te) (a)	$	199.9		$	185.4		$	165.9		$	385.3		$	328.4		$	204.1		$	199.9		$	165.7		$	589.4		$	494.1
Average earning assets	$	24,338.1		$	22,770.0		$	21,147.0		$	23,558.4		$	21,028.9		$	24,487.4		$	24,338.1		$	21,197.4		$	23,871.5		$	21,085.4
Net interest margin - reported		3.43	%		3.37	%		3.25	%		3.40	%		3.24	%		3.44	%		3.43	%		3.20	%		3.41	%		3.23	%
Net purchase accounting adjustments		0.14	%		0.08	%		0.10	%		0.11	%		0.10	%		0.12	%		0.14	%		0.08	%		0.11	%		0.10	%
Core net interest margin		3.29	%		3.29	%		3.15	%		3.29	%		3.14	%		3.32	%		3.29	%		3.12	%		3.30	%		3.13	%

During the ~~second~~third quarter of 2017, ~~the Company~~we recorded a total provision for loan losses of ~~$15.0~~$13.0 million, down ~~$1.0 million from the first quarter of 2017 and down $2.2~~$1.9 million from the second quarter of 2017 and down $5.9 million from the third quarter of 2016. For the ~~six~~nine months ended ~~June~~September 30, 2017, ~~the Company~~we recorded a total provision for loan losses of ~~$30.9~~$44.0 million, compared to ~~$77.2~~$96.2 million for the ~~six~~nine months ended ~~June~~September 30, ~~2016. The first half of~~ 2016, which included $50 million in provision expense related to the energy portfolio.

Provision for loan losses reflects net charge-offs from the non-purchased credit impaired loan portfolio totaling $11.8 million, which represents 0.25% of average total loans on an annualized basis in 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~~Item 2. ~~Management’s~~“Management's Discussion and Analysis of Financial Condition and Results of Operations – Allowance for Loan Losses and Asset Quality” provides additional information on changes in the allowance for loan losses and general credit quality.

Noninterest income totaled ~~$67.5~~$67.1 million for the third quarter of 2017, down $0.4 million, or 1%, from the second quarter of 2017 and up ~~$4.0~~$4.1 million, or 6%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 nine months of 2017, up $13.2 million, or 7%, from the first ~~quarter of 2017 and up $3.8 million, or 6%, compared to the second 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. ~~Virtually all categories experienced significant growth when compared to the prior quarter. Most fee income lines are also up when comparing the three and six months ended June 30, 2017 and 2016.~~

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



	Three months ended						Six months ended				Three Months Ended						Nine Months Ended
	June 30,		March 31,		June 30,		June 30,				September 30,		June 30,		September 30,		September 30,
(in thousands)	2017		2017		2016		2017		2016		2017		2017		2016		2017		2016
Service charges on deposit accounts	$	20,061	$	19,206	$	18,394	$	39,267	$	36,777	$	21,444	$	20,061	$	18,716	$	60,711	$	55,493
Trust fees		11,506		11,211		12,089		22,717		23,313		10,742		11,506		11,512		33,459		34,825
Bank card and ATM fees		13,687		12,468		11,954		26,155		23,302		13,390		13,687		11,808		39,545		35,110
Investment and annuity fees		5,271		4,599		5,043		9,870		9,976		5,570		5,271		4,289		15,440		14,265
Secondary mortgage market operations		4,241		3,567		4,176		7,808		7,088		4,157		4,241		4,917		11,965		12,005
Insurance commissions and fees		1,174		665		1,240		1,839		2,547		660		1,174		1,088		2,499		3,635
Amortization of FDIC loss share receivable		(1,327)		(1,100)		(1,526)		(2,427)		(3,139)		—		(1,327)		(1,539)		(2,427)		(4,678)
Income from bank-owned life insurance		2,883		2,652		4,501		5,535		7,051		3,097		2,883		4,097		8,632		11,148
Credit related fees		2,898		2,878		2,267		5,776		4,624		2,521		2,898		2,685		8,297		7,309
Derivative income		2,680		465		533		3,145		394		1,339		2,680		1,347		4,484		1,741
Net (loss) gain on sale of assets		(60)		(227)		1,801		(287)		3,566
Net gain on sale of assets												400		(60)		991		113		4,557
Safety deposit box income		391		449		413		840		891		424		391		424		1,264		1,315
Other miscellaneous		4,082		2,306		2,041		6,388		4,376		3,371		4,082		2,322		9,759		6,698
Securities transactions		—		—		768		—		1,114		—		—		351		—		1,465
Total noninterest operating income		67,487		59,139		63,694		126,626		121,880	$	67,115	$	67,487	$	63,008	$	193,741	$	184,888
Nonoperating income items		—		4,352		—		4,352		—		—		—		—		4,352		—
Total noninterest income	$	67,487	$	63,491	$	63,694	$	130,978	$	121,880	$	67,115	$	67,487	$	63,008	$	198,093	$	184,888

Service charges on deposits totaled ~~$20.1~~$21.4 million for the third quarter of 2017, up $1.4 million, or 7%, from the second quarter of 2017 and up ~~$0.9~~$2.7 million, or 4%15%, from the ~~first quarter of 2017 and up $1.7 million, or 9%, from the second~~third quarter of 2016. These increases were primarily due to an increase in consumer overdraft fees ~~approximately half of which related to the addition of FNBC deposits.~~and new sustained overdraft fees.

Bank card and ATM fees totaled ~~$13.7~~$13.4 million for the ~~quarter ended June 30, 2017, compared to $12.5 million in the first~~third quarter of ~~2017.~~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 ~~second~~third quarter of 2016, bank card and ATM fees were up ~~$1.7~~$1.6 million, or ~~14%~~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 and merchant fees.~~

~~Secondary mortgage market operations fee income increased $0.7 million, or 19%, from~~ the ~~first~~second quarter of 2017 and ~~were~~$384 million in the third quarter of 2016. Income from secondary mortgage market operations was relatively flat compared to the second quarter of ~~2016. A $16~~2017 and down $0.8 million, ~~increase in production and a higher percentage~~or 15%, from the third quarter of ~~loans sold in the secondary market were the primary factors in the~~2016.

Trust fees decreased $0.8 million, or 7%, linked quarter ~~increase. Mortgage loan originations for the second quarter of 2017 totaled $361 million, compared~~due to ~~$345 million in the first quarter of 2017 and $339 million~~seasonal income related to tax preparation fees earned in the second quarter ~~of 2016.~~

~~Trust fees, investment and annuity fees, and insurance commissions and fees totaled $18.0 million in~~2017. For the ~~second quarter~~first nine months of 2017, ~~up $1.5~~trust fees decreased $1.4 million, ~~linked quarter and down $0.4 million~~or 4%, compared to the ~~second quarter~~first nine months of 2016. ~~The decline in trust fees compared to the second quarter of 2016~~This decrease was ~~in part,~~primarily due to the sale of ~~the~~certain Hancock Horizon ~~funds mentioned above. The linked quarter increase in investment~~funds.

Investment and annuity fees ~~is attributable~~increased $0.3 million, or 6%, compared to ~~both a sales initiative on fee-based investment products, including sales~~second quarter 2017 and increased $1.3 million, or 30%, compared to ~~former FNBC~~

~~customers,~~third quarter 2016. The increases are mainly due to corporate underwriting fees and an overall appreciation in asset value as a result of favorable market conditions. ~~Insurance~~ commissions were up compared to the first quarter 2017, but down compared to the second quarter of 2016, due to changes in ancillary sales methodology, decreased seasonal demand and residual claims related to major flooding in Louisiana in 2016.

Income from bank-owned life insurance increased $0.2 million, or ~~9% compared to the first quarter of 2017, but was down $1.6 million, or 36%~~7%, compared to the second quarter of 2017, but was down $1.0 million, or 24%, compared to the third quarter of 2016. AnFor 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 ~~drove the linked quarter increase, while the second quarter~~ of ~~2016 experienced an abnormally high level of income from death benefit claims.~~2017.

Income on our customer interest rate derivative program resulted in a ~~$2.7~~$1.3 million net gain for the ~~second~~third quarter of 2017 compared to net gains of ~~$0.5~~$2.7 million in ~~both~~ the ~~first~~second quarter of 2017 and $1.3 million for the ~~second~~third quarter of 2016. This income can be volatile ~~in nature~~ and is dependent upon both customer sales activity and market value adjustments due to interest rate movement. ~~Management believes the derivative fee income for the quarter is approximately $1.0 million higher than a normal run rate.~~

Other miscellaneous income totaled ~~$4.1~~$3.4 million in the ~~second~~third quarter of 2017, ~~up $1.8~~down $0.7 million linked quarter and ~~$2.0~~up $1.0 million compared to the ~~second~~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 ~~includes~~included a ~~$1.0~~$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 ~~these fees are~~this income is part of our normal operations, ~~they~~it can be unpredictable as to ~~future timing and amount and are driving most of the increase compared to prior periods.~~timing.

Noninterest expense for the ~~second~~third quarter of 2017 was ~~$183.5~~$177.6 million, ~~up $19.9~~down $5.9 million, or ~~12%~~3%, from the ~~first~~second quarter of 2017, and up ~~$32.5~~$28.6 million, or ~~22%~~19%, from the ~~second~~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 ~~second quarter of~~nine months ended September 30, 2017 totaled ~~$172.9~~$496.2 million, ~~an increase of $15.8~~up $45.1 million, or 10% linked quarter and up $21.9 million, or 15% from the second quarter of 2016. For the first six months of 2017, total noninterest expense was $347.0 million, a $40.0, or 13% increase over 2016. Excluding nonoperating expense items, noninterest expense for the first half of 2017 totaled $329.9 million, up $27.9 million, or 9%, 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 disruption. As a result, our reported results do not include any material expenses related to the impact from those storms.

Nonoperating expenses incurred in ~~both the second and first quarters of~~ 2017 ~~included acquisition-related~~primarily include merger-related costs associated with the FNBC transactions ~~totaling $4.0~~and $6.6 million ~~and $6.5 million, respectively. The second quarter~~ of ~~2017 also includes a $6.6 million~~ expense due to the second quarter 2017 termination of a FDIC loss share ~~agreement~~agreements associated with the ~~People’s~~Peoples First transaction in 2009. ~~There were no nonoperating expenses for the second quarter of 2016.~~ The components of noninterest expense and nonoperating expense are presented in the following tables for the indicated periods.

Three months ended

Six months ended

June 30,

March 31,

June 30,

June 30,
(in thousands)

2017

2017

2016

2017

2016
Operating expense

Compensation expense

$
80,876

$
73,005

$
70,233

$
153,881

$
139,671
Employee benefits

15,334

16,007

14,004

31,341

29,307
Personnel expense

96,210

89,012

84,237

185,222

168,978
Net occupancy expense

12,969

10,762

10,394

23,731

20,750
Equipment expense

3,799

3,708

3,080

7,507

6,854
Data processing expense

16,755

15,395

14,370

32,150

28,577
Professional services expense

8,153

6,649

7,712

14,802

15,152
Amortization of intangibles

5,757

4,705

5,005

10,462

10,129
Telecommunications and postage

3,698

3,467

3,272

7,165

6,633
Deposit insurance and regulatory fees

6,983

6,490

6,049

13,473

11,446
Other real estate expense, net

(1,004)

(13)

350

(1,017)

795
Advertising

4,083

2,947

2,693

7,030

5,050
Ad valorem and franchise taxes

3,519

3,036

2,340

6,555

4,643
Printing and supplies

1,324

1,174

1,065

2,498

2,176
Insurance expense

807

817

829

1,624

1,664
Travel expense

1,206

1,044

1,079

2,250

2,028
Entertainment and contributions

1,974

1,767

2,001

3,741

3,633
Tax credit investment amortization

1,213

1,212

1,833

2,425

3,576
Other miscellaneous

5,407

4,907

4,633

10,314

9,912
Total operating expense

$
172,853

$
157,079

$
150,942

$
329,932

$
301,996
Nonoperating expense items

10,617

6,463

—

17,080

4,978
Total noninterest expense

$
183,470

$
163,542

$
150,942

$
347,012

$
306,974

~~Table of Contents~~



	Three months ended						Nine months ended
	September 30,		June 30,		September 30,		September 30,
(in thousands)	2017		2017		2016		2017		2016
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		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		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		3,552		4,083		2,859		10,582		7,909
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


	Three months ended						Six months ended				Three Months Ended						Nine Months Ended
	June 30,		March 31,		June 30,		June 30,				September 30,		June 30,		September 30,		September 30,
(in thousands)	2017		2017		2016			2017		2016	2017		2017		2016			2017		2016
Nonoperating expense
Personnel expense	$	1,435	$	107	$	—		1,542		3,974	$	2,120	$	1,435	$	—	$	3,662	$	3,974
Net occupancy and equipment expense		276		1		—		277		—		500		276		—		777		—
Professional services expense		2,200		4,627		—		6,827		181		2,854		2,200		—		9,681		181
Other real estate expense, net		(1,511)		—		—		(1,511)		323
Other real estate (income) expense, net												—		(1,511)		—		(1,511)		323
Advertising		901		130		—		1,031		—		358		901		—		1,389		—
Write-down related to FDIC loss share termination		6,603						6,603				—		6,603				6,603		—
Other expense		713		1,598		—		2,311		500		5,561		713		—		7,872		500
Total nonoperating expenses	$	10,617	$	6,463	$	—	$	17,080	$	4,978	$	11,393	$	10,617	$	—	$	28,473	$	4,978

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

~~As noted earlier, expenses~~There were minimal nonpermanent costs related to the FNBC ~~I and II~~ transactions ~~include nonpermanent costs in addition to those identified as nonoperating. These nonpermanent expenses include costs to maintain certain operations~~during the third quarter of the former FNBC, including 29 branch locations and other back office functions prior to systems conversion and consolidation of overlapping branches. Management estimates that these nonpermanent costs2017, while there were approximately $7 million ~~or $0.05 per share, in~~during the second quarter of 2017. ~~We expect these~~As noted earlier, nonpermanent costs included costs of operating ~~costs~~former FNBC branches and maintaining separate operations to ~~decrease~~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 and be eliminated by the fourth~~ quarter of 2017.

Personnel expense totaled ~~$96.2~~$92.6 million for the ~~second~~third quarter of 2017, ~~up $7.2~~down $3.6 million, or ~~8% linked~~4%, from the previous quarter due to ~~annual merit increases, higher bonus~~a decrease in the number of former FNBC employees, and incentive costs and $4.5 million related to the addition of personnel from FNBC. Approximately $3.5 million of the additional personnel costs are expected to be eliminated once consolidations are complete.lower pension costs. Year over year, personnel expense was up ~~$12.0~~$9.5 million, or ~~14%.~~11%, due to additional employees from the FNBC transactions, as well as merit increases.

Occupancy and equipment expenses totaled ~~$16.8~~$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 ~~16%, from the first quarter of 2017 and up $3.3 million, or 24%~~17%, compared to the ~~second~~third quarter of 2016 primarily due ~~in part,~~ to ~~approximately $1.1 million in costs related to acquired branches to be consolidated in~~ the ~~second half~~addition of ~~2017.~~ FNBC locations.

ORE expense for the third quarter of 2017 was $0.2 million compared to net gains on ORE dispositions ~~exceeded ORE expense by~~of $1.0 million ~~compared to near breakeven~~in the linked quarter and ~~$0.3~~$5.2 million ~~of net expense~~ in the ~~second~~third quarter of ~~2017.~~2016. Management ~~does not expect this~~believes the current quarter reflects a more typical level of ORE ~~gains to be sustainable in future quarters.~~expense.

All other expenses, excluding amortization of intangibles and nonoperating expense items, totaled ~~$55.1~~$51.6 million for the third quarter of 2017, down $3.5 million, or 6%, from the second quarter of 2017, ~~up $6.2~~and down $1.2 million, or ~~13%, from the first quarter of 2017, and up $7.2 million, or 15%~~2% compared to the ~~second~~third quarter of 2016. ~~These increases~~The decreases from the prior quarter were primarily seen in the professional services, data processing and advertising categories ~~including~~as the second quarter included $2.2 million of ~~temporary~~nonpermanent operating ~~cost~~costs related to FNBC transactions. The increases from the third quarter of 2016 include data processing, regulatory fees, and ad valorem taxes, primarily related to the FNBC transactions.

The effective income tax rate for the ~~second~~third quarter of 2017 was approximately ~~24.0%~~25.7%, compared to ~~25.3%~~24.0% in the ~~first~~second quarter of 2017 and ~~22.5%~~20.1% in the ~~second~~third quarter of 2016. Management expects the effective tax rate for the fourth quarter of 2017 ~~will~~to be approximately 21% to 22% due to the change in accounting treatment for stock-based compensation and the ~~range~~vesting of ~~25% to 27%, excluding the impact of employee share-based compensation.~~awards. The adoption of the new accounting standard for employee ~~share-based~~stock-based compensation results in ~~stock~~excess tax benefits from stock-based compensation having a direct impact on income tax expense, and therefore ~~the~~lowers our effective tax rate. ~~Depending~~The impact upon our effective tax rate will vary from quarter to quarter depending upon the Company’s share price and the number of shares vesting during the ~~period, the impact of stock compensation on income tax expense and the effective tax rate will vary from quarter to quarter.~~period. For the ~~second~~third quarter of 2017, excess tax benefits from ~~employee share-based~~stock-based compensation decreased income tax expense by ~~$1.4~~$0.2 million. The Company currently estimates that vesting of restricted stock awards ~~in the third quarter of 2017 will be minimal and~~ in the fourth quarter of 2017 will result in an additional income tax benefit of approximately ~~$3.7 million.This estimate is~~$3.6 million, based on the share price ~~as of the end of the second quarter and does not include the impact of stock option exercises.~~ 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 sources of tax credits 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 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.

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						Six months ended				Three months ended						Nine months ended
	June 30,		March 31,		June 30,		June 30,				September 30,		June 30,		September 30,		September 30,
	2017		2017		2016		2017		2016		2017		2017		2016		2017		2016
Common Share Data
Earnings per share:
Basic	$	0.60	$	0.57	$	0.59	$	1.17	$	0.64	$	0.68	$	0.60	$	0.59	$	1.85	$	1.23
Diluted	$	0.60	$	0.57	$	0.59	$	1.17	$	0.64	$	0.68	$	0.60	$	0.59	$	1.85	$	1.23
Cash dividends paid	$	0.24	$	0.24	$	0.24	$	0.48	$	0.48	$	0.24	$	0.24	$	0.24	$	0.72	$	0.72
Book value per share (period-end)	$	33.21	$	32.70	$	31.77	$	33.21	$	31.77	$	33.78	$	33.21	$	32.09	$	33.78	$	32.09
Tangible book value per share (period-end)	$	23.27	$	23.19	$	22.50	$	23.27	$	22.50	$	23.92	$	23.27	$	22.89	$	23.92	$	22.89
Weighted average number of shares (000s):
Basic		84,614		84,365		77,523		84,489		77,512		84,749		84,614		77,550		84,577		77,525
Diluted		84,867		84,624		77,680		84,755		77,676		84,980		84,867		77,677		84,818		77,653
Period-end number of shares (000s)		84,738		84,517		77,538		84,738		77,538		84,767		84,738		77,571		84,767		77,571
Market data:
High sales price	$	52.94	$	49.50	$	27.84	$	52.94	$	27.84	$	50.40	$	52.94	$	32.94	$	52.94	$	32.94
Low sales price	$	42.70	$	41.71	$	21.93	$	41.71	$	20.01	$	41.05	$	42.70	$	24.49	$	41.05	$	20.01
Period-end closing price	$	49.00	$	45.55	$	26.11	$	49.00	$	26.11	$	48.45	$	49.00	$	32.43	$	48.45	$	32.43
Trading volume (000s) (a)		39,035		45,119		41,668		84,154		97,987		33,243		39,035		42,809		117,397		140,796



	Three months ended						Six months ended				Three months ended						Nine months ended
	June 30,		March 31,		June 30,		June 30,				September 30,		June 30,		September 30,		September 30,
(in thousands)	2017		2017		2016		2017		2016		2017		2017		2016		2017		2016
Income Statement:
Interest income	$	226,177	$	202,515	$	183,506	$	428,692	$	364,147	$	232,716	$	226,177	$	182,153	$	661,408	$	546,300
Interest income (te) (a)		234,741		210,813		189,702		445,554		375,686		241,295		234,741		188,937		686,849		564,623
Interest expense		26,460		20,824		18,537		47,284		36,342		29,859		26,460		18,640		77,143		54,982
Net interest income (te) (a)		208,281		189,989		171,165		398,270		339,344		211,436		208,281		170,297		609,706		509,641
Provision for loan losses		14,951		15,991		17,196		30,942		77,232		13,040		14,951		18,972		43,982		96,204
Noninterest income		67,487		63,491		63,694		130,978		121,880		67,115		67,487		63,008		198,093		184,888
Noninterest expense (excluding amortization of intangibles)		177,713		158,837		145,937		336,550		296,845		171,546		177,713		144,172		508,096		441,017
Amortization of intangibles		5,757		4,705		5,005		10,462		10,129		6,070		5,757		4,886		16,532		15,015
Income before income taxes		68,783		65,649		60,525		134,432		65,479		79,316		68,783		58,491		213,748		123,970
Income tax expense		16,516		16,635		13,618		33,151		14,733		20,414		16,516		11,772		53,565		26,505
Net income	$	52,267	$	49,014	$	46,907	$	101,281	$	50,746	$	58,902	$	52,267	$	46,719	$	160,183	$	97,465



	Three months ended						Six months ended				Three months ended						Nine months ended
	June 30,		March 31,		June 30,		June 30,				September 30,		June 30,		September 30,		September 30,
	2017		2017		2016		2017		2016		2017		2017		2016		2017		2016
Performance Ratios
Return on average assets	0.79	%	0.80	%	0.82	%	0.80	%	0.44	%	0.88	%	0.79	%	0.80	%	0.82	%	0.56	%
Return on average common equity	7.52	%	7.27	%	7.76	%	7.40	%	4.20	%	8.23	%	7.52	%	7.52	%	7.69	%	5.33	%
Return on average tangible common equity	10.69	%	9.92	%	11.04	%	10.31	%	5.98	%	11.68	%	10.69	%	10.58	%	10.77	%	7.55	%
Earning asset yield (te) (a)	3.87	%	3.74	%	3.60	%	3.80	%	3.59	%	3.92	%	3.87	%	3.55	%	3.84	%	3.58	%
Total cost of funds	0.44	%	0.37	%	0.35	%	0.40	%	0.35	%	0.48	%	0.44	%	0.35	%	0.43	%	0.35	%
Net interest margin (te) (a)	3.43	%	3.37	%	3.25	%	3.40	%	3.24	%	3.44	%	3.43	%	3.20	%	3.41	%	3.23	%
Noninterest income to total revenue (te) (a)	24.47	%	25.05	%	27.12	%	24.75	%	26.43	%	24.09	%	24.47	%	27.01	%	24.52	%	26.62	%
Efficiency ratio (b)	60.59	%	61.16	%	62.14	%	60.86	%	63.28	%	57.50	%	60.59	%	61.80	%	59.70	%	62.78	%
Average loan/deposit ratio	87.76	%	89.90	%	85.80	%	88.77	%	86.24	%	87.08	%	87.76	%	85.64	%	88.18	%	86.04	%
FTE employees (period-end)	4,162		3,819		3,723		4,162		3,723		3,979		4,162		3,747		3,979		3,747
Capital Ratios
Common stockholders' equity to total assets	10.57	%	10.84	%	10.68	%	10.57	%	10.68	%	10.68	%	10.57	%	10.77	%	10.68	%	10.77	%
Tangible common equity ratio (c)	7.65	%	7.94	%	7.81	%	7.65	%	7.81	%	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 stockholders’ equity less intangible assets divided by total assets less intangible assets.



	Three months ended									Six months ended						Three months ended									Nine months ended
	June 30,			March 31,			June 30,			June 30,			June 30,			September 30,			June 30,			September 30,			September 30,			September 30,
($ in thousands)	2017			2017			2016			2017			2016			2017			2017			2016			2017			2016
Asset Quality Information
Nonaccrual loans (a)	$	238,219		$	262,649		$	265,722		$	238,219		$	265,722		$	269,676		$	238,219		$	302,810		$	269,676		$	302,810
Restructured loans - still accruing		90,502			47,267			35,974			90,502			35,974			96,735			90,502			8,059			96,735			8,059
Total nonperforming loans		328,721			309,916			301,696			328,721			301,696			366,411			328,721			310,869			366,411			310,869
Other real estate (ORE) and foreclosed assets		18,049			17,156			23,374			18,049			23,374			21,219			18,049			19,806			21,219			19,806
Total nonperforming assets	$	346,770		$	327,072		$	325,070		$	346,770		$	325,070		$	387,630		$	346,770		$	330,675		$	387,630		$	330,675
Accruing loans 90 days past due (a)	$	18,390		$	590		$	7,982		$	18,390		$	7,982		$	28,850		$	18,390		$	4,933		$	28,850		$	4,933
Net charge-offs - non-purchased credit impaired		5,985			29,911			7,803			35,896			29,102			11,783			5,985			9,531			47,679			38,633
Net charge-offs - purchased credit impaired		(45)			118			(147)			73			(214)			—			(45)			(124)			73			(338)
Allowance for loan losses		221,865			213,550			226,086			221,865			226,086			223,122			221,865			236,061			223,122			236,061
Provision for loan losses		14,951			15,991			17,196			30,942			77,232			13,040			14,951			18,972			43,982			96,204
Ratios:
Nonperforming assets to loans, ORE and foreclosed assets		1.88	%		1.79	%		2.02	%		1.88	%		2.02	%		2.06	%		1.88	%		2.06	%		2.06	%		2.06	%
Accruing loans 90 days past due to loans		0.10	%		0.00	%		0.05	%		0.10	%		0.05	%		0.15	%		0.10	%		0.03	%		0.15	%		0.03	%
Nonperforming assets + accruing loans 90 days past due to loans, ORE and foreclosed assets		1.97	%		1.80	%		2.07	%		1.97	%		2.07	%		2.21	%		1.97	%		2.09	%		2.21	%		2.09	%
Net charge-offs - non-purchased credit impaired to average loans		0.13	%		0.70	%		0.20	%		0.41	%		0.37	%		0.25	%		0.13	%		0.24	%		0.35	%		0.32	%
Allowance for loan losses to period-end loans		1.20	%		1.17	%		1.41	%		1.20	%		1.41	%		1.19	%		1.20	%		1.47	%		1.19	%		1.47	%
Allowance for loan losses to nonperforming loans + accruing loans 90 days past due		63.92	%		68.77	%		73.01	%		63.92	%		73.01	%		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

June 30,

March 31,

December 31,

September 30,

June 30,
(in thousands)

2017

2017

2016

2016

2016
Period-End Balance Sheet

Total loans, net of unearned income (a)

$
18,473,841

$
18,204,868

$
16,752,151

$
16,070,821

$
16,035,796
Loans held for sale

26,787

20,883

34,064

42,545

42,297
Securities

5,668,836

5,001,273

5,017,128

4,843,112

4,806,370
Short-term investments

126,428

51,273

78,177

128,920

153,159
Earning assets

24,295,892

23,278,297

21,881,520

21,085,398

21,037,622
Allowance for loan losses

(221,865)

(213,550)

(229,418)

(236,061)

(226,086)
Goodwill

740,265

716,761

621,193

621,193

621,193
Other intangible assets, net

101,694

86,952

87,757

92,523

97,409
Other assets

1,714,583

1,616,566

1,614,250

1,545,677

1,533,652
Total assets

$
26,630,569

$
25,485,026

$
23,975,302

$
23,108,730

$
23,063,790
Noninterest-bearing deposits

$
7,887,867

$
7,722,279

$
7,658,203

$
7,543,041

$
7,151,416
Interest-bearing transaction and savings deposits

8,402,133

7,162,760

6,910,466

6,620,373

6,754,513
Interest-bearing public funds deposits

2,537,030

2,595,263

2,563,758

2,394,148

2,354,234
Time deposits

2,615,785

2,441,718

2,291,839

2,327,915

2,556,706
Total interest-bearing deposits

13,554,948

12,199,741

11,766,063

11,342,436

11,665,453
Total deposits

21,442,815

19,922,020

19,424,266

18,885,477

18,816,869
Short-term borrowings

1,810,907

2,121,932

1,225,406

1,075,956

1,095,107
Long-term debt

407,876

525,082

436,280

463,710

468,028
Other liabilities

155,009

152,370

169,582

194,460

220,421
Stockholders' equity

2,813,962

2,763,622

2,719,768

2,489,127

2,463,365
Total liabilities & stockholders' equity

$
26,630,569

$
25,485,026

$
23,975,302

$
23,108,730

$
23,063,790



	Three months ended						Six months ended				Three months ended						Nine months ended
	June 30,		March 31,		June 30,		June 30,		June 30,		September 30,		June 30,		September 30,		September 30,		September 30,
(in thousands)	2017		2017		2016		2017		2016		2017		2017		2016		2017		2016
Average Balance Sheet
Total loans, net of unearned income (a)	$	18,369,446	$	17,303,044	$	16,059,846	$	17,839,191	$	15,954,308	$	18,591,219	$	18,369,446	$	16,023,458	$	18,092,622	$	15,977,526
Loans held for sale		22,389		21,328		29,053		21,862		21,937		21,723		22,389		38,687		21,815		27,561
Securities (b)		5,241,735		5,037,286		4,648,807		5,140,075		4,588,449		5,679,841		5,241,735		4,707,224		5,321,974		4,628,330
Short-term investments		704,560		408,343		409,323		557,270		464,155		194,643		704,560		428,037		435,066		452,028
Earning assets		24,338,130		22,770,001		21,147,029		23,558,398		21,028,849		24,487,426		24,338,130		21,197,406		23,871,477		21,085,445
Allowance for loan losses		(216,851)		(226,503)		(220,679)		(221,650)		(201,971)		(224,537)		(216,851)		(228,603)		(222,623)		(210,913)
Goodwill and other intangible assets		826,097		729,766		721,031		778,198		723,563		837,107		826,097		716,097		798,050		721,056
Other assets		1,578,877		1,483,242		1,491,210		1,531,322		1,485,112		1,577,577		1,578,877		1,517,890		1,546,910		1,496,117
Total assets	$	26,526,253	$	24,756,506	$	23,138,591	$	25,646,268	$	23,035,553	$	26,677,573	$	26,526,253	$	23,202,790	$	25,993,814	$	23,091,705
Noninterest-bearing deposits	$	7,769,932	$	7,462,258	$	7,079,426	$	7,616,945	$	7,056,553	$	7,775,913	$	7,769,932	$	7,277,568	$	7,670,517	$	7,130,762
Interest-bearing transaction and savings deposits		8,047,426		6,897,660		6,779,565		7,475,719		6,797,634		8,097,370		8,047,426		6,732,815		7,685,213		6,775,870
Interest-bearing public fund deposits		2,539,424		2,547,874		2,302,096		2,543,626		2,237,766		2,764,961		2,539,424		2,253,588		2,618,215		2,243,078
Time deposits		2,575,779		2,340,066		2,556,668		2,458,574		2,407,802		2,711,574		2,575,779		2,446,265		2,543,834		2,420,717
Total interest-bearing deposits		13,162,629		11,785,600		11,638,329		12,477,919		11,443,202		13,573,905		13,162,629		11,432,668		12,847,262		11,439,665
Total deposits		20,932,561		19,247,858		18,717,755		20,094,864		18,499,755		21,349,818		20,932,561		18,710,236		20,517,779		18,570,427
Short-term borrowings		2,232,845		2,127,256		1,351,227		2,180,342		1,458,015		1,909,365		2,232,845		1,366,236		2,089,024		1,427,199
Long-term debt		428,292		458,050		471,924		443,089		477,636		339,535		428,292		468,100		408,191		474,435
Other liabilities		145,989		190,253		167,680		167,998		169,271		240,338		145,989		185,820		192,376		174,826
Stockholders' equity		2,786,566		2,733,089		2,430,005		2,759,975		2,430,876		2,838,517		2,786,566		2,472,398		2,786,444		2,444,818
Total liabilities & stockholders' equity	$	26,526,253	$	24,756,506	$	23,138,591	$	25,646,268	$	23,035,553	$	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									Six months ended						Three months ended									Nine months ended
		June 30,			March 31,			June 30,			June 30,			June 30,			September 30,			June 30,			September 30,			September 30,			September 30,
($ in thousands)		2017			2017			2016			2016			2016			2017			2017			2016			2017			2016
Net interest income	$	199,717		$	181,691		$	164,969		$	381,408		$	327,805		$	202,857		$	199,717		$	163,513		$	584,265		$	491,318
Tax-equivalent adjustment (te)(a)		8,564			8,298			6,196			16,862			11,539			8,579			8,564			6,784			25,441			18,323
Net interest income (te)	$	208,281		$	189,989		$	171,165		$	398,270		$	339,344		$	211,436		$	208,281		$	170,297		$	609,706		$	509,641
Purchase accounting adjustments
Net loan discount accretion (b)		8,801			5,017			5,878			13,818			12,236			7,711			8,801			5,206			21,529			17,443
Net investment premium amortization (c)		(398)			(454)			(636)			(852)			(1,356)			(364)			(398)			(581)			(1,216)			(1,936)
Net purchase accounting adjustments		8,403			4,563			5,242			12,966			10,880			7,347			8,403			4,625			20,313			15,507
Net interest income (te) - core	$	199,878		$	185,426		$	165,923		$	385,304		$	328,464		$	204,089		$	199,878		$	165,672		$	589,393		$	494,134
Average earning assets	$	24,338,130		$	22,770,001		$	21,147,029		$	23,558,398		$	21,028,849		$	24,487,426		$	24,338,130		$	21,197,406		$	23,871,477		$	21,085,445
Net interest margin - reported		3.43	%		3.37	%		3.25	%		3.40	%		3.24	%		3.44	%		3.43	%		3.20	%		3.41	%		3.23	%
Net purchase accounting adjustments		0.14	%		0.08	%		0.10	%		0.11	%		0.10	%		0.12	%		0.14	%		0.08	%		0.11	%		0.10	%
Net interest margin - core		3.29	%		3.29	%		3.15	%		3.29	%		3.14	%		3.32	%		3.29	%		3.12	%		3.30	%		3.13	%


	Three months ended						Six months ended					Three months ended						Nine months ended
		June 30,		March 31,		June 30,			June 30,		June 30,		September 30,		June 30,		September 30,			September 30,		September 30,
(in thousands)		2017		2017		2016			2017		2016		2017		2017		2016			2017		2016
Net interest income	$	199,717	$	181,691	$	164,969		$	381,408	$	327,805	$	202,857	$	199,717	$	163,513		$	584,265	$	491,318
Noninterest income		67,487		63,491		63,694			130,978		121,880		67,115		67,487		63,008			198,093		184,888
Total revenue	$	267,204	$	245,182	$	228,663		$	512,386	$	449,685	$	269,972	$	267,204	$	226,521		$	782,358	$	676,206
Tax-equivalent adjustment (a)		8,564		8,298		6,196			16,862		11,539		8,579		8,564		6,784			25,441		18,323
Purchase accounting adjustments - revenue (d)		(7,076)		(3,463)		(3,716)			(10,539)		(7,742)		(7,347)		(7,076)		(3,088)			(17,886)		(10,830)
Nonoperating revenue		—		(4,352)		—			(4,352)		—		—		—		—			(4,352)		—
Core revenue (te)	$	268,692	$	245,665	$	231,143		$	514,357	$	453,482	$	271,204	$	268,692	$	230,217		$	785,561	$	683,699
Noninterest expense		(183,470)		(163,542)		(150,942)			(347,012)		(306,974)		(177,616)		(183,470)		(149,058)			(524,628)		(456,032)
Intangible amortization		5,757		4,705		5,005			10,462		10,129		6,070		5,757		4,886			16,532		15,015
Nonoperating items		10,617		6,463		—			17,080		4,978
Nonoperating expense													11,393		10,617		—			28,473		4,978
Core pre-tax, pre-provision net revenue (te)	$	101,596	$	93,291	$	85,206		$	194,887	$	161,615	$	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 36.61% at September 30, 2017, compared to 33.57% at June 30, 2017 ~~compared to 20.29%~~and 23.97% at ~~March 31, 2017 and 28.39% at June~~September 30, 2016. The total amount of free securities at June 30, 2017 increased by $0.9 billion compared to the prior quarter as total securities rose by $0.7 billion due in part to the deployment of excess liquidity from the FNBC II transaction. The total of pledged securities at ~~June~~September 30, 2017 was down ~~$227~~$203.8 million compared to ~~March 31,2017~~June 30, 2017 as collateral related to seasonal public fund tax deposits was released. Total securities at ~~June~~September 30, 2017 were ~~$0.9~~$0.8 billion higher than at ~~June~~September 30, 2016.



	June 30,		March 31,		December 31,		September 30,		June 30,		September 30,		June 30,		March 31,		December 31,		September 30,
Liquidity Metrics	2017		2017		2016		2016		2016		2017		2017		2017		2016		2016
Free securities / total securities	33.57	%	20.29	%	23.46	%	23.97	%	28.39	%	36.61	%	33.57	%	20.29	%	23.46	%	23.97	%
Core deposits / total deposits	93.05	%	92.93	%	93.22	%	93.03	%	91.99	%	91.70	%	93.05	%	92.93	%	93.22	%	93.03	%
Wholesale funds / core deposits	11.12	%	14.30	%	9.18	%	8.76	%	9.03	%	10.47	%	11.12	%	14.30	%	9.18	%	8.76	%
Quarter-to-date average loans /quarter-to-date average deposits	87.76	%	89.90	%	86.31	%	85.64	%	85.80	%	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. The ratio of core deposits to total deposits was 91.70% at September 30, 2017, compared to 93.05% at June 30, 2017 ~~compared to 92.93%~~and 93.03% at ~~March 31, 2017 and 91.99% at June~~September 30, 2016. Core deposits totaled ~~$20.0~~$19.7 billion at ~~June~~September 30, 2017, ~~an increase~~a decrease of ~~$1.4 billion from March 31, 2017, and up $2.6~~$0.2 billion from June 30, 2017, and up $2.2 billion from September 30, 2016. ~~These increases were~~The increase from September 30, 2016 was primarily due to the FNBC transactions. Brokered deposits totaled ~~$758 million~~$1.1 billion as of September 30, 2017, a $0.3 billion, or 42%, increase compared to June 30, 2017 ~~a $42 million, or 5%, decrease from March 31, 2017,~~ and ~~down $201 million compared to June~~September 30, 2016. The 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 ~~June~~September 30, 2017, the Bank had ~~borrowed $1.3~~borrowings of approximately $1.2 billion ~~from the FHLB~~ and had approximately ~~$2.6~~$3.0 billion available under this line. The Bank also has unused borrowing capacity at the Federal Reserve’s discount window of approximately $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 ~~11.12%~~10.47% of core deposits at ~~June~~September 30, 2017, compared to ~~14.30%~~11.12% at ~~March 31,~~June 30, 2017 and ~~9.03%~~8.76% at ~~June~~September 30, 2016. The linked quarter decrease primarily related to ~~the FNBC II transaction which added approximately $1.5 billion~~a $0.2 million decrease in both wholesale funds and core deposits. Cash received in the transaction allowed the Company to pay down approximately $800 million of FHLB borrowings. In addition, long-term debt decreased $117 million, primarily due to the payoff of the Company’s subordinated debt that matured in April 2017. The ~~year-over-year~~year over year increase was primarily due to an increase in FHLB borrowings. FHLB borrowings totaled $1.2 billion at September 30, 2017 compared to $1.3 billion at June 30, 2017 ~~compared to $1.7 billion at March 31, 2017~~ and $0.7 billion at ~~June~~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 ~~second~~third quarter of 2017 was ~~87.76%~~87.08%, compared to ~~89.90% linked quarter and 85.80%~~87.76% at June 30, ~~2016. The loan-to-deposit ratio for the second quarter of~~ 2017 ~~was impacted by the $1.5 billion in deposits acquired in the FNBC II transaction, while the first quarter of 2017 ratio was impacted by the $1.2 billion of loans~~ and ~~$0.4 billion of deposits acquired in the FNBC I transaction.~~85.64% 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%.

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 ~~six~~nine months ended ~~June~~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 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 to provide liquidity in an amount sufficient to fund a minimum of at least six quarters of anticipated common stockholder dividends.

Stockholders’ equity totaled ~~$2.8~~$2.9 billion at September 30, 2017, up $49 million, or 2% from June 30, 2017 and up ~~$50~~$374 million, or ~~2% compared to March 31, 2017 and up $351 million, or 14%~~15%, from ~~June~~September 30, 2016. The tangible common equity ratio was 7.80% at September 30, 2017, compared to 7.65% at June 30, 2017 ~~compared~~and 7.93% at September 30, 2016. The increase in the ratio from prior quarter is due to ~~7.94% at March 31, 2017 and 7.81% at June 30, 2016.~~net tangible earnings. The decline in the ratio from prior periods was due to the effect of the assets acquired in the FNBC ~~transactions. Partially offsetting the year-over-year decrease~~transactions, which was partially offset by the $259 million stock issuance in the fourth quarter of 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 June 30, 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 ~~down compared~~lower in the third quarter of 2017 relative to ~~March 31, 2017 and~~ December 31, 2016 ~~due to~~as a result the FNBC transactions, ~~but remained~~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 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-		June 30,		March 31,		December 31,		September 30,		June 30,		Well-		September 30,		June 30,		March 31,		December 31,		September 30,
	Capitalized		2017		2017		2016		2016		2016		Capitalized		2017		2017		2017		2016		2016
Total capital (to risk weighted assets)
Hancock Holding Company	10.00	%	11.76	%	11.91	%	13.21	%	12.15	%	11.96	%	10.00	%	11.84	%	11.76	%	11.91	%	13.21	%	12.15	%
Whitney Bank	10.00	%	11.33	%	11.52	%	11.57	%	11.81	%	11.70	%	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	%	10.01	%	10.16	%	11.26	%	10.09	%	9.94	%	6.50	%	10.10	%	10.01	%	10.16	%	11.26	%	10.09	%
Whitney Bank	6.50	%	10.28	%	10.49	%	10.39	%	10.56	%	10.48	%	6.50	%	10.31	%	10.28	%	10.49	%	10.39	%	10.56	%
Tier 1 capital (to risk weighted assets)
Hancock Holding Company	8.00	%	10.01	%	10.16	%	11.26	%	10.09	%	9.94	%	8.00	%	10.10	%	10.01	%	10.16	%	11.26	%	10.09	%
Whitney Bank	8.00	%	10.28	%	10.49	%	10.39	%	10.56	%	10.48	%	8.00	%	10.31	%	10.28	%	10.49	%	10.39	%	10.56	%
Tier 1 leverage capital
Hancock Holding Company	5.00	%	8.21	%	8.79	%	9.56	%	8.35	%	8.22	%	5.00	%	8.34	%	8.21	%	8.79	%	9.56	%	8.35	%
Whitney Bank	5.00	%	8.44	%	9.09	%	8.83	%	8.76	%	8.69	%	5.00	%	8.53	%	8.44	%	9.09	%	8.83	%	8.76	%

~~Investment~~Investments in securities totaled ~~$5.7~~$5.6 billion at September 30, 2017, up $44 million, or 1%, from June 30, 2017 and up ~~$668 million, or 13%, from March 31, 2017 and $862~~$781 million from ~~June~~September 30, 2016. ~~During the second quarter of 2017, the Company purchased approximately $810 million of mortgage-backed securities and municipal securities at a nominal average yield of 2.35%.~~ At ~~June~~September 30, 2017, securities available for sale totaled $2.8 billion and securities held to maturity totaled ~~$2.9~~$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 ~~June~~September 30, 2017, the average maturity of the portfolio was ~~5.53~~5.57 years with an effective duration of ~~4.84~~4.64 years and a nominal weighted-average yield of ~~2.35%~~2.36%. Management simulations indicate that the effective duration would increase to ~~5.08~~4.90 years with a 100 bps increase in the yield curve and to ~~5.20~~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 ~~June~~September 30, 2016 was ~~5.0~~5.06 years, while the duration was ~~3.39~~3.78 years, and the nominal weighted average yield was ~~2.43%~~2.28%.

Total loans at ~~June~~September 30, 2017 were ~~$18.5~~$18.8 billion, up approximately ~~$269~~$312 million, or ~~1.5%~~1.7%, from ~~March 31,~~June 30, 2017. ~~The increase includes approximately $165 million of loans from the FNBC II transaction (net of the fair value discount).~~ Loans to ~~energy-related~~energy related companies decreased ~~$59~~$97 million ~~and nonenergy shared national credits decreased $82 million during the second 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.

During the quarter, the Company reached an agreement with the FDIC to terminate the remaining portion of its 2009 loss share agreement. In the second quarter of 2017, the Company wrote down the indemnification asset by $6.6 million to $3.2 million, the amount received from the FDIC in the third quarter of 2017. The remaining loan balances that were covered under the agreement totaled $154 million at June 30, 2017, with a reserve totaling $15 million.



		June 30,		March 31,		December 31,		September 30,		June 30,	September 30,		June 30,		March 31,		December 31,		September 30,
(in thousands)		2017		2017		2016		2016		2016	2017		2017		2017		2016		2016
Total loans:
Commercial non-real estate	$	8,093,104	$	8,074,287	$	7,613,917	$	7,133,928	$	7,132,519	$	8,129,429	$	8,093,104	$	8,074,287	$	7,613,917	$	7,133,928
Commercial real estate - owner occupied		2,078,332		2,047,451		1,906,821		1,901,825		1,916,200		2,076,014		2,078,332		2,047,451		1,906,821		1,901,825
Total commercial and industrial		10,171,436		10,121,738		9,520,738		9,035,753		9,048,719		10,205,443		10,171,436		10,121,738		9,520,738		9,035,753
Commercial real estate - income producing		2,401,673		2,505,104		2,013,890		1,990,309		2,024,471		2,511,808		2,401,673		2,505,104		2,013,890		1,990,309
Construction and land development		1,313,522		1,252,667		1,010,879		946,592		880,588		1,373,048		1,313,522		1,252,667		1,010,879		946,592
Residential mortgages		2,493,923		2,266,263		2,146,713		2,037,162		2,017,650		2,596,692		2,493,923		2,266,263		2,146,713		2,037,162
Consumer		2,093,287		2,059,096		2,059,931		2,061,005		2,064,368		2,099,294		2,093,287		2,059,096		2,059,931		2,061,005
Total loans	$	18,473,841	$	18,204,868	$	16,752,151	$	16,070,821	$	16,035,796	$	18,786,285	$	18,473,841	$	18,204,868	$	16,752,151	$	16,070,821

~~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.



	June 30,				March 31,				December 31,				September 30,				June 30,				September				June 30,				March 31,				December 31,				September 30,
	2017				2017				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	$	1,258,221	13	%	$	1,119,937	11	%	$	975,821	10	%	$	980,484	11	%	$	986,502	11	%	$	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)		1,133,314	11			1,211,006	12			1,320,294	14			1,311,480	15			1,382,496	15			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		1,116,411	11			1,076,164	11			1,010,135	11			953,900	10			900,604	10			1,023,939	10			1,084,644	11			1,076,164	11			1,010,135	11			953,900	10
Public Administration		848,475	8			839,005	8			796,742	8			717,629	8			686,179	8			832,638	8			848,543	8			839,005	8			796,742	8			717,629	8
Manufacturing (a)		793,016	8			769,118	8			729,926	8			637,194	7			655,493	7			726,339	7			769,161	8			769,118	8			729,926	8			637,194	7
Retail Trade (a)		810,512	8			755,059	8			682,775	7			632,175	7			645,073	7			761,418	7			774,414	8			755,059	8			682,775	7			632,175	7
Finance and Insurance		519,983	5			478,473	5			507,339	5			451,469	5			463,953	5			559,092	5			503,551	5			478,473	5			507,339	5			451,469	5
Wholesale Trade (a)		503,336	5			490,569	5			486,940	5			461,133	5			452,973	5			513,086	5			492,910	5			490,569	5			486,940	5			461,133	5
Construction		553,403	5			519,663	5			478,926	5			447,206	5			441,160	5			564,444	6			521,926	5			519,663	5			478,926	5			447,206	5
Transportation and Warehousing (a)		587,985	6			556,468	5			468,377	5			428,936	5			422,649	5			563,263	6			569,923	6			556,468	5			468,377	5			428,936	5
Educational Services		438,195	4			428,248	4			421,035	4			421,114	5			429,810	5			438,247	4			434,955	4			428,248	4			421,035	4			421,114	5
Professional, Scientific, and Technical Services (a)		389,092	4			362,610	4			340,323	4			339,642	4			320,319	4			356,560	3			371,055	4			362,610	4			340,323	4			339,642	4
Other Services (except Public Administration)		369,202	4			342,155	3			308,802	3			292,669	3			292,482	3			349,711	3			348,080	3			342,155	3			308,802	3			292,669	3
Accommodation and Food Services		347,773	3			338,241	3			270,693	3			295,625	3			294,607	3			340,551	3			305,421	3			338,241	3			270,693	3			295,625	3
Other (a)		502,518	5			835,022	8			722,610	8			665,097	7			674,419	7			966,882	10			899,457	8			835,022	8			722,610	8			665,097	7
Total commercial & industrial loans	$	10,171,436	100	%	$	10,121,738	100	%	$	9,520,738	100	%	$	9,035,753	100	%	$	9,048,719	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 ~~$1.2~~$1.1 billion, ~~$1.3~~$1.2 billion, $1.4 billion, $1.4 billion, and ~~$1.5~~$1.4 billion, at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, ~~September 30, 2016,~~ and ~~June~~September 30, 2016, respectively.

(b) June 30, 2017 reflects reclassifications from the previous filing for the FNBC transactions.

At ~~June~~September 30, 2017, commercial and industrial (“C&I”) loans, including both non-real estate and owner occupied real estate secured loans, totaled approximately $10.2 billion, an increase of ~~$49.7~~$34.0 million, or ~~0.5%~~0.3%, from ~~March 31,~~June 30, 2017. Included in C&I are ~~$1.2~~$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 ~~6.7%~~6.0% of total loans at ~~June~~September 30, 2017, down from 12.4% in fourth quarter of 2014, the beginning of the downturn of the energy cycle. Payoffs and paydowns of approximately ~~$134~~$142 million and charge-offs of approximately $8 million were partially offset by approximately ~~$75~~$52 million in 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 ~~June~~September 30, 2017 totaling approximately ~~$2.1~~$2.0 billion, or 11% of total loans, were down ~~$114~~$75 million compared to ~~March 31,~~June 30, 2017 and down ~~$76~~$41 million from ~~June~~September 30, 2016. Approximately ~~$781~~$718 million of shared national credits were with ~~energy-related~~energy related customers at ~~June~~September 30, 2017, down approximately ~~$32~~$72 million from ~~March 31,~~June 30, 2017 and down ~~$198~~$199 million from ~~June~~September 30, 2016.

Commercial real estate – income producing loans totaled approximately ~~$2.4~~$2.5 billion at ~~June~~September 30, 2017, ~~a decrease~~an increase of ~~$103~~$110 million, or 4%5%, from ~~March 31,~~June 30, 2017. The majority of the ~~decrease~~increase in commercial real estate – income producing loans was related to the ~~multi-family~~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.

June 30,

March 31,

December 31,

September 30,

June 30,

2017

2017

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

$
538,979

23
%

$
565,673

23
%

$
466,168

22
%

$
483,026

24
%

$
505,146

25
%
Office

535,210

22

482,121

19

371,029

19

382,191

19

360,677

18

Multifamily

347,583

15

444,188

18

346,612

17

314,539

16

366,608

18

Industrial

310,154

13

307,170

12

289,482

14

292,037

15

285,897

14

Hotel/Motel

345,556

14

268,138

11

179,016

9

129,209

6

131,750

7

Other

324,191

13

437,814

17

361,583

19

389,307

20

374,393

18

Total commercial real estate - income producing loans

$
2,401,673

100
%

$
2,505,104

100
%

$
2,013,890

100
%

$
1,990,309

100
%

$
2,024,471

100
%

Construction and land development loans, totaling approximately ~~$1.3~~$1.4 billion at ~~June~~September 30, 2017, increased approximately ~~$61~~$60 million from ~~March 31,~~June 30, 2017. Residential mortgages ~~increased $228 million, in part, due to the FNBC II acquisition~~ and ~~partly due to the Company’s revenue-generating initiatives. Consumer~~consumer loans increased ~~$34~~$103 million and $6 million respectively, during the ~~second~~third quarter of 2017.

The Company's total allowance for loan losses was $223.1 million at September 30, 2017, compared to $221.9 million at June 30, ~~2017, compared to $213.6 million at March 31,~~ 2017. The ratio of the allowance for loan losses to period-end loans ~~increased~~decreased 1 bp to ~~1.20%~~1.19%, compared to ~~1.17% for the prior quarter end.~~1.20% at June 30, 2017. The increase in ~~coverage~~allowance is primarily driven by higher non-energy reserves ~~that were increased~~due to ~~strengthen coverage as we continue to grow~~continued growth and ~~diversify~~diversification of that portfolio. Energy prices ~~while down from~~improved compared the prior quarter and have remained relatively ~~stable~~stable. Energy exposure and ~~there is some improvement in energy~~ criticized loan levels ~~across~~continued to decline in all portfolios. Management believes the allowance level for the energy portfolio, as built in previous quarters, remains adequate.

~~During the second quarter of 2017, Hancock recorded a total provision for loan losses of $15.0 million, down $1.0 million from $16.0 million in the first quarter of 2017.~~

Net charge-offs from the non-purchased credit impaired loan portfolio were ~~$6.0~~$11.8 million, or ~~0.13%~~0.25%, of average total loans on an annualized basis in the ~~second~~third quarter of 2017, ~~down~~up from ~~$29.9~~$6.0 million, or ~~0.70%~~0.13%, of average total loans in the ~~first~~second quarter of 2017. Net charge-offs to energy credits in the third quarter of 2017 totaled $3.6 million, consisting of gross charge-offs of $7.6 million, net of recoveries of $4.0 million. There were no ~~charge-offs~~charges-offs related to energy credits in the second quarter of 2017. ~~Energy~~Third quarter residential mortgage charge-offs were ~~approximately $23.0~~up $1.4 million ~~in the~~compared 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 ~~quarter~~and fourth quarters of ~~2017.~~2017 and 2016, respectively.

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



(in millions)	Outstanding Balance		Allocated Allowance for Loan and Lease Losses		Allowance for Loan and Lease Losses as a % of Loans			Outstanding Balance		Allocated Allowance for Loan and Lease Losses		Allowance for Loan and Lease Losses as a % of Loans
Upstream (reserve-based lending)	$	400	$	21.6		5.4	%	$	380	$	18.2		4.8	%
Midstream		66		1.3		2.0			55		0.7		1.2
Support - drilling		161		11.7		7.3			153		12.8		8.4
Support - nondrilling		604		48.8		8.1			545		48.1		8.8
Total	$	1,231	$	83.4		6.8	%	$	1,133	$	79.8		7.0	%

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 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. There were no charge offs~~cycle including the net charge-off of $3.6 million in the ~~second 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									Six months ended
															Three months ended									Nine months ended
	June 30,			March 31,			June 30,			June 30,					September 30,			June 30,			September 30,			September 30,
(in thousands)	2017			2017			2016			2017			2016		2017			2017			2016			2017			2016
Allowance for loan losses at beginning of period	$	213,550		$	229,418		$	217,794		$	229,418		$	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		1,427			24,791			4,545			26,218			22,212		9,029			1,427			5,292			35,247			27,504
Commercial real estate - owner-occupied		488			29			416			517			1,199		10			488			461			527			1,660
Total commercial & industrial		1,915			24,820			4,961			26,735			23,411		9,039			1,915			5,753			35,774			29,164
Commercial real estate - income producing		153			7			76			160			191		—			153			—			160			191
Construction and land development		77			37			482			114			592		479			77			235			593			827
Residential mortgages		401			289			417			690			592		1,693			401			316			2,383			908
Consumer		6,568			8,539			5,425			15,107			11,268		7,584			6,568			6,135			22,691			17,403
Total non-purchased credit impaired charge-offs		9,114			33,692			11,361			42,806			36,054		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		4			54			—			58			18		19			4			—			77			18
Residential mortgages		27			59			23			86			23		16			27			68			102			91
Consumer		14			139			8			153			8		—			14			—			153			8
Total purchased credit impaired charge-offs		45			252			31			297			78		35			45			68			332			146
Total charge-offs		9,159			33,944			11,392			43,103			36,132		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		880			936			993			1,816			1,802		4,621			880			907			6,437			2,709
Commercial real estate - owner-occupied		43			200			197			243			238		94			43			49			337			287
Total commercial & industrial		923			1,136			1,190			2,059			2,040		4,715			923			956			6,774			2,996
Commercial real estate - income producing		23			375			124			398			268		257			23			405			655			673
Construction and land development		268			448			520			716			1,125		285			268			297			1,001			1,422
Residential mortgages		154			108			179			262			480		54			154			17			316			497
Consumer		1,761			1,714			1,545			3,475			3,039		1,701			1,761			1,233			5,176			4,272
Total non-purchased credit impaired recoveries		3,129			3,781			3,558			6,910			6,952		7,012			3,129			2,908			13,922			9,860
Purchased credit impaired loans:
Commercial non real estate		—			2			5			2			8		3			—			68			5			76
Commercial real estate - owner-occupied		18			75			85			93			120		17			18			43			110			163
Total commercial & industrial		18			77			90			95			128		20			18			111			115			239
Commercial real estate - income producing		—			—			1			—			2		—			—			—			—			2
Construction and land development		16			23			18			39			53		10			16			45			49			98
Residential mortgages		14			5			2			19			3		4			14			30			23			33
Consumer		42			29			67			71			106		1			42			6			72			112
Total purchased credit impaired recoveries		90			134			178			224			292		35			90			192			259			484
Total recoveries		3,219			3,915			3,736			7,134			7,244		7,047			3,219			3,100			14,181			10,344
Net charge-offs - non-purchased credit impaired loans		5,985			29,911			7,803			35,896			29,102		11,783			5,985			9,531			47,679			38,633
Net charge-offs - purchased credit impaired loans		(45)			118			(147)			73			(214)		—			(45)			(124)			73			(338)
Total net charge-offs		5,940			30,029			7,656			35,969			28,888		11,783			5,940			9,407			47,752			38,295
Provision for loan losses before FDIC benefit - purchased credit impaired loans		(912)			(2,236)			(1,059)			(3,148)			(3,744)		180			(912)			(6)			(2,968)			(3,750)
Benefit attributable to FDIC loss share agreement		696			1,830			1,248			2,526			3,437		—			696			(410)			2,526			3,027
Provision for loan losses non-purchased credit impaired loans		15,167			16,397			17,007			31,564			77,539		12,860			15,167			19,388			44,424			96,927
Provision for loan losses, net		14,951			15,991			17,196			30,942			77,232		13,040			14,951			18,972			43,982			96,204
Increase (decrease) in FDIC loss share receivable		(696)			(1,830)			(1,248)			(2,526)			(3,437)		—			(696)			410			(2,526)			(3,027)
Allowance for loan losses at end of period	$	221,865		$	213,550		$	226,086		$	221,865		$	226,086	$	223,122		$	221,865		$	236,061		$	223,122		$	236,061
Ratios:
Gross charge-offs - non-purchased credit impaired to average loans		0.20	%		0.79	%		0.28	%		0.48	%		0.45		0.40	%		0.20	%		0.31	%		0.46	%		0.41
Recoveries - non-purchased credit impaired to average loans		0.07	%		0.09	%		0.09	%		0.08	%		0.09		0.15	%		0.07	%		0.07	%		0.10	%		0.08
Net charge-offs - non-purchased credit impaired to average loans		0.13	%		0.70	%		0.20	%		0.41	%		0.37		0.25	%		0.13	%		0.24	%		0.35	%		0.32
Allowance for loan losses to period-end loans		1.20	%		1.17	%		1.41	%		1.20	%		1.41		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.



	June 30,			December 31,			September 30,			December 31,
(in thousands)	2017			2016			2017			2016
Loans accounted for on a nonaccrual basis: (a)
Commercial non-real estate	$	80,572		$	170,703		$	76,933		$	170,703
Commercial non-real estate - restructured		87,138			78,334			112,049			78,334
Total commercial non-real estate		167,710			249,037			188,982			249,037
Commercial real estate - owner occupied		10,200			13,432			13,704			13,432
Commercial real estate - owner-occupied - restructured		1,550			981			601			981
Total commercial real estate - owner-occupied		11,750			14,413			14,305			14,413
Total commercial & industrial		179,460			263,450			203,287			263,450
Commercial real estate - income producing		7,322			13,147			8,766			13,147
Commercial real estate - income producing - restructured		6,116			807			5,594			807
Total commercial real estate - income producing		13,438			13,954			14,360			13,954
Construction and land development		2,526			3,652			3,137			3,652
Construction and land development - restructured		295			898			155			898
Total construction and land development		2,821			4,550			3,292			4,550
Residential mortgage		26,973			22,814			33,495			22,814
Residential mortgage - restructured		1,185			851			1,179			851
Total residential mortgage		28,158			23,665			34,674			23,665
Consumer		14,342			12,351			13,946			12,351
Consumer - restructured		—			—			117			—
Total consumer		14,342			12,351			14,063			12,351
Total nonaccrual loans	$	238,219		$	317,970		$	269,676		$	317,970
Restructured loans - still accruing:
Commercial non-real estate	$	82,483		$	32,887		$	89,913		$	32,887
Commercial real estate - owner occupied		3,221			493			1,600			493
Total commercial & industrial		85,704			33,380			91,513			33,380
Commercial real estate - income producing		3,899			5,939			3,864			5,939
Construction and land development		—			—			—			—
Residential mortgage		508			259			971			259
Consumer		391			240			387			240
Total restructured loans - still accruing		90,502			39,818			96,735			39,818
Total nonperforming loans		328,721			357,788			366,411			357,788
ORE and foreclosed assets		18,049			18,943			21,219			18,943
Total nonperforming assets (b)	$	346,770		$	376,731		$	387,630		$	376,731
Loans 90 days past due still accruing	$	18,390		$	3,039		$	28,850		$	3,039
Total restructured loans	$	186,786		$	121,689		$	216,430		$	121,689
Ratios:
Nonperforming assets to loans plus ORE and foreclosed assets		1.88	%		2.25	%		2.06	%		2.25	%
Allowance for loan losses to nonperforming loans and accruing loans 90 days past due		63.92	%		63.58	%		56.45	%		63.58	%
Loans 90 days past due still accruing to loans		0.10	%		0.02	%		0.15	%		0.02	%

Nonperforming assets totaled ~~$347~~$388 million at ~~June~~September 30, 2017, ~~down $30~~up $11 million, or 8%3%, from December 31, 2016, ~~but~~ up ~~$20~~$41 million, or 6%12%, from ~~March 31,~~June 30, 2017 and up ~~$22~~$57 million from ~~June~~September 30, 2016. During the ~~second~~third quarter of 2017, total nonperforming loans increased approximately ~~$19~~$38 million, ~~after a drop~~and up $9 million compared to December 31, 2016. Most of ~~almost $100~~the increase in nonperforming loans linked quarter was in nonenergy commercial, with approximately $13 million of the increase in the ~~first quarter.~~energy portfolio. ORE and other foreclosed assets increased approximately $1$3 million in the ~~second~~third quarter of 2017, ~~following a $2 million decrease in~~due mostly to the ~~first quarter.~~transfer of consolidated bank-owned facilities. Nonperforming assets as a percent of total loans, ORE and other foreclosed assets was ~~1.88%~~2.06% at ~~June~~September 30, 2017, up 918 bps from ~~March 31,~~June 30, 2017. This ratio ~~stood~~was at 2.25% at December 31, 2016 and ~~2.02%~~2.06% at ~~June~~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 ~~$126~~$112 million at ~~June~~September 30, 2017. This ~~total was up $75~~represents a decrease of $15 million ~~from the prior quarter end~~ and ~~down $27~~$17 million from June 30, ~~2016.~~2017 and 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 ~~$705~~$195 million for the third quarter of 2017 were down $510 million compared to the second quarter of 2017, ~~were up $296~~and down $233 million compared to the ~~first quarter of 2017, and up $295 million compared to the second~~third quarter of 2016. Year-to-date average short-term investments were ~~$557~~$435 million, ~~an increase~~a decrease of ~~$93~~$17 million from the ~~first six months of~~same period in 2016. See the Liquidity section above for further discussion regarding the Company’s management of its short-term investment portfolio and the impact upon its liquidity in general.

Total deposits were ~~$21.4~~$21.5 billion at ~~June~~September 30, 2017, up ~~$1.5 billion,~~$91 million, or 8%less than 1% from ~~March 31,~~June 30, 2017, and up $2.6 billion, or 14%, from ~~June~~September 30, 2016. Average deposits for the ~~second~~third quarter of 2017 were ~~$20.9~~$21.3 billion, up ~~$1.7 billion,~~$417 million, or ~~9%, from the first quarter of 2017 and up $2.2 billion, or 12%~~2%, from the second quarter of 2017 and up $2.6 billion, or 14%, from the third quarter of 2016. The deposits assumed in the FNBC transactions ~~added $0.4~~made up $1.6 billion toof the increase in both deposits ~~during~~and average deposits over the ~~first~~third quarter ~~and $1.5 billion in the second quarter of 2017.~~2016.

Noninterest-bearing demand deposits were $7.9 billion at ~~June~~September 30, 2017, up ~~$166~~$9 million, or 2%less than 1%, linked quarter, and ~~$736~~$353 million, or ~~10%~~5%, year over year. The FNBC transactions added noninterest-bearing demand deposits of ~~$285 million.~~$259 million, compared to the third quarter of 2016. Noninterest-bearing demand deposits comprised ~~36.8%~~37% of total deposits at September 30, 2017 and June 30, 2017, ~~compared to 38.8%~~and 40% at ~~March 31, 2017, and 38.0% at June~~September 30, 2016.

Interest-bearing transaction and savings accounts of ~~$8.4~~$7.9 billion at ~~June~~September 30, 2017 ~~increased $1.2 billion,~~decreased $509 million, or ~~17%, compared to March 31, 2017 and $1.6 billion, or 24%~~6%, compared to June 30, 2017 and $1.3 billion, or 19%, compared to September 30, 2016. ~~Deposits assumed in~~The majority of the increase over the third quarter of 2016 was related to the FNBC ~~transactions accounted for the majority of these increases.~~ transactions.

Interest-bearing public fund deposits totaled ~~$2.5~~$2.8 billion at September 30, 2017, down $225 million, or 9% from June 30, 2017 ~~down slightly from March 31, 2017. This category was~~and up ~~$183~~$368 million, or 8%15% compared to ~~June~~September 30, 2016. Time deposits other than public funds totaled ~~$2.6~~$3.0 billion at September 30, 2017 up $366 million from June 30, ~~2017. The $174 million increase from March 31,~~ 2017, ~~was primarily due to~~which includes an increase in ~~public fund CDs and recapture~~brokered CD’s of ~~funds from CDs that the FDIC paid out as part of FNBC’s closure.~~$317 million.

At ~~June~~September 30, 2017, short-term borrowings totaled ~~$1.8~~$1.7 billion, down ~~$311~~$74 million from ~~March 31,~~June 30, 2017, as FHLB borrowings decreased ~~$409~~$28 million, and securities sold under agreements to repurchase increased ~~$37~~$30 million. Short-term borrowings increased ~~$716~~$661 million from ~~June~~September 30, 2016, due to both an increase in the Company’s FHLB 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 ~~$2.2~~$1.9 billion in the third quarter of 2017 were down $323 million, or 14% compared to the second quarter of 2017, ~~were~~and up ~~$106~~$543 million, or 5%40% compared to the ~~first quarter of 2017, and up $882 million, or 65% compared to the second~~third quarter of 2016. 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 loan portfolio, subject to specific criteria.

At ~~June~~September 30, 2017, long-term debt totaled ~~$408~~$331 million, down ~~$117~~$77 million from ~~March 31, 2017, primarily due to the payoff of the company’s $96 million in subordinated debt that matured in April, as well as the paydown of $17 million of long-term FHLB borrowings.~~June 30, 2017. The Company was in compliance with all contractual covenants, as amended, related to long-term debt as of ~~June~~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 ~~June~~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	$	6,499,919	$	2,929,575	$	1,552,193	$	1,100,540	$	917,611	$	6,651,407	$	2,991,344	$	1,571,652	$	1,177,179	$	911,232
Letters of credit		388,386		296,069		81,651		10,518		148		356,374		310,052		35,539		10,651		132
Total	$	6,888,305	$	3,225,644	$	1,633,844	$	1,111,058	$	917,759	$	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.

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 ~~June~~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 100 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 ~~June~~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 ~~June~~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.

~~There were no purchases made by the issuer or any affiliated purchaser of the issuer’s equity securities for the six months ended June 30, 2017.~~None.

Exhibit

Filed

Incorporated by Reference

Filed

Incorporated by Reference

Number

Description

Herewith

Form

Exhibit

Filing Date

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

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

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

Notice of Lease by and between HPT New Orleans OSS, LLC and Whitney Bank

10.2

Form of Performance Stock Award Agreement (TSR) (approved in 2017)

10-Q

10.2

5/5/2017

10.3

Form of Performance Stock Award Agreement (EPS) (approved in 2017)

10-Q

10.3

5/5/2017

10.4

Purchase and Assumption Agreement with the FDIC

8-K

99.1

4/28/2017

10.5

401(k) Plan Amendments

8-K

10.1

6/28/2017

10.6

Pension Plan Amendment

8-K

10.2

6/28/2017

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

XBRL Interactive Data

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.


Goodwill balance at December 31, 2016	$	621,193
Additions:
~~Goodwill from~~Initial goodwill recorded in FNBC I transaction		~~96,063~~95,568
~~Goodwill from~~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 ~~June~~September 30, 2017	$	~~740,265~~739,403



Securities Held to Maturity
(in thousands)	June 30, 2017								December 31, 2016
			Gross		Gross						Gross		Gross
	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
U.S. Treasury and government agency securities	$	50,000	$	—	$	64	$	49,936	$	50,000	$	—	$	44	$	49,956
Municipal obligations		730,599		7,205		9,614		728,190		648,093		2,147		20,175		630,065
Residential mortgage-backed securities		796,190		7,402		1,315		802,277		862,162		4,329		3,068		863,423
Commercial mortgage-backed securities		75,705		—		2,637		73,068		75,739		—		4,038		71,701
Collateralized mortgage obligations		1,221,960		1,690		10,592		1,213,058		864,226		1,420		10,674		854,972
	$	2,874,454	$	16,297	$	24,222	$	2,866,529	$	2,500,220	$	7,896	$	37,999	$	2,470,117



Net Interest Income (te) at Risk

	Estimated
Change in	increase (decrease)
interest rate	in net interest income (te)

(basis points)	Year 1		Year 2
(100)	(2.89)	%	(5.05)	%
+100	2.91	%	3.57	%
+200	5.10	%	5.94	%
+300	6.87	%	7.56	%


	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:	~~August 4,~~November 7, 2017